As filed with the Securities and Exchange Commission on October 31, 1996
Registration No. 333-
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SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
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FORM S-3
REGISTRATION STATEMENT
UNDER
THE SECURITIES ACT OF 1933
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MGI PROPERTIES
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(Exact Name of Registrant as Specified in Its Charter)
Massachusetts
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(State or other jurisdiction of
incorporation or organization)
04-6268740
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(IRS Employer
Identification Number)
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One Winthrop Square
Boston, Massachusetts 02110
(617) 422-6000
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(Address and telephone number of
Registrant's Principal Executive Offices)
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W. Pearce Coues
Chairman of the Board of Trustees
One Winthrop Square
Boston, Massachusetts 02110
(617) 422-6000
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(Name, Address and Telephone Number
of Agent for Service)
Copy to:
Victor M. Rosenzweig, Esq.
Olshan Grundman Frome & Rosenzweig LLP
505 Park Avenue
New York, New York 10022
(212) 753-7200
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Approximate date of commencement of proposed sale to the public: As
soon as practicable after this Registration Statement becomes effective.
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If the only securities being registered on this Form are being
offered pursuant to dividend or interest reinvestment plans, please check the
following box. [ ]
If any of the securities being registered on this Form are to be
offered on a delayed or continuous basis pursuant to Rule 415 under the
Securities Act of 1933, 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. [ ]
<TABLE>
<CAPTION>
CALCULATION OF REGISTRATION FEE
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Proposed
Maximum
Amount Aggregate Proposed Maximum
Title of Securities to to be Price Aggregate Amount of
be Registered Registered Per Share Offering Price Registration Fee
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<S> <C> <C> <C> <C>
Common Shares, par
value $1.00 per share.
Preferred Shares, par
value $1.00 per share
(1)...................
Debt Securities(1).... (2) (3)
Warrants or Rights(1).
Units (of two or more
of the above)
Total $100,000,000(4) $30,303.03
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</TABLE>
(1) The Registrant is also registering such currently indeterminate number of
Common Shares and Preferred Shares as may be issued upon conversion of the
Debt Securities or the Preferred Shares or upon exercise of the Warrants
or Rights registered hereby.
(2) The amount to be registered consists of up to $100,000,000 of an
indeterminate amount of Common Shares, Preferred Shares, Debt Securities,
Warrants or Rights and/or Units.
(3) Not applicable pursuant to General Instruction II(D) to Form S-3 under the
Securities Act of 1933, as amended.
(4) Estimated solely for purposes of computing the registration fee pursuant
to Rule 457(o) under the Securities Act of 1933, as amended.
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The Registrant hereby amends this Registration Statement on such date or
dates as may be necessary to delay its effective date until the Registrant shall
file a further amendment which specifically states that this Registration
Statement shall thereafter become effective in accordance with Section 8(a) of
the Securities Act of 1933 or until the Registration Statement shall become
effective on such date as the Commission, acting pursuant to said Section 8(a),
may determine.
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<PAGE>
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.
SUBJECT TO COMPLETION, DATED OCTOBER 31, 1996
PROSPECTUS
$100,000,000
MGI PROPERTIES
Common Shares
Preferred Shares
Debt Securities
Warrants or Rights
Units
MGI Properties (together with its consolidated subsidiaries, "MGI" or the
"Trust") may offer from time to time in one or more series (i) its common shares
of beneficial interest, par value $1.00 per share ("Common Shares"), (ii) its
preferred shares of beneficial interest, par value $1.00 per share ("Preferred
Shares" and, together with the Common Shares, the "Capital Stock"), (iii) its
unsecured debt securities consisting of bonds, debentures, notes and/or other
evidences of indebtedness ("Debt Securities"), (iv) warrants or rights
("Warrants") to purchase Common Shares, Preferred Shares and/or Debt Securities
and (v) units ("Units") consisting of two or more of the foregoing securities,
with an aggregate public offering price of up to $100,000,000 in amount, at
prices and on terms to be determined at the time of offering. The Common Shares,
Preferred Shares, Debt Securities, Warrants and Units (collectively, the
"Securities") may be offered separately or together, in separate series, in
amounts, at prices and on terms to be set forth in one or more supplements to
this Prospectus (each a "Prospectus Supplement").
The specific terms of the Securities for 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 Common Shares, the offering price;
(ii) in the case of Preferred Shares, the specific designation and stated value
per share, any dividend, liquidation, redemption, conversion, voting and other
rights, and the offering price; (iii) in the case of Debt Securities, the
specific title, aggregate principal amount, ranking, currency, form (which may
be registered or bearer, or certificated or global), authorized denominations,
maturity, rate (or manner of calculation thereof) and time of payment of
interest, terms for redemption at the option of the Trust or repayment at the
option of the holder, terms for sinking fund payments, terms for conversion into
Preferred Shares or Common Shares, covenants and the offering price; (iv) in the
case of Warrants, the number and terms thereof, any applicable designation
thereof, and the designation and the number of securities issuable upon their
exercise, the exercise price, the terms of the offering and sale thereof and,
where applicable, the duration, detachability and transferability thereof and
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(v) in the case of Units, a description of the securities comprising such
Units and the offering price thereof. 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 consistent with the Trust's
Second Amended and Restated Declaration of Trust, as amended (the "Declaration
of Trust") or otherwise appropriate to preserve the status of the Trust as a
real estate investment trust ("REIT") for federal income tax purposes.
The applicable Prospectus Supplement will also contain information, where
appropriate, about certain United States federal income tax considerations
relating to, and any listing on a securities exchange of, the Securities covered
by such Prospectus Supplement.
The Securities may be offered directly by the Trust, through agents
designated from time to time by the Trust or to or through underwriters or
dealers. If any agents or underwriters are involved in the sale of any of the
Securities, their names, and any applicable purchase price, fee, commission or
discount arrangement between or among them, will be set forth, or will be
calculable from the information set forth, in an accompanying Prospectus
Supplement. See "Plan of Distribution." No Securities may be sold without
delivery of a Prospectus Supplement describing the method and terms of the
offering of such Securities.
The Common Shares are traded on the New York Stock Exchange (the "NYSE")
under the symbol "MGI." On October 31, 1996, the last sale price for the Common
Shares on the NYSE was $19 1/8.
THESE SECURITIES HAVE NOT BEEN APPROVED OR DISAPPROVED BY THE
SECURITIES AND EXCHANGE COMMISSION NOR HAS THE 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
The Trust 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 "Commission"). Such reports, proxy
statements and other information can be inspected and copied at the public
reference facilities maintained by the Commission at Judiciary Plaza, 450 Fifth
Street, N.W., Washington, D.C. 20549; 500 West Madison Street, Suite 1400,
Chicago, Illinois 60661; and Seven World Trade Center, Suite 1300, New York, New
York 10048. Copies of such material can be obtained from the Public Reference
Section of the Commission at Judiciary Plaza, 450 Fifth Street, N.W.,
Washington, D.C. 20549, at prescribed rates. Such material may also be accessed
electronically by means of the Commission's home page on the Internet at
http://www.sec.gov. The Common Shares are listed on the NYSE and such reports
and other information may also be inspected at the offices of the NYSE, 20 Broad
Street, New York, New York 10005.
The Trust has filed with the Commission a Registration Statement on Form
S-3 under the Securities Act of 1933, as amended (the "Securities Act"), with
respect to the Securities. This Prospectus, which constitutes a part of the
Registration Statement, does not contain all of the information set forth in the
Registration Statement, certain parts of which are omitted in accordance with
the rules and regulations of the Commission. The Registration Statement,
including exhibits thereto, may be inspected and copied at the locations
described above. Statements contained in this Prospectus as to the contents of
any contract or other document referred to are not necessarily complete, and in
each instance reference is made to the copy of such contract or other document
filed as an exhibit to the Registration Statement, each such statement being
qualified in all respects by such reference.
INCORPORATION OF CERTAIN DOCUMENTS BY REFERENCE
The following documents previously filed by the Trust are incorporated by
reference in this Prospectus and shall be deemed to be a part hereof: (i) the
Trust's Annual Report on Form 10-K for the fiscal year ended November 30, 1995,
(ii) the Trust's Reports on Form 10-Q for the fiscal quarters ended February 29,
1996, May 31, 1996 and August 31, 1996, (iii) the Trust's Definitive Proxy
Statement with respect to its Annual Meeting of Shareholders on March 21, 1996
and (iv) Reports on Form 8-K dated July 2, 1996, as amended, and August 30,
1996, as amended, each reporting Acquisition of Assets. All documents filed by
the Trust pursuant to Sections 13(a), 13(c), 14 or 15(d) of the Exchange Act
subsequent to the date of this Prospectus and prior to the termination of the
offering of all Securities shall also be deemed to be incorporated by reference
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in this Prospectus and to be a part hereof from the date of filing of such
documents.
Any statement contained herein or in a document incorporated or deemed to
be incorporated herein by reference shall be deemed to be modified or superseded
for purposes of this Prospectus to the extent that a statement contained herein
(or in an applicable Prospectus Supplement) or in any subsequently filed
document that is incorporated by reference herein modifies or supersedes such
statement. Any such statement so modified or superseded shall not be deemed to
constitute a part of this Prospectus or any Prospectus Supplement, except as so
modified or superseded.
The Trust hereby undertakes to provide without charge to each person to
whom a copy of this Prospectus has been delivered, on the written or oral
request of any such person, a copy of any or all of the documents referred to
above which have been or may be incorporated in this Prospectus by reference,
other than exhibits to such documents. Written requests for such copies should
be directed to MGI Properties at One Winthrop Square, Boston, Massachusetts
02110, Attention: Ms. Jean Harrington, Vice President and Secretary. Oral
requests should be directed to such individual (telephone number (617)
422-6000).
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No dealer, salesman or other person has been authorized to give any
information or to make any representations other than those contained in this
Prospectus in connection with the offer made hereby, and, if given or made, such
information or representations must not be relied upon as having been authorized
by the Trust. This Prospectus does not constitute an offer to sell, or a
solicitation of an offer to buy, the securities offered hereby to any person in
any state or other jurisdiction in which such offer or solicitation is unlawful.
The delivery of this Prospectus at any time does not imply that information
contained herein is correct as of any time subsequent to its date.
111167.5
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<PAGE>
THE TRUST
MGI Properties is a self-advised REIT that owns and operates a diversified
portfolio of income producing real estate, consisting of 57 commercial
properties (83% of real estate investments, at cost) and interests in six
multifamily residential properties (17% of real estate investments, at cost).
Since 1992, the Trust has focused on the commercial segment of the real estate
market, specifically industrial and office properties located in New England. At
August 31, 1996, 48% of MGI's real estate assets were located in New England. As
of such date, the Trust's commercial portfolio was leased to 303 tenants and
aggregated 5,260,000 square feet (3,258,000 industrial, 1,195,000 office and
807,000 retail). The multifamily properties consist of five wholly owned
residential complexes aggregating 1,335 units and a 4% partnership investment.
At August 31, 1996, the commercial and residential properties were 97% and 95%
leased, respectively.
The Common Shares are listed on the NYSE under the symbol "MGI."
The Trust, formerly known as Mortgage Growth Investors, was organized in
1971 as a Massachusetts common law business trust. MGI initially operated as a
hybrid REIT with a significant portion of its assets invested in mortgage loans.
In 1985, the Trust began the conversion to an equity REIT, which has direct
ownership of income producing properties. The conversion was completed by
January 1993. The conversion to an equity REIT has enabled the Trust to assume
control and management of its investments. Management believes that the
conversion has proven beneficial to the shareholders.
The Trust's offices are located at One Winthrop Square, Boston,
Massachusetts 02110 and its telephone number is (617) 422-6000.
USE OF PROCEEDS
Unless otherwise described in the applicable Prospectus Supplement, the
Trust intends to use the net proceeds from the sale of Securities primarily for
general business purposes, including the acquisition, leasing, management of
industrial, office, multifamily or other properties or the acquisition of
interests in partnerships or other entities owning industrial, office,
multifamily or other properties as suitable opportunities arise, the acquisition
of real estate service entities, the repayment of certain outstanding debt,
selective development and effecting improvements to certain properties in the
Trust's portfolio.
Pending their use as described above, the net proceeds from the sale of
any Securities may be used for other general corporate purposes of the Trust or
invested in short-term securities, interest-bearing time or demand deposits
111167.5
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issued by financial institutions, cash items or qualified government securities.
RATIOS OF EARNINGS TO FIXED CHARGES
The following table sets forth the historical ratios of earnings to fixed
charges of the Trust for the periods indicated:
<TABLE>
<CAPTION>
Quarter Ended
Year Ended November 30, August 31,
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1991 1992 1993 1994 1995 1995 1996
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<S> <C> <C> <C> <C> <C> <C>
1.96:1 2.32:1 2.57:1 3.48:1 3.29:1 3.08:1 2.34:1
</TABLE>
To date, the Trust has not issued any Preferred Shares. Accordingly, the ratios
of earnings to combined fixed charges and Preferred Shares dividends are
unchanged from the ratios shown above. For purposes of computing these ratios,
earnings have been calculated by adding fixed charges (excluding capitalized
interest) to net income (loss) before income taxes and extraordinary items.
Fixed charges consist of interest costs, whether expensed or capitalized, the
interest component of rental expense, if any, and amortization of debt discounts
and issue costs, whether expensed or capitalized.
DESCRIPTION OF DEBT SECURITIES
The Debt Securities will be issued in one or more series under an
Indenture (the "Indenture") which may be supplemented by supplemental indentures
(each, an "Indenture Supplement") between the Trust and a bank trustee (the
"Trustee") to be named prior to the issuance of any Debt Securities. The terms
of the Debt Securities include those stated in the Indenture and those made part
of the Indenture (before any Indenture Supplements) by reference to the Trust
Indenture Act of 1939, as amended (the "TIA"). A copy of the form of the
Indenture is filed as an exhibit to the Registration Statement and is
incorporated herein by reference. The following is a summary of the Indenture,
which summary does not purport to be complete, and is qualified in its entirety
by reference to the detailed provisions of the Indenture, including the
definitions of certain terms. Parenthetical references to Sections are
references to the corresponding section of the Indenture unless otherwise
indicated.
General
The Indenture does not limit the aggregate principal amount of Debt
Securities that may be issued thereunder and provides that Debt Securities may
be issued from time to time in one or more series. 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
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series. Debt Securities will be unsecured general obligations of the Trust,
which may be convertible into Common Shares or Preferred Shares. Debt Securities
of any series may bear interest from the date of delivery at the rate shown on
the cover page of the applicable Prospectus Supplement. The indebtedness
represented by the Debt Securities of any series may be subordinated in right of
payment to the prior payment in full of the Senior Indebtedness of the Trust, as
described under "Subordination of Debt Securities." The particular terms of the
Debt Securities of any series will be set forth in the applicable Indenture
Supplement and described in the applicable Prospectus Supplement. Such
description will include any applicable modifications of, or additions to, the
general terms of the Debt Securities as described herein or in the Indenture, as
modified by any applicable Indenture Supplement. Accordingly, for a description
of the Debt Securities of any series, reference must be made to both the
Prospectus Supplement relating thereto and the description of the Debt
Securities set forth in this Prospectus.
The Indenture will provide that the Trust may, but need not, designate
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. 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, and, except
as otherwise indicated herein, any action described herein to be taken by each
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.
Prospectus Supplement
The applicable Prospectus Supplement will describe the following terms of
the series of Debt Securities offered in connection therewith:
(a) the title of such Debt Securities (which shall distinguish such Debt
Securities from all other series thereof);
(b) the currency or currencies, including composite currencies, in which
payment of the principal of (and premium, if any) and/or interest on such Debt
Securities shall be payable (if other than U.S. Dollars) and the manner of
determining the equivalent thereof in U.S. Dollars;
(c) any limit upon the aggregate principal amount of such Debt Securities
which may be authenticated and delivered under the Indenture;
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(d) the manner in which the amount of payments of principal of (and
premium, if any) and/or interest on such Debt Securities may be determined with
reference to an index;
(e) the dates, or the method for determining such dates, on
which the principal of such Debt Securities will be payable;
(f) the rate or rates, or the method by which such rate or rates shall be
determined, at which such Debt Securities will bear interest, if any, and the
basis upon which interest will be calculated if other than that of a 360-day
year of twelve 30-day months;
(g) the place or places where the principal of (and premium, if any)
and/or interest, if any, on such Debt Securities of the series will be payable,
where such Debt Securities may be surrendered for conversion or registration of
transfer or exchange and where notices or demands to or upon the Trust in
respect of such Debt Securities and the Indenture may be served;
(h) 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 any other terms and conditions upon which such Debt
Securities may, pursuant to any optional or mandatory redemption provisions, be
redeemed, in whole or in part, at the option of the Trust, if the Trust is to
have the option;
(i) any mandatory or optional sinking fund or analogous provision;
(j) the period or periods within which and the price or prices at which
such Debt Securities may, pursuant to any optional or mandatory redemption
provisions (including any provisions for redemption at the option of the holder
thereof), be redeemed and other terms and conditions of any such optional or
mandatory redemption;
(k) whether such Debt Securities will be in registered or bearer form and,
if in registered form, the terms and conditions relating thereto;
(l) whether such Debt Securities shall be issued in the form of one or
more Global Securities (as defined below), and, if so, the identity of the
Depositary of such series;
(m) the currency or currencies, including composite currencies, in which
payment of the principal of (and premium, if any) and/or interest of such
Securities will be payable if other than the currency of the United States;
(n) whether such Debt Securities are to be issued upon the exercise of
warrants or rights, the time, manner and place for such Debt Securities to be
authenticated and delivered;
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(o) any deletions from, modifications of, or additions to, the Events of
Default or covenants of the Trust with respect to such Securities of such
series, whether or not such Events of Default or covenants are consistent with
the Events of Default or covenants set forth in the general provisions of the
applicable Indenture;
(p) if other than the Trustee, the identity of each Security
Registrar and/or Paying Agent;
(q) the applicability, if any, of the defeasance and covenant defeasance
provisions described in the general provisions of the applicable Indenture and
any applicable Indenture Supplement thereto;
(r) the circumstances, if any, under which the Trust will pay any
additional amounts on such Debt Securities in respect of any tax, assessment or
governmental charge and, if so, whether the Trust will have the option to redeem
such Debt Securities in lieu of making such payment;
(s) if such Debt Securities are to be issued at an original issue
discount, as described below, the amount of principal, if any, payable upon
acceleration of such Debt Securities following an Event of Default; and
(t) any other terms of such Debt Securities not inconsistent
with the provisions of the Indenture.
If so provided in the applicable Indenture Supplement, Debt Securities may
be issued at a substantial discount below their principal amount and provide for
less than the entire principal amount thereof to be payable upon declaration of
acceleration of the maturity thereof (collectively the "Original Issue Discount
Securities"). In such cases, special U.S. federal income tax, accounting and
other considerations applicable to Original Issue Discount Securities will be
described in the applicable Prospectus Supplement.
Denomination, Interest, Registration and Transfer
Unless otherwise provided in any applicable Indenture Supplement, Debt
Securities will be issued only in fully registered form in denominations of
$1,000 principal amount or any integral multiple thereof (Section 3.2). Debt
Securities are exchangeable and transfers thereof will be registrable without
charge therefor, except that the Trust may require payment of a sum sufficient
to cover any tax or other governmental charge payable in connection therewith
(Section 3.5).
Unless otherwise specified in the applicable Prospectus Supplement, the
principal of (and applicable premium, if any) and interest on any series of Debt
Securities will be payable at the corporate trust office of the Trustee, the
address of which will be stated in the applicable Prospectus Supplement;
provided that, at the option of the Trust, payment of interest may be made by
check mailed to the address of the person entitled thereto as it appears in the
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applicable register for such Debt Securities or by wire transfer of funds to
such person at an account maintained within the United States.
All monies paid by the Trust to a paying agent or a Trustee for the
payment of the principal of or any premium, if any, or interest on any Debt
Security which remain unclaimed at the end of three years after the same has
become due and payable shall, unless otherwise required by applicable law, be
repaid to the Trust, and the holder of such Debt Security thereafter may look
only to the Trust for payment thereof.
Subject to certain limitations imposed upon Debt Securities issued in
book-entry form, the Debt Securities of any series will be exchangeable for any
authorized denomination of other Debt Securities of the same series and of a
like aggregate principal amount and tenor upon surrender of such Debt Securities
at the corporate trust office of the applicable Trustee or at the office of any
transfer agent designated by the Trust for such purpose. In addition, subject to
certain limitations imposed upon Debt Securities issued in book-entry form, the
Debt Securities of any series may be surrendered for conversion or registration
of transfer or exchange thereof at the corporate trust office of the applicable
Trustee or at the office of any transfer agent designated by the Trust for such
purpose. Every Debt Security surrendered for conversion, registration of
transfer or exchange must be duly endorsed or accompanied by a written
instrument of transfer, and the person requesting such action must provide
evidence of title and identity satisfactory to the applicable Trustee or
transfer agent. No service charge will be made for any registration of transfer
or exchange of any Debt Securities, but the Trust may require payment of a sum
sufficient to cover any tax or other governmental charge payable in connection
therewith. If the applicable Prospectus Supplement refers to any transfer agent
(in addition to the applicable Trustee) initially designated by the Trust with
respect to any series of Debt Securities, the Trust may at any time rescind the
designation of any such transfer agent or approve a change in the location
through which any such transfer agent acts, except that the Trust will be
required to maintain a transfer agent in each place of payment for such series.
The Trust may at any time designate additional transfer agents with respect to
any series of Debt Securities.
Consolidation, Merger, Sale or Conveyance
The Indenture will provide that the Trust, without the consent of the
holders of the then outstanding Debt Securities may merge or consolidate with,
or sell or convey all or substantially all of its assets to, any other or
entity, provided that (i) either the Trust shall be the continuing entity, or
the successor entity (if other than the Trust) shall be an entity organized and
existing under the laws of the United States or a state thereof or the District
of Columbia (although it may, in turn, be owned by a foreign entity) and such
entity shall expressly assume by the applicable Indenture Supplement all of the
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obligations of the Trust under the Debt Securities and the Indenture; (ii)
immediately after giving effect to such transactions no default or Event of
Default shall have occurred and be continuing, and (iii) the Trust shall have
delivered to the Trustee an officers' certificate and opinion of counsel,
stating that the transaction and the applicable Indenture Supplement comply with
the Indenture (Section 8.1).
Reorganization and Other Transactions
The Indenture will not afford the holders of Debt Securities any
protection from a decline of credit quality, nor will it give any protection in
the event of a highly leveraged transaction, reorganization, restructuring,
merger or similar transaction ("Leveraged Transaction") involving the Trust that
may adversely affect holders of Debt Securities, except to the limited extent
described above. The Indenture will not contain any provision requiring the
Trust to repurchase any of Debt Securities in the event of a Leveraged
Transaction, even though the Trust's creditworthiness and the market value of
Debt Securities may decline significantly as a result of any such transaction.
Conversion Rights
If and to the extent set forth in the Indenture and the applicable
Indenture Supplement and described in the applicable Prospectus Supplement, any
portion of the principal amount of any Debt Securities of any series which is
$1,000 or an integral multiple thereof may be converted into Common Shares
and/or Preferred Shares at any time prior to redemption or maturity, following
the date set forth in the applicable Prospectus Supplement. The conversion price
and the specific class of Capital Stock of the Trust into which Debt Securities
are convertible will be set forth on the cover page of the applicable Prospectus
Supplement (subject to adjustments as described below), except that the right to
convert Debt Securities of a series called for redemption will terminate at the
close of business on the specific redemption date and will be lost if not
exercised prior to that time (Section 16.1).
To protect the Trust's status as a REIT, the holder may not convert any
Debt Security if as a result of such conversion any person would then be deemed
to beneficially own in excess of 9% in value of all outstanding shares of
Capital Stock (Section 16.1).
The conversion price will be subject to adjustment under certain
conditions, including in connection with (i) the payment of dividends or other
distributions in respect of any class of Capital Stock in shares of Capital
Stock; (ii) subdivisions, combinations, reorganizations and reclassifications of
any class of Capital Stock; (iii) the issuance to all or substantially all
holders of shares of any class of Capital Stock of rights or warrants entitling
them to subscribe for, or purchase shares of, Capital Stock at a price per share
(or having a conversion price per share) at less than the current market price
per share (Paragraph 2 of Section 16.4) of such holders' respective class of
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Capital Stock (subject to the limitation that under certain circumstances shares
of Capital Stock issued under the Trust's dividend reinvestment plan will not be
deemed to be issued pursuant to rights or warrants for purposes of this clause
(iii)); and (iv) distributions to all or substantially all of the holders of any
class of Capital Stock of evidences of indebtedness or assets (including any
securities, other than those rights, warrants, dividends or other distributions
referred to in clause (iii) above and dividends or other distributions not
otherwise prohibited under the terms of the Indenture, including certain
purchase rights relating to the dividend reinvestment plan) of the Trust;
subject to the limitation that all adjustments by reason of any of the foregoing
would not be made until they result in a cumulative change in the applicable
conversion price of at least 1% (Section 16.4).
A conversion price adjustment made according to the provisions of any
series of Debt Securities (or the absence of a provision for such an adjustment)
might result in a constructive distribution to the holders of Debt Securities of
such series or of shares of a class of Capital Stock. The Trust may, at its
option, but shall not be required to, make any of the adjustment to the
conversion price, in addition to those adjustments described above, to avoid or
diminish any income tax to any holders of any shares of any class of Capital
Stock resulting from any dividend or other distribution thereof (or rights to
acquire such shares) or from any event treated as such for income tax purposes
or for any other reason. The Board of Trustees of the Trust (the "Board of
Trustees") will have the power to resolve any ambiguity or correct any error in
the provision relating to the adjustment of the conversion price of any series
of Debt Securities. Its actions shall be final and conclusive (Section 16.4).
In the event the Trust shall (i) effect any capital reorganization or
reclassification of any class of its shares of Capital Stock, (ii) consolidate
or merge with or into any trust or corporation (other than a consolidation or
merger in which the Trust is the surviving entity), or (iii) sell or transfer
substantially all of its assets, the holders of any series of Debt Securities
shall have the right, if entitled to convert such Debt Securities, to receive
upon conversion thereof, the same kind and amount of Capital Stock and other
securities, cash or property as shall have been issuable or distributable prior
to such consolidation, merger, sale or transfer (Sections 16.4(5) and 16.10).
Fractional shares will not be issued upon conversion, but, in lieu
thereof, the Trust will pay on the applicable conversion date a cash adjustment
based upon market price (Section 16.8).
The record holders of Debt Securities at the close of business on an
interest payment record date shall be entitled to receive the interest payable
on such Debt Securities on the corresponding interest payment date
notwithstanding the conversion thereof. However, Debt Securities surrendered for
conversion during the period from the close of business on any record date to
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the opening of business on the corresponding interest payment date must be
accompanied by payment of an amount equal to the interest payable on such
interest payment date. Holders of Debt Securities who convert Debt Securities on
an interest payment date will receive the interest payable on such date and need
not include payment of such interest upon surrender of Debt Securities for
conversion. Except as aforesaid, no payment or adjustment is to be made on
conversion for interest accrued on Debt Securities or for dividends on shares of
any class of Capital Stock (Sections 3.7 and 16.3).
Subordination of Debt Securities
The indebtedness evidenced by Debt Securities of any series may be
subordinated and junior in rights of payment, to the extent set forth in the
Indenture and the applicable Indenture Supplement, to the prior payment in full
of amounts then due on all Senior Indebtedness (as hereinafter defined). No
payment shall be made by the Trust on account of principal of (or premium, if
any) or interest on Debt Securities of any series or on account of the purchase
or other acquisition of Debt Securities of any series, if there shall have
occurred and be continuing a default with respect to any Senior Indebtedness
permitting the holders to accelerate the maturity thereof or with respect to the
payment of any Senior Indebtedness, and such default shall be the subject of a
judicial proceeding or the Trust shall have received notice of such default from
any holder of Senior Indebtedness, unless and until such default or event of
default shall have been cured or waived or shall have ceased to exist. By reason
of these provisions, in the event of default on any Senior Indebtedness, whether
now outstanding or hereafter issued, payments of principal of (and premium, if
any) and interest on Debt Securities of any series may not be permitted to be
made until such Senior Indebtedness is paid in full, or the event of default on
such Senior Indebtedness is cured or waived (Section 15.2).
Upon any acceleration of the principal of Debt Securities or any
distribution of assets of the Trust upon any receivership, dissolution,
winding-up, liquidation, reorganization, or similar proceedings of the Trust,
whether voluntary or involuntary, or in bankruptcy or insolvency, all amounts
due or to become due upon all Senior Indebtedness must be paid in full before
the holders of Debt Securities of any series or the Trustee are entitled to
receive or retain any assets so distributed in respect of Debt Securities
(Section 15.2). By reason of this provision, in the event of insolvency, holders
of Debt Securities of any series may recover less, ratably, than holders of
Senior Indebtedness.
"Senior Indebtedness" is defined to mean the principal of and interest on,
or substantially similar payments to be made by the Trust in respect of, the
following, whether outstanding at the date of execution of the Indenture or
thereafter incurred, created or assumed: (a) indebtedness of the Trust for money
borrowed or represented by purchase-money obligations, (b) indebtedness of the
Trust evidenced by notes, debentures, or bonds, or other securities issued under
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the provisions of an indenture, fiscal agency agreement or other instrument, (c)
obligations of the Trust as lessee under leases of property either made as part
of any sale and lease-back transaction to which the Trust is a party or
otherwise, (d) indebtedness of partnerships and joint ventures which is included
in the Trust's consolidated financial statements, (e) indebtedness, obligations
and liabilities of others in respect of which the Trust is liable contingently
or otherwise to pay or advance money or property or as guarantor, endorser of
otherwise or which the Trust has agreed to purchase or otherwise acquire, and
(f) any binding commitment of the Trust to fund any real estate investment or to
fund any investment in any entity making such real estate investment; but
excluding, however, (1) any such indebtedness, obligation or liability referred
to in clauses (a) through (f) above as to which, in the instrument creating or
evidencing the same or pursuant to which the same is outstanding, it is provided
that such indebtedness, obligation or liability is not superior in right of
payment to the Securities, or ranks pari passu with the Securities, (2) any such
indebtedness, obligation or liability which is subordinated to indebtedness of
the Trust to substantially the same extent as or to a greater extent than the
Securities are subordinated and (3) the Securities. As used in the preceding
sentence the term "purchase-money obligations" shall mean indebtedness or
obligations evidenced by a note, debenture, bond or other instrument (whether or
not secured by any lien or other security interest but excluding indebtedness or
obligations for which recourse is limited to the property purchased) issued or
assumed as all or a part of the consideration for the acquisition of property,
whether by purchase, merger, consolidation or otherwise, but shall not include
any trade accounts payable. A distribution may consist of cash, securities or
other property.
"Indebtedness" with respect to any person means (a) all indebtedness for
borrowed money whether or not evidenced by bonds, notes, debentures or a similar
instrument, (b) that portion of obligations with respect to leases that is
properly classified as a liability on a balance sheet in accordance with
generally accepted accounting principles, (c) notes payable and drafts accepted
representing extensions of credit, (d) any balance owed for all or any part of
the deferred purchase price of property or services, which purchase price is due
more than six months from the date of incurrence of the obligation in respect
thereof (except any such balance that constitutes (i) a trade payable or an
accrued liability arising in the ordinary course of business or (ii) a trade
draft or note payable issued in the ordinary course of business in connection
with the purchase of goods or services), if and to the extent such debt would
appear as a liability upon a balance sheet of such person prepared in accordance
with generally accepted accounting principles, (e) all indebtedness for letters
of credit or bankers acceptances issued for the account of such person or
performance, surety or similar bonds, (f) all indebtedness under interest rate
swaps, caps or similar agreements and foreign exchange contracts, currency swaps
or similar agreements, (g) any liability of others of the kind described in the
preceding clauses (a) through (f), which such person has guaranteed or which is
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otherwise its legal liability, and (h) any and all deferrals, renewals,
extensions and refunding of, or amendments, modifications or supplements to, any
liability of the kind described in any of the preceding clauses (a) through (f);
provided, however, that, in computing the "Indebtedness" of any person, there
shall be excluded any particular indebtedness if, upon or prior to the maturity
thereof and at the time of determination of such indebtedness, there shall have
been deposited with a depositary in trust money (or evidences of indebtedness if
permitted by the instrument creating such indebtedness) in the necessary amount
to pay, redeem or satisfy such indebtedness as it becomes due, and the amount so
deposited shall not be included in any computation of the assets of such person.
Discharge, Defeasance and Covenant Defeasance
As indicated in the applicable Prospectus Supplement, the Trust may be
permitted, at its option, to discharge certain obligations to holders of any
series of Debt Securities issued under any Indenture that have not already been
delivered to the applicable Trustee for cancellation and that either have become
due and payable or will become due and payable within one year (or scheduled for
redemption within one year) by irrevocably depositing with the applicable
Trustee in trust, money, U.S. Government Obligations or a combination thereof 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 (Section 4.1).
Optional Redemption
Debt Securities of any series will be subject to redemption, in whole or
in part, or on any date subsequent to the date set forth in the Prospectus
Supplement, at the option of the Trust on at least 60 days prior notice (45 days
prior notice in the case of redemption of all Securities of any series) by mail
or by guaranteed overnight courier, at a redemption price equal to 100% (or such
greater price as is set forth in the Prospectus Supplement relating to such
series of Debt Securities) of the principal amount plus interest accrued to the
date of redemption (Section 11.2). The Trust may exercise its redemption powers
over a holder's Debt Securities at any time to the extent deemed sufficient by
the Trust to prevent the holder of such securities or any other person having an
interest therein, if such securities were converted into Capital Stock, from
being deemed to own Excess Shares (See "Description of Capital Stock --
Repurchase and Transferability of Shares"). The Indenture does not contain any
provision requiring the Trust to repurchase Debt Securities at the option of the
holders in the event of a Leveraged Transaction, even though the Trust's
creditworthiness and the market value of Debt Securities may decline
significantly as a result of such transaction. Nor does the Indenture protect
holders thereof against any decline in credit quality.
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Certain Covenants
The applicable Prospectus Supplement will describe any material covenants
in respect of the Debt Securities of any particular series. Unless otherwise
indicated in the applicable Prospectus Supplement, the Debt Securities will
include the following covenants:
Maintenance of Existence. Except as permitted under "Consolidation,
Merger, Sale or Conveyance," the Trust will do or cause to be done all things
necessary to preserve and keep in full force and effect its existence as a
Massachusetts business trust, all material rights (as provided in the
Declaration of Trust and under Massachusetts law) and material franchises;
provided, however, that the Trust shall not be required to preserve any right or
franchise if it determines that the preservation thereof is no longer desirable
in the conduct of its business (Section 10.4).
Maintenance of Office or Agency. The Trust will maintain in each location
where Debt Securities of any series shall be paid an office or agency where such
Debt Securities may be presented or surrendered for payment, registration of
transfer or exchange, or conversion and where notices and demands in respect of
such Debt Securities, the Indenture and/or the Trust may be served. The Trust
will give prompt written notice to the Trustee of each location, and any change
thereto, of such office or agency (Section 10.2).
Maintenance of Properties and Insurance. The Trust will cause all of its
properties used and material to 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 Trust may be reasonably necessary so that the
business carried on in connection therewith may be properly and conducted at all
times (Section 10.5). In addition, the Trust will and will cause each subsidiary
to keep all of its insurable properties insured against loss or damage at least
equal to their then full insurable value with insurers of recognized
responsibility (Section 10.6). There is, however, no prohibition against the
Trust selling or otherwise disposing for value of its properties in the ordinary
course of business or discontinuing the operation or maintenance of any such
properties, if the Trust determines that their preservation is no longer
desirable in the conduct of its business and not disadvantageous in any material
respect to the holders of Debt Securities.
Money for Securities Payments to Be Held in Trust. If the Trust shall at
any time act as its own Paying Agent with respect to any series of Debt
Securities, it will, on or before each due date of the principal of (and
premium, if any) or interest on any of the Debt Securities of that series,
segregate and hold in trust for the benefit of the persons entitled thereto a
sum sufficient to pay such amounts until such sums shall be paid to such persons
or otherwise disposed of as provided in the Indenture. If the Trust shall have
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one or more Paying Agents for any series of Securities, it will, on or before
each due date of any payment of principal, premium, if any or interest on any
Debt Securities of that series, deposit with a Paying Agent a sum sufficient to
pay any such sum which sum will be held in trust for the benefit of the persons
entitled thereto and will cause each Paying Agent for any series of Debt
Securities to execute and deliver to the Trustee a paying agency agreement
setting forth the terms and conditions of such agency (Section 10.3).
Payment of Taxes and Other Claims. The Trust will pay or discharge or
cause to be paid or discharged, within 30 days after the Trust shall have
received notice that the same has become delinquent, (i) all material taxes,
assessments and governmental charges levied or imposed upon it or any subsidiary
or upon the income, profits or property of the Trust or any subsidiary, and (ii)
all material lawful claims for labor, materials and supplies which, if unpaid,
might by law become a lien upon the property of the Trust or any subsidiary,
unless such lien would not have a material adverse effect upon such property;
provided, however, that the Trust 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 10.10).
Payment of Debt Securities and Reports to the Trustee. The Trust will be
obligated to pay the principal of, premium, if any, and interest on, Debt
Securities when due in accordance with their terms (Section 10.1). The Trust
also covenants to file with the Trustee copies of all reports filed with the
Commission promptly after making such filings with the Commission (Sections 7.4
and 10.7), and also to deliver to the Trustee within 120 days after the end of
each fiscal year a certificate as to the Trust's compliance with the terms of
the Indenture during such fiscal year (Section 10.8).
Limitation on Distributions and Acquisitions of Shares. The Indenture may
provide that the Trust will not (i) declare or pay any dividend or make any
distribution to holders of its Capital Stock (other than dividends or
distributions payable in its shares or other than as the Trust determines is
necessary to maintain its REIT status) or (ii) purchase, redeem or otherwise
acquire or retire for value any of its Capital Stock or permit any subsidiary to
do so, if at the time of such action an Event of Default (as defined in the
Indenture) has occurred and is continuing or would exist immediately after
giving effect to such action (Section 10.9).
Further Covenants. The Prospectus Supplement with respect to any series of
Debt Securities will describe any further covenants to the Trust set forth in
the Indenture Supplement relating to such series, which may include any
limitations on incurrence of additional debt.
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Modification of the Indenture
With certain exceptions, the rights and obligations of the Trust and the
rights of holders of any series of Debt Securities may only be modified by the
Trust and the Trustee with the consent of the holders of at least a majority in
principal amount of each series of affected Debt Securities. Without the consent
of each affected Debt Security holder, no amendment or waiver or supplement may
(i) reduce the principal of, or rate of interest on, any Debt Security; (ii)
change the stated maturity date of the principal of, premium, if any, on, or any
installment of interest on, any Debt Security; (iii) change the currency for
payment of the principal of, or premium, if any, or interest on, any Debt
Security; (iv) impair the right to institute suit for the enforcement of any
such payment when due; (v) reduce the amount of outstanding Debt Securities
necessary to consent to an amendment or waiver provided for in the Indenture; or
(vi) modify any provisions of the Indenture relating to the modification,
supplement and amendment of the Indenture or waivers of past defaults, except as
otherwise specified (Section 9.2 and Section 316(b) of the TIA).
Events of Default, Notice and Waiver
The following events will be Events of Default under the Indenture in
respect of any applicable series of Debt Securities: (i) default in the payment
of interest on Debt Securities of such series when due and payable, which
continues for 30 days; (ii) default in the payment of principal of (and premium,
if any) on such Debt Securities when due, at maturity, upon redemption or
otherwise, or failure to deposit any sinking fund payment when due; (iii)
failure to perform any other covenant of the Trust contained in the Indenture or
such Debt Securities which continues for 60 days after written notice is given
as provided in the Indenture; (iv) default under any bond, debenture or other
Indebtedness of the Trust or any subsidiary, if (a) either (x) such event of
default results from the failure to pay any such Indebtedness at maturity or (y)
as a result of such event of default, the maturity of such Indebtedness has been
accelerated prior to its expressed maturity and such acceleration shall not be
rescinded or annulled or the accelerated amount paid within ten days after
notice to the Trust of such acceleration, or such Indebtedness having been
discharged, and (b) the principal amount of such Indebtedness, together with the
principal amount of any other Indebtedness in default for failure to pay
principal or interest thereon, or the maturity of which has been so accelerated,
aggregates $10,000,000 or more; (v) certain events of bankruptcy, insolvency or
reorganization relating to the Trust, and (vi) any other Event of Default
provided with respect to Debt Securities of such series (Section 5.1). The
Indenture Supplement with respect to any series of Debt Securities may provide
for additional or modified Events of Default for the Debt Securities of such
series. If an Event of Default shall occur and be continuing, the Trustee or the
holders of a majority in aggregate principal amount of the applicable series of
Debt Securities may declare such Debt Securities due and payable (Section 5.2).
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The Indenture will provide that the Trustee shall, within 90 days after
the occurrence of any default or Event of Default with respect to Debt
Securities of any series, give to the holders of Debt Securities notice of all
uncured defaults or Events of Default known to it. The Trustee shall be
protected if in good faith it determines that the withholding of such notice is
in the interest of the holders of Debt Securities of any series (Section 6.5).
The Indenture will provide that the holders of a majority in aggregate
principal amount of the outstanding Debt Securities of any series may direct the
time, method and place of conducting any proceedings for any remedy available to
the Trustee or exercising any trust or power conferred on the Trustee with
respect to Debt Securities of such series (Section 5.12). The right of a holder
to institute a proceeding with respect to the Indenture is subject to certain
conditions including notice and indemnity to the Trustee, but the holder has an
absolute right to receipt of principal of (and premium, if any) and interest on
such holder's Debt Security on or after the respective due dates expressed in
Debt Securities and to institute suit for the enforcement of any such payments
(Section 5.8).
The holders of a majority in principal amount of the outstanding Debt
Securities of any series may on behalf of the holders of all Debt Securities of
such series waive certain past defaults, except a default in payment of the
principal of (and premium, if any) or interest on any Debt Securities of such
series or in respect of certain provisions of the Indenture which cannot be
modified or amended without the consent of the holder of each Debt Security
affected thereby (Section 5.13).
The Trust will be required to furnish the Trustee annually a statement of
certain officers of the Trust stating whether or not they know of any Default or
Events of Default (as defined in the Indenture) and, if they have such
knowledge, a description of the efforts to remedy the same (Section 10.8).
Global Securities
Debt Securities of a series may be issued in whole or in part in the form
of one or more global or book-entry securities ("Global Securities") that will
be deposited with, or on behalf of, a depositary identified in the applicable
Prospectus Supplement relating to such series. Global Securities may be issued
in either registered or bearer form and in either temporary or permanent form.
The specific terms of the depositary arrangement with respect to a series of
Debt Securities will be described in the applicable Prospectus Supplement
relating to such series.
DESCRIPTION OF CAPITAL STOCK
The description of the Capital Stock set forth below does not purport to
be complete and is qualified in its entirety by reference to the Declaration of
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Trust and the Trust's Bylaw, as amended (the "Bylaw"), copies of which are
exhibits to the Registration Statement of which this Prospectus is a part.
General
Under the Declaration of Trust, the Trust has authority to issue up to
23.5 million shares of Capital Stock, consisting of 17.5 million Common Shares,
par value $1.00 per share, and six million Preferred Shares, par value $1.00 per
share. At October 16, 1996, there were approximately 11,563,199 Common Shares
issued and outstanding and no Preferred Shares issued or outstanding.
Common Shares
All Common Shares offered hereby have been duly authorized and will, when
issued and paid for as described in the applicable Prospectus Supplement, be
fully paid and non-assessable. All outstanding Common Shares participate equally
in distributions when and as declared by the Board of Trustees and in the assets
available for distribution after payment of liabilities and of the preferential
amounts, if any, as to which holders of any Preferred Shares then outstanding
may be entitled upon the termination of the Trust. Shareholders of the Trust do
not have any preemptive rights. Shareholders of record are entitled to cast one
vote for each Common Share held on all matters presented for a vote of the
shareholders. Except as set forth below, in meetings where a quorum is present,
shareholder action requires approval of a majority of the votes cast.
The Declaration of Trust provides that, subject to the provisions of any
series of Preferred Shares then outstanding, the affirmative vote of the holders
of Common Shares representing not less than 66-2/3% of the total votes
authorized to be cast by shares of all classes which are present in person or by
proxy and entitled to vote and voting in the election of Trustees at such
meeting is required for the election of each of the nominees for Trustee (i.e.,
66-2/3% of the votes cast). The Board of Trustees is divided into three classes.
Each class to be elected is generally voted upon every three years. In the event
that no nominee for a particular trusteeship receives the requisite number of
votes for election to such trusteeship at the annual meeting of shareholders at
which such nominee is standing for election, the incumbent Trustee would remain
in such office until the next annual meeting and until a successor is elected
and qualified. At that meeting, such nominee would stand for election for the
remainder of such term, together with the nominees for the class whose term then
expires. Cumulative voting for the election of Trustees is not permitted. Except
as provided in the provisions of any series of Preferred Shares at the time
outstanding, the provisions of the Declaration of Trust may be amended or
repealed, without the approval of the Board of Trustees, by the affirmative vote
of the holders of not less than 80% of each class of outstanding voting shares
of Capital Stock. In addition, the approval of not less than 66-2/3% of the
whole Board of Trustees (the "whole Board" being the number of Trustees
theretofore established by Board resolution), together with the approval of the
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holders of a majority of the outstanding voting shares of Capital Stock, is
required to amend the Declaration of Trust or to terminate the Trust or for a
merger or sale of all or substantially all of the assets of the Trust.
The Declaration of Trust also provides that special meetings of
shareholders may be called by a majority of the Trustees and, subject to the
provisions of any series of Preferred Shares then outstanding, shall be called
by any Trustee upon the written request of shareholders holding not less than
50% of the total outstanding shares of Capital Stock of all classes entitled to
vote at such a meeting.
Shareholders are entitled to receive distributions when and as declared by
the Board of Trustees out of funds legally available therefor. In the event of
termination, shareholders are entitled to share ratably in the assets available
for distribution after payment of liabilities and of such preferential amounts,
if any, as the holders of any Preferred Shares at the time outstanding shall be
entitled. There are no conversion, redemption (except as may be necessary for
REIT qualification), exchange, sinking fund, or similar provisions regarding the
Common Shares.
The transfer agent and registrar for the Common Shares is BostonEquiServe,
L.P.
Preferred Shares
General. Preferred Shares may be issued from time to time, in one or more
series, as authorized by the Board of Trustees. The Trustees are authorized to
issue the Preferred Shares in series and to establish from time to time the
number of Preferred Shares to be included in such series and to fix the
designation and any preferences, conversion and other rights, voting powers,
restrictions, limitations as to dividends, qualifications, and terms and
conditions of redemption of the Preferred Shares of each series.
Terms. 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 Bylaw and
any applicable additional amendment to the Declaration of Trust designating
terms of a series of Preferred Shares (a "Designating Amendment").
Reference is made to the Prospectus Supplement relating to the Preferred
Shares offered thereby for specific terms, including:
(a) The title and stated value of such Preferred Shares;
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(b) The number of such Preferred Shares offered, the liquidation
preference per share and the offering price of such Preferred Shares;
(c) The dividend rate(s), period(s) and/or payment date(s) or method(s) of
calculation thereof applicable to such Preferred Shares;
(d) The date from which dividends on such Preferred Shares
shall accumulate, if applicable;
(e) The voting rights, if any, of such Preferred Shares;
(f) The procedures for any auction and remarketing, if any,
for such Preferred Shares;
(g) The provision for a sinking fund, if any, for such
Preferred Shares;
(h) The provision for redemption, if applicable, of such
Preferred Shares;
(i) Any listing of such Preferred Shares on any securities
exchange;
(j) If convertible, the terms and conditions upon which such Preferred
Shares will be convertible into Common Shares, including the initial conversion
price (or manner of calculation thereof) and the conversion period;
(k) Any other specific terms, preferences, rights, limitations
or restrictions of such Preferred Shares;
(l) A discussion of federal income tax considerations
applicable to such Preferred Shares;
(m) The relative ranking and preference of such Preferred Shares as to
dividend rights and rights upon liquidation, dissolution or winding up of the
affairs of the Trust;
(n) Any limitations on issuance of any series of Preferred Shares ranking
senior to or on a parity with such series of Preferred Shares as to dividend
rights and rights upon liquidation, dissolution or winding up of the affairs of
the Trust; and
(o) Any limitations on direct or beneficial ownership and restrictions on
transfer, in each case as may be appropriate to preserve the status of the Trust
as a REIT.
Rank. Unless otherwise specified in the Prospectus Supplement, the
Preferred Shares will, with respect to dividend rights and rights upon
liquidation, dissolution or winding up of the Trust, rank (i) senior to all
classes or series of Common Shares, and to all equity securities ranking junior
to such Preferred Shares; (ii) on a parity with all equity securities issued
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by the Trust the terms of which specifically provide that such equity securities
rank on a parity with the Preferred Shares; and (iii) junior to all equity
securities issued by the Trust the terms of which specifically provide that such
equity securities rank senior to the Preferred Shares. The term "equity
securities" does not include convertible debt securities.
Dividends. Holders of the Preferred Shares of each series will be entitled
to receive, when, as and if declared by the Board of Trustees, out of assets of
the Trust legally available for payment, dividends in such form, 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 the Trust on such record dates as shall be fixed by the
Board of Trustees.
Dividends on any series of the Preferred Shares may be cumulative or
non-cumulative, as provided in the applicable Prospectus Supplement. Dividends,
if cumulative, will be cumulative from and after the date set forth in the
applicable Prospectus Supplement. If the Board of Trustees fails to declare a
dividend payable on a dividend payment date on any series of the Preferred
Shares for which dividends are non-cumulative, then the holders of such series
of the Preferred Shares will have no right to receive a dividend in respect of
the dividend period ending on such dividend payment date, and the Trust 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 the Trust 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 is 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 is 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
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such series (which shall not include any accumulation in respect of unpaid
dividends for prior dividend periods if such Preferred Shares does not have a
cumulative dividend) and such other series of Preferred Shares bear to each
other. No interest, or sum of money in lieu of interest, shall be payable in
respect of any dividend payment or payments on Preferred Shares of such series
which may be in arrears.
Except as provided in the immediately preceding paragraph, unless (i) if
such series of Preferred Shares has a cumulative dividend, full cumulative
dividends on the Preferred Shares of such series have been or contemporaneously
are declared and paid or declared and a sum sufficient for the payment thereof
is 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 is set apart for payment for the then current dividend
period, no dividends (other than in Common Shares or other shares of capital
stock 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 nor shall
any other distribution be declared or made upon the Common Shares, or any other
capital stock of the Trust ranking junior to or on a parity with the Preferred
Shares of such series as to dividends or upon liquidation, nor shall any Common
Shares, or any other shares of capital stock of the Trust ranking junior to or
on a parity with the Preferred Shares of such series as to dividends or upon
liquidation be redeemed, purchased or otherwise acquired for any consideration
(or any moneys be paid to or made available for a sinking fund for the
redemption of any such shares) by the Trust (except by conversion into or
exchange for other capital stock of the Trust ranking junior to the Preferred
Shares of such series as to dividends and upon liquidation).
Any dividend payment made on shares of a series of Preferred Shares shall
first be credited against the earliest accrued but unpaid dividend due with
respect to shares of such series which remains payable.
Redemption. If so provided in the applicable Prospectus Supplement, the
Preferred Shares shall be subject to mandatory redemption or redemption at the
option of the Trust, 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 the Trust 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
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date of redemption. The redemption price may be payable in cash or other
property, as specified in the applicable Prospectus Supplement. If the
redemption price for Preferred Shares of any series is payable only from the net
proceeds of the issuance of shares of capital stock of the Trust, the terms of
such Preferred Shares may provide that, if no such shares of capital stock shall
have been issued or to the extent the net proceeds from any issuance are
insufficient to pay in full the aggregate redemption price then due, such
Preferred Shares shall automatically and mandatorily be converted into the
applicable shares of capital stock of the Trust pursuant to conversion
provisions specified in the applicable Prospectus Supplement.
Notwithstanding the foregoing, unless (i) if a series of Preferred Shares
has a cumulative dividend, full cumulative dividends on all shares of such
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 a series of Preferred Shares does not have a cumulative dividend, full
dividends on all of 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
shares of such series of Preferred Shares shall be redeemed unless all
outstanding shares of Preferred Shares of such series are simultaneously
redeemed; provided, however, that the foregoing shall not prevent the purchase
or acquisition of Preferred Shares of such series to preserve the REIT status of
the Trust or pursuant to a purchase or exchange offer made on the same terms to
holders of all outstanding Preferred Shares of such series. In addition, unless
(i) if such series of Preferred Shares has a cumulative dividend, full
cumulative dividends on all outstanding shares of such 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 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, the Trust shall not purchase or
otherwise acquire directly or indirectly any Preferred Shares of such series
(except by conversion into or exchange for capital stock of the Trust ranking
junior to the Preferred Shares of such series as to dividends and upon
liquidation); provided, however, that the foregoing shall not prevent the
purchase or acquisition of Preferred Shares of such series to preserve the REIT
status of the Trust or pursuant to a purchase or exchange offer made on the same
terms to holders of all outstanding Preferred Shares of such series.
If fewer than all of the outstanding Preferred Shares of any series are to
be redeemed, the number of shares to be redeemed will be determined by the Trust
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
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is requested by such holder (with adjustments to avoid redemption of fractional
shares) or by lot in a manner determined by the Trust.
Notice of redemption will be mailed at least 30 days but not more than 60
days before the redemption date to each holder of record of Preferred Shares of
any series to be redeemed at the address shown on the share transfer books of
the Trust. Each notice shall state: (i) the redemption date; (ii) the number 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 Preferred Shares of any series are to be
redeemed, the notice mailed to each such holder thereof shall also specify the
number of Preferred Shares to be redeemed from each such holder. If notice of
redemption of any Preferred Shares has been given and if the funds necessary for
such redemption have been set aside by the Trust in trust for the benefit of the
holders of any Preferred Shares so called for redemption, then from and after
the redemption date dividends will cease to accrue on such Preferred Shares, and
all rights of the holders of such shares will terminate, except the right to
receive the redemption price.
Liquidation Preference. Upon any voluntary or involuntary liquidation,
dissolution or winding up of the affairs of the Trust, then, before any
distribution or payment shall be made to the holders of any Common Shares or any
other class or series of Capital Stock ranking junior to the Preferred Shares in
the distribution of assets upon any liquidation, dissolution or winding up of
the Trust, the holders of each series of Preferred Shares shall be entitled to
receive out of assets of the Trust legally available for distribution to
shareholders liquidating distributions in the amount of the liquidation
preference per share (set forth in the applicable Prospectus Supplement), plus
an amount equal to all dividends accrued and unpaid thereon (which shall not
include any accumulation in respect of unpaid noncumulative dividends for prior
dividend periods). After payment of the full amount of the liquidating
distributions to which they are entitled, the holders of Preferred Shares will
have no right or claim to any of the remaining assets of the Trust. In the event
that, upon any such voluntary or involuntary liquidation, dissolution or winding
up, the available assets of the Trust 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 Stock 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 Stock shall share ratably in any such distribution of
assets in proportion to the full liquidating distributions to which they would
otherwise be respectively entitled.
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If liquidating distributions shall have been made in full to all holders
of Preferred Shares, the remaining assets of the Trust shall be distributed
among the holders of any other classes or series of Capital Stock ranking junior
to the Preferred Shares upon liquidation, dissolution or winding up, according
to their respective rights and preferences and in each case according to their
respective number of shares. For such purposes, the consolidation or merger of
the Trust with or into any other corporation, trust or entity, or the sale,
lease or conveyance of all or substantially all of the property or business of
the Trust, shall not be deemed to constitute a liquidation, dissolution or
winding up of the Trust.
Voting Rights. Holders of the Preferred Shares will not have any voting
rights, except as set forth below or as indicated in the applicable Prospectus
Supplement.
Whenever dividends on any Preferred Shares shall be in arrears for six or
more consecutive quarterly periods, the holders of such 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 the Trust at a special meeting
called by the holders of record of at least twenty-five percent (25%) of any
series of Preferred Shares so in arrears (unless such request is received less
than 90 days before the date fixed for the next annual or special meeting of the
shareholders) or at the next annual meeting of shareholders, and at each
subsequent annual meeting until (i) if such series of Preferred Shares has a
cumulative dividend, all dividends accumulated on such 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 will be increased by two trustees.
Unless provided otherwise for any series of Preferred Shares, so long as
any Preferred Shares of a series remain outstanding, the Trust will not, without
the affirmative vote or consent of the holders of at least a majority of such
series of Preferred Shares outstanding at the time, given in person or by proxy,
either in writing or at a meeting (such series voting separately as a class),
(i) authorize or create, or increase the authorized or issued amount of, any
class or series of capital stock ranking prior to such series of Preferred
Shares with respect to payment of dividends or the distribution of assets upon
liquidation, dissolution or winding up or reclassify any authorized capital
stock of the Trust 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
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adversely affect any right, preference, privilege or voting power of such series
of Preferred Shares or the holders thereof; provided, however, with respect to
the occurrence of any of the Events set forth in (ii) above, so long as the
Preferred Shares remains outstanding with the terms thereof materially
unchanged, taking into account that upon the occurrence of an Event the Trust
may not be the surviving entity, the occurrence of any such Event shall not be
deemed to materially and adversely affect such rights, preferences, privileges
or voting power of holders of Preferred Shares and provided further that (x) any
increase in the amount of the authorized Preferred Shares or the creation or
issuance of any other series of Preferred Shares, or (y) any increase in the
amount of authorized shares of such series or any other series of Preferred
Shares, in each case ranking on a parity with or junior to the Preferred Shares
of such series with respect to payment of dividends or the distribution of
assets upon liquidation, dissolution or winding up, shall not be deemed to
materially and adversely affect such rights, preferences, privileges or voting
powers.
The foregoing voting provisions will not apply if, at or prior to the time
when the act with respect to which such vote would otherwise be required shall
be effected, all outstanding Preferred Shares of such series shall have been
redeemed or called for redemption and sufficient funds shall have been set aside
by the Trust in trust for the benefit of the holders of such shares to effect
such redemption.
Conversion Rights. The terms and conditions, if any, upon which any series
of Preferred Shares is convertible into Common Shares will be set forth in the
applicable Prospectus Supplement relating thereto. Such terms will include the
number of Common Shares into which the Preferred Shares are convertible, the
conversion price (or manner of calculation thereof), the conversion period,
provisions as to whether conversion will be at the option of the holders of the
Preferred Shares or the Trust, 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.
Restrictions on Ownership. As discussed below under "Description of
Capital Stock--Repurchase and Transferability of Shares," for the Trust to
qualify as a REIT under the Internal Revenue Code of 1986, as amended (the
"Code"), not more than 50% in value of its outstanding capital stock 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 the Trust in meeting this requirement, the Trust may take certain actions
to limit the beneficial ownership, directly or indirectly, by a single person of
the Trust's outstanding equity securities, including any Preferred Shares.
Therefore, the Designating Amendment for each series of Preferred Shares may
contain provisions restricting the ownership and transfer of the Preferred
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Shares. The applicable Prospectus Supplement will specify any additional
ownership limitation relating to a series of Preferred Shares.
Transfer Agent and Registrar. The transfer agent and registrar for the
Preferred Shares will be set forth in the applicable Prospectus Supplement.
Shareholder Liability to Third Persons and Indemnification by Trust
The Declaration of Trust provides that shareholders shall not be
personally liable in connection with the property or affairs of the Trust. The
Declaration of Trust further provides that the Trust shall indemnify and hold
harmless each shareholder from all claims and liabilities to which the
shareholders may become subject by reason of his being or having been a
shareholder, and that the Trust shall reimburse each shareholder for all legal
and other expenses reasonably incurred by him in connection with such claim or
liability. In addition, the Trust is required to, and as a matter of practice
does, insert a recital in every written instrument creating any obligation of
the Trust that such obligation is not binding upon any of the Trustees or
shareholders personally. However, with respect to tort claims and contractual
claims where shareholder liability is not disavowed as provided above, claims
for taxes and certain statutory liabilities, the shareholders may, in some
jurisdictions, be personally liable to the extent that such claims are not
satisfied by the Trust. The Declaration of Trust provides that upon payment of
any such claim the shareholders will be entitled to reimbursement from the
Trust. Inasmuch as the Trust carries public liability insurance, any risk of
personal liability to shareholders is limited to situations in which the Trust's
assets plus its insurance coverage would be insufficient to satisfy the claims
against the Trust and its shareholders. The Trust intends, as a matter of
general policy, to make investments with a view to avoiding, to the extent
possible, shareholder liability for obligations of the Trust by making such
investments based on advice of counsel, or with due consideration as to the
availability of indemnification or insurance coverage, as well as other
considerations. Since the organization of the Trust as a REIT in 1971, no claim
has ever been asserted against any shareholder personally for any obligation of
the Trust by virtue of his status as a shareholder.
Repurchase and Transferability of Shares
In order for the Trust to qualify as a REIT under the Code, not more than
50% in value of its outstanding shares of Capital Stock may be owned, directly
or constructively, by five or fewer individuals during the last half of the
taxable year, and the shares of Capital Stock must be beneficially owned by 100
or more persons during at least 335 days of a taxable year of 12 months or
during a proportionate part of a shorter taxable year. Shares of Capital Stock
are not redeemable except that, under the Declaration of Trust, if, in the good
faith opinion of the Trustees, ownership of the shares of Capital Stock has or
may become concentrated to an extent which may prevent the Trust from qualifying
as a REIT, the Trustees have the power, by lot or other means deemed equitable
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to them, to prevent the transfer of and/or call for redemption the number of
shares of Capital Stock sufficient, in the opinion of the Trustees, to maintain
or bring the direct or constructive ownership thereof into conformity with the
requirements for qualification as a REIT. Concentrated ownership is restricted
under the Declaration of Trust and the Bylaw so that where a shareholder
acquires shares of Capital Stock which together with shares of Capital Stock
owned as of such date would aggregate in excess of 9% of the shares of Capital
Stock outstanding. Such excess shares of Capital Stock will be deemed to be
Excess Shares ("Excess Shares"). The Excess Shares will be deemed to be issued
and outstanding shares of stock of the Trust and will be freely transferable by
the owner thereof. Holders of Excess Shares will not be entitled to exercise any
voting rights with respect to such Excess Shares and will not be entitled to
receive any dividends or other distributions with respect to such Excess Shares
(other than distributions in additional shares of Capital Stock). All dividends
and other distributions that would otherwise be payable with respect to Excess
Shares will be accumulated by the Trust (or an agent thereof) and deposited in a
savings account in a Massachusetts bank or with the Trust's dividend disbursing
agent bank, for the benefit of, and be payable to, the holder of such Excess
Shares at such time as such Excess Shares shall cease to be Excess Shares.
The Declaration of Trust requires that each person who becomes the owner
of Excess Shares immediately give notice or cause to be given notice to the
Trust thereof and such other information as the Trust may reasonably require of
such person with respect to identifying all owners and amount of ownership of
its outstanding capital stock.
The Excess Shares provisions may have the effect of delaying, deferring or
preventing the acquisition of control of the Trust. However, the Declaration of
Trust provides that such Excess Shares provisions shall not apply to shares of
capital stock acquired by an underwriter in a public offering of Securities of
the Trust, or in any transaction involving the issuance of Securities by the
Trust, in which a majority of the Trustees determine that such Securities will
timely distribute such Securities to or among others such that following such
distribution none of such Securities will be Excess Shares.
Amendment of Declaration of Trust by Trustees
The Trustees may, by a 66-2/3% vote of the Trustees then in office, amend
provisions of the Declaration of Trust from time to time without a vote of
Shareholders to the extent deemed by the Trustees in good faith to be necessary,
among other things, (a) to meet the requirements for qualification as a REIT
under the Code or (b) to increase or decrease the number of authorized shares of
Capital Stock.
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Shareholder Rights and Certain Other Plans
On June 21, 1989, the Board of Trustees adopted a shareholder rights plan
(the "Shareholder Rights Plan"). Under such plan, one right was attached to each
outstanding Common Share on July 5, 1989, and one right will be attached to each
Common Share thereafter issued. Each right entitles the holder to purchase,
under certain conditions, one one-hundredth of a share of Series A participating
preferred stock for $60. The rights may also, under certain conditions, entitle
the holders to receive Common Shares, common shares of an entity acquiring the
Trust, or other consideration, each having a value equal to twice the exercise
price of each right ($120). 150,000 of such Preferred Shares have been
designated as Series A participating Preferred Shares and are reserved for
issuance under the Shareholder Rights Plan. The rights are redeemable by the
Trust at a price of $.01 per right. If not exercised or redeemed, all rights
expire on July 5, 1999. The Board of Trustees has reserved the right to extend
the Plan. The description and terms of the rights are set forth in a Shareholder
Rights Agreement between the Trust and The First National Bank of Boston, as
Rights Agent.
The Board of Trustees also adopted a severance compensation plan (the
"Severance Compensation Plan") for officers in the event of a "hostile
takeover," which includes the following events, if not approved by two-thirds of
the members of the Board of Trustees in office immediately prior to the
occurrence of any such event: (i) the election as Trustee(s) in any year of one
or more persons not nominated by at least two-thirds of the Board of Trustees in
office prior to such election; (ii) a business combination such as a merger;
(iii) the acquisition of 15% or more of the voting power of the Trust's
securities by any person or entity; or (iv) the failure of the Trust to qualify
as a REIT for tax purposes by reason of more than 50% in value of the Trust's
voting securities outstanding being held by five or fewer individuals. All full
time officers who have completed a minimum of 36 months of continuous employment
with the Trust are eligible under the Severance Compensation Plan and will be
entitled to severance compensation equal to three months compensation for each
12 months of employment based on the highest total annual compensation rate
earned prior to the hostile takeover, subject to certain maximum payment
limitations.
The Shareholder Rights Plan, the Severance Compensation Plan and certain
provisions of the Declaration of Trust and the Bylaw may have the effect of
perpetuating the existing management of the Trust or discouraging any attempt by
a third party to gain control of the Board of Trustees in the future.
DESCRIPTION OF WARRANTS
The Trust may issue warrants or rights (collectively, the "Warrants") for
the purchase of any series of Debt Securities or Common Shares of the Trust.
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Warrants may be issued independently or together with any other Securities and
may be attached to or separate from such Securities.
Each series of Warrants will be issued under a separate warrant agreement
or rights agreement (each, a "Warrant Agreement") to be entered into between the
Trust and a warrant agent or rights agent ("Warrant Agent"). The Warrant Agent
will act solely as an agent of the Trust in connection with the Warrants of such
series and will not assume any obligation or relationship of agency or trust for
or with any holders or beneficial owners of Warrants.
The applicable Prospectus Supplement will describe the following terms,
where applicable, of the Warrants in respect of which this Prospectus is being
delivered: (a) the title of such Warrants; (b) the aggregate number of such
Warrants; (c) the price or prices at which such Warrants will be issued; (d) the
designation, aggregate principal amount and terms of the Securities purchasable
upon exercise of such Warrants; (e) the designation and terms of the Securities,
if any, with which such Warrants are issued and the number of such Warrants
issued with each such Security; (f) if applicable, the date on and after which
such Warrants and the related Securities will be separately transferable; (g)
the price at which the Securities purchasable upon exercise of such Warrants may
be purchased; (h) the date on which the right to exercise such Warrants shall
commence and the date on which such right shall expire; (i) the minimum or
maximum amount of such Warrants that may be exercised at any one time; (j)
information with respect to book-entry procedures, if any; (k) a discussion of
certain federal income tax considerations; and (l) any other terms of such
Warrants, including terms, procedures and limitations relating to the exchange
and exercise of such Warrants.
DESCRIPTION OF UNITS OF SECURITIES
The Trust may issue Units consisting of two or more other constituent
Securities, which Units may be issuable as, and for the period of time specified
therein may be transferable as, a single Security only, as distinguished from
the separate constituent Securities comprising such Units. Any such Units will
be offered pursuant to a Prospectus Supplement which will (a) identify and
designate the title of any series of Units; (b) identify and describe the
separate constituent Securities comprising such Units; (c) set forth the price
or prices at which such Units will be issued; (d) describe, if applicable, the
date on and after which the constituent Securities comprising the Units will
become separately transferable; (e) provide information with respect to
book-entry procedures, if any; (f) discuss applicable federal income tax
considerations relating to the Units; and (g) any other terms of the Units and
their constituent Securities.
PLAN OF DISTRIBUTION
The Trust may sell Securities through underwriters or dealers, directly to
one or more purchasers, or through agents. Direct sales to investors may be
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accomplished through subscription offerings or through subscription rights
distributed to the Trust's shareholders directly 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, at
market prices prevailing at the time of sale or at prices related to such
prevailing market prices, or at negotiated prices.
In connection with the sale of Securities, underwriters or agents may
receive compensation from the Trust or from purchasers of Securities for whom
they may act as agents, in the form of discounts, concessions, or commissions.
Underwriters may sell Securities to or through dealers, and such dealers may
receive compensation in the form of discounts, concessions, or commissions from
the underwriters and/or commissions from the purchasers for whom they may act as
agents. Underwriters, dealers, and agents that participate in the distribution
of Securities may be deemed to be underwriters, and any discounts or commissions
they receive from the Trust, and any profit on the resale of Securities they
realize may be deemed to be underwriting discounts and commissions, under the
Securities Act. Any such underwriter or agent will be identified, and any such
compensation received from the Trust will be described, in the applicable
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 Common Shares which are listed on the NYSE. Any Common Shares
sold pursuant to a Prospectus Supplement will be listed on the NYSE, subject to
official notice of issuance. The Trust may elect to list any series of Debt
Securities or Preferred Shares on an exchange, but is not obligated to do so. It
is possible that one or more underwriters may make a market in a series of
Securities, but will not be obligated to do so and may discontinue any market
making at any time without notice. Therefore, no assurance can be given as to
the liquidity of, or the trading market for, the Securities.
Under agreements into which the Trust may enter, underwriters will be, and
dealers and agents who participate in the distribution of Securities may be,
entitled to indemnification by the Trust against certain liabilities, including
liabilities under the Securities Act.
Underwriters, dealers and agents may engage in transactions with, or
perform services for, or be customers of, the Trust in the ordinary course of
business.
If so indicated in the applicable Prospectus Supplement, the Trust may
itself, or may authorize underwriters or other persons acting as the Trust's
agents to solicit offers by certain institutions to purchase Securities from the
Trust 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,
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educational and charitable institutions and others, but in all cases such
institutions must be approved by the Trust. 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.
In the event the Trust acquires real estate properties through an
affiliated operating partnership (or similar acquisition vehicle) which may be
organized for such purpose (an "Operating Partnership"), interests in such
Operating Partnership (collectively, the "Interests") would be issued in
exchange for such property. If applicable, a Prospectus Supplement may cover the
issuance by the Trust of Common Shares in exchange for Interests, in accordance
with the terms of any applicable agreements relating to the acquisition of such
properties.
In order to comply with the securities laws of certain states, if
applicable, the Securities offered hereby will be sold in such jurisdictions
only through registered or licensed brokers or dealers. In addition, Securities
may not be sold in certain states unless they have been registered or qualified
for sale in the applicable state or an exemption from the registration or
qualification requirement is available and is complied with.
Under applicable rules and regulations under the Exchange Act, any person
engaged in the distribution of the Securities offered hereby may not
simultaneously engage in market making activities with respect to the Securities
for a period of two business days prior to the commencement of such
distribution.
LEGAL MATTERS
Certain legal matters, including the legality of the Securities, will be
passed upon for the Trust by Olshan Grundman Frome & Rosenzweig LLP. Members of
Olshan Grundman Frome & Rosenzweig LLP own an aggregate of 15,015 Common
Shares and hold options to purchase an aggregate of 23,400 Common Shares.
EXPERTS
The financial statements and schedules of the Trust as of November 30,
1995 and 1994, and for each of the years in the three-year period ended November
30, 1995, have been incorporated by reference herein and in the registration
statement in reliance upon the report of KPMG Peat Marwick LLP, independent
certified public accountants, incorporated by reference herein, and upon the
authority of said firm as experts in accounting and auditing. To the extent that
KPMG Peat Marwick LLP audits and reports on financial statements of the Trust
issued at future dates, and consents to the use of their report thereon, such
financial statements also will be incorporated by reference in the registration
statement in reliance upon their report and said authority.
111167.5
-34-
<PAGE>
The Historical Summary of Gross Income and Direct Operating Expenses of
Two Portland Square, One Portland Square and One Portland Square Parking Lot for
the year ended December 31, 1995 appearing in MGI Properties' current report on
Form 8-K dated July 2, 1996 as amended on September 16, 1996, have been audited
by Ernst & Young LLP, independent auditors, as set forth in their report thereon
included therein and incorporated herein by reference. Such Historical Summary
of Gross Income and Direct Operating Expenses are incorporated herein by
reference in reliance upon such reports given upon the authority of such firm as
experts in accounting and auditing.
111167.5
-35-
<PAGE>
PART II
INFORMATION NOT REQUIRED IN PROSPECTUS
Item 14. Other Expenses of Issuance and Distribution.
The expenses in connection with the issuance and distribution of the
securities being registered, all of which will be paid by the Registrant, are as
follows:
SEC Registration fee........................... $ 30,303.03
Stock Exchange listing......................... 20,000.00
Printing and engraving......................... 5,000.00
Accounting fees and expenses................... 10,000.00
Legal fees and expenses........................ 35,000.00
Miscellaneous expenses......................... 20,000.00
------------
Total.......................................... $120,303.03
============
All expenses in connection with the issuance and distribution of the
Securities being offered will be borne by the Trust.
Item 15. Indemnification of Trustees and Officers
- -------- -----------------------------------------
Section 5.3 of the Second Amended and Restated Declaration of Trust, as
amended, of MGI Properties (the "Trust") provides as follows:
The Trust shall indemnify each of its Trustees, officers, employees and
agents (including any Person who serves at its written request as director,
officer, partner, trustee or the like of another organization in which it has
any interest as a shareholder, creditor or otherwise), against all liabilities
and expenses, including amounts paid in satisfaction of judgments, in compromise
or as fines and penalties, counsel fees, reasonably incurred by him in
connection with the defense or disposition of any action, suit or proceeding,
whether civil or criminal, in which he may be involved or with which he may be
threatened, while acting as Trustee or as an officer, employee or agent, of the
Trust or the Trustees, as the case may be, or thereafter, by reason of his being
or having been such a Trustee, officer, employee or agent, except with respect
to any matter as to which he shall have been adjudicated to have acted in bad
faith or with willful misconduct or reckless disregard of his duties or gross
negligence or not to have acted in good faith in the reasonable belief that his
action was in the best interests of the Trust; provided, however, that a Trustee
adjudicated to have been grossly negligent (i.e., found to have breached his
fiduciary duty of care) may nevertheless be indemnified pursuant to the
provisions of this paragraph consistent with the provisions of Section 5.2; and
provided, further, however, that as to any matter disposed of by a compromise
payment by such Trustee, officer, employee or agent, pursuant to a consent
decree or otherwise, no indemnification either for said payment or for any other
expenses shall be provided unless such compromise shall be
111167.5
II-1
<PAGE>
approved as in the best interest of the Trust by a majority of the disinterested
Trustees or the Trust shall have received a written opinion of independent legal
counsel to the effect that such Trustee, officer, employee or agent appears to
have acted in good faith in the reasonable belief that his action was in the
best interests of the Trust. The rights accruing to any Trustee, officer,
employee or agent under these provisions shall not exclude any other right to
which he may be lawfully entitled; provided, however, that no Trustee, officer,
employee or agent may satisfy any right of indemnity or reimbursement granted
herein or to which he may be otherwise entitled except out of the Trust
Property, and no Shareholder shall be personally liable to any Person with
respect to any claim for indemnity or reimbursement or otherwise. The Trustees
may make advance payments in connection with indemnification under this Section
5.3, provided that the indemnified Trustee, officer, employee or agent shall
have given a written undertaking to reimburse the Trust in the event it is
subsequently determined that he is not entitled to such indemnification.
Any action taken by or conduct on the part of the Adviser, a Trustee,
officer, employee or agent of the Trust in conformity with or in good faith
reliance upon the provisions of Section 2.16 or 3.4 hereof shall not, for
purposes of this Declaration of Trust (including, without limitation, Sections
5.1 and 5.2 hereof and this Section 5.3), constitute bad faith, willful
misconduct, gross negligence or reckless disregard of his duties, or failure to
act in good faith in the reasonable belief that his action was in the best
interests of the Trust.
Item 16. Exhibits.
- -------- ---------
Exhibit Index
-------------
Exhibit
- -------
**1 Form of Underwriting Agreement
3(a) Second Amended and Restated Declaration of Trust of MGI Properties,
as amended, incorporated by reference to Trust's (i) Annual Report on
Form 10-K for the fiscal year ended November 30, 1981, (ii) Report
on Form 8-K filed on January 13, 1983, (iii) Amendment No. 1 to the
Trust's Registration Statement on Form S-2 filed on June 7, 1985,
(iv) Annual Report on Form 10-K for the fiscal year ended November
30, 1986, (v) Annual Report on Form 10-K for the fiscal year ended
November 30, 1987, (vi) Registration Statement on Form S-8 filed on
May 3, 1988, (vii) Registration Statement on Form S-4 filed on
November 10, 1988 (Reg. No. 33-25495), (viii) Annual Report on Form
10-K for the fiscal year ended November 30, 1989, (ix) Report on Form
111167.5
II-2
<PAGE>
8-K dated March 21, 1989 and (x) Quarterly Report Form 10-Q for
quarter ended May 31, 1995.
3(b) Bylaw of MGI Properties, as amended, incorporated by reference to the
Trust's (i) Report on Form 8-K filed on January 12, 1983 and (ii)
Report on Form 8-K dated March 21, 1989.
*4(a) Form of Indenture between MGI Properties and the
trustee thereunder.
*4(b) Form of Warrant Agreement between MGI Properties and the warrant
agent thereunder.
**4(c) Terms of Preferred Shares as set forth in resolution of the Board of
Trustees of MGI Properties.
**4(d) Form of certificate of Preferred Shares.
*5 Opinion of Olshan Grundman Frome & Rosenzweig LLP with respect to the
securities registered hereunder.
*23(a) Consent of KPMG Peat Marwick LLP.
*23(b) Consent of Ernst & Young.
23(c) Consent of Olshan Grundman Frome & Rosenzweig LLP (included within
Exhibit 5).
24(a) Powers of Attorney (included on page II-4).
**25 Statement of Eligibility of indenture trustee on
Form T-1.
- --------------
* Filed herewith.
** To be filed by amendment or incorporated by subsequent
reference.
Item 17. Undertakings
- ------- ------------
The undersigned registrant hereby undertakes:
a. To file, during any period in which offers or sales are
being made, a post-effective amendment to this registration statement 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.
111167.5
II-3
<PAGE>
b. That, for the purpose of determining any liability under
the Securities Act of 1933, each such post-effective amendment shall be deemed
to be a new registration statement relating to the securities offered therein,
and the offering of such securities at that time shall be deemed to be the
initial bona fide offering thereof.
c. To remove from registration by means of a post-effective
amendment any of the securities being registered which remain unsold at the
termination of the offering.
The undersigned registrant hereby undertakes that, for purposes of
determining any liability under the Securities Act of 1933, each filing of the
registrant's annual report pursuant to Section 13(a) or 15(d) of the Securities
Exchange Act of 1934 (and, where applicable, each filing of an employee benefit
plan's annual report pursuant to Section 15(d) of the Securities Exchange act of
1934) that is incorporated by reference in the registration statement shall be
deemed to be a new registration statement relating to the securities offered
therein, and the offering of such securities at that time shall be deemed to be
the initial bona fide offering thereof.
Insofar as indemnification for liabilities arising under the
Securities Act of 1933 may be permitted to Trustees, officers and controlling
persons of the registrant pursuant to the foregoing provisions, or otherwise,
the registrant has been advised that in the opinion of the Securities and
Exchange Commission such indemnification is against public policy as expressed
in the 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 Trustee, officer or controlling
person of the registrant in the successful defense of any action, suit or
proceeding) is asserted by such Trustee, officer or controlling person in
connection with the securities being registered, the registrant will, unless in
the opinion of its counsel the matter has been settled by controlling precedent,
submit to a court of appropriate jurisdiction the question whether such
indemnification by it is against public policy as expressed in the Act and will
be governed by the final adjudication of such issue.
The undersigned registrant hereby undertakes, in connection with
securities to be offered pursuant to warrants, to supplement the prospectus,
after the expiration of the subscription period, to set forth the results of the
subscription offer, the transactions by the underwriters during the
subscription period, the amount of unsubscribed securities to be purchased by
the underwriters, and the terms of any subsequent reoffering thereof. If any
public offering by the underwriters is to be made on terms differing from those
set forth on the cover page of the prospectus, a post-effective amendment will
be filed to set forth the terms of such offering.
The undersigned registrant hereby undertakes to file an application
for the purpose of determining the eligibility of the trustee to act under
subsections (a) of Section 310 of the Trust Indenture Act in accordance with the
rules and regulations prescribed by the Commission under Section 305(b)(2) of
the Act.
111167.5
II-4
<PAGE>
SIGNATURES
Pursuant to the requirements of the Securities Act of 1933, the Registrant
certifies that it has reasonable grounds to believe that it meets all of the
requirements for filing on Form S-3 and has duly caused this registration
statement to be signed on its behalf by the undersigned, thereunto duly
authorized, in the City of Boston, County of Suffolk, Commonwealth of
Massachusetts, on October 31, 1996.
MGI PROPERTIES
By: /s/ W. Pearce Coues
-------------------------
W. Pearce Coues
Chairman of the Board of
Trustees and Chief
Executive Officer
POWER OF ATTORNEYS AND SIGNATORIES
Pursuant to the requirements of the Securities Act of 1933, as amended, this
Registration Statement has been signed by the following persons in the
capacities and on the date indicated. Each of the undersigned officers and
Trustees of MGI Properties hereby constitutes and appoints W. Pearce Coues,
Robert Ware and Phillip C. Vitali and each of them singly, as true and lawful
attorneys-in-fact and agents with full power of substitution and resubstitution,
for him in his name in any and all capacities, to sign any and all amendments
(including post-effective amendments) to this Registration Statement and to file
the same, with all exhibits thereto, and other documents in connection
therewith, with the Securities and Exchange Commission and to prepare any and
all exhibits thereto, and other documents in connection therewith, and to make
any applicable state securities law or blue sky filings, granting unto said
attorneys-in-fact and agents, full power and authority to do and perform each
and every act and thing requisite or necessary to be done to enable MGI
Properties to comply with the provisions of the Securities Act of 1933, as
amended, and all requirements of the Securities and Exchange Commission, as
fully to all intents and purposes as he might or could do in person, hereby
ratifying and confirming all that said attorneys-in-fact and agents, or their
substitute or substitutes, may lawfully do or cause to be done by virtue hereof.
<TABLE>
<CAPTION>
Signatures Capacity Date
---------- -------- ----
<S> <C> <C>
/s/ W. Pearce Coues Chairman of the Board of October 31, 1996
- --------------------------- Trustees and Chief
W. Pearce Coues Executive Officer
(Principal Executive
Officer)
/s/ Phillip C. Vitali Executive Vice President, October 31, 1996
- --------------------------- Chief Financial Officer
Phillip C. Vitali and Treasurer (Principal
Financial Officer)
/s/ David P. Morency Controller (Principal October 31, 1996
- --------------------------- Accounting Officer)
David P. Morency
111167.5
II-5
<PAGE>
/s/ George S. Bissell Trustee October 31, 1996
- ---------------------------
George S. Bissell
/s/ Herbert D. Conant Trustee October 31, 1996
- ---------------------------
Herbert D. Conant
/s/ Francis P. Gunning Trustee October 31, 1996
- ---------------------------
Francis P. Gunning
/s/ Colin C. Hampton Trustee October 31, 1996
- ---------------------------
Colin C. Hampton
/s/ George M. Lovejoy, Jr. Trustee October 31, 1996
- ---------------------------
George M. Lovejoy, Jr.
/s/ Rodger P. Nordblom Trustee October 31, 1996
- ---------------------------
Rodger P. Nordblom
/s/ William F. Murdoch, Jr. Trustee October 31, 1996
- ---------------------------
William F. Murdoch, Jr.
</TABLE>
111167.5
II-6
<PAGE>
EXHIBIT 4(a)
===============================================================================
-------------------
MGI PROPERTIES,
as Issuer
TO
[NAME OF TRUSTEE],
as Trustee
__% [Convertible] Debt Securities
-------------------
-----------
INDENTURE
Dated as of _________, __
-----------
===============================================================================
112982.4
<PAGE>
MGI PROPERTIES
Reconciliation and tie between Trust Indenture Act of 1939 (the "TIA"), as
amended by the Trust Reform Act of 1990, and the Indenture, dated as of
_____________, 19__.
Trust Indenture Act Section Indenture Section
ss.310 (a)(1) 6.9
(a)(2) 6.9
(a)(3) Not Applicable
(a)(4) Not Applicable
(a)(5) 6.9
(b) 6.9
ss.311 (a) 6.10
(b) 6.10
(c) Not Applicable
ss.312 (a) 7.1, 7.2
(b) 7.2(b)
(c) 7.2(c)
ss.313 (a) 7.3
(b) 7.3
(c) 7.3
(d) 7.3
ss.314 (a) 7.4
(b) Not Applicable
(c)(1) 1.3
(c)(2) 1.3
(c)(3) Not Applicable
(d) Not Applicable
(e) 1.3
(f) Not Applicable
ss.315 (a) 6.1(b)
(b) 6.5
(c) 6.1(a)
(d) 6.1(c)
(e) 5.14
ss.316 (a)(last sentence) 1.1 ("Outstanding")
(a)(1)(A) 5.2, 5.12
(a)(1)(B) 5.13
(a)(2) Not Applicable
(b) 5.8
(c) 1.5
ss.317 (a)(1) 5.3
(a)(2) 5.4
(b) 10.3
ss.318 (a) 1.8
112982.4
(i)
<PAGE>
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 TIA, which
provides that the provisions of Sections 310 to and including 317 of the TIA are
a part of and govern every qualified Indenture, whether or not physically
contained therein.
112982.4
(ii)
<PAGE>
TABLE OF CONTENTS
NOTE: This table of contents shall not, for any purpose, be deemed to
be a part of the Indenture.
ARTICLE 1 - DEFINITIONS AND OTHER PROVISIONS OF GENERAL APPLICATION
SECTION 1.1. Definitions........................................1
SECTION 1.2. Incorporation by Reference to Trust Indenture Act.10
SECTION 1.3. Compliance Certificates and Opinions..............11
SECTION 1.4. Form of Documents Delivered to Trustee............12
SECTION 1.5. Acts of Holders...................................12
SECTION 1.6. Notices, Etc., to Trustee and the Trust...........14
SECTION 1.7. Notice to Holders; Waiver.........................14
SECTION 1.8. Conflict with Trust Indenture Act.................15
SECTION 1.9. Effect of Headings and Table of Contents..........15
SECTION 1.10. Successors and Assigns............................15
SECTION 1.11. Severability Clause...............................15
SECTION 1.12. Benefits of Indenture.............................15
SECTION 1.13. Governing Law.....................................15
SECTION 1.14. Legal Holidays....................................16
SECTION 1.15. Shareholders, Employees, Officers and Trustees
of Trust Exempt from Individual Liability.........16
ARTICLE 2 - SECURITY FORMS
SECTION 2.1. Forms Generally...................................16
SECTION 2.2. Securities in Global Form.........................17
ARTICLE 3 - THE SECURITIES
SECTION 3.1. Amount Unlimited Issuable in Series...............18
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..........................................23
SECTION 3.6. Mutilated, Destroyed, Lost and Stolen Securities..25
SECTION 3.7. Payment of Interest; Interest Rights Preserved;
Paying Agent Definitions..........................26
SECTION 3.8. Persons Deemed Owners.............................28
SECTION 3.9. Cancellation......................................28
SECTION 3.10. Computation of Interest...........................29
112982.4
(iii)
<PAGE>
ARTICLE 4 - SATISFACTION AND DISCHARGE
SECTION 4.1. Satisfaction, Discharge and Defeasance of the
Securities of Indenture...........................29
SECTION 4.2. Application of Trust Money........................30
SECTION 4.3. Paying Agent to Repay Monies Held.................30
SECTION 4.4. Return of Unclaimed Monies........................31
SECTION 4.5. Reinstatement.....................................31
ARTICLE 5 - DEFAULTS AND REMEDIES
SECTION 5.1. Events of Default.................................31
SECTION 5.2. Acceleration of Maturity; Rescission and
Annulment.........................................34
SECTION 5.3. Collection of Indebtedness and Suits for
Enforcement by Trustee............................35
SECTION 5.4. Trustee May File Proofs of Claim..................36
SECTION 5.5. Trustee May Enforce Claims Without Possession
of Securities.....................................37
SECTION 5.6. Application of Money Collected....................37
SECTION 5.7. Limitations on Suits..............................37
SECTION 5.8. Unconditional Right of Holders to Receive
Principal, Premium, if any, and Interest..........38
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................................39
SECTION 5.13. Waiver of Past Defaults...........................40
SECTION 5.14. Undertaking for Costs.............................41
SECTION 5.15. Waiver of Stay or Extension Laws..................41
ARTICLE 6 - THE TRUSTEE
SECTION 6.1. Certain Duties and Responsibilities of the
Trustee...........................................41
SECTION 6.2. Certain Rights of Trustee.........................43
SECTION 6.3. Individual Rights of Trustee......................43
SECTION 6.4. Trustee's Disclaimer..............................44
SECTION 6.5. Notice of Defaults................................44
SECTION 6.6. Compensation and Indemnity........................44
SECTION 6.7. Replacement of Trustee............................45
SECTION 6.8. Successor Trustee by Merger, Etc..................46
SECTION 6.9. Eligibility; Disqualification.....................46
SECTION 6.10. Preferential Collection of Claims Against Trust...46
SECTION 6.11. Appointment of Authenticating Agent...............46
112982.4
(iv)
<PAGE>
ARTICLE 7 - HOLDERS' LISTS AND REPORTS BY TRUSTEE AND TRUST
SECTION 7.1. Trust to Furnish Trustee Names and Addresses of
Holders...........................................48
SECTION 7.2. Preservation of Information; Communications to
Holders...........................................48
SECTION 7.3 Reports by Trustee to Holders.....................49
SECTION 7.4 Reports by Trust..................................49
ARTICLE 8 - SUCCESSOR CORPORATION OR TRUST
SECTION 8.1 When Trust May Merge, Etc.........................50
SECTION 8.2 Successor Corporation or Trust Substituted........50
ARTICLE 9 - SUPPLEMENTAL INDENTURES
SECTION 9.1 Supplemental Indentures Without Consent of
Holders...........................................51
SECTION 9.2 Supplemental Indentures with Consent of Holders...51
SECTION 9.3 Compliance with Trust Indenture Act...............53
SECTION 9.4 Revocation and Effect of Consents.................53
SECTION 9.5 Notation On or Exchange of Securities.............53
SECTION 9.6 Effect of Supplemental Indentures.................54
SECTION 9.7 Reference in Securities to Supplemental
Indentures........................................54
ARTICLE 10 - COVENANTS
SECTION 10.1 Payment of Principal, Premium and Interest........54
SECTION 10.2 Maintenance of Office or Agency...................54
SECTION 10.3 Money for Securities Payments to Be Held in Trust.54
SECTION 10.4 Trust Existence...................................55
SECTION 10.5 Maintenance of Properties.........................56
SECTION 10.6 Insurance.........................................56
SECTION 10.7 SEC Reports.......................................56
SECTION 10.8 Compliance Certificates...........................57
SECTION 10.9 Limitation on Dividends and Other Distributions...57
SECTION 10.10 Payment of Taxes and Other Claims.................57
SECTION 10.11 Defeasance of Certain Obligations.................58
ARTICLE 11 - REDEMPTION OF SECURITIES
SECTION 11.1 Applicability of Article..........................59
SECTION 11.2 Election to Redeem; Notice to Trustee.............59
SECTION 11.3 Selection by Trustee of Securities to Be Redeemed.59
SECTION 11.4 Notice of Redemption..............................60
SECTION 11.5 Deposit of Redemption Price.......................61
SECTION 11.6 Securities Payable on Redemption Date.............61
112982.4
(v)
<PAGE>
SECTION 11.7 Securities Redeemed in Part.......................61
ARTICLE 12 - SINKING FUNDS
SECTION 12.1 Applicability of Article..........................62
SECTION 12.2 Satisfaction of Sinking Fund Payments with
Securities........................................62
SECTION 12.3 Redemption of Securities for Sinking Fund.........62
ARTICLE 13 - REPAYMENT AT THE OPTION OF HOLDERS
SECTION 13.1 Applicability of Article..........................63
ARTICLE 14 - MEETINGS OF HOLDERS
SECTION 14.1 Purposes of Holders' Meetings.....................63
SECTION 14.2 Call of Meetings by Trustee.......................64
SECTION 14.3 Call of Meetings by Trust or Holders..............64
SECTION 14.4 Qualifications for Voting.........................64
SECTION 14.5 Regulations.......................................64
SECTION 14.6 Voting............................................65
SECTION 14.7 Rights of Trustee or Holders Not Delayed..........65
ARTICLE 15 - SUBORDINATION; SENIORITY
SECTION 15.1 Securities Subordinated to Senior Indebtedness....66
SECTION 15.2 Trust Not to Make Payments with Respect to
Securities in Certain Circumstances...............66
SECTION 15.3 Subrogation of Securities.........................68
SECTION 15.4 Authorization by Holders of Securities............69
SECTION 15.5 Notices of Trustee................................69
SECTION 15.6 Trustee's Relation to Senior Indebtedness.........70
SECTION 15.7 No Impairment of Subordination....................71
SECTION 15.8 Article 15 Not To Prevent Events of Default.......71
SECTION 15.9 Paying Agents Other Than the Trustee..............71
ARTICLE 16 - CONVERSION OF SECURITIES
SECTION 16.1 Right of Conversion; Conversion Price.............71
SECTION 16.2 Issuance of Shares on Conversion..................72
SECTION 16.3 No Adjustment for Interest or Dividends...........73
SECTION 16.4 Adjustment of Conversion Price....................73
SECTION 16.5 Notice of Adjustment of Conversion Price..........75
SECTION 16.6 Notice of Certain Trust Action....................76
SECTION 16.7 Taxes on Conversions..............................77
112982.4
(vi)
<PAGE>
SECTION 16.8 Fractional Shares.................................77
SECTION 16.9 Cancellation of Converted Securities..............77
SECTION 16.10 Provisions in Case of Consolidation,
Merger or Sale of Assets..........................77
SECTION 16.11 Disclaimer by Trustee of Responsibility for
Certain Matters...................................78
SECTION 16.12 Covenant to Reserve Shares........................78
EXHIBIT A - FORM OF SECURITY
112982.4
(vii)
<PAGE>
INDENTURE, dated as of _________________, by and between MGI PROPERTIES, a
Massachusetts trust (the "Trust"), having its principal office at One Winthrop
Square, Boston, Massachusetts 02110, and _____________________ (the "Trustee").
RECITALS OF THE TRUST
The Trust has duly authorized the execution and delivery of this Indenture
to provide for the issuance of its [convertible] securities (hereinafter being
collectively referred to as the "Securities") evidencing its [convertible]
unsecured indebtedness, unlimited as to principal amount, to bear interest at
the rates, to mature at such times[, to be convertible into shares of the
capital stock of the Trust], 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 (the "TIA"), 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
Trust, in accordance with its terms, have been done.
NOW, THEREFORE, THIS INDENTURE WITNESSETH:
For and in consideration of the premises and the purchases 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 1 - 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:
(1) the terms defined in this Article 1 have the meanings assigned
them in this Article, and include the plural as well as the singular;
(2) whenever this Indenture refers to a provision of the TIA, the
provision is incorporated by reference in and made a part of this
Indenture. All terms used herein which are defined in the TIA, either
directly or by reference therein, have the meaning assigned to them
therein;
112982.4
<PAGE>
(3) all accounting terms, not otherwise defined herein, have the
meanings assigned them in accordance with GAAP; and
(4) the words "herein," "hereof" and "hereunder" and other words of
similar import refer to this Indenture as a whole and not any particular
Article, Section or other subdivision.
"Act," when used herein with respect to any Holder, has the meaning set
forth in Section 1.5.
"Affiliate" means any Person directly or indirectly controlling or
controlled by or under direct or indirect common control with such Person. For
the purposes of this definition, "control" (including, with correlative
meanings, the terms "controlled by" and "under common control with"), as used
with respect to any Person, shall mean the possession, directly or indirectly,
of the power to direct to cause the direction of the management or policies of
such Person, whether through the ownership of voting securities or by agreement
or otherwise.
"Agent" means any Authenticating Agent, Security Registrar, Paying Agent,
Conversion Agent, co-registrar or agent for service of notices and demands.
"Authenticating Agent" means any Person or Persons authorized from time to
time by the Trustee pursuant to Section 6.11 to act on behalf of the Trustee to
authenticate Securities of one or more series.
"Bankruptcy Law" means Title 11 of the U.S. Code or any similar Federal or
State law for the relief of debtors.
"Board of Trustees" means the Board of Trustees of the Trust or any
Committee thereof.
"Board Resolution" means a resolution certified by the Secretary or an
Assistant Secretary of the Trust 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 the Securities of any
series, means, unless specified with respect to such Securities pursuant to
Section 3.1, any day, other than 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.
112982.4
-2-
<PAGE>
"Capital Stock" means any and all shares or other equivalents (however
designated) of capital stock, including Common Shares and Preferred Shares
issued or authorized for issuance, in series or otherwise, all in accordance
with the Declaration of Trust.
"Closing Price" means with respect to the per share price of Common Shares
or Preferred Shares, as the case may be, on any Trading Day, (i) the last
reported sales price regular way or, in case no such reported sale takes place
on such Trading Day, the average of the reported closing bid and asked prices
regular way, in either case on the New York Stock Exchange, or (ii) if not
listed or admitted to trading on the New York Stock Exchange, on the principal
national securities exchange on which such shares are listed or admitted to
trading, or (iii) if such shares are not listed or admitted to trading on any
national securities exchange, the average of the closing bid and asked prices as
furnished by any New York Stock Exchange member firm selected from time to time
by the Trust for that purpose.
"Code" means the Internal Revenue Code of 1986, as amended, and the rules
and regulations issued thereunder, as from time to time in effect.
"Common Shares" of the Trust means every share of each class (however
designated) of the Capital Stock that is not a Preferred Share of the Trust
issued or authorized for issuance in accordance with the Declaration of Trust.
"Conversion Agent" means any Person authorized by the Trust to act as a
conversion agent pursuant to this Indenture for purposes of Article 16.
"Conversion Price" has the meaning set forth in Section 16.1.
"Corporate Trust Office" means the principal office of the Trustee at
which at any particular time its corporate trust business shall be administered,
which office on the date of execution of this Indenture is located at
____________ ________________.
"Custodian" means any receiver, trustee, liquidator or similar official
under any Bankruptcy Law.
"Declaration of Trust" means the Trust's Second Amended and Restated
Declaration of Trust, as amended, as further amended, supplemented or otherwise
modified from time to time in accordance with the provisions thereof.
"Defaulted Interest" has the meaning specified in Section 3.7.
"Depositary" means with respect to the Securities of any series issuable
or issued in the form of one or more Global Securities, the Person designated as
the "Depositary" by the Trust pursuant to Section 3.1 until a successor
Depositary shall have become such pursuant to the applicable provisions of this
Indenture, and thereafter the "Depositary" shall mean or include each Person who
is then a Depositary hereunder, and if at any time there is more than one such
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Person, the "Depositary" as used with respect to the Securities of any series
shall mean the Depositary with respect to the Securities of that series. Each
Depositary must, at the time of its designation and at all times while it serves
as a Depositary, be a clearing agency registered under the Exchange Act, and any
other applicable statute or regulation.
"Dollar" or "$" means a dollar or other equivalent unit in such coin or
currency of the United States as at the time there shall be legal tender for the
payment of public and private debts.
"Events of Default" has the meaning set forth in Section 5.1.
"Exchange Act" means the Securities Exchange Act of 1934, as amended, and
the rules and regulations promulgated thereunder, as from time to time in
effect.
"GAAP" means generally accepted accounting principles, as in effect from
time to time, as used in the United States.
"Global Security" means a Security evidencing all or a part of a series of
Securities, issued to and registered in the name of the Depositary for such
series, or its nominee, in accordance with Section 3.3, and bearing the legend
prescribed in Section 2.2.
"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, if any, the bearer thereof, and, when used with respect to any
coupon, if any, shall mean the bearer thereof.
"Indebtedness," as applied to any Person, means, without duplication (i)
all indebtedness for borrowed money whether or not evidenced by bonds, notes,
debentures or a similar instrument, (ii) that portion of obligations with
respect to leases that is properly classified as a liability on a balance sheet
in accordance with GAAP, (iii) notes payable and drafts accepted representing
extensions of credit, (iv) any balance owed for all or any part of the deferred
purchase price of property or services, which purchase price is due more than
six months from the date of incurrence of the obligation in respect thereof
(except any such balance that constitutes (x) a trade payable or an accrued
liability arising in the ordinary course of business or (y) a trade draft or
note payable issued in the ordinary course of business in connection with the
purchase of goods or services), if and to the extent such debt would appear as a
liability upon a balance sheet of such Person prepared in accordance with GAAP,
(v) all indebtedness for letters of credit or bankers acceptances issued for the
account of such Person or performance, surety or similar bonds, (vi) all
indebtedness under interest rate swaps, caps or similar agreements and foreign
exchange contracts, currency swaps or similar agreements, (vii) any liability of
others of the kind described in the preceding clauses (i) through (vi), which
such Person has guaranteed or which is otherwise its legal liability, and (viii)
any and all deferrals, renewals, extensions and refunding of, or amendments,
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modifications or supplements to, any liability of the kind described in any of
the preceding clauses (i) through (vi); provided, however, that, in computing
the "Indebtedness" of any Person, there shall be excluded any particular
indebtedness if, upon or prior to the maturity thereof and at the time of
determination of such indebtedness, there shall have been deposited with a
depositary in trust money (or evidences of indebtedness if permitted by the
instrument creating such indebtedness) in the necessary amount to pay, redeem or
satisfy such indebtedness as it becomes due, and the amount so deposited shall
not be included in any computation of the assets of such Person.
"Indenture" means the instrument as originally executed or as it may from
time to time be supplemented or amended by one or more indentures supplemental
hereto entered into pursuant to the applicable provisions hereof and shall
include the terms of particular series of Securities established as contemplated
by Section 3.1; provided, however, that if at any time more than one Person is
acting as Trustee under this Indenture due to the appointment of one or more
separate Trustees for any one or more separate series of Securities pursuant to
Section 6.7, "Indenture" shall mean, with respect to such series of Securities
for which any 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 of
Article 9 and shall include the terms, as contemplated by Section 3.1, of the
particular series of Securities for which such Person is Trustee, exclusive,
however, of any provisions or terms which relate solely to any 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.
"Interest Payment Date," when used with respect to any Security, means the
Stated Maturity of an installment of interest on such Security.
"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 defined, whether at the Stated Maturity or by
declaration of acceleration, notice of redemption, notice of option to elect
repayment or otherwise.
"Officer" means the Chairman of the Board, the President, any Vice
President, the Treasurer, any Assistant Treasurer, the Secretary or any
Assistant Secretary of the Trust.
"Officers' Certificate" means a certificate signed by two Officers and
delivered to the Trustee.
"Opinion of Counsel" means a written opinion from Olshan Grundman Frome &
Rosenzweig LLP or any other legal counsel who is reasonably acceptable to the
Trustee. The counsel may be an employee of or counsel to the Trust or the
Trustee.
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"Original Issue Discount Security" means any Security which provides for
an amount less than the principal amount thereof to be due and payable upon
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:
(i) Securities theretofore cancelled by the Trustee or delivered
to the Trustee for cancellation;
(ii) Securities for whose payment or redemption money in the
necessary amount has been theretofore deposited with the Trustee or any
Paying Agent (other than the Trust) in trust or set aside and segregated
in trust by the Trust (if the Trust shall act as its own Paying Agent) for
the Holders of such Securities; provided that, if such Securities are to
be redeemed, notice of such redemption has been duly given pursuant to
this Indenture or provision therefor satisfactory to the Trustee has been
made;
(iii) Securities, with respect to which the Trust effected
defeasance pursuant to or in accordance with this Indenture if the terms
of such Securities provided for defeasance pursuant to Section 3.1;
(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
Trust; and
(v) Securities converted into Common Shares or Preferred Shares
pursuant to or in accordance with this Indenture if the terms of such
Securities provided for convertibility pursuant to Section 3.1;
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 ss. 313, (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 acceleration of the Maturity thereof pursuant to Section
5.2, (ii) the principal amount of a Security denominated in one or more foreign
currencies or currency units shall be the Dollar equivalent, determined as of
the date of original issuance of such Security in the manner provided as
contemplated by Section 3.1, of the principal amount (or, in the case of an
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Original Issue Discount Security, the Dollar equivalent on the date of original
issuance of such Security of the amount determined as provided in (i) above) of
such Security, and (iii) Securities owned by the Trust or any other obligor upon
the Securities or any Affiliate of the Trust or of such other obligor shall be
disregarded and deemed not to be Outstanding, except that, in determining
whether the Trustee shall be protected in relying upon any such request, demand,
authorization, direction, notice, consent or waiver, only Securities which the
Trustee knows to be so owned shall be so disregarded. Securities owned as
provided in clause (iii) above which have been pledged in good faith may be
regarded as Outstanding if the pledgee establishes to the satisfaction of the
Trustee the pledgee's right so to act with respect to such Securities and that
the pledgee is not the Trust or any other obligor upon the Securities or any
Affiliate of the Trust or of such other obligor.
"Ownership Limit" as to any Holder or other Person means, on any date of
determination, the number of shares of any or all classes or series of Capital
Stock with an aggregate value equal to 9% of the aggregate value of all
outstanding shares of Capital Stock of the Trust determined in accordance with
the principles (including, without limitation, the authority of the Board of
Trustees) set forth in Section 8.5.1 of the Declaration of Trust.
"Paying Agent" means any Person authorized by the Trust to pay the
principal of (and premium, if any), or interest on, any Securities on behalf of
the Trust.
"Payment or Distribution" has the meaning set forth in Section 15.1.
"Person" means any individual, corporation, limited liability company,
partnership, joint venture, association, joint-stock company, trust,
unincorporated organization or government or any agency or political 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 the Securities of that series 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 indebtedness 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 in lieu
of a mutilated, destroyed, lost or stolen Security shall be deemed to evidence
the same debt as the mutilated, destroyed, lost or stolen Security.
"Preferred Shares" means, with respect to the Trust, Capital Stock issued
by the Trust in accordance with the Declaration of Trust that is entitled to a
preference or priority over any other Capital Stock issued by the Trust upon any
distribution of the Trust's assets, whether by dividends or upon any voluntary
or involuntary liquidation, dissolution or winding up to any other share of such
or any class of the Capital Stock.
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"Principal" of a Security means the principal of the Security plus, when
appropriate, the premium, if any, on the Security.
"Redemption Date," when used with respect to any Security to be redeemed,
means the date fixed for such redemption pursuant to this Indenture.
"Redemption Price," when used with respect to the Securities of any series
to be redeemed means the price fixed for such redemption pursuant to this
Indenture as specified in such Security.
"Regular Record Date," for the interest payable on any Interest Payment
Date on the 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.
"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 designated by a number or a word or words
added before and after the title "vice president"), the secretary, any assistant
secretary, the clerk, any assistant clerk, 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 officers
designated hereinabove 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.
"Rule 13e-3 Transaction" has the meaning set forth in Section 16.6(2).
"SEC" means the Securities and Exchange Commission, as from time to time
constituted, or, if at any time after execution of this instrument the SEC is
not existing and performing the duties now assigned to it under the TIA, then
the body performing such duties on such date.
"Security" has the meaning set forth in the first recital of this
Indenture and, more particularly, means any Security 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
this Indenture as to which such Person is Trustee will have the meaning stated
in the first recital of hereof and, more particularly, will mean Securities
authenticated and delivered hereunder, 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.
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"Senior Indebtedness" means the principal of and interest on, or
substantially similar payments to be made by the Trust in respect of, the
following, whether outstanding at the date of execution of this Indenture or
thereafter incurred, created or assumed: (a) Indebtedness of the Trust for money
borrowed or represented by purchase-money obligations, (b) indebtedness of the
Trust evidenced by notes, debentures, or bonds, or other securities issued under
the provisions of an indenture, fiscal agency agreement or other instrument, (c)
obligations of the Trust as lessee under leases of property either made as part
of any sale and lease-back transaction to which the Trust is a party or
otherwise, (d) indebtedness of partnerships and joint ventures which is included
in the Trust's consolidated financial statements, (e) indebtedness, obligations
and liabilities of others in respect of which the Trust is liable contingently
or otherwise to pay or advance money or property or as guarantor, endorser of
otherwise or which the Trust has agreed to purchase or otherwise acquire, and
(f) any binding commitment of the Trust to fund any real estate investment or to
fund any investment in any entity making such real estate investment; but
excluding, however, (1) any such indebtedness, obligation or liability referred
to in clauses (a) through (f) above as to which, in the instrument creating or
evidencing the same or pursuant to which the same is outstanding, it is provided
that such indebtedness, obligation or liability is not superior in right of
payment to the Securities, or ranks pari passu with the Securities, (2) any such
indebtedness, obligation or liability which is subordinated to indebtedness of
the Trust to substantially the same extent as or to a greater extent than the
Securities are subordinated and (3) the Securities. As used in the preceding
sentence the term "purchase-money obligations" shall mean indebtedness or
obligations evidenced by a note, debenture, bond or other instrument (whether or
not secured by any lien or other security interest but excluding indebtedness or
obligations for which recourse is limited to the property purchased) issued or
assumed as all or a part of the consideration for the acquisition of property,
whether by purchase, merger, consolidation or otherwise, but shall not include
any trade accounts payable. A distribution may consist of cash, securities or
other property.
"Special Record Date" for the payment of any Defaulted Interest means a
date fixed by the Trust 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.
"Subordinated Indebtedness" means the principal, premium, if any, and
interest on any Indebtedness of the Trust which by its terms is expressly
subordinated in right of payment to the Senior Indebtedness.
"Subsidiary" means, with respect to any Person, any corporation or other
business entity of which securities representing more than 50% of the combined
voting power of the total voting stock (or in the case of an association or
other business entity which is not a corporation, more than 50% of the equity
interest) is at the time owned or controlled, directly or indirectly, by that
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Person or one or more of the other Subsidiaries of that Person or a combination
thereof. When used herein without reference to any Person, Subsidiary means a
Subsidiary of the Trust. For the purposes of this definition, "voting stock"
means stock which ordinarily has voting power for the election of directors,
whether at all times or only so long as no senior class of stock has such voting
power by reason of any contingency.
"Trading Day" means each day on which the securities exchange or other
market which is used to determine the Closing Price is open for trading or
operation.
"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 9.3.
"Trust Officer," when used with respect to the Trustee, means the chairman
or any vice-chairman of the board of directors, the chairman or any
vice-chairman of the executive committee of the board of directors, the chairman
of the trust committee, the president, any vice-president, the secretary, any
assistant secretary, the clerk, any assistant clerk, the treasurer, any
assistant treasurer, the cashier, any assistant cashier, any trust officer or
assistant trust officer, the controller or any assistant controller or any other
officer of the Trustee customarily performing functions similar to those
performed by any of the above designated officers and also means, with respect
to a particular corporate trust matter, any other officer of the Trustee to whom
such matter is referred because of such officer's knowledge of and familiarity
with the particular subject.
"Trust Request" or "Trust Order" means a written request or order signed
in the name of the Trust by an Officer and delivered to the Trustee.
"Trustee" means the Person named as the "Trustee" in the first paragraph
of this instrument until a successor trustee shall have become such pursuant to
the applicable provisions of this Indenture, and thereafter "Trustee" shall mean
or include each Person who is then a trustee hereunder, and if at any time there
is more than one such Person, "Trustee" as used with respect to the Securities
of any series shall mean the Trustee with respect to Securities of that series,
and if at any time there is more than one such Person, the "Trustee" as used
with respect to the Securities of any series shall mean the Trustee with respect
to that series.
"United States" means the United States of America.
"U.S. Government Obligations" means direct, noncallable obligations of, or
noncallable obligations guaranteed by, the United States for the timely payment
of which obligation or guarantee the full faith and credit of the United States
is pledged.
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SECTION 1.2. Incorporation by Reference to Trust Indenture Act.
-------------------------------------------------
Whenever this Indenture refers to a provision of the TIA, the provision is
incorporated by reference in and made a part of this Indenture. The following
TIA terms used in this Indenture have the following meanings:
"Commission" means the SEC.
"indenture securities" means the Securities.
"indenture security holder" means a Holder.
"indenture to be qualified" means this Indenture.
"indenture trustee" or "institutional trustee" means the Trustee.
"obligor" on the indenture securities means the Trust or any other obligor
on the indenture securities.
All other terms used in this Indenture that are defined by the TIA,
defined by TIA reference to another statute or defined by SEC rules have the
meanings assigned to them therein.
SECTION 1.3. Compliance Certificates and Opinions.
------------------------------------
Upon any application or request by the Trust to the Trustee to take any
action under any provision of this Indenture, the Trust 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 (other than certificates provided
pursuant to the last paragraph of Section 3.3) 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;
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(c) a statement that, in the opinion of each such individual, such
individual has made such examination or investigation as is necessary to
enable such individual 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 each such
individual, such condition or covenant has been complied with.
SECTION 1.4. Form of Documents Delivered to Trustee.
--------------------------------------
In any case where several matters are required to be certified by, or
covered by an opinion of, any specified Person, it is not necessary that all
such matters be certified by, or covered by the opinion of, only one such
Person, or that they be so certified or covered by only one document, but one
such Person may certify or give an opinion with respect to some matters and one
or more other such Persons as to other matters, and any such Person may certify
or give an opinion as to such matters in one or several documents.
Any certificate or opinion of an Officer may be based, insofar as it
relates to legal matters, upon a certificate or opinion of, or representations
by, counsel, unless such Officer knows, or in the exercise of reasonable care
should know, that the certificate or opinion or representations with respect to
the matters upon which such Officer's certificate or opinion is based are
erroneous. Any such certificate or Opinion of Counsel may be based, insofar as
it relates to factual matters, upon a certificate or opinion of, or
representations by, an Officer or Officers, stating that the information with
respect to such factual matters is in the possession of the Trust, unless such
counsel knows, or in the exercise of reasonable care should know, that the
certificate or opinion or representations with respect to such matters are
erroneous.
Where any Person is required to make, give or execute two or more
applications, requests, consents, certificates, statements, opinions or other
instruments under this Indenture, they may, but need not, be consolidated and
form one instrument.
SECTION 1.5. 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; and, except as herein otherwise expressly provided, such action shall
become effective when such instrument or instruments are delivered to the
Trustee and, where it is hereby expressly required, to the Trust. Such
instrument or instruments (and the action embodied therein and evidenced
thereby) are herein sometimes referred to as the "Act" of the Holders signing
such instrument or instruments. Proof of execution of any such instrument or of
a writing appointing any such agent shall be sufficient for any purpose of this
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Indenture and (subject to Section 6.1) conclusive in favor of the Trustee and
the Trust, if made in the manner provided in this Section 1.5. The record of any
meeting of Holders of Securities shall be proved in the manner provided in
Section 14.6.
(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 such individual the execution
thereof. Where such execution is by a signer acting in a capacity other than his
individual capacity, such certificate or affidavit shall also constitute
sufficient proof of such signer's authority. The fact and date of the execution
of any such instrument or writing, or the authority of the Person executing the
same, may also be proved in any other manner which the Trustee deems sufficient.
(c) The Trust may, in the circumstances permitted by the TIA or by this
Indenture, fix any day as the record date for the purpose of determining the
Holders of Securities of any series entitled to give or take any request,
demand, authorization, direction, notice, consent, waiver or other action, or to
vote on any action, authorized or permitted to be given or taken by Holders of
Securities of such series. If not set by the Trust prior to the first
solicitation of a Holder of Securities of such series made by any person in
respect of any such action, or, in the case of any such vote, prior to such
vote, the record date for any such action or vote shall be the 30th day (or, if
later, the date of the most recent list of Holders required to be provided
pursuant to Section 7.1) prior to such first solicitation or vote, as the case
may be, except otherwise expressly provided herein. With regard to any record
date for action to be taken by the Holders of one or more series of Securities,
only the Holders of Securities of such series on such date (or their duly
designated proxies) shall be entitled to give or take, or vote on, the relevant
action.
(d) The ownership of Securities shall be proved by the Security Register;
as to any matter relating to beneficial ownership interests in any Global
Security, the appropriate Depositary's records shall be dispositive for purposes
of this Indenture.
(e) Any request, demand, authorization, direction, notice, consent, waiver
or other Act of the Holder of any Security shall bind every future Holder of the
same Security and the Holder of every Security issued upon the registration of
transfer thereof or in exchange therefor or in lieu thereof in respect of
anything done, omitted or suffered to be done by the Trustee, any Security
Registrar, any Paying Agent, any Authenticating Agent or the Trust in reliance
thereon, whether or not notation of such action is made upon such Security.
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SECTION 1.6. Notices, Etc., to Trustee and the Trust.
---------------------------------------
Any request, demand, authorization, direction, notice, consent, waiver or
Act of Holders or other document provided or permitted by this Indenture to be
made upon, given or furnished to, or filed with:
(1) the Trustee by any Holder or by the Trust shall be sufficient
for every purpose hereunder if made, given or furnished or filed in
writing to or with the Trustee at its ________________________,
Attention: ____________,
(2) the Trust 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 Trust
addressed to it at the address of its principal office specified in the
first paragraph of this instrument or at any other address previously
furnished in writing to the Trustee by the Trust, Attention: Phillip C.
Vitali (with a copy to Victor M. Rosenzweig, Esq., Olshan Grundman Frome &
Rosenzweig LLP, 505 Park Avenue, New York, New York 10022-1170), or
(3) either the Trustee or the Trust, by the other party, shall be
sufficient for every purpose hereunder if given by facsimile transmission,
receipt confirmed by telephone followed by an original copy delivered by
guaranteed overnight courier; if to the Trustee at facsimile number (___)
___-____; and if to the Trust at facsimile number (617) 422-6010.
SECTION 1.7. Notice to Holders; Waiver.
-------------------------
Where this Indenture provides for notice to Holders of any event, such
notice shall be sufficiently given (unless otherwise herein expressly provided)
if in writing and mailed, first-class, postage prepaid, to each Holder affected
by such event, at such Holder's address as it appears in the Security Register,
not later than the latest date, if any, and not earlier than the earliest date,
if any, prescribed for the giving of such notice. In any case where notice to
Holders is given by mail, neither the failure to mail such notice, nor any
defect in any notice so mailed, to any particular Holder shall affect the
sufficiency of such notice with respect to other Holders. Where this Indenture
provides for notice in any manner, such notice may be waived in writing by the
Person entitled to receive such notice, either before or after the event, and
such waiver shall be the equivalent of such notice. Waivers of notice by Holders
shall be filed with the Trustee, but such filing shall not be a condition
precedent to the validity of any action taken in reliance upon such waiver.
In case by reason of the suspension of regular mail service or by reason
of any other cause it shall be impracticable to give such notice by mail, then
such notification as shall be made with the approval of the Trustee shall
constitute a sufficient notification for every purpose hereunder.
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SECTION 1.8. Conflict with Trust Indenture Act.
---------------------------------
If any provision hereof limits, qualifies or conflicts with another
provision hereof which is required or deemed to be included in this Indenture by
any of the provisions of the TIA, such required provision shall control. If any
provision of this Indenture modifies or excludes any provision of the TIA that
may be so modified or excluded, the latter provision shall be deemed to apply to
this Indenture as so modified or to be excluded, as the case may be.
SECTION 1.9. 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 1.10. Successors and Assigns.
----------------------
All covenants and agreements in this Indenture by the Trust shall bind its
successors and assigns, whether so expressed or not.
SECTION 1.11. Severability Clause.
-------------------
In case any provision in this Indenture or in the Securities of any series
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 1.12. Benefits of Indenture.
---------------------
Nothing in this Indenture or in the Securities of any series, express or
implied, shall give to any Person, other than the parties hereto and their
successors hereunder and the Holders, any benefit or any legal or equitable
right, remedy or claim under this Indenture.
SECTION 1.13. Governing Law.
-------------
This Indenture and the Securities shall be governed by and construed in
accordance with the laws of The Commonwealth of Massachusetts; provided,
however, that, solely as to the standards of performance by the Trustee of its
obligations hereunder to the extent the Federal laws of the United States are
not applicable, the laws in the State in which the principal corporate trust
office of the Trustee is located shall govern.
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SECTION 1.14. Legal Holidays.
--------------
In any case where any Interest Payment Date, Redemption Date or Stated
Maturity of the Securities of any series or the last date on which a Holder has
the right to convert or exchange the Securities of any series shall not be a
Business Day at any Place of Payment, then (notwithstanding any other provision
of this Indenture or of the Securities of such series, other than a provision of
the Securities of any series that specifically states that it shall apply in
lieu of this Section 1.14) payment of interest or principal (and premium, if
any) or conversion or exchange of such Security need not be made at such Place
of Payment on such date, but (except as otherwise provided in a Board
Resolution, Officers' Certificate or supplemental indenture with respect to
Securities of any series) 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 or Redemption Date, or at the Stated Maturity, or on such last day
for conversion or exchange, as the case may be; provided that no interest shall
accrue for the period from and after such Interest Payment Date, Redemption Date
or Stated Maturity, as the case may be.
SECTION 1.15. Shareholders, Employees, Officers and Trustees of Trust Exempt
from Individual Liability.
--------------------------------------------------------------
No recourse under or upon any obligation, covenant or agreement contained
in this Indenture, or in the Securities of any series, or because of any
Indebtedness evidenced thereby, shall be had against any past, present or future
shareholder, employee, officer or trustee, as such, of the Trust or of any
successor, either directly or through the Trust or any successor, under any rule
of law, statute or constitutional provision or by the enforcement of any
assessment or by any legal or equitable proceeding or otherwise, all such
liability being expressly waived and released by the acceptance of the
Securities by the Holders and as part of the consideration for the issuance of
the Securities.
ARTICLE 2 - SECURITY FORMS
SECTION 2.1. Forms Generally.
---------------
The Securities of each series shall either be (i) substantially in the
form of Exhibit A hereto or (ii) in such form (not inconsistent with this
Indenture) as shall be established from time to time by or pursuant to a Board
Resolution or in one or more indentures supplemental hereto, in each case with
such appropriate insertions, omissions, substitutions and other variations as
are required or permitted by this Indenture, and may have such letters, numbers
or other marks of identification and such legends or endorsements placed thereon
as may be required to comply with the rules of any securities exchange or as
may, consistently herewith, be determined by the Officers executing such
Securities, as evidenced by their execution of the Securities. If the form of
Securities of any series is established by action taken pursuant to a Board
Resolution, a copy of an appropriate record of such action shall be certified by
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<PAGE>
the Secretary or an Assistant Secretary of the Trust and delivered to the
Trustee at or prior to the delivery of the Trust Order contemplated by Section
3.3 for the authentication and delivery of such Securities.
The Trustee's certificates of authentication shall be substantially in the
form set forth below:
This is one of the Securities of the series designated therein referred to
in the within-mentioned Indenture.
[NAME OF TRUSTEE],
as Trustee
By
-------------------------
Authorized Signature
The definitive Securities shall be printed, lithographed or engraved on
steel engraved borders or mechanically reproduced on safety paper, or may be
produced in any other manner, all as determined by the Officers executing such
Securities, as evidenced by their execution of such Securities.
SECTION 2.2. Securities in Global Form.
-------------------------
If Securities of or within a series shall be issuable in the form of one
or more Global Securities, then notwithstanding clause (10) of Section 3.1 and
the provisions of Section 3.2, any such Global Security or Global Securities may
provide that it or they shall represent the aggregate amount of all Outstanding
Securities of such series (or such lesser amount as is permitted by the terms
thereof) from time to time endorsed thereon and may also provide that the
aggregate amount of Outstanding Securities represented thereby may from time to
time be increased or reduced from time to time to reflect exchanges. Any
endorsement of any Global Security to reflect the amount, or any increase or
decrease in the amount, or changes in the rights of Holders, of Outstanding
Securities represented thereby shall be made by the Trustee in such manner or by
such Person or Persons as shall be specified therein or in the Trust Order to be
delivered pursuant to Section 3.3 or 3.4 with respect thereto and the records of
the registrar for such Global Securities shall be conclusive evidence of the
aggregate principal amount outstanding of any Global Security. Subject to the
provisions of Section 3.3 and, if applicable, Section 3.4, the Trustee shall
deliver and redeliver any Global Security in permanent global form in the manner
and upon instructions given by the Person or Persons specified therein or in the
applicable Trust Order.
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<PAGE>
Unless otherwise specified as contemplated by Section 3.1, payment of
principal of and premium, if any, and interest on any Global Security in
permanent global form shall be made to the registered Holder thereof.
Any Global Security authenticated and delivered hereunder shall bear a
legend in substantially the following form:
"This Security is a Global Security within the meaning set forth in
the Indenture hereinafter referred to and is registered in the name
of a Depositary or a nominee of a Depositary. This Security is
exchangeable for Securities registered in the name of a person other
than the Depositary or its nominee only in the limited circumstances
described in the Indenture, and may not be transferred except as a
whole by the Depositary to a nominee of the Depositary to the
Depositary or another nominee of the Depositary or by the Depositary
or its nominee to a successor Depositary or its nominee."
ARTICLE 3 - 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 or pursuant to a Board Resolution, and set forth in an Officers'
Certificate, or established in one or more indentures supplemental hereto, prior
to the issuance of Securities of any series:
(1) the title of such Securities (which shall distinguish the
Securities of the series from all other series of Securities);
(2) the currency or currencies, including composite currencies, in
which payment of the principal of (and premium, if any) and
interest on the Securities of the series shall be payable (if
other than Dollars) and the manner of determining the
equivalent thereof in Dollars for purposes of the definition
of "Outstanding" pursuant to Section 1.1;
(3) any limit upon the aggregate principal amount of the
Securities of the series which may be authenticated and
delivered under this Indenture (except for Securities
authenticated and delivered upon registration of transfer of,
or in exchange for, or in lieu of, other Securities of such
series pursuant to Section 3.4, 3.5, 3.6, 9.3 or 11.7 and
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except from any Securities which, pursuant to Section 3.3, are
deemed never to have been authenticated and delivered
hereunder);
(4) if 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, the manner in which such amounts shall be determined;
(5) the date or dates, or the method for determining such date or
dates, on which the principal of the Securities of the series
will be payable;
(6) the rate or rates, or the method by which such rate or rates
shall be determined, at which the Securities of the series
will bear interest, if any, and the date or dates from which
such interest will accrue or the method by which such date or
dates will 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 Security on any Interest
Payment Date, or the method by which such date will be
determined, and the basis upon which interest will be
calculated if other than that of a 360-day year of twelve
30-day months;
(7) the place or places where the principal of (and premium, if
any) and interest, if any, on the Securities of the series
will be payable, where such Securities may be surrendered for
conversion or registration of transfer or exchange and where
notices or demands to or upon the Trust in respect of such
Securities and this Indenture may be served;
(8) 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 other terms and
conditions upon which the Securities of the series may,
pursuant to any optional or mandatory redemption provisions,
be redeemed, in whole or in part, at the option of the Trust,
if the Trust is to have the option;
(9) the obligation, if any, of the Trust 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
currencies in which, and other terms and conditions upon which
such Securities of the series will be redeemed, repaid or
purchased, in whole or in part, pursuant to such obligation;
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<PAGE>
(10) whether the Securities of the series will be in registered or
bearer form and, if in registered form, the denominations
thereof if other than $1,000 and any integral multiple thereof
and, if in bearer form, the denominations thereof and terms
and conditions relating thereto;
(11) whether the Securities of the series shall be issued in the
form of one or more Global Securities and in such case, (a) if
registered Securities of the series are to be issuable as a
Global Security, the Depositary for such Global Security or
Securities, which Depositary shall be a clearing agency
registered under the Exchange Act and (b) the circumstances
under which any such Global Security may be exchanged for
Securities registered in the name of, and any transfer of such
Global Security may be registered to, a Person other than such
Depositary or its nominee, if other than as set forth in
Section 3.5;
(12) whether the principal of (and premium, if any), or interest,
if any, on the Securities of the series are to be payable, at
the election of the Trust 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, an the terms and conditions upon which, such
election may be made, and the time and manner of, and identity
of the exchange rate between the currency or currencies,
currency unit or units or composite currency or currencies in
which such Securities are to be so payable;
(13) if the Securities of the series are to be issued upon the
exercise of warrants, the time, manner and place for such
Securities to be authenticated and delivered;
(14) any deletions from, modifications of, or additions to, the
Events of Default or covenants of the Trust with respect to
the Securities of such series, whether or not such Events of
Default or covenants are consistent with the Events of Default
or covenants set forth herein;
(15) if other than the Trustee, the identity of each Security
Registrar and/or Paying Agent;
(16) the applicability, if any, of the defeasance and covenant
defeasance provisions described herein or set forth in any
applicable supplement hereto, or any modification hereof or
thereof;
(17) the circumstances, if any, under which the Trust will pay any
additional amounts on the Securities of the series in respect
of any tax, assessment or governmental charge and, if so,
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whether the Trust will have the option to redeem such
Securities in lieu of making such payment;
(18) if the Securities of the series are to be issued at an
original issue discount, the amount of principal, if any,
payable upon acceleration of such Securities following an
Event of Default; and
(19) any other terms of the Securities of the series not
inconsistent with the provisions of this Indenture.
All Securities of any one series shall be substantially identical (other
than as to denomination) except as may otherwise be provided in or pursuant to
such Board Resolution and set forth in such Officers' Certificate setting forth
the terms of such series.
If any of the terms of a series of Securities are established by action
taken pursuant to a Board Resolution, a copy of an appropriate record of such
action shall be certified by the Secretary or an Assistant Secretary of the
Trust and delivered to the Trustee at or prior to the delivery to the Trustee of
the Officers' Certificate setting forth the terms of such series.
SECTION 3.2. Denominations.
-------------
The Securities of each series shall be issuable in registered form without
coupons in such denominations as shall be specified as contemplated by Section
3.1. In the absence of any such provisions with respect to the Securities of any
series, the Securities of each series shall be issuable in denominations of
$1,000 and any integral multiple thereof.
SECTION 3.3. Execution, Authentication, Delivery and Dating.
----------------------------------------------
The Securities, if issued, shall be signed by manual or facsimile
signature by the Chairman of the Board, the President, or any Vice President of
the Trust and countersigned by the Treasurer, any Assistant Treasurer, the
Secretary or any Assistant Secretary of the Trust. The Trust's seal shall be
impressed, affixed, imprinted or reproduced on the Securities and may be in
facsimile form.
If an Officer whose signature is on a Security no longer holds that office
at the time the Trustee authenticates the Security, the Security shall
nevertheless be valid.
A Security shall not be valid until the Trustee manually signs the
certificate of authentication thereon. Such signature shall be conclusive
evidence that such Security has been authenticated under this Indenture. The
Trustee shall authenticate Securities for original issue upon written order or
orders of the Trust signed by two Officers thereof.
At any time and from time to time after the execution and delivery of this
Indenture, the Trust may deliver Securities of any series executed by the Trust
to the Trustee for authentication, together with a Trust Order for the
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<PAGE>
authentication and delivery of such Securities, and the Trustee in accordance
with the Trust Order shall authenticate and deliver such Securities. If the form
or terms of the Securities of the series have been established in or pursuant to
one or more Board Resolutions as permitted by Section 2.1 and 3.1, 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 Section 6.2) shall be fully protected in
relying upon, (a) an Opinion of Counsel stating:
(1) that the form of such Securities has been established in
conformity with the provisions of this Indenture;
(2) that the terms of such Securities have been established in
conformity with the provisions of this Indenture; and
(3) that such Securities, when authenticated and delivered by the
Trustee and issued by the Trust in the manner and subject to any
conditions specified in such Opinion of Counsel, will constitute valid and
legally binding obligations of the Trust, enforceable in accordance with
their terms, subject to bankruptcy, insolvency, fraudulent transfer,
reorganization and other laws of general applicability relating to or
affecting the enforcement of creditors' rights and to general equity
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 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 all of the Securities of a series are not to be originally issued at
the same time, then the documents required to be delivered pursuant to the
fourth paragraph of this Section 3.3 must be delivered only once, prior to the
authentication and delivery of the first security of such series; provided,
however, that any subsequent request by the Trust to the Trustee to authenticate
Securities of such series upon original issuance shall be deemed to constitute a
representation and warranty by the Trust that, as of the date of such request,
the statements made in the Officers' Certificate delivered pursuant to the
fourth paragraph of this Section 3.3 shall be true and correct as if made on
such date.
If the Trust shall establish pursuant to Section 3.1 that the Securities
of a series are to be issued in the form of one or more Global Securities, then
the Trust shall execute and the Trustee shall, in accordance with this Section
3.3 and the Trust Order with respect to such series, authenticate and deliver
one or more Global Securities that shall be registered in the name of the
Depositary for such Global Security or Securities or the nominee of such
Depositary and shall be delivered by the Trustee to such Depositary or pursuant
to such Depositary's instruction.
Each Security shall be dated the date of its authentication.
112982.4
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<PAGE>
No Security shall be entitled to any benefit under this Indenture or be
valid or obligatory for any purpose unless there appears on such Security a
certificate of authentication substantially in the form provided for herein
executed by the Trustee by manual signature, and such certificate upon any
Security shall be conclusive evidence, and the only evidence, that such Security
has been duly authenticated and delivered hereunder and is entitled to the
benefits of this Indenture.
Notwithstanding the foregoing, if any Security (including a Global
Security) shall have been authenticated and delivered hereunder but never issued
and sold by the Trust, and the Trust shall deliver such Security to the Trustee
for cancellation as provided in Section 3.9 together with a written statement
(which need not comply with Section 1.3 and need not be accompanied by an
Opinion of Counsel) stating that such Security has never been issued and sold by
the Trust, 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 Trust
may execute, and upon Trust Order the Trustee shall authenticate and deliver,
temporary Securities which are printed, lithographed, typewritten, mimeographed
or otherwise produced, in any authorized denomination, substantially of the
tenor of the definitive Securities in lieu of which they are issued and with
such appropriate insertions, omissions, substitutions and other variations as
the officers executing such Securities may determine, as evidenced by their
execution of such Securities.
Except in the case of temporary Securities issued in global form, which
shall be exchanged in accordance with the provisions thereof, if temporary
Securities of any series are issued, the Trust will cause definitive Securities
of that series to be prepared without unreasonable delay. After the preparation
of definitive Securities of such series, the temporary Securities of such series
shall be exchangeable for definitive Securities of such series upon surrender of
the temporary Securities of such series at the office or agency of the Trust 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, the
Trust 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. 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.
---------------------------------------------------
With respect to Securities issued in definitive registered form, if any,
the Trust shall cause to be kept at the Corporate Trust Office of the Trustee a
register (the register maintained in such office and in any other office or
agency of the Trust in a Place of Payment being herein sometimes collectively
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referred to as the "Security Register") in which, subject to such reasonable
regulations as it may prescribe, the Trust shall provide for the registration of
Securities and of transfers of Securities. The Trustee is hereby appointed
"Security Registrar" for the purpose of registering Securities and transfers of
Securities as herein provided.
Upon surrender for registration of transfer of any Security of any series
at the office or agency in a Place of Payment for the series, the Trust shall
execute, and the Trustee shall authenticate and deliver, in the name of the
designated transferee or transferees, one or more new Securities of the same
series, of any authorized denomination and of a like aggregate principal amount.
Notwithstanding any other provision of this Section 3.5, unless and until
it is exchanged in whole or in part for Securities in definitive registered
form, a Global Security representing all or a portion of the Securities of a
series may not be transferred except as a whole by the Depositary for such
series to a nominee of such Depositary, by a nominee of such Depositary to such
Depositary or by such Depositary or any such nominee to a successor Depositary
for such series or a nominee of such successor Depositary.
At the option of the Holder, Securities of any series (except a Global
Security) may be exchanged for other Securities of the same series, of any
authorized denominations and of a like aggregate principal amount, upon
surrender of the Securities to be exchanged at such office or agency. Whenever
any Securities are so surrendered for exchange, the Trust shall execute, and the
Trustee shall authenticate and deliver, the Securities which the Holder making
the exchange is entitled to receive.
All Securities issued upon any registration or transfer or exchange of
Securities shall be the valid obligations of the Trust, evidencing the same debt
and entitled to the same benefits under this Indenture, as the Securities
surrendered upon such registration of transfer or exchange.
Every Security presented or surrendered for registration of transfer or
for exchange shall be duly endorsed or be accompanied by a written instrument of
transfer in form satisfactory to the Trust and the Security Registrar duly
executed by the Holder thereof or such Holder's attorney duly authorized in
writing.
No service charge shall be made for any registration of transfer or
exchange of Securities, but the Trust 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, 9.3 or 11.7 not involving any transfer.
Notwithstanding the foregoing and except as otherwise specified or
contemplated by Section 3.1, any Global Security shall be exchangeable pursuant
to this Section 3.5 or Sections 3.4 and 11.7 for Securities registered in the
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name of any person other than the Depositary for such Security or its nominee
only if (i) such Depositary notifies the Trust that it is unwilling or unable to
continue as Depositary for such Global Security or if at any time such
Depositary ceases to be a clearing agency registered under the Exchange Act;
(ii) the Trust executes and delivers to the Trustee a Trust Order that such
Global Security shall be so exchangeable and the transfer thereof so registrable
(which Trust Order will authorize and direct the Trustee to authenticate and
deliver upon such exchange Securities of such series in definitive registered
form, in authorized denominations, in the aggregate principal amount equal to
the principal amount or amounts of such Global Security or Securities) or (iii)
there shall have occurred and be continuing an Event of Default with respect to
the Securities of such series. Upon the occurrence in respect of any Global
Security of any series of any one or more of the conditions specified in clause
(i), (ii) or (iii) of the preceding sentence or such other conditions as may be
specified pursuant to Section 3.1, such Global Security may be exchanged for
Securities registered in the names of, and the transfer of such Global Security
may be registered to, such persons (including persons other than the Depositary
with respect to such series and its nominees) as such Depositary, pursuant to
instructions from its direct or indirect participants or otherwise, shall
direct. Such Securities shall be delivered at the Corporate Trust Office to the
persons in whose names such Securities are so registered. Notwithstanding any
other provision of this Indenture, any Security authenticated and delivered upon
registration of transfer of, or in exchange for, or in lieu of, any Global
Security shall also be a Global Security and shall bear the legend specified in
Section 2.2 except for any Security authenticated and delivered in exchange for,
or upon registration of transfer of, a Global Security pursuant to the preceding
sentence. Upon the exchange of a Global Security for Securities in definitive
registered form such Global Security shall be cancelled by the Trustee.
The Trust shall not be required (i) to issue, register the transfer of or
exchange Securities of any series during a period beginning at the opening of
business 15 days before the day of the mailing of a notice of redemption of
Securities of that series selected for redemption under Section 11.3 and ending
at the close of business on the day of such mailing, or (ii) to register the
transfer of or exchange any Security so selected for redemption in whole or in
part, except the unredeemed portion of any Security being redeemed in part.
SECTION 3.6. Mutilated, Destroyed, Lost and Stolen Securities.
------------------------------------------------
If any mutilated Security is surrendered to the Trustee, the Trust shall
execute and the Trustee shall authenticate and deliver in exchange therefore a
new Security of the same series and of like tenor and principal amount and
bearing a number not contemporaneously outstanding.
If there shall be delivered to the Trust and the Trustee (i) evidence to
their satisfaction of the destruction, loss or theft of any Security and (ii)
such security or indemnity as may be required by them to save each of them and
any agent of either of them harmless, then, in the absence of notice to the
Trust or the Trustee that such Security has been acquired by a bona fide
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purchaser, the Trust shall execute and upon its request the Trustee shall
authenticate and deliver, in lieu of any such destroyed, lost or stolen
Security, a new Security of the same series and of like tenor and principal
amount and bearing a number not contemporaneously outstanding.
In case any such mutilated, destroyed, lost or stolen Security has become
or is about to become due and payable, the Trust in its discretion may, instead
of issuing an new Security, pay such Security.
Upon the issuance of any new Securities under this Section 3.6, the Trust
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 issued pursuant to this Section in lieu
of any destroyed, lost or stolen Security shall constitute an original
additional contractual obligation of the Trust, whether or not the destroyed,
lost or stolen Security shall be at any time enforceable by anyone, and shall be
entitled to all the benefits of this Indenture equally and proportionately with
any and all other Securities of that series duly issued hereunder.
The provisions of this Section are exclusive and shall preclude (to the
extent lawful) all other rights and remedies with respect to the replacement or
payment of mutilated, destroyed, lost or stolen Securities.
SECTION 3.7. Payment of Interest; Interest Rights Preserved; Paying Agent
Definitions.
-----------------------------------------------------------------
Interest of any Security which is payable, and is punctually paid or duly
provided for, on any Interest Payment Date shall be paid to the Person in whose
name that Security (or one or more Predecessor Securities) is registered at the
close of business on the Regular Record Date for such interest.
Any interest on any Security of any series which is payable, but is not
punctually paid or duly provided for, on any Interest Payment Date (herein
referred to as the "Defaulted Interest") shall forthwith cease to be payable to
the Holder on the relevant Regular Record Date by virtue of having been such
Holder, and such Defaulted Interest may be paid by the Trust, at its election in
each case, as provided in clause (1) or (2) below:
(1) The Trust may elect to make payment of any Defaulted Interest to
the Persons in whose names the Securities of such series (or their
respective Predecessor Securities) are registered at the close of business
on a Special Record Date for the payment of such Defaulted Interest, which
shall be fixed in the following manner. The Trust shall notify the Trustee
in writing of the amount of Defaulted Interest proposed to be paid on each
Security of such series and the date of the proposed payment, and at the
same time the Trust shall deposit with the Trustee an amount of money
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equal to the aggregate amount proposed to be paid in respect of such
Defaulted Interest or shall make arrangements satisfactory to the Trustee
for such deposit prior to the date of the proposed payment, such money
when deposited to be held in trust for the benefit of the Persons entitled
to such Defaulted Interest as in this clause (1) provided. Thereupon the
Trust 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
Trust shall promptly notify the Trustee of such Special Record Date and,
in the name and at the expense of the Trust, the Trustee shall cause
notice of the proposed payment of such Defaulted Interest and the Special
Record Date therefor to be mailed, first-class postage prepaid, to each
Holder of Securities of such series at such Holder's address as it appears
in the Security Register, not less than 10 days prior to such Special
Record Date. Notice of the proposed payment of such Defaulted Interest and
the Special Record Date therefor having been so mailed, such Defaulted
Interest shall be paid to the Persons in whose names the Securities of
such series (or their respective Predecessor Securities) are registered at
the close of business on such Special Record Date and shall no longer be
payable pursuant to the following clause (2);
(2) The Trust may make payment of any Defaulted Interest on the
Securities of any series in any other lawful manner not inconsistent with
the requirements of any securities exchange on which such Securities may
be listed, and upon such notice as may be required by such exchange, if,
after notice given by the Trust to the Trustee of the proposed payment
pursuant to this clause (2), such manner of payment shall be practicable
by the Trustee.
Subject to the foregoing provisions of this Section 3.7, 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.
The Trust shall maintain an office or agency where Securities may be
presented for payment. The Trustee is hereby appointed "Paying Agent." The Trust
may appoint one or more additional Paying Agents. The term Paying Agent includes
any additional Paying Agent. The Trust or any of its Subsidiaries may act as
Paying Agent.
The Trust shall enter into an appropriate agency agreement with any Paying
Agent not a party to this Indenture that shall implement the provisions of this
Indenture that relate to such Paying Agent. The Trust shall give prompt written
notice to the Trustee of the name and address of any such Paying Agent and any
change in the address of such Paying Agent.
In the case of any Security which is converted after any Regular Record
Date and on or prior to the next succeeding Interest Payment Date (other than
any Security whose Maturity is prior to such Interest Payment Date), interest,
the Stated Maturity of which is on such Interest Payment Date, shall be payable
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on such Interest Payment Date notwithstanding such conversion, and such interest
(whether or not punctually paid or duly provided for) shall be paid to the
Person in whose name that Security (or one or more Predecessor Securities) is
registered at the close of business on such Regular Record Date. Except as
otherwise expressly provided in the immediately preceding sentence, in the case
of any Security which is converted, interest the Stated Maturity of which is
after the date of conversion of such Security shall not be payable.
SECTION 3.8. Persons Deemed Owners.
---------------------
Prior to due presentment of a Security for registration of transfer, the
Trust, the Trustee and any agent of the Trust or the Trustee may treat the
Person in whose name such Security is registered as the owner of such Security
for the purpose of receiving payment of principal of (and premium, if any) and,
subject to Section 3.7, interest on such Security and for all other purposes
whatsoever, whether or not such Security be overdue, and neither the Trust, the
Trustee nor any agent of the Trust or the Trustee shall be affected by notice to
the contrary. If such payments so made to any such Person, or upon such Person's
order, shall be valid, and, to the extent of the sum or sums so paid, effectual
to satisfy and discharge the liability for monies payable upon any such
Security.
No Holder of any beneficial interest in any Global Security held on its
behalf by a Depositary shall have any rights under this Indenture with respect
to such Global Security, and such Depositary shall be treated by the Trust, the
Trustee, and any agent of the Trust or the Trustee as the owner of such Global
Security for all purposes whatsoever. Neither the Trust, 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 in any Global Security or for maintaining, supervising or
reviewing any records relating to such beneficial ownership interests.
SECTION 3.9. Cancellation.
------------
All Securities surrendered for payment, redemption, registration of
transfer or exchange or conversion or for credit against any sinking fund
payment shall, if surrendered to any Person other than the Trustee, be delivered
to the Trustee and shall be promptly cancelled by it. The Trust may at any time
deliver to the Trustee for cancellation any Securities previously authenticated
hereunder which the Trust has not issued and sold and all Securities so
delivered shall be promptly cancelled by the Trustee. No Securities shall be
authenticated in lieu of or in exchange for any Securities cancelled as provided
in this Section, except as expressly permitted by this Indenture. All cancelled
Securities held by the Trustee shall be destroyed by the Trustee and a
certificate of destruction provided to the Trust, unless the Trustee is
otherwise directed by a Trust Order.
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SECTION 3.10. Computation of Interest.
-----------------------
Except as otherwise specified as contemplated by Section 3.1 for
Securities of any series, interest on the Securities of each series shall be
computed on the basis of a 360-day year of twelve 30-day months.
ARTICLE 4 - SATISFACTION AND DISCHARGE
SECTION 4.1. Satisfaction, Discharge and Defeasance of the Securities of
Indenture.
------------------------------------------------------------
This Indenture shall upon Trust Request cease to be of further effect
(except as to any surviving rights of conversion, exchange, registration of
transfer or exchange of Securities herein expressly provided for), and the
Trustee, at the expense of the Trust, shall execute instruments in form and
substance satisfactory to the Trustee and the Trust acknowledging satisfaction
and discharge of this Indenture, when:
(a) either:
(1) all Securities theretofore authenticated and delivered (other
than (i) Securities which have been destroyed, lost or stolen and which have
been replaced or paid as provided in Section 3.6 and (ii) Securities for whose
payment money has therefore been deposited in trust or segregated and held in
trust by the Trust and thereafter repaid to the Trust or discharged from such
trust, as provided in Section 10.3) have been delivered to the Trustee for
cancellation; or
(2) all Securities not theretofore delivered to the Trustee for
cancellation (i) have become due and payable, (ii) will become due and payable
at their Stated Maturity within one year, (iii) are to be called for redemption
within one year under arrangements satisfactory to the Trustee for the giving of
notice of redemption by the Trustee in the name, and at the expense, of the
Trust, or (iv) are deemed paid and discharged pursuant to this Section 4.1, and
the Trust, in the case of clauses (i), (ii), (iii) or (iv) above, has deposited
or caused to be deposited with the Trustee as trust funds in trust, money, U.S.
Government Obligations, or a combination thereof, sufficient, 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 the
entire indebtedness on all the Securities of such series of Securities for
principal (and premium, if any, or interest to the Maturity thereof of such
series of Securities as such principal, premium, if any) and interest becomes
due and payable in accordance with the terms of this Indenture and the
Securities;
(b) the Trust has paid or caused to be paid all other sums payable
hereunder by the Trust in connection with all of the Securities of any series,
including all fees and expenses of the Trustee; and
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(c) the Trust has delivered to the Trustee an Officers' Certificate
stating that all conditions precedent herein provided for relating to the
satisfaction and discharge of the entire indebtedness on the Securities and the
discharge of this Indenture and the termination of the Trust's obligations
hereunder have been complied with.
Notwithstanding the satisfaction and discharge of this Indenture, the
obligations of the Trust to the Trustee under Section 6.6, the obligations of
the Trust to any Authenticating Agent under Section 6.11 and, if money shall
have been deposited with the Trustee pursuant to subclause (ii) of clause (1) 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 Money.
(a) Subject to the provisions of Section 4.1 and the last paragraph of
Section 10.3, all money and U.S. Government Obligations deposited with the
Trustee for the Securities of any series pursuant to Section 4.1, and all money
received by the Trustee in respect of U.S. Government Obligations deposited with
the Trustee for the Securities of any series pursuant to Section 4.1, shall be
held in trust and reinvested by the Trustee in U.S. Government Obligations in
accordance with the Trust's written instructions and applied by the Trustee in
accordance with the provisions of the Securities of such series and this
Indenture, to the payment, either directly or through any Paying Agent
(including the Trust acting as its own Paying Agent) as the Trustee may
determine, to the Persons entitled thereto, of the principal of (and premium, if
any) and interest, if any, on the Securities of such series; but such money need
not be segregated from other funds except to the extent required by law.
(b) The Trustee shall deliver or pay to the Trust from time to time upon
the Trust's written request any U.S. Government Obligations, or money held by it
as provided in Section 4.1 which, in the written opinion of a nationally
recognized firm of independent public accountants expressed in a written
certification thereof delivered to the Trustee, are then in excess of the amount
thereof which then would have been required to be deposited for the purpose for
which such U.S. Government Obligations, or money were deposited or received.
SECTION 4.3. Paying Agent to Repay Monies Held.
Upon the satisfaction and discharge of this Indenture with respect to the
Securities of any series, all monies then held by any Paying Agent for the
benefit of Securities of such series under the provisions of this Indenture
shall, upon written demand of the Trust, be repaid to it or paid to the Trustee,
and thereupon such Paying Agent shall be released from all further liability
with respect to such monies.
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SECTION 4.4. Return of Unclaimed Monies.
--------------------------
Any monies deposited with or paid to the Trustee or any Paying Agent for
the Securities of any series, or then held by the Trust in trust, for the
payment of any principal of (and premium, if any) and interest, if any, on the
Securities of any series and not applied but remaining unclaimed by the Holders
of the Securities of such series for three years after the date upon which the
principal of (and premium, if any) and interest, if any, on the Securities of
such series, as the case may be, shall have become due and payable, shall,
unless otherwise required by mandatory provisions of applicable escheat or
abandoned or unclaimed property law, be repaid to the Trust by such Trustee or
any Paying Agent on written demand by the Trust or (if then held by the Trust)
shall be discharged from such trust; and the Holders of the Securities of such
series entitled to receive such payment shall thereafter look only to the Trust
for the payment thereof; provided, however, that, before being required to make
any such repayment, such Trustee may, or shall at the written request of the
Trust, at the expense of the Trust, cause to be published once in an authorized
newspaper in the same city in which the place of payment with respect to the
Securities of such series shall be located and in an authorized newspaper in the
City of New York, or mail to each such Holder, a notice (in such form as may be
deemed appropriate by such Trustee) that said monies remain unclaimed and that,
after a date named therein, any unclaimed balance of said monies then remaining
will be returned to the Trust.
SECTION 4.5. Reinstatement.
-------------
If the Trustee or Paying Agent is unable to apply any money or U.S.
Government Obligations with respect to the Securities of any series in
accordance with Section 4.1 by reason of any legal proceeding or by reason of
any order or judgment of any court or governmental authority enjoining,
restraining or otherwise prohibiting such application, the Trust's obligations
under this Indenture and the Securities of such series shall be revived and
reinstated as though no deposit had occurred pursuant to Section 4.1 until such
time as the Trustee or Paying Agent is permitted to apply all such money or U.S.
Government Obligations in accordance with Section 4.4; provided, however, that
if the Trust has made any payment of interest on or principal of any Securities
of any series because of the reinstatement of its obligations, the Trust shall
be subrogated to the rights of the Holders of such Securities to receive such
payment from the money or U.S. Government Obligations held by the Trustee or
Paying Agent.
ARTICLE 5 - DEFAULTS AND REMEDIES
SECTION 5.1. Events of Default.
-----------------
An "Event of Default", wherever used herein with respect to Securities of
any series, means any one of the following events (whatever the reason for such
Event of Default and whether it shall be voluntary or involuntary or be effected
by operation of law pursuant to any judgment, decree or order of any court or
any order, rule or regulation of any administrative or governmental body):
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(1) default in the payment of interest on any Security of that
series when the same becomes due and payable and the default continues for
a period of 30 days;
(2) that default in (a) the payment of the principal of (and
premium, if any, on) any Security of that series when the same becomes due
and payable at Maturity, or (b) the deposit of any sinking fund payment,
when and as due by the terms of a Security of that series;
(3) default in the performance, or breach of any covenant or
warranty of the Trust 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
Trust by the Trustee or to the Trust and 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;
(4) default under any bond, debenture, note or other evidence of
indebtedness for money borrowed by the Trust (including obligations under
leases required to be capitalized on the balance sheet of the lessee under
GAAP, but not including any indebtedness or obligations for which recourse
is limited to such property purchased or so encumbered, as the case may
be) or under any mortgage, indenture or other instrument under which there
may be issued or by which there may be secured or evidenced any
indebtedness of the Trust or any Subsidiary, whether any such indebtedness
now exists or shall hereafter be created, if (a) either (i) such default
results from the failure to pay any such indebtedness at maturity or (ii)
as a result of such default, the maturity of such indebtedness has been
accelerated prior to its expressed maturity, provided that any such
failure to pay shall not be cured and any such acceleration shall not be
rescinded or annulled or the accelerated amount paid within ten days after
notice to the Trust of such failure to pay or acceleration, or such
indebtedness having been discharged and (b) the principal amount of such
indebtedness, together with the principal amount of any other such
indebtedness in default for failure to pay principal or interest thereon,
or the maturity of which has been so accelerated, aggregates $10,000,000
or more;
(5) the Trust pursuant to or within the meaning of any Bankruptcy
Law:
(A) commences a voluntary case or proceeding;
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<PAGE>
(B) consents to the entry of an order or of relief against it
in an involuntary case or proceeding;
(C) consents to the appointment of a Custodian of it or for
all or substantially all of its property; or
(D) makes a general assignment for the benefit of its
creditors;
(6) a court of competent jurisdiction enters an order or decree
under any Bankruptcy Law that:
(A) is for relief against the Trust in an involuntary case or
proceeding;
(B) appoints a Custodian of the Trust or for all or
substantially all of its property; or
(C) orders the liquidation of the Trust;
and the order or decree remains in effect for 90 consecutive days (or any
dismissal, stay, recision or termination ceasing to remain in effect); or
(7) any other Event of Default provided with respect to
Securities of that series,
provided, however, that a default under this Section 5.1 is not an Event of
Default with respect to any series of Securities if a specified event is either
applicable to a particular series or it is specifically deleted or modified in
the supplemental indenture creating such series of Securities or in the form of
Security for such series.
Upon receipt by the Trustee of any Notice of Default pursuant to this
Section 5.1 with respect to Securities of a series all or part of which is
represented by a Global Security, a record date shall be established for
determining Holders of Outstanding Securities of such series entitled to join in
such Notice of Default, which record date shall be at the close of business on
the day the Trustee receives such Notice of Default. The Holders of such series
on such record date, or their duly designated proxies, and only such Persons,
shall be entitled to join in such Notice of Default, whether or not such Holders
remain Holders after such record date; provided that if Holders of less than the
requisite percentage in principal amount of the Outstanding Securities of such
series, or their proxies, shall have joined in such Notice of Default prior to
the day which is 90 days after such record date, such Notice of Default shall
automatically and without further action by any Holder be cancelled and of no
further effect. Nothing in this paragraph shall prevent a Holder, or a proxy of
a Holder, from giving, after expiration of such 90-day period, a new Notice of
Default identical to a Notice of Default which has been cancelled pursuant to
the proviso to the preceding sentence, in which event a new record date shall be
established pursuant to the provisions of this Section 5.1.
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SECTION 5.2. Acceleration of Maturity; Rescission and Annulment.
--------------------------------------------------
If an Event of Default (other than an Event of Default described in
Section 5.1(5) or 5.1(6)) with respect to 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 a majority in principal amount of the Outstanding
Securities of that series may declare the principal amount (or, if the
Securities of that series are Original Issue Discount Securities, such portion
of the principal amount as may be specified in the terms of that series) of all
of the Securities of that series to be due and payable immediately, by a notice
in writing to the Trust (and to the Trustee if given by Holders), and upon any
such declaration such principal amount (or specified amount) and all accrued
interest thereon, if any, shall become immediately due and payable. In case an
Event of Default described in Section 5.1(5) or 5.1(6) shall occur, such amount
shall be due and payable without any declaration of acceleration or any act on
the part of the Trustee or the Holders.
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 5 provided, the Holders of a majority in principal amount of the
Outstanding Securities of the series, by written notice to the Trust and the
Trustee, may rescind and annul such declaration of acceleration and its
consequences if:
(1) the Trust has paid or deposited with the Trustee a sum
sufficient to pay:
(i) All overdue interest on all Securities of that series;
(ii) the principal of (and premium, if any, on) any Securities
of that series which have become due otherwise than by such
declaration of acceleration and interest thereon at the rate or
rates prescribed therefor in such Securities;
(iii) to the extent that payment of such interest is lawful,
interest upon overdue interest at the rate or rates prescribed
therefor 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 agent and counsel;
and
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<PAGE>
(2) all Events of Default with respect to Securities of that series,
other than the non-payment of the principal of Securities of that series
which have become due solely by such declaration of acceleration, have
been cured or waived as provided in Section 5.13.
No such rescission shall affect any subsequent default or impair any right
consequent thereon.
Upon receipt by the Trustee of any written notice declaring such an
acceleration, or rescission and annulment thereof, with respect to Securities of
a series all or part of which is represented by a Global Security, a record date
shall be established for determining Holders of Outstanding Securities of such
series entitled to join in such notice, which record date shall be at the close
of business on the day the Trustee receives such notice. The Holders on such
record date or their duly designated proxies, and only such Persons, shall be
entitled to join in such notice, whether or not such Holders remain Holders
after such record date; provided, that unless such declaration of acceleration,
or rescission and annulment, as the case may be, shall have become effective by
virtue of the requisite percentage having joined in such notice prior to the day
which is 90 days after such record date, such notice of declaration of
acceleration, or rescission and annulment, as the case may be, shall
automatically and without further action by any Holder be cancelled and of no
further effect. Nothing in this paragraph shall prevent a Holder, or a proxy of
a Holder, from giving, after expiration of such 90-day period, a new written
notice of declaration of acceleration, or rescission and annulment thereof, as
the case may be, that is identical to a written notice which has been cancelled
pursuant to the proviso to the preceding sentence, in which event a new record
date shall be established pursuant to the provisions of this Section 5.2.
SECTION 5.3. Collection of Indebtedness and Suits for Enforcement by Trustee.
---------------------------------------------------------------
The Trust covenants that if:
(1) default is made in the payment of any interest on any Security
when such interest becomes due and payable and such default continues for
a period of 30 days; or
(2) default is made in the payment of the principal of (and
premium, if any, on) any Security at the Maturity thereof,
the Trust will, upon demand of the Trustee, pay to it, for the benefit of the
Holders of such Securities, the whole amount then due and payable on such
Securities for principal of (and premium, if any) and interest and, to the
extent that payment of such interest shall be legally enforceable, interest on
any overdue principal (and premium, if any) and on any overdue interest, at the
rate or rates prescribed therefor in such Securities, and, in addition thereto,
such further amount as shall be sufficient to cover the costs and expenses of
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collection, including the reasonable compensation, expenses, disbursements and
advances of the Trustee, its agents and counsel.
If the Trust 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 Trust or any other obligor upon such Securities and collect the
monies adjudged or decreed to be payable in the manner provided by law out of
the property of the Trust or any other obligor upon such Securities wherever
situated.
If an Event of Default with respect to Securities of any series occurs and
is continuing, the Trustee may in its discretion proceed to protect and enforce
its rights and the rights of the Holders of Securities of such series by such
appropriate judicial proceedings as the Trustee shall deem most effectual to
protect and enforce any such rights, whether for the specific enforcement of any
covenant or agreement in this Indenture or in aid of the exercise of any power
granted herein, or to enforce any other proper remedy.
SECTION 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, or in case a Custodian or similar official
shall have been appointed for or taken possession of, the Trust or any other
obligor upon the Securities or the property of the Trust 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 by declaration or otherwise and irrespective of whether the Trustee
shall have made any demand on the Trust for the payment of overdue principal or
interest) shall be entitled and empowered, by intervention in such proceeding or
otherwise:
(1) to file and prove a claim for the whole amount of principal (and
premium, if any) and interest owing and unpaid in respect of the
Securities of any series and to file such other papers or documents as may
be necessary or advisable in order to have the claims of the Trustee
(including any claim for the reasonable compensation, expenses,
disbursements and advances of the Trustee, its agents and counsel) and of
the Holders allowed in such judicial proceeding; and
(2) to collect and receive any monies or other property payable or
deliverable on any such claims and to distribute the same;
and any Custodian or other similar official in any such judicial proceeding is
hereby authorized by each Holder to make such payments to the Trustee and, in
the event that the Trustee shall consent to the making of such payments directly
to the Holders, to pay to the Trustee any amount due it for the reasonable
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compensation, expenses, disbursements and advances of the Trustee, its agents
and counsel, and any other amounts due the Trustee under Section 6.6.
Nothing herein contained shall be deemed to authorize the Trustee to
authorize or consent to or accept or adopt on behalf of any Holders any plan or
reorganization, arrangement, adjustment or composition affecting the Securities
of any Holder thereof or to authorize the Trustee to vote in respect of the
claim of any Holder in any such proceeding, except, as aforesaid, to vote for
the election of a trustee in bankruptcy or similar Person.
In any proceedings brought by the Trustee (and also any proceedings
involving the interpretation of any provision of this Indenture to which the
Trustee shall be a party) the Trustee shall be held to represent all the Holders
of the Securities, and it shall not be necessary to make any Holders of the
Securities of any series parties to any such proceedings.
SECTION 5.5. Trustee May Enforce Claims Without Possession of Securities.
-----------------------------------------------------------
All rights of action and claims under this Indenture or the Securities of
any series may be prosecuted and enforced by the Trustee without the possession
of any of the Securities or the production thereof in any proceeding relating
thereto, and any such proceeding instituted by the Trustee shall be brought in
its own name as trustee of an express trust, and any recovery of judgment shall,
after provision for the payment of the reasonable compensation, expenses,
disbursements and advances of the Trustee, its agents and counsel, be for the
ratable benefit of the Holders of the Securities in respect of which such
judgment has been recovered.
SECTION 5.6. Application of Money Collected.
Any money collected by the Trustee pursuant to this Article 5 shall be
applied in the following order, at the date or dates fixed by the Trustee and,
in case of the distribution of such money on account of principal (or premium,
if any) or interest, upon presentation of the Securities and the notation
thereon of the payment if only partially paid and upon surrender thereof if
fully paid:
FIRST: To the payment of all amounts due the Trustee under Section
6.6; and
SECOND: To the payment of the amounts then due and unpaid for
principal of (or premium, if any) and interest on the Securities in
respect of which or for the benefit of which such money has been
collected, ratably, without preference or priority of any kind, according
to the amounts due and payable on such Securities for principal (or
premium, if any) and interest, respectively.
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SECTION 5.7. Limitations on Suits.
--------------------
No Holder of any Security of any series shall have any right to institute
any proceeding, judicial or otherwise, with respect to this Indenture, or for
the appointment of a receiver or trustee, or for any other remedy hereunder,
unless:
(1) such Holder has previously given written notice to the Trustee
of a continuing Event of Default with respect to the Securities of that
series;
(2) the Holders of not less than a majority in principal amount of
the Outstanding Securities of that series shall have given written request
to the Trustee to institute proceedings in respect of such Event of
Default in its own name as Trustee hereunder;
(3) such Holder or Holders have offered to the Trustee reasonable
indemnity against the costs, expenses and liabilities to be incurred in
compliance with such request;
(4) the Trustee for 60 days after its receipt of such notice,
request and offer of indemnity has failed to institute any such
proceeding; and
(5) no direction inconsistent with such written request has been
given to the Trustee during such 60-day period by the Holders of a
majority in principal amount of the Outstanding Securities of that series;
it being understood and intended that no one or more of such Holders shall have
any right in any manner whatever by virtue of, or by availing of, any provision
of this Indenture to affect, disturb or prejudice the rights of any other of
such Holders, or to obtain or to seek to obtain priority or preference over any
other of such Holders or to enforce any right under this Indenture, except in
the manner herein provided and for the equal and ratable benefit of all of such
Holders.
SECTION 5.8. Unconditional Right of Holders to Receive Principal, Premium,
if any, and Interest.
-------------------------------------------------------------
Notwithstanding any other provision in this Indenture but subject to the
provisions of Article 15, the Holder of any Security shall have the right, which
is absolute and unconditional and shall not be impaired without the consent of
such Holder, to
(1) receive payment of the principal (or premium, if any) and
(subject to Section 3.7) interest on such Security on the
Stated Maturity or Maturities expressed in such Security (or,
in the case of redemption, on the Redemption Date);
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(2) convert such Security in accordance with Article 16, if such
Security is so convertible;
(3) exchange such Security in accordance with one or more
indentures supplemental hereto, if such Security is
exchangeable; and
(4) institute suit for the enforcement of any such payment, right
to convert or right to exchange, as the case may be.
SECTION 5.9. Restoration of Rights and Remedies.
----------------------------------
If the Trustee or any Holder has instituted any proceeding to enforce any
right or remedy under this Indenture and such proceeding has been discontinued
or abandoned for any reason, or has been determined adversely to the Trustee or
to such Holder, then and in every such case, subject to any determination in
such proceeding, the Trust, the Trustee and the Holders shall be restored
severally and respectively to their former positions hereunder and thereafter
all rights and remedies of the Trustee and the Holders shall continue as though
no such proceeding had been instituted.
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 in the last paragraph of Section
3.6, no right or remedy herein conferred upon or reserved to the Trustee or to
the Holders is intended to be exclusive of any other right or remedy, and every
right and remedy shall, to the extent permitted by law, be cumulative and in
addition to every other right and remedy given hereunder or now or hereafter
existing at law or in equity or otherwise. The assertion or employment of any
right or remedy hereunder, or otherwise, shall not prevent the concurrent
assertion 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 Securities to
exercise any right or remedy accruing upon any Event of Default shall impair any
such right or remedy or constitute a waiver of any such Event of Default or an
acquiescence therein. Every right and remedy given by this Article Five or by
law to the Trustee or to the Holders may be exercised from time to time, and as
often as may be deemed expedient, by the Trustee or by the Holders, as the case
may be.
SECTION 5.12. Control by Holders.
------------------
The Holders of a majority in principal amount of the Outstanding
Securities of any series shall have the right to direct the time, method and
place of conducting any proceeding for any remedy available to the Trustee, or
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exercising any trust or power conferred on the Trustee, with respect to the
Securities of such series, provided that:
(1) such direction shall not be in conflict with any rule of law
or with this Indenture; and
(2) the Trustee may take any other action deemed proper by the
Trustee which is not inconsistent with such direction.
Upon receipt by the Trustee of any written notice directing the time,
method or place of conducting any such proceeding or exercising any such trust
or power, with respect to Securities of a series all or part of which is
represented by a Global Security, a record date shall be established for
determining Holders of Outstanding Securities of such series entitled to join in
such notice, which record date shall be at the close of business on the day the
Trustee receives such notice. The Holders on such record date, or their duly
designated proxies, and only such Persons, shall be entitled to join in such
notice, whether or not such Holders remain Holders after such record date;
provided that if less than the Holders of a majority in principal amount of the
Outstanding Securities of such series shall have joined in such notice prior to
the day which is 90 days after such record date, such notice shall automatically
and without further action by any Holder be cancelled and of no further effect.
Nothing in this paragraph shall prevent a Holder, or a proxy of a Holder, from
giving, after expiration of such 90-day period, a new notice identical to a
notice which has been cancelled pursuant to the proviso to the preceding
sentence, in which event a new record date shall be established pursuant to the
provisions of this Section 5.12.
Nothing in this Indenture shall impair the right of the Trustee in its
discretion to take any action deemed proper by the Trustee and which is not
inconsistent with such direction by Holders.
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 waive any past default hereunder with respect to such
series and its consequences except a default:
(1) in the payment of the principal of (or premium, if any) or
interest, if any, on any Security of such series; or
(2) in respect of a covenant or provision hereof which under Article
9 cannot be modified or amended without the consent of the Holder of each
Outstanding Security of such series affected.
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The Trust may, but shall not be obligated to, fix a record date for the
purpose of determining the persons entitled to waive any past default hereunder.
If a record date is fixed, the Holders of securities of such series on such
record date, or their duly designated proxies, and only such persons, shall be
entitled to waive any default hereunder, whether or not such Holders remain
Holders after such record date; provided that unless such majority in principal
amount of the Outstanding Securities of any series shall have waived such
default prior to the date which is 90 days after such record date, any such
waiver previously given shall automatically and without further action by any
Holder of securities of such series be cancelled and of no further effect.
Upon any such waiver, such default shall cease to exist, and any Event of
Default arising therefrom shall be deemed to have been cured, for every purpose
of this Indenture; but no such waiver shall extend to any subsequent or other
default or impair any right consequent thereon.
SECTION 5.14. Undertaking for Costs.
---------------------
All parties to this Indenture agree, and each Holder of any Security by
such Holder's acceptance thereof shall be deemed to have agreed, that any court
may in its discretion require, in any suit for the enforcement of any right or
remedy under this Indenture, or in any suit against the Trustee for any action
taken, suffered or omitted by it as Trustee, the filing by any party litigant in
such suit of an undertaking to pay the costs of 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 5.14 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 of
any series or to any suit instituted by any Holder for the enforcement of the
payment of the principal of (or premium, if any) or interest on any Security on
or after the Stated Maturity or Maturities expressed in such Security (or, in
the case of redemption, on or after the Redemption Date).
SECTION 5.15. Waiver of Stay or Extension Laws.
--------------------------------
The Trust covenants (to the extent that it may lawfully do so) that it
will not at any time insist upon, or plead, or in any manner whatsoever claim or
take the benefit or advantage of, any stay or extension law wherever enacted,
now or at any time hereafter in force, which may affect the covenants or the
performance of this Indenture; and the Trust (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.
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ARTICLE 6 - THE TRUSTEE
SECTION 6.1. Certain Duties and Responsibilities of the Trustee.
--------------------------------------------------
(a) If an Event of Default has occurred and is continuing, the Trustee
shall exercise its rights and powers vested in it by this Indenture and use the
same degree of care and skill in their exercise as a prudent Person would
exercise or use under the circumstances in the conduct of such Person's own
affairs.
(b) Except during the continuance of an Event of Default:
(1) The Trustee need perform only those duties that are specifically
set forth in this Indenture and no others, and no implied covenants or
obligation shall be read into this Indenture against the Trustee.
(2) In the absence of bad faith on its part, the Trustee may
conclusively rely, as to the truth of the statements and the correctness
of the opinions expressed therein, upon certificates or opinions furnished
to the Trustee and conforming to the requirements of this Indenture. The
Trustee, however, shall examine the certificates and opinions to determine
whether or not they confirm to the requirements of this Indenture.
(c) The Trustee may not be relieved from liability for its own negligent
action, its own negligent failure to act, or its own willful misconduct, except
that:
(1) This paragraph does not limit the effect of Section 6.1(b).
(2) The Trustee shall not be liable for any error in judgment made
in good faith by a Trust Officer, unless it is proved that the Trustee was
negligent in ascertaining the pertinent facts.
(3) The Trustee shall not be liable with respect to any action it
takes or omits to take in good faith in accordance with a direction
received by it pursuant to Section 5.12.
(4) No provision of this Indenture shall require the Trustee to
expend or risk its own funds or otherwise incur any financial liability in
the performance of any of its duties hereunder or in the exercise of any
of its rights or powers, if it shall have reasonable grounds for believing
that repayment of such funds or adequate indemnity against such risk or
liability is not reasonably assured to it.
(d) Every provision of this Indenture that in any way relates to the
Trustee is subject to Sections 6.1(a), 6.1(b) and 6.1(c).
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(e) Subject to Section 6.1(c), the Trustee may refuse to perform any duty
or exercise any right or power unless, subject to the provisions of the TIA, it
receives indemnity satisfactory to it against any loss, liability, expense or
fee.
(f) The Trustee shall not be liable for interest on any money received by
it except as the Trustee may agree in writing with the Trust. Money held in
trust by the Trustee need not be segregated from other funds except to the
extent required by law.
SECTION 6.2. Certain Rights of Trustee.
-------------------------
Subject to the provisions of TIA Section 3.15(a) through 3.15(d):
(1) The Trustee may rely on and shall be protected in acting or refraining
from acting upon any document believed by it to be genuine and to have been
signed or presented by the proper Person. The Trustee need not investigate any
fact or matter stated in the document.
(2) Before the Trustee acts or, refrains from acting, it may require an
Officers' certificate or an Opinion of Counsel, or both, which shall conform to
Section 1.3. The Trustee shall, not be liable for any action it takes or omits
to take in good faith in reliance on such Officers' Certificate or Opinion of
Counsel.
(3) The Trustee may act through agents and shall not be responsible for
the misconduct or negligence of any agent appointed with due care.
(4) The Trustee shall not be liable for any action it takes or omits to
take in good faith which it believes to be authorized or within its rights or
powers.
(5) The Trustee may consult with counsel and the written advice of such
counsel or any Opinion of Counsel shall be full and complete authorization and
protection in respect of any action taken, suffered or omitted by the Trustee
hereunder in good faith and reliance thereon.
(6) The Trustee shall be under no obligation to exercise any of the rights
or powers vested in it by this Indenture at the request or direction of any of
the Holders of Securities of any series pursuant to this Indenture, unless such
Holders shall have offered to the Trustee reasonable security or indemnity
against the costs, expenses and liabilities which might be incurred by it in
compliance with such request or direction.
SECTION 6.3. Individual Rights of Trustee.
----------------------------
The Trustee in its individual or any other capacity may become the owner
or pledgee of securities of any series and may otherwise deal with the Trust or
its Affiliates with the same rights it would have if it were not Trustee. Any
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agent may do the same with like rights. The Trustee, however, is subject to
Sections 6.10 and 6.11.
SECTION 6.4. Trustee's Disclaimer.
--------------------
The Trustee makes no representation as to the validity or adequacy of this
Indenture or the Securities of any series, it shall not be accountable for the
Trust's use of the proceeds from the Securities of any series, and it shall not
be responsible for any statement of the Trust in the Indenture or any statement
in the Securities of any series other than its certificate of authentication or
in any document used in the sale of the Securities of any series other than any
statement in writing provided by the Trustee expressly for use in such document.
SECTION 6.5. Notice of Defaults.
------------------
Within 90 days after the occurrence and continuance of a default or an
Event of Default with respect to the Securities of any series, the Trustee shall
transmit in the manner and to the extent provided in TIA Section 3.13(c), notice
of such default or Event of Default, hereunder known to the Trustee, unless such
default or Event of Default in the payment of principal of (premium, if any) or
interest on the Securities 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 such Securities; provided further, however, that
in the case of any default or Event of Default of the character set forth in
Section 5.1(3), no such notice to Holders shall be given until at least 60 days
after the occurrence thereof.
SECTION 6.6. Compensation and Indemnity.
--------------------------
The Trust shall pay to the Trustee from time to time reasonable
compensation for its services (which compensation shall not be limited by any
provision of law in regard to the compensation of a trustee of an express
trust). The Trust shall reimburse the Trustee upon request for all reasonable
disbursements, expenses and advances incurred or made by it. Such expenses may
include the reasonable compensation, disbursements and expenses of the Trustee's
agents and counsel.
The Trust shall indemnify the Trustee for, and hold it harmless against,
any loss or liability incurred by it in connection with the acceptance or
administration of this trust, including the costs and expenses of defending
itself against any claim or liability in connection with the Securities or the
exercise or performance of any of its powers or duties hereunder. The Trustee
shall notify the Trust promptly of any claim asserted against the Trustee for
which it may seek indemnity and the Trust may elect by written notice to the
Trustee to assume the defense of any such claim at the Trust's expense with
counsel reasonably satisfactory to the Trustee.
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<PAGE>
The Trust need not reimburse the Trustee for any expense or indemnify it
against any loss or liability incurred by it through the Trustee's negligence,
bad faith or willful misconduct. The Trust shall not be liable for any
settlement of any claim or action effected without the Trust's consent.
SECTION 6.7. Replacement of Trustee.
----------------------
A resignation or removal of the Trustee and appointment of any successor
trustee shall become effective only upon the successor Trustee's acceptance of
appointment as provided in this Section 6.7.
Any Trustee may resign with respect to any series of Securities by so
notifying the Trust. The Holders of a majority in principal amount of the
Securities of any series then outstanding may remove any Trustee with respect to
such series of securities by so notifying such Trustee and may appoint a
successor Trustee with respect to such series of Securities with the Trust's
written consent. The Trust may remove any Trustee with respect to any series of
Securities (or, if clause (4) of this Section 6.7 applies, with respect to all
series) if:
(1) such Trustee fails to comply with Section 6.9;
(2) such Trustee is adjudged a bankrupt or an insolvent;
(3) a receiver or other public officer takes charge of such
Trustee or its property; or
(4) such Trustee otherwise becomes incapable of acting with respect
to any series of Securities.
If any Trustee resigns or is removed with respect to any series of
Securities or if a vacancy exists in the office of Trustee with respect to any
series of Securities for any reason, the Trust shall promptly appoint a
successor Trustee with respect to such series.
If a successor Trustee with respect to any series of Securities does not
take office within 45 days after the retiring Trustee with respect to such
series resigns or is removed, the retiring Trustee, the Trust or the Holders of
a majority in principal amount of the Securities of such series then outstanding
may petition any court of competent jurisdiction for the appointment of a
successor Trustee.
If any Trustee fails to comply with Section 6.9, any Holder may petition
any court of competent jurisdiction for the removal of such Trustee and the
appointment of a successor Trustee.
A successor Trustee shall deliver a written acceptance of its appointment
with respect to any series of Securities to the retiring Trustee and to the
Trust. Immediately after that, the retiring Trustee shall, upon payment of its
charges, transfer all property held by it as Trustee with respect to such series
to the successor Trustee, the resignation or removal of the retiring Trustee
shall become effective with respect to such series, and the successor Trustee
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shall have all the rights, powers and duties of the Trustee under this Indenture
with respect to such series. Notwithstanding the replacement of the Trustee with
respect to any series of Securities pursuant to this Section 6.7, the Trust's
obligations under Section 6.6 shall continue for the benefit of the retiring
Trustee with respect to expenses and liabilities incurred by it and compensation
earned by it prior to such replacement or otherwise with respect to the
Securities of such series or the Indenture. A successor Trustee with respect to
any series of Securities shall mail notice of its succession to each Holder of
Securities of such series.
SECTION 6.8. Successor Trustee by Merger, Etc.
--------------------------------
If any Trustee consolidates with, merges or converts into, or transfers
all or substantially all of its corporate trust assets to, another corporation,
the successor corporation without any further act shall be the successor
Trustee.
SECTION 6.9. Eligibility; Disqualification.
-----------------------------
This Indenture shall always have a Trustee who satisfies the requirements
of TIA ss.310(a)(1). Each Trustee shall have a combined capital and surplus of
at least $50,000,000 as set forth in its most recent published annual report of
condition. Each Trustee shall comply with TIA ss.310(b), including the optional
provision permitted by the second sentence of TIA ss.310(b)(9). Neither the
Trust nor any Person directly or indirectly controlling, controlled by, or under
common control with the Trust shall serve as Trustee.
SECTION 6.10. Preferential Collection of Claims Against Trust.
-----------------------------------------------
The Trustee is subject to TIA ss. 311(a), excluding any creditor
relationship listed in TIA ss. 311(b). A Trustee who has resigned or been
removed shall be subject to TIA ss. 311(a) to the extent indicated therein.
SECTION 6.11. Appointment of Authenticating Agent.
-----------------------------------
The Trustee may appoint an Authenticating Agent or Agents with respect to
one or more series of Securities which shall be authorized to act on behalf of
the Trustee to authenticate Securities of such series issued upon exchange,
registration of transfer or partial redemption thereof or pursuant to Section
3.6, 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. Whenever reference is made in this Indenture to the
authentication and delivery of Securities by the Trustee or the Trustee's
certificate of authentication, such reference shall be deemed to include
authentication and delivery on behalf of the Trustee by an Authenticating Agent
and a certificate of authentication executed on behalf of the Trustee by an
Authenticating Agent. Each Authenticating Agent shall be acceptable to the Trust
and shall at all times be a corporation organized and doing business under the
laws of the United States, any State thereof or the District of Columbia,
authorized under such laws to act as Authenticating Agent, having a combined
capital and surplus of not less than $50,000,000 and subject to supervision or
examination by Federal or State authority. If such Authenticating Agent
publishes reports of condition at least annually, pursuant to law or to the
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requirements of said 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. If 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 that such corporation shall be otherwise eligible
under this Section 6.11, without the execution or filing of any paper of any
further act on the part of the Trustee or the Authenticating Agent.
An Authenticating Agent may resign at any time by giving written notice
thereof to the Trustee and to the Trust. The Trustee may at any time terminate
the agency of its respective Authenticating Agent by giving written notice of
resignation or upon such a termination, or in case at any time such
Authenticating Agent shall cease to be eligible in accordance with the
provisions of the Section 6.11, the Trustee may appoint a successor
Authenticating Agent which shall be acceptable to the Trust and shall mail
written notice of such appointment by first-class mail, postage prepaid, to all
Holders of Securities of the series with respect to which such Authenticating
Agent will serve, as their names and addresses appear in the Security Register.
Any successor Authenticating Agent upon acceptance of its appointment hereunder
shall become vested with all the rights, powers and duties of its predecessor
hereunder, with like effect as if originally names as an Authenticating Agent.
No successor Authenticating Agent shall be appointed unless eligible under the
provisions of this Section 6.11.
The Trust agrees to pay each Authenticating Agent from time to time
reasonable compensation 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 each Trustee's certificate of authentication, an alternate
certificate of authentication in the following form:
This is one of the Securities of the
series designated therein referred to
in the within-mentioned Indenture.
[NAME OF TRUSTEE],
As Trustee
By:
---------------------------------
As Authenticating Agent
By:
---------------------------------
Authorized Agent
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ARTICLE 7 - HOLDERS' LISTS AND REPORTS BY TRUSTEE AND TRUST
SECTION 7.1. Trust to Furnish Trustee Names and Addresses of Holders.
-------------------------------------------------------
The Trust will furnish or cause to be furnished to the Trustee:
(1) semi-annually, not later than ___________ and ________ in each
year, a list, in such form as the Trustee may reasonably require, of the
names and addresses of the Holders as of the preceding _______ and
___________, as the case may be, and
(2) at such other times as the Trustee may request in writing,
within 10 days after the receipt by the Trust of any such request, a list
of similar form and content as of a date not more than 15 days prior to
the time such list is furnished;
provided, however, that so long as the Trustee is acting as Securities
Registrar, no such list need be furnished.
SECTION 7.2. Preservation of Information; Communications to Holders.
------------------------------------------------------
(a) The Trustee shall preserve, in as current form as is reasonably
practicable, the names and addresses of Holders contained in the most recent
list furnished to the Trustee as provided in Section 7.1 and the names and
addresses of Holders received by the Trustee in its capacity as Security
Registrar, if so acting. The Trustee may destroy any list furnished to it as
provided in Section 7.1 upon receipt of a new list so furnished.
(b) If three or more Holders (herein referred to as "applicants") apply in
writing to the Trustee, and furnish to the Trustee reasonable proof that each
such applicant has owned a Security for a period of at least six months
preceding the date of such application, and such application states that the
applicants desire to communicate with other Holders with respect to their rights
under this Indenture or under the Securities and is accompanied by a copy of the
form of proxy or other communication which such applicants propose to transmit,
then the Trustee shall, within five business days after the receipt of such
application, at its election, either:
(1) afford such applicants access to the information preserved at
the time by the Trustee in accordance with Section 7.2(a); or
(2) inform such applicants as to the approximate number of Holders
whose names and addresses appear in the information preserved at the time
by the Trustee in accordance with Section 7.2(a), and as to the
approximate cost of mailing to such Holders the form of proxy or other
communication, if any, specified in such application.
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<PAGE>
If the Trustee shall elect not to afford such applicants access to such
information, the Trustee shall, upon the written request of such applicant, mail
to each Holder whose name and address appear in the information preserved at the
time by the Trustee in accordance with Section 7.2(a) a copy of the form of
proxy or other communication which is specified in such request, with reasonable
promptness after a tender to the Trustee of the material to be mailed and of
payment, or provision for the payment, of the reasonable expenses of mailing,
unless within five days after such tender the Trustee shall mail to such
applicants and file with the SEC, together with a copy of the material to be
mailed, a written statement to the effect that, in the opinion of the Trustee,
such mailing would be contrary to the best interests of the Holders or would be
in violation of applicable law. Such written statement shall specify the basis
of such opinion. If the SEC, after opportunity for a hearing upon the objections
specified in the written statement so filed, shall enter an order refusing to
sustain any of such objections or if, after the entry of an order sustaining one
or more of such objections, the SEC shall find, after notice and opportunity for
hearing, that all the objections so sustained have been met, and shall enter an
order so declaring, the Trustee shall mail copies of such material to all such
Holders with reasonable promptness after the entry of such order and the renewal
of such tender; otherwise the Trustee shall be relieved of any obligation or
duty to such applicants respecting their application.
(c) Every Holder of Securities, by receiving and holding the same, agrees
with the Trust and the Trustee that neither the Trust nor the Trustee nor any
agent of either of them shall be held accountable by reason of the disclosure of
any such information as to the names and addresses of the Holders in accordance
with Section 7.2(b), regardless of the source from which such information was
derived, and that the Trustee shall not be held accountable by reason of mailing
any material pursuant to a request made under Section 7.2(b).
SECTION 7.3 Reports by Trustee to Holders.
-----------------------------
Within 60 days after each ________ beginning with _______, the Trustee, if
required by the provisions of TIA ss.313(a), shall mail to each Holder a brief
report dated as of such _______, that complies with TIA ss.313(a). The Trustee
also shall comply with TIA ss.313(b) and ss.313(c).
A copy of each report at the time of its mailing to Holders shall be
mailed to the Trust and filed with the SEC and each stock exchange on which the
Securities of any series are listed. The Trust agrees to notify the Trustee in
writing whenever the Securities of any series become listed or delisted on or
from any stock exchange.
SECTION 7.4 Reports by Trust.
----------------
The Trust will:
(1) file with the Trustee, within 15 days after the Trust is
required to file the same with the SEC, copies of the annual reports and
of the information, documents and other reports (or copies of such
portions of any of the foregoing as the SEC may from time to time by rules
and regulations prescribe) which the Trust may be required to file with
the SEC pursuant to Section 13 or Section 15(d) of the Exchange Act, or,
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if the Trust is not required to file information, documents or reports
pursuant to either of such Sections, then it shall file with the Trustee
and the SEC, in accordance with rules and regulations prescribed from time
to time by the SEC, such of the supplementary and periodic information,
documents and reports which may be required pursuant to Section 13 of the
Exchange Act, in respect of a security listed and registered on a national
securities exchange as may be prescribed from time to time in such rules
and regulations;
(2) file with the Trustee and the SEC, in accordance with the rules
and regulations prescribed from time to time by the SEC, such additional
information, documents and reports with respect to compliance by the Trust
with the conditions and covenants of this Indenture as may be required
from time to time by such rules and regulations;
(3) transmit by mail to all Holders, as their names and addresses
appear in the Security Register, within 30 days after the filing thereof
with the Trustee, such summaries of any information, documents and reports
required to be filed by the Trust pursuant to paragraphs (1) and (2) of
this Section 7.4 as may be required by rules and regulations prescribed
from time to time by the SEC; and
(4) furnish to the Trustee the certificate required by Section 10.8.
For purposes of such certificate, compliance by the Trust with all
conditions and covenants of this Indenture shall be determined without
regard to any period of grace or requirement of notice provided under this
Indenture.
ARTICLE 8 - SUCCESSOR CORPORATION OR TRUST
SECTION 8.1 When Trust May Merge, Etc.
-------------------------
The Trust shall not consolidate with or merge into, or transfer all or
substantially all of its assets to, another Person in any transaction in which
the Trust is not the continuing or surviving entity unless (i) the resulting,
surviving or transferee Person is a corporation or trust which assumes by
supplemental indenture all the obligations of the Trust under the Securities of
each series and this Indenture; (ii) such corporation or trust is organized and
existing under the laws of the United States, a State thereof, or the District
of Columbia although it in turn may be owned by a foreign entity; (iii)
immediately after giving effect to such transaction no material default or Event
of Default shall have happened and be continuing, and the Officers' Certificate
referred to in the following clause reflects that such Officers are not aware of
any such material default or Event of Default that shall have occurred and be
continuing, and (iv) the Trust shall have delivered to the Trustee an Officers'
Certificate and an Opinion of Counsel, each stating that such consolidation,
merger or transfer and such supplemental indenture comply with this Indenture,
and thereafter all obligations of the Trust shall terminate.
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SECTION 8.2 Successor Corporation or Trust Substituted.
------------------------------------------
Upon any consolidation or merger, or any transfer of all or substantially
all of the assets of the Trust in accordance with Section 8.1, the successor
corporation or trust formed by such consolidation or into which the Trust is
merged or to which such transfer is made shall succeed to, and be substituted
for, and may exercise every right and power of, the Trust under this Indenture
with the same effect as if such successor corporation or trust has been named as
the Trust herein.
ARTICLE 9 - SUPPLEMENTAL INDENTURES
SECTION 9.1 Supplemental Indentures Without Consent of Holders.
--------------------------------------------------
The Trust, when authorized by Board Resolution, and the Trustee at any
time and from time to time, may amend this Indenture or enter into one or more
indentures supplemental hereto, to be in a form satisfactory to the Trustee
without notice to or consent of any Holder for any of the following purposes:
(1) to comply with Section 8.1; or
(2) to provide for uncertificated Securities of any series in
addition to or in place of certificated Securities; or
(3) to add to the covenants of the Trust, 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 Trust; or
(4) to add any Events of Default (and if such Events of Default are
to be applicable to less than all series of Securities, stating that such Events
of Default are expressly being included solely to be applicable to such series);
or
(5) to change or eliminate any of the provisions of this Indenture;
provided that any such change or elimination shall become effective only when
there is no Security outstanding of any series created prior to the execution of
such supplemental indenture which is entitled to the benefit of such provision;
or
(6) to establish the form or terms of Securities of any series as
permitted by Sections 3.1 and 3.2; or
(7) 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 any provision of this
Indenture, provided that such other provisions shall not adversely affect the
interests of the Holders of Securities of any series in any material respect.
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<PAGE>
SECTION 9.2 Supplemental Indentures with Consent of Holders.
-----------------------------------------------
With the written consent of the Holders of not less than a majority in
aggregate principal amount of the Securities of each series at the time
outstanding affected by such supplemental indenture, the Trust, when authorized
by Board Resolution, and the Trustee may amend this Indenture or from time to
time and at any time enter into an indenture or indenture supplemental hereto
(which shall conform to the provisions of the TIA as in force at the date of the
execution thereof) for the purpose of adding any provisions to or changing in
any manner or eliminating any of the provisions of this Indenture or of any
supplemental indenture, except as otherwise permitted by Section 9.1, or of
modifying in any manner the rights of the Holders of the Securities of each such
series. Subject to Section 9.4, without the consent of each Holder of Securities
of any series affected, however, an amendment, supplement or waiver, including a
waiver pursuant to Section 5.13, may not:
(1) 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 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
at the option of the Holder, on or after the Redemption Date), or
(2) reduce the percentage in principal amount of the Outstanding
Securities of any series, the consent of whose Holders is required for any such
supplemental indenture, or the consent of whose Holders is required for any
waiver with respect to such series (or compliance with certain provisions of
this Indenture or certain defaults hereunder and their consequences) provided
for in this Indenture, or
(3) modify any of the provisions of this Section 9.2, Section 5.8,
or Section 5.13, 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.
Upon the request of the Trust, accompanied by a copy of a Board Resolution
certified by the Secretary or an Assistant Secretary of the Trust authorizing
the execution of any such supplemental indenture, and upon the filing with the
Trustee of evidence of the consent of Holders as aforesaid, the Trustee shall
join with the Trust in the execution of such supplemental indenture unless such
supplemental indenture affects the Trustee's own rights, duties or immunities
under this Indenture or otherwise, in which case the Trustee may in its
discretion, but shall not be obligated to, enter into such supplemental
indenture.
It shall not be necessary for the consent of the Holders under this
Section 9.2 to approve the particular form of any proposed amendment, supplement
or waiver, but it shall be sufficient if such consent shall approve the
substance thereof.
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<PAGE>
Promptly after the execution by the Trust and the Trustee of any
supplemental indenture pursuant to the provisions of this Section, the Trust
shall mail a notice, setting forth in general terms the substance of such
supplemental indenture, to all Holders of Securities of each series so affected
as the names and addresses of such Holders shall appear on the registry books.
Any failure of the Trust so to mail such notice, or any defect therein, shall
not, however, in any way impair or affect the validity of any such supplemental
indenture.
SECTION 9.3 Compliance with Trust Indenture Act.
-----------------------------------
Every amendment or supplement to this Indenture or the Securities of any
series shall comply with the TIA as then in effect.
SECTION 9.4 Revocation and Effect of Consents.
---------------------------------
Subject to this Indenture, each amendment, supplement or waiver evidencing
other action shall become effective in accordance with its terms. Until an
amendment, supplement or waiver becomes effective, a consent to it by a Holder
of a Security of any series is a continuing consent by the Holder even if
notation of the consent is not made on any Security. Any such Holder or
subsequent Holder, however, may revoke the consent as to such Holder's Security
or portion of a Security, if the Trustee receives the notice of revocation
before the date the amendment, waiver or other action becomes effective.
The Trust may, but shall not be obligated to, fix a record date for the
purpose of determining the Holders entitled to consent to any amendment,
supplement or waiver. If a record date is fixed, then notwithstanding the
provisions of the immediately preceding paragraph, those Persons who were
Holders at such record date (or their duly designated proxies) and only those
Persons, shall be entitled to consent to such amendment, supplement or waiver or
to revoke any consent previously given, whether or not such Persons continue to
be Holders after such record date. No consent shall be valid or effective for
more than 90 days after such record date unless consent from Holders of the
principal amount of Securities of any series then outstanding required hereunder
for such amendment, supplement or waiver to be effective shall have also been
given and not revoked within such 90-day period.
After an amendment supplement or waiver becomes effective, it shall bind
every Holder, unless it makes a change described in any of the clauses (1)
through (3) of Section 9.2. In that case the amendment, supplement or waiver
shall only bind the Holders of a Security or portion of a Security of the same
series.
SECTION 9.5 Notation On or Exchange of Securities.
-------------------------------------
If an amendment, supplement or waiver changes the terms of a Security of
any series, the Trustee may request the Holder of the Security of such series to
deliver it to the Trustee. The Trustee may place an appropriate notation on the
Security about the changed terms and return it to the Holder. Alternatively, if
the Trust or the Trustee so determine, the Trust in exchange for the Security of
such series shall issue and the Trustee shall authenticate a new Security of
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such series that reflects the changed terms the cost and expense of which will
be borne by the Trust.
SECTION 9.6 Effect of Supplemental Indentures.
---------------------------------
Upon the execution of any supplemental indenture under this Article 9,
this Indenture shall be modified in accordance therewith, and such supplemental
indenture shall form a part of this Indenture for all purposes; and every Holder
of Securities of any applicable series theretofore or thereafter authenticated
and delivered hereunder shall be bound thereby.
SECTION 9.7 Reference in Securities to Supplemental Indentures.
--------------------------------------------------
Securities of any series authenticated and delivered after the execution
of any supplemental indenture pursuant to this Article 9 may, and shall if
required by the Trustee, bear a notation in form approved by the Trustee as to
any matter provided for in such supplemental indenture. If the Trust shall so
determine, new Securities of any series so modified as to conform, in the
opinion of the Trustee and the Board of Trustees, to any such supplemental
indenture may be prepared and executed by the Trust and authenticated and
delivered by the Trustee in exchange for Securities outstanding of such series.
ARTICLE 10 - COVENANTS
SECTION 10.1 Payment of Principal, Premium and Interest.
------------------------------------------
The Trust covenants and agrees for the benefit of each series of
Securities that it will duly and punctually pay the principal of (and premium,
if any) and interest on the Securities of that series in accordance with the
terms of the Securities and this Indenture.
SECTION 10.2 Maintenance of Office or Agency.
-------------------------------
The Trust will maintain in each Place of Payment for any series of
Securities an office or agency where Securities of that series may be presented
or surrendered for payment, where Securities of that series may be surrendered
for registration of transfer or exchange, where Securities may be surrendered
for conversion and where notices and demands to or for registration of transfer
or exchange and where notices and demands to or upon the Trust in respect of the
Securities of that series and this Indenture may be served. The Trust will give
prompt written notice to the Trustee of the location, and any change in the
location, of such office or agency. If at any time the Trust shall fail to
maintain any such required office or agency or shall fail to furnish the Trustee
with the address thereof, such presentations, surrenders, notices and demands
may be made or served at the Corporate Trust Office of the Trustee, and the
Trust hereby appoints the Trustee as its agent to receive all such
presentations, surrenders, notices and demands.
The Trust may also from time to time designate one or more other offices
or agencies where the Securities of one or more series may be presented or
surrendered for any or all such purposes and may from time to time rescind such
designations; provided, however, that no such designation or rescission shall in
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any manner relieve the Trust of its obligation to maintain an office or agency
in each Place of Payment for Securities of any series for such purposes. The
Trust will give prompt written notice to the Trustee of any such designation or
rescission and of any change in the location of any such other office or agency.
SECTION 10.3 Money for Securities Payments to Be Held in Trust.
-------------------------------------------------
If the Trust shall at any time act as its own Paying Agent with respect to
any series of Securities, it will, on or before each due date of the principal
of (and premium, if any) or interest on any of the Securities of that series,
segregate and hold in trust for the benefit of the Persons entitled thereto a
sum sufficient to pay the principal (and premium, if any) or interest so
becoming due until such sums shall be paid to such Persons or otherwise disposed
of as herein provided and will promptly notify the Trustee of its action or
failure so to act.
Whenever the Trust shall have one or more Paying Agents for any series of
Securities, it will, on or before each due date of the principal of (and
premium, if any) or interest on any Securities of that series, deposit with a
Paying Agent a sum sufficient to pay the principal (and premium, if any) or
interest so becoming due, such sum to be held in trust for the benefit of the
Persons entitled to such principal, premium or interest, and (unless such Paying
Agent is the Trustee) the Trust will promptly notify the Trustee of its action
or failure so to act.
The Trust will cause each Paying Agent for any series of Securities other
than the Trustee to execute and deliver to the Trustee an instrument in which
such Paying Agent shall agree with the Trustee, subject to the provisions of
this Section 10.3, that such Paying Agent will:
(1) hold all sums held by it for the payment of the principal of
(and premium, if any) or interest on Securities of that series in trust
for the benefit of the Persons entitled thereto until such sums shall be
paid to such Persons or otherwise disposed of as herein provided;
(2) give the Trustee notice of any default by the Trust (or any
other obligor upon the Securities of that series) in the making of any
payment of principal (and premium, if any) or interest on the Securities
of that series; and
(3) at any time during the continuance of any such default, upon the
written request of the Trustee, forthwith pay to the Trustee all sums so
held in trust by such Paying Agent.
The Trust may at any time, for the purpose of obtaining the satisfaction
and discharge of this Indenture or for any other purpose, pay, or by Trust Order
direct any Paying Agent to pay, to the Trustee all sums held in trust by the
Trust or such Paying Agent, such sums to be held by the Trustee upon the same
terms as those upon which such sums were held by the Trust or such Paying Agent;
and, upon such payment by any Paying Agent to the Trustee, such Paying Agent
shall be released from all further liability with respect to such money.
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<PAGE>
Any money deposited with the Trustee or any Paying Agent, or then held by
the Trust in trust for the payment of the principal of (and premium, if any) or
interest on any Security of any series and remaining unclaimed for two years
after such principal (and premium, if any) or interest has become due and
payable shall be paid to the Trust on Trust Request, or (if then held by the
Trust) shall be discharged from such trust; and the Holder of such Security
shall thereafter, as an unsecured general creditor, look only to the Trust for
payment thereof, and all liability of the Trustee or such Paying Agent with
respect to such trust money, and all liability of the Trust 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
Trust cause to be published once, in a newspaper published in the English
language, customarily published on each Business Day and of general circulation
in The City of New York, 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 Trust.
SECTION 10.4 Trust Existence.
---------------
Subject to Article 8, the Trust will do or cause to be done all things
necessary to preserve and keep in full force and effect its existence, all
material rights (as provided in the Declaration of Trust and under applicable
law) and material franchises; provided, however, that the Trust shall not be
required to preserve any such right or franchise if the Trust shall determine
that the preservation thereof is no longer desirable in the conduct of the
business of the Trust.
SECTION 10.5 Maintenance of Properties.
-------------------------
The Trust will cause all of its properties used or useful in the conduct
of its business or the business of any Subsidiary to be maintained and kept in
good condition, repair and working order and supplied with all necessary
equipment and will cause to be made all necessary repairs, renewals,
replacements, betterments and improvements thereof, all as in the judgment of
the Trust may be reasonably necessary so that the business carried on in
connection therewith may be properly and advantageously conducted at all times.
SECTION 10.6 Insurance.
---------
The Trust will, and will cause each Subsidiary to, keep all of its
insurable properties insured against loss or damage at least equal to their then
full insurable value with insurers of recognized responsibility.
SECTION 10.7 SEC Reports.
-----------
The Trust shall file with the Trustee, promptly after it files them with
the SEC, copies of the annual reports and of the information, documents and
other reports (or copies of such portions of any of the foregoing as the SEC may
by rules and regulations prescribe) which the Trust is required to file with the
SEC pursuant to Section 13 or 15(d) of the Exchange Act. The Trust shall also
comply with the other provisions of TIA ss.314(a).
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SECTION 10.8 Compliance Certificates.
-----------------------
The Trust will deliver to the Trustee, within 120 days after the end of
each fiscal year of the Trust (which as of the date hereof is November 30), a
written statement signed by an Officer, stating, as to each signer thereof,
that:
(1) a review of the activities of the Trust during such year and of
performance under this Indenture has been made under such Officer's supervision;
and
(2) to each Officer's knowledge, based on such review, the Trust has
kept, observed, performed and fulfilled in all material respects each and every
condition and covenant contained in this Indenture throughout such year, or, if
there has been a default in the fulfillment of any such condition or covenant,
specifying each such default known to such Officer and the nature and status
thereof.
The Trust will give the Trustee written notice of a change in the fiscal
year of the Trust, within a reasonable time after such change is effected.
SECTION 10.9 Limitation on Dividends and Other Distributions.
-----------------------------------------------
The Trust will not declare or pay any dividends or make any distribution
to holders of its Capital Stock (other than dividends or distributions payable
in Capital Stock of the Trust), or purchase, redeem or otherwise acquire or
retire for value any of its Capital Stock or permit any Subsidiary to purchase,
redeem or otherwise acquire or retire for value any of the Trust's Capital Stock
if at the time of any of the aforementioned actions an Event of Default has
occurred and is continuing or would exist immediately after giving effect to
such action.
Notwithstanding the foregoing, the provisions of this Section 10.9 will
not prevent (i) the payment of any dividend within 60 days after the date of
declaration when the payment would have complied with the foregoing provisions
on the date of declaration; (ii) the retirement of any share of Capital Stock by
exchange for, or out of the proceeds of the substantially concurrent sale (other
than to a Subsidiary) of, other shares of its Capital Stock; or (iii) the
payment of any dividend or distribution or the purchase or redemption of any
share of Capital Stock to the extent deemed prudent by the Trust to enable it to
maintain its status as a real estate investment trust under the Code.
SECTION 10.10 Payment of Taxes and Other Claims.
---------------------------------
The Trust will pay or discharge or cause to be paid or discharged, within
30 days after the Trust shall have received notice that the same has become
delinquent, (i) all material taxes, assessments and governmental charges levied
or imposed upon the Trust or any Subsidiary or upon the income, profits or
property of the Trust or any Subsidiary, and (ii) all material lawful claims for
labor, materials and supplies which, if unpaid, might by law become a lien upon
the property of the Trust or any Subsidiary; provided, however, that the Trust
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.
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SECTION 10.11 Defeasance of Certain Obligations.
---------------------------------
Subject to Section 4.1, the Trust may omit to comply with any term,
provision or condition set forth in Sections 10.5, 10.6, 10.8 or 10.10 and
Section 5.1(4) shall not be deemed to be an Event of Default with respect to any
series of Securities, provided that the following conditions shall have been
satisfied:
(1) The Trust has deposited or caused to be deposited with the
Trustee (or another Trustee satisfying the requirements of Section 6.9),
irrevocably (irrespective of whether the conditions in subparagraphs (2),
(3), (4) and (5) below have been satisfied), as trust funds in trust,
specifically pledged as security for, and dedicated solely to, the benefit
of the Holders of such series of Securities, with reference to this
Section 10.11, (i) money in an amount, (ii) U.S. Government Obligations
which through the payment of interest and principal in respect thereof in
accordance with their terms, without regard to any reinvestment thereof,
will provide not later than the close of business on the day prior to the
date of any payment referred to in this subparagraph (1) money in an
amount, or (iii) a combination thereof, sufficient, 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 the principal of (and premium, if any) and each installment of
interest of such Outstanding Securities on the Stated Maturity of such
principal or installment of interest on the day on which such payments are
due and payable in accordance with the terms of this Indenture and of such
Securities;
(2) such deposit will not result in a breach or violation of, or
constitute a default under, this Indenture or any other agreement or
instrument to which the Trust is a party or by which it is bound;
(3) no Event of Default or event which, after notice or lapse of
time or both, would become an Event of Default shall have occurred and be
continuing on the date of such deposit, and no Event of Default under
Section 5.1(5) or 5.1(6) or event which, after notice or lapse of time or
both, would become an Event of Default under Section 5.1(5) or 5.1(6)
shall have occurred and be continuing on the 91st day after such date;
(4) the Trust has delivered to the Trustee an Officers' Certificate
and an Opinion of Counsel to the effect that Holders of such Securities
will not recognize income, gain or loss for Federal income tax purposes as
a result of such deposit and defeasance of certain obligations and will be
subject to Federal income tax on the same amounts and in the same manner
and at the same times, as would have been the case if such deposit and
defeasance had not occurred; and
(5) the Trust has delivered to the Trustee an Officers' Certificate
and an Opinion of Counsel, each stating that all conditions precedent
provided for relating to the defeasance contemplated by this Section 10.11
have been complied with.
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ARTICLE 11 - 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 11.
SECTION 11.2 Election to Redeem; Notice to Trustee.
-------------------------------------
The election of the Trust to redeem any Securities shall be evidenced by a
Board Resolution. In case of any redemption of any Securities at the election of
the Trust, the Trust shall, at least 60 days (45 days in the case of redemption
of all the Securities of any series) prior to the Redemption Date fixed by the
Trust (unless a shorter notice shall be satisfactory to the Trustee), notify the
Trustee of such Redemption Date and of the principal amount of Securities of
such series to be redeemed. In the case of any redemption of Securities prior to
the expiration of any restriction on such redemption provided in the terms of
such Securities or elsewhere in this Indenture, the Trust shall furnish the
Trustee, at the time of the giving of notice of redemption to 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 are to be redeemed (unless
all of the Securities of such series of a specified tenor 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 not previously called for redemption by pro rata or by lot or 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 $1,000 or integral multiples thereof. If less than all of the Securities of
such series and of a specified tenor 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
and specified tenor not previously called for redemption in accordance with the
preceding sentence.
If any Security selected for partial redemption is converted in part
before termination of the conversion right with respect to the portion of the
Security so selected, the converted portion of such Security shall be deemed (so
far as may be) to be the portion selected for redemption. Securities which have
been converted during a selection of Securities to be redeemed shall be treated
by the Trustee as Outstanding for the purpose of such selection.
The Trustee shall promptly notify the Trust 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.
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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 Securities redeemed or to be redeemed only in part, to the portion
of the principal amount of such Securities which has been or is to be redeemed.
SECTION 11.4 Notice of Redemption.
--------------------
Notice of redemption shall be given by first-class mail, postage prepaid,
or by guaranteed overnight courier, mailed not less than 30 days and not more
than 60 days prior to the Redemption Date, to each Holder of Securities to be so
redeemed, at such Holder's address appearing in the Security Register.
All notices of redemption shall state:
(1) the Redemption Date, plus accrued interest, if any, or
Defaulted Interest, if any;
(2) the Redemption Price;
(3) if less than all the Outstanding Securities of any series are to
be redeemed, the identification (and, in the case of partial redemption,
the principal amounts) of the particular Securities to be redeemed;
(4) that on the Redemption Date the Redemption Price will become due
and payable upon each such Security to be redeemed and, if applicable,
that interest thereon will cease to accrue on and after said date;
(5) the Conversion Price, if any, the date on which the right to
convert the principal of the Securities to be redeemed will terminate and
the place or places where such Securities may be surrendered for
conversion, if applicable;
(6) the place or places where such Securities are to be
surrendered for payment of the Redemption Price; and
(7) the CUSIP number of the Securities to be redeemed.
Notice of redemption of Securities to be redeemed at the election of the
Trust shall be given by the Trust or, at the Trust's request, by the Trustee in
the name and at the expense of the Trust.
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SECTION 11.5 Deposit of Redemption Price.
---------------------------
On or prior to any Redemption Date, the Trust shall deposit with the
Trustee or with a Paying Agent (or, if the Trust is acting as its own Paying
Agent, segregate and hold in trust as provided in Section 10.3) an amount of
money sufficient to pay the Redemption Price of, and (except if the Redemption
Date shall be an Interest Payment Date) accrued interest on all the Securities
which are to be redeemed on that date.
If any Security called for redemption is converted, any money deposited
with the Trustee or with any Paying Agent or so segregated and held in trust for
the redemption of such Security shall (subject to any right of the Holder of
such Security or any Predecessor Security to receive interest as provided in the
last paragraph of Section 3.7) be paid to the Trust upon Trust Request or, if
then held by the Trust, shall be discharged from such trust.
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, and from and after such date (unless the
Trust shall default in the payment of the Redemption Price and accrued interest)
such Securities shall cease to bear interest. Upon surrender of any such
Security for redemption in accordance with said notice, such Security shall be
paid by the Trust at the Redemption Price, together with accrued interest to the
Redemption Date; provided, however, that installments of interest whose Stated
Maturity is on or prior to the Redemption Date shall be payable to the Holders
of such Securities, or one or more Predecessor Securities, registered as such at
the close of business on the relevant Record Dates according to their terms and
the provisions of Section 3.7.
If any Security called for redemption shall not be so paid upon surrender
thereof for redemption, the principal (and premium, if any) shall, until paid,
bear interest from the Redemption Date at the rate prescribed therefor in the
Security.
SECTION 11.7 Securities Redeemed in Part.
---------------------------
Any Security which is to be redeemed only in part shall be surrendered at
a Place of Payment therefor (with due endorsement by, or a written instrument of
transfer in form satisfactory to the Trust and the Trustee duly executed by, the
Holder thereof or such Holder's attorney duly authorized in writing), and the
Trust 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. If a Global Security is so
surrendered, the Trust shall execute and the Trustee shall authenticate and
deliver to the Depositary, without service charge, a new Global Security in a
denomination equal to and in exchange for the unredeemed portion of the
principal of the Global Security so surrendered.
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ARTICLE 12 - SINKING FUNDS
SECTION 12.1 Applicability of Article.
------------------------
The provisions of this Article 12 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 Securities of any series is herein referred to as an "optional sinking
fund payment." If provided for by the terms of Securities of any series, the
cash amount of any sinking fund payment may be subject to reduction as provided
in Section 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 Payments with Securities.
-----------------------------------------------------
The Trust (i) may deliver Outstanding Securities of a series (other than
any previously called for redemption) and (ii) may apply as a credit Securities
of a series which have been redeemed either at the election of the Trust
pursuant to the terms of such Securities or through the application of permitted
optional sinking fund payments pursuant to the terms of such Securities, in each
case, in satisfaction of all or any part of any sinking fund payment with
respect to the Securities of such series required to be made pursuant to the
terms of such Securities as provided for by the terms of such series; provided
that such Securities have not been previously so credited. Such Securities shall
be received and credited for such purpose by the Trustee at the Redemption Price
specified in such Securities for redemption through operation of the sinking
fund and the amount of such sinking fund payment shall be reduced accordingly.
SECTION 12.3 Redemption of Securities for Sinking Fund.
-----------------------------------------
Not less than 75 days prior to each sinking fund payment date for any
series of Securities, the Trust will deliver to the Trustee an Officers'
Certificate specifying the amount of the next ensuing sinking fund payment for
that series pursuant to the terms of that series, the portion thereof, if any,
which is to be satisfied by payment of cash and the portion thereof, if any,
which is to be satisfied by delivering and crediting Securities of that series
pursuant to Section 12.2 and will also deliver to the Trustee any Securities to
be so delivered. Not less than 60 days before each such sinking fund payment
date the Trustee shall select the Securities to be redeemed upon such sinking
fund payment date in the manner specified in Section 11.3. The Trustee shall
cause notice of the redemption thereof to be given in the name of and at the
expense of the Trust 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.
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ARTICLE 13 - REPAYMENT AT THE OPTION OF HOLDERS
SECTION 13.1 Applicability of Article.
------------------------
Unless otherwise provided with respect to Securities of any series in
accordance with Section 3.1 hereof, Securities of any series which are repayable
at the option of the Holders thereof before their Stated Maturity shall be
repaid in accordance with the terms of the Securities of such series. The
repayment of any principal amount of Securities pursuant to such option of the
Holder to require repayment of Securities before their Stated Maturity, for
purposes of Section 3.9, shall not operate as a payment, redemption or
satisfaction of the indebtedness represented by such Securities unless and until
the Trust, at its option, shall deliver or surrender the same to the Trustee
with a directive that such Securities be cancelled. Notwithstanding anything to
the contrary contained in this Section 13.1, in connection with any repayment of
Securities the Trust may arrange for the purchase of any Securities by an
agreement with one or more investment bankers or other purchasers to purchase
such Securities by paying to the Holders of such Securities on or before the
close of business on the repayment date an amount no less than the repayment
price payable by the Trust on repayment of such Securities, and the obligation
of the Trust to pay the repayment price of such Securities shall be satisfied
and discharged to the extent such payment is so paid by such purchasers.
ARTICLE 14 - MEETINGS OF HOLDERS
SECTION 14.1 Purposes of Holders' Meetings.
-----------------------------
A meeting of Holders of Securities of any series may be called at any time
and from time to time pursuant to the provisions of this Article 14 for any of
the following purposes:
(1) to give any notice to the Trust or to the Trustee, or to give
any directions to the Trustee, or to consent to the waiving of any default
hereunder and its consequences, or to take any other action authorized to
be taken by Holders pursuant to any of the provisions of Article 5;
(2) to remove the Trustee and nominate a successor trustee
pursuant to the provisions of Article 6;
(3) to consent to the execution of an indenture or indentures
supplemental hereto pursuant to the provisions of Article 9; or
(4) to take any other action authorized to be taken by or on behalf
of the Holders of any specified aggregate principal amount of the
Securities of such series under any other provision of this Indenture or
under applicable law.
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SECTION 14.2 Call of Meetings by Trustee.
---------------------------
The Trustee may at any time call a meeting of Holders of Securities of any
series to take any action specified in Section 14.1, to be held at such time and
at such place as the Trustee shall determine. Notice of every meeting of Holders
of Securities in any series, setting forth the time and the place of such
meeting and in general terms the action proposed to be taken at such meeting,
shall be given to Holders of Securities of such series in the manner provided in
Section 1.6. Such notice shall be given not less than 20 nor more than 90 days
prior the date fixed for such meeting. Any failure by the Trustee to give such
notice, or any defect therein, shall not affect or impair the validity of any
action taken at such meeting.
Any meeting of Holders of Securities of any series shall be valid without
notice if the Holders of all Outstanding Securities of such series are present
in person or by proxy or if notice is waived before or after the meeting by all
Holders of Outstanding Securities of such series who are not present in person
or by proxy, and if the Trust and the Trustee are either present by duly
authorized representative or have, before or after the meeting, waived notice.
SECTION 14.3 Call of Meetings by Trust or Holders.
------------------------------------
In case at any time the Trust, pursuant to a Board Resolution, or the
Holders of at least 25% in aggregate principal amount of the Outstanding
Securities of any series shall have requested the Trustee to call a meeting
of Holders of Securities of such series, by written request setting forth in
reasonable detail the action proposed to be taken at the meeting, and the
Trustee shall not have mailed the notice of such meeting within 20 days after
receipt of such request, then the Trust or such Holders may determine the
time and the place for such meeting and may call such meeting to take any
action authorized in Section 14.1, by giving notice thereof as provided in
Section 14.2.
SECTION 14.4 Qualifications for Voting.
-------------------------
To be entitled to vote at any meetings of Holders of Securities of any
series a Person shall (i) be a Holder of one or more Securities of such series
or (ii) be a Person appointed by an instrument in writing as proxy by a Holder
of one or more Securities of such series. The only Persons who shall be
entitled to be present or to speak at any meeting of Holders shall be the
persons entitled to vote at such meetings and their counsel and any
representatives of the Trustee and its counsel and any representatives of the
Trust and its counsel.
SECTION 14.5 Regulations.
----------
Notwithstanding any other provisions of this Indenture, the Trustee may
make such reasonable regulations as it may deem advisable for any meeting of
Holders, in regard to proof of the holding of Securities and of the appointment
of proxies, and in regard to the appointment and duties if 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 think fit.
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<PAGE>
The Trustee shall, by an instrument in writing, appoint a temporary
chairman of the meeting, unless the meeting shall have been called by the Trust
or by the Holders as provided in Section 14.3, in which case the Trust, or
Holders 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 majority vote of the Holders of Outstanding
Securities and proxies.
At any meeting each Holder of Outstanding Securities or proxy shall be
entitled to one vote for each $1,000 principal amount of Securities held or
represented by such Holder; provided, 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 other than by virtue of Outstanding
Securities held by such chairman or instruments in writing as aforesaid duly
designating such chairman as the person to vote on behalf of other Holders. At
any meeting of Holders duly called pursuant to the provisions of Section 14.2 or
14.3, the presence of persons holding or representing Securities in an aggregate
principal amount sufficient to take any action on any business for the
transaction of which such meeting was called shall constitute a quorum. Any
meeting of Holders duly called pursuant to the provisions of Section 14.2 or
14.3 may be adjourned from time to time by a majority of those present, whether
or not constituting a quorum, and the meeting may be held as so adjourned
without further notice.
SECTION 14.6 Voting.
------
The vote upon any resolution submitted to any meeting of Holders shall be
by written ballots on which shall be subscribed the signatures of the Holders of
Securities or of their representatives by proxy and the principal amount of
Securities 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 in duplicate of the proceedings of each
meeting of Holders shall be prepared by the secretary of the meeting and there
shall be attached to said record the original reports of the inspectors of votes
on any vote by ballot taken thereat and affidavits by one or more persons having
knowledge of the facts setting forth a copy of the notice of the meeting and
showing that said notice was given as provided in Section 14.2. The record shall
show the principal amount of the Securities voting in favor of or against any
resolution. The record shall be signed and verified by the affidavits of the
permanent chairman and secretary of the meeting and one of the duplicates shall
be delivered to the Trust and the other to the Trustee to be preserved by the
Trustee.
Any record so signed and verified shall be conclusive evidence of the
matters therein stated.
SECTION 14.7 Rights of Trustee or Holders Not Delayed
----------------------------------------
Nothing in this Article 14 contained shall be deemed or construed to
authorize or permit, by reason of any call of a meeting of Holders or any rights
expressly or impliedly conferred hereunder to make such call, any hindrance or
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delay in the exercise of any right or rights conferred upon or reserved to the
Trustee or to the Holders under any of the provisions of this Indenture or of
the Securities.
ARTICLE 15 - SUBORDINATION; SENIORITY
SECTION 15.1 Securities Subordinated to Senior Indebtedness.
----------------------------------------------
(a) The Trust agrees, and each Holder of the Securities of any series by
such Holder's acceptance thereof likewise agrees, that the payment of the
principal of, premium, if any, and interest on the Securities of such series
(all of the foregoing, a "Payment or Distribution") is subordinated and junior
in right of payment, to the extent and in the manner provided in this Article
15, to the prior payment in full in cash of all Senior Indebtedness whether
outstanding on the date hereof or hereafter created, incurred, assumed or
guaranteed.
A Payment or Distribution shall include any asset of any kind or
character, and may consist of cash, securities or other property, by set-off or
otherwise, and shall include, without limitation, any purchase, redemption or
other acquisition of the Securities of the series or the making of any deposit
of funds or securities pursuant to this Indenture (including, without
limitation, any deposit pursuant to Article 4).
(b) The Senior Indebtedness of the Trust shall continue to be Senior
Indebtedness and entitled to the benefit of these subordination provisions
irrespective of any amendment, modification or waiver of any term of any
instrument relating to refinancing, extension or renewal of the Senior
Indebtedness.
(c) All the provisions of this Indenture and the Securities of any series
shall be subject to the provisions of this Article 15 so far as they may be
applicable thereto, except that nothing in this Article 15 shall apply to claims
for, or payments to, the Trustee under or pursuant to Section 6.6.
(d) No right of any holder of any Senior Indebtedness to enforce
subordination as herein provided shall at any time or in any way be affected or
impaired by any failure to act on the part of the Trust, any Paying Agent, the
Holders of the Securities of any series, the Trustee or the holders of the
Senior Indebtedness, or by any noncompliance by the Trust, any Paying Agent, the
Holders of the Securities of any series or the Trustee with any of the terms,
provisions and covenants of the Securities of this Indenture, regardless of any
knowledge thereof that any such holder of Senior Indebtedness may have or be
otherwise charged with.
(e) In the event that the Securities of any series are declared due and
payable before the maturity because of the occurrence of a default hereunder,
the Trust will give prompt notice in writing of such happening to the holders of
Senior Indebtedness.
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SECTION 15.2 Trust Not to Make Payments with Respect to Securities in
Certain Circumstances.
---------------------------------------------------------
No Payment or Distribution shall be made by the Trust, the Trustee or the
Paying Agent on account of principal of (or premium, if any) or interest on the
Securities of any series, whether upon Stated Maturity, upon redemption or
acceleration, or otherwise, or on account of the purchase or other acquisition
of Securities of such series, whether upon stated maturity, upon redemption or
acceleration, or otherwise, if there shall have occurred and be continuing a
default with respect to any Senior Indebtedness permitting the acceleration
thereof or with respect to the payment of any Senior Indebtedness and (a) such
default is the subject of a judicial proceeding or (b) notice of such default in
writing or by telegram has been given to the Trust by any holder or holders of
any Senior Indebtedness, unless and until the Trust shall have received written
notice from such holder or holders that such default or event of default shall
have been cured or waived or shall have ceased to exist.
Upon any acceleration of the principal of the Securities of any series or
any payment by the Trust or distribution of assets of the Trust of any kind or
character, whether in cash, property or securities, to creditors upon any
dissolution or winding up or liquidation or reorganization of the Trust, whether
voluntary or involuntary, or in bankruptcy, insolvency, receivership or other
proceedings, all amounts due or to become due upon all Senior Indebtedness shall
first be paid in full in cash, or payment thereof provided for to the
satisfaction of the holders thereof, before any Payment or Distribution is made
on account of the redemption price or principal of (and premium, if any) or
interest on the Securities of such series; and (subject to the power of a court
of competent jurisdiction to make other equitable provision, which shall have
been determined by such court to give effect to the rights conferred in this
Article 15 upon the Senior Indebtedness and the holders thereof with respect to
the Securities of such series or the Holders thereof or the Trustee, by a lawful
plan of reorganization or readjustment under applicable law) upon any such
dissolution or winding up or liquidation or reorganization, any Payment or
Distribution by the Trust or distribution of assets of the Trust of any kind or
character, whether in cash, property or securities, to which the Holders of the
Securities of any series or the Trustee would be entitled except for the
provisions of this Article 15, shall be paid by the Trust or by any receiver,
trustee in bankruptcy, liquidating trustee, agent or other Person making such
Payment or Distribution directly to the holders of Senior Indebtedness of the
Trust or their representative or representatives, or to the trustee or trustees
under any indenture pursuant to which any instruments evidencing any Senior
Indebtedness may have been issued, at their respective interests may appear, to
the extent necessary to pay all Senior Indebtedness in full in cash, after
giving effect to any concurrent payment or distribution to or for the holders of
Senior Indebtedness, before any Payment or Distribution is made to the Holders
of the Securities of such series or to the Trustee, except that the Trustee will
have a lien for the payment of its fees and expenses.
In the event that, notwithstanding the foregoing, any Payment or
Distribution by the Trust of any kind or character, whether in cash, property or
securities, prohibited by the foregoing, shall be received by the Trustee or the
Holders of the Securities of any series before all Senior Indebtedness is paid
in full in cash, or provision is made for such payment to the satisfaction of
the holders thereof, and if such fact shall then have been or thereafter
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be made known to a Trust Officer of the Trustee or, as the case may be, such
Holder, then and in such event such Payment or Distribution shall be paid over
or delivered to the holders of Senior Indebtedness or their representative or
representatives, or to the trustee or trustees under any indenture pursuant to
which any instruments evidencing any Senior Indebtedness may have been issued,
as their respective interests may appear, for application to the payment of all
Senior Indebtedness remaining unpaid to the extent necessary to pay all Senior
Indebtedness in full in cash, after giving effect to any concurrent Payment or
Distribution to or for the holders of such Senior Indebtedness, and, until so
delivered, the same shall be held in trust by any Holder of a Security as the
property of the holders of Senior Indebtedness.
The consolidation of the Trust with, or the merger of the Trust into,
another Person or the liquidation or dissolution of the Trust following the
conveyance or transfer of its property as an entirety, or substantially as an
entirety, to another trust or corporation upon the terms and conditions provided
in Article 8 shall not be deemed a dissolution, winding up, liquidation or
reorganization for the purposes of this Section 15.2 if such other Person shall,
as a part of such consolidation, merger, conveyance or transfer, comply with the
conditions stated in Article 8. Nothing in this Section shall apply to claims
of, or payments to, the Trustee under or pursuant to Section 6.6.
The holders of Senior Indebtedness may, at any time and from time to time,
without the consent of or notice to the Holders of the Securities of any series,
without incurring responsibility to the Holders of the Securities of such series
and without impairing or releasing the obligations of the Holders of the
Securities of such series hereunder to the holders of Senior Indebtedness; (i)
change the manner, place or terms of payment or change or extend the time of
payment of, or renew or alter, Senior Indebtedness, or otherwise amend in any
manner Senior Indebtedness or any instrument evidencing the same or any
agreement under which Senior Indebtedness is outstanding; (ii) sell, exchange,
release or otherwise deal with any property pledged, mortgaged or otherwise
securing Senior Indebtedness; (iii) release any Person liable in any manner for
the collection of Senior Indebtedness; and/or (iv) exercise or refrain from
exercising any rights against the Trust and any other Person.
SECTION 15.3 Subrogation of Securities.
-------------------------
Subject to the payment in full in cash of all amounts then due (whether by
acceleration of the maturity thereof or otherwise) on account of all Senior
Indebtedness at the time outstanding, the Holders of the Securities of any
series shall be subrogated to the rights of the holders of Senior Indebtedness
to receive Payment or Distributions of cash, property or securities of the Trust
applicable to the Senior Indebtedness until the principal of (and premium, if
any) and interest on the Securities shall be paid in full; and, for the purposes
of such subrogation, no Payments or Distributions to the holders of Senior
Indebtedness to which the Holders of the Securities of any series or the Trustee
would be entitled except for the provisions of this Article 15, and no payments
over pursuant to the provisions of this Article 15 to the holders of Senior
Indebtedness by Holders of the Securities of any series or the Trustee, shall,
as between the Trust, the Trust's creditors other than holders of Senior
Indebtedness, and the Holders of the Securities of such series, be deemed to be
a payment by the Trust to or on account of the Senior Indebtedness. It is
understood that the provisions of this Article 15 are and are intended solely
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for the purpose of defining the relative rights of the Holders of the Securities
of any series, on the one hand, and the holders of Senior Indebtedness, on the
other hand.
Nothing contained in this Article 15 or elsewhere in this Indenture or in
the Securities is intended to or shall impair, as among the Trust, its creditors
other than the holders of Senior Indebtedness, and the Holders of the Securities
of each series, the obligation of the Trust, which is absolute and
unconditional, to pay to the Holders of the Securities of any series the
principal of (and premium, if any) and interest on the Securities of such series
as and when the same shall become due and payable in accordance wit their terms,
or is intended to or shall affect the relative rights of the Holders of the
Securities of any series and creditors of the Trust other than the holder of
Senior Indebtedness, nor shall anything herein or therein prevent the Trustee or
the Holder of any Security of any series from exercising all remedies otherwise
permitted by applicable law upon default under this Indenture, subject to the
rights, if any, under this Article 15 of the holders of Senior Indebtedness in
respect of cash, property or securities of the Trust received upon the exercise
of any such remedy.
Upon any payment or distribution of assets of the Trust referred to in
this Article, the Trustee, subject to the provisions of Article 6, and the
Holders of the Securities of any series shall be entitled to rely upon any order
or decree made by any court of competent jurisdiction in which any dissolution,
winding up, liquidation or reorganization proceedings are pending, or
certificate of the receiver, trustee in bankruptcy, liquidating trustee, agent
or other Person making such payment or distribution, delivered to the Trustee or
to the Holders of the Securities of such series, for the purpose of ascertaining
the Persons entitled to participate in such distribution, the holders of Senior
Indebtedness and other indebtedness of the Trust, the amount thereof or payable
thereon, the amount or amounts paid or distributed thereon and all other facts
pertinent thereto or to this Article 15.
SECTION 15.4 Authorization by Holders of Securities.
--------------------------------------
Each Holder of a Security of any series by acceptance thereof authorizes
and directs the Trustee on such Holder's behalf to take such action as may be
necessary or appropriate to effectuate, as between the Holder of the Security
and the holders of Senior Indebtedness, the subordination provided in this
Article and appoints the Trustee such Holder's attorney-in-fact for any and all
such purposes including, without limitation, to execute, verify, deliver and
file any proofs of claim which any holder of Senior Indebtedness may at any time
require in order to prove and realize upon any rights of claims pertaining to
the Securities and to effectuate the full benefit of the subordination contained
herein. Upon failure of the Trustee so to do, any such holder of Senior
Indebtedness shall be deemed to be irrevocably appointed the agent and
attorney-in-fact of the Holder to execute, verify, deliver and file any such
proofs of claim.
SECTION 15.5 Notices of Trustee.
------------------
The Trust shall give prompt written notice to the Trustee of any fact
known to it which would prohibit the making of any payment of monies to or by
the Trustee in respect of the Securities of any series pursuant to the
provisions of this Article 15. Notwithstanding the provisions of this Article or
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any other provision of this Indenture, the Trustee shall not be charged with
knowledge of the existence of any facts which would prohibit the making of any
payment of monies to or by the Trustee in respect of the Securities of any
series pursuant to the provisions of this Article, unless and until a Trust
Officer of the Trustee shall have received at its Corporate Trust Office written
notice thereof from the Trust or a holder or holders of Senior Indebtedness or
from any trustee or agent therefor; and prior to the receipt of any such written
notice, the Trustee, subject to the provisions of Article 6, shall be entitled
in all respects to assume that no such facts exist; provided, however, that if a
Trust Officer of the Trustee shall not have received at least three Business
Days prior to the date upon which by the terms hereof any such monies may become
payable for any purpose (including, without limitation, the payment of the
principal of (premium, if any) or interest on any Security of any series) with
respect to such monies the notice provided for in this Section 15.5, then,
anything herein contained to the contrary notwithstanding, the Trustee shall
have the full power and authority to receive such monies and to apply the same
to the purpose for which they were received and shall not be affected by any
notice to the contrary which may be received by it within three Business Days
prior to such date.
The Trustee shall be entitled to rely conclusively on the delivery to it
of a written notice by a Person representing such Person to a holder of Senior
Indebtedness (or a trustee on behalf of such holder) to establish that such
notice has been given by a holder of Senior Indebtedness or a trustee or agent
on behalf of any such holder. In the event that the Trustee determines in good
faith that further evidence is required with respect to the right of any Person
as a holder of Senior Indebtedness to participate in any payment or distribution
pursuant to this Article 15, the Trustee may request such Person to furnish
evidence to the reasonable satisfaction of the Trustee as to the amount of
Senior Indebtedness held by such Person, the extent to which such Person is
entitled to participate in such payment or distribution and any other facts
pertinent to the rights of such Person under this Article 15, and if such
evidence is not furnished, the Trustee may defer any payment to such Person
pending judicial determination as to the right of such Person to receive such
payment.
SECTION 15.6 Trustee's Relation to Senior Indebtedness.
-----------------------------------------
The Trustee in its individual capacity shall be entitled to all the rights
set forth in this Article 15 in respect of any Senior Indebtedness at any time
held by it, to the same extent as any other holder of Senior Indebtedness, and
nothing in Article 6 or elsewhere in this Indenture shall deprive the Trustee of
any of its rights as such holder.
With respect to the holders of Senior Indebtedness, the Trustee undertakes
to perform or to observe only such of its covenants and obligations as are
specifically set forth in this Article 15, and no implied covenants or
obligations with respect to the holders of Senior Indebtedness shall be read
into this Indenture against the Trustee. The Trustee shall not owe any fiduciary
duty to the holders of Senior Indebtedness and shall not be liable to any such
holder if it shall mistakenly pay over or distribute to Holders of the
Securities of any series or the Trust or any other Person money or assets to
which any holder of Senior Indebtedness shall be entitled by virtue of this
Article 15 or otherwise.
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SECTION 15.7 No Impairment of Subordination.
------------------------------
No right of any present or future holder of any Senior Indebtedness to
enforce subordination as herein provided shall at any time in any way be
prejudiced or impaired by any act or failure to act on the part of the Trust,
the Trustee or the Holder of any of the Securities of any series or by any act,
or failure to act, in good faith, by any such holder of Senior Indebtedness, or
by any noncompliance by the Trust, the Trustee or the Holder of any of the
Securities of any series with the terms, provisions and covenants of this
Indenture, regardless of any knowledge thereof which any such holder may have or
otherwise be charged with.
SECTION 15.8 Article 15 Not To Prevent Events of Default.
-------------------------------------------
The failure to make a payment on account of principal of (premium, if any)
or interest on the Securities of any series by reason of any provision in this
Article 15 shall not be construed as preventing the occurrence of an Event of
Default with respect to such series under Section 5.1.
SECTION 15.9 Paying Agents Other Than the Trustee.
------------------------------------
In any case at any time any Paying Agent other than the Trustee shall have
been appointed by the Trust and be then acting hereunder, the term "Trustee," as
used in this Article 15 shall in such case (unless the context shall otherwise
require) be construed as extending to and including such Paying Agent within its
meaning as fully for all intents and purposes as if such Paying Agent were named
in this Article 15 in addition to or in place of the Trustee.
ARTICLE 16 - CONVERSION OF SECURITIES
SECTION 16.1 Right of Conversion; Conversion Price.
-------------------------------------
Subject to the provisions of any series of the Securities, the Holder of
any Security or Securities of a particular series shall have the right, at such
Holder's option, at any time after such date as determined by Board Resolution
with respect to such series of Securities and before the close of business on
such date as determined by Board Resolution with respect to such series of
Securities (except that, with respect to any Security or portion of a Security
of such series which shall be called for redemption, such right shall terminate
at the close of business on the date fixed for redemption of such Security or
portion of a Security unless the Trust shall default in payment due upon
redemption thereof) to convert, subject to the terms and provisions of this
Article 16, the principal of any Security or Securities of such series or any
portion thereof which is $1,000 principal amount or an integral multiple thereof
into shares of Capital Stock, initially at the conversion price per share
specified in the Securities of such series; or, in case an adjustment of such
price has taken place pursuant to the provisions of Section 16.4, that at the
price as last adjusted (such price or adjusted price being referred to herein as
the "Conversion Price"), upon surrender of the Security or Securities, the
principal of which is so to be converted, accompanied by written notice of
conversion duly executed, to the Trust, at any time during usual business hours
at the office or agency maintained by it for such purpose, and, if so required
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by the Conversion Agent or Registrar, accompanied by a written instrument or
instruments of transfer in form satisfactory to the Conversion Agent or Security
Registrar duly executed by the Holder of such Holder's duly authorized
representative in writing. For convenience, the conversion of any portion of the
principal of any Security or Securities into shares of Capital Stock is
hereinafter sometimes referred to as the conversion of such Security or
Securities.
Notwithstanding the other provisions contained in this Article 16, a
Holder may not convert the Securities of any series and the Securities of such
securities held by such Holder shall not be convertible, if as a result of such
conversion such Holder or any other Person would, or in the determination of the
Board of Trustees, might then be deemed, directly or indirectly, to have
acquired or be holding shares of Capital Stock in excess of such Holder's or
other Person's Ownership Limit.
SECTION 16.2 Issuance of Shares on Conversion.
--------------------------------
As promptly as practicable after the surrender, as herein provided, of any
Security or Securities of any series for conversion, the Trust shall deliver or
cause to be delivered at its said office or agency, to or upon the written order
of the Holder of the Security or Securities so surrendered, certificates
representing the number of fully paid and nonassessable shares of Capital Stock
into which such Security or Securities may be converted in accordance with the
provisions of this Article 16. Such conversion shall be deemed to have been made
as of the close of business on the date that such Security or Securities shall
have been surrendered for conversion by delivery thereof with a written notice
of conversion duly executed, so that the rights of the Holder of such Security
or Securities as a Holder shall cease at such time and, subject to the following
provisions of this paragraph, the Person or Persons entitled to receive the
shares of Capital Stock upon conversion of such Security or Securities shall be
treated for all purposes as having become the record holder or holders of such
shares of Capital Stock at such time and such conversion shall be at the
Conversion Price in effect at such time; provided, however, that no such
surrender on any date when the stock transfer books of the Trust shall be closed
shall be effective to constitute the Person or Persons entitled to receive the
shares of Capital Stock upon such conversion as the record holder or holders of
such shares of Capital Stock on such date, but such surrender shall be effective
to constitute the Person or Persons entitled to receive such shares of Capital
Stock as the record holder or holders thereof for all purposes at the close of
business on the next succeeding day on which such stock transfer books are open;
such conversion shall be at the Conversion Price in effect on the date that such
Security or Securities shall have been surrendered for conversion by delivery
thereof, as if the stock transfer books of the Trust had not been closed. The
Trust shall give or cause to be given to the Trustee written notice whenever the
stock transfer books of the Trust shall be closed.
Upon Conversion of any Security of any series which is converted in part
only, the Trust shall execute and the Trustee shall authenticate and deliver to
or on the order of the Holder thereof in accordance with Section 3.3, at the
expense of the Trust, a new Security or Securities of such series of authorized
denominations in principal amount equal to the unconverted portion of such
Security.
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SECTION 16.3 No Adjustment for Interest or Dividends.
---------------------------------------
No payment or adjustment in respect of interest on the Securities of any
series or dividends on the shares of Capital Stock shall be made upon the
conversion of any Security or Securities; provided, however, that if a Security
or any series or any portion thereof shall be converted subsequent to any
Regular Record Date and on or prior to the next succeeding interest payment
date, the interest falling due on such interest payment date shall be payable on
such interest payment date notwithstanding such conversion, and such interest
(whether or not punctually paid or duly provided for) shall be paid to the
Person in whose name such Security is registered at the close of business on
such Regular Record Date and Securities surrendered for conversion during the
period from the close of business on any Regular Record Date to the opening of
business on the corresponding Interest Payment Date must be accompanied by
payment of any amount equal to the interest payable on such interest payment
date.
SECTION 16.4 Adjustment of Conversion Price.
------------------------------
(1) In case the Trust shall pay or make a dividend or other distribution
on any class of Capital Stock in shares of Capital Stock, the Conversion Price
for any series of Securities in effect at the opening of business on the day
following the date fixed for the determination of shareholders entitled to
receive such dividend or other distribution shall be reduced by multiplying such
Conversion Price by a fraction of which the numerator shall be the number of
shares of the appropriate class of Capital Stock outstanding at the close of
business on the date fixed for such determination and the denominator shall be
the sum of such number of shares and the total number of shares constituting
such dividend or other distribution, such reduction to become effective
immediately after the opening of business on the day following the date fixed
for such determination.
(2) In case the Trust shall issue rights or warrants to all or
substantially all holders of shares of a class of Capital Stock entitling them
to subscribe for or purchase shares of Capital Stock at a price per share (or
having a Conversion Price per share) less than the current market price per
share (determined as provided in paragraph (6) of this Section 16.4) of the
shares of such class of Capital Stock on the date fixed for the determination of
shareholders entitled to receive such rights or warrants, the Conversion Price
for any series of Securities in effect at the opening of business on the day
following the date fixed for such determination shall be reduced by multiplying
such Conversion Price by a fraction of which the numerator shall be the number
of shares of such class of Capital Stock outstanding at the close of business on
the date fixed for such determination plus the number of shares of such class of
Capital Stock which the aggregate of the subscription price of the total number
of shares of such class of Capital Stock so offered for subscription or purchase
would purchase at such current market price and the denominator shall be the
number of shares of such class of Capital Stock outstanding at the close of
business on the date fixed for such determination plus the number of shares of
such class of Capital Stock so offered for subscription or purchase, such
reduction to become effective immediately after the opening of business on the
day following the date fixed for such determination. In the event that all of
the shares of such class of Capital Stock subject to such rights or warrants
have not been issued when such rights or warrants expire, then the Conversion
Price shall promptly be readjusted to the Conversion Price which would then be
112982.4
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<PAGE>
in effect had the adjustment upon the issuance of such rights or warrants been
made on the basis of the actual number of shares of such class of Capital Stock
issued upon the exercise of such rights or warrants. Shares issued under the
Trust's Dividend Reinvestment Plan in effect on the date of this Indenture, or
under any successor plan which permits shareholders to reinvest dividends and
purchase [shares of additional Capital Stock in any fiscal quarter] at a
discount of not in excess of 5% of the current market price per share (as
determined in said plan)], shall not be deemed to be issued pursuant to rights
or warrants for purposes of this paragraph (2). For the purposes of this
paragraph (2), the number of shares of Capital Stock at any time outstanding
shall not include shares held in the treasury of the Trust but shall include
shares issuable in respect of scrip certificates issued in lieu of fractions of
shares of Capital Stock. The Trust will not issue any rights or warrants in
respect of shares of such class of Capital Stock held in the treasury of the
Trust.
(3) In case the outstanding shares of such class of Capital Stock shall be
subdivided into a greater number of shares, the Conversion Price in effect at
the opening of business on the day following the day upon which such subdivision
becomes effective for any series of Securities (that are convertible into such
classes of Capital Stock) shall be proportionately reduced, and, conversely, in
case outstanding shares of such class of Capital Stock shall each be combined
into a smaller number of shares, the Conversion price for any series of
Securities in effect at the opening of business on the day following the day
upon which such combination becomes effective shall be proportionately
increased, such reduction or increase, as the case may be, to become effective
immediately after the opening of business on the day following the day upon
which such subdivision or combination becomes effective.
(4) In case the Trust shall, by dividend or otherwise, distribute to all
or substantially all holders of shares of such class of Capital Stock evidences
of indebtedness or assets (including securities, but excluding (i) any rights or
warrants referred to in paragraph (2) of this Section 16.4, (ii) any cash
dividend or distribution not prohibited by Section 10.9 and (iii) any dividend
or distribution referred to in paragraph (1) of this Section), the Conversion
Price for any series of Securities that are convertible into such class of
Capital Stock shall be adjusted so that the same shall equal the price
determined by multiplying the Conversion Price in effect immediately prior to
the close of business on the day fixed for the determination of shareholders
entitled to receive such distribution by a fraction of which the numerator shall
be the current market price per share (determined as provided in paragraph (6)
of this Section 16.4) of the shares of such class of Capital Stock on the date
fixed for such determination less the then fair market value as determined by
the Board of Trustees (whose determination shall be conclusive and described in
a resolution of the Board of Trustees filed with the Trustee) of the portion of
the assets or evidences of indebtedness so distributed allocable to one share of
such class of Capital Stock and the denominator shall be such current market
price per share of the shares of such class of Capital Stock, such adjustment to
become effective immediately prior to the opening of business on the day
following the date fixed for the determination of shareholders entitled to
receive such distribution.
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<PAGE>
(5) In case the shares of such class of Capital Stock shall be changed
into the same or a different number of shares of any class or classes of stock,
whether by capital reorganization, reclassification, or otherwise (other than a
subdivision or combination of shares or a stock dividend described in paragraph
(1) or paragraph (3) of this Section 16.4, or a consolidation, merger or sale of
assets described in Section 16.10), then and in each such event the Holders of
Securities of any series that have the rights to convert into such class shall
have the right thereafter to convert such Securities into the kind and amount of
shares of stock and other securities and property receivable upon such
reorganization, reclassification or other change, by holders of the number of
shares of such class of Capital Stock into which such Securities might have been
converted immediately prior to such reorganization, reclassification or change.
(6) For the purpose of any computation under paragraphs (2) and (4) of
this Section 16.4, the current market price for a share of such class of Capital
Stock on any date shall be deemed to be the average of the Closing Prices for a
share of such class for the 15 consecutive Business Days selected by the Trust
commencing not more than 30 and not less than 20 Business Days before the date
in question.
(7) No adjustment in the Conversion Price for the Securities of any series
shall be required unless such adjustment (plus any adjustments not previously
made by reason of this paragraph (7)) would require an increase or decrease of
at least 1% in such price; provided, however, that any adjustments which by
reason of this paragraph (7) are not required to be made shall be carried
forward and taken into account in any subsequent adjustment. All calculations
under this paragraph (7) shall be made to the nearest cent.
(8) The Trust may, but shall not be required to, make such reductions in
the Conversion Price for the Securities of any series, in addition to those
required by paragraphs (1), (2), (3), (4) and (5) of this Section, as the Board
of Trustees considers to be advisable in order to avoid or diminish any income
tax to any holders of shares of such class of Capital Stock resulting from any
dividend or distribution of stock or issuance of rights or warrants to purchase
or subscribe for stock or from any event treated as such for income tax purposes
or for any other reasons. The Board of Trustees shall have the power to resolve
any ambiguity or correct any error in the adjustments made pursuant to this
Section 16.4 and its actions in so doing shall be final and conclusive.
SECTION 16.5 Notice of Adjustment of Conversion Price.
----------------------------------------
Whenever the Conversion Price for the Securities of any series is adjusted
as herein provided:
(a) the Trust shall compute the adjusted Conversion Price in accordance
with Section 16.4 and shall prepare an Officers' Certificate setting forth the
adjusted Conversion Price and showing the facts upon which such adjustment is
based and the computation thereof, and such certificate shall forthwith be filed
at each office or agency maintained for the purpose of conversion of Securities
pursuant to Section 3.5 and with the Trustee; and
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<PAGE>
(b) a notice stating that the Conversion Price has been adjusted and
setting forth the adjusted Conversion Price shall as soon as practicable be
mailed by the Trust to all Holders of Securities of such series at their last
addresses as they shall appear in the Security Register.
(c) If the Conversion Price is adjusted and the Trust fails to file an
Officers' Certificate with the Trustee as provided by Section 16.5(a) and the
Trustee is acting as the Conversion Agent, the Trustee shall be entitled to rely
conclusively on the Conversion Price set forth in the Officers' Certificate most
recently received by the Trustee (or as set forth in this Indenture if the
Conversion Price shall not have been adjusted).
SECTION 16.6 Notice of Certain Trust Action.
------------------------------
(1) In case:
(a) the Trust shall authorize the granting to holders of its shares
of such class of Capital Stock into which a series of Securities is convertible
of rights or warrants entitling them to subscribe for or purchase any shares of
such class of Capital Stock of any class or of any other rights; or
(b) of any reclassification of the shares of such class of Capital
Stock of the Trust into which a series of Securities is convertible, or of any
consolidation or merger to which the Trust is a party and for which approval of
any shareholders of the Trust is required, or of the sale or transfer of all or
substantially all of the assets of the Trust; or
(c) of the voluntary or involuntary dissolution, liquidation or
winding up of the Trust;
then the Trust shall cause to be filed at each office or agency maintained for
the purpose of conversion of Securities of any series pursuant to Section 3.5
and shall cause to be mailed to all Holders of Securities of such series at
their last addresses as they shall appear in the Security Register, at least 20
days (or 10 days in any case specified in clause (a) or (b) above) prior to the
applicable record date hereinafter specified, a notice stating (x) the date on
which a record is to be taken for the purpose of such dividend, distribution,
rights or warrants, or, if a record is not to be taken the date as of which the
Holders of shares of Capital Stock of record to be entitled to such dividend,
distribution, rights or warrants are to be determined, or (y) the date on which
such reclassification, consolidation, merger, sale, transfer, dissolution,
liquidation or winding up is expected to become effective, and the date as of
which it is expected that holders of shares of Capital Stock of record shall be
entitled to exchange their shares of Capital Stock for securities, cash or other
property deliverable upon such reclassification, consolidation, merger, sale,
transfer, dissolution, liquidation or winding up. Such notice shall also state
whether such transaction will result in any adjustment in the Conversion Price
applicable to the Securities of such series and, if so, shall state what the
adjusted Conversion Price will be and when it will become effective. Neither the
failure to give the notice required by this Section, nor any defect therein, to
any particular Holder shall affect the sufficiency of the notice or the legality
or validity of any such dividend, distribution, right, warrant,
reclassification, consolidation, merger, sale, transfer, liquidation,
112982.4
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<PAGE>
dissolution or winding-up, or the vote on any notice authorizing such with
respect to the other Holders.
(2) In case the Trust or any Affiliate of the Trust shall propose to
engage in a "Rule 13e-3 Transaction" as defined in the SEC's Rule 13e-3
promulgated under the Exchange Act, the Trust shall, no later than the date on
which any information with respect to such Rule 13e-3 Transaction is first
required to be given to the SEC or any Person pursuant to such Rule 13e-3, cause
to be mailed to all Holders at their last addresses as they shall appear in the
Security Register, a copy of all information required to be given to the holders
of Capital Stock pursuant to such Rule 13e-3. The information required to be
given under this paragraph shall be in addition to and not in lieu of any other
information required to be given by the Trust pursuant to this Section 16.6 or
any other provision of the Securities or this Indenture.
SECTION 16.7 Taxes on Conversions.
--------------------
The Trust will pay any and all stamp or similar taxes that may be payable
in respect of the issuance or delivery of shares of Capital Stock on conversion
of Securities pursuant hereto. The Trust shall not, however, be required to pay
any tax which may be payable in respect of any transfer involved in the issuance
and delivery of shares of Capital Stock in a name other than that of the Holder
of the Security or Securities to be converted, and no such issuance or delivery
shall be made unless and until the Person requesting such issuance has paid to
the Trust the amount of any such tax, or has established to the satisfaction of
the Trust that such tax has been paid.
SECTION 16.8 Fractional Shares.
-----------------
No fractional shares or scrip representing fractional shares shall be
issued upon any conversion of Securities. If any such conversion would otherwise
require the issuance of a fractional share, an amount equal to such fraction
multiplied by the current market price per share of Capital Stock (determined as
provided in paragraph (6) of Section 16.4) on the day of conversion shall be
paid to the Holder in cash by the Trust.
SECTION 16.9 Cancellation of Converted Securities.
------------------------------------
All Securities delivered for conversion shall be delivered to the
Trustee or the Conversion Agent to be cancelled by or at the direction of the
Trustee or the Conversion Agent, which shall dispose of the same as provided
in Section 3.9.
SECTION 16.10 Provisions in Case of Consolidation, Merger or Sale of Assets.
-------------------------------------------------------------
(1) In case of any consolidation of the Trust with, or merger of the Trust
into, any other corporation or trust, or in case of any merger of another
corporation or trust into the Trust (other than a consolidation or merger which
does not result in any reclassification, conversion, exchange or cancellation of
outstanding shares of Capital Stock of the Trust), or in case of any sale or
transfer of all or substantially all of the assets of the Trust, the corporation
or trust formed by such consolidation or resulting from such merger or which
112982.4
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<PAGE>
acquires such assets, as the case may be, shall execute and deliver to the
Trustee a supplemental indenture providing that the Holder of each Security of
any series then outstanding shall have the right thereafter, during the period
such Security shall be convertible as specified in Section 16.1 to convert such
Security only into the kind and amount of securities, cash and other property
receivable upon such consolidation, merger, sale or transfer by a holder of the
number of shares of Capital Stock into which such Security might have been
converted immediately prior to such consolidation, merger, sale or transfer.
Such supplemental indenture shall provide for adjustments which, for events
subsequent to the effective date of such supplemental indenture, shall be as
nearly equivalent as may be practicable to the adjustments provided for in this
Article. The provisions of this Section 16.10 shall similarly apply to
successive consolidations, mergers, sales or transfers.
(2) The Trustee shall not be under any responsibility to determine the
correctness of any provisions contained in any such supplemental indenture
relating either to the kind or amount of shares of stock or securities or
property receivable by Holders upon the conversion of their Securities after any
such reclassification, change, consolidation, merger, sale or conveyance or to
any adjustment to be made with respect thereto.
SECTION 16.11 Disclaimer by Trustee of Responsibility for Certain Matters.
-----------------------------------------------------------
The Trustee shall not at any time be under any duty or responsibility to
any Holder of Securities of any series to determine whether any facts exist
which may require any adjustment of the Conversion Price for such series, or
with respect to the nature or extent of any such adjustment when made, or with
respect to the method employed, or herein or in any supplemental indenture
provided to be employed, in making the same. The Trustee shall not be
accountable with respect to the validity, value, kind or amount of any shares of
Capital Stock, or of any securities or property, which may at any time be issued
or delivered upon the conversion of any Security; and it makes no representation
with respect thereto. The Trustee shall not be responsible for any failure of
the Trust to issue, transfer or deliver any shares of Capital Stock or stock
certificates or other securities or property upon the surrender of any Security
for the purpose of conversion or, subject to Article 6, to comply with any of
the covenants of the Trust contained in this Article 16.
SECTION 16.12 Covenant to Reserve Shares.
--------------------------
The Trust covenants that it will at all times reserve and keep available,
free from preemptive rights, out of its authorized shares of Capital Stock,
solely for the purpose of issuance upon conversion of Securities as herein
provided, such number of shares of the appropriate class or classes or series of
Capital Stock as shall then be issuable upon the conversion of all outstanding
Securities. The Trust covenants that all shares of Capital Stock which shall be
so issuable shall be, when issued, duly and validly issued and fully paid and
non-assessable. For purposes of this Section 16.12, the number of shares of such
class of Capital Stock which shall be deliverable upon the conversion of all
outstanding Securities shall be computed as if at the time of computation all
outstanding Securities were held by a single holder.
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* * * * * * * *
This Indenture may be executed in multiple counterparts, each of
which so executed shall be deemed to be an original, but both of such
counterparts shall together constitute but one and the same instrument.
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<PAGE>
IN WITNESS WHEREOF, the parties hereto have caused this Indenture to be
duly executed, and their respective seals to be hereunder affixed and attested,
all as of the day and year first above written.
MGI PROPERTIES
Attest:
By:
---------------------------
Name:
Title:
- ---------------------
---------------------, Trustee
Attest:
By:
---------------------------
Name:
Title:
- ---------------------
112982.4
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<PAGE>
STATE OF )
) SS.:
)
On the ________ day of ______________________, 1996, before me personally
came ___________________, to me known, who, being by me duly sworn, did depose
and say that he is the _________________________ of MGI PROPERTIES, one of the
entities described in and which executed the foregoing instrument; that he knows
the seal of said entity; that the seal affixed to said instrument is such
entity's seal; that it was so affixed by authority of the Board of Trustees of
said entity, and that he signed his name thereto by like authority.
---------------------------------
Notary Public
My Commission Expires:
---------------------------------
STATE OF )
) SS.:
COUNTY OF )
On the ________ day of ______________________, 1996, before me personally
came ___________________, to me known, who, being by me duly sworn, did depose
and say that he is the _________________________ of ________________________,
one of the entities described in and which executed the foregoing instrument;
that he knows the seal of said entity; that the seal affixed to said instrument
is such entity's seal; that it was so affixed by authority of the Board of
Directors of said entity, and that he signed his name thereto by like authority.
---------------------------------
Notary Public
My Commission Expires:
---------------------------------
112982.4
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EXHIBIT A
[Form of [Convertible] [Redeemable] [Nonredeemable] Subordinated Security]
If the Holder of this Note (as indicated below) is The Depository Trust
Company (the "Depository") or a nominee of the Depository, this Note is a Global
Security and the following two legends apply:
Unless this Note is presented by an authorized representative of The Depository
Trust Company [(55 Water Street, New York, New York)] to the issuer or its agent
for registration of transfer, exchange or payment, and such Note issued is
registered in the name of CEDE & Co., or such other name as requested by an
authorized representative of the Depository, ANY TRANSFER, PLEDGE OR OTHER USE
HEREOF FOR VALUE OR OTHERWISE BY OR TO ANY PERSON IS WRONGFUL, since the
registered owner hereof, CEDE & CO., has an interest herein.
Unless and until this certificate is exchanged in whole or in part for Notes in
certificated form, this certificate may not be transferred except as a whole by
the Depository to a nominee thereof or by a nominee thereof to the Depository or
another nominee of the Depository or by the Depository or any such nominee to a
successor of the Depository or a nominee of such successor.
[FACE OF SECURITY]
MGI PROPERTIES
__% [Convertible] [Redeemable] [Nonredeemable] [Subordinated] Note
Due _______________________
No. _________________ $__________________
MGI PROPERTIES, a Massachusetts trust (herein referred to as the "Trust,"
which term includes any successor entity under the Indenture referred to on the
reverse hereof), for value received, hereby promises to pay to _________________
or registered assigns, the principal sum of _________________________ Dollars,
on ____________ (the "Stated Maturity") [or date fixed for earlier redemption
(the "Redemption Date," and with respect to principal repayable on such date,
the "Maturity Date")], and to pay interest thereon from ________________ or the
most recent Interest Payment Date to which interest has been paid or duly
provided for, semi-annually on ______________ and ________________ in each year
(each, an "Interest Payment Date"), commencing __________, at the rate of
_________% per annual, until the principal hereof is paid or duly provided for.
The interest so payable, and punctually paid or duly provided for, on any
Interest Payment Date will, as provided in such Indenture, be paid to the Holder
in whose name this Note (or one or more Predecessor Securities) is registered at
the close of business on the Regular Record Date for such interest, which shall
be _______ or _____ (whether or not a Business Day), as the case may be, next
preceding such Interest payment Date [at the office or agency of the Trust
maintained for such purpose; provided, however, that such interest may be paid,
112982.4
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<PAGE>
at the Trust's option, by mailing a check to such Holder at its registered
address or by transfer of fund to an account maintained by such Holder within
the United States]. Any such interest or so punctually paid or duly provided for
shall forthwith cease to be payable to the Holder on such Regular Record Date,
and may be paid to the Holder in whose name this Note (or one or more
Predecessor Securities) is registered at the close of business on a Special
Record Date for the payment of such Defaulted Interest to be fixed by the
Trustee referred to on the reverse hereof, notice whereof shall be given to
Holders of Notes of this series not less than 10 days prior to such Special
Record Date, or may be paid at any time in any other lawful manner not
inconsistent with the requirements of any securities exchange on which the Notes
of this series may be listed, and upon such notice as may be required by such
exchange, all as more fully provided in the Indenture. Interest will be computed
on the basis of a 360-day year of twelve 30-day months.
The principal of this Note payable on the Stated Maturity Date [or the
principal of, premium, if any, and, if the Redemption Date is not an Interest
Payment Date, interest on this Note payable on the Redemption Date] will be paid
against presentation of this Note at the office or agency of the Trust
maintained for that purpose in _______________, in such coin or currency of the
United States of America as at the time of payment is legal tender for the
payment of public and private debts.
Interest payable on this Note on any Interest Payment Date and on the
[Stated] Maturity Date [or Redemption Date], as the case may be, will include
interest accrued from and including the next preceding Interest Payment Date in
respect of which interest has been paid or duly provided for (or from and
including ________________, if no interest has been paid on this Note) to but
excluding such Interest Payment Date or the [Stated] Maturity Date [or
Redemption Date], as the case may be. If any Interest Payment Date or the
[Stated] Maturity Date or [Redemption Date] falls on a day that is not a
Business Day, as defined below, principal, premium, if any and/or interest
payable with respect to such Interest Payment Date or [Stated] Maturity Date [or
Redemption Date], as the case may be, will be paid on the next succeeding
Business Day with the same force and effect as if it were paid on the date such
payment was due, and no interest shall accrue on the amount so payable for the
period from and after such Interest Payment Date or [Stated] Maturity Date [or
Redemption Date], as the case may be. "Business Day" means any day, other than a
Saturday or Sunday, on which banking institutions in the City of New York are
authorized or required by law, regulation or executive order to be closed.
[If this Note is a Global Security, insert - All payments of principal,
premium if any, any interest in respect of this Note will be made by the Trust
in immediately available funds.]
Reference is hereby made to the further provisions of this Note set forth
on the reverse hereof, which further provisions shall for all purposes have the
same effect as if set forth at this place.
112982.4
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Unless the Certificate of Authentication hereon has been executed by the
Trustee by manual signature of one of its authorized signatories, this Note
shall not be entitled to any benefit under the Indenture, or be valid or
obligatory for any purpose.
IN WITNESS WHEREOF, the Trust has caused this instrument to be duly
executed under its facsimile seal.
Date:
----------------------
MGI PROPERTIES
By:
--------------------------
Name:
Title:
Attest:
-------------------
Secretary
TRUSTEE'S CERTIFICATE OF AUTHENTICATION
This is one of the Securities of the series designated therein referred to
in the within-mentioned Indenture.
By:
-------------------
Authorized Officer
SEAL
112982.4
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<PAGE>
[REVERSE OF SECURITY]
MGI PROPERTIES
__% [Convertible] [Redeemable] [Nonredeemable] [Subordinated] Notes
Due _________
This Note is one of a duly authorized issue of [Convertible] [Redeemable]
[Nonredeemable] [Subordinated] Notes of the Trust (herein called the
"Securities"), issued and to be issued in one or more series under an Indenture,
dated as of ____________, (herein called the "Indenture") between the Trust and
__________________, as Trustee (herein called the "Trustee," which term includes
any successor trustee under the Indenture with respect to the series of which
this Note is a part), to which Indenture and all indentures supplemental thereto
reference is hereby made for a statement of the respective rights, limitations
or rights, duties and immunities thereunder of the Trust, the Trustee and the
Holders of the Securities, and of the terms upon which the Securities are, and
are to be, authenticated and delivered. This Note is one of the duly authorized
series of Securities designated as "_______% [Convertible] [Redeemable]
[Nonredeemable] [Subordinated] Notes due ______________" (collectively, the
"Notes"), and the aggregate principal amount of the Notes to be issued under
such series is limited to $___________ (except for Notes authenticated and
delivered upon transfer of, or in exchange for, or in lieu of other Notes). All
terms used in this Note which are defined in the Indenture shall have the
meanings assigned to them in the Indenture.
1. Interest. The Trust promises to pay interest on the principal amount of
this Security at the rate per annum shown above. The Trust will pay interest
semiannually on _____________ and ___________ of each year beginning _________
19__. Interest on the Securities will accrue from the most recent date to which
interest has been paid or, if no interest has been paid, from ___________,
________; provided that, if there is no existing default in the payment of
interest, and if this Security is authenticated between a record date referred
to on the face hereof and the next succeeding interest payment date, interest
shall accrue from such interest payment date. Interest will be computed on the
basis of a 360 day year of twelve 30-day months.
2. Method of Payment. The Trust will pay interest on the Securities
(except defaulted interest) to the Persons who are the registered Holders of the
Securities at the close of business on the _________ or __________ next
preceding the interest payment date. Holders must surrender Securities to a
Paying Agent to collect the principal payments. The Trust will pay principal and
interest in money of the United States that at the time of payment is legal
tender for payment of public and private debts. The Trust, however, may pay
principal and interest by its check payable in such money. It may mail an
interest check to Holder's registered address.
3. Registrar and Agents. Initially, _____________ will act as Security
Registrar, Paying Agent, Conversion Agent and agent for service of notices and
demands. The Trust may change any Security Registrar, co-registrar, Paying
Agent, Conversion Agent and agent for service of notices and demands without
notice. The Trust or any of its Subsidiaries may act as Paying Agent or
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<PAGE>
Conversion Agent. The address of ___________ _________________________________,
Attention: _______________________________.
4. Indenture; Limitations. The Trust issued the Securities as a series of
its Securities under the Indenture. The terms of the Securities include those
stated in the Indenture and those made part of the Indenture by reference to the
TIA as in effect on the date of the Indenture. The Securities are subject to all
such terms, and the Holders of the Securities are referred to the Indenture and
said TIA for a statement of them.
The Securities are general unsecured obligations of the Trust limited to
$_________ principal amount. The Indenture imposes certain limitations on the
ability of the Trust to, among other things, make payments in respect of its
Capital Stock, merge or consolidate with any other Person and sell, lease,
transfer or otherwise dispose of its properties or assets.
5. Optional Redemption by the Trust. The Trust may, at its option, redeem
the Securities, in whole or from time to time in part, on any date subsequent to
______________, _________ at ___% of the principal amount thereof, plus accrued
interest to the Redemption Date; provided, however, that Securities will be
immediately redeemable by the Trust to the extent deemed sufficient by the Trust
to prevent the Holder of such Securities or any other person having an interest
therein in excess of the Ownership Limit.
6. Notice of Redemption. Notice of redemption will be mailed at least 30
days but not more than 60 days before the Redemption Date to each Holder of
Securities to be redeemed at his registered address. Securities in denominations
larger than $_________ principal amount may be redeemed in part, but only in
whole multiples thereof. On and after the Redemption Date interest ceases to
accrue on Securities or portions of them called for redemption.
[7. Conversion. A Holder of a Security may convert such Security into
_______ Shares at any time after _______, _______ and before the close of
business on ________. If the Security is called for redemption, the Holder may
convert it at any time before the close of business on the date fixed for such
redemption. The initial Conversion Price is $_____________ per share, subject to
adjustment in certain events (such conversion price, as adjusted, the
"Conversion Price"). To determine the number of shares issuable upon conversion
of a Security, divide the principal amount to be converted by the Conversion
Price in effect on the conversion date. The Trust will deliver a check for any
fractional share.
To convert a Security, a Holder must (1) complete and sign the conversion
notice on the back of the Security, (2) surrender the Security to the Conversion
Agent, (3) furnish appropriate endorsements and transfer documents if required
by the Registrar or Conversion Agent and (4) pay any transfer or similar tax if
required. No payment or adjustment is to be made on conversion for interest
accrued hereon or for dividends on _______ Shares issued on conversion;
provided, however, that if a Security is surrendered for conversion after the
record date for a payment of interest and on or before the interest payment
date, then, notwithstanding such conversion, the interest falling due to such
interest payment date will be paid to the Person in whose name the Security is
registered at the close of business on such record date and any Security
112982.4
A-5
<PAGE>
surrendered for conversion during the period from the close of business on any
regular record payment date to the opening of business on the corresponding
interest payment date must be accompanied by payment of an amount equal to the
interest payable on such interest payment date. A Holder may convert a portion
of a Security if the portion is $1,000 principal amount or an integral multiple
thereof.
If the Trust is a party to a consolidation or merger or a transfer or
lease of all or substantially all of its assets, the right to convert a Security
into _______ Shares may be changed into a right to convert it into securities,
cash or other assets of the Trust or another Person.
Notwithstanding the foregoing, a Holder may not convert any Security, and
the Security shall not be convertible, if as a result of such conversion the
Holder or any other Person would, or, in the determination of the Board of
Trustees, might then be deemed, directly or indirectly, to have acquired or be
holding shares of Capital Stock in excess of such Holder's or other Person's
Ownership Limit.]
[8. Subordination. This Security is subordinated and junior in right of
payment to all Senior Indebtedness of the Trust. To the extent and in the manner
provided in the Indenture, Senior Indebtedness must be paid before any payment
may be made to any Holders of Securities. Any Holder by accepting this Security
agrees to the subordination and authorizes the Trustee to give it effect.
In addition to all other rights of Senior Indebtedness described in the
Indenture, the Senior Indebtedness shall continue to be Senior Indebtedness and
entitled to the benefits of the subordination provisions irrespective of any
amendment, modification or waiver of any term of any instrument relating to the
Senior Indebtedness or extension or renewal of the Senior Indebtedness.]
[9.] Denominations, Transfer, Exchange. This Security is one of a duly
authorized issue of Securities of the Trust designated as its ____%
[Convertible] [Redeemable] [Nonredeemable] [Subordinated] Notes due ________
[Series ________] limited in aggregate principal amount to $_______. The
Securities are in registered form without coupons in denominations of
$___________ principal amount and integral multiples thereof. A Holder may
register the transfer of or exchange Securities in accordance with the
Indenture. The Security Registrar may require a Holder, among other things, to
furnish appropriate endorsements and transfer documents and to pay any taxes and
fees required by law or permitted by the Indenture. The Security Registrar need
not register the transfer of or exchange any Securities selected for redemption
or register the transfer of or exchange any Securities for a period of 15 days
before a selection of Securities to be redeemed.
[10.] Persons Deemed Owners. The registered Holder of a Security may be
treated as the owner of it for all purposes.
[11.] Unclaimed Money. If money for the payment of principal or interest
on any Securities remains unclaimed for two years, subject to applicable law,
the Trustee and the Paying Agent will pay the money back to the Trust at its
request. After that, Holders may look only to the Trust for payment.
112982.4
A-6
<PAGE>
[12.] Discharge Prior to Redemption or Maturity. The Indenture will be
discharged and cancelled except for certain sections thereof upon payment of all
the Securities, or upon the irrevocable deposit with the Trustee of funds or
U.S. Government Obligations maturing on or before such payment date or
Redemption Date, sufficient to pay principal, premium, if any, and interest on
such payment or redemption.
[13.] Supplemental Indenture. Subject to certain exceptions, without
notice to the Holders of the Securities, the Indenture may be amended or
supplemented with respect to the Securities with the consent of the Holders of
at least a majority in principal amount of the Securities then outstanding and
any existing default or compliance with any provision may be waived with the
consent of the Holders of the majority in principal amount of the Securities
then outstanding. Without the consent of or notice to any Holder, the Trust may
supplement the Indenture, to among other things, to cure any ambiguity, defect
or inconsistency or make any other change that does not adversely affect the
rights or any Holder.
[14.] Successors. When a successor assumes all the obligations of its
predecessor under the Securities and the Indenture, the predecessor will be
released from those obligations.
[15.] Defaults and Remedies. If an Event of Default with respect to these
Securities, as defined in the Indenture, occurs and is continuing, the Trustee
or the Holders of a majority in principal amount of Securities may declare all
the Securities to be due and payable immediately in the manner and with the
effect provided in the Indenture. Holders of Securities may not enforce the
Indenture or the Securities except as provided in the Indenture. The Trustee may
require indemnity satisfactory to it, subject to the provisions of the TIA
before it enforces the Indenture or the Securities. Subject to certain
limitations, Holders of a majority in principal amount of the Securities then
outstanding may direct the Trustee in its exercise of any trust or power with
respect to the Securities. The Trustee may withhold from Holders of Securities
notice of certain continuing defaults (except a default in payment of principal
or interest) if it determines that withholding notice is in their interests. The
Trust is required to file periodic reports with the Trustee as to the absence of
any default or Event of Default.
[16.] Trustee Dealings with the Trust. ______________, the Trustee under
the Indenture, in its individual or any other capacity, may make loans to,
accept deposits from, and perform services for the Trust or its Affiliates, and
may otherwise deal with the Trust or its Affiliates, as if it were not Trustee.
[17.] No Recourse Against Others. No shareholder, trustee, officer or
incorporator, as such, past, present or future, of the Trust or any successor
trust shall have any liability for any obligation of the Trust under the
Securities or the Indenture or for any claim based on, in respect of or by
reason of, such obligations, or their creation. Each Holder of a Security by
accepting a Security waives and releases all such liability. The waiver and
release are part of the consideration for the issuance of the Securities.
112982.4
A-7
<PAGE>
[18.] Authentication. This Security shall not be valid until the Trustee
or an authenticating agent appointed by the Trustee signs the certificate of
authentication on the other side of this Security.
[19.] Abbreviations. Customary abbreviations may be used in the name of a
Holder or an assignee, such as: TEN COM (=tenants in common), TEN ENT (=tenants
by the entities), JT TEN (=Joint tenants with rights of survivorship and not as
tenants in common), CUST (=Custodian), and U/G/M/A (=Uniform Gifts to Minors
Act).
The Trust will furnish to any Holder upon written request and without
charge a copy of the Indenture and any supplemental indentures thereto. It also
will furnish the text of this Security in larger type. Requests may be made to:
MGI PROPERTIES, One Winthrop Square, Boston, Massachusetts 02110, Attention:
Phillip C. Vitali.
112982.4
A-8
<PAGE>
ASSIGNMENT FORM
If you the Holder want to assign this Security, fill in the form below and have
your signature guaranteed:
For value received, I or we assign and transfer this Security to
(INSERT ASSIGNEE'S SOCIAL SECURITY OR
TAX IDENTIFICATION NUMBER)
===============================================================================
===============================================================================
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
(Print or type assignee's name, address and zip code)
and irrevocably appoint---------------------------------------------------------
agent to transfer this Security on the books of the Trust. The agent may
substitute another to act for him.
Date:
--------------------------------------------------------------------------
Your signature:
----------------------------------------------------------------
(Sign exactly as your name appears on
the other side of this Security)
Signature Guarantee:
-----------------------------------------------------------
112982.4
A-9
<PAGE>
CONVERSION NOTICE
To convert this Security into __________ Shares of the Trust, check the box:
[ ]
To convert only part of this Security, state the principal amount to be
converted (which must be a minimum of $_________ or any multiple thereof):
===============================================================================
$
===============================================================================
If you want the Security certificate, if any, made out in another person's name,
fill in the form below:
(INSERT OTHER PERSON'S SOCIAL SECURITY
OR TAX IDENTIFICATION NUMBER)
===============================================================================
===============================================================================
- -------------------------------------------------------------------------------
- -------------------------------------------------------------------------------
- -------------------------------------------------------------------------------
- -------------------------------------------------------------------------------
(Print or type assignee's name, address and zip code)
Date:
--------------------------------------------------------------------------
Your signature:
----------------------------------------------------------------
(Sign exactly as your name appears on
the other side of this Security)
Signature Guarantee By:
--------------------------------------------------------
112982.4
A-10
EXHIBIT 4(b)
------------
================================================================================
------------------------
MGI PROPERTIES
STANDARD [COMMON SHARES/PREFERRED SHARES] WARRANT
AGREEMENT PROVISIONS
------------------------
===============================================================================
113030.3
<PAGE>
TABLE OF CONTENTS
SECTION 1. Number of Warrants Unlimited; Issuable from Time to
Time............................................... 1
SECTION 2. Form of Warrant Certificates....................... 1
SECTION 3. Temporary Warrant Certificates..................... 2
SECTION 4. Execution of Warrant Certificates.................. 2
SECTION 5. Registration and Countersignature.................. 2
SECTION 6. Exchange and Transfer.............................. 3
SECTION 7. Duration and Exercise of Warrants.................. 3
SECTION 8. Call of Warrants by the Trust...................... 4
SECTION 9. Optional Reduction of Exercise Price............... 4
SECTION 10. Cancellation of Warrant Certificates............... 4
SECTION 11. Treatment of Holders of Warrant Certificates....... 5
SECTION 12. Payment of Taxes................................... 5
SECTION 13. Mutilated or Missing Warrant Certificates.......... 5
SECTION 14. Reservation of Shares.............................. 5
SECTION 15. Obtaining Governmental Approvals and Stock Exchange
Listings........................................... 6
SECTION 16. Adjustment of Exercise Price and Number of Common
Shares and/or Preferred Shares Purchasable or Number
of Warrants for Common Shares and/or Preferred
Shares............................................. 6
SECTION 17. Fractional Warrants and Fractional Shares.......... 8
SECTION 18. Notices to Holders................................. 9
SECTION 19. Merger, Consolidation or Change of Name of Warrant
Agent.............................................. 10
SECTION 20. Warrant Agent...................................... 10
SECTION 21. Conditions of Warrant Agent's Obligations.......... 10
SECTION 22. Change of Warrant Agent............................ 12
SECTION 23. Holder Not Deemed a Shareholder.................... 12
SECTION 24. Delivery of Prospectus............................. 12
113030.3
(i)
<PAGE>
SECTION 25. Notice and Demands to the Trust and Warrant Agent.. 12
SECTION 26. Persons Having Rights Under Warrant Agreement...... 12
SECTION 27. Inspection of Agreement............................ 13
SECTION 28. Notices to Trust and Warrant Agent................. 13
SECTION 29. Supplements and Amendments......................... 13
SECTION 30. Successors......................................... 13
SECTION 31. Termination........................................ 13
SECTION 32. Governing Law...................................... 13
SECTION 33. Benefit of this Agreement.......................... 13
SECTION 34. Counterparts....................................... 14
SECTION 35. Headings........................................... 14
SECTION 36. Board of Trustees.................................. 14
113030.3
(ii)
<PAGE>
From time to time, MGI Properties (the "Trust") may enter into one
or more warrant agreements that provide for the issuance and sale of warrants
(collectively, the "Warrants") to purchase the Trust's [common shares, par value
$1.00 per share (the "Common Shares")] [preferred shares, par value $1.00 per
share (the "Preferred Shares")] (such [Common Shares] [Preferred Shares] are
hereinafter referred to as the "Underlying Securities" and, where appropriate,
such term shall also mean the other securities or property purchasable upon the
exercise of the Warrants). The standard provisions set forth herein may be
incorporated by reference in any such warrant agreement (each, a "Warrant
Agreement"). The Warrant Agreement, including the provisions incorporated
therein by reference, is herein referred to as this "Agreement." The person
named as the "Warrant Agent" in the first paragraph of the Warrant Agreement is
herein referred to as the "Warrant Agent." Unless otherwise defined in this
Agreement or in the Warrant Agreement, as the case may be, terms defined in the
Warrant Agreement are used herein as therein defined and terms defined herein
are used in the Warrant Agreement as herein defined.
SECTION 1. Number of Warrants Unlimited; Issuable from Time to Time.
The number of Warrants which may be issued and delivered under this Agreement is
unlimited.
There shall be established in or pursuant to resolution of the Board
of Trustees of the Trust (the "Board") or established in one or more warrant
agreements supplemental hereto, prior to the issuance of any Warrants:
(1) the designation of such Warrants, the number of Warrants to be
issued and the initial number and title of Underlying
Securities for which each Warrant shall be exercisable;
(2) if the Warrants are issued together as a unit with any other
securities of the Trust, the date after which the Warrants
shall be freely tradable separately from such other securities
(the "Distribution Date") and if the Trust may, at its option,
or under circumstances described therein, provide for an
earlier Distribution Date;
(3) the Expiration Date pursuant to Section 7;
(4) the Exercise Price and any form of consideration other than
lawful money of the United States of America (the "United
States") by which the Exercise Price may be paid pursuant to
Section 7;
(5) the Call Price, Call Date and Call Terms pursuant to
Section 8, if any;
(6) the limitations, if any, upon the Reduced Exercise Price and
the Reduced Exercise Price Period pursuant to Section 9;
(7) the circumstances, if any, under which the Exercise Price and
the number of shares of Underlying Securities purchasable upon
the exercise of each Warrant and the number of Warrants
outstanding are subject to adjustment and the manner of making
any such adjustment; and
(8) any additional limitations, modifications or provisions
applicable to the Warrants to be issued.
SECTION 2. Form of Warrant Certificates. The certificates evidencing
the Warrants (the "Warrant Certificates") to be delivered pursuant to this
Agreement shall be in registered form only. The Warrant Certificates shall be in
substantially such form or forms as shall be established by the Trust from time
to time pursuant to one or more resolutions of the Board or in one or more
warrant agreements supplemental hereto, in each case with such appropriate
113030.3
<PAGE>
insertions, omissions, substitutions and other variations as are required or
permitted by this Agreement, and may have such letters, numbers or other marks
of identification and such legends or endorsements placed thereon as may be
required to comply with any law or with any rules made pursuant thereto or with
any rules of any securities exchange or as may, consistently herewith, be
determined by the officers executing such Warrants, as evidenced by their
execution of the Warrants.
SECTION 3. Temporary Warrant Certificates. Pending the preparation
of definitive Warrant Certificates, the Trust may execute, and upon the order of
the Trust the Warrant Agent shall authenticate and deliver, temporary Warrant
Certificates which are printed, lithographed, typewritten, mimeographed or
otherwise produced substantially of the tenor of the definitive Warrant
Certificates in lieu of which they are issued and with such appropriate
insertions, omissions, substitutions and other variations as the officers
executing such Warrant Certificates may determine, as evidenced by their
execution of such Warrant Certificates.
If temporary Warrant Certificates are issued, the Trust will cause
definitive Warrant Certificates to be prepared without unreasonable delay. After
the preparation of definitive Warrant Certificates, the temporary Warrant
Certificates shall be exchangeable for definitive Warrant Certificates upon
surrender of the temporary Warrant Certificates at the office of the Warrant
Agent, without charge to any holder thereof (each, a "Holder"). Upon surrender
for cancellation of any one or more temporary Warrant Certificates, the Trust
shall execute and the Warrant Agent shall authenticate and deliver in exchange
therefor, definitive Warrant Certificates representing the same aggregate number
of Warrants. Until so exchanged, the temporary Warrant Certificates shall in all
respects be entitled to the same benefits under this Agreement as definitive
Warrant Certificates.
SECTION 4. Execution of Warrant Certificates. Warrant Certificates
shall be signed on behalf of the Trust by its Chairman of the Board, its
President, if any, or any Vice President and countersigned by its Treasurer, any
Assistant Treasurer, its Secretary, or any Assistant Secretary, under its seal.
Each such signature upon the Warrant Certificates may be in the form of a
facsimile signature of the current or any future Chairman of the Board,
President (if any), Vice President, Treasurer, Assistant Treasurer, Secretary or
Assistant Secretary and may be imprinted or otherwise reproduced on the Warrant
Certificates and for that purpose the Trust may adopt and use the facsimile
signature of any person who shall have been Chairman of the Board, President (if
any), any Vice President, Treasurer, Assistant Treasurer, Secretary or any
Assistant Secretary, notwithstanding the fact at the time the Warrant
Certificates shall be countersigned and delivered or disposed of such person
shall have ceased to hold such office. The seal of the Trust may be in the form
of a facsimile thereof and may be impressed, affixed, imprinted or otherwise
reproduced on the Warrant Certificates.
If any officer of the Trust who shall have signed any of the Warrant
Certificates shall cease to be such officer before the Warrant Certificates so
signed shall have been countersigned by the Warrant Agent or disposed of by the
Trust, such Warrant Certificates nevertheless may be countersigned and delivered
or disposed of as though such person had not ceased to be such officer of the
Trust; and any Warrant Certificate may be signed on behalf of the Trust by any
person who, at the actual date of the execution of such Warrant Certificate,
shall be a proper officer of the Trust to sign such Warrant Certificate,
although at the date of the execution of this Agreement any such person was not
such officer.
SECTION 5. Registration and Countersignature. Warrant Certificates
shall be manually countersigned and dated the date of countersignature by the
Warrant Agent and shall not be valid for any purpose unless so countersigned.
The Warrants shall be numbered and shall be registered in a register (the
"Warrant Register") to be maintained by the Warrant Agent.
113030.3
2
<PAGE>
The Warrant Agent's countersignature on all Warrants shall be in
substantially the following form:
[NAME OF WARRANT AGENT],
as Warrant Agent
By
--------------------
Authorized Signatory
The Trust and the Warrant Agent may deem and treat the registered
Holder of a Warrant Certificate as the absolute owner thereof (notwithstanding
any notation of ownership or other writing thereon made by anyone), for the
purpose of any exercise thereof or any distribution to the Holder thereof and
for all other purposes, and neither the Trust nor the Warrant Agent shall be
affected by any notice to the contrary.
SECTION 6. Exchange and Transfer. Upon surrender at the office of
the Warrant Agent, Warrant Certificates evidencing Warrants may be exchanged for
Warrant Certificates in other denominations evidencing such Warrants and the
transfer of Warrants may be registered in whole or in part; provided that such
other Warrant Certificates shall evidence the same aggregate number of Warrants
as the Warrant Certificates surrendered for exchange or registration of
transfer. The Warrant Agent shall keep, at its office, books in which it shall
register Warrant Certificates and exchanges and transfers of outstanding Warrant
Certificates, upon surrender of the Warrant Certificates to the Warrant Agent at
its office for exchange or registration of transfer and written instructions for
transfer, all in form satisfactory to the Trust and the Warrant Agent. No
service charge shall be made for any exchange or registration of transfer of
Warrant Certificates, but the Trust may require payment of a sum sufficient to
cover any stamp or other tax or other governmental charge that may be imposed in
connection with any such exchange or registration or transfer. Whenever any
Warrant Certificates are surrendered for exchange or registration of transfer,
an authorized officer of the Warrant Agent shall mutually countersign and
deliver to the person or person entitled thereto a Warrant Certificate or
Warrant Certificates duly authorized and executed by the Trust, as so requested.
The Warrant Agent shall not be required to effect any exchange or registration
of transfer that will result in the issuance of a Warrant Certificate evidencing
a fraction of a Warrant or a number of full Warrants and a fraction of a
Warrant. All Warrant Certificates issued upon any exchange or registration of
transfer of Warrant Certificates shall be the valid obligations of the Trust,
evidencing the same obligations and entitled to the same benefits under this
Agreement as the Warrant Certificates surrendered for such exchange or
registration of transfer.
SECTION 7. Duration and Exercise of Warrants. The Warrants shall
expire on (a) the close of business on [the date set forth pursuant to Section
1], or (b) such later date as shall be determined in the sole discretion of the
Trust, in a written statement to the Warrant Agent and with notice to registered
Holders of Warrants in the manner provided for in Section 18 (such date of
expiration being herein referred to as the "Expiration Date"). On and after the
[specified date], each Warrant may be exercised on any business day on or prior
to the close of business on the Expiration Date. After the close of business on
the Expiration Date, the Warrants will become void and of no value.
Subject to the provisions of this Agreement, including Section 16,
the Holder of each Warrant shall have the right to purchase from the Trust (and
the Trust shall issue and sell to such Holder of a Warrant) [number of]
Underlying Securities, as adjusted pursuant to Sections 14 and 16, at the price
set forth pursuant to Section 1 (such price, as may be adjusted from time to
time and provided in Section 16, being the "Exercise Price") upon depositing
with the Warrant Agent at an office thereof the Warrant Certificate evidencing
such Warrant, with the form of election to purchase on the reverse thereof duly
completed and signed by the respective registered Holder or Holders thereof or
by the duly appointed legal representative thereof or by a duly authorized
attorney, such signature to be guaranteed by a bank or trust company, by a
broker or dealer which is a member of the NASD or by a member of a national
securities exchange, and upon payment of the Exercise Price for the number of
113030.3
3
<PAGE>
Underlying Securities in respect of which such Warrants are being exercised.
Unless otherwise provided pursuant to Section 1, payment of the aggregate
Exercise Price shall be made in cash or by certified or official bank check in
New York Clearing House funds or by bank wire transfer in immediately available
funds, in the lawful money of the United States.
Subject to Section 11, upon such surrender of a Warrant Certificate
and payment of the Exercise Price, if the Underlying Securities are [Common
Shares] [Preferred Shares], the Warrant Agent shall requisition from the Trust's
stock transfer agent (the "Transfer Agent") for issuance and delivery to or upon
the written order of the registered Holder of such Warrant Certificate and in
such name or names as such registered Holder may designate, a certificate or
certificates for the Underlying Securities issuable upon the exercise of the
Warrant or Warrants evidenced by such Warrant Certificate. Such certificate or
certificates shall be deemed to have been issued and any person so designated to
be named therein shall be deemed to have become the Holder of record of such
shares of Underlying Securities as of the date of the surrender of such Warrant
Certificate duly executed and payment of the Exercise Price. The Warrants
evidenced by a Warrant Certificate shall be exercisable, at the election of the
registered Holder thereof, either as an entirety or from time to time for a
portion of the number of Warrants specified in the Warrant Certificate. If less
than all of the Warrants evidenced by a Warrant Certificate surrendered upon the
exercise of the Warrants are exercised at any time prior to the Expiration Date,
a new Warrant Certificate or Certificates shall be issued for the remaining
number of Warrants evidenced by the Warrant Certificate so surrendered, and the
Warrant Agent is hereby authorized to countersign the required new Warrant
Certificate or Certificates pursuant to the provisions of Section 6 and this
Section 7.
The Warrant Agent shall account promptly to the Trust with respect
to Warrants exercised and concurrently pay or deliver to the Trust all moneys
and other consideration received by it on the purchase of the shares of the
Underlying Securities through the exercise of Warrants.
SECTION 8. Call of Warrants by the Trust. If so provided in the
Warrant Agreement, the Trust shall have the right to call and repurchase any or
all Warrants at the price (the "Call Price") and on or after the date (the "Call
Date") and upon the terms (the "Call Terms") as shall be established from time
to time in or pursuant to resolutions of the Board or in the Warrant Agreement
before the issuance of such Warrants. Notice of such Call Price, Call Date and
Call Terms shall be given to registered Holders of Warrants in writing by the
Trust or the Warrant Agent.
SECTION 9. Optional Reduction of Exercise Price. Subject to the
limits, if any, established from time to time by the Board or in the Warrant
Agreement, the Trust shall have the right, at any time or from time to time,
voluntarily to reduce the then current Exercise Price to such amount (the
"Reduced Exercise Price") and for such period or periods of time, which may be
through the close of business on the Expiration Date (the "Reduced Exercise
Price Period"), as may be deemed appropriate by the Board. Notice of any such
Reduced Exercise Price and Reduced Exercise Price Period shall be given to
registered Holders of Warrants in writing by the Trust or the Warrant Agent.
Unless further action is taken by the Trust pursuant to this Section 9, after
the termination of the Reduced Exercise Period, the Exercise Price shall be such
Exercise Price that would have been in effect had there been no reduction in the
Exercise Price pursuant to the provisions of this Section 9.
SECTION 10. Cancellation of Warrant Certificates. Any Warrant
Certificate surrendered for exercise, registration of transfer or exchange
shall, if surrendered to the Trust, be delivered to the Warrant Agent, and all
Warrant Certificates surrendered or so delivered to the Warrant Agent shall be
promptly cancelled by the Warrant Agent and shall not be issued and, except as
expressly permitted by this Agreement, no Warrant Certificate shall be issued
hereunder in lieu thereof. The Warrant Agent shall deliver to the Trust from
time to time, or otherwise dispose of, cancelled Warrant Certificates in a
manner satisfactory to the Trust.
113030.3
4
<PAGE>
SECTION 11. Treatment of Holders of Warrant Certificates. Every
Holder of a Warrant Certificate, by accepting the same, consents and agrees with
the Trust, the Warrant Agent and with every subsequent Holder of such Warrant
Certificate that, until the transfer of the Warrant Certificate is registered on
the books of the Warrant Agent, the Trust and the Warrant Agent may treat the
registered Holder as the absolute owner thereof for any purpose and as the
person entitled to exercise the rights represented by the Warrants evidenced
thereby, any notice to the contrary notwithstanding.
SECTION 12. Payment of Taxes. The Trust will pay all documentary
stamp taxes attributable to the initial issuance of Warrants and of the shares
of the Underlying Securities upon the exercise of Warrants; provided, that the
Trust shall not be required to pay any tax or taxes which may be payable in
respect of any transfer involved in the issue of any Warrant Certificates or any
certificates for the shares of the Underlying Securities in a name other than
the registered Holder of a Warrant Certificate surrendered upon the exercise of
a Warrant, and the Trust shall not be required to issue or deliver such
certificates unless or until the person or persons requesting the issuance
thereof shall have paid to the Trust the amount of such tax or shall have
established to the satisfaction of the Trust that such tax has been paid.
SECTION 13. Mutilated or Missing Warrant Certificates. Upon receipt
by the Trust and the Warrant Agent of evidence reasonably satisfactory to them
of the ownership and the loss, theft, destruction or mutilation of the Warrant
Certificate, and of indemnity reasonably satisfactory to them, and, in the case
of mutilation, upon surrender thereof to the Warrant Agent for cancellation,
then, in the absence of notice to the Trust or the Warrant Agent that such
Warrant Certificate has been acquired by a bona fide purchaser, the Trust shall
execute, and an authorized officer of the Warrant Agent shall manually
countersign and deliver, in exchange for or in lieu of the lost, stolen,
destroyed or mutilated Warrant Certificate, a new Warrant Certificate of the
same tenor and for a like number of Warrants. Upon the issuance of any new
Warrant Certificate under this Section, the Trust 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 expense (including, without limitation, the
fees and expenses of the Warrant Agent) in connection therewith. Every
substitute Warrant Certificate executed and delivered pursuant to this Section
13 in lieu of any lost, stolen or destroyed Warrant Certificate shall constitute
an additional contractual obligation of the Trust, whether or not the lost,
stolen or destroyed Warrant Certificate shall be at any time enforceable by
anyone, and shall be entitled to the benefits of this Agreement equally and
proportionately with any and all other Warrant Certificates duly executed and
delivered hereunder. The provisions of this Section 13 are exclusive and shall
preclude (to the extent lawful) any and all other rights or remedies with
respect to the replacement of mutilated, lost, stolen or destroyed Warrant
Certificates.
SECTION 14. Reservation of Shares. For the purpose of enabling it to
satisfy any obligation to issue Underlying Securities upon exercise of Warrants
for Common Shares, and/or Preferred Shares, the Trust will at all times through
the close of business on the Expiration Date, reserve out of its aggregate
authorized but unissued or treasury shares of Common Shares and Preferred
Shares, the number of Underlying Securities deliverable upon the exercise of all
outstanding Warrants for shares of such Underlying Securities, and the Transfer
Agent for such shares is hereby irrevocably authorized and directed at all times
to reserve such number of authorized and unissued or treasury shares of Common
Shares and Preferred Shares as shall be required for such purpose. The Trust
will keep a copy of this Agreement on file with such Transfer Agent and with
every transfer agent for any shares of the Trust's capital stock issuable upon
the exercise of Warrants for Common Shares and/or Preferred Shares pursuant to
this Section 14. The Warrant Agent is hereby irrevocably authorized to
requisition from time to time from such Transfer Agent stock certificates
issuable upon exercise of outstanding Warrants for Common Shares and/or
Preferred Shares, and the Trust will supply such Transfer Agent with duly
executed stock certificates for such purpose.
Before taking any action that would cause an adjustment pursuant to
Section 16 reducing the Exercise Price below the then par value (if any) of the
shares of Underlying Securities issuable upon exercise of the Warrants for
Common Shares and/or Preferred Shares, the Trust will take any trust action that
may, in the opinion of its counsel, be necessary in order that the Trust may
113030.3
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validly and legally issue fully paid and nonassessable shares of Underlying
Securities at the Exercise Price as so adjusted.
The Trust covenants that all shares of Underlying Securities issued
upon exercise of the Warrants for Common Shares and/or Preferred Shares will,
upon issuance in accordance with the terms of this Agreement, be duly and
validly issued and fully paid and nonassessable and free from all taxes, liens,
charges and security interests created by or imposed upon the Trust with respect
to the issuance and/or holding thereof.
SECTION 15. Obtaining Governmental Approvals and Stock Exchange
Listings. So long as any Warrants for Common Shares and/or Preferred Shares
remain outstanding, the Trust will take all necessary steps (a) to obtain and
keep effective any and all permits, consents and approvals of governmental
agencies and authorities and to make filing under federal and state securities
acts and laws, which be or become requisite in connection with the issuance,
sale, transfer and delivery of the Warrant Certificates, the exercise of the
Warrants for Common Shares and/or Preferred Shares and the issuance, sale,
transfer and delivery of the shares of Underlying Securities issued upon
exercise of Warrants for such shares, and (b) to have Common Shares and/or
Preferred Shares, immediately upon their issuance upon exercise of Warrants, (i)
listed on each national securities exchange on which the Common Shares and/or
Preferred Shares is then listed or (ii) if the Common Shares and/or Preferred
Shares is not then listed on any national securities exchange, listed for
quotation on the NASD Automated Quotation System ("NASDAQ") National Market
("Nasdaq/NNM") or such other over-the-counter quotation system on which the
Common Shares and/or Preferred Shares may then be listed.
SECTION 16. Adjustment of Exercise Price and Number of Common Shares
and/or Preferred Shares Purchasable or Number of Warrants for Common Shares
and/or Preferred Shares. Except as may be otherwise provided in accordance with
Section 1, the Exercise Price, the number of shares of Underlying Securities
purchasable upon the exercise of each Warrant for Common Shares and/or Preferred
Shares and the number of Warrants for such shares of outstanding are subject to
adjustment from time to time upon the occurrence of the events enumerated in
this Section 16.
(a) If the Trust shall (i) pay a dividend on its capital stock
(including in respect of any Common Shares or Preferred Shares) in Common Shares
and/or Preferred Shares, (ii) subdivide its outstanding Common Shares and/or
Preferred Shares, (iii) combine its outstanding Common Shares and/or Preferred
Shares into a smaller number of such shares or (iv) issue any shares of its
capital stock in a reclassification of the Common Shares and/or Preferred Shares
(including any such reclassification in connection with a consolidation or
merger in which the Trust is the continuing entity), the number of shares of the
Underlying Securities purchasable upon exercise of each Warrant immediately
prior thereto shall be adjusted so that the Holder of each Warrant shall be
entitled to receive the kind and number of the shares of the Underlying
Securities or other securities of the Trust which such Holder would have owned
or have been entitled to receive after the happening of any of the events
described above, had such Warrant been exercised immediately prior to the
happening of such event or any record date with respect thereto. An adjustment
made pursuant to this paragraph (a) shall become effective immediately after the
effective date of such event retroactive to the record date, if any, for such
event.
(b) In the event of any capital reorganization or any
reclassification of the Common Shares and/or Preferred Shares (except as
provided in paragraph (a) above or paragraph (h) below), any Holder of Warrants
upon exercise thereof shall be entitled to receive, in lieu of the Common Shares
and/or Preferred Shares to which such Holder would have become entitled upon
exercise immediately prior to such reorganization or reclassification, the
shares (of any class or classes) or other securities or property of the Trust
that such Holder would have been entitled to receive at the same aggregate
Exercise Price upon such reorganization or reclassification if such Holder's
Warrants had been exercised immediately prior thereto; and in any such case,
appropriate provision (as determined in good faith by the Board, whose
determination shall be conclusive and shall be evidenced by a resolution filed
with the Warrant Agent) shall be made for the application of this Section 16
with respect to the rights and interests thereafter of the Holders of Warrants
(including the allocation of the adjusted Exercise Price between or among shares
113030.3
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of classes of capital stock), to the end that this Section 16 (including the
adjustments of the number of Common Shares and/or Preferred Shares or other
securities purchasable and the Exercise Price thereof) shall thereafter be
reflected, as nearly as reasonably practicable, in all subsequent exercises of
the Warrants for any shares or securities or other property thereafter
deliverable upon the exercise of the Warrants.
(c) Except for adjustments required by paragraph (h) hereof, no
adjustment in the number of the shares of the Underlying Securities purchasable
hereunder shall be required unless such adjustment would require an increase or
decrease of at least one percent (1%) in the number of the shares of the
Underlying Securities purchasable upon the exercise of each Warrant; provided,
however, that any adjustments which by reason of this paragraph (c) are not
required to be made shall be carried forward and taken into account in any
subsequent adjustment. All calculations shall be made to the nearest cent and to
the nearest one-hundredth of a share of the Underlying Security, as the case may
be.
(d) Whenever the number of the shares of the Underlying Securities
purchasable upon the exercise of each Warrant is adjusted as herein provided
(whether or not the Trust then or thereafter elects to issue additional Warrants
in substitution for an adjustment in the number of shares of the Underlying
Securities as provided in paragraph (f)), the Exercise Price payable upon
exercise of each Warrant shall be adjusted by multiplying such Exercise Price
immediately prior to such adjustment by a fraction, of which the numerator shall
be the number of the shares of the Underlying Securities purchasable upon the
exercise of each Warrant immediately prior to such adjustment, and of which the
denominator shall be the number of the shares of the Underlying Securities so
purchasable immediately thereafter.
(e) For the purpose of this Section 16, the term "Common Shares
and/or Preferred Shares" shall mean (i) the class of stock designated as the
Common Shares or Preferred Shares, as the case may be, of the Trust at the date
of this Agreement, or (ii) any other class of stock resulting from successive
changes or reclassification of such shares consisting solely of changes in par
value, or from par value to no par value, or from no par value to par value. If
at any time, as a result of an adjustment made pursuant to paragraph (a) or (b)
above, the Holders of Warrants shall become entitled to purchase any shares of
the Trust other than Common Shares and/or Preferred Shares, thereafter the
number of such other shares so purchasable upon exercise of each Warrant and the
Exercise Price of such shares shall be subject to adjustment from time to time
in a manner and on terms as nearly equivalent as practicable to the provisions
with respect to the shares of the Underlying Securities contained in paragraphs
(a) through (d), inclusive, above, and the provisions of Sections 12, 15 and 16,
with respect to the shares of the Underlying Securities, shall apply on like
terms to any such other shares.
(f) The Trust may elect, on or after the date of any adjustment
required by paragraphs (a) and (b) of this Section 16, to adjust the number of
Warrants in substitution for an adjustment in the number of shares of the
Underlying Securities purchasable upon the exercise of a Warrant. Each of the
Warrants outstanding after such adjustment of the number of Warrants shall be
exercisable for the same number of shares of the Underlying Securities as
immediately prior to such adjustment. Each Warrant held of record prior to such
adjustment of the number of Warrants shall become the number of Warrants
(calculated to the nearest hundredth) obtained by dividing the Exercise Price in
effect prior to adjustment of the Exercise Price by the Exercise Price in effect
at adjustment of the Exercise Price. The Trust shall notify the Holders of
Warrants in the same manner as provided in the first paragraph of Section 18, of
its election to adjust the number of Warrants, indicating the record date for
the adjustment, and, if known at the time, the amount of the adjustment to be
made. This record date may be the date on which the Exercise Price is adjusted
or any date thereafter. Upon each adjustment of the number of Warrants pursuant
to this paragraph (f), the Trust shall, as promptly as practicable, cause to be
distributed to Holders of record of Warrants on such record date Warrant
Certificates evidencing, subject to Section 15, the additional Warrants to which
such Holders shall be entitled as a result of such adjustment, or, at the option
of the Trust, shall cause to be distributed to such Holders of record in
substitution and replacement for the Warrant Certificates held by such Holders
prior to the date of adjustment, and upon surrender thereof, if required by the
Trust, new Warrant Certificates evidencing all the Warrants to be issued,
executed and registered in the manner specified in Sections 4 and 5 (and which
113030.3
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<PAGE>
may bear, at the option of the Trust, the adjusted Exercise Price) and shall be
registered in the names of the Holders of record of Warrant Certificates on the
record date specified in the notice.
(g) Except as provided in paragraph (a) of this Section 16, no
adjustment in respect of any dividends shall be made during the term of a
Warrant or upon the exercise of a Warrant.
(h) In the case of any consolidation of the Trust with or merger of
the Trust into another entity or in case of any sale or conveyance to another
entity of the property of the Trust as an entirety or substantially as an
entirety, the Trust or such successor or purchasing entity, as the case may be,
shall execute with the Warrant Agent an agreement that each Holder of a Warrant
shall have the right thereafter upon payment of the Exercise Price in effect
immediately prior to such action to purchase upon exercise of each Warrant the
kind and amount of shares and other securities and property which he would have
owned or have been entitled to receive after the happening of such
consolidation, merger, sale or conveyance had such Warrant been exercised
immediately prior to such action. The Trust shall mail by first-class mail,
postage prepaid, to each Holder of a Warrant, notice of the execution of any
such agreement. Such agreement shall provide for adjustments, which shall be as
nearly equivalent as may be practicable to the adjustments provided for in this
Section 16. The provisions of this paragraph (h) shall similarly apply to
successive consolidations, mergers, sales or conveyances. The Warrant Agent
shall be under no duty or responsibility to determine the correctness of any
provisions contained in any such agreement relating either to the kind or amount
of shares of stock or other securities or property receivable upon exercise of
Warrants or with respect to the method employed and provided therein for any
adjustments and shall be entitled to rely upon the provisions contained in any
such agreement.
(i) Irrespective of any adjustments in the Exercise Price or the
number or kind or shares purchasable upon the exercise of the Warrants, Warrants
theretofore or thereafter issued may continue to express the same price and
number and kind of shares as are stated in the Warrants initially issuable
pursuant to this Agreement.
SECTION 17. Fractional Warrants and Fractional Shares.
(a) The Trust shall not be required to issue fractions of Warrants
on any distribution of Warrants to Holders of Warrant Certificates pursuant to
Section 16(f) or to distribute Warrant Certificates that evidence fractional
Warrants. In lieu of such fractional Warrants there shall be paid to the
registered Holders of the Warrant Certificates with regard to which such
fractional Warrants would otherwise be issuable, an amount in cash equal to the
same fraction of the current market value of a full Warrant. For purposes of
this Section 17(a), the current market value of a Warrant shall be the closing
price of one Warrant (as determined pursuant to paragraph (c) below) for the
trading day immediately prior to the date on which such fractional Warrant would
have been otherwise issuable.
(b) Notwithstanding any adjustment pursuant to Section 16 in the
number of the shares of the Underlying Securities purchasable upon the exercise
of a Warrant, the Trust shall not be required to issue fractional shares upon
exercise of the Warrants or to distribute certificates which evidence fractional
shares. In lieu of fractional shares, there shall be paid to the registered
Holders of Warrant Certificates at the time such Warrant Certificates are
exercised as herein provided an amount in cash equal to the same fraction of the
current market value of a Common Share or Preferred Share, as the case may be.
For purposes of this Section 17(b), the current market value of a Common Share
or Preferred Share, as the case may be, shall be the closing price of a share of
such capital stock (as determined pursuant to paragraph (c) below) for the
trading day immediately prior to the date of such exercise.
(c) The closing price for each day shall be the last sale price,
regular way, or, if no such sale takes place on such day, the average of the
closing bid and asked prices, regular way, for such day, in either case as
reported in the principal consolidated transaction reporting system with respect
to securities listed or admitted to trading on the New York Stock Exchange or,
113030.3
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if the Warrants, Common Shares and/or Preferred Shares, as the case may be, are
not listed or admitted to trading on such exchange, as reported on the principal
consolidated transaction reporting system with respect to securities listed on
the principal national securities exchange on which the Warrants, Common Shares
and/or Preferred Shares, as the case may be, are listed or admitted to trading
or, if the Warrants, Common Shares and/or Preferred Shares, as the case may be,
are not listed or admitted to trading on any national securities exchange, as
reported on Nasdaq/NNM or, if the Warrants, Common Shares and/or Preferred
Shares, as the case may be, are not listed or admitted to trading on Nasdaq/NNM,
as reported on NASDAQ.
SECTION 18. Notices to Holders. Upon any adjustment of the number of
the shares of the underlying Securities purchasable upon exercise of each
Warrant, the Exercise Price or the number of Warrants outstanding pursuant to
Section 16, the Trust within 20 calendar days thereafter shall (i) cause to be
filed with the Warrant Agent a certificate of a firm of independent public
accountants of recognized standing selected by the Trust (who may be the regular
auditors of the Trust) setting forth the Exercise Price and either the number of
the shares of the underlying Securities purchasable upon exercise of each
Warrant or the additional number of Warrants to be issued for each previously
outstanding Warrant, as the case may be, after such adjustment and setting forth
in reasonable detail the method of calculation and the facts upon which such
adjustment was made, which certificate shall be conclusive evidence of the
correctness of the matter set forth therein, and (ii) cause to be given to each
registered Holder of the Warrant Certificates at such Holder's address appearing
on the Warrant Register written notice of such adjustments by first-class mail,
postage prepaid. Where appropriate, such notice may be given in advance and
included as part of the notice required to be mailed under the other provisions
of this Section 18.
Pursuant to Sections 1, 7, 8 and 9, the Trust shall cause written
notice of such later Distribution Date, such later Expiration Date, such Call
Price, Call Date and Call Terms and such Reduced Exercise Price and Reduced
Exercise Price Period, as the case may be, to be given as soon as practicable to
the Warrant Agent and to each of the registered Holders of the Warrant
Certificates by first-class mail, postage prepaid, at such Holder's address
appearing on the Warrant Register. In addition to the written notice referred to
in the preceding sentence, the Trust shall make a public announcement in a daily
morning newspaper of general circulation in New York City and in Boston of such
earlier Distribution Date, such later Expiration Date, such Call Price, Call
Date and Call Terms and such Reduced Exercise Price and Reduced Exercise Price
Period, as the case may be, at least once a week for two successive weeks prior
to the implementation of such terms.
If (a) the Trust shall declare any dividend payable in any
securities upon its Common Shares and/or Preferred Shares or make any
distribution (other than a cash dividend) to the Holders of its Common Shares
and/or Preferred Shares, or (b) the Trust shall offer to the Holders of its
Common Shares and/or Preferred Shares any additional shares thereof or
securities convertible into Common Shares and/or Preferred Shares or any right
to subscribe thereto, or (c) there shall be a dissolution, liquidation or
winding up of the Trust (other than in connection with a consolidation, merger
or sale of all or substantially all of its property, assets and business as an
entirety); then the Trust shall (x) cause written notice of such event to be
filed with the Warrant Agent and shall cause written notice of such event to be
given to each of the registered Holders of the Warrant Certificates at such
Holder's address appearing on the Warrant Register, by first-class mail, postage
prepaid, and (y) make a public announcement in a daily newspaper of general
circulation in New York City and Boston of such event, such giving of notice and
publication to be completed at least 10 calendar days (or 20 calendar days in
any case specified in clause (c) above) prior to the date fixed as a record date
of the date of closing the transfer books for the determination of the
shareholders entitled to such dividend, distribution or subscription rights, or
for the determination of shareholders entitled to vote on such proposed
dissolution, liquidation or winding up. Such notice shall specify such record
date or the date of closing the transfer books, as the case may be. The failure
to give the notice required by this Section 18 or any defect therein shall not
affect the legality or validity of any distribution, right, warrant,
dissolution, liquidation or winding up or the vote upon or any other action
taken in connection therewith.
113030.3
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SECTION 19. Merger, Consolidation or Change of Name of Warrant
Agent. Any corporation into which the Warrant 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 the Warrant Agent shall be a party,
or any corporation succeeding to the business of the Warrant Agent, shall be the
successor to the Warrant Agent hereunder without the execution or filing of any
paper or any further act on the part of any of the parties hereto, provided that
such corporation would be eligible for appointment as a successor Warrant Agent
under the provisions of this Section 19. If, at the time such successor to the
Warrant Agent shall succeed under this Agreement, any of the Warrant
Certificates shall have been countersigned but not delivered, any such successor
to the Warrant Agent may adopt the countersignature of the original Warrant
Agent; and if at that time any of the Warrant Certificates shall not have been
countersigned, any successor to the Warrant Agent may countersign such Warrant
certificates either in name of the predecessor Warrant Agent or in the name of
the successor Warrant Agent; and in all such cases such Warrant Certificates
shall have the full force provided in the Warrant Certificates and in this
Agreement.
If at any time the name of the Warrant Agent shall be changed and at
such time any of the Warrant Certificates shall have been countersigned but not
delivered, the Warrant Agent whose name has changed may adopt the
countersignature under its prior name; and if at that time any of the Warrant
Certificates shall not have been countersigned, the Warrant Agent may
countersign such Warrant Certificates either in its prior name or in its changed
name; and in all such cases such Warrant Certificates shall have the full force
provided in the Warrant Certificates and in this Agreement.
SECTION 20. Warrant Agent. The Trust hereby appoints the Warrant
Agent as the Warrant Agent of the Trust in respect of the Warrant Certificates
upon the terms and subject to the conditions herein set forth, and the Warrant
Agent hereby accepts such appointment. The Warrant Agent shall have the powers
and authority granted to and conferred upon it in the Warrant Certificate and by
this Agreement, and such further powers and authority to act on behalf of the
Trust as the Trust may hereafter grant to or confer upon it. All of the terms
and provisions with respect to such powers and authority contained in the
Warrant Certificates are subject to and governed by the terms and provisions
hereof.
SECTION 21. Conditions of Warrant Agent's Obligations. The Warrant
Agent accepts its obligations herein set forth upon the terms and conditions
hereof, including the following (to all of which the Trust agrees and to all of
which the rights hereunder of the Holders from time to time of the Warrant
Certificates shall be subject):
(a) Performance by the Trust. The Trust agrees that it will perform,
execute, acknowledge and deliver or cause to be performed, executed,
acknowledged and delivered all such further and other acts, instruments and
assurances as may reasonably be required by the Warrant Agent for the carrying
out or performing of the provisions of this Agreement.
(b) Compensation and Indemnification. The Trust agrees to pay to the
Warrant Agent reasonable compensation for all services rendered by the Warrant
Agent under this Agreement, to reimburse the Warrant Agent upon demand for all
expenses, taxes and governmental charges and other charges of any kind and
nature incurred by the Warrant Agent in the performance of its duties under this
Agreement and to indemnify the Warrant Agent in the performance of its duties
under this Agreement and to indemnify the Warrant Agent and save it harmless
against any and all losses, liabilities and expenses, including judgments, costs
and reasonable counsel fees, for anything done or omitted by the Warrant Agent
arising out of or in connection with this Agreement except as a result of its
negligence, bad faith or willful misconduct.
(c) Agent for the Trust. The Warrant Agent shall act hereunder
solely as agent for the Trust, and its duties shall be determined solely by the
provisions hereof, and the Warrant Agent does not assume any obligation or
relationship of agency or trust for or with any of the owners or Holders of
Warrant Certificates. The Warrant Agent shall not be liable for anything which
113030.3
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it may do or refrain from doing in connection with this Agreement except for its
own negligence, bad faith or willful misconduct.
(d) Counsel. The Warrant Agent may consult at any time with counsel
satisfactory to it (who may be counsel for the Trust) and the Warrant Agent
shall incur no liability or responsibility to the Trust or any Holder of any
Warrant Certificate in respect of any action taken, suffered or omitted by it
hereunder in good faith and in accordance with the opinion or the advice of such
counsel.
(e) Document. The Warrant Agent shall incur no liability or
responsibility to the Trust or to any Holder of any Warrant Certificate for any
action taken in reliance on any notice, resolution, waiver, consent, order,
certificate or other paper, document or instrument believed by it to be genuine
and to have been signed, sent or presented by the proper party or parties.
(f) Certain Transactions. The Warrant Agent and any stockholder,
director, officer or employee thereof, may buy, sell or deal in any of the
Warrants or other securities of the Trust or become pecuniarily interested in
any transaction in which the Trust may be interested, or contract with or lend
money to the Trust or otherwise act as fully and freely as though they were not
the Warrant Agent under this Agreement, or a stockholder, director, officer or
employee of the Warrant Agent, as the case may be. Nothing herein shall preclude
the Warrant Agent from acting in any other capacity for the Trust or for any
other legal entity.
(g) No Liability for Interest. Except as set forth in the Warrant
Agreement, the Warrant Agent shall not be under any liability for interest on
any money or other consideration at any time received by it pursuant to any of
the provisions of this Agreement or of the Warrant Certificates.
(h) No Liability for Invalidity and No Responsibility for
Representations. The Warrant Agent shall not be under any responsibility in
respect of the validity of this Agreement or the execution and delivery hereof
(except the due execution hereof by the Warrant Agent) or in respect of the
validity or execution of any Warrant Certificate (except its countersignature
thereof), nor shall the Warrant Agent by any act hereunder be deemed to make any
representation or warranty as to the authorization or reservation of the shares
to be issued pursuant to this Agreement or any Warrant Certificate or as to
whether the shares will when issued be validly issued, fully paid and
nonassessable or as to the Exercise Price or the number of shares issuable upon
exercise of any Warrant.
(i) No Liability for Acceptance of Instructions. The Warrant Agent
is hereby authorized and directed to accept instructions with respect to the
performance of its duties hereunder from the Chairman of the Board, the
President (if any), any Vice President, the Treasurer, any Assistant Treasurer,
the Secretary or any Assistant Secretary of the Trust, and to apply to such
officers for advice or instructions in connection with its duties, and shall not
be liable for any action taken or suffered to be taken by it in good faith in
accordance with instructions of any such officer or in good faith reliance upon
any statement signed by any one of such officers of the Trust with respect to
any fact or matter (unless other evidence in respect thereof is herein
specifically prescribed) which may be deemed to be conclusively proved and
established by such signed statement.
(j) No Implied Obligations. The Warrant Agent shall be obligated to
perform such duties as are herein and in the Warrant Certificates specifically
set forth, but no implied duties or obligations shall be read into this
Agreement or the Warrant Certificates against the Warrant Agent. The Warrant
Agent shall be under no obligation to institute any action, suit or legal
proceeding or to take any other action likely to involve expense unless the
Trust or one or more registered Holders or Warrant Certificates shall furnish
the Warrant Agent with reasonable security and indemnity for any costs or
expenses which may be incurred. All rights of action under this Agreement or
under any of the Warrants may be enforced by the Warrant Agent without the
possession of any of the Warrant Certificates or the production thereof at any
trial or other proceeding relative thereto, and any such action, suit or
proceeding instituted by the Warrant Agent shall be brought in its name as
Warrant Agent, and any recovery or judgment shall be for the ratable benefit of
the registered Holders of the Warrants, as their respective rights or interests
113030.3
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may appear. The Warrant Agent shall not be accountable or under any duty or
responsibility for the use by the Trust of any of the Warrant Certificates
authenticated by the Warrant Agent and delivered by it to the Trust pursuant to
this Agreement or for the application by the Trust of the proceeds of the
Warrant Certificates. The Warrant Agent shall have no duty or responsibility in
case of any default by the Trust in the performance of its covenants or
agreements contained in the Warrant Certificates or in the case of the receipt
of any written demand from a Holder of a Warrant Certificate with respect to
such default, including any duty or responsibility to initiate or attempt to
initiate any proceedings at law or otherwise or to make any demand upon the
Trust.
SECTION 22. Change of Warrant Agent. If the Warrant Agent shall resign
(such resignation to become effective not earlier than 60 days after the giving
of written notice thereof to the Trust and the registered Holders of Warrant
Certificates) or shall become incapable of acting as Warrant Agent or if the
Board shall by resolution remove the Warrant Agent (such removal to become
effective not earlier than 30 days after the filing of a certified copy of such
resolution with the Warrant Agent and the giving of written notice of such
resolution with the Warrant Agent and the giving of written notice of such
removal to the registered Holders of Warrant Certificates), the Trust shall
appoint a successor to the Warrant Agent. If the Trust shall fail to make such
appointment within a period of 30 days after such removal or after it has been
so notified in writing of such resignation or incapacity by the Warrant Agent or
by the registered Holder of a Warrant Certificate (in case of incapacity), then
the registered Holder of any Warrant Certificate may apply to any court of
competent jurisdiction for the appointment of a successor to the Warrant Agent.
Pending appointment of a successor to the Warrant Agent, either by the Trust or
by such a court, the duties of the Warrant Agent shall be carried out by the
Trust. Any successor Warrant Agent, whether appointed by the Trust or by such a
court, shall be in good standing, incorporated under the laws of any state or of
the United States. As soon as practicable after appointment of the successor
Warrant Agent, the Trust shall cause written notice of the change in the Warrant
Agent to be given to each of the registered Holders of the Warrant Certificates
at such Holder's address appearing on the Warrant Register. After appointment,
the successor Warrant Agent shall be vested with the same powers, rights, duties
and responsibilities as if it had been originally named as Warrant Agent without
further act or deed. The former Warrant Agent shall deliver and transfer to the
successor Warrant Agent any property at the time held by it hereunder and
execute and deliver, at the expense of the Trust, any further assurance,
conveyance, act or deed necessary for the purpose. Failure to give any notice
provided in this Section 22 or any defect therein, shall not affect the legality
or validity of the removal of the Warrant Agent or the appointment of a
successor Warrant Agent, as the case may be.
SECTION 23. Holder Not Deemed a Shareholder. Nothing contained in this
Agreement or in any of the Warrant Certificates shall be construed as conferring
upon Holders thereof the right to vote or to receive dividends or to consent or
to receive notice as shareholders in respect of the meetings of shareholders or
for the election of trustees of the Trust or any other matter, or any rights
whatsoever as shareholders of the Trust.
SECTION 24. Delivery of Prospectus. If the Trust is required under
applicable federal or state securities laws to deliver a prospectus upon
exercise of Warrants, the Trust will furnish to the Warrant Agent sufficient
copies of a prospectus, and the Warrant Agent agrees that upon the exercise of
any Warrant Certificate by the Holder thereof, the Warrant Agent will deliver to
such Holder, prior to or concurrently with the delivery of the certificate of
certificates for the shares of the Underlying Securities issued upon such
exercise, a copy of the prospectus.
SECTION 25. Notice and Demands to the Trust and Warrant Agent. If the
Warrant Agent shall receive any notice or demand addressed to the Trust by the
Holder of a Warrant Certificate pursuant to the provisions of the Warrant
Certificates, the Warrant Agent shall promptly forward such notice of demand to
the Trust.
SECTION 26. Persons Having Rights Under Warrant Agreement. Nothing in this
Agreement is intended, or shall be construed, to confer upon, or give to, any
person or entity other than the Trust, the Warrant Agent and the Holders of the
Warrant Certificates any right, remedy or claim under or by reason of this
Agreement or of any covenant, condition, stipulation, promise or agreement
hereof. All covenants, conditions, stipulations, promises and agreements
contained in this Agreement shall be for the sole and exclusive benefit of the
Trust, the Warrant Agent and their successors and of the Holders of the Warrant
Certificates.
113030.3
12
<PAGE>
SECTION 27. Inspection of Agreement. A copy of this Agreement shall be
available at all reasonable times at the principle office of the Warrant Agent
for inspection by the Holder of any Warrant Certificate. The Warrant Agent may
require such Holder to submit his Warrant Certificate for inspection by it.
SECTION 28. Notices to Trust and Warrant Agent. Any notice or demand
authorized by this Agreement to be given or made by the Warrant Agent or by any
registered Holder of any Warrant Certificate to or on the Trust shall be
sufficiently given or made if sent by mail, first-class or registered, postage
prepaid, addressed (until another address is filed in writing by the Trust with
the Warrant Agent), as follows:
MGI Properties
One Winthrop Square
Boston, Massachusetts 02110
Attention: Mr. Phillip C. Vitali
If the Trust shall fail to maintain such office or agency or shall fail to
give such notice of any change in the location thereof, presentation may be made
and notices and demands may be served at the principal office of the Warrant
Agent.
Any notice pursuant to this Agreement to be given by the Trust or by any
registered Holder of any Warrant Certificate to the Warrant Agent shall be
sufficiently given if sent by mail, first-class or registered, postage prepaid,
addressed (until another address is filed in writing by the Warrant Agent with
the Trust) to the Warrant Agent at the address set forth in the Warrant
Agreement.
SECTION 29. Supplements and Amendments. The Trust and the Warrant Agent
may from time to time supplement or amend this Agreement without the approval of
any Holders of Warrant Certificates in order to designate Warrants pursuant to
Section 1, to cure any ambiguity, manifest error or other mistake in this
Agreement, or to correct or supplement any provision contained herein that may
be defective or inconsistent with any other provision herein, or to make any
other provisions in regard to matters or questions arising hereunder that the
Trust and the Warrant Agent may deem necessary or desirable and that shall not
adversely affect, alter or change the interests of the Holders of the Warrant
Certificates.
SECTION 30. Successors. All the covenants and provisions of this
Agreement by or for the benefit of the Trust or the Warrant Agent shall bind and
inure to the benefit of their respective successors and assigns
hereunder.
SECTION 31. Termination. This Agreement shall terminate at the
close of business on the Expiration Date. Notwithstanding the foregoing, this
Agreement will terminate on any earlier date when all Warrants have been
exercised. The provisions of Section 21(b) shall survive such termination.
SECTION 32. Governing Law. This Agreement and each Warrant Certificate
issued hereunder shall be deemed to be a contract made under the laws of The
Commonwealth of Massachusetts and for all purposes shall be construed in
accordance with the laws of such Commonwealth.
SECTION 33. Benefit of this Agreement. Nothing in this Agreement shall be
construed to give to any person or entity other than the Trust, the Warrant
Agent and the registered Holders of the Warrant Certificates any legal or
equitable right, remedy or claim under this Agreement, and this Agreement shall
be for the sole and exclusive benefit of the Trust, the Warrant Agent and the
registered Holders of the Warrant Certificates.
113030.3
13
<PAGE>
SECTION 34. Counterparts. This Agreement shall be exercised in any number
of counterparts and each of such counterparts shall, for all purposes of this
Agreement, be deemed to be an original, and such counterparts shall together
constitute but one and the same instrument.
SECTION 35. Headings. The headings of sections of this Agreement
have been inserted for convenience of reference only, are not to be considered
a part hereof and shall in no way restrict any of the terms or provisions
hereof.
SECTION 36. Board of Trustees. All references to any actions to be
taken by the Trust's Board shall be deemed to include actions taken by either
the Trust's Board or an authorized committee thereof.
113030.3
14
October 31, 1996
Securities and Exchange Commission
450 Fifth Street, N.W.
Judiciary Plaza
Washington, D.C. 20549
Re: MGI Properties-
Registration Statement on Form S-3
Ladies and Gentlemen:
We have acted as counsel to MGI Properties, a Massachusetts trust (the
"Trust"), in connection with the preparation and filing by the Trust with the
Securities and Exchange Commission of a registration statement on Form S-3 (the
"Registration Statement") under the Securities Act of 1933, as amended, in
respect of an indeterminate amount of the Trust's (i) common shares of
beneficial interest, par value $1.00 per share (the "Common Shares"); (ii)
preferred shares of beneficial interest, par value $1.00 per share (the
"Preferred Shares"); (iii) unsecured debt securities consisting of bonds,
debentures, notes and/or other evidences of indebtedness which may or may not be
convertible into Common Shares or Preferred Shares (the "Debt Securities"); (iv)
warrants or rights (the "Warrants") to purchase Common Shares, Preferred Shares
or Debt Securities; and (v) units (the "Units") consisting of two or more of the
foregoing securities, with an aggregate public offering price of up to
$100,000,000 (the Common Shares, Preferred Shares, Debt Securities, Warrants and
Units are collectively referred to hereinafter as the "Securities"). The
Registration Statement provides that the Securities may be offered separately
or together, in one or more series, in amounts, at prices and on terms to be set
forth in one or more supplements to the Prospectus contained in the Registration
Statement (each a "Prospectus Supplement").
<PAGE>
Securities and Exchange Commission
October 31, 1996
Page -2-
We advise you that we have examined originals or copies, certified or
otherwise identified to our satisfaction, of the Trust's Second Amended and
Restated Declaration of Trust, as amended, the Trust's By-law, as amended,
minutes of meetings of the Trust's Board of Trustees (the "Board") and
shareholders of the Trust and such other documents, instruments and certificates
of officers and representatives of the Trust and public officials, and we have
made such examination of the law as we have deemed appropriate as the basis for
the opinion hereinafter expressed. In making such examination, we have assumed
the genuineness of all signatures, the authenticity of all documents submitted
to us as originals and the conformity to original documents of documents
submitted to us as certified or photostatic copies.
Based upon the foregoing, and subject to the qualifications set forth
herein, we are of the opinion that, when specifically authorized for issuance by
the Board or an authorized committee thereof (the "Authorizing Resolution") and
when issued as described in a Prospectus Supplement that is consistent with the
Authorizing Resolution, and upon receipt by the Trust of the consideration
provided for in the Authorizing Resolution (which consideration is not less than
the $1.00 par value per share in the case of Common Shares or Preferred Shares),
the Securities will be legally issued, fully paid and non-assessable and, in the
case of Debt Securities, binding obligations of the Trust enforceable against it
in accordance with their terms, subject to (i) applicable bankruptcy,
insolvency, fraudulent conveyance, reorganization, moratorium and similar laws
affecting creditors' rights and remedies generally and (ii) general principles
of equity, including principles of commercial reasonableness, good faith and
fair dealing (regardless of whether enforcement is sought in a proceeding at law
or equity).
We hereby consent to (i) filing of this opinion as an exhibit to the
Registration Statement and (ii) the reference to this firm under the caption
"Legal Matters" in the Prospectus forming a part of the Registration Statement.
Please also be advised that members of this firm own an aggregate of 15,015
Common Shares and hold options to purchase an aggregate of 23,400 Common Shares.
Very truly yours,
OLSHAN GRUNDMAN FROME & ROSENZWEIG LLP
Exhibit 23(a)
Consent of Independent Certified Public Accountants
The Board of Trustees
MGI Properties:
We consent to the use of our report incorporated herein by reference and to the
reference to our firm under the heading "Experts" in the prospectus.
KPMG Peat Marwick LLP
Boston, Massachusetts
October 31, 1996
Exhibit 23(b)
Consent of Independent Auditors
We consent to the reference to our firm under the caption "Experts" in the
Registration Statement Form S-3 and related Prospectus of MGI Properties for the
registration of its common shares, preferred shares, debt securities, warrants
or rights, and units of up to a maximum aggregate offering of $100,000,000 and
to the incorporation by reference therein of our report dated February 9, 1996,
with respect to the Historical Summary of Gross Income and Direct Operating
Expenses of Two Portland Square, One Portland Square and One Portland Square
Parking Lot included in its Form 8-K dated July 2, 1996, as amended on September
16, 1996, filed with the Securities and Exchange Commission.
Boston Massachusetts Ernst & Young LLP
October 31, 1996
