<PAGE> 1
As filed with the Securities and Exchange Commission on February 6, 1996
Registration Nos. 33-64335 and 33-64335-01
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SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
_______________________
AMENDMENT NO. 1 TO
FORM S-3
REGISTRATION STATEMENT
UNDER
THE SECURITIES ACT OF 1933
<TABLE>
<CAPTION>
STARWOOD LODGING TRUST STARWOOD LODGING CORPORATION
<S> <C>
(Exact name of registrant as specified (Exact name of registrant as specified
in its governing instruments) in its governing instruments)
11845 West Olympic Blvd., Suite 550 11845 West Olympic Blvd., Suite 560
Los Angeles, California 90064 Los Angeles, California 90064
(310) 575-3900 (310) 575-3900
(Address of principal executive offices) (Address of principal executive offices)
</TABLE>
_______________________
<TABLE>
<CAPTION>
<S> <C>
Maryland Maryland
(State or other jurisdiction (State or other jurisdiction
of incorporation or organization) of incorporation or organization)
52-0901263 52-1193298
(I.R.S. employer identification no.) (I.R.S. employer identification no.)
JEFFREY C. LAPIN KEVIN E. MALLORY
President and Chief Operating Officer Executive Vice President
11845 West Olympic Blvd., Suite 550 11845 West Olympic Blvd., Suite 560
Los Angeles, California 90064 Los Angeles, California 90064
(310) 575-3900 (310) 575-3900
(Name and address of agent for service) (Name and address of agent for service)
COPIES TO:
SHERWIN L. SAMUELS, Esq. JAMES M. ASHER, Esq.
Sidley & Austin ROBERT E. KING, JR., Esq.
555 West Fifth Street Rogers & Wells
Los Angeles, California 90013 200 Park Avenue
(213) 896-6000 New York, New York 10166
(212) 878-8000
</TABLE>
_______________________
Approximate date of commencement of proposed sale to the public:
From time to time after the effective date of this Registration Statement.
_______________________
If the only securities being registered on this Form are being offered
pursuant to dividend or interest reinvestment plans, please check the
following box. [ ]
If any of the securities being registered on this Form are to be offered
on a delayed or continuous basis pursuant to Rule 415 under the Securities Act
of 1933, other than securities offered only in connection with dividend or
interest reinvestment plans, check the following box. [X]
If this Form is filed to register additional securities for an offering
pursuant to Rule 462(b) under the Securities Act, please check the following
box and list the Securities Act registration statement number of the earlier
effective registration statement for the same offering. [ ]
If this Form is a post-effective amendment filed pursuant to Rule 462(c)
under the Securities Act, check the following box and list the Securities Act
registration statement number of the earlier effective registration statement
for the same offering. [ ]
If delivery of the prospectus is expected to be made pursuant to Rule
434, please check the following box. [ ]
<PAGE> 2
CALCULATION OF REGISTRATION FEE
<TABLE>
<CAPTION>
==============================================================================================================
Proposed Maximum Amount of
Title of each class of securities to be registered Aggregate Offering Price Registration Fee
- --------------------------------------------------------------------------------------------------------------
<S> <C> <C>
Shares of beneficial interest, $0.01 par
value, of Starwood Lodging Trust(3) Paired with
Shares of common stock, $0.01 par value, of
Starwood Lodging Corporation
Convertible Notes
Warrants to Purchase Debt Securities,
Preferred Shares or Paired Common Shares
Shares of Preferred Stock, $0.01 par value, of
Starwood Lodging Trust which may be
paired with
Shares of Preferred Stock, $0.01 par value, of
Starwood Lodging Corporation
Debt Securities
Total $500,000,000 $172,400
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</TABLE>
_______________________
THE REGISTRANTS HEREBY AMEND THIS REGISTRATION STATEMENT ON SUCH DATE OR
DATES AS MAY BE NECESSARY TO DELAY ITS EFFECTIVE DATE UNTIL THE REGISTRANTS
SHALL FILE A FURTHER AMENDMENT THAT SPECIFICALLY STATES THAT THIS REGISTRATION
STATEMENT SHALL THEREAFTER BECOME EFFECTIVE IN ACCORDANCE WITH SECTION 8(A) OF
THE SECURITIES ACT OF 1933, OR UNTIL THIS REGISTRATION STATEMENT SHALL BECOME
EFFECTIVE ON SUCH DATE AS THE COMMISSION, ACTING PURSUANT TO SAID SECTION
8(A), MAY DETERMINE.
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<PAGE> 3
SUBJECT TO COMPLETION, PRELIMINARY PROSPECTUS DATED FEBRUARY __, 1996
PROSPECTUS
$500,000,000
STARWOOD LODGING
STARWOOD LODGING TRUST STARWOOD LODGING CORPORATION
COMMON STOCK, WARRANTS, PREFERRED
STOCK AND DEBT SECURITIES
Starwood Lodging Trust (the "Trust") and Starwood Lodging Corporation
(the "Corporation" and, with the Trust, the "Company") may from time to time
offer in one or more series: (i) shares of beneficial interest, $.01 par value,
of the Trust (the "Trust Shares") and shares of common stock, $.01 par value,
of the Corporation (the "Corporation Shares") which are "paired" and traded as
units consisting of one Trust Share and one Corporation Share (the "Paired
Common Shares"); (ii) warrants to purchase Trust Shares and warrants to
purchase Corporation Shares which are "paired" and traded as units consisting
of one warrant to purchase Trust Shares and one warrant to purchase a like
number of Corporation Shares (the "Warrants"); (iii) shares of preferred stock,
$.01 par value, of the Trust (the "Trust Preferred Shares") and shares of
preferred stock, $.01 par value, of the Corporation (the "Corporation Preferred
Shares" and, with the Trust Preferred Shares, the "Preferred Shares") which
may, but are not required to, be "paired" with preferred stock of the other
entity; and (iv) unsecured debt securities of the Trust or the Corporation
(the "Debt Securities") with an aggregate public offering price of up to
$500,000,000 (or its equivalent in another currency based on the exchange rate
at the time of sale) in amounts, at prices and on terms to be determined at the
time of offering. The Trust or the Corporation may from time to time offer in
one or more series unsecured Debt Securities which may, but are not required
to, be paired with Debt Securities of the other entity. The Paired Common
Shares, Warrants, Preferred Shares and Debt Securities, (collectively, the
"Securities") may be offered, separately or together, in separate series in
amounts, at prices and on terms to be set forth in one or more supplements to
this Prospectus (each a "Prospectus Supplement").
The specific terms of the 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 Paired Common
Shares, any initial public offering price; (ii) in the case of Warrants, the
duration, offering price, exercise price and detachability, if applicable; (iii)
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; and (iv) 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 the issuer or repayment at the
option of the holder, terms for sinking fund payments, covenants and any initial
public offering price. In addition, such specific terms may include limitations
on direct or beneficial ownership and restrictions on transfer of the
Securities, in each case as may be appropriate to preserve the status of the
Trust as a real estate investment trust ("REIT") for United States federal
income tax purposes.
The applicable Prospectus Supplement will also contain information,
where applicable, relating to any listing on a securities exchange of the
securities covered by such Prospectus Supplement.
INFORMATION CONTAINED HEREIN IS SUBJECT TO COMPLETION OR AMENDMENT. A
REGISTRATION STATEMENT RELATING TO THESE SECURITIES HAS BEEN FILED WITH THE
SECURITIES AND EXCHANGE COMMISSION. THESE SECURITIES 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 SUCH STATE.
<PAGE> 4
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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.
------------------
NEITHER THE NEVADA GAMING COMMISSION NOR THE NEVADA STATE GAMING
CONTROL BOARD HAS PASSED ON THE ACCURACY OR ADEQUACY OF THIS
PROSPECTUS OR THE INVESTMENT MERITS OF THE SECURITIES
OFFERED HEREBY. ANY REPRESENTATION TO
THE CONTRARY IS UNLAWFUL.
------------------
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.
The date of this Prospectus is February __, 1996.
The Securities may be offered directly, through agents designated from
time to time by the Trust or the Corporation or to or through underwriters or
dealers. If any agents or underwriters are involved in the sale of any of the
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 an accompanying Prospectus
Supplement. See "Plan of Distribution." No Securities may be sold without
delivery of a Prospectus Supplement describing the method and terms of the
offering of such series of Securities.
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AVAILABLE INFORMATION
The Trust and the Corporation are subject to the informational
requirements of the Securities Exchange Act of 1934, as amended (the "Exchange
Act"), and, in accordance therewith, file reports, proxy or information
statements and other information with the Securities and Exchange Commission
(the "Commission"). Such reports, proxy or information statements and other
information can be inspected and copied at Room 1024, Judiciary Plaza, 450
Fifth Street, N.W., Washington, D.C. 20549, and at the following regional
offices of the Commission: Seven World Trade Center, New York, New York 10048
and Northwestern Atrium Center, 500 West Madison Street, Suite 1400, Chicago,
Illinois 60661, and copies of such material can be obtained from the Public
Reference Section of the Commission, 450 Fifth Street, N.W., Washington, D.C.
20549 at prescribed rates. Such reports, proxy statements and other
information concerning the Trust and the Corporation can also be inspected at
the offices of the New York Stock Exchange, Public Reference Section, 20 Broad
Street, New York, New York 10005.
The Company has filed with the Commission a registration statement on
Form S-3 (the "Registration Statement") under the Securities Act of 1933, as
amended (the "Securities Act"), with respect to the Securities offered hereby.
This Prospectus does not contain all the information set forth in the
Registration Statement, certain portions of which have been omitted as
permitted by the rules and regulations of the Commission. Statements contained
in this Prospectus as to the contents of any contract or other documents are
not necessarily complete, and in each instance, reference is made to the copy
of such contract or documents filed as an exhibit to the Registration
Statement, each such statement being qualified in all respects by such
reference. For further information with respect to the Trust, the Corporation
and the Securities offered hereby, reference is made to the Registration
Statement and exhibits thereto.
INCORPORATION OF CERTAIN DOCUMENTS BY REFERENCE
The following documents filed by the Company (SEC File Nos. 1-6828 and
1-7959) with the Commission under the Securities Act and the Exchange Act are
incorporated in this Prospectus by reference and are made a part hereof:
1. The Company's Annual Report on Form 10-K for the year ended December 31,
1994 (as amended by Form 10-K/A filed on February __, 1996).
2. The Company's Quarterly Reports on Form 10-Q for the quarters
ended March 31, 1995 (as amended by Form 10-Q/A filed on February __, 1996),
June 30, 1995 (as amended by Form 10-Q/A filed on February __, 1996) and
September 30, 1995 (as amended by Form 10-Q/A filed on February __, 1996).
3. The Company's Current Reports on Form 8-K, dated January 31, 1995
(as amended by Form 8-K/A filed on April 18, 1995 and Form 8-K/A1 filed on
February __, 1996), June 8, 1995, September 20, 1995 (as amended by Form 8-K/A
filed on December 1, 1995 and Form 8-K/A1 filed on February __, 1996),
October 31, 1995, and January 18, 1996 (as amended by Form 8-K/A filed on
__________, 1996) and February 5, 1996 (as amended by Form 8-K/A filed on
_______, 1996.
4. The description of the Company's Paired Common Shares contained
in the Company's Registration Statement on Form 8-A, filed on October 3, 1986
and any amendments or reports filed for the purpose of updating such
descriptions which have been filed by the Company with the Commission.
5. The financial statements of Embassy Suites - Tempe, Starwood Wichita
Investors, L.P., Capitol Hill Suites, French Quarter Square and Sheraton Colony
Square contained in the Company's Registration Statement on Form S-2 declared
effective on June 29, 1995 (Registration Nos. 33-59155 and 33-59155-01).
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<PAGE> 6
Each document filed by the Trust or the Corporation subsequent to the
date of this Prospectus pursuant to Section 13(a), 13(c), 14 or 15(d) of the
Exchange Act and prior to termination of the offering of all Securities to
which this Prospectus relates shall be deemed to be incorporated by reference
in this Prospectus and shall be part hereof from the date of filing of such
document. Any statement contained herein or 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 in this Prospectus (in the case of a statement in a previously-filed
document incorporated or deemed to be incorporated by reference herein), in any
accompanying Prospectus Supplement relating to a specific offering of
Securities or in any other subsequently filed document that is also
incorporated or deemed to be incorporated by reference herein, modifies or
supersedes such statement. Any such statement so modified or superseded shall
not be deemed, except as so modified or superseded, to constitute a part of
this Prospectus or any accompanying Prospectus Supplement. Subject to the
foregoing, all information appearing in this Prospectus and each accompanying
Prospectus Supplement is qualified in its entirety by the information appearing
in the documents incorporated by reference.
Copies of all documents incorporated by reference, other than exhibits
to such documents not specifically incorporated by reference therein, will be
provided without charge to each person to whom this Prospectus is delivered,
upon oral or written request to Jayne Gordon, 11845 West Olympic Boulevard,
Suite 550, Los Angeles, California 90064.
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<PAGE> 7
THE COMPANY
The Company was reorganized, effective January 1, 1995, to combine the
hotel investment and operating businesses of the Company with certain hotel
investments of Starwood Capital Group, L.P. and certain of its affiliates
(collectively, "Starwood Capital"). Management believes that the Company's
unique "paired share" ownership structure gives it a competitive advantage over
other hotel REITs and other hotel owner/operators with respect to owning and
operating hotels, as discussed below. The Company has owned hotel assets since
1969 and has managed hotel assets since 1980. Starwood Capital has been an
active opportunistic investor in the hotel industry over the last three years.
As of September 30, 1995, the Company owned, operated and managed a
geographically diversified portfolio of hotel assets (the "Hotel Assets"),
including fee, ground lease and first mortgage interests in 46 hotel
properties, comprising over 9,829 rooms located in 20 states. Thirty-four of
such hotels are operated under licensing or franchise agreements with national
hotel organizations, including Marriott(TM), Embassy Suites(TM), Omni(TM),
Doubletree(TM), Radisson(TM), Residence Inn(TM), Holiday Inn(TM), Sheraton(TM),
Best Western(TM), Days Inn(TM), Ramada(TM), Quality Inn(TM) and Harvey(TM).
Substantially all of the Company's interests in the Hotel Assets are
held by and its operations conducted through SLT Realty Limited Partnership (the
"Realty Partnership") or SLC Operating Partnership (the "Operating
Partnership"), respectively. Accordingly, substantially all of the income of
the Trust and the Corporation is derived from distributions of the Realty
Partnership and the Operating Partnership, respectively. The Company is the
sole general partner of each of the Realty Partnership and the Operating
Partnership and as of September 30, 1995, owned a controlling interest of
approximately 69.9% in each of the Realty Partnership and Operating Partnership.
The remaining 30.1% interest in each of the Realty Partnership and the Operating
Partnership is owned by Starwood Capital. As of September 30, 1995, Starwood
Capital owned 30.5% of the equity interests of the Company on a fully diluted
basis.
The Company's paired share ownership structure is unique for a hotel
REIT because its shareholders own both the owner, the Trust, and the operator,
the Corporation, of the Company's hotels. Therefore, the Company's
shareholders retain the economic benefits of both the lease payments received
by the Trust and the operating profits realized by the Corporation while
maintaining the tax benefits of the Trust's REIT status. The pairing
arrangement creates total commonality of ownership, as the shares of beneficial
interest of the Trust (the "Trust Shares") and the shares of common stock of
the Corporation (the "Corporation Shares") are paired on a one for one basis
and may only be held or transferred as units consisting of one Trust Share and
one Corporation Share ("Paired Common Shares").
The Trust was organized in 1969 as a Maryland real estate investment
trust. The Trust's executive offices are located at 11845 West Olympic
Boulevard, Suite 550, Los Angeles, California 90064; telephone (310) 575-3900.
The Corporation is a Maryland corporation formed in 1980. The
Corporation's executive offices are located at 11845 West Olympic Boulevard,
Suite 560, Los Angeles, California 90064; telephone (310) 575-3900.
USE OF PROCEEDS
The Company will use the net proceeds of any sale of Securities to (i)
either repay loans owing to the Realty Partnership or the Operating
Partnership, or (ii) make contributions to the Realty Partnership and the
Operating Partnership in return for securities of the Realty Partnership and
the Operating Partnership. The allocation of the net proceeds of any sale of
Securities between the Realty Partnership and the Operating Partnership shall
be set forth in the Prospectus Supplement relating to the sale of such
Securities.
Except as otherwise provided in the applicable Prospectus Supplement,
the Company, the Realty Partnership and the Operating Partnership intend to use
any such net proceeds for working capital and general business purposes, which
may include the reduction of certain outstanding indebtedness, the financing of
future acquisitions and the improvement of certain properties in their
portfolio.
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<PAGE> 8
Pending application of the net proceeds, the Realty Partnership and
the Operating Partnership will invest such portion of the net proceeds in
interest-bearing accounts and short-term, interest-bearing securities, which,
in the case of the Realty Partnership, are consistent with the Trust's
intention to qualify for taxation as a REIT. Such investments may include, for
example, obligations of the Government National Mortgage Association, other
governmental and government agency securities, certificates of deposit,
interest-bearing bank deposits and mortgage loan participations.
RATIOS OF EARNINGS TO FIXED CHARGES
The following table sets forth the Company's consolidated ratios of
earnings to fixed charges for the periods shown:
<TABLE>
<CAPTION>
Nine Months Year Ended December 31,
Ended -----------------------------------------------------------------------
September 30, 1995 1994 1993 1992 1991 1990
--------------------- -------- -------- -------- -------- --------
<S> <C> <C> <C> <C> <C>
2.06x .74x(1) .54x(1) (.39x)(1) (.34x)(1) (.68x)(1)
</TABLE>
(1) Earnings were inadequate to cover fixed charges by $27,586,000 in
1990, $22,084,000 in 1991, $19,743,000 in 1992, $7,032,000 in 1993
and $4,663,000 in 1994. These deficiencies occurred prior to the
Reorganization in January 1995 and the public offering of Paired
Common Shares in July 1995.
The ratios of earnings to fixed charges were computed by dividing
earnings by fixed charges. For this purpose, earnings represent pretax income
from continuing operations. Fixed charges consist of interest expense
(including interest costs capitalized) and amortization of debt issuance costs.
To date, the Company has not issued any preferred stock; therefore, the ratios
of earnings to combined fixed charges and preferred stock dividends are the same
as the ratios presented above.
DESCRIPTION OF DEBT SECURITIES
The Debt Securities will be issued under one or more indentures (an
"Indenture"), in each case among the Trust or the Corporation, as the case may
be, the Corporation, as guarantor (if applicable), and a trustee (a "Trustee").
Any Indenture will be subject to, and governed by, the Trust Indenture Act of
1939, as amended (the "TIA"). The statements made hereunder relating to any
Indenture and the Debt Securities to be issued thereunder are summaries of the
anticipated provisions thereof and do not purport to be complete and are
subject to, and are qualified in their entirety by reference to, all provisions
of the Indentures and such Debt Securities.
GENERAL
The Debt Securities will be direct, unsecured obligations of the Trust
or the Corporation, as the case may be, and will either rank equally with all
other unsecured and unsubordinated indebtedness of the issuing entity ("Senior
Securities") or, if so provided in the applicable Prospectus Supplement, be
subordinated in right of payment to the prior payment in full of the Senior
Debt as defined below) of the issuing entity as described under
"--Subordination" ("Subordinated Securities"). 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 governing board of the Trust or the Corporation,
respectively, or as established in one or more indentures supplemental to the
applicable Indenture. All Debt Securities of one series need not be
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<PAGE> 9
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.
Debt securities issued by the Trust may be guaranteed by the
Corporation; however, the Trust may not guarantee Debt Securities issued by the
Corporation.
It is anticipated that any Indenture will provide that there may be
more than one Trustee thereunder, each with respect to one or more series of
Debt Securities. Any Trustee under an Indenture may resign or be removed with
respect to one or more series of Debt Securities, and a successor Trustee may
be appointed to act with respect to such series. In the event that two or more
persons are acting as Trustee with respect to different series of Debt
Securities, each such Trustee shall be a trustee of a trust under the
applicable Indenture separate and apart from the trust administered by any
other Trustee, and, except as otherwise indicated herein, any action described
herein to be taken by a Trustee may be taken by each such Trustee with respect
to, and only with respect to, the one or more series of Debt Securities for
which it is Trustee under the applicable Indenture.
Reference is made to the Prospectus Supplement relating to the series
of Debt Securities being offered for the specific terms thereof, including:
(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) whether such Debt Securities are Senior Securities or
Subordinated Securities;
(4) if such Debt Securities will be issued by the Trust, whether
such Debt Securities will be guaranteed by the Corporation;
(5) the percentage of the principal amount at which such Debt
Securities will be issued and, if other than the principal
amount thereof, the portion of the principal amount thereof
payable upon declaration of acceleration of the maturity
thereof, or (if applicable) the portion of the principal
amount of such Debt Securities that is convertible into Paired
Common Shares or Preferred Shares, or the method by which any
such portion shall be determined;
(6) if convertible, the terms on which such Debt Securities are
convertible, including the initial conversion price or rate
and the conversion period and any applicable limitations on
the ownership or transferability of the Paired Common Shares
or Preferred Shares receivable on conversion;
(7) the date or dates, or the method for determining such date or
dates, on which the principal of such Debt Securities will be
payable;
(8) 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;
(9) the date or dates, or the method for determining such date or
dates, from which any interest will accrue, the dates on which
any such interest will be payable, the record dates for such
interest payment dates, or the method by which any such date
shall be determined, the person to whom such interest shall be
payable, and the basis upon which interest shall be calculated
if other than that of a 360-day year of twelve 30-day months;
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<PAGE> 10
(10) the place or places where the principal of (and premium, if
any) and interest, if any, on such Debt Securities will be
payable, such Debt Securities may be surrendered for
conversion or registration of transfer or exchange and where
notices or demands to or upon the Trust or the Corporation, as
the case may be, in respect of such Debt Securities, any
applicable Guarantees and the applicable Indenture may be
served;
(11) the period or periods within which, the price or prices at
which and the terms and conditions upon which such Debt
Securities may be redeemed, as a whole or in part, at the
option of the Trust or the Corporation, as the case may be, if
the issuer is to have such an option;
(12) the obligation, if any, of the issuer 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 price or prices at
which and the terms and conditions upon which such Debt
Securities will be redeemed, repaid or purchased, as a whole
or in part, pursuant to such obligation;
(13) if other than United States 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;
(14) whether the amount of payments of principal of (and premium,
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;
(15) the events of default or covenants of such Debt Securities, to
the extent different from or in addition to those described
herein;
(16) whether such Debt Securities will be issued in certificated
and/or book-entry form;
(17) 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 and terms and
conditions relating thereto;
(18) the applicability, if any, of the defeasance and covenant
defeasance provisions described herein, or any modification
thereof;
(19) whether and under what circumstances the Trust or the
Corporation, as the case may be, will pay additional amounts
on such Debt Securities in respect of any tax, assessment or
governmental charge and, if so, whether such issuer will have
the option to redeem such Debt Securities in lieu of making
such payment; and
(20) any other terms of such Debt Securities.
The Debt Securities may provide for less than the entire principal
amount thereof to be payable upon declaration of acceleration of the maturity
thereof ("Original Issue Discount Securities"). If material or applicable,
special United States federal income tax, accounting and other considerations
applicable to Original Issue Discount Securities will be described in the
applicable Prospectus Supplement.
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<PAGE> 11
Except as described under "Merger, Consolidation or Sale" or as may be
set forth in any Prospectus Supplement, an Indenture will not contain any other
provisions that would limit the ability of either the Trust or the Corporation
to incur indebtedness or that would afford holders of the Debt Securities
protection in the event of (i) a highly leveraged or similar transaction
involving the Trust or the Corporation, the management of the Trust or the
Corporation, or any affiliate of any such party, (ii) a change of control, or
(iii) a reorganization, restructuring, merger or similar transaction involving
the Trust or the Corporation that may adversely affect the holders of the Debt
Securities. Restrictions on ownership and transfers of the Paired Common
Shares and Preferred Shares are designed to preserve the Trust's status as a
REIT and, therefore, may act to prevent or hinder a change of control. See
"Description of Paired Common Shares--Ownership Limits; Restrictions on
Transfer; Repurchase and Redemption of Shares" and "Description of Preferred
Shares--Ownership Limits; Restrictions on Transfer; Repurchase and Redemption
of Shares." 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 that are described below, including any
addition of a covenant or other provision providing event risk or similar
protection.
GUARANTEES
The Corporation may unconditionally and irrevocably guarantee, on a
senior or subordinated basis, the due and punctual payment of principal of,
premium, if any, and interest on Debt Securities issued by the Trust, and the
due and punctual payment of any sinking fund payments thereon, when and as the
same shall become due and payable, whether at a maturity date, by declaration of
acceleration, call for redemption or otherwise. The applicability and terms of
any such guarantee relating to a series of Debt Securities will be set forth in
the Prospectus Supplement relating to such Debt Securities.
DENOMINATIONS, INTEREST, REGISTRATION AND TRANSFER
Unless otherwise described in the applicable Prospectus Supplement,
the Debt Securities of any series which are registered securities (other than
registered securities issued in global form, which may be of any denomination),
shall be issuable in denominations of $1,000 and any integral multiple thereof.
Unless otherwise specified in the applicable Prospectus Supplement,
the principal of (and premium, if any) and interest on any series of Debt
Securities will be payable at the corporate trust office of the Trustee, the
address of which will be stated in the applicable Prospectus Supplement,
provided that, at the option of the Trust or the Corporation, as the case may
be, payment of interest may be made by check mailed to the address of the
person entitled thereto as it appears in the applicable register for such Debt
Securities or by wire transfer of funds, provided that payment by wire transfer
of immediately available funds will be required with respect to principal of
(and premium, if any) and interest on all Global Securities.
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 relevant regular record date
and may either be paid to the person in whose name such Debt Security is
registered at the close of business on a special record date (the "Special
Record Date") for the payment of such Defaulted Interest to be fixed by the
Trustee, notice whereof 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 applicable
Indenture.
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 Trustee referred to above.
In addition, subject to certain limitations imposed upon Debt
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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 Trustee referred to above. Every Debt Security surrendered
for conversion, registration of transfer or exchange shall be duly endorsed or
accompanied by a written instrument of transfer. No service charge will be
made for any registration of transfer or exchange of any Debt Securities, but
the Trustee, the Trust or the Corporation may require payment of a sum
sufficient to cover any tax or other governmental charge payable in connection
therewith. If the applicable Prospectus Supplement refers to any transfer
agent (in addition to the Trustee) initially designated by the Trust or the
Corporation, as the case may be, with respect to any series of Debt Securities,
such entity 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 the Trust or the Corporation, as the case may be, will be required
to maintain a transfer agent in each place of payment for such series. The
Trust or the Corporation, as the case may be, may at any time designate
additional transfer agents with respect to any series of Debt Securities.
Neither the Trust, the Corporation nor the Trustee shall be required
(i) to issue, register the transfer of or exchange any Debt Security if such
Debt Security may be among those selected for redemption during a period
beginning at the opening of business 15 days before the day of the mailing of a
notice of redemption of the Debt Securities to be redeemed and ending at the
close of business on (A) if such Debt Securities are issuable only as
registered securities, the day of the mailing of the relevant notice of
redemption and (B) if such Debt Securities are issuable as bearer securities,
the day of the first publication of the relevant notice of redemption or, if
such Debt 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 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.
MERGER, CONSOLIDATION OR SALE
Any of the Trust and the Corporation 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 the Trust or the Corporation,
as the case may be, shall be the continuing entity, or the successor entity (if
other than the Trust or the Corporation, as the case may be) formed by or
resulting from any such consolidation or merger or which shall have received
the transfer of such assets shall expressly assume payment of the principal of
(and premium, if any) and interest on all the Debt Securities and the due and
punctual performance and observance of all of the covenants and conditions
contained in the applicable indenture (b) immediately after giving effect to
such transaction, no event of default under the indentures, 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 Trustee.
CERTAIN COVENANTS
Existence. Except as permitted under "--Merger, Consolidation or
Sale," each of the Trust and the Corporation will be required to do or cause to
be done all things necessary to preserve and keep in full force and effect its
existence, rights and franchises; provided, however, that each of the Trust and
the Corporation shall not be required to preserve any right or franchise if it
determines that the preservation thereof is no longer desirable in the conduct
of its business.
Maintenance of Properties. Each of the Trust and the Corporation will
be required to cause all of its material properties used or useful in the
conduct of its business or the business of any subsidiary to be maintained
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and kept in good condition, repair and working order and supplied with all
necessary equipment and to cause to be made all necessary repairs, renewals,
replacements, betterments and improvements thereof, all as in the judgment of
the Trust or the Corporation, as the case may be, may be necessary so that the
business carried on in connection therewith may be properly and advantageously
conducted at all times; provided, however, that each of the Trust and the
Corporation shall not be required to continue the operation or maintenance of
any such property or prevented from disposing of such property if it determines
that such discontinuance or disposal is desirable in the conduct of the
business.
Insurance. Each of the Trust and the Corporation will be required to,
and will be required to 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 insurers of recognized responsibility.
Payment of Taxes and Other Claims. Each of the Trust and the
Corporation, as the case may be, will be required to pay or discharge or cause
to be paid or discharged before the same shall become delinquent, (i) all
material taxes, assessments and governmental charges levied or imposed upon it
or any subsidiary or upon its income, profits or property or that of any
subsidiary, and (ii) all lawful claims for labor, materials and supplies which,
if unpaid, might by law become a material lien upon the property of the Trust,
the Corporation or any subsidiary; provided, however, that the Trust and the
Corporation, as the case may be, 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.
Provision of Financial Information. Whether or not the Trust or the
Corporation, as the case may be, is subject to Section 13 or 15(d) of the
Exchange Act, the Trust or the Corporation, as the case may be, will, be
required within 15 days of each of the respective dates by which the Company
would have been required to file annual reports, quarterly reports and other
documents with the Commission if the Company were so subject to (i) transmit by
mail to all Holders of its Debt Securities, as their names and addresses appear
in the security register for such Debt Securities, without cost to such
Holders, copies of the annual reports and quarterly reports which the Trust or
the Corporation, as the case may be, would have been required to file with the
Commission pursuant to Section 13 or 15(d) of the Exchange Act if the Trust or
the Corporation, as the case may be, were subject to such Sections and (ii)
file with any Trustee copies of the annual reports, quarterly reports and other
documents which the Trust or the Corporation, as the case may be, would have
been required to file with the Commission pursuant to Section 13 or 15(d) of
the Exchange Act if the Trust or the Corporation, as the case may be, were
subject to such Sections and (iii) promptly upon written request and payment of
the reasonable cost of duplication and delivery, supply copies of such
documents to any prospective holder.
Additional Covenants. Any additional or different covenants of the
Trust or the Corporation with respect to any series of Debt Securities will be
set forth in the Prospectus Supplement relating thereto.
EVENTS OF DEFAULT, NOTICE AND WAIVER
Each Indenture will provide that the following events are "Events of
Default" with respect to any series of Debt Securities issued thereunder: (a)
default for 30 days in the payment of any installment of interest on any Debt
Security of such series; (b) default in the payment of the principal of (or
premium, 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, or breach, of any other covenant
of the Trust or the Corporation contained in the applicable Indenture (other
than a covenant added to such Indenture solely for the benefit of a series of
Debt Securities issued thereunder other than such series), such default having
continued for 60 days after written notice as provided in such Indenture; (e)
default in the payment of an aggregate principal amount exceeding a specified
amount of any evidence of indebtedness of the Trust or the Corporation, as the
case may be, 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
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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) certain events of bankruptcy, insolvency or reorganization, or
court appointment of a receiver, liquidator or trustee of the Trust or the
Corporation, as the case may be, or any Significant Subsidiary or any of their
respective property; and (g) any other event of default provided with respect
to a particular series of Debt Securities. The term "Significant Subsidiary"
means each significant subsidiary (as defined in Regulation S-X promulgated
under the Securities Act) of the Trust or the Corporation, as the case may be.
If an Event of Default under any Indenture with respect to Debt
Securities of any series at the time outstanding occurs and is continuing, then
in every such case the applicable Trustee or the holders of not less than 25%
in principal amount of the outstanding Debt Securities of that series may
declare the principal amount (or, if the Debt Securities of that series are
Original Issue Discount Securities or indexed securities, such portion of the
principal amount as may be specified in the terms thereof) of all of the Debt
Securities of that series to be due and payable immediately by written notice
thereof to the Trust or the Corporation, as the case may be (and to the
applicable Trustee if given by the holders). However, at any time after such a
declaration of acceleration with respect to Debt Securities of such series (or
of all Debt Securities then outstanding under any Indenture, as the case may
be) has been made, but before a judgment or decree for payment of the money due
has been obtained by the applicable Trustee, the holders of not less than a
majority in principal amount of outstanding Debt Securities of such series (or
of all Debt Securities then outstanding under the applicable Indenture, as the
case may be) may rescind and annul such declaration and its consequences if (a)
the Trust or the Corporation, as the case may be, shall have deposited with the
applicable Trustee all required payments of the principal of (and premium, if
any) and interest on the Debt Securities of such series (or of all Debt
Securities then outstanding under any Indenture, as the case may be), plus
certain fees, expenses, disbursements and advances of the applicable Trustee
and (b) all events of default, other than the non-payment of accelerated
principal of (or specified portion thereof), with respect to Debt Securities of
such series (or of all Debt Securities then outstanding under the applicable
Indenture, as the case may be) have been cured or waived as provided in the
Indenture. Any Indenture will also provide that the holders of not less than a
majority in principal amount of the outstanding Debt Securities of any series
(or of all Debt Securities then outstanding under the applicable Indenture, as
the case may be) 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, if any) or interest on any Debt Security or such series or (y) in
respect of a covenant or provision contained in the applicable Indenture that
cannot be modified or amended without the consent of the holder of each
outstanding Debt Security affected thereby.
Each Trustee will be required to give notice to the holders of Debt
Securities within 90 days of a default under the applicable Indenture unless
such default has been cured or waived; provided, however, that such 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, if any) or interest an any Debt Security of such series or in
the payment of any sinking fund installment in respect of any Debt Security of
such series) if specified responsible officers of such Trustee consider such
withholding to be in the interest of such holders.
Each Indenture will provide that no holders of Debt Securities of any
series may institute any proceedings, judicial or otherwise, with respect to
the applicable Indenture or for any remedy thereunder, except in the case of
failure of the applicable 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 indemnity reasonably
satisfactory to it. 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, if any) and interest on such Debt Securities at the
respective due dates thereof.
Subject to provisions in each Indenture relating to its duties in case
of default, no Trustee will be under any obligation to exercise any of its
rights or powers under an Indenture at the request or direction of any holders
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of any series of Debt Securities then outstanding under such Indenture, unless
such holders shall have offered to the Trustee thereunder reasonable security
or indemnity. The holders of not less than a majority in principal amount of
the outstanding Debt Securities of any series (or of all Debt Securities then
outstanding under an Indenture, as the case may be) shall have the right to
direct the time, method and place of conducting any proceeding for any remedy
available to the applicable Trustee, or of exercising any trust or power
conferred upon such Trustee. However, a Trustee may refuse to follow any
direction which is in conflict with any law or the applicable Indenture, which
may involve such Trustee in personal liability or which may be unduly
prejudicial to the holders of Debt Securities of such series not joining
therein.
Within 120 days after the close of each fiscal year, the Trust or the
Corporation, as the case may be, will be required to deliver to each Trustee a
certificate, signed by one of several specified officers of the Company,
stating whether or not such officer has knowledge of any default under the
applicable Indenture and, if so, specifying each such default and the nature
and status thereof.
MODIFICATION OF THE INDENTURES
Modifications and amendments of an Indenture will be permitted to be
made only with the consent of the holders of not less than a majority in
principal amount of all outstanding Debt Securities or series of 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 (if any) or any installment of
interest on, any such Debt Security; (b) reduce the principal amount of, or the
rate or amount of interest on, or any premium payable on redemption of, any
such Debt Security, or reduce the amount of principal of an Original Issue
Discount Security 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 coin or currency, for payment
of principal of, premium, if any, or interest on 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
applicable 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 such Indenture; (f) modify any of the provisions set
forth in such Indenture relating to subordination; (g) change the redemption
provisions set forth in such Indenture in a manner adverse to the holders of
Debt Securities; or (h) 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.
The holders of not less than a majority in principal amount of a
series of outstanding Debt Securities have the right to waive compliance by the
Trust or the Corporation, as the case may be, with certain covenants relating
to such series of Debt Securities in the Indenture.
Modifications and amendments of an Indenture will be permitted to be
made by the Trust or the Corporation, as the case may be, and the respective
Trustee thereunder without the consent of any holder of Debt Securities for any
of the following purposes: (i) to evidence the succession of another person to
the Trust, or the Corporation, as the case may be, as obligor under such
Indenture; (ii) to add to the covenants of the Trust or the Corporation, as the
case may be, for the benefit of the holders of all or any series of Debt
Securities or to surrender any right or power conferred upon the Trust or the
Corporation, as the case may be, in such 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 an 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 an Indenture, provided that any such change or
elimination
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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, including the provisions and
procedures, if applicable, for the conversion of such Debt Securities into
Paired Common Shares or Preferred Shares of the Company; (viii) to provide for
the acceptance of appointment by a successor Trustee or facilitate the
administration of the trusts under the Indenture by more than one Trustee; (ix)
to cure any ambiguity, defect or inconsistency in an Indenture, provided that
such action shall not adversely affect the interests of holders of Debt
Securities of any series in any material respect; or (x) to supplement any of
the provisions of an Indenture to the extent necessary to permit or facilitate
defeasance and discharge of any series of such Debt Securities or of any
applicable guarantees, provided that such action shall not adversely affect the
interests of the holders of the Debt Securities of any series in any material
respect.
Each Indenture will provide 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 United States 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 United States 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 such indenture, and (iv) Debt Securities owned by the
Trust, the Corporation or any other obligor upon the Debt Securities or any
affiliate of the Trust, the Corporation or of such other obligor shall be
disregarded.
Each Indenture will contain provisions for convening meetings of the
holders of Debt Securities of a series. A meeting will be permitted to be
called at any time by the Trustee, and also, upon request, by the Trust, the
Corporation, or other obligor of such Debt Securities 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 such Indenture.
Except for any consent that must be given by the holder of each Debt Security
affected by certain modifications and amendments of an Indenture, any
resolution presented at a meeting or adjourned meeting duly reconvened at which
a quorum is present will be permitted to 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 of any series duly held in accordance with an 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.
Notwithstanding the foregoing provisions, any Indenture will provide
that 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 such 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
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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 such Indenture.
SUBORDINATION
Upon any distribution to creditors of the Trust or the Corporation, as
the case may be, in a liquidation, dissolution or reorganization, the payment
of the principal of and interest on any Subordinated Securities will be
subordinated to the extent provided in the applicable Indenture in right of
payment to the prior payment in full of all Senior Debt (as defined below), but
the obligation of the Trust or the Corporation, as the case may be, to make
payment of the principal and interest on such Subordinated Securities will not
otherwise be affected. No payment of principal or interest will be permitted
to be made on Subordinated Securities at any time if a default on Senior Debt
exists that permits the holders of such Senior Debt to accelerate its maturity
and the default is the subject of judicial proceedings or the Trust or the
Corporation, as the case may be, receives notice of the default. By reason of
such subordination, in the event of a distribution of assets upon insolvency,
certain general creditors of the Trust or the Corporation, as the case may be,
may recover more, ratably, than holders of Subordinated Securities.
Unless otherwise specified in the applicable Prospectus Supplement,
Senior Debt will be defined in the applicable Indenture as the principal of and
interest on, or substantially similar payments to be made by the Trust or the
Corporation, as the case may be, in respect of, the following, whether
outstanding at the date of execution of the applicable indenture or thereafter
incurred, created or assumed: (a) indebtedness of the Trust or the Corporation,
as the case may be, for money borrowed or represented by purchase-money
obligations, (b) indebtedness of the Trust or the Corporation, as the case may
be, evidenced by notes, debentures, or bonds, or other securities issued under
the provisions of an indenture, fiscal agency agreement or other agreement, (c)
obligations of the Trust or the Corporation, as the case may be, as lessee
under leases of property either made as part of any sale and leaseback
transaction to which the Trust or the Corporation, as the case may be, is a
party or otherwise, (d) indebtedness of partnerships and joint ventures which
is included in the consolidated financial statements of the Company, (e)
indebtedness, obligations and liabilities of others in respect of which the
Trust or the Corporation, as the case may be, is liable contingently or
otherwise to pay or advance money or property or as guarantor, endorser or
otherwise or which the Trust or the Corporation, as the case may be, has agreed
to purchase or otherwise acquire, and (f) any binding commitment of the Trust
or the Corporation, as the case may be, to fund any real estate investment or
to fund any investment in any entity making such real estate investment, in
each case other than (1) any such indebtedness, obligation or liability
referred to in clauses (a) through (f) above as to which, in the instrument
creating or evidencing the same or pursuant to which the same is outstanding,
it is expressly provided that such indebtedness, obligation or liability is not
superior in right of payment to the subordinated Securities or ranks pari passu
with the Subordinated Securities, (2) any such indebtedness, obligation or
liability which is subordinated to indebtedness of the Trust or the
Corporation, as the case may be, to substantially the same extent as or to a
greater extent than the Subordinated Securities are subordinated, and (3) the
Subordinated Securities. There will not be any restrictions in an Indenture
relating to Subordinated Securities upon the creation of additional Senior
Debt.
If this Prospectus is being delivered in connection with a series of
Subordinated Securities, the accompanying Prospectus Supplement or the
information incorporated herein by reference will set forth the approximate
amount of Senior Debt outstanding as of the end of the most recent fiscal
quarter of the Trust or Corporation, as the case may be.
DISCHARGE, DEFEASANCE AND COVENANT DEFEASANCE
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The Trust or the Corporation, as the case may be, may be permitted
under the applicable Indenture to discharge certain obligations to holders of
any series of Debt Securities that have not already been delivered to the
Trustee for cancellation and that either have become due and payable or will
become due and payable within one year (or scheduled for redemption within one
year) by irrevocably depositing with the Trustee, in trust, funds in such
currency or currencies, currency unit or units or composite currency or
currencies in which such Debt Securities are payable in an amount sufficient to
pay the entire indebtedness on such Debt Securities in respect of principal
(and premium, if any) and interest 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.
An Indenture may provide that, if certain provisions thereof are made
applicable to the Debt Securities of or within any series pursuant to such
Indenture, each of the Trust or the Corporation, as the case may be, 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") or (b) to be released from its
obligations with respect to such Debt Securities under certain sections, of
such Indenture (including the restrictions described under "Certain Covenants")
and, if provided pursuant to such 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"), in either case upon the irrevocable deposit
by the Trust or the Corporation, as the case may be, with the Trustee, in
trust, of an amount, in such currency or currencies, currency unit or units or
composite currency or currencies in which such Debt Securities are payable at
stated maturity, or Government 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, if any) and interest on
such Debt Securities, and any mandatory sinking fund or analogous payments
thereon, an the scheduled due dates therefor.
Such a trust will only be permitted to be established if, among other
things, the Trust or the Corporation, as the case may be, has delivered to the
Trustee an opinion of counsel (as specified in the applicable indenture) to the
effect that the holders of such Debt Securities will not recognize income, gain
or loss for United States federal income tax purposes as a result of such
defeasance or covenant defeasance and will be subject to United States federal
income tax on the same amounts, in the same manner and at the same times as
would have been the case if 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 (the "IRS") or a
change in applicable United States federal income tax law occurring after the
date of the applicable Indenture.
"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.
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Unless otherwise provided in the applicable Prospectus Supplement, if
after the Trust or the Corporation, as the case may be, 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 the applicable 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, 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 Conversion Event based on the applicable
market exchange rate. "Conversion Event" means the cessation of use of (i) a
currency, currency unit or composite currency both by the government of the
country which issued such currency and for the settlement of transactions by a
central bank or other public institution 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
Community or (iii) any currency unit or composite currency other than the ECU
for the purposes for which it was established. Unless otherwise provided in
the applicable Prospectus Supplement, all payments of principal of (and
premium, if any) and interest on any Debt Security that is payable in a foreign
currency that ceases to be used by its government of issuance shall be made in
United States dollars.
In the event the Trust or the Corporation, as the case may be, 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 specified sections of
the Indenture (which sections would no longer be applicable to such Debt
Securities) or described in clause (g) under "Events of Default, Notice and
Waiver" with respect to any other covenant as to which there had 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 applicable Trustee, will be sufficient to pay amounts due on such Debt
Securities at the time of their stated maturity but may not be sufficient to
pay amounts due on such Debt Securities at the time of the acceleration
resulting from such Event of Default. However, the Trust or the Corporation,
as the case may be, 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 any series of Debt
Securities is convertible into Paired Common Shares or Preferred Shares will be
set forth in the applicable Prospectus Supplement relating thereto. Such terms
will include whether such Debt Securities are convertible into Paired Common
Shares or Preferred Shares, 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 the Trust or the Corporation, as the case may be,
the events requiring an adjustment of the conversion price and provisions
affecting conversion in the event of the redemption of such series of Debt
Securities and any restrictions on conversion, including restrictions directed
at maintaining the Trust's REIT status.
GLOBAL SECURITIES
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The Debt Securities of a series may be issued in whole or in part in
the form of one or more global securities (the "Global Securities") that will
be deposited with, or on behalf of, a depositary ("the "Depositary") identified
in the applicable Prospectus Supplement relating to such series. Global
Securities may be issued in either registered or bearer form and in either
temporary or permanent form. The specific terms of the depositary arrangement
with respect to a series of Debt Securities will be described in the applicable
Prospectus Supplement relating to such series.
DESCRIPTION OF CAPITAL STOCK
GENERAL
The Declaration of Trust authorizes the Trust to issue 135 million
shares of beneficial interests in the Trust, including (i) 100 million Trust
Shares, with a par value of $0.01 per share, (ii) 20 million excess trust
shares, with a par value of $0.01 per share ("Excess Common Trust Shares") and
(iii) 5 million excess Preferred Shares, with a par value of $0.01 per share
("Excess Preferred Trust Shares" and, together with the Excess Common Trust
Shares, the "Excess Trust Shares"). The Declaration of Trust grants the Board
of Trustees the power to create and authorize the issuance of up to 110 million
shares (less any Trust Shares) of preferred shares ("Trust Preferred Shares")
in one or more classes or series, having such voting rights, such rights to
dividends and distribution and rights in liquidation, such conversion, exchange
and redemption rights and such designations, preferences and participations and
other limitations and restrictions as are not prohibited by the Declaration of
Trust or applicable law and as are specified by the Board of Trustees in its
discretion. As of September 30, 1995, the Board of Trustees had not created or
authorized any class or series of Trust Preferred Shares and no Excess Trust
Shares were outstanding.
The Articles of Incorporation authorize the Corporation to issue 135
million shares, consisting of (i) 10 million shares of preferred stock, with a
par value of $0.01 per share ("Corporation Preferred Shares"), (ii) 100 million
Corporation Shares, (iii) 20 million shares of excess common stock, with a par
value of $0.01 per share ("Excess Corporation Common Stock"), and (iv) 5
million shares of excess preferred stock, with a par value of $0.01 per share
("Excess Corporation Preferred Stock" and, together with the Excess Corporation
Common Stock, the "Excess Corporation Stock"). The Corporation Preferred
Shares are issuable in classes or series with such rights, preferences,
privileges and restrictions as the Board of Directors may determine, including
voting rights, redemption provisions, dividend rates, liquidation preferences
and conversion rights. As of September 30, 1995, no such class or series of
Corporation Preferred Shares had been established and no Excess Corporation
Stock was outstanding.
As of September 30, 1995 there were 13,809,658 Paired Common Shares
outstanding. Each outstanding Paired Common Share entitles the holder to one
vote on all matters presented to shareholders for a vote. The Trust and the
Corporation have reserved for issuance 5,943,578 Paired Common Shares upon
exchange of units of partnership interest ("Units") of the Realty Partnership
and the Operating Partnership currently held by Starwood Capital.
PREEMPTIVE RIGHTS
Holders of Trust Shares and Corporation Shares do not have preemptive
rights with respect to the issuance of additional shares. Accordingly, any
issuance of authorized but unissued shares could have the effect of diluting
the earnings per share and book value per share of currently outstanding
shares.
DESCRIPTION OF PREFERRED SHARES
The following description of the Preferred Shares sets forth certain
general terms and provisions of the Preferred Shares to which any Prospectus
Supplement may relate. The statements below describing the Preferred Shares
are in all respects subject to and qualified in their entirety by reference to
the applicable provisions of the
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Declaration of Trust and the Articles of Incorporation and any applicable
amendment to the Declaration of Trust or the Articles of Incorporation
designating terms of a series of Preferred Shares (a "Designating Amendment").
The Trust may authorize and issue Trust Preferred Shares without the
issuance by the Corporation of corresponding shares, and the Corporation may
authorize and issue Corporation Preferred Shares without the issuance by the
Trust of corresponding shares. Furthermore, the Pairing Agreement does not
limit the power of the Boards of the Trust and the Corporation to independently
determine the rights, preferences and restrictions of such shares. However, if
either the Trust or the Corporation were to issue Preferred Shares for which the
other entity did not issue corresponding (i.e., paired) shares in such an amount
that greater than 50% of such entity's beneficial equity interests were
represented by such unpaired Preferred Shares, then the Trust and the
Corporation could lose their status as "grandfathered" from the application of
Section 269B of the Internal Revenue Code of 1986 as amended (the "Code") and
jeopardize the Trust's ability to qualify as a REIT. Neither the Trust nor the
Corporation intends to issue unpaired Preferred Shares in excess of such
limitation.
TERMS
Subject to the limitations prescribed by the Declaration of Trust and
the Articles of Incorporation, respectively, each of the Board of Trustees and
the Board of Directors is authorized to fix the number of shares constituting
each series of Preferred Shares and the designations and powers, preferences
and relative, participating, optional or other special rights and
qualifications, limitations or restrictions thereof, including such provisions
as may be desired concerning voting, redemption, dividends, dissolution or the
distribution of assets, conversion or exchange, and such other subjects or
matters as may be fixed by resolution of the Board of Trustees and the Board of
Directors. The Preferred Shares will, when issued, be fully paid and
nonassessable by the Trust or the Corporation, as the case may be, (except as
described under "--Shareholder Liability" below) and will have no preemptive
rights.
Reference is made to the Prospectus Supplement relating to the
Preferred Shares offered thereby for specific terms, including:
(1) The title and stated value of such Preferred Shares and
whether such Preferred Shares are paired;
(2) The number of shares of such Preferred Shares offered, the
liquidation preference per share and the offering price of
such Preferred Shares;
(3) The dividend rate(s), periodic 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
accumulate, 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 Paired Common
Shares, including the conversion price (or manner of
calculation thereof);
(10) Whether interests in such Preferred Shares will be represented
by Depositary Shares;
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(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 the Trust or the Corporation,
respectively;
(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 the Trust or the
Corporation, respectively; and
(15) Any limitations on direct or beneficial ownership and
restrictions on transfer, in each case as may be appropriate
to preserve the status of the Trust as a REIT.
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 the Trust or the Corporation, respectively, rank
(i) senior to all classes or series of Paired Common Shares, and to all equity
securities ranking junior to such Preferred Shares; (ii) on a parity with all
equity securities issued by the Trust or the Corporation, respectively, the
terms of which specifically provide that such equity securities rank on a
parity with the Preferred Shares; and (iii) junior to all equity securities
issued by the Trust or the Corporation, respectively, the terms of which
specifically provide that such equity securities rank senior to the Preferred
Shares. The term "equity securities" does not include convertible debt
securities.
DIVIDENDS
Holders of the Preferred Shares of each series will be entitled to
receive, when, as and if declared by the Board of Trustees or the Board of
Directors, as the case may be, out of the respective assets of the Trust and
the Corporation legally available for payment, cash dividends at such rates and
on such dates as will be set forth in the applicable Prospectus Supplement.
Each such dividend shall be payable to holders of record us they appear on the
share transfer books of the Trust or the Corporation, as the case may be, on
such record dates as shall be fixed by the Board of Trustees or the Board of
Directors.
Dividends on any series of the Preferred Shares may be cumulative or
noncumulative, 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 or the Board of
Directors fails to declare a dividend payable on a dividend payment date on any
series of the Preferred Shares for which dividends are non-cumulative, then the
holders of such series of the Preferred Shares will have no right to receive a
dividend in respect of the dividend period ending on such dividend payment
date, and the Trust or the Corporation, as the case may be, will have no
obligation to pay the dividend accrued for such period, whether or not
dividends on such series are declared payable on any future dividend payment
date.
If Preferred Shares of any series are outstanding, no dividends will
be declared or paid or set apart for payment on any capital stock of the Trust
or the Corporation, as the case may be, 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
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have been or contemporaneously are declared and paid or declared and a sum
sufficient for the payment thereof set apart for such payment on the Preferred
Shares of such series. When dividends are not paid in full (or a sum
sufficient for such full payment is not so set apart) upon Preferred Shares of
any series and the shares of any other series of Preferred Shares ranking on a
parity as to dividends with the Preferred Shares of such series, 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 of
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
accumulation in respect of unpaid dividends for prior dividend periods if such
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 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 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 of Paired Common Shares or
other capital shares ranking junior to the Preferred Shares of such series as
to dividends and upon liquidation) shall be declared or paid or set aside for
payment or other distribution shall be declared or made upon the Paired Common
Shares, or any other capital shares of the Trust or the Corporation, as the
case may be, ranking junior to or on a parity with the Preferred Shares of such
series as to dividends or upon liquidation, nor shall any shares of Paired
Common Shares, or any other capital shares of the Trust or the Corporation, as
the case may be, 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 the
Trust or the Corporation, as the case may be, except by conversion into or
exchange for other capital shares of the Trust or the Corporation, as the case
may be, ranking junior to the Preferred Shares of such series as to dividends
and upon liquidation).
REDEMPTION
If so provided in the applicable Prospectus Supplement, the Preferred
Shares will be subject to mandatory redemption or redemption at the option of
the Trust or the Corporation, as the case may be, 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 shares of
such Preferred Shares that shall be redeemed by the Trust or the Corporation,
as the case may be, 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 accumulation in respect
of unpaid dividends for prior dividend periods) to the date of redemption. The
redemption price may be payable in cash or other property, as specified in the
applicable Prospectus Supplement. If the redemption price for Preferred Shares
of any series is payable only from the net proceeds of the issuance of capital
shares of the Trust or the Corporation, as the case may be, the terms of such
Preferred Shares may provide that, if no such capital shares shall have been
issued or to the extent the net proceeds from any issuance are insufficient to
pay in full the aggregate redemption price then due, such Preferred Shares
shall automatically and mandatorily be converted into the applicable capital
shares of the Trust or the Corporation, as the case may be, pursuant to
conversion provisions specified in the applicable Prospectus Supplement.
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Notwithstanding the foregoing, unless (i) if such series of Preferred
Shares has a cumulative dividend, full cumulative dividends on all shares of
any series of Preferred Shares shall have been or contemporaneously are
declared and paid or declared and a sum sufficient for the payment thereof set
apart for payment for all past dividend periods and the then current dividend
period, and (ii) if such series of Preferred Shares does not have a cumulative
dividend, full dividends of the Preferred Shares of any series have been or
contemporaneously are declared and paid or declared and a sum sufficient for
the payment thereof set apart for payment for the then current dividend period,
no shares of any series of Preferred Shares shall be redeemed unless all
outstanding Preferred Shares of such series is simultaneously redeemed;
provided, however, that the foregoing shall not prevent the purchase or
acquisition of Preferred Shares of such series to preserve the REIT status of
the Trust or pursuant to a purchase or exchange offer made on the same terms to
holders of all outstanding Preferred Shares of such series. In addition,
unless (i) if such series of Preferred Shares has a cumulative dividend, full
cumulative dividends on all outstanding shares of any series of Preferred
Shares 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
dividends 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 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, the Trust or the Corporation, as
the case may be, shall not purchase or otherwise acquire directly or indirectly
any shares of Preferred Shares of such series (except by conversion into or
exchange for capital shares of the Trust or the Corporation, as the case may
be, ranking junior to the Preferred Shares of such series as to dividends and
upon liquidation); provided, however, that the foregoing shall not prevent the
purchase or acquisition of Preferred Shares of such series to preserve the REIT
status of the Trust or pursuant to a purchase or exchange offer made on the
same terms to holders of all outstanding Preferred Shares of such series.
If fewer than all of the outstanding shares of Preferred Shares of any
series are to be redeemed, the number of shares to be redeemed will be
determined by the Trust or the Corporation, as the case may be, and such shares
may be redeemed pro rata from the holders of record of such shares in
proportion to the number of such shares held or for which redemption is
requested by such holder (with adjustments to avoid redemption of fractional
shares) or by lot in a manner determined by the Trust or the Corporation, as
the case may be.
Notice of redemption will be mailed at least 30 days but not more than
60 days before the redemption date to each holder of record of Preferred Shares
of any series to be redeemed at the address shown on the share transfer books
of the Trust or the Corporation, as the case may be. 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 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 shares shall terminate, if fewer
than all the shares of Preferred Shares of any series are to be redeemed, the
notice mailed to each such holder thereof shall also specify the number of
shares 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 the Trust or the Corporation, as the
case may be, 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 the Trust or the Corporation, as the case may be, then,
before any distribution or payment shall be made to the holders of any Paired
Common Shares or any other class or series of capital shares of the Trust or
the Corporation, as the case may be, ranking junior to the Preferred Shares in
the distribution of assets upon any liquidation, dissolution or winding up of
the Trust or the Corporation, as the case may be, the holders of each series of
Preferred Shares shall
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be entitled to receive out of assets of the Trust or the Corporation, as the
case may be, legally available for distribution to shareholders liquidating
distributions in the amount of the liquidation preference per share (set forth
in the applicable Prospectus Supplement), plus an amount equal to all dividends
accrued and unpaid thereon (which shall not include any accumulation in respect
of unpaid dividends for prior dividend periods if such Preferred Shares do not
have a cumulative dividend). After payment of the full amount of the
liquidating distributions to which they are entitled, the holders of Preferred
Shares will have no right or claim to any of the remaining assets of the Trust
or the Corporation, as the case may be. In the event that, upon any such
voluntary or involuntary liquidation, dissolution or winding up, the available
assets of the Trust or the Corporation, as the case may be, are insufficient to
pay the amount of the liquidating distributions on all outstanding Preferred
Shares and the corresponding amounts payable on all shares of other classes or
series of capital shares of the Trust or the Corporation, as the case may be,
ranking on a parity with the Preferred Shares in the distribution of assets,
then the holders of the Preferred Shares and all other such classes or series
of capital shares shall share ratably in any such distribution of assets in
proportion to the full liquidating distributions to which they would otherwise
be respectively entitled.
If liquidating distributions shall have been made in full to all
holders of Preferred Shares, the remaining assets of the Trust or the
Corporation, as the case may be, shall be distributed among the holders of any
other classes or series of capital shares ranking junior to the Preferred
Shares upon liquidation, dissolution or winding up, according to their
respective rights and preferences and in each case according to their
respective number of shares. For such purposes, the consolidation or merger of
the Trust or the Corporation, as the case may be, with or into any other
corporation, trust or entity, or the sale, lease or conveyance of all or
substantially all of the property or business of the Trust or the Corporation,
as the case may be, shall not be deemed to constitute a liquidation,
dissolution or winding up of the Trust or the Corporation, as the case may be.
VOTING RIGHTS
Holders of the Preferred Shares will not have any voting rights,
except as set forth below or as otherwise from time to time required by law or
as indicated in the applicable Prospectus Supplement.
Whenever dividends on any shares of Preferred Shares shall be in
arrears for six or more consecutive quarterly periods, the holders of such
shares of Preferred Shares (voting separately as a class with all other series
of preferred stock upon which like voting rights have been conferred and are
exercisable) will be entitled to vote for the election of two additional
trustees or directors of the Trust or the Corporation, as the case may be, at a
special meeting called by the holders of record of at least ten percent (10%)
of any series of Preferred Shares so in arrears (unless such request is
received less than 90 days before the date fixed for the next annual or special
meeting of the shareholders) or at the next annual meeting of stockholders.
Directors so elected shall serve until the next annual meeting or until their
respective successors are elected and qualify, or if sooner until all dividends
in arrears have been fully paid or declared and a sum sufficient for the
payment thereof set aside for payment. In such case, the entire board of the
Trust or the Corporation, as the case may be, will be increased by two
trustees or directors.
Unless provided otherwise for any series of Preferred Shares, so long
as any shares of Preferred Shares remain outstanding, the Trust or the
Corporation, as the case may be, will not, without the affirmative vote or
consent of the holders of at least two-thirds of the shares of each series of
Preferred Shares outstanding at the time, given in person or by proxy, either
in writing or at a meeting (such series voting separately as a class), (i)
authorize or create, or increase the authorized or issued amount of any class
or series of capital stock ranking prior to such series of Preferred Shares
with respect to payment of dividends or the distribution of assets upon
liquidation, dissolution or winding up or reclassify any authorized capital
stock of the Trust or the Corporation, as the case may be, into such shares,
or create, authorize or issue any obligation or security convertible into or
evidencing the right to purchase any such shares; or (ii) amend, alter or
repeal the provisions of the Declaration of Trust or the Articles of
Incorporation or the Designating Amendment for such series of Preferred Shares,
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whether by merger, consolidation or otherwise (an "Event"), so as to materially
and adversely affect any right, preference, privilege or voting power of such
series of Preferred Shares or the holders thereof; provided, however, with
respect to the occurrence of any of the Events set forth in (ii) above, so long
as the Preferred Shares remain outstanding with the terms thereof materially
unchanged, taking into account that upon the occurrence of an Event, the Trust
or the Corporation, as the case may be, may not be the surviving entity, the
occurrence of any such Event shall not be deemed to materially and adversely
affect such rights, preferences, privileges or voting power of holders of
Preferred Shares and provided further that (x) any increase in the amount of
the authorized Preferred Shares or the creation or issuance of any other series
of Preferred Shares, or (y) any increase in the amount of authorized shares of
such series or any other series of Preferred Shares, in each case ranking on a
parity with or junior to the Preferred Shares of such series with respect to
payment of dividends or the distribution of assets upon liquidation,
dissolution or winding up shall not be deemed to materially and adversely
affect such rights, preferences, privileges or voting powers.
The foregoing voting provisions will not apply if, at or prior to the
time when the act with respect to which such vote would otherwise be required
shall be effected, all outstanding shares of such series of Preferred Shares
shall have been redeemed or called for redemption and sufficient funds shall
have been deposited in trust to effect such redemption.
CONVERSION RIGHTS
The terms and conditions, if any, upon which any series of Preferred
Shares is convertible into Paired Common Shares will be set forth in the
applicable Prospectus Supplement relating thereto. Such terms will include the
number of Paired Common Shares into which the shares of 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 or the Trust or the Corporation, as the case may be, the events
requiring an adjustment of the conversion price and provisions affecting
conversion in the event of the redemption of such series of Preferred Shares
and any restrictions on conversion, including restrictions directed at
maintaining the Trust's REIT status.
OWNERSHIP LIMITS; RESTRICTIONS ON TRANSFER; REPURCHASE AND REDEMPTION OF SHARES
As discussed below under "Description of Paired Common
Shares--Ownership Limits; Restrictions on Transfer; Repurchase and Redemption of
Shares," for the Trust to qualify as a REIT under the Code, the Trust must meet
several requirements concerning the ownership of its shares. To assist the
Trust in meeting this requirement, the Trust may take certain actions to limit
the beneficial ownership, directly or indirectly, by a single person of the
Trust's outstanding equity securities, including any Preferred Shares of the
Trust. Therefore, the Designating Amendment for each series of Preferred Shares
may contain provisions restricting the ownership and transfer of the Preferred
Shares. The applicable Prospectus Supplement will specify any additional
ownership limitation relating to a series of Preferred Shares.
REGISTRAR AND TRANSFER AGENT
The Registrar and Transfer Agent for the Preferred Shares will be set
forth in the applicable Prospectus Supplement.
DESCRIPTION OF PAIRED COMMON SHARES
GENERAL
All Paired Common Shares offered hereby will be duly authorized, fully
paid and nonassessable. Subject to the preferential rights of any other shares
or series of shares of beneficial interest and to the provisions of the
Declaration of Trust regarding Excess Trust Shares and the Articles of
Incorporation regarding Excess Corporation
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Stock, holders of Paired Common Shares will be entitled to receive dividends
if, as and when authorized and declared by the Board of Trustees or the Board
of Directors, as the case may be, out of assets legally available therefor and
to share ratably in the assets of the Trust or the Corporation legally
available for distribution to its shareholders in the event of its liquidation,
dissolution or winding-up after payment of, or adequate provision for, all
known debts and liabilities of the Trust or the Corporation.
The Paired Common Shares currently outstanding are listed for trading
on the New York Stock Exchange (the "NYSE"). The Trust and the Corporation
will apply to the NYSE to list the additional Paired Common Shares to be sold
pursuant to any Prospectus Supplement, and the Trust and the Corporation
anticipate that such shares will be so listed.
Subject to the provisions of the Declaration of Trust regarding Excess
Trust Shares and the Articles of Incorporation regarding Excess Corporation
Stock, each outstanding Paired Common Share entitles the holder to one vote on
all matters submitted to a vote of shareholders, including the election of
trustees or directors, and, except as otherwise required by law or except as
provided with respect to any other class or series of shares of beneficial
interest, the holders of such Paired Common Shares will possess the exclusive
voting power. There is no cumulative voting in the election of trustees or
directors, which means that the holders of a majority of the outstanding Paired
Common Shares can elect all of the trustees or directors then standing before
election and the holders of the remaining shares of beneficial interest, if
any, will not be able to elect any trustees or directors.
Holders of Paired Common Shares have no conversion, sinking fund,
redemption or preemptive rights to subscribe for any securities of the Trust of
the Corporation, as the case may be.
Subject to the provisions of the Declaration of Trust regarding Excess
Shares and the Articles of Incorporation regarding Excess Corporation Stock,
Paired Common Shares will have equal dividend, distribution, liquidation and
other rights, and will have no preference, exchange, or except as expressly
required by the Maryland statute governing real estate investment trusts formed
under Maryland law (the "Maryland REIT Law") and the Maryland General
Corporation Law, as amended (the "MGCL"), appraisal rights.
THE PAIRING AGREEMENT
The Trust and the Corporation have entered into an agreement dated
June 25, 1980, as amended (the "Pairing Agreement") pursuant to which all
outstanding Trust Shares and Corporation Shares are "paired" on a one-for-one
basis. The following is a summary of certain provisions of the Pairing
Agreement. This summary does not purport to be complete and is qualified in
its entirety by reference to the text of the Pairing Agreement, a copy of which
is incorporated by reference as an exhibit to the Registration Statement.
Transfer of Paired Common Shares. Under the Pairing Agreement, Trust
Shares are transferable only together with an equal number of Corporation
Shares, and Corporation Shares are transferable only together with an equal
number of Trust Shares. Certificates evidencing Trust Shares and Corporation
Shares are required by the Pairing Agreement to include a reference to this
transfer restriction. The Declaration of Trust and the Articles of
Incorporation contain similar restrictions on the transfer of Trust Shares and
Corporation Shares, as well as other restrictions on the transfer and ownership
of Trust Shares and Corporation Shares. The Pairing Agreement also provides
that any Excess Trust Shares and any Excess Corporation Stock which may be
issued will be paired in the same manner as the Trust Shares and Corporation
Shares are paired.
Issuance of Shares. Under the Pairing Agreement, the Trust may not
issue Trust Shares and the Corporation may not issue Corporation Shares unless
provision is made for the acquisition by the same person of the same number of
shares of the other entity. The Trust and the Corporation must agree on the
manner and basis of allocating the consideration to be received upon such
issuance, or on the payment by one entity to the other of
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cash or other consideration in lieu of a portion of the consideration to be
received upon issuance of such Paired Common Shares.
Share Dividends, Reclassifications and other Similar Events. Neither
the Trust nor the Corporation may declare or pay any dividend or other
distribution payable in Trust Shares or Corporation Shares, issue any rights or
warrants to purchase Trust Shares or Corporation Shares, or subdivide, combine
or otherwise reclassify such shares, unless the other entity concurrently takes
the same action.
Amendment and Termination. The Pairing Agreement may be amended by
the Board of Trustees and the Board of Directors, provided that an amendment
permitting the separate issuance and transfer of Trust Shares and Corporation
Shares must be approved by a majority of each of the outstanding Trust Shares
and the outstanding Corporation Shares. The Pairing Agreement may be
terminated only with the affirmative vote of the holders of a majority of each
of the outstanding Trust Shares and the outstanding Corporation Shares. Upon
such termination, the Trust Shares and the Corporation Shares could be delisted
by the NYSE if the Trust and the Corporation, respectively, did not as separate
entities then meet the listing requirements of such Exchange.
Preferred Shares. The Trust may authorize and issue other classes or
series of shares of beneficial interest in addition to the Trust Shares without
the issuance by the Corporation of corresponding shares, and the Corporation
may authorize and issue shares of Corporation Preferred Stock without the
issuance by the Trust of corresponding shares. Furthermore, the Pairing
Agreement does not limit the power of the Boards of the Trust and the
Corporation to independently determine the rights, preferences and restrictions
of such shares.
MARYLAND TAKEOVER LEGISLATION
Under the MGCL, certain "business combinations" (including mergers,
consolidations, share exchanges, or, in certain circumstances, asset transfers
or issuances or reclassifications of equity securities) between a Maryland
corporation or a Maryland real estate investment trust and any person who
beneficially owns 10% or more of the voting power of the corporation's or
trust's shares or an affiliate of the corporation or trust who, at any time
within the two-year period prior to the date in question, was the beneficial
owner of 10% or more of the voting power of the then-outstanding voting shares
of the corporation or trust (an "Interested Stockholder") or an affiliate
thereof, are prohibited or restricted unless exempted. The Company has
exempted all "business combinations" involving any party from the business
combination provisions of the MGCL.
Under Maryland law, under certain circumstances "control shares" of a
Maryland corporation or a Maryland real estate investment trust acquired in a
"control share acquisition" may have no voting rights. The Company has
exempted all control share acquisitions involving any person from the MGCL.
OWNERSHIP LIMITS; RESTRICTIONS ON TRANSFER; REPURCHASE AND REDEMPTION OF SHARES
The Declaration of Trust and the Articles of Incorporation provide
that, subject to certain exceptions specified in the Declaration of Trust and
the Articles of Incorporation, no shareholder may own, or be deemed to own by
virtue of the attribution provisions of the Code, more than 8.0% of the capital
stock, whether measured by vote, value or number of Paired Common Shares (other
than for shareholders who owned in excess of 8.0% as of the date the
Reorganization closed, who may not so own or be deemed to own more than the
lesser of 9.9% or the number of Paired Common Shares they held on such date) of
the outstanding Paired Common Shares or Preferred Shares which may be issued,
or any combination thereof. The Board of Trustees and the Board of Directors
may waive the Ownership Limitation if evidence satisfactory to the Board of
Trustees and the Board of Directors and the tax counsel to the Trust and the
Corporation is presented that such ownership will not jeopardize the Trust's
status as a REIT. As a condition of such waiver, each of the Board of Trustees
and the Board of Directors may require opinions of counsel satisfactory to it
and/or an undertaking from the applicant with respect to preserving the REIT
status of the Trust. If shares which would cause the Trust to be beneficially
owned by
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fewer than 100 persons are issued or transferred to any person, such issuance
or transfer shall be null and void and the intended transferee will acquire no
rights to the stock. Any acquisition of capital stock of the Trust or the
Corporation and continued holding or ownership of capital stock of the Trust or
the Corporation constitutes, under the Declaration of Trust and the Articles of
Incorporation, a continuous representation of compliance with the Ownership
Limitation.
In the event of a purported transfer or other event that would, if
effective, result in the ownership of Paired Common Shares or Preferred Shares
in violation of the Ownership Limitation, such transfer with respect to that
number of shares that would be owned by the transferee in excess of the
Ownership Limitation would be deemed void ab initio and such Paired Common
Shares or Preferred Shares would automatically be exchanged for Excess Shares
or Excess Preferred Stock, respectively (collectively, "Excess Stock"),
authorized by the Declaration of Trust and the Articles of Incorporation,
according to rules set forth in the Declaration of Trust and the Articles of
Incorporation, to the extent necessary to ensure that the purported transfer or
other event does not result in ownership of Paired Common Shares or Preferred
Shares or Excess Stock in violation of the Ownership Limitation. Any purported
transferee or other purported holder of Excess Stock is required to give
written notice to the Trust and the Corporation of a purported transfer or
other event that would result in the issuance of Excess Stock.
Any Excess Trust Shares and Excess Corporation Stock which may be
issued will be "paired" in the same manner that the Trust Shares and the
Corporation Shares are currently paired. Excess Stock is not Treasury stock
but rather continues as issued and outstanding capital stock of the Trust and
the Corporation. While outstanding, Excess Stock will be held in trust. The
trustees of such trusts shall be appointed by the Trust and the Corporation and
shall be independent of the Trust, the Corporation and the holder of Excess
Stock. The beneficiary of such trust shall be one or more charitable
organizations selected by the trustee. If, after the purported transfer or
other event resulting in an exchange of Paired Common Shares or Preferred
Shares for Excess Stock and prior to the discovery by the Trust and the
Corporation of such exchange, dividends or distributions are paid with respect
to the Paired Common Shares or Preferred Shares that were exchanged for Excess
Stock, then such dividends or distributions are to be repaid to the trustee
upon demand for payment to the charitable beneficiary. While Excess Stock is
held in trust, an interest in that trust may be transferred by the trustee only
to a person whose ownership of Paired Common Shares or Preferred Shares will
not violate the Ownership Limitation, at which time the Excess Stock will be
automatically exchanged for the same number of Paired Common Shares or
Preferred Shares of the same type and class as the Paired Common Shares or
Preferred Shares for which the Excess Stock was originally exchanged. The
Declaration of Trust and the Articles of Incorporation contain provisions that
are designed to ensure that the purported transferee or other purported holder
of the Excess Stock may not receive in return for such a transfer an amount
that reflects any appreciation in the Paired Common Shares or Preferred Shares
for which such Excess Stock was exchanged during the period that such Excess
Stock was outstanding. Any amount received by a purported transferee or other
purported holder in excess of the amount permitted to be received must be
turned over to the charitable beneficiary of the trust. If the foregoing
restrictions are determined to be void or invalid by virtue of any legal
decision, statute, rule or regulation, then the intended transferee or holder
of any Excess Stock may be deemed, at the option of the Trust and the
Corporation, to have acted as an agent on behalf of the Trust and the
Corporation in acquiring or holding such Excess Stock and to hold such Excess
Stock on behalf of the Trust and the Corporation.
The Declaration of Trust and the Articles of Incorporation further
provide that the Trust and the Corporation may purchase, for a period of 90
days during the time the Excess Stock is held in trust, all or any portion of
the Excess Stock from the original transferee-shareholder at the lesser of the
price paid for the Paired Common Shares or Preferred Shares by the purported
transferee (or if no notice of such purchase price is given, at a price to be
determined by the Board of Trustees and the Board of Directors, in their sole
discretion, but no lower than the lowest market price of such stock (based on
the market price of the Paired Common Shares or Preferred Shares) at any time
during the period in which the Excess Stock is held in trust) and the closing
market price for the Paired Common Shares or Preferred Shares on the date the
Trust and the Corporation exercise their
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option to purchase. The 90-day period begins on the date of the violative
transfer if the original transferee-shareholder gives notice to the Trust and
the Corporation of the transfer or (if no notice is given) the date the Board
of Trustees and the Board of Directors determine that a violative transfer has
been made.
The Ownership Limitation will not be removed automatically even if the
REIT provisions of the Code are changed so as to no longer contain any
ownership concentration limitation or if the ownership concentration limitation
is increased. Except as otherwise described above, any change in the Ownership
Limitation would require an amendment to the Declaration of Trust and the
Articles of Incorporation. Amendments to the Declaration of Trust and to the
Articles of Incorporation generally require the affirmative vote of holders
owning a majority of the outstanding Trust Shares and Corporation Shares
respectively, except that changes to the Ownership Limitation require
two-thirds approval. In addition to preserving the Trust's status as a REIT,
the Ownership Limitation may have the effect of precluding an acquisition of
control of the Trust and the Corporation without the approval of the Board of
Trustees and the Board of Directors.
All persons who own, directly or by virtue of the attribution
provisions of the Code, 5% or more (or such other percentage as may be required
by the Code or regulations promulgated thereunder) of the outstanding Paired
Common Shares, Preferred Shares or Excess Stock must file an affidavit with the
Trust and the Corporation containing the information specified in the
Declaration of Trust and the Articles of Incorporation before January 30 of
each year. In addition, each shareholder shall upon demand be required to
disclose to the Trust and the Corporation in writing such information with
respect to the direct, indirect and constructive ownership of shares as the
Board of Trustees or the Board of Directors deems necessary to comply with the
provisions of the Declaration of Trust and the Articles of Incorporation or the
Code applicable to a REIT or to comply with the requirements of any taxing
authority or governmental agency.
CONVERTIBLE NOTES
In order to facilitate an underwritten offering by the Company of
Paired Common Shares or any other equity securities of the Trust or the
Corporation, underwriters may purchase a series of Starwood Lodging Convertible
Notes (the "Notes"). The Notes will be automatically converted into Paired
Common Shares or other equity securities (at a conversion price equal to the
public offering price of the Paired Common Shares or such other securities, as
the case may be) upon certification to the Trustee (defined below) of the
transfer of beneficial ownership of the Notes to any person or entity which is
not an underwriter or a selected dealer in the offering or an affiliate of any
of either. The automatic conversion will take place without physical delivery
of the Notes to any transferee of an underwriter, selected dealer or affiliate:
such transferee will receive only a certificate for the Paired Common Shares
issued upon such conversion. The structure of such an offering is designed to
avoid the possibility that the underwriters, selected dealers and the
affiliates of either, or any of them, acquire 8.0% or more of the Paired Common
Shares in violation of the Ownership Limitation. See "Description of Paired
Common Shares -- Ownership Limits; Restrictions on Transfer; Repurchase and
Redemption of Shares."
Because the Notes automatically will be converted into Paired Common
Shares upon sale to the public, no market for the Notes is expected to develop.
The following description of the Notes is provided in the event that any Notes
are acquired and held by any underwriter, selected dealer or affiliate of any
of either, in whose hands the Notes do not automatically convert into Paired
Common Shares.
The Notes are to be issued under an indenture (the "Note Indenture")
to be dated as of the date of such underwritten offering between the Company
and the trustee (the "Note Trustee"). The following statements relating to the
Notes and the Note Indenture are summaries, do not purport to be complete and
are qualified in their entirety by reference to the Notes and the Note
Indenture.
The Notes will not bear interest. The Notes will be issued in
registered form in denominations of the same dollar amount as a multiple of the
public offering price of the Paired Common Shares and will be unsecured,
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several obligations of the Trust and the Corporation maturing on the date six
months after the date of the Note Indenture. At the option of the Company, the
maturity date of the Notes may be extended at any time or from time to time, by
written notice to the Note Trustee prior to the maturity date, including any
extension thereof, to a date not later than the second anniversary of the
initial maturity date.
There are no redemption or sinking fund provisions applicable to the
Notes and the Notes are not subject to redemption prior to maturity by the
Trust and the Corporation or either of them.
The following are Events of Default under the Note Indenture: failure
of the Trust or the Corporation to pay principal owing by it in respect of any
Note when due; failure of the Trust or the Corporation to comply with any of
its other agreements in the Notes or the Note Indenture, continued for 90 days
after notice is given as provided in the Note Indenture; and certain events of
bankruptcy, insolvency or reorganization. If an Event of Default occurs and is
continuing, either the Note Trustee or the holders of at least 25% in aggregate
principal amount of the Notes outstanding may declare the entire principal
amount of the Notes to be due and payable immediately.
The Note Indenture provides that, subject to the duty of the Note
Trustee during default to act with the required standard of care, the Note
Trustee will be under no obligation to exercise any of its rights or powers
under the Note Indenture unless it shall have received reasonable security and
indemnity from the holders of the Notes against any costs, expenses or
liabilities. Subject to such provisions for the indemnification of the Note
Trustee, the holders of a majority in aggregate principal amount of the
outstanding Notes will have the right to direct the time, method and place of
conducting any proceeding for any remedy available to the Note Trustee or
exercising any trust or power conferred on the Note Trustee.
The Note Indenture does not require the Company to furnish to the Note
Trustee any periodic evidence as to the absence of any default under the Note
Indenture or the compliance by the Company with the terms of the Note
Indenture.
The Note Indenture or the Notes may be amended or supplemented without
the consent of the noteholders in certain circumstances and with the consent of
holders of at least a majority of the principal amount of the Notes at the time
outstanding, subject to certain exceptions. Any past default, or compliance
with any provision may be waived with the consent of the holders of a majority
of the principal amount of the Notes at the time outstanding.
REGISTRAR AND TRANSFER AGENT
The Registrar and Transfer Agent for the Paired Common Shares is First
Interstate Bank, Ltd., Los Angeles, California.
DESCRIPTION OF WARRANTS
The Company may issue Warrants for the purchase of Debt Securities,
Preferred Shares or Paired Common Shares. Warrants may be issued independently
or together with Debt Securities, Preferred Stock or Paired Common Shares
offered by any Prospectus Supplement and may be attached to or separate from
such Securities. Each series of Warrants will be issued under a separate
warrant agreement (a "Warrant Agreement") to be entered into between the
Company and a bank or trust company, as warrant agent (the "Warrant Agent"),
all as set forth in the Prospectus Supplement relating to the particular issue
of offered Warrants. The Warrant Agent will act solely as an agent of the
Company in connection with the 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 Warrants. The following summaries of certain provisions
of the Warrant Agreements and 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 Warrant
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Agreement and the Warrant certificates relating to each series of the
Warrants which will be filed with the Commission and incorporated by reference
as an exhibit to the Registration Statement of which this Prospectus is a part
at or prior to the time of the issuance of such series of Warrants.
The applicable Prospectus Supplement will describe the terms of such
Warrants, including the following where applicable: (i) the title of such
Warrants; (ii) the aggregate number of such Warrants; (iii) the price or prices
at which such Warrants will be issued; (iv) the currencies in which the price
of such Warrants may be payable; (v) the designation, aggregate principal
amount and terms of the securities purchasable upon exercise of such Warrants;
(vi) the designation and terms of the series of Debt Securities, Preferred
Shares or Paired Common Shares with which such Warrants are being offered and
the number of such Warrants being offered with each such security; (vii) the
date, if any, on and after which such Warrants and the related securities will
be transferable separately; (viii) the price at which and currency or
currencies, including composite currencies, in which the securities purchasable
upon exercise of such Warrants may be purchased; (ix) the date on which the
right to exercise such Warrants shall commence and the date on which such right
shall expire (the "Expiration Date"); (x) any material United States federal
income tax consequences; (xi) the terms, if any, on which the Company may
accelerate the date by which the Warrants must be exercised; and (xii) any
other terms of such Warrants, including terms, procedures and limitations
relating to the exchange and exercise of such Warrants.
FEDERAL INCOME TAX CONSIDERATIONS
The following is a summary of the material federal income tax
considerations that may be relevant to a prospective holder of Securities.
This summary is for information purposes only and is not tax advice. Except as
discussed below, no ruling or determination letters from the IRS have been or
will be requested by the Company on any tax issue connected with this
Registration Statement. This summary is based upon the Code, as currently in
effect, applicable Treasury Regulations thereunder and judicial and
administrative interpretations thereof, all of which are subject to change,
including changes that may be retroactive. No assurance can be given that the
IRS will not challenge the propriety of one or more of the tax positions
described herein or that such a challenge would not be successful.
The tax treatment of a holder of any of the Securities will vary
depending upon the terms of the specific securities acquired by such holder, as
well as such holder's particular situation. The discussion below addresses
federal income tax considerations to holders of Paired Common Shares. Federal
income tax considerations relevant to holders of Securities other than Paired
Common Shares will be provided in the applicable Prospectus Supplement relating
thereto. This summary does not purport to deal with all aspects of taxation
that may be relevant to particular holders of Paired Common Shares or other
Securities in light of their personal investment or tax circumstances. Except
as specifically provided, the discussion below does not address foreign, state,
or local tax consequences, nor does it specifically address the tax
consequences to taxpayers subject to special treatment under the federal income
tax laws (including dealers in securities, foreign persons, life insurance
companies, tax-exempt organizations, financial institutions, and taxpayers
subject to the alternative minimum tax). The discussion below assumes that the
Paired Common Shares are or will be held as capital assets within the meaning
of Section 1221 of the Code. No assurance can be given that legislative,
judicial or administrative changes will not affect the accuracy of any
statements in this Prospectus with respect to transactions entered into or
contemplated prior to the effective date of such changes.
EACH PROSPECTIVE PURCHASER OF SECURITIES IS ADVISED TO CONSULT HIS OR
HER OWN TAX ADVISOR REGARDING THE SPECIFIC TAX CONSEQUENCES TO HIM OR HER
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OF THE PURCHASE, OWNERSHIP AND SALE OF SECURITIES, INCLUDING THE FEDERAL,
STATE, LOCAL, FOREIGN AND OTHER TAX CONSEQUENCES OF SUCH PURCHASE, OWNERSHIP
AND SALE AND OF POTENTIAL CHANGES IN THE APPLICABLE TAX LAWS.
FEDERAL INCOME TAXATION OF THE TRUST
BACKGROUND
In 1980, prior to the establishment of the Corporation and the pairing
of its shares with the shares of the Trust, the IRS issued a Private Letter
Ruling (the "Ruling") to the Trust in which the IRS held that the pairing of
the Trust Shares and the Corporation Shares and the operation of the
Corporation would not preclude the Trust from qualifying as a REIT. Subsequent
to the issuance of the Ruling, (i) the IRS announced that it would no longer
issue rulings to the effect that a REIT whose shares are paired with those of a
non-REIT will qualify as a REIT if the activities of the paired entities are
integrated, and (ii) Congress, in 1984, enacted Section 269B of the Code, which
treats a REIT and a non-REIT, the paired shares of which were not paired on or
before June 30, 1983, as one entity for purposes of determining whether either
company qualifies as a REIT. Section 269B of the Code has not applied to the
Trust and the Corporation (since the Trust Shares and the Corporation Shares
were paired prior to that date), and the Ruling's conclusions were not
adversely affected thereby.
In 1994, the Trust requested and received a determination letter from
the IRS (the "IRS Letter"). The IRS Letter provides that the Trust's failure to
send the shareholder demand letters required by the REIT Provisions (defined
below) terminated its election to be taxed as a REIT beginning with the Trust's
taxable year ended December 31, 1991 and permits the Trust to re-elect to be
taxed as a REIT commencing with its taxable year ended December 31, 1995. The
IRS Letter also directed the Trust to file amended federal income tax returns
for its taxable years ended December 31, 1991 and 1992 as a C corporation (and
not as a REIT) and to file its federal income tax returns for its taxable years
ended December 31, 1993 and 1994 as a C corporation. The Trust has filed such
returns. Because the Trust had net losses for federal income tax purposes and
did not pay any dividends during its taxable years ended December 31, 1991,
1992, 1993 and 1994, the IRS Letter did not result in the Trust owing any
federal income tax. The Trust has instituted REIT compliance controls that are
intended to prevent the reoccurrence of any such failure to comply with the
reporting and recordkeeping requirements for REITs.
GENERAL
The Trust will elect to be taxed as a REIT under Sections 856 through
860 of the Code and applicable Treasury Regulations (the "REIT Requirements"
or "REIT Provisions"), commencing with its taxable year ended December 31,
1995. The Trust believes that, commencing with such taxable year, it was
organized and operated in such a manner so as to qualify for taxation as a REIT
and the Trust intends to continue to operate in such a manner; however no
assurance can be given that the Trust has qualified as a REIT or will continue
to so qualify.
The REIT Provisions are highly technical and complex. The following
sets forth the material aspects of the REIT Provisions that govern the federal
income tax treatment of a REIT and its shareholders. This summary is qualified
in its entirety by the REIT Provisions and administrative and judicial
interpretations thereof.
Prior to the issuance of any of the Securities, Sidley & Austin,
counsel to the Company, will render an opinion to the effect that, commencing
with the Trust's taxable year ended December 31, 1995, the Trust was organized
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and has operated in conformity with the requirements for qualification as a
REIT, and its proposed method of operation will enable it to continue to meet
the requirements for qualification and taxation as a REIT under the Code for its
subsequent taxable years. It must be emphasized that Sidley & Austin's opinion
will be based on the IRS Letter and various assumptions and will be conditioned
upon certain representations made by the Trust and the Corporation as to factual
matters. In particular, Sidley & Austin's opinion will be based upon factual
representations of the Trust concerning its business and properties. Moreover,
such qualification and taxation as a REIT depends upon the Trust's ability to
meet, through actual annual operating results, certain distribution levels,
specified diversity of stock ownership, and various other qualification tests
imposed under the REIT Provisions, as discussed below. The Trust's annual
operating results will not be reviewed by Sidley & Austin. Accordingly, no
assurance can be given that the actual results of the Trust's operation for any
particular taxable year will satisfy such requirements. Further, the
anticipated federal income tax treatment described in this Prospectus may be
changed, perhaps retroactively, by legislative, administrative, or judicial
action at any time. For a discussion of the tax consequences of failure to
qualify as a REIT, see "--Failure to Qualify."
As long as the Trust qualifies for taxation as a REIT, it generally
will not be subject to federal corporate income taxes on net income that it
currently distributes to shareholders. This treatment substantially eliminates
the "double taxation" (once at the corporate level and again at the shareholder
level) that generally results from investment in a regular corporation.
Even if the Trust qualifies for taxation as a REIT, however, it may be
subject to federal income or excise tax as follows. First, the Trust will be
taxed at regular corporate rates on any undistributed REIT taxable income (as
discussed below), including undistributed net capital gains. Second, under
certain circumstances, the Trust may be subject to the "alternative minimum tax"
on its items of tax preference, if any. Third, if the Trust has (i) net income
from the sale or other disposition of "foreclosure property" (which is, in
general, property acquired on foreclosure or otherwise on default on a loan
secured by such property or a lease of such property) or (ii) other
non-qualifying income from foreclosure property, it will be subject to tax at
the highest corporate rate on such income. Fourth, if the Trust has net income
from "prohibited transactions" (which are, in general, certain sales or other
dispositions of property, other than foreclosure property, held primarily for
sale to customers in the ordinary course of business), such income will be
subject to a 100% tax. Fifth, if the Trust should fail to satisfy the 75% gross
income test or the 95% gross income test (as discussed below), but has
nonetheless maintained its qualification as a REIT because certain other
requirements have been met, it will be subject to a 100% tax on the net income
attributable to the greater of the amount by which the Trust fails the 75% or
95% test, multiplied by a fraction intended to reflect the Trust's
profitability. Sixth, if the Trust 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 periods, the Trust will be subject to a
4% excise tax on the excess of such required distributions over the amounts
actually distributed. Seventh, pursuant to IRS Notice 88-19, if the Trust has a
net unrealized built-in gain, with respect to any asset (a "Built-in Gain
Asset") held by the Trust on January 1, 1995 or acquired by the Trust from a
corporation that is or has been a C corporation (i.e., generally a corporation
subject to full corporate-level tax) in certain transactions in which the basis
of the Built-in Gain Asset in the hands of the Trust is determined by reference
to the basis of the asset in the hands of the C corporation, and the Trust
directly or indirectly recognizes gain on the disposition of such asset
during the 10-year period (the "Recognition Period") beginning on January 1,
1995 with respect to assets held by the Trust on such date or, with respect to
other assets, the date on which such asset was acquired by the Trust, then, to
the extent of the Built-in Gain (i.e., the excess of (a) the fair market value
of such asset over (b) the Trust's adjusted basis in such asset, determined as
of the beginning of the Recognition Period), such gain will be subject to tax at
the highest regular corporate rate pursuant to Treasury Regulations that have
not yet been promulgated. The results described above with respect to the
recognition of Built-in Gain assume that the Trust will make an election
pursuant to IRS Notice 88-19. The Trust believes that it will have
Built-in-Gain
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Assets as of January 1, 1995 and, thus, direct or indirect sales of assets by
the Trust after 1994 could result in a federal income tax liability to the
Trust.
REQUIREMENTS FOR QUALIFICATION
To qualify as a REIT, the Trust must elect to be so treated and must
meet on a continuing basis certain requirements (as discussed below) relating
to the Trust's organization, sources of income, nature of assets, and
distribution of income to shareholders.
The Code defines a REIT as a corporation, trust or association: (i)
that is managed by one or more trustees or directors; (ii) the beneficial
ownership of which is evidenced by transferable shares, or by transferable
certificates of beneficial interest; (iii) that would be taxable as a domestic
corporation, but for the REIT Provisions; (iv) that is neither a financial
institution nor an insurance company subject to certain provisions of the Code;
(v) the beneficial ownership of which is held by 100 or more persons; (vi)
during the last half of each taxable year not more than 50% in value of the
outstanding stock of which is owned, directly or indirectly, by five or fewer
individuals (defined in the Code to include certain entities); (vii) as of the
close of the taxable year, has no earnings and profits accumulated in any
non-REIT year; (viii) is not electing to be taxed as a REIT prior to the fifth
taxable year which begins after the first taxable year for which its REIT
status terminated or was revoked or the IRS has waived the applicability of
such waiting period; (ix) that has the calendar year as its taxable year; and
(x) that meets certain other tests, described below, regarding the nature of
its income and assets. The REIT Provisions provide that conditions (i) to
(iv), inclusive, must be met during the entire taxable year and that condition
(v) must be met during at least 335 days of a taxable year of 12 months, or
during a proportionate part of a taxable year of less than 12 months.
Conditions (v) and (vi) will not apply until after the first taxable year for
which an election is made by the REIT to be taxed as a REIT.
The Trust believes that it satisfies conditions (i) through (x)
(described above). In addition, the Declaration of Trust and the Articles of
Incorporation provide for restrictions regarding the transfer and ownership of
shares, which restrictions are intended to assist the Trust in continuing to
satisfy the share ownership requirements described in conditions (v) and (vi)
above. See "Description of Paired Common Shares--Ownership Limits: Restrictions
on Transfer; Repurchase and Redemption of Shares." In order to elect to be
taxed as a REIT, the Trust must also maintain certain records and request
certain information from its shareholders designed to disclose the actual
ownership of its stock. The Trust believes that it has and will comply with
these requirements.
In the case of a REIT that is a partner in a partnership, the REIT
Provisions provide that the REIT is deemed to own its proportionate share of
the assets of the partnership and is deemed to be entitled to the income of the
partnership attributable to such share. In addition, the character of the
assets and gross income of the partnership shall retain the same character in
the hands of the REIT for purposes of the REIT Requirements, including
satisfying the gross income tests and the asset tests, described below.
Similar treatment applies with respect to lower-tier partnerships which the
REIT indirectly owns through its interests in higher-tier partnerships. Thus,
the Trust's proportionate share of the assets, liabilities and items of income
of the Realty Partnership and the other partnerships and limited liability
companies in which the Trust owns a direct or indirect interest (collectively,
the "Subsidiary Entities"), will be treated as assets, liabilities and items of
income of the Trust for purposes of applying the requirements described herein,
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provided that the Realty Partnership and the Subsidiary Entities are treated as
partnerships for federal income tax purposes. See "--Federal Income Tax
Aspects of the Partnerships and the Subsidiary Entities" below.
Paired Shares. Section 269B of the Code provides that if the shares
of a REIT and a non-REIT are paired, then the REIT and the non-REIT shall be
treated as one entity for purposes of determining whether either company
qualifies as a REIT. If Section 269B applied to the Trust and the Corporation,
then the Trust would not be able to satisfy the gross income tests (described
below) and thus would not be eligible to be taxed as a REIT. Section 269B does
not apply, however, if the shares of the REIT and the non-REIT were paired on
or before June 30, 1983 and the REIT was taxable as a REIT on or before June
30, 1983. As a result of this grandfathering rule, Section 269B has not
applied to the Trust and the Corporation. This grandfathering rule does not,
by its terms, require that the Trust be taxed as a REIT at all times after June
30, 1983. Prior to the issuance of any of the Securities, Sidley & Austin will
render an opinion to the effect that the IRS Letter and the termination of the
Trust's REIT election for the taxable years ended December 31, 1991 through
1994 did not result in Section 269B becoming applicable to the Trust. There
are, however, no judicial or administrative authorities interpreting this
grandfathering rule. Therefore, Sidley & Austin's opinion will be based
solely on the literal language of the statutory grandfathering rule.
Even though Section 269B of the Code does not apply to the Trust and
the Corporation, the IRS could assert that the Trust and the Corporation should
be treated as one entity under general tax principles. In general, such an
assertion should only be upheld if the separate corporate identities are a sham
or unreal. Not all of the trustees of the Trust are also directors of the
Corporation and no individual serves as an officer of both the Trust and the
Corporation. In addition, the Trust, the Corporation, the Realty Partnership,
the Operating Partnership, each Subsidiary Entity and each partnership or
limited liability company owned in whole or in part by the Operating Partnership
("Operating Subsidiary Entity") have separate creditors and are subject to
different state law licensing and regulatory requirements. The Trust and the
Corporation have represented that they and the Realty Partnership, the Operating
Partnership, the Subsidiary Entities and the Operating Subsidiary Entities will
each maintain separate books and records and all material transactions among
them have been and will be negotiated and structured with the intention of
achieving an arm's-length result. Prior to the issuance of any of the
Securities, Sidley & Austin will render an opinion to the effect that, based on
the foregoing, the separate corporate identities of the Trust and the
Corporation will be respected.
Due to the paired structure, the Trust, the Corporation, the Realty
Partnership, the Operating Partnership, the Subsidiary Entities and the
Operating Subsidiary Entities are controlled by the same interests. As a
result, the IRS could, pursuant to Section 482 of the Code, seek to distribute,
apportion or allocate gross income, deductions, credits or allowances between or
among them if it determines that such distribution, apportionment or allocation
is necessary in order to prevent evasion of taxes or to clearly reflect income.
The Trust and the Corporation believe that all material transactions between
them and among them and the Realty Partnership, the Operating Partnership, the
Subsidiary Entities and the Operating Subsidiary Entities have been and will be
negotiated and structured with the intention of achieving an arm's-length
result. As a result, the potential application of Section 482 of the Code
should not have a material effect on the Trust or the Corporation.
Income Tests. In order to maintain qualification as a REIT, the Trust
must annually satisfy three gross income requirements (the "gross income
tests"). First, at least 75% of the Trust's gross income (excluding gross
income from prohibited transactions) for each taxable year must consist of
defined types of income derived directly or indirectly from investments
relating to real property or mortgages on real property (including "rents from
real property," as described below, and in certain circumstances, interest) or
from certain types of qualified temporary investments. Second, at least 95% of
the Trust's gross income (excluding gross income from prohibited transactions)
for each taxable year must be derived from the same items which qualify under
the 75% income test and from dividends, interest, and gain from the sale or
disposition of stock or securities that do not constitute dealer property or
from any combination of the foregoing. Third, short-term gain from the sale or
other disposition of stock or securities, gain from
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prohibited transactions and gain on the sale or other disposition of real
property held for less than four years (apart from involuntary conversions and
sales of foreclosure property) must represent less than 30% of the Trust's
gross income (including gross income from prohibited transactions) for each
taxable year.
Rents received or deemed to be received by the Trust will qualify as
"rents from real property" for purposes of the gross income tests only if
several conditions are met. First, the amount of rent must not be based in
whole or in part on the income or profits of any person. However, an amount
received or accrued generally will not be excluded from the term "rents from
real property" solely by reason of being based on a fixed percentage or
percentages of receipts or sales (or items thereof). Second, the Code provides
that rents received from a tenant will not qualify as "rents from real
property" in satisfying the gross income tests if the REIT, or a direct or
indirect owner of 10% or more of the REIT directly or indirectly, owns 10% or
more of such tenant (a "Related Party Tenant"). Third, 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." Finally, a REIT may provide services to its tenants and the
income will qualify as "rents from real property" only if the services are of a
type that a tax-exempt organization can provide to its tenants without causing
its rental income to be unrelated business taxable income under the Code.
Services that would give rise to unrelated business taxable income if provided
by a tax-exempt organization ("Prohibited Services") must be provided by an
"independent contractor" who is adequately compensated and from whom the REIT
does not derive any income. Payments for services furnished (whether or not
rendered by an independent contractor) that are not customarily provided to
tenants in properties of a similar class in the geographic market in which the
REIT's property is located will not qualify as "rents from real property."
Substantially all of the Trust's income will be derived from its
partnership interest in the Realty Partnership and the Subsidiary Entities. The
Realty Partnership and the Subsidiary Entities lease for a fixed period all of
their fee and leasehold interests in their hotels and associated property to the
Operating Partnership, to the Operating Subsidiary Entities or to unrelated
persons (the "Leases"). The Leases are net leases which generally provide for
payment of rent equal to the greater of a fixed rent or a percentage rent. The
percentage rent is calculated by multiplying fixed percentages of the gross room
revenues and, for certain hotels, fixed percentages of other types of gross
revenues in excess of certain levels.
In order for the rents paid under the Leases to constitute "rents from
real property," the Leases must be respected as true leases for federal income
tax purposes and not treated as service contracts, joint ventures or some other
type of arrangement. The determination of whether the Leases are true leases
depends upon an analysis of all of the surrounding facts and circumstances. In
making such a determination, courts have considered a variety of factors,
including the intent of the parties, the form of the agreement, the degree of
control over the property that is retained by the property owner and the extent
to which the property owner retains the risk of loss with respect to the
property.
Prior to the issuance of any of the Securities, Sidley & Austin will
render an opinion to the effect that the Leases will be treated as true leases
for federal income tax purposes. This opinion will be based, in part, on the
following facts: (i) the lessors and the lessees intend for their relationship
to be that of lessor and lessee and each such relationship will be documented by
a lease agreement; (ii) the lessees will have the right to exclusive possession
and use and quiet enjoyment of the leased premises during the term of the
Leases; (iii) the lessees will bear the cost of, and be responsible for,
day-to-day maintenance and repair of the leased premises, other than the cost of
certain capital expenditures, and will dictate how the leased premises are
operated and maintained; (iv) the lessees will bear all of the costs and
expenses of operating the leased premises during the term of the Leases; (v) the
term of the Leases is less than the economic life of the leased premises and the
lessees do not have purchase options with respect to the leased premises; (vi)
the lessees are required to pay substantial fixed rent during the term of the
Leases; and (vii) each lessee stands to incur substantial losses or reap
substantial profits depending on how successfully it operates the leased
premises.
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Investors should be aware, however, that there are not controlling
authorities involving leases with terms substantially the same as the Leases.
Therefore, the opinion of Sidley & Austin will be based upon an analysis of
the facts and circumstances and upon rulings and judicial decisions involving
situations that are analogous. If any significant Lease is recharacterized
as a service contract or a partnership agreement, rather than as a true lease,
the Trust would not be able to satisfy either the 75% or 95% gross income
tests and, as a result, would lose its REIT status.
In order for rent payments under the Leases to qualify as "rents from
real property," the rent must not be based on the income or profits of any
person. The percentage rent under the Leases will qualify as "rents from real
property" if it is based on percentages of receipts or sales and the
percentages (i) are fixed at the time the Leases are entered into; (ii) are not
renegotiated during the term of the Leases in a manner that has the effect of
basing percentage rent on income or profits; and (iii) conform with normal
business practice. More generally, percentage rent will not qualify as "rents
from real property" if, considering the Leases and all the surrounding
circumstances, the arrangement does not conform with normal business practice,
but is in reality used as a means of basing the percentage rent on income or
profits. The Trust and the Corporation believe that the Leases conform with
normal business practice and the percentage rent will be treated as "rents from
real property" under this requirement. The Trust has further represented with
respect to hotel properties that the Realty Partnership may directly or
indirectly acquire in the future that it will not charge rent that is based in
whole or in part on the income or profits of any person (except by reason of
being based on a fixed percentage of receipts or sales, as described above).
Another requirement for rent payments under a Lease to constitute
"rents from real property" is that the rent attributable to personal property
under the Lease must not be greater than 15% of the rent received under the
Lease. For this purpose, rent attributable to personal property is the amount
that bears the same ratio to the total rent for the taxable year as the average
of the adjusted basis of the personal property at the beginning and at the end
of the taxable year bears to the average of the aggregate adjusted basis of
both the real property and personal property leased under, or in connection
with, such lease. The Trust believes that under each of the Leases less than
15% of the total rent is attributable to personal property and, as a result, no
portion of such rent will be treated as being for rental of personal property
for purposes of the 75% and 95% gross income tests. If the IRS were to
successfully assert that with respect to one or more of the Leases rent
attributable to personal property is greater than 15% of the total rent, then
it is possible that the Trust would not be able to satisfy either the 75% or
95% gross income tests and, as a result, would lose its REIT status. With
respect to both the Leases and future acquisitions, the Trust has represented
that it will monitor the 15% test to ensure continued qualification as a REIT.
A third requirement for qualification of rent under the Leases as
"rents from real property" is that the Trust must not own, directly or
constructively, 10% or more of the Operating Partnership or any Operating
Subsidiary Entity (or any other tenant under a Lease). If the Trust were to own
directly or indirectly, 10% or more of the Operating Partnership or any
Operating Subsidiary Entity (or such tenant), the rent paid by the tenant with
respect to the leased property would not qualify as income of the type that can
be received by a REIT. In order to prevent such a situation, which would likely
result in the disqualification of the Trust as a REIT, the Declaration of Trust
and the Articles of Incorporation contain restrictions on the amount of Trust
Shares and Corporation Shares that any one person can own. These restrictions
generally provide that any attempt by any one person to actually or
constructively acquire 8.0% or more of the outstanding Paired Common Shares will
be ineffective. See "Description of Paired Common Shares--Ownership Limits;
Restrictions on Transfer; Repurchase and Redemption of Shares." However,
notwithstanding such restrictions, because the Code's constructive ownership
rules for purposes of the 10% ownership limit are broad and it is not possible
to continually monitor direct and indirect ownership of Paired Common Shares, it
is possible that some person may at some time own sufficient Paired Common
Shares to cause the termination of the Trust's REIT status.
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Finally, rent under the Leases will not qualify as "rents from real
property" if either the Trust, the Realty Partnership or any Subsidiary Entity
renders or furnishes Prohibited Services to the occupants of the properties. So
long as the Leases are treated as true leases, none of the Trust, the Realty
Partnership or any Subsidiary Entity should be treated as rendering or
furnishing Prohibited Services to the occupants of the properties.
Based on the foregoing, prior to the issuance of any of the Securities,
Sidley & Austin will render an opinion to the effect that the rent payable
under the Leases will be treated as "rents from real property" for purposes of
the 75% and 95% gross income tests. There can, however, be no assurance that
the IRS will not successfully assert a contrary position or that there will not
be a change in circumstances (such as the entering into of new leases) which
would result in a portion of the rent received to fail to qualify as "rents
from real property." In such case, it is possible that the Trust would not be
able to satisfy either the 75% or 95% gross income test and, as a result, would
lose its REIT status.
For purposes of the gross income tests, the term "interest" generally
does not include any amount received or accrued (directly or indirectly) if the
determination of such amount depends in whole or in part on the income or
profits of any person. However, an amount received or accrued generally will
not be excluded from the term "interest" solely by reason of being based on a
fixed percentage or percentages of receipts or sales. The Realty Partnership
and certain of the Subsidiary Entities hold notes and may advance money from
time to time to tenants for the purpose of financing tenant improvements,
making real estate loans or holding or acquiring additional notes. None of the
notes currently held by the Realty Partnership or the Subsidiary Entities
provide for the payment of any amount based on the income or profits of any
person other than amounts based, on a fixed percentage or percentages of
receipts or sales. In addition, none of the Trust, the Realty Partnership or
the Subsidiary Entities intend to charge interest that will depend in whole or
in part on the income or profits of any person or to make loans (not secured in
substantial part by real estate mortgages) in amounts that could jeopardize the
Trust's compliance with the 75% and 5% asset tests, discussed below. To the
extent the notes held by the Realty Partnership or the Subsidiary Entities are
secured by real property, the interest received or accrued with respect to such
notes should be treated as qualifying income for both the 75% and the 95% gross
income tests. Certain of the notes held by the Realty Partnership are not
secured by real property. Interest received or accrued with respect to such
notes should be treated as qualifying income for the 95% gross income test but
should not be treated as qualifying income for the 75% gross income tax.
However, the Company believes that the amount of such interest will not cause
the Trust to fail to satisfy the 75% gross income test.
Any gross income derived from a prohibited transaction is taken into
account in applying the 30% income test necessary to qualify as a REIT, and the
net income from that transaction is subject to a 100% tax. The Trust believes
that no asset directly or indirectly owned by it is held for sale to customers
and that sale of any such property will not be in the ordinary course of
business of the Trust, the Realty Partnership or any Subsidiary Entity.
If the Trust fails to satisfy one or both of the 75% or 95% gross
income tests for any taxable year, it may nevertheless qualify as a REIT for
such year if it is entitled to relief under certain provisions of the Code.
It is not possible to state whether in all circumstances the Trust would
be entitled to the benefit of these relief provisions. Even if these relief
provisions apply, a tax would be imposed
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with respect to the excess net income. No similar mitigation provision applies
if the Trust fails the 30% income test. In such case, the Trust will cease to
qualify as a REIT.
Asset Tests. In order to maintain qualification as a REIT, the Trust,
at the close of each quarter of its taxable year, must also satisfy three tests
relating to the nature of its assets. First, at least 75% of the value of the
Trust's total assets must be represented by "real estate assets" (including
stock or debt instruments held for not more than one year purchased with the
proceeds of a stock offering or long-term (at least five years) debt offering
of the Trust), cash, cash items and government securities. Second, not more
than 25% of the Trust's total assets may be represented by securities other
than those in the 75% asset class. Third, of the investments included in the
25% asset class, the value of any one issuer's securities owned by the Trust
may not exceed 5% of the value of the Trust's total assets, and the Trust may
not own more than 10% of any one issuer's outstanding voting securities.
The Trust believes that commencing with its taxable year ended
December 31, 1995 it has complied with the asset tests. Substantially all of
the Trust's investments are in properties owned by the Realty Partnership and
the Subsidiary Entities, at least 75% of which represent qualifying real
estate assets. A substantial portion of the indebtedness of the Operating
Partnership to the Realty Partnership may not be qualifying assets under the
75% asset test. However, such portion does not exceed 5% of the value of the
assets of the Realty Partnership and, thus, will not cause the Trust to fail
the 5% asset test.
After initially meeting the asset tests at the close of any quarter,
the Trust will not lose its status as a REIT for failure to satisfy the asset
tests at the end of a later quarter solely by reason of changes in asset
values. If the failure to satisfy the asset tests results from an acquisition
of securities or other property during a quarter, the failure can be cured by
disposition of sufficient non-qualifying assets within 30 days after the close
of that quarter. The Trust intends to maintain adequate records of the value
of its assets to ensure compliance with the asset tests and to take such
actions within 30 days after the close of any quarter as may be required to
cure any non-compliance.
Annual Distribution Requirements. The Trust, in order to qualify as a
REIT, is required to distribute dividends (other than capital gain dividends)
to its shareholders in an amount at least equal to (i) the sum of (a) 95% of
the Trust's "REIT taxable income" (computed without regard to the dividends
paid deduction and the Trust's net capital gain) and (b) 95% of the net income
(after tax), if any, from foreclosure property, minus (ii) the sum of certain
items of non-cash income. In addition, if the Trust directly or indirectly
disposes of any Built-in Gain Asset during its Recognition Period, the Trust
will be required, pursuant to IRS regulations that have not yet been
promulgated, to distribute at least 95% of the Built-in Gain (after tax), if
any, recognized on the disposition of such asset. Distributions must be paid
in the taxable year to which they relate, or in the following taxable year if
declared before the Trust 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 the Trust 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 thereon at regular ordinary and capital
gain corporate tax rates. Furthermore, if the Trust 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 income for such year,
and (iii) any undistributed taxable income from prior periods, the Trust will be
subject to a 4% excise tax on the excess of such required distribution over the
amounts actually distributed.
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The Trust intends to make timely distributions sufficient to satisfy
the annual distribution requirements and to the extent practical, avoid payment
of material amounts of federal income or excise tax by the Trust. It is
possible, however, that the Trust, from time to time may not have sufficient
cash or other liquid assets to meet the distribution requirements described
above. In order to meet the distribution requirements in such cases, the
Trust, the Realty Partnership or a Subsidiary Entity may find it necessary to
arrange for short-term or possible long-term borrowings or to pay dividends
in the form of taxable stock dividends.
Under certain circumstances, the Trust may be able to rectify a
failure to meet the distribution requirements for a year by paying
"deficiency dividends" to shareholders in a later year, which may be included
in the Trust's deduction for dividends paid for the earlier year. Thus, the
Trust may be able to avoid being taxed on amounts distributed as deficiency
dividends; however, the Trust will be required to pay interest based upon the
amount of any deduction taken for deficiency dividends.
FAILURE TO QUALIFY
If the Trust fails to qualify for taxation as a REIT in any taxable
year, and the relief provisions do not apply, the Trust 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
the Trust fails to qualify will not be deductible by the Trust nor will they be
required to be made. As a result, the Trust's failure to qualify as a REIT
could reduce the cash available for distribution by the Trust to its
shareholders. In addition, if the Trust fails to qualify as a REIT, all
distributions to shareholders will be taxable as ordinary income to the extent
of the Trust's current and accumulated earnings and profits, and, subject to
certain limitations of the Code, corporate distributees may be eligible for the
dividends-received deduction. Unless entitled to relief under specific
statutory provisions, the Trust will also be disqualified from taxation as a
REIT for the four taxable years following the year during which qualification
was lost. It is not possible to state whether in all circumstances the Trust
would be entitled to such statutory relief.
FEDERAL INCOME TAXATION OF THE CORPORATION
The Corporation is the common parent of an affiliated group of
corporations filing a consolidated return (the "Corporation Group"). After
obtaining certain necessary licenses and regulatory approvals of certain gaming
authorities, substantially all of the Corporation Group's taxable income will
consist of its distributive share of the Operating Partnership's taxable
income. The Corporation Group will be subject to federal
income tax on its taxable income.
FEDERAL INCOME TAXATION OF HOLDERS OF PAIRED COMMON SHARES
FEDERAL INCOME TAXATION OF TAXABLE U.S. HOLDERS
As used herein, the term "U.S. Shareholder" means a holder of Paired
Common Shares who is: (i) a citizen or resident of the United States; (ii) a
corporation, partnership, or other entity created or organized in or under the
laws of the United States or of any political subdivision thereof; or (iii)
an estate or trust the income of which is subject to U.S. federal income
taxation regardless of its source. As long as the Trust qualifies as a REIT,
distributions made to the Trust's U.S. Shareholders up to the amount of the
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Trust's 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 properly designated by the Trust as capital gain
dividends will be taxed as long-term capital gain (to the extent they do not
exceed the Trust's actual net capital gain for the taxable year) without regard
to the period for which the holder has held its stock. However, corporate
holders may be required to treat up to 20% of certain capital gain dividends as
ordinary income, and capital gains dividends are not eligible for the
dividends-received deduction. Distributions in excess of the Trust's current
and accumulated earnings and profits will not be taxable to a holder to the
extent that they do not exceed the adjusted basis of the holder's Trust Shares,
but rather will reduce the adjusted basis of such Trust Shares. To the extent
that such distributions exceed the adjusted basis of a holder's Trust Shares
they will be included in income as long-term capital gain (or short-term
capital gain if the shares have been held for one year or less). In addition,
any dividend declared by the Trust in October, November or December of any year
payable to a holder of record on a specified date in any such month shall be
treated as both paid by the Trust and received by the holder on December 31 of
such year, provided that the dividend is actually paid by the Trust during
January of the following calendar year.
The Trust will be treated as having sufficient earnings and profits to
treat as a dividend any distribution by the Trust up to the amount required to
be distributed in order to avoid imposition of the 4% excise tax discussed
above. As a result, holders may be required to treat certain distributions
that would otherwise result in a tax-free return of capital as taxable
distributions. Moreover, any "deficiency dividend" will be treated as a
"dividend" (either as ordinary or capital gain dividend, as the case may be),
regardless of the Trust's earnings and profits.
Distributions from the Trust and gain from the disposition of the
Trust Shares will not be treated as passive activity income and, therefore,
shareholders will not be able to apply any "passive losses" against such income.
Dividends from the Trust (to the extent they do not constitute a return of
capital) will generally be treated as investment income for purposes of the
investment interest expense limitation. Gain from the disposition of shares
and capital gains dividends will not be treated as investment income unless the
holders elect to have the gain taxed at ordinary income rates.
Distributions from the Corporation up to the amount of the
Corporation's current or accumulated earnings and profits will be taken into
account by U.S. Shareholders as ordinary income and will be eligible for the
dividends-received deduction for corporations. Distributions in excess of the
Corporation's current and accumulated earnings and profits will not be taxable
to a holder to the extent that they do not exceed the adjusted basis of the
holder's Corporation Shares, but rather will reduce the adjusted basis of such
Corporation Shares. To the extent that such distributions exceed the adjusted
basis of a holder's Corporation Shares they will be included in income as
long-term capital gain (or short-term capital gain if the stock has been held
for one year or less).
In general, a U.S. Shareholder will realize capital gain or loss on
the disposition of Paired Common Shares equal to the difference between the
amount realized on such disposition and the holder's adjusted basis in such
Paired Common Shares. Such gain or loss will generally constitute long-term
capital gain or loss if the holder held such Paired Common Shares for more than
one year. However, any loss upon a sale or exchange of Trust Shares by a
holder 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 the Trust required to be treated by such holder as
long-term capital gain.
U.S. Shareholders may not include in their individual income tax
returns any net operating losses or capital losses of the Trust or the
Corporation.
FEDERAL TAXATION OF TAX-EXEMPT HOLDERS OF PAIRED COMMON SHARES
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The IRS has ruled that amounts distributed as dividends by a REIT to a
tax-exempt employee's pension trust do not constitute unrelated business
taxable income ("UBTI"). Based on this ruling and the analysis therein,
distributions by the Trust should not, subject to certain exceptions described
below, be UBTI to a qualified plan, IRA or other tax-exempt entity (a "Tax-
Exempt Shareholder") provided the Tax-Exempt Shareholder has not held its
shares as "debt financed property" within the meaning of the Code and the
shares are not otherwise used in an unrelated trade or business of the
Tax-Exempt Shareholder. Similarly, income from the sale of Trust Shares should
not, subject to certain exceptions described below, constitute UBTI unless the
Tax-Exempt Shareholder has held such Trust Shares as a dealer (under Section
512(b)(5)(B) of the Code) or as "debt-financed property" within the meaning of
Section 514 of the Code. Revenue rulings are interpretive in nature and
subject to revocation or modification by the IRS.
For Tax-Exempt Shareholders that are social clubs, voluntary employee
benefit associations, supplemental unemployment benefit trusts, and qualified
group legal services plans, exempt from federal income taxation under Sections
501(c)(7), (c)(9), (c)(17) and (c)(20) of the Code respectively, income from an
investment in the Trust will constitute UBTI unless the organization is able to
deduct properly amounts set aside or placed in reserve for certain purposes so
as to offset the income generated by its investment in the Trust. Such
prospective investors should consult their tax advisors concerning these
"set-aside" and reserve requirements.
Notwithstanding the above, however, a portion of the dividends paid by
a "pension held REIT" shall (subject to a de minimis exception) be treated as
UBTI as to any trust that (i) is described in Section 401 (a) of the Code, (ii)
is tax-exempt under Section 501(a) of the Code, and (iii) holds more than 10%
(by value) of the interests in the REIT. Due to the Ownership Limitation, the
Trust does not expect to be a "pension held REIT" within the meaning of the
Code.
FEDERAL TAXATION OF NON-US. HOLDERS OF PAIRED COMMON SHARES
The rules governing United States federal income taxation of the
ownership and disposition of stock by persons that are, for purposes of such
taxation, non-resident alien individuals, foreign corporations, foreign
partnerships, or foreign estates or trusts (collectively, "Non-U.S.
Shareholders") are complex, and no attempt is made herein to provide more than
a brief summary of such rules. Accordingly, the discussion does not address
all aspects of United States federal income tax and does not address state,
local or foreign tax consequences that may be relevant to a Non-U.S.
Shareholder in light of its particular circumstances. Prospective Non-U.S.
Shareholders should consult with their own tax advisors to determine the effect
of federal, state, local, and foreign income tax laws with regard to an
investment in Paired Common Shares, including any reporting requirements.
In general, a Non-U.S. Shareholder will be subject to regular United
States income tax with respect to its investment in Paired Common Shares if
such investment is "effectively connected" with the Non-U.S. Shareholder's
conduct of a trade or business in the United States. A corporate Non-U.S.
Shareholder that receives income that is (or is treated as) effectively
connected with a United States trade or business may also be subject to the
branch profits tax under Section 884 of the Code, which is payable in addition
to regular United States corporate income tax. The following discussion will
apply to Non-U.S. Shareholders whose investment in Paired Common Shares is not
so effectively connected.
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Distributions. Distributions by the Trust to a Non-U.S. Shareholder
that are neither attributable to gain from sales or exchanges by the Trust of
United States real property interests nor designated by the Trust as capital
gains dividends and distributions by the Corporation will be treated as
dividends of ordinary income to the extent that they are made out of current or
accumulated earnings and profits of the Trust or the Corporation, as the case
may be. Such distributions ordinarily will be subject to United States
withholding tax on a gross basis at a 30% rate or such lower rate as may
be specified by an applicable income tax treaty. Distributions in excess of
current or accumulated earnings and profits of the Trust or the Corporation, as
the case may be, will not be taxable to a Non-U.S. Shareholder to the extent
that they do not exceed the adjusted basis of the Non-U.S. Shareholder's Trust
Shares or Corporation Shares, as the case may be, but rather will reduce the
adjusted basis of such shares. To the extent that such distributions exceed
the adjusted basis of a Non-U.S. Shareholder's Trust Shares or Corporation
Shares, as the case may be, they will give rise to gain from the sale or
exchange of Non-U.S. Shareholder's Paired Common Shares if the Non-U.S.
Shareholder otherwise would be subject to tax on any gain from the sale or
other disposition of Paired Common Shares, as described below. If it cannot be
determined at the time a distribution is made whether or not such distribution
will be in excess of current or accumulated earnings and profits, the
distribution will generally be treated as a dividend for withholding purposes.
However, amounts thus withheld are generally refundable if it is subsequently
determined that such distribution was, in fact, in excess of current or
accumulated earnings and profits of the Trust or the Corporation, as the case
may be. The Trust and the Corporation expect to withhold United States income
tax at the rate of 30% on the gross amount of any such distributions made to a
Non-U.S. Shareholder unless (i) a lower rate is provided for under an
applicable tax treaty and the shareholder files the required form evidencing
eligibility for that reduced rate with the Trust and the Corporation, or (ii)
the Non-U.S. Shareholder files an IRS Form 4224 with the Trust and the
Corporation claiming that the distribution is "effectively connected" income.
Distributions to a Non-U.S. Shareholder that are attributable to gain
from sales or exchanges by the Trust of United States real property interests
will cause the Non-U.S. Shareholder to be treated as recognizing such gain as
income effectively connected with a United States trade or business. Non-U.S.
Shareholders would thus generally be taxed at the same rates applicable to U.S.
Shareholders (subject to any applicable alternative minimum tax and a special
alternative minimum tax in the case of non-resident alien individuals). Also,
such gain may be subject to a 30% branch profits tax in the hands of a Non-U.S.
Shareholder that is a corporation, that is not entitled to an exemption under a
tax treaty. The Trust is required to withhold and remit to the IRS 35% of any
distribution that could be designated a capital gains dividend. That amount is
creditable against the Non-U.S. Shareholder's United States federal income tax
liability.
Sale of Paired Common Shares. Gain recognized by a Non-U.S.
Shareholder upon a sale or other disposition of Paired Common Shares generally
will not be subject to United States federal income tax, if (i) in the case of
Trust Shares, the Trust is a "domestically controlled REIT" or (ii) (A) the
Paired Common Shares are regularly traded on an established securities market
(e.g., the NYSE, where the Paired Common Shares are currently traded) and (B)
the Selling Non-U.S. Shareholder held 5% or less of the outstanding Paired
Common Shares at all times during specified period, unless, in the case of a
Non-U.S. Shareholder who is a non-resident alien individual, such individual
is present in the United States for 183 days or more and certain other
conditions apply. A domestically controlled REIT is defined generally as a
REIT in which at all times during a specified testing period less than 50% in
value of the stock was held directly or indirectly by foreign persons. The
Trust believes that it qualifies as a domestically controlled REIT.
INFORMATION REPORTING REQUIREMENTS AND BACKUP WITHHOLDING
Under certain circumstances, U.S. Shareholders may be subject to
backup withholding at a rate of 31% on payments made with respect to, or on
cash proceeds of a sale or exchange of, Paired Common
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Shares. Backup withholding will apply only if the holder: (i) fails to furnish
its taxpayer identification number ("TIN") (which, for an individual, would be
his or her Social Security number); (ii) furnishes an incorrect TIN; (iii) is
notified by the IRS that the holder has failed to report properly payments of
interest and dividends; or (iv) under certain circumstances, fails to certify,
under penalty of perjury, that the holder has furnished a correct TIN and has
not been notified by the IRS that the holder is subject to backup withholding
for failure to report interest and dividend payments. Backup withholding will
not apply with respect to payments made to certain exempt recipients, such as
corporations and tax-exempt organizations. In addition, the Trust and the
Corporation may be required to withhold a portion of capital gain distributions
made to any holders who fail to certify their non-foreign status. Additional
issues may arise pertaining to information reporting and withholding with
respect to Non-U.S. Shareholders and each Non-U.S. Shareholder should consult
his or her tax advisor with respect to any such information reporting and
withholding requirements.
FEDERAL INCOME TAX ASPECTS OF THE PARTNERSHIPS AND THE SUBSIDIARY ENTITIES
Substantially all of the Trust's assets are held directly or indirectly
through the Realty Partnership and, after obtaining certain necessary licenses
and regulatory approvals of certain gaming authorities, substantially all of
the Corporation's (and its subsidiaries') assets will be held directly or
indirectly through the Operating Partnership.
The Realty Partnership, the Operating Partnership, the Subsidiary
Entities and the Operating Subsidiary Entities involve special tax
considerations, including the possibility of a challenge by the IRS of the
status of any of such partnerships or limited liability companies as a
partnership (as opposed to an association taxable as a corporation) for federal
income tax purposes. If any of such partnerships or limited liability
companies were to be treated as an association, it would be taxable as a
corporation and, therefore, subject to an entity level tax on its income. Such
an entity level tax is likely to substantially reduce the amount of cash
available for distribution to holders of Paired Common Shares. See "--Federal
Income Taxation of the Corporation" above. In addition, if the Realty
Partnership or any Subsidiary Entity were to be taxable as a corporation, the
Trust would not qualify as a REIT. Furthermore, any change in the status
of a partnership or limited liability company for tax purposes might be
treated as a taxable event in which case the Trust or the Corporation might
incur a tax liability without any related cash distributions.
The Company has not requested and does not intend to request, a ruling
from the IRS regarding treatment of any partnership or limited liability
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company in which it owns an interest as a partnership for federal income tax
purposes. Instead, prior to the issuance of any of the Securities, Sidley &
Austin will render an opinion to the effect that, based on certain factual
assumptions and representations, each of the Realty Partnership, the Operating
Partnership, the Subsidiary Entities and the Operating Subsidiary Entities
will be classified as a partnership for federal income tax purposes. Unlike
a private letter ruling, an opinion of counsel is not binding on the IRS, and
no assurance can be given that the IRS will not challenge the status of a
partnership or limited liability company as a partnership for federal income
tax purposes. If such a challenge were sustained by a court, the subject
partnership or limited liability company would be treated as an association
taxable as a corporation for federal income tax purposes. In addition, the
opinion of Sidley & Austin will be based on existing law. No assurance
can be given that administrative or judicial changes would not modify the
conclusions expressed in the opinion.
TAX ALLOCATIONS WITH RESPECT TO CONTRIBUTED PROPERTIES
Pursuant to Section 704(c) of the Code, income, gain, loss and
deduction attributable to appreciated or depreciated property that is
contributed to a partnership in exchange for an interest in the partnership,
must be allocated in a manner such that the contributing partner is charged
with, or benefits from, respectively, the unrealized gain or unrealized loss
associated with the property at the time of the contribution. The amount of
such unrealized gain or unrealized loss is generally equal to the difference
between the fair market value of the contributed property at the time of
contribution and the adjusted tax basis of such property at the time of
contribution (a "Book-Tax Difference"). Such allocations are solely for
federal income tax purposes and do not affect the book capital accounts or
other economic or legal arrangements among the partners. The Realty
Partnership and the Operating Parntership have been formed by way of
contributions of the Company's property and certain property held by Starwood
Capital. Consequently, allocations with respect to such contributed property
must be made in a manner consistent with Section 704(c) of the Code.
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The Treasury Regulations under Section 704(c) of the Code allow
partnerships to use any reasonable method of accounting for Book-Tax
Differences so that the contributing partner receives the tax benefits and
burdens of any built-in gain or loss associated with the contributed property.
However, the special allocation rules of Section 704(c) of the Code do not
always entirely eliminate the Book-Tax Difference on an annual basis or with
respect to a specific taxable transaction such as a sale. Thus, the carryover
basis of the contributed assets in the hands of the Realty Partnership or the
Operating Partnership may cause the Trust or the Corporation, as the case may
be, to be allocated lower depreciation and other deductions, and possibly an
amount of taxable income in the event of a sale of such contributed assets in
excess of the economic or book income allocated to it as a result of such sale.
This may cause the Trust or the Corporation to recognize taxable income in
excess of cash proceeds, which, in the case of the Trust, might adversely
affect the Trust's ability to comply with the REIT distribution requirements.
See "--Federal Income Taxation of the Trust--Requirements For Qualification--
Annual Distribution Requirements." The foregoing principles also apply in
determining the earnings and profits of the Trust and the Corporation for
purposes of determining the portion of distributions taxable as dividend
income. See "--Federal Income Taxation of Holders of Paired Common Shares."
The application of these rules over time may result in a higher portion of
distributions being taxed as dividends than would have occurred had the Trust
and the Corporation contributed assets with an adjusted tax basis equal to
their fair market values.
PARTNERSHIP ANTI-ABUSE RULE
The IRS has published regulations that provide an anti-abuse rule
(the "Anti-Abuse Rule") under the partnership provisions of the Code (the
"Partnership Provisions"). Under the Anti-Abuse Rule, if a partnership is
formed or availed of in connection with a transaction a principal purpose of
which is to reduce substantially the present value of the partners' aggregate
federal tax liability in a manner that is inconsistent with the intent of the
Partnership Provisions, the IRS can recast the transaction for federal tax
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purposes to achieve tax results that are consistent with the intent of the
Partnership Provisions. This analysis is to be made based on all facts and
circumstances. The Anti-Abuse Rule states that the intent of the Partnership
Provisions incorporates the following requirements: (i) the partnership must be
bona fide and each partnership transaction or series of related transactions
must be entered into for a substantial business purpose; (ii) the form of each
partnership transaction must be respected under substance over form principles;
and (iii) with certain exceptions, the tax consequences under the Partnership
Provisions to each partner of partnership operations and the transactions
between the partner and the partnership must accurately reflect the partner's
economic agreement and clearly reflect the partner's income.
Prior to the issuance of any of the Securities, Sidley & Austin will
render an opinion to the effect that the Company's structure is not
inconsistent with the intent of the Partnership Provisions and that, therefore,
the IRS should not be able to invoke the Anti-Abuse Rule to recast the
structure of the Company for federal income tax purposes. This opinion will be
based on examples contained in the Anti-Abuse Rule. However, no assurance
can be given that the IRS or a court will concur with such opinion.
The Anti-Abuse Rule also provides that, unless a provision of the Code
or the Treasury Regulations prescribes the treatment of a partnership as an
entity, in whole or in part, and that treatment and the ultimate tax results,
taking into account all the relevant facts and circumstances, are clearly
contemplated by that provision, the IRS can treat a partnership as an aggregate
of its partners, in whole or in part, as appropriate to carry out the purpose
of any provision of the Code or the Treasury Regulations. Treatment of either
Partnership or any of the Subsidiary Entities, in whole or in part, as an
aggregate rather than an entity is unlikely to materially change the federal
tax consequences to any partner. In addition, the REIT Provisions generally
treat a partnership as an aggregate rather than an entity for purposes of
applying the REIT Requirements. Therefore, the Anti-Abuse Rule should not have
a material adverse effect on the federal income tax consequences to any partner
or on the ability of the Trust to qualify as a REIT.
OTHER TAX CONSEQUENCES
The Company and the holders of Securities may be subject to state or
local taxation in various jurisdictions, including those in which it or they
transact business or reside. The state and local tax treatment of the Trust,
the Corporation and the holders of Securities may not conform to the federal
income tax consequences discussed above. CONSEQUENTLY, HOLDERS OF SECURITIES
SHOULD CONSULT THEIR OWN TAX ADVISORS REGARDING THE EFFECT OF STATE AND LOCAL
TAX LAWS ON THE PURCHASE, OWNERSHIP AND SALE OF SECURITIES.
PLAN OF DISTRIBUTION
The Trust and the Corporation may sell Securities to or through
underwriters, and also may sell Securities directly to either purchasers or
through agents.
The distribution of the 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 market prices prevailing at the time of sale, at prices related to such
prevailing market prices or at negotiated prices.
In connection with the sale of Securities, underwriters may receive
compensation from the Trust, the Corporation, or from purchasers of Securities,
for whom they may act as agents, in the form of discounts, concessions, or
commissions. Underwriters may sell Securities to or through dealers, and such
dealers may receive compensation in the form of discounts, concessions, or
commissions from the underwriters and/or commissions from the purchasers for
whom they may act as agents. Underwriters, dealers, and agents that
participate in the distribution of Securities may be deemed to be underwriters,
and any discounts or commissions
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they receive from the Trust or the Corporation and any profit on the resale of
Securities they realize may be deemed to be underwriting discounts and
commissions under the Securities Act. Any such underwriter or agent will be
identified, and any such compensation received from the Trust or the
Corporation will be described, in the Prospectus Supplement.
Unless otherwise specified in the related Prospectus Supplement, each
series of Securities will be a new issue with no established trading market,
other than the Paired Common Shares which are listed on the NYSE. Any Paired
Common Shares sold pursuant to a Prospectus Supplement will be listed on such
exchange. The Trust or the Corporation may elect to list any series of Debt
Securities or Preferred Shares on an exchange, but is not obligated to do so.
It is possible that one or more underwriters may make a market in a series of
Securities, but will not be obligated to do so and may discontinue any market
making at any time without notice. Therefore, no assurance can be given as to
the liquidity of the trading market for any of the Securities.
Under agreements the Trust and the Corporation may enter into,
underwriters, dealers, and agents who participate in the distribution of
Securities may be entitled to indemnification by the Trust or the Corporation
against certain liabilities, including liabilities under the Securities Act.
Underwriters, dealers and agents may engage in transactions with, or
perform services for, or be customers of, the Trust or the Corporation in the
ordinary course of business.
If so indicated in the applicable Prospectus Supplement, the Trust or
the Corporation, as the case may be, will authorize underwriters or other
persons acting as the Trust's or the Corporation's agents to solicit offers by
certain institutions to purchase Securities from the Trust or the Corporation
pursuant to contracts providing for payment and delivery at a future date.
Institutions with which such contracts may be made include commercial and
savings banks, insurance companies, pension funds, investment companies,
educational and charitable institutions and others, but in all cases such
institutions must be approved by the Trust or the Corporation, as the case may
be. The obligations of any purchaser under any such contract will be subject
to the condition that the purchase of the Securities shall not at the time of
delivery be prohibited under the laws of the jurisdiction to which such
purchaser is subject. The underwriters and such other agents will not have any
responsibility in respect of the validity or performance of such contracts.
LEGAL MATTERS
Sidley & Austin, Chicago, Illinois, has passed upon the validity of
the issuance of the Securities offered pursuant to this Prospectus. Lawyers at
Sidley & Austin own or hold options to purchase an aggregate of 12,227 Paired
Common Shares. Rogers & Wells, New York, New York will act as counsel to any
underwriters, dealers or agents. Rogers & Wells acted as counsel to Starwood
Capital in connection with the Reorganization. Sidley & Austin and Rogers &
Wells will rely upon the opinion of Piper & Marbury L.L.P., Baltimore,
Maryland, as to certain matters of Maryland law.
EXPERTS
The separate and combined financial statements and financial statement
schedules of Starwood Lodging Trust and Starwood Lodging Corporation as of
December 31, 1994 and 1993 and for each of the three years in the period ended
December 31, 1994, and the financial statements of the Doubletree Club Hotel of
Rancho Bernardo incorporated by reference in this Prospectus, have been audited
by Deloitte & Touche LLP, independent auditors, as stated in their reports also
incorporated by reference herein. Such financial statements and financial
statement schedules have been incorporated by reference herein in reliance upon
the reports of such firm given upon their authority as experts in accounting
and auditing.
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The audited financial statements of Embassy Suites--Tempe, Starwood
Wichita Investors, L.P., Capitol Hill Suites, and French Quarter Square and the
Schedules of Operating Revenue and Certain Expenses for the French Quarter
Square incorporated in the prospectus by reference to the pages F126-133,
F92-99, F114-119, F101-107, and F109-111, respectively, of the Company's
Registration Statement on Form S-2 Amendment No. 2 (Registration Nos. 33-519155
and 33-59155-01) dated June 29, 1995, have been so incorporated in reliance on
the reports of Price Waterhouse LLP, independent accountants (which, with
respect to French Quarter Square, contain an explanatory language relating to
certain litigation disputing the ownership of the underlying real property as
more fully described in Note 7 to the financial statements), given on the
authority of said firm as experts in auditing and accounting.
The financial statements of Sheraton Colony Square as of December 31,
1994 and 1993 and for each of the three years in the period ended December 31,
1994 appearing in the Company's Registration Statement on Form S-2 (Nos.
33-59155 and 33-59155-01) declared effective by the Securities and Exchange
Commission on June 29, 1995 have been audited by Ernst & Young LLP,
independent auditors, as set forth in their report thereon included therein
and incorporated herein by reference. Such financial statements are
incorporated herein by reference in reliance upon such report given upon the
authority of such firm as experts in accounting and auditing.
The financial statements of the Doral Inn as of December 31, 1994 and
1993 and for each of the three years in the period ended December 31, 1994
appearing in the Company's Current Report on Form 8-K/A, dated September 20,
1995 have been audited by David Berdon & Co. LLP, independent auditors, as set
forth in their report thereon included therein and incorporated herein by
reference. Such financial statements are incorporated herein by reference in
reliance upon such report given upon the authority of such firm as experts in
accounting and auditing.
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===============================================================================
NO DEALER, SALESPERSON OR OTHER INDIVIDUAL HAS BEEN AUTHORIZED TO GIVE
ANY INFORMATION OR MAKE ANY REPRESENTATIONS NOT CONTAINED OR INCORPORATED BY
REFERENCE IN THIS PROSPECTUS IN CONNECTION WITH THE OFFERING MADE BY THIS
PROSPECTUS. IF GIVEN OR MADE, SUCH INFORMATION OR REPRESENTATIONS MUST NOT BE
RELIED UPON AS HAVING BEEN AUTHORIZED BY THE COMPANY OR ANY AGENT, DEALER OR
UNDERWRITER. THIS PROSPECTUS DOES NOT CONSTITUTE AN OFFER TO SELL, OR A
SOLICITATION OR AN OFFER TO BUY, ANY SECURITY OTHER THAN THE REGISTERED
SECURITIES OF THE COMPANY OFFERED BY THIS PROSPECTUS, NOR DOES IT CONSTITUTE AN
OFFER TO SELL OR A SOLICITATION OF AN OFFER TO BUY THE SECURITIES BY ANYONE IN
ANY JURISDICTION WHERE SUCH AN OFFER WOULD BE UNLAWFUL. NEITHER THE DELIVERY
OF THIS PROSPECTUS NOR ANY SALE MADE HEREUNDER SHALL, UNDER ANY CIRCUMSTANCES,
CREATE AN IMPLICATION THAT THERE HAS NOT BEEN ANY CHANGE IN THE FACTS SET FORTH
IN THIS PROSPECTUS OR IN THE AFFAIRS OF THE COMPANY SINCE THE DATE HEREOF.
__________________
TABLE OF CONTENTS
<TABLE>
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Page
<S> <C>
Available Information . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Incorporation of Certain Documents by Reference . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
The Company . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Use of Proceeds . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Ratios of Earnings to Fixed Charges . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Description of Debt Securities . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Description of Capital Stock . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Description of Preferred Stock . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Description of Paired Common Shares . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Description of Warrants . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Federal Income Tax Considerations . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Plan of Distribution . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Convertible Notes . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Legal Matters . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Experts . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
</TABLE>
===============================================================================
===============================================================================
$500,000,000
STARWOOD LODGING
TRUST
STARWOOD LODGING
CORPORATION
COMMON STOCK, WARRANTS,
PREFERRED STOCK AND
DEBT SECURITIES
__________________
PROSPECTUS
__________________
===============================================================================
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PART II
INFORMATION NOT REQUIRED IN PROSPECTUS
ITEM 14. OTHER EXPENSES OF ISSUANCE AND DISTRIBUTION.*
<TABLE>
<S> <C>
Registration Fee . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . $172,400
NYSE Listing Fee . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Rating Agencies Fees . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Printing and Engraving Expenses . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Legal Fees and Expenses . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Accounting Fees and Expenses . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Blue Sky Fees and Expenses . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Fees and Expenses of Transfer Agent, Trustee and Depositary . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Miscellaneous . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Total . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . $
</TABLE>
*Expenses are estimated except for the registration fee.
ITEM 15. INDEMNIFICATION OF DIRECTORS AND OFFICERS.
Certain provisions of the MGCL provide that the Company may, and in
some circumstances must, indemnify the trustees, directors and officers of the
Company against liabilities and expenses incurred by such person by reason of
the fact that such person was serving in such capacity, subject to certain
limitations and conditions set forth in the statute. The Corporation's
Articles of Incorporation and the Trust's Declaration of Trust provide that the
Corporation and Trust shall indemnify its directors, trustees and officers to
the extent permitted by the MGCL.
The Company has entered into indemnification agreements with its
directors, trustees and executive officers providing for the maintenance of
directors, trustees and officers liability insurance, subject to certain
conditions, and the indemnification of and advancement of expenses to such
directors, trustees and executive officers.
II-1
<PAGE> 53
ITEM 16. EXHIBITS.
The following exhibits are filed herewith or incorporated herein by
reference.
<TABLE>
<CAPTION>
EXHIBIT
NO. DESCRIPTION OF EXHIBIT
------- ----------------------
<S> <C>
2* Formation Agreement dated as of November 11, 1994 among the Trust, the Corporation, Starwood
Capital Group, L.P., Berl Holdings L.P., Starwood Apollo Hotel Partners I, L.P., Starwood Apollo
Hotel Partners VIII, L.P., Starwood Apollo Hotel Partners IX, L.P. and Starwood Nomura Hotel
Investors, L.P. (incorporated by reference to Exhibit 2 to the Trust's and the Corporation's
Joint Current Report on Form 8-K dated November 16, 1994 (the "November 1994 Form 8-K")).
3.1* Amended and Restated Declaration of Trust of the Trust dated June 6, 1988, as amended
(incorporated by reference to Exhibit 3A to the Trust's and the Corporation's Joint Current
Report on Form 8-K dated January 31, 1995 (the "January 1995") Form 8-K")).
3.2* Amendment and Restatement of Articles of Incorporation of the Corporation, as amended
(incorporated by referenced to Exhibit 3B to the January 1995 Form 8-K).
3.3* Trustees' Regulations of the Trust, as amended (incorporated by referenced to Exhibit 3.3 to the
Trust's and the Corporation's Joint Annual Report on Form 10-K for the year ended December 31,
1994 (the "1994 Form 10-K")).
3.4* By-laws of the Corporation, as amended (incorporated by reference to Exhibit 3.4 to the 1994
Form 10-K).
4.1 Form of Indenture for Debt Securities
4.2 Form of Indenture for Convertible Notes
4.3 Form of Convertible Notes (included in Exhibit 4.2)
5(1) Opinion of Counsel.
12.1 Computation of Ratio of Earnings to Fixed Charges.
23.1 Consent of Independent Public Accountants.
23.2 Consent of Counsel (included in Exhibit 5).
24* Powers of Attorney.
26(1) Form T-1 of Trustee for the Notes.
</TABLE>
______________
(1)To be filed by amendment.
*Previously filed.
ITEM 17 UNDERTAKINGS.
Each of the undersigned Registrants hereby undertakes that insofar as
indemnification for liabilities arising under the Securities Act of 1933 may be
permitted to directors, officers and controlling persons of such Registrant
pursuant to the provisions described in Item 15 above, or otherwise, such
Registrant has been advised that in the opinion of the Securities and Exchange
Commission such indemnification is against public policy as expressed in the
Act and is, therefore, unenforceable. In the event that a claim for
indemnification against such liabilities (other than the payment by the
Registrants of expenses incurred or paid by a director, officer or controlling
person of the Registrants in the successful defense of any action, suit or
proceeding) is asserted by such director, officer or controlling person in
connection with the securities being registered, each 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
II-2
<PAGE> 54
question whether such indemnification by it is against public policy as
expressed in the Act and will be governed by the final adjudication of such
issue.
The undersigned Registrants hereby further undertake:
(1) To file, during any period in which offers or sales are being
made, a post-effective amendment to this Registration Statement:
(i) To include any prospectus required by section
10(a)(3) of the Securities Act of 1933;
(ii) To reflect in the prospectus any facts or events
arising after the effective date of the Registration Statement (or the
most recent post-effective amendment thereof) which, individually or
in the aggregate, represent a fundamental change in the information
set forth in the Registration Statement. Notwithstanding the
foregoing, any increase or decrease in volume of securities offered
(if the total dollar value of securities offered would not exceed that
which was registered) and any deviation from the low or high end of
the estimated maximum offering range may be reflected in the form of
prospectus filed with the Commission pursuant to Rule 424(b) (Section
230.424(b) of 17 C.F.R.) if, in the aggregate, the changes in volume
and price represent no more than a 20% change in the maximum aggregate
offering price set forth in the "Calculation of Registration Fee"
table in the effective registration statement; and
(iii) To include any material information with respect to
the plan of distribution not previously disclosed in the Registration
Statement or any material change to such information in the
Registration Statement;
provided, however, that paragraphs (1)(i) and (1)(ii) do not apply if the
Registration Statement is on Form S-3 or Form S-8, and 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
Registrants pursuant to Section 13 or Section 15(d) of the Securities Exchange
Act of 1934 that are incorporated by reference in the Registration Statement.
(2) That, for the purpose of determining any liability under the
Securities Act of 1933, each such post-effective amendment shall be deemed to
be a new registration statement relating to the securities offered therein, and
the offering of such securities at that time shall be deemed to be the initial
bona fide offering thereof.
(3) To remove from registration by means of a post-effective
amendment any of the securities being registered which remain unsold at the
termination of the offering.
The undersigned Registrants hereby further undertake that, for
purposes of determining any liability under the Securities Act of 1933, each
filing of the Registrants' annual reports pursuant to Section 13(a) or Section
15(d) of the Securities Exchange Act of 1934 (and, where applicable, each
filing of an employee benefit plan's annual report pursuant to Section 15(d) of
the Securities Exchange Act of 1934) that is incorporated by reference in the
Registration Statement shall be deemed to be a new registration statement
relating to the securities offered therein, and the offering of such securities
at that time shall be deemed to be the initial bona fide offering thereof.
The undersigned Registrants further undertake that:
(a) For purposes of determining any liability under the Securities
Act of 1933, the information omitted from the form of Prospectus filed as part
of this Registration Statement in reliance upon Rule 430A and contained in a
form of prospectus filed by the Registrants pursuant to Rule 424(b)(1) or (4)
or 497(h) under the Securities Act shall be deemed to be part of this
Registration Statement as of the time it was declared effective.
(b) For the purpose of determining any liability under the
Securities Act of 1933, each post-effective amendment that contains a form of
prospectus shall be deemed to be a new registration statement relating to the
II-3
<PAGE> 55
securities offered therein, and the offering of such securities at that time
shall be deemed to be the initial bona fide offering thereof.
II-4
<PAGE> 56
SIGNATURES
Pursuant to the requirements of the Securities Act of 1933, as
amended, 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 Los Angeles, State of
California, on the 6th day of February, 1996.
STARWOOD LODGING TRUST
By:
/s/ Jeffrey C. Lapin
-----------------------------
President and Chief Operating
Officer
II-5
<PAGE> 57
Pursuant to the requirements of the Securities Act of 1933, as
amended, this Registration Statement has been signed below by the following
persons in the capacities and on the dates indicated.
<TABLE>
<S> <C> <C>
/s/ Barry S. Sternlicht* Chairman, Chief Executive Officer and Trustee February 6, 1996
- ----------------------------------- (Principal Executive Officer)
Barry S. Sternlicht
/s/ Jeffrey C. Lapin President, Chief Operating Officer and Trustee February 6, 1996
- -----------------------------------
Jeffrey C. Lapin
/s/ Ronald C. Brown* Vice President (Principal Financial and February 6, 1996
- ----------------------------------- Accounting Officer)
Ronald C. Brown
/s/ Bruce W. Duncan* Trustee February 6, 1996
- -----------------------------------
Bruce W. Duncan
/s/ Madison F. Grose* Trustee February 6, 1996
- -----------------------------------
Madison F. Grose
/s/ Stephen R. Quazzo* Trustee February 6, 1996
- -----------------------------------
Stephen R. Quazzo
/s/ William E. Simms* Trustee February 6, 1996
- -----------------------------------
William E. Simms
/s/ Daniel H. Stern* Trustee February 6, 1996
- -----------------------------------
Daniel H. Stern
*By /s/ Jeffrey C. Lapin
- -----------------------------------
Jeffrey C. Lapin
Attorney-in-fact
</TABLE>
II-6
<PAGE> 58
Pursuant to the requirements of the Securities Act of 1933, as
amended, the Registrant certifies that it has reasonable grounds to believe
that it meets all of the requirements for filing a 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 Los Angeles, State of California on
the 7th of February, 1996.
STARWOOD LODGING CORPORATION
By: /s/ Kevin E. Mallory
---------------------------
Executive Vice President
Pursuant to the requirements of the Securities Act of 1933, as
amended, this Registration Statement has been signed below by the following
persons in the capacities and on the dates indicated.
<TABLE>
<S> <C> <C>
/s/ Earle F. Jones* Chairman of the Board of Directors and February 6, 1996
- ----------------------------------- Director
Earle F. Jones
/s/ Kevin E. Mallory* Executive Vice President (Principal Executive February 6, 1996
- ----------------------------------- Officer)
Kevin E. Mallory
/s/ Kenneth J. Biehl Vice President and Controller (Principal February 6, 1996
- ----------------------------------- Financial and Accounting Officer)
Kenneth J. Biehl
/s/ Bruce M. Ford* Director February 6, 1996
- -----------------------------------
Bruce M. Ford
/s/ Graeme W. Henderson* Director February 6, 1996
- -----------------------------------
Graeme W. Henderson
*By: /s/ Kenneth J. Biehl
- -----------------------------------
Kenneth J. Biehl
Attorney-in-fact
</TABLE>
II-7
<PAGE> 59
EXHIBIT INDEX
<TABLE>
<CAPTION> SEQUENTIALLY
EXHIBIT NUMBERED
NO. DESCRIPTION OF EXHIBIT PAGE
------- ---------------------- -------
<S> <C> <C>
2* Formation Agreement dated as of November 11, 1994 among the Trust, the Corporation, Starwood
Capital Group, L.P., Berl Holdings L.P., Starwood Apollo Hotel Partners I, L.P., Starwood Apollo
Hotel Partners VIII, L.P., Starwood Apollo Hotel Partners IX, L.P. and Starwood Nomura Hotel
Investors, L.P. (incorporated by reference to Exhibit 2 to the Trust's and the Corporation's
Joint Current Report on Form 8-K dated November 16, 1994 (the "November 1994 Form 8-K")).
3.1* Amended and Restated Declaration of Trust of the Trust dated June 6, 1988, as amended
(incorporated by reference to Exhibit 3A to the Trust's and the Corporation's Joint Current
Report on Form 8-K dated January 31, 1995 (the "January 1995") Form 8-K")).
3.2* Amendment and Restatement of Articles of Incorporation of the Corporation, as amended
(incorporated by referenced to Exhibit 3B to the January 1995 Form 8-K).
3.3* Trustees' Regulations of the Trust, as amended (incorporated by referenced to Exhibit 3.3 to the
Trust's and the Corporation's Joint Annual Report on Form 10-K for the year ended December 31,
1994 (the "1994 Form 10-K")).
3.4* By-laws of the Corporation, as amended (incorporated by reference to Exhibit 3.4 to the 1994
Form 10-K).
4.1 Form of Indenture for Debt Securities
4.2 Form of Indenture for Convertible Notes
4.3 Form of Convertible Notes (included in Exhibit 4.2)
5(1) Opinion of Counsel.
12.1 Computation of Ratio of Earnings to Fixed Charges.
23.1 Consent of Independent Public Accountants.
23.2 Consent of Counsel (included in Exhibit 5).
24* Powers of Attorney (contained in the signature pages hereto).
26(1) Form T-1 of Trustee for the Notes.
</TABLE>
______________
(1)To be filed by amendment.
*Previously filed.
<PAGE> 1
EXHIBIT 4.1
___________________________________________________________________________
STARWOOD LODGING TRUST AND
STARWOOD LODGING CORPORATION
TO
_______________________________
TRUSTEE
____________________
INDENTURE
DEBT SECURITIES
DATED AS OF ____________, 199_
____________________
___________________________________________________________________________
<PAGE> 2
STARWOOD LODGING TRUST AND STARWOOD LODGING CORPORATION
RECONCILIATION AND TIE BETWEEN TRUST INDENTURE ACT OF 1939
AND INDENTURE, DATED AS OF ______________, 199_
<TABLE>
<CAPTION>
TRUST INDENTURE INDENTURE SECTION
ACT SECTION
<S> <C> <C>
Section 310(a)(1) . . . . . . . . . . . . . . . . . . . . . . . . . . . 608
(a)(2) . . . . . . . . . . . . . . . . . . . . . . . . . . . 608
(a)(3) . . . . . . . . . . . . . . . . . . . . . . . . . . . Not Applicable
(a)(4) . . . . . . . . . . . . . . . . . . . . . . . . . . . Not Applicable
(b) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 608,610
Section 311(a) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 609
(b) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 609
(b)(2) . . . . . . . . . . . . . . . . . . . . . . . . . . . 703(a), 703(b)
Section 312(a) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 701, 702(a)
(b) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 702(b)
(c) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 702(c)
Section 313(a) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 703(a)
(b) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 703(b)
(c) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 703(a), 703(b)
(d) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 703(b)
Section 314(a) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 704, 1007, 1008
(b) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . Not Applicable
(c)(1) . . . . . . . . . . . . . . . . . . . . . . . . . . . 102
(c)(2) . . . . . . . . . . . . . . . . . . . . . . . . . . . 102
(c)(3) . . . . . . . . . . . . . . . . . . . . . . . . . . . Not Applicable
(d) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . Not Applicable
(e) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 102
Section 315(a) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 601(a)
(b) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 602, 703(a)
(c) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 601(b)
(d) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 601(c)
(d)(1) . . . . . . . . . . . . . . . . . . . . . . . . . . . 601(a), 601(c)
(d)(2) . . . . . . . . . . . . . . . . . . . . . . . . . . . 601(c)
(d)(3) . . . . . . . . . . . . . . . . . . . . . . . . . . . 601(c)
(e) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 514
Section 316(a) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 101
(a)(1)(A) . . . . . . . . . . . . . . . . . . . . . . . . . . 512
(a)(1)(B) . . . . . . . . . . . . . . . . . . . . . . . . . . 502, 513
(a)(2) . . . . . . . . . . . . . . . . . . . . . . . . . . . Not Applicable
(b) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 508
Section 317(a)(1) . . . . . . . . . . . . . . . . . . . . . . . . . . . 503
(a)(2) . . . . . . . . . . . . . . . . . . . . . . . . . . . 504
(b) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 1010
(c) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 104(c)
Section 318(a) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 107
</TABLE>
____________________
NOTE: THIS RECONCILIATION AND TIE SHALL NOT, FOR ANY PURPOSE, BE DEEMED TO BE
A PART OF THIS INDENTURE.
<PAGE> 3
TABLE OF CONTENTS*
<TABLE>
<CAPTION>
PAGE
----
<S> <C>
Parties . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Recitals of the Company . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
ARTICLE ONE
Definitions and Other Provisions
of General Application
SECTION 101. Definitions . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 1
SECTION 102. Compliance Certificates and Opinions . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 10
SECTION 103. Form of Documents Delivered to Trustee . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 11
SECTION 104. Acts of Holders . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 11
SECTION 105. Notices, Etc., to Trustee and Companies . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 13
SECTION 106. Notice to Holders; Waiver . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 14
SECTION 107. Conflict with Trust Indenture Act . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 15
SECTION 108. Effect of Headings and Table of Contents . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 15
SECTION 109. Successors and Assigns . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 15
SECTION 110. Separability Clause . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 15
SECTION 111. Benefits of Indenture . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 16
SECTION 112. Governing Law . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 16
SECTION 113. Legal Holidays . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 16
SECTION 114. No Recourse Against Others . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 16
SECTION 115. Judgment Currency . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 17
ARTICLE TWO
Security Forms
SECTION 201. Forms Generally . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 17
SECTION 202. Form of Legend for Global Securities . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 18
</TABLE>
__________________________________
* NOTE: THIS RECONCILIATION AND TIE SHALL NOT, FOR ANY PURPOSE, BE DEEMED TO
BE A PART OF THIS INDENTURE.
-i-
<PAGE> 4
<TABLE>
<CAPTION>
PAGE
----
<S> <C> <C>
SECTION 203. Form of Trustee's Certificate of Authentication . . . . . . . . . . . . . . . . . . . . . . . 19
SECTION 204. Securities in Global Form . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 19
SECTION 205. CUSIP Number . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 20
ARTICLE THREE
The Securities
SECTION 301. Amount Unlimited; Issuable in Series . . . . . . . . . . . . . . . . . . . . . . . . . . . . 20
SECTION 302. Denominations . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 24
SECTION 303. Execution, Authentication, Delivery and Dating . . . . . . . . . . . . . . . . . . . . . . . 24
SECTION 304. Temporary Securities . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 26
SECTION 305. Registration, Registration of Transfer and Exchange . . . . . . . . . . . . . . . . . . . . . 28
SECTION 306. Mutilated, Destroyed, Lost and Stolen Securities . . . . . . . . . . . . . . . . . . . . . . 31
SECTION 307. Payment of Interest; Interest Rights Preserved . . . . . . . . . . . . . . . . . . . . . . . 32
SECTION 308. Persons Deemed Owners . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 34
SECTION 309. Cancellation . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 35
SECTION 310. Computation of Interest . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 36
ARTICLE FOUR
Satisfaction and Discharge
SECTION 401. Satisfaction and Discharge of Indenture . . . . . . . . . . . . . . . . . . . . . . . . . . . 36
SECTION 402. Application of Trust Money . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 37
SECTION 403. Reinstatement . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 38
ARTICLE FIVE
Remedies
SECTION 501. Events of Default . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 38
SECTION 502. Acceleration of Maturity; Rescission and Annulment . . . . . . . . . . . . . . . . . . . . . 40
</TABLE>
-ii-
<PAGE> 5
<TABLE>
<CAPTION>
PAGE
----
<S> <C> <C>
SECTION 503. Collection of Indebtedness and Suits for Enforcement by Trustee . . . . . . . . . . . . . . . 42
SECTION 504. Trustee May File Proofs of Claim . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 43
SECTION 505. Trustee May Enforce Claims Without Possession of Securities . . . . . . . . . . . . . . . . . 44
SECTION 506. Application of Money Collected . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 44
SECTION 507. Limitation on Suits . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 44
SECTION 508. Unconditional Right of Holders to Receive Principal, Premium and Interest . . . . . . . . . . 45
SECTION 509. Restoration of Rights and Remedies . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 45
SECTION 510. Rights and Remedies Cumulative . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 46
SECTION 511. Delay or Omission Not Waiver . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 46
SECTION 512. Control by Holders . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 46
SECTION 513. Waiver of Past Defaults . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 47
SECTION 514. Undertaking for Costs . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 47
ARTICLE SIX
The Trustee
SECTION 601. Certain Duties and Responsibilities of the Trustee . . . . . . . . . . . . . . . . . . . . . 48
SECTION 602. Notice of Defaults . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 49
SECTION 603. Certain Rights of Trustee . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 49
SECTION 604. Not Responsible for Recitals or Issuance of Securities . . . . . . . . . . . . . . . . . . . 51
SECTION 605. May Hold Securities . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 51
SECTION 606. Money Held in Trust . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 52
SECTION 607. Compensation and Reimbursement . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 52
SECTION 608. Eligibility; Disqualification; Conflicting Interests . . . . . . . . . . . . . . . . . . . . 53
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SECTION 609. Preferential Collection of Claims Against Companies . . . . . . . . . . . . . . . . . . . . . 53
SECTION 610. Resignation and Removal; Appointment of Successor . . . . . . . . . . . . . . . . . . . . . . 53
SECTION 611. Acceptance of Appointment by Successor . . . . . . . . . . . . . . . . . . . . . . . . . . . 55
SECTION 612. Merger, Conversion, Consolidation or Succession to Business . . . . . . . . . . . . . . . . . 56
SECTION 613. Appointment of Authenticating Agent . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 56
ARTICLE SEVEN
Holders' Lists And Reports By Trustee And Companies
SECTION 701. Companies to Furnish Trustee Names and Addresses of Holders . . . . . . . . . . . . . . . . . 58
SECTION 702. Preservation of Information; Communications to Holders . . . . . . . . . . . . . . . . . . . 58
SECTION 703. Reports by Trustee . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 60
SECTION 704. Reports by Companies . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 60
ARTICLE EIGHT
Consolidation, Merger, Conveyance, Transfer or Lease
SECTION 801. Companies May Consolidate, Etc. on Certain Terms . . . . . . . . . . . . . . . . . . . . . . 61
SECTION 802. Successor Substituted . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 62
ARTICLE NINE
Supplemental Indentures
SECTION 901. Supplemental Indentures Without Consent of Holders . . . . . . . . . . . . . . . . . . . . . 62
SECTION 902. Supplemental Indentures with Consent of Holders . . . . . . . . . . . . . . . . . . . . . . . 64
SECTION 903. Execution of Supplemental Indentures . . . . . . . . . . . . . . . . . . . . . . . . . . . . 65
SECTION 904. Effect of Supplemental Indentures . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 65
SECTION 905. Conformity with Trust Indenture Act . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 66
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SECTION 906. Reference in Securities to Supplemental Indentures . . . . . . . . . . . . . . . . . . . . . 66
SECTION 907. Notice of Supplemental Indentures . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 66
ARTICLE TEN
Covenants
SECTION 1001. Payments of Securities . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 66
SECTION 1002. Maintenance of Office or Agency . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 67
SECTION 1003. Corporate Existence . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 68
SECTION 1004. Payment of Taxes and Other Claims . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 68
SECTION 1005. Maintenance of Properties . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 69
SECTION 1006. Insurance . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 69
SECTION 1007. Compliance Certificates . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 69
SECTION 1008. Commission Reports . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 70
SECTION 1009. Waiver of Stay, Extension or Usury Laws . . . . . . . . . . . . . . . . . . . . . . . . . . . 71
SECTION 1010. Money for Securities Payments to Be Held in Trust . . . . . . . . . . . . . . . . . . . . . . 72
SECTION 1011. Additional Amounts . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 73
ARTICLE ELEVEN
Redemption of Securities
SECTION 1101. Applicability of Article . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 75
SECTION 1102. Election to Redeem; Notice to Trustee . . . . . . . . . . . . . . . . . . . . . . . . . . . . 75
SECTION 1103. Selection by Trustee of Securities to Be Redeemed . . . . . . . . . . . . . . . . . . . . . . 75
SECTION 1104. Notice of Redemption . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 76
SECTION 1105. Deposit of Redemption Price . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 77
SECTION 1106. Securities Payable on Redemption Date . . . . . . . . . . . . . . . . . . . . . . . . . . . . 77
SECTION 1107. Securities Redeemed in Part . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 78
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ARTICLE TWELVE
Sinking Funds
SECTION 1201. Applicability of Article . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 79
SECTION 1202. Satisfaction of Sinking Fund Payments with Securities . . . . . . . . . . . . . . . . . . . . . 79
SECTION 1203. Redemption of Securities for Sinking Fund . . . . . . . . . . . . . . . . . . . . . . . . . . . 79
ARTICLE THIRTEEN
Defeasance and Covenant Defeasance
SECTION 1301. Applicability of Article; Companies' Option to Effect Defeasance or Covenant Defeasance . . . . 80
SECTION 1302. Defeasance and Discharge . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 80
SECTION 1303. Covenant Defeasance . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 81
SECTION 1304. Conditions to Defeasance or Covenant Defeasance . . . . . . . . . . . . . . . . . . . . . . . . 81
SECTION 1305. Deposited Money and Government Obligations To Be Held In Trust . . . . . . . . . . . . . . . . 84
SECTION 1306. Reinstatement . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 84
ARTICLE FOURTEEN
Subordination of Securities
SECTION 1401. Applicability of Article . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 86
SECTION 1402. Securities Subordinate to Senior Indebtedness . . . . . . . . . . . . . . . . . . . . . . . . . 86
SECTION 1403. Payment Over of Proceeds Upon Dissolution, Etc. . . . . . . . . . . . . . . . . . . . . . . . . 86
SECTION 1404. Prior Payment to Senior Indebtedness Upon Acceleration of Securities . . . . . . . . . . . . . 88
SECTION 1405. No Payment When Senior Indebtedness in Default . . . . . . . . . . . . . . . . . . . . . . . . 88
SECTION 1406. Payment Permitted if No Default . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 89
SECTION 1407. Subrogation to Rights of Holders of Senior Indebtedness . . . . . . . . . . . . . . . . . . . . 89
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SECTION 1408. Provisions Solely to Define Relative Rights . . . . . . . . . . . . . . . . . . . . . . . . . . 90
SECTION 1409. Trustee to Effectuate Subordination . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 90
SECTION 1410. No Waiver of Subordination Provisions . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 90
SECTION 1411. Notice to Trustee . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 91
SECTION 1412. Reliance on Judicial Order or Certificate of Liquidating Agent . . . . . . . . . . . . . . . . 92
SECTION 1413. Trustee Not Fiduciary for Holders of Senior Indebtedness . . . . . . . . . . . . . . . . . . . 92
SECTION 1414. Rights of Trustee as Holder of Senior Indebtedness; Preservation of Trustee's Rights . . . . . 92
SECTION 1415. Article Applicable to Paying Agents . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 93
ARTICLE FIFTEEN
Guaranty
SECTION 1501. Applicability of Article . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 93
SECTION 1502. Guaranty . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 93
SECTION 1503. Execution and Delivery of Guaranty . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 95
SECTION 1504. Guarantor May Consolidate, Etc., on Certain Terms . . . . . . . . . . . . . . . . . . . . . . . 96
SECTION 1505. Release of Guarantor . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 97
ARTICLE SIXTEEN
Meetings of Holders of Securities
SECTION 1601. Purpose for Which Meetings May be Called . . . . . . . . . . . . . . . . . . . . . . . . . . . 98
SECTION 1602. Call, Notice and Place of Meetings . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 98
SECTION 1603. Persons Entitled to Vote at Meetings . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 98
SECTION 1604. Quorum; Action . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 99
SECTION 1605. Determination of Voting Rights; Conduct and Adjournment of Meetings . . . . . . . . . . . . . . 100
SECTION 1606. Counting Votes and Recording Action of Meetings . . . . . . . . . . . . . . . . . . . . . . . . 101
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ARTICLE SEVENTEEN
Miscellaneous
SECTION 1701. Miscellaneous . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 102
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INDENTURE, dated as of ________________, 199_, among Starwood
Lodging Trust, a Maryland real estate investment trust (the "TRUST"), Starwood
Lodging Corporation, a Maryland corporation (the "CORPORATION" and, together
with the Trust, the "COMPANIES"), having their principal offices at 11845 West
Olympic Boulevard, Suite 550, Los Angeles, California 90064 and 11845 West
Olympic Boulevard, Suite 560, Los Angeles, California 90064, respectively, and
__________________________, a ____________________________, as Trustee (herein
called the "TRUSTEE").
RECITALS OF THE COMPANIES
Each of the Trust and the Corporation has duly authorized the
execution and delivery of this Indenture to provide for the issuance from time
to time of its unsecured debentures, notes or other evidences of indebtedness
(herein called the "SECURITIES"), to be issued in one or more series as in this
Indenture provided.
All things necessary to make the Securities, when executed by
the Companies and authenticated and delivered hereunder and duly issued by the
Companies, the valid obligations of the Companies and to make this Indenture a
valid agreement of the Companies, in accordance with their and its terms, have
been done.
NOW, THEREFORE, THIS INDENTURE WITNESSETH:
For and in consideration of the premises and the acquisition
of the Securities by the Holders thereof, it is mutually covenanted and agreed,
for the equal and proportionate benefit of all Holders of the Securities or of
series thereof, as follows:
ARTICLE ONE
DEFINITIONS AND OTHER PROVISIONS
OF GENERAL APPLICATION
SECTION 101. Definitions.
For all purposes of this Indenture, except as otherwise
expressly provided or unless 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
Trust Indenture Act, either directly or by reference therein, have the
meanings assigned to them therein;
<PAGE> 12
(3) all accounting terms not otherwise defined herein
have the meanings assigned to them in accordance with generally
accepted accounting principles, and except as otherwise herein
expressly provided, the term "generally accepted accounting
principles" with respect to any computation required or permitted
hereunder shall mean such accounting principles as are generally
accepted at the date of this instrument; and
(4) the words "HEREIN," "HEREOF" and "HEREUNDER" and
other words of similar import refer to this Indenture as a whole and
not to any particular Article, Section or other subdivision.
"ACT," when used with respect to any Holder, has the meaning
specified in Section 104.
"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 Person authorized by the
Trustee pursuant to Section 613 to act on behalf of the Trustee to authenticate
Securities.
"AUTHORIZED NEWSPAPER" means a newspaper, in an official
language of the place of publication or in the English language, customarily
published on each day that is a Business Day in the place of publication, and
of general circulation in each place in connection with which the term is used
or in the financial community of each such place. Where successive
publications are required to be made in Authorized Newspapers, the successive
publications may be made in the same or in different newspapers in the same
city meeting the foregoing requirements and in each case on any day that is a
Business Day in the place of publication.
"BANKRUPTCY LAW" means Title 11, U.S. Code or any similar
federal or state law for the relief of debtors.
"BEARER SECURITY" means any Security in the form established
pursuant to Section 301 which is payable to bearer.
"BOARD OF DIRECTORS" means, with respect to the Trust, the
Board of Trustees of the Trust (or any committee of the Board of Trustees of
the Trust duly authorized to act on such matter), and with respect to the
Corporation, the Board of Directors of
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the Corporation (or any committee of the Board of Directors of the
Corporation duly authorized to act on such matter).
"BOARD RESOLUTION" means a copy of a resolution certified by
the Secretary or an Assistant Secretary of the Trust or the Corporation, as the
case may be, to have been duly adopted by its Board of Directors and to be in
full force and effect on the date of such certification, and delivered to the
Trustee.
"BUSINESS DAY," when used with respect to any Place of
Payment, means each Monday, Tuesday, Wednesday, Thursday and Friday which is
not a day on which banking institutions in that Place of Payment are authorized
or obligated by law (including any executive order) to close.
"CAPITAL STOCK" means, with respect to any Person, any and all
shares, interests, participations, warrants, rights, options or other
equivalents (however designated) of capital stock or any other equity interest
of such Person, including each class of common stock and preferred stock.
"COMMISSION" means the Securities and Exchange Commission, as
from time to time constituted, created under the Exchange Act, or, if at any
time after the execution of this 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 at such time.
"COMMON DEPOSITARY" has the meaning specified in Section 304.
"COMPANY" means one or both, respectively, of the Persons
named as "Companies" in the first paragraph of this Indenture until a successor
Person or Persons shall have become such pursuant to the applicable provisions
of this Indenture, and thereafter "Company" shall mean such successor Person or
Persons.
"COMPANY REQUEST" or "COMPANY ORDER" means a written request
or order signed in the name of one or both of the Companies by its Chairman of
the Board of Directors, its President or any Vice President, and by its
Treasurer, its Controller or its Secretary and delivered to the Trustee.
"CORPORATE TRUST OFFICE" means the office of the Trustee in
[city], [state] which shall be at ________________ or its office in the city in
which it has its principal place of business at which at any particular time
its corporate trust business shall be principally administered.
"COUPON" means any interest coupon appertaining to a Bearer
Security.
"COVENANT DEFEASANCE" has the meaning specified in Section
1303.
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"CUSTODIAN" means any receiver, custodian, trustee, assignee,
liquidator, sequestrator or similar official under any Bankruptcy Law.
"DEBT" means the principal of (and premium, if any) and
interest (including interest accruing subsequent to the commencement of any
proceeding for the bankruptcy or reorganization of the Company under any
applicable bankruptcy, insolvency or similar law now or hereafter in effect) on
(a) indebtedness of the Trust or the Corporation, as the case may be, whether
heretofore or hereafter incurred for money borrowed or represented by
purchase-money obligations, (b) indebtedness of the Trust or the Corporation,
as the case may be, evidenced by notes, debentures, or bonds, or other
securities issued under the provisions of an indenture, fiscal agency agreement
or other agreement, (c) obligations of the Trust or the Corporation, as the
case may be, as lessee under leases of property either made as part of any sale
and lease- back transaction to which the Trust or the Corporation, as the case
may be, is a party or otherwise, (d) indebtedness of partnerships and joint
ventures which is included in the Companies consolidated financial statements,
(e) indebtedness, obligations and liabilities of others in respect of which the
Trust or the Corporation, as the case may be, is liable contingently or
otherwise to pay or advance money or property or as guarantor, endorser or
otherwise or which the Trust or the Corporation, as the case may be, has agreed
to purchase or otherwise acquire, (f) any binding commitment of the Trust or
the Corporation, as the case may be, to fund any real estate investment or to
fund any investment in any entity making such real estate investment, (g)
amendments, modifications, renewals, extensions and deferrals of any such
indebtedness, and (h) any indebtedness issued in exchange for any such
indebtedness.
"DEFAULT" means any event which is, or after notice or passage
of time or both would be, an Event of Default.
"DEFAULTED INTEREST" has the meaning specified in Section 307.
"DEFEASANCE" has the meaning specified in Section 1302.
"DOLLARS" and "$" means lawful money of the United States of
America.
"EVENT OF DEFAULT" has the meaning specified in Section 501.
"EXCHANGE ACT" means the Securities Exchange Act of 1934, as
amended from time to time, and the rules and regulations promulgated
thereunder.
"GAAP" means such accounting principles as are generally
accepted in the United States of America on the date or time of any computation
required hereunder.
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"GLOBAL SECURITY" means a Security that evidences all or part
of the Securities of any series and is authenticated and delivered to, and
registered in the name of, the U.S. Depositary for such Securities or a nominee
thereof.
"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 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 of 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.
"HOLDER" or "SECURITYHOLDER", in the case of any Registered
Security, means a Person in whose name such Security is registered in the
Security Register and, in the case of any Bearer Security, means the bearer
thereof and, in the case of any Coupon, means the bearer thereof.
"INDENTURE" means this instrument as originally executed or as
it may from time to time be supplemented or amended by one or more indentures
supplemental hereto entered into pursuant to the applicable provisions hereof,
including, for all purposes of this instrument and any such supplemental
indenture, the provisions of the Trust Indenture Act that are deemed to be a
part of and govern this instrument and any such supplemental indenture,
respectively. The term "Indenture" shall also include the terms of particular
series of Securities established as contemplated by Section 301.
"INTEREST," when used with respect to an Original Issue
Discount Security which by its terms bears interest only after Maturity, means
interest payable after Maturity.
"INTEREST PAYMENT DATE," when used with respect to any
Security, means the Stated Maturity of an installment of interest on such
Security.
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"JUDGMENT CURRENCY" has the meaning specified in Section 115.
"MATURITY," when used with respect to any Security, means the
date on which the principal of such Security or an installment of principal
becomes due and payable as therein or herein provided, whether at the Stated
Maturity or by declaration of acceleration, call for redemption or otherwise.
"NEW YORK BANKING DAY" has the meaning specified in Section
115.
"NYSE" means the New York Stock Exchange, Inc.
"OFFICER'S CERTIFICATE" means a certificate delivered to the
Trustee and signed by the Chairman of the Board of Directors, the President or
any Vice President and by the Treasurer, the Controller or the Secretary of a
Company.
"OPINION OF COUNSEL" means a written opinion of counsel, who
may be an employee of or counsel to a Company, and who shall be reasonably
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 or
Securities of any series, means, as of the date of determination, all such
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 (a) money in the necessary amount has been
theretofore deposited with the Trustee or any Paying Agent (other than
a Company) in trust or set aside and segregated in trust by a Company
(if a Company shall act as its own Paying Agent) for the Holders of
such Securities or (b) money or Government Obligations as contemplated
by Section 401 in the necessary amount have been theretofore deposited
with the Trustee, in trust for the Holders of such Securities;provided
that, if such Securities are to be redeemed, notice of such redemption
has been duly given pursuant to this Indenture or provision therefor
satisfactory to the Trustee has been made;
(iii) 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
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which there shall have been presented to the Trustee proof
satisfactory to it that such Securities are held by a bona fide
purchaser in whose hands such Securities are valid obligations of the
Companies; and
(iv) Securities which have been defeased pursuant
to Section 1302;
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 whether a
quorum is present at a meeting of Holders of Securities, (a) the principal
amount of an Original Issue Discount Security that shall be deemed to be
Outstanding for such purposes shall be that portion of the principal amount
thereof that could be declared to be due and payable upon the occurrence of an
Event of Default and the continuation thereof pursuant to the terms of such
Original Issue Discount Security as of the date of such determination, (b) the
principal amount of a Security denominated in a foreign currency that shall be
deemed to be Outstanding shall be the United States dollar equivalent,
determined on the issue date for such Security, of the principal amount (or in
the case of an Original Issue Discount Security, the United States dollar
equivalent on the issue date of such Security of the amount determined as
provided in (a) above), (c) the principal amount of an indexed Security that
shall be deemed to be 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 this Indenture, and (d) Securities owned
by a Company or any other obligor upon the Securities or any Affiliate of a
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 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 a Company or any other obligor upon the Securities
or any Affiliate of a Company or of such other obligor.
"PAYING AGENT" means any Person authorized by the Companies to
pay the principal of (and premium, if any) or interest on any Securities or any
Coupon on behalf of the Companies. A Company may act as Paying Agent with
respect to any of its Securities issued hereunder.
"PERSON" means any individual, corporation, partnership,
limited liability company, joint venture, association, joint-stock company,
trust, unincorporated
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organization or government or any agency or political subdivision thereof.
"PLACE OF PAYMENT," when used with respect to the Securities
of any series, means the place or places where the principal of (and premium,
if any) and interest on the Securities of that series are payable as designated
in or pursuant to Section 301.
"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 shall be deemed to
evidence the same debt as the mutilated, destroyed, lost or stolen Security.
"REDEMPTION DATE," when used with respect to any Security of
any series to be redeemed, means the date fixed for such redemption by or
pursuant to this Indenture.
"REDEMPTION PRICE," when used with respect to any Security of
any series to be redeemed, means the price at which it is to be redeemed
pursuant to this Indenture.
"REGISTERED SECURITY" means any Security issued hereunder
and registered in the Security Register.
"REGULAR RECORD DATE" for the interest payable on any Interest
Payment Date on the Securities of any series means the date specified for that
purpose as contemplated by Section 301.
"REQUIRED CURRENCY" has the meaning specified in Section 115.
"RESPONSIBLE OFFICER," when used with respect to the Trustee,
means the chairman or any vice-chairman of the board of directors, the chairman
or any vice-chairman of the executive committee of the board of directors, the
chairman of the trust committee, the president, any vice president, the
secretary, any assistant secretary, the treasurer, any assistant treasurer, the
cashier, any assistant cashier, any senior trust officer or assistant trust
officer, the controller or any assistant controller or any other officer of the
Trustee customarily performing functions similar to those performed by any of
the above designated officers and also means, with respect to a particular
corporate trust matter, any other officer to whom such matter is referred
because of his knowledge of and familiarity with the particular subject.
"SECURITIES" has the meaning stated in the first recital of
this Indenture and more particularly means any Securities authenticated and
delivered under this Indenture.
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"SECURITY REGISTER" and "SECURITY REGISTRAR" have the
respective meanings specified in Section 305.
"SENIOR INDEBTEDNESS" with respect to the Trust or the
Corporation, means Debt of such Company other than and (i) any Debt as to
which, in the instrument creating or evidencing such Debt or pursuant to which
such Debt is outstanding, it is expressly provided that such Debt is not
superior in right of payment to Subordinated Indebtedness or ranks pari passu
with Subordinated Indebtedness of such Company; and (2) any Debt of such
Company that is Subordinated Indebtedness.
"SIGNIFICANT SUBSIDIARY" means any Subsidiary which is a
"significant subsidiary" of the Trust or the Corporation, as the case may be,
within the meaning of Rule 1.02(v) of Regulation S-X promulgated by the
Commission as in effect as of the date of this Indenture.
"SPECIAL RECORD DATE" for the payment of any Defaulted
Interest means a date fixed by the Trustee pursuant to Section 307.
"STATED MATURITY," when used with respect to any Security or
any installment of principal thereof or interest thereon, means the date
specified in such Security as the fixed date on which the principal of such
Security or such installment of principal or interest is due and payable.
"SUBORDINATED INDEBTEDNESS" with respect to the Trust or the
Corporation, means any Debt of such Company as to which, in the instrument
evidencing such Debt, or pursuant to which such Debt was issued, it is
expressly provided that such Debt is subordinated in right of payment to Senior
Indebtedness or other Debt of such Company.
"SUBSIDIARY" means, with respect to any Person, (i) any
corporation of which at least a majority in interest of the outstanding Capital
Stock having by the terms thereof voting power under ordinary circumstances to
elect directors of such corporation, irrespective of whether or not at the time
stock of any other class or classes of such corporation shall have or might
have voting power by reason of the happening of any contingency, is at the
time, directly or indirectly, owned or controlled by such Person, or by one or
more other corporations a majority in interest of such stock of which is
similarly owned or controlled or by such Person and one or more other
corporations a majority in interest of such stock of which is similarly owned
or controlled, or (ii) any other Person (other than a corporation) in which
such Person, directly or indirectly, at the date of determination thereof, has
at least a majority equity ownership interest.
"TRUSTEE" means the Person named as the "Trustee" in the first
paragraph of this instrument until a successor Trustee
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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, and if at any time there is more than one such Person,
"Trustee" as used with respect to the Securities of any series shall mean the
Trustee with respect to Securities of that series.
"TRUST INDENTURE ACT" means the Trust Indenture Act of 1939,
as amended, as in force at the date as of which this instrument was executed,
except as provided in Section 905.
"U.S. DEPOSITARY" means, with respect to the Securities of any
series issuable or issued in whole or in part in the form of one or more Global
Securities, the Person designated as U.S. Depositary by the Company pursuant to
Section 301, which must be a clearing agency registered under the Exchange Act,
until a successor U.S. Depositary shall have become such pursuant to the
applicable provisions of this Indenture, and thereafter "U.S. Depositary" shall
mean or include each Person who is then a U.S. Depositary hereunder, and if at
any time there is more than one such Person, "U.S. Depositary" shall mean the
U.S. Depositary with respect to the Securities of that series.
"VICE PRESIDENT," when used with respect to a Company or the
Trustee, means any vice president, whether or not designated by a number or a
word or words added before or after the title "vice president".
SECTION 102. Compliance Certificates and Opinions.
Upon any application or request by a Company to the Trustee to
take any action under any provision of this Indenture, such Company shall
furnish to the Trustee an Officer's Certificate stating that all conditions
precedent, if any, provided for in this Indenture relating to the proposed
action have been complied with and an Opinion of Counsel stating that in the
opinion of such counsel all such conditions precedent, if any, have been
complied with, except that in the case of any such application or 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 shall include:
a. a statement that each individual signing such
certificate or opinion has read such covenant or condition and the
definitions herein relating thereto;
b. a brief statement as to the nature and scope
of the examination or investigation upon which the
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statements or opinions contained in such certificate or
opinion are based;
c. a statement that, in the opinion of each such
individual, he or she has made such examination or
investigation as is necessary to enable him or her to express
an informed opinion as to whether or not such covenant or
condition has been complied with; and
d. a statement as to whether or not, in the
opinion of each such individual, such condition or covenant
has been complied with.
SECTION 103. Form of Documents Delivered to Trustee.
In any case where several matters are required to be certified
by, or covered by an opinion of, any specified Person, it is not necessary that
all such matters be certified by, or covered by the opinion of, only one such
Person, or that they be so certified or covered by only one document, but one
such Person may certify or give an opinion with respect to some matters and one
or more other such Persons as to other matters, and any such Person may certify
or give an opinion as to such matters in one or several documents.
Any certificate or opinion of an officer of a Company may be
based, insofar as it relates to legal matters, upon a certificate or opinion
of, or representations by, counsel, unless such officer knows, or in the
exercise of reasonable care should know, that the certificate or opinion or
representations with respect to the matters upon which his certificate or
opinion is based are erroneous. Any such certificate or Opinion of Counsel may
be based, insofar as it relates to factual matters, upon a certificate or
opinion of, or representations by, an officer or officers of a Company stating
that the information with respect to such factual matters is in the possession
of such Company, unless such counsel knows, or in the exercise of reasonable
care should know, that the certificate or opinion or representations with
respect 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 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 , but only if, Securities of a series are issuable as
Bearer Securities, any request, demand, authorization, direction,
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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 Sixteen, 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 received by the Trustee and, where it is
hereby expressly required, by the Companies. Such instrument or instruments
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 (subject to Section 601) conclusive in favor of the Trustee
and the Companies, 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 1606.
(b) The fact and date of the execution by any Person of any such
instrument or writing may be proved by the affidavit of a witness of such
execution or by a certificate of a notary public or other officer authorized by
law to take acknowledgments of deeds, certifying that the individual signing
such instrument or writing acknowledged to him or her the execution thereof.
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 manner which the Trustee deems sufficient.
(c) The ownership of Registered Securities shall be proved by the
Security Register.
(d) The ownership, principal amount and serial number of Bearer
Securities held by any person 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 reasonably acceptable to the Companies,
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 Companies may
assume that such ownership of any Bearer Security continues until (1) another
certificate or affidavit bearing a later date
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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
held by the Person so executing such instrument or writing and the date of the
commencement and the date of the termination of holding the same may also be
proved in any other manner which the Trustee deems sufficient.
(e) 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 or a
Company in reliance thereon, whether or not notation of such action is made
upon such Security.
(f) The Companies may, in the circumstances permitted by the Trust
Indenture Act, fix any day as the record date for the purpose of determining
the Holders entitled to give or take any request, demand, authorization,
direction, notice, consent, waiver or other Act, or to vote on any action,
authorized or permitted to be given to taken by Holders. If not set by the
Companies prior to the first solicitation of a Holder made by any person in
respect of any such action, or, in the case of any such vote, prior to such
vote, the record date for any such action or vote shall be the 30th day (or, if
later, the date of the most recent list of Holders required to be provided
pursuant to Section 701) prior to such first solicitation or vote, as the case
may be. With regard to any record date, only the Holders on such date (or
their duly designated proxies) shall be entitled to give or take, or vote on,
the relevant action. Notwithstanding the foregoing, the Companies shall not
set a record date for, and the provisions of this paragraph shall not apply
with respect to, any Act by the Holders pursuant to Sections 501, 502, or 512.
(g) Without limiting the foregoing, a Holder entitled hereunder to
give or take any action hereunder with regard to any particular Security may do
so with regard to all or any part of the principal amount of such Security of
by one or more duly appointed agents each of which may do so pursuant to such
appointment with regard to all or on any different part of such principal
amount.
SECTION 105. Notices, Etc., to Trustee and Companies.
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,
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a. the Trustee by any Holder or by a 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 Trustee Administration, or
b. a 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 such Company addressed to it at the address of its
principal office specified in the first paragraph of this Indenture:
attention of the Treasurer, or at any other address previously
furnished in writing to the Trustee by such Company.
SECTION 106. Notice to Holders; Waiver.
Where this Indenture or any Security provides for notice to
Holders of any event,
(1) such notice shall be deemed sufficiently given (unless otherwise
herein or in such Security expressly provided) if in writing and mailed,
first-class postage prepaid, to each Holder of a Registered Security affected
by such event, at his address as it appears in the Security Register, not later
than the latest date (if any), and not earlier than the earliest date (if any),
prescribed for the giving of such notice; and
(2) such notice shall be sufficiently given to Holders of Bearer
Securities, if any, if published in an Authorized Newspaper in The City of New
York and, if such Securities are then listed on any stock exchange outside the
United States, in an Authorized Newspaper in such city as the Company shall
advise the Trustee that such stock exchange so requires, on a Business Day at
least twice, the first such publication to be not earlier than the earliest
date (if any) and not later than the latest date (if any) 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 of a Registered Security shall
affect the sufficiency of such notice with respect to other Holders of
Registered Securities, the sufficiency of any notice to Holders of Bearer
Securities given as provided herein or the validity of the proceedings to which
such notice relates. Where this Indenture or any Security 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.
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In case by reason of the suspension of regular mail service or
by reason of any other cause it shall be impracticable to give such notice by
mail, then such notification as shall be made with the approval of the Trustee
shall constitute a sufficient notification for every purpose hereunder. In
case 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
Holders of Bearer Securities as provided above, nor any defect in any notice so
published, shall affect the sufficiency of any notice mailed to Holders of
Registered Securities as provided above.
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.
SECTION 107. Conflict with Trust Indenture Act.
If any provision hereof limits, qualifies or conflicts with
another provision hereof that is required to be included or deemed included in
this Indenture by any of the provisions of the Trust Indenture Act, such
required provision shall control. If any provision of this Indenture modifies
or excludes any provision of the Trust Indenture Act that may be so modified or
excluded, the latter provision shall be deemed to apply to this Indenture as so
modified or to be excluded, as the case may be.
SECTION 108. 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 109. Successors and Assigns.
All covenants and agreements in this Indenture by a Company
shall bind its successors and assigns, whether so expressed or not.
SECTION 110. Separability Clause.
In case any provision in this Indenture, any Security or any
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.
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SECTION 111. Benefits of Indenture.
Nothing in this Indenture, the Securities or any Coupon,
express or implied, shall give to any Person, other than the parties hereto and
holders of Senior Indebtedness and their successors hereunder and the Holders
of Securities or Coupons, any benefit or any legal or equitable right, remedy
or claim under this Indenture.
SECTION 112. Governing Law.
This Indenture and the Securities shall be governed by and
construed in accordance with the laws (other than the choice of law provisions)
of the State of New York.
SECTION 113. Legal Holidays.
In any case where any Interest Payment Date, Redemption Date
or Stated Maturity of any Security shall not be a Business Day at any Place of
Payment, then (notwithstanding any other provision of this Indenture, any
Security or any Coupon other than a provision of the Security or Coupon which
specifically states that such provision shall apply in lieu of this Section)
payment of interest or principal (and premium, if any) need not be made at such
Place of Payment on such date, but may be made on the next succeeding Business
Day or on such other day as may be set out in the Officer's Certificate
pursuant to Section 301 at such Place of Payment with the same force and effect
as if made on the Interest Payment Date or Redemption Date or at the Stated
Maturity, provided that no interest shall accrue for the period from and after
such Interest Payment Date, Redemption Date or Stated Maturity, as the case may
be, if payment is made on such next succeeding Business Day or other day set
out in such Officer's Certificate.
SECTION 114. No Recourse Against Others.
(a) No recourse under or upon any obligation, covenant or
agreement contained in this Indenture, in any Security, or because of any
indebtedness evidenced thereby, shall be had against any incorporator, as such
or against any past, present or future stockholder, shareholder, officer,
director or trustee, as such, of a Company or of any successor, either directly
or through a 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.
(b) Without limiting the generality of Section 114(a),
each of the parties hereto acknowledges and agrees that (and, by the acceptance
of the Securities by the Holders thereof and as part of the consideration for
the issue of the Securities, each
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Holder acknowledges and agrees that) the name "Starwood Lodging Trust" is a
designation of the Trust and its trustees (as trustees but not personally)
under a Declaration of Trust dated August 25, 1969, as amended and restated,
and all persons dealing with the Trust shall look solely to the Trust's assets
for the enforcement of any claims against the Trust, and the Trustees,
officers, agents and security holders of the Trust assume no personal liability
for obligations entered into on behalf of the Trust, and their respective
individual assets shall not be subject to the claims of any person relating to
such obligations.
SECTION 115. Judgment Currency.
Each Company agrees, to the fullest extent that it may
effectively do so under applicable law, that (a) if for the purpose of
obtaining judgment in any court it is necessary to convert the sum due in
respect of the principal of, or premium or interest, if any, on the Securities
of any series or a Coupon (the "REQUIRED CURRENCY") into a currency in which a
judgment will be rendered (the "JUDGMENT CURRENCY"), the rate of exchange used
shall be the rate at which in accordance with normal banking procedures the
Trustee could purchase in the City of New York the Required Currency with the
Judgment Currency on the New York Banking Day preceding that on which a final
unappealable judgment is given and (b) its obligations under this Indenture to
make payments in the Required Currency (i) shall not be discharged or satisfied
by any tender, or any recovery pursuant to any judgment (whether or not entered
in accordance with subsection (a)), in any currency other than the Required
Currency, except to the extent that such tender or recovery shall result in the
actual receipt, by the payee, of the full amount of the Required Currency
expressed to be payable in respect of such payments, (ii) shall be enforceable
as an alternative or additional cause of action for the purpose of recovering
in the Required Currency the amount, if any, by which such actual receipt shall
fall short of the full amount of the Required Currency so expressed to be
payable and (iii) shall not be affected by judgment being obtained for any
other sum due under this Indenture. For purposes of the foregoing, "NEW YORK
BANKING DAY" means any day except a Saturday, Sunday or a legal holiday in the
City of New York or a day on which banking institutions in the City of New York
are authorized or required by law or executive order to close.
ARTICLE TWO
SECURITY FORMS
SECTION 201. Forms Generally.
Each Registered Security, Bearer Security, Coupon and Global
Security issued pursuant to this Indenture shall be in
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substantially the form established by or pursuant to a Board Resolution or in
one or more indentures supplemental hereto, in each case with such appropriate
insertions, omissions, substitutions and other variations as are required or
permitted by this Indenture or any indenture supplemental hereto, and may have
such letters, numbers or other marks of identification and such legends or
endorsements placed thereon as may be required to comply with the rules of any
securities exchange or as may, consistently herewith, be determined by the
officers executing such Security or Coupon, as evidenced by their execution of
such Security or Coupon. If the form of Securities of any series or Coupons is
established by action taken pursuant to a Board Resolution, a copy of an
appropriate record of such action shall be certified by the Secretary or an
Assistant Secretary of such Company and delivered to the Trustee at or prior to
the delivery of the Company Order contemplated by Section 303 for the
authentication and delivery of such Securities. If all of the Securities of
any series and Coupons established by action taken pursuant to a Board
Resolution are not to be issued at one time, it shall not be necessary to
deliver a record of such action at the time of issuance of each Security of
such series, but an appropriate record of such action shall be delivered at or
before the time of issuance of the first Security of such series.
Unless otherwise provided in or pursuant to this Indenture,
the Securities shall be issuable in registered form without Coupons.
The Trustee's certificates of authentication shall be in
substantially the form set forth in this Article.
The definitive Securities and definitive Coupons shall be
printed, lithographed or engraved on steel engraved borders or may be produced
in any other manner, all as determined by the officers executing such
Securities or Coupons, as evidenced by their execution of such Securities or
Coupons.
SECTION 202. Form of Legend for Global Securities.
Every Global Security authenticated and delivered hereunder
shall bear a legend in substantially the following form:
THIS SECURITY IS A GLOBAL SECURITY WITHIN THE MEANING OF THE
INDENTURE HEREINAFTER REFERRED TO AND IS REGISTERED IN THE NAME OF A U.S.
DEPOSITARY OR A NOMINEE OF A U.S. DEPOSITARY. THIS GLOBAL SECURITY IS
EXCHANGEABLE FOR SECURITIES REGISTERED IN THE NAME OF A PERSON OTHER THAN THE
U.S. DEPOSITARY OR ITS NOMINEE ONLY IN THE LIMITED CIRCUMSTANCES DESCRIBED IN
THE INDENTURE, AND NO TRANSFER OF THIS SECURITY (OTHER THAN A TRANSFER OF THIS
SECURITY AS A WHOLE BY THE U.S. DEPOSITARY TO A NOMINEE OF THE U.S. DEPOSITARY
OR BY A NOMINEE OF THE U.S. DEPOSITARY TO THE U.S. DEPOSITARY OR ANOTHER
NOMINEE OF THE U.S. DEPOSITARY) MAY BE REGISTERED EXCEPT IN SUCH LIMITED
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CIRCUMSTANCES. EVERY SECURITY DELIVERED UPON REGISTRATION OF TRANSFER OF, OR
IN EXCHANGE FOR, OR IN LIEU OF, THIS GLOBAL SECURITY SHALL BE A GLOBAL SECURITY
SUBJECT TO THE FOREGOING, EXCEPT IN THE LIMITED CIRCUMSTANCES DESCRIBED ABOVE.
UNLESS THIS CERTIFICATE IS PRESENTED BY AN AUTHORIZED
REPRESENTATIVE OF THE DEPOSITORY TRUST COMPANY, A NEW YORK CORPORATION ("DTC"),
TO THE COMPANY OR ITS AGENT FOR REGISTRATION OF TRANSFER, EXCHANGE OR PAYMENT,
AND ANY CERTIFICATE ISSUED IS REGISTERED IN THE NAME OF CEDE & CO. OR IN SUCH
OTHER NAME AS IS REQUESTED BY AN AUTHORIZED REPRESENTATIVE OF DTC (AND ANY
PAYMENT IS TO BE MADE TO CEDE & CO. OR TO SUCH OTHER ENTITY AS IS REQUESTED BY
AN AUTHORIZED REPRESENTATIVE OF DTC), ANY TRANSFER, PLEDGE OR OTHER USE HEREOF
FOR VALUE OR OTHERWISE BY OR TO ANY PERSON IS WRONG INASMUCH AS THE REGISTERED
OWNER HEREOF, CEDE & CO., HAS AN INTEREST HEREIN.
SECTION 203. Form of Trustee's Certificate of Authentication.
Dated: ______________________
This is one of the Securities of the series designated therein
referred to in the within-mentioned Indenture.
___________________________________
As Trustee
By ________________________________
Authorized Signatory
SECTION 205. Securities in Global Form.
If Securities of a series are issuable in global form, as
contemplated by Section 301, then, notwithstanding 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 from time to time
endorsed thereon and that the aggregate amount of Outstanding Securities
represented thereby may from time to time be changed 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 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 Section 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
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instructions by a 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 Section 309 shall apply to any Security
represented by a Security in global form if such Security was never issued and
sold by a Company and such 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.
Notwithstanding the provisions of Sections 201 and 307, unless
otherwise specified as contemplated by Section 301, payment of principal or any
premium and interest on any Security in 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, a Company, the Trustee and any agent of
such Company and the Trustee shall treat a Person as the Holder of such
principal amount of Outstanding Securities represented by a Global Security as
shall be specified in a written statement of the Holder of such Global
Security.
SECTION 206. CUSIP Number
A Company in issuing Securities of any series may use a
"CUSIP" number, and if so, the Trustee may use the CUSIP number in notices of
redemption or exchange as a convenience to Holders of such series; provided,
that any such notice may state that no representation is made as to the
correctness or accuracy of the CUSIP number printed on the notice or on the
Securities of such series, and that reliance may be placed only on the other
identification numbers printed on the Securities, and any such redemption shall
not be affected by any defect in or omission of such numbers. A Company will
promptly notify the Trustee of any change in the CUSIP number of any series of
Securities.
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 from time to time in one or more
series. Prior to the issuance of Securities of any
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series, there shall be established in or pursuant to (i) a Board Resolution,
and set forth in an Officer's Certificate, or (ii) one or more indentures
supplemental hereto:
(1) the title of the Securities of the series (which
shall distinguish the Securities of the series from all other
Securities);
(2) any limit upon the aggregate principal amount of the
Securities of the series which may be authenticated and delivered
under this Indenture (except for Securities authenticated and
delivered upon registration of transfer of, or in exchange for, or in
lieu of, other Securities of the series pursuant to Sections 304, 305,
306, 906 or 1107);
(3) the ranking of the Securities of the series with
respect to other Debt of the Companies;
(4) if the Securities are issued by the Trust, whether
such Securities will be guaranteed by the
Corporation;
(5) if other than the principal amount thereof, the
portion of the principal amount of Securities of the series which
shall be payable upon declaration of acceleration of the Maturity
thereof pursuant to Section 502;
(6) the provisions, if any, relating to the conversion or
exchange of the Securities of any series into Securities of another
series or into any other debt or equity securities, including the
initial conversion price or rate and the conversion period, and any
applicable limitations on the ownership or transferability of any
common stock or preferred stock received on conversion;
(7) the date or dates, or the method for determining such
date or dates, on which the principal of the Securities of the series
is payable;
(8) the rate or rates, or the method by which such rate
or rates shall be determined, at which the Securities of the series
shall bear interest, if any, the date or dates from which such
interest shall accrue, the Interest Payment Dates on which such
interest shall be payable and the Regular Record Date for the interest
payable on any Interest Payment Date;
(9) the place or places where the principal of (and
premium, if any) and interest on Securities of the series shall be
payable, such Securities may be surrendered for conversion or
registration of transfer or exchange;
(10) the period or periods within which, the price or
prices at which and the terms and conditions upon which Securities of
the series may be redeemed, in whole or in
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part, at the option of the Companies, pursuant to any sinking fund or
mandatory redemption or otherwise;
(11) the obligation, if any, of the Companies to redeem,
repay or purchase Securities of the series pursuant to any sinking
fund or analogous provisions or at the option of a Holder thereof and
the period or periods within which, the price or prices at which and
the terms and conditions upon which Securities of the series shall be
redeemed, repaid or purchased, in whole or in part, pursuant to such
obligation, and, where applicable, the obligation of the Companies to
select the Securities to be redeemed;
(12) if other than U.S. dollars, the currency or
currencies in which the Securities of such series shall be denominated
and in which payments or principal of, and any premium and interest
on, such Securities shall or may be payable, which may be a foreign
currency or units of two or more foreign currencies or a composite
currency or currencies and the manner of determining the equivalent
thereof in U.S. Dollars for purposes of the definition of
"Outstanding" in Section 101;
(13) whether the amount of payments of principal of (and
premium, if any) or interest on 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;
(14) any deletions from, modifications of or additions to
the Events of Default or covenants of the Companies with respect to
Securities of any series, whether or not such Events of Default or
covenants are consistent with the Events of Default or covenants set
forth herein;
(15) whether any Securities of the series are to be
issuable as Global Securities with or without Coupons and, if so, (i)
whether beneficial owners of interests in any such 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 (ii) the name of the Common Depositary
(as defined in Section 304) or the U.S. Depositary, as the case may
be, with respect to any Global Security;
(16) if such Securities are to be issuable other than
solely as Registered Securities (whether as Bearer Securities or
alternatively as Bearer Securities or Registered Securities), and if
such Securities are to be issued as Bearer Securities, whether the
Bearer Securities
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are to be issuable with Coupons, without Coupons or both, and any
restrictions applicable to the offer, sale or delivery of the Bearer
Securities and the terms, if any, upon which Bearer Securities may be
exchanged for Registered Securities and vice versa and the date as of
which any such Bearer Security shall be dated (if other than its date
of authentication);
(17) if other than denominations of $1,000 and any
integral multiple thereof, the denominations in which Securities of
the series shall be issuable;
(18) if either or both of Section 1302 and Section 1303
shall be inapplicable to the Securities of the series (provided that
if no such inapplicability shall be specified, then both Section 1302
and Section 1303 shall be applicable to the Securities of the series);
(19) whether and under what circumstances the Companies
will pay Additional Amounts as contemplated by Section 1010 on the
Securities of 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 Companies will have the option to redeem such Securities
rather than pay such Additional Amounts (and the terms of any such
option);
(20) the identity of the Trustee for the Securities of the
series, and the identity of each Paying Agent and Securities Registrar
for the Securities of the series;
(21) additional covenants with respect to Securities of
the series, if any, other than those set forth herein;
(22) any other terms of the series (which terms shall not be
inconsistent with the provisions of this Indenture).
All Securities of any one series and all Coupons, if any,
appertaining to Bearer Securities of such series shall be substantially
identical except as to denomination and except as may otherwise be provided in
or pursuant to such Board Resolution and set forth in such Officer's
Certificate or in any such indenture supplemental hereto.
If any of the terms of the series are established by action
taken pursuant to a Board Resolution, a copy of an appropriate record of such
action shall be certified by the Secretary or an Assistant Secretary of such
Company and delivered to the Trustee at or prior to the delivery of the
Officer's Certificate setting forth, or providing the manner for determining,
the terms of the series.
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SECTION 302. Denominations.
Unless otherwise specified in accordance with Section 301, the
Securities of each series shall be issuable in registered form without coupons
in such denominations as shall be specified as contemplated by Section 301. In
the absence of any such provisions with respect to the Securities of any
series, the Securities of such series shall be issuable in denominations of
$1,000 and any integral multiple thereof.
SECTION 303. Execution, Authentication, Delivery and Dating.
The Securities shall be executed on behalf of the Trust or the
Corporation, as the case may be, by its Chairman of the Board, its President or
one of its Vice Presidents, under its corporate seal reproduced thereon
attested by its Secretary or one of its Assistant Secretaries. Coupons shall
be executed on behalf of the Trust or the Corporation, as the case may be, by
its Treasurer or any Assistant Treasurer. The signature of any of these
officers on the Securities or any Coupon may be manual or facsimile. The seal
of the Trust or the Corporation, as the case may be, may be in the form of a
facsimile thereof and may be impressed, affixed, imprinted or otherwise
reproduced on the Securities. Typographical and other minor errors or defects
in any such reproduction of the seal or any such signature shall not affect the
validity or enforceability of any Security that has been duly authenticated and
delivered by the Trustee.
Securities and any Coupons appertaining thereto bearing the
manual or facsimile signatures of individuals who were at any time the proper
officers of a Company shall bind such 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.
At any time and from time to time after the execution and
delivery of this Indenture, a Company may deliver Securities of any series,
together with Coupons appertaining thereto, executed by such Company to the
Trustee for authentication, together with a Company Order for the
authentication and delivery of such Securities, and the Trustee in accordance
with such Company Order shall either at one time or from time to time pursuant
to such instructions as may be described therein authenticate and deliver such
Securities as provided in this Indenture and not otherwise. If the form or
terms of the Securities of the series and any Coupons appertaining thereto have
been established in or pursuant to one or more Board Resolutions as permitted
by Sections 201 and 301, in authenticating such Securities and any Coupons
appertaining thereto, and accepting the additional responsibilities under this
Indenture in relation to such Securities and any Coupons appertaining thereto,
the Trustee shall be entitled to receive, and (subject to Sections 315(a)
through (d) of the Trust
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Indenture Act) shall be fully protected in relying upon, an Opinion of Counsel
stating,
(a) if the form of such Securities and Coupons, if any,
have been established by or pursuant to Board Resolution as permitted
by Section 201, that such form or forms have been established in
conformity with the provisions of this Indenture;
(b) if the terms of such Securities and Coupons, if any,
have been established by or pursuant to Board Resolution as permitted
by Section 301, that such terms have been established in conformity
with the provisions of this Indenture;
(c) that such Securities and Coupons, if any, when
authenticated and delivered by the Trustee and issued by the Trust or
the Corporation, as the case may be, in the manner and subject to any
conditions specified in such Opinion of Counsel, will constitute valid
and legally binding obligations of the Trust or the Corporation, as
the case may be, enforceable in accordance with their terms, except to
the extent enforceability may be limited by applicable bankruptcy,
insolvency, reorganization, moratorium, fraudulent conveyance and
other similar laws affecting the enforcement of creditors' rights
generally and by the effect of general principles of equity
(regardless of whether enforceability is considered in a proceeding in
equity or at law); and
(d) that no consent, approval, authorization, order,
registration or qualification of or with any court or any governmental
agency or body having jurisdiction over the Trust or the Corporation,
as the case may be, is required for the execution and delivery of such
Securities by such Company, except such as have been obtained (except
that no opinion need be expressed as to state securities or Blue Sky
laws).
If such form or terms have been so established, 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 or
immunities under the Securities and this Indenture or otherwise in a manner
which is not reasonably acceptable to the Trustee, or in the written opinion of
counsel to the Trustee (which counsel may be an employee of the Trustee) such
authentication may not lawfully be made or would involve the Trustee in
personal liability.
Notwithstanding the provisions of Section 301 and of the
immediately preceding paragraph, if all Securities of a series are not to be
originally issued at one time, it shall not be necessary to deliver the Board
Resolution and the Officer's Certificate otherwise required pursuant to Section
301 or the
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Company Order and Opinion of Counsel otherwise required pursuant to the
immediately preceding paragraph at or prior to the time of authentication of
each Security of such series if such documents are delivered at or prior to the
authentication upon original issuance of the first Security of such series to
be issued.
If the Trust or the Corporation, as the case may be, shall
establish pursuant to Section 301 that the Securities of a series are to be
issued in the form of one or more Global Securities, then such Company shall
execute and the Trustee shall, in accordance with this Section and the Company
Order with respect to the authentication and delivery of such series,
authenticate and deliver one or more Global Securities that (i) shall be in an
aggregate amount equal to the aggregate principal amount specified in such
Company Order, (ii) shall be registered in the name of the Common Depositary or
U.S. Depositary, as the case may be, therefor or its nominee, and (iii) shall
be made available for delivery by the Trustee to such depositary or pursuant to
such depositary's instruction.
Each depositary designated pursuant to Section 301 must, at
the time of its designation and at all times while it serves as depositary, be
a clearing agency registered under the Exchange Act and any other applicable
statute or regulation.
Unless otherwise provided for in the form of Security, each
Security shall be dated the date of its authentication.
No Security or Coupon shall be entitled to any benefit under
this Indenture or be valid or obligatory for any purpose unless there appears
on such Security a certificate of authentication substantially in the form
provided for herein executed by the Trustee by manual signature, 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. Except as
permitted by Section 306 or 307, the Trustee shall not authenticate and deliver
any Bearer Security unless all Coupons appertaining thereto then matured have
been detached and cancelled. Notwithstanding the foregoing, if any Security
shall have been authenticated and delivered hereunder but never issued and sold
by the Trust or the Corporation, as the case may be, and such Company shall
deliver such Security to the Trustee for cancellation as provided in Section
309, 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.
Pending the preparation of definitive Securities of any
series, the Trust or the Corporation, as the case may be, may execute, and upon
Company Order the Trustee shall authenticate and deliver, temporary Securities
which are printed,
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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 or pursuant to this Indenture, 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 evidenced by their execution of such Securities.
In the case of Securities of any series, such temporary
Securities may be in global form, representing all or a portion of the
Outstanding Securities of such series.
Except in the case of temporary Securities in global form
(which shall be exchanged in accordance with the provisions of Section 305), if
temporary Securities of any series are issued, the Trust or the Corporation, as
the case may be, 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 Trust or the Corporation, as the
case may be, 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 unmatured Coupons appertaining
thereto), the Trust or the Corporation, as the case may be, shall execute and
the Trustee shall authenticate and deliver in exchange therefor a like
principal amount of definitive Securities of the same series of authorized
denominations and of like tenor; provided, however, that no definitive Bearer
Security, except as provided in or pursuant to this Indenture, 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
or pursuant to this Indenture. 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 and tenor. 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 and tenor.
If temporary Securities of any series are issued in global
form, any such temporary global Security shall, unless otherwise provided
therein, be delivered to the office of a depositary or common depositary (the
"COMMON DEPOSITARY") for credit to the respective accounts of the beneficial
owners of such Securities (or to such other accounts as they may direct).
SECTION 305. Registration, Registration of Transfer and Exchange.
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Each of the Companies shall cause to be kept at the Corporate
Trust Office of the Trustee a register (the register maintained in such office
and in any other office or agency of the Companies in a Place of Payment being
herein sometimes collectively referred to as the "SECURITY REGISTER") in which,
subject to such reasonable regulations as it may prescribe, each of the
Companies shall provide for the registration of Securities and of transfers of
Securities. The Trustee is hereby appointed "SECURITY REGISTRAR" for the
purpose of registering Securities and transfers of Registered Securities as
herein provided.
Upon surrender for registration of transfer of any Registered
Security of any series at the office or agency of the Trust or the Corporation,
as the case may be, in a Place of Payment for that series, the Trust or the
Corporation, as the case may be, 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 and Stated
Maturity.
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 denominations and of a like aggregate principal amount and
Stated Maturity, upon surrender of the Registered Securities to be exchanged at
such office or agency. Whenever any Registered Securities are so surrendered
for exchange, the Trust or the Corporation, as the case may be, shall execute,
and the Trustee shall authenticate and deliver, the Registered Securities which
the Holder making the exchange is entitled to receive.
If provided in or pursuant to this Indenture, with respect to
Securities of any series, at the option of the Holder, Bearer Securities of
such series may be exchanged for Registered Securities of such series
containing identical terms, denominated as authorized in or pursuant to this
Indenture and in the same aggregate principal amount, upon surrender of the
Bearer Securities to be exchanged at any office or agency in a Place of Payment
for such series, 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 Coupon or Coupons in default,
such exchange may be effected if the Bearer Securities are accompanied by
payment in funds acceptable to the Trust or the Corporation, as the case may
be, and the Trustee in an amount equal to the face amount of such missing
Coupon or Coupons, or the surrender of such missing Coupon or Coupons, or the
surrender of such missing Coupon or Coupons may be waived by the Trust or the
Corporation, as the case may be, and the Trustee if there is furnished to them
such security or indemnity as they may require to save each of them and any
Paying Agent harmless. If thereafter the Holder of such Bearer Security shall
surrender to any Paying Agent any such missing Coupon in respect of which such
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a payment shall have been made, such Holder shall be entitled to receive the
amount of such 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 in a Place
of Payment for such series located outside the United States. Notwithstanding
the foregoing, in case a Bearer Security is surrendered at any such office or
agency in a Place of Payment for such series in exchange for a Registered
Security of such series and like tenor after the close of business at such
office or agency on (i) any Regular Record Date, or (ii) any Special Record
Date and before the opening of business at such office or agency on the related
date for payment of Defaulted Interest, such Bearer Security shall be
surrendered without the Coupon relating to such interest Payment Date or
proposed date of payment, as the case may be (or, if such Coupon is so
surrendered with such Bearer Security, such Coupon shall be returned to the
Person so surrendering the Bearer Security), and interest or Defaulted
Interest, as the case may be, shall 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 shall be
payable only to the Holder of such Coupon when due in accordance with the
provisions of this Indenture.
If provided in or pursuant to this Indenture with respect to
Securities of any series, at the option of the Holder, Registered Securities of
such series may be exchanged for Bearer Securities upon such terms and
conditions as may be provided in or pursuant to this Indenture with respect to
such series.
Whenever any Securities are surrendered for exchange as
contemplated by the immediately preceding two paragraphs, the Trust or the
Corporation, as the case may be, 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
or contemplated by Section 301, any Global Security shall be exchangeable only
as provided in this paragraph. If the beneficial owners of interests in a
Global Security are entitled to exchange such interests for Securities of such
series and of like tenor and principal amount of another authorized form and
denomination, as specified in and subject to the conditions contemplated by
Section 301, then without unnecessary delay but in any event not later than the
earliest date on which such interests may be so exchanged, the Trust or the
Corporation, as the case may be, shall deliver to the Trustee definitive
Securities of that series in aggregate principal amount equal to the principal
amount of such Global Security, executed by such Company. On or after the
earliest date on which such interests may be so exchanged, such Global
Securities shall be surrendered from time to time by the Common Depositary or
the U.S. Depositary, as the case may be, for exchange in whole or in part
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for definitive Securities of the same series without charge, and in accordance
with instructions given to the Trustee and the Common Depositary or the U.S.
Depositary, as the case may be, (which instructions shall be in writing but
need not comply with Section 102 or be accompanied by an Opinion of Counsel),
as shall be specified in the Company Order with respect thereto to the Trustee,
as the agent of the Trust or the Corporation, as the case may be, for such
purpose. The Trustee shall authenticate and make available for delivery, in
exchange for each portion of such surrendered Global Security, a like aggregate
principal amount of definitive Securities of the same series of authorized
denominations and of like tenor as the portion of such Global Security to be
exchanged which shall be in the form of the Securities of such series;
provided, however, that no such exchanges may occur during a period beginning
at the opening of business 15 days before the day of the mailing of a notice of
redemption of Securities of that series selected for redemption under Section
1103 and ending at the close of business on the day of such mailing. Promptly
following any such exchange in part, such Global Security shall be returned by
the Trustee to the Common Depositary or the U.S. Depositary, as the case may
be, or such other Common Depositary or U.S. Depositary referred to above in
accordance with the written instructions of the Trust or the Corporation, as
the case may be, referred to above. If a Security in the form specified for
such series is issued in exchange for any portion of a Global Security after
the close of business at the office or agency where such exchange occurs on (i)
any Regular Record Date and before the opening of business at such office or
agency on the relevant Interest Payment Date, or (ii) any Special Record Date
and before the opening of business at such office or agency on the related
proposed date for payment of interest or Defaulted Interest, as the case may
be, such interest or Defaulted Interest will not be payable on such Interest
Payment Date or proposed date for payment, as the case may be, in respect of
such Security in the form specified for such series, 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 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 Trust or the
Corporation, as the case may be, 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 shall (if so required by the Trust or
the Corporation, as the case may be, or the Trustee) be duly endorsed, or be
accompanied by a written instrument of transfer in form satisfactory to the
Trust or the Corporation, as
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the case may be, and the Security Registrar duly executed, by the Holder
thereof or his attorney duly authorized in writing.
Unless otherwise provided in the Securities to be transferred
or exchanged, no service charge shall be made for any registration of transfer
or exchange of Securities, but the Trustee or the Trust or the Corporation, as
the case may be, 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 or 1107.
Neither the Trust or the Corporation, as the case may be, nor
the Trustee shall be required (i) to issue, register the transfer of or
exchange Securities of any series during a period beginning at the opening of
business 15 days before the day of the mailing of a notice of redemption of
Securities of that series selected for redemption 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 Bearer
Security may be exchanged for a Registered Security of the same 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 (i) any mutilated Security or a Security with a mutilated
Coupon appertaining to it is surrendered to the Trustee or if there shall be
delivered to the Trust or the Corporation, as the case may be, and the Trustee
evidence to their satisfaction of the destruction, loss or theft of any
Security or Coupon and (ii) there shall be delivered to the Trust or the
Corporation, as the case may be, and the Trustee such security and 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 Trust or the Corporation, as
the case may be, or the Trustee that such Security or Coupon has been acquired
by a bona fide purchaser, the Trust or the Corporation, as the case may be,
shall execute and upon their request the Trustee shall authenticate and deliver
in lieu of any such mutilated, destroyed, lost or stolen Security, a new
Security of the same
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series and of like tenor and principal amount and bearing a number not
contemporaneously outstanding, with Coupons appertaining thereto corresponding
to the Coupons, if any, appertaining to the surrendered Security.
In case any such mutilated, destroyed, lost or stolen Security
or Coupon has become or is about to become due and payable, the Trust or the
Corporation, as the case may be, in their discretion may, instead of issuing a
new Security, pay such Security or Coupon.
Upon the issuance of any new Security under this Section, the
Trust or the Corporation, as the case may be, 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 any Coupons
appertaining thereto, issued pursuant to this Section in lieu of any destroyed,
lost or stolen Security, or in exchange for a Security to which a destroyed,
lost or stolen Coupon appertains, shall constitute an original additional
contractual obligation of the Trust or the Corporation, as the case may be,
whether or not the destroyed, lost or stolen Security 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 any Coupons 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.
Interest on any Registered Security which is payable, and is
punctually paid or duly provided for, on any Interest Payment Date shall be
paid to the Person in whose name that Registered Security (or one or more
Predecessor Securities) is registered at the close of business on the Regular
Record Date for such interest. The Securities will be payable as to principal
(premium, if any) and interest at the office or agency of the Trust or the
Corporation, as the case may be, maintained for such purpose within or without
the City and State of New York or, at the option of the Trust or the
Corporation, as the case may be, payment of principal (premium, if any) and
interest may be made by check mailed to the Holders at their addresses set
forth in the Security Register, and provided that payment by wire transfer of
immediately available funds will be required with respect to principal of
(premium, if any) and interest on all Global Securities. In case a Bearer
Security is surrendered in exchange for a Registered Security after the close
of business
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(at an office or agency at a Place of Payment for such Security) on any Regular
Record Date therefor and before the opening of Business (at such office or
agency) on the next succeeding Interest Payment Date therefor, such Bearer
Security shall be surrendered without the Coupon relating to such Interest
Payment Date and interest shall not be payable on such Interest Payment Date in
respect of the Registered Security issued in exchange for such Bearer Security,
but shall be payable only to the Holder of such Coupon when due in accordance
with the provisions of this Indenture.
Any interest on any Registered Security of any series which is
payable, but is not punctually paid or duly provided for, on any Interest
Payment Date (herein called "DEFAULTED INTEREST") shall forthwith cease to be
payable to the Holder on the relevant Regular Record Date by virtue of having
been such Holder, and such Defaulted Interest may be paid by the Companies, at
their election in each case, as provided in Clause (1) or (2) below:
(1) The Trust or the Corporation, as the case may be, 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 Trust or
the Corporation, as the case may be, shall notify the Trustee in
writing of the amount of Defaulted Interest proposed to be paid on
each Registered Security of such series and the date of the proposed
payment, and at the same time such Company shall deposit with the
Trustee an amount of money equal to the aggregate amount proposed to
be paid in respect of such Defaulted Interest or shall make
arrangements satisfactory to the Trustee for such deposit prior to the
date of the proposed payment, such money when deposited to be held in
trust for the benefit of the Persons entitled to such Defaulted
Interest as in this Clause provided. Thereupon the Trustee shall fix
a Special Record Date for the payment of such Defaulted Interest 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 Trust or the Corporation, as the
case may be, of such Special Record Date and, in the name and at the
expense of such 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.
Notice of the proposed payment of such Defaulted Interest and the
Special Record Date therefor having been so mailed, such Defaulted
Interest shall be paid to the Persons
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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 is
surrendered at the office or agency at a Place of Payment for such
Security in exchange for a Registered Security 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 shall not be payable on such
proposed date of payment in respect of the Registered Security issued
in exchange for such Bearer Security, but shall be payable only to the
Holder of such Coupon when due in accordance with the provisions of
this Indenture.
(2) The Trust or the Corporation, as the case may
be, may make payment of any Defaulted Interest on the 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 such Company to the Trustee of the proposed
payment pursuant to this Clause, such manner of payment shall be
deemed practicable by the Trustee.
Subject to the foregoing provisions of this Section, each
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 Trust or the Corporation, as the case may be, the
Trustee and any agent of such Company 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, if any) and
(subject to Section 307) interest on such Security and for all other purposes
whatsoever, whether or not such Security be overdue, and neither the Trust or
the Corporation, as the case may be, the Trustee nor any agent of such Company
or the Trustee shall be affected by notice to the contrary.
The Trust or the Corporation, as the case may be, the Trustee
and any agent of such Company or the Trustee may treat the bearer of any Bearer
Security or the bearer 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 any payment with respect to
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such Security or Coupon shall be overdue, and neither the Trust or the
Corporation, as the case may be, nor the Trustee or any agent of such Company
or the Trustee shall be affected by notice to the contrary.
None of the Trust or the Corporation, as the case may be, the
Trustee or any agent of such Company or the Trustee shall have any
responsibility or liability for any aspect of the records relating to or
payments made on account of beneficial ownership interest of a Global Security,
or for maintaining, supervising or reviewing any records relating to such
beneficial ownership interest. Notwithstanding the foregoing, with respect to
any Global Security, nothing herein shall prevent the Trust or the Corporation,
as the case may be, or the Trustee or any agent of such Company, or the
Trustee, from giving effect to any written certification, proxy or other
authorization furnished by any Common Depositary (or its nominee), as a Holder,
with respect to such Global Security or impair, as between such Common
Depositary and owners of beneficial interests in such Global Security, the
operation of customary practices governing the exercise of the right of such
Common Depositary (or its nominee) as holder of such Global Security.
SECTION 309. Cancellation.
All Securities and Coupons surrendered for payment,
redemption, 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 shall be promptly cancelled by it.
The Trust or the Corporation, as the case may be, may at any time deliver to
the Trustee for cancellation any Securities previously authenticated and
delivered hereunder which such 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 such Company has not issued and sold, and all Securities so
delivered shall be promptly cancelled by the Trustee. 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. All
cancelled Securities and Coupons held by the Trustee shall be disposed of as
directed by a Company Order.
SECTION 310. Computation of Interest.
Except as otherwise specified as contemplated by Section 301
for Securities of any series, interest on the Securities of each series shall
be computed on the basis of a year of twelve 30-day months.
ARTICLE FOUR
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SATISFACTION AND DISCHARGE
SECTION 401. Satisfaction and Discharge of Indenture.
This Indenture shall cease to be of further effect (except as
to any surviving rights of registration of transfer or exchange of Securities
herein expressly provided for or in the form of Security for such series), and
the Trustee, at the expense of the Companies, shall execute proper instruments
acknowledging satisfaction and discharge of this Indenture, when
(1) either
(A) all Securities theretofore authenticated and
delivered (other than (i) Coupons appertaining to Bearer Securities surrendered
in exchange for Registered Securities of such series and maturing after such
exchange whose surrender is not required or has been waived as provided in
Section 305, (ii) Securities or Coupons 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 this
Indenture, and (iv) Securities for whose payment money has theretofore been
deposited in trust or segregated and held in trust by the Trust or the
Corporation, as the case may be, and thereafter repaid to such Company or
discharged from such trust, as provided in Section 1010) have been delivered to
the Trustee for cancellation; or
(B) all such Securities 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
(iii) 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
Trust or the Corporation, as the case may be, and the Trust or the Corporation,
as the case may be, in the case of (i), (ii) or (iii) above, have deposited or
caused to be deposited with the Trustee as trust funds in trust for the purpose
an amount of (a) funds in such currency or currencies, currency unit or units
or composite currency or currencies in which such securities are payable or (b)
in the case of (ii) or (iii) above, Government Obligations which through the
payment of interest and principal in respect thereof in accordance with their
terms will provide not later than one day before the Stated Maturity or
Redemption Date money in an amount, or (c) a combination of money and
Government Obligations, in each case sufficient, in the opinion of a nationally
recognized firm of
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independent certified public accountants expressed in a written certificate
thereof delivered to the Trustee, to pay and discharge the entire indebtedness
on such Securities and any Coupons appertaining thereto not theretofore
delivered to the Trustee for cancellation, for principal (and premium, if any)
and interest 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 Trust or the Corporation, as the case may be,
have paid or caused to be paid all other sums payable hereunder by such
Company; and
(3) the Trust or the Corporation, as the case may be,
have delivered to the Trustee an Officer's Certificate and an Opinion of
Counsel, each stating that all conditions precedent provided for herein
relating to the satisfaction and discharge of this Indenture have been complied
with.
Notwithstanding the satisfaction and discharge of this
Indenture, the obligations of the Trust or the Corporation, as the case may be,
to the Trustee under Section 607, the obligations of the Trustee to an
Authenticating Agent under Section 613 and, if money or Government Obligations
shall have been deposited with 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 1010 shall survive.
SECTION 402. Application of Trust Money.
Subject to the provisions of the last paragraph of Section
1010, all money or Government Obligations deposited with the Trustee pursuant
to Section 401 and all money received by the Trustee in respect of Government
Obligations 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
and this Indenture, to the payment, either directly or through any Paying Agent
(including a Company acting as its own Paying Agent) as the Trustee may
determine, to the Persons entitled thereto, of the principal (and premium, if
any) and interest for whose payment such money has been deposited with or
received by the Trustee.
SECTION 403. Reinstatement.
If the Trustee or the Paying Agent is unable to apply any
money in accordance with this Article by reason of any order or judgment of any
court or governmental authority enjoining, restraining or otherwise prohibiting
such application, then the obligations of the Trust or the Corporation, as the
case may be, under this Indenture and the Securities shall be revived and
reinstated as though no deposit had occurred pursuant to this Article until
such time as the Trustee or Paying Agent is permitted to apply all money held
in trust with respect to the
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Securities; provided, however, that if the Trust or the Corporation, as the
case may be, makes any payment of principal of any Security following the
reinstatement of its obligations, such Company shall be subrogated to the
rights of the Holders of the Securities to receive such payment from the money
so held in trust.
ARTICLE FIVE
REMEDIES
SECTION 501. Events of Default.
"EVENT OF DEFAULT," wherever used herein with respect to
Securities of any series, means any one of the following events:
(1) default in the payment of interest on any Security of
that series when such interest becomes due and payable and the default
continues for a period of 30 days; or
(2) default in the payment of the principal of (or
premium, if any, on) any Security of that series when the same becomes due and
payable at Maturity, upon redemption (including redemptions under Article
Eleven), or otherwise; or
(3) default in the payment of any sinking fund payment,
when and as due by the terms of a Security of that series; or
(4) default in the performance, or breach, of any other
covenant, agreement or warranty of the Trust or the Corporation, as the case
may be, in the Securities of that series or this Indenture (other than a
covenant, agreement or warranty a default in whose performance is elsewhere in
this Section specifically dealt with or which has expressly been included in
this Indenture solely for the benefit of series of Securities other than that
series), and continuance of such default for a period of 60 days after there
has been given, by registered or certified mail, to such Company by the Trustee
or to such Company and the Trustee by the Holders of at least 25% in principal
amount of the Outstanding Securities a written notice specifying such default
and requiring it to be remedied and stating that such notice is a "Notice of
Default" hereunder; or
(5) an event of default, as defined in any mortgage,
indenture, or instrument under which there may be issued, or by which there may
be secured or evidenced, any Indebtedness of the Trust or the Corporation, as
the case may be, (including Securities of another series) or a Subsidiary of
such Company (whether such Indebtedness now exists or shall hereafter be
created or incurred) shall occur and shall consist of default in
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the payment of such Indebtedness at the maturity thereof (after giving effect
to any applicable grace period) or shall result in Indebtedness becoming or
being declared due and payable prior to the date on which it would otherwise
become due and payable, and such default in payment is not cured or such
acceleration shall not be rescinded or annulled within 15 days after written
notice to the Trust or the Corporation, as the case may be, from the Trustee or
to the Trust or the Corporation, as the case may be, and to the Trustee from
the Holders of at least 10% in aggregate principal amount of the Securities of
that series at the time outstanding; provided that it shall not be an Event of
Default if the principal amount of Indebtedness which is not paid at maturity
or the maturity of which is accelerated is less than $_________; provided
further that if, prior to a declaration of acceleration of the maturity of the
Securities of that series or the entry of judgment in favor of the Trustee in a
suit pursuant to Section 503, such default shall be remedied or cured by the
Trust or the Corporation, as the case may be, or waived by the holders of such
Indebtedness, then the Event of Default hereunder by reason thereof shall be
deemed likewise to have been thereupon remedied, cured or waived without
further action upon the part of either the Trustee or any of the Holders of the
Securities of that series, and provided further, that, subject to Sections 601
and 602, the Trustee shall not be charged with knowledge of any such default
unless written notice of such default shall have been given to the Trustee by
Trust or the Corporation, as the case may be, by a holder or an agent of a
holder of any such Indebtedness, by the trustee then acting under any indenture
or other instrument under which such default shall have occurred, or by the
Holders of at least five percent in aggregate principal amount of the
Securities of that series at the time outstanding; or
(6) the entry by a court having jurisdiction in the
premises of (A) a decree or order for relief in respect of the Trust or the
Corporation, as the case may be, or a Significant Subsidiary of such Company in
an involuntary case or proceeding under any applicable Federal or state
bankruptcy, insolvency, reorganization or other similar law or (B) a decree or
order adjudging the Trust or the Corporation, as the case may be, or a
Significant Subsidiary of such Company, a bankrupt or insolvent, or approving
as properly filed a petition seeking reorganization, arrangement, adjustment or
composition of or in respect of the Trust or the Corporation, as the case may
be, or a Significant Subsidiary of such Company under any applicable Federal or
state law, or appointing a custodian, receiver, liquidator, assignee, trustee,
sequestrator or other similar official of the Trust or the Corporation, as the
case may be, or a Significant Subsidiary of such Company or of any substantial
part of the property of the Trust or the Corporation, as the case may be, or a
Significant Subsidiary of such Company or ordering the winding up or
liquidation of affairs, and the continuance of any such decree or order
unstayed and in effect for a period of 90 consecutive days; or
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(7) the commencement by the Trust or the Corporation, as
the case may be, or a Significant Subsidiary of such Company of a voluntary
case or proceeding under any applicable Federal or state bankruptcy,
insolvency, reorganization or other similar law or of any other case or
proceeding to be adjudicated a bankrupt or insolvent, or the consent by it to
the entry of a decree or order for relief in respect of the Trust or the
Corporation, as the case may be, or a Significant Subsidiary of such Company in
an involuntary case or proceeding under any such law, or to the commencement of
any bankruptcy or insolvency case or proceeding against it, or the filing by it
of a petition or answer or consent seeking reorganization or relief under any
applicable Federal or state law, or the consent by it to the filing of such a
petition or to the appointment of or taking possession by a custodian,
receiver, liquidator, assignee, trustee, sequestrator or similar official of
the Trust or the Corporation, as the case may be, or a Significant Subsidiary
of such Company or of any substantial part of the property of the Trust or the
Corporation, as the case may be, or a Significant Subsidiary of such Company or
the making of an assignment for a benefit of creditors, or the admission by it
in writing of the inability of the Trust or the Corporation, as the case may
be, or a Significant Subsidiary of such Company to pay its debts generally as
they become due, or the taking of appropriate action in furtherance of any such
action of the Trust or the Corporation, as the case may be, or a Significant
Subsidiary of such Company; or
(8) any other Event of Default provided with respect to
Securities of that series.
SECTION 502. Acceleration of Maturity; Rescission and Annulment.
If an Event of Default with respect to Securities of any
series at the time outstanding (other than an Event of Default specified in
clause (6) or (7) of Section 501) occurs and is continuing, then in every such
case the Trustee or the Holders of not less than 25% in aggregate principal
amount of the Outstanding Securities of that series, may declare the unpaid
principal (or, if the Securities of that series are Original Issue Discount
Securities or indexed Securities, such portion of the principal amount as may
be specified in the terms of that series) of and accrued interest to the date
of acceleration on all the Outstanding Securities of that series to be due and
payable immediately by notice in writing to the Trust or the Corporation, as
the case may be, (and to the Trustee if given by the Holders) and, upon any
such declaration, the Outstanding Securities of that series (or specified
principal amount) shall become immediately due and payable.
If an Event of Default specified in clause (6) or (7) of
Section 501 occurs, all unpaid principal of and accrued interest on the
Outstanding Securities of that series (or specified principal amount) shall
ipso facto become and be
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immediately due and payable without any declaration or other act on the part of
the Trustee or any Holder of any Security of that series.
Upon payment of all such principal and interest, all of the
Trust's or the Corporation's obligations, as the case may be, under the
Securities of that series and (upon payment of the Securities of all series)
this Indenture shall terminate, except obligations under Section 607.
At any time after such a declaration of acceleration, but
before a judgment or decree for payment of the money due has been obtained by
the Trustee or the Stated Maturity thereof, the Holders of not less than a
majority in principal amount of the Outstanding Securities of that series, by
written notice to the Trust or the Corporation, as the case may be, and the
Trustee, may rescind and annul such acceleration and its consequences if:
(1) the Trust or the Corporation, as the case may
be, has paid or deposited with the Trustee a sum sufficient to pay all
overdue interest on all Securities of that series and any Coupons
appertaining thereto, the principal of (and premium, if any, on) any
Securities of that series which have become due otherwise than by such
declaration of acceleration and any interest thereon at the rate or
rates prescribed therefor in such Securities and, to the extent the
payment of such interest is lawful, interest on overdue installments
of interest and overdue principal that has become due otherwise than
by such declaration of acceleration have been paid, plus certain fees,
expenses, disbursements and advances of the Trustee;
(2) all existing Events of Default, other than the
nonpayment of the principal of the Securities of that series that
has become due solely by such declaration of acceleration, have been
cured or waived as provided in Section 513.
No such rescission shall affect any subsequent default or
impair any right consequent thereon.
SECTION 503. Collection of Indebtedness and Suits for Enforcement by
Trustee.
Each of the Companies covenants that if:
(1) default is made in the payment of any interest on any
Security of any series or any Coupon appertaining thereto when such interest
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, if any, on) any Security of any series at the Maturity thereof,
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the Trust or the Corporation, as the case may be, will, upon demand of the
Trustee, pay to the Trustee, for the benefit of the Holders of such Securities
and any Coupons appertaining thereto, the whole amount then due and payable on
such Securities and any Coupons appertaining thereto for principal (and
premium, if any) and interest and, to the extent that payment of such interest
shall be legally enforceable, interest on any overdue principal (and premium,
if any) and on any overdue interest, at the rate or rates prescribed therefor
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 Trust or the Corporation, as the case may be, 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 sum so due and unpaid, may prosecute such proceeding to
judgment or final decree and may enforce the same, severally and not jointly,
against such Company or any other obligor upon such Securities and any Coupons
appertaining thereto and collect the moneys adjudged or decreed to be payable
in the manner provided by law out of the property of such Company or any other
obligor upon such Securities and any Coupons appertaining thereto, wherever
situated.
If an Event of Default with respect to Securities of any
series occurs and is continuing, the Trustee may in its discretion proceed to
protect and enforce its rights and the rights of the Holders of Securities of
such series and any Coupons appertaining thereto by such appropriate judicial
proceedings as the Trustee 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
secure 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 Trust or the Corporation, as the
case may be, or any other obligor upon the Securities or any Coupons
appertaining thereto or the property of such Company or of such other obligor
or their creditors, the Trustee (irrespective of whether the principal of the
Securities 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 such Company for the payment of overdue principal or interest) shall be
entitled and empowered, by intervention in such proceeding or otherwise,
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(i) to file and prove a claim for the whole
amount of principal (and premium, if any) and interest owing and
unpaid by such Company in respect of the Securities or any Coupons
appertaining thereto and to file such other papers and documents as
may be necessary or advisable in order to have the claims of the
Trustee (including any claim for the reasonable compensation,
expenses, disbursements and advances of the Trustee, its agents and
counsel) and of the Holders allowed in such judicial proceedings, and
(ii) to collect and receive any moneys or other
property payable or deliverable on any such claims and to distribute
the same;
(iii) and any custodian, receiver, assignee,
trustee, liquidator, sequestrator or other similar official in any
such judicial proceeding is hereby authorized by each Holder to make
such payments to the Trustee and, in the event that the Trustee shall
consent to the making of such payments directly to the Holders, to pay
to the Trustee any amount due it for the reasonable compensation,
expenses, disbursements and advances of the Trustee, its agents and
counsel, and any other amounts due the Trustee under Section 607.
Nothing herein contained shall be deemed to authorize the
Trustee to authorize or consent to or accept or adopt on behalf of any Holder
any plan of reorganization, arrangement, adjustment or composition affecting
the Securities or any Coupon or the rights of any Holder thereof or to
authorize the Trustee to vote in respect of the claim of any Holder in any such
proceeding; provided, however, that the Trustee may, on behalf of the Holders,
vote for the election of a trustee in bankruptcy or similar official and may be
a member of the Creditors' Committee.
SECTION 505. Trustee May Enforce Claims Without Possession of Securities.
All rights of action and claims under this Indenture or 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 or
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 in
respect of the Securities of any series or Coupons
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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, if any) or interest, upon presentation of the Securities or
Coupons in respect of which moneys have been collected and the notation thereon
of the payment if only partially paid and upon surrender thereof if fully paid:
First: To the payment of costs and expenses of collection,
including 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 all other amounts due the Trustee under Section 607 applicable
to such series;
Second: To the payment of the amounts then due and unpaid for
principal of (and premium, if any) and interest on the Securities of such
series and any Coupon in respect of which or for the benefit of which such
money or other property has been collected, ratably, without preference or
priority of any kind, according to the amounts due and payable on such
Securities of such series and Coupons for principal (and premium, if any) and
interest, respectively; and
Third: The balance, if any, to the Trust or the Corporation,
as the case may be, as their interests may appear.
SECTION 507. Limitation on Suits.
No Holder of any Security of any series or any Coupons
appertaining thereto shall have any right to institute any proceeding, judicial
or otherwise, with respect to this Indenture, or for the appointment of a
receiver or trustee, or for any other remedy hereunder, unless:
(1) such Holder has previously given written notice to
the Trustee of a continuing Event of Default with respect to the Securities of
that series;
(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 shall have offered to the
Trustee reasonable security and 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 security and offer of indemnity has failed to
institute any such proceedings; and
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(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 of
Securities 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 Holders, or to obtain or to seek to obtain priority or
preference over any other Holders or to enforce any right under this Indenture,
except in the manner herein provided and for the equal and ratable benefit of
all the Holders.
SECTION 508. Unconditional Right of Holders to Receive Principal, Premium
and Interest.
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, if any) and
(subject to Section 307) interest on such Security or payment of such Coupon,
as the case may be, on the respective Stated Maturity or Maturities 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 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, subject to any
determination in such proceeding, each of the Companies, the Trustee and the
Holders shall 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 has 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
reserved to the Trustee or to the Holders is intended to be exclusive of any
other right or remedy, and every right and remedy shall, to the extent
permitted by law, be cumulative and in addition to every other right and remedy
given hereunder or now or hereafter existing at law or in equity or otherwise.
The assertion or employment of any right or remedy hereunder, or otherwise,
shall not prevent
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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
Securities or Coupons to exercise any right or remedy accruing upon any Event
of Default shall impair any such right or remedy or constitute a waiver of any
such Event of Default or an acquiescence therein. Every right and remedy given
by this Article or by law to the Trustee or to the Holders may be exercised
from time to time, and as often as may be deemed expedient, by the Trustee or
by the Holders, as the case may be.
SECTION 512. Control by Holders.
The Holders of not less than a majority in 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) subject to the provisions of Section 601, the Trustee
shall have the right to decline to follow any such direction if the Trustee,
being advised by counsel, shall determine that the action or proceeding so
directed may not lawfully be taken or if the Trustee in good faith shall
determine that the action or proceedings so directed might involve the Trustee
in personal liability or if the Trustee in good faith shall so determine that
the actions or forebearances specified in or pursuant to such direction shall
be unduly prejudicial to the interests of holders of the Securities of such
series not joining in the giving of said direction, it being understood that
(subject to Section 601) the Trustee shall have no duty to ascertain whether or
not such actions or forebearances are unduly prejudicial to such holders.
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 by written notice to the Trustee
on behalf of the Holders of all the Securities of such series waive any default
with respect to such series and its consequences, except a default
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(1) in respect of the payment of the principal of (or
premium, if any) or interest on any Security of such series or any Coupons
appertaining thereto, or
(2) in respect of a covenant or provision hereof which
under Article Nine cannot be modified or amended without the consent of the
Holder of each Outstanding Security of such series affected.
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 and the Securities of such series; but no such
waiver shall extend to any subsequent or other default or impair any right
consequent thereon.
SECTION 514. Undertaking for Costs.
All parties to this Indenture agree, and each Holder of any
Security by his acceptance thereof shall be deemed to have agreed, that any
court may in its discretion require, in any suit for the enforcement of any
right or remedy under this Indenture, or in any suit against the Trustee for
any action taken, suffered or omitted by it as Trustee, the filing by any party
litigant in such suit of an undertaking to pay the costs of such suit, and that
such court may in its discretion assess reasonable costs, including reasonable
attorneys' fees, 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 a Company, to any suit instituted by the Trustee, to any suit
instituted by any Holder, or group of Holders, holding in the aggregate more
than 25% in principal amount of the Outstanding Securities of any series, or to
any suit instituted by any Holder for the enforcement of the payment of the
principal of (or premium, if any) or interest on any Security on or after the
Stated Maturity or Maturities expressed in such Security (or, in the case of
redemption, on or after the Redemption Date).
ARTICLE SIX
THE TRUSTEE
SECTION 601. Certain Duties and Responsibilities of the Trustee.
(a) Except during the continuance of an Event of Default:
(1) the Trustee undertakes to perform such duties and
only such duties as are specifically set forth in this
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Indenture, and no implied covenants or obligations shall be read into
this Indenture against the Trustee; and
(2) in the absence of bad faith on its part, the Trustee
may conclusively rely, as to the truth of the statements and the
correctness of the opinions expressed therein, upon any certificates
or opinions furnished to the Trustee and conforming to the
requirements of this Indenture; but in the case of any such
certificates or opinions which by any provision hereof are
specifically required to be furnished to the Trustee, the Trustee
shall be under a duty to examine the same to determine whether or not
they conform to the requirements of this Indenture.
(b) In case an Event of Default has occurred and is
continuing, the Trustee shall exercise such of the rights and powers vested in
it by this Indenture, and use the same degree of care and skill in its
exercise, as a prudent person would exercise or use under the circumstances in
the conduct of his own affairs.
(c) No provision of this Indenture shall be construed to
relieve the Trustee from liability for its own negligent action, its own
negligent failure to act, or its own willful misconduct, except that
(1) this Subsection shall not be construed to limit the
effect of Subsection (a) of this Section;
(2) the Trustee shall not be liable for any error or
judgment made in good faith by a Responsible Officer, unless it shall
be proved that the Trustee was negligent in ascertaining the pertinent
facts;
(3) the Trustee shall not be liable with respect to any
action taken or omitted to be taken by it in good faith in accordance
with the direction of the Holders of not less than a majority in
principal amount of the Outstanding Securities relating to the time,
method and place of conducting any proceedings for any remedy
available to the Trustee, or exercising any trust or power conferred
upon the Trustee, under this Indenture; and
(4) no provision of this Indenture shall require the
Trustee to expend or risk its own funds or otherwise incur any
financial liability in the performance of any of its duties hereunder,
or in the exercise of any of its rights or powers, if it shall have
reasonable grounds for believing that repayment of such funds or
adequate security and indemnity against such risk or liability is not
reasonably assured to it.
(d) Whether or not therein expressly so provided, every
provision of this Indenture relating to the conduct or
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affecting the liability of or affording protection to the Trustee shall be
subject to the provisions of this Section and subject to Sections 315 and 316
of the Trust Indenture Act.
SECTION 602. Notice of Defaults.
Within 90 days after the occurrence of any Default or Event of
Default with respect to the Securities of any series, the Trustee shall give to
all Holders of Securities of such series, in the manner provided by Section 106
hereof, notice of such Default or Event of Default known to the Trustee, unless
such Default or Event of Default shall have been cured or waived; provided,
however, that, except in the case of a Default or Event of Default in the
payment of the principal of (or premium, if any) or interest on any Security of
such series or in the payment of any sinking fund installment with respect to
Securities of such series, the Trustee shall be protected in withholding such
notice if and so long as the board of directors, the executive committee or a
trust committee of directors or Responsible Officers of the Trustee in good
faith determine that the withholding of such notice is in the interest of the
Holders of Securities of such series.
SECTION 603. Certain Rights of Trustee.
Subject to the provisions of Section 601:
(a) the Trustee may rely and shall be protected in acting
or refraining from acting upon any resolution, officer's certificate,
statement, instrument, opinion, report, notice, request, direction, consent,
order, bond, debenture, note, other evidence of indebtedness or other paper or
document believed by it to be genuine and to have been signed or presented by
the proper party or parties;
(b) any request or direction of a Company mentioned
herein shall be sufficiently evidenced by a Company Request or Company Order
and any resolution of a Board of Directors may be sufficiently evidenced by a
Board Resolution;
(c) 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 Officer's Certificate;
(d) before the Trustee acts or refrains from acting the
Trustee may consult with counsel and the written advice of such counsel or any
Opinion of Counsel shall be full and complete authorization and protection in
respect of any action taken, suffered or omitted by it hereunder in good faith
and in reliance thereon;
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(e) the Trustee shall be under no obligation to exercise
any of the rights or powers vested in it by this Indenture at the request or
direction of any of the Holders pursuant to this Indenture, unless such Holders
shall have offered to the Trustee reasonable security and indemnity against the
costs, expenses and liabilities which might be incurred by it in compliance
with such request or direction;
(f) prior to the occurrence of an Event of Default with
respect to the Securities of any series and after the curing or waiving of all
such Events of Default, the Trustee shall not be bound to make any
investigation into the facts or matters stated in any resolution, officer's
certificate or other certificate, statement, instrument, opinion, report,
notice, request, consent, order, approval, appraisal, bond, debenture, note,
coupon, security or other paper or document, unless requested in writing to do
so by the Holders of not less than a majority in aggregate principal amount of
the Outstanding Securities of any series; provided, that if the payment within
a reasonable time to the Trustee of the costs, expenses or liabilities likely
to be incurred by it in the making of such investigation is, in the opinion of
the Trustee, not reasonably assured to the Trustee by the security afforded to
it by the terms of this Indenture, the Trustee may require reasonable indemnity
against such expenses or liabilities as a condition to so proceeding; the
reasonable expenses of every such examination shall be paid by the Trust or the
Corporation, as the case may be, or, if advanced by the Trustee, shall be
repaid by the Trust or the Corporation, as the case may be, upon demand;
(g) the Trustee may execute any of the trusts or powers
hereunder or perform any duties hereunder either directly or by or through
agents or attorneys and the Trustee shall not be responsible for any misconduct
or negligence on the part of any agent or attorney appointed with due care by
it hereunder;
(h) the Trustee shall not be liable for any action taken
or omitted by it in good faith and believed by it to be authorized or within
the discretion, rights or powers conferred upon it by this Indenture;
(i) the Trustee shall not be required to give any bond or
surety in respect of the performance of its powers and duties hereunder;
(j) the Trustee shall not be bound to ascertain or
inquire as to the performance or observance of any covenants, conditions, or
agreements on the part of a Company, except as otherwise set forth herein, but
the Trustee may require of a Company full information and advice as to the
performance of the covenants, conditions and agreements contained herein and
shall be entitled in connection herewith to examine the books, records and
premises of such Company;
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(k) the permissive rights of the Trustee to do things
enumerated in this Indenture shall not be construed as a duty and the Trustee
shall not be answerable for other than its negligence or willful default; and
(l) except for (h), a default under Sections 501(a) or
(b) hereof, or (ii) any other event of which the Trustee has "actual knowledge"
and which event, with the giving of notice or the passage of time or both,
would constitute an Event of Default under this Indenture, the Trustee shall
not be deemed to have notice of any default or event unless specifically
notified in writing of such event by the Trust or the Corporation, as the case
may be, or the Holders of not less than 25% in aggregate principal amount of
the Outstanding Securities; as used herein, the term "actual knowledge" means
the actual fact or statement of knowing, without any duty to make any
investigation with regard thereto.
SECTION 604. Not Responsible for Recitals or Issuance of Securities.
The recitals contained herein and in the Securities and
Coupons, except the Trustee's certificates of authentication, shall be taken as
the statements of the Trust or the Corporation, as the case may be, and the
Trustee assumes no responsibility for their correctness. The Trustee makes no
representations as to the validity or sufficiency of this Indenture or of the
Securities or Coupons. The Trustee shall not be accountable for the use or
application by the Trust or the Corporation, as the case may be, of Securities
or the proceeds thereof.
SECTION 605. May Hold Securities.
The Trustee, any Authenticating Agent, any Paying Agent, any
Security Registrar or any other agent of a Company, in its individual or any
other capacity, may become the owner or pledgee of Securities or Coupons and,
subject to Sections 608 and 609, may otherwise deal with a Company with the
same rights it would have if it were not Trustee, Authenticating Agent, Paying
Agent, Security Registrar or such other agent.
SECTION 606. Money Held in Trust.
Money held by the Trustee in trust hereunder (including
amounts held by the Trustee as Paying Agent) need not be segregated from other
funds except to the extent required by law. The Trustee shall be under no
liability for interest on any money received by it hereunder except as
otherwise agreed to in writing by the Companies and the Trustee.
SECTION 607. Compensation and Reimbursement.
The Companies agree
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(1) to pay to the Trustee from time to time, and the
Trustee shall be entitled to, 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 the Trustee upon its request for all reasonable expenses,
disbursements and advances incurred or made by the Trustee in
accordance with any provision of this Indenture (including the
reasonable compensation and the expenses and disbursements of its
agents and counsel), except any such expense, disbursement or advance
as may be attributable to its negligence or bad faith; and
(3) to indemnify the Trustee for, and to hold it harmless
against, any loss, liability or expense incurred without negligence or
bad faith on its part, arising out of or in connection with the
acceptance or administration of the trust or trusts hereunder,
including the costs and expenses of defending itself against or
investigating any claim or liability in connection with the exercise
or performance of any of its powers or duties hereunder.
The obligations of the Companies under this Section to
compensate the Trustee, to pay or reimburse the Trustee for expenses,
disbursements and advances and to indemnify and hold harmless the Trustee shall
constitute additional indebtedness hereunder and shall survive the satisfaction
and discharge of this Indenture. As security for the performance of such
obligations of the Companies, the Trustee shall have a claim 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 particular
Securities, and the Securities are hereby subordinated to such prior claim.
When the Trustee incurs expenses or renders services in connection with an
Event of Default specified in Section 501(6) or Section 501(7), the expenses
(including reasonable fees and expenses of its counsel) and the compensation
for the service in connection therewith are intended to constitute expenses of
administration under any applicable Bankruptcy Law.
SECTION 608. Eligibility; Disqualification; Conflicting Interests.
The Trustee shall at all times satisfy the requirements of
Trust Indenture Act Section 310(a)(1). The Trustee shall have a combined
capital and surplus of at least $50,000,000 as set forth in its most recent
published annual report of condition. The Trustee shall comply with Trust
Indenture Act Section 310(b).
SECTION 609. Preferential Collection of Claims Against Companies.
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The Trustee shall comply with Trust Indenture Act Section
311(a), excluding any creditor relationship listed in Trust Indenture Act
Section 311(b). A Trustee who has resigned or been removed shall be subject to
Trust Indenture Act Section 311(a) to the extent indicated therein.
SECTION 610. 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 611.
(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
Companies. If the instrument of acceptance by a successor Trustee required by
Section 611 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
with respect to the Securities of such series.
(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 Companies.
(d) If at any time:
(1) the Trustee shall fail to comply with Section 608
after written request therefor by a Company or by any Holder who has
been a bona fide Holder of a Security for at least six months; or
(2) the Trustee shall cease to be eligible under Section
608 and shall fail to resign after written request therefor by the
Companies or by any such 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 Companies, each by a Board Resolution, may
remove the Trustee, or (ii) subject to Section 514, any Holder who has been a
bona fide Holder of a Security for at least six months may, on behalf of
himself and all others similarly situated, petition any court of competent
jurisdiction
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for the removal of the Trustee 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 Companies,
each by 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 Companies and the retiring Trustee, the successor Trustee so appointed
shall, forthwith upon its acceptance of such appointment in accordance with the
applicable requirements of Section 611, become the successor Trustee with
respect to the Securities of such series and to that extent supersede the
successor Trustee appointed by the Companies with respect to such Securities.
If no successor Trustee with respect to the Securities of any series shall have
been so appointed by the Companies or the Holders and accepted appointment in
the manner required by Section 611, any Holder 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 the Securities of
such series.
(f) The Companies 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 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 611. Acceptance of Appointment by Successor.
(a) Every successor Trustee appointed hereunder shall
execute, acknowledge and deliver to the Companies 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 the
request of a 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
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duly assign, transfer and deliver to such successor Trustee all property and
money held by such retiring Trustee hereunder.
(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
Companies, the retiring Trustee and each successor Trustee with respect to the
Securities of such series shall execute and deliver an indenture supplemental
hereto 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 Companies 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
Companies 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 612. Merger, Conversion, Consolidation or Succession to Business.
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Any corporation into which the Trustee may be merged or
converted or with which it may be consolidated, or any corporation resulting
from any merger, conversion or consolidation to which the Trustee shall be a
party, or any corporation succeeding to all or substantially all 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 shall have been
authenticated, but not delivered, by the Trustee then in office, any successor
by merger, conversion, consolidation to such authenticating Trustee may adopt
such authentication and deliver the Securities so authenticated with the same
effect as if such successor Trustee had itself authenticated such Securities.
SECTION 613. Appointment of Authenticating Agent.
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 the
original issue and upon exchange, registration of transfer or partial
redemption thereof or pursuant to Section 306, 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.
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 Companies and shall at all
times be a corporation organized and doing business under the laws of the
United States of America, any State thereof 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 authority. If such Authenticating Agent
publishes reports of condition at least annually, pursuant to law or to the
requirements of said 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. If 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
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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 to be an Authenticating Agent, provided
such corporation shall be otherwise eligible under this Section, without the
execution or filing of any paper or any further act on the part of the Trustee
or the Authenticating Agent.
An Authenticating Agent may resign at any time by giving
written notice thereof to the Trustee and to the Companies. The Trustee may at
any time terminate the agency of an Authenticating Agent by giving written
notice thereof to such Authenticating Agent and to the Companies. Upon
receiving such 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 may appoint a successor
Authenticating Agent which shall be acceptable to the Companies and shall
provide notice of such appointment to all Holders of Securities of the series
with respect to which such Authenticating Agent will serve, in the manner
provided 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. No successor Authenticating Agent shall be appointed
unless eligible under the provisions of this Section.
The Trustee agrees to pay to each Authenticating Agent from
time to time reasonable compensation for its services under this Section, and
the Trustee shall be entitled to be reimbursed for such payments, subject to
the provisions of Section 607.
If an appointment with respect to Securities of one or more
series is made pursuant to this Section, the Securities of such series may have
endorsed thereon, in addition to the Trustee's certificate of authentication,
an alternate certificate of authentication in the following form:
Dated:_________________
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This is one of the Securities of the series designated therein
referred to in the within-mentioned Indenture.
_____________________________
As Trustee
By____________________________
As Authenticating Agent
By____________________________
Authorized Officer
ARTICLE SEVEN
HOLDERS' LISTS AND REPORTS BY TRUSTEE AND COMPANIES
SECTION 701. Companies to Furnish Trustee Names and Addresses of Holders.
The Trust or the Corporation, as the case may be, will furnish
or cause to be furnished to the Trustee:
(a) semi-annually, not later than 15 days after each
Regular Record Date, a list for each series of Securities, in such form as the
Trustee may reasonably require, of the names and addresses of the Holders as of
such Regular Record Date; and
(b) at such other times as the Trustee may request in
writing, within 30 days after the receipt by such 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.
SECTION 702. Preservation of Information; Communications to Holders.
(a) The Trustee shall preserve, in as current a form as
is reasonably practicable, the names and addresses of Holders contained in the
most recent list furnished to the Trustee as provided in Section 701 and the
names and addresses of Holders received by the Trustee in its capacity as
Security Registrar. The Trustee may destroy any list furnished to it as
provided in Section 701 upon receipt of a new list so furnished.
(b) If three or more Holders (herein referred to as
"applicants") apply in writing to the Trustee, and furnish to the Trustee
reasonable proof that each such applicant has owned a Security for a period of
at least six months preceding the date
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of such application, and such application states that the applicants desire to
communicate with other Holders with respect to their rights under this
Indenture or under the Securities or Coupons and is accompanied by a copy of
the form of proxy or other communication which such applicants propose to
transmit, then the Trustee shall, within five Business Days after the receipt
of such application, at its election, either
(i) afford such applicants access to the
information preserved at the time by the Trustee in accordance with
Section 702(a); or
(ii) inform such applicants as to the approximate
number of Holders whose names and addresses appear in the information
preserved at the time by the Trustee in accordance with Section
702(a), and as to the approximate cost of mailing to such Holders the
form of proxy or other communication, if any, specified in such
application.
If the Trustee shall elect not to afford such applicants
access to such information, the Trustee shall, upon the written request of such
applicants, mail to each Holder whose name and address appears in the
information preserved at the time by the Trustee in accordance with Section
702(a) a copy of the form of proxy or other communication which is specified in
such request, with reasonable promptness after a tender to the Trustee of the
material to be mailed and of payment, or provision for the payment, of the
reasonable expenses of mailing, unless within five days after such tender the
Trustee shall mail to such applicants and file with the Commission, together
with a copy of the material to be mailed, a written statement to the effect
that, in the opinion of the Trustee, such mailing would be contrary to the best
interest of the Holders or would be in violation of applicable law. Such
written statement shall specify the basis of such opinion. If the Commission,
after opportunity for a hearing upon the objections specified in the written
statement so filed, shall enter an order refusing to sustain any of such
objections or if, after the entry of an order sustaining one or more of such
objections, the Commission shall find, after notice and opportunity for
hearing, that all objections so sustained have been met and shall enter an
order so declaring, the Trustee shall mail copies of such material to all such
Holders with reasonable promptness after the entry of such order and the
renewal of such tender; otherwise the Trustee shall be relieved of any
obligation or duty to such applicants respecting their application.
(c) Every Holder of Securities or Coupons, by receiving
and holding the same, agrees with the Trust or the Corporation, as the case may
be, and the Trustee that neither such Company nor the Trustee nor any agent of
either of them shall be held accountable by reason of the disclosure of any
such information as to the names and addresses of the Holders in accordance
with Section 702(b), regardless of the source from
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which such information was derived, and that the Trustee shall not be held
accountable by reason of mailing any material pursuant to a request made under
Section 702(b).
SECTION 703. Reports by Trustee.
(a) The Trustee shall transmit to Holders of Securities
such reports concerning the Trustee and its actions under this Indenture as may
be required pursuant to the Trust Indenture Act at the times and in the manner
provided pursuant thereto.
(b) A copy of each such report at the time of its
transmission to Holders shall be filed with the Commission and each securities
exchange on which any Securities are listed. The Trust or the Corporation, as
the case may be, agrees promptly to notify the Trustee whenever any Securities
become listed on any securities exchange and of any delisting thereof.
SECTION 704. Reports by Companies.
Each of the Companies shall:
(1) file with the Trustee, within 15 days after such
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 such
Company may be required to file with the Commission pursuant to
Section 13 or Section 15(d) of the Exchange Act; or, if such Company
is not required to file information, documents or reports pursuant to
either of said Sections, then it shall file with the Trustee and the
Commission, in accordance with rules and regulations prescribed from
time to time by the Commission, such of the supplementary and periodic
information, documents and reports which may be required pursuant to
Section 13 of the Exchange Act in respect of a security listed and
registered on a national securities exchange as may be prescribed from
time to time in such rules and regulations;
(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 such Company with the conditions and
covenants of this Indenture as may be required from time to time by
such rules and regulations;
(3) transmit by mail to all Holders, as their names and
addresses appear in the Security Register, (a) concurrently with
furnishing the same to its stockholders, such Company's annual report
to stockholders,
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containing certified financial statements, and any other financial
reports which such Company generally furnishes to its stockholders,
and (b) within 30 days after the filing thereof with the Trustee, such
summaries of any other information, documents and reports required to
be filed by such 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; and
(4) furnish to the Trustee, on or before May 1 of each
year, a brief certificate from the principal executive officer,
principal financial officer or principal accounting officer as to his
or her knowledge of such Company's compliance with all conditions and
covenants under this Indenture. For purposes of this paragraph, such
compliance shall be determined without regard to any period of grace
or requirement of notice provided under this Indenture. Such
certificate need not comply with Section 102.
ARTICLE EIGHT
CONSOLIDATION, MERGER, CONVEYANCE, TRANSFER OR LEASE
SECTION 801. Companies May Consolidate, Etc. on Certain Terms
Neither the Trust or the Corporation, as the case may be,
shall consolidate with, or sell, lease, or convey all or substantially all of
its assets to, or merge with or into, any other Person, unless:
(1) either the Trust or the Corporation, as the case may
be, shall be the continuing entity, or the successor entity (if other
than the Trust or the Corporation, as the case may be) formed by or
resulting from any such consolidation or merger or which shall have
received the transfer of such assets shall be a corporation,
partnership or trust organized and existing under the laws of the
United States of America, any State thereof or the District of
Columbia and shall, by an indenture supplemental hereto executed and
delivered to the Trustee, in form satisfactory to the Trustee,
expressly assume the due and punctual payment of the principal of (and
premium, if any) and interest on all the Securities and the due and
punctual performance and observance of all of the covenants of the
Securities, Coupons and this Indenture on the part of such Company to
be performed or observed Securities, Coupons and this Indenture;
(2) immediately after giving effect to such transaction,
no Event of Default, or event which after notice or lapse of time, or
both, would become an Event of Default, shall have occurred and be
continuing; and
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(3) such Company shall have delivered to the Trustee an
Officer's Certificate and an Opinion of Counsel, each stating that
such consolidation, sale, lease, conveyance, or merger and such
supplemental indenture comply with this Article and that all
conditions precedent herein provided for relating to such transaction
have been complied with.
SECTION 802. Successor Substituted.
Upon any consolidation with or merger with or into, or any
sale, lease or conveyance, of all or substantially all of its assets to, any
Person in accordance with Section 801, the successor Person formed by such
consolidation or into which such Company is merged or to which such conveyance,
transfer or lease is made shall succeed to, and be substituted for, and may
exercise every right and power of, such Company under this Indenture with the
same effect as if such successor Person had been named as such Company herein,
and thereafter, except in the case of a lease to another Person, the
predecessor person shall be relieved of all obligations and covenants under
this Indenture, the Securities and the Coupons.
ARTICLE NINE
SUPPLEMENTAL INDENTURES
SECTION 901. Supplemental Indentures Without Consent of Holders.
Without the consent of any Holders, the Companies, when
authorized by a Board Resolution, and the Trustee, at any time and from time to
time, may enter into one or more indentures supplemental hereto, in form
satisfactory to the Trustee, for any of the following purposes:
(1) to evidence the succession of another Person to a
Company and the assumption by any such successor of the covenants of
such Company herein and in the Securities; or
(2) to add to the covenants of a 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 a Company; or
(3) to add any additional Events of Default for the
benefit of the Holders of all or any series of Securities; or
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(4) to add or change any of the provisions of this
Indenture to such extent as shall be necessary to permit or facilitate
the issuance of, or to liberalize certain terms of, Securities in
bearer form, or to permit or facilitate the issuance of Securities in
uncertificated form and with or without interest coupons;provided,
that such action shall not adversely affect the interests of the
holders of the Securities of any series in any material respect;
(5) to change or eliminate any provisions of this
Indenture in respect of one or more series of Securities, provided
that any such change or elimination shall become effective only when
there is no Security Outstanding of any series or Coupon 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 as permitted by Sections 201 and 301; or
(8) to evidence and provide for the acceptance of
appointment hereunder by a successor Trustee with respect to the
Securities of one or more series or facilitate the administration of
the trust hereunder by more than one Trustee, pursuant to the
requirements of Section 611(b); or
(9) to cure any ambiguity, defect or inconsistency or to
correct or supplement any provision herein which may be inconsistent
with any other provision herein or to make any other provisions with
respect to matters or questions arising under this Indenture provided
that such action shall not adversely affect the interests of the
Holders of Securities of any series in any material respect; or
(10) to supplement any of the provisions of this Indenture
to the extent necessary to permit or facilitate the defeasance and
discharge of any series of Securities or of any applicable
Guarantees;provided that such action shall not adversely affect the
interests of the Holders of the Securities of any series in any
material respect.
Upon request of the Companies, accompanied by a Board
Resolution authorizing the execution of any such supplemental indenture, and
upon receipt by the Trustee of the documents described in (and subject to the
last sentence of) Section 903, the Trustee shall join with the Companies in the
execution of any supplemental indenture authorized or permitted by the terms of
this Indenture.
SECTION 902. Supplemental Indentures with Consent of Holders.
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With the consent of the Holders of not less than a majority in
principal amount of the Outstanding Securities of each series affected by such
supplemental indenture, by Act of said Holders delivered to each of the
Companies and the Trustee, the Companies, each when authorized by 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 of such series
and any 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, if any, or any installment of principal of or interest on,
any such Security, or reduce the principal amount thereof or the rate
of interest thereon or any premium payable upon the redemption thereof
or extend the time for payment thereof, or reduce the amount of the
principal of an Original Issue Discount Security that would be due and
payable upon a declaration of acceleration of the Maturity thereof
pursuant to Section 502 or would be provable in bankruptcy or
adversely affect any right of repayment of the Holder of any such
Security, or change any Place of Payment where, or the coin or
currency in which, any such Security or any premium or the interest
thereon is payable, or impair the right to institute suit for the
enforcement of any such payment on or with respect to any such
Security;
(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 of compliance with certain
provisions of this Indenture or Defaults or Events of Default
hereunder and their consequences or to reduce the quorum or voting
requirements provided for in this Indenture;
(3) modify any of the provisions of this Indenture
relating to the subordination of any Securities issued hereunder
(including Article Fourteen) in a manner adverse to the Holders of
such Securities; or
(4) change the redemption provisions (including Article
Eleven) hereof in a manner adverse to such Holder; or
(5) modify any of the provisions of this Section, or
Section 513, except to increase any such required percentage or to
provide that certain other provisions of this
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Indenture cannot be modified or waived without the consent of the
Holder of each Outstanding Security affected thereby; provided,
howeve, that this clause shall not be deemed to require the consent of
any Holder with respect to changes in the references to "the Trustee"
and concomitant changes in this Section, or the deletion of this
proviso, in accordance with the requirements of Sections 611(b) and
901(8).
A supplemental indenture which changes or eliminates any covenant or other
provisions of this Indenture which has expressly been included solely 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.
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.
SECTION 903. Execution of Supplemental Indentures.
The Trustee shall sign any supplemental indenture authorized
pursuant to this Article, subject to the last sentence of this Section 903. In
executing, or accepting the additional trusts created by, any supplemental
indenture permitted by this Article or the modifications thereby of the trusts
created by this Indenture, the Trustee shall be entitled to receive, and
(subject to Section 601) 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 shall be bound thereby.
SECTION 905. Conformity with Trust Indenture Act.
Every supplemental indenture executed pursuant to this Article
shall conform to the requirements of the Trust Indenture Act as then in effect.
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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 Trust or the
Corporation, as the case may be, shall so determine, new Securities of any
series so modified as to conform, in the opinion of the Trustee and such
Company to any such supplemental indenture may be prepared and executed by such
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 each of the Companies and the
Trustee of any supplemental indenture pursuant to Section 902, the Companies
shall transmit to the Holders a notice setting forth the substance of such
supplemental indenture.
ARTICLE TEN
COVENANTS
SECTION 1001. Payments of Securities.
With respect to each series of Securities, the Trust or the
Corporation, as the case may be, covenants and agrees, severally and not
jointly, that it will duly and punctually pay the principal of (and premium, if
any) and interest on such Securities in accordance with the terms of the
Securities or any Coupons appertaining thereto and this Indenture, and will
duly comply with all the other terms, agreements and conditions contained in,
or made in the Indenture for the benefit of, the Securities of such series.
Any interest due on any Bearer Security on or before the maturity thereof shall
be payable only upon presentation and surrender of the Coupons appertaining
thereto for such interest as they severally mature.
SECTION 1002. Maintenance of Office or Agency.
The Trust or the Corporation, as the case may be, will
maintain in each Place of Payment an office or agency where Securities (but not
Bearer Securities, except as otherwise provided below, unless such Place of
Payment is located outside the United States) may be presented or surrendered
for payment, where Securities may be surrendered for registration of transfer
or exchange and where notices and demands to or upon such Company
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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 Trust or the
Corporation, as the case may be, shall maintain, subject to any laws or
regulations applicable thereto, an office or agency in a Place of Payment for
such series which is located outside the United States where Securities of such
series and any Coupons appertaining thereto may be presented and surrendered
for payment. The Trust or the Corporation, as the case may be, will give
prompt written notice to the Trustee of the location, and any change in the
location, of such office or agency. If at any time the Trust or the
Corporation, as the case may be, 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
such series and any Coupons appertaining thereto may be presented and
surrendered for payment at the place specified for the purpose with respect to
such Securities as provided in or pursuant to this Indenture, and each of the
Trust or the Corporation, as the case may be, hereby appoints the Trustee as
its agent to receive all such presentations, surrenders, notices and demands.
Except as otherwise provided in or pursuant to this Indenture,
no payment of principal (premium, if any) or interest with respect to Bearer
Securities shall be made at any office or agency of the Trust or the
Corporation, as the case may be, in the United States or by check mailed to any
address in the United States by transfer to an account maintained with a bank
located in the United States; provided, however, if amounts owing with respect
to any Bearer Securities shall be payable in U.S. dollars, payment of principal
of (premium, if any) or interest on any such Security may be made at the
Corporate Trust Office of the Trustee or any office or agency designated by the
Trust or the Corporation, as the case may be, in the United States, but only if
payment of the full amount of such principal (premium, if any) or interest at
all offices outside the United States maintained for such purpose by the Trust
or the Corporation, as the case may be, in accordance with the Indenture is
illegal or effectively precluded by exchange controls or other similar
restrictions.
The Trust or the Corporation, as the case may be, may also
from time to time designate one or more other offices or agencies where the
Securities of one or more series may be presented or surrendered for any or all
such purposes and may from time to time rescind such designations; provided,
however, that no such designation or rescission shall in any manner relieve
such Company of its obligation to maintain an office or agency in each Place of
Payment for such purposes. The Trust or the Corporation, as the case may be,
will give prompt written
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notice to the Trustee of any such designation or rescission and of any change
in the location of any such other office or agency.
SECTION 1003. Corporate Existence.
Subject to Article Eight hereof, the Trust or the Corporation,
as the case may be, will do or cause to be done all things necessary to
preserve and keep in full force and effect its existence and that of each of
its Subsidiaries and the rights (charter and statutory), licenses and
franchises of such Company and its Subsidiaries; provided, however, that (a)
such Company shall not be required to preserve any such right, license or
franchise or the corporate existence of any of its Subsidiaries if its Board of
Directors, or the board of directors of the Subsidiary concerned, as the case
may be, shall determine that the preservation thereof is no longer desirable in
the conduct of the business of such Company or any of its Subsidiaries, and (b)
nothing herein contained shall prevent any Subsidiary of such Company from
liquidating or dissolving, or merging into, or consolidating with such Company
(provided that such Company shall be the continuing or surviving corporation)
or with any one or more other Subsidiaries if the Board of Directors of a
Company or the board of directors of the Subsidiary concerned, as the case may
be, shall so determine.
SECTION 1004. Payment of Taxes and Other Claims.
The Trust or the Corporation, as the case may be, will pay or
discharge, or cause to be paid or discharged, before the same shall become
delinquent, (1) all material taxes, assessments and governmental charges levied
or imposed upon such Company or any Subsidiary or upon the income, profits or
property of such Company or any Subsidiary, and (2) all lawful claims for
labor, materials and supplies which, if unpaid, might by law become a material
lien upon the property of such Company or any Subsidiary; provided, however,
that such 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 1005. Maintenance of Properties.
The Trust or the Corporation, as the case may be, will cause
all of its material properties used or useful in the conduct of its business or
the business of any of its Subsidiaries to be maintained and kept in good
condition, repair and working order (normal wear and tear excepted) and
supplied with all necessary equipment and will cause to be made all necessary
repairs, renewals, replacements, betterments and improvements thereof, all as
in the judgment of such Company may be necessary, so that the business carried
on in connection
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therewith may be properly and advantageously conducted at all times; provided,
however, that nothing in this Section shall prevent such Company from
discontinuing the operation or maintenance of any of such properties, or
disposing of any of them, if such discontinuance or disposal is, in the
judgment of its Board of Directors or of the board of directors of the
Subsidiary concerned, as the case may be, desirable in the conduct of the
business of such Company or any Subsidiary of such Company.
SECTION 1006. Insurance.
The Trust or the Corporation, as the case may be, 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 insurers of recognized responsibility.
SECTION 1007. Compliance Certificates.
(a) The Trust or the Corporation, as the case may be,
shall deliver to the Trustee within 120 days after the end of each
fiscal year of such Company (which fiscal year currently ends on
December 31), an Officer's Certificate stating whether or not the
signer knows of any Default or Event of Default by such Company that
occurred prior to the end of the fiscal year and is then continuing.
If the signer does know of such a Default or Event of Default, the
certificate shall describe each such Default or Event of Default and
its status and the specific section or sections of this Indenture in
connection with which such Default or Event of Default has occurred.
The Trust or the Corporation, as the case may be, shall also promptly
notify the Trustee in writing should such Company's fiscal year be
changed so that the end thereof is on any date other than the date on
which such Company's fiscal year currently ends. The certificate need
not comply with Section 102 hereof, but shall comply with Section
314(a)(4) of the Trust Indenture Act.
(b) The Trust or the Corporation, as the case may be,
shall deliver to the Trustee, within 10 days after the occurrence
thereof, notice of any acceleration which with the giving of notice
and the lapse of time would be an Event of Default within the meaning
of Section 501(4) hereof.
(c) The Trust or the Corporation, as the case may be,
shall deliver to the Trustee within 90 days after the end of each
fiscal year a written statement by such Company's independent
certified public accountants stating (i) that their audit examination
has included a review of the terms of this Indenture and the
Securities as they relate to
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accounting matters and (ii) whether, in connection with their audit
examination, any Default has come to their attention and if such a
Default has come to their attention, specifying the nature and period
of existence thereof and the specific section or sections of this
Indenture in connection with which such Default has occurred;provided
that, without any restriction as to the scope of the audit
examination, such independent certified public accountants shall not
be liable by reason of the failure to obtain knowledge of such Default
that would not be disclosed in the course of an audit examination
conducted in accordance with generally accepted auditing standards.
(d) The Trust or the Corporation, as the case may be,
shall deliver to the Trustee forthwith upon becoming aware of a
Default or Event of Default (but in no event later than 10 days after
the occurrence of each Default or Event of Default that is
continuing), an Officer's Certificate setting forth the details of
such Default or Event of Default and the action that such Company
proposes to take with respect thereto and the specific section or
sections of this Indenture in connection with which such Default or
Event of Default has occurred.
SECTION 1008. Commission Reports.
(a) The Companies shall file with the Trustee, within 15 days
after filing them with the Commission, copies of the quarterly and
annual reports and of the information, documents, and other reports
(or copies of such portions of any of the foregoing as the Commission
may by rules and regulations prescribe) which the Companies are
required to file with the Commission pursuant to Section 13 or 15(d)
of the Exchange Act. If the Companies are not subject to the
requirements of such Section 13 or 15(d) of the Exchange Act, the
Companies shall file with the Trustee, within 15 days after they would
have been required to file such information with the Commission,
financial statements, including any notes thereto and, with respect to
annual reports, an auditors' report by an accounting firm of
established national reputation and a "Management's Discussion and
Analysis of Financial Condition and Results of Operations," both
comparable to that which the Companies would have been required to
include in such annual reports, information, documents or other
reports if the Companies had been subject to the requirements of such
Sections 13 or 15(d) of the Exchange Act. The Companies also shall
comply with the other provisions of Section 314(a) of the Trust
Indenture Act.
(b) So long as the Securities remain outstanding, the
Companies shall cause their annual report to stockholders
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and any other financial reports furnished by them to stockholders
generally, to be mailed to the Holders at their addresses appearing in
the register of Securities maintained by the Security Registrar in
each case at the time of such mailing or furnishing to stockholders.
If the Companies are not required to furnish annual or quarterly
reports to their stockholders pursuant to the Exchange Act, the
Companies shall cause their financial statements, including any notes
thereto and, with respect to annual reports, an auditors' report by an
accounting firm of established national reputation and a "Management's
Discussion and Analysis of Financial Condition and Results of
Operations," to be so filed with the Trustee and mailed to the Holders
within 90 days after the end of each of the Companies' fiscal years
and within 45 days after the end of each of the first three quarters
of each fiscal year.
(c) The Companies shall provide the Trustee with a sufficient
number of copies of all reports and other documents and information
that the Companies may be required to deliver to the Holders under
this Section 1008.
SECTION 1009. Waiver of Stay, Extension or Usury Laws.
The Trust or the Corporation, as the case may be, 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, and will actively resist any
and all efforts to be compelled to take the benefit or advantage of, any stay
or extension law or any usury law or other law, which would prohibit or forgive
such Company from paying all or any portion of the principal of and/or interest
on the Securities as contemplated herein, wherever enacted, now or at any time
hereafter in force, or which may affect the covenants or the performance of
this Indenture; and (to the extent that it may lawfully do so) each such
Company 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 1010. Money for Securities Payments to Be Held in Trust.
If the Trust or the Corporation, as the case may be, shall at
any time act as its own Paying Agent with respect to any series of Securities,
it will, on or before each due date of the principal of (and premium, if any)
or interest on any of the Securities of that series, segregate and hold in
trust for the benefit of the Persons entitled thereto a sum sufficient to pay
the principal (and premium, if any) or interest so becoming due until such sums
shall be paid to such Persons or otherwise
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disposed of as herein provided and will promptly notify the Trustee of its
action or failure so to act.
Whenever the Trust or the Corporation, as the case may be,
shall have one or more Paying Agents for any series of Securities and any
Coupons appertaining thereto, it will, one Business Day prior to each due date
of the principal of (and premium, if any) or interest on any Securities of that
series, deposit with a Paying Agent a sum sufficient to pay the principal (and
premium, if any) or interest so becoming due, such sum to be held in trust for
the benefit of the Persons entitled to such principal (premium, if any) or
interest, and (unless such Paying Agent is the Trustee) such Company will
promptly notify the Trustee of its action or failure to so act.
The Trust or the Corporation, as the case may be, will cause
each Paying Agent for any series of Securities 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 the
principal of (and premium, if any) or interest on Securities of that
series in trust for the benefit of the Persons entitled thereto until
such sums shall be paid to such Persons or otherwise disposed of as
herein provided;
(2) give the Trustee notice of any default by the Trust
or the Corporation, as the case may be (or any other obligor upon the
Securities of that series), in the making of any payment of principal
(and premium, if any) or interest on the Securities of that series;
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 for payment in
respect of the Securities of that series.
The Trust or the Corporation, as the case may be, 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 such 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 such Company or such Paying Agent; and, upon
such payment by any Paying Agent to the Trustee, such Paying Agent shall be
released from all further liability with respect to such money.
Any money deposited with the Trustee or any Paying Agent, or
then held by the Trust or the Corporation, as the case
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may be, in trust for the payment of the principal of (and premium, if any) or
interest on any Security of any series and remaining unclaimed for one year
after such principal (and premium, if any) or interest has become due and
payable shall be paid to such Company on Company Request, or (if then held by
such Company) shall be discharged from such trust; and the Holder of such
Security or any Coupon appertaining thereto shall thereafter, as an unsecured
general creditor, look only to such Company for payment thereof, and all
liability of the Trustee or such Paying Agent with respect to such trust money,
and all liability of such Company, as trustee thereof, shall thereupon cease;
provided, however, that the Trustee or such Paying Agent, before being required
to make any such repayment, may at the expense of such Company, cause to be
published once, in an Authorized Newspaper published in the English language in
New York, New York, 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 such Company.
SECTION 1011. Additional Amounts.
If any Securities of a series provide for the payment of
Additional Amounts, the Trust or the Corporation, as the case may be, will pay
to the Holder of any Security of any 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 of (and premium, if any)
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.
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 (of if the Securities of that series will not bear
interest prior to Maturity, the first day on which a payment of principal (and
premium, if any) is made), and at least 10 days prior to each date of payment
of principal (and premium, if any) or interest if there has been any change
with respect to the matters set forth in the below-mentioned Officers'
Certificate,
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the Trust or the Corporation, as the case may be, will furnish the Trustee and
such 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 premium, if
any) 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 on account of any tax, assessment or other
governmental charge described in the Securities of 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 Trust or the
Corporation, as the case may be, will pay to the Trustee or such Paying Agent
the Additional Amounts required by the terms of such Securities. If 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 Trust or the Corporation, as the case
may be, covenants to indemnify the Trustee and any Paying Agent for, and to
hold them harmless against, any loss, liability or expense reasonably incurred
without negligence or bad faith on its part arising out of or in connection
with actions taken or omitted by any of them in reliance on any Officers'
Certificate furnished pursuant to this Section or in reliance on such Company's
not furnishing such an Officers' Certificate.
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 Trust or the Corporation, as the case may
be, to redeem any Securities shall be evidenced by a
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Board Resolution. In case of any redemption at the election of the Trust or
the Corporation, as the case may be, of less than all the Securities of any
series, such Company shall, at least 45 days prior to the Redemption Date fixed
by such Company (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
Trust or the Corporation, as the case may be, shall furnish the Trustee with an
Officer's 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 are to be
redeemed, the particular Securities to be redeemed shall be selected not more
than 90 days prior to the Redemption Date by the Trustee, from the Outstanding
Securities of such series not previously called for redemption, substantially
pro rata, by lot or by any other method as the Trustee considers fair and
appropriate and that complies with the requirements of the principal national
securities exchange, if any, on which such Securities are listed, 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;
provided that in case the Securities of such series have different terms and
maturities, the Securities to be redeemed shall be selected by the Trust or the
Corporation, as the case may be, and such Company shall give notice thereof to
the Trustee.
The Trustee shall promptly notify the Trust or the
Corporation, as the case may be, 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 the Securities
shall relate, in the case of any Securities redeemed or to be redeemed only in
part, to the portion of the principal amount of such Securities 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 nor more than 45 days
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prior to the Redemption Date, to each Holder of Securities to be redeemed.
All notices of redemption shall state:
(1) the Redemption Date;
(2) the Redemption Price;
(3) if less than all the Outstanding Securities of any
series are to be redeemed, the identification (and, in the case of
partial redemption, the principal amounts) of the particular
Securities to be redeemed;
(4) that on the Redemption Date the Redemption Price will
become due and payable upon each such Security to be redeemed and, if
applicable, that interest thereon will cease to accrue on and after
said date;
(5) the place or places 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;
(6) that the redemption is for a sinking fund, if such is
the case;
(7) 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 Trust or the Corporation, as the case
may be, the Trustee and any Paying Agent is furnished;
(8) if Bearer Securities of any series are to be redeemed
and any Registered Securities of such series are not being redeemed,
and if such Bearer Securities may be exchanged for Registered
Securities not subject to redemption on the Redemption Date pursuant
to Section 305 or otherwise, the last date, as determined by the Trust
or the Corporation, as the case may be, on which such exchanges may be
made, and
(9) the CUSIP number, if any, of the Securities to be
redeemed.
Notice of redemption of Securities to be redeemed at the
election of the Trust or the Corporation, as the case may be,
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shall be given by such Company or, at such Company's request, by the Trustee in
the name and at the expense of such Company.
SECTION 1105. Deposit of Redemption Price.
Prior to any Redemption Date, the Trust or the Corporation, as
the case may be, shall deposit with the Trustee or with a Paying Agent (or, if
such Company is acting as its own Paying Agent, segregate and hold in trust as
provided in Section 1010) an amount of money sufficient to pay the Redemption
Price of, and (except if the Redemption Date shall be an Interest Payment Date)
accrued interest on, all the Securities 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, and from and after such date
(unless the Trust or the Corporation, as the case may be, shall default in the
payment of the Redemption Price and accrued interest) such Securities shall
cease to bear interest and Coupons for such interest appertaining to any Bearer
Securities to be redeemed, except as provided below, shall be void. Upon
surrender of any such Security for redemption in accordance with said notice,
together with all Coupons such Security shall be paid by the Trust or the
Corporation, as the case may be, at the Redemption Price, together with accrued
interest to the Redemption Date; provided, however, that installments of
interest whose Stated Maturity is on or prior to the Redemption Date shall be
payable to the Holders of such Securities, or one or more Predecessor
Securities, registered as such at the close of business on the relevant Regular
or Special Record Dates according to their terms and the provisions of Section
307; and provided, further, that installments of interest on Bearer Securities
whose Stated Maturity is on or prior to the Redemption Date shall be payable
only upon presentation and surrender of Coupons for such interest at an office
or agency located outside of the United States except as otherwise provided in
Section 1002.
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 Trust or the Corporation, as the
case may be, 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
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been made from the Redemption Price, such Holder shall be entitled to receive
the amount so deducted; provided, however, that any interest represented by
Coupons shall be payable only upon presentation and surrender of those Coupons
at an office or agency for such Security located outside of the United States
except as otherwise provided in Section 1002.
If any Security called for redemption shall not be so paid
upon surrender thereof for redemption, the principal (and premium, if any)
shall, until paid, bear interest from the Redemption Date at the rate
prescribed therefor in the Security.
SECTION 1107. Securities Redeemed in Part.
Any Registered Security which is to be redeemed only in part
shall be surrendered at an office or agency of the Trust or the Corporation, as
the case may be, at a Place of Payment therefor (with, if such Company or the
Trustee so requires, due endorsement by, or a written instrument of transfer in
form satisfactory to such Company and the Trustee duly executed by, the Holder
thereof or his attorney duly authorized in writing), and such Company shall
execute, and the Trustee shall authenticate and deliver to the Holder of such
Registered Security without service charge, a new Registered Security or
Registered Securities of the same series and Stated Maturity, 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
Registered 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 Securities of any series is herein referred to as
an "OPTIONAL SINKING FUND PAYMENT." If provided for by the terms of Securities
of any series, the cash amount of any sinking fund payment may be subject to
reduction as provided in Section 1202. Each sinking fund payment shall be
applied to the redemption of
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Securities of any series as provided for by the terms of Securities of such
series.
SECTION 1202. Satisfaction of Sinking Fund Payments with Securities.
The Trust or the Corporation, as the case may be, (1) may
deliver Securities of a series (other than any Securities previously called for
redemption), together in the case of any Bearer Securities for such series with
all unmatured Coupons appertaining thereto and (2) may apply as a credit
Securities of a series which have been redeemed either at the election of such
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, in each case in satisfaction of all or any part of any sinking fund
payment with respect to the Securities of such series required to be made
pursuant to the terms of such Securities as provided for by the terms of such
series; provided that such Securities have not been previously so credited.
Such Securities shall be received and credited for such purpose by the Trustee
at the Redemption Price specified in such Securities for redemption through
operation of the sinking fund and the amount of such sinking fund payment shall
be reduced accordingly.
SECTION 1203. Redemption of Securities for Sinking Fund.
Not less than 45 days prior to each sinking fund payment date
for any series of Securities, the Trust or the Corporation, as the case may be,
will deliver to the Trustee an Officer's Certificate specifying the amount of
the next ensuing 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 and the portion thereof, if any, which is to be satisfied by delivering
and crediting Securities of that series pursuant to Section 1202 and will also
deliver to the Trustee any Securities to be so delivered (which have not been
previously delivered). 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 Trust or the Corporation, as the case may be, 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
DEFEASANCE AND COVENANT DEFEASANCE
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SECTION 1301. Applicability of Article; Companies' Option to Effect
Defeasance or Covenant Defeasance.
Unless pursuant to Section 301 provision is made for the
inapplicability of either or both of (a) defeasance of the Securities of a
series under Section 1302 or (b) covenant defeasance of the Securities of a
series under Section 1303, then the provisions of such Section or Sections, as
the case may be, together with the other provisions of this Article, shall be
applicable to the Securities of such series, and the Trust or the Corporation,
as the case may be, may at their option, by Board Resolution, at any time, with
respect to the Securities of such series, elect to have either Section 1302
(unless inapplicable) or Section 1303 (unless inapplicable) be applied to the
Outstanding Securities of such series upon compliance with the applicable
conditions set forth below in this Article.
SECTION 1302. Defeasance and Discharge.
Upon the exercise of the option provided in Section 1301 to
defease the Outstanding Securities of a particular series and any Coupons
appertaining thereto, the Trust or the Corporation, as the case may be, shall
be discharged from its obligations with respect to the Outstanding Securities
of such series and any Coupons appertaining thereto on the date the applicable
conditions set forth in Section 1304 are satisfied (hereinafter, "DEFEASANCE").
Defeasance shall mean that the Trust or the Corporation, as the case may be,
shall be deemed to have paid and discharged the entire indebtedness represented
by the Outstanding Securities of such series and any Coupons appertaining
thereto and to have satisfied all 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 such Company, shall execute proper instruments acknowledging
the same); provided, however, that the following rights, obligations, powers,
trusts, duties and immunities shall survive until otherwise terminated or
discharged hereunder: (A) the rights of Holders of Outstanding Securities of
such series and any Coupons appertaining thereto to receive, solely from the
trust fund provided for in Section 1304, payments in respect of the principal
of (and premium, if any) and interest on such Securities and any Coupons
appertaining thereto when such payments are due, (B) such Company's obligations
with respect to such Securities and any Coupons appertaining thereto under
Sections 304, 305, 306, 1002 and 1010, (C) the rights, powers, trusts, duties
and immunities of the Trustee hereunder and (D) this Article. Subject to
compliance with this Article, the Trust or the Corporation, as the case may be,
may exercise their option with respect to defeasance under this Section 1302
notwithstanding the prior exercise of their option with respect
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to covenant defeasance under Section 1303 in regard to the Securities of such
series and any Coupons appertaining thereto.
SECTION 1303. Covenant Defeasance.
Upon the exercise of the option provided in Section 1301 to
obtain a covenant defeasance with respect to the Outstanding Securities of a
particular series and any Coupons appertaining thereto, the Trust or the
Corporation, as the case may be, shall be released from its obligations under
this Indenture (except its obligations under Sections 304, 305, 306, 506, 509,
610, 1001, 1002, 1005 and 1010) with respect to the Outstanding Securities of
such series on and after the date the applicable conditions set forth in
Section 1304 are satisfied (hereinafter, "COVENANT DEFEASANCE"). Covenant
defeasance shall mean that, with respect to the Outstanding Securities of such
series, the Trust or the Corporation, as the case may be, may omit to comply
with and shall have no liability in respect of any term, condition or
limitation set forth in this Indenture (except its obligations under Sections
304, 305, 306, 506, 509, 610, 1001, 1002, 1005 and 1010), whether directly or
indirectly by reason of any reference elsewhere herein or by reason of any
reference to any other provision herein or in any other document, and such
omission to comply shall not constitute an Event of Default under Section
501(4) with respect to Outstanding Securities of such series, and the remainder
of this Indenture and of the Securities of such series shall be unaffected
thereby.
SECTION 1304. Conditions to Defeasance or Covenant Defeasance.
The following shall be the conditions to defeasance under
Section 1302 and covenant defeasance under Section 1303 with respect to the
Outstanding Securities of a particular series:
(1) the Trust or the Corporation, as the case may
be, shall irrevocably have deposited or caused to be deposited
with the Trustee (or another trustee satisfying the
requirements of Section 608 who shall agree to comply with the
provisions of this Article applicable to it), under the terms
of an irrevocable trust agreement in form and substance
reasonably satisfactory to such Trustee, 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, (A) funds in such currency or
currencies, currency unit or units or composite currency or
currencies in which such securities are payable in an amount,
or (B) Government Obligations which through the scheduled
payment of principal and interest in respect thereof in
accordance
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with their terms will provide, not later than the due date of
any payment, money in an amount, or (C) a combination thereof,
in each case sufficient, after payment of all Federal, State
and local taxes or other charges or assessments in respect
thereof payable by the Trustee, 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, if any, on) and each installment of
principal of (and premium, if any) and interest on the
Outstanding Securities of such series 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 the
Outstanding Securities of such series 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.
(2) No Default or Event of Default with respect
to the Securities of such series shall have occurred and be
continuing on the date of such deposit or shall occur as a
result of such deposit, and no Default or Event of Default
under clause (6) or (7) of Section 501 hereof shall occur and
be continuing, 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).
(3) Such deposit, defeasance or covenant
defeasance shall not result in a breach or violation of, or
constitute a default under, any other agreement or instrument
to which the defeasing Company is a party or by which it is
bound.
(4) Such defeasance or covenant defeasance shall
not cause any Securities of such series then listed on any
national securities exchange registered under the Exchange Act
to be delisted.
(5) In the case of an election with respect to
Section 1302, the Trust or the Corporation, as the case may
be, shall have delivered to the Trustee either (A) a ruling
directed to the Trustee received from the Internal Revenue
Service to the effect that the Holders of the Outstanding
Securities of such series will not recognize income, gain or
loss for Federal income tax
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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 or (B) an Opinion of Counsel,
based on such ruling or on a change in the applicable Federal
income tax law since the date of this Indenture, in either
case to the effect that, and based thereon such opinion shall
confirm that, the Holders of the Outstanding Securities of
such series 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.
(6) In the case of an election with respect to
Section 1303, the Trust or the Corporation, as the case may
be, shall have delivered to the Trustee an Opinion of Counsel
or a ruling directed to the Trustee received from the Internal
Revenue Service to the effect that the Holders of the
Outstanding Securities of such series 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.
(7) Such defeasance or covenant defeasance shall
be effected in compliance with any additional terms,
conditions or limitations which may be imposed on the Trust or
the Corporation, as the case may be, in connection therewith
pursuant to Section 301.
(8) The Trust or the Corporation, as the case may
be, shall have delivered to the Trustee an Officer's
Certificate and an Opinion of Counsel, each stating that all
conditions precedent provided for relating to either the
defeasance under Section 1302 or the covenant defeasance under
Section 1303 (as the case may be) have been complied with.
SECTION 1305. Deposited Money and Government Obligations To Be Held In
Trust.
Subject to the provisions of the last paragraph of Section
1010, all money and Government Obligations (including the proceeds thereof)
deposited with the Trustee (or other qualifying trustee--collectively for
purposes of this Section 1305, the "Trustee") pursuant to Section 1304 in
respect of the Outstanding Securities of a particular series and any Coupons
appertaining
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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 Trust or the Corporation, as the case may be, 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, if any) and interest, but such money need
not be segregated from other funds except to the extent required by law.
If the Trust or the Corporation, as the case may be, have
deposited funds and/or Government Obligations to effect defeasance or covenant
defeasance with respect to Securities of any series, (a) the Holder of a
Security of such series is entitled to, and does elect pursuant to the
applicable Indenture or the terms of such 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 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 Security shall be deemed to have been, and will be, fully
discharged and satisfied through the payment of the principal of (and premium,
if any) and interest on such Security as they become due out of the proceeds
yielded by converting the amount so deposited in respect of such Security into
the currency, currency unit or composite currency in which such Security
becomes payable as a result of such election or such Conversion Event based on
the applicable market exchange rate. "Conversion Event" means the cessation of
use of (i) a currency, currency unit or composite currency both by the
government of the country which issued such currency and for the settlement of
transactions by a central bank or other public institution 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 Community or (iii) any currency unit or composite currency
other than the ECU for the purposes for which it was established. Unless
otherwise provided in accordance with Section 301, all payments of principal of
(and premium, if any) and interest on any Security that is payable in a foreign
currency that ceases to be used by its government of issuance shall be made in
U.S. dollars.
The Trust or the Corporation, as the case may be, shall pay
and indemnify the Trustee against any tax, fee or other charge imposed on or
assessed against the Government Obligations deposited pursuant to Section 1304
or the principal and interest received in respect thereof, other than any such
tax, fee or other charge which by law is for the account of the Holders of the
Outstanding Securities of such series and any Coupons appertaining thereto.
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Anything in this Article to the contrary notwithstanding, the
Trustee shall deliver or pay to the Trust or the Corporation, as the case may
be, from time to time upon Company Request any money or Government Obligations
held by it as provided in Section 1304 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 for the purpose for which
such money or Government Obligations were deposited.
SECTION 1306. Reinstatement.
If the Trustee or the Paying Agent is unable to apply any
money in accordance with this Article with respect to the Securities of any
series and any Coupons appertaining thereto by reason of any order or judgment
of any court or governmental authority enjoining, restraining or otherwise
prohibiting such application, then the obligations of the Trust or the
Corporation, as the case may be, under this Indenture and the Securities of
such series and any Coupons appertaining thereto shall be revived and
reinstated as though no deposit had occurred pursuant to this Article with
respect to Securities of such series or any Coupons appertaining thereto until
such time as the Trustee or Paying Agent is permitted to apply all money held
in trust pursuant to Section 1305 with respect to Securities of such series and
any Coupons appertaining thereto in accordance with this Article; provided,
however, that if the Trust or the Corporation, as the case may be, make any
payment of principal of (or premium, if any) or interest on any Security of
such series or any Coupons appertaining thereto following the reinstatement of
its obligations, such Company shall be subrogated to the rights of the Holders
of Securities of such series and any Coupons appertaining thereto to receive
such payment from the money so held in trust.
ARTICLE FOURTEEN
SUBORDINATION OF SECURITIES
SECTION 1401. Applicability of Article.
The provisions of this Article shall be applicable to
Securities of any series which are Subordinated Indebtedness, except as
otherwise specified as contemplated by Section 301 for Securities of such
series.
SECTION 1402. Securities Subordinate to Senior Indebtedness.
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The Trust or the Corporation, as the case may be, covenants
and agrees, and each Holder of a Security or Coupon, by his or her acceptance
thereof, likewise covenants and agrees, that, to the extent and in the manner
hereinafter set forth in this Article, the indebtedness represented by the
Securities and any Coupons appertaining thereto and the payment of the
principal of (and premium, if any) and interest on each and all of the
Securities or Coupons are hereby expressly made subordinate and subject in
right of payment to the prior payment in full of all Senior Indebtedness.
SECTION 1403. Payment Over of Proceeds Upon Dissolution, Etc.
In the event of (a) any insolvency or bankruptcy case or
proceeding, or any receivership, liquidation, reorganization or other similar
case or proceeding in connection therewith, relative to the Trust or the
Corporation as the case may be, or to its creditors, as such, or to its assets,
or (b) any liquidation, dissolution or other winding up of the Trust or the
Corporation, as the case may be, whether voluntary or involuntary and whether
or not involving insolvency or bankruptcy, or (c) any assignment for the
benefit of a creditors or any other marshalling of assets and liabilities of
the Trust or the Corporation, as the case may be, then and in any such event
the holders of Senior Indebtedness shall be entitled to receive payment in full
of all amounts due or to become due on or in respect of all Senior Indebtedness
before the Holders of the Securities are entitled to receive any payment on
account of principal of (or premium, if any) or interest on the Securities, and
to that end the holders of Senior Indebtedness shall be entitled to receive,
for application to the payment thereof, any payment or distribution of any kind
or character, whether in cash, property or securities, including any such
payment or distribution which may be payable or deliverable by reason of the
payment of any other indebtedness of such Company being subordinated to the
payment of the Securities or Coupons, which may be payable or deliverable in
respect of the Securities or Coupons in any such case, proceeding, dissolution,
liquidation or other winding up or event.
In the event that, notwithstanding the foregoing provisions of
this Section, the Trustee or the Holder of any Security or Coupon shall have
received any payment or distribution of assets of the Trust or the Corporation,
as the case may be, of any kind or character, whether in cash, property or
securities, including any such payment or distribution which may be payable or
deliverable by reason of the payment of any other indebtedness of such Company
being subordinated to the payment of the Securities or Coupons, before all
Senior Indebtedness is paid in full, and if such fact shall, at or prior to the
time of such payment or distribution, have been made known to the Trustee or,
as the case may be, such Holder, then and in such event such payment or
distribution shall be paid over or
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delivered forthwith to the trustee in bankruptcy, receiver, liquidating
trustee, custodian, assignee, agent or other Person making payment or
distribution of assets of such Company for application to the payment of all
Senior Indebtedness remaining unpaid, to the extent necessary to pay all Senior
Indebtedness in full, after giving effect to any concurrent payment or
distribution to or for the holders of Senior Indebtedness.
For purposes of this Article only, the words "cash, property
or securities" shall not be deemed to include shares of stock or beneficial
interest of the Trust or the Corporation, as the case may be, as reorganized or
readjusted, or securities of such Company or any other corporation provided for
by a plan of reorganization or readjustment which are subordinated in right of
payment to all Senior Indebtedness which may at the time be outstanding to
substantially the same extent as, or to a greater extent than, the Securities
and Coupons are so subordinated as provided in this Article. The consolidation
of the Trust or the Corporation, as the case may be, with, or the merger of
such Company into, another Person or the liquidation or dissolution of such
Company following the conveyance or transfer of its properties and assets
substantially as an entirety to another Person upon the terms and conditions
set forth in Article Eight shall not be deemed a dissolution, winding up,
liquidation, reorganization, assignment for the benefit of creditors or
marshalling of assets and liabilities of such Company for the purposes of this
Section if the Person formed by such consolidation or into which such Company
is merged or the Person which acquires by conveyance or transfer such
properties and assets substantially an entirety, as the case may be, shall, as
a part of such consolidation, merger, conveyance or transfer, comply with the
conditions set forth in Article Eight.
SECTION 1404. Prior Payment to Senior Indebtedness Upon Acceleration of
Securities.
In the event that any Securities or Coupons are declared due
and payable before their Stated Maturity, then and in such event the holders of
the Senior Indebtedness shall be entitled to receive payment in full of all
amounts due on or in respect of all Senior Indebtedness before the Holders of
the Securities or Coupons are entitled to receive any payment (including any
payment which may be payable by reason of the payment of any other indebtedness
of the Trust or the Corporation, as the case may be, being subordinated to the
payment of the Securities or Coupons) by the Trust or the Corporation, as the
case may be, on account of the principal of (or premium, if any) or interest on
the Securities or Coupons or on account of the purchase or other acquisition of
Securities or Coupons.
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In the event that, notwithstanding the foregoing, the Trust or
the Corporation, as the case may be, shall make any payment to the Trustee or
the Holder of any Security or Coupon prohibited by the foregoing provisions of
this Section, and if such fact shall at or prior to the time of such payment,
have been made known to the Trustee or, as the case may be, such Holder, then
in such event such payment shall be paid over and delivered forthwith to such
Company.
The provisions of this Section shall not apply to any payment
with respect to which Section 1403 would be applicable.
SECTION 1405. No Payment When Senior Indebtedness in Default.
(a) In the event and during the continuation of any default
in the payment of principal of (or premium, if any) or interest on any Senior
Indebtedness beyond any applicable grace period with respect thereto, or in the
event that any event of default with respect to any Senior Indebtedness shall
have occurred and be continuing permitting the holders of such Senior
Indebtedness (or a trustee on behalf of the holders thereof) to declare such
Senior Indebtedness due and payable prior to the date on which it would
otherwise have become due and payable, and unless and until such default in
payment or event of default shall have been cured or waived or shall have
ceased to exist or unless judicial proceedings with respect thereto have not
been commenced within 150 days after such default in payment or event of
default, or (b) in the event any judicial proceeding shall be pending with
respect to any such default in payment or event of default, then no payment
(including any payment which may be payable by reason of the payment of any
other indebtedness of the Trust or the Corporation, as the case may be, being
subordinated to the payment of the Securities or Coupons) shall be made by the
Trust or the Corporation, as the case may be, on account of principal of (or
premium, if any) or interest on the Securities or Coupons or on account of the
purchase or other acquisition of Securities or Coupons.
In the event that, notwithstanding the foregoing, the Trust or
the Corporation, as the case may be, shall make any payment to the Trustee or
the Holder of any Security of Coupon prohibited by the forgoing provisions of
this Section, and if such fact shall, at or prior to the time of such payment,
have been made known to the Trustee or, as the cause may be, such Holder, then
and in such event such payment shall be paid over and delivered forthwith to
such Company.
The provisions of this Section shall not apply to any payment
with respect to which Section 1403 would be applicable.
SECTION 1406. Payment Permitted if No Default.
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Nothing contained in this Article or elsewhere in this
Indenture or in any of the Securities shall prevent (a) the Trust or the
Corporation, as the case may be, at any time except during the pendency of any
case, proceeding, dissolution, liquidation or other winding up, assignment for
the benefit of creditors or other marshalling of assets and liabilities of such
Company referred to in Section 1403 or under the conditions described in
Section 1404 or 1405, from making payments at any time of principal of (or
premium, if any) or interest on the Securities or Coupons, or (b) the
application by the Trustee of any money deposited with it hereunder to the
payment of or on account of the principal (or premium, if any) or interest on
the Securities or Coupons or the retention of such payment by the Holders, if,
at the time of such application by the Trustee, it did not have knowledge, as
provided in Section 1411, that such payment would have been prohibited by the
provisions of this Article.
SECTION 1407. Subrogation to Rights of Holders of Senior Indebtedness.
Subject to the payment in full of all Senior Indebtedness, the
Holders of the Securities and Coupons shall be subrogated (equally and ratably
with the holders of all indebtedness of the Trust or the Corporation, as the
case may be, which by its express terms is subordinated to indebtedness of such
Company to substantially the same extent as the Securities and Coupons are
subordinated and is entitled to like rights of subrogation) to the rights of
the holders of such Senior Indebtedness to receive payments and distributions
of cash, property and securities applicable to the Senior Indebtedness until
the principal of (and premium, if any) and interest on the Securities and
Coupons shall be paid in full. For purposes of such subrogation, no payments
or distributions to the holders of the Senior Indebtedness of any cash,
property or securities to which the Holders of the Securities or the Trustee
would be entitled except for the provisions of this Article, and no payments
over pursuant to the provisions of this Article to the holders of Senior
Indebtedness by Holders of the Securities or Coupons or the Trustee, shall, as
among the Trust or the Corporation, as the case may be, its creditors other
than holders of Senior Indebtedness and the Holders, be deemed to be a payment
or distribution by such Company to or on account of the Senior Indebtedness.
SECTION 1408. Provisions Solely to Define Relative Rights.
The provisions of this Article are and are intended solely for
the purpose of defining the relative rights of the Holders on the one hand and
the holders of Senior Indebtedness on the other hand. Nothing contained in
this Article or elsewhere in this Indenture or in the Securities or Coupons is
intended to or shall (a) impair, as among the Trust or the Corporation, as
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the case may be, its creditors other than holders of Senior Indebtedness and
the Holders, the obligation of such Company, which is absolute and
unconditional (and which, subject to the rights under this Article of the
holders of Senior Indebtedness, is intended to the fullest extent permitted by
law to rank equally with all other general obligations of such Company), to pay
to the Holders of the Securities and Coupons the principal of (or premium, if
any) and interest on the Securities and Coupons as and when the same shall
become due and payable in accordance with their terms; or (b) affect the
relative rights against such Company of the Holders and creditors of such
Company other than the holders of Senior Indebtedness; or (c) prevent the
Trustee or the Holder from exercising all remedies otherwise permitted by
applicable law upon default under this Indenture, subject to the rights, if
any, under this Article of the holders of Senior Indebtedness to receive cash,
property and securities otherwise payable or deliverable to the Trustee or such
Holder.
SECTION 1409. Trustee to Effectuate Subordination.
Each Holder of a Security or Coupon by his or her acceptance
thereof authorizes and directs the Trustee on his or her behalf to take such
action as may be necessary or appropriate to effectuate the subordination
provided in this Article and appoints the Trustee his or her attorney-in-fact
for any and all such purposes.
SECTION 1410. No Waiver of Subordination Provisions.
No right of any present or future holder of any Senior
Indebtedness to enforce subordination as herein provided shall at any time in
any way be prejudiced or impaired by any act or failure to act on the part of
the Trust or the Corporation, as the case may be, or by any act or failure to
act, in good faith, by any such holder, or by any non-compliance by such
Company with the terms, provisions and covenants of this Indenture, regardless
of any knowledge thereof any such holder may have or be otherwise charged with.
Without in any way limiting the generality of the foregoing
paragraph, the holders of Senior Indebtedness may, at any time and from time to
time, without the consent of or notice to the Trustee or the Holders of the
Securities or Coupons, without incurring responsibility to the Holders of the
Securities or Coupons and without impairing or releasing the subordination
provided in this Article or the obligations hereunder of the Holders of the
Securities or Coupons to the holders of Senior Indebtedness, do any one or more
of the following: (i) change the manner, place or terms of payment or extend
the time of payment of, or renew or alter, Senior Indebtedness, or otherwise
amend or supplement in any manner Senior Indebtedness or any instrument
evidencing the same or any agreement under which Senior
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Indebtedness is outstanding; (ii) sell, exchange, release or otherwise deal
with any property pledged, mortgaged or otherwise securing Senior Indebtedness;
(iii) release any Person liable in any manner for the collection of Senior
Indebtedness; and (iv) exercise or refrain from exercising any rights against
the Companies or any other Person.
SECTION 1411. Notice to Trustee.
The Trust or the Corporation, as the case may be, shall give
prompt written notice to the Trustee of any fact known to such Company which
would prohibit the making of any payment to or by the Trustee in respect of the
Securities or Coupons. Notwithstanding the provisions of this Article or any
other provision of this Indenture, the Trustee shall not be charged with
knowledge of the existence of any facts which would prohibit the making of any
payment to or by the Trustee in respect of the Securities or Coupons, unless
and until the Trustee shall have received written notice thereof from the Trust
or the Corporation, as the case may be, or a holder of Senior Indebtedness or
from any trustee therefor; and, prior to the receipt for any such written
notice, the Trustee, subject to the provisions of Section 601, shall be
entitled in all respects to assume that no such facts exist; provided, however,
that if the Trustee shall not have received the notice provided for in this
Section 1411 at least three Business Days prior to the date upon which by the
terms hereof any money may become payable for any purpose (including, without
limitation, the payment of the principal of (or premium if any) or interest on
any Security or Coupon), then, anything herein contained to the contrary
notwithstanding, the Trustee shall have full power and authority to receive
such money and to apply the same to the purpose for which such money was
received and shall not be affected by any notice to the contrary which may be
received by it during or after such three Business Day period.
Subject to the provisions of Section 601, the Trustee shall be
entitled to rely on the delivery to it of a written notice by a Person
representing himself or herself to be a holder of Senior Indebtedness (or a
trustee therefor) to establish that such notice has been given by a holder of
Senior Indebtedness (or a trustee therefor). In the event that the Trustee
determines in good faith that further evidence is required with respect to the
right of any Person as a holder of Senior Indebtedness to participate in any
payment or distribution pursuant to this Article, the Trustee may request such
Person to furnish evidence to the reasonable satisfaction of the Trustee as to
the amount of Senior Indebtedness held by such Person, the extent to which such
Person is entitled to participate in such payment or distribution and any other
facts pertinent to the rights of such Person under this Article, and if such
evidence is not furnished, the Trustee may defer any payment to such Person
pending judicial
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determination as to the right of such Person to receive such payment.
SECTION 1412. Reliance on Judicial Order or Certificate of Liquidating
Agent.
Upon any payment or distribution of assets of the Trust or the
Corporation, as the case may be, referred to in this Article, the Trustee,
subject to the provisions of Section 601, and the Holders of the Securities and
Coupons shall be entitled to rely upon any order or decree entered by any court
of competent jurisdiction in which such insolvency, bankruptcy, receivership,
liquidation, reorganization, dissolution, winding up or similar case or
proceeding is pending, or a certificate of the trustee in bankruptcy, receiver,
liquidating trustee, custodian, assignee for the benefit of creditors, agent or
other Person making such payment or distribution, delivered to the Trustee or
the Holders of Securities or Coupons, for the purpose of ascertaining the
Persons entitled to participate in such payment or distribution, the holders of
the Senior Indebtedness and other indebtedness of such Company, the amount
thereof or payable thereon, the amount or amounts paid or distributed thereon
and all other facts pertinent thereto or to this Article.
SECTION 1413. Trustee Not Fiduciary for Holders of Senior Indebtedness.
The Trustee shall not be deemed to owe any fiduciary duty to
the holders of Senior Indebtedness and shall not be liable to any such holders
if it shall in good faith mistakenly pay over or distribute to Holders of
Securities or Coupons or to the Trust or the Corporation, as the case may be,
or to any other Person cash, property or securities to which any holders of
Senior Indebtedness shall be entitled by virtue of this Article or otherwise.
SECTION 1414. Rights of Trustee as Holder of Senior Indebtedness;
Preservation of Trustee's Rights.
The Trustee in its individual capacity shall be entitled to
all the rights set forth in this Article with respect to any Senior
Indebtedness which may at any time be held by it, to the same extent as any
other holder of Senior Indebtedness, and nothing in this Indenture shall
deprive the Trustee of any of its rights as such holder.
Nothing in this Article shall apply to claims of, or payments
to, the Trustee under or pursuant to Section 607.
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SECTION 1415. Article Applicable to Paying Agents.
In case at any time any Paying Agent other than the Trustee
shall have been appointed by the Trust or the Corporation, as the case may be,
and be then acting hereunder, the term "Trustee" as used in this Article shall
in such case (unless the context otherwise requires) be construed as extending
to and including such Paying Agent within its meaning as fully for all intents
and purposes as if such Paying Agent were named in this Article in addition to
or in place of the Trustee; provided, however, that Section 1414 shall not
apply to such Company or any Affiliate of such Company if it or such Affiliate
acts as Paying Agent.
ARTICLE FIFTEEN
GUARANTY
SECTION 1501. Applicability of Article.
The provisions of this Article shall be applicable to any
guaranty by the Corporation of Securities of any series issued by the Trust,
except as otherwise specified as contemplated by Section 301 for Securities of
such series.
SECTION 1502. Guaranty.
(a) In consideration of good and valuable consideration,
the receipt and sufficiency of which is hereby acknowledged, the Corporation
hereby irrevocably and unconditionally guarantees (the "Guaranty"), to each
Holder of a Security or Coupon authenticated and delivered by the Trustee and
to the Trustee and its successors and assigns, irrespective of the validity and
enforceability of this Indenture, the Securities, the Coupons or the
obligations of the Trust under this Indenture, the Securities or Coupons, that:
(x) the principal of (and premium, if any) and interest on the Securities and
Coupons will be paid in full when due, whether at the Stated Maturity or
Interest Payment Date, by acceleration, call for redemption or otherwise; (y)
all other obligations of the Trust to the Holders or the Trustee under this
Indenture or the Securities will be promptly paid in full or performed, all in
accordance with the terms of this Indenture and the Securities; and (z) in case
of any extension of time of payment or renewal of any Securities, Coupons or
any of such other obligations, they will be paid in full when due or performed
in accordance with the terms of the extension or renewal, whether at maturity,
by acceleration, call for redemption or otherwise. Failing payment when due of
any amount so guaranteed for whatever reason, the Corporation shall be
obligated to pay the same before failure so
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to pay becomes an Event of Default. If the Trust defaults in the payment of
the principal of, premium, if any, or interest on, the Securities when and as
the same shall become due, whether upon maturity, acceleration, call for
redemption or otherwise, without the necessity of action by the Trustee or any
Holder, the Corporation shall be required to promptly make such payment in
full.
(b) The Corporation hereby agrees that its obligations
with regard to this Guaranty shall be unconditional, irrespective of the
validity, regularity or enforceability of the Securities, Coupons or this
Indenture, the absence of any action to enforce the same, any delays in
obtaining or realizing upon or failures to obtain or realize upon collateral,
the recovery of any judgment against the Trust, any action to enforce the same
or any other circumstances that might otherwise constitute a legal or equitable
discharge or defense of a guarantor (except as provided in Sections 1504 and
1505). The Corporation hereby waives diligence, presentment, demand of
payment, filing of claims with a court in the event of insolvency or bankruptcy
of the Trust, any right to require a proceeding first against the Trust or
right to require the prior disposition of the assets of the Trust to meet its
obligations, protest, notice and all demands whatsoever and covenants that this
Guaranty will not be discharged (except to the extent released pursuant to
Section 1504 or 1505) except by complete performance of the obligations
contained in the Securities, Coupons and this Indenture.
(c) If any Holder or the Trustee is required by any court
or otherwise to return to either the Trust or the Corporation, or any
Custodian, trustee, or similar official acting in relation to either the Trust
or the Corporation, any amount paid by either the Trust or the Corporation to
the Trustee or such Holder, this Guaranty, to the extent theretofore
discharged, shall be reinstated in full force and effect (except to the extent
released pursuant to Section 1504 or 1505). The Corporation agrees that it
will not be entitled to any right of subrogation in relation to the Holders in
respect of any obligations guaranteed hereby until payment in full of all
obligations guaranteed hereby. The Corporation further agrees that, as between
the Corporation, on the one hand, and the Holders and the Trustee, on the other
hand, (i) the maturity of the obligations guaranteed hereby may be accelerated
as provided in Section 502 for the purposes of this Guaranty, notwithstanding
any stay, injunction or other prohibition preventing such acceleration as to
the Trust of the obligations guaranteed hereby, and (ii) in the event of any
declaration of acceleration of those obligations as provided in Section 502,
those obligations (whether or not due and payable) will forthwith become due
and payable by the Corporation for the purpose of this Guaranty.
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(d) The Corporation and by its acceptance of a Security
issued hereunder each Holder hereby confirms that it is the intention of all
such parties that the guarantee by the Corporation set forth in Section 1502(a)
not constitute a fraudulent transfer or conveyance for purpose of any
Bankruptcy Law, the Uniform Fraudulent Conveyance Act, the Uniform Fraudulent
Transfer Act or any similar federal or state law. To effectuate the foregoing
intention, the Holders and the Corporation hereby irrevocably agree that the
obligations of the Corporation under its guarantee set forth in Section 1502(a)
shall be limited to the maximum amount as will, after giving effect to all
other contingent and fixed liabilities of the Corporation, result in the
obligations of the Corporation under such guarantee not constituting such a
fraudulent transfer or conveyance.
(e) It is the intention of the Corporation and the Trust
that the obligations of the Corporation hereunder shall be in, but not in
excess of, the maximum amount permitted by applicable law. Accordingly, if the
obligations in respect of the Guaranty would be annulled, avoided or
subordinated to the creditors of the Corporation by a court of competent
jurisdiction in a proceeding actually pending before such court as a result of
a determination both that such Guaranty was made without fair consideration
and, immediately after giving effect thereto, the Corporation was insolvent or
unable to pay its debts as they mature or left with an unreasonably small
capital, then the obligations of the Corporation under such Guaranty shall be
reduced by such court if and to the extent such reduction would result in the
avoidance of such annulment, avoidance or subordination; provided, however,
that any reduction pursuant to this paragraph shall be made in the smallest
amount as is strictly necessary to reach such result. For purposes of this
paragraph, "fair consideration," "insolvency," "unable to pay its debts as they
mature," "unreasonably small capital" and the effective times of reductions, if
any, required by this paragraph shall be determined in accordance with
applicable law.
SECTION 1503. Execution and Delivery of Guaranty.
The Corporation shall, by virtue of its execution and delivery
of this Indenture, be deemed to have signed on each Security issued hereunder
and to be guaranteed in accordance with Sections 1501 and 301 the notation of
guarantee set forth on such Securities to the same extent as if the signature
of the Corporation appeared on such Security.
The delivery of any Security to be guaranteed in accordance
with Sections 1501 and 301 by the Trustee, after the authentication thereof
hereunder, shall constitute due delivery of the guaranty set forth in Section
1502 on behalf of the Corporation. The notation of a guaranty set forth on any
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Security shall be null and void and of no further effect with respect to the
guaranty of the Corporation if, pursuant to Section 1504 or Section 1505, the
Corporation is released from such guaranty.
SECTION 1504. Guarantor May Consolidate, Etc., on Certain Terms.
(a) Nothing contained in this Indenture or in any of the
Securities shall prevent any consolidation or merger of the Corporation with or
into the Trust. Upon any such consolidation or merger, the guarantees (as set
forth in Section 1502) of the Corporation shall be released and shall no longer
have any force or effect.
(b) Except as provided in Section 1504(c), nothing
contained in this Indenture shall prevent any sale or conveyance of assets of
the Corporation.
(c) Except as provided in Section 1504(a) or Section
1505, the Corporation shall not, directly or indirectly, consolidate with, or
merge with or into, or sell or convey all or substantially all of its assets
to, another Person, unless (i) either (a) the Corporation is the continuing
entity or (b) the resulting, surviving or successor entity is a corporation
organized under the laws of the United States, any state thereof or the
District of Columbia and expressly assumes by supplemental indenture all of the
obligations of the Corporation in connection with the Securities, Coupons and
this Indenture; (ii) no Default or Event of Default would occur as a
consequence of (after giving effect, on a pro forma basis, to) such
transaction; and (iii) the Corporation has delivered to the Trustee an
Officers' Certificate and an Opinion of Counsel, each stating that such
consolidation, merger or asset transfer, and if a supplemental indenture is
required, such supplemental indenture comply with this Indenture and that all
conditions precedent herein relating to such transaction have been satisfied.
(d) Upon any consolidation, merger or asset transfer of
the Corporation in accordance with Section 1504 hereof, the successor
corporation formed by such consolidation or into which the Corporation is
merged shall succeed to, and be substituted for, and may exercise every right
and power of, the Corporation under this Indenture with the same effect as if
such successor corporation had been named herein as the Corporation, and when a
successor corporation duly assumes all of the obligations of the Corporation
pursuant hereto and pursuant to the Securities, the Corporation shall be
released from such obligations.
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SECTION 1505. Release of Guarantor.
(a) Without any further notice or action being required
by any Person, the Corporation shall be fully and conditionally released and
discharged from all obligations under its guarantee, the Securities and this
Indenture, upon (i) the sale or other disposition of all or substantially all
of the assets or properties of the Corporation, or 50% or more of the Capital
Stock of the Corporation to Persons other than the Trust and the Subsidiaries
of the Trust or the Corporation, or (ii) the consolidation or merger of the
Corporation with any Person other than the Trust or a Subsidiary of the Trust
or the Corporation, if, as a result of such consolidation or merger, Persons
other than the Trust and the Subsidiaries of the Trust or the Corporation
beneficially own more than 50% of the capital stock of the Corporation, or
(iii) a Legal Defeasance or Covenant Defeasance, as set forth in Article
Thirteen.
(b) The releases and discharges set forth in Section
1505(a) shall be effective (i) in the case of releases and discharges; effected
pursuant to clause (i) or (ii) of Section 1505 (a) by virtue of a sale,
disposition, consolidation or merger, on the date of consummation thereof and
(ii) in the case of releases and discharges effected pursuant to clause (iii)
of Section 1505(a), upon the date of Covenant Defeasance or Legal Defeasance,
as applicable. At the written request of the Trust, the Trustee shall promptly
execute and deliver appropriate instruments in forms reasonably acceptable to
the Trust evidencing and further implementing any releases and discharges
pursuant to the foregoing provisions. If the Trust desires the instruments
evidencing or implementing any releases or discharges to be executed prior to
the effectiveness of such releases and discharges as set forth above, such
instruments may be made conditional upon the occurrence of the events necessary
to cause the effectiveness of such releases and discharges, as specified in the
first sentence of this Section 1505.
(c) Notwithstanding the foregoing provisions of this
Article, the Corporation may elect, by written notice to the Trustee, to
maintain in effect a guarantee that would otherwise be released pursuant to the
provisions of this Section 1505 notwithstanding the event or events that
otherwise would cause the release of such guarantee (which election to maintain
such guarantee in effect may be conditional or for a limited period of time).
-97-
<PAGE> 108
ARTICLE SIXTEEN
MEETINGS OF HOLDERS OF SECURITIES
SECTION 1601. Purpose for Which Meetings May be Called.
A meeting of Holders of Securities of any series may be called
at any time and from time to time pursuant to this Article to make, give or
take any request, demand, authorization, direction, notice, consent, waiver or
other action provided by this Indenture to be made, given or taken by Holders
of Securities of such series.
SECTION 1602. 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 1601, to be
held at such time and at such place in the Borough of Manhattan, The City of
New York, or, if Securities of such series are to be issued as Bearer
Securities, in London, 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. The Trustee
or the Trust or the Corporation, as the case may be, may fix, in advance of the
giving of such notice, a date as the record date for determining the Holders
entitled to notice or to vote at any such meeting not more than 15 days prior
to the date fixed for the giving of such notice.
(b) In case at any time the Trust or the Corporation, as
the case may be, 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 any series for any purpose specified in
Section 1601, 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 such Company or the Holders of the Securities of such
series in the amount above specified, as the case may be, may determine the
time and the place in the Borough of Manhattan, The City of New York, or, if
Securities of such series are to be issued as Bearer Securities, in London for
such meeting and may call such meeting for such purposes by giving notice
thereof as provided in subsection (a) of this Section.
SECTION 1603. Persons Entitled to Vote at Meetings.
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<PAGE> 109
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 Trust or the Corporation, as the case may be, and its
counsel.
SECTION 1604. 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 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, will constitute a quorum.
Notwithstanding the foregoing provisions, 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.
In the absence of a quorum within 30 minutes after the time
appointed for any such meeting, the meeting shall, if convened at the request
of Holders of Securities of such series, be dissolved. In any other case the
meeting may be adjourned for a period of not less than 10 days as determined by
the chairman of the meeting prior to the adjournment of such meeting. In the
absence of a quorum at any such adjourned meeting, such adjourned meeting may
be further adjourned for a period of not less than 10 days as determined by the
chairman of the meeting prior to the adjournment of such adjourned meeting.
Notice of the reconvening of any adjourned meeting shall be given as provided
in Section
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<PAGE> 110
1602(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.
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 only 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 such series.
Any resolution passed or decision taken at any meeting of
Holders of Securities of any series duly held in accordance with this Section
shall be binding on all the Holders of Securities of such series and the
Coupons appertaining thereto, whether or not present or represented at the
meeting.
SECTION 1605. Determination of Voting Rights; Conduct and Adjournment of
Meetings.
(a) Notwithstanding any other provisions of this
Indenture, the Trustee may make such reasonable regulations as it may deem
advisable for any meeting of Holders of Securities of such 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 meetings 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 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 Trust or the Corporation, as the
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<PAGE> 111
case may be, or by Holders of Securities as provided in Section 1602(b), in
which case such Company or the Holders of Securities of 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 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 1602 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 1606. 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 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 serial 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 triplicate of all votes cast at the meeting. A record, at least in
triplicate, 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 facts setting forth a copy of the notice of the meeting and
showing that said notice was given as provided in Section 1602 and, if
applicable, Section 1604. 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 Trust or the Corporation, as the case may be,
and another to the Trustee to be preserved by the Trustee, the latter to have
attached thereto the ballots voted at the meeting.
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<PAGE> 112
Any record so signed and verified shall be conclusive evidence of the
matters therein stated.
ARTICLE SEVENTEEN
MISCELLANEOUS
SECTION 1701. Miscellaneous.
This instrument 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 instrument.
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.
STARWOOD LODGING TRUST
By___________________________
Name:
Title:
[SEAL]
Attest:
_____________________________
Name:
Title:
STARWOOD LODGING CORPORATION
By___________________________
Name:
Title:
[SEAL]
Attest:
_____________________________
Name:
Title:
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<PAGE> 113
____________________________,
as Trustee
By___________________________
Name:
Title:
[SEAL]
Attest:
_____________________________
Name:
Title:
-103-
<PAGE> 114
STATE OF ________ )
) SS.:
COUNTY OF ___________ )
On the ___ day of ________, 199_, before me personally came
___________________, to me known, who, being by me duly sworn, did depose and
say that he is ________________________ of Starwood Lodging Trust, one of the
parties 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.
__________________________
My commission expires:
-104-
<PAGE> 115
STATE OF ________ )
) SS.:
COUNTY OF ___________ )
On the ___ day of ________, 199_, before me personally came
___________________, to me known, who, being by me duly sworn, did depose and
say that he is ________________________ of Starwood Lodging Corporation, one of
the parties 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.
____________________________
My commission expires:
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<PAGE> 116
STATE OF __________ )
) SS.:
COUNTY OF _________ )
On the ____ day of ___________, 199_, before me personally
came ____________________, to me known, who, being by me duly sworn, did depose
and say that he is ________________ of ____________________________, one of the
parties described in and which executed the foregoing instrument; that he knows
the seal of said bank; 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 bank, and that he signed his name thereto by like authority.
______________________________
My commission expires:
-106-
<PAGE> 1
EXHIBIT 4.2
STARWOOD LODGING TRUST
STARWOOD LODGING CORPORATION
TO
_____________________________________
TRUSTEE
_____________________
INDENTURE
DATED AS OF
___________ __, 199_
_____________________
$_______________
NON-INTEREST BEARING CONVERTIBLE NOTES
<PAGE> 2
RECONCILIATION AND TIE BETWEEN TIA OF 1939
AND INDENTURE, DATED AS OF __________ __, 199_
<TABLE>
<CAPTION>
TRUST INDENTURE INDENTURE
ACT SECTION SECTION
--------------- -------------
<S> <C>
Section 310(a)(1)............................ 608
(a)(2).............................. 608
(a)(3).............................. Not Applicable
(a)(4).............................. Not Applicable
(a)(5).............................. 608
(b)................................. 610
Section 311(a)............................... 613(a)
(b)................................. 613(b)
(b)(2).............................. 703(a)(2), 703(b)
Section 312(a)............................... 701; 702(a)
(b)................................. 702(b)
(c)................................. 702(c)
Section 313(a)............................... 703(a)
(b)................................. 703(b)
(c)................................. 703(a), 703(b)
(d)................................. 703(c)
Section 314(a)............................... 704
(b)................................. Not Applicable
(c)(1).............................. 102
(c)(2).............................. 102
(c)(3).............................. Not Applicable
(d)................................. Not Applicable
(e)................................. 102
Section 315(a)............................... 601(a)
(b)................................. 602, 703(a)(6)
(c)................................. 601(b)
(d)................................. 601(c)
(d)(1).............................. 601(a)(l)
(d)(2).............................. 601(c)(2)
(d)(3).............................. 601(c)(3)
(e)................................. 514
Section 316(a)............................... 101
(a)(1)(A)........................... 502, 512
(a)(1)(B)........................... 513
(a)(2).............................. Not Applicable
(b)................................. 508
Section 317(a)(l)............................ 503
(a)(2).............................. 504
(b)................................. 1003
Section 318(a)............................... 107
</TABLE>
____________________
NOTE: This reconciliation and tie shall not, for any purpose, be deemed to
be a part of the Indenture.
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<PAGE> 3
TABLE OF CONTENTS
<TABLE>
<CAPTION>
Page
----
<S> <C>
Parties . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 1
Recitals of the Companies . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 1
ARTICLE ONE
DEFINITIONS AND OTHER PROVISIONS OF GENERAL APPLICATION
Section 101. Definitions:
Act . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 2
Affiliate; control . . . . . . . . . . . . . . . . . . . . . . . . . 2
Authenticating Agent . . . . . . . . . . . . . . . . . . . . . . . . 2
Board of Directors . . . . . . . . . . . . . . . . . . . . . . . . . 2
Board Resolution . . . . . . . . . . . . . . . . . . . . . . . . . . 2
Business Day . . . . . . . . . . . . . . . . . . . . . . . . . . . . 2
Commission . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 2
Company . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 2
Company Request; Company Order . . . . . . . . . . . . . . . . . . . 2
Corporate Trust Office . . . . . . . . . . . . . . . . . . . . . . . 2
Event of Default . . . . . . . . . . . . . . . . . . . . . . . . . . 2
Holder . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 2
Indenture . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 2
Maturity . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 3
Officers' Certificate . . . . . . . . . . . . . . . . . . . . . . . . 3
Opinion of Counsel . . . . . . . . . . . . . . . . . . . . . . . . . 3
Outstanding . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 3
Paired Shares . . . . . . . . . . . . . . . . . . . . . . . . . . . . 3
Partnership . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 3
Paying Agent . . . . . . . . . . . . . . . . . . . . . . . . . . . . 3
Person . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 3
Place of Payment . . . . . . . . . . . . . . . . . . . . . . . . . . 3
Predecessor Security . . . . . . . . . . . . . . . . . . . . . . . . 4
Responsible Officer . . . . . . . . . . . . . . . . . . . . . . . . . 4
Securities . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 4
Security Register and Security
Registrar . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 4
Significant Subsidiary . . . . . . . . . . . . . . . . . . . . . . . 4
Stated Maturity . . . . . . . . . . . . . . . . . . . . . . . . . . . 4
Subsidiary . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 4
Trustee . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 4
TIA . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 4
U. S. Government Obligations . . . . . . . . . . . . . . . . . . . . 4
Vice President . . . . . . . . . . . . . . . . . . . . . . . . . . . 5
- --------------------
</TABLE>
NOTE: This table of contents shall not, for any purpose, be deemed to be a
part of the Indenture.
-ii-
<PAGE> 4
<TABLE>
<S> <C> <C>
Section 102. Compliance Certificates and
Opinions . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 5
Section 103. Form of Documents Delivered to
Trustee . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 5
Section 104. Acts of Holders . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 6
Section 105. Notices, Etc., to Trustee
and Companies . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 6
Section 106. Notice to Holders; Waiver . . . . . . . . . . . . . . . . . . . . . . . . . 7
Section 107. Conflict with TIA . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 7
Section 108. Effect of Headings and
Table of Contents . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 7
Section 109. Successors and Assigns . . . . . . . . . . . . . . . . . . . . . . . . . . . 7
Section 110. Separability Clause . . . . . . . . . . . . . . . . . . . . . . . . . . . . 7
Section 111. Benefits of Indenture . . . . . . . . . . . . . . . . . . . . . . . . . . . 8
Section 112. Governing Law . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 8
Section 113. Legal Holidays . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 8
Section 114. Stockholders, Officers and Directors
of Companies Exempt from
Individual Liability . . . . . . . . . . . . . . . . . . . . . . . . . . . 8
ARTICLE TWO
SECURITY FORMS
Section 201. Forms Generally . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 9
Section 202. Form of Face of Security . . . . . . . . . . . . . . . . . . . . . . . . . . 9
Section 203. Form of Reverse of Security . . . . . . . . . . . . . . . . . . . . . . . . 11
Section 204. Form of Trustee's Certificate
of Authentication . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 13
Section 205. Form of Conversion Notice . . . . . . . . . . . . . . . . . . . . . . . . . 13
ARTICLE THREE
THE SECURITIES
Section 301. Title and Terms . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 15
Section 302. Denominations . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 15
Section 303. Execution, Authentication,
Delivery and Dating . . . . . . . . . . . . . . . . . . . . . . . . . . . . 15
Section 304. Temporary Securities . . . . . . . . . . . . . . . . . . . . . . . . . . . . 16
Section 305. Registration, Registration of
Transfer and Exchange . . . . . . . . . . . . . . . . . . . . . . . . . . . 16
Section 306. Mutilated, Destroyed, Lost and
Stolen Securities . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 17
Section 307. Persons Deemed Owners . . . . . . . . . . . . . . . . . . . . . . . . . . . 17
Section 308. Cancellation . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 17
</TABLE>
-iii-
<PAGE> 5
<TABLE>
<S> <C> <C>
ARTICLE FOUR
SATISFACTION AND DISCHARGE
Section 401. Satisfaction and Discharge of
Indenture . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 18
Section 402. Application of Trust Money . . . . . . . . . . . . . . . . . . . . . . . . . 19
Section 403. Reinstatement . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 19
ARTICLE FIVE
REMEDIES
Section 501. Events of Default . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 19
Section 502. Acceleration of Maturity;
Rescission and Annulment . . . . . . . . . . . . . . . . . . . . . . . . . 20
Section 503. Collection of Indebtedness and
Suits for Enforcement by
Trustee . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 21
Section 504. Trustee May File Proofs of Claim . . . . . . . . . . . . . . . . . . . . . . 21
Section 505. Trustee May Enforce Claims
Without Possession of
Securities . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 22
Section 506. Application of Money Collected . . . . . . . . . . . . . . . . . . . . . . . 22
Section 507. Limitation on Suits . . . . . . . . . . . . . . . . . . . . . . . . . . . . 22
Section 508. Unconditional Right of Holders
to Receive Principal and to
Convert . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 23
Section 509. Restoration of Rights
and Remedies . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 23
Section 510. Rights and Remedies Cumulative . . . . . . . . . . . . . . . . . . . . . . . 23
Section 511. Delay or Omission Not Waiver . . . . . . . . . . . . . . . . . . . . . . . . 23
Section 512. Control by Holders . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 23
Section 513. Waiver of Past Defaults . . . . . . . . . . . . . . . . . . . . . . . . . . 24
Section 514. Undertaking for Costs . . . . . . . . . . . . . . . . . . . . . . . . . . . 24
Section 515. Waiver of Stay or Extension Laws . . . . . . . . . . . . . . . . . . . . . . 24
ARTICLE SIX
THE TRUSTEE
Section 601. Certain Duties and Responsibilities . . . . . . . . . . . . . . . . . . . . 25
Section 602. Notice of Defaults . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 26
Section 603. Certain Rights of Trustee . . . . . . . . . . . . . . . . . . . . . . . . . 26
Section 604. Not Responsible for Recitals
of Issuance of Securities . . . . . . . . . . . . . . . . . . . . . . . . . 27
Section 605. May Hold Securities . . . . . . . . . . . . . . . . . . . . . . . . . . . . 27
Section 606. Money Held in Trust . . . . . . . . . . . . . . . . . . . . . . . . . . . . 27
Section 607. Compensation and Reimbursement . . . . . . . . . . . . . . . . . . . . . . . 28
</TABLE>
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<PAGE> 6
<TABLE>
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Section 608. Eligibility; Disqualification; Conflicting
Interests . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 28
Section 609. Preferential Collection of Claim
Against Companies . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 28
Section 610. Resignation and Removal;
Appointment of Successor . . . . . . . . . . . . . . . . . . . . . . . . . 28
Section 611. Acceptance of Appointment
by Successor . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 29
Section 612. Merger, Conversion, Consolidation
or Succession to Business . . . . . . . . . . . . . . . . . . . . . . . . . 30
Section 613. Appointment of Authenticating Agent . . . . . . . . . . . . . . . . . . . . 30
ARTICLE SEVEN
HOLDERS' LISTS AND REPORTS BY TRUSTEE AND COMPANIES
Section 701. Company to Furnish Trustee
Names and Addresses of Holders . . . . . . . . . . . . . . . . . . . . . . 31
Section 702. Preservation of Information;
Communications to Holders . . . . . . . . . . . . . . . . . . . . . . . . . 31
Section 703. Reports by Trustee . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 32
Section 704. Reports by Companies . . . . . . . . . . . . . . . . . . . . . . . . . . . . 33
ARTICLE EIGHT
CONSOLIDATION, MERGER, CONVEYANCE, TRANSFER OR LEASE
Section 801. Companies May Consolidate,
Etc. on Certain Terms . . . . . . . . . . . . . . . . . . . . . . . . . . . 33
Section 802. Successor Substituted . . . . . . . . . . . . . . . . . . . . . . . . . . . 34
ARTICLE NINE
SUPPLEMENTAL INDENTURES
Section 901. Supplemental Indentures Without
Consent of Holders . . . . . . . . . . . . . . . . . . . . . . . . . . . . 34
Section 902. Supplemental Indentures with
Consent of Holders . . . . . . . . . . . . . . . . . . . . . . . . . . . . 35
Section 903. Execution of Supplemental
Indentures . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 35
Section 904. Effect of Supplemental
Indentures . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 35
Section 905. Conformity with TIA . . . . . . . . . . . . . . . . . . . . . . . . . . . . 35
Section 906. Reference in Securities to
Supplemental Indentures . . . . . . . . . . . . . . . . . . . . . . . . . . 36
Section 907. Notice of Supplemental Indenture . . . . . . . . . . . . . . . . . . . . . . 36
</TABLE>
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<TABLE>
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ARTICLE TEN
COVENANTS
Section 1001. Payment of Securities . . . . . . . . . . . . . . . . . . . . . . . . . . . 36
Section 1002. Maintenance of Office or Agency . . . . . . . . . . . . . . . . . . . . . . 36
Section 1003. Money for Securities Payment
to Be Held in Trust . . . . . . . . . . . . . . . . . . . . . . . . . . . . 36
ARTICLE ELEVEN
CONVERSION OF SECURITIES
Section 1101. Conversion Privilege and Conversion
Price . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 37
Section 1102. Conversion Procedure . . . . . . . . . . . . . . . . . . . . . . . . . . . . 38
Section 1103. Fractions of Shares . . . . . . . . . . . . . . . . . . . . . . . . . . . . 38
Section 1104. Adjustment for Change in Capital Stock . . . . . . . . . . . . . . . . . . . 39
Section 1105. Notice of Adjustments of Conversion
Price . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 39
Section 1106. Companies to Reserve Stock . . . . . . . . . . . . . . . . . . . . . . . . . 40
Section 1107. Taxes on Conversions . . . . . . . . . . . . . . . . . . . . . . . . . . . . 40
Section 1108. Covenant as to Stock . . . . . . . . . . . . . . . . . . . . . . . . . . . . 40
Section 1109. Cancellation of Converted Securities . . . . . . . . . . . . . . . . . . . . 40
Section 1110. Provisions in Case of Consolidation,
Merger or Sale of Assets . . . . . . . . . . . . . . . . . . . . . . . . . 40
Section 1111. Trustee not Responsible for Determining
Conversion Price or Adjustments . . . . . . . . . . . . . . . . . . . . . 40
</TABLE>
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<PAGE> 8
INDENTURE, dated as of __________ __, 199_, among Starwood
Lodging Trust, a Maryland real estate investment trust (the "Trust"), having
its principal office at 11845 West Olympic Blvd., Suite 550, Los Angeles,
California 90064, Starwood Lodging Corporation, a Maryland corporation (the
"Corporation" and, together with the Trust, the "Companies"), having its
principal office at 11845 West Olympic Blvd., Suite 560, Los Angeles,
California 90064, and _____________________________________, Trustee (herein
called the "Trustee").
RECITALS OF THE COMPANIES
The Companies have duly authorized the creation of an issue of
Non-Interest Bearing Convertible Notes (herein called the "Securities") of the
tenor and amount hereinafter set forth, and to provide therefor the Companies
have duly authorized the execution and delivery of this Indenture.
All things necessary to make the Securities, when executed by
the Companies and authenticated and delivered hereunder and duly issued by the
Companies, the valid obligations of the Companies and to make this Indenture a
valid agreement of the Companies, in accordance with their and its terms, have
been done.
NOW, THEREFORE, THIS INDENTURE WITNESSETH:
For and in consideration of the premises and the acquisition
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 unless 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;
(3) all accounting terms not otherwise defined herein have
the meanings assigned to them in accordance with generally accepted
accounting principles, and, except as otherwise herein expressly
provided, the term "generally accepted accounting principles" with
respect to any computation required or permitted hereunder shall mean
such accounting principles as are generally accepted at the date of
this instrument; and
(4) the words "herein", "hereof" and "hereunder" and other
words of similar import refer to this Indenture as a whole and not to
any particular Article, Section or other subdivision.
<PAGE> 9
"Act," when used with respect to any Holder, has the meaning specified
in Section 104.
"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 person authorized by the Trustee
pursuant to Section 613 to act on behalf of the Trustee to authenticate
Securities.
"Board of Directors" means, with respect to the Trust, either the
Board of Trustees of the Trust or any committee of the Board of Trustees of the
Trust duly authorized to act on such matter, and, with respect to the
Corporation, either the Board of Directors of the Corporation or any committee
of the Board of Directors of the Corporation duly authorized to act on such
matter.
"Board Resolution" means a copy of a resolution certified by the
Secretary or an Assistant Secretary of the Trust or the Corporation, as the
case may be, to have been duly adopted by its Board of Directors and to be in
full force and effect on the date of such certification, and delivered to the
Trustee.
"Business Day," when used with respect to any Place of Payment, means
each Monday, Tuesday, Wednesday, Thursday and Friday which is not a day on
which banking institutions in that Place of Payment are authorized or obligated
by law (including any executive order) to close.
"Commission" means the Securities and Exchange Commission, as from
time to time constituted, created under the Securities Exchange Act of 1934, as
amended, or, if at any time after the execution of this instrument such
Commission is not existing and performing the duties now assigned to it under
the TIA, then the body performing such duties at such time.
"Company" means one or both, respectively, of the Persons named as
"Companies" in the first paragraph of this instrument until a successor Person
or Persons shall have become such pursuant to the applicable provisions of this
Indenture, and thereafter "Company" shall mean such successor Person or
Persons.
"Company Request" or "Company Order" means a written request or order
signed in the name of each of the Companies by its Chairman of the Board, its
President or any Vice President, and by its Treasurer, its Controller or its
Secretary and delivered to the Trustee.
"Corporate Trust Office" means the office of the Trustee in [Los
Angeles, California which shall be at 707 Wilshire Boulevard], or its office in
the city in which it has its principal place of business at which at any
particular time its corporate trust business shall be principally administered.
"Event of Default" has the meaning specified in Section 501.
"Holder" means a Person in whose name a Security is registered in the
Security Register.
"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,
including, for all purposes of this instrument and any such supplemental
indenture, the provisions of the TIA that are deemed to be a part of and govern
this instrument and any such supplemental indenture, respectively.
"Issue Date" means, with respect to each series of Securities the date
of the first issuance of Securities of such series under the Indenture.
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<PAGE> 10
"Maturity," when used with respect to any Security, means the date on
which the principal of such Security becomes due and payable as therein or
herein provided, whether at the Stated Maturity or by declaration of
acceleration.
"Officers' Certificate" means a certificate delivered to the Trustee
and signed by the Chairman of the Board, the President or any Vice President,
and by the Treasurer, the Controller, or the Secretary of a Company.
"Opinion of Counsel" means a written opinion of counsel, who may be an
employee of or of counsel to a Company, and who shall be reasonably
satisfactory to the Trustee.
"Outstanding," when used with respect to Securities of any series,
means, as of the date of determination, all Securities of such series
theretofore authenticated and delivered under this Indenture, except:
(i) Securities theretofore cancelled by the Trustee or delivered to
the Trustee for cancellation;
(ii) Securities for whose payment (a) money in the necessary amount
has been theretofore deposited with the Trustee or any Paying Agent
(other than a Company) in trust or set aside and segregated in trust
by a Company (if a Company shall act as its own Paying Agent) for the
Holders of such Securities or (b) money or U.S. Government Obligations
as contemplated by Section 401 in the necessary amount have been
theretofore deposited with the Trustee, in trust for the Holders of
such Securities; and
(iii) 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 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 Companies;
provided, however, that in determining whether the Holders of the requisite
principal amount of the Outstanding Securities of any series have given any
request, demand, authorization, direction, notice, consent or waiver hereunder,
Securities owned by a Company or any other obligor upon the Securities or any
Affiliate of a 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 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 a Company or any other obligor upon the
Securities or any Affiliate of a Company or of such other obligor.
"Paired Shares" has the meaning specified in Section 1101.
"Partnership" means SLT Realty Limited Partnership, a Delaware limited
partnership or SLC Operating Limited Partnership, a Delaware limited
partnership.
"Paying Agent" means any Person authorized by the Companies to pay the
principal of any Securities on behalf of the Companies.
"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 the place where the principal of the
Securities are payable as designated in or pursuant to Section 301.
"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
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<PAGE> 11
authenticated and delivered under Section 306 in exchange for or in lieu of a
mutilated, destroyed, lost or stolen Security shall be deemed to evidence the
same debt as the mutilated, destroyed, lost or stolen Security.
"Responsible Officer," when used with respect to the Trustee, means
the chairman or any vice-chairman of the board of directors, the chairman or
any vice-chairman of the executive committee of the board of directors, the
chairman of the trust committee, the president, any vice president, the
secretary, any assistant secretary, the treasurer, any assistant treasurer, the
cashier, any assistant cashier, any trust officer or assistant trust officer,
the controller or any assistant controller or any other officer of the Trustee
customarily performing functions similar to those performed by any of the above
designated officers and also means, with respect to a particular corporate
trust matter, any other officer to whom such matter is referred because of his
knowledge of and familiarity with the particular subject.
"Securities" has the meaning stated in the first recital of this
Indenture and more particularly means any Securities of any series
authenticated and delivered under this Indenture.
"Security Register" and "Security Registrar" have the respective
meanings specified in Section 305.
"Significant Subsidiary" means any Subsidiary of a Company which at
the time of determination (i) is a "significant subsidiary" within the meaning
of Rule 405 of Regulation C of the rules and regulations prescribed by the
Commission pursuant to the Securities Act of 1933, as in effect on the date of
this Indenture and (ii) is consolidated for financial reporting purposes.
"Stated Maturity", when used with respect to any Security, means the
date specified in such Security as the fixed date on which the principal of
such Security is due and payable.
"Subsidiary" means any corporation more than 50% of the outstanding
voting stock of which is at the time owned, directly or indirectly, by a
Company or by one or more other Subsidiaries, or by a Company and one or more
other Subsidiaries. For the purposes of this definition, "voting stock" means
stock which ordinarily has voting power for the election of directors, whether
at all times or only so long as no senior class of stock has such voting power
by reason of any contingency.
"Trustee" means the Person named as the "Trustee" in the first
paragraph of this instrument until a successor Trustee shall have become such
pursuant to the applicable provisions of this Indenture, and thereafter
"Trustee" shall mean or include each Person who is then a Trustee hereunder and
if at any time there is more than one such Person, "Trustee" as used with
respect to the Securities of any series shall mean the Trustee with respect to
Securities of that series.
"TIA" means the Trust Indenture Act of 1939 as in force at the date as
of which this instrument was executed, except as provided in Section 905.
"U.S. Government Obligations" means securities which are (i) direct
obligations of the United States of America 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 the payment of which is unconditionally guaranteed as a full faith
and credit obligation by the United States of America, which, in either case,
are not callable or redeemable at the option of the issuer thereof, and shall
also include a depository receipt issued by a bank or trust company as
custodian with respect to any such U.S. Government Obligation or a specific
payment of interest on or principal of any such U.S. 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 U.S. Government
Obligations or the specific payment of interest on or principal of the U.S.
Government Obligation evidenced by such depository receipt.
"Vice President," when used with respect to a Company or the Trustee,
means any vice president, whether or not designated by a number or a word or
words added before or after the title "vice president."
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<PAGE> 12
Section 102. Compliance Certificates and Opinions.
Upon any application or request by a Company to the Trustee to
take any action under any provision of this Indenture, such Company shall
furnish to the Trustee an Officers' Certificate stating that all conditions
precedent, if any, provided for in this Indenture relating to the proposed
action have been complied with and an Opinion of Counsel stating that in the
opinion of such counsel all such conditions precedent, if any, have been
complied with, except that, in the case of any such application or 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 shall include:
(1) a statement that each individual signing such certificate
or opinion has read such covenant or condition 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 or she has made such examination or investigation as is necessary
to enable him or her to express an informed opinion as to whether or
not such covenant or condition has been complied with; and
(4) a statement as to whether or not, in the opinion of each
such individual, such condition or covenant has been complied with.
Section 103. Form of Documents Delivered to Trustee.
In any case where several matters are required to be certified
by, or covered by an opinion of, any specified Person, it is not necessary that
all such matters be certified by, or covered by the opinion of, only one such
Person, or that they be so certified or covered by only one document, but one
such Person may certify or give an opinion with respect to some matters and one
or more other such Persons as to other matters, and any such Person may certify
or give an opinion as to such matters in one or several documents.
Any certificate or opinion of an officer of a Company may be
based, insofar as it relates to legal matters, upon a certificate or opinion
of, or representations by, counsel, unless such officer knows, or in the
exercise of reasonable care should know, that the certificate or opinion or
representations with respect to the matters upon which his certificate or
opinion is based are erroneous. Any such certificate or Opinion of Counsel may
be based, insofar as it relates to factual matters, upon a certificate or
opinion of, or representations by, an officer or officers of a Company stating
that the information with respect to such factual matters is in the possession
of such Company, unless such counsel knows, or in the exercise of reasonable
care should know, that the certificate or opinion or representations with
respect 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 may be embodied in and evidenced by one or more instruments of
substantially similar tenor signed by such 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 received
by the Trustee and, where it is hereby expressly required, to the Companies.
Such instrument or instru-
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<PAGE> 13
ments (and the action embodied therein and evidenced thereby) are herein
sometimes referred to as the "Act" of the Holders signing such instrument or
instruments. Proof of execution of any such instrument or of a writing
appointing any such agent shall be sufficient for any purpose of this Indenture
and (subject to Section 601) conclusive in favor of the Trustee and the
Companies, if made in the manner provided in this Section.
(b) The fact and date of the execution by any Person of any
such instrument or writing may be proved by the affidavit of a witness of such
execution or by a certificate of a notary public or other officer authorized by
law to take acknowledgments of deeds, certifying that the individual signing
such instrument or writing acknowledged to him or her the execution thereof.
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 manner which the Trustee deems sufficient.
(c) The ownership of Securities shall be proved by the
Security Register.
(d) 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 or a
Company in reliance thereon, whether or not notation of such action is made
upon such Security.
(e) The Companies may, in the circumstances permitted by the
TIA, fix any day as the record date for the purpose of determining the Holders
entitled to give or take any request, demand, authorization, direction, notice,
consent, waiver or other action, or to vote on any action, authorized or
permitted to be given or taken by Holders. If not set by the Companies prior
to the first solicitation of a Holder made by any person in respect of any such
action, or, in the case of any such vote, prior to such vote, the record date
for any such action or vote shall be the 30th day (or, if later, the date of
the most recent list of Holders required to be provided pursuant to Section
701) prior to such first solicitation or vote, as the case may be. With regard
to any record date, only the Holders on such date (or their duly designated
proxies) shall be entitled to give or take, or vote on, the relevant action.
Notwithstanding the foregoing, the Companies shall not set a record date for,
and the provisions of this paragraph shall not apply with respect to, any Act
by the Holders pursuant to Sections 501, 502, or 512.
(f) Without limiting the foregoing, a Holder entitled
hereunder to give or take any action hereunder with regard to any particular
Security may do so with regard to all or any part of the principal amount of
such Security of by one or more duly appointed agents each of which may do so
pursuant to such appointment with regard to all or on any different part of
such principal amount.
Section 105. Notices, Etc. to Trustee and Companies.
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 a 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,
or
(2) a 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 such Company addressed to it at the address of its
principal office specified in the first paragraph of this instrument:
attention of the Treasurer, or at any other address previously
furnished in writing to the Trustee by such Company.
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<PAGE> 14
Section 106. Notice to Holders; Waiver.
Where this Indenture or any Security provides for notice to
Holders of any event, such notice shall be sufficiently given (unless otherwise
herein or in such Security expressly provided) if in writing and mailed,
first-class postage prepaid, to each Holder affected by such event, at his
address as it appears in the Security Register, not later than the latest date
(if any), and not earlier than the earliest date (if any), prescribed for the
giving of such notice. In any case where notice to Holders is given by mail,
neither the failure to mail such notice, nor any defect in any notice so
mailed, to any particular Holder shall affect the sufficiency of such notice
with respect to other Holders. Where this Indenture or any Security provides
for notice in any manner, such notice may be waived in writing by the Person
entitled to receive such notice, either before or after the event, and such
waiver shall be the equivalent of such notice. Waivers of notice by Holders
shall be filed with the Trustee, but such filing shall not be a condition
precedent to the validity of any action taken in reliance upon such waiver. In
case by reason of the suspension of regular mail service or by reason of any
other cause it shall be impracticable to give such notice by mail, then such
notification as shall be made with the approval of the Trustee shall constitute
a sufficient notification for every purpose hereunder.
Section 107. Conflict With TIA.
If any provision hereof limits, qualifies or conflicts with
another provision hereof which is required to be included in this Indenture by
any of the provisions of the TIA, such required provision shall control. If
any provision of this Indenture modifies or excludes any provision of the TIA
that may be so modified or excluded, the latter provision shall be deemed to
apply to this Indenture as so modified or to be excluded, as the case may be.
Section 108. 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 109. Successors and Assigns.
All covenants and agreements in this Indenture by a Company
shall bind its successors and assigns, whether so expressed or not.
Section 110. Separability Clause.
In case any provision in this Indenture or in the Securities
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 111. Benefits of Indenture.
Nothing in this Indenture or in the Securities, express or
implied, shall give to any Person, other than the parties hereto and their
successors hereunder and the Holders, any benefit or any legal or equitable
right, remedy or claim under this Indenture.
Section 112. Governing Law.
This Indenture and the Securities shall be governed by and
construed in accordance with the laws of the State of California.
Section 113. Legal Holidays.
In any case where any Stated Maturity of any Security or the
last date on which a Holder has the right to convert his Securities shall not
be a Business Day at any Place of Payment then (notwithstanding any other
provision of this Indenture or of the Securities) payment of principal or a
conversion of the Securities need not be
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<PAGE> 15
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 at the Stated Maturity, or on such last day for conversion.
Section 114. Stockholders, Officers and Directors of Companies Exempt from
Individual Liability.
(a) No recourse under or upon any obligation, covenant or
agreement contained in this Indenture, in any Security, or because of any
indebtedness evidenced thereby, shall be had against any incorporator, as such
or against any past, present or future stockholder, shareholder, officer,
director or trustee, as such, of a Company or of any successor, either directly
or through a 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.
(b) Without limiting the generality of Section 114(a), each
of the parties hereto acknowledges and agrees that (and, by the acceptance of
the Securities by the Holders thereof and as part of the consideration for the
issue of the Securities, each Holder acknowledges and agrees that) the name
"Starwood Lodging Trust" is a designation of the Trust and its Trustees (as
Trustees but not personally) under a Declaration of Trust dated August 25,
1969, as amended and restated, and all persons dealing with the Trust shall
look solely to the Trust's assets for the enforcement of any claims against the
Trust, and the Trustees, officers, agents and security holders of the Trust
assume no personal liability for obligations entered into on behalf of the
Trust, and their respective individual assets shall not be subject to the
claims of any person relating to such obligations
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<PAGE> 16
ARTICLE TWO
SECURITY FORMS
Section 201. Forms Generally.
The Securities and the Trustee's certificate of authentication
thereon shall be in substantially the forms set forth in this Article, with
such appropriate insertions, omissions, substitutions and other variations as
are required or permitted by this Indenture, and may have such letters, numbers
or other marks of identification and such legends or endorsements placed
thereon as may be required to comply with the rules of any securities exchange
or as may, consistently herewith, be determined by the officers executing such
Securities, as evidenced by their execution of the Securities.
The definitive Securities shall be printed, lithographed or
engraved on steel engraved borders or may be produced in any other manner, all
as determined by the officers executing such Securities, as evidenced by their
execution of such Securities.
Section 202. Form of Face of Security.
STARWOOD LODGING TRUST
STARWOOD LODGING CORPORATION
NON-INTEREST BEARING CONVERTIBLE NOTE
DUE ____________, 199_
THIS SECURITY IS NOT CONVERTIBLE INTO PAIRED SHARES SO LONG AS
BENEFICIAL OWNERSHIP OF THIS NOTE IS HELD BY (I) ANY PARTY TO THAT
CERTAIN _______________________________________________________
AGREEMENT AMONG UNDERWRITERS DATED _______________________, (THE
"AGREEMENT AMONG UNDERWRITERS") WHO PARTICIPATED IN THE DISTRIBUTION
OF THE NON-INTEREST BEARING CONVERTIBLE NOTES DUE ____________, 199_
OF STARWOOD LODGING TRUST AND STARWOOD LODGING CORPORATION (THE
"SECURITIES"), (II) ANY PERSON WHO IS OTHERWISE AN UNDERWRITER OR
DEALER WHO PARTICIPATED IN THE DISTRIBUTION OF THE SECURITIES (THE
PARTIES REFERRED TO IN (I) AND (II) ARE HEREIN REFERRED TO AS
"UNDERWRITERS"), OR (III) ANY "UNDERWRITER AFFILIATE" (AS THAT TERM IS
HEREINAFTER DEFINED). THIS SECURITY IS CONVERTIBLE BY ANY PERSON WHO
IS NOT AN UNDERWRITER OR AN UNDERWRITER AFFILIATE AND WILL BE
CONVERTED AUTOMATICALLY AS SET FORTH BELOW.
No. __________ $_________
Starwood Lodging Trust, a Maryland real estate
investment trust (the "Trust", which term shall include any successor
person under the Indenture hereinafter referred to), for value
received, hereby promises to pay the principal sum of $__________ (__%
of the principal amount hereof), and Starwood Lodging Corporation, a
Maryland corporation (the "Corporation", which term shall include any
successor person under the Indenture hereinafter referred to), for
value received, hereby promises to pay the principal sum of
$__________ (_% of the principal amount hereof) to __________, or
registered assigns, at the office of the Trustee hereinafter referred
to, on ____________, 199_. At the option of the Trust and the
Corporation (herein collectively referred to as the "Companies"), the
maturity date of this Security may be extended, at any time or from
time to time by written notice to the Trustee prior to the maturity
date as
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<PAGE> 17
theretofore extended, to a date not later than _______________, 199_.
Such respective obligations of the Companies are several and not
joint.
This Security bears no interest and may not be
redeemed by the Companies or either of them prior to its maturity.
Payment of the principal of this Security will be
made at the office or agency of the Companies maintained for that
purpose in the City of Los Angeles, California, and in such other
cities, if any, as the Companies may designate in writing to the
Trustee, in such coin or currency of the United States of America as
at the time of payment is legal tender for payment of public and
private debts.
This Security will be automatically converted into
one share of beneficial interest, par value $.01 per share, of the
Trust and one share of common stock, par value $.01 per share, of the
Corporation which are paired pursuant to the Pairing Agreement dated
June 25, 1980, as amended (each such share of beneficial interest and
share of common stock are herein together referred to as a "Paired
Share"), for each $_____ principal amount of this Security (subject to
adjustment in certain events as provided in the Indenture) upon
certification to the Trustee, in substantially the form shown on the
reverse side of this Security, of (i) the transfer of this Security to
or for the benefit of any person who is not an Underwriter or an
Underwriter Affiliate, or (ii) the sale of the Paired Shares issuable
upon conversion of this Security in a regular-way transaction on the
New York Stock Exchange prior to the time that any of the Underwriters
is deemed to have completed its participation in the distribution of
the Securities within the meaning of Rule 10b-6(c)(3) (excluding, for
such purpose, the last sentence thereof) of the Securities Exchange
Act of 1934, as amended (the "Exchange Act"). As used herein
"Underwriter Affiliate" means, with respect to any Underwriter, a
partner in or holder of 10% or more of the shares of such Underwriter,
a person in which such Underwriter holds 10% or more of the shares or
is a partner, or a family member of, or trust for, any such
Underwriter, partner or shareholder. NO SUCH CONVERSION SHALL RESULT
UPON THE TRANSFER OF THIS SECURITY TO A PERSON WHO IS AN UNDERWRITER
OR UNDERWRITER AFFILIATE, UNLESS THE UNDERWRITER OR UNDERWRITER
AFFILIATE PROVIDES EVIDENCE SATISFACTORY TO THE COMPANIES AND THE
TRUSTEE THAT THE BENEFICIAL OWNER IS NOT AN UNDERWRITER OR AN
UNDERWRITER AFFILIATE AND THAT TITLE OF THE UNDERWRITER OR UNDERWRITER
AFFILIATE IS ONLY FOR PURPOSES OF RECORD OWNERSHIP. Such conversion
may take place at any time up to and including the maturity date of
this Security.
Reference is hereby made to the further provisions of
this Security set forth on the reverse hereof, which further
provisions shall for all purposes have the same effect as if set forth
at this place.
Unless the certificate of authentication hereon has
been executed by the Trustee referred to on the reverse hereof by
manual signature, this Security shall not be entitled to any benefit
under the Indenture or be valid or obligatory for any purpose.
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<PAGE> 18
IN WITNESS WHEREOF, each of the Companies has caused
this instrument to be duly executed under its corporate seal.
Dated:
Attest: STARWOOD LODGING TRUST
__________________________________ By ___________________________
Secretary President
Attest: STARWOOD LODGING CORPORATION
__________________________________ By ___________________________
Secretary Executive Vice President
Section 203. Form of Reverse of Security.
This Security is one of a duly authorized issue of
securities of the Companies designated as Non-Interest Bearing
Convertible Notes due ____________, 199_ (herein called the
"Securities"), limited in aggregate principal amount to $___________
(except as otherwise provided in the Indenture) issued and to
be issued under an Indenture, dated as of __________ __, 199_
(herein called the "Indenture"), between the Companies and
_____________________________________, as Trustee (herein called
the "Trustee", which term includes any successor trustee under the
Indenture), to which Indenture and all indentures supplemental thereto
reference is hereby made for a statement of the respective rights,
limitations of rights, duties and immunities thereunder of the
Companies, the Trustee, and the Holders of the Securities and of the
terms upon which the Securities are, and are to be, authenticated and
delivered.
If an Event of Default shall occur and be continuing,
the principal of the Securities may be declared due and payable in the
manner and with the effect provided in the Indenture.
The Indenture permits, with certain exceptions as
therein provided, the amendment thereof and the modification of the
rights and obligations of the Companies and the rights of the Holders
of the Securities to be affected under the Indenture at any time by
the Companies and the Trustee with the consent of the Holders of a
majority in aggregate principal amount of the Securities at the time
Outstanding. The Indenture also contains provisions permitting the
Holders of a majority in aggregate principal amount of the Securities
at the time Outstanding, on behalf of the Holders of all Securities,
to waive compliance by the Companies with certain provisions of the
Indenture and certain past defaults under the Indenture and their
consequences. Any such consent or waiver by the Holder of this
Security shall be conclusive and binding upon such Holder and upon all
future Holders of this Security and of any Security issued upon the
registration of transfer hereof or in exchange therefor or in lieu
hereof, whether or not notation of such consent or waiver is made upon
this Security.
No reference herein to the Indenture and no provision
of this Security or of the Indenture shall alter or impair the
respective obligations of the Companies, which is absolute and
unconditional, to pay
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<PAGE> 19
the principal of this Security at the times, place and rate, and in
the coin or currency, herein prescribed or to convert this Security as
provided in the Indenture.
As provided in the Indenture and subject to certain
limitations therein set forth, the transfer of this Security is
registerable in the Security Register, upon surrender of this Security
for registration of transfer at the office or agency of the Companies
in any place where the principal of this Security is payable, duly
endorsed by, or accompanied by a written instrument of transfer in
form satisfactory to the Companies and the Security Registrar duly
executed by, the Holder hereof or his attorney duly authorized in
writing, and thereupon one or more new Securities, of authorized
denominations and for the same aggregate principal amount, will be
issued to the designated transferee or transferees.
The Securities are issuable only in registered form
without coupons. As provided in the Indenture and subject to certain
limitations therein set forth, Securities of any series are
exchangeable for a like aggregate principal amount of Securities of
such series of a different authorized denomination, as requested by
the Holder surrendering the same.
No service charge shall be made for any such
registration of transfer or exchange, but the Companies may require
payment of a sum sufficient to cover any tax or other governmental
charge payable in connection therewith.
Prior to due presentment of this Security for
registration of transfer, each of the Companies, the Trustee and any
agent of a Company or the Trustee may treat the Person in whose name
this Security is registered as the owner hereof for all purposes,
whether or not this Security be overdue, and neither of the Companies,
the Trustee nor any such agent shall be affected by notice to the
contrary.
No recourse under or upon any obligation, covenant or
agreement contained in the Indenture, in this Security, or because of
any indebtedness evidenced hereby, shall be had against any
incorporator, as such or against any past, present or future
stockholder, shareholder, officer, director or trustee, as such, of a
Company or of any successor, either directly or through a 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 this Security by the Holder
hereof and as part of the consideration for the issue of the
Securities.
Without limiting the generality of the foregoing, by
the acceptance of this Security by the Holder hereof, such Holder
acknowledges and agrees that the name "Starwood Lodging Trust" is a
designation of the Trust and its Trustees (as Trustees but not
personally) under a Declaration of Trust dated August 25, 1969, as
amended and restated, and all persons dealing with the Trust shall
look solely to the Trust's assets for the enforcement of any claims
against the Trust, and the Trustees, officers, agents and security
holders of the Trust assume no personal liability for obligations
entered into on behalf of the Trust, and their respective individual
assets shall not be subject to the claims of any person relating to
such obligations
All terms used in this Security which are defined in
the Indenture shall have the meanings assigned to them in the
Indenture.
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<PAGE> 20
Section 204. Form of Trustee's Certificate of Authentication.
This is one of the Securities referred to in the
within-mentioned Indenture.
_____________________________________,
as Trustee
By ___________________________
Authorized Signer
Section 205. Form of Conversion Notice.
CONVERSION NOTICE
The undersigned Holder of this Security hereby
irrevocably exercises the option to convert this Security, or portion
hereof below designated, into Paired Shares in accordance with the
terms of the Indenture, and directs that the Paired Shares issuable
and deliverable upon such conversion, together with any check in
payment for fractional shares and any Securities representing any
unconverted principal amount hereof, be issued and delivered to the
undersigned unless a different name has been indicated below. If
Paired Shares or Securities are to be issued in the name of a person
other than the undersigned, the undersigned will pay all transfer
taxes payable with respect thereto.
By signing this Notice in the place provided below,
you make the following certification and request to the Trustee:
The undersigned certifies that
(1) the beneficial ownership of this Security (or
the portion thereof indicated above) has been transferred to a Person
who is not an Underwriter or Underwriter Affiliate (as defined on the
other side of this Security); or
(2) the Paired Shares issuable upon the conversion
of this Security (or a portion thereof) have been sold in a
regular-way transaction on the New York Stock Exchange prior to the
time that any of the Underwriters is deemed to have completed its
participation in the distribution of the Securities within the meaning
of Rule 10b-6(c)(3) (excluding, for such purpose, the last sentence
thereof) of the Exchange Act.
SIGNATURE
The undersigned requests that the Trustee, as agent
for the transferee of this Security (or the portion thereof indicated
above) accept delivery of this Security, effect the conversion of this
Security (or such portion) into Paired Shares in the case where
conversion is requested, and deliver Securities in the case of a
transfer of Securities and certificates for shares where a conversion
is requested, registered as indicated above, to the undersigned, for
the account of and for delivery to such transferee.
Signature of Transferor
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<PAGE> 21
(Sign exactly as name appears on the other side of this Security)
Date:_________________________
TRUSTEE'S ACKNOWLEDGEMENT
The Trustee hereby acknowledges receipt of the
foregoing instructions. In the case where conversion is requested,
the Trustee acknowledges that it is holding this Security (or the
portion thereof to be converted), and will hold the Paired Shares
issued upon conversion of this Security until delivered as provided in
the foregoing instructions, for the account of the transferee thereof.
Date:_________________________
_____________________________________,
as Trustee
By:___________________________________
If shares or Securities are to Principal amount to be converted
be registered of a Person other (if less in the name than all):
than the Holder, please print such $_______.00
Person's name and address:
________________________________
Social Security or other
Taxpayer Identification Number
--------------------------------------------
Name
--------------------------------------------
Street Address
--------------------------------------------
City, State and Zip Code
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<PAGE> 22
ARTICLE THREE
THE SECURITIES
Section 301. Title and Terms.
The aggregate principal amount of Securities which may be
authenticated and delivered under this Indenture is limited to $500,000,000
except for Securities authenticated and delivered upon registration of transfer
of, or in exchange for, or in lieu of, other Securities pursuant to Sections
304, 305, 306, 906 or 1102.
The Securities may be issued from time to time in one or more series.
The Securities shall be known and designated as the
"Non-Interest Bearing Convertible Notes of the Companies. The Stated Maturity
of each series of Securities shall be six months after the Issue Date of such
Securities; provided that the Companies, acting jointly, may extend the Stated
Maturity of each series of the Securities on one or more occasions prior to the
Stated Maturity thereof (including any Stated Maturity established by a prior
extension), to a date not later than 30 months after the Issue Date of such
Securities, by written notice to the Trustee. The Securities of each series
shall not bear interest and shall not be redeemable prior to Maturity.
The Securities of each series shall be convertible as provided
in Article Eleven.
Section 302. Denominations.
The Securities of each series shall be issued only in fully
registered form without coupons.
Section 303. Execution, Authentication, Delivery and Dating.
The Securities shall be executed on behalf of each Company by
its Chairman of the Board, its President or one of its Vice Presidents, under
its corporate seal reproduced thereon attested by its Secretary or one of its
Assistant Secretaries. The signature of any of these officers on the
Securities may be manual or facsimile.
Securities bearing the manual or facsimile signatures of
individuals who were at any time the proper officers of a Company shall bind
such 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.
At any time and from time to time after the execution and
delivery of this Indenture, the Companies may deliver Securities executed by
each Company to the Trustee for authentication, together with a Company Order
for the authentication and delivery of such Securities, and the Trustee in
accordance with such Company Order shall either at one time or from time to
time pursuant to such instructions as may be described therein authenticate and
deliver such Securities as provided in this Indenture and not otherwise.
Each Security shall be dated the date of its authentication.
No Security shall be entitled to any benefit under this
Indenture or be valid or obligatory for any purpose unless there appears on
such Security a certificate of authentication substantially in the form
provided for herein executed by the Trustee by manual signature, 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.
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<PAGE> 23
Section 304. Temporary Securities.
Pending the preparation of definitive Securities, the
Companies 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 and with such appropriate insertions, omissions, substitutions and
other variations as the officers executing such Securities may determine, as
evidenced by their execution of such Securities.
If temporary Securities are issued, the Companies will cause
definitive Securities to be prepared without unreasonable delay. After the
preparation of definitive Securities, the temporary Securities shall be
exchangeable for definitive Securities upon surrender of the temporary
Securities at the office or agency of the Companies in a Place of Payment,
without charge to the Holder. Upon surrender for cancellation of any one or
more temporary Securities the Companies shall execute and the Trustee shall
authenticate and deliver in exchange therefor a like principal amount of
definitive Securities of authorized denominations. Until so exchanged the
temporary Securities shall in all respects be entitled to the same benefits
under this Indenture as definitive Securities.
Section 305. Registration, Registration of Transfer and Exchange.
The Companies shall cause to be kept at the Corporate Trust
Office a register (the register maintained in such office and in any other
office or agency of the Companies in a Place of Payment being herein sometimes
collectively referred to as the "Security Register") in which, subject to such
reasonable regulations as it may prescribe, the Companies shall provide for the
registration of Securities and of transfers of Securities. The Trustee is
hereby appointed "Security Registrar" for the purpose of registering Securities
and transfers of Securities as herein provided.
Upon surrender for registration of transfer of Security of any
series at the office or agency of the Companies in a Place of Payment, the
Companies shall execute, and the Trustee shall authenticate and deliver, in the
name of the designated transferee or transferees, one or more new Securities of
such series, of any authorized denominations and of a like aggregate principal
amount.
At the option of the Holder, Securities of any series may be
exchanged for other Securities of such series any authorized denominations and
of a like aggregate principal amount, upon surrender of the Securities to be
exchanged at such office or agency. Whenever Securities of any series are so
surrendered for exchange, the Companies shall execute, and the Trustee shall
authenticate and deliver, the Securities of such series which the Holder making
the exchange is entitled to receive.
All Securities issued upon any registration of transfer or
exchange of Securities shall be the valid obligations of the Companies,
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 Security presented or surrendered for registration of
transfer or for exchange shall (if so required by a Company or the Trustee) be
duly endorsed, or be accompanied by a written instrument of transfer in form
satisfactory to the Companies 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 Companies 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 or 1107.
Section 306. Mutilated, Destroyed, Lost and Stolen Securities.
If (i) any mutilated Security of any series is surrendered to
the Trustee or if there shall be delivered to the Companies and the Trustee
evidence to their satisfaction of the destruction, loss or theft of any
Security and (ii)
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<PAGE> 24
there shall be delivered to the Companies and the Trustee such security and
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 Companies or the
Trustee that such Security has been acquired by a bona fide purchaser, the
Companies shall execute and upon its request the Trustee shall authenticate and
deliver, in lieu of any such mutilated, destroyed, lost or stolen Security of
such series, a new Security of like tenor and principal amount and bearing a
number not contemporaneously outstanding.
In case any such mutilated, destroyed, lost or stolen Security
has become or is about to become due and payable, the Companies in their
discretion may, instead of issuing a new Security, pay such Security.
Upon the issuance of any new Security under this Section, the
Companies 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 issued pursuant to this Section in lieu of
any destroyed, lost or stolen Security shall constitute an original additional
contractual obligation of the Companies, whether or not the destroyed, lost or
stolen Security 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 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.
Section 307. Persons Deemed Owners.
Prior to due presentment of a Security for registration of
transfer, the Companies, the Trustee and any agent of a Company or the Trustee
may treat the Person in whose name such Security is registered as the owner of
such Security for the purpose of receiving payment of principal of such
Security, and for all other purposes whatsoever, whether or not such Security
be overdue, and neither the Companies, the Trustee nor any agent of a Company
or the Trustee shall be affected by notice to the contrary.
Section 308. Cancellation.
All Securities surrendered for payment, registration of
transfer or exchange or conversion shall, if surrendered to any Person other
than the Trustee, be delivered to the Trustee and shall be promptly cancelled
by it. The Companies, acting jointly, may at any time deliver to the Trustee
for cancellation any Securities previously authenticated and delivered
hereunder which the Companies may have acquired in any manner whatsoever, and
all Securities so delivered shall be promptly cancelled by the Trustee. 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. All cancelled Securities held by the Trustee shall be disposed of
as directed by a Company Order.
ARTICLE FOUR
SATISFACTION AND DISCHARGE
Section 401. Satisfaction and Discharge of Indenture.
This Indenture shall cease to be of further effect (except as
to any surviving rights of registration of transfer or exchange or conversion
of Securities herein expressly provided for), and the Trustee, at the expense
of the Companies, shall execute proper instruments acknowledging satisfaction
and discharge of this Indenture, when
(1) either
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<PAGE> 25
(A) all Securities theretofore authenticated and
delivered (other than (i) Securities which have been
destroyed, lost or stolen and which have been replaced or paid
as provided in Section 306 and (ii) Securities for whose
payment money has theretofore been deposited in trust or
segregated and held in trust by the Companies and thereafter
repaid to the Companies or discharged from such trust, as
provided in Section 1003) have been delivered to the Trustee
for cancellation; or
(B) all such Securities 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,
and the Companies, in the case of (i) or (ii) above, has
deposited or caused to be deposited with the Trustee as trust
funds in trust for the purpose an amount of (a) money or (b)
in the case of (ii) above U.S. Government Obligations which
through the payment of interest and principal in respect
thereof in accordance with their terms will provide not later
than one day before the Stated Maturity money in an amount or
(c) a combination of money and U.S. Government Obligations, in
each case sufficient, in the opinion of a nationally
recognized firm of independent certified public accountants
expressed in a written certificate thereof delivered to the
Trustee, to pay and discharge the entire indebtedness on such
Securities not theretofore delivered to the Trustee for
cancellation, for principal to the date of such deposit (in
the case of Securities which have become due and payable) or
to the Stated Maturity, as the case may be;
(2) the Companies have paid or caused to be paid all other
sums payable hereunder by the Companies; and
(3) the Companies have 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 have been complied with.
Notwithstanding the satisfaction and discharge of this
Indenture, the obligations of the Companies to the Trustee under Section 607,
the obligations of the Trustee to an Authenticating Agent under Section 614
and, if money or U.S. Government Obligations shall have been deposited with 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 Money.
Subject to the provisions of the last paragraph of Section
1003, all money or U.S. Government Obligations deposited with the Trustee
pursuant to Section 401 and all money received by the Trustee in respect of
U.S. Government Obligations 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 and this Indenture, to the payment, either directly or through
any Paying Agent (including a Company acting as its own Paying Agent) as the
Trustee may determine, to the Persons entitled thereto, of the principal for
whose payment such money has been deposited with or received by the Trustee.
All moneys deposited with the Trustee pursuant to Section 401 (and held by it
or any Paying Agent) for the payment of Securities subsequently converted shall
be returned to the Companies upon Company Request.
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<PAGE> 26
Section 403. Reinstatement.
If the Trustee or the Paying Agent is unable to apply any
money in accordance with this Article Four by reason of any order or judgment
of any court or governmental authority enjoining, restraining or otherwise
prohibiting such application, then the obligations of each of the Companies
under this Indenture and the Securities shall be revived and reinstated as
though no deposit had occurred pursuant to this Article Four until such time as
the Trustee or Paying Agent is permitted to apply all money held in trust with
respect to the Securities; provided, however, that if a Company makes any
payment of principal of any Security following the reinstatement of its
obligations, such Company shall be subrogated to the rights of the Holders of
the Securities to receive such payment from the money so held in trust.
ARTICLE FIVE
REMEDIES
Section 501. Events of Default.
"Event of Default", wherever used herein with respect to
Securities of any series, means any one of the following events:
(1) default in the payment of the principal of any Security
of that series at its Maturity; or
(2) default in the performance, or breach, of any covenant,
agreement or warranty of a Company in this Indenture (other than a
covenant, agreement or warranty a default in whose performance is
elsewhere in this Section specifically dealt with) and continuance of
such default for a period of 90 days after there has been given, by
registered or certified mail, to each of the Companies by the Trustee
or to each of the Companies and the Trustee by the Holders of at least
25% in principal amount of the Outstanding Securities a written notice
specifying such default and requiring it to be remedied and stating
that such notice is a "Notice of Default" hereunder; or
(3) the entry by a court having jurisdiction in the premises
of (A) a decree or order for relief in respect of a Company, a
Partnership or a Significant Subsidiary in an involuntary case or
proceeding under any applicable Federal or state bankruptcy,
insolvency, reorganization or other similar law or (B) a decree or
order adjudging a Company, a Partnership or a Significant Subsidiary a
bankrupt or insolvent, or approving as properly filed a petition
seeking reorganization, arrangement, adjustment or composition of or
in respect of a Company, a Partnership or a Significant Subsidiary
under any applicable Federal or state law, or appointing a custodian,
receiver, liquidator, assignee, trustee, sequestrator or other similar
official of a Company, a Partnership or a Significant Subsidiary or of
any substantial part of a Company's, a Partnership's or a Significant
Subsidiary's property, or ordering the winding up or liquidation of
affairs, and the continuance of any such decree or order unstayed and
in effect for a period of 90 consecutive days; or
(4) the commencement by a Company, a Partnership or a
Significant Subsidiary of a voluntary case or proceeding under any
applicable Federal or state bankruptcy, insolvency, reorganization or
other similar law or of any other case or proceeding to be adjudicated
a bankrupt or insolvent, or the consent by it to the entry of a decree
or order for relief in respect of a Company, a Partnership or a
Significant Subsidiary in an involuntary case or proceeding under any
such law, or to the commencement of any bankruptcy or insolvency case
or proceeding against it, or the filing by it of a petition or answer
or consent seeking reorganization or relief under any applicable
Federal or state law, or the consent by it to the filing of such a
petition or to the appointment of or taking possession by a custodian,
receiver, liquidator, assignee, trustee,
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sequestrator or similar official of a Company, a Partnership or a
Significant Subsidiary or of any substantial part of such Company's,
such Partnership's or such Significant Subsidiary's property, or the
making of an assignment for a benefit of creditors, or the admission
by it in writing of a Company's, such Partnership's or such
Significant Subsidiary's inability to pay its debts generally as they
become due, or the taking of appropriate action by a Company, a
Partnership or a Significant Subsidiary in furtherance of any such
action.
Section 502. Acceleration of Maturity; Rescission and Annulment.
If an Event of Default with respect to Securities of any
series occurs and is continuing, then in every such case the Trustee or the
Holders of not less than 25% in principal amount of the Outstanding Securities
of that series may declare the principal amount of all the Securities of that
series to be due and payable immediately, by a notice in writing to each of the
Companies (and to the Trustee if given by Holders), and upon any such
declaration such principal amount shall become immediately due and payable.
At any time after such a declaration of acceleration has been
made and before the Stated Maturity thereof, the Holders of a majority in
principal amount of the Outstanding Securities of that series, by written
notice to each of the Companies and the Trustee, may rescind and annul such
declaration and its consequences if
(1) the Companies have paid or deposited with the Trustee a
sum sufficient to pay
(A) the principal of any Securities of that series
which have become due otherwise than by such declaration of
acceleration, and
(B) 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, other than the non-payment of the
principal of 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
consequent thereon.
Section 503. Collection of Indebtedness and Suits for Enforcement by Trustee.
Each of the Companies covenants that if default is made by it
in the payment of the principal of any Securities of any series at the Maturity
thereof, such Company will, upon demand of the Trustee, pay to the Trustee, for
the benefit of the Holders of such Securities, the whole amount then due and
payable by it on such Securities for principal 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 a 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 sum so due and
unpaid, may prosecute such proceeding to judgment or final decree and may
enforce the same, severally and not jointly, against such Company or any other
obligor upon such Securities and collect the moneys adjudged or decreed to be
payable in the manner provided by law out of the property of such Company or
any other obligor upon such Securities, 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 the Securities
of such
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series 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 a Company or any other obligor upon
the Securities or the property of a Company or of such other obligor or their
creditors, the Trustee (irrespective of whether the principal of the Securities
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
such Company for the payment of overdue principal) shall be entitled and
empowered, by intervention in such proceeding or otherwise,
(i) to file and prove a claim for the whole amount of
principal owing and unpaid by such Company in respect of the
Securities and to file such other papers and documents as may be
necessary or advisable in order to have the claims of the Trustee
(including any claim for the reasonable compensation, expenses,
disbursements and advances of the Trustee, its agents and counsel) and
of the Holders allowed in such judicial proceeding, and
(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 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 it for the reasonable compensation,
expenses, disbursements and advances of the Trustee, its agents and counsel,
and any other amounts due the Trustee under Section 607.
Nothing herein contained shall be deemed to authorize the
Trustee to authorize or consent to or accept or adopt on behalf of any Holder
any plan of reorganization, arrangement, adjustment or composition affecting
the Securities or the rights of any Holder thereof or to authorize the Trustee
to vote in respect of the claim of any Holder in any such proceeding; provided,
however, that the Trustee may, on behalf of the Holders, vote for the election
of a trustee in bankruptcy or similar official and may be a member of the
Creditors' Committee.
Section 505. Trustee May Enforce Claims Without Possession of Securities.
All rights of action and claims under this Indenture or the
Securities may be prosecuted and enforced by the Trustee without the possession
of any of the Securities 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 in respect of which such
judgment has been recovered.
Section 506. Application of Money Collected.
Any money or other property collected by the Trustee pursuant
to this Article in respect of the Securities of any series 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, upon presentation of
the Securities of such series and the notation thereon of the payment if only
partially paid and upon surrender thereof if fully paid:
First: To the payment of costs and expenses of collection,
including all sums paid or advanced by the Trustee hereunder and the
reasonable compensation, expenses and disbursements of the Trustee,
its agents and counsel and all other amounts due the Trustee under
Section 607; and
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Second: To the payment of the amounts then due and unpaid for
principal of the Securities of such series in respect of which or for
the benefit of which such money or other property has been collected,
ratably, without preference or priority of any kind, according to the
amounts due and payable on such Securities of such series.
Third: The balance, if any, to the Companies, as their
interests may appear.
Section 507. Limitation on Suits.
No Holder of any Security of any series shall have any right
to institute any proceeding, judicial or otherwise, with respect to this
Indenture, or for the appointment of a receiver or trustee, or for any other
remedy hereunder, unless
(1) such Holder has previously given written notice to the
Trustee of a continuing Event of Default;
(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 security and 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 security and offer of indemnity has failed to
institute any such proceedings; 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 Holders of Securities
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 Holders, or to obtain or to seek to obtain priority or preference
over any other Holders or to enforce any right under this Indenture, except in
the manner herein provided and for the equal and ratable benefit of all the
Holders.
Section 508. Unconditional Right of Holders to Receive Principal and to
Convert.
Notwithstanding any other provision in this Indenture, the
Holder of any Security shall have the right, which is absolute and
unconditional, to receive payment of the principal of such Security on the
Stated Maturity expressed in such Security and to convert such Security in
accordance with Article Eleven and to institute suit for the enforcement of any
such payment and right to convert and such other rights shall not be impaired
without the consent of such Holder.
Section 509. Restoration of Rights and Remedies.
If the Trustee or any Holder has instituted any proceeding to
enforce any right or remedy under this Indenture 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, subject to any
determination in such proceeding, each of the Companies, the Trustee and the
Holders shall be restored severally and respectively to their former positions
hereunder and thereafter all rights and remedies of the Trustee and the Holders
shall continue as though no such proceeding had been instituted.
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Section 510. Rights and Remedies Cumulative.
Except as otherwise provided with respect to the replacement
or payment of mutilated, destroyed, lost or stolen Securities in the last
paragraph of Section 306, no right or remedy herein conferred upon or reserved
to the Trustee or to the Holders is intended to be exclusive of any other right
or remedy, and every right and remedy shall, to the extent permitted by law, be
cumulative and in addition to every other right and remedy given hereunder or
now or hereafter existing at law or in equity or otherwise. The assertion or
employment of any right or remedy hereunder, or otherwise, shall not prevent
the concurrent assertion or employment of any other appropriate right or
remedy.
Section 511. Delay or Omission Not Waiver.
No delay or omission of the Trustee or of any Holder of any
Securities to exercise any right or remedy accruing upon any Event of Default
shall impair any such right or remedy or constitute a waiver of any such Event
of Default or an acquiescence therein. Every right and remedy given by this
Article or by law to the Trustee or to the Holders may be exercised from time
to time, and as often as may be deemed expedient, by the Trustee or by the
Holders, as the case may be.
Section 512. Control by Holders.
The Holders of 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, provided
that
(1) such direction shall not be in conflict with any rule of
law or with this Indenture, and
(2) the Trustee may take any other action deemed proper by
the Trustee which is not inconsistent with such direction; and
(3) (subject to the provisions of Section 601) the Trustee
shall have the right to decline to follow any such direction if
the Trustee, being advised by counsel, shall determine that the action
or proceeding so directed may not lawfully be taken or if the Trustee
in good faith shall determine that the action or proceedings so
directed might involve the Trustee in personal liability or if the
Trustee in good faith shall so determine that the actions or
forebearances specified in or pursuant to such direction shall be
unduly prejudicial to the interests of holders of the Securities of
such series not joining in the giving of said direction, it being
understood that (subject to Section 601) the Trustee shall have no
duty to ascertain whether or not such actions or forebearances are
unduly prejudicial to such holders.
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 waive any past default hereunder and its
consequences, except a default
(1) in the payment of the principal of any Security of such
series, or
(2) in respect of a covenant or provision hereof which under
Article Nine cannot be modified or amended without the consent of the
Holder of each Outstanding Security offered.
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 and the Securities of such series; but no such
waiver shall extend to any subsequent or other default or impair any right
consequent thereon.
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Section 514. 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, suffered or omitted by it as Trustee, the filing by any party
litigant in such suit of an undertaking to pay the costs of such suit, and that
such court may in its discretion assess reasonable costs, including reasonable
attorneys' fees, 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 a Company, to any suit instituted by the Trustee, to any suit
instituted by any Holder, or group of Holders, holding in the aggregate more
than 25% 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
any Security on or after the Stated Maturity expressed in such Security or for
the enforcement of the right to convert any Security in accordance with Article
Eleven.
Section 515. Waiver of Stay or Extension Laws.
Each of the Companies covenants (to the extent that it may
lawfully do so) that it will not at any time insist upon, or plead, or in any
manner whatsoever claim or take the benefit or advantage of, any stay or
extension law wherever enacted, now or at any time hereafter in force, which
may affect the covenants or the performance of this Indenture; and each of the
Companies (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.
ARTICLE SIX
THE TRUSTEE
Section 601. Certain Duties and Responsibilities.
(a) Except during the continuance of an Event of Default:
(1) the Trustee undertakes to perform such duties and only
such duties as are specifically set forth in this Indenture, and no
implied covenants or obligations shall be read into this Indenture
against the Trustee; and
(2) in the absence of bad faith on its part, the Trustee may
conclusively rely, as to the truth of the statements and the
correctness of the opinions expressed therein, upon any certificates
or opinions furnished to the Trustee and conforming to the
requirements of this Indenture; but in the case of any such
certificates or opinions which by any provision hereof are
specifically required to be furnished to the Trustee, the Trustee
shall be under a duty to examine the same to determine whether or not
they conform to the requirements of this Indenture.
(b) In case an Event of Default has occurred and is
continuing, the Trustee shall exercise such of the rights and powers vested in
it by this Indenture, and use the same degree of care and skill in its
exercise, as a prudent person would exercise or use under the circumstances in
the conduct of his own affairs.
(c) No provision of this Indenture shall be construed to
relieve the Trustee from liability for its own negligent action, its own
negligent failure to act, or its own willful misconduct, except that
(1) this Subsection shall not be construed to limit the
effect of Subsection (a) of this Section;
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(2) the Trustee shall not be liable for any error or judgment
made in good faith by a Responsible Officer, unless it shall be proved
that the Trustee was negligent in ascertaining the pertinent facts;
(3) the Trustee shall not be liable with respect to any
action taken or omitted to be taken by it in good faith in accordance
with the direction of the Holders of not less than a majority in
principal amount of the Outstanding Securities relating to the time,
method and place of conducting any proceedings for any remedy
available to the Trustee, or exercising any trust or power conferred
upon the Trustee, under this Indenture; and
(4) no provision of this Indenture shall require the Trustee
to expend or risk its own funds or otherwise incur any financial
liability in the performance of any of its duties hereunder, or in the
exercise of any of its rights or powers, if it shall have reasonable
grounds for believing that repayment of such funds or adequate
security and indemnity against such risk or liability is not
reasonably assured to it.
(d) Whether or not therein expressly so provided, every
provision of this Indenture relating to the conduct or affecting the liability
of or affording protection to the Trustee shall be subject to the provisions of
this Section and subject to Sections 315 and 316 of the TIA.
Section 602. 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 by
mail to all Holders of Securities of such series, as their names and addresses
appear in the Security Register, notice of such default hereunder known to the
Trustee, unless such default shall have been cured or waived; provided,
however, that, except in the case of a default in the payment of the principal
of any Security of such series, the Trustee shall be protected in withholding
such notice if and so long as the board of directors, the executive committee
or a trust committee of directors or Responsible Officers of the Trustee in
good faith determine that the withholding of such notice is in the interest of
the Holders of Securities of such series. 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.
Section 603. Certain Rights of Trustee.
Subject to the provisions of Section 601:
(a) the Trustee may rely and shall be protected in acting or
refraining from acting upon any resolution, officer's certificate,
certificate, statement, instrument, opinion, report, notice, request,
direction, consent, order, bond, debenture, note, other evidence of
indebtedness or other paper or document believed by it to be genuine
and to have been signed or presented by the proper party or parties;
(b) any request or direction of a Company mentioned herein
shall be sufficiently evidenced by a Company Request or Company Order
and any resolution of a Board of Directors may be sufficiently
evidenced by a Board Resolution;
(c) 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;
(d) before the Trustee acts or refrains from acting the
Trustee may consult with counsel and the written advice of such
counsel or any Opinion of Counsel shall be full and complete
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authorization and protection in respect of any action taken, suffered
or omitted by it hereunder in good faith and in reliance thereon;
(e) the Trustee shall be under no obligation to exercise any
of the rights or powers vested in it by this Indenture at the request
or direction of any of the Holders pursuant to this Indenture, unless
such Holders shall have offered to the Trustee reasonable security and
indemnity against the costs, expenses and liabilities which might be
incurred by it in compliance with such request or direction;
(f) prior to the occurrence of an Event of Default hereunder
with respect to the Securities of any series and after the curing or
waiving of all Events of Default, the Trustee shall not be bound to
make any investigation into the facts or matters stated in any
resolution, officer's certificate, or other certificate, statement,
instrument, opinion, report, notice, request, consent, order,
approval, appraisal, bond, debenture, note, coupon, security, or other
paper or document unless requested in writing so to do by the Holders
of not less than a majority in aggregate principal amount of the
Outstanding Securities of such series; provided, that, if the payment
within a reasonable time to the Trustee of the costs, expenses or
liabilities likely to be incurred by it in the making of such
investigation is, in the opinion of the Trustee, not reasonably
assured to the Trustee by the security afforded to it by the terms of
this Indenture, the Trustee may require reasonable indemnity against
such expenses or liabilities as a condition to proceeding; the
reasonable expenses of every such examination shall be paid by the
Companies or, if advanced by the Trustee, shall be repaid by the
Companies upon demand;
(g) the Trustee may execute any of the trusts or powers
hereunder or perform any duties hereunder either directly or by or
through agents or attorneys and the Trustee shall not be responsible
for any misconduct or negligence on the part of any agent or attorney
appointed with due care by it hereunder;
(h) the Trustee shall not be responsible for the computation
of any adjustment to the conversion price or for any determination as
to whether an adjustment is required;
(i) the Trustee shall not be liable for any action taken or
omitted by it in good faith and believed by it to be authorized or
within the discretion, rights or powers conferred upon it by this
Indenture;
(j) the Trustee shall not be required to give any bond or
surety in respect of the performance of its powers and duties
hereunder;
(k) the Trustee shall not be bound to ascertain or inquire as
to the performance or observance of any covenants, conditions, or
agreements on the part of a Company, except as otherwise set forth
herein, but the Trustee may require of a Company full information and
advice as to the performance of the covenants, conditions and
agreements contained herein and shall be entitled in connection
herewith to examine the books, records and premises of such Company;
(l) the permissive rights of the Trustee to do things
enumerated in this Indenture shall not be construed as a duty and the
Trustee shall not be answerable for other than its negligence or
willful default; and
(m) except for (i) a default under Sections 501(a) or (b)
hereof, or (ii) any other event of which the Trustee has "actual
knowledge" and which event, with the giving of notice or the passage
of time or both, would constitute an Event of Default under this
Indenture, the Trustee shall not be deemed to have notice of any
default or event unless specifically notified in writing of such event
by a Company or the Holders of not less than 25% in aggregate
principal amount of the Outstanding Securities of any series; as used
herein, the term "actual knowledge" means the actual fact or statement
of knowing, without any duty to make any investigation with regard
thereto.
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Section 604. Not Responsible for Recitals or Issuance of Securities.
The recitals contained herein and in the Securities, except
the Trustee's certificates of authentication, shall be taken as the statements
of the Companies, and the Trustee assumes no responsibility for their
correctness. The Trustee makes no representations as to the validity or
sufficiency of this Indenture or of the Securities. The Trustee shall not be
accountable for the use or application by the Companies of Securities or the
proceeds thereof.
Section 605. May Hold Securities.
The Trustee, any Authenticating Agent, any Paying Agent, any
Security Registrar or any other agent of a Company, in its individual or any
other capacity, may become the owner or pledgee of Securities and, subject to
Sections 608 and 613, may otherwise deal with a Company with the same rights it
would have if it were not Trustee, any Authenticating Agent, Paying Agent,
Security Registrar or such other agent.
Section 606. 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 any money received by it hereunder
except as otherwise agreed to in writing by the Companies and the Trustee.
Section 607. Compensation and Reimbursement.
The Companies, acting jointly, agree
(l) to pay to the Trustee from time to time, and the Trustee
shall be entitled to, 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 the Trustee upon its request for all reasonable expenses,
disbursements and advances incurred or made by the Trustee in
accordance with any provision of this Indenture (including the
reasonable compensation and the expenses and disbursements of its
agents and counsel), except any such expense, disbursement or advance
as may be attributable to its gross negligence or wilful misconduct;
and
(3) to indemnify the Trustee for, and to hold it harmless
against, any loss, liability or expense incurred without gross
negligence or wilful misconduct on its part, arising out of or in
connection with the acceptance or administration of the trust or
trusts hereunder, including the costs and expenses of defending itself
against or investigating any claim or liability in connection with the
exercise or performance of any of its powers or duties hereunder.
The obligations of the Companies under this Section to
compensate the Trustee, to pay or reimburse the Trustee for expenses,
disbursements and advances and to indemnify and hold harmless the Trustee shall
constitute additional indebtedness hereunder and shall survive the satisfaction
and discharge of this Indenture. As security for the performance of such
obligations of the Companies, the Trustee shall have a claim 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 particular
Securities, and the Securities are hereby subordinated to such prior claim.
When the Trustee incurs expenses or renders services in connection with an
Event of Default specified in Article Five hereof, the expenses (including
reasonable fees and expenses of its counsel) and the compensation for the
service in connection therewith are intended to constitute expense of
administration under any applicable Bankruptcy law.
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Section 608. Eligibility; Disqualification; Conflicting Interests.
The Trustee shall at all times satisfy the requirements of TIA
Section 310(a)(1). The Trustee shall have a combined capital and surplus of at
least $50,000,000 as set forth in its most recent published annual report of
condition. The Trustee shall comply with TIA Section 310(b).
Section 609. Preferential Collection of Claims Against Companies.
The Trustee shall comply with TIA Section 311(a), excluding
any creditor relationship listed in TIA Section 311(b). A Trustee who has
resigned or been removed shall be subject to TIA Section 311(a) to the extent
indicated therein.
Section 610. 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 611.
(b) The Trustee may resign at any time by giving written
notice thereof to the Companies. If the instrument of acceptance by a
successor Trustee required by Section 611 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 by Act of the
Holders of a majority in principal amount of the Outstanding Securities,
delivered to the Trustee and to the Companies.
(d) If at any time:
(1) the Trustee shall fail to comply with Section 608 after
written request therefor by a Company or by any Holder who has been a
bona fide Holder of a Security for at least six months, or
(2) the Trustee shall cease to be eligible under Section 608
and shall fail to resign after written request therefor by the
Companies, acting jointly, or by any such Holder, 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 Companies, acting jointly, each by a Board
Resolution, may remove the Trustee, or (ii) subject to Section 514, any Holder
who has been a bona fide Holder of a Security for at least six months may, on
behalf of himself and all others similarly situated, petition any court of
competent jurisdiction for the removal of the Trustee and the appointment of a
successor Trustee 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, the Companies, acting jointly, each by a Board Resolution, shall
promptly appoint a successor Trustee. If, within one year after such
resignation, removal or incapability, or the occurrence of such vacancy, a
successor Trustee shall be appointed by Act of the Holders of a majority in
principal amount of the Outstanding Securities delivered to the Companies and
the retiring Trustee, the successor Trustee so appointed shall, forthwith upon
its acceptance of such appointment in accordance with the applicable
requirements of Section 611, become the successor Trustee and supersede the
successor Trustee appointed by the Companies. If no successor Trustee shall
have been so appointed by the Companies or the Holders and accepted appointment
in the
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manner required by Section 611, any Holder who has been a bona fide Holder of a
Security for at least six months may, on behalf of himself and all others
similarly situated, petition any court of competent jurisdiction for the
appointment of a successor Trustee.
(f) The Companies shall give notice of each resignation and
each removal of the Trustee and each appointment of a successor Trustee by
mailing written notice of such event by first-class mail, postage prepaid, to
all Holders of Securities as their names and addresses appear in the Security
Register. Each notice shall include the name of the successor Trustee and the
address of its Corporate Trust Office.
Section 611. Acceptance of Appointment by Successor.
(a) Every successor Trustee appointed hereunder shall
execute, acknowledge and deliver to the Companies 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 the
request of a Company or the successor Trustee, such retiring Trustee shall,
upon payment of its charges, execute and deliver an instrument transferring to
such successor Trustee all the rights, powers and trusts of the retiring
Trustee and shall duly assign, transfer and deliver to such successor Trustee
all property and money held by such retiring Trustee hereunder.
(b) 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 612. Merger, Conversion, Consolidation or Succession to Business.
Any corporation into which the Trustee may be merged or
converted or with which it may be consolidated, or any corporation resulting
from any merger, conversion or consolidation to which the Trustee shall be a
party, or any corporation succeeding to all or substantially all 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 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 so authenticated with the same
effect as if such successor Trustee had itself authenticated such Securities.
Section 613. Appointment of Authenticating Agent.
The Trustee may appoint an Authenticating Agent or Agents,
which shall be authorized to act on behalf of the Trustee to authenticate
Securities issued upon the original issue and upon exchange, registration of
transfer, partial conversion, or pursuant to Section 306, 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. 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 each of the Companies and
shall at all times be a corporation organized and doing business under the laws
of the United States of America, any State thereof 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 authority. If such Authenticating Agent
publishes reports of condition at least annually, pursuant to law or to the
requirements of said 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. If 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.
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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 to be an Authenticating Agent, provided such corporation shall be
otherwise eligible under this Section, without the execution or filing of any
paper or any further act on the part of the Trustee or the Authenticating
Agent.
An Authenticating Agent may resign at any time by giving
written notice thereof to the Trustee and to each of the Companies. The
Trustee may at any time terminate the agency of an Authenticating Agent by
giving written notice thereof to such Authenticating Agent and to each of the
Companies. Upon receiving such 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 may
appoint a successor Authenticating Agent which shall be acceptable to each of
the Companies and shall mail written notice of such appointment by first-class
mail, postage prepaid, to all Holders as their names and addresses appear in
the Security Register. 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. No successor Authenticating Agent shall be appointed
unless eligible under the provisions of this Section.
The Trustee agrees to pay to each Authenticating Agent from
time to time reasonable compensation for its services under this Section, and
the Trustee shall be entitled to be reimbursed for such payments, subject to
the provisions of Section 607.
If an appointment is made pursuant to this Section, the
Securities may have endorsed thereon, in addition to the Trustee's certificate
of authentication, an alternate certificate of authentication in the following
form:
This is one of the Securities described in the within-mentioned Indenture.
[_________________________]
_____________________________________
As Trustee
By___________________________________
As Authenticating Agent
By___________________________________
Authorized Officer
ARTICLE SEVEN
HOLDERS' LISTS AND REPORTS BY TRUSTEE AND COMPANIES
Section 701. Companies to Furnish Trustee Names and Addresses of Holders.
Each of the Companies will furnish or cause to be furnished
to the Trustee
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(a) semi-annually, not later than fifteen days after each
Regular Record Date, a list, in such form as the Trustee may
reasonably require, of the names and addresses of the Holders as of
such Regular Record Date, and
(b) at such other times as the Trustee may request in
writing, within 30 days after the receipt by such 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.
Section 702. Preservation of Information; Communications to Holders.
(a) The Trustee shall preserve, in as current a form as is
reasonably practicable, the names and addresses of Holders contained in the
most recent list furnished to the Trustee as provided in Section 701 and the
names and addresses of Holders received by the Trustee in its capacity as
Security Registrar. The Trustee may destroy any list furnished to it as
provided in Section 701 upon receipt of a new list so furnished.
(b) If three or more Holders (herein referred to as
"applicants") apply in writing to the Trustee, and furnish to the Trustee
reasonable proof that each such applicant has owned a Security for a period of
at least six months preceding the date of such application, and such
application states that the applicants desire to communicate with other Holders
with respect to their rights under this Indenture or under the Securities and
is accompanied by a copy of the form of proxy or other communication which such
applicants propose to transmit, then the Trustee shall, within five Business
Days after the receipt of such application, at its election, either
(i) afford such applicants access to the information
preserved at the time by the Trustee in accordance with Section
702(a), or
(ii) inform such applicants as to the approximate number of
Holders whose names and addresses appear in the information preserved
at the time by the Trustee in accordance with Section 702(a), and as
to the approximate cost of mailing to such Holders the form of proxy
or other communication, if any, specified in such application.
If the Trustee shall elect not to afford such applicants
access to such information, the Trustee shall, upon the written request of such
applicants, mail to each Holder whose name and address appear in the
information preserved at the time by the Trustee in accordance with Section
702(a) a copy of the form of proxy or other communication which is specified in
such request, with reasonable promptness after a tender to the Trustee of the
material to be mailed and of payment, or provision for the payment, of the
reasonable expenses of mailing, unless within five days after such tender the
Trustee shall mail to such applicants and file with the Commission, together
with a copy of the material to be mailed, a written statement to the effect
that, in the opinion of the Trustee, such mailing would be contrary to the best
interest of the Holders or would be in violation of applicable law. Such
written statement shall specify the basis of such opinion. If the Commission,
after opportunity for a hearing upon the objections specified in the written
statement so filed, shall enter an order refusing to sustain any of such
objections or if, after the entry of an order sustaining one or more of such
objections, the Commission shall find, after notice and opportunity for
hearing, that all the objections so sustained have been met and shall enter an
order so declaring, the Trustee shall mail copies of such material to all such
Holders with reasonable promptness after the entry of such order and the
renewal of such tender; otherwise the Trustee shall be relieved of any
obligation or duty to such applicants respecting their application.
(c) Every Holder of Securities, by receiving and holding the
same, agrees with each of the Companies and the Trustee that neither of the
Companies nor the Trustee nor any agent of either of them shall be held
accountable by reason of the disclosure of any such information as to the names
and addresses of the Holders in accordance with Section 702(b), regardless of
the source from which such information was derived, and that the Trustee shall
not be held accountable by reason of mailing any material pursuant to a request
made under Section 702(b).
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Section 703. Reports by Trustee.
(a) The Trustee shall transmit to Holders such reports
concerning the Trustee and its actions under this Indenture as may be required
pursuant to the TIA at the times and in the manner provided pursuant thereto.
(b) A copy of each report at the time of its mailing to all
Holders shall be filed with the Commission and each securities exchange on
which the Securities of any Series are listed. Each of the Companies agrees
promptly to notify the Trustee whenever the Securities become listed on any
securities exchange and of any delisting thereof.
Section 704. Reports by Companies.
Each of the Companies shall:
(1) file with the Trustee, within 15 days after such 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 such Company
may be required to file with the Commission pursuant to Section 13 or
Section 15(d) of the Securities Exchange Act of 1934; or, if such
Company is not required to file information, documents or reports
pursuant to either of said Sections, then it shall file with the
Trustee and the Commission, in accordance with rules and regulations
prescribed from time to time by the Commission, such of the
supplementary and periodic information, documents and reports which
may be required pursuant to Section 13 of the Securities Exchange Act
of 1934 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 such 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 all Holders, as their names and
addresses appear in the Security Register, within 30 days after the
filing thereof with the Trustee, such summaries of any information,
documents and reports required to be filed by such 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.
ARTICLE EIGHT
CONSOLIDATION, MERGER, CONVEYANCE, TRANSFER OR LEASE
Section 801. Companies May Consolidate, Etc. on Certain Terms.
Neither Company shall consolidate with or merge into any
Person or convey, transfer or lease its properties and assets as, or
substantially as, an entirety to any Person, unless:
(1) the Person formed by such consolidation or into which
such Company is merged or the Person which acquires by conveyance,
transfer, or lease the properties and assets of such Company as, or
substantially as, an entirety shall be a corporation, partnership or
trust organized and existing under the laws of the United States of
America, any State thereof or the District of Columbia and shall, by
an indenture supplemental hereto executed and delivered to the
Trustee, in form satisfactory to the Trustee, expressly assume the due
and punctual payment of the principal of
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all the Securities and the performance of every covenant of this
Indenture on the part of such Company to be performed or observed and
shall have provided for conversion rights in accordance with Article
Eleven.
(2) immediately after such transaction, no Event of Default,
or event which after notice or lapse of time, or both, would become an
Event of Default, shall have occurred and be continuing; and
(3) such Company shall have delivered to the Trustee an
Officers' Certificate and an Opinion of Counsel, each stating that
such consolidation, merger, conveyance, transfer or lease and such
supplemental indenture comply with this Article and that all
conditions precedent herein provided for relating to such transaction
have been complied with.
Section 802. Successor Substituted.
Upon any consolidation or merger or any conveyance, transfer
or lease of the properties and assets of a Company as, or substantially as, an
entirety to any Person in accordance with Section 801, the successor Person
formed by such consolidation or into which such Company is merged or to which
such conveyance, transfer or lease is made shall succeed to, and be substituted
for, and may exercise every right and power of, such Company under this
Indenture with the same effect as if such successor Person had been named as
such Company herein, and thereafter, except in the case of a lease to another
Person, the predecessor Person shall be relieved of all obligations and
covenants under this Indenture and the Securities.
ARTICLE NINE
SUPPLEMENTAL INDENTURES
Section 901. Supplemental Indentures Without Consent of Holders.
Without the consent of any Holders, the Companies, acting
jointly, each when authorized by a Board Resolution, and the Trustee, at any
time and from time to time, may enter into one or more indentures supplemental
hereto, in form satisfactory to the Trustee, for any of the following purposes:
(1) to evidence the succession of another Person to a Company
and the assumption by any such successor of the covenants of such
Company herein and in the Securities; or
(2) to add to the covenants of a 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 a Company; or
(3) to change or eliminate any of the provisions of this
Indenture in respect of one or more series of Securities, 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
(4) to secure the Securities; or
(5) to make provision with respect to the conversion rights
of Holders pursuant to the requirements of Article Eleven; or
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(6) to cure any ambiguity, to correct or supplement any
provision herein which may be inconsistent with any other provision
herein, or to make any other provisions with respect to matters or
questions arising under this Indenture, provided such action shall not
adversely affect the interests of the Holders of Securities in any
material respect; or
(7) to evidence and provide for the acceptance of appointment
hereunder by a successor Trustee with respect to the Securities of one
or more series.
Section 902. Supplemental Indentures with Consent of Holders.
With the consent of the Holders of not less than a majority in
principal amount of the Outstanding Securities of each series affected by such
supplemental indenture, by Act of said Holders delivered to each of the
Companies and the Trustee, the Companies, acting jointly, each when authorized
by 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 of such
series 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 any such
Security, or reduce the principal amount thereof or change any Place
of Payment where, or the coin or currency in which, any such Security
is payable, or impair the right to institute suit for the enforcement
of any such payment on or after the Stated Maturity thereof or
adversely affect the right to convert any Security as provided in
Article Eleven (except as permitted by Section 901(5)), or
(2) reduce the percentage in principal amount of the
Outstanding Securities, the consent of whose Holders is required for
any such supplemental indenture, or the consent of whose Holders is
required for any waiver provided for in this Indenture, or
(3) modify any of the provisions of this Section or Section
513, except to increase any such percentage 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.
A supplemental indenture which changes or eliminates any
covenant or other provisions of this Indenture which has expressly been
included solely 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.
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.
Section 903. Execution of Supplemental Indentures.
In executing, or accepting the additional trusts created by,
any supplemental indenture permitted by this Article or the modifications
thereby of the trusts created by this Indenture, the Trustee shall be entitled
to receive, and (subject to Section 601) 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.
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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 shall be bound thereby.
Section 905. Conformity with TIA.
Every supplemental indenture executed pursuant to this Article
shall conform to the requirements of the TIA 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 Companies,
acting jointly, or the Trustee shall so determine, new Securities of any series
so modified as to conform, in the opinion of the Trustee and the Companies, to
any such supplemental indenture may be prepared and executed by the Companies
and authenticated and delivered by the Trustee in exchange for Outstanding
Securities of such series.
Section 907. Notice of Supplemental Indenture.
Promptly after the execution by each of the Companies and the
Trustee of any supplemental indenture pursuant to Section 902, the Companies
shall transmit to the Holders a notice setting forth the substance of such
supplemental indenture.
ARTICLE TEN
COVENANTS
Section 1001. Payment of Securities.
Each Company covenants and agrees, severally and not jointly,
that it will duly and punctually pay the principal amount of the Securities
shown thereon as owing by such Company in accordance with the terms of the
Securities and this Indenture.
Section 1002. Maintenance of Office or Agency.
The Companies will maintain in each Place of Payment an office
or agency where Securities may be presented or surrendered for payment, where
Securities may be surrendered for registration of transfer or exchange, where
Securities may be surrendered for conversion and where notices and demands to
or upon the Companies in respect of the Securities and this Indenture may be
served. The Companies will give prompt written notice to the Trustee of the
location, and any change in the location, of such office or agency. If at any
time the Companies 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, and each of the Companies hereby appoints the Trustee as
its agent to receive all such presentations, surrenders, notices and demands.
The Companies may also from to time designate one or more
other offices or agencies where the Securities may be presented or surrendered
for any or all such purposes and may from time to time rescind such
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designations; provided, however, that no such designation or rescission shall
in any manner relieve a Company of its obligation to maintain an office or
agency in each Place of Payment for such purposes. The Companies 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.
Section 1003. Money for Securities Payments to be Held in Trust.
If a Company shall at any time act as its own Paying Agent, it
will, on or before each due date of the principal of any of the Securities,
segregate and hold in trust for the benefit of the Persons entitled thereto a
sum sufficient to pay the principal 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 a Company shall have one or more Paying Agents, it
will, one business Day prior to each due date of the principal of any
Securities, deposit with a Paying Agent a sum sufficient to pay the principal
so becoming due, such sum to be held in trust for the benefit of the Persons
entitled to such principal, and (unless such Paying Agent is the Trustee) such
Company will promptly notify the Trustee of its action or failure so to act.
Each 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 the principal
of 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 a Company (or
any other obligor upon the Securities) in the making of any payment of
principal on the Securities; 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 Companies 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 Companies 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
Companies or such Paying Agent; and, upon such payment by any Paying Agent to
the Trustee, such Paying Agent shall be released from all further liability
with respect to such money.
Any money deposited with the Trustee or any Paying Agent, or
then held by the Companies, in trust for the payment of the principal of any
Security and remaining unclaimed for two years after such principal has become
due and payable shall be paid to the Companies on Company Request, or (if then
held by the Companies) shall be discharged from such trust; and the Holder of
such Security shall thereafter, as an unsecured general creditor, look only to
the Companies for payment thereof, and all liability of the Trustee or such
Paying Agent with respect to such trust money, and all liability of the
Companies as trustee thereof, shall thereupon cease; provided, however, that
the Trustee or such Paying Agent, before being required to make any such
repayment, may at the expense of the Companies cause to be published once, in a
newspaper published in the English language, customarily published on each
Business Day and of general circulation in the City of New York, New York or to
be mailed to such Holder or both, notice that such money remains unclaimed and
that, after a date specified therein, which shall not be less than 30 days from
the earlier of the date of such publication or such mailing, any unclaimed
balance of such money then remaining will be repaid to the Companies.
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ARTICLE ELEVEN
CONVERSION OF SECURITIES
Section 1101. Conversion Privilege and Conversion Price.
Each Security (or a portion thereof) shall be automatically
converted into Paired Shares upon surrender of such Security at any office or
agency of the Companies maintained for that purpose pursuant to Section 1002,
accompanied by written notice of conversion and a certification from the Holder
thereof, in substantially the form set forth on the reverse side of each
Security, to the effect that:
(i) the beneficial ownership of such Security (or a portion
thereof) has been transferred to a person which is not (a) a party to
that certain Merrill Lynch, Pierce, Fenner & Smith Incorporated Master
Agreement Among Underwriters dated April 15, 1985 (as revised) (the
"Agreement Among Underwriters") who participated in the distribution
of the Securities, (b) a Person who is otherwise an underwriter or
dealer who participated in the distribution of the Securities, or (c)
any Underwriter Affiliate (as defined below) of such a party; or
(ii) the Paired Shares issuable upon the conversion of the
Security (or a portion thereof) have been sold in a regular-way sale
on the New York Stock Exchange prior to the time that any of the
Underwriters (as defined in the Security) is deemed to have completed
its participation in the distribution of the Securities within the
meaning of Rule 10b-6(c)(3) (excluding, for such purpose, the last
sentence thereof) of the Exchange Act.
The number of Paired Shares issuable upon conversion of a
Security is to be determined by dividing the principal amount of the Security
by an amount to be determined by the Companies and the Underwriters. Only
whole Paired Shares may be acquired in any conversion of a Security.
"Paired Shares" means a unit consisting of one share of
beneficial interest, par value $.01 per share, of the Trust ("Trust Shares")
and one share of Common Stock, $.01 per share, of the Corporation ("Corporation
Shares"), which are paired pursuant to the Pairing Agreement dated June 25,
1980, as amended, in each case as such securities exist on the date of this
Indenture or as they may be constituted from time to time.
"Underwriter Affiliate" for the purposes of this Article
Eleven means with respect to any Underwriter (a) a partner in or holder of 10%
or more of the shares of such Underwriter, (b) a person in which such
Underwriter holds 10% or more of the shares or is a partner, or (c) a family
member of, or trust for, any such Underwriter, partner or shareholder.
Section 1102. Conversion Procedure.
Securities shall be deemed to have been converted immediately
prior to the close of business on the day of surrender of such Securities for
conversion in accordance with the foregoing provisions (the "Date of
Conversion"), and at such time the rights of the Holders of such Securities as
Holders shall cease, and the Person or Persons entitled to receive Paired
Shares issuable upon conversion shall be treated for all purposes as the record
holder or holders of such Paired Shares at such time. As promptly as
practicable on or after the Date of Conversion, the Companies shall issue and
shall deliver at such office or agency a certificate or certificates for the
number of full Paired Shares issuable upon conversion, together with payment in
lieu of any fraction of a share, as provided in Section 1103.
In the case of any Security which is converted in part only,
upon such conversion the Companies shall execute and the Trustee shall
authenticate and deliver to the Holder thereof, at the expense of the
Companies, a
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new Security or Securities of the same series of authorized denominations in
aggregate principal amount equal to the unconverted portion of the principal
amount of such Security.
Section 1103. Fractions of Shares.
No fractional Trust Shares or Corporation Shares shall be
issued upon conversion of Securities. If more than one Security shall be
surrendered for conversion at one time by the same Holder, the number of full
shares which shall be issuable upon conversion thereof shall be computed on the
basis of the aggregate principal amount of the Securities (or specified
portions thereof) so surrendered. Instead of any fractional Trust Share or
Corporation Share which would otherwise be issuable upon conversion of any
Security or Securities (or specified portions thereof), the Companies shall pay
a cash adjustment in respect of such fraction in an aggregate amount equal to
the same fraction of the market price per Paired Share (as determined by the
Board of Directors or in any manner prescribed by the Board of Directors) at
the close of business on the Date of Conversion.
Section 1104. Adjustment for Change in Capital Stock.
If either the Trust or the Corporation:
(1) pays a dividend in Trust Shares or Corporation Shares,
respectively;
(2) subdivides its outstanding Trust Shares or Corporation
Shares, respectively, into a greater number of shares;
(3) combines its outstanding Trust Shares or Corporation
Shares, respectively, into a smaller number of shares;
(4) distributes to all holders of its Trust Shares or
Corporation Shares, respectively, shares of its capital stock other
than its Trust Shares or Corporation Shares, respectively; or
(5) issues by reclassification of its Trust Shares or
Corporation Shares, respectively, any shares of its capital stock;
then the conversion and the conversion price in effect immediately prior to
such action shall be adjusted so that the Holder of any Security thereafter
converted may receive the number of Paired Shares which such Holder would have
owned immediately following such action if such Holder had converted the
Security immediately prior to such action.
For a dividend or distribution, the adjustment shall become
effective immediately after the record date for the dividend or distribution.
For a subdivision, combination or reclassification, the adjustment shall become
effective immediately after the effective date of the subdivision, combination
or reclassification.
If after an adjustment a Holder of a Security upon conversion
of it may receive shares of two or more classes of capital stock of a Company,
such Company shall determine the allocation of the adjusted conversion price
between or among the classes of such capital stock. After such allocation, the
conversion prices of the classes of capital stock shall thereafter be subject
to adjustment on terms comparable to those applicable to common stock in this
Indenture.
Section 1105. Notice of Adjustments of Conversion Price.
Whenever the conversion price is adjusted as herein provided:
(a) the Companies shall compute the adjusted conversion price in
accordance with Section 1104 and shall prepare a certificate
signed by the Treasurer of each Company setting forth the
adjusted conversion price and showing in reasonable detail the
facts upon which such adjustment is based,
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and such certificate shall forthwith be filed with the Trustee
and at each office or agency maintained for the purpose of
conversion of Securities pursuant to Section 1002; and
(b) a notice stating that the conversion price has been adjusted
and setting forth the adjusted conversion price shall
forthwith be required, and as soon as practicable after it is
required, such notice shall be mailed by the Companies to all
Holders at their last addresses as they shall appear in the
Security Register.
Section 1106. Companies to Reserve Stock.
Each of the Trust and the Corporation shall at all times
reserve and keep available, free from preemptive rights, out of its authorized
but unissued Trust Shares and Corporation Shares, respectively, for the purpose
of effecting the conversion of Securities, the full number of Trust Shares and
Corporation Shares, respectively, then issuable upon the conversion of all
outstanding Securities.
Section 1107. Taxes on Conversions.
The Companies will pay any and all taxes that may be payable
in respect of the issue or delivery of Paired Shares on conversion of
Securities pursuant hereto. The Companies shall not, however, be required to
pay any tax which may be payable in respect of any transfer involved in the
issue and delivery of Paired Shares in a name other than that of the Holder of
the Security or Securities to be converted, and no such issue or delivery shall
be made unless and until the Person requesting such issue has paid to the
Companies the amount of any such tax, or has established to the satisfaction of
the Companies that such tax has been paid.
Section 1108. Covenant as to Stock.
Each of the Trust and the Corporation covenants that all Trust
Shares and Corporation Shares, respectively, which may be issued by it upon
conversion of Securities will upon issue be fully paid and nonassessable and,
except as provided in Section 1107, it will pay all taxes, liens and charges
with respect to the issue thereof.
Section 1109. Cancellation of Converted Securities.
All Securities delivered for conversion shall be delivered to
the Trustee to be cancelled by or at the direction of the Trustee, which shall
dispose of the same as provided in Section 309.
Section 1110. Provisions in Case of Consolidation, Merger or Sale of Assets.
In case of any consolidation of either Company with, or merger
of either Company into, any other Person, any merger of another Person into
either Company (other than a merger which does not result in any
reclassification, conversion, exchange or cancellation of outstanding Trust
Shares or Corporation Shares of such Company) or any sale or transfer of all or
substantially all of the assets of either Company, the Person formed by such
consolidation or resulting from such merger or which acquires such assets, as
the case may be, shall execute and deliver to the Trustee a supplemental
indenture providing that the Holder of each Security then outstanding shall
have the right thereafter to convert such Security into the kind and amount of
securities, cash and other property receivable upon such consolidation, merger,
sale or transfer by a holder of the number of Paired Shares into which such
Security might have been converted immediately prior to such consolidation,
merger, sale or transfer. The above provisions of this Section shall similarly
apply to successive consolidations, mergers, sales or transfers.
Section 1111. Trustee not Responsible for Determining Conversion Price or
Adjustments.
Neither the Trustee nor any conversion agent shall at any time
be under any duty or responsibility to any Holder of any Security to determine
whether any facts exist which may require any adjustment of the conversion
price, or with respect to the nature or extent of any such adjustment when
made, or with respect to the method employed, herein or in any supplemental
indenture provided to be employed, in making the same. Neither
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<PAGE> 47
the Trustee nor any conversion agent shall be accountable with respect to the
validity or value (or the kind of amount) of any Paired Shares or of any
securities or property, which may at any time be issued or delivered upon the
conversion of any Security; and neither the Trustee nor any conversion agent
makes any representation with respect thereto. Neither the Trustee nor any
conversion agent shall be responsible for any failure of a Company to make any
cash payment or to issue, transfer or deliver any Paired Shares or stock
certificates or other securities or property upon the surrender of any Security
for the purpose of conversion, or, except as expressly herein provided, to
comply with any of the covenants of a Company contained in Article Ten or this
Article Eleven.
_________________________
This instrument 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 instrument.
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<PAGE> 48
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.
Attest: STARWOOD LODGING TRUST
________________________________ By:________________________________
Secretary
Attest: STARWOOD LODGING CORPORATION
________________________________ By:________________________________
Secretary
Attest: _____________________________________,
AS TRUSTEE
________________________________ By:________________________________
Secretary
-41-
<PAGE> 49
State of ______________________)
) SS.:
County of _____________________)
On the __th day of __________, 199_, before me personally came
____________________, to me known, who being by me duly sworn, did depose and
say that he is ________________ of Starwood Lodging Trust, the trust described
in and which executed the foregoing instrument; that he knows the seal of said
trust; that the seal affixed to said instrument is such trust seal; that it was
so affixed by authority of the Board of Trustees of said trust, and that he
signed his name thereto by like authority.
_____________________________________
Notary Public
On the __th day of __________, 199_, before me personally came
____________________, to me known, who being by me duly sworn, did depose and
say that he is ________________ of Starwood Lodging Corporation, the
corporation 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 corporation 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.
_____________________________________
Notary Public
On the __th day of __________, 199_, before me personally came
____________, to me known, who being by me duly sworn, did depose and say that
he/she is a Vice President of _____________________, 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.
_____________________________________
Notary Public
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<PAGE> 1
Exhibit 12.1
Starwood Lodging Trust and Starwood Lodging Corporation
Combined Computation of Ratio of Earnings to Fixed Charges
<TABLE>
<CAPTION>
9 Months
Ending 12 Months Ending
-------------------------------------------------------------------------------------------
9-30-95 12-31-94 12-31-93 12-31-92 12-31-91 12-31-90
--------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C>
Income from continuing operations
before provision for income taxes $12,348,000 $(4,663,000) $(7,032,000) $(19,743,000) $(22,084,000) $(27,586,000)
Add
Amortization of debt issuance
costs 414,000 86,000 -- -- -- --
Interest expense 11,198,000 17,606,000 15,187,000 14,208,000 16,458,000 16,408,000
-------------------------------------------------------------------------------------------
Income as adjusted 23,960,000 13,029,000 8,155,000 (5,535,000) (5,626,000) (11,178,000)
===========================================================================================
Fixed charges:
Interest expense 11,198,000 17,606,000 15,187,000 14,208,000 16,458,000 16,408,000
Amortization of debt issuance costs 414,000 86,000 -- -- -- --
-------------------------------------------------------------------------------------------
Total fixed charges $11,612,000 $17,692,000 $15,187,000 $14,208,000 $16,458,000 $16,408,000
============================================================================================
Ratio of Earnings to Fixed
Charges $2.06 $0.74 $0.54 $(0.39) $(0.34) $(0.68)
Earnings inadequate to cover
fixed charges by: n/a $4,663,000 $7,032,000 $19,743,000 $22,084,000 $27,586,000
</TABLE>
<PAGE> 1
Exhibit 23.1.(a)
INDEPENDENT AUDITORS' CONSENT
We consent to the incorporation by reference in this Amendment No. 1 to
Registration Statement Nos. 33-64335 and 33-64335-01 of Starwood Lodging Trust
and Starwood Lodging Corporation (the "Companies") on Form S-3 of our report
dated March 24, 1995 on the separate and combined financial statements and
financial statement schedules of the Companies appearing in the Companies'
Annual Report on Form 10-K for the year ended December 31, 1994 and of our
report dated March 24, 1995 on the financial statements of the Doubletree
Club Hotel of Rancho Bernardo appearing in the Companies' Current Report on
Form 8-K/A dated January 31, 1995.
We also consent to the reference to us under the heading "Experts" in the
Prospectus, which is part of the Registration Statement.
DELOITTE & TOUCHE LLP
Los Angeles, California
February 1, 1996
<PAGE> 1
EXHIBIT 23.1.(b)
CONSENT OF INDEPENDENT ACCOUNTANTS
We hereby consent to the incorporation by reference in the Prospectus
constituting part of this Registration Statement on Form S-3 of our reports on
the financial statements of Embassy Suites - Tempe, Starwood Wichita Investors,
L. P., Capital Hill Suites, and French Quarter Square and the Schedules of
Operating Revenue and Certain Expenses for the French Quarter Square, which
appear on pages F126, F90-91, F112-113, F100 and F108, respectively, of the
Starwood Lodging Trust's and Starwood Lodging Corporation's joint Registration
Statement on Form S-2 dated June 29, 1995. We also consent to the references
to us under the heading "Expert" in such Prospectus:
<TABLE>
<CAPTION>
Property Date of Report
- -------- --------------
<S> <C>
Embassy Suites--Tempe ............................. May 25, 1995
Starwood Wichita Investors, L.P. .................. January 27, 1995
The French Quarter Square ......................... March 3, 1995
Except Note 7, which
is as of May 11, 1995
Capital Hill Suites ............................... March 2, 1995
</TABLE>
PRICE WATERHOUSE LLP
Dallas, Texas
January 31, 1996
<PAGE> 1
Exhibit 23.1.(c)
CONSENT OF INDEPENDENT ACCOUNTANTS
We consent to the reference to our firm under the caption "Experts" in the
Registration Statement on Form S-3 Nos. 33-64335 and 33-64335-01 and the
related Prospectus of Starwood Lodging Trust and Starwood Lodging Corporation
and to the incorporation by reference therein of our report dated May 25, 1995
with respect to the financial statements of Sheraton Colony Square Hotel as of
December 31, 1994 and 1993 and for each of the three years in the period ended
December 31, 1994 included in the Registration Statement (Form S-3 Nos. 33-64335
and 33-64335-01) and filed with the Securities and Exchange Commission.
Ernst & Young LLP
Los Angeles, California
February 1, 1996
