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AS FILED WITH THE SECURITIES AND EXCHANGE COMMISSION ON DECEMBER 11, 1996
REGISTRATION NO. 333-09711
- --------------------------------------------------------------------------------
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
---------------------------
AMENDMENT NO. 1
TO
FORM S-3
REGISTRATION STATEMENT UNDER THE SECURITIES ACT OF 1933
---------------------------
EASTGROUP PROPERTIES
(Exact name of registrant as specified in its charter)
MARYLAND 13-2711135
(State or other jurisdiction (I.R.S. Employer
of incorporation or organization) Identification No.)
300 ONE JACKSON PLACE
188 EAST CAPITOL STREET
JACKSON, MISSISSIPPI 39201-2195
(601) 354-3555
(Address, including zip code, and telephone number,
including area code, of registrant's principal executive offices)
DAVID H. HOSTER II, PRESIDENT
300 ONE JACKSON PLACE
188 EAST CAPITOL STREET
JACKSON, MISSISSIPPI 39201-2195
(601) 354-3555
(Name, address, including zip code, and telephone number,
including area code, of agent for service)
---------------------------
Copies to:
JOSEPH P. KUBAREK, ESQ.
JAECKLE, FLEISCHMANN & MUGEL
800 FLEET BANK BUILDING
12 FOUNTAIN PLAZA
BUFFALO, NEW YORK 14202
(716) 856-0600
APPROXIMATE DATE OF COMMENCEMENT OF PROPOSED SALE TO THE PUBLIC: AS SOON AS
PRACTICABLE AFTER THE EFFECTIVE DATE OF THIS REGISTRATION STATEMENT.
IF THE ONLY SECURITIES BEING REGISTERED ON THIS FORM ARE BEING OFFERED
PURSUANT TO A DIVIDEND OR INTEREST REINVESTMENT PLAN, 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 (THE "SECURITIES ACT"), OTHER THAN THE SECURITIES OFFERED ONLY IN
CONNECTION WITH DIVIDEND OR INTEREST REINVESTMENT PLANS, CHECK THE FOLLOWING
BOX. [X]
IF THIS FORM IS FILED TO REGISTER ADDITIONAL SECURITIES FOR AN OFFERING
PURSUANT TO RULE 462(b) UNDER THE SECURITIES ACT, PLEASE CHECK THE FOLLOWING BOX
AND LIST THE SECURITIES ACT REGISTRATION STATEMENT NUMBER OF THE EARLIER
EFFECTIVE REGISTRATION STATEMENT FOR THE SAME OFFERING. [ ]
IF THIS FORM IS A POST-EFFECTIVE AMENDMENT FILED PURSUANT TO RULE 462(c)
UNDER THE SECURITIES ACT, CHECK THE FOLLOWING BOX AND LIST THE SECURITIES ACT
REGISTRATION STATEMENT NUMBER OF THE EARLIER EFFECTIVE REGISTRATION STATEMENT
FOR THE SAME OFFERING. [ ]
IF DELIVERY OF THE PROSPECTUS IS EXPECTED TO BE MADE PURSUANT TO RULE 434,
PLEASE CHECK THE FOLLOWING BOX. [ ]
THE REGISTRANT HEREBY AMENDS THIS REGISTRATION STATEMENT ON SUCH DATE OR
DATES AS MAY BE NECESSARY TO DELAY ITS EFFECTIVE DATE UNTIL THE REGISTRANT SHALL
FILE A FURTHER AMENDMENT WHICH SPECIFICALLY STATES THAT THIS REGISTRATION
STATEMENT SHALL THEREAFTER BECOME EFFECTIVE IN ACCORDANCE WITH SECTION 8(a) OF
THE SECURITIES ACT OF 1933 OR UNTIL THIS REGISTRATION
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STATEMENT SHALL BECOME EFFECTIVE ON SUCH DATE AS THE COMMISSION, ACTING PURSUANT
TO SAID SECTION 8(a), MAY DETERMINE.
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EXPLANATORY NOTE
This Registration Statement relates to securities which may be offered from
time to time by EastGroup Properties ("EastGroup"). This Registration Statement
contains a form of basic prospectus (the "Basic Prospectus") relating to
EastGroup which will be used in connection with an offering of securities by
EastGroup. The specific terms of the securities to be offered will be set forth
in a prospectus supplement relating to such securities (the "Prospectus
Supplement").
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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.
DATED DECEMBER ___, 1996
PROSPECTUS
$100,000,000
SHARES OF BENEFICIAL INTEREST, PREFERRED SHARES,
DEPOSITARY SHARES AND
DEBT SECURITIES
-------------------------
EastGroup Properties ("EastGroup") may from time to time offer
in one or more series or classes (i) shares of its beneficial interest, par
value $1.00 per share (the "Shares of Beneficial Interest"); (ii) its preferred
shares (the "Preferred Shares"); (iii) Preferred Shares represented by
Depositary Shares (the "Depositary Shares"); and (iv) unsecured convertible debt
securities ("Debt Securities"), with an aggregate public offering price of up to
$100,000,000 in amounts, at prices and on terms to be determined at the time of
offering. The Shares of Beneficial Interest, Preferred Shares, Depositary Shares
and Debt Securities (collectively, the "Securities") may be offered, separately
or together, 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 Shares of
Beneficial Interest, any public offering price; (ii) in the case of Preferred
Shares, the specific title and stated value, any dividend, liquidation,
redemption, conversion, voting and other rights, and any public offering price;
(iii) in the case of Depositary Shares, the fractional share of Preferred Shares
represented by each such Depository Share; 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
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of interest, terms for redemption at the option of EastGroup 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
EastGroup as a real estate investment trust ("REIT") for federal income tax
purposes.
The applicable Prospectus Supplement will also contain
information, where applicable, about certain United States federal income tax
considerations relating to, and any listing on a securities exchange of, the
Securities covered by such Prospectus Statement.
SEE "RISK FACTORS" ON PAGE 2 FOR A DISCUSSION OF CERTAIN
FACTORS THAT SHOULD BE CONSIDERED IN EVALUATING WHETHER TO MAKE AN INVESTMENT IN
THE SECURITIES DESCRIBED HEREIN.
The Securities may be offered directly, through agents
designated from time to time by EastGroup, 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 the applicable Prospectus
Supplement. See "Plan of Distribution." No Securities may be sold without
delivery of the applicable Prospectus Supplement describing the method and terms
of the offering of such series of Securities.
----------------
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.
----------------
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 _________________, 1996.
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AVAILABLE INFORMATION
EastGroup is subject to the informational requirements of the
Securities Exchange Act of 1934, as amended (the "Exchange Act"), and in
accordance therewith files reports, proxy statements and other information with
the Securities and Exchange Commission (the "SEC"). Such reports, proxy
statements and other information filed by EastGroup may be inspected at, and,
upon payment of the SEC's customary charges, copies obtained from, the Public
Reference Section of the SEC, 450 Fifth Street, N.W., Washington, DC 20549. Such
reports, proxy statements and other information are also available for
inspection and copying at prescribed rates at the SEC's regional offices in New
York, New York (Seven World Trade Center, 13th Floor, New York, New York 10048)
and in Chicago, Illinois (Suite 1400, Citicorp Center, 500 West Madison Street,
Chicago, Illinois 60661-2511). The SEC maintains a Web site (http://www.sec.gov)
that also contains reports, proxy statements and other information concerning
EastGroup. In addition, the Shares of Beneficial Interest are traded on the New
York Stock Exchange, Inc. ("NYSE") under the symbol "EGP" and can be inspected
and copied at the offices of the NYSE, 20 Broad Street, New York, New York
10005.
EastGroup has filed with the SEC a Registration Statement on
Form S-3 (the "Registration Statement") under the Securities Act of 1933, as
amended (the "Securities Act"), and the rules and regulations promulgated
thereunder, with respect to the Securities. This Prospectus constitutes the
Prospectus of EastGroup, filed as part of the Registration Statement. As
permitted by the rules and regulations of the SEC, this Prospectus omits certain
information contained in the Registration Statement, and reference is made to
the Registration Statement and the exhibits listed therein, which can be
inspected at the public reference facilities of the SEC noted above, and copies
of which can be obtained from the SEC at prescribed rates as indicated above.
NO PERSON HAS BEEN AUTHORIZED TO GIVE ANY INFORMATION OR TO
MAKE ANY REPRESENTATION OTHER THAN AS CONTAINED HEREIN IN CONNECTION WITH THE
MATTERS DESCRIBED HEREIN AND, IF GIVEN OR MADE, SUCH INFORMATION OR
REPRESENTATION MUST NOT BE RELIED UPON AS HAVING BEEN AUTHORIZED BY EASTGROUP.
NEITHER THE DELIVERY HEREOF NOR ANY DISTRIBUTION OF SECURITIES MADE HEREUNDER
SHALL, UNDER ANY CIRCUMSTANCES, CREATE AN IMPLICATION THAT THERE HAS BEEN NO
CHANGE IN THE FACTS HEREIN SET FORTH SINCE THE DATE HEREOF. THIS PROSPECTUS DOES
NOT CONSTITUTE AN OFFER TO SELL OR A SOLICITATION OF AN OFFER TO BUY THE
SECURITIES OFFERED BY THIS PROSPECTUS IN ANY JURISDICTION WHERE, OR TO ANY
PERSON TO WHOM, IT IS UNLAWFUL TO MAKE SUCH AN OFFER OR SOLICITATION.
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INCORPORATION OF CERTAIN DOCUMENTS BY REFERENCE
Incorporated into this Prospectus by reference are the documents listed
below filed by EastGroup under the Exchange Act. Copies of any such documents,
other than exhibits to such documents, are available without charge to each
person to whom a copy of this Prospectus has been delivered upon written or oral
request of such person from EastGroup, 300 One Jackson Place, 188 East Capitol
Street, Jackson, Mississippi 39201-2195, Attention: Chief Financial Officer,
telephone number (601) 354-3555.
The following documents or portions thereof are hereby incorporated into
this Prospectus by reference:
1. EastGroup's Annual Report on Form 10-K for the year ended December 31,
1995 (Commission file No. 1-7094).
2. Amendment No. 1 to EastGroup's Form 10-K for the year ended December
31, 1995 (Commission file No. 1-7094).
3. EastGroup's Quarterly Report on Form 10-Q for the quarter ended March
31, 1996 (Commission file No. 1-7094).
4. EastGroup's Quarterly Report on Form 10-Q for the quarter ended June
30, 1996 (Commission file No. 1-7094).
5. Amendment No. 1 to EastGroup's Quarterly Report on Form 10-Q for the
quarter ended June 30, 1996 (Commission file No. 1-7094).
6. EastGroup's Current Report on Form 8-K dated May 14, 1996 (Commission
file No. 1-7094).
7. EastGroup's Current Report on Form 8-K dated June 19, 1996 (Commission
file No. 1-7094).
8. EastGroup's Quarterly Report on Form 10-Q for the quarter ended
September 30, 1996 (Commission file No. 1-7094).
All documents filed by EastGroup pursuant to Sections 13(a), 13(c), 14 or
15(d) of the Exchange Act after the date of this Prospectus and prior to the
termination of the offering shall be deemed to be incorporated by reference
herein and to be a part hereof from the respective dates of the filing thereof.
Any statement contained in a document incorporated or deemed to be incorporated
by reference herein shall be deemed to be modified or superseded for
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purposes of this Prospectus to the extent that a statement contained herein, or
in any other subsequently filed document that also is or is 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.
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<TABLE>
<CAPTION>
TABLE OF CONTENTS
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PAGE
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<S> <C>
THE COMPANY..................................................................................................... 1
RISK FACTORS.................................................................................................... 2
Risks of Real Estate Ownership........................................................................ 2
Tenant Defaults....................................................................................... 2
Americans with Disabilities Act....................................................................... 3
Risk of Catastrophic Loss............................................................................. 3
Possible Environmental Liabilities.................................................................... 4
Continuation of REIT Status........................................................................... 5
Competition........................................................................................... 6
Risks Associated with Rapid Growth.................................................................... 6
Substantial Debt Obligations.......................................................................... 6
RATIO OF EARNINGS TO FIXED CHARGES.............................................................................. 7
USE OF PROCEEDS................................................................................................. 7
DESCRIPTION OF DEBT SECURITIES.................................................................................. 8
General .............................................................................................. 8
Denominations, Interest, Registration and Transfer.................................................... 12
Merger, Consolidation or Sale......................................................................... 13
Certain Covenants..................................................................................... 13
Events of Default, Notice and Waiver.................................................................. 15
Modification of the Indenture......................................................................... 17
Discharge, Defeasance and Covenant Defeasance......................................................... 19
Conversion Rights..................................................................................... 22
Global Securities..................................................................................... 22
DESCRIPTION OF PREFERRED SHARES................................................................................. 23
General .............................................................................................. 23
Terms ................................................................................................ 23
Rank ................................................................................................. 24
Dividends............................................................................................. 25
Redemption............................................................................................ 26
Liquidation Preference................................................................................ 28
Voting Rights......................................................................................... 29
Conversion Rights..................................................................................... 30
</TABLE>
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<TABLE>
<CAPTION>
<S> <C>
Shareholder Liability................................................................................. 30
Restrictions on Ownership............................................................................. 31
Registrar and Transfer Agent.......................................................................... 31
DESCRIPTION OF DEPOSITARY SHARES................................................................................ 31
General .............................................................................................. 31
Dividends and Other Distributions..................................................................... 32
Withdrawal of Stock................................................................................... 32
Redemption of Depositary Shares....................................................................... 33
Voting of the Preferred Shares........................................................................ 33
Liquidation Preference................................................................................ 34
Conversion of Preferred Shares........................................................................ 34
Amendment and Termination of a Deposit Agreement...................................................... 35
Charges of a Preferred Shares Depositary.............................................................. 36
Resignation and Removal of Depositary................................................................. 36
Miscellaneous......................................................................................... 36
DESCRIPTION OF SHARES OF BENEFICIAL INTEREST.................................................................... 37
General .............................................................................................. 37
Provisions of EastGroup's Restated Declaration of Trust, as Amended, and
Trustees Regulations.......................................................................... 38
Other Matters......................................................................................... 38
Restrictions on Transfer.............................................................................. 38
FEDERAL INCOME TAX CONSIDERATIONS............................................................................... 40
Introductory Notes.................................................................................... 40
Taxation of the Company............................................................................... 41
Taxation of Stockholders.............................................................................. 45
PLAN OF DISTRIBUTION............................................................................................ 49
EXPERTS ...................................................................................................... 50
LEGAL MATTERS................................................................................................... 51
</TABLE>
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THE COMPANY
EastGroup is a real estate investment trust ("REIT") which is qualified
under the Internal Revenue Code of 1986, as amended (the "Code"), and formed
under the laws of the state of Maryland. EastGroup owns a portfolio of income
producing real estate properties, with a primary emphasis in industrial
properties. Geographically, EastGroup is concentrated in the Sunbelt markets of
the United States with a special emphasis in the states of California, Florida,
Texas and Arizona. At September 30, 1996, EastGroup owned or had an interest
in twenty-eight industrial facilities, four office buildings and eight
apartment complexes.
Through EastGroup's participation in recent business combinations (i.e. LNH
REIT, Inc. ("LNH") merged with and into a wholly-owned subsidiary of EastGroup
on May 14, 1996 and Copley Properties, Inc. ("Copley") merged with and into
EastGroup on June 19, 1996), EastGroup has expanded its portfolio of industrial
and office properties and enhanced its presence in the Sunbelt region of the
southern United States (primarily in the states of California, Florida,
Texas and Arizona). Pursuant to these business combinations, EastGroup
acquired twelve industrial and office properties encompassing 2,150,000 square
feet of leasable space and which were, at September 30, 1996, 98% leased. As a
result of these mergers and subsequent property acquisitions, EastGroup's
portfolio of industrial and office properties has expanded to 5,502,000 square
feet of leasable space which, at September 30, 1996, was 97% leased. As a
result of EastGroup's business combinations with Copley and LNH, EastGroup
believes that it is one of the larger publicly held owners and operators of
industrial and office properties in the Sunbelt region of the United States.
The mergers have also had the effect of increasing EastGroup's number of
Shares of Beneficial Interest outstanding from 4,245,000 to 7,027,000 as of
December 3, 1996. Assuming a stock price of $27.125, the closing price on
December 3, 1996, the value of EastGroup's outstanding Shares of Beneficial
Interest has increased 110% from $90,737,000 prior to the mergers to
$190,607,000 following the mergers.
EastGroup's offices are located at 300 One Jackson Place, 188 East Capitol
Street, Jackson, Mississippi 39201-2195. Its telephone number is (601) 354-3555.
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RISK FACTORS
RISKS OF REAL ESTATE OWNERSHIP
EastGroup's assets primarily consist of equity investments in
various types of real property. Stockholders of EastGroup are subject to the
risks inherent in the ownership and management of real property owned by
EastGroup. These risks include, among others: adverse changes in general or
local economic conditions; adverse changes in interest rates and in the
availability of permanent mortgage funds which may render the acquisition, sale
or refinancing of properties difficult or unattractive; existing law, rules and
regulations and judicial decisions regarding liability for a variety of
potential problems related to real estate generally; adverse changes in real
estate, zoning, environmental or land-use laws; increases in real property taxes
and federal or local economic or rent controls; other governmental rules;
increases in operating costs and the need for additional capital and tenant
improvements; the supply of and demand for properties; possible insolvencies and
other material defaults by tenants; overbuilding in certain markets; ability to
obtain or maintain full occupancy of properties or to provide for adequate
maintenance or insurance; the presence of hazardous waste materials; mechanics
liens resulting from construction; property related claims and litigation;
fiscal policies; and acts of God. The illiquidity of real estate investments
generally impairs the ability of real estate owners to respond quickly to
changed circumstances.
Additionally, a substantial percentage of EastGroup's
properties are located in the Sunbelt region of the United States (particularly
the states of California, Florida, Texas and Arizona) and such properties
consist predominantly of industrial and office properties. EastGroup's
performance therefore will be linked to economic conditions in the Sunbelt and
to the market for industrial and office space generally. To the extent that
these conditions impact the market rents for industrial and office space, they
could result in a reduction of net income, funds from operations ("FFO"), and
cash available for distribution and thus affect the amount of distributions
EastGroup can make to its stockholders.
Certain significant expenditures associated with investments
in real estate (such as mortgage payments, real estate taxes, insurance and
maintenance costs) are generally not reduced when circumstances cause a
reduction in rental revenues from the property. In addition, real estate values
and yields from investments in properties may also be affected by such factors
as conditions in financial markets, environmental conditions and compliance with
laws.
TENANT DEFAULTS
A substantial part of EastGroup's income is expected to be
derived from rental income from real property. Consequently, EastGroup's ability
to make expected distributions
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to stockholders would be adversely affected if a significant number of tenants
failed to meet their lease obligations. In the event of a default by a lessee,
EastGroup may experience delays in enforcing its rights as lessor and may incur
substantial costs in protecting its investment. At any time, a tenant may also
seek protection under the bankruptcy laws, which could result in rejection and
termination of such tenant's lease and thereby cause a reduction in the cash
available for distribution by EastGroup. If a tenant rejects its lease,
EastGroup's claim for breach of the lease would (absent collateral securing the
claim) be treated as a general unsecured claim. The amount of the claim would be
capped at the amount owed for unpaid pre-petition lease payments unrelated to
the rejection, plus the greater of one year's lease payment or 15% of the
remaining lease payments payable under the lease (but not to exceed the amount
of three years' lease payments).
AMERICANS WITH DISABILITIES ACT
Under the Americans with Disabilities Act of 1990, as amended
(the "ADA"), all public accommodations are required to meet certain federal
requirements related to access and use by disabled persons. Existing industrial
properties generally are not deemed to be public accommodations and, hence, are
exempt from many of the provisions of the ADA. Compliance with the public
accommodations provisions of the ADA could require the removal of access
barriers, and noncompliance could result in the imposition of fines or awards of
damages. Additional legislation may impose further burdens or restrictions on
owners with respect to access by disabled persons. The ultimate amount of the
cost of compliance with the ADA or such legislation is not currently
ascertainable, and, while such costs are not expected to have a material effect
on EastGroup, such costs could be substantial.
RISK OF CATASTROPHIC LOSS
EastGroup has obtained, or has caused tenants to obtain,
comprehensive liability, fire and extended coverage insurance with respect to
its properties, of the types and in the amounts customarily obtained for similar
properties. There are, however, certain types of losses (generally of a
catastrophic nature, such as earthquakes, floods and wars) that may be either
uninsurable or not economically insurable. Should such an uninsured loss occur,
EastGroup could lose both its invested capital and anticipated profits relating
to such property.
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POSSIBLE ENVIRONMENTAL LIABILITIES
Under various federal, state and local laws, ordinances and
regulations, an owner of real estate is liable for the costs of removal or
remediation of certain hazardous or toxic substances on or in such property.
Such laws often impose such liability without regard to whether the owner knew
of, or was responsible for, the presence of such hazardous or toxic substances.
The presence of such substances, or the failure to properly remediate such
substances, may adversely affect the owner's ability to sell or rent such
property or to use such property as collateral in its borrowings. All of
EastGroup's properties have been subjected to environmental audits by
independent environmental consultants. With the exception of two properties, one
commonly known and numbered as the Kingsview Industrial Center, 17120 South
Kingsview Avenue, Carson, California ("Kingsview"), a portion of which is used
for purposes of operating an oil and gas well and pipeline, and the other,
commonly known as Cowesett Corners Shopping Center, 300 Cowesett Road at Route
2, Warwick, Rhode Island ("Cowesett"), portions of which are used for purposes
of operating a drycleaning business and paint store, these environmental audit
reports have not revealed any potential significant environmental liability, nor
is management of EastGroup aware of any environmental liability with respect to
the properties that such management believes would have a material adverse
effect on EastGroup's business, assets or results of operations.
Preliminary environmental studies performed at the Kingsview
property indicated that oil and certain hazardous materials have been released
at Kingsview in connection with the oil and gas operations formerly conducted at
Kingsview by a party unrelated to EastGroup who had an oil and gas lease with
respect to the Kingsview property and adjacent parcels. Such preliminary
environmental studies consisted of a preliminary site assessment and a
subsurface investigation undertaken by Applied GeoSciences, Inc. ("AGI"), an
environmental consultant with offices in Tustin, California. Pursuant to the oil
and gas lease, the operator agreed to indemnify and hold EastGroup, as successor
to the lessor, harmless from any claims or demands for injury to persons or
property resulting from or in any way connected with its operations under such
oil and gas lease. The operator engaged its own environmental consultant, the
Reynolds Group of Tustin, California, to undertake an additional site assessment
and subsurface investigation of the property. The operator has verbally
represented to EastGroup that the Reynolds Group concurs with AGI's assessment
that such contamination has affected only surface soil. Based upon advice from
AGI, management of EastGroup believes that the cost of remediation is between
$25,000 and $50,000.
Preliminary environmental studies performed at the Cowesett
property indicated that certain hazardous materials have been released at
Cowesett in connection with the drycleaning operations and paint store
operations conducted on part of the property by parties unrelated to EastGroup.
Such preliminary environmental studies included a Phase II investigation of the
Cowesett property. Based upon these studies, management of EastGroup believes
that the hazardous materials have been contained. EastGroup is continuing to
investigate the need for remediation at the Cowesett
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<PAGE> 15
property and based on current information, management of EastGroup believes that
the cost of such remediation is between $200,000 and $300,000. EastGroup owns a
50% joint venture interest in Cowesett, and any costs with respect to
environmental conditions at Cowesett will be shared equally with its joint
venture partner. No assurance can be given that existing environmental studies
with respect to any of the properties reveal all environmental liabilities or
that any prior owner of any such property did not create any material
environmental condition not known to EastGroup.
CONTINUATION OF REIT STATUS
EastGroup is a REIT. Stockholders of EastGroup will experience
the tax benefits available to REITs. Continuation of these tax benefits will
depend on EastGroup continuing to meet the various REIT qualification rules,
which include: (i) maintaining ownership of specified minimum levels of real
estate related assets; (ii) generating specified minimum levels of real estate
related income; (iii) maintaining certain ownership restrictions on the Shares
of Beneficial Interest; and (iv) distributing substantially all real estate
investment taxable income on an annual basis. Although management of EastGroup
believes that the consummation of the Offering should not affect EastGroup's
continuing ability to qualify as a REIT, no assurance can be given that
EastGroup will be able to continue to operate in a manner so as to qualify or
remain so qualified.
If EastGroup fails to qualify as a REIT, EastGroup will be
subject to federal income tax (including any applicable alternative minimum tax)
on its taxable income at corporate rates. In addition, unless entitled to relief
under certain statutory provisions, EastGroup will be disqualified from
treatment as a REIT for the four taxable years following the year during which
qualification is lost. This treatment would reduce the net earnings of EastGroup
available for investment or distribution to stockholders because of the
additional tax liability to EastGroup for the year or years involved. In
addition, distributions would no longer be required to be made. To the extent
that distributions to stockholders had been made in anticipation of EastGroup's
qualifying as a REIT, EastGroup might be required to borrow funds or to
liquidate certain of its investments to pay the applicable tax.
The failure to qualify as a REIT would have a material adverse
effect on an investment in EastGroup as the taxable income of EastGroup would be
subject to federal income taxation at corporate rates, and, therefore, the
amount of cash available for distribution to its stockholders would be reduced
or eliminated. See "Federal Income Tax Considerations--Taxation of the Company"
and "Federal Income Tax Considerations--Taxation of Stockholders."
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COMPETITION
Substantially all of the properties owned by EastGroup are
located in developed areas. There are numerous other industrial and office
properties and real estate companies within the market area of each such
property which compete with EastGroup for tenants and development and
acquisition opportunities. The number of competitive industrial and office
properties and real estate companies in such areas could have a material effect
on (i) EastGroup's ability to rent space at the properties and the amount of
rents currently charged and (ii) development and acquisition opportunities.
EastGroup will compete for tenants and acquisitions with others who have greater
resources than EastGroup.
RISKS ASSOCIATED WITH RAPID GROWTH
EastGroup is currently experiencing a period of rapid growth.
As a result of the mergers with LNH and Copley and subsequent property
acquisitions, EastGroup's industrial and office property portfolio has
increased from 18 properties at March 31, 1996, consisting of approximately
2,884,000 square feet of leasable space, to 32 properties at September 30,
1996, consisting of approximately 5,502,000 square feet of leasable space.
EastGroup's ability to manage its growth effectively will require it to
integrate successfully the new properties. The inability of EastGroup to
integrate the properties in a timely and efficient manner could have an
adverse effect on EastGroup's business.
SUBSTANTIAL DEBT OBLIGATIONS
EastGroup's debt obligations as a result of the mergers with
LNH and Copley increased from $69,787,000 as of March 31, 1996 to approximately
$138,665,000 as of September 30, 1996. The ratio of debt to total market
capitalization of EastGroup was 44% as of September 30, 1996, as compared to 43%
for EastGroup as of March 31, 1996. This increase in EastGroup's leverage and
its ratio of debt to total market capitalization may increase the risk of
default under its indebtedness. Failure to pay debt obligations when due could
result in EastGroup losing its interest in the properties collateralizing such
obligations. Certain of EastGroup's credit agreements provide that a default
with respect to any other indebtedness of the respective company shall cause an
event of default under the credit agreement and accelerate EastGroup's
obligations thereunder.
EastGroup believes that the ratio of debt to total market
capitalization is an important factor to consider in evaluating a REIT's debt
level because this ratio is one indicator of a company's ability to borrow
funds. EastGroup believes that using the ratio of debt to book value of assets
is not as reliable an indicator of a REIT's debt level because the book value of
a REIT's assets indicate only the depreciated value of the REIT's property
without consideration
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of the market value of such assets at a particular point in time. The use of the
ratio of debt to total market capitalization does have certain risks because the
total market capitalization of a company is more variable than book value
because it is dependent upon the current stock trading price of a company. For
example, a decrease in the value of a company's stock, for whatever reason, will
cause a corresponding increase in the ratio of debt to total market
capitalization. Accordingly, there can be no assurance that the use of the ratio
debt to total market capitalization in evaluating EastGroup's debt level will
adequately protect it from being highly leveraged. The risks associated with the
debt obligations of EastGroup may adversely affect the market price of Shares of
Beneficial Interest.
RATIO OF EARNINGS TO FIXED CHARGES
EastGroup's ratio of earnings to fixed charges for the nine
months ended September 30, 1996 was 2.2, for the six months ended June 30,
1996 was 2.4, for the three months ended March 31, 1996 was 2.7, for the year
ended December 31, 1995 was 2.2, for the year ended December 31, 1994 was 2.8,
for the year ended December 31, 1993 was 2.9, for the year ended December 31,
1992 was (0.3) and for the year ended December 31, 1991 was 2.9. There was no
preferred stock outstanding for any of the periods shown above. Accordingly, the
ratio of earnings to combined fixed charges and preferred stock dividends is
identical to the ratio of earnings to fixed charges.
For purposes of computing these ratios, earnings have been
calculated by adding fixed charges, excluding capitalized interest, to pre-tax
income from continuing operations (net income or loss). Fixed charges consist of
interest costs, whether expensed or capitalized, the interest component of
rental expense and amortization of debt issuance costs.
USE OF PROCEEDS
EastGroup intends to use the net proceeds from the Offering
for working capital purposes including, without limitation, the acquisition and
development of real estate properties, whether by acquisition of properties
directly or through potential business combination transactions, and the
repayment of debt. Pending application of the net proceeds, EastGroup will
invest such proceeds in interest-bearing accounts and short-term,
interest-bearing securities, which are consistent with EastGroup's intention to
continue to qualify for taxation as a REIT. Such investments may include, for
example, certificates of deposit, interest-bearing bank deposits and mortgage
loan participations.
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DESCRIPTION OF DEBT SECURITIES
The Debt Securities will be issued under an Indenture (the
"Indenture"), between EastGroup and a trustee (the "Trustee") chosen by
EastGroup and qualified to act as Trustee under the Trust Indenture Act of 1939,
as amended (the "TIA"). The Indenture has been filed as an exhibit to the
Registration Statement of which this Prospectus is a part and will be available
for inspection at the corporate trust office of the Trustee or as described
above under "Available Information." The Indenture is subject to, and governed
by, the TIA. The statements made hereunder relating to the Indenture and the
Debt Securities to be issued thereunder are summaries of certain 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 Indenture and such Debt
Securities. All section references appearing herein are to sections of the
Indenture, and capitalized terms used but not defined herein shall have the
respective meanings set forth in the Indenture.
GENERAL
The Debt Securities will be direct, unsecured obligations of
EastGroup and will rank equally with all other unsecured and unsubordinated
indebtedness of EastGroup. At September 30, 1996, the total outstanding debt of
EastGroup was approximately $139 million, all of which was unsubordinated
indebtedness and secured debt. The Debt Securities may be issued without limit
as to aggregate principal amount, in one or more series, in each case as
established from time to time in or pursuant to authority granted by a
resolution of the Board of Trustees of EastGroup or as established in one or
more indentures supplemental to the Indenture. All Debt Securities of one series
need not be issued at the same time and, unless otherwise provided, a series may
be reopened, without the consent of the holders of the Debt Securities of such
series, for issuance of additional Debt Securities of such series (Section 3.1).
The Indenture provides that there may be more than one Trustee
thereunder, each with respect to one or more series of Debt Securities. Any
Trustee under the Indenture may resign or be removed with respect to one or more
series of Debt Securities, and a successor Trustee may be appointed to act with
respect to such series (Section 6.8). 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 Indenture separate and apart
from the trust administered by any other Trustee (Section 6.9), 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
Indenture.
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Reference is made to the Prospectus Supplement relating to the series
of Debt Securities offered thereby for the specific terms thereof, including:
(i) the title of such Debt Securities;
(ii) the aggregate principal amount of such Debt Securities and any
limit on such aggregate principal amount;
(iii) 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;
(iv) the date or dates, or the method for determining such date or
dates, on which the principal of such Debt Securities will be payable;
(v) 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;
(vi) 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;
(vii) 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 registration of transfer or exchange and
notices or demands to or upon EastGroup in respect of such Debt Securities and
the Indenture may be served;
(viii) 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, in
whole or in part, at the option of EastGroup, if EastGroup is to have such an
option;
(ix) the obligation, if any, of EastGroup 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, in whole or in part, pursuant
to such obligation;
(x) if other than U.S. dollars, the currency or currencies in which
such Debt Securities are denominated and payable, which may be a foreign
currency or units of two
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or more foreign currencies or a composite currency or currencies, and the terms
and conditions relating thereto;
(xi) 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 of composite currency or currencies) and the manner in which such amounts
shall be determined;
(xii) the events of default or covenants of such Debt
Securities, to the extent different from or in addition to those described
herein;
(xiii) whether such Debt Securities will be issued in
certificated and/or book-entry form;
(xiv) whether such Debt Securities will be in registered or
bearer form and, if in registered form, the denominations thereof if other than
$1,000 and any integral multiple thereof and, if in bearer form, the
denominations thereof if other than $5,000 and terms and conditions relating
thereto;
(xv) the applicability, if any, of the defeasance and covenant
defeasance provisions described herein, or any modification thereof;
(xvi) whether and under what circumstances EastGroup will pay
additional amounts on such Debt Securities in respect of any tax, assessment or
governmental charge and, if so, whether EastGroup will have the option to redeem
such Debt Securities in lieu of making such payment;
(xvii) with respect to any Debt Securities that provide for
optional redemption or prepayment upon the occurrence of certain events (such as
a change of control of EastGroup), (a) the possible effects of such provisions
on the market price of EastGroup's securities or in deterring certain mergers,
tender offers or other takeover attempts, and the intention of EastGroup to
comply with the requirements of Rule 14e-1 under the Exchange Act and any other
applicable securities laws in connection with such provisions; (b) whether the
occurrence of the specified events may give rise to cross-defaults on other
indebtedness such that payment on such Debt Securities may be effectively
subordinated; and (c) the existence of any limitations on EastGroup's financial
or legal ability to repurchase such Debt Securities upon the occurrence of such
an event (including, if true, the lack of assurance that such a repurchase can
be effected) and the impact, if any, under the Indenture of such a failure,
including whether and under what circumstances such a failure may constitute an
Event of Default; and
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(xviii) any other terms of such Debt Securities not
inconsistent with the terms of the Indenture.
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 U.S. federal income tax, accounting and other considerations applicable
to Original Issue Discount Securities will be described in the applicable
Prospectus Supplement.
Except as described under "--Merger, Consolidation or Sale" below or as
may be set forth in any Prospectus Supplement, the Indenture does not contain
any other provisions that would limit the ability of EastGroup 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 EastGroup
or any affiliate of EastGroup; (ii) a change of control; or (iii) a
reorganization, restructuring, merger or similar transaction involving EastGroup
that may adversely affect the holders of the Debt Securities. In addition,
subject to the limitations set forth under "--Merger, Consolidation or Sale"
below, EastGroup may, in the future, enter into certain transactions, such as
the sale of all or substantially all of its assets or the merger or
consolidation of EastGroup, that would increase the amount of EastGroup's
indebtedness or substantially reduce or eliminate EastGroup's assets, which may
have an adverse effect on EastGroup's ability to service its indebtedness,
including the Debt Securities. In addition, restrictions on ownership and
transfers of Shares of Beneficial Interest and Preferred Shares are designed to
preserve its status as a REIT and, therefore, may act to prevent or hinder a
change of control. See "Description of Shares of Beneficial
Interest--Restrictions on Transfer" and "Description of Preferred Shares--
Restrictions on Ownership." 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.
Reference is made to "--Certain Covenants" below and to the description
of any additional covenants with respect to a series of Debt Securities in the
applicable Prospectus Supplement. Except as otherwise described in the
applicable Prospectus Supplement, compliance with such covenants generally may
not be waived with respect to a series of Debt Securities by the Board of
Trustees of EastGroup or by the Trustee unless the Holders of at least a
majority in principal amount of all outstanding Debt Securities of such series
consent to such waiver, except to the extent that the defeasance and covenant
defeasance provisions of the Indenture described under "--Discharge, Defeasance
and Covenant Defeasance" below apply to such series of Debt Securities. See
"--Modification of the Indenture."
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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
and the Debt Securities which are bearer securities, other than bearer
securities issued in global form (which may be of any denomination), shall be
issuable in denominations of $5,000 (Section 3.2).
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, provided that, at
the option of EastGroup, payment of interest may be made by check mailed to the
address of the Person entitled thereto as it appears in the applicable Security
Register or by wire transfer of funds to such Person at an account maintained
within the United States (Sections 3.1, 3.7 and 10.2).
Any interest not punctually paid or duly provided for on any Interest
Payment Date with respect to a Debt Security ("Defaulted Interest") will
forthwith cease to be payable to the Holder on the applicable Regular Record
Date and 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 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. In addition,
subject to certain limitations imposed upon Debt Securities issued in book entry
form, the Debt Securities of any series may be surrendered for registration of
transfer thereof at the corporate trust office of the Trustee. Every Debt
Security surrendered for 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 or EastGroup may require payment of a sum sufficient
to cover any tax or other governmental charge payable in connection therewith
(Section 3.5). If the applicable Prospectus Supplement refers to any transfer
agent (in addition to the Trustee) initially designated by EastGroup with
respect to any series of Debt Securities, EastGroup 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 EastGroup will be
required to maintain a transfer agent in each place of payment for such series.
EastGroup may at any time designate additional transfer agents with respect to
any series of Debt Securities (Section 10.2).
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Neither EastGroup 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 selection 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 (Section 3.5).
MERGER, CONSOLIDATION OR SALE
EastGroup 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 (i) EastGroup shall be the continuing entity, or the successor
entity (if other than EastGroup) 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 Indenture;
(ii) immediately after giving effect to such transaction and treating any
indebtedness which becomes an obligation of EastGroup or any Subsidiary as a
result thereof as having been incurred by EastGroup or such Subsidiary at the
time of such transaction, no Event of Default under the Indenture, and no event
which, after notice of the lapse of time, or both, would become such an Event of
Default, shall have occurred and be continuing; and (iii) an officer's
certificate and legal opinion covering such conditions shall be delivered to the
Trustee (Sections 8.1, 8.2 and 8.3).
CERTAIN COVENANTS
Existence. Except as permitted under "Merger, Consolidation or
Sale" above, EastGroup is 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 EastGroup shall not be required to
preserve any right or franchise if it determines that the preservation thereof
is no
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<PAGE> 24
longer desirable in the conduct of its business and that the loss thereof is not
disadvantageous in any material respect to the Holders of the Debt Securities
(Section 10.6).
Maintenance of Properties. EastGroup is 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 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 EastGroup may be necessary so that the
business carried on in connection therewith may be properly and advantageously
conducted at all times; provided, however, that EastGroup and its Subsidiaries
shall not be prevented from selling or otherwise disposing for value their
respective properties in the ordinary course of business (Section 10.7).
Payment of Taxes and Other Claims. EastGroup is required to
pay or discharge or cause to be paid or discharged, before the same shall become
delinquent, (i) all taxes, assessments and governmental charges levied or
imposed upon it or any Subsidiary or upon 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 lien upon the property of
EastGroup or any Subsidiary; provided, however, that EastGroup 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 10.8).
Provision of Financial Information. The Holders of Debt
Securities will be provided with copies of the annual reports and quarterly
reports of EastGroup. Whether or not EastGroup is subject to Sections 13 or
15(d) of the Exchange Act and for so long as any Debt Securities are
outstanding, EastGroup will, to the extent permitted under the Exchange Act, be
required to file with the SEC the annual reports, quarterly reports and other
documents which EastGroup would have been required to file with the SEC pursuant
to such Sections 13 or 15(d) (the "Financial Statements") if EastGroup were so
subject, such documents to be filed with the SEC on or prior to the respective
dates (the "Required Filing Dates") by which EastGroup would have been required
so to file such documents if EastGroup were so subject. EastGroup will also in
any event (i) within 15 days of each Required Filing Date (a) transmit by mail
to all Holders of Debt Securities, as their names and addresses appear in the
Security Register, without cost to such Holders, copies of the annual reports
and quarterly reports which EastGroup would have been required to file with the
SEC pursuant to Sections 13 or 15(d) of the Exchange Act if EastGroup were
subject to such Sections and (b) file with the Trustee copies of the annual
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<PAGE> 25
reports, quarterly reports and other documents which EastGroup would have been
required to file with the SEC pursuant to Sections 13 or 15(d) of the Exchange
Act if EastGroup were subject to such sections and (ii) if filing such documents
by EastGroup with the SEC is not permitted under the Exchange Act, promptly upon
written request and payment of the reasonable cost of duplication and delivery,
supply copies of such documents to any prospective Holder (Section 10.9).
Additional Covenants. Any additional or different covenants of
EastGroup with respect to any series of Debt Securities will be set forth in the
Prospectus Supplement relating thereto.
EVENTS OF DEFAULT, NOTICE AND WAIVER
The Indenture provides that the following events are "Events
of Default" with respect to any series of Debt Securities issued thereunder: (i)
default for 30 days in the payment of any installment of interest on any Debt
Security of such series; (ii) default in the payment of the principal of (or
premium, if any, on) any Debt Security of such series at its maturity; (iii)
default in making any sinking fund payment as required for any Debt Security of
such series; (iv) default in the performance of any other covenant of EastGroup
contained in the Indenture (other than a covenant added to the Indenture solely
for the benefit of a series of Debt Securities issued thereunder other than such
series), such default having continued for 60 days after written notice as
provided in the Indenture; (v) default in the payment of an aggregate principal
amount exceeding $5,000,000 of any evidence of recourse indebtedness of
EastGroup or any mortgage, indenture or other instrument under which such
indebtedness is issued or by which such indebtedness is secured, such default
having occurred after the expiration of any applicable grace period and having
resulted in the acceleration of the maturity of such indebtedness, but only if
such indebtedness is not discharged or such acceleration is not rescinded or
annulled; (vi) certain events of bankruptcy, insolvency or reorganization, or
court appointment of a receiver, liquidator or trustee of EastGroup or any
Significant Subsidiary, as defined below, or any of their respective property;
and (vii) 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 EastGroup.
If an Event of Default under the Indenture with respect to
Debt Securities of any series at the time outstanding occurs and is continuing,
then in every such case the 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
EastGroup (and to the Trustee if given by the Holders). However, at any time
after such a declaration of acceleration with respect to Debt Securities of
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<PAGE> 26
such series (or of all Debt Securities then outstanding under the 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 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 Indenture, as the case may be)
may rescind and annul such declaration and its consequences if (i) EastGroup
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 the Indenture, as the
case may be), plus certain fees, expenses, disbursements and advances of the
Trustee and (ii) all Events of Default, other than the nonpayment of accelerated
principal of (or specified portion thereof), or premium (if any) or interest on
the Debt Securities of such series (or of all Debt Securities then outstanding
under the Indenture, as the case may be) have been cured or waived as provided
in the Indenture (Section 5.2). The Indenture also provides 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 Indenture,
as the case may be) may waive any past default with respect to such series and
its consequences, except a default (a) in the payment of the principal of (or
premium, if any) or interest on any Debt Security of such series or (b) in
respect of a covenant or provision contained in the Indenture that cannot be
modified or amended without the consent of the Holder of each Outstanding Debt
Security affected thereby (Section 5.8).
The Trustee will be required to give notice to the Holders of
Debt Securities within 90 days of a default under the Indenture unless such
default has been cured or waived; provided, however, that the 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 on 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 the Trustee consider such
withholding to be in the interest of such Holders (Section 6.1).
The Indenture provides that no Holders of Debt Securities of
any series may institute any proceedings, judicial or otherwise, with respect to
the Indenture or for any remedy thereunder, except in the case of failure of the
Trustee, for 60 days, to act after it has received a written request to
institute proceedings in respect of an Event of Default from the Holders of 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 (Section
5.7). 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 (Section 5.8).
Subject to provisions in the Indenture relating to its duties
in case of default, the Trustee is under no obligation to exercise any of its
rights or powers under the Indenture at the request or direction of any Holders
of any series of Debt Securities then outstanding under the
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Indenture, unless such Holders shall have offered to the Trustee thereunder
reasonable security or indemnity (Section 6.2). 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 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 Trustee, or of exercising any trust
or power conferred upon the Trustee. However, the Trustee may refuse to follow
any direction which is in conflict with any law or the Indenture, which may
involve the Trustee in personal liability or which may be unduly prejudicial to
the holders of Debt Securities of such series not joining therein (Section
5.12).
Within 120 days after the close of each fiscal year, EastGroup
must deliver to the Trustee a certificate, signed by one of several specified
officers of EastGroup, stating whether or not such officer has knowledge of any
default under the Indenture and, if so, specifying each such default and the
nature and status thereof.
MODIFICATION OF THE INDENTURE
Modifications and amendments of the 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 Holders of each such Debt Security affected thereby,
(i) change the Stated Maturity of the principal of, or premium (if any) or any
installment of interest on, any such Debt Security; (ii) 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;
(iii) 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; (iv)
impair the right to institute suit for the enforcement of any payment on or with
respect to any such Debt Security; (v) reduce the above stated percentage of
outstanding Debt Securities of any series necessary to modify or amend the
Indenture, to waive compliance with certain provisions thereof or certain
defaults and consequences thereunder or to reduce the quorum or voting
requirements set forth in the Indenture; or (vi) 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 Holders of such Debt Security
(Section 9.2).
The Indenture provides that 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
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EastGroup with certain covenants relating to such series of Debt Securities in
the Indenture (Section 10.12).
Modifications and amendments of the Indenture will be
permitted to be made by EastGroup and the Trustee without the consent of any
Holder of Debt Securities for any of the following purposes: (i) to evidence the
succession of another Person to EastGroup as obligor under the Indenture; (ii)
to add to the covenants of EastGroup for the benefit of the Holders of all or
any series of Debt Securities or to surrender any right or power conferred upon
EastGroup in the Indenture; (iii) to add Events of Default for the benefit of
the Holders of all or any series of Debt Securities; (iv) to add or change any
provisions of the Indenture to facilitate the issuance of, or to liberalize
certain terms of, Debt Securities in bearer form, or to permit or facilitate the
issuance of Debt Securities in uncertificated form, provided, that such action
shall not adversely affect the interests of the Holders of the Debt Securities
of any series in any material respect; (v) to change or eliminate any provisions
of the Indenture, provided that any such change or elimination shall become
effective only when there are no Debt Securities Outstanding of any series
created prior thereto which are entitled to the benefit of such provision; (vi)
to secure the Debt Securities; (vii) to establish the form or terms of Debt
Securities of any series; (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 the 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 the Indenture to the
extent necessary to permit or facilitate defeasance and discharge of any series
of such Debt Securities, provided that such action shall not adversely affect
the interests of the Holders of the Debt Securities of any series in any
material respect (Section 9.1).
The Indenture provides that in determining whether the Holders
of the requisite principal amount of Outstanding Debt Securities of a series
have given any request, demand, authorization, direction, notice, consent or
waiver thereunder or whether a quorum is present at a meeting of Holders of Debt
Securities, (i) the principal amount of an Original Issue Discount Security that
shall be deemed to be outstanding shall be the amount of the principal thereof
that would be due and payable as of the date of such determination upon
declaration of acceleration of the maturity thereof; (ii) the principal amount
of a Debt Security denominated in a foreign currency that shall be deemed
outstanding shall be the U.S. dollar equivalent, determined on the issue date
for such Debt Security, of the principal amount (or, in the case of an Original
Issue Discount Security, the U.S. dollar equivalent on the issue date of such
Debt Security of the amount determined as provided in (i) above); (iii) the
principal amount of an Indexed Security that shall be deemed outstanding shall
be the principal face amount of such Indexed Security at original issuance,
unless otherwise provided with respect to such Indexed Security pursuant to the
Indenture; and (iv) Debt Securities owned by EastGroup or any other obligor upon
the Debt Securities or any affiliate to EastGroup or of such other obligor shall
be disregarded.
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The Indenture contains provisions for convening meetings of
the Holders of Debt Securities of a series (Section 15.1). A meeting will be
permitted to be called at any time by the Trustee, and also, upon request, by
EastGroup or the holders of at least 25% in principal amount of the Outstanding
Debt Securities of such series, in any such case upon notice given as provided
in the Indenture (Section 15.2). Except for any consent that must be given by
the Holder of each Debt Security affected by certain modifications and
amendments of the Indenture, any resolution presented at a meeting or adjourned
meeting duly reconvened at which a quorum is present 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 the Indenture will be
binding on all Holders of Debt Securities of that series. The quorum at any
meeting called to adopt a resolution, and at any reconvened meeting, will be
Persons holding or representing a majority in principal amount of the
Outstanding Debt Securities of a series; provided, however, that if any action
is to be taken at such meeting with respect to a consent or wavier which may be
given by the Holders of not less than a specified percentage in principal amount
of the Outstanding Debt Securities of a series, the Persons holding or
representing such specified percentage in principal amount of the Outstanding
Debt Securities of such series will constitute a quorum (Section 15.4).
Notwithstanding the foregoing provisions, if any action is to
be taken at a meeting of Holders of Debt Securities of any series with respect
to any request, demand, authorization, direction, notice, consent, waiver or
other action that the Indenture expressly provides may be made, given or taken
by the Holders of a specified percentage in principal amount of all Outstanding
Debt Securities affected thereby, or of the Holders of such series and one or
more additional series: (i) there shall be no minimum quorum requirement for
such meeting and (ii) the principal amount of the Outstanding Debt Securities of
such series that vote in favor of such request, demand, authorization,
direction, notice, consent, waiver or other action shall be taken into account
in determining whether such request, demand, authorization, direction, notice,
consent, waiver or other action has been made, given or taken under the
Indenture (Section 15.4).
DISCHARGE, DEFEASANCE AND COVENANT DEFEASANCE
EastGroup may 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
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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 (Sections 14.1 and 14.4).
The Indenture provides that, if the provisions of Article
Fourteen are made applicable to the Debt Securities of or within any series
pursuant to Section 3.1 of the Indenture, EastGroup may elect either (i) to
defease and be discharged from any and all obligations with respect to such Debt
Securities (except for the obligation to pay additional amounts, if any, upon
the occurrence of certain events of tax, assessment or governmental charge with
respect to payments on such Debt Securities and the obligations to register the
transfer or exchange of such Debt Securities, to replace temporary or mutilated,
destroyed, lost or stolen Debt Securities, to maintain an office or agency in
respect of such Debt Securities and to hold moneys for payment in trust)
("defeasance") (Section 14.2) or (ii) to be released from its obligations with
respect to such Debt Securities under Sections 10.4 to 10.9, inclusive, of the
Indenture (including the restrictions described under "Certain Covenants" above)
and its obligations with respect to any other covenant, and any omission to
comply with such obligations shall not constitute a default or an Event of
Default with respect to such Debt Securities ("covenant defeasance") (Section
14.3), in either case upon the irrevocable deposit by EastGroup 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, on the scheduled due dates therefor.
Such a trust will only be permitted to be established if,
among other things, EastGroup has delivered to the Trustee an Opinion of Counsel
(as specified in the Indenture) to the effect that the Holders of such Debt
Securities will not recognize income, gain or loss for U.S. federal income tax
purposes as a result of such defeasance or covenant defeasance and will be
subject to U.S. federal income tax on the same amounts, in the same manner and
at the same times as would have been the case if such defeasance or covenant
defeasance had not occurred, and such Opinion of Counsel, in the case of
defeasance, must refer to and be based upon a ruling of the Internal Revenue
Service or a change in applicable United States Federal income tax law occurring
after the date of the Indenture (Section 14.4).
"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
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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 Obligations 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.
Unless otherwise provided in the applicable Prospectus
Supplement, if after EastGroup has deposited funds and/or Government Obligations
to effect defeasance or covenant defeasance with respect to Debt Securities of
any series: (i) the Holder of a Debt Security of such series is entitled to, and
does, elect pursuant to the Indenture or the terms of such Debt Security to
receive payment in a currency, currency unit or composite currency other than
that in which such deposit has been made in respect of such Debt Security; or
(ii) 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
institutions of or within the international banking community; (ii) the European
Currency Unit as defined and revised from time to time by the Council of the
European Community ("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 U.S. dollars.
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In the event EastGroup 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 (iv) under "Events of Default, Notice and Waiver"
with respect to Sections 10.4 to 10.9, inclusive, of the Indenture (which
sections would no longer be applicable to such Debt Securities) or described in
clause (vii) under "Events of Default, Notice and Waiver" with respect to any
other covenant as to which there has been covenant defeasance, the amount in
such currency, currency unit or composite currency in which such Debt Securities
are payable, and Government Obligations on deposit with the 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, EastGroup 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 modification 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 of the Debt
Securities are convertible into capital stock of or equity interest in EastGroup
will be set forth in the applicable Prospectus Supplement relating thereto. Such
terms will include the amount of capital stock of or equity interest in
EastGroup into which the Debt Securities are convertible, the conversion price
(or manner of calculation thereof), the conversion period, provisions as to
whether conversions will be at the option of the holders of the Debt Securities
or EastGroup, the events requiring an adjustment of the conversion price and
provisions affecting conversion in the event of the redemption of such Debt
Securities.
GLOBAL SECURITIES
The Debt Securities of a series may be issued in whole or in
part in the form of one or more global securities (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.
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DESCRIPTION OF PREFERRED SHARES
GENERAL
The Board of Trustees of EastGroup may classify or reclassify
any unissued shares of its capital stock from time to time by setting or
changing the preferences, conversion or other rights, voting powers,
restrictions, limitations as to dividends or distributions, qualifications, or
terms or conditions of redemption of such shares. There were no Preferred Shares
outstanding at December 1, 1996.
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 Declaration of Trust and Trustees
Regulations and any applicable articles supplementing the Declaration of Trust
designating terms of a series of Preferred Shares (a "Designating Amendment").
TERMS
Subject to the limitations prescribed by the Declaration of
Trust, the Board of Trustees is authorized to fix the number of shares
constituting each series of Preferred Shares and the preference, conversion or
other rights, voting powers, restrictions, limitation as to dividends,
qualifications, or terms or conditions of redemption of the Preferred Shares.
The Preferred Shares will, when issued, be fully paid and nonassessable by
EastGroup (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 thereof, including:
(i) The title and stated value of such Preferred Shares;
(ii) The number of shares of such Preferred Shares offered,
the liquidation preference per share and the offering price of such Preferred
Shares;
(iii) The dividend rate(s), period(s) and/or payment date(s)
or method(s) of calculation thereof applicable to such Preferred Shares;
(iv) The date from which dividends on such Preferred Shares
shall accumulate, if applicable;
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(v) The procedures for any auction or remarketing, if any, for
such Preferred Shares;
(vi) The provision for a sinking fund, if any, for such
Preferred Shares;
(vii) The provision for redemption, if applicable, of such
Preferred Shares;
(viii) Any listing of such Preferred Shares on any securities
exchange;
(ix) The terms and conditions, if applicable, upon which such
Preferred Shares will be convertible into Shares of Beneficial Interest,
including the conversion price (or manner of calculation thereof);
(x) Whether interests in such Preferred Shares will be
represented by Depositary Shares;
(xi) Any other specific terms, preferences, rights,
limitations or restrictions of such Preferred Shares;
(xii) A discussion of U.S. federal income tax considerations
applicable to such Preferred Shares;
(xiii) The relative ranking of preferences of such Preferred
Shares as to dividend rights and rights upon liquidation, dissolution or winding
up of the affairs of EastGroup;
(xiv) 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 EastGroup; and
(xv) Any limitations on direct or beneficial ownership and
restrictions on transfer, in each case as may be appropriate to preserve the
status of EastGroup 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 EastGroup, rank (i) senior to all
classes or series of Shares of Beneficial Interest of EastGroup, and to all
equity securities ranking junior to such Preferred Shares; (ii) on a parity with
all equity securities issued by EastGroup 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
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issued by EastGroup the terms of which specifically provide that such equity
securities rank senior to the Preferred Shares.
DIVIDENDS
Holders of the Preferred Shares of each series will be
entitled to receive, when, as and if declared by the Board of Trustees of
EastGroup, out of assets of EastGroup 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
as they appear on the share transfer books of EastGroup on such record dates as
shall be fixed by the Board of Trustees of EastGroup.
Dividends on any series of the Preferred Shares may be
cumulative or non-cumulative, as provided in the applicable Prospectus
Supplement. Dividends, if cumulative, will be cumulative from and after the date
set forth in the applicable Prospectus Supplement. If the Board of Trustees of
EastGroup 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 EastGroup 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 is outstanding, no dividends
will be declared or paid or set apart for payment on any capital stock of
EastGroup of any other series ranking, as to dividends, on a parity with or
junior to the Preferred Shares of such series for any period unless (i) if such
series of Preferred Shares has a cumulative dividend, full cumulative dividends
have been or contemporaneously are declared and paid or declared and a sum
sufficient for the payment thereof set apart for such payment on the Preferred
Shares of such series for all past dividend periods and the then current
dividend period or (ii) if such series of Preferred Shares does not have a
cumulative dividend, full dividends for the then current dividend period have
been or contemporaneously are declared and paid or declared and a sum sufficient
for the payment thereof set apart for such payment on the Preferred Shares of
such series. When dividends are not paid in full (or a sum sufficient for such
full payment is not so set apart) upon 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
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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 Beneficial
Interest 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
Shares of Beneficial Interest, or any other capital shares of EastGroup 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 Beneficial Interest, or
any other capital shares of EastGroup 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
EastGroup (except by conversion into or exchange for other capital shares of
EastGroup 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 EastGroup, as a whole or in part, in each case upon the terms, at the
times and at the redemption prices set forth in such Prospectus Supplement.
The Prospectus Supplement relating to a series of Preferred
Shares that is subject to mandatory redemption will specify the number of such
Preferred Shares that shall be redeemed by EastGroup 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 EastGroup, the terms of such
Preferred Shares may provide that, if no such capital shares shall
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<PAGE> 37
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 EastGroup pursuant to conversion provisions
specified in the applicable Prospectus Supplement.
Notwithstanding the foregoing, unless (i) if such series of
Preferred Shares has a cumulative dividend, full cumulative dividends on all
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
EastGroup 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 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 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, EastGroup 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 EastGroup
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 EastGroup 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 EastGroup 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
EastGroup.
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 EastGroup. Each notice shall
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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 EastGroup 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 EastGroup, then, before any distribution or payment
shall be made to the holders of any Shares of Beneficial Interest or any other
class or series of capital shares of EastGroup ranking junior to the Preferred
Shares in the distribution of assets upon any liquidation, dissolution or
winding up of EastGroup, the holders of each series of Preferred Shares shall be
entitled to receive out of assets of EastGroup legally available for
distribution to stockholders 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 does 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 EastGroup. In the event that, upon any
such voluntary or involuntary liquidation, dissolution or winding up, the
available assets of EastGroup 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 EastGroup 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 EastGroup 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
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of EastGroup 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
EastGroup, shall not be deemed to constitute a liquidation, dissolution or
winding up of EastGroup.
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 Shares upon which like voting rights have been conferred and are
exercisable) will be entitled to vote for the election of two additional
trustees of EastGroup 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 stockholders) or at the next annual meeting of
stockholders, and at each subsequent annual meeting until (i) if such series of
Preferred Shares has a cumulative dividend, all dividends accumulated on such
shares of Preferred Shares for the past dividend periods and the then current
dividend period shall have been fully paid or declared and a sum sufficient for
the payment thereof set aside for payment or (ii) if such series of Preferred
Shares does not have a cumulative dividend, four consecutive quarterly dividends
shall 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 Trustees of
EastGroup will be increased by two directors.
Unless provided otherwise for any series of Preferred Shares,
so long as any shares of Preferred Shares remain outstanding, EastGroup 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 EastGroup 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 Designating Amendment for such
series of Preferred Shares, 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 holder
thereof; provided, however, to the occurrence of any of the Events set forth in
(ii) above, so long as the Preferred Shares remains outstanding with the terms
thereof materially unchanged, taking into account that
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upon the occurrence of an Event, EastGroup 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 (a) any increase in the amount of the
authorized Preferred Shares or the creation or issuance of any other series of
Preferred Shares, or (b) 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.
Under Maryland law, notwithstanding anything to the contrary
set forth above, holders of each series of Preferred Shares will be entitled to
vote upon any proposed amendment to the Declaration of Trust if the amendment
would change the contract rights of such shares as expressly set forth in the
Declaration of Trust.
CONVERSION RIGHTS
The terms and conditions, if any, upon which any series of
Preferred Shares is convertible into Shares of Beneficial Interest will be set
forth in the applicable Prospectus Supplement relating thereto. Such terms will
include the number of Shares of Beneficial Interest into which the Preferred
Shares are convertible, the conversion price (or manner of calculation thereof),
the conversion period, provisions as to whether conversions will be at the
option of the holders of the Preferred Shares or EastGroup, 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.
SHAREHOLDER LIABILITY
As discussed below under "Description of Shares of Beneficial
Interest--General," applicable Maryland law provides that no stockholder,
including holders of Preferred Shares, will be personally liable for the acts
and obligations of EastGroup and that the funds and property of EastGroup will
be the only recourse for such acts or obligations.
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RESTRICTIONS ON OWNERSHIP
As discussed below under "Description of Shares of Beneficial
Interest--Restrictions on Transfer," for EastGroup to qualify as a REIT under
the Code, not more than 50% in value of its outstanding capital shares may be
owned, directly or indirectly, by five or fewer individuals (as defined in the
Code to include certain entities) during the last half of a taxable year. To
assist EastGroup in meeting this requirement, EastGroup may take certain actions
to limit the beneficial ownership, directly or indirectly, by a single person of
EastGroup's outstanding equity securities, including any Preferred Shares of
EastGroup. 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 Statement.
DESCRIPTION OF DEPOSITARY SHARES
GENERAL
EastGroup may issue receipts ("Depositary Receipts") for
Depositary Shares, each of which will represent a fractional interest of a share
of a particular series of Preferred Shares, as specified in the applicable
Prospectus Supplement. Preferred Shares of each series represented by Depositary
Shares will be deposited under a separate deposit agreement (each, a "Deposit
Agreement") among EastGroup, the depositary named therein (a "Preferred Shares
Depositary") and the holders from time to time of the Depositary Receipts.
Subject to the terms of the applicable Deposit Agreement, each owner of a
Depositary Receipt will be entitled, in proportion to the fractional interest of
a share of a particular series of Preferred Shares represented by the Depositary
Shares evidenced by such Depositary Receipt, to all the rights and preferences
of the Preferred Shares represented by such Depositary Shares (including
dividend, voting, conversion, redemption and liquidation rights).
The Depositary Shares will be evidenced by Depositary Receipts
issued pursuant to the applicable Deposit Agreement. Immediately following the
issuance and delivery of the Preferred Shares by EastGroup to a Preferred Shares
Depositary, EastGroup will cause such Preferred Shares Depositary to issue, on
behalf of EastGroup, the Depositary Receipts. Copies
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of the applicable form of Deposit Agreement and Depositary Receipt may be
obtained from EastGroup upon request, and the statements made hereunder relating
to Deposit Agreements and the Depositary Receipts to be issued thereunder are
summaries of certain anticipated provisions thereof and do not purport to be
complete and are subject to, and qualified in their entirety by reference to,
all of the provisions of the applicable Deposit Agreement and related Depositary
Receipts.
DIVIDENDS AND OTHER DISTRIBUTIONS
A Preferred Shares Depositary will be required to distribute
all cash dividends or other cash distributions received in respect of the
applicable Preferred Shares to the record holders of Depositary Receipts
evidencing the related Depositary Shares in proportion to the number of such
Depositary Receipts owned by such holders, subject to certain obligations of
holders to file proofs, certificates and other information and to pay certain
charges and expenses to such Preferred Shares Depositary.
In the event of a distribution other than in cash, a Preferred
Shares Depositary will be required to distribute property received by it to the
record holders of Depositary Receipts entitled thereto, subject to certain
obligations of holders to file proofs, certificates and other information and to
pay certain charges and expenses to such Preferred Shares Depositary, unless
such Preferred Shares Depositary determines that it is not feasible to make such
distribution, in which case such Preferred Shares Depositary may, with the
approval of EastGroup, sell such property and distribute the net proceeds from
such sale to such holders.
No distribution will be made in respect of any Depositary
Share to the extent that it represents any Preferred Shares which have been
converted or exchanged.
WITHDRAWAL OF STOCK
Upon surrender of the Depositary Receipts at the corporate
trust office of the applicable Preferred Shares Depositary (unless the related
Depositary Shares have previously been called for redemption or converted), the
holders thereof will be entitled to delivery at such office, to or upon each
such holder's order, of the number of whole or fractional shares of the
applicable Preferred Shares and any money or other property represented by the
Depositary Shares evidenced by such Depositary Receipts. Holders of Depositary
Receipts will be entitled to receive whole or fractional shares of the related
Preferred Shares on the basis of the proportion of Preferred Shares represented
by each Depositary Share as specified in the applicable Prospectus Supplement,
but holders of such Preferred Shares will not thereafter be entitled to receive
Depositary Shares therefor. If the Depositary Receipts delivered by the holder
evidence a number of Depositary Shares in excess of the number of Depositary
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Shares representing the number of Preferred Shares to be withdrawn, the
applicable Preferred Shares Depositary will be required to deliver to such
holder at the same time a new Depositary Receipt evidencing such excess number
of Depositary Shares.
REDEMPTION OF DEPOSITARY SHARES
Whenever EastGroup redeems Preferred Shares held by a
Preferred Shares Depositary, such Preferred Shares Depositary will be required
to redeem as of the same redemption date the number of Depositary Shares
representing the Preferred Shares so redeemed, provided EastGroup shall have
paid in full to such Preferred Shares Depositary the redemption price of the
Preferred Shares to be redeemed plus an amount equal to any accrued and unpaid
dividends thereon to the date fixed for redemption. The redemption price per
Depositary Share will be equal to the redemption price and any other amounts per
share payable with respect to the Preferred Shares. If fewer than all the
Depositary Shares are to be redeemed, the Depositary Shares to be redeemed will
be selected pro rata (as nearly as may be practicable without creating
fractional Depositary Shares) or by any other equitable method determined by
EastGroup that preserves the REIT status of EastGroup.
From and after the date fixed for redemption, all dividends in
respect of the Preferred Shares so called for redemption will cease to accrue,
the Depositary Shares so called for redemption will no longer be deemed to be
outstanding and all rights of the holders of the Depositary Receipts evidencing
the Depositary Shares so called for redemption will cease, except the right to
receive any moneys payable upon such redemption and any money or other property
to which the holders of such Depositary Receipts were entitled upon such
redemption upon surrender thereof to the applicable Preferred Shares Depositary.
VOTING OF THE PREFERRED SHARES
Upon receipt of notice of any meeting at which the holders of
the applicable Preferred Shares are entitled to vote, a Preferred Shares
Depositary will be required to mail the information contained in such notice of
meeting to the record holders of the Depositary Receipts evidencing the
Depositary Shares which represent such Preferred Shares. Each record holder of
Depositary Receipts evidencing Depositary Shares on the record date (which will
be the same date as the record date for the Preferred Shares) will be entitled
to instruct such Preferred Shares Depositary as to the exercise of the voting
rights pertaining to the amount of Preferred Shares represented by such holder's
Depositary Shares. Such Preferred Shares Depositary will be required to vote the
amount of Preferred Shares represented by such Depositary Shares in accordance
with such instructions, and EastGroup will agree to take all reasonable action
which may be deemed necessary by such Preferred Shares Depositary in order to
enable such Preferred Shares Depositary to do so. Such Preferred Shares
Depositary will be required to abstain from
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voting the amount of Preferred Shares represented by such Depositary Shares to
the extent it does not receive specific instructions from the holders of
Depositary Receipts evidencing such Depositary Shares. A Preferred Shares
Depositary will not be responsible for any failure to carry out any instruction
to vote, or for the manner or effect of any such vote made, as long as any such
action or non-action is in good faith and does not result from negligence or
willful misconduct of such Preferred Shares Depositary.
LIQUIDATION PREFERENCE
In the event of the liquidation, dissolution or winding up of
EastGroup, whether voluntary or involuntary, the holders of each Depositary
Receipt will be entitled to the fraction of the liquidation preference accorded
each share of Preferred Shares represented by the Depositary Share evidenced by
such Depositary Receipt, as set forth in the applicable Prospectus Supplement.
CONVERSION OF PREFERRED SHARES
The Depositary Shares, as such, will not be convertible into
Shares of Beneficial Interest or any other securities or property of EastGroup.
Nevertheless, if so specified in the applicable Prospectus Supplement relating
to an offering of Depositary Shares, the Depositary Receipts may be surrendered
by holders thereof to the applicable Preferred Shares Depositary with written
instructions to such Preferred Shares Depositary to instruct EastGroup to cause
conversion of the Preferred Shares represented by the Depositary Shares
evidenced by such Depositary Receipts into whole Shares of Beneficial Interest,
other Preferred Shares or other shares of stock, and EastGroup will agree that
upon receipt of such instructions and any amounts payable in respect thereof, it
will cause the conversion thereof utilizing the same procedures as those
provided for delivery of Preferred Shares to effect such conversion. If the
Depositary Shares evidenced by a Depositary Receipt are to be converted in part
only, a new Depositary Receipt or Receipts will be issued for any Depositary
Shares not to be converted. No fractional Shares of Beneficial Interest or
Preferred Shares will be issued upon conversion, and if such conversion will
result in a fractional share being issued, an amount will be paid in cash by
EastGroup equal to the value of the fractional interest based upon the closing
price of the Shares of Beneficial Interest or Preferred Shares, respectively, on
the last business day prior to the conversion.
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AMENDMENT AND TERMINATION OF A DEPOSIT AGREEMENT
Any form of Depositary Receipt evidencing Depositary Shares
which will represent Preferred Shares and any provision of a Deposit Agreement
will be permitted at any time to be amended by agreement between EastGroup and
the applicable Preferred Shares Depositary. However, any amendment that
materially and adversely alters the rights of the holders of Depositary Receipts
or that would be materially and adversely inconsistent with the rights granted
to the holders of the related Preferred Shares will not be effective unless such
amendment has been approved by the existing holders of at least two-thirds of
the applicable Depositary Shares evidenced by the applicable Depositary Receipts
then outstanding. No amendment shall impair the right, subject to certain
anticipated exceptions in the Deposit Agreements, of any holders of Depositary
Receipts to surrender any Depositary Receipt with instructions to deliver to the
holder the related Preferred Shares and all money and other property, if any,
represented thereby, except in order to comply with law. Every holder of an
outstanding Depositary Receipt at the time any such amendment becomes effective
shall be deemed, by continuing to hold such Depositary Receipt, to consent and
agree to such amendment and to be bound by the applicable Deposit Agreement as
amended thereby.
A Deposit Agreement will be permitted to be terminated by
EastGroup upon not less than 30 days' prior written notice to the applicable
Preferred Shares Depositary if (i) such termination is necessary to preserve
EastGroup's status as a REIT or (ii) a majority of each series of Preferred
Shares affected by such termination consents to such termination, whereupon such
Preferred Shares Depositary will be required to deliver or make available to
each holder of Depositary Receipts, upon surrender of the Depositary Receipts
held by such holder, such number of whole or fractional shares of Preferred
Shares as are represented by the Depositary Shares evidenced by such Depositary
Receipts together with any other property held by such Preferred Shares
Depositary with respect to such Depositary Receipts. EastGroup will agree that
if a Deposit Agreement is terminated to preserve EastGroup's status as a REIT,
then EastGroup will use its best efforts to list the Preferred Shares issued
upon surrender of the related Depositary Shares on a national securities
exchange. In addition, a Deposit Agreement will automatically terminate if (i)
all outstanding Depositary Shares thereunder shall have been redeemed; (ii)
there shall have been a final distribution in respect of the related Preferred
Shares in connection with any liquidation, dissolution or winding up of
EastGroup and such distribution shall have been distributed to the holders of
Depositary Receipts evidencing the Depositary Shares representing such Preferred
Shares; or (iii) each share of the related Preferred Shares shall have been
converted into stock of EastGroup not so represented by Depositary Shares.
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CHARGES OF A PREFERRED SHARES DEPOSITARY
EastGroup will pay all transfer and other taxes and
governmental charges arising solely from the existence of a Deposit Agreement.
In addition, EastGroup will pay the fees and expenses of a Preferred Shares
Depositary in connection with the performance of its duties under a Deposit
Agreement. However, holders of Depositary Receipts will pay the fees and
expenses of a Preferred Shares Depositary for any duties requested by such
holders to be performed which are outside of those expressly provided for in the
applicable Deposit Agreement.
RESIGNATION AND REMOVAL OF DEPOSITARY
A Preferred Shares Depositary will be permitted to resign at
any time by delivering to EastGroup notice of its election to do so, and
EastGroup will be permitted at any time to remove a Preferred Shares Depositary,
any such resignation or removal to take effect upon the appointment of a
successor Preferred Shares Depositary. A successor Preferred Shares Depositary
will be required to be appointed within 60 days after delivery of the notice of
resignation or removal and will be required to be a bank or trust company having
its principal office in the United States and having a combined capital and
surplus of at least $50,000,000.
MISCELLANEOUS
A Preferred Shares Depositary will be required to forward to
holders of Depositary Receipts any reports and communications from EastGroup
which are received by such Preferred Shares Depositary with respect to the
related Preferred Shares.
Neither a Preferred Shares Depositary nor EastGroup will be
liable if it is prevented from or delayed in, by law or any circumstances beyond
its control, performing its obligations under a Deposit Agreement. The
obligations of EastGroup and a Preferred Shares Depositary under a Deposit
Agreement will be limited to performing their duties thereunder in good faith
and without negligence (in the case of any action or inaction in the voting of
Preferred Shares represented by the applicable Depositary Shares), gross
negligence or willful misconduct, and neither EastGroup nor any applicable
Preferred Shares Depositary will be obligated to prosecute or defend any legal
proceeding in respect of any Depositary Receipts, Depositary Shares or shares of
Preferred Shares represented thereby unless satisfactory indemnity is furnished.
EastGroup and any Preferred Shares Depositary will be permitted to rely on
written advice of counsel or accountants, or information provided by persons
presenting shares of Preferred Shares represented thereby for deposit, holders
of Depositary Receipts or other persons believed in good faith to be competent
to give such information, and on documents believed in good faith to be genuine
and signed by a proper party.
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In the event a Preferred Shares Depositary shall receive
conflicting claims, requests or instructions from any holders of Depositary
Receipts, on the one hand, and EastGroup on the other hand, such Preferred
Shares Depositary shall be entitled to act on such claims, requests or
instructions received from EastGroup.
DESCRIPTION OF SHARES OF BENEFICIAL INTEREST
GENERAL
EastGroup is authorized to issue up to 20,000,000 Shares of
Beneficial Interest. As of December 1, 1996, EastGroup had issued or reserved
for issuance 7,431,721 Shares of Beneficial Interest. Holders of Shares of
Beneficial Interest are entitled to receive such dividends as may be declared
from time to time by the trustees out of funds legally available therefor. All
of the issued and outstanding Shares of Beneficial Interest are fully paid and
non-assessable and have equal voting, distribution and liquidation rights.
Shares of Beneficial Interest are not subject to call or redemption; provided,
however, if the EastGroup Board of Trustees determines that the direct or
indirect ownership of Shares of Beneficial Interest has or may become
concentrated to an extent which threatens EastGroup's status as a REIT, the
Board of Trustees may call for the redemption of a number of Shares of
Beneficial Interest.
Each Share of Beneficial Interest is entitled to one vote on
matters put to a vote of the stockholders, except that in the election of
trustees, stockholders have cumulative voting rights. This means an EastGroup
stockholder is entitled to as many votes as equal the number of Shares of
Beneficial Interest owned by him or her multiplied by the number of trustees to
be elected. Stockholders may cast all their votes for one trustee candidate or
distribute the votes as they so determine.
Shares of Beneficial Interest currently outstanding are listed
for trading on the New York Stock Exchange, Inc. (the "NYSE") under the symbol
"EGP." EastGroup will apply to the NYSE to list the additional Shares of
Beneficial Interest to be sold pursuant to any Prospectus Supplement, and
EastGroup anticipates that such shares will be so listed.
Under Maryland law, stockholders are generally not liable for
EastGroup's debts or obligations. If EastGroup is liquidated, subject to the
right of any holders of preferred stock, if any, to receive preferential
distributions, each outstanding Share of Beneficial Interest will be entitled to
participate pro rata in the assets remaining after payment of, or adequate
provision for, all known debts and liabilities of EastGroup.
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PROVISIONS OF EASTGROUP'S RESTATED DECLARATION OF TRUST, AS AMENDED, AND
TRUSTEES REGULATIONS
EastGroup's Restated Declaration of Trust, as amended, (the
"Declaration of Trust"), provides that the number of Trustees will not be less
than three nor more than twelve, and that the number of trustees will be set
forth in EastGroup's Trustees Regulations. The Trustees Regulations provide that
EastGroup will have seven trustees. All seven positions on the Board of Trustees
are filled by the vote of the stockholders at the annual meeting. Stockholders
have cumulative voting rights in the election of trustees. This means an
EastGroup stockholder is entitled to as many votes as equal the number of Shares
of Beneficial Interest owned by him or her multiplied by the number of trustees
to be elected. Stockholders may cast all their votes for one trustee candidate
or distribute the votes as they so determine.
OTHER MATTERS
The transfer agent and registrar for the Shares of Beneficial
Interest is KeyCorp Shareholder Services, Inc., Cleveland, Ohio.
RESTRICTIONS ON TRANSFER
Ownership Limits. For EastGroup to qualify as a REIT under the
Code, no more than 50% in value of its outstanding Shares of Beneficial Interest
may be owned, actually and constructively under the applicable attribution
provisions of the Code, by five or fewer individuals (as defined in the Code to
include certain entities) during the last half of a taxable year (other than the
first year) or during a proportionate part of a shorter taxable year. The Shares
of Beneficial Interest must also be beneficially owned by 100 or more persons
during at least 335 days of a taxable year (other than the first year) or during
a proportionate part of a shorter taxable year. Because EastGroup has elected to
be treated as a REIT, the Declaration of Trust contains restrictions on the
acquisition of Shares of Beneficial Interest intended to ensure compliance with
these requirements.
The Declaration of Trust provides that if the Board of
Trustees shall, at any time and in good faith, be of the opinion that the direct
and indirect ownership of Shares of Beneficial Interest has or may become
concentrated to an extent which threatens EastGroup's REIT status, then the
Board of Trustees may call for the redemption of such Shares of Beneficial
Interest or any number of such Shares of Beneficial Interest. The redemption
price shall be determined in good faith by the Board of Trustees. Any Shares of
Beneficial Interest subject to redemption shall not be entitled to dividends,
voting rights and other benefits excepting the right to the payment of the
redemption price. Redeemed Shares of Beneficial Interest shall be cancelled.
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Each stockholder shall, upon request by the Board of Trustees,
furnish such information including, without limitation, information as to the
actual ownership of the Shares of Beneficial Interest by such stockholder, as
the trustees may require in order to determine EastGroup's status as a REIT.
The foregoing ownership limitations may have the effect of
precluding acquisition of control of EastGroup without the consent of the Board
of Trustees.
Special Voting Requirements for Certain Business Combinations.
Pursuant to Maryland law, EastGroup is governed by special procedures that apply
to certain business combinations between a corporation and interested
shareholders. The purpose of such provisions is to protect the corporation and
its shareholders against hostile takeovers by requiring that certain criteria
are satisfied. These criteria include prior approval by the board of trustees,
prior approval by a majority or supermajority vote of disinterested shareholders
and requirements that a "fair price" be paid to the disinterested shareholders.
Maryland law provides that a Maryland corporation may not
engage in any "business combination" with any "interested shareholder." An
"interested shareholder" is defined, in essence, as any person owning
beneficially, directly or indirectly, ten percent or more of the outstanding
voting stock of a Maryland corporation. Unless an exemption applies, EastGroup
may not engage in any business combination with an interested shareholder for a
period of five years after the interested shareholder became an interested
shareholder, and thereafter may not engage in a business combination unless it
is recommended by the board of trustees and approved by the affirmative vote of
at least (i) eighty percent of the votes entitled to be cast by the holders of
all outstanding voting stock of EastGroup, voting together as a single voting
group and (ii) two-thirds of the votes entitled to be cast by all holders of
outstanding shares of voting stock other than voting stock held by the
interested shareholder. The voting requirements do not apply at any time to
business combinations with an interested shareholder or its affiliates if
approved by the board of trustees of the corporation prior to the time the
interested shareholder first became an interested shareholder. Additionally, if
the business combination involves the receipt of consideration by the
shareholders in exchange for the corporation's stock, the voting requirements do
not apply if certain "fair price" conditions are met.
Control Share Acquisitions. Maryland law provides for the
elimination of the voting rights of shares held by any person who makes a
"control share acquisition" except to the extent that such acquisition is exempt
or is approved by at least two-thirds of all votes entitled to be cast on the
matter, excluding shares of capital stock owned by the acquirer or by officers
or trustees who are employees of the corporation whose shares were acquired. A
"control share acquisition" is the direct or indirect acquisition by any person
of ownership of, or the power to direct the exercise of voting power with
respect to, shares of voting stock ("control shares") that would, if aggregated
with all other voting stock owned by such person, entitle such person to
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exercise voting power in electing trustees within one of the following ranges of
voting power: (i) one-fifth or more but less than one-third; (ii) one-third or
more but less than a majority; or (iii) a majority or more of voting power.
A person who has made or proposes to make a control share
acquisition, upon the satisfaction of certain conditions (including an
undertaking to pay expenses), may compel the board of trustees to call a special
meeting of shareholders to be held within 50 days of demand to consider the
voting rights of the shares. If no request for a meeting is made, the
corporation may itself present the question at any shareholders meeting. If
voting rights are not approved at the meeting or if the acquiring person does
not deliver an acquiring person statement as permitted by the statute, then,
subject to certain conditions and limitations, the corporation may redeem any or
all of the control shares (except those for which voting rights have previously
been approved) for fair value determined, without regard to voting rights, as of
the date of the last control share acquisition or as of the date of any meeting
of shareholders at which the voting rights of such shares are considered and not
approved.
If voting rights for control shares are approved at a
shareholders meeting and the acquirer becomes entitled to vote a majority of the
shares entitled to vote, all other shareholders may exercise appraisal rights.
The fair value of the stock as determined for purposes of such appraisal rights
may not be less than the highest price per share paid in the control share
acquisition, and certain limitations and restrictions otherwise applicable to
the exercise of dissenters' rights do not apply in the context of a control
share acquisition. The control share acquisition statute does not apply to stock
acquired in a merger, consolidation or stock exchange if the corporation is a
party to the transaction.
Supermajority Votes. The Declaration of Trust provides that
the charter may not be amended except upon the affirmative vote of the holders
of not less than two-thirds of the Shares of Beneficial Interest then
outstanding.
FEDERAL INCOME TAX CONSIDERATIONS
INTRODUCTORY NOTES
The following discussion summarizes certain Federal income tax
considerations that may be relevant to a prospective holder of securities of
EastGroup. This discussion is based on current law. The discussion is not
exhaustive of all possible tax considerations and does not give a detailed
discussion of any state, local, or foreign tax considerations. It also does not
discuss all of the aspects of Federal income taxation that may be relevant to a
prospective shareholder in light of his particular circumstances or to certain
types of shareholders (including insurance companies, tax-exempt entities,
financial institutions or broker-dealers, foreign
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corporations and persons who are not citizens or residents of the United States)
who are subject to special treatment under the Federal income tax laws.
EACH PROSPECTIVE PURCHASER IS ADVISED TO CONSULT WITH HIS OWN
TAX ADVISOR REGARDING THE SPECIFIC TAX CONSEQUENCES TO HIM OF THE PURCHASE,
OWNERSHIP AND SALE OF SECURITIES IN AN ENTITY ELECTING TO BE TAXED AS A REAL
ESTATE INVESTMENT TRUST, INCLUDING THE FEDERAL, STATE, LOCAL, FOREIGN, AND OTHER
TAX CONSEQUENCES OF SUCH PURCHASE, OWNERSHIP, SALE, AND ELECTION AND OF
POTENTIAL CHANGES IN APPLICABLE TAX LAWS.
TAXATION OF THE COMPANY
General. EastGroup has elected to be taxed as a REIT under
Sections 856 through 860 of the Code effective since its inception. EastGroup's
qualification and taxation as a REIT depends upon its ability to meet on a
continuing basis, through actual annual operating results, distribution levels
and diversity of stock ownership, the various qualification tests and
organizational requirements imposed under the Code, as discussed below.
EastGroup believes that it is organized and has operated in such a manner as to
qualify under the Code for taxation as a REIT commencing since its inception,
and it intends to continue to operate in such a manner. No assurances, however,
can be given that EastGroup will operate in a manner so as to qualify or remain
qualified as a REIT. See "Failure to Qualify" below.
The following is a general summary of the Code provisions that
govern the Federal income tax treatment of a REIT and its shareholders. These
provisions of the Code are highly technical and complex. This summary is
qualified in its entirety by the applicable Code provisions, the regulations
promulgated thereunder ("Treasury Regulations"), and administrative and judicial
interpretations thereof.
If EastGroup 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" (at the corporate and shareholder levels) that generally
results from investment in a corporation. Notwithstanding its REIT election,
however, EastGroup will be subject to Federal income tax in the following
circumstances. First, EastGroup will be taxed at regular corporate rates on any
undistributed taxable income, including undistributed net capital gains. Second,
under certain circumstances, the company may be subject to the "alternative
minimum tax" on its items of tax preference. Third, if EastGroup has (i) net
income from the sale or other disposition of "foreclosure property" (which is,
in general, property acquired by foreclosure or otherwise on default of a loan
secured by the property) which is held primarily for sale to customers in the
ordinary course of business or (ii) other non-qualifying income from foreclosure
property, it will be subject to tax at the highest
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corporate rate on such income. Fourth, if EastGroup 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 EastGroup should fail to satisfy the 75% gross
income test or the 95% gross income test (as discussed below), and 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 it fails the 75% or 95% test,
multiplied by a fraction intended to reflect its profitability. Sixth, if
EastGroup should fail to distribute during each calendar year at least the sum
of (i) 85% of its REIT ordinary income for such year; (ii) 95% of its REIT
capital gain net income for such year; and (iii) any undistributed taxable
income from prior years, EastGroup would be subject to a 4% excise tax on the
excess of such required distribution over the amounts actually distributed.
Seventh, if EastGroup acquires any asset from a C corporation (i.e., a
corporation generally subject to full corporate level tax) in a transaction in
which the basis of the asset in EastGroup's hands is determined by reference to
the basis of the asset (or any other property) in the hands of the C
corporation, and EastGroup recognizes gain on the disposition of such asset
during the 10-year period beginning on the date on which such asset was acquired
by it, then, to the extent of such property's built-in gain (the excess of the
fair market value of such property at the time of acquisition by EastGroup over
the adjusted basis of such property at such time), such gain will be subject to
tax at the highest regular corporate rate applicable (as provided in IRS
regulations that have not yet been promulgated).
Requirements for Qualification. The Code defines a REIT as a
corporation, trust or association (i) which 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) which would be taxable as a domestic corporation but for Sections 856
through 860 of the Code; (iv) which 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 (as defined in
the Code to include certain entities); and (vii) which meets certain other
tests, described below, regarding the nature of its income and assets. The Code
provides that conditions (i) through (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 to be taxed as a REIT.
EastGroup has issued sufficient Shares of Beneficial Interest with sufficient
diversity of ownership to allow it to satisfy requirements (v) and (vi). In
addition, EastGroup's Declaration contains restrictions regarding the transfer
of its shares that are intended to assist it in continuing to satisfy the share
ownership requirements described in (v) and (vi) above. See "Capital Stock of
EastGroup -- Restrictions on Transfer."
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In addition, a corporation may not elect to become a REIT
unless its taxable year is the calendar year. EastGroup's taxable year is the
calendar year.
Income Tests. In order to maintain qualification as a REIT,
three gross income requirements must be satisfied annually. First, at least 75%
of the REIT's gross income (excluding gross income from prohibited transactions)
for each taxable year must be derived directly or indirectly from investments
relating to real property or mortgages on real property (including "rents from
real property" and, in certain circumstances, interest) or from certain types of
temporary investments. Second, at least 95% of the REIT's gross income
(excluding gross income from prohibited transactions) for each taxable year must
be derived from such real property investments described above, and from
dividends, interest and gain from the sale or disposition of stock or
securities, or from any combination of the foregoing. Third, short-term gain
from the sale or other disposition of stock or securities, gain from 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 REIT's gross income
(including gross income from prohibited transactions) for each taxable year.
Rents received by EastGroup will qualify as "rents from real
property" in satisfying the above 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, amounts received or accrued generally
will not be excluded from "rents from real property" solely by reason of being
based on a fixed percentage or percentages of receipts or sales. Second, rents
received from a tenant will not qualify as "rents from real property" if
EastGroup, or an owner of 10% or more of EastGroup, directly or constructively
owns 10% or more of such tenant (a "Related Party Tenant"). Third, if rent
attributable to personal property that is 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, for rents received to qualify as "rents
from real property," EastGroup generally must not operate or manage the property
or furnish or render services to tenants, other than through an "independent
contractor" from whom EastGroup derives no revenue. The "independent contractor"
requirement, however, does not apply to the extent the services provided by
EastGroup are "usually or customarily rendered" in connection with the rental of
space for occupancy only and are not otherwise considered "rendered to the
occupant." EastGroup believes that all services that are provided to its tenants
will be considered "usually or customarily" rendered in connection with the
rental of comparable properties. Further, any noncustomary services will be
provided only through qualifying independent contractors.
If EastGroup 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.
These relief provisions generally will be available if its
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failure to meet such tests was due to reasonable cause and not due to willful
neglect, EastGroup attaches a schedule of the sources of its income to its
return, and any income information on the schedules was not due to fraud with
intent to evade tax. It is not possible, however, to state whether in all
circumstances EastGroup would be entitled to the benefit of these relief
provisions. As discussed above in "General," even if these relief provisions
were to apply, a tax would be imposed with respect to the excess net income.
Asset Tests. At the close of each quarter of its taxable year,
EastGroup must also satisfy three tests relating to the nature of its assets.
First, at least 75% of the value of EastGroup'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 or debt offering of the
company), cash, cash items and government securities. Second, not more than 25%
of EastGroup'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 EastGroup may not exceed 5% of
the value of EastGroup's total assets, and EastGroup may not own more than 10%
of any one issuer's outstanding voting securities. The 5% test must generally be
met for any quarter in which a REIT acquires securities of an issuer.
Annual Distribution Requirements. EastGroup, 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 its "REIT taxable income" (computed without regard to the dividends paid
deduction and the REIT'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
noncash income. Such distributions must be paid in the taxable year to which
they relate, or in the following taxable year if declared before EastGroup
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 EastGroup
does not distribute all of its net capital gain or distributes at least 95%, but
less than 100%, of its "REIT taxable income," as adjusted, it will be subject to
tax on the nondistributed amount at regular capital gains and ordinary corporate
tax rates. Furthermore, if EastGroup 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, it will be subject to a 4%
excise tax on the excess of such required distribution over the amounts actually
distributed.
EastGroup has made and intends to continue to make timely
distributions sufficient to satisfy the annual distribution requirements. It is
possible, however, that the company, from time to time, may not have sufficient
cash or liquid assets to meet the distribution requirements due to timing
differences between the actual receipt of income and actual payment of
deductible expenses and the inclusion of such income and deduction of such
expenses in arriving at EastGroup's taxable income, or if the amount of
nondeductible expenses such as principal amortization or capital expenditures
exceed the amount of noncash deductions. In the event that
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such timing differences occur, in order to meet the distribution requirements,
EastGroup may arrange for short-term, or possible long-term, borrowing to permit
the payment of required dividends. If the amount of nondeductible expenses
exceeds noncash deductions, EastGroup may refinance its indebtedness to reduce
principal payments and borrow funds for capital expenditures.
Under certain circumstances, EastGroup may be able to rectify
a failure to meet the distribution requirement for a year by paying "deficiency
dividends" to shareholders in a later year that may be included in EastGroup's
deduction for dividends paid for the earlier year. Thus, EastGroup may be able
to avoid being taxed on amounts distributed as deficiency dividends; however,
the company will be required to pay interest to the IRS based upon the amount of
any deduction taken for deficiency dividends.
Failure to Qualify. If EastGroup fails to qualify for taxation
as a REIT in any taxable year and no relief provisions apply, EastGroup 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 EastGroup fails to qualify will not be deductible by it, nor will such
distributions be required to be made. In such event, to the extent of current
and accumulated earnings and profits, all distributions to shareholders will be
taxable as ordinary income, and, subject to certain limitations in the Code,
corporate distributees may be eligible for the dividends received deduction.
Unless entitled to relief under specific statutory provisions, EastGroup also
will 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 EastGroup would be entitled to such statutory
relief.
TAXATION OF STOCKHOLDERS
Taxation of Taxable Domestic Stockholders. As long as
EastGroup qualifies as a REIT, distributions made to its taxable domestic
shareholders out of current or accumulated earnings and profits (and not
designated as capital gain dividends) will be taken into account by them as
ordinary income, and corporate shareholders will not be eligible for the
dividends received deduction as to such amounts. Distributions that are
designated as capital gain dividends will be taxed as long-term capital gains
(to the extent they do not exceed EastGroup's actual net capital gain for the
taxable year) without regard to the period for which the shareholder has held
his shares. However, corporate shareholders may be required to treat up to 20%
of certain capital gain dividends as ordinary income. Distributions in excess of
current and accumulated earnings and profits will not be taxable to a
shareholder to the extent that they do not exceed the adjusted basis of the
shareholder's Shares of Beneficial Interest, but rather will reduce the adjusted
basis of such shares. To the extent that such distributions exceed the adjusted
basis of a shareholder's Shares of Beneficial Interest, 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
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or less), assuming the shares are a capital asset in the hands of the
shareholders. In addition, any dividend declared by the company in October,
November or December of any year payable to a shareholder of record on a
specific date in any such month shall be treated as both paid by EastGroup and
received by the shareholder on December 31 of such year, provided that the
dividend is actually paid by the company during January of the following
calendar year. Shareholders may not include in their individual income tax
returns any net operating losses or capital losses of EastGroup.
In general, any loss upon a sale or exchange of Shares of
Beneficial Interest by a shareholder who has held such shares for six months or
less (after applying certain holding period rules) will be treated as long-term
capital loss to the extent of distributions from EastGroup required to be
treated by such shareholder as long-term capital gain.
Backup Withholding. EastGroup will report to its domestic
shareholders and the IRS the amount of dividends paid during each calendar year,
and the amount of tax withheld, if any, with respect thereto. Under the backup
withholding rules, a shareholder may be subject to backup withholding at the
rate of 31% with respect to dividends paid unless such holder (i) is a
corporation or comes within certain other exempt categories and, when required,
demonstrates this fact, or (ii) provides a taxpayer identification number,
certifies as to no loss of exemption from backup withholding, and otherwise
complies with applicable requirements of the backup withholding rules. A
shareholder who does not provide EastGroup with its correct taxpayer
identification number may also be subject to penalties imposed by the IRS. Any
amount paid as backup withholding will be creditable against the shareholder's
income tax liability. In addition, EastGroup may be required to withhold a
portion of capital gain distributions made to any shareholders who fail to
certify their non-foreign status to the company. See "Taxation of Foreign
Shareholders" below.
Taxation of Tax-Exempt Shareholders. The IRS has ruled that
amounts distributed by a REIT to a tax-exempt employees' pension trust do not
constitute "unrelated business taxable income" ("UBTI"). Based upon this ruling
and subject to the discussion below regarding qualified pension trust investors,
distributions by EastGroup to a shareholder that is a tax-exempt entity should
not constitute UBTI, provided that the tax-exempt entity has not financed the
acquisition of its shares with "acquisition indebtedness" within the meaning of
the Code and the Shares of Beneficial Interest are not otherwise used in an
unrelated trade or business of the tax-exempt entity. Revenue rulings, however,
are interpretative in nature and subject to revocation or modification by the
IRS.
A "qualified trust" (defined to be any trust described in
section 401(a) of the Code and exempt from tax under section 501(a) of the Code)
that holds more than 10% of the value of the shares of a REIT may be required,
under certain circumstances, to treat a portion of distributions from the REIT
as UBTI. This requirement will apply for a taxable year only if (i) the REIT
satisfies the requirement that not more than 50% of the value of its shares be
held by
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five or fewer individuals (the "five or fewer requirement") by relying on a
special "look-through" rule under which shares held by qualified trust
shareholders are treated as held by the beneficiaries of such trusts in
proportion to their actuarial interests therein; and (ii) the REIT is
"predominantly held" by qualified trusts. A REIT is "predominantly held" if
either (i) a single qualified trust holds more than 25% of the value of the REIT
shares or (ii) one or more qualified trusts, each owning more than 10% of the
value of the REIT shares, hold in the aggregate more than 50% of the value of
the REIT shares. If the foregoing requirements are met, the percentage of any
REIT dividend treated as UBTI to a qualified trust that owns more than 10% of
the value of the REIT shares is equal to the ratio of (i) the UBTI earned by the
REIT (treating the REIT as if it were a qualified trust and therefore subject to
tax on its UBTI) to (ii) the total gross income (less certain associated
expenses) of the REIT. A de minimis exception applies where the ratio set forth
in the preceding sentence is less than 5% for any year.
The provisions requiring qualified trusts to treat a portion
of REIT distributions as UBTI will not apply if the REIT is able to satisfy the
five or fewer requirement without relying on the "look-through" rule. The
restrictions on ownership of Shares of Beneficial Interest in EastGroup's
Declaration should prevent application of the foregoing provisions to qualified
trusts purchasing shares pursuant to the Offering, absent a waiver of the
restrictions by the Board of Trustees.
Taxation of Foreign Shareholders. The rules governing U.S.
Federal income taxation of nonresident alien individuals, foreign corporations,
foreign partnerships and other foreign shareholders (collectively, "Non-U.S.
Shareholders") are complex, and no attempt will be made herein to provide more
than a limited summary of such rules. Prospective Non-U.S. Shareholders should
consult with their own tax advisors to determine the impact of U.S. Federal,
state and local income tax laws with regard to an investment in Shares of
Beneficial Interest, including any reporting requirements.
Distributions that are not attributable to gain from sales or
exchanges by EastGroup of U.S. real property interests and not designated by
EastGroup as capital gain dividends will be treated as dividends of ordinary
income to the extent that they are made out of current or accumulated earnings
and profits of EastGroup. Such distributions, ordinarily, will be subject to a
withholding tax equal to 30% of the gross amount of the distribution unless an
applicable tax treaty reduces that tax. However, if income from the investment
in Shares of Beneficial Interest is treated as effectively connected with the
Non-U.S. Shareholder's conduct of a U.S. trade or business, the Non-U.S.
Shareholder generally will be subject to a tax at graduated rates, in the same
manner as U.S. shareholders are taxed with respect to such dividends (and may
also be subject to the 30% branch profits tax if the shareholder is a foreign
corporation). EastGroup expects to withhold U.S. income tax at the rate of 30%
on the gross amount of any dividends paid to a Non-U.S. Shareholder that are not
designated as capital gain dividends unless (i) a lower treaty rate applies and
the required form evidencing eligibility for
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that reduced rate is filed with EastGroup or (ii) the Non-U.S. Shareholder files
an IRS Form 4224 with EastGroup claiming that the distribution is income treated
as effectively connected to a U.S. trade or business.
Distributions in excess of current and accumulated earnings
and profits of EastGroup will not be taxable to a shareholder to the extent that
they do not exceed the adjusted basis of the shareholder's Shares of Beneficial
Interest, 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 shares, they will give rise to tax liability if the Non-U.S.
Shareholder would otherwise be subject to tax on any gain from the sale or
disposition of his Shares of Beneficial Interest as described below. EastGroup
expects to withhold U.S. income tax at the rate of 10% on the amount realized by
Non-U.S. Shareholders on distributions that are not paid out of current or
accumulated earnings and profits unless the Non-U.S. Shareholders provide
EastGroup with IRS withholding certificates evidencing their exemption from
withholding tax. If it cannot be determined at the time a distribution is made
whether or not such distribution will be in excess of current and accumulated
earnings and profits, the distribution will be subject to withholding at the
rate applicable to dividends. However, the Non-U.S. Shareholder may seek a
refund of such amounts from the IRS if it is subsequently determined that such
distribution was, in fact, in excess of current and accumulated earnings and
profits of EastGroup.
For any year in which EastGroup qualifies as a REIT,
distributions that are attributable to gain from sales or exchanges by EastGroup
of U.S. real property interests will be taxed to a Non-U.S. Shareholder under
the provisions of the Foreign Investment in Real Property Tax Act of 1980
("FIRPTA"). Under FIRPTA, these distributions are taxed to a Non-U.S.
Shareholder as if such gain were effectively connected with a U.S. business.
Thus, Non-U.S. Shareholders will be taxed on such distributions at the normal
capital gain rates applicable to U.S. shareholders (subject to applicable
alternative minimum tax and a special alternative minimum tax in the case of
nonresident alien individuals). Also, distributions subject to FIRPTA may be
subject to a 30% branch profits tax in the hands of a corporate Non-U.S.
Shareholder not entitled to treaty relief or exemption. EastGroup is required by
applicable Treasury Regulations to withhold 35% of any distribution that could
be designated by the company as a capital gain dividend. This amount is
creditable against the Non-U.S. Shareholder's FIRPTA tax liability.
Gain recognized by a Non-U.S. Shareholder upon a sale of
Shares of Beneficial Interest generally will not be taxed under FIRPTA if
EastGroup is a "domestically controlled REIT," defined generally as a REIT in
which at all times during a specified testing period less than 50% in value of
its shares was held directly or indirectly by foreign persons. EastGroup
believes that it currently qualifies as a "domestically controlled REIT," and
that the sale of Shares of Beneficial Interest will not therefore be subject to
tax under FIRPTA. Because EastGroup is publicly traded, however, no assurance
can be given that the company will continue to be a domestically controlled
REIT. If EastGroup were not a domestically controlled
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REIT, whether a Non-U.S. Shareholder's gain would be taxed under FIRPTA would
depend on whether the Shares of Beneficial Interest were regularly traded on an
established securities market and on the size of the selling shareholder's
interest in EastGroup. In addition, gain not subject to FIRPTA will be taxable
to a Non-U.S. Shareholder if (i) the investment in Shares of Beneficial
Interests is treated as effectively connected with the Non-U.S. Shareholder's
trade or business, in which case the Non-U.S. Shareholder will be subject to the
same treatment as the U.S. shareholders with respect to such gain; or (ii) the
Non-U.S. Shareholder is a nonresident alien individual who was present in the
United States for 183 days or more during the taxable year and has a "tax home"
in the United States, in which case the nonresident alien individual will be
subject to a 30% tax on the individual's capital gains. If the gain on the sale
of Shares of Beneficial Interest were to be subject to tax under FIRPTA, the
Non-U.S. Shareholder would be subject to the same treatment as U.S. shareholders
with respect to such gain (subject to applicable alternative minimum tax and a
special alterative minimum tax in the case of nonresident alien individuals).
State and Local Taxes. EastGroup and its shareholders may be
subject to state or local taxation in various state or local jurisdictions,
including those in which it or they transact business or reside (although
shareholders who are individuals generally should not be required to file state
income tax returns outside of their state of residence with respect to
EastGroup's operations and distributions). The state and local tax treatment of
EastGroup and its shareholders may not conform to the Federal income tax
consequences discussed above. Consequently, prospective shareholders should
consult their own tax advisors regarding the effect of state and local tax laws
on an investment in the Securities.
PLAN OF DISTRIBUTION
EastGroup may sell Securities to or through underwriters, and
also may sell Securities directly to other 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 EastGroup or for 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
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may be deemed to be underwriters, and any discounts or commissions they receive
from EastGroup 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 EastGroup 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 Shares of Beneficial Interest which are listed on
the NYSE. Any Shares of Beneficial Interest sold pursuant to a Prospectus
Supplement will be listed on such exchange, subject to official notice of
issuance. EastGroup may elect to list any series of Debt Securities, Preferred
Shares or Depositary 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 the Securities.
Under agreements EastGroup may enter into, underwriters,
dealers and agents who participate in the distribution of Securities may be
entitled to indemnification by EastGroup 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, EastGroup in the ordinary
course of business.
If so indicated in the applicable Prospectus Supplement,
EastGroup will authorize underwriters or other persons acting as EastGroup's
agents to solicit offers by certain institutions to purchase Securities from
EastGroup pursuant to contracts providing for payment and delivery on 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 EastGroup. 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.
EXPERTS
The consolidated financial statements of EastGroup as of
December 31, 1995 and 1994, and for each of the years in the three year period
ended December 31, 1995, have been incorporated by reference in the Prospectus
and Registration Statement in reliance upon the
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report of KPMG Peat Marwick LLP, independent certified public accountants,
incorporated by reference herein in, and upon the authority of said firm as
experts in accounting and auditing.
The consolidated financial statements of Copley as of December
31, 1995 and 1994, and for each of the three years in the period ended December
31, 1995 incorporated by reference in this Registration Statement have been
audited by Arthur Andersen LLP, independent public accountants, as indicated in
their report with respect thereto, and are included herein in reliance upon the
authority of said firm as experts in giving said reports.
The consolidated financial statements of LNH appearing in
LNH's Annual Report (Form 10-KSB) for the year ended December 31, 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
consolidated 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.
LEGAL MATTERS
The legality of the Securities will be passed upon for
EastGroup by Jaeckle, Fleischmann & Mugel, Buffalo, New York.
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PART II
INFORMATION NOT REQUIRED IN PROSPECTUS
ITEM 14. OTHER EXPENSES OF ISSUANCE AND DISTRIBUTION.
The following table sets forth the various expenses in
connection with the issuance and distribution of the Securities, other than
underwriting discounts and commissions. All of the amounts shown are estimated
except the Securities and Exchange Commission ("SEC") registration fee.
SEC Registration Fee..............................$ 34,482.76
New York Stock Exchange, Inc. Listing fee......... 12,950.00
Blue Sky fees and expenses........................ 1,000.00
Printing and engraving expenses................... 75,000.00
Legal fees and expenses........................... 75,000.00
Accounting fees and expenses...................... 93,000.00
Miscellaneous..................................... 8,567.24
Total....................................$300,000.00
ITEM 15. INDEMNIFICATION OF TRUSTEES AND OFFICERS.
EastGroup's Restated Declaration of Trust, as amended,
contains a provision authorizing EastGroup to indemnify and hold harmless, to
the fullest extent permitted by Maryland law, trustees and officers involved in
an action, suit or proceeding.
Section 2-418 of the Maryland General Corporation Law (the
"Indemnification Statute"), the law of the state in which EastGroup is
organized, empowers a trust, subject to certain limitations, to indemnify its
officers and trustees against expenses, including attorneys' fees, judgments,
penalties, fines, settlements and expenses, actually and reasonably incurred by
them in any suit or proceeding to which they are parties unless the act or
omission of the trustee was material to the matter giving rise to the proceeding
and was committed in bad faith, or was the result of active and deliberate
dishonesty, or the trustee received an improper personal
II-1
<PAGE> 63
benefit or, with respect to a criminal action or proceeding, the trustee had no
reasonable cause to believe their conduct was unlawful.
EastGroup has entered into an indemnification agreement (the
"Indemnification Agreement") with each of its trustees and officers, and the
Board of Trustees has authorized EastGroup to enter into an Indemnification
Agreement with each of the future trustees and officers of EastGroup. The
Indemnification Statute permits a corporation to indemnify its trustees and
officers. However, the protection that is specifically afforded by the
Indemnification Statute authorizes other arrangements for indemnification of
trustees and officers, including insurance. The Board of Trustees has approved
and the stockholders have ratified the Indemnification Agreement, which is
intended to provide indemnification to the maximum extent allowable by, or not
in violation of, or offensive to, any law of the State of Maryland.
The Indemnification Agreement provides that EastGroup shall
indemnify a trustee or officer who is a party to the agreement (the
"Indemnitee") if he or she was or is a party to or otherwise involved in any
proceeding by reason of the fact that he or she was or is a trustee or officer
of EastGroup, or was or is serving at its request in a certain capacity of
another entity, against losses incurred in connection with the defense or
settlement of such proceeding. This indemnification shall be provided to the
fullest extent permitted by settlement of such proceeding. This is similar to
the indemnification provided by the Indemnification Statute except that
indemnification is not available to the Indemnitee who is adjudged liable on the
basis that a personal benefit was improperly received or who pays any amount in
settlement of a proceeding without EastGroup's written consent.
ITEM 16. EXHIBITS.
The following exhibits are filed herewith (or incorporated by
reference):
(4) Form of Indenture, filed herewith.
(5) Opinion of Jaeckle, Fleischmann & Mugel regarding legality of
shares being registered, filed herewith.
(12) Statement regarding computation of ratios, filed herewith.
(23)(a) Consent of KPMG Peat Marwick LLP, filed herewith.
II-2
<PAGE> 64
(b) Consent of Arthur Anderson LLP, filed herewith.
(c) Consent of Ernst & Young LLP, filed herewith.
(d) Consent of Jaeckle, Fleischmann & Mugel (incorporated by
reference to Exhibit 5).
(24) Powers of Attorney, (incorporated by reference to Exhibit 24
to EastGroup's Registration Statement on Form S-3 (No.
333-09711) dated August 7, 1996).
(25) Statement of eligibility of trustee, to be filed by amendment.
ITEM 17. UNDERTAKINGS.
(a) The undersigned Registrant hereby undertakes:
(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, as amended (the "Securities
Act");
(ii) To reflect in the prospectus any facts
or events arising after the effective date of the Registration Statement (or the
most recent post-effective amendment thereof) which, individually or in the
aggregate, represent a fundamental change in the information set forth in the
Registration Statement. Notwithstanding the foregoing, any increase or decrease
in volume of securities offered (if the total dollar value of securities offered
would not exceed that which was registered) and any deviation from the low or
high end of the estimated maximum offering range may be reflected in the form of
prospectus filed with the SEC pursuant to Rule 424(b) if, in the aggregate, the
changes in volume and price represent no more than a 20 percent 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 (a)(1)(i) and (a)(1)(ii) do not apply if
information required to be included in a post-effective amendment by those
paragraphs is contained in periodic reports filed with or furnished to the SEC
by the Registrant pursuant to Sections 13 or 15(d) of the Securities Exchange
Act of 1934 that are incorporated by reference in the Registration Statement.
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<PAGE> 65
(2) That, for the purpose of determining any
liability under the Securities Act, 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.
(b) The undersigned Registrant hereby undertakes that, for
purposes of determining any liability under the Securities Act, each filing of
the Registrant's annual report pursuant to Section 13(a) or Section 15(d) of the
Securities Exchange Act of 1934 that is incorporated by reference in the
Registration Statement shall be deemed to be a new Registration Statement
relating to the securities offered therein, and the offering of such securities
at that time shall be deemed to be the initial bona fide offering thereof.
(c) Insofar as indemnification for liabilities arising under
the Securities Act may be permitted to directors, officers and controlling
persons of the Registrant pursuant to the foregoing provisions, or otherwise,
the Registrant has been advised that in the opinion of the SEC such
indemnification is against public policy as expressed in the Securities Act and
is, therefore, unenforceable. In the event that a claim for indemnification
against such liabilities (other than the payment by the Registrant of expenses
incurred or paid by a director, officer or controlling person of the Registrant
in the successful defense of any action, suit or proceeding) is asserted by such
director, officer or controlling person in connection with the securities being
registered, the Registrant will, unless in the opinion of its counsel the matter
has been settled by controlling precedent, submit to a court of appropriate
jurisdiction the question whether such indemnification by it is against public
policy as expressed in the Securities Act and will be governed by the final
adjudication of such issue.
(d) The undersigned Registrant hereby undertakes that:
(1) For purposes of determining any liability under
the Securities Act, 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 or prospectus filed by the Registrant 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.
(2) For the purpose of determining any liability
under the Securities Act, each post-effective amendment that contains a form of
prospectus shall be deemed to be a new Registration Statement relating to the
securities offered therein, and the offering of such securities at that time
shall be deemed to be the initial bona fide offering thereof.
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<PAGE> 66
SIGNATURES
----------
Pursuant to the requirements of the Securities of the
Securities Act of 1933, the Registrant certifies that it has reasonable grounds
to believe that it meets all of the requirements for filing on Form S-3 and has
duly caused this Amendment to be signed on its behalf by the undersigned,
thereunto duly authorized, in the City of Jackson, State of Mississippi as of
the 10th day of December 1996.
EASTGROUP PROPERTIES
By: /s/David H. Hoster II
David H. Hoster II
President and Trustee
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<PAGE> 67
Pursuant to the requirements of the Securities Act of 1933,
this Amendment has been signed by the following person in the capacities
indicated on the 10th day of December 1996.
<TABLE>
<CAPTION>
NAME TITLE
<S> <C> <C>
Leland R. Speed Managing Trustee and Chief }
Executive Officer (Principal }
Executive Officer) }
David H. Hoster II President and Trustee }
N. Keith McKey Executive Vice President, Chief }
Financial Officer and Secretary }
Diane W. Hayman Controller (Principal Accounting } /s/ N. Keith McKey
Officer) } N. Keith McKey,
Individually and
Alexander G. Anagnos Trustee } as Attorney-in-Fact
H.C. Bailey, Jr. Trustee }
Harold B. Judell Trustee }
David M. Osnos Trustee }
John N. Palmer Trustee }
</TABLE>
II-6
<PAGE> 1
EXHIBIT 4
EASTGROUP PROPERTIES
Reconciliation and Tie between Trust Indenture Act of 1939
(the "1939 Act") and Indenture, dated as of __________________, 199_.
Trust Indenture Act Section Indenture Section
310(a)(1) 6.7
310(a)(2) 6.7
310(b) 6.7, 6.8
312(a) 7.4
312(c) 7.1
313(a) 7.2
313(c) 7.2
314(a)(4) 10.10
314(c)(1) 1.2
314(c)(2) 1.2
314(e) 1.2
315(b) 6.1
316(a) 1.1 (definition of "Outstanding")
316(a)(1)(A) 5.2, 5.12
316(a)(1)(B) 5.13
316(b) 5.8
317(a)(1) 5.3
317(a)(2) 5.4
318(a) 1.11
318(c) 1.11
- --------------------------------------
NOTE: This reconciliation and tie shall not, for any purpose, be
deemed to be a part of the Indenture.
Attention should also be directed to Section 318(c) of the
1939 Act, which provides that the provisions of Sections 310 to and including
317 of the 1939 Act are a part of and govern every qualified indenture, whether
or not physically contained therein.
<PAGE> 2
EASTGROUP PROPERTIES
ISSUER
TO
-----------------------
TRUSTEE
FORM OF
INDENTURE
DATED AS OF ____________, 199_
SENIOR DEBT SECURITIES
<PAGE> 3
<TABLE>
<CAPTION>
TABLE OF CONTENTS
<S> <C>
RECITALS OF THE ISSUER................................................................................................. 1
ARTICLE I
DEFINITIONS AND OTHER PROVISIONS OF GENERAL APPLICATION........................................................... 1
SECTION 1.1 DEFINITIONS....................................................................... 1
Act ......................................................................................... 2
Additional Amounts............................................................................. 2
Affiliate...................................................................................... 2
Authenticating Agent........................................................................... 2
Authorized Newspaper........................................................................... 2
Bankruptcy Law................................................................................. 2
Bearer Security................................................................................ 2
Board of Trustees.............................................................................. 2
Board Resolution............................................................................... 2
Business Day................................................................................... 2
Commission..................................................................................... 3
Common Depositary.............................................................................. 3
Consolidated Income Available for Debt Service................................................. 3
Consolidated Net Income........................................................................ 3
Conversion Event............................................................................... 3
Corporate Trust Office......................................................................... 3
Corporation.................................................................................... 3
Coupon......................................................................................... 3
Custodian...................................................................................... 3
Debt ......................................................................................... 3
Defaulted Interest............................................................................. 4
Dollar......................................................................................... 4
DTC ......................................................................................... 4
ECU ......................................................................................... 4
European Communities........................................................................... 4
European Monetary System....................................................................... 4
Event of Default............................................................................... 4
Exchange Act................................................................................... 4
Foreign Currency............................................................................... 4
Funds from Operations.......................................................................... 5
GAAP ......................................................................................... 5
Government Obligations......................................................................... 5
Holder......................................................................................... 5
Indenture...................................................................................... 5
Indexed Security............................................................................... 6
Interest....................................................................................... 6
</TABLE>
i
<PAGE> 4
<TABLE>
<S> <C>
Interest Payment Date.......................................................................... 6
Issuer......................................................................................... 6
Issuer Request................................................................................. 6
Maturity....................................................................................... 6
Maximum Annual Service Charge.................................................................. 6
Officers' Certificate.......................................................................... 6
Opinion of Counsel............................................................................. 6
Original Issue Discount Security............................................................... 6
Outstanding.................................................................................... 6
Paying Agent................................................................................... 8
Permitted Indebtedness......................................................................... 8
Person......................................................................................... 8
Place of Payment............................................................................... 8
Predecessor Security........................................................................... 8
Redemption Date................................................................................ 8
Redemption Price............................................................................... 8
Registered Security............................................................................ 8
Regular Record Date............................................................................ 8
Repayment Date................................................................................. 8
Repayment Price................................................................................ 9
Responsible Officer............................................................................ 9
Security....................................................................................... 9
Security Register.............................................................................. 9
Significant Subsidiary......................................................................... 9
Special Record Date............................................................................ 9
Stated Maturity................................................................................ 9
Subsidiary..................................................................................... 9
Total Assets................................................................................... 10
Total Unencumbered Assets...................................................................... 10
Trust Indenture Act............................................................................ 10
Trustee........................................................................................ 10
Undepreciated Real Estate Assets............................................................... 10
United States.................................................................................. 10
United States Person........................................................................... 10
Unsecured Debt................................................................................. 10
Yield to Maturity.............................................................................. 10
SECTION 1.2 COMPLIANCE CERTIFICATES AND OPINIONS.............................................. 11
SECTION 1.3 FORM OF DOCUMENTS DELIVERED TO
TRUSTEE........................................................................................ 11
SECTION 1.4 ACTS OF HOLDERS................................................................... 12
SECTION 1.5 NOTICES, ETC., TO TRUSTEE AND ISSUER.............................................. 13
SECTION 1.6 NOTICE TO HOLDERS; WAIVER......................................................... 14
SECTION 1.7 EFFECT OF HEADINGS AND TABLE OF
CONTENTS....................................................................................... 15
</TABLE>
ii
<PAGE> 5
<TABLE>
<S> <C>
SECTION 1.8 SUCCESSORS AND ASSIGNS............................................................ 15
SECTION 1.9 SEPARABILITY CLAUSE............................................................... 15
SECTION 1.10 BENEFITS OF INDENTURE............................................................. 15
SECTION 1.11 GOVERNING LAW..................................................................... 15
SECTION 1.12 LEGAL HOLIDAYS.................................................................... 15
ARTICLE II
SECURITIES FORMS.................................................................................................. 16
SECTION 2.1 FORMS OF SECURITIES............................................................... 16
SECTION 2.2 FORM OF TRUSTEE'S CERTIFICATE OF
AUTHENTICATION................................................................................. 16
SECTION 2.3 SECURITIES ISSUABLE IN GLOBAL FORM................................................ 16
ARTICLE III
THE SECURITIES.................................................................................................... 17
SECTION 3.1 AMOUNT UNLIMITED; ISSUABLE IN SERIES.............................................. 17
SECTION 3.2 DENOMINATIONS..................................................................... 21
SECTION 3.3 EXECUTION, AUTHENTICATION, DELIVERY
AND DATING..................................................................................... 21
SECTION 3.4 TEMPORARY SECURITIES.............................................................. 23
SECTION 3.5 REGISTRATION, REGISTRATION OF TRANSFER
AND EXCHANGE................................................................................... 24
SECTION 3.6 MUTILATED, DESTROYED, LOST AND STOLEN
SECURITIES..................................................................................... 27
SECTION 3.7 PAYMENT OF INTEREST; INTEREST RIGHTS
RESERVED....................................................................................... 28
SECTION 3.8 PERSONS DEEMED OWNERS............................................................. 30
SECTION 3.9 CANCELLATION...................................................................... 31
SECTION 3.10 COMPUTATION OF INTEREST........................................................... 31
ARTICLE IV
SATISFACTION AND DISCHARGE........................................................................................ 32
SECTION 4.1 SATISFACTION AND DISCHARGE OF
INDENTURE...................................................................................... 32
SECTION 4.2 APPLICATION OF TRUST FUNDS........................................................ 33
ARTICLE V
REMEDIES.......................................................................................................... 33
SECTION 5.1 EVENTS OF DEFAULT................................................................. 33
</TABLE>
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<PAGE> 6
<TABLE>
<S> <C>
SECTION 5.2 ACCELERATION OF MATURITY; RESCISSION
AND ANNULMENT.................................................................................. 35
SECTION 5.3 ISSUER RESPONSIBILITIES UPON
ACCELERATION OF MATURITY; RESCISSION AND
ANNULMENT...................................................................................... 36
SECTION 5.4 TRUSTEE MAY FILE PROOFS OF CLAIM.................................................. 37
SECTION 5.5 TRUSTEE MAY ENFORCE CLAIMS WITHOUT
POSSESSION OF SECURITIES OR COUPONS............................................................ 37
SECTION 5.6 APPLICATION OF MONEY COLLECTED.................................................... 38
SECTION 5.7 LIMITATION ON SUITS............................................................... 38
SECTION 5.8 UNCONDITIONAL RIGHT OF HOLDERS TO
RECEIVE PRINCIPAL, PREMIUM, IF ANY, INTEREST
AND ADDITIONAL AMOUNTS......................................................................... 39
SECTION 5.9 RESTORATION OF RIGHTS AND REMEDIES................................................ 39
SECTION 5.10 RIGHTS AND REMEDIES CUMULATIVE.................................................... 39
SECTION 5.11 DELAY OR OMISSION NOT WAIVER...................................................... 39
SECTION 5.12 CONTROL BY HOLDERS OF SECURITIES.................................................. 40
SECTION 5.13 WAIVER OF PAST DEFAULTS........................................................... 40
SECTION 5.14 WAIVER OF USURY, STAY OR EXTENSION
LAWS........................................................................................... 40
SECTION 5.15 UNDERTAKING FOR COSTS............................................................. 40
ARTICLE VI
THE TRUSTEE
.................................................................................................................. 41
SECTION 6.1 NOTICE OF DEFAULTS................................................................ 41
SECTION 6.2 CERTAIN RIGHTS OF TRUSTEE......................................................... 41
SECTION 6.3 NOT RESPONSIBLE FOR RECITALS OR
ISSUANCE OF SECURITIES......................................................................... 43
SECTION 6.4 MAY HOLD SECURITIES............................................................... 43
SECTION 6.5 MONEY HELD IN TRUST............................................................... 43
SECTION 6.6 COMPENSATION AND REIMBURSEMENT.................................................... 43
SECTION 6.7 CORPORATE TRUSTEE REQUIRED;
ELIGIBILITY; CONFLICTING INTERESTS............................................................. 44
SECTION 6.8 RESIGNATION AND REMOVAL; APPOINTMENT
OF SUCCESSOR................................................................................... 44
SECTION 6.9 ACCEPTANCE OF APPOINTMENT BY
SUCCESSOR...................................................................................... 45
SECTION 6.10 MERGER, CONVERSION, CONSOLIDATION
OR SUCCESSION TO BUSINESS...................................................................... 46
SECTION 6.11 APPOINTMENT OF AUTHENTICATING AGENT............................................... 47
</TABLE>
iv
<PAGE> 7
<TABLE>
<CAPTION>
<S> <C>
ARTICLE VII
HOLDERS' LIST AND REPORTS BY TRUSTEE AND ISSUER................................................................... 49
SECTION 7.1 DISCLOSURE OF NAMES AND ADDRESSES OF
HOLDERS........................................................................................ 49
SECTION 7.2 REPORTS BY TRUSTEE................................................................ 49
SECTION 7.3 REPORTS BY ISSUER................................................................. 49
SECTION 7.4 ISSUER TO FURNISH TRUSTEE NAMES AND
ADDRESSES OF HOLDERS........................................................................... 49
ARTICLE VIII
CONSOLIDATION, MERGER, SALE, LEASE OR CONVEYANCE.................................................................. 50
SECTION 8.1 CONSOLIDATIONS AND MERGERS OF ISSUER
AND SALES, LEASES AND CONVEYANCE PERMITTED
SUBJECT TO CERTAIN CONDITIONS.................................................................. 50
SECTION 8.2 RIGHTS AND DUTIES OF SUCCESSOR
CORPORATION.................................................................................... 50
SECTION 8.3 OFFICERS' CERTIFICATE AND OPINION OF
COUNSEL........................................................................................ 51
ARTICLE IX
SUPPLEMENTAL INDENTURES........................................................................................... 51
SECTION 9.1 SUPPLEMENTAL INDENTURES WITHOUT
CONSENT OF HOLDERS............................................................................. 51
SECTION 9.2 SUPPLEMENTAL INDENTURES WITH CONSENT
OF HOLDERS..................................................................................... 52
SECTION 9.3 EXECUTION OF SUPPLEMENTAL INDENTURES.............................................. 53
SECTION 9.4 EFFECT OF SUPPLEMENTAL INDENTURES................................................. 54
SECTION 9.5 CONFORMITY WITH TRUST INDENTURE ACT............................................... 54
SECTION 9.6 REFERENCE IN SECURITIES TO
SUPPLEMENTAL INDENTURES........................................................................ 54
ARTICLE X
COVENANTS......................................................................................................... 54
SECTION 10.1 PAYMENT OF PRINCIPAL, PREMIUM, IF
ANY, INTEREST AND ADDITIONAL AMOUNTS........................................................... 54
SECTION 10.2 MAINTENANCE OF OFFICE OR AGENCY................................................... 54
SECTION 10.3 MONEY FOR SECURITIES PAYMENTS TO BE
HELD IN TRUST.................................................................................. 56
SECTION 10.4 LIMITATIONS ON INCURRENCE OF DEBT................................................. 57
</TABLE>
v
<PAGE> 8
<TABLE>
<CAPTION>
<S> <C>
SECTION 10.5 MAINTENANCE OF TOTAL UNENCUMBERED
ASSETS......................................................................................... 58
SECTION 10.6 EXISTENCE......................................................................... 58
SECTION 10.7 MAINTENANCE OF PROPERTIES......................................................... 59
SECTION 10.8 PAYMENT OF TAXES AND OTHER CLAIMS................................................. 59
SECTION 10.9 PROVISION OF FINANCIAL INFORMATION................................................ 59
SECTION 10.10 STATEMENT AS TO COMPLIANCE........................................................ 60
SECTION 10.11 ADDITIONAL AMOUNTS................................................................ 60
SECTION 10.12 WAIVER OF CERTAIN COVENANTS....................................................... 61
ARTICLE XI
REDEMPTION OF SECURITIES.......................................................................................... 61
SECTION 11.1 APPLICABILITY OF ARTICLE.......................................................... 61
SECTION 11.2 ELECTION TO REDEEM; NOTICE TO
TRUSTEE........................................................................................ 61
SECTION 11.3 SELECTION BY TRUSTEE OF SECURITIES TO
BE REDEEMED.................................................................................... 61
SECTION 11.4 NOTICE OF REDEMPTION.............................................................. 62
SECTION 11.5 DEPOSIT OF REDEMPTION PRICE....................................................... 63
SECTION 11.6 SECURITIES PAYABLE ON REDEMPTION
DATE........................................................................................... 63
SECTION 11.7 SECURITIES REDEEMED IN PART....................................................... 64
ARTICLE XII
SINKING FUNDS..................................................................................................... 65
SECTION 12.1 APPLICABILITY OF ARTICLE.......................................................... 65
SECTION 12.2 SATISFACTION OF SINKING FUND PAYMENT
WITH SECURITIES................................................................................ 65
SECTION 12.3 REDEMPTION OF SECURITIES FOR SINKING
FUND........................................................................................... 65
ARTICLE XIII
REPAYMENT AT THE OPTION OF HOLDERS................................................................................ 66
SECTION 13.1 APPLICABILITY OF ARTICLE.......................................................... 66
SECTION 13.2 REPAYMENT OF SECURITIES........................................................... 66
SECTION 13.3 EXERCISE OF OPTION................................................................ 66
SECTION 13.4 WHEN SECURITIES PRESENTED FOR
REPAYMENT BECOME DUE AND PAYABLE............................................................... 67
SECTION 13.5 SECURITIES REPAID IN PART......................................................... 68
</TABLE>
vi
<PAGE> 9
<TABLE>
<CAPTION>
<S> <C>
ARTICLE XIV
DEFEASANCE AND COVENANT DEFEASANCE................................................................................ 68
SECTION 14.1 APPLICABILITY OF ARTICLE; ISSUER'S
OPTION TO EFFECT DEFEASANCE OR COVENANT
DEFEASANCE..................................................................................... 68
SECTION 14.2 DEFEASANCE AND DISCHARGE.......................................................... 68
SECTION 14.3 COVENANT DEFEASANCE............................................................... 69
SECTION 14.4 CONDITIONS TO DEFEASANCE OR
COVENANT DEFEASANCE............................................................................ 69
SECTION 14.5 DEPOSITED MONEY AND GOVERNMENT
OBLIGATIONS TO BE HELD IN TRUST; OTHER
MISCELLANEOUS PROVISIONS....................................................................... 71
ARTICLE XV
MEETINGS OF HOLDERS OF SECURITIES................................................................................. 72
SECTION 15.1 PURPOSES FOR WHICH MEETINGS MAY BE
CALLED......................................................................................... 72
SECTION 15.2 CALL, NOTICE AND PLACE OF MEETINGS................................................ 72
SECTION 15.3 PERSONS ENTITLED TO VOTE AT MEETINGS.............................................. 73
SECTION 15.4 QUORUM; ACTION.................................................................... 73
SECTION 15.5 DETERMINATION OF VOTING RIGHTS;
CONDUCT AND ADJOURNMENT OF MEETINGS............................................................ 74
SECTION 15.6 COUNTING VOTES AND RECORDING ACTION
OF MEETINGS.................................................................................... 75
</TABLE>
vii
<PAGE> 10
INDENTURE, dated as of __________________, 199_ between
EASTGROUP PROPERTIES, a real estate investment trust formed under the laws of
the state of Maryland (the "Issuer"), having its principal offices at 300 One
Jackson Place, 188 East Capitol Street, Jackson, Mississippi 39201-2195 and
______________________, as Trustee hereunder (the "Trustee"), having its
Corporate Trust Office at ___________________________.
RECITALS OF THE ISSUER
The Issuer deems it necessary to issue from time to time for
its lawful purposes senior debt securities (hereinafter called the
"Securities"), evidencing its unsecured indebtedness, and has duly authorized
the execution and delivery of this Indenture to provide for the issuance from
time to time of the Securities, unlimited as to principal amount, to bear
interest at the rates or formulas, to mature at such times and to have such
other provisions as shall be fixed as hereinafter provided.
This Indenture is subject to the provisions of the Trust
Indenture Act of 1939, as amended, that are deemed to be incorporated into this
Indenture and shall, to the extent applicable, be governed by such provisions.
All things necessary to make this Indenture a valid agreement
of the Issuer, in accordance with its terms, have been done.
NOW, THEREFOR, for and in consideration of the premises and
the purchase of the Securities by the holders thereof, it is mutually covenanted
and agreed, for the equal and proportionate benefit of all Holders of the
Securities, as follows:
ARTICLE I
DEFINITIONS AND OTHER PROVISIONS OF GENERAL APPLICATION
SECTION 1.1 DEFINITIONS. For all purposes of this Indenture,
except as otherwise expressly provided or unless the context otherwise requires:
(a) the terms defined in this Article have the meanings
assigned to them in this Article, and include the plural as well as the
singular;
(b) all other terms used herein which are defined in the
TIA, either directly or by reference therein, have the meanings assigned to them
therein, and the terms "cash transaction" and "self-liquidating paper," as used
in TIA Section 311, shall have the meanings assigned to them in the rules of the
Commission adopted under the TIA;
(c) all accounting terms not otherwise defined herein
have the meanings assigned to them in accordance with GAAP; and
<PAGE> 11
(d) the words "herein," "hereof" and "hereunder" and
other words of similar import refer to this Indenture as a whole and not to any
particular Article, Section or other subdivision.
"Act," when used with respect to any Holder, has the meaning
specified in Section 1.4.
"Additional Amounts" means any additional amounts which are
required by a Security or by or pursuant to a Board Resolution, under
circumstances specified therein, to be paid by the Issuer in respect of certain
taxes imposed on certain Holders and which are owing to such Holders.
"Affiliate" of any specified Person means any other Person
directly or indirectly controlling or controlled by or under direct or indirect
common control with such specified Person. For the purposes of this definition,
"control" when used with respect to any specified Person means the power to
direct the management and policies of such Person, directly or indirectly,
whether through the ownership of voting securities, by contract or otherwise;
and the terms "controlling" and "controlled" have meanings correlative to the
foregoing.
"Authenticating Agent" means any authenticating agent
appointed by the Trustee pursuant to Section 6.11.
"Authorized Newspaper" means a newspaper, printed in the
English language or in an official language of the country of publication,
customarily published on each Business Day, whether or not published on
Saturdays, Sundays or holidays, and of general circulation in each place in
connection with which the term is used or in the financial community of each
such place. Whenever successive publications are required to be made in
Authorized Newspapers, the successive publications may be made in the same or in
different Authorized Newspapers in the same city meeting the foregoing
requirements and in each case on any Business Day.
"Bankruptcy Law" has the meaning specified in Section 5.1.
"Bearer Security" means any Security established pursuant to
Section 2.1 which is payable to bearer.
"Board of Trustees" means the board of trustees of the Issuer
or any committee of that board duly authorized to act hereunder.
"Board Resolution" means a copy of a resolution certified by
the President or Secretary of the Issuer to have been duly adopted by the Board
of Trustees and to be in full force and effect on the date of such
certification, and delivered to the Trustee.
"Business Day" when used with respect to any Place of Payment
or any other particular location referred to in this Indenture or in the
Securities, means, unless otherwise
2
<PAGE> 12
specified with respect to any Securities pursuant to Section 3.1, any day, other
than a Saturday or Sunday, that is neither a legal holiday nor a day on which
banking institutions in that Place of Payment or particular location are
authorized or required by law, regulation or executive order to close.
"Commission" means the Securities and Exchange Commission, as
from time to time constituted, created under the Exchange Act, or, if at anytime
after execution of this instrument such Commission is not existing and
performing the duties now assigned to it under the Trust Indenture Act, then the
body performing such duties on such date.
"Common Depositary" means the office of a depositary or common
depositary.
"Consolidated Income Available for Debt Service" for any
period means Consolidated Net Income of the Issuer and its Subsidiaries plus
amounts which have been deducted for (i) interest on Debt of the Issuer and its
Subsidiaries; (ii) provision for taxes of the Issuer and its Subsidiaries based
on income; (iii) amortization of debt discount; (iv) provisions for gains and
losses on properties; (v) depreciation and amortization; (vi) the effect of any
noncash charge resulting from a change in accounting principles in determining
Consolidated Net Income for such period; and (vii) amortization of deferred
charges.
"Consolidated Net Income" for any period means the amount of
consolidated income (or loss) of the Issuer and its Subsidiaries for such period
determined on a consolidated basis in accordance with GAAP.
"Conversion Event" means the cessation of use of (i) a Foreign
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
institutions of or within the international banking community; (ii) the ECU both
within the European Monetary System and for the settlement of transactions by
public institutions of or within the European Communities; or (iii) any currency
unit (or composite currency) other than the ECU for the purposes for which it
was established.
"Corporate Trust Office" means the office of the Trustee at
which, at any particular time, its corporate trust business shall be principally
administered, which office at the date hereof is located at
_________________________________.
"Corporation" includes corporations, associations,
partnerships, companies and business trusts.
"Coupon" means any interest coupon appertaining to a Bearer
Security.
"Custodian" has the meaning specified in Section 5.1.
"Debt" of the Issuer or any Subsidiary means any indebtedness
of the Issuer or any Subsidiary, whether or not contingent, in respect of (i)
borrowed money evidenced by bonds,
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notes, debentures or similar instruments; (ii) indebtedness secured by any
mortgage, pledge, lien, charge, encumbrance or any security interest existing on
property owned by the Issuer or any Subsidiary; (iii) the reimbursement
obligations, contingent or otherwise, in connection with any letters of credit
actually issued or amounts representing the balance deferred and unpaid of the
purchase price of any property except any such balance that constitutes an
accrued expense or trade payable; or (iv) any lease of property by the Issuer or
any Subsidiary as lessee which is reflected on the Issuer's consolidated balance
sheet as a capitalized lease in accordance with GAAP, in the case of items of
indebtedness under (i) through (iii) above to the extent that any such items
(other than letters of credit) would appear as a liability on the Issuer's
consolidated balance sheet in accordance with GAAP, and also includes, to the
extent not otherwise included, any obligation by the Issuer or any Subsidiary to
be liable for, or to pay, as obligor, guarantor or otherwise (other than for
purposes of collection in the ordinary course of business), indebtedness of
another Person (other than the Issuer or any Subsidiary) (it being understood
that Debt shall be deemed to be incurred by the Issuer and its Subsidiaries on a
consolidated basis whenever the Issuer and its Subsidiaries on a consolidated
basis shall create, assume, guarantee or otherwise become liable in respect
thereof).
"Defaulted Interest" has the meaning specified in Section 3.7.
"Dollar" or "$" means a dollar or other equivalent unit in
such coin or currency of the United States of America as at the time shall be
legal tender for the payment of public and private debts.
"DTC" means The Depository Trust Company.
"ECU" means the European Currency Unit, as defined and revised
from time to time by the Council of the European Community.
"European Communities" means the European Economic Community,
the European Coal and Steel Community and the European Atomic Energy Community.
"European Monetary System" means the European Monetary System
established by the Resolution of December 5, 1978 of the Council of the European
Community.
"Event of Default" has the meaning specified in Article V.
"Exchange Act" shall mean the Securities Exchange Act of 1934,
as amended.
"Foreign Currency" means any currency, currency unit or
composite currency, including, without limitation, the ECU issued by the
government of one or more countries other than the United States of America or
by any recognized confederation or association of such government.
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"Funds from Operations" for any period means the Consolidated
Net Income of the Issuer and its Subsidiaries for such period excluding gains or
losses from debt restructuring and sales of property, plus depreciation of real
estate assets, and after adjustment for unconsolidated partnerships and joint
ventures, all determined on a consistent basis in accordance with GAAP.
"GAAP" means generally accepted accounting principles, as in
effect from time to time, as used in the United States applied on a consistent
basis.
"Government Obligations" means securities which are (i) direct
obligations of the United States of America or the government which issued the
Foreign Currency in which the Securities of a particular series are payable, for
the payment of which its full faith and credit is pledged or (ii) obligations of
a Person controlled or supervised by and acting as an agency or instrumentality
of the United States of America or such government which issued the Foreign
Currency in which the Securities of such series are payable, the payment of
which is unconditionally guaranteed as a full faith and credit obligation by the
United States of America or such other government, which, in either case, are
not callable or redeemable at the option of the issuer thereof, and shall also
include a depository receipt issued by a bank or trust company as custodian with
respect to any such Government Obligation or held by such custodian for the
account of the holder of a depository receipt, provided that (except as required
by law) such custodian is not authorized to make any deduction from the amount
payable to the holder of such depository receipt from any amount received by the
custodian in respect of the Government Obligation or the specific payment of
interest on or principal of the Government Obligation evidenced by such
depository receipt.
"Holder" means, in the case of a Registered Security, the
Person in whose name a Security is registered in the Security Register and, in
the case of a Bearer Security, the bearer thereof and, when used with respect to
any coupon, shall mean the bearer thereof.
"Indenture" means this instrument as originally executed or as
it may from time to time be supplemented or amended by one or more indentures
supplemental hereto entered into pursuant to the applicable provisions hereof,
and shall include the terms of a particular series of Securities established as
contemplated by Section 3.1; provided, however, that, if at any time more than
one Person is acting as Trustee under this instrument, "Indenture" shall mean,
with respect to any one or more series of Securities for which such Person is
Trustee, this instrument as originally executed or as it may from time to time
be supplemented or amended by one or more indentures supplemental hereto entered
into pursuant to the applicable provisions hereof and shall include the terms of
the particular series of Securities for which such Person is Trustee established
as contemplated by Section 3.1, exclusive, however, of any provisions or terms
which relate solely to other series of Securities for which such Person is not
Trustee, regardless of when such terms or provisions were adopted, and exclusive
of any provisions or terms adopted by means of one or more indentures
supplemental hereto executed and delivered after such Person had become such
Trustee but to which such Person, as such Trustee, was not a party.
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<PAGE> 15
"Indexed Security" means a Security the terms of which provide
that the principal amount thereof payable at Stated Maturity may be more or less
than the principal face amount thereof at original issuance.
"Interest," when used with respect to an Original Issue
Discount Security which by its terms bears interest only after Maturity, shall
mean interest payable after Maturity, and, when used with respect to a Security
which provides for the payment of Additional Amounts pursuant to Section 10.12,
includes such Additional Amounts.
"Interest Payment Date," when used with respect to any
Security, means the Stated Maturity of an installment of interest on such
Security.
"Issuer" means the Person named as the "Issuer" in the first
paragraph of this Indenture until a successor shall have become such pursuant to
the applicable provisions of this Indenture, and thereafter "Issuer" shall mean
such successor.
"Issuer Request" and "Issuer Order" mean, respectively, a
written request or order signed in the name of the Issuer by its Chairman of the
Board, the President or the Vice President, and by its Treasurer, an Assistant
Treasurer, the Secretary or an Assistant Secretary, and delivered to the
Trustee.
"Maturity," when used with respect to any Security, means the
date on which the principal of such Security or an installment of principal
becomes due and payable as therein or herein provided, whether at the Stated
Maturity or by declaration of acceleration, notice of redemption, notice of
option to elect repayment or otherwise.
"Maximum Annual Service Charge" as of any date means the
maximum amount which is expended in any 12-month period for interest on Debt.
"Officers' Certificate" means a certificate signed by the
Chairman of the Board of Trustees, the President or a Vice President and by the
Treasurer, an Assistant Treasurer, the Secretary or an Assistant Secretary, of
the Issuer, and delivered to the Trustee.
"Opinion of Counsel" means a written opinion of counsel, who
may be counsel for the Issuer or who may be an employee of or other counsel for
the Issuer and who shall be 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 5.2.
"Outstanding," when used with respect to Securities, means, as
of the date of determination, all Securities theretofore authenticated and
delivered under this Indenture, except:
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<PAGE> 16
(i) Securities theretofore canceled by the Trustee
or delivered to the Trustee for cancellation;
(ii) Securities, or portions thereof, for whose
payment or redemption or repayment at the option of the Holder money in the
necessary amount has been theretofore deposited with the Trustee or any Paying
Agent (other than the Issuer) in trust or set aside and segregated in trust by
the Issuer (if the Issuer shall act as its own Paying Agent) for the Holders of
such Securities and any coupons appertaining thereto, provided that, if such
Securities are to be redeemed, notice of such redemption has been duly given
pursuant to this Indenture or provision theretofore satisfactory to the Trustee
has been made;
(iii) Securities, except to the extent provided in
Section 14.2 and 14.3, with respect to which the Issuer has effected defeasance
and/or covenant defeasance as provided in Article XIV; and
(iv) Securities which have been paid pursuant to
Section 3.6 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 Issuer; provided,
however, that in determining whether the Holders of the requisite principal
amount of the Outstanding Securities have given any request, demand,
authorization, direction, notice, consent or waiver hereunder or are present at
a meeting of Holders for quorum purposes, and for the purpose of making the
calculations required by TIA Section 313, (A) the principal amount of an
Original Issue Discount Security that may be counted in making such
determination or calculation and that shall be deemed to be Outstanding for such
purpose shall be equal to the amount of principal thereof that would be (or
shall have been declared to be) due and payable, at the time of such
determination, upon a declaration of acceleration of the maturity thereof
pursuant to Section 5.2; (B) the principal amount of any Security denominated in
a Foreign Currency that may be counted in making such determination or
calculation and that shall be deemed Outstanding for such purpose shall be equal
to the Dollar equivalent, determined pursuant to Section 3.1 as of the date such
Security is originally issued by the Issuer, of the principal amount (or, in the
case of an Original Issue Discount Security, the Dollar equivalent as of such
date of original issuance of the amount determined as provided in clause (A)
above) of such Security; (C) the principal amount of any Indexed Security that
may be counted in making such determination or calculation and that shall be
deemed outstanding for such purpose shall be equal to the principal face amount
of such Indexed Security at original issuance, unless otherwise provided with
respect to such Security pursuant to Section 3.1; and (D) Securities owned by
the Issuer or any other obligor upon the Securities or any Affiliate of the
Issuer or of such other obligor shall be disregarded and deemed not to be
Outstanding, except that, in determining whether the Trustee shall be protected
in making such calculation or in relying upon any such request, demand,
authorization, direction, notice, consent, or waiver, only Securities which the
Trustee knows to be so owned shall be so disregarded. Securities so owned which
have been pledged in good faith may be regarded as Outstanding if the pledgee
establishes to the satisfaction of the Trustee the pledgee's right so to act
with respect to such Securities and that the
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<PAGE> 17
pledgee is not the Issuer or any other obligor upon the Securities or any
Affiliate of the Issuer or of such other obligor.
"Paying Agent" means any Person authorized by the Issuer to
pay the principal of (and premium, if any) or interest on any Securities or
coupons on behalf of the Issuer.
"Permitted Indebtedness" means Indebtedness of the Issuer or
any Subsidiary owing to any Subsidiary or the Issuer; PROVIDED that any such
Indebtedness is made pursuant to an intercompany note and is subordinated in
right of payment to the Securities; provided further that any disposition,
pledge or transfer of any such Indebtedness to a Person (other than the Issuer
or another Subsidiary) shall be deemed to be an incurrence of such Indebtedness
by the Issuer or a Subsidiary, as the case may be, and not Permitted
Indebtedness as defined herein.
"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," when used with respect to the Securities
of or within any series, means the place or places where the principal of (and
premium, if any) and interest on such Securities are payable as specified as
contemplated by Sections 3.1 and 10.2.
"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 3.6 in exchange for or in
lieu of a mutilated, destroyed, lost or stolen Security or a Security to which a
mutilated, destroyed, lost or stolen coupon appertains shall be deemed to
evidence the same debt as the mutilated, destroyed, lost or stolen Security or
the Security to which the mutilated, destroyed, lost or stolen coupon
appertains.
"Redemption Date," when used with respect to any Security to
be redeemed, in whole or in part, means the date fixed for such redemption by or
pursuant to this Indenture.
"Redemption Price," when used with respect to any Security to
be redeemed, means the price at which it is to be redeemed pursuant to this
Indenture.
"Registered Security" shall mean any Security which is
registered in the Security Register.
"Regular Record Date" for the interest payable on any Interest
Payment Date on the Registered Securities of or within any series means the date
specified for that purpose as contemplated by Section 3.1, whether or not a
Business Day.
"Repayment Date" means, when used with respect to any Security
to be repaid at the option of the Holder, the date fixed for such repayment by
or pursuant to this Indenture.
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<PAGE> 18
"Repayment Price" means, when used with respect to any
Security to be repaid at the option of the Holder, the price at which it is to
be repaid by or pursuant to this Indenture.
"Responsible Officer," when used with respect to the Trustee,
means the chairman or vice-chairman of the board of directors, the chairman or
vice-chairman of the executive committee of the board of directors, the
president, any vice president (whether or not designated by a number or a word
or words added before or after the title "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 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 such officer's knowledge and familiarity with the
particular subject.
"Security" has the meaning stated in the first recital of this
Indenture and, more particularly, means any Security or Securities authenticated
and delivered under this Indenture; provided, however, that, if at any time
there is more than one Person acting as Trustee under this Indenture,
"Securities" with respect to the Indenture as to which such Person is Trustee
shall have the meaning stated in the first recital of this Indenture and shall
more particularly mean Securities authenticated and delivered under this
Indenture, exclusive, however, of Securities of any series as to which such
Person is not Trustee.
"Security Register" and "Security Registrar" have the
respective meanings specified in Section 3.5.
"Significant Subsidiary" means any Subsidiary which is a
"significant subsidiary" (as defined in Article I, Rule 1-02 of Regulation S-X,
promulgated under the Securities Act of 1933) of the Issuer.
"Special Record Date" for the payment of any Defaulted
Interest on the Registered Securities of or within any series means a date fixed
by the Trustee pursuant to Section 3.7.
"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 or a coupon representing such installment of interest
as the fixed date on which the principal of such Security or such installment of
principal or interest is due and payable.
"Subsidiary" means a corporation, partnership or limited
liability company a majority of the outstanding voting stock, partnership
interests or membership interests, as the case may be, of which is owned or
controlled, directly or indirectly, by the Issuer or by one or more other
subsidiaries of the Issuer. For the purposes of this definition, "voting stock"
means stock having voting power for the election of directors, or trustees, as
the case may be, whether at all times or only so long as no senior class of
stock has such voting power by reason of any contingency.
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<PAGE> 19
"Total Assets" as of any date means the sum of (i) the
Undepreciated Real Estate Assets and (ii) all other assets of the Issuer and its
Subsidiaries on a consolidated basis determined in accordance with GAAP (but
excluding intangibles and accounts receivable).
"Total Unencumbered Assets" means the sum of (i) those
Undepreciated Real Estate Assets not subject to an encumbrance and (ii) all
other assets of the Issuer and its Subsidiaries not subject to an encumbrance
determined in accordance with GAAP (but excluding intangibles and accounts
receivable).
"Trust Indenture Act" or "TIA" means the Trust Indenture Act
of 1939, as amended and as in force at the date as of which this Indenture was
executed, except as provided in Section 9.5.
"Trustee" means the Person named as the "Trustee" in the first
paragraph of this Indenture until a successor Trustee shall have become such
pursuant to the applicable provisions of this Indenture, and thereafter
"Trustee" shall mean or include each Person who is then a Trustee hereunder;
provided, however, that if at any time there is more than one such Person,
"Trustee" as used with respect to the Securities of any series shall mean only
the Trustee with respect to Securities of that series.
"Undepreciated Real Estate Assets" means as of any date the
cost (original cost plus capital improvements) of real estate assets of the
Issuer and its Subsidiaries on such date, before depreciation and amortization,
determined on a consolidated basis in accordance with GAAP.
"United States" means, unless otherwise specified with respect
to any Securities pursuant to Section 3.1, the United States of America
(including the states and the District of Columbia), its territories, its
possessions and other areas subject to its jurisdiction.
"United States Person" means, unless otherwise specified with
respect to any Securities pursuant to Section 3.1, an individual who is a
citizen or resident of the United States, a corporation, partnership or other
entity created, formed or organized in or under the laws of the United States or
an estate or trust the income of which is subject to United States federal
income taxation regardless of its source.
"Unsecured Debt" means Debt of the Issuer or any Subsidiary
which is not secured by any mortgage, lien, charge, pledge or security interest
of any kind upon any of the properties owned by the Issuer or any of its
Subsidiaries.
"Yield to Maturity" means the yield to maturity, computed at
the time of issuance of a Security (or, if applicable, at the most recent
redetermination of interest on such Security) and as set forth in such Security
in accordance with generally accepted United States bond yield computation
principles.
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<PAGE> 20
SECTION 1.2 COMPLIANCE CERTIFICATES AND OPINIONS. Upon any
application or request by the Issuer to the Trustee to take any action under any
provision of this Indenture, the Issuer 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 (including certificates
delivered pursuant to Section 10.11) shall include:
(a) a statement that each individual signing such
certificate or opinion has read such condition or covenant and the definitions
herein relating thereto;
(b) a brief statement as to the nature and scope of the
examination or investigation upon which the statements or opinions contained in
such certificate or opinion are based;
(c) a statement that, in the opinion of each such
individual, he or she has made such examination or investigation as is necessary
to enable him or her to express an informed opinion as to whether or not such
condition or covenant has been complied with; and
(d) a statement as to whether, in the opinion of such
individual, such condition or covenant has been complied with.
SECTION 1.3 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 Person or that such matters
be so certified or covered by only one document, but one Person may certify or
give an opinion as to some matters and one or more other Persons as to other
matters, and any Person may certify or give an opinion as to such matters in one
or several documents.
Any certificate or opinion of an officer of the Issuer may be
based, insofar as it relates to legal matters, upon an Opinion of Counsel or a
certificate or representations of or by counsel, unless such officer knows, or
in the exercise of reasonable care should know, that the opinion, certificate or
representations with respect to the matters upon which his or her certificate or
opinion is based are erroneous. Any such Opinion of Counsel or certificate or
representations may be based, insofar as it relates to factual matters, upon a
certificate or opinion of, or representations by, an officer or officers of the
Issuer stating that the information as to such factual
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<PAGE> 21
matters is in the possession of the Issuer, unless such counsel knows that the
certificate, opinion or representations as to such matters are erroneous.
Where any Person is required to make, give or execute two or
more applications, requests, consents, certificates, statements, opinions or
other instruments under this Indenture, they may, but need not, be consolidated
and form one instrument.
SECTION 1.4 ACTS OF HOLDERS. (a) Any request, demand,
authorization, direction, notice, consent, waiver or other action provided by
this Indenture to be given or taken by Holders of the Outstanding Securities of
all series or one or more series, as the case may be, may be embodied in and
evidenced by one or more instruments of substantially similar tenor signed by
such Holders in person or by agents duly appointed in writing. If Securities of
a series are issuable as Bearer Securities, any request, demand, authorization,
direction, notice, consent, waiver or other action provided by this Indenture to
be given or taken by Holders of Securities of such series may, alternatively, be
embodied in and evidenced by the record of Holders of Securities of such series
voting in favor thereof, either in person or by proxies duly appointed in
writing, at any meeting of Holders of Securities of such series duly called and
held in accordance with the provisions of Article XV, or a combination of such
instruments and any such record. Except as herein otherwise expressly provided,
such action shall become effective when such instrument or instruments or record
or both are delivered to the Trustee and, where it is hereby expressly required,
to the Issuer. 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, 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. The record of any meeting of
Holders of Securities shall be proved in the manner provided in Section 15.6.
(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 or her individual capacity, such certificate or affidavit shall
also constitute sufficient proof of his or her authority. The fact and date of
the execution of any such instrument or writing or the authority of the Person
executing the same may also be proved in any other reasonable manner which the
Trustee deems sufficient.
(c) The ownership of Registered Securities shall be
proved by the Security Register.
(d) The ownership of Bearer Securities may be proved by
the production of such Bearer Securities or by a certificate executed, as
depositary, by any trust company, bank, banker or other depositary, wherever
situated, if such certificate shall be deemed by the Trustee to be satisfactory,
showing that at the date therein mentioned such Person had on deposit with such
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<PAGE> 22
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 Issuer may assume that such ownership of
any Bearer Security continues until (i) another certificate or affidavit bearing
a later date issued in respect of the same Bearer Security is produced; (ii)
such Bearer Security is produced to the Trustee by some other Person; (iii) such
Bearer Security is surrendered in exchange for a Registered Security; or (iv)
such Bearer Security is no longer Outstanding. The ownership of Bearer
Securities may also be proved in any other manner which the Trustee deems
sufficient.
(e) If the Issuer shall solicit from the Holders of
Registered Securities any request, demand, authorization, direction, notice,
consent, waiver or other Act, the Issuer may, at its option, in or pursuant to a
Board Resolution, fix in advance a record date for the determination of Holders
entitled to give such request, demand, authorization, direction, notice,
consent, waiver or other Act, but the Issuer shall have no obligation to do so.
Notwithstanding TIA Section 316(c), such record date shall be the record date
specified in or pursuant to such Board Resolution, which shall be a date not
earlier than the date 30 days prior to the first solicitation of Holders
generally in connection therewith and not later than the date such solicitation
is completed. If such a record date is fixed, such request, demand,
authorization, direction, notice, consent, waiver or other Act may be given
before or after such record date, but only the Holders of record at the close of
business on such record date shall be deemed to be Holders for the purposes of
determining whether Holders of the requisite proportion of Outstanding
Securities have authorized, agreed or consented to such request, demand,
authorization, direction, notice, consent, waiver or other Act, and for that
purpose the Outstanding Securities shall be computed as of such record date;
provided that no such authorization, agreement or consent by the Holders on such
record date shall be deemed effective unless it shall become effective pursuant
to the provisions of this Indenture not later than eleven months after the
record date.
(f) Any request, demand, authorization, direction,
notice, consent, waiver or other Act of the Holder of any Security shall bind
every future Holder of the same Security and the Holder of every Security issued
upon the registration of transfer thereof, in exchange therefor or in lieu
thereof in respect of anything done, omitted or suffered to be done by the
Trustee, any Security Registrar, any Paying Agent, any Authenticating Agent or
the Issuer in reliance thereon, whether or not notation of such action is made
upon such Security.
SECTION 1.5 NOTICES, ETC., TO TRUSTEE AND ISSUER. Any request,
demand, authorization, direction, notice, consent, waiver or Act of Holders or
other document provided or permitted by this Indenture to be made upon, given or
furnished to, or filed with, (a) the Trustee by a Holder or by the Issuer shall
be sufficient for every purpose hereunder if made, given, furnished or filed in
writing to or with the Trustee at ____________________, Attention:
____________________; or (b) the Issuer by the Trustee or by any Holder shall be
sufficient for every purpose hereunder (unless otherwise herein expressly
provided) if in writing and mailed, first class postage prepaid, to the Issuer
addressed to it at the address of its principal office
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specified in the first paragraph of this Indenture or at any other address
previously furnished in writing to the Trustee by the Issuer.
SECTION 1.6 NOTICE TO HOLDERS; WAIVER. Where this Indenture
provides for notice of any event to Holders of Registered Securities by the
Issuer or the Trustee such notice shall be sufficiently given (unless otherwise
herein expressly provided) if in writing and mailed, first-class postage
prepaid, to each such Holder affected by such event, at his or her address as it
appears in the Security Register not later than the latest date and not earlier
than the earliest date prescribed for the giving of such notice. In any case
where notice to Holders of Registered Securities is given by mail, neither the
failure to mail such notice nor any defect in any notice so mailed to any
particular Holder shall affect the sufficiency of such notice with respect to
other Holders of Registered Securities or the sufficiency of any notice to
Holders of Bearer Securities given as provided herein. Any notice mailed to a
Holder in the manner herein prescribed shall be conclusively deemed to have been
received by such Holder, whether or not such Holder actually receives such
notice.
If by reason of the suspension of or irregularities in regular
mail service or by reason of any other cause it shall be impracticable to give
such mail, then such notification to Holders of Registered Securities as shall
be made with the approval of the Trustee shall constitute a sufficient
notification to such Holders for every purpose hereunder.
Except as otherwise expressly provided herein or otherwise
specified with respect to any Securities pursuant to Section 3.1, where this
Indenture provides for notice to Holders of Bearer Securities of any event, such
notice shall be sufficiently given if published in an Authorized Newspaper in
New York City and in such other city or cities as may be specified in such
Securities on a Business Day, such publication to be not later than the latest
date and not earlier than the earliest date prescribed for the giving of such
notice. Any such notice shall be deemed to have been given on the date of such
publication or, if published more than once, on the date of the first such
publication.
If by reason of the suspension of publication of any
Authorized Newspaper or Authorized Newspapers or by reason of any other cause it
shall be impracticable to publish any notice to Holders of Bearer Securities as
provided above, then such notifications to Holders of Bearer Securities as shall
be given with the approval of the Trustee shall constitute sufficient notice to
such Holders for every purpose hereunder. Neither the failure to give notice by
publication to any particular Holder of Bearer Securities as provided above nor
any defect in any notice so published shall affect the sufficiency of such
notice with respect to other Holders of Bearer Securities or the sufficiency of
any notice to Holders of Registered Securities given as provided herein.
Any request, demand, authorization, direction, notice, consent
or waiver required or permitted under this Indenture shall be in the English
language, except that any published notice may be in an official language of the
country of publication.
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Where this Indenture provides for notice in any manner, such
notice may be waived in writing by the Person entitled to receive such notice,
either before or after the event, and such waiver shall be the equivalent of
such notice. Waivers of notice by Holders shall be filed with the Trustee, but
such filing shall not be a condition precedent to the validity of any action
taken in reliance upon such waiver.
SECTION 1.7 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 1.8 SUCCESSORS AND ASSIGNS. All covenants and
agreements in this Indenture by the parties hereto shall bind their successors
and assigns, whether so expressed or not; however, neither party shall assign
its rights and obligations hereunder without the prior written consent of the
other party.
SECTION 1.9 SEPARABILITY CLAUSE. In case any provision in this
Indenture or in any Security or coupon shall be invalid, illegal or
unenforceable, the validity, legality and enforceability of the remaining
provisions shall not in any way be affected or impaired thereby.
SECTION 1.10 BENEFITS OF INDENTURE. Nothing in this Indenture
or in the Securities or coupons, express or implied, shall given to any Person,
other than the parties hereto, any Security Registrar, any Paying Agent, any
Authenticating Agent, the Holders and any of their successors hereunder any
benefit or any legal or equitable right, remedy or claim under this Indenture.
SECTION 1.11 GOVERNING LAW. This Indenture and the Securities
and coupons shall be governed by and construed in accordance with the laws of
the State of New York. This Indenture is subject to the provisions of the TIA
that are required to be part of this Indenture and shall, to the extent
applicable, be governed by such provisions.
SECTION 1.12 LEGAL HOLIDAYS. In any case where any Interest
Payment Date, Redemption Date, Repayment Date, sinking fund payment date, Stated
Maturity or Maturity of any Security shall not be a Business Day at any Place of
Payment, then (notwithstanding any other provision of this Indenture or any
Security or coupon other than a provision in the Securities of any series which
specifically states that such provision shall apply in lieu hereof) payment of
interest or any Additional Amounts or principal (and premium, if any) need not
be made at such Place of Payment on such date but may be made on the next
succeeding Business Day at such Place of Payment with the same force and effect
as if made on the Interest Payment Date, Redemption Date, Repayment Date,
sinking fund payment date, the Stated Maturity or Maturity, provided that no
interest shall accrue on the amount so payable for the period from and after
such Interest Payment Date, Redemption Date, Repayment Date, sinking fund
payment date, Stated Maturity or Maturity, as the case may be.
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ARTICLE II
SECURITIES FORMS
SECTION 2.1 FORMS OF SECURITIES. The Registered Securities, if
any, of each series and the Bearer Securities, if any, of each series and
related coupons shall be in substantially the forms as shall be established in
one or more indentures supplemental hereto or approved from time to time by or
pursuant to a Board Resolution in accordance with Section 3.1, shall have such
appropriate insertions, omissions, substitutions and other variations as are
required or permitted by this Indenture or any indenture supplemental hereto,
and may have such letters, numbers or other marks of identification or
designation and such legends or endorsements placed thereon as the Issuer may
deem appropriate and as are not inconsistent with the provisions of this
Indenture, or as may be required to comply with any law or with any rule or
regulation made pursuant thereto or with any rule or regulation of any stock
exchange on which the Securities may be listed or to conform to usage.
Unless otherwise specified as contemplated by Section 3.1,
Bearer Securities shall have interest coupons attached.
The definitive Securities and coupons shall be printed,
lithographed or engraved or produced by any combination of these methods on a
steel engraved border or steel engraved borders or may be produced in any other
manner, all as determined by the officers executing such Securities or coupons,
as evidenced by their execution of such Securities or coupons.
SECTION 2.2 FORM OF TRUSTEE'S CERTIFICATE OF AUTHENTICATION.
Subject to Section 6.11, the Trustee's certificate of authentication shall be in
substantially the following form:
This is one of the Securities of the series designated therein
referred to in the within-mentioned Indenture.
(TRUSTEE)
as Trustee
By:
------------------------------
Authorized Signatory
SECTION 2.3 SECURITIES ISSUABLE IN GLOBAL FORM. If Securities
of or within a series are issuable in global form, as specified as contemplated
by Section 3.1, then, notwithstanding clause (h) of Section 3.1 and the
provisions of Section 3.2, any such Security shall represent such of the
Outstanding Securities of such series as shall be specified therein and may
provide that it shall represent the aggregate amount of Outstanding Securities
of such series from
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time to time endorsed thereon and that the aggregate amount of Outstanding
Securities of such series represented thereby may from time to time be increased
or decreased to reflect exchanges. Any endorsement of a Security in global form
to reflect the amount, or any increase or decrease in the amount, of Outstanding
Securities represented thereby shall be made by the Trustee in such manner and
upon instructions given by such Person or Persons as shall be specified therein
or in the Issuer Order to be delivered to the Trustee pursuant to Section 3.3 or
3.4. Subject to the provisions of Section 3.3 and, if applicable, Section 3.4,
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 Issuer Order. If an Issuer Order pursuant to
Section 3.3 or 3.4 has been, or simultaneously is, delivered, any instructions
by the Issuer with respect to endorsement or delivery or redelivery of a
Security in global form shall be in writing but need not comply with Section 1.2
and need not be accompanied by an Opinion of Counsel.
The provisions of that last sentence of Section 3.3 shall
apply to any Security represented by a Security in global form if such Security
was never issued and sold by the Issuer and the Issuer delivers to the Trustee
the Security in global form together with written instructions (which need not
comply with Section 1.2 and need not be accompanied by an Opinion of Counsel)
with regard to the reduction in the principal amount of Securities represented
thereby, together with the written statement contemplated by the last sentence
of Section 3.3.
Notwithstanding the provisions of Section 3.7, unless
otherwise specified as contemplated by Section 3.1, payment of principal of and
any premium and interest on any Security in permanent global form shall be made
to the Person or Persons specified therein.
Notwithstanding the provisions of Section 3.8 and except as
provided in the preceding paragraph, the Issuer, the Trustee and any agent of
the Issuer and the Trustee shall treat as the Holder of such principal amount of
Outstanding Securities represented by a permanent global Security (a) in the
case of permanent global Security in registered form, the Holder of such
permanent global Security in registered form; or (b) in the case of a permanent
global Security in bearer form, the Person or Persons specified pursuant to
Section 3.1.
ARTICLE III
THE SECURITIES
SECTION 3.1 AMOUNT UNLIMITED; ISSUABLE IN SERIES. The
aggregate principal amount of Securities which may be authenticated and
delivered under this Indenture is unlimited.
The Securities may be issued in one or more series. There
shall be established in one or more Board Resolutions or pursuant to authority
granted by one or more Board Resolutions and, subject to Section 3.3, set forth,
or determined in the manner provided, in an Officers' Certificate, or
established in one or more indentures supplemental hereto, prior to the issuance
of
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Securities of any series, any or all of the following, as applicable, each of
which, if so provided, may be determined from time to time by the Issuer with
respect to unissued Securities of the series when issued from time to time:
(a) the title of the Securities of the series (which
shall distinguish the Securities of such series from all other series of
Securities);
(b) any limit upon the aggregate principal amount of the
Securities of the series that may be authenticated and delivered under this
Indenture (except for Securities authenticated and delivered upon registration
of transfer of, in exchange for or in lieu of other Securities of the series
pursuant to Section 3.4, 3.5, 3.6, 9.6, 11.7 or 13.5);
(c) the percentage of the principal amount at which the
Securities of the series will be issued and, if other than the principal amount
thereof, the portion of the principal amount thereof payable upon declaration of
acceleration of maturity thereof;
(d) the date or dates, or the method for determining
such date or dates, on which the principal of the Securities of the series shall
be payable;
(e) the rate or rates at which the Securities of the
series shall bear interest, if any, or the method by which such rate or rates
shall be determined, the date or dates from which such interest shall accrue or
the method by which such date or dates shall be determined, the Interest Payment
Dates on which such interest will be payable and the Regular Record Date, if
any, for the interest payable on any Registered Security on any Interest Payment
Date, or the method by which such date shall be determined, and the basis upon
which interest shall be calculated if other than that of a 360-day year of
twelve 30-day months;
(f) the place or places, if any, other than or in
addition to the Borough of Manhattan, New York City, where the principal of (and
premium, if any), interest, if any, on, and Additional Amounts, if any, payable
in respect of, the Securities of the series shall be payable, any Registered
Securities of the series may be surrendered for registration of transfer,
exchange or conversion and notices or demands to or upon the Issuer in respect
of the Securities of the series and this Indenture may be served;
(g) the period or periods within which, the price or
prices at which, the currency or currencies, currency unit or units or composite
currency or currencies in which, and other terms and conditions upon which the
Securities of the series may be redeemed, as a whole or in part, at the option
of the Issuer, if the Issuer is to have such an option;
(h) the obligation, if any, of the Issuer to redeem,
repay or purchase the Securities of the series pursuant to any sinking fund or
analogous provision or at the option of a Holder thereof, and the period or
periods within which or the date or dates on which, the price or prices at
which, the currency or currencies, currency unit or units or composite currency
or
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currencies in which, and other terms and conditions upon which the Securities of
the series shall be redeemed, repaid or purchased, as a whole or in part,
pursuant to such obligation;
(i) if other than denominations of $1,000 and any
integral multiple thereof, the denominations in which any Registered Securities
of the series shall be issuable and, if other than denominations of $5,000 and
any integral multiple thereof, the denomination or denominations in which any
Bearer Securities of the series shall be issuable;
(j) if other than the Trustee, the identity of each
Security Registrar and/or Paying Agent;
(k) if other than the principal amount thereof, the
portion of the principal amount of the Securities of the series that shall be
payable upon declaration of acceleration of the Maturity thereof pursuant to
Section 3.2 or the method by which such portion shall be determined;
(l) if other than Dollars, the Foreign Currency or
Currencies in which payment of the principal of (and premium, if any) or
interest or Additional Amounts, if any, on the Securities of the series shall be
payable or in which the Securities of the series shall be denominated;
(m) whether the amount of payments of principal of (and
premium, if any) or interest, if any, on the Securities of the series may be
determined with reference to an index, formula or other method (which index,
formula or method may be based, without limitation, on one or more currencies,
currency units, composite currencies, commodities, equity indices or other
indices), and the manner in which such amounts shall be determined;
(n) whether the principal of (and premium, if any) or
interest or Additional Amounts, if any, on the Securities of the series are to
be payable, at the election of the Issuer or a Holder thereof, in a currency or
currencies, currency unit or units or composite currency or currencies other
than that in which such Securities are denominated or stated to be payable, the
period or periods within which, and the terms and conditions upon which, such
election may be made, and the time and manner of, and identity of the exchange
rate agent with responsibility for, determining the exchange rate between the
currency or currencies, currency unit or units or composite currency or
currencies in which such Securities are denominated or stated to be payable and
the currency or currencies, currency unit or units or composite currency or
currencies in which such Securities are to be so payable;
(o) provisions, if any, granting special rights to the
Holders of the Securities of the series upon the occurrence of such events as
may be specified;
(p) any deletions from, modifications of or additions to
the Events of Default or covenants of the Issuer with respect to the Securities
of the series, whether or not such Events of Default or covenants are consistent
with the Events of Default or covenants set forth herein;
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(q) whether the Securities of the series are to be
issuable as Registered Securities, Bearer Securities (with or without coupons)
or both, any restrictions applicable to the offer, sale or delivery of Bearer
Securities and the terms upon which Bearer Securities of the series may be
exchanged for Registered Securities of the series and vice versa (if permitted
by applicable laws and regulations), whether any Securities of the series are to
be issuable initially in temporary global form and whether any Securities of the
series are to be issuable in permanent global form with or without coupons and,
if so, whether beneficial owners of interests in any such permanent global
Security may exchange such interests for Securities of such series and of like
tenor of any authorized form and denomination and the circumstances under which
any such exchanges may occur, if other than in the manner provided in Section
3.5, and, if Registered Securities of the series are to be issuable as a global
Security, the identity of the depositary for such series;
(r) the date as of which any Bearer Securities of the
series and any temporary global Security representing Outstanding Securities of
the series shall be dated if other than the date of original issuance of the
first Security of the series to be issued;
(s) the Person to whom any interest on any Registered
Security of the series shall be payable, if other than the Person in whose name
that Security (or one or more Predecessor Securities) is registered at the close
of business on the Regular Record Date for such interest, the manner in which,
or the Person to whom, any interest on any Bearer Security of the series shall
be payable, if otherwise than upon presentation and surrender of the coupons
appertaining thereto as they severally mature, and the extent to which, or the
manner in which, any interest payable on a temporary global Security on an
Interest Payment Date will be paid if other than in the manner provided in
Section 3.4;
(t) the applicability, if any, of Sections 14.2 and 14.3
to the Securities of the series and any provisions in modification of, in
addition to or in lieu of, any of the provisions of Article XIV;
(u) if the Securities of such series are to be issuable
in definitive form (whether upon original issue or upon exchange of a temporary
Security of such series) only upon receipt of certain certificates or other
documents or satisfaction of other conditions, then the form and terms of such
certificates, documents or conditions;
(v) whether and under what circumstances the Issuer will
pay Additional Amounts as contemplated by Section 10.11 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 Issuer will have the option to
redeem such Securities rather than pay such Additional Amounts (and the terms of
any such option);
(w) with respect to any Securities that provide for
optional redemption or prepayment upon the occurrence of certain events (such as
a change of control of the Issuer) (i) the possible effects of such provisions
on the market price of the Issuer's securities or in deterring
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certain mergers, tender offers or other takeover attempts, and the intention of
the Issuer to comply with the requirements of Rule 14e-1 under the Exchange Act
and any other applicable securities laws in connection with such provisions;
(ii) whether the occurrence of the specified events may give rise to
cross-defaults on other indebtedness such that payment on such Securities may be
effectively subordinated; and (iii) the existence of any limitation on the
Issuer's financial or legal ability to repurchase such Securities upon the
occurrence of such an event (of, if true, the lack of assurance that such a
repurchase can be effected) and the impact, if any, under the Indenture of such
a failure, including whether and under what circumstances such a failure may
constitute an Event of Default; and
(x) any other terms of the series (which terms shall not
be inconsistent with the provisions of this Indenture).
All Securities of any one series and the coupons appertaining
to any Bearer Securities of the series shall be substantially identical except,
in the case of Registered Securities, as to denomination and except as may
otherwise be provided in or pursuant to such Board Resolution (subject to
Section 3.3) and set forth in such Officers' Certificate or in any such
indenture supplemental hereto. All Securities of any one series need not be
issued at the same time and, unless otherwise provided, a series may be
reopened, without the consent of the Holders, for issuances of additional
Securities of such series.
If any of the terms of the Securities of any series are
established by action taken pursuant to one or more Board Resolutions, a copy of
an appropriate record of such action(s) shall be certified by the Secretary or
an Assistant Secretary of the Issuer and delivered to the Trustee at or prior to
the delivery of the Officers' Certificate setting forth the terms of the
Securities of such series.
SECTION 3.2 DENOMINATIONS. The Securities of each series shall
be issuable in such denominations as shall be specified as contemplated by
Section 3.1. With respect to Securities of any series denominated in Dollars, in
the absence of any such provisions with respect to the Securities of any series,
the Registered Securities of such series, other than Registered Securities
issued in global form (which may be of any denomination), shall be issuable in
denominations of $1,000 and any integral multiple thereof and the Bearer
Securities of such series, other than Bearer Securities issued in global form
(which may be of any denomination), shall be issuable in denominations of $5,000
and any integral multiple thereof.
SECTION 3.3 EXECUTION, AUTHENTICATION, DELIVERY AND DATING.
The Securities and any coupons appertaining thereto shall be executed on behalf
of the Issuer by its Chairman of the Board, its President or one of its Vice
Presidents, under its corporate seal reproduced thereon, and attested by its
Secretary or one of its Assistant Secretaries. The signature of any of these
officers on the Securities and coupons may be manual or facsimile signatures of
the present or any future such authorized officer and may be imprinted or
otherwise reproduced on the Securities.
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Securities or coupons bearing the manual or facsimile
signatures of individuals who were at any time the proper officers of the Issuer
shall bind the Issuer, notwithstanding that such individuals or any of them have
ceased to hold such offices prior to the authentication and delivery of such
Securities or did not hold such offices at the date of such Securities or
coupons.
At any time and from time to time after the execution and
delivery of this Indenture, the Issuer may deliver the Securities of any series,
together with any coupon appertaining thereto, executed by the Issuer to the
Trustee for authentication, together with the Board Resolution and Officers'
Certificate or supplemental indenture or indentures with respect to such
Securities referred to in Section 3.1 and an Issuer Order for the authentication
and delivery of such Securities, and the Trustee in accordance with the Issuer
Order and subject to the provisions hereof shall authenticate and deliver such
Securities; provided, however, that, in connection with its original issuance,
no Bearer Security shall be mailed or otherwise delivered to any location in the
United States. If any Security shall be represented by a permanent global Bearer
Security, then, for purposes of this Section and Section 3.4, the notation of a
beneficial owner's interest therein upon original issuance of such Security or
upon exchange of a portion of temporary global Security shall be deemed to be
delivery in connection with its original issuance of such beneficial owner's
interest in such permanent global Security. Except as permitted by Section 3.6,
the Trustee shall not authenticate and deliver any Bearer Security unless all
appurtenant coupons for interest then matured have been detached and canceled.
If all the Securities of any series are not to be issued at
one time and if the Board Resolution or supplemental indenture establishing such
series permits, such Issuer Order may set forth procedures acceptable to the
Trustee for the issuance of such Securities and determining the terms of
particular Securities of such series, such as interest rate or formula, maturity
date, date of issuance and date from which interest shall accrue. In
authenticating such Securities and accepting the additional responsibilities
under this Indenture in relation to such Securities, the Trustee shall be
entitled to receive and (subject to TIA Sections 315(a) through 315(d)) shall be
fully protected in relying upon:
(a) an Opinion of Counsel stating that:
(i) the form or forms of such Securities and any
coupons have been established in conformity with the provisions of this
Indenture;
(ii) the terms of such Securities and any coupons
have been established in conformity with the provisions of this Indenture; and
(iii) such Securities, together with any coupons
appertaining thereto, when completed by appropriate insertions and executed and
delivered by the Issuer to the Trustee for authentication in accordance with
this Indenture, authenticated and delivered by the Trustee in accordance with
this Indenture and issued by the Issuer in the manner and subject to any
conditions specified in such Opinion of Counsel, will constitute legal, valid
and binding obligations of the Issuer, enforceable in accordance with their
terms, subject to applicable bankruptcy, insolvency,
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reorganization and other similar laws of general applicability relating to or
affecting the enforcement of creditors' rights generally and to general
equitable principles; and
(b) an Officers' Certificate stating that all conditions
precedent provided for in this Indenture relating to the issuance of the
Securities have been complied with and that, to the best of the knowledge of the
signers of such certificate, no Event of Default with respect to any of the
Securities shall have occurred and be continuing.
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,
obligations or immunities under the Securities and this Indenture or otherwise
in a manner which is not reasonably acceptable to the Trustee.
Notwithstanding the provisions of Section 3.1 and of the
preceding paragraph, if all the Securities of any series are not to be issued at
one time, it shall not be necessary to deliver an Officers' Certificate
otherwise required pursuant to Section 3.1 or an Issuer Order, or an Opinion of
Counsel or an Officers' Certificate otherwise required pursuant to the preceding
paragraph at the time of issuance of each Security of such series, but such
order, opinion and certificate, with appropriate modifications to cover such
future issuances, shall be delivered at or before the time of issuance of the
first Security of such series.
Each Registered Security shall be dated the date of its
authentication and each Bearer Security shall be dated as of the date specified
as contemplated by Section 3.1.
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 or Security to which such coupon appertains a certificate of
authentication substantially in the form provided for herein duly executed by
the Trustee by manual signature of an authorized signatory, and such certificate
upon any Security shall be conclusive evidence, and the only evidence, that such
Security has been duly authenticated and delivered hereunder and is entitled to
the benefits of this Indenture. Notwithstanding the foregoing, if any Security
shall have been authenticated and delivered hereunder but never issued and sold
by the Issuer, and the Issuer shall have delivered such Security to the Trustee
for cancellation as provided in Section 3.9 together with a written statement
(which need not comply with Section 1.2 and need not be accompanied by an
Opinion of Counsel) stating that such Security has never been issued and sold by
the Issuer, then 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 3.4 TEMPORARY SECURITIES. Pending the preparation of
definitive Securities of any series, the Issuer may execute, and upon receipt of
an Issuer Order the Trustee shall authenticate and deliver, temporary Securities
which are printed, lithographed, typewritten, mimeographed or otherwise
produced, in any authorized denomination, substantially of the tenor of the
definitive Securities in lieu of which they are issued, in registered form, or,
if authorized, in bearer form with one or more coupons or without coupons, and
with such appropriate insertions,
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omissions, substitutions and other variations as the officers executing such
Securities may determine, as conclusively evidenced by their execution of such
Securities. In the case of Securities of any series, such temporary Securities
may be in global form.
Except in the case of temporary Securities in global form
(which shall be exchanged as provided in and pursuant to a Board Resolution), if
temporary Securities of any series are issued, the Issuer 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 Issuer 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 nonmatured coupons appertaining thereto), the Issuer
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; 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. Unless otherwise provided in or pursuant to this Indenture with
respect to a temporary global Security, 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.
SECTION 3.5 REGISTRATION, REGISTRATION OF TRANSFER AND
EXCHANGE. The Issuer shall cause to be kept at the Corporate Trust Office of the
Trustee or in any office or agency of the Issuer in a Place of Payment a
register for each series of Securities (the register or registers maintained in
such office or in any such office or agency of the Issuer in a Place of Payment
being herein sometimes referred to collectively as the "Security Register") in
which, subject to such reasonable regulations as the Issuer may prescribe, the
Issuer shall provide for the registration of Registered Securities and of
transfers of Registered Securities. The Security Register shall be in written
form or any other form capable of being converted into written form within a
reasonable time. The Trustee, at its Corporate Trust Office, is hereby appointed
"Security Registrar" for the purpose of registering Registered Securities and
transfers of Registered Securities on such Security Register as herein provided.
In the event that the Trustee shall cease to be Security Registrar, it shall
have the right to examine the Security Register at all reasonable times.
Subject to the provisions of this Section 3.5, upon surrender
for registration of transfer of any Registered Security of any series at any
office or agency of the Issuer in a Place of Payment for that series, the Issuer
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, bearing a number not contemporaneously outstanding and
containing identical terms and provisions upon surrender of the Registered
Securities to be exchanged at any such office or agency. Whenever any such
Registered Securities are so surrendered for exchange, the Issuer shall execute
and the
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Trustee shall authenticate and deliver the Registered Securities which the
Holder making the exchange is entitled to receive. Unless otherwise specified
with respect to any series of Securities as contemplated by Section 3.1, Bearer
Securities may not be issued in exchange for Registered Securities.
If (but only if) permitted by the applicable Board Resolution
and (subject to Section 3.3) set forth in the applicable Officers' Certificate
or in any indenture supplemental hereto delivered as contemplated by Section
3.1, at the option of the Holder, Bearer Securities of any series may be
exchanged for Registered Securities of the same series of any authorized
denominations and of a like aggregate principal amount and tenor upon surrender
of the Bearer Securities to be exchanged at any such office or agency with all
unmatured coupons and all matured coupons in default thereto appertaining. If
the Holder of a Bearer Security is unable to produce any such unmatured coupon
or coupons or matured coupon or coupons in default, any such permitted exchange
may be effected if the Bearer Securities are accompanied by payment in funds
acceptable to the Issuer in an amount equal to the face amount of such missing
coupon or coupons, or the surrender of such missing coupon or coupons may be
waived by the Issuer and the Trustee if there is furnished to them such security
or indemnity as they may require to save each of them and any Paying Agent
harmless. If thereafter the Holder of such Security shall surrender to any
Paying Agent any such missing coupon in respect of which such a payment shall
have been made, such Holder shall be entitled to receive the amount of such
payment; provided, however, that interest represented by coupons shall be
payable only upon presentation and surrender of those coupons at an office or
agency located outside the United States. Notwithstanding the foregoing, in case
a Bearer Security of any series is surrendered at any such office or agency in a
permitted exchange for a Registered Security of the same series and like tenor
after the close of business at such office or agency on (a) any Regular Record
Date and before the opening of business at such office or agency on the relevant
Interest Payment Date; or (b) any Special Record Date and before the opening of
business at such office or agency on the related proposed date for payment of
Defaulted Interest, such Bearer Security shall be surrendered without the coupon
relating to such Interest Payment Date or proposed date for payment, as the case
may be, and interest or Defaulted Interest, as the case may be, will not be
payable on such Interest Payment Date or proposed date for payment, as the case
may be, in respect of the Registered Security issued in exchange for such Bearer
Security, but will be payable only to the Holder of such coupon when due in
accordance with the provisions of this Indenture. Whenever any Securities are so
surrendered for exchange, the Issuer shall execute and the Trustee shall
authenticate and deliver the Securities which the Holder making the exchange is
entitled to receive.
Notwithstanding the foregoing, except as otherwise specified
as contemplated by Section 3.1, any permanent global Security shall be
exchangeable only as provided in this paragraph. If the depositary for any
permanent global Security is DTC, then unless the terms of such global Security
expressly permit such global Security to be exchanged in whole or in part for
definitive Securities, a global Security may be transferred, in whole but not in
part, only to a nominee of DTC, or by a nominee of DTC to DTC, or to a successor
to DTC for such global Security selected or approved by the Issuer or to a
nominee of such successor to DTC. If at any time DTC notifies the Issuer that it
is unwilling or unable to continue as depositary for the
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applicable global Security or Securities or if at any time DTC ceases to be a
clearing agency registered under the Exchange Act if so required by applicable
law or regulation, the Issuer shall appoint a successor depositary with respect
to such global Security or Securities. If (a) a successor depositary for such
global Security or Securities is not appointed by the Issuer within 90 days
after the Issuer receives such notice or becomes aware of such unwillingness,
inability or ineligibility; (b) an Event of Default has occurred and is
continuing and the beneficial owners representing a majority in principal amount
of the applicable series of Securities represented by such global Security or
Securities advise DTC to cease acting as depositary for such global Security or
Securities; or (c) the Issuer, in its sole discretion, determines at any time
that all Outstanding Securities (but not less than all) of any series issued or
issuable in the form of one or more global Securities shall no longer be
represented by such global Security or Securities, then the Issuer shall execute
and the Trustee shall authenticate and deliver definitive Securities of like
series, rank, tenor and terms in definitive form in an aggregate principal
amount equal to the principal amount of such global Security or Securities. If
any beneficial owner of an interest in a permanent global Security is otherwise
entitled to exchange such interest for Securities of such series and of like
tenor and principal amount of another authorized form and denomination as
specified as contemplated by Section 3.1 and provided that any applicable notice
provided in the permanent global Security shall have been given, then without
unnecessary delay but in any event not later than the earliest day on which such
interest may be so exchanged, the Issuer shall execute and the Trustee shall
authenticate and deliver definitive Securities in aggregate principal amount
equal to the principal amount of such beneficial owner's interest in such
permanent global Security. On or after the earliest date on which such interests
may be so exchanged, such permanent global Security shall be surrendered for
exchange by DTC or such other depositary as shall be specified in the Issuer
Order with respect thereto to the Trustee, as the Issuer's agent for such
purpose; provided, however, that no such exchanges may occur during a period
beginning at the opening of business 15 days before any selection of Securities
to be redeemed and ending on the relevant Redemption Date if the Security for
which exchange is requested may be among those selected for redemption; and
provided further that no Bearer Security delivered in exchange for a portion of
a permanent global Security shall be mailed or otherwise delivered to any
location in the United States. If a Registered Security is issued in exchange
for any portion of a permanent global Security after the close of business at
the office or agency where such exchange occurs on (a) any Regular Record Date
and before the opening of business at such office or agency on the relevant
Interest Payment Date; or (b) any Special Record Date and 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, will not be payable on such
Interest Payment Date or proposed date for payment, as the case may be, in
respect of such Registered Security, but will be payable on such Interest
Payment Date or proposed date for payment, as the case may be, only to the
Person to whom interest in respect of such portion of such permanent global
Security is payable in accordance with the provisions of this Indenture.
All Securities issued upon any registration of transfer or
exchange of Securities shall be the valid obligations of the Issuer evidencing
the same debt and entitled to the same benefits under this Indenture as the
Securities surrendered upon such registration of transfer or exchange.
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Every Registered Security presented or surrendered for
registration of transfer or for exchange or redemption shall (if so required by
the Issuer or the Security Registrar) be duly endorsed or accompanied by a
written instrument of transfer in form satisfactory to the Issuer 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 Issuer 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 3.4, 9.6, 11.7 or 13.5 not involving any
transfer.
The Issuer or the Trustee, as applicable, shall not be
required (a) to issue, register the transfer of or exchange any Security if such
Security may be among those selected for redemption during a period beginning at
the opening of business 15 days before selection of the Securities to be
redeemed under Section 11.3 and ending at the close of business on (i) if such
Securities are issuable only as Registered Securities, the day of the mailing of
the relevant notice of redemption and (ii) 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
(b) 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 (c)
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 (d) 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 3.6 MUTILATED, DESTROYED, LOST AND STOLEN SECURITIES.
If any mutilated Security or a Security with a mutilated coupon appertaining to
it is surrendered to the Trustee or the Issuer together with, in proper cases,
such security or indemnity as may be required by the Issuer or the Trustee to
save each of them or any agent of either of them harmless, the Issuer shall
execute and the Trustee shall authenticate and deliver in exchange therefor a
new Security of the same series and principal amount containing identical terms
and provisions and bearing a number not contemporaneously outstanding with
coupons corresponding to the coupons, if any, appertaining to the surrendered
Security.
If there shall be delivered to the Issuer and to the Trustee
(a) evidence to their satisfaction of the destruction, loss or theft of any
Security or coupon; and (b) such security or indemnity as may be required by
them to save each of them and any agent of either of them harmless, then, in the
absence of notice to the Issuer or the Trustee that such Security or coupon has
been acquired by a bona fide purchaser, the Issuer shall execute and upon its
request the Trustee shall authenticate and deliver, in lieu of any such
destroyed, lost or stolen Security or in
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exchange for the Security to which a destroyed, lost or stolen coupon appertains
(with all appurtenant coupons not destroyed, lost or stolen), a new Security of
the same series and principal amount, containing identical terms and provisions
and bearing a number not contemporaneously outstanding, with coupons
corresponding to the coupons, if any, appertaining to such destroyed, lost or
stolen Security or to the Security to which such destroyed, lost or stolen
coupon appertains.
Notwithstanding the provisions of the previous two paragraphs,
in case any such mutilated, destroyed, lost or stolen Security or coupon has
become or is about to become due and payable, the Issuer in its discretion may,
instead of issuing a new Security, with coupons corresponding to the coupons, if
any, appertaining to such destroyed, lost or stolen Security or to the Security
to which such destroyed, lost or stolen coupon appertains, pay such Security or
coupon; provided, however, that payment of principal of (and premium, if any),
and interest on and any Additional Amounts with respect to, Bearer Securities
shall, except as otherwise provided in Section 10.2, be payable only at an
office or agency located outside the United States and, unless otherwise
specified as contemplated by Section 3.1, any interest in Bearer Securities
shall be payable only upon presentation and surrender of the coupons
appertaining thereto.
Upon the issuance of any new Security under this Section 3.6,
the Issuer may require the payment of a sum sufficient to cover any tax or other
governmental charge that may be imposed in relation thereto and any other
expenses (including the fees and expenses of the Trustee) connected therewith.
Every new Security of any series with its coupons, if any,
issued pursuant to this Section 3.6 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 Issuer, whether or not the destroyed, lost or stolen Security
and its coupons, if any, or the destroyed, lost or stolen coupon shall be at any
time enforceable by anyone and shall be entitled to all the benefits of this
Indenture equally and proportionately with any and all other Securities of that
series and their coupons, if any, duly issued hereunder.
The provisions of this Section 3.6 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 3.7 PAYMENT OF INTEREST; INTEREST RIGHTS RESERVED.
Except as otherwise specified with respect to a series of Securities in
accordance with the provisions of Section 3.1, interest on any Registered
Security that is payable and is punctually paid or duly provided for on any
Interest Payment Date shall be paid to the Person in whose name that Security
(or one or more Predecessor Securities) is registered at the close of business
on the Regular Record Date for such interest at the office or agency of the
Issuer maintained for such purpose pursuant to Section 10.2; provided, however,
that each installment of interest on any Registered Security may at the Issuer's
option be paid by (a) mailing a check for such interest, payable to or upon the
written order of the Person entitled thereto pursuant to Section 3.8, to the
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address of such person as it appears on the Security Register or (b) transfer to
an account maintained by the payee located inside the United States.
Unless otherwise provided as contemplated by Section 3.1 with
respect to the Securities of any series, payment of interest may be made, in the
case of a Bearer Security, by transfer to an account maintained by the payee
with a bank located outside the United States.
Unless otherwise provided as contemplated by Section 3.1,
every permanent global Security will provide that interest, if any, payable on
any Interest Payment Date will be paid to DTC, with respect to that portion of
such permanent global Security held for its account by ________________ or the
Common Depositary, as the case may be, for the purpose of permitting such party
to credit the interest received by it in respect of such permanent global
Security to the accounts of the beneficial owners thereof.
In case a Bearer Security of any series is surrendered in
exchange for a Registered Security of such series after the close of business
(at an office or agency in a Place of Payment for such series) on any Regular
Record Date and before the opening of business (at such office or agency) on the
next succeeding Interest Payment Date, such Bearer Security shall be surrendered
without the coupon relating to such Interest Payment Date and interest will not
be payable on such Interest Payment Date in respect of the Registered Security
issued in exchange for such Bearer Security, but will be payable only to the
Holder of such coupon when due in accordance with the provisions of this
Indenture.
Except as otherwise specified with respect to a series of
Securities in accordance with the provisions of Section 3.1, any interest on any
Registered Security of any series that is payable, but is not punctually paid or
duly provided for, on any interest Payment Date (herein called "Defaulted
Interest") shall forthwith cease to be payable to the registered Holder thereof
on the relevant Regular Record Date by virtue of having been such Holder, and
such Defaulted Interest may be paid by the Issuer, at its election in each case,
as provided in clauses (a) or (b) below:
(a) The Issuer 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 Issuer shall notify
the Trustee in writing of the amount of Defaulted Interest proposed to be paid
on each Registered Security of such series and the date of the proposed payment
(which shall not be less than 20 days after such notice is received by the
Trustee), and at the same time the Issuer shall deposit with the Trustee an
amount of money in the currency or currencies, currency unit or units or
composite currency or currencies in which the Securities of such series are
payable (except as otherwise specified pursuant to Section 3.1 for the
Securities of such series) equal to the aggregate amount proposed to be paid in
respect of such Defaulted Interest or shall make arrangements satisfactory to
the Trustee for such deposit on or prior to the date of the proposed payment,
such money when deposited to be held in trust for the benefit of the Persons
entitled to such Defaulted Interest as
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provided in this clause. 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 Issuer of such Special Record
Date and, in the name and at the expense of the Issuer, 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 or her address as it appears in the Security
Register not less than 10 days prior to such Special Record Date. The Trustee
may, in its discretion, in the name and at the expense of the Issuer, cause a
similar notice to be published at least once in an Authorized Newspaper in each
place of payment, but such publication shall not be a condition precedent to the
establishment of such Special Record Date. Notice of the proposed payment of
such Defaulted Interest and the Special Record Date therefore having been mailed
as aforesaid, such Defaulted Interest shall be paid to the Persons in whose
names the Registered Securities of such series (or their respective Predecessor
Securities) are registered at the close of business on such Special Record Date
and shall no longer be payable pursuant to the following clause (b). In case a
Bearer Security of any series is surrendered at the office or agency in a Place
of Payment for such series in exchange for a Registered Security of such series
after the close of business at such office or agency on any Special Record Date
and before the opening of business at such office or agency on the related
proposed date for payment of Defaulted Interest, such Bearer Security shall be
surrendered without the coupon relating to such proposed date of payment and
Defaulted Interest will not be payable on such proposed date of payment in
respect of the Registered Security issued in exchange for such Bearer Security,
but will be payable only to the Holder of such coupon when due in accordance
with the provisions of this Indenture.
(b) The Issuer may make payment of any Defaulted
Interest on the Registered Securities of any series in any other lawful manner
not inconsistent with the requirements of any securities exchange on which such
Securities may be listed and upon such notice as may be required by such
exchange if, after notice given by the Issuer 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 3.7 and
Section 3.5, 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 3.8 PERSONS DEEMED OWNERS. Prior to due presentment of
a Registered Security for registration of transfer, the Issuer, the Trustee and
any agent of the Issuer 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
Sections 3.5 and 3.7) interest on, such Registered Security and for all other
purposes whatsoever, whether or not such Registered Security is overdue, and
neither the issuer, the Trustee nor any agent of the Issuer or the Trustee shall
be affected by notice to the contrary.
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Title to any Bearer Security and any coupons appertaining
thereto shall pass by delivery. The Issuer, the Trustee and any agent of the
Issuer or the Trustee may treat the Holder of any Bearer Security and the Holder
of any coupon as the absolute owner of such Security or coupon for the purpose
of receiving payment thereof or on account thereof and for all other purposes
whatsoever, whether or not such Security or coupon be overdue, and neither the
Issuer, the Trustee nor any agent of the Issuer or the Trustee shall be affected
by notice to the contrary.
None of the Issuer, the Trustee, any Paying Agent or the
Security Registrar will have any responsibility or liability for any aspect of
the records relating to or payments made on account of beneficial ownership
interests of a Security in global form or for maintaining, supervising or
reviewing any records relating to such beneficial ownership interests.
Notwithstanding the foregoing, with respect to any global
Security, nothing herein shall prevent the Issuer, the Trustee or any agent of
the Issuer or the Trustee from giving effect to any written certification, proxy
or other authorization furnished by any depositary, as a Holder, with respect to
such global Security or impair, as between such depositary and owners of
beneficial interests in such global Security, the operation of customary
practices governing the exercise of the rights of such depositary (or its
nominee) as Holder of such global Security.
SECTION 3.9 CANCELLATION. All Securities and coupons
surrendered for payment, redemption, repayment at the option of the Holder,
registration of transfer or exchange or for credit against any sinking fund
payment shall, if surrendered to any Person other than the Trustee, be delivered
to the Trustee and any such Securities and coupons and Securities and coupons
surrendered directly to the Trustee for any such purpose shall be promptly
canceled by it; provided, however, where the Place of Payment is located outside
of the United States, the Paying Agent at such Place of Payment may cancel the
Securities surrendered to it for such purposes prior to delivering the
Securities to the Trustee. The Issuer may at any time deliver to the Trustee for
cancellation any Securities previously authenticated and delivered hereunder
which the Issuer may have acquired in any manner whatsoever and may deliver to
the Trustee (or to any other Person for delivery to the Trustee) for
cancellation any Securities previously authenticated hereunder which the Issuer
has not issued and sold. All Securities so delivered shall be promptly canceled
by the Trustee. If the Issuer shall so acquire any of the Securities, however,
such acquisition shall not operate as a redemption or satisfaction of the
indebtedness represented by such Securities unless and until the same are
surrendered to the Trustee for cancellation. No Securities shall be
authenticated in lieu of or in exchange for any Securities canceled as provided
in this Section 3.9, except as expressly permitted by this Indenture. Canceled
Securities and coupons held by the Trustee shall be destroyed by the Trustee and
the Trustee shall deliver a certificate of such destruction to the Issuer unless
by an Issuer Order the Issuer directs the return of such cancelled Securities
and coupons to the Issuer.
SECTION 3.10 COMPUTATION OF INTEREST. Except as otherwise
specified as contemplated by Section 3.1 with respect to Securities of any
series, interest on the Securities of each series shall be computed on the basis
of a 360-day year consisting of twelve 30-day months.
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ARTICLE IV
SATISFACTION AND DISCHARGE
SECTION 4.1 SATISFACTION AND DISCHARGE OF INDENTURE. This
Indenture shall upon Issuer Request cease to be of further effect with respect
to any series of Securities specified in such Issuer Request (except as to any
surviving rights of registration of transfer or exchange of Securities of such
series herein expressly provided for and any right to receive Additional Amounts
as provided in Section 10.11), and the Trustee, upon receipt of an Issuer Order,
and at the expense of the Issuer, shall execute proper instruments acknowledging
satisfaction and discharge of this Indenture as to such series when
(a) either
(i) all Securities of such series theretofore
authenticated and delivered and all coupons, if any, appertaining thereto (other
than (A) coupons appertaining to Bearer Securities surrendered for exchange for
Registered Securities and maturing after such exchange, whose surrender is not
required or has been waived as provided in Section 3.5; (B) Securities and
coupons of such series which have been destroyed, lost or stolen and which have
been replaced or paid as provided in Section 3.6; (C) coupons appertaining to
Securities called for redemption and maturing after the relevant Redemption
Date, whose surrender has been waived as provided in Section 11.6; and (D)
Securities and coupons of such series for whose payment money has theretofore
been deposited in trust or segregated and held in trust by the Issuer and
thereafter repaid to the Issuer or discharged from such Trust as provided in
Section 10.3) have been delivered to the Trustee for cancellation; or
(ii) all Securities of such series and, in the
case of (A) or (B) below, any coupons appertaining thereto not theretofore
delivered to the Trustee for cancellation
(A) have become due and payable;
(B) will become due and payable at their
Stated Maturity within one year; or
(C) if redeemable at the option of the
Issuer, 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 case, and at the expense, of the Issuer;
and the Issuer, in the case of (A), (B) or (C) above, has irrevocably deposited
or caused to be deposited with the Trustee as trust funds in trust for the
purpose an amount in the currency or currencies, currency unit or units or
composite currency or currencies in which the Securities of such series are
payable, sufficient to pay and discharge the entire indebtedness on such
Securities and such coupons not theretofore delivered to the Trustee for
cancellation, for principal (and premium, if any) interest, and any Additional
Amounts with respect thereto, to the date of such
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deposit (in the case of Securities which have become due and payable) or to the
Stated Maturity or Redemption Date, as the case may be;
(b) the Issuer has paid or caused to be paid all other
sums payable hereunder by the Issuer; and
(c) the Issuer has delivered to the Trustee an Officers'
Certificate and an Opinion of Counsel, each stating that all conditions
precedent herein provided for relating to the satisfaction and discharge of this
Indenture as to such series have been complied with.
Notwithstanding the satisfaction and discharge of this Indenture, the
obligations of the Issuer to the Trustee and any predecessor trustee under
Section 6.6, the obligations of the Issuer to any Authenticating Agent under
Section 6.11 and, if money shall have been deposited with and held by the
Trustee pursuant to subclause (ii) of the clause (a) of this Section 4.1, the
obligations of the Trustee under Section 4.2 and the last paragraph of Section
10.3 shall survive.
SECTION 4.2 APPLICATION OF TRUST FUNDS. Subject to the
provisions of the last paragraph of Section 10.3, all money deposited with the
Trustee pursuant to Section 4.1 shall be held in trust and applied by it, in
accordance with the provisions of the Securities, the coupons and this
Indenture, to the payment, either directly or through any Paying Agent
(including the Issuer acting as its own Paying Agent) as the Trustee may
determine, to the Persons entitled thereto, of the principal (and premium, if
any) and any interest and Additional Amounts for whose payment such money has
been deposited with or received by the Trustee, but such money need not be
segregated from other funds except to the extent required by law.
ARTICLE V
REMEDIES
SECTION 5.1 EVENTS OF DEFAULT. "Event of Default," wherever
used herein with respect to any particular series of Securities, means any one
of the following events (whatever the reason for such Event of Default and
whether or not it shall be voluntary or involuntary or be effected by operation
of law or pursuant to any judgment, decree or order of any court or any order,
rule or regulation of any administrative or governmental body):
(a) default in the payment of any interest upon or any
Additional Amounts payable in respect of any Security of that series or of any
coupon appertaining thereto, when such interest, Additional Amounts or coupon
becomes due and payable, and continuance of such default for a period of 30
days;
(b) default in the payment of the principal of (or
premium, if any, on) any Security of that series when it becomes due and payable
at its Maturity;
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(c) default in the deposit of any sinking fund payment,
when and as due by the terms of any Security of that series;
(d) default in the performance or breach of any covenant
or warranty of the Issuer in this Indenture with respect to any Security of that
series (other than a covenant or warranty a default in whose performance or
whose breach is elsewhere in this Section 5.1 specifically dealt with), and
continuance of such default or breach for a period of 60 days after there has
been given, by registered or certified mail, to the Issuer by the Trustee or to
the Issuer and the Trustee by the Holders of at least 25% in principal amount of
the Outstanding Securities of that series a written notice specifying such
default or breach and requiring it to be remedied and stating that such notice
is a "Notice of Default" hereunder;
(e) a default under any bond, evidence of recourse
indebtedness of the Issuer, or under any mortgage, indenture or other instrument
of the Issuer (including a default with respect to Securities of any series
other than that series) under which there may be issued or by which there may be
secured any recourse indebtedness of the Issuer (or by any Subsidiary, the
repayment of which the Issuer has guaranteed or for which the Issuer is directly
responsible or liable as obligor or guarantor), whether such indebtedness now
exists or shall hereafter be created, which default shall constitute a failure
to pay an aggregate principal amount exceeding $5,000,000 of such indebtedness
when due and payable after the expiration of any applicable grace period with
respect thereto and shall have resulted in such indebtedness in an aggregate
principal amount exceeding $5,000,000 becoming or being declared due and payable
prior to the date on which it would otherwise have become due and payable,
without such indebtedness having been discharged or such acceleration having
been rescinded or annulled within a period of 10 days after there shall have
been given, by registered or certified mail, to the Issuer by the Trustee or to
the Issuer and the Trustee by the Holders of at least 10% in principal amount of
the Outstanding Securities of that series a written notice specifying such
default and requiring the Issuer to cause such indebtedness to be discharged or
cause such acceleration to be rescinded or annulled and stating that such notice
is a "Notice of Default" hereunder;
(f) the Issuer or any Significant Subsidiary pursuant to
or within the meaning of any Bankruptcy Law:
(i) commences a voluntary case;
(ii) consents to the entry of an order for relief
against it in an involuntary case;
(iii) consents to the appointment of a Custodian
of it or for all or substantially all of its property; or
(iv) makes a general assignment for the benefit of
its creditors;
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(g) a court of competent jurisdiction enters an order or
decree under any Bankruptcy Law that:
(i) is for relief against the Issuer or any
Significant Subsidiary in an involuntary case;
(ii) appoints a Custodian of the Issuer or any
Significant Subsidiary for all or substantially all of either of its property;
or
(iii) orders the liquidation of the Issuer or any
Significant Subsidiary, and the order or decree remains unstayed and in effect
for 90 days; or
(h) any other Event of Default provided with respect to
Securities of that series.
As used in this Section 5.1, the term "Bankruptcy Law" means Title 11, U.S. Code
or any similar Federal or State law for the relief of debtors and the term
"Custodian" means any receiver, trustee, assignee, liquidator or other similar
official under any Bankruptcy Law.
SECTION 5.2 ACCELERATION OF MATURITY; RESCISSION AND
ANNULMENT. If an Event of Default with respect to Securities of any series at
the time Outstanding occurs and is continuing, then and in every such case the
Trustee or the Holders of not less than 25% in principal amount of the
Outstanding Securities of that series may declare the principal (or, if any
Securities are Original Issue Discount Securities or Indexed Securities, such
portion of the principal as may be specified in the terms thereof) of all the
Securities of that series to be due and payable immediately, by a notice in
writing to the Issuer (and to the Trustee if given by the Holders), and upon any
such declaration such principal or specified portion thereof shall become
immediately due and payable.
At any time after such a declaration of acceleration with
respect to Securities of any series has been made and before a judgment or
decree for payment of the money due has been obtained by the Trustee as
hereinafter in this Article provided, the Holders of a majority in principal
amount of the Outstanding Securities of that series, by written notice to the
Issuer and the Trustee, may rescind and annul such declaration and its
consequences if:
(a) the Issuer has paid or deposited with the Trustee a
sum sufficient to pay in the currency or currency unit or composite currency in
which the Securities of such series are payable (except as otherwise specified
pursuant to Section 3.1 for the Securities of such series):
(i) all overdue installments of interest on and
any Additional Amounts payable in respect of all Outstanding Securities of that
series and any related coupons;
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(ii) the principal of (and premium, if any, on)
any Outstanding Securities of that series which have become due otherwise than
by such declaration of acceleration and interest thereon at the rate or rates
borne by or provided for in such Securities;
(iii) to the extent that payment of such interest
is lawful, interest upon overdue installments of interest and any Additional
Amounts at the rate or rates borne by or provided for in such Securities; and
(iv) 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
(b) all Events of Default with respect to Securities of
that series, other than the nonpayment of the principal of (or premium, if any)
or interest on Securities of that series which have become due solely by such
declaration of acceleration, have been cured or waived as provided in Section
5.13.
No such rescission shall affect any subsequent default or impair any right
consequent thereon.
SECTION 5.3 ISSUER RESPONSIBILITIES UPON ACCELERATION OF
MATURITY; RESCISSION AND ANNULMENT. The Issuer covenants that if: (a) default is
made in the payment of any installment of interest or Additional Amounts, if
any, on any Security of any series and any related coupon when such interest or
Additional Amount becomes due and payable and such default continues for a
period of 30 days; or (b) default is made in the payment of the principal of (or
premium, if any, on) any Security of any series at its Maturity, then the Issuer
will, upon demand of the Trustee, pay to the Trustee, for the benefit of the
Holders of such Securities of such series and coupons, the whole amount then due
and payable on such Securities and coupons for principal (and premium, if any)
and interest and Additional Amounts, with interest upon any overdue principal
(and premium, if any) and, to the extent that payment of such interest shall be
legally enforceable, upon any overdue installments of interest or Additional
Amounts, if any, at the rate or rates borne by or provided for in such
Securities, and, in addition thereto, such further amount as shall be sufficient
to cover the costs and expenses of collection, including the reasonable
compensation, expenses, disbursements and advances of the Trustee, its agents
and counsel.
If the Issuer fails to pay such amounts forthwith upon such
demand, the Trustee, in its own name and as trustee of an express trust, may
institute a judicial proceeding for the collection of the sums so due and
unpaid, may prosecute such proceeding to judgment or final decree, and may
enforce the same against the Issuer or any other obligor upon such Securities of
such series and collect the moneys adjudged or decreed to be payable in the
manner provided by law out of the property of the Issuer or any other obligor
upon such Securities of such series, wherever situated.
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If an Event of Default with respect to Securities of any
series occurs and is continuing, the Trustee may in its discretion proceed to
protect and enforce its rights and the rights of the Holders of Securities of
such series and any related coupons by such appropriate judicial proceedings as
the Trustee shall deem most effectual to protect and enforce any such rights,
whether for the specific enforcement of any covenant or agreement in this
Indenture, in aid of the exercise of any power granted herein or to enforce any
other proper remedy.
SECTION 5.4 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 Issuer or any other obligor upon the Securities or
the property of the Issuer or of such other obligor or their creditors, the
Trustee (irrespective of whether the principal of the Securities of any series
shall then be due and payable as therein expressed or by declaration or
otherwise and irrespective of whether the Trustee shall have made any demand on
the Issuer for the payment of overdue principal (and premium, if any) or
interest shall be entitled and empowered, by intervention in such proceeding or
otherwise:
(a) to file and prove a claim for the whole amount, or
such lesser amount as may be provided for in the Securities of such series, of
principal (and premium, if any) and interest and Additional Amounts, if any,
owing and unpaid in respect of the Securities and to file such other claims of
the Trustee (including any claim for the reasonable compensation, expenses,
disbursements and advances of the Trustee, its agents and counsel) and of the
Holders allowed in such judicial proceeding; and
(b) 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 such series and coupons to make such payments to the
Trustee, and in the event that the Trustee shall consent to the making of such
payments directly to the Holders, to pay to the Trustee any amount due to it for
the reasonable compensation, expenses, disbursements and advances of the Trustee
and any predecessor Trustee, their agents and counsel, and any other amounts due
the Trustee or any predecessor Trustee under Section 6.6.
Nothing herein contained shall be deemed to authorize the
Trustee to authorize, consent to or accept or adopt on behalf of any Holder of a
Security or coupon any plan of reorganization, arrangement, adjustment or
composition affecting the Securities or coupons or the rights of any Holder
thereof, or to authorize the Trustee to vote in respect of the claim of any
Holder of a Security or coupon in any such proceeding.
SECTION 5.5 TRUSTEE MAY ENFORCE CLAIMS WITHOUT POSSESSION OF
SECURITIES OR COUPONS. All rights of action and claims under this Indenture or
any of the Securities or coupons may be prosecuted and enforced by the Trustee
without the possession of any of the Securities or coupons or the production
thereof in any proceeding relating thereto. 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
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compensation, expenses, disbursements and advances of the Trustee, its agents
and counsel, be for the ratable benefit of the Holders of the Securities and
coupons in respect of which such judgment has been recovered.
SECTION 5.6 APPLICATION OF MONEY COLLECTED. Any money
collected by the Trustee pursuant to this Article shall be applied in the
following order, at the date or dates fixed by the Trustee and, in case of the
distribution of such money on account of principal (or premium, if any) or
interest and any Additional Amounts, upon presentation of the Securities or
coupons, or both, as the case may be, and the notation thereon of the payment if
only partially paid and upon surrender thereof if fully paid:
FIRST: To the payment of all amounts due the Trustee and any
predecessor Trustee under Section 6.6;
SECOND: To the payment of the amounts then due and unpaid upon
the Securities and coupons for principal (and premium, if any) and interest and
any Additional Amounts payable, in respect of which or for the benefit of which
such money has been collected, ratably, without preference or priority of any
kind, according to the aggregate amounts due and payable on such Securities and
coupons for principal (and premium, if any), interest and Additional Amounts,
respectively; and
THIRD: To the payment of the remainder, if any, to the Issuer.
SECTION 5.7 LIMITATION ON SUITS. No Holder of any Security of
any series or any related coupon shall have any right to institute any
proceeding, judicial or otherwise, with respect to this Indenture, for the
appointment of a receiver or trustee or for any other remedy hereunder, unless:
(a) such Holder has previously given written notice to
the Trustee of a continuing Event of Default with respect to the Securities of
that series;
(b) the Holders of not less than 25% in principal amount
of the Outstanding Securities of that series shall have made written request to
the Trustee to institute proceedings in respect of such Event of Default in its
own name as Trustee hereunder;
(c) such Holder or Holders have offered to the Trustee
indemnity reasonably satisfactory to the Trustee against the costs, expenses and
liabilities to be incurred in compliance with such request;
(d) the Trustee for 60 days after its receipt of such
notice, request and offer of indemnity has failed to institute any such
proceeding; and
(e) no direction inconsistent with such written request
has been given to the Trustee during such 60-day period by the Holders of a
majority in principal amount of the
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Outstanding Securities of that series; it being understood and intended that no
one or more of such Holders shall have any right in any manner whatever by
virtue of or by availing of any provision of this Indenture to affect, disturb
or prejudice the rights of any other of such Holders, or to obtain or to seek to
obtain priority or preference over any other of such Holders or to enforce any
right under this Indenture, except in the manner herein provided and for the
equal and ratable benefit of all such Holders.
SECTION 5.8 UNCONDITIONAL RIGHT OF HOLDERS TO RECEIVE
PRINCIPAL, PREMIUM, IF ANY, INTEREST AND ADDITIONAL AMOUNTS. Notwithstanding any
other provision in this Indenture, the Holder of any Security or coupon shall
have the right which is absolute and unconditional to receive payment of the
principal of (and premium, if any) and (subject to Sections 3.5 and 3.7)
interest on, and any Additional Amounts in respect of, such Security or payment
of such coupon on the respective due dates expressed in such Security or coupon
(or, in the case of redemption, on the Redemption Date) and to institute suit
for the enforcement of any such payment, and such rights shall not be impaired
without the consent of such Holder.
SECTION 5.9 RESTORATION OF RIGHTS AND REMEDIES. If the Trustee
or any Holder of a Security or coupon has instituted any proceeding to enforce
any right or remedy under this Indenture and such proceeding has been
discontinued or abandoned for any reason, or has been determined adversely to
the Trustee or to such Holder, then and in every such case, the Issuer, the
Trustee and the Holders of Securities and coupons shall, subject to any
determination in such proceeding, be restored severally and respectively to
their former positions hereunder and thereafter all rights and remedies of the
Trustee and the Holders shall continue as though no such proceeding had been
instituted.
SECTION 5.10 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
3.6, no right or remedy herein conferred upon or reserved to the Trustee or to
the Holders of Securities or coupons is intended to be exclusive of any other
right or remedy, and every right and remedy shall, to the extent permitted by
law, be cumulative and in addition to every other right and remedy given
hereunder or now or hereafter existing at law or in equity or otherwise. The
assertion or employment of any right or remedy hereunder, or otherwise, shall
not prevent the concurrent assertion or employment of any other appropriate
right or remedy.
SECTION 5.11 DELAY OR OMISSION NOT WAIVER. No delay or
omission of the Trustee or of any Holder of any Security or coupon to exercise
any right or remedy accruing upon any Event of Default shall impair any such
right or remedy or constitute a waiver of any such Event of Default or an
acquiescence therein. Every right and remedy given by this Article or by law to
the Trustee or to the Holders may be exercised from time to time, and as often
as may be deemed expedient, by the Trustee or by the Holders of Securities or
coupons, as the case may be.
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SECTION 5.12 CONTROL BY HOLDERS OF SECURITIES. The Holders of
not less than a majority in principal amount of the Outstanding Securities of
any series shall have the right to direct the time, method and place of
conducting any proceeding for any remedy available to the Trustee or exercising
any trust or power conferred on the Trustee with respect to the Securities of
such series, provided that
(a) such direction shall not be in conflict with any
rule of law or with this Indenture;
(b) the Trustee may take any other action deemed proper
by the Trustee which is not inconsistent with such direction; and
(c) the Trustee need not take any action which might
involve it in personal liability or be unduly prejudicial to the Holders of
Securities of such series not joining therein.
SECTION 5.13 WAIVER OF PAST DEFAULTS. The Holders of not less
than a majority in principal amount of the Outstanding Securities of any series
may on behalf of the Holders of all the Securities of such series and any
related coupons waive any past default hereunder with respect to such series and
its consequences, except a default
(a) in the payment of the principal of (or premium, if
any) or interest on or Additional Amounts payable in respect of any Security of
such series or any related coupons; or
(b) in respect of a covenant or provision hereof which
under Article IX cannot be modified or amended without the consent of the Holder
of each Outstanding Security of such series affected.
Upon any such waiver, such default shall cease to exist and
any Event of Default arising therefrom shall be deemed to have been cured, for
every purpose of this Indenture; but no such waiver shall extend to any
subsequent or other default or Event of Default or impair any right consequent
thereon.
SECTION 5.14 WAIVER OF USURY, STAY OR EXTENSION LAWS. The
Issuer covenants (to the extent that it may lawfully do so) that it will not at
any time insist upon, plead or in any manner whatsoever claim or take the
benefit or advantage of, any usury, stay or extension law wherever enacted, now
or at any time hereafter in force, which may affect the covenants or the
performance of this Indenture; and the Issuer (to the extent that it may
lawfully do so) hereby expressly waives all benefit or advantage of any such
law, and covenants that it will not hinder, delay or impede the execution of any
power herein granted to the Trustee, but will suffer and permit the execution of
every such power as though no such law had been enacted.
SECTION 5.15 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
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under this Indenture, or in any suit against the Trustee for any action taken or
omitted by it as Trustee the filing by any party litigant in such suit of any
undertaking to pay the costs of such suit, and that such court may in its
discretion assess reasonable costs, including reasonable attorneys' fees,
against any party litigant in such suit having due regard to the merits and good
faith of the claims or defenses made by such party litigant; but the provisions
of this Section shall not apply to any suit instituted by the Trustee, to any
suit instituted by any Holder or group of Holders holding in the aggregate more
than 10% in principal amount of the Outstanding Securities, or to any suit
instituted by any Holder for the enforcement of the payment of the principal of
(or premium, if any) or interest on any Security on or after the respective
Stated Maturities expressed in such Security (or, in the case of redemption, on
or after the Redemption Date).
ARTICLE VI
THE TRUSTEE
SECTION 6.1 NOTICE OF DEFAULTS. Within 90 days after the
occurrence of any default hereunder with respect to the Securities of any
series, the Trustee shall transmit in the manner and to the extent provided in
TIA Section 313(c), notice of such default hereunder known to the Trustee,
unless such default shall have been cured or waived; provided, however, that,
except in the case of a default in the payment of the principal of (or premium,
if any) or interest on or any Additional Amounts with respect to any Security of
such series, or in the payment of any sinking fund installment with respect to
the Securities of such series, the Trustee shall be protected in withholding
such notice if and so long as Responsible Officers of the Trustee in good faith
determine that the withholding of such notice is in the interests of the Holders
of the Securities and coupons of such series; and provided further that in the
case of any default or breach of the character specified in Section 5.1(d) with
respect to the Securities and coupons of such series, no such notice to Holders
shall be given until at least 60 days after the occurrence thereof. For the
purpose of this Section, the term "default" means any event which is, or after
notice or lapse of time or both would become, an Event of Default with respect
to the Securities of such series.
SECTION 6.2 CERTAIN RIGHTS OF TRUSTEE. Subject to the
provisions of TIA Section 315(a) through 315(d):
(a) the Trustee may rely and shall be protected in
acting or refraining from acting upon any resolution, certificate, statement,
instrument, opinion, report, notice, request, direction, consent, order, bond,
debenture, note, coupon or other paper or document believed by it to be genuine
and to have been signed or presented by the proper party or parties;
(b) any request or direction of the Issuer mentioned
herein shall be sufficiently evidenced by an Issuer Request or Issuer Order
(other than delivery of any Security, together with any coupons appertaining
thereto, to the Trustee for authentication and delivery pursuant to Section
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3.3 which shall be sufficiently evidenced as provided therein) and any
resolution of the Board of Trustees 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) the Trustee may consult with counsel and the advice
of such counsel or any Opinion of Counsel shall be full and complete
authorization and protection in respect of any action taken, suffered or omitted
by it hereunder in good faith and in reliance thereon;
(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 of Securities of any series or any related
coupons pursuant to this Indenture, unless such Holders shall have offered to
the Trustee security or indemnity reasonably satisfactory to the Trustee against
the costs, expenses and liabilities which might be incurred by it in compliance
with such request or direction;
(f) the Trustee shall not be bound to make any
investigation into the facts or matters stated in any resolution, certificate,
statement, instrument, opinion, report, notice, request, direction, consent,
order, bond, debenture, note, coupon or other paper or document, but the
Trustee, in its discretion, may make such further inquiry or investigation into
such facts or matters as it may see fit, and, if the Trustee shall determine to
make such further inquiry or investigation, it shall be entitled to examine the
books, records and premises of the Issuer, personally or by agent or attorney
following reasonable notice to the Issuer;
(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; and
(h) the Trustee shall not be liable for any action
taken, suffered or omitted by it in good faith and reasonably believed by it to
be authorized or within the discretion, rights or powers conferred upon it by
this Indenture.
The Trustee shall not be required to expend or risk its own
funds or otherwise incur any financial liability in the performance of any of
its duties hereunder, or in the exercise of any of its rights or powers, if it
shall have reasonable grounds for believing that repayment of such funds or
adequate indemnity against such risk or liability is not reasonably assured to
it.
Except during the continuance of an Event of Default, the
Trustee undertakes to perform 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.
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SECTION 6.3 NOT RESPONSIBLE FOR RECITALS OR ISSUANCE OF
SECURITIES. The recitals contained herein and in the Securities, except the
Trustee's certificate of authentication, and in any coupons shall be taken as
the statements of the Issuer, and neither the Trustee nor any Authenticating
Agent assumes any responsibility for their correctness. The Trustee makes no
representations as to the validity or sufficiency of this Indenture or of the
Securities or coupons, except that the Trustee represents that it is duly
authorized to execute and deliver this Indenture, authenticate the Securities
and perform its obligations hereunder. Neither the Trustee nor any
Authenticating Agent shall be accountable for the use or application by the
Issuer of Securities or the proceeds thereof.
SECTION 6.4 MAY HOLD SECURITIES. The Trustee, any Paying
Agent, Security Registrar, Authenticating Agent or any other agent of the
Issuer, in its individual or any other capacity, may become the owner or pledgee
of Securities and coupons and, subject to TIA Sections 310(b) and 311, may
otherwise deal with the Issuer with the same rights it would have if it were not
Trustee, Paying Agent, Security Registrar, Authenticating Agent or such other
agent.
SECTION 6.5 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 with the Issuer.
SECTION 6.6 COMPENSATION AND REIMBURSEMENT. The Issuer agrees:
(a) to pay to the Trustee from time to time reasonable
compensation for all services rendered by it hereunder (which compensation shall
not be limited by any provision of law in regard to the compensation of a
trustee of an express trust);
(b) except as otherwise expressly provided herein, to
reimburse each of the Trustee and any predecessor Trustee upon its request for
all reasonable expenses, disbursements and advances incurred or made by 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
(c) to indemnify each of the Trustee and any predecessor
Trustee for, and to hold it harmless against, any loss, liability or expense
incurred without negligence or bad faith on its own 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 any
claim or liability in connection with the exercise or performance of any its
powers or duties hereunder.
When the Trustee incurs expenses or renders services in
connection with an Event of Default specified in Section 5.1(f) the expenses
(including the reasonable charges and expenses of its counsel) and the
compensation for the services are intended to constitute expenses of
administration under any applicable Federal or state bankruptcy, insolvency or
other similar law.
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As security for the performance of the obligations of the
Issuer under this Section 6.6, the Trustee shall have a lien prior to the
Securities upon all property and funds held or collected by the Trustee as such,
except funds held in trust for the payment of principal of (or premium, if any)
or interest on particular Securities or any coupons.
The provisions of this Section 6.6 shall survive the
termination of this Indenture.
SECTION 6.7 CORPORATE TRUSTEE REQUIRED; ELIGIBILITY;
CONFLICTING INTERESTS. There shall at all times be a Trustee hereunder which
shall be eligible to act as Trustee under TIA Section 310(a)(1) and shall have a
combined capital and surplus of at least $150,000.00. If such corporation
publishes reports of condition at least annually, pursuant to law or the
requirements of Federal, State, Territorial or District of Columbia supervising
or examining authority, then for the purposes of this Section 6.7, the combined
capital and surplus of such corporation shall be deemed to be its combined
capital and surplus as set forth in its most recent report of condition so
published. If at any time the Trustee shall cease to be eligible in accordance
with the provisions of this Section 6.7, it shall resign immediately in the
manner and with the effect hereinafter specified in this Article.
SECTION 6.8 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 6.9.
(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
Issuer. If any instrument of acceptance by a successor Trustee shall not have
been delivered to the Trustee within 30 days after the giving of such notice of
resignation, the resigning Trustee may petition any court of competent
jurisdiction for the appointment of a successor Trustee.
(c) The Trustee may be removed at any time with respect
to the Securities of any series by Act of the Holders of a majority in principal
amount of the Outstanding Securities of such series delivered to the Trustee and
to the Issuer.
(d) If at any time:
(i) the Trustee shall fail to comply with the
provisions of TIA Section 310(b) after written request therefor by the Issuer or
by any Holder of a Security who has been a bona fide Holder of a Security for at
least six months;
(ii) the Trustee shall cease to be eligible under
Section 6.7 and shall fail to resign after written request therefor by the
Issuer or by any Holder of a Security who has been a bona fide Holder of a
Security for at least six months; or
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(iii) the Trustee shall become incapable of
acting, shall be adjudged a bankrupt or insolvent, a receiver of the Trustee or
of its property shall be appointed or any public officer shall take charge or
control of the Trustee, its property or affairs for the purpose of
rehabilitation, conservation or liquidation, then, in any such case, (A) the
Issuer by or pursuant to a Board Resolution may remove the Trustee and appoint a
successor Trustee with respect to all Securities; or (B) subject to TIA Section
315(e), any Holder of a Security who has been a bona fide Holder of a Security
for at least six months may, on behalf of himself or herself and all others
similar situated, petition any court of competent jurisdiction for the removal
of the Trustee with respect to all Securities and the appointment of a successor
Trustee or Trustees.
(e) If the Trustee shall resign, be removed or become
incapable of acting, or if a vacancy shall occur in the office of Trustee for
any cause with respect to the Securities of one or more series, the Issuer, by
or pursuant to a Board Resolution, shall promptly appoint a successor Trustee or
Trustees with respect to the Securities of that or those series (it being
understood that any such successor Trustee may be appointed with respect to the
Securities of one or more or all of such series and that at any time there shall
be only one Trustee with respect to the Securities of any particular series).
If, within one year after such resignation, removal or incapability, or the
occurrence of such vacancy, a successor Trustee with respect to the Securities
of any series shall be appointed by Act of the Holders of a majority in
principal amount of the Outstanding Securities of such series delivered to the
Issuer and the retiring Trustee, the successor Trustee so appointed shall,
forthwith upon its acceptance of such appointment, become the successor Trustee
with respect to the Securities of such series and to that extent supersede the
successor Trustee appointed by the Issuer. If no successor Trustee with respect
to the Securities of any series shall have been so appointed by the Issuer or
the Holders of Securities and accepted appointment in the manner hereinafter
provided any Holder of a Security who has been a bona fide Holder of a Security
of such series for at least six months may, on behalf of himself and all others
similarly situated, petition any court of competent jurisdiction for the
appointment of a successor Trustee with respect to Securities of such series.
(f) The Issuer shall give notice of each resignation and
each removal of the Trustee with respect to the Securities of any series and
each appointment of a successor Trustee with respect to the Securities of any
series in the manner provided for notices to the Holders of Securities in
Section 1.6. 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 6.9 ACCEPTANCE OF APPOINTMENT BY SUCCESSOR. (a) In
case of the appointment hereunder of a successor Trustee with respect to all
Securities, every such successor Trustee shall execute, acknowledge and deliver
to the Issuer 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; provided, however, on request of the Issuer 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,
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transfer and deliver to such successor Trustee all property and money held by
such retiring Trustee hereunder, subject nevertheless to its claim, if any,
provided for in Section 6.6.
(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
Issuer, the retiring Trustee and each successor Trustee with respect to the
Securities of one or more series shall execute and deliver an indenture
supplemental hereto, pursuant to Article IX hereof, wherein each successor
Trustee shall accept such appointment and which (i) shall contain such provision
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; (ii) 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 (iii) 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 Trustee's 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; provided, however,
on request of the Issuer 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
Issuer 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 6.9, 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 VI.
SECTION 6.10 MERGER, CONVERSION, CONSOLIDATION OR SUCCESSION
TO BUSINESS. Any corporation into which the Trustee may be merged or converted
or with which it may be consolidated, or any corporation resulting from any
merger, conversion or consolidation to which the Trustee shall be a party, or
any corporation succeeding to all or substantially all of the corporate trust
business of the Trustee, shall be the successor of the Trustee hereunder,
provided such corporation shall be otherwise qualified and eligible under this
Article VI, without the execution or filing of any paper or any further act on
the part of any of the
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parties hereto. In case any Securities or coupons shall have been authenticated,
but not delivered, by the Trustee then in office, any successor by merger,
conversion or consolidation to such authenticating Trustee may adopt such
authentication and deliver the Securities or coupons so authenticated with the
same effect as if such successor Trustee had itself authenticated such
Securities or coupons. In case any Securities or coupons shall not have been
authenticated by such predecessor Trustee, any such successor Trustee may
authenticate and deliver such Securities or coupons, in either its own name or
that of its predecessor Trustee, with the full force and effect which this
Indenture provides for the certificate of authentication of the Trustee.
SECTION 6.11 APPOINTMENT OF AUTHENTICATING AGENT. At any time
when any of the Securities remain Outstanding, the Trustee may appoint an
Authenticating Agent or Agents with respect to one or more series of Securities
which shall be authorized to act on behalf of the Trustee to authenticate
Securities of such series issued upon exchange, registration of transfer or
partial redemption or repayment thereof, and Securities so authenticated shall
be entitled to the benefits of this Indenture and shall be valid and obligatory
for all purposes as if authenticated by the Trustee hereunder. Any such
appointment shall be evidenced by an instrument in writing signed by a
Responsible Officer of the Trustee, a copy of which instrument shall be promptly
furnished to the Issuer. Wherever reference is made in this Indenture to the
authentication and delivery of Securities by the Trustee or the Trustee's
certification 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
Issuer and shall at all times be a bank or trust company or corporation
organized and doing business and in good standing under the laws of the United
States of America or of any State or the District of Columbia, authorized under
such laws to act as Authenticating Agent, having a combined capital and surplus
of not less than $150,000 and subject to supervision or examination by Federal
or State authorities. If such Authenticating Agent publishes reports of
condition at least annually, pursuant to law or the requirements of the
aforesaid supervising or examining authority, then for the purposes of this
Section 6.11, the combined capital and surplus of such Authenticating Agent
shall be deemed to be its combined capital and surplus as set forth in its most
recent report of condition so published. In case at any time an Authenticating
Agent shall cease to be eligible in accordance with the provisions of this
Section 6.11, such Authenticating Agent shall resign immediately in the manner
and with the effect specified in this Section 6.11.
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 6.11, without the execution or filing of
any paper or further act on the part of the Trustee or the Authenticating Agent.
An Authenticating Agent for any series of Securities may at
any time resign by giving written notice of resignation to the Trustee for such
series and to the Issuer. The Trustee
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for any series of Securities may at any time terminate the agency of an
Authenticating Agent by giving written notice of termination to such
Authenticating Agent and to the Issuer. Upon receiving such a notice of
resignation or upon such a termination, or in case at any time such
Authenticating Agent shall cease to be eligible in accordance with the provision
of this Section 6.11, the Trustee for such series may appoint a successor
Authenticating Agent which shall be acceptable to the Issuer and shall give
notice of such appointment to all Holders of Securities of the series with
respect to which such Authenticating Agent will serve in the manner set forth in
Section 1.6. Any successor Authenticating Agent upon acceptance of its
appointment hereunder shall become vested with all the rights, powers and duties
of its predecessor hereunder, with like effect as if originally named as an
Authenticating Agent herein. No successor Authenticating Agent shall be
appointed unless eligible under the provisions of this Section 6.11.
The Issuer agrees to pay to each Authenticating Agent from
time to time reasonable compensation including reimbursement of its reasonable
expenses for its services under this Section 6.11.
If an appointment with respect to one or more series is made
pursuant to this Section 6.11, the Securities of such series may have endorsed
thereon, in addition to or in lieu of the Trustee's certificate of
authentication, an alternate certificate of authentication substantially in the
following form:
This is one of the Securities of the series designated
therein referred to in the within-mentioned Indenture.
(Trustee)
as Trustee
By:
-------------------------------
as Authenticating Agent
By:
-------------------------------
Authorized Signatory
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ARTICLE VII
HOLDERS' LIST AND REPORTS BY TRUSTEE AND ISSUER
SECTION 7.1 DISCLOSURE OF NAMES AND ADDRESSES OF HOLDERS.
Every Holder of Securities or coupons, by receiving and holding the same, agrees
with the Issuer and the Trustee that neither the Issuer nor the Trustee nor an
Authenticating Agent nor any Paying Agent nor any Security Registrar shall be
held accountable by reason of the disclosure of any information as to the names
and addresses of the Holders of Securities in accordance with TIA Section 312,
regardless of the source from which such information was derived, and that the
Trustee shall not be held accountable by reason of mailing any material pursuant
to a request made under TIA Section 312(b).
SECTION 7.2 REPORTS BY TRUSTEE. Within 60 days after May 15 of
each year commencing with the first May 15 after the first issuance of
Securities pursuant to this Indenture, the Trustee shall transmit by mail to all
Holders of Securities as provided in TIA Section 313(c) a brief report dated as
of such May 15 if required by TIA Section 313(a).
SECTION 7.3 REPORTS BY ISSUER. The Issuer will:
(a) file with the Trustee and the Commission, in
accordance with rules and regulations prescribed from time to time by the
Commission, such additional information, documents and reports with respect to
compliance by the Issuer with the conditions and covenants of this Indenture as
may be required from time to time by such rules and regulations; and
(b) transmit by mail to the Holders of Securities,
within 30 days after the filing thereof with the Trustee, in the manner and to
the extent provided in TIA Section 313(c), such summaries of any information,
documents and reports required to be filed by the Issuer pursuant to Section
10.10 and paragraph (a) of this Section as may be required by rules and
regulations prescribed from time to time by the Commission.
SECTION 7.4 ISSUER TO FURNISH TRUSTEE NAMES AND ADDRESSES OF
HOLDERS. The Issuer will furnish or cause to be furnished to the Trustee:
(a) semiannually, not later than 15 days after the
Regular Record Date for interest for each series of Securities, a list, in such
form as the Trustee may reasonably require, of the names and addresses of the
Holders of Registered Securities of such series as of such Regular Record Date,
or if there is no Regular Record Date for interest for such series of
Securities, semiannually, upon such dates as are set forth in the Board
Resolution or indenture supplemental hereto authorizing such series; and
(b) at such other times as the Trustee may request in
writing, within 30 days after the receipt by the Issuer 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;
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provided however, that, so long as the Trustee is the Security Registrar, no
such list shall be required to be furnished.
ARTICLE VIII
CONSOLIDATION, MERGER, SALE, LEASE OR CONVEYANCE
SECTION 8.1 CONSOLIDATIONS AND MERGERS OF ISSUER AND SALES,
LEASES AND CONVEYANCE PERMITTED SUBJECT TO CERTAIN CONDITIONS. The Issuer may
consolidate with, or sell, lease or convey all or substantially all of its
assets to, or merge with or into any other corporation, provided that in any
such case, (a) either the Issuer shall be the continuing corporation or the
successor corporation shall be a corporation organized and existing under the
laws of the United States or a State thereof and such successor corporation
shall expressly assume the due and punctual payment of the principal of (and
premium, if any) and any interest (including all Additional Amounts, if any,
payable pursuant to Section 10.12) on all of the Securities, according to their
tenor, and the due and punctual performance and observance of all of the
covenants and conditions of this Indenture to be performed by the Issuer by
supplemental indenture, complying with Article IX hereof, satisfactory to the
Trustee, executed and delivered to the Trustee by such corporation and (b)
immediately after giving effect to such transaction and treating any
indebtedness which becomes an obligation of the Issuer or any Subsidiary as a
result thereof as having been incurred by the Issuer or such Subsidiary at the
time of such transaction, no Event of Default, and no event which, after notice
or the lapse of time, or both, would become an Event of Default, shall have
occurred and be continuing.
SECTION 8.2 RIGHTS AND DUTIES OF SUCCESSOR CORPORATION. In
case of any such consolidation, merger, sale, lease or conveyance and upon any
such assumption by the successor corporation, such successor corporation shall
succeed to and be substituted for the Issuer, with the same effect as if it had
been named herein as the party of the first part, and the predecessor
corporation, except in the event of a lease, shall be relieved of any further
obligation under this Indenture and the Securities. Such successor corporation
thereupon may cause to be signed, and may issue either in its own name or in the
name of the Issuer, any or all of the Securities issuable hereunder which
theretofore shall not have been signed by the Issuer and delivered to the
Trustee; and, upon the order of such successor corporation, instead of the
Issuer, and subject to all the terms, conditions and limitations in this
Indenture prescribed, the Trustee shall authenticate and shall deliver any
Securities which previously shall have been signed and delivered by the officers
of the Issuer to the Trustee for authentication, and any Securities which such
successor corporation thereafter shall cause to be signed and delivered to the
Trustee for that purpose. All the Securities so issued shall in all respects
have the same legal rank and benefit under this Indenture as the Securities
theretofore or thereafter issued in accordance with the terms of this Indenture
as though all of such Securities had been issued at the date of the execution
hereof.
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In case of any such consolidation, merger, sale, lease or
conveyance, such changes in phraseology and form (but not in substance) may be
made in the Securities thereafter to be issued as may be appropriate.
SECTION 8.3 OFFICERS' CERTIFICATE AND OPINION OF COUNSEL. Any
consolidation, merger, sale, lease or conveyance permitted under Section 8.1 is
also subject to the condition that the Trustee receive an Officers' Certificate
and an Opinion of Counsel to the effect that any such consolidation, merger,
sale, lease or conveyance, and the assumption by any successor corporation,
complies with the provisions of this Article VIII and that all conditions
precedent herein provided for relating to such transaction have been complied
with.
ARTICLE IX
SUPPLEMENTAL INDENTURES
SECTION 9.1 SUPPLEMENTAL INDENTURES WITHOUT CONSENT OF
HOLDERS. Without the consent of any Holders of Securities or coupons, the
Issuer, when authorized by or pursuant to a Board Resolution, and the Trustee,
at any time and from time to time, may enter into one or more indentures
supplemental hereto, in form satisfactory to the Trustee, for any of the
following purposes:
(a) to evidence the succession of another Person to the
Issuer and the assumption by any such successor of the covenants of the Issuer
herein and in the Securities contained;
(b) to add to the covenants of the Issuer for the
benefit of the Holders of all or any series of Securities (and if such covenants
are to be for the benefit of less than all series of securities, stating that
such covenants are expressly being included solely for the benefit of such
series) or to surrender any right or power herein conferred upon the Issuer;
(c) to add any additional Events of Default for the
benefit of the Holders of all or any series of Securities (and if such Events of
Default are to be for the benefit of less than all series of Securities, stating
that such Events of Default are expressly being included solely for the benefit
of such series); provided, however, that in respect of any such additional
Events of Default such supplemental indenture may provide for a particular
period of grace after default (which period may be shorter or longer than that
allowed in the case of other defaults) or may provide for an immediate
enforcement upon such default or may limit the remedies available to the Trustee
upon such default or may limit the right of the Holders of a majority in
aggregate principal amount of that or those series of Securities to which such
additional Events of Default apply to waive such default;
(d) to add to or change any of the provisions of this
Indenture to provide that Bearer Securities may be registrable as to principal,
to change or eliminate any restrictions on the
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payment of principal of or any premium or interest on Bearer Securities, to
permit Bearer Securities to be issued in exchange for Registered Securities, to
permit Bearer Securities to be issued in exchange for Bearer Securities of other
authorized denominations or to permit or facilitate the issuance of Securities
in uncertificated form, provided that any such action shall not adversely affect
the interests of the Holders of Securities of any series or any related coupons
in any material respect;
(e) to change or eliminate any of the provisions of this
Indenture, provided that any such change or elimination shall become effective
only when there is no Security Outstanding of any series created prior to the
execution of such supplemental indenture which is entitled to the benefit of
such provision;
(f) to secure the Securities;
(g) to establish the form or terms of Securities of any
series and any related coupons as permitted by Sections 2.1 and 3.1;
(h) to evidence and provide for the acceptance of
appointment hereunder by a successor Trustee with respect to the Securities of
one or more series and to add to or change any of the provisions of this
Indenture as shall be necessary to provide for or facilitate the administration
of the trusts hereunder by more than one Trustee;
(i) to cure any ambiguity, to correct or supplement any
provision herein which may be defective or inconsistent with any other provision
herein or to make any other provisions with respect to matters or questions
arising under this Indenture which shall not be inconsistent with the provisions
of this Indenture, provided such provisions shall not adversely affect the
interests of the Holders of Securities of any series or any related coupons in
any material respect; or
(j) to supplement any of the provisions of this
Indenture to such extent as shall be necessary to permit or facilitate the
defeasance and discharge of any series of Securities pursuant to Sections 4.1,
14.2 and 14.3, provided that any such action shall not adversely affect the
interests of the Holders of Securities of such series and any related coupons or
any other series of Securities in any material respect.
SECTION 9.2 SUPPLEMENTAL INDENTURES WITH CONSENT OF HOLDERS.
With the consent of the Holders of not less than a majority in principal amount
of all Outstanding Securities affected by such supplemental indenture, by Act of
said Holders delivered to the Issuer and the Trustee, the Issuer, when
authorized by or pursuant to a Board Resolution, and the Trustee may enter into
an indenture or indentures supplemental hereto for the purpose of adding any
provisions to or changing in any manner or eliminating any of the provisions of
this Indenture or of modifying in any manner the rights of the Holders of
Securities and any related coupons under this Indenture; provided, however, that
no such supplemental indenture shall, without the consent of the Holder of each
Outstanding Security affected thereby:
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(a) change the Stated Maturity of the principal of (or
premium, if any, on) or any installment of principal of or interest on, any
Security, or reduce the principal amount thereof or the rate or amount of
interest thereon or any Additional Amounts payable in respect thereof, or any
premium payable upon the redemption thereof, or change any obligation of the
Issuer to pay Additional Amounts pursuant to Section 10.11 (except as
contemplated by Section 8.1(a) and permitted by Section 9.1(a), 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 5.2 or the amount thereof provable in bankruptcy pursuant to Section
5.4, or adversely affect any right of repayment at the option of the Holder of
any Security, or change any Place of Payment where, or the currency or
currencies, currency unit or units or composite currency or currencies in which,
any Security or any premium or the interest thereon is payable, or impair the
right to institute suit for the enforcement of any such payment on or after the
Stated Maturity thereof (or, in the case of redemption or repayment at the
option of the Holder, on or after the Redemption Date or the Repayment Date, as
the case may be);
(b) reduce the percentage in principal amount of the
Outstanding Securities of any series, the consent of whose Holders is required
for any such supplemental indenture, or the consent of whose Holders is required
for any waiver with respect to such series (or compliance with certain
provisions of this Indenture or certain defaults hereunder and their
consequences) provided for in this Indenture, or reduce the requirements of
Section 15.4 for quorum or voting; or
(c) modify any of the provisions of this Section 9.2,
Section 5.13 or Section 10.12, except to increase the required percentage to
effect such action or to provide that certain other provisions of this Indenture
cannot be modified or waived without the consent of the Holder of each
Outstanding Security affected thereby.
It shall not be necessary for any Act of Holders under this
Section 9.2 to approve the particular form of any proposed supplemental
indenture, but it shall be sufficient if such Act shall approve the substance
thereof.
A supplemental indenture which changes or eliminates any
covenant or other provision of this Indenture which has expressly been included
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.
SECTION 9.3 EXECUTION OF SUPPLEMENTAL INDENTURES. In
executing, or accepting the additional trusts created by, any supplemental
indenture permitted by this Article IX or the modification thereby of the trusts
created by this Indenture, the Trustee shall be entitled to receive, and shall
be fully protected in relying upon, an Opinion of Counsel stating that the
execution of such supplemental indenture is authorized or permitted by this
Indenture. The Trustee may, but shall not be obligated to, enter into any such
supplemental indenture which affects the Trustee's own rights, duties or
immunities under this Indenture or otherwise.
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SECTION 9.4 EFFECT OF SUPPLEMENTAL INDENTURES. Upon the
execution of any supplemental indenture under this Article IX, this Indenture
shall be modified in accordance therewith, and such supplemental indenture shall
form a part of this Indenture for all purposes; and every Holder of Securities
theretofore or thereafter authenticated and delivered hereunder and of any
coupon appertaining thereto shall be bound thereby.
SECTION 9.5 CONFORMITY WITH TRUST INDENTURE ACT. Every
supplemental indenture executed pursuant to this Article IX shall conform to the
requirements of the Trust Indenture Act as then in effect.
SECTION 9.6 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 Issuer shall
so determine, new Securities of any series so modified as to conform, in the
opinion of the Trustee and the Issuer, to any such supplemental indenture may be
prepared and executed by the Issuer and authenticated and delivered by the
Trustee in exchange for Outstanding Securities of such series.
ARTICLE X
COVENANTS
SECTION 10.1 PAYMENT OF PRINCIPAL, PREMIUM, IF ANY, INTEREST
AND ADDITIONAL AMOUNTS. The Issuer covenants and agrees for the benefit of the
Holders of each series of Securities that it will duly and punctually pay the
principal of (and premium, if any) and interest on and any Additional Amounts
payable in respect of the Securities of that series in accordance with the terms
of such series of Securities, any coupons appertaining thereto and this
Indenture. Unless otherwise specified as contemplated by Section 3.1 with
respect to any series of Securities, any interest due on and any Additional
Amounts payable in respect of Bearer Securities on or before Maturity, other
than Additional Amounts, if any, payable as provided in Section 10.11 in respect
of principal of (or premium, if any, on) such a Security, shall be payable only
upon presentation and surrender of the several coupons for such interest
installments as are evidenced thereby as they severally mature. Unless otherwise
specified with respect to Securities of any series pursuant to Section 3.1, at
the option of the Issuer, all payments of principal may be paid by check to the
registered Holder of the Registered Security or other person entitled thereto
against surrender of such Security.
SECTION 10.2 MAINTENANCE OF OFFICE OR AGENCY. If Securities of
a series are issuable only as Registered Securities, the Issuer shall maintain
in each Place of Payment for any series of Securities an office or agency where
Securities of that series may be presented or surrendered for payment or
conversion, where Securities of that series may be surrendered for registration
of transfer or exchange and where notices and demands to or upon the Issuer in
respect
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of the Securities of that series and this Indenture may be served. If Securities
of a series are issuable as Bearer Securities, the Issuer will maintain: (a) in
the Borough of Manhattan, New York City, an office or agency where any
Registered Securities of that series may be presented or surrendered for payment
or conversion, where any Registered Securities of that series may be surrendered
for registration of transfer, where Securities of that series may be surrendered
for exchange, where notices and demands to or upon the Issuer in respect of the
Securities of that series and this Indenture may be served and where Bearer
Securities of that series and related coupons may be presented or surrendered
for payment or conversion in the circumstances described in the following
paragraph (and not otherwise); (b) subject to any laws or regulations applicable
thereto, in a Place of Payment for that series which is located outside the
United States, an office or agency where Securities of that series and related
coupons may be presented and surrendered for payment (including payment of any
Additional Amounts payable on Securities of that series pursuant to Section
10.11) or conversion; provided, however, that if the Securities of that series
are listed on any stock exchange located outside the United States and such
stock exchange shall so require, the Issuer will maintain a Paying Agent for the
Securities of that series in any required city located outside the United
States, as the case may be, so long as the Securities of that series are listed
on such exchange; and (c) subject to any laws or regulations applicable thereto,
in a Place of Payment for that series located outside the United States an
office or agency where any Registered Securities of that series may be
surrendered for registration of transfer, where Securities of that series may be
surrendered for exchange and where notices and demands to or upon the Issuer in
respect of the Securities of that series and this Indenture may be served. The
Issuer will give prompt written notice to the Trustee of the location, and any
change in the location, of each such office or agency. If at any time the Issuer
shall fail to maintain any such required office or agency or shall fail to
furnish the Trustee with the address thereof, such presentations, surrenders,
notices and demands may be made or served at the Corporate Trust Office of the
Trustee, except that Bearer Securities of that series and the related coupons
may be presented and surrendered for payment (including payment of any
Additional Amounts payable on Bearer Securities of that series pursuant to
Section 10.11) or conversion at the offices specified in the Security, and the
Issuer hereby appoints the same as its agent to receive such respective
presentations, surrenders, notices and demands, and the Issuer hereby appoints
the Trustee its agent to receive all such presentations, surrenders, notices and
demands.
Unless otherwise specified with respect to any Securities
pursuant to Section 3.1, no payment of principal, premium or interest on or
Additional Amounts in respect of Bearer Securities shall be made at any office
or agency of the Issuer in the United States or by check mailed to any address
in the United States or by transfer to an account maintained with a bank located
in the United States; provided, however, that, if the Securities of a series are
payable in Dollars, payment of principal of and any premium and interest on any
Bearer Security (including any Additional Amounts payable on Securities of such
series pursuant to Section 10.11) shall be made at the office of the designated
agent of the Issuers Paying Agent in the Borough of Manhattan, New York City, if
(but only if) payment in Dollars of the full amount of such principal, premium,
interest or Additional Amounts, as the case may be, at all offices or agencies
outside the United States maintained for the purpose by the Issuer in accordance
with this Indenture, is illegal or effectively precluded by exchange controls or
other similar restrictions.
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The Issuer may 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 of such purposes, and may from time to time
rescind such designations; provided, however, that no such designations or
rescission shall in any manner relieve the Issuer of its obligation to maintain
an office or agency in accordance with the requirements set forth above for
Securities of any series for such purposes. The Issuer will give prompt written
notice to the Trustee of any such designation or rescission and of any change in
the location of any such other office or agency. Unless otherwise specified with
respect to any Securities pursuant to Section 3.1 with respect to a series of
Securities, the Issuer hereby designates as a Place of Payment for each series
of Securities the office or agency of the Issuer in the Borough of Manhattan,
New York City, and initially appoints the Trustee at its Corporate Trust Office
as Paying Agent in such city and as its agent to receive all such presentations,
surrenders, notices and demands.
Unless otherwise specified with respect to any Securities
pursuant to Section 3.1, if and so long as the Securities of any series (a) are
denominated in a Foreign Currency or (b) may be payable in a Foreign Currency,
or so long as it is required under any other provision of the Indenture, then
the Issuer will maintain with respect to each such series of Securities, or as
so required, at least one exchange rate agent.
SECTION 10.3 MONEY FOR SECURITIES PAYMENTS TO BE HELD IN
TRUST. If the Issuer shall at any time act as its own Paying Agent with respect
to any series of any Securities and any related coupons, it will, on or before
each due date of the principal of (and premium, if any) or interest on or
Additional Amounts in respect of, any of the Securities of that series,
segregate and hold in trust for the benefit of the Persons entitled thereto a
sum in the currency or currencies, currency unit or units or composite currency
or currencies in which the Securities of such series are payable (except as
otherwise specified pursuant to Section 3.1 for the Securities of such series)
sufficient to pay the principal (and premium, if any) or interest or Additional
Amounts so becoming due until such sums shall be paid to such Persons or
otherwise disposed of as herein provided, and will promptly notify the Trustee
of its action or failure so to act.
Whenever the Issuer shall have one or more Paying Agents for
any series of Securities and any related coupons, it will, before each due date
of the principal of (and premium, if any) or interest on or Additional Amounts
in respect of, any Securities of that series, deposit with a Paying Agent a sum
(in the currency or currencies, currency unit or units or composite currency or
currencies described in the preceding paragraph) sufficient to pay the principal
(and premium, if any) or interest or Additional Amounts, so becoming due, such
sum to be held in trust for the benefit of the Persons entitled to such
principal, premium or interest or Additional Amounts and (unless such Paying
Agent is the Trustee) the Issuer will promptly notify the Trustee of its action
or failure so to act.
The Issuer 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 10.3,
that such Paying Agent will
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(a) hold all sums held by it for the payment of
principal of (and premium, if any) or interest on Securities or Additional
Amounts in trust for the benefit of the Persons entitled thereto until such sums
shall be paid to such Persons or otherwise disposed of as herein provided;
(b) give the Trustee notice of any default by the Issuer
(or any other obligor upon the Securities) in the making of any such payment of
principal (and premium, if any) or interest or Additional Amounts; and
(c) at any time during the continuance of any such
default upon the written request of the Trustee, forthwith pay to the Trustee
all sums so held in trust by such Paying Agent.
The Issuer may at any time, for the purpose of obtaining the
satisfaction and discharge of this Indenture or for any other purpose, pay, or
by Issuer Order direct any Paying Agent to pay, to the Trustee all sums held in
trust by the Issuer 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 Issuer or
such Paying Agent; and, upon such payment by any Paying Agent to the Trustee,
such Paying Agent shall be released from all further liability with respect to
such sums.
Except as otherwise provided in the Securities of any series,
any money deposited with the Trustee or any Paying Agent, or then held by the
Issuer, in trust for the payment of the principal of (and premium, if any) or
interest on, or any Additional Amounts in respect of, any Security of any series
and remaining unclaimed for two years after such principal (and premium, if any)
interest or Additional Amounts has become due and payable shall be paid to the
Issuer upon Issuer Request or, if then held by the Issuer, shall be discharged
from such trust; and the Holder of such Security shall thereafter, as an
unsecured general creditor, look only to the Issuer for payment of such
principal of (and premium, if any) interest on or any Additional Amounts in
respect of, any Security, without interest thereon, and all liability of the
Trustee or such Paying Agent with respect to such trust money, and all liability
of the Issuer 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 Issuer cause to be published once, in an
Authorized Newspaper, notice that such money remains unclaimed and that, after a
date specified therein, which shall not be less than 30 days from the date of
such publication, any unclaimed balance of such money then remaining will be
repaid to the Issuer.
SECTION 10.4 LIMITATIONS ON INCURRENCE OF DEBT. (a) The Issuer
will not, and will not permit any Subsidiary to, incur any Debt, other than
Permitted Indebtedness if, immediately after giving effect to the incurrence of
such additional Debt, the aggregate principal amount of all outstanding Debt of
the Issuer and its Subsidiaries on a consolidated basis determined in accordance
with GAAP is greater than 60% of the sum of (i) the Total Assets as of the end
of the calendar quarter covered in the Issuer's Annual Report on Form 10-K or
Quarterly Report on Form 10-Q, as the case may be, most recently filed with the
Commission (or, if such filing is not permitted under the Exchange Act, with the
Trustee) prior to the incurrence of such additional Debt and (ii) any increase
in the Total Assets since the end of such quarter including, without limitation,
any increase in Total Assets resulting from the incurrence of such additional
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Debt (such increase together with the Total Assets being referred to as the
"Adjusted Total Assets").
(b) In addition to the limitation set forth in
subsection (a) of this Section 10.4, the Issuer will not, and will not permit
any Subsidiary to, incur any Debt if, for the period consisting of the four
consecutive fiscal quarters most recently ended prior to the date on which such
additional Debt is to be incurred, the ratio of Consolidated Income Available
for Debt Service to the Maximum Annual Service Charge shall have been less than
1.5 to 1, on a pro forma basis after giving effect to the incurrence of such
Debt and to the application of the proceeds therefrom, and calculated on the
assumption that (i) such Debt and any other Debt incurred by the Issuer or its
Subsidiaries since the first day of such four-quarter period and the application
of the proceeds therefrom, including to refinance other Debt, had occurred at
the beginning of such period; (ii) the repayment or retirement of any other Debt
by the Issuer or its Subsidiaries since the first day of such four-quarter
period had been incurred, repaid or retained at the beginning of such period
(except that, in making such computation, the amount of Debt under any revolving
credit facility shall be computed based upon the average daily balance of such
Debt during such period); (iii) any income earned as a result of any increase in
Adjusted Total Assets since the end of such four quarter period had been earned,
on an annualized basis, for such period; and (iv) in the case of any acquisition
or disposition by the Issuer or any Subsidiary of any asset or group of assets
since the first day of such four quarter period, including, without limitation,
by merger, stock purchase or sale, or asset purchase or sale, such acquisition
or disposition or any related payment of Debt had occurred as of the first day
of such period with the appropriate adjustments with respect to such acquisition
or disposition being included in such pro forma calculation.
(c) In addition to the limitations set forth in
subsections (a) and (b) of this Section 10.4, the Issuer will not, and will not
permit any Subsidiary to, incur any Debt secured by any mortgage, lien, charge,
pledge, encumbrance or security interest of any kind upon any of the property of
the Issuer or any Subsidiary (the "Secured Debt"), whether owned at the date
hereof or hereafter acquired, if, immediately after giving effect to the
incurrence of such additional Secured Debt, the aggregate principal amount of
all outstanding Secured Debt of the Issuer and its Subsidiaries on a
consolidated basis is greater than 40% of the Adjusted Total Assets.
(d) For purposes of this Section 10.4, Debt shall be
deemed to be "incurred" by the Issuer or its Subsidiaries on a consolidated
basis whenever the Issuer and its Subsidiaries on a consolidated basis shall
create, assume, guarantee or otherwise become liable in respect thereof.
SECTION 10.5 MAINTENANCE OF TOTAL UNENCUMBERED ASSETS. The
Issuer will maintain Total Unencumbered Assets of not less than 150% of the
aggregate outstanding principal amount of the Unsecured Debt of the Issuer.
SECTION 10.6 EXISTENCE. Subject to Article VIII, the Issuer
will 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
the Issuer shall not be required to preserve any right or franchise if the Board
of Trustees shall determine that the preservation thereof is no longer
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desirable in the conduct of the business of the Issuer and that the loss thereof
is not disadvantageous in any material respect to the Holders.
SECTION 10.7 MAINTENANCE OF PROPERTIES. The Issuer will cause
all of its material properties used or useful in the conduct of its business or
the business of any Subsidiary to be maintained and kept in good condition,
repair and working order and supplied with all necessary equipment and will
cause to be made all necessary repairs, renewals, replacements, betterments and
improvements thereof, all as in the judgment of the Issuer may be necessary so
that the business carried on in connection therewith may be properly and
advantageously conducted at all times; provided, however, that nothing in this
Section 10.7 shall prevent the Issuer or any Subsidiary from selling or
otherwise disposing for value its properties in the ordinary course of its
business.
SECTION 10.8 PAYMENT OF TAXES AND OTHER CLAIMS. The Issuer
will pay or discharge or cause to be paid or discharged, before the same shall
become delinquent, (a) all taxes, assessments and governmental charges levied or
imposed upon it or any Subsidiary or upon the income, profits or property of the
Issuer or any Subsidiary; and (b) all lawful claims for labor, materials and
supplies which, if unpaid, might by law become a lien upon the property of the
Issuer or any Subsidiary; provided, however, that the Issuer 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 10.9 PROVISION OF FINANCIAL INFORMATION. Whether or
not the Issuer is subject to Sections 13 or 15(d) of the Exchange Act and for so
long as any Securities are outstanding, the Issuer will, to the extent permitted
under the Exchange Act, file with the Commission the annual reports, quarterly
reports and other documents which the Issuer would have been required to file
with the Commission pursuant to such Sections 13 or 15(d) (the "Financial
Statements") if the Issuer were so subject, such documents to be filed with the
Commission on or prior to the respective dates (the "Required Filing Dates") by
which the Issuer would have been required so to file such documents if the
Issuer were so subject.
The Issuer will also in any event (a) within 15 days of each
Required Filing Date (i) transmit by mail to all Holders, as their names and
addresses appear in the Security Register, without cost to such Holders copies
of the annual reports and quarterly reports which the Issuer would have been
required to file with the Commission pursuant to Sections 13 or 15(d) of the
Exchange Act if the Issuer were subject to such Sections and (ii) file with the
Trustee copies of the annual reports, quarterly reports and other documents
which the Issuer would have been required to file with the Commission pursuant
to Sections 13 or 15(d) of the Exchange Act if the Issuer were subject to such
Sections, and (b) if filing such documents by the Issuer with the Commission is
not permitted under the Exchange Act, promptly upon written request and payment
of the reasonable cost of duplication and delivery, supply copies of such
documents to any prospective Holder.
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SECTION 10.10 STATEMENT AS TO COMPLIANCE. The Issuer will
deliver to the Trustee, within 120 days after the end of each fiscal year, a
brief certificate from the principal executive officer, principal financial
officer or principal accounting officer of the Issuer as to his or her knowledge
of the Issuer's compliance with all conditions and covenants under this
Indenture and, in the event of any noncompliance, specifying such noncompliance
and the nature and status thereof. For purposes of this Section 10.10, such
compliance shall be determined without regard to any period of grace or
requirement of notice under this Indenture.
SECTION 10.11 ADDITIONAL AMOUNTS. If any Securities of a
series provide for the payment of Additional Amounts, the Issuer will pay to the
Holder of any Security of such series or any coupon appertaining thereto
Additional Amounts as may be specified as contemplated by Section 3.1. Whenever
in this Indenture there is mentioned, in any context except in the case of
Section 5.2(a), the payment of the principal of or any premium 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 3.1
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 3.1,
if the Securities of a series provide for the payment of Additional Amounts, at
least 10 days prior to the first Interest Payment Date with respect to that
series of Securities (or if the Securities of that series will not bear interest
prior to Maturity, the first day on which a payment of principal and any premium
is made), and at least 10 days prior to each date of payment of principal and
any premium or interest if there has been any change with respect to the matters
set forth in the below-mentioned Officers' Certificate instructing the Trustee
and such Paying Agent or Paying Agents whether such payment of principal of and
any premium or interest on the Securities of that series shall be made to
Holders of Securities of that series or any related coupons who are not United
States persons without withholding for or on account of any tax, assessment or
other governmental charge described in the Securities of 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 Issuer 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 (a) 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 (b) to make all payments of
principal and interest with respect to the Securities of a series or related
coupons without withholdings or deductions until otherwise advised. The Issuer
covenants to indemnify the Trustee and any Paying Agent for, and to hold them
harmless against, any loss, liability or expense reasonably incurred without
negligence or bad faith on their part arising out of or in connection with
actions taken or omitted by any of them or
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in reliance on any Officers' Certificate furnished pursuant to this Section
10.11 or in reliance on the Issuer's not furnishing such an Officers'
Certificate.
SECTION 10.12 WAIVER OF CERTAIN COVENANTS. The Issuer may omit
in any particular instance to comply with any term, provision or condition set
forth in Sections 10.4 to 10.9, inclusive, if before or after the time for such
compliance the Holders of at least a majority in principal amount of all
outstanding Securities of such series, by Act of such Holders, either waive such
compliance in such instance or generally waive compliance with such covenant or
condition, but no such waiver shall extend to or affect such covenant or
condition except to the extent so expressly waived, and, until such waiver shall
become effective, the obligations of the Issuer and the duties of the Trustee in
respect of any such term, provision or condition shall remain in full force and
effect.
ARTICLE XI
REDEMPTION OF SECURITIES
SECTION 11.1 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 3.1 for Securities of any series) in accordance with this Article XI.
SECTION 11.2 ELECTION TO REDEEM; NOTICE TO TRUSTEE. The
election of the Issuer to redeem any Securities shall be evidenced by or
pursuant to a Board Resolution. In case of any redemption at the election of the
Issuer of less than all of the Securities of any series, the Issuer shall, at
least 45 days prior to the giving of the notice of redemption in Section 11.4
(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 Issuer shall furnish the
Trustee with an Officers' Certificate evidencing compliance with such
restriction.
SECTION 11.3 SELECTION BY TRUSTEE OF SECURITIES TO BE
REDEEMED. If less than all the Securities of any series issued on the same day
with the same terms are to be redeemed, the particular Securities to be redeemed
shall be selected not more than 60 days prior to the Redemption Date by the
Trustee, from the Outstanding Securities of such series issued on such date with
the same terms not previously called for redemption, by such method as the
Trustee shall deem fair and appropriate and which may provide for the selection
for redemption of portions (equal to the minimum authorized denomination for
Securities of that series or any integral multiple thereof) of the principal
amount of Securities of such series of a denomination larger than the minimum
authorized denomination for Securities of that series.
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The Trustee shall promptly notify the Issuer and the Security
Registrar (if other than itself) in writing of the Securities selected for
redemption and, in the case of any Securities selected for partial redemption,
the principal amount thereof to be redeemed.
For all purposes of this Indenture, unless the context
otherwise requires, all provisions relating to the redemption of Securities
shall relate, in the case of any Security redeemed or to be redeemed only in
part, to the portion of the principal amount of such Security which has been or
is to be redeemed.
SECTION 11.4 NOTICE OF REDEMPTION. Notice of redemption shall
be given in the manner provided in Section 1.6, not less than 30 days nor more
than 60 days prior to the Redemption Date, unless a shorter period is specified
by the terms of such series established pursuant to Section 3.1, to each Holder
of Securities to be redeemed, but failure to give such notice in the manner
herein provided to the Holder of any Security designated for redemption as a
whole or in part, or any defect in the notice to any such Holder, shall not
affect the validity of the proceedings for the redemption of any other such
Security or portion thereof.
Any notice that is mailed to the Holders of Registered
Securities in the manner herein provided shall be conclusively presumed to have
been duly given, whether or not the Holder receives the notice.
All notices of redemption shall state:
(a) the Redemption Date;
(b) the Redemption Price, accrued interest to the
Redemption Date payable as provided in Section 11.6, if any, and Additional
Amounts, if any;
(c) if less than all Outstanding Securities of any
series are to be redeemed, the identification (and, in the case of partial
redemption, the principal amount) of the particular Security or Securities to be
redeemed;
(d) in case any Security is to be redeemed in part only,
the notice which relates to such Security shall state that on and after the
Redemption Date, upon surrender of such Security, the holder will receive,
without a charge, a new Security or Securities of authorized denominations for
the principal amount thereof remaining unredeemed;
(e) that on the Redemption Date the Redemption Price and
accrued interest to the Redemption Date payable as provided in Section 11.6, if
any, will become due and payable upon each such Security, or the portion
thereof, to be redeemed and, if applicable, that interest thereon shall cease to
accrue on and after said date;
(f) the Place or Places of Payment where such
Securities, together in the case of Bearer Securities with all coupons
appertaining thereto, if any, maturing after the Redemption
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Date, are to be surrendered for payment of the Redemption Price and accrued
interest, if any, or for conversion;
(g) that the redemption is for a sinking fund, if such
is the case;
(h) 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 Issuer, the
Trustee for such series and any Paying Agent is furnished;
(i) if Bearer Securities of any series are to be
redeemed and any Registered Securities of such series are not to be redeemed,
and if such Bearer Securities may be exchanged for Registered Securities not
subject to redemption on this Redemption Date pursuant to Section 3.5 or
otherwise, the last date, as determined by the Issuer, on which such exchanges
may be made;
(j) the CUSIP number of such Security, if any; and
(k) if applicable, that a Holder of Securities who
desires to convert Securities for redemption must satisfy the requirements for
conversion contained in such Securities, the then existing conversion price or
rate, and the date and time when the option to convert shall expire.
Notice of redemption of Securities to be redeemed shall be
given by the Issuer or, at the Issuer's request, by the Trustee in the name and
at the expense of the Issuer.
SECTION 11.5 DEPOSIT OF REDEMPTION PRICE. At least one
Business Day prior to any Redemption Date, the Issuer shall deposit with the
Trustee or with a Paying Agent (or, if the Issuer is acting as its own Paying
Agent, which it may not do in the case of a sinking fund payment under Article
XII, segregate and hold in trust as provided in Section 10.3) an amount of money
in the currency or currencies, currency unit or units or composite currency or
currencies in which the Securities of such series are payable (except as
otherwise specified pursuant to Section 3.1 for the Securities of such series)
sufficient to pay on the Redemption Date the Redemption Price of, and (except if
the Redemption Date shall be an Interest Payment Date) accrued interest on, all
the Securities or portions thereof which are to be redeemed on that date.
SECTION 11.6 SECURITIES PAYABLE ON REDEMPTION DATE. Notice of
redemption having been given as aforesaid, the Securities so to be redeemed
shall, on the Redemption Date, become due and payable at the Redemption Price
therein specified in the currency or currencies, currency unit or units or
composite currency or currencies in which the Securities of such series are
payable (except as otherwise specified pursuant to Section 3.1 for the
Securities of such series) (together with accrued interest, if any, to the
Redemption Date), and from and after such date (unless the Issuer shall default
in the payment of the Redemption Price and accrued interest) such Securities
shall, if the same were interest-bearing, cease to bear interest
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and the coupons for such interest appertaining to any Bearer Securities so to be
redeemed, except to the extent provided below, shall be void. Upon surrender of
any such Security for redemption in accordance with said notice, together with
all coupons, if any, appertaining thereto maturing after the Redemption Date,
such Security shall be paid by the Issuer at the Redemption Price, together with
accrued interest, if any, to the Redemption Date; provided, however, that
installments of interest on Bearer Securities whose Stated Maturity is on or
prior to the Redemption Date shall be payable only at an office or agency
located outside the United States (except as otherwise provided in Section 10.2)
and, unless otherwise specified as contemplated by Section 3.1, only upon
presentation and surrender of coupons for such interest; and provided further
that, except as otherwise provided with respect to Securities convertible into
Common Stock or Preferred Stock, installments of interest on Registered
Securities whose Stated Maturity is on or prior to the Redemption Date shall be
payable to the Holders of such Securities, or one or more Predecessor
Securities, registered as such at the close of business on the relevant Record
Dates according to their terms and the provisions of Section 3.7.
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 Issuer and the Trustee if there be
furnished to them such security or indemnity as they may require to save each of
them and any Paying Agent harmless. If thereafter the Holder of such Security
shall surrender to the Trustee or any Paying Agent any such missing coupon in
respect of which a deduction shall have been made from the Redemption Price,
such Holder shall be entitled to receive the amount so deducted; provided,
however, that interest represented by coupons shall be payable only at an office
or agency located outside the United States (except as otherwise provided in
Section 10.2) and unless otherwise specified as contemplated by Section 3.1,
only upon presentation and surrender of those coupons.
If any Security called for redemption shall not be so paid
upon surrender thereof for redemption, the principal (and premium, if any)
shall, until paid, bear interest from the Redemption Date at the rate borne by
the Security.
SECTION 11.7 SECURITIES REDEEMED IN PART. Any Registered
Security which is to be redeemed only in part (pursuant to the provisions of
this Article XI or of Article XII) shall be surrendered at a Place of Payment
therefor (with, if the Issuer or the Trustee so requires, due endorsement by, or
a written instrument of transfer in form satisfactory to the Issuer and the
Trustee duly executed by, the Holder thereof or his or her attorney duly
authorized in writing) and the Issuer shall execute and the Trustee shall
authenticate and deliver to the Holder of such Security without service charge a
new Security or Securities of the same series, of any authorized denomination as
requested by such Holder in aggregate principal amount equal to and in exchange
for the unredeemed portion of the principal of the Security so surrendered.
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ARTICLE XII
SINKING FUNDS
SECTION 12.1 APPLICABILITY OF ARTICLE. The provisions of this
Article XII shall be applicable to any sinking fund for the retirement of
Securities of a series except as otherwise specified as contemplated by Section
3.1 for Securities of such series.
The minimum amount of any sinking fund payment provided for by
the terms of Securities of any series is herein referred to as a "mandatory
sinking fund payment," and any payment in excess of such minimum amount provided
for by the terms of such Securities of any series is herein referred to as an
"optional sinking fund payment." If provided for by the terms of any Securities
of any series, the cash amount of any mandatory sinking fund payment may be
subject to reduction as provided in Section 12.2. Each sinking fund payment
shall be applied to the redemption of Securities of any series as provided for
by the terms of Securities of such series.
SECTION 12.2 SATISFACTION OF SINKING FUND PAYMENT WITH
SECURITIES. The Issuer may, in satisfaction of all or any part of any mandatory
sinking fund payment with respect to the Securities of a series, (a) deliver
Outstanding Securities of such series (other than any previously called for
redemption) together in the case of any Bearer Securities of such series with
all unmatured coupons appertaining thereto and (b) apply as a credit Securities
of such series which have been redeemed either at the election of the Issuer
pursuant to the terms of such Securities or through the application of permitted
optional sinking fund payments pursuant to the terms of such Securities, as
provided for by the terms of such Securities, or which have otherwise been
acquired by the Issuer; provided that such Securities so delivered or applied as
a credit have not been previously so credited. Such Securities shall be received
and credited for such purpose by the Trustee at the applicable Redemption Price
specified in such Securities for redemption through operation of the sinking
fund and the amount of such mandatory sinking fund payment shall be reduced
accordingly.
SECTION 12.3 REDEMPTION OF SECURITIES FOR SINKING FUND. Not
less than 60 days prior to each sinking fund payment date for Securities of any
series, the Issuer will deliver to the Trustee an Officers' Certificate
specifying the amount of the next ensuing mandatory sinking fund payment for
that series pursuant to the terms of that series, the portion thereof, if any,
which is to be satisfied by payment of cash in the currency or currencies,
currency unit or units or composite currency or currencies in which the
Securities of such series are payable (except as otherwise specified pursuant to
Section 3.1 for the Securities of such series) and the portion thereof, if any,
which is to be satisfied by delivering and crediting Securities of that series
pursuant to Section 12.2, and the optional amount, if any, to be added in cash
to the next ensuing mandatory sinking fund payment, and will also deliver to the
Trustee any Securities to be so delivered and credited. If such Officers'
Certificate shall specify an optional amount to be added in cash to the next
ensuing mandatory sinking fund payment, the Issuer shall thereupon be obligated
to pay the amount therein specified. Not less than 30 days before each such
sinking fund payment date the Trustee shall select the Securities to be redeemed
upon such sinking fund
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payment date in the manner specified in Section 11.3 and cause notice of the
redemption thereof to be given in the name of and at the expense of the Issuer
in the manner provided in Section 11.4. Such notice having been duly given, the
redemption of such securities shall be made upon the terms and in the manner
stated in Sections 11.6 and 11.7.
ARTICLE XIII
REPAYMENT AT THE OPTION OF HOLDERS
SECTION 13.1 APPLICABILITY OF ARTICLE. Repayment of Securities
of any series before their Stated Maturity at the option of Holders thereof
shall be made in accordance with the terms of such Securities, if any, and
(except as otherwise specified by the terms of such series established pursuant
to Section 3.1) in accordance with this Article XIII.
SECTION 13.2 REPAYMENT OF SECURITIES. Securities of any series
subject to repayment in whole or in part at the option of the Holders thereof
will, unless otherwise provided in the terms of such Securities, be repaid at a
price equal to the principal amount thereof, together with interest, if any,
thereon accrued to the Repayment Date specified in or pursuant to terms of such
securities. The Issuer covenants that at least one Business Day prior to the
Repayment Date it will deposit with the Trustee or with a Paying Agent (or, if
the Issuer is acting as its own Paying Agent, segregate and hold in trust as
provided in Section 10.3) an amount of money in currency or currencies, currency
unit or composite currency or currencies in which the Securities of such series
are payable (except as otherwise specified pursuant to Section 3.1 for the
Securities of such series) sufficient to pay the principal (or, if so provided
by the terms of the Securities of any series, a percentage of the principal) of,
an (except if the Repayment Date shall be an Interest Payment Date) accrued
interest on, all the Securities or portions thereof, as the case may be, to be
repaid on such date.
SECTION 13.3 EXERCISE OF OPTION. Securities of any series
subject to repayment at the option of the Holders thereof will contain an
"Option to Elect Repayment" form on the reverse of such Securities. In order for
any Security to be repaid at the option of the Holder, the Trustee must receive
at the Place of Payment therefor specified in the terms of such Security (or at
such other place or places of which the Issuer shall from time to time notify
the Holders of such Securities) not earlier than 60 days nor later than 30 days
prior to the Repayment Date (a) the Security so providing for such repayment
together with the "Option to Elect Repayment" form on the reverse thereof duly
completed by the Holder (or by the Holder's attorney duly authorized in writing)
or (b) a telegram, telex, facsimile transmission or a letter from a member of a
national securities exchange, or the National Association of Securities Dealers,
Inc., or a commercial bank or trust company in the United States setting forth
the name of the Holder of the Security, the principal amount of the Security,
the principal amount of the Security to be repaid, the CUSIP number, if any, or
a description of the tenor and terms of the Security, a statement that the
option to elect repayment is being exercised thereby and a guarantee that the
Security to be repaid, together with the duly completed form entitled "Option to
Elect Repayment"
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on the reverse of the Security, will be received by the Trustee not later than
the fifth Business Day after the date of such telegram, telex, facsimile
transmission or letter; provided, however, that such telegram, telex, facsimile
transmission or letter shall only be effective if such Security and form duly
completed are received by the Trustee by such fifth Business Day. If less than
the entire principal amount of such Security is to be repaid in accordance with
the terms of such Security, the principal amount of such Security to be repaid,
in increments of the minimum denominations for Securities of such series, and
the denomination or denominations of the Security or Securities to be issued to
the Holder for the portion of the principal amount of such Security surrendered
that is not to be repaid, must be specified. The principal amount of any
Security providing for repayment at the option of the Holder thereof may not be
repaid in part if, following such repayment, the unpaid principal amount of such
Security would be less than the minimum authorized denomination of Securities of
the series of which such Security to be repaid as a party. Except as otherwise
may be provided by the terms of any Security providing for repayment at the
option of the Holder thereof, exercise of the repayment option by the Holder
shall be irrevocable unless waived by the Issuer.
SECTION 13.4 WHEN SECURITIES PRESENTED FOR REPAYMENT BECOME
DUE AND PAYABLE. If Securities of any series providing for repayment at the
option of the Holders thereof shall have been surrendered as provided in this
Article XIII and as provided by or pursuant to the terms of such Securities,
such Securities or the portions thereof, as the case may be, to be repaid shall
become due and payable and shall be paid by the Issuer on the Repayment Date
therein specified, and on and after such Repayment Date (unless the Issuer shall
default in the payment of such Securities on such Repayment Date) such
Securities shall, if the same were interest-bearing, cease to bear interest and
the coupons for such interest appertaining to any Bearer Securities so to be
repaid, except to the extent provided below, shall be void. Upon surrender of
any such Security for repayment in accordance with such provisions, together
with all coupons, if any, appertaining thereto maturing after the Repayment
Date, the principal amount of such Security so to be repaid shall be paid by the
Issuer, together with accrued interest, if any, to the Repayment Date; provided,
however, that coupons whose Stated Maturity is on or prior to the Repayment Date
shall be payable only at an office or agency located outside the United States
(except as otherwise provided in Section 10.2) and, unless otherwise specified
pursuant to Section 3.1, only upon presentation and surrender of such coupons;
and provided further that, in the case of Registered Securities, installments of
interest, if any, whose Stated Maturity is on or prior to the Repayment Date
shall be payable (but without interest thereon, unless the Issuer shall default
in the payment thereof) to the Holders of such Securities, or one or more
Predecessor Securities, registered as such at the close of business on the
relevant Record Dates according to their terms and the provisions of Section
3.7.
If any Bearer Security surrendered for repayment shall not be
accompanied by all appurtenant coupons maturing after the Repayment Date, such
Security may be paid after deducting from the amount payable therefor as
provided in Section 13.2 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
Issuer 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
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such Security shall surrender to the Trustee or any Paying Agent any such
missing coupon in respect of which a deduction shall have been made as provided
in the preceding sentence, such Holder shall be entitled to receive the amount
so deducted; provided, however, that interest represented by coupons shall be
payable only at an office or agency located outside the United States (except as
otherwise provided in Section 10.2) and, unless otherwise specified as
contemplated by Section 3.1, only upon presentation and surrender of those
coupons.
If the principal amount of any Security surrendered for
repayment shall not be so repaid upon surrender thereof, such principal amount
(together with interest, if any, thereon, accrued to such Repayment Date) shall,
until paid, bear interest from the Repayment Date at the rate of interest or
Yield to Maturity (in the case of Original Issue Discount Securities) set forth
in such Security.
SECTION 13.5 SECURITIES REPAID IN PART. Upon surrender of any
Registered Security which is to be repaid in part only, the Issuer shall execute
and the Trustee shall authenticate and deliver to the Holder of such Security
without service charge and at the expense of the Issuer, a new Registered
Security or Securities of the same series, of any authorized denomination
specified by the Holder, in an aggregate principal amount equal to and in
exchange for the portion of the principal of such Security so surrendered which
is not to be repaid.
ARTICLE XIV
DEFEASANCE AND COVENANT DEFEASANCE
SECTION 14.1 APPLICABILITY OF ARTICLE; ISSUER'S OPTION TO
EFFECT DEFEASANCE OR COVENANT DEFEASANCE. If, pursuant to Section 3.1, provision
is made for either or both of (a) defeasance of the Securities of or within a
series under Section 14.2 or (b) covenant defeasance of the Securities of or
within a series under Section 14.3, then the provisions of such Section or
Sections, as the case may be, together with the other provisions of this Article
XIV (with such modifications thereto as may be specified pursuant to Section 3.1
with respect to any Securities), shall be applicable to such Securities and any
coupons appertaining thereto, and the Issuer may at its option by Board
Resolution, at any time, with respect to such Securities and any coupons
appertaining thereto, elect to have Section 14.2 (if applicable) or Section 14.3
(if applicable) be applied to such Outstanding Securities and any coupons
appertaining thereto upon compliance with the conditions set forth below in this
Article XIV.
SECTION 14.2 DEFEASANCE AND DISCHARGE. Upon the Issuer's
exercise of the above option applicable to this Section 14.2 with respect to any
Securities of or within a series, the Issuer shall be deemed to have been
discharged from its obligations with respect to such Outstanding Securities and
any coupons appertaining thereto on the date the conditions set forth in Section
14.4 are satisfied (hereinafter, "defeasance"). For this purpose, such
defeasance means that the Issuer shall be deemed to have paid and discharged the
entire indebtedness represented by
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such Outstanding Securities and any coupons appertaining thereto, which shall
thereafter be deemed to be "Outstanding" only for the purposes of Section 14.5
and the other Sections of this Indenture referred to in clauses (a) and (b)
below, and to have satisfied all of its other obligations under such Securities
and any coupons appertaining thereto and this Indenture insofar as such
Securities and any coupons appertaining thereto are concerned (and the Trustee,
at the expense of the Issuer, shall execute proper instruments acknowledging the
same), except for the following which shall survive until otherwise terminated
or discharged hereunder: (a) the rights of Holders of such Outstanding
Securities and any coupons appertaining thereto receive, solely from the trust
fund described in Section 14.4 and as more fully set forth in such Section,
payments in respect of the principal of (and premium, if any) and interest, if
any, on such Securities and any coupons appertaining thereto when such payments
are due; (b) the Issuer's obligations with respect to such Securities under
Sections 3.5, 3.6, 10.2 and 10.3 and with respect to the payment of Additional
Amounts, if any, on such Securities as contemplated by Section 10.11; (c) the
rights, powers, trusts, duties and immunities of the Trustee hereunder; and (d)
this Article XIV. Subject to compliance with this Article XIV, the Issuer may
exercise its option under this Section 14.2 notwithstanding the prior exercise
of its option under Section 14.3 with respect to such Securities and any coupons
appertaining thereto.
SECTION 14.3 COVENANT DEFEASANCE. Upon the Issuer's exercise
of the above option applicable to this Section 14.3 with respect to any
Securities of or within a series, the Issuer shall be released from its
obligations under Sections 10.4 to 10.9, inclusive, and, if specified pursuant
to Section 3.1, its obligations under any other covenant, with respect to such
Outstanding Securities and any coupons appertaining thereto on and after the
date the conditions set forth in Section 14.4 are satisfied (hereinafter,
"covenant defeasance"), and such Securities and any coupons appertaining thereto
shall thereafter be deemed to be not "Outstanding" for the purposes of any
direction, waiver, consent or declaration or Act of Holders (and the
consequences of any thereof) in connection with Sections 10.4 to 10.9,
inclusive, or such other covenant, but shall continue to be deemed "Outstanding"
for all other purposes hereunder. For this purpose, such covenant defeasance
means that, with respect to such Outstanding Securities and any coupons
appertaining thereto, the Issuer may omit to comply with and shall have no
liability in respect of any term, condition or limitation set forth in any such
Section or such other covenant, whether directly or indirectly, by reason of any
reference elsewhere herein to any such Section or such other covenant or by
reason of reference in any such Section or such other covenant to any other
provision herein or in any other document and such omission to comply shall not
constitute a default or an Event of Default under Section 5.1(d) or 5.1(h) or
otherwise, as the cases may be, but, except as specified above, the remainder of
this Indenture and such Securities and any coupons appertaining thereto shall be
unaffected thereby.
SECTION 14.4 CONDITIONS TO DEFEASANCE OR COVENANT DEFEASANCE.
The following shall be the conditions to application of Section 14.2 or Section
14.3 to any Outstanding Securities of or within a series and any coupons
appertaining thereto:
(a) The Issuer shall irrevocably have deposited or
caused to be deposited with the Trustee (or another trustee satisfying the
requirements of Section 6.7 who shall agree to
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comply with the provisions of this Article XIV applicable to it) as trust funds
in trust for the purpose of making the following payments, specifically pledged
as security for, and dedicated solely to, the benefit of the Holders of such
Securities and any coupons appertaining thereto, (i) an amount in such currency,
currencies or currency unit in which such Securities and any coupons
appertaining thereto are then specified as payable at Stated Maturity; or (ii)
Government Obligations applicable to such Securities and coupons appertaining
thereto (determined on the basis of the currency, currencies or currency unit in
which such Securities and coupons appertaining thereto are then specified as
payable at Stated Maturity) which through the scheduled payment of principal and
interest in respect thereof in accordance with their terms will provide, not
later than one day before the due date of any payment of principal of (and
premium, if any) and interest, if any, on such Securities and any coupons
appertaining thereto, money in an amount; or (iii) a combination thereof, in an
amount, sufficient, without consideration of any reinvestment of such principal
and interest, in the opinion of a nationally recognized firm of independent
public accountants expressed in a written certification thereof delivered to the
Trustee, to pay and discharge, and which shall be applied by the Trustee (or
other qualifying trustee) to pay and discharge; (A) the principal of (and
premium, if any) and interest, if any, on such Outstanding Securities and any
coupons appertaining thereto on the Stated Maturity of such principal or
installment of principal or interest and (B) any mandatory sinking fund payments
or analogous payments applicable to such Outstanding Securities and any coupons
appertaining thereto on the day on which such payments are due and payable in
accordance with the terms of this Indenture and of such Securities and any
coupons appertaining thereto.
(b) Such defeasance or covenant defeasance shall not
result in a breach or violation of, or constitute a default under, this
Indenture or any other material agreement or instrument to which the Issuer is a
party or by which it is bound.
(c) No Event of Default or event which with notice or
lapse of time or both would become an Event of Default with respect to such
Securities and any coupons appertaining thereto shall have occurred and be
continuing on the date of such deposit or, insofar as Sections 5.1(f) and 5.1(g)
are concerned, at any time during the period ending on the 91st day after the
date of such deposit (it being understood that this condition shall not be
deemed satisfied until the expiration of such period).
(d) In the case of an election under Section 14.2, the
Issuer shall have delivered to the Trustee an Opinion of Counsel stating that
(i) the Issuer has received from, or there has been published by, the Internal
Revenue Service a ruling; or (ii) since the date of execution of this Indenture,
there has been a change in the applicable Federal income tax law, in either case
to the effect that, and based thereon such opinion shall confirm that, the
Holders of such Outstanding Securities and any coupons appertaining thereto will
not recognize income, gain or loss for Federal income tax purposes as a result
of such defeasance and will not 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.
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(e) In the case of an election under Section 14.3, the
Issuer shall have delivered to the Trustee an Opinion of Counsel to the effect
that the Holders of such Outstanding Securities and any coupons appertaining
thereto will not recognize income, gain or loss for Federal income tax purposes
as a result of such covenant defeasance and will be subject to Federal income
tax on the same amounts, in the same manner and at the same times as would have
been the case if such covenant defeasance had not occurred.
(f) The Issuer shall have delivered to the Trustee an
Officers' Certificate and an Opinion of Counsel, each stating that all
conditions precedent to the defeasance under Section 14.2 or the covenant
defeasance under Section 14.3 (as the case may be) have been complied with and
an Opinion of Counsel to the effect that either (i) as a result of a deposit
pursuant to subsection (a) above and the related exercise of the Issuer's option
under Section 14.2 or Section 14.3 (as the case may be), registration is not
required under the Investment Company Act of 1940, as amended, by the Issuer,
with respect to the trust funds representing such deposit or by the Trustee for
such trust funds or (ii) all necessary registrations under said Investment
Company Act have been effected.
(g) Notwithstanding any other provisions of this Section
14.4, such defeasance or covenant defeasance shall be effected in compliance
with any additional or substitute terms, conditions or limitations which may be
imposed on the Issuer in connection therewith pursuant to Section 3.1.
SECTION 14.5 DEPOSITED MONEY AND GOVERNMENT OBLIGATIONS TO BE
HELD IN TRUST; OTHER MISCELLANEOUS PROVISIONS. Subject to the provisions of the
last paragraph of Section 10.3, all money and Government Obligations (or other
property as may be provided pursuant to Section 3.1) (including the proceeds
thereof) deposited with the Trustee (or other qualifying trustee, collectively
for purposes of this Section 14.5, the "Trustee") pursuant to Section 14.4 in
respect of any Outstanding Securities of any series and any coupons appertaining
thereto shall be held in trust and applied by the Trustee, in accordance with
the provisions of such Securities and any coupons appertaining thereto and this
Indenture, to the payment, either directly or through any Paying Agent
(including the Issuer 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 thereon in respect of principal (and
premium, if any), interest and Additional Amounts, if any, but such money need
not be segregated from other funds except to the extent required by law.
Unless otherwise specified with respect to any Security
pursuant to Section 3.1, if, after a deposit referred to in Section 14.4(a) has
been made, (a) the Holder of a Security in respect of which such deposit was
made is entitled to, and does, elect pursuant to Section 3.1 or the terms of
such Security to receive payment in a currency or currency unit other than that
in which the deposit pursuant to Section 14.4(a) has been made in respect of
such Security; or (b) a Conversion Event occurs in respect of the currency or
currency unit in which the deposit pursuant to Section 14.4(a) has been made,
the indebtedness represented by such Security and any coupons appertaining
thereto shall be deemed to have been, and will be, fully discharged and
satisfied
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through the payment of the principal of (and premium, if any), and interest, if
any, on such Security as the same becomes due out of the proceeds yielded by
converting (from time to time as specified below in the case of any such
election) the amount or other property deposited in respect of such Security
into the currency or currency unit in which such Security becomes payable as a
result of such election or Conversion Event based on the applicable market
exchange rate for such currency or currency unit in effect on the second
Business Day prior to each payment date, except, with respect to a Conversion
Event, for such currency or currency unit in effect (as nearly as feasible) at
the time of the Conversion Event.
The Issuer shall pay and indemnify the Trustee against any
tax, fee or other charge imposed on or assessed against the Government
Obligations deposit pursuant to Section 14.4 or the principal and interest
received in respect thereof other than any such tax, fee or other charge which
by law is for the account of the Holders of such Outstanding Securities and any
coupons appertaining thereto.
Anything in this Article XIV to the contrary notwithstanding,
subject to Section 6.6, the Trustee shall deliver or pay to the Issuer from time
to time upon Issuer Request any money or Government Obligations (or other
property and any proceeds therefrom) held by it as provided in Section 14.4
which, in the opinion of a nationally recognized firm of independent public
accountants expressed in a written certification thereof delivered to the
Trustee, are in excess of the amount thereof which would then be required to be
deposited to effect a defeasance or covenant defeasance, as applicable, in
accordance with this Article XIV.
ARTICLE XV
MEETINGS OF HOLDERS OF SECURITIES
SECTION 15.1 PURPOSES FOR WHICH MEETINGS MAY BE CALLED. A
meeting of Holders of Securities of any series may be called at any time and
from time to time pursuant to this Article XV 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 15.2 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 15.1, to be held at such time and at such
place in the Borough of Manhattan, New York City, or elsewhere 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 and in general terms the action
proposed to be taken at such meeting, shall be given, in the manner provided in
Section 1.6, not less than 21 nor more than 180 days prior to the date fixed for
the meeting.
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(b) In case at any time the Issuer, pursuant to a Board
Resolution, or any Holders of at least 25% in principal amount of the
Outstanding Securities of any series shall have requested the Trustee to call a
meeting of the Holders of Securities of such series for any purpose specified in
Section 15.1, by written request setting forth in reasonable detail the action
proposed to be taken at the meeting, and the Trustee shall not have made the
first publication of the notice of such meeting within 21 days after receipt of
such request or shall not thereafter proceed to cause the meeting to be held as
provided herein, then the Issuer or the Holders of Securities of such series in
the amount above specified, as the case may be, may determine the time and the
place in the Borough of Manhattan, New York City, or elsewhere for such meeting
and may call such meeting for such purposes by giving notice thereof as provided
in subsection (a) of this Section 15.2.
SECTION 15.3 PERSONS ENTITLED TO VOTE AT MEETINGS. To be
entitled to vote at any meeting of Holders of Securities of any series, a Person
shall be (a) a Holder of one or more Outstanding Securities of such series; or
(b) 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 Issuer and its counsel.
SECTION 15.4 QUORUM; ACTION. The Persons entitled to vote a
majority in principal amount of the Outstanding Securities of a series shall
constitute a quorum for a meeting of Holders of Securities of such series;
provided, however, that if any action is to be taken at such meeting with
respect to a consent or waiver which this Indenture expressly provides may be
given by the Holders of not less than a specified percentage in principal amount
of the Outstanding Securities of a series, the Persons entitled to vote such
specified percentage in principal amount of the Outstanding Securities of such
series shall constitute a quorum. In the absence of a quorum within 30 minutes
after the time appointed for any such meeting, the meeting shall, if convened at
the request of Holders of Securities of such series, be dissolved. In any other
case the meeting may be adjourned for a period of not less than 10 days as
determined by the chairman of the meeting prior to the adjournment of such
meeting. In the absence of a quorum at the reconvening of 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 15.2(a), except that
such notice need to be given only once not less than five days prior to the date
on which the meeting is scheduled to be reconvened. Notice of the reconvening of
any adjourned meeting shall state expressly the percentage, as provided above,
of the principal amount of the Outstanding Securities of such series which shall
constitute a quorum.
Except as limited by the proviso to Section 9.2, any
resolution presented to a meeting or adjourned meeting duly reconvened at which
a quorum is present as aforesaid may be adopted by the affirmative vote of the
persons entitled to vote a majority in aggregate principal amount of the
Outstanding Securities represented at such meeting; provided, however, that,
except
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as limited by the proviso to Section 9.2, any resolution with respect to any
request, demand, authorization, direction, notice, consent, waiver or other
action which this Indenture expressly provides may be made, given or taken by
the Holders of a specified percentage, which is less than a majority, in
principal amount of the Outstanding Securities of a series may be adopted at a
meeting or an adjourned meeting duly reconvened and at which a quorum is present
as aforesaid by the affirmative vote of the Holders of such specified percentage
in principal amount of the Outstanding Securities of that series.
Any resolution passed or decision taken at any meeting of
Holders of Securities of any series duly held in accordance with this Section
15.4 shall be binding on all the Holders of Securities of such series and the
related coupons, whether or not present or represented at the meeting.
Notwithstanding the foregoing provisions of this Section 15.4,
if any actions are 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:
(a) there shall be no minimum quorum requirement for
such meeting; and
(b) 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.
SECTION 15.5 DETERMINATION OF VOTING RIGHTS; CONDUCT AND
ADJOURNMENT OF MEETINGS. (a) Notwithstanding any provisions of this Indenture,
the Trustee may make such reasonable regulations as it may deem advisable for
any meeting of Holders of Securities of a series in regard to proof of the
holding of Securities of such series and of the appointment of proxies and in
regard to the appointment and duties of inspectors of votes, the submission and
examination of proxies, certificates and other evidence of the right to vote,
and such other matters concerning the conduct of the meeting as it shall deem
appropriate. Except as otherwise permitted or required by any such regulations,
the holding of Securities shall be proved in the manner specified in Section 1.4
and the appointment of any proxy shall be proved in the manner specified in
Section 1.4 or by having the signature of the Person executing the proxy
witnessed or guaranteed by any trust company, bank or banker authorized by
Section 1.4 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 1.4 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
canceled by the Issuer of by Holders
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of Securities as provided in Section 15.2(b), in which case the Issuer 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 Outstanding Securities of
such series represented at the meeting.
(c) At any meeting each holder of a Security of such
series or proxy shall be entitled to one vote for each $1,000 principal amount
of the Outstanding Securities of such series held or represented by him or her;
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 15.2 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 15.6 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
duplicate of all votes cast at the meeting. A record, at least in duplicate, of
the proceedings of each meeting of Holders of Securities of any series shall be
prepared by the secretary of the meeting and there shall be attached to said
record the original reports of the inspectors of votes on any vote by ballot
taken thereat and affidavits by one or more persons having knowledge of the
fact, setting forth a copy of the notice of the meeting and showing that said
notice was given as provided in Section 15.2 and, if applicable, Section 15.4.
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 Issuer and another to the Trustee to be preserved by the Trustee, the latter
to have attached thereto the ballots voted at the meeting. Any record so signed
and verified shall be conclusive evidence of the matters therein stated.
* * * * * *
This Indenture may be executed in any number of counterparts,
each of which so executed shall be deemed to be an original, but all such
counterparts shall together constitute but one and the same Indenture.
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IN WITNESS WHEREOF, the parties hereto have caused this
Indenture to be duly executed, and their respective corporate seals to be
hereunto affixed and attested, all as of the day and year first above written.
EASTGROUP PROPERTIES
By:
--------------------------
Name: David H. Hoster II
Title: President
Attest:
- ---------------------------------
N. Keith McKey, Secretary
[TRUSTEE]
as Trustee
By:
--------------------------
Name:
Title:
Attest:
- ---------------------------------
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<PAGE> 86
STATE OF )
COUNTY OF ) SS.:
On the ____ day of _____________ 199_, before me personally
came David H. Hoster II to me known, who, being by me duly sworn, did depose and
say that he resides at ______________________________________, that he is the
President of EASTGROUP PROPERTIES, one of the parties described in and which
executed the foregoing instrument, and that he signed his name thereto by
authority of the Board of Trustees.
(Notarial Seal)
-----------------------------------
Notary Public
COMMISSION EXPIRES
STATE OF )
COUNTY OF ) SS.:
On the ____ day of ______________ 199_, before me personally
came ____________ to me known, who, being by me duly sworn, did depose and say
that he/she resides at _______________________________, that he/she signed
his/her name thereto by authority of the Board of directors.
(Notarial Seal)
-----------------------------------
Notary Public
COMMISSION EXPIRES
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EXHIBIT A
FORM OF CERTIFICATE TO BE GIVEN BY PERSON ENTITLED
TO RECEIVE BEARER SECURITY OR TO OBTAIN INTEREST
PAYABLE PRIOR TO THE EXCHANGE DATE
CERTIFICATE
(Insert title or sufficient description of Securities to be delivered)
This is to certify that, as of the date hereof, and except as
set forth below, the above-captioned Securities held by you for our account (i)
are owned by person(s) that are not citizens or residents of the United States,
domestic partnerships, domestic corporations or any estate or trust the income
of which is subject to united States federal income taxation regardless of its
source ("United States person(s)"), (ii) are owned by United States person(s)
that are (a) foreign branches of United States financial institutions (financial
institutions, as defined in United States Treasury Regulations Section
2.165-12(c) (1) (v) are herein referred to a "financial institutions")
purchasing for their own account or for resale, or (b) United States person(s)
who acquired the Securities through foreign branches of United States financial
institutions and who hold the Securities through such United States financial
institutions on the date hereof (and in either case (a) or (b), each such United
States financial institution hereby agrees, on its own behalf or through its
agent, that you may advise EastGroup Properties or its agent that such financial
institution will comply with the requirements of Section 165(j) (3) (A), (B) or
(C) of the United States Internal Revenue Code of 1986, amended, and the
regulations thereunder), or (iii) are owned by United States or foreign
financial institution(s) for purposes of resale during the restricted period (as
defined in United States Treasury Regulations Section 1.163-5(c) (2) (i) (D)
(7)), and, in addition, if the owner is a United States or foreign financial
institution described in clause (iii) above (whether or not also described in
clause (i) or (ii)), this is to further certify that such financial institution
has not acquired the Securities for purposes of resale directly or indirectly to
a United States person or to a person within the United States or its
possessions.
As used herein, "United States" means the United States of
America (including the States and the District of Columbia; and its
"possessions" include Puerto Rico, the U.S. Virgin Islands, Guam, American
Samoa, Wake Island and the Northern Mariana Islands.
We undertake to advise your promptly by tested telex on or
prior to the date on which you intend to submit your certification relating to
the above-captioned Securities held by you for our account in accordance with
Operating Procedures if nay applicable statement herein is not correct on such
date, and in the absence of any such notification it may be assumed that this
certification applies as of such date.
This certificate excepts and does not relate to U.S. of such
interest in the above-captioned Securities in respect of which we are not able
to certify and as to which we understand an exchange for an interest in a
Permanent Global Security or an exchange for and delivery of definitive
Securities (or, if relevant, collection of any interest) cannot be made until we
do so certify.
<PAGE> 88
We understand that this certificate may be required in
connection with certain tax legislation in the United States. If administrative
or legal proceedings are commenced or threatened in connection with which this
certificate is or would be relevant, we irrevocable authorize you to produce
this certificate or a copy thereof to any interested party in such proceedings.
Dated: ___________________________ , 19___.
(To be dated no earlier than the 15th day prior to (i) the Exchange Date or (ii)
the relevant Interest Payment Date occurring prior to the Exchange Date, as
applicable)
(Name of Person Making Certification)
----------------------------------------
(Authorized Signatory)
Name:
Title:
<PAGE> 1
Exhibit 5
JAECKLE FLEISCHMANN & MUGEL, LLP
ATTORNEYS AT LAW
FLEET BANK BUILDING TWELVE FOUNTAIN PLAZA BUFFALO, NEW YORK 14202-2292 USA
TEL (716) 856-0600 FAX (716) 856-0432
December 11, 1996
EastGroup Properties
300 One Jackson Place
188 East Capitol Street
Jackson, Mississippi 39201
Ladies and Gentlemen:
Re: Registration Statement on Form S-3 (No. 333-09711) under the
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Securities Act of 1933, covering the registration of shares
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of beneficial interest, $1.00 par value per share (the "Shares
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of Beneficial Interest"), preferred shares ("Preferred
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Shares"), Preferred Shares represented by Depositary Shares,
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and unsecured convertible debt securities (collectively, the
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"Securities") of EastGroup Properties ("EastGroup")
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As your counsel we have examined the above Registration Statement and
we are familiar with the documents referred to therein, as well as EastGroup's
Restated Declaration of Trust, as amended, and Trustees Regulations, as
amended, such records of proceedings of EastGroup as we deemed material, and
such other proceedings of EastGroup as we deemed necessary for the purpose of
this opinion.
We have examined the proceedings heretofore taken and we are informed as
to the procedures proposed to be followed by EastGroup in connection with the
authorization, issuance and sale of the above described Securities. In our
opinion the Securities to be issued by EastGroup will be, when issued and paid
for pursuant to the Registration Statement and the Exhibits thereto, duly
authorized for issuance by all necessary corporate action and, upon the
issuance thereof in accordance with their terms, the Securities will be legally
issued, fully paid and non-assessable.
We consent to the filing of this opinion letter as an exhibit to the
Registration Statement.
Very truly yours,
/s/ Jaeckle Fleischmann & Mugel, LLP
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<TABLE>
<CAPTION>
EASTGROUP PROPERTIES
RATIO OF EARNINGS TO FIXED CHARGES EXHIBIT 12
9 MONTHS 6 MONTHS 3 MONTHS YEAR YEAR
ENDED ENDED ENDED ENDED ENDED
SEP 30, 1996 JUN 30, 1996 MAR 31, 1996 DEC 31, 1995 DEC 31, 1994
-------------- ------------- ------------- ------------- -------------
<S> <C> <C> <C> <C> <C>
Pretax income from continuing operation 7,249,598.46 4,563,136.09 2,528,929.75 7,710,814.49 7,167,825.65
(net income (loss))
Add: fixed charges 6,046,746.37 3,185,373.31 1,527,443.18 6,286,788.07 3,905,060.22
-------------- ------------- ------------- ------------- -------------
13,296,344.83 7,748,509.40 4,056,372.93 13,997,602.56 11,072,885.87
6,046,746.37 3,185,373.31 1,527,443.18 6,286,788.07 3,905,060.22
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Ratio of earnings to fixed charges 2.198926 2.432528 2.655662 2.226511 2.835522
============= ============= ============= ============= =============
Fixed charges:
Interest expense per original financials 5,975,348.70 3,746,867.98
Add: amortization of loan costs 311,439.37 158,192.24
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Interest per adjusted 10-K 6,286,788.07 3,905,060.22
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Fixed charges consist of interest costs and
amortization of debt issuance costs.
<CAPTION>
YEAR YEAR YEAR
ENDED ENDED ENDED
DEC 31, 1993 DEC 31, 1992 DEC 31, 1991
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<S> <C> <C> <C>
Pretax income from continuing operation 6,414,661.94 (3,672,543.23) 5,700,083.19
(net income (loss))
Add: fixed charges 3,415,318.22 2,832,702.95 3,040,583.42
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9,829,980.16 (839,840.28) 8,740,666.61
3,415,318.22 2,832,702.95 3,040,583.42
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Ratio of earnings to fixed charges 2.878203 (0.296480) 2.874668
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Fixed charges:
Interest expense per original financials 3,112,526.97 2,749,349.04 2,969,976.56
Add: amortization of loan costs 302,791.25 83,353.91 70,606.86
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Interest per adjusted 10-K 3,415,318.22 2,832,702.95 3,040,583.42
============= ============= =============
Fixed charges consist of interest costs and
amortization of debt issuance costs.
</TABLE>
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Exhibit 23(a)
INDEPENDENT AUDITORS' CONSENT
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The Trustees and Shareholders
EastGroup Properties:
We consent to the use of our reports incorporated herein by reference and to
the reference to our firm under the heading "Experts" in the prospectus.
KPMG PEAT MARWICK LLP
Jackson, Mississippi
December 11, 1996
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Exhibit 23(b)
ARTHUR ANDERSEN LLP
CONSENT OF INDEPENDENT PUBLIC ACCOUNTANTS
As independent public accountants, we hereby consent to the
incorporation by reference in the Form S-3 filed by EastGroup Properties of our
report to the Board of Directors of Copley Properties, Inc. dated March 15,
1996 included in EastGroup's current report on Form 8-K dated June 19, 1996 and
to all references to our Firm included in this registration statement.
/s/ Arthur Andersen LLP
December 10, 1996
Boston, Massachusetts
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Exhibit 23(c)
Consent of Independent Auditors
We consent to the reference to our firm under the caption "Experts" and to
the incorporation by reference of our report dated March 15, 1996, with respect
to the consolidated financial statements of LNH REIT, Inc. included in its
Annual Report (Form 10-KSB) for the year ended December 31, 1995, filed with
the Securities and Exchange Commission, in the Registration Statement
(Amendment No. 1 to Form S-3) and related Prospectus of EastGroup Properties
for the registration of an aggregate of shares of beneficial interest,
preferred shares, depositary shares and debt securities up to $100,000,000.
Ernst & Young LLP
Jackson, Mississippi
December 10, 1996
