UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, DC 20549
FORM 10-Q
QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF
THE SECURITIES EXCHANGE ACT OF 1934
(X) QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15 (d)
OF THE SECURITIES EXCHANGE ACT OF 1934
For the quarterly period ended June 30, 1996
OR
( ) TRANSITION REPORT PURSUANT TO SECTION 13 OR 15 (d)
OF THE SECURITIES EXCHANGE ACT OF 1934
For the transition period from ________ to _________
Commission file number 1-10524
UNITED DOMINION REALTY TRUST, INC.
(Exact name of registrant as specified in its charter)
VIRGINIA 54-0857512
(State or other jurisdiction of (I.R.S. Employer
incorporation of organization) Identification No.
10 South Sixth Street, Suite 203
Richmond, Virginia 23219-3802 (Address of
principal executive offices - zip code)
(804) 780-2691
Registrant's telephone number, including area code
APPLICABLE ONLY TO CORPORATE USERS:
Indicate the number of shares outstanding of each of the issuer's classes of
common stock, as of August 1, 1996:
Common Stock 56,754,597
Indicate by check mark whether the registrant (1) has filed all reports required
to be filed by Section 13 or 15 (d) of the Securities Exchange Act of 1934
during the preceding 12 months, and (2) has been subject to filing requirements
for at least the past 90 days.
Yes X No
<PAGE>
UNITED DOMINION REALTY TRUST, INC.
CONSOLIDATED BALANCE SHEETS
(In thousands, except for share data)
(Unaudited)
<TABLE>
<CAPTION>
June 30, December 31,
1996 1995
------------ ------------
<S> <C>
Assets
Real estate held for investment $ 1,238,045 $ 1,131,098
Less accumulated depreciation 146,988 129,454
------------ ------------
1,091,057 1,001,644
Real estate held for disposition 48,710 51,015
Cash and cash equivalents 7,592 2,904
Other assets 23,560 25,053
------------ ------------
$ 1,170,919 $ 1,080,616
============ ============
Liabilities and shareholders' equity
Mortgage notes payable $ 195,017 $ 180,481
7 1/4% Notes due April 1, 1999 75,000 75,000
8 1/2% Debentures due September 15, 2024 150,000 150,000
Other notes payable 197,118 124,858
Distributions payable to common shareholders 13,621 12,695
Accounts payable, accrued expenses and other liabilities 30,315 21,193
------------ ------------
661,071 564,227
------------ ------------
Minority interest of unitholders in Operating Partnership 2,007 --
Shareholders' equity:
Preferred stock, no par value; 25,000,0000 shares authorized:
9 1/4% Series A Cumulative Redeemable Preferred Stock
(liquidation preference of $25 per share), 4,200,000 shares issued
and outstanding 105,000 105,000
Common stock, $1 par value; 100,000,000 shares authorized
56,745,450 shares issued and outstanding (56,375,333 in 1995) 56,745 56,375
Additional paid-in-capital 485,408 480,971
Notes receivable from officer shareholders (6,024) (6,091)
Distributions in excess of net income (134,628) (120,314)
Unrealized gain on securities available-for-sale 1,340 448
------------ ------------
Total shareholders' equity 507,841 516,389
============ ============
$ 1,170,919 $ 1,080,616
============ ============
</TABLE>
The accompanying notes are an integral part of the financial statements.
2
<PAGE>
UNITED DOMINION REALTY TRUST, INC.
CONSOLIDATED STATEMENTS OF OPERATIONS
(In thousands, except per share data)
(Unaudited)
<TABLE>
<CAPTION>
Three Months Ended Six Months Ended
June 30, June 30,
------------------ ----------------
1996 1995 1996 1995
----------- ------------ ---------- -----------
<S> <C>
Revenues
Rental income $ 57,197 $ 47,747 $ 112,036 $ 93,239
Interest and other income 445 361 795 535
----------- ------------ ------------ -----------
57,642 48,108 112,831 93,774
Expenses
Rental expenses:
Utilities 3,857 3,271 8,385 6,927
Repairs and maintenance 10,597 7,717 19,136 14,065
Real estate taxes 4,209 3,422 8,189 6,658
Property management 1,247 1,114 2,748 2,368
Other rental expenses 5,279 4,146 10,453 8,214
Real estate depreciation 10,805 9,493 21,365 18,549
Interest 11,237 10,135 21,883 20,589
General and administrative 1,549 1,547 2,932 2,781
Other depreciation and amortization 276 270 560 543
Impairment loss on real estate held for disposition (Note 3) 290 -- 290 --
----------- ------------ ------------ -----------
49,346 41,115 95,941 80,694
Income before gains (losses) on sales of investments and minority interest
of unitholders in Operating Partnership 8,296 6,993 16,890 13,080
Gains (losses) on sales of investments (129) 4,576 836 4,639
Minority interest of unitholders in Operating Partnership (Note 1) (1) -- (1) --
----------- ------------ ------------ -----------
Net income 8,166 11,569 17,725 17,719
Dividends to preferred shareholders 2,428 1,781 4,856 1,781
----------- ------------ ------------ -----------
Net income available to common shareholders $ 5,738 $ 9,788 $ 12,869 $ 15,938
=========== ============== ============ ===========
Net income per common share $ 0.10 $ 0.19 $ 0.23 $ 0.31
=========== ============ ============ ===========
Dividends declared per common share $ 0.24 $ 0.225 $ 0.48 $ 0.45
=========== ============ ============ ===========
Weighted average number of common shares outstanding 56,666 51,776 56,566 51,452
</TABLE>
The accompanying notes are an integral part of the financial statements.
3
<PAGE>
UNITED DOMINION REALTY TRUST, INC.
CONSOLIDATED STATEMENTS OF CASH FLOWS
(In thousands)
(Unaudited)
<TABLE>
<CAPTION>
Six Months Ended June 30,
1996 1995
---------- ----------
<S> <C>
Operating Activities
Net income $ 17,725 $ 17,719
Adjustments to reconcile net income to cash provided
by operating activities:
Minority interest of unitholders in Operating Partnership 1 --
Impairment loss on real estate held for disposition 290 --
Gains on sales of investments (836) (4,639)
Depreciation and amortization 21,925 19,092
Changes in operating assets and liabilities:
Increase in operating liabilities 8,555 4,539
Increase (decrease) in operating assets (567) 145
---------- ----------
Net cash provided by operating activities 47,093 36,856
Investing Activities
Acquisition of real estate, net of debt and liabilties assumed (80,678) (95,111)
Capital expenditures (24,856) (14,547)
Net proceeds from the sales of investments 15,794 16,601
Other 2 36
---------- ----------
Net cash used in investing activities (89,738) (93,021)
Financing Activities
Net proceeds from the issuance of common stock 4,874 18,383
Net proceeds from the issuance of preferred stock -- 101,478
Net proceeds from the issuance of notes payable 111 10,000
Net proceeds from the issuance of mortgage notes payable -- 15,720
Net borrowings of short-term bank borrowings 82,400 (14,150)
Cash distributions paid to preferred shareholders (4,856) --
Cash distributions paid to common shareholders (26,257) (21,473)
Scheduled mortgage principal payments (1,213) (1,115)
Mortgage financing proceeds released from construction funds 2,665 --
Payments on notes and non-scheduled mortgage principal payments (10,077) (45,180)
Payment of financing costs (314) (742)
---------- ----------
Net cash provided by financing activities 47,333 62,921
Net increase in cash and cash equivalents 4,688 6,756
Cash and cash equivalents, beginning of period 2,904 7,261
---------- ----------
Cash and cash equivalents, end of period $ 7,592 $ 14,017
========== ==========
</TABLE>
The accompanying notes are an integral part of the financial statements.
4
<PAGE>
UNITED DOMINION REALTY TRUST, INC.
CONSOLIDATED STATEMENT OF SHAREHOLDERS' EQUITY
FOR THE SIX MONTHS ENDED JUNE 30, 1996
(In thousands, except share and per share amounts)
(Unaudited)
<TABLE>
<CAPTION>
Common Stock, $1 Par Value Preferred Stock
--------------------------- ------------------- Additional
Number Number Paid-in-
of Shares Amount of Shares Amount Capital
-----------------------------------------------------------------
<S> <C>
Balance at December 31, 1995 56,375,333 $56,375 4,200,000 $105,000 $480,971
Exercise of common share options 96,132 96 - - 899
Common shares purchased by officers, net of loan repayments 2,500 3 - - 32
Common shares issued through dividend reinvestment and
stock purchase plan 268,557 268 - - 3,465
Common shares issued through employee stock purchase plan 2,928 3 - - 41
Preferred stock dividends declared ($1.16 per share) - - - - -
Common stock distributions declared ($.48 per share) - - - - -
Unrealized gain on securities available-for-sale
- - - - -
Net income - - - - -
============= ============= ========== ========== ========
Balance at June 30, 1996 56,745,450 $56,745 4,200,000 $105,000 $485,408
============= ============= ========== ========== ========
</TABLE>
The accompanying notes are an integral part of the financial statements.
<TABLE>
<CAPTION>
Unrealized
Gain on
Receivable Distribution Securities- Total
from Office in Excess of Available- Shareholders'
Shareholder Net Income for-Sale Equity
---------------------------------------------------------------
<S> <C>
Balance at December 31, 1995 ($6,091) ($120,314) $448 $516,389
Exercise of common share options - - - 995
Common shares purchased by officers, net of loan repayments 67 - - 102
Common shares issued through dividend reinvestment and
stock purchase plan - - - 3,733
Common shares issued through employee stock purchase plan - - - 44
Preferred stock dividends declared ($1.16 per share) - (4,856) - (4,856)
Common stock distributions declared ($.48 per share) - (27,183) - (27,183)
Unrealized gain on securities available-for-sale - - 892 892
Net income - 17,725 - 17,725
========== ========== ========== ===========
Balance at June 30, 1996 ($6,024) ($134,628) $1,340 $507,841
========== ========== ========== ===========
</TABLE>
The accompanying notes are an integral part of the financial statements.
5
UNITED DOMINION REALTY TRUST, INC.
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
(Unaudited)
1. Basis of presentation
The consolidated financial statements reflect all adjustments which are, in the
opinion of management, necessary for a fair presentation of financial position
at June 30, 1996 and results of operations for the interim periods ended June
30, 1996 and 1995. Such adjustments are of a normal and recurring nature.
Certain information and note disclosures normally included in the annual
financial statements of United Dominion Realty Trust, Inc. (the "Company")
prepared in accordance with generally accepted accounitng principles have been
condensed or omitted. The accompanying consolidated financial statements should
be read in conjunction with the audited financial statements and related notes
appearing in the Company's December 31, 1995 Annual Report on Form 10-K filed
with the Securities and Exchange Commission. The interim results presented are
not necessarily indicative of results that can be expected for a full year.
The consolidated financial statements include the accounts of the Company and
its wholly owned subsidiaries and United Dominion Realty, L.P. (the " Operating
Partnership"), formed in 1995. At June 30, 1996, 11 of the Company's apartment
communities were owned by the Operating Partnership. At June 30, 1996, the
Company was the sole general partner and held a 1% interest in the Operating
Partnership. UDRT of North Carolina, L.L.C., a wholly owned subsidiary, held a
96.9% interest. All significant inter-company accounts and transactions have
been eliminated in consolidation.
2. Reclassifications
Certain previously reported amounts have been reclassified to conform with the
current financial statement presentation.
3. Real Estate Owned
Real estate held for investment
The following summarizes real estate held for investment at June 30, 1996 and
December 31, 1995:
June 30, December 31,
Dollars in thousands 1996 1995
- -------------------- ------------ ------------
Land and land improvements $ 213,512 $ 193,672
Buildings and improvements 940,224 864,331
Furniture, fixtures and equipment 80,405 72,576
Construction in progress 3,904 519
------------ ------------
Real estate held for investment 1,238,045 1,131,098
Accumulated depreciation (146,988) (129,454)
------------ ------------
Real estate held for investment, net $ 1,091,057 $ 1,001,644
============ ============
Real estate held for disposition
Real estate held for disposition included in the Consolidated Balance Sheet in
the aggregate amount of $48.7 million includes: (i) two parcels of land
aggregating $1.9 million, (ii) seven apartment communities aggregating $22.5
million, (iii) five shopping centers aggregating $21.6 million and (iv) four
office/ industrial properties aggregating $2.7 million. These properties
contributed net rental income ( total rental income, less rental expenses, less
depreciation expense) in the aggregate amount of approximately $1.7 million and
$3.4 million for the three and six months ended June 30, 1996, respectively.
At June 30, 1996, the Company reclassified one shopping center and three
office/industrial properties, from assets held for investment to assets held for
disposition in the Consolidated Balance Sheet and recorded an aggregate $290,000
impairment loss relating to the shopping center and one office building,
representing the excess of the carrying values of the assets over the estimated
fair values less estimated costs to sell.
6
<PAGE>
UNITED DOMINION REALTY TRUST, INC.
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
(Unaudited)
4. Acquisitions
During the second quarter of 1996, the Company acquired four apartment
communities containing 1,425 apartment homes at a total cost of $62.6 million,
including closing costs. These acquisitions were as follows (in millions of
dollars):
No. Apartment Year Purchase
Name/Location Homes Built Price
Westland Park
Jacksonville, FL 405 1990 $ 16.7
The Antlers
Jacksonville, FL 400 1985 15.2
Chase at Middle Ridge
Woodbridge, VA 280 1990 16.6
Riverwood (1)
Atlanta, GA 340 1980 14.1
----- ------
Total 1,425 $ 62.6
===== ======
For the six month period ended June 30, 1996, the Company acquired eight
apartment communities containing 2,237 apartment homes at a total cost of $99.0
million, including closing costs.
(1) Held by the Operating Partnership.
5. Dispositions
During the second quarter, the Company sold Village Square Shopping Center in
Myrtle Beach, South Carolina, for approximately $7.8 million and West Knoll
Apartments in Newark, Delaware for approximately $3.4 million. The net proceeds
from the sales have been utilized primarily for apartment acquisitions. An
aggregate $129,000 loss on these two sales was recognized for financial
reporting purposes.
For the six months ended June 30, 1996, the Company recognized an aggregate
$836,000 book gain on property sales. In addition to the two aforementioned
sales, in February, 1996, the Company sold Deerfield Plaza Shopping Center in
Myrtle Beach, South Carolina for approximately $5.9 million. A $965,000
financial reporting gain was recognized on this transaction which was structured
to qualify as a like-kind exchange under Section 1031 of the Internal Revenue
Code, so the related capital gains will be deferred for federal income tax
purposes.
6. Mortgage Notes Payable
Mortgage notes payable consisted of the following at June 30, 1996 and 1995 and
December 31, 1995 (in thousands of dollars):
June 30, December 31,
1996 1995 1995
-------- -------- --------
Conventional fixed-rate $ 71,419 $ 42,363 $ 56,368
Tax-exempt fixed-rate 112,428 103,578 112,843
-------- -------- --------
Total fixed-rate 183,847 145,941 169,211
Tax-exempt variable-rate 11,170 12,100 11,270
-------- -------- --------
$195,017 $158,041 $180,481
======== ======== ========
7
<PAGE>
UNITED DOMINION REALTY TRUST, INC.
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
(Unaudited)
Conventional Fixed-Rate Mortgage Notes Conventional fixed-rate mortgage notes
included 21 loans encumbering 15 properties at June 30, 1996 and 16 loans
encumbering 10 properties at June 30, 1995. Mortgage notes are generally due in
monthly installments of principal and interest and mature at various dates
through 2020. At June 30, 1996 and 1995, this debt carried fixed rates of
interest ranging from 7.00% to 9.625% (8.26% weighted average) and 7.00% to
9.625% (8.06% weighted average), respectively.
Tax-Exempt Mortgage Notes At June 30, 1996, 17 properties were encumbered by
fixed-rate mortgage notes aggregating $112.4 million which secure related
tax-exempt housing bond issues. Interest on these notes is generally payable in
semi-annual installments and the notes mature at various dates through 2025. At
June 30, 1996 and 1995, tax-exempt fixed-rate mortgage notes had interest rates
ranging from 6.00% to 8.50% (weighted average 6.91%), and 5.976% to 8.00%
(weighted average 6.95%), respectively.
At June 30, 1996, three of the Company's properties were encumbered by
variable-rate mortgage notes aggregating $11.2 million which secure tax-exempt
housing bond issues. Interest on these notes is generally payable in monthly
installments and the notes mature at various dates through 2010. At June 30,
1996 and 1995, tax-exempt variable-rate notes had interest rates ranging from
5.16% to 7.30% (weighted average 6.53%) and 4.60% to 7.29% (weighted average
5.21%), respectively.
The tax-exempt mortgage notes contain certain covenants which require the
Company to lease or hold for lease 15% to 40% of the apartment homes for low to
moderate income residents, as defined. Certain of the Company's tax-exempt notes
contain covenants which require minimum rentals to individuals based upon income
levels, as specified.
7. Other Notes Payable
A summary of other notes payable at June 30, 1996 and 1995 and December 31, 1995
is as follows (in thousands of dollars):
<TABLE>
<CAPTION>
June 30, June 30, December 31,
1996 1995 1995
--------- -------- -----------
<S> <C>
Commercial Banks
Borrowings outstanding under revolving
credit facilities (a) (1) $ 100,800 $ --- $ 18,400
Insurance Companies--Senior Unsecured Notes
7.98% due March, 1997-2003 (b) 52,000 52,000 52,000
9.57% due July, 1996 (2) 35,000 35,000 35,000
7.89% due March, 1996 --- 10,000 10,000
8.72% due November, 1996-1998 (c) 6,000 8,000 6,000
Other (d) 3,318 3,724 3,458
--------- -------- ---------
197,118 108,724 124,858
Senior Unsecured Notes - Other
7 1/4% Notes due April 1, 1999 75,000 75,000 75,000
8 1/2% Debentures due
September 15, 2024 (e) 150,000 150,000 150,000
--------- ------- ---------
$ 422,118 $333,724 $ 349,858
========= ======== =========
</TABLE>
(1) Of this amount $93.1 million was repaid on July 12, 1996
using proceeds from a $125 million medium-term note issue.
See Note 8.
(2) This loan was repaid at maturity on July 15, 1996.
(a) The weighted average balance outstanding for the quarters
ended June 30, 1996 and 1995 was $83.2 million and $8.2
million, respectively. This debt carried a weighted
average daily interest rate during the second quarter of
1996 and 1995 of 6.14% and 6.92%, respectively. The
weighted average balance outstanding for the six months
ended June 30, 1996 and 1995 was $54.3 million and $9.1
million, respectively. The weighted average daily interest
rate for the six months ended June 30, 1996 and 1995 was
6.14% and 6.84%, respectively. This debt carried a
weighted average daily interest rate at June 30, 1996 of
6.18%.
(b) Payable in seven equal annual principal installments of
$7.4 million.
8
<PAGE>
UNITED DOMINION REALTY TRUST, INC.
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
(Unaudited)
(c) Payable in equal annual principal installments of $2
million.
(d) Includes $2.9 million and $3.2 million at June 30, 1996
and 1995, respectively, of deferred gain from an interest
rate hedge transaction.
(e) Debentures include an investor put feature which grants
the debenture-holder a one time option to redeem
debentures in September 2004.
The underlying loan agreements contain certain covenants which, among other
things, require the Company to maintain minimum consolidated tangible net worth,
as defined, and maintain certain financial ratios.
At June 30, 1996, the Company had $70 million of unsecured revolving credit
facilities with four commercial banks. These credit agreements currently expire
in June, 1997 and 1998, but are renewable annually by mutual agreement between
the Company and each bank. Interest on borrowings outstanding under these
agreements are at varying rates depending on the level of the Company's debt and
the term of the borrowing. Generally, loans for 30 days or more are priced at
LIBOR plus 5/8% to 1%. Loans of shorter duration are priced at spreads of 5/8%
to 1 1/8% over the applicable base rate. The Company is obligated to pay a fee
equal to 1/4% per annum on the average daily amount of the unused portion of the
commitment during the revolving loan period. None of these agreements have
compensating balance requirements. The Company had $70.0 million outstanding
under these revolving credit facilities at June 30, 1996.
At June 30, 1996, the Company had unsecured lines of credit with three
commercial banks totaling $33.5 million. In addition, the Company had a interim
bank line of credit with one of these banks in the amount of $50 million. At
June 30, 1996, the Company had $30.8 million outstanding under these lines. Each
line is subject to periodic bank review and requires the Company to maintain a
depository relationship with the respective bank, however, there are no formal
compensating balance arrangements. Borrowings bear interest generally at
negotiated rates in line with borrowings under the Company's revolving credit
facilities.
8. Subsequent Events
On July 1, 1996, the Company executed a contract to acquire a portfolio of 18
apartment communities containing 4,508 apartment homes, for approximately $182.3
million, excluding closing costs. The properties are located in North Carolina
(13), South Carolina (3), Virginia (1) and Georgia (1). Closing is scheduled to
occur prior to August 20, 1996.
Subsequent to June 30, 1996, the Company sold two properties: (i) a 203,000
square foot shopping center located in Richmond, Virginia for $2.4 million and
(ii) a 76 unit apartment community located in Hopewell, Virginia for $1.8
million which was encumbered by $1.2 million of tax-exempt bonds. For financial
reporting purposes the Company will recognize an approximate $800,000 aggregate
gain on these sales. These sales were also structured to qualify as a
like-kind-exchange under Section 1031 of the Internal Revenue Code, so the
related capital gains will be deferred for federal income tax purposes.
During the fourth quarter of 1995, the Company filed a shelf registration
statement covering up to an aggregate of $462.5 million of various debt and
equity securities. During 1996, the Company implemented a $200 million
medium-term note program under this shelf registration statement. On July 9,
1996, the Company issued $125 million of ten year notes under its medium-term
note program at an interest rate of 7.95%. Net proceeds of approximately $124.2
million were used to (i) curtail existing bank debt in the amount of $93.1
million, and (ii) repay a 9.57%, $35 million senior note that matured on July
15, 1996. Including the $35 million note, the Company has aggregate debt
maturities of $37 million during the remainder of 1996 with a weighted average
interest rate of 9.52%. In July, 1995, the Company executed a forward starting
interest rate swap with a notional amount of $50 million which had the effect of
fixing the interest rate on a 10-year Treasury starting July 15, 1996 at 6.544%.
This transactions was intended to lock-in an approximate 170 basis point savings
on $47 million of unsecured debt that was to be refinanced in 1996, including
the $35 million loan which matured on July 15, 1996. In anticipation of
implementing the medium-term note program, the Company entered into a second
interest rate hedge agreement for $75 million (notional amount) on June 28, 1996
which allowed the Company to lock-in a 10 year Treasury rate of 6.75%. The two
interest rate hedge agreements were terminated simultaneously with the $125
million medium-term note issuance and the Company received $3.0 million in cash.
This had the economic effect of reducing the interest rate to approximately
7.61% over the ten year term.
9
<PAGE>
Management's Discussion and Analysis of Financial Condition and Results of
Operations
Overview
The following discussion should be read in conjunction with the Consolidated
Financial Statements and Notes thereto appearing elsewhere in this report.
The Company operates primarily in 17 major markets dispersed throughout a nine
state area extending from Delaware to Florida and Tennessee and Alabama. At June
30, 1996, the Company did not own more than 10% of its apartment homes in any
one market. The Company believes that this diversity in its apartment portfolio
reduces the risk of volatility in its aggregate occupancy and rental rates. The
following table summarizes the Company's major apartment market information
(includes real estate held for investment and real estate held for disposition):
<TABLE>
<CAPTION>
Six Months Ended Three Months Ended
As of June 30, 1996 June 30, 1996 June 30, 1996
------------------------------------------------ -------------------------- ---------------------------
Number of Number of Percentage of Average Average
Apartment Apartment Apartment Economic Monthly Economic Monthly
Market Communities Homes Homes Occupancy Rental Rates* Occupancy Rental Rates*
- ------------------------------------------------------------------ -------------------------- ---------------------------
<S> <C>
Richmond, VA 14 3,773 10% 95.1% $511 94.6% $ 514
Columbia, SC 11 3,218 9% 92.2% 478 91.4% 480
Orlando, FL 9 2,453 7% 90.7% 544 90.3% 545
Raleigh, NC 8 2,440 7% 98.4% 568 98.4% 572
Tampa, FL 8 2,351 6% 92.1% 541 93.5% 543
Charlotte, NC 12 2,334 6% 95.3% 532 95.2% 537
Atlanta, GA 8 2,234 6% 94.8% 555 95.2% 558
Baltimore, MD 8 1,746 5% 89.6% 632 90.3% 634
Eastern NC 8 1,730 5% 96.1% 507 96.2% 511
Nashville, TN 6 1,520 4% 94.3% 553 94.9% 556
Hampton Roads, VA 6 1,436 4% 91.4% 522 91.8% 525
Greenville, SC 7 1,330 4% 92.5% 482 92.5% 486
Washington, DC 6 1,483 4% 89.0% 663 89.7% 664
Jacksonville, FL 3 1,157 3% 93.1% 586 93.0% 593
Ft. Lauderdale, FL 4 960 3% 91.6% 773 90.5% 774
Memphis, TN 4 935 3% 93.5% 483 95.3% 487
Greensboro, NC 3 691 2% 92.6% 527 93.1% 528
Other 23 4,570 12% 92.9% 539 92.9% 541
--- ------ ---- ------- ---- ----- ----
Total 148 36,361 100% 93.2% $545 93.3% $ 548
=== ====== ==== ======= ==== ===== ======
</TABLE>
* Average Monthly Rental Rates for the Quarter and Six Months Ended June 30,
1996, represents potential rent collections (gross potential rents less
market adjustments), which approximates net effective rents.
Financial Condition
As a qualified REIT, the Company distributes a substantial portion of its cash
flow to its shareholders in the form of quarterly distributions. The Company
seeks to retain sufficient cash to cover normal operating needs, including
routine replacements and to help fund additional acquisitions. For the six
months ended June 30, 1996, the Company's cash flow from operating activities
exceeded cash distributions paid to common shareholders by approximately $20.8
million. The Company utilizes a variety of primarily external financing sources
to fund portfolio growth, major capital improvement programs and balloon debt
payments. The Company has frequently utilized its bank lines of credit to
temporarily finance these expenditures and has subsequently replaced this
short-term bank debt with longer term debt or equity. The Company has, from time
to time, used derivative instruments to synthetically alter on-balance sheet
liabilities or to hedge anticipated financing transactions. Derivative contracts
did not have a material impact on results of operations during the periods ended
June 30, 1996 or 1995.
10
<PAGE>
At June 30, 1996, the Company's outstanding indebtedness totaled $617.1 million
with a weighted average interest rate of 7.52%. This amount includes (i)
conventional mortgage notes payable aggregating $71.4 million with a weighted
average interest rate of 8.26%, (ii) tax-exempt bond indebtedness aggregating
$123.6 million with a weighted average interest rate of 6.88%, (iii) senior
unsecured notes payable aggregating $321.3 million with a weighted average
interest rate of 8.07% and (iv) bank line borrowings aggregating $100.8 million
with a weighted average interest rate of 6.18%. At June 30, 1996, total senior
debt equaled 40% of the Company's total market capitalization.
At the beginning of 1996, the Company had approximately $2.9 million of cash and
cash equivalents and $85.1 million of available and unused bank lines of credit.
For the six months ended June 30, 1996, the Company's cash flow from operating
activities increased approximately $10.2 million over the same period last year,
primarily as a result of the significant expansion of the Company's portfolio of
apartment communities as discussed below and under "Results of Operations".
During the six months ended June 30, 1996, net cash used for investing
activities was approximately $89.7 million which resulted primarily from the
Company's acquisition of eight apartment communities containing 2,237 apartment
homes for a total cost, net of liabilities assumed of $80.7 million, which
includes $15.7 million of mortgage notes payable with a weighted average
interest rate of 8.5% assumed in these transactions. The Company also funded
$24.9 million of capital improvements to its properties during this same period.
The Company received net cash proceeds of $15.8 million from the sales of real
estate held for disposition during the first six months of 1996 which included
one apartment community and two shopping centers, the proceeds of which were
primarily used to fund the acquisitions of apartment communities.
Net cash provided by financing activities during the six months ended June 30,
1996, was approximately $47.3 million reflecting (i) net proceeds from the
issuance of common stock through the exercise of stock options and amounts
received from the dividend reinvestment and stock purchase plan in the amount of
$4.9 million, (ii) net proceeds from the issuance of notes payable of
approximately $111,000, (iii) net short-term bank borrowings of $82.4 million,
and (iv) mortgage financing proceeds released from construction funds in the
amount of $2.7 million. These cash inflows were partially offset by (i) $31.1
million of cash distributions paid to common and preferred shareholders funded
with cash flows from operating activities, (ii) scheduled mortgage principal
payments of $1.2 million, (iii) payments on notes and non-scheduled mortgage
principal payments of $10.1 million, and (iv) payment of financing costs
aggregating $314,000.
The Company considers its cash provided by operating activities to be adequate
to meet operating requirements and payments of distributions. The Company hopes
to acquire an additional 6,000 apartment homes during the remainder of 1996 at
an estimated cost of $40,000 per apartment home which includes the acquisition
of a portfolio of 18 properties containing 4,508 apartment homes that is
scheduled to be acquired on August 15, 1996 for an aggregate purchase price of
approximately $182.3 million.
Depending upon the volume and timing of acquisition activity, the Company
anticipates raising additional debt and equity capital during the next twelve
months.
During the fourth quarter of 1995, the Company filed a shelf registration
statement covering up to an aggregate of $462.5 million of various debt and
equity securities. During 1996, the Company implemented a $200 million
medium-term note program under this shelf registration statement. On July 9,
1996, the Company issued $125 million of ten year notes under its medium-term
note program at an interest rate of 7.95%. Net proceeds of approximately $124.2
million were used to (i) curtail existing bank debt in the amount of $93.1
million, and (ii) repay a 9.57%, $35 million senior note that matured on July
15, 1996. Including the $35 million note, the Company has aggregate debt
maturities of $37 million during the remainder of 1996 with a weighted average
interest rate of 9.52%. In July, 1995, the Company executed a forward starting
interest rate swap with a notional amount of $50 million which had the effect of
fixing the interest rate on a 10-year Treasury starting July 15, 1996 at 6.544%.
This transactions was intended to lock-in an approximate 170 basis point savings
on $47 million of
11
<PAGE>
unsecured debt that was to be refinanced in 1996, including the $35 million loan
which matured on July 15, 1996. In anticipation of implementing the medium-term
note program, the Company entered into a second interest rate hedge agreement
for $75 million (notional amount) on June 28, 1996 which allowed the Company to
lock-in a 10 year Treasury rate of 6.75%. The two interest rate hedge agreements
were terminated simultaneously with the $125 million medium-term note issuance
and the Company received $3.0 million in cash. This had the economic effect of
reducing the interest rate to approximately 7.61% over the ten year term.
The Company's liquidity and capital resources are believed to be more than
adequate to meet its cash requirements for the next several years. The Company
expects to meet its long-term liquidity requirements, such as balloon debt
maturities, property acquisitions and significant capital improvements primarily
through the public and private sale of capital stock and the issuance of medium
and long-term unsecured notes payable. The Company may also raise capital
through (i) the assumption of mortgage indebtedness, (ii) sales of properties,
(iii) distributions reinvested and cash invested through the Company's Dividend
Reinvestment and Stock Purchase Plan, (iv) retained cash flow and (v) the
issuance of Operating Partnership Units.
Although no formal plans which would commit the Company for divestiture have
been made, the Company hopes to substantially liquidate it commercial properties
over time as suitable opportunities arise. At the end of October, 1995, the
Company executed a letter of intent to sell five of its seven shopping centers
in a bulk sale at an aggregate purchase price of $28.4 million. During the first
quarter of 1996, the contract for the five shopping centers was terminated.
Since January 1, 1996, two of the five shopping centers included in the
terminated bulk sale, were sold in separate and unrelated transactions at an
aggregate sales price of $10.2 million (one sold in the second quarter for $7.8
million and one sold in the third quarter for $2.4 million) and one is currently
under contract for sale. In addition, the Company sold a Myrtle Beach, South
Carolina shopping center for $5.9 million in February, 1996. The three remaining
shopping centers in the Company's portfolio are currently not under letter of
intent or contract for sale. At June 30, 1996, the Company had one apartment
community, two shopping centers, one industrial park and two parcels of
undeveloped land under contract or letter of intent to sell. These sales are
expected to occur during the remainder of 1996 and are expected to generate
approximately $15 million in cash proceeds. One of the properties is encumbered
with approximately $1.2 million of secured debt. For income tax purposes, it is
anticipated that the transactions will be structured to qualify as tax deferred
exchanges pursuant to Section 1031 of the Internal Revenue Code of 1986, as
amended (the "Code") so that a substantial portion of the related capital gains
will be deferred. The proceeds from these sales are expected to be reinvested in
acquisitions of apartment communities. There are no assurances that any of these
sales transactions will be consummated. Included in the consolidated balance
sheet as "Real estate held for disposition" are 16 properties in the aggregate
amount of $48.7 million, net of accumulated depreciation and impairment loss
valuation allowance. Real estate held for disposition contributed net rental
income (total rental income, less rental expenses, less depreciation expense) of
approximately $1.7 million and $3.4 million for the quarter and six months ended
June 30, 1996, respectively. The 16 properties consist of the following: (i)
seven apartment communities aggregating $22.5 million, (ii) five shopping
centers aggregating $21.6 million, (iii) four office/ industrial properties in
the amount of $2.7 million and (iv) two parcels of land aggregating $1.9
million.
At June 30, 1996, the Company reclassified one shopping center and three
office/industrial properties, from assets held for investment to assets held for
disposition in the Consolidated Balance Sheet and recorded an aggregate $290,000
impairment loss relating to the shopping center and one office building,
representing the excess of the carrying values of the assets over the estimated
fair values less estimated costs to sell.
12
<PAGE>
Funds from operations
Funds from operations ("FFO") is defined as income before gains (losses) on
sales investments, minority interest of unitholders in Operating Partnership and
extraordinary items (computed in accordance with generally accepted accounting
principles) plus real estate depreciation, less preferred dividends and after
adjustment for significant non-recurring items, if any. The Company computes FFO
in accordance with the recommendations set forth by the National Association of
Real Estate Investment Trusts ("NAREIT"). The Company considers FFO in
evaluating property acquisitions and its operating performance, and believes
that FFO should be considered along with, but not as an alternative to, net
income and cash flows as a measure of the Company's operating performance and
liquidity. FFO does not represent cash generated from operating activities in
accordance with generally accepted accounting principles and is not necessarily
indicative of cash available to fund cash needs.
For the three months ended June 30, 1996, FFO increased 15.4% to $17.0 million,
compared with $14.7 million for the second quarter of 1995. For the six months
ended June 30, 1996, FFO increased 12.9% to $33.7 million, compared to $29.8
million for the same period last year. The increase in FFO for both periods
presented was principally due to the increased net rental income from the
Company's 7,379 non-mature apartment homes in 31 apartment communities (those
acquired subsequent to December 31, 1994).
<TABLE>
<CAPTION>
Three Months Ended June 30, Six Months Ended June 30,
(In thousands) (In thousands)
(Unaudited) (Unaudited)
------------------------------ ---------------------------------
1996 1995 % Change 1996 1995 % Change
------------------------------ ---------------------------------
<S> <C>
Calculation of Funds from Operations:
Income before gains (losses) on sales of
investments and minority interest of
unitholders in Operating Partnership $ 8,296 $ 6,993 18.6% $ 16,890 $ 13,080 29.1%
Adjustments:
Real estate depreciation 10,805 9,493 13.8% 21,365 18,549 15.2%
Dividends to preferred
shareholders (2,428) (1,781) 36.3% (4,856) (1,781) 173%
Impairment loss on real
estate held for
disposition 290 -- -- 290 -- --
------ ------- ----- -------- -------- -----
Funds from Operations $16,963 $14,705 15.4% $ 33,689 $ 29,848 12.9%
====== ======= ===== ======== ======== =====
</TABLE>
Results of Operations
The Company's net income is primarily generated from the operations of its
apartment communities. For purposes of evaluating the Company's comparative
operating performance, the Company categorizes its apartment communities into
two categories (i) mature - those communities acquired prior to January 1, 1995
and (ii) non- mature - those communities acquired subsequent to December 31,
1994 plus three apartment communities sold during this same period.
For the quarter and six months ended June 30, 1996, the Company reported
significant increases over the same period last year in rental income and income
before gains (losses) on sales of investments and minority interest of
unitholders in Operating Partnership and FFO. Since the beginning of 1995, the
Company acquired a total of 7,379 apartment homes in 31 communities representing
a 25.5% expansion in the number of apartment homes owned during that period.
These apartment homes (the "non-mature" communities) provided a substantial
portion of the aggregate reported increases noted above. Net income decreased
$3.4 million for the quarter ended June 30, 1996 and was flat for the six month
period ended June 30, 1996 when compared to the same periods last year
13
<PAGE>
primarily as a result of the June 30, 1995 sale of four Richmond, Virginia
shopping centers at an aggregate $4.6 million gain.
All Communities
The operating performance for all of the Company's 148 apartment communities
containing 36,361 apartment homes and the 122 apartment communities containing
31,507 apartment homes for the three months and six months ended June 30, 1996
and 1995, respectively, is summarized as follows:
<TABLE>
<CAPTION>
Three Months Ended June 30 Six Months Ended June 30,
(In thousands) (In thousands)
(Unaudited) (Unaudited)
---------------------------------- -------------------------------
1996 1995 %Change 1996 1995 % Change
---------------------------------- -------------------------------
<S> <C>
Rental income $ 55,826 $ 45,578 22.5% $109,106 $ 88,904 22.7%
Rental expenses 24,727 19,346 27.8% 47,949 37,537 27.7%
Real estate depreciation 10,805 8,905 21.3% 21,271 17,366 22.5%
-------- -------- ----- -------- -------- -----
Net rental income (1) $ 20,294 $ 17,327 17.1% $ 39,886 $ 34,001 17.3%
======== ======== ===== ======== ======== =====
Weighted average number of
apartment homes 35,423 30,765 15.1% 34,942 30,095 16.1%
Economic occupancy (2) 93.3% 93.9% (0.6%) 93.2% 94.2% (1.0%)
Average monthly rental rates $ 545 $ 498 9.4% $ 548 $ 485 12.9%
</TABLE>
(1) Net rental income for an apartment community is defined as total rental
income, less rental expenses, less depreciation expense.
(2) Economic occupancy is defined as rental income (gross potential rent less
vacancy loss, management units and credit loss) divided by potential collections
(gross potential rent less management units) for the period, expressed as a
percentage.
Due to the acquisition of 7,379 apartment homes since January 1, 1995, the
weighted average number of apartment homes has increased 15.1% and 16.1% for the
three and six months period ended June 30, 1996, respectively. For the six month
period, the weighted average number of apartment homes increased to 34,942 from
30,095 apartment homes compared to the same period last year and to 35,423 from
30,765 for the quarter ended June 30, 1996. As a result of the increase in the
number of apartment homes acquired since January 1, 1995, the Company has
experienced significant increases in rental income, rental expenses and real
estate depreciation for the three and six month periods ended June 30, 1996.
The non-mature apartment homes provided the majority of the increases in rental
income, rental expenses and depreciation expense for the three and six month
periods ended June 30, 1996, however, the higher average rents at the Company's
mature communities also contributed to the increases in rental income. The
non-mature apartment homes provided all of the increase in the aggregate net
rental income experienced by the Company during the three and six month period
ended June 30, 1996. For the 36,361 apartment homes in the 148 apartment
communities owned at June 30, 1996, economic occupancy averaged 93.2%, the
operating expense ratio (ratio of rental expenses to rental income) averaged
43.9% and average monthly rents were $545 for the six months ended June 30,
1996. For the six months ended June 30, 1995, the 31,507 apartment homes then
owned had economic occupancy of 94.2%, the operating expense ratio averaged
42.2% and the average monthly rents were $498.
Overall, for the three and six months ended June 30, 1996, rent growth was
higher than the same period last year, however, this increase was offset by
lower occupancy and higher expenses. The increase in operating expenses for the
six month period was in part attributable to the severe winter weather
experienced during the first quarter of 1996 which resulted in an increase in
gas, snow removal and repair labor expenses. In addition, during the second
14
<PAGE>
quarter of 1996, the Company's mature apartments experienced increases in most
of the operating expense categories compared to the second quarter last year.
Exterior painting and other non-recurring exterior improvements, such as
striping and sealcoating parking lots, accounted for a significant amount of the
increase. The major markets in which the Company operates have experienced good
job growth and household formation, which has led to strong rent growth.
Mature Communities
The operating performance for the Company's 117 mature apartment communities
containing 28,982 apartment homes for the three months and six months ended June
30, 1996 and 1995 is summarized as follows:
<TABLE>
<CAPTION>
Three Months Ended June 30, Six Months Ended June 30,
(In thousands) (In thousands)
(Unaudited) (Unaudited)
------------------------------- ---------------------------------
1996 1995 % Change 1996 1995 % Change
------------------------------- ---------------------------------
<S> <C>
Rental income $ 44,804 $ 42,788 4.7% $ 88,956 $ 85,410 4.2%
Rental expenses 20,255 18,316 10.6% 39,720 36,195 9.7%
Real estate depreciation 8,846 8,406 5.2% 17,719 16,775 5.6%
-------- -------- ------ --------------------- -----
Net rental income $ 15,703 $ 16,066 (2.3%) $ 31,517 $ 32,440 (2.8%)
Economic occupancy 93.2% 93.9% (0.7%) 93.1% 94.2% (1.1%)
Average monthly rental
rates $ 536 $ 511 4.8% $ 533 $ 509 4.6%
</TABLE>
For the six months ended June 30, 1996, the Company's mature communities
provided approximately 82% of the Company's rental income and 79% of its net
rental income. Compared to the same six month period last year, total rental
income from these apartment homes grew 4.2%, or $3.5 million, reflecting an
increase in average monthly rents of 4.6% to $533 per month and an increase in
other income of 41% as a result of the generally strong rental markets. The
Company expects to maintain rent growth in the 4 1/2% range through the
remainder of the year. For the six month period ended June 30, 1996, these
rental rate increases were offset by a decrease in economic occupancy of 1.1% to
93.1% which resulted from a decrease in physical occupancy of .8% and an
increase in credit loss of .3%. The Company expects to be able to sustain
economic occupancy of approximately 94% through the remainder of the year. These
same factors led to similar increases in rental income for the quarter ended
June 30, 1996, as total rental income from these apartment homes grew 4.7%, or
$2.0 million, reflecting an increase in average monthly rents of 4.8% to $536
per month and an increase in other income of 44%, over the same period last
year.
For the six months ended June 30, 1996 rental expenses at these communities
increased 9.7%, or $3.5 million, resulting in an increase in the operating
expense ratio (the ratio of rental expenses to rental income) of 2.3% to 44.7%.
The increase in rental expenses is partly attributable to the severe winter of
1996 compared to the relatively mild winter of 1995. Of the $3.5 million
increase, approximately $450,000 was weather related which included increases in
gas, snow removal and repair labor expenses. During the second quarter of 1996,
the Company's mature apartments experienced increases in most of its operating
expense categories compared to the same period last year. Exterior painting and
other non-recurring exterior improvements, such as striping and sealcoating
parking lots, accounted for a significant amount of the increase. In 1996, the
Company began the process of upgrading certain of its older apartment
communities. The upgrades relate primarily to the modernization of the kitchens
and bathrooms with new appliances, cabinets, light fixtures, ceiling fans,
shelving, countertops, doors and floor coverings. Although much of these costs
have been capitalized, a portion has been expensed. The Company expects rental
expenses to moderate in the two remaining quarters of 1996. However, the Company
expects continuing pressure on certain expenses such as real estate taxes,
insurance and water/sewer rates. Turnover (measured by move-outs) for the first
six months of 1996, was 31.2% at the mature communities which
15
<PAGE>
approximates turnover for the six month period last year. The combination of
higher rents which were offset by a decrease in occupancy and higher rental
expenses led to a decrease in net rental income from mature communities of
approximately $923,000 or 2.8% for the six month period ended June 30, 1996.
Excluding the effects of the winter related expenses incurred during the first
quarter, these same factors resulted in similar increases in operating expenses
for the quarter ended June 30, 1996, as rental expenses increased 10.6% which
resulted in an increase in the operating expense ratio of 2.4% to 45.2%.
Non-Mature Communities
The operating performance for the three and six months ended June 30, 1996 and
1995 for the Company's non-mature apartment communities which includes (i) the
7,379 apartment homes acquired since January 1, 1995 and (ii) the three
apartment communities containing 302 apartment homes sold subsequent to December
31, 1994, is summarized as follows:
<TABLE>
<CAPTION>
Three Months Ended June 30, Six Months Ended June 30,
(In thousands) (In thousands)
(Unaudited) (Unaudited)
------------------------------- -----------------------------
1996 1995 $ Change 1996 1995 $ Change
------------------------------- -----------------------------
<S> <C>
Rental income $ 11,022 $ 2,791 $ 8,231 $ 20,150 $ 3,495 $ 16,655
Rental expenses 4,472 1,030 3,442 8,230 1,342 6,888
Real estate depreciation 1,958 499 1,459 3,552 591 2,961
-------- -------- ------- -------- ------- --------
Net rental income $ 4,592 $ 1,262 $ 3,330 $ 8,368 $ 1,562 $ 6,806
</TABLE>
For the six months ended June 30, 1996, the Company's non-mature communities
provided approximately 18% of the Company's rental income and 21% of its net
rental income. Rental income, rental expenses and real estate depreciation
increased from 1995 to 1996 directly as a result of the increase in the number
of apartment homes acquired during 1995 and the first six months of 1996. For
the 7,379 apartments in the 31 non-mature communities acquired since January 1,
1995, average economic occupancy was 93.4% and the operating expense ratio was
40.8% during the first six months of 1996. These communities provided increases
of $16.7 million, $6.9 million and $6.8 million, respectively, in rental income,
rental expenses , and net rental income for the six months ended June 30, 1996.
For the quarter ended June 30, 1996, these communities provided increases of
$8.2 million, $3.4 million and $3.3 million, respectively in rental income,
rental expenses , and net rental income.
Commercial
Rental income, rental expenses and net rental income from commercial properties
decreased $1.9 million, $354,000 and $508,000, respectively during the first six
months of 1996 compared to the same period last year. Rental income, rental
expenses and net rental income from commercial properties decreased $1.1
million, $194,000 and $293,000, respectively during the quarter ended June 30,
1996 compared to the same period last year. The decreases for both periods are
directly attributable to the sale of nine shopping centers since the beginning
of 1995.
Other Income and Expenses
Interest and other income increased $84,000 and $260,000 for the three and six
month periods ended June 30, 1996, primarily due to dividend income from the
Company's investment in securities available-for-sale in First Washington Realty
Trust, Inc. 9.75% Series A Cumulative Participating Preferred Stock which was
not held by the Company during the first six months of 1995. However, this
amount was somewhat offset by interest income earned on the Company's short-term
investments during the second quarter of 1995 relating to funds received from
the April, 1995 issuance of preferred stock which was not fully invested in new
apartment acquisitions until July, 1995.
16
<PAGE>
Depreciation of real estate owned increased $1.3 million and $2.8 million for
the three and six month periods ended June 30, 1996 over the same periods last
year with substantially all of the increase attributable to the portfolio
expansion that occurred during 1995. However, the increase was somewhat offset
by the sales of nine shopping centers since January 1, 1995 and the transfer of
properties from real estate held for investment to real estate held for
disposition.
Interest expense increased $1.1 million and $1.3 million for the three and six
month periods ended June 30, 1996 over the same period last year. The weighted
average amount of debt employed for the six months ended June 30, 1996 was
higher than it was in 1995 ($563.3 million in 1996 versus $510.7 million in
1995). The weighted average interest rate on this debt was slightly lower than
it was during the same period last year, decreasing from 7.82% in 1995 to 7.61%
in 1996. For the quarter ended June 30, 1996, the weighted average amount of
debt outstanding was higher than the same period last year ($600.1 million in
1996 versus $510.6 million in 1995). The weighted average interest rate
on this debt was slightly lower than it was during the same period last year,
decreasing from 7.82% in 1995 to 7.56% in 1996.
General and administrative expenses increased by $151,000 or 5.4% for the six
months ended June 30, 1996 over the same period last year. In 1996, the Company
incurred increases in most of its general and administrative expense categories
with the largest increases in payroll and payroll related expenses and
shareholder relation expense which are directly related to the higher
administrative costs associated with increasing the size of the Company.
Although the Company experienced these same increases for the quarter ended June
30, 1996, total general and administrative expenses were flat compared to the
same period last year when approximately $204,000 of expenses associated with an
unsuccessful business combination with another apartment company was
written-off.
Gains (losses) on sales of investments For the second quarter of 1996, the
Company recognized a $129,000 financial reporting loss on the sale of a shopping
center located in Myrtle Beach, South Carolina and one apartment community
located in Newark, Delaware. In addition, a $965,000 financial reporting gain
was recognized on the February, 1996 sale of a Myrtle Beach, South Carolina
shopping center. The results of operations for the three and six month periods
ended June 30, 1995 included a $4.6 million gain recognized on the sale of four
of the Company's shopping centers to another REIT on June 30, 1995.
Other depreciation and amortization increased $6,000 and $17,000 for the three
and six month periods ended June 30, 1996, primarily due to the increasing size
of the Company.
Income before gains (losses) on the sales of investments and minority interest
of unitholders in Operating Partnership increased $1.3 million and $3.8 million
for the three and six month periods ended June 30, 1996, primarily as a result
of the expansion of the Company's apartment portfolio during the past 18 months.
Net income decreased $3.4 million and increased $6,000 for the three and six
month periods ended June 30, 1996 compared to the same period last year
primarily as a result of the $4.6 million gain on the sale of investments
recorded in the second quarter of 1995. Net income per share decreased 26% for
the first six months of 1996 to $.23 per share from $.31 per share and decreased
47% for the quarterly period to $.10 per share from $.19 per share for this same
reason.
Dividends to preferred shareholders totaled $2.4 million and $4.9 million for
the three and six month periods ended June 30, 1996, compared to $1.8 million
for the same periods last year. The Company issued 4.2 million shares of 9 1/4%
Cumulative Redeemable Preferred Stock on April 24, 1995, therefore, the
preferred stock was outstanding for only a portion of the periods presented last
year.
17
<PAGE>
Inflation
The Company believes that the direct effects of inflation on the Company's
operations have been inconsequential.
18
<PAGE>
ITEM 1. LEGAL PROCEEDINGS
None
ITEM 2. CHANGES IN SECURITIES
None
ITEM 3. DEFAULTS UPON SENIOR SECURITIES
None
ITEM 4. SUBMISSION OF MATTERS TO A VOTE OF SECURITY HOLDERS
None
ITEM 5. OTHER INFORMATION
None
ITEM 6. EXHIBITS AND REPORTS ON FORM 8-K
(a) The exhibits listed on the accompanying index to exhibits are
filed as part of this quarterly report.
(b) A Form 8-K dated April 12, 1996 as filed with the Securities
and Exchange Commission on April 12, 1996. The filing updated
the reported the pro forma consolidated results of operations
to reflect a full twelve months for the period ended December
31, 1995.
19
<PAGE>
EXHIBIT INDEX
Item 6 (a)
.
The exhibits listed below are filed as part of this quarterly report.
References under the caption "Location" to exhibits, forms, or other filings
indicate that the form or other filing has been filed, that the indexed exhibit
and the exhibit referred to are the same and that the exhibit referred to is
incorporated by reference.
<TABLE>
<CAPTION>
Exhibit Description Location
<S> <C>
3(a) Restated Articles of Incorporation Exhibit 4(i)(c) to the Company's Form S-3 Registration
Statement (Registration No. 33-64275) filed with the
Commission on November 15, 1995.
3(b)(i) By-Laws Exhibit 4(c) to the Company's Form S-3 Registration
Statement (Registration No. 33-44743) filed with the
Commission on December 31, 1991.
3(b)(ii) Amendment of By-Laws Exhibit 3(b)(ii) to the Company's Annual Report
On Form 10-K for the year ended December 31, 1995.
4(i)(a) Specimen Common Stock Exhibit 4(i) to the Company's Annual Report
Certificate on Form 10-K for the year ended December
31, 1993.
4(i)(b) Form of Certificate for Shares Exhibit 1(e) to the Company's Form 8-A
of 9 1/4% Series A Cumulative Registration Statement dated April 24, 1995.
Redeemable Preferred Stock
4(ii)(a) Loan Agreement dated as of Exhibit 6(c)(i) to the Company's Form 8-A
November 7, 1991, between the Registration Statement dated April 19, 1990.
Company and Aid Association for
Lutherans
4(ii)(e) Note Purchase Agreement dated Exhibit 6(c)(5) to the Company's Form 8-A
as of February 15, 1993, between Registration Statement dated April 19, 1990.
the Company and CIGNA Property
and Casualty Insurance Company,
Connecticut General Life Insurance
Company, Connecticut General Life
Insurance Company, on behalf of
one or more separate accounts,
Insurance Company of North
America, Principal Mutual Life
Insurance Company and Aid
Association for Lutherans
4(ii)(f) Credit Agreement dated as of Exhibit 6 (c)(6) to the Company's
December 15, 1994 between the Form 8-A Registration Statement
Company and First Union National Bank dated April 19, 1990.
of Virginia
20
<PAGE>
4(ii)(g)(1) Indenture dated as of April 1, 1994, Exhibit 4(ii)(f)(1) to the Company's
between the Company and First Union Quarterly Report on Form 10-Q for
National Bank of Virginia, N.A., the quarter ended March 31, 1994.
as Trustee.
4(ii)(g)(2) Resolution of the Board of Directors Exhibit 4(ii)(f)(2) to the Company's
of the Company establishing terms of Quarterly Report on Form 10-Q for
7 1/4% Notes due April 1, 1999 the quarter ended March 31, 1994.
4(ii)(g)(3) Form of 7 1/4% Notes due April 1, Exhibit 4(ii)(f)(3) to the Company's
1999 Quarterly Report on Form 10-Q for
the quarter ended March 31, 1994.
4(ii)(g)(4) Resolution of the Board of Exhibit 4 (ii)(f)(4) to the Company's
the Company establishing terms of Quarterly Report on Form 10-Q for
the 8 1/2% Debentures due quarter ended September 30, 1994.
September 15, 2024
4(ii)(g)(5) Form of 8 1/2% Debentures Exhibit 4 (ii)(f)(5) to the Company's
due September 15, 2024 Quarterly Report on Form 10-Q for
the quarter ended September 30, 1994.
4(ii)(h)(1) Indenture dated November 1, Filed herewith.
1995, between the Company
And First Union National Bank
of Virginia, N.A., as Trustee
4(ii)(h)(2) Resolution of the Board of the Filed herewith.
Company establishing the terms
of the Medium-Term Notes
4(ii)(h)(3) Form of Note for Medium-Term Filed herewith.
Notes due nine months or more
from the date of issue
</TABLE>
The Company agrees to furnish to the Commission on request a copy of
any instrument with respect to long-term debt of the Company or its subsidiaries
the total amount of securities authorized under which does not exceed 10% of the
total assets of the Company and its subsidiaries on a consolidated basis.
<TABLE>
<S> <C>
10(i) Employment Agreement between Exhibit 10(v)(i) to the Company's Annual Report on
the Company and John P. McCann Form 10-K for the year ended December 31, 1982.
dated October 29, 1982
10(ii) Employment Agreement between Exhibit 10(v)(ii) to the Comapny's Annual Report on
the Company and James Dolphin Form 10-K for the year ended December 31, 1982.
dated October 29, 1982.
10(iii) Employment Agreement between Exhibit 10(iii) to the Company's Annual
The Company and Barry M. Kornblau, Report on Form 10-K for the year December
dated February 1, 1991. 31, 1990.
21
<PAGE>
10(iv) 1985 Stock Option Plan, Exhibit A to the Company's definitive proxy
as amended statement dated March 28, 1996.
10(v) 1991 Stock Purchase and Loan Exhibit 10(v) to the Company's Annual Report on Form
Plan 10-K for the year ended December 31, 1991.
10(vi) Amended and Restated Agreement Exhibit 10(vi) to the Company's Annual Report on
of Limited Partnership of Form 10-K for the year ended December 31, 1995.
United Dominion Realty, L.P.
Dated as of December 31, 1995
10(vii) Distribution Agreement dated as of Filed herewith.
July 8, 1996, between the Company
And Merrill Lynch & Co., Merrill
Lynch, Pierce, Fenner & Smith
Incorporated, Alex Brown & Sons
Incorporated, Goldman Sachs & Co.,
J. P. Morgan Securities, Inc. and
NationsBanc Capital Markets, Inc.
relating to Medium-Term Notes
due nine months or more from the
date of issue.
12 Computation of Ratio of Earnings Filed herewith.
to Fixed Charges
21 The Company has the following subsidiaries, all of which are wholly owned:
The Commons of Columbia, a Virginia corporation
UDRT of North Carolina, L.L.C., a North Carolina limited
liability company
UDRT of Alabama, Inc., an Alabama corporation
UDR of Marble Hill, L.L.C., a Virginia limited
liability company
United Dominion Realty, L.P., a Virginia
limited partnership
United Dominion Residential, Inc., a
Virginia corporation
UDRT of Virginia, Inc., a Virginia
corporation
</TABLE>
22
<PAGE>
SIGNATURES
Pursuant to the requirements of Section 13 or 15 (d) of the Securities Exchange
Act of 1934, the registrant has duly caused this Quarterly Report to be signed
on its behalf by the undersigned, thereunto duly authorized.
United Dominion Realty Trust, Inc.
(registrant)
Date: August 14, 1996 /s/ James Dolphin
- --------------------- -----------------
James Dolphin
Senior Vice President,
and Chief Financial Officer
Date: August 14, 1996 /s/ Jerry A. Davis
- --------------------- ------------------
Jerry A. Davis
Vice President, Controller-Corporate
Accounting and Chief Accounting Officer
23
Exhibit 4(ii)(h)(1)
- --------------------------------------------------------------------------
UNITED DOMINION REALTY TRUST, INC.
TO
FIRST UNION NATIONAL BANK OF VIRGINIA,
Trustee
Indenture
Dated as of November 1, 1995
Senior Debt Securities
- --------------------------------------------------------------------------
<PAGE>
TABLE OF CONTENTS
Page
ARTICLE ONE
DEFINITIONS AND OTHER PROVISIONS OF GENERAL APPLICATION
SECTION 101. Definitions ............................................... 1
Acquired Debt........................................ 2
Act ................................................ 2
Additional Amounts................................... 2
Affiliate............................................ 2
Annual Service Charge................................ 2
Authenticating Agent................................. 2
Authorized Newspaper................................. 2
Bankruptcy Law....................................... 2
Bearer Security...................................... 3
Board of Directors................................... 3
Board Resolution..................................... 3
Business Day......................................... 3
Capital Stock........................................ 3
CEDEL................................................ 3
Commission........................................... 3
Consolidated Income Available for Debt Service....... 3
Conversion Event..................................... 3
Corporate Trust Office............................... 3
corporation.......................................... 4
coupon............................................... 4
Custodian............................................ 4
Debt ................................................ 4
Defaulted Interest................................... 4
Disqualified Stock................................... 4
Dollar or $.......................................... 5
DTC ................................................ 5
ECU ................................................ 5
Euroclear............................................ 5
European Communities................................. 5
European Monetary System............................. 5
Event of Default..................................... 5
Exchange Act......................................... 5
Foreign Currency..................................... 5
i
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Funds from Operations................................ 5
GAAP ................................................ 5
Government Obligations............................... 6
Holder............................................... 6
Indenture............................................ 6
Indexed Security..................................... 6
interest............................................. 6
Interest Payment Date................................ 7
Make-Whole Amount.................................... 7
Maturity............................................. 7
Officers' Certificate................................ 7
Opinion of Counsel................................... 7
Original Issue Discount Security..................... 7
Outstanding.......................................... 7
Paying Agent......................................... 9
Person............................................... 9
Place of Payment..................................... 9
Predecessor Security................................. 9
Redemption Date...................................... 9
Redemption Price..................................... 9
Registered Security.................................. 9
Regular Record Date.................................. 9
Repayment Date....................................... 9
Repayment Price...................................... 9
Responsible Officer.................................. 9
Securities Act....................................... 10
Security............................................. 10
Security Register and Security Registrar............. 10
Significant Subsidiary............................... 10
Special Record Date.................................. 10
Stated Maturity...................................... 10
Subsidiary........................................... 10
Total Assets......................................... 10
Trust................................................ 10
Trust Indenture Act or TIA........................... 10
Trust Request and Trust Order........................ 11
Trustee.............................................. 11
Undepreciated Real Estate Assets..................... 11
United States........................................ 11
United States person................................. 11
Yield to Maturity.................................... 11
SECTION 102. Compliance Certificates and Opinions........................ 11
SECTION 103. Form of Documents Delivered to Trustee...................... 12
SECTION 104. Acts of Holders............................................. 13
ii
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SECTION 105. Notices, etc., to Trustee and Trust......................... 14
SECTION 106. Notice to Holders; Waiver................................... 15
SECTION 107. Effect of Headings and Table of Contents.................... 16
SECTION 108. Successors and Assigns...................................... 16
SECTION 109. Separability Clause......................................... 16
SECTION 110. Benefits of Indenture....................................... 16
SECTION 111. No Personal Liability....................................... 16
SECTION 112. Governing Law............................................... 17
SECTION 113. Legal Holidays.............................................. 17
ARTICLE TWO
SECURITIES FORMS
SECTION 201. Forms of Securities......................................... 18
SECTION 202. Form of Trustee's Certificate of Authentication............. 18
SECTION 203. Securities Issuable in Global Form.......................... 19
ARTICLE THREE
THE SECURITIES
SECTION 301. Amount Unlimited; Issuable in Series........................ 20
SECTION 302. Denominations............................................... 24
SECTION 303. Execution, Authentication Delivery and Dating............... 24
SECTION 304. Temporary Securities........................................ 26
SECTION 305. Registration, Registration of Transfer and Exchange......... 29
SECTION 306. Mutilated, Destroyed, Lost and Stolen Securities............ 32
SECTION 307. Payment of Interest; Interest Rights Preserved.............. 33
SECTION 308. Persons Deemed Owners....................................... 35
SECTION 309. Cancellation ............................................... 36
SECTION 310. Computation of Interest..................................... 37
ARTICLE FOUR
SATISFACTION AND DISCHARGE
SECTION 401. Satisfaction and Discharge of Indenture..................... 37
SECTION 402. Application of Trust Funds.................................. 38
ARTICLE FIVE
REMEDIES
iii
<PAGE>
SECTION 501. Events of Default........................................... 39
SECTION 502. Acceleration of Maturity; Rescission and Annulment.......... 41
SECTION 503. Collection of Indebtedness and Suits for Enforcement by
Trustee........................................ 42
SECTION 504. Trustee May File Proofs of Claim............................ 43
SECTION 505. Trustee May Enforce Claims Without Possession of Securities
or Coupons..................................... 43
SECTION 506. Application of Money Collected.............................. 44
SECTION 507. Limitation on Suits......................................... 44
SECTION 508. Unconditional Right of Holders to Receive Principal,
Premium or Make-Whole Amount, if any,
Interest and Additional Amounts................ 45
SECTION 509. Restoration of Rights and Remedies.......................... 45
SECTION 510. Rights and Remedies Cumulative.............................. 45
SECTION 511. Delay or Omission Not Waiver................................ 46
SECTION 512. Control by Holders of Securities............................ 46
SECTION 513. Waiver of Past Defaults..................................... 46
SECTION 514. Waiver of Usury, Stay or Extension Laws..................... 47
SECTION 515. Undertaking for Costs....................................... 47
ARTICLE SIX
THE TRUSTEE
SECTION 601. Notice of Defaults.......................................... 48
SECTION 602. Certain Rights of Trustee................................... 48
SECTION 603. Not Responsible for Recitals or Issuance of Securities...... 49
SECTION 604. May Hold Securities......................................... 50
SECTION 605. Money Held in Trust......................................... 50
SECTION 606. Compensation and Reimbursement.............................. 50
SECTION 607. Corporate Trustee Required; Eligibility; Conflicting
Interests...................................... 51
SECTION 608. Resignation and Removal; Appointment of Successor........... 51
SECTION 609. Acceptance of Appointment By Successor...................... 53
SECTION 610. Merger, Conversion, Consolidation or Succession to Business. 54
SECTION 611. Appointment of Authenticating Agent......................... 54
ARTICLE SEVEN
HOLDERS' LISTS AND REPORTS BY TRUSTEE AND TRUST
SECTION 701. Disclosure of Names and Addresses of Holders................ 56
SECTION 702. Reports by Trustee.......................................... 56
SECTION 703. Reports by Trust............................................ 56
SECTION 704. Trust to Furnish Trustee Names and Addresses of Holders..... 57
iv
<PAGE>
ARTICLE EIGHT
CONSOLIDATION, MERGER, SALE, LEASE OR CONVEYANCE
SECTION 801. Consolidations and Mergers of Trust and Sales, Leases and
Conveyances Permitted Subject to
Certain Conditions............................. 58
SECTION 802. Rights and Duties of Successor Corporation.................. 58
SECTION 803. Officers' Certificate and Opinion of Counsel................ 59
ARTICLE NINE
SUPPLEMENTAL INDENTURES
SECTION 901. Supplemental Indentures Without Consent of Holders.......... 60
SECTION 902. Supplemental Indentures with Consent of Holders............. 61
SECTION 903. Execution of Supplemental Indentures........................ 63
SECTION 904. Effect of Supplemental Indentures........................... 63
SECTION 905. Conformity with Trust Indenture Act......................... 63
SECTION 906. Reference in Securities to Supplemental Indentures.......... 63
SECTION 907. Notice of Supplemental Indentures........................... 63
ARTICLE TEN
COVENANTS
SECTION 1001. Payment of Principal, Premium or Make-Whole Amount, if
any, Interest and Additional Amounts........... 64
SECTION 1002. Maintenance of Office or Agency............................. 64
SECTION 1003. Money for Securities Payments to Be Held in Trust........... 66
SECTION 1004. Limitations on Incurrence of Debt........................... 67
SECTION 1005. Existence ............................................... 69
SECTION 1006. Maintenance of Properties................................... 69
SECTION 1007. Insurance ............................................... 69
SECTION 1008. Payment of Taxes and Other Claims........................... 69
SECTION 1009. Provision of Financial Information.......................... 69
SECTION 1010. Statement as to Compliance.................................. 70
SECTION 1011. Additional Amounts.......................................... 70
SECTION 1012. Waiver of Certain Covenants................................. 71
ARTICLE ELEVEN
REDEMPTION OF SECURITIES
SECTION 1101. Applicability of Article.................................... 72
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SECTION 1102. Election to Redeem; Notice to Trustee....................... 72
SECTION 1103. Selection by Trustee of Securities to Be Redeemed........... 72
SECTION 1104. Notice of Redemption........................................ 72
SECTION 1105. Deposit of Redemption Price................................. 74
SECTION 1106. Securities Payable on Redemption Date....................... 74
SECTION 1107. Securities Redeemed in Part................................. 75
ARTICLE TWELVE
SINKING FUNDS
SECTION 1201. Applicability of Article.................................... 76
SECTION 1202. Satisfaction of Sinking Fund Payments with Securities....... 76
SECTION 1203. Redemption of Securities for Sinking Fund................... 76
ARTICLE THIRTEEN
REPAYMENT AT THE OPTION OF HOLDERS
SECTION 1301. Applicability of Article.................................... 77
SECTION 1302. Repayment of Securities..................................... 77
SECTION 1303. Exercise of Option.......................................... 77
SECTION 1304. When Securities Presented for Repayment Become Due and
Payable........................................ 78
SECTION 1305. Securities Repaid in Part................................... 79
ARTICLE FOURTEEN
DEFEASANCE AND COVENANT DEFEASANCE
SECTION 1401. Applicability of Article; Trust's Option to Effect
Defeasance or Covenant Defeasance........................... 80
SECTION 1402 Defeasance and Discharge.................................... 80
SECTION 1403. Covenant Defeasance......................................... 81
SECTION 1404. Conditions to Defeasance or Covenant Defeasance............. 81
SECTION 1405. Deposited Money and Government Obligations to Be Held in
Trust; Other Miscellaneous Provisions.......... 83
ARTICLE FIFTEEN
MEETINGS OF HOLDERS OF SECURITIES
SECTION 1501. Purposes for Which Meetings May Be Called................... 84
vi
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SECTION 1502. Call, Notice and Place of Meetings.......................... 84
SECTION 1503. Persons Entitled to Vote at Meetings........................ 85
SECTION 1504. Quorum; Action.............................................. 85
SECTION 1505. Determination of Voting Rights; Conduct and Adjournment
of Meetings.................................... 86
SECTION 1506. Counting Votes and Recording Action of Meetings............. 87
SECTION 1507. Evidence of Action Taken by Holders......................... 87
SECTION 1508. Proof of Execution of Instruments........................... 88
TESTIMONIUM
SIGNATURES AND SEALS
ACKNOWLEDGMENTS
EXHIBIT A -- FORMS OF CERTIFICATION
vii
<PAGE>
UNITED DOMINION REALTY TRUST, INC.
Reconciliation and tie between Trust Indenture Act of 1939, as amended (the
"1939 Act"), and Indenture, dated as of November 1, 1995
Trust Indenture Act Section Indenture Section
ss. 310 (a)(1)......................................................607(a)
(a)(2)......................................................607(a)
(b)....................................................607(b), 608
ss. 312 (c)............................................................701
ss. 314 (a)............................................................703
(a)(4)........................................................1011
(c)(1).........................................................102
(c)(2).........................................................102
(e)............................................................102
ss. 315 (b)............................................................601
ss. 316 (a) (last sentence)............................101 ("Outstanding")
(a)(1)(A).................................................502, 512
(a)(1)(B)......................................................513
(b)............................................................508
ss. 317 (a)(1).........................................................503
(a)(2).........................................................504
ss. 318 (a)............................................................112
(c)............................................................112
- --------------------------
NOTE: This reconciliation and tie shall not, for any purpose, be deemed to
be a part of the Indenture.
Attention should also be directed to Section 318(c) of the 1939 Act,
which provides that the provisions of Sections 310 to and including
317 of the 1939 Act are a part of and govern every qualified
indenture, whether or not physically contained therein.
viii
<PAGE>
INDENTURE, dated as of November 1, 1995, between UNITED DOMINION REALTY
TRUST, INC., a Virginia corporation (hereinafter called the "Trust"), having its
principal office at 10 South Sixth Street, Suite 203, Richmond, Virginia
23219-3802, and FIRST UBION NATIONAL BANK OF VIRGINIA, a national banking
association, as Trustee hereunder (hereinafter called the "Trustee"), having its
Corporate Trust Office at 901 East cary Street, Richmond, Virginia 23219.
RECITALS OF THE TRUST
The Trust deems it necessary to issue from time to time for its lawful
purposes senior debt securities (hereinafter called the "Securities") evidencing
its unsecured and unsubordinated indebtedness, and has duly authorized the
execution and delivery of this Indenture to provide for the issuance from time
to time of the Securities, unlimited as to aggregate principal amount, to bear
interest at the rates or formulas, to mature at such times and to have such
other provisions as shall be fixed therefor as hereinafter provided.
All things necessary to make this Indenture a valid agreement of the
Trust, in accordance with its terms, have been done.
NOW, THEREFORE, THIS INDENTURE WITNESSETH:
For and in consideration of the premises and the purchase of the
Securities by the Holders thereof, it is mutually covenanted and agreed, for the
equal and proportionate benefit of all Holders of the Securities, as follows:
ARTICLE ONE
DEFINITIONS AND OTHER PROVISIONS OF GENERAL APPLICATION
SECTION 101. Definitions.
For all purposes of this Indenture, except as otherwise expressly
provided or the context otherwise requires:
(1) the terms defined in this Article have the meanings
assigned to them in this Article, and include the plural as well as the
singular;
(2) all other terms used herein which are defined in the TIA,
either directly or by reference therein, have the meanings assigned to
them therein, and the terms "cash transaction" and "self-liquidating
paper," as used in TIA Section 311, shall have the meanings assigned to
them in the rules of the Commission adopted under the TIA;
(3) all accounting terms not otherwise defined herein have the
meanings assigned to them in accordance with GAAP; and
<PAGE>
(4) the words "herein," "hereof" and "hereunder" and other
words of similar import refer to this Indenture as a whole and not to
any particular Article, Section or other subdivision.
Certain terms, used principally in Article Three, Article Five, Article
Six and Article Ten, are defined in those Articles. In addition, the following
terms shall have the indicated respective meanings:
"Acquired Debt" means Debt of a Person (i) existing at the time such
Person becomes a Subsidiary or (ii) assumed in connection with the acquisition
of assets from such Person, in each case, other than Debt incurred in connection
with, or in contemplation of, such Person becoming a Subsidiary or such
acquisition. Acquired Debt shall be deemed to be incurred on the date of the
related acquisition of assets from any Person or the date the acquired Person
becomes a Subsidiary.
"Act" has the meaning specified in Section 104.
"Additional Amounts" means any additional amounts which are required by
a Security, under circumstances specified therein, to be paid by the Trust in
respect of certain taxes imposed on certain Holders and which are owing to such
Holders.
"Affiliate" of any specified Person means any other Person directly or
indirectly controlling or controlled by or under direct or indirect common
control with such specified Person. For the purposes of this definition,
"control" when used with respect to any specified Person means the power to
direct the management and policies of such Person, directly or indirectly,
whether through the ownership of voting securities, by contract or otherwise;
and the terms "controlling" and "controlled" have meanings correlative to the
foregoing.
"Annual Service Charge" as of any date means the maximum amount which
is payable in any period for interest on, and original issue discount of, Debt
of the Trust and its Subsidiaries and the amount of dividends which are payable
in respect of any Disqualified Stock.
"Authenticating Agent" means any authenticating agent appointed by the
Trustee pursuant to Section 611.
"Authorized Newspaper" means a newspaper, printed in the English
language or in an official language of the country of publication, customarily
published on each Business Day, whether or not published on Saturdays, Sundays
or holidays, and of general circulation in each place in connection with which
the term is used or in the financial community of each such place. Whenever
successive publications are required to be made in Authorized Newspapers, the
successive publications may be made in the same or in different Authorized
Newspapers in the same city meeting the foregoing requirements and in each ease
on any Business Day.
"Bankruptcy Law" has the meaning specified in Section 501.
2
<PAGE>
"Bearer Security" means a Security which is payable to bearer.
"Board of Directors" means the Board of Directors of the Trust, the
executive committee or any other committee of that board duly authorized to act
for it in respect hereof.
"Board Resolution" means a copy of a resolution certified by the
Secretary or an Assistant Secretary of the Trust to have been duly adopted by
the Board of Directors, and to be in full force and effect on the date of such
certification, and delivered to the Trustee.
"Business Day," when used with respect to any Place of Payment or any
other particular location referred to in this Indenture or in the Securities,
means, unless otherwise specified with respect to any Securities pursuant to
Section 301, any day, other than a Saturday or Sunday, that is neither a legal
holiday nor a day on which banking institutions in that Place of Payment or
particular location are authorized or required by law, regulation or executive
order to close.
"Capital Stock" means, with respect to any Person, any capital stock
(including preferred stock), shares, interests, participations or other
ownership interests (however designated) of such Person and any rights (other
than debt securities convertible or exchangeable for corporate stock), warrants
or options to purchase any thereof.
"CEDEL" means Centrale de Livraison de Valeurs Mobilieres, S.A., or its
successor.
"Commission" means the Securities and Exchange Commission, as from time
to time constituted, created under the Exchange Act, or, if at any time after
execution of this instrument such Commission is not existing and performing the
duties now assigned to it under the Trust Indenture Act, then the body
performing such duties on such date.
"Consolidated Income Available for Debt Service" for any period means
Funds from Operations of the Trust and its Subsidiaries plus amounts which have
been deducted for interest on Debt of the Trust and its Subsidiaries.
"Conversion Event" means the cessation of use of (i) a Foreign Currency
(other than the ECU or other currency unit) both by the government of the
country which issued such currency and for the settlement of transactions by a
central bank or other public institutions of or within the international banking
community, (ii) the ECU both within the European Monetary System and for the
settlement of transactions by public institutions of or within the European
Communities or (iii) any currency unit (or composite currency) other than the
ECU for the purposes for which it was established.
"Corporate Trust Office" means the office of the Trustee at which, at
any particular time, its corporate trust business shall be principally
administered and at which notices or demands to or upon the Trust in respect of
the Securities of or within a series and this Indenture may be served, which
office at the date hereof is located at 901 East Cary Street, Suite 1700,
Richmond, Virginia 23219.
3
<PAGE>
"Corporate Trust Operations Office" means the office of the Trustee at
which, at any particular time, the principal of (and Make-Whole Amount, if any),
interest, if any, on, and Additional Amounts, if any, payable in respect of,
Securities of or within a series shall be payable and any Registered Securities
of or within such series may be surrendered for registration of transfer or
exchange, which office at the date hereof is located at 230 South Tryon Street,
Charlotte, North Carolina 28288.
"corporation" includes corporations, associations, companies and
business trusts.
"coupon" means any interest coupon appertaining to a Bearer Security.
"Custodian" has the meaning set forth in Section 501.
"Debt" of the Trust or any Subsidiary means any indebtedness of the
Trust or any Subsidiary, whether or not contingent, in respect of (without
duplication) (i) borrowed money or evidenced by bonds, notes, debentures or
similar instruments, (ii) indebtedness secured by any mortgage, pledge, lien,
charge, encumbrance or any security interest existing on property owned by the
Trust or any Subsidiary, (iii) the reimbursement obligations, contingent or
otherwise, in connection with any letters of credit actually issued or amounts
representing the balance deferred and unpaid of the purchase price of any
property or services, except any such balance that constitutes an accrued
expense or trade payable, or all conditional sale obligations or obligations
under any title retention agreement, (iv) the principal amount of all
obligations of the Trust or any Subsidiary with respect to redemption, repayment
or other repurchase of any Disqualified Stock or (v) any lease of property by
the Trust or any Subsidiary as lessee which is reflected on the Trust's
consolidated balance sheet as a capitalized lease in accordance with GAAP to the
extent, in the case of items of indebtedness under (i) through (iii) above, that
any such items (other than letters of credit) would appear as a liability on the
Trust's consolidated balance sheet in accordance with GAAP, and also includes,
to the extent not otherwise included, any obligation by the Trust or any
Subsidiary to be liable for, or to pay, as obligor, guarantor or otherwise
(other than for purposes of collection in the ordinary course of business), Debt
of another Person (other than the Trust or any Subsidiary).
"Defaulted Interest" has the meaning specified in Section 307.
"Disqualified Stock" means, with respect to any Person, any Capital
Stock of such Person which by the terms of such Capital Stock (or by the terms
of any security into which it is convertible or for which it is exchangeable or
exercisable), upon the happening of any event or otherwise (i) matures or is
mandatorily redeemable, pursuant to a sinking fund obligation or otherwise, (ii)
is convertible into or exchangeable or exercisable for Debt or Disqualified
Stock or (iii) is redeemable at the option of the holder thereof, in whole or in
part, in each case on or prior to the Stated Maturity of the series of Debt
Securities.
4
<PAGE>
"Dollar" or "$" means a dollar or other equivalent unit in such coin or
currency of the United States of America as at the time shall be legal tender
for payment of public and private debts.
"DTC" means The Depository Trust Company.
"ECU" means the European Currency Unit as defined and revised from time
to time by the Council of the European Communities.
"Euroclear" means Morgan Guaranty Trust Company of New York, Brussels
Office, or its successor as operator of the Euroclear System.
"European Communities" means the European Economic Community, the
European Coal and Steel Community and the European Atomic Energy Community.
"European Monetary System" means the European Monetary System
established by the Resolution of December 5, 1978 of the Council of the European
Communities.
"Event of Default" has the meaning specified in Article Five.
"Exchange Act" means the Securities Exchange Act of 1934, as amended,
and the rules and regulations promulgated thereunder by the Commission.
"Foreign Currency" means any currency, currency unit or composite
currency, including, without limitation, the ECU, issued by the government of
one or more countries other than the United States of America or by any
recognized confederation or association of such governments.
"Funds from Operations" for any period means income before gains
(losses) on investments and extraordinary items plus amounts which have been
deducted, and minus amounts which have been added, for the following items
(without duplication): (a) provision for Preferred Stock dividends, (b)
provision for property depreciation and amortization and (c) the effect of any
adjustments for significant non-recurring items, including any noncash charge
resulting from a change in accounting principles in determining income before
gains (losses) on investments and extraordinary items for such period, as
reflected in the financial statements of the Trust and its Subsidiaries for such
period determined on a consolidated basis in accordance with GAAP.
"GAAP" means generally accepted accounting principles as used in the
United States applied on a consistent basis as in effect from time to time;
provided, that solely for purposes of any calculation required by the financial
covenants contained herein, "GAAP" shall mean generally accepted accounting
principles as used in the United States on the date hereof, applied on a
consistent basis.
5
<PAGE>
"Government Obligations" means securities which are (i) direct
obligations of the United States of America or the government which issued the
Foreign Currency in which the Securities of a particular series are payable, for
the payment of which its full faith and credit is pledged or (ii) obligations of
a Person controlled or supervised by and acting as an agency or instrumentality
of the United States of America or such government which issued the Foreign
Currency in which the Securities of such series are payable, the payment of
which is unconditionally guaranteed as a full faith and credit obligation by the
United States of America or such other government, which, in either case, are
not callable or redeemable at the option of the issuer thereof, and shall also
include a depository receipt issued by a bank or trust company as custodian with
respect to any such Government Obligation or a specific payment of interest on
or principal of any such Government Obligation held by such custodian for the
account of the holder of a depository receipt, provided that (except as required
by law) such custodian is not authorized to make any deduction from the amount
payable to the holder of such depository receipt from any amount received by the
custodian in respect of the Government Obligation or the specific payment of
interest on or principal of the Government Obligation evidenced by such
depository receipt.
"Holder" means, in the case of a Registered Security, the Person in
whose name a Security is registered in the Security Register and, in the case of
a Bearer Security, the bearer thereof and, when used with respect to any coupon,
shall mean the bearer thereof.
"Indenture" means this instrument as originally executed or as it may
from time to time be supplemented or amended by one or more indentures
supplemental hereto entered into pursuant to the applicable provisions hereof,
and shall include the terms of particular series of Securities established as
contemplated by Section 301; provided, however, that, if at any time more than
one Person is acting as Trustee under this instrument, "Indenture" shall mean,
with respect to any one or more series of Securities for which such Person is
Trustee, this instrument as originally executed or as it may from time to time
be supplemented or amended by one or more indentures supplemental hereto entered
into pursuant to the applicable provisions hereof and shall include the terms of
the or those particular series of Securities for which such Person is Trustee
established as contemplated by Section 301, exclusive, however, of any
provisions or terms which relate solely to other series of Securities for which
such Person is not Trustee, regardless of when such terms or provisions were
adopted, and exclusive of any provisions or terms adopted by means of one or
more indentures supplemental hereto executed and delivered after such Person had
become such Trustee but to which such Person, as such Trustee, was not a party.
"Indexed Security" means a Security the terms of which provide that the
principal amount thereof payable at Stated Maturity may be more or less than the
principal face amount thereof at original issuance.
"interest" when used with respect to an Original Issue Discount
Security which by its terms bears interest only after Maturity, shall mean
interest payable after Maturity, and, when
6
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used with respect to a Security which provides for the payment of Additional
Amounts pursuant to Section 1011, includes such Additional Amounts.
"Interest Payment Date" means, when used with respect to any Security,
the Stated Maturity of an installment of interest on such Security.
"Make-Whole Amount" means the amount, if any, in addition to principal
which is required by a Security, under the terms and conditions specified
therein or as otherwise specified as contemplated by Section 301, to be paid by
the Trust to the Holder thereof in connection with any optional redemption or
accelerated payment of such Security.
"Maturity" means, when used with respect to any Security, the date on
which the principal of such Security or an installment of principal become due
and payable as therein or herein provided, whether at the Stated Maturity or by
declaration of acceleration, notice of redemption, notice of option to elect
repayment, repurchase or otherwise.
"Officers' Certificate" means a certificate signed by the President or
a Vice President and by the Treasurer, an Assistant Treasurer, the Secretary of
an Assistant Secretary, of the Trust, and delivered to the Trustee.
"Opinion of Counsel" means a written opinion of counsel, who may be an
employee of or counsel for the Trust or other counsel satisfactory to the
Trustee.
"Original Issue Discount Security" means any Security which provides
for an amount less than the principal amount thereof to be due and payable upon
a declaration of acceleration of the Maturity thereof pursuant to Section 502.
"Outstanding," when used with respect to Securities, means, as of the
date of determination, all Securities theretofore authenticated and delivered
under this Indenture, except:
(i) Securities theretofore cancelled by the Trustee
or delivered to the Trustee for cancellation;
(ii) Securities, or portions thereof, for whose
payment or redemption or repayment at the option of the Holder money in
the necessary amount has been theretofore deposited with the Trustee or
any Paying Agent (other than the 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 and any coupons
appertaining thereto; provided that, if such Securities are to be
redeemed, notice of such redemption has been duly given pursuant to
this Indenture or other provision therefor satisfactory to the Trustee
has been made;
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(iii) Securities, except solely to the extent
provided in Sections 1402 or 1403, as applicable, with respect to which
the Trust has effected defeasance and/or covenant defeasance as
provided in Article Fourteen;
(iv) Securities which have been paid pursuant to
Section 306 or in exchange for or in lieu of which other Securities
have been authenticated and delivered pursuant to this Indenture, other
than any such Securities in respect of which there shall have been
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 Capital Stock of the
Trust pursuant to or in accordance with this Indenture if the terms of
such Securities provide for convertibility pursuant to Section 301;
provided, however, that in determining whether the Holders of the requisite
principal amount of the Outstanding Securities have given any request, demand,
authorization, direction, notice, consent or waiver hereunder or are present at
a meeting of Holders for quorum purposes, and for the purpose of making the
calculations required by TIA Section 313, (i) the principal amount of an
Original Issue Discount Security that may be counted in making such
determination or calculation and that shall be deemed to be Outstanding for such
purpose shall be equal to the amount of principal thereof that would be (or
shall have been declared to be) due and payable, at the time of such
determination, upon a declaration of acceleration of the maturity thereof
pursuant to Section 502, (ii) the principal amount of any Security denominated
in a Foreign Currency that may be counted in making such determination or
calculation and that shall be deemed Outstanding for such purpose shall be equal
to the Dollar equivalent, determined pursuant to Section 301 as of the date such
Security is originally issued by the Trust, of the principal amount (or, in the
case of an Original Issue Discount Security, the Dollar equivalent as of such
date of original issuance of the amount determined as provided in clause (i)
above) of such Security, (iii) the principal amount of any Indexed Security that
may be counted in making such determination or calculation and that shall be
deemed outstanding for such purpose shall be equal to the principal face amount
of such Indexed Security at original issuance, unless otherwise provided with
respect to such Indexed Security pursuant to Section 301, and (iv) Securities
owned by the 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 making such calculation or in relying upon any such request, demand,
authorization, direction, notice, consent or waiver, only Securities which the
Trustee knows to be so owned shall be so disregarded. Securities so owned which
have been pledged in good faith may be regarded as Outstanding if the pledgee
establishes to the satisfaction of the Trustee the pledgee's right so to act
with respect to such Securities and that the pledgee is not the Trust or any
other obligor upon the Securities or any Affiliate of the Trust or of such other
obligor.
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"Paying Agent" means any Person authorized by the Trust to pay the
principal of (and premium or Make-Whole Amount, if any) or interest on any
Securities or coupons on behalf of the Trust, or if no such Person is
authorized, the Trust.
"Person" means any individual, corporation, partnership, limited
liability company, joint venture, association, joint-stock company, trust,
unincorporated organization or government or any agency or political subdivision
thereof.
"Place of Payment" means, when used with respect to the Securities of
or within any series, the place or places where the principal of (and premium or
Make-Whole Amount, if any) and interest on such Securities are payable as
specified in or pursuant to Sections 301 and 1002.
"Predecessor Security" of any particular Security means every previous
Security evidencing all or a portion of the same debt as that evidenced by such
particular Security; and, for the purposes of this definition, any Security
authenticated and delivered under Section 306 in exchange for or in lieu of a
mutilated, destroyed, lost or stolen Security or a Security to which a
mutilated, destroyed, lost or stolen coupon appertains shall be deemed to
evidence the same debt as the mutilated, destroyed, lost or stolen Security or
the Security to which the mutilated, destroyed, lost or stolen coupon
appertains.
"Redemption Date" means, when used with respect to any Security to be
redeemed in whole or in part, the date fixed for such redemption by or pursuant
to this Indenture.
"Redemption Price" means, when used with respect to any Security to be
redeemed, the price at which it is to be redeemed pursuant to this Indenture.
"Registered Security" means any Security which is registered in the
Security Register.
"Regular Record Date" for the installment of interest payable on any
Interest Payment Date on the Registered Securities of or within any series means
the date specified for that purpose as contemplated by Section 301, whether or
not a Business Day.
"Repayment Date" means, when used with respect to any Security to be
repaid or repurchased at the option of the Holder, the date fixed for such
repayment or repurchase by or pursuant to this Indenture.
"Repayment Price" means, when used with respect to any Security to be
repaid or purchased at the option of the Holder, the price at which it is to be
repaid or repurchased by or pursuant to this Indenture.
"Responsible Officer" means, when used with respect to the Trustee, any
officer of the Trustee assigned by the Trustee to administer its corporate trust
matters.
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"Securities Act" means the Securities Act of 1933, as amended, and the
rules and regulations promulgated thereunder by the Commission.
"Security" has the meaning stated in the first recital of this
Indenture and, more particularly, means any Security or Securities authenticated
and delivered under this Indenture; provided, however, that, if at any time
there is more than one Person acting as Trustee under this Indenture,
"Securities" with respect to the Indenture as to which such Person is Trustee
shall have the meaning stated in the first recital of this Indenture and shall
more particularly mean Securities authenticated and delivered under this
Indenture, exclusive, however, of Securities of or within any series as to which
such Person is not Trustee.
"Security Register" and "Security Registrar" have the respective
meanings specified in Section 305.
"Significant Subsidiary" means any Subsidiary which is a "significant
subsidiary" (within the meaning of Regulation S-X, promulgated under the
Securities Act) of the Trust.
"Special Record Date" for the payment of any Defaulted Interest on the
Registered Securities of or within any series means a date fixed by the Trustee
pursuant to Section 307.
"Stated Maturity" means, when used with respect to any Security or any
installment of principal thereof or interest thereon, the date specified in such
Security or a coupon representing such installment of interest as the fixed date
on which the principal of such Security or such installment of principal or
interest is due and payable.
"Subsidiary" means, with respect to any Person, any corporation or
other entity of which a majority of (a) the voting power of the voting equity
securities or (b) the outstanding equity interests of which are owned, directly
or indirectly, by such Person. For the purposes of this definition, "voting
equity securities" means equity securities having voting power for the election
of directors, whether at all times or only so long as no senior class of
security has such voting power by reason of any contingency.
"Total Assets" as of any date means the sum of (i) the Trust's
Undepreciated Real Estate Assets and (ii) all other assets of the Trust
determined in accordance with GAAP (but excluding intangibles).
"Trust" means the Person named as the "Trust" in the first paragraph of
this Indenture until a successor corporation shall have become such pursuant to
the applicable provisions of this Indenture, and thereafter "Trust" shall mean
such successor corporation.
"Trust Indenture Act" or "TIA" means the Trust Indenture Act of 1939,
as amended and as in force at the date as of which this Indenture was executed,
except as provided in Section 905.
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"Trust Request" and "Trust Order" mean, respectively, a written request
or order signed in the name of the Trust by the President or a Vice President of
the Trust, and by the Treasurer, an Assistant Treasurer, the Secretary or an
Assistant Secretary of the Trust, and delivered to the Trustee.
"Trustee" means the Person named as the "Trustee" in the first
paragraph of this Indenture until a successor Trustee shall have become such
pursuant to the applicable provisions of this Indenture, and thereafter
"Trustee" shall mean or include each Person who is then a Trustee hereunder;
provided, however, that if at any time there is more than one such Person,
"Trustee" as used with respect to the Securities of or within any series shall
mean only the Trustee with respect to the Securities of that series.
"Undepreciated Real Estate Assets" as of any date means the cost
(original cost plus capital improvements) of real estate assets of the Trust and
its Subsidiaries on such date, before depreciation and amortization determined
on a consolidated basis in accordance with GAAP.
"United States" means, unless otherwise specified with respect to any
Securities pursuant to Section 301, the United States of America (including the
states and the District of Columbia), its territories, its possessions and other
areas subject to its jurisdiction.
"United States person" means, unless otherwise specified with respect
to any Securities pursuant to Section 301, an individual who is a citizen or
resident of the United States, a corporation, partnership or other entity
created or organized in or under the laws of the United States or an estate or
trust the income of which is subject to United States federal income taxation
regardless of its source.
"Yield to Maturity" means the yield to maturity, computed at the time
of issuance of a Security (or, if applicable, at the most recent redetermination
of interest on such Security) and as set forth in such Security in accordance
with generally accepted United States bond yield computation principles.
SECTION 102. Compliance Certificates and Opinions.
Upon any application or request by the 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 (including covenants, compliance with which
constitute conditions precedent) relating to the proposed action have been
complied with and an Opinion of Counsel stating that in the opinion of such
counsel all such conditions precedent, if any, have been complied with, except
that in the case of any such application or request as to which the furnishing
of such documents is specifically required by any provision of this Indenture
relating to such particular application or request, no additional certificate or
opinion need be furnished.
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Every certificate or opinion with respect to compliance with a
condition or covenant provided for in this Indenture (excluding certificates
delivered pursuant to Section 1010) shall include:
(1) a statement that each individual signing such certificate
or opinion has read such condition or covenant and the definitions
herein relating thereto;
(2) a brief statement as to the nature and scope of the
examination or investigation upon which the statements or opinions
contained in such certificate or opinion are based;
(3) a statement that, in the opinion of each such individual,
he has made such examination or investigation as is necessary to enable
him to express an informed opinion as to whether or not such condition
or covenant has been complied with; and
(4) a statement as to whether, in the opinion of each such
individual, such condition or covenant has been complied with.
SECTION 103. Form of Documents Delivered to Trustee.
In any case where several matters are required to be certified by, or
covered by an opinion of, any specified Person, it is not necessary that all
such matters be certified by, or covered by the opinion of, only one such
Person, or that they be so certified or covered by only one document, but one
such Person may certify or give an opinion as to some matters and one or more
other such Persons as to other matters, and any such Person may certify or give
an opinion as to such matters in one or several documents.
Any certificate or opinion of an officer of the Trust may be based,
insofar as it relates to legal matters, upon an Opinion of Counsel, or a
certificate or representations by counsel, unless such officer knows, or in the
exercise of reasonable care should know, that the opinion, certificate or
representations with respect to the matters upon which his certificate or
opinion is based are erroneous. Any such Opinion of Counsel or certificate or
representations may be based, insofar as it relates to factual matters, upon a
certificate or opinion of, or representations by, an officer or officers of the
Trust stating that the information as to such factual matters is in the
possession of the Trust, unless such counsel knows that the certificate or
opinion or representations as to such matters are erroneous.
Where any Person is required to make, give or execute two or more
applications, requests, consents, certificates, statements, opinions or other
instruments under this Indenture, they may, but need not, be consolidated and
form one instrument.
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SECTION 104. Acts of Holders.
(a) Any request, demand, authorization, direction, notice,
consent, waiver or other action provided by this Indenture to be given
or taken by Holders of the Outstanding Securities of all series or one
or more series, as the case may be, may be embodied in and evidenced by
one or more instruments of substantially similar tenor signed by such
Holders in person or by agents duly appointed in writing. If Securities
of a series are issuable as Bearer Securities, any request, demand,
authorization, direction, notice, consent, waiver or other action
provided by this Indenture to be given or taken by Holders of
Securities of such series may, alternatively, be embodied in and
evidenced by the record of Holders of Securities of such series voting
in favor thereof, whether in person or by proxies duly appointed in
writing, at any meeting of Holders of Securities of such series duly
called and held in accordance with the provisions of Article Fifteen,
or a combination of such instruments and any such record. Except as
herein otherwise expressly provided, such action shall become effective
when such instrument or instruments or record or both instruments or
record or both are delivered to the Trustee and, where it is hereby
expressly required, to the Trust. Such instrument or instrument and any
such record (and the action embodied therein and evidenced thereby) are
herein sometimes referred to as the "Act" of the Holders signing such
instrument or instruments or so voting at any such meeting. Proof of
execution of any such instrument or of a writing appointing any such
agent, or of the holding by any Person of a Security, shall be
sufficient for any purpose of this Indenture and conclusive in favor of
the Trustee and the Trust and any agent of the Trustee or the Trust, if
made in the manner provided in this Section. The record of any meeting
of Holders of Securities shall be proved in the manner provided in
Section 1506.
(b) The fact and date of the execution by any Person of any
such instrument or writing may be proved by the affidavit of a witness
of such execution or by a certificate of a notary public or other
officer authorized by law to take acknowledgements of deeds, certifying
that the individual signing such instrument or writing acknowledged to
him the execution thereof. Where such execution is by a signer acting
in a capacity other than his individual capacity, such certificate or
affidavit shall also constitute sufficient proof of his authority. The
fact and date of the execution of any such instrument or writing, or
the authority of the Person executing the same, may also be proved in
any other reasonable manner which the Trustee deems sufficient.
(c) The ownership of Registered Securities shall be proved by
the Security Register.
(d) The ownership of Bearer Securities may be proved by the
production of such Bearer Securities or by a certificate executed, as
depositary, by any trust company, bank, banker or other depositary,
wherever situated, if such certificate shall be deemed by the Trustee
to be satisfactory, showing that at the date therein mentioned such
Person had on deposit with such depositary, or exhibited to it, the
Bearer Securities therein
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described; or such facts may be proved by the certificate or affidavit
of the Person holding such Bearer Securities, if such certificate or
affidavit is deemed by the Trustee to be satisfactory. The Trustee and
the Trust may assume that such ownership of any Bearer Security
continues until (1) another certificate or affidavit bearing a later
date issued in respect of the same Bearer Security is produced, or (2)
such Bearer Security is produced to the Trustee by some other Person,
or (3) such Bearer Security is surrendered in exchange for a Registered
Security, or (4) such Bearer Security is no longer Outstanding. The
ownership of Bearer Securities may also be proved in any other manner
which the Trustee deems sufficient.
(e) If the Trust shall solicit from the Holders of Registered
Securities any request, demand, authorization, direction, notice,
consent, waiver or other Act, the Trust may, at its option, in or
pursuant to a Board Resolution, fix in advance a record date for the
determination of Holders entitled to give such request, demand,
authorization, direction, notice, consent, waiver or other Act, but the
Trust shall have no obligation to do so. Notwithstanding TIA Section
316(c), such record date shall be the record date specified in or
pursuant to such Board Resolution, which shall be a date not earlier
than the date 30 days prior to the first solicitation of Holders
generally in connection therewith and not later than the date such
solicitation is completed. If such a record date is fixed, such
request, demand, authorization, direction, notice, consent, waiver or
other Act may be given before or after such record date, but only the
Holders of record at the close of business on such record date shall be
deemed to be Holders for the purposes of determining whether Holders of
the requisite proportion of Outstanding Securities have authorized or
agreed or consented to such request, demand, authorization, direction,
notice, consent, waiver or other Act, and for that purpose the
Outstanding Securities shall be computed as of such record date;
provided that no such authorization, agreement or consent by the
Holders on such record date shall be deemed effective unless it shall
become effective pursuant to the provisions of this Indenture not later
than eleven months after the record date.
(f) Any request, demand, authorization, direction, notice,
consent, waiver or other Act of the Holder of any Security shall bind
every future Holder of the same Security and the Holder of every
Security issued upon the registration of transfer thereof or in
exchange therefor or in lieu thereof in respect of anything done,
omitted or suffered to be done by the Trustee, any Security Registrar,
any Paying Agent, any Authenticating Agent or the Trust in reliance
thereon, whether or not notation of such action is made upon such
Security.
SECTION 105. Notices, etc., to Trustee and 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,
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(1) the Trustee by any Holder or by the Trust shall be
sufficient for every purpose hereunder if made, given, furnished or
filed in writing to or with the Trustee at its Corporate Trust Office,
Attention: Corporate Trust Operations, or
(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 Indenture or at any
other address previously furnished in writing to the Trustee by the
Trust.
SECTION 106. Notice to Holders; Waiver.
Where this Indenture provides for notice of any event to Holders of
Registered Securities by the Trust or the Trustee, such notice shall be
sufficiently given (unless otherwise herein expressly provided) if in writing
and mailed, first-class postage prepaid, to each such Holder affected by such
event, at his address as it appears in the Security Register, not later than the
latest date, and not earlier than the earliest date, prescribed for the giving
of such notice. In any case where notice to Holders of Registered Securities is
given by mail, neither the failure to mail such notice, nor any defect in any
notice so mailed, to any particular Holder shall affect the sufficiency of such
notice with respect to other Holders of Registered Securities or the sufficiency
of any notice to Holders of Bearer Securities given as provided herein. Any
notice mailed to a Holder in the manner herein prescribed shall be conclusively
deemed to have been received by such Holder, whether or not such Holder actually
receives such notice.
If by reason of the suspension of or irregularities in regular mail
service or by reason of any other cause it shall be impracticable to give such
notice by mail, then such notification to Holders of Registered Securities as
shall be made with the approval of the Trustee shall constitute a sufficient
notification to such Holders for every purpose hereunder.
Except as otherwise expressly provided herein or otherwise qualified
with respect to any Securities pursuant to Section 301, where this Indenture
provides for notice to Holders of Bearer Securities of any event, such notices
shall be sufficiently given if published in an Authorized Newspaper in The City
of New York and in such other city or cities as may be specified in such
Securities, and if the Securities of such series are listed on any stock
exchange outside the United States, in any place at which such Securities are
listed on a securities exchange to the extent that such securities exchange so
requires, on a Business Day, such publication to be not later than the latest
date, and not earlier than the earliest date, prescribed for the giving of such
notice. Any such notice shall be deemed to have been given on the date of such
publication or, if published more than once, on the date of the first such
publication.
If by reason of the suspension of publication of any Authorized
Newspaper or Authorized Newspapers or by reason of any other cause it shall be
impracticable to publish any notice to Holders of Bearer Securities as provided
above, then such notification to Holders of Bearer Securities as shall be given
with the approval of the Trustee shall constitute sufficient notice to
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such Holders for every purpose hereunder. Neither the failure to give notice by
publication to any particular Holder of Bearer Securities as provided above, nor
any defect in any notice so published, shall affect the sufficiency of such
notice with respect to other Holders of Bearer Securities or the sufficiency of
any notice to Holders of Registered Securities given as provided herein.
Any request, demand, authorization, direction, notice, consent or
waiver required or permitted under this Indenture shall be in the English
language, except that any published notice may be in an official language of the
country of publication.
Where this Indenture provides for notice in any manner, such notice may
be waived in writing by the Person entitled to receive such notice, either
before or after the event, and such waiver shall be the equivalent of such
notice. Waivers of notice by Holders shall be filed with the Trustee, but such
filing shall not be a condition precedent to the validity of any action taken in
reliance upon such waiver.
SECTION 107. Effect of Headings and Table of Contents.
The Article and Section headings herein and the Table of Contents are
for convenience only and shall not affect the construction hereof.
SECTION 108. Successors and Assigns.
All covenants and agreements in this Indenture by the Trust shall bind
its successors and assigns, whether so expressed or not.
SECTION 109. Separability Clause.
In case any provision in this Indenture or in any Security or coupon
shall be invalid, illegal or unenforceable, the validity, legality and
enforceability of the remaining provisions shall not in any way be affected or
impaired thereby.
SECTION 110. Benefits of Indenture.
Nothing in this Indenture or in the Securities or coupons appertaining
thereto, express or implied, shall give to any Person, other than the parties
hereto, any Security Registrar, any Paying Agent, any Authenticating Agent and
their successors hereunder and the Holders any benefit or any legal or equitable
right, remedy or claim under this Indenture.
SECTION 111. No Personal Liability.
No recourse under or upon any obligation, covenant or agreement
contained in this Indenture, in any Security or coupon appertaining thereto, or
because of any indebtedness evidenced thereby, shall be had against any
promoter, as such or, against any past, present or
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future shareholder, officer or director, 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 thereof and as part of the consideration for the issue
of the Securities.
SECTION 112. Governing Law.
This Indenture and the Securities and coupons shall be governed by and
construed in accordance with the law of the Commonwealth of Virginia. This
Indenture is subject to the provisions of the TIA that are required to be part
of this Indenture and shall, to the extent applicable, be governed by such
provisions.
SECTION 113. Legal Holidays.
In any case where any Interest Payment Date, Redemption Date, Repayment
Date, sinking fund payment date, Stated Maturity or Maturity of any Security
shall not be a Business Day at any Place of Payment, then (notwithstanding any
other provision of this Indenture or any Security or coupon other than a
provision in the Securities of any series which specifically states that such
provision shall apply in lieu hereof), payment of interest or any Additional
Amounts or principal (and premium or Make-Whole Amount, if any) need not be made
at such Place of Payment on such date, but may be made on the next succeeding
Business Day at such Place of Payment with the same force and effect as if made
on the Interest Payment Date, Redemption Date, Repayment Date or sinking fund
payment date, or at the Stated Maturity or Maturity, provided that no interest
shall accrue on the amount so payable for the period from and after such
Interest Payment Date, Redemption Date, Repayment Date, sinking fund payment
date, Stated Maturity or Maturity, as the case may be.
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ARTICLE TWO
SECURITIES FORMS
SECTION 201. Forms of Securities.
The Registered Securities, if any, of each series and the Bearer
Securities, if any, and related coupons of each series, shall be in
substantially the forms as shall be established in or pursuant to one or more
indentures supplemental hereto or Board Resolutions, shall have such appropriate
insertions, omissions, substitutions and other variations as are required or
permitted by this Indenture or any indenture supplemental hereto, and may have
such letters, numbers or other marks of identification or designation and such
legends or endorsements placed thereon as the Trust may deem appropriate and as
are not inconsistent with the provisions of this Indenture, or as may be
required to comply with any law or with any rule or regulation made pursuant
thereto or with any rule or regulation of any stock exchange on which the
Securities may be listed, or to conform to usage.
Unless otherwise specified as contemplated by Section 301, Bearer
Securities shall have interest coupons attached.
The definitive Securities and coupons shall be printed, lithographed or
engraved or produced by any combination of these methods on a steel engraved
border or steel engraved borders or may be produced in any other manner, all as
determined by the officers executing such Securities or coupons, as evidenced by
their execution of such Securities or coupons.
SECTION 202. Form of Trustee's Certificate of Authentication.
Subject to Section 611, the Trustee's certificate of authentication
shall be in substantially the following form:
This is one of the Securities of the series designated therein referred
to in the within-mentioned Indenture.
FIRST UNION NATIONAL BANK OF VIRGINIA,
as Trustee
By _____________________________
Authorized Signatory
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SECTION 203. Securities Issuable in Global Form.
If Securities of or within a series are issuable in global form, as
specified as contemplated by Section 301, then, notwithstanding clause (8) of
Section 301 and the provisions of Section 302, any such Security shall represent
such of the Outstanding Securities of such series as shall be specified therein
and may provide that it shall represent the aggregate amount of Outstanding
Securities of such series from time to time endorsed thereon and that the
aggregate amount of Outstanding Securities of such series represented thereby
may from time to time be increased or decreased to reflect exchanges. Any
endorsement of a Security in global form to reflect the amount, or any increase
or decrease in the amount, of Outstanding Securities represented thereby shall
be made by the Trustee in such manner and upon instructions given by such Person
or Persons as shall be specified therein or in the Trust Order to be delivered
to the Trustee pursuant to Section 303 or 304. Subject to the provisions of
Section 303 and, if applicable, the Trustee shall deliver and redeliver any
Security in permanent global form in the manner and upon instructions given by
the Person or Persons specified therein or in the applicable Trust Order. If a
Trust Order pursuant to Section 303 or 304 has been, or simultaneously is,
delivered, any instructions by the Trust with respect to endorsement or delivery
or redelivery of a Security in global form shall be in writing but need not
comply with Section 102 and need not be accompanied by an Opinion of Counsel.
The provisions of the last sentence of Section 303 shall apply to any
Security represented by a Security in global form if such Security was never
issued and sold by the Trust and the Trust delivers to the Trustee the Security
in global form together with written instructions (which need not comply with
Section 102 and need not be accompanied by an Opinion of Counsel) with regard to
the reduction in the principal amount of Securities represented thereby,
together with the written statement contemplated by the last sentence of Section
303.
Notwithstanding the provisions of Section 307, unless otherwise
specified as contemplated by Section 301, payment of principal of and any
premium or Make-Whole Amount and interest on any Security in permanent global
form shall be made to the Person or Persons specified therein.
Notwithstanding the provisions of Section 308 and except as provided in
the preceding paragraph, the Trust, the Trustee and any agent of the Trust and
the Trustee shall treat as the Holder of such principal amount of Outstanding
Securities represented by a permanent global Security (i) in the case of a
permanent global Security in registered form, the Holder of such permanent
global Security in registered form, or (ii) in the case of a permanent global
Security in bearer form, Euroclear or CEDEL.
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ARTICLE THREE
THE SECURITIES
SECTION 301. Amount Unlimited; Issuable in Series.
The aggregate principal amount of Securities which may be authenticated
and delivered under this Indenture is unlimited.
The Securities may be issued in one or more series. There shall be
established in or pursuant to one or more Board Resolutions, or indentures
supplemental hereto, prior to the issuance of Securities of any series, any or
all of the following, as applicable (each of which (except for the matters set
forth in clauses (1), (2) and (15) below), if so provided, may be determined
from time to time by the Trust with respect to unissued Securities of or within
the series when issued from time to time):
(1) the title of the Securities of or within the series
(which shall distinguish the Securities of such series from all other
series of Securities);
(2) any limit upon the aggregate principal amount of the
Securities of or within the series that may be authenticated and
delivered under this Indenture (except for Securities authenticated and
delivered upon registration of transfer of, or in exchange for, or in
lieu of, other Securities of or within the series pursuant to Section
304, 305, 306, 906, 1107 or 1305);
(3) the date or dates, or the method by which such date or
dates will be determined, on which the principal of the Securities of
or within the series shall be payable and the amount of principal
payable thereon;
(4) the rate or rates at which the Securities of or within the
series shall bear interest, if any, or the method by which such rate or
rates shall be determined, the date or dates from which such interest
shall accrue or the method by which such date or dates shall be
determined, the Interest Payment Dates on which such interest will be
payable and the Regular Record Date, if any, for the interest payable
on any Registered Security on any Interest Payment Date, or the method
by which such date shall be determined, and the basis upon which
interest shall be calculated if other than that of a 360-day year
consisting of twelve 30-day months;
(5) the place or places, if any, other than or in addition to
the Borough of Manhattan, The City of New York, where the principal of
(and premium or Make-Whole Amount, if any), interest, if any, on, and
Additional Amounts, if any, payable in respect of, Securities of or
within the series shall be payable, any Registered Securities of or
within the series may be surrendered for registration of transfer or
exchange and notices
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or demands to or upon the Trust in respect of the Securities of or
within the series and this Indenture may be served;
(6) the period or periods within which, the price or prices
(including the premium or Make-Whole Amount, if any) at which, the
currency or currencies, currency unit or units or composite currency or
currencies in which and other terms and conditions upon which
Securities of or within the series may be redeemed in whole or in part,
at the option of the Trust, if the Trust is to have the option;
(7) the obligation, if any, of the Trust to redeem, repay or
purchase Securities of or within the series pursuant to any sinking
fund or analogous provision or at the option of a Holder thereof, and
the period or periods within which or the date or dates on which, the
price or prices at which, the currency or currencies, currency unit or
units or composite currency or currencies in which, and other terms and
conditions upon which Securities of or within the series shall be
redeemed, repaid or purchased, in whole or in part, pursuant to such
obligation;
(8) if other than denominations of $1,000 and any integral
multiple thereof, the denominations in which any Registered Securities
of or within the series shall be issuable and, if other than the
denomination of $5,000, the denomination or denominations in which any
Bearer Securities of or within the series shall be issuable;
(9) if other than the Trustee, the identity of each Security
Registrar and/or Paying Agent;
(10) if other than the principal amount thereof, the portion
of the principal amount of Securities of or within the series that
shall be payable upon declaration of acceleration of the maturity
thereof pursuant to Section 502, or the method by which such portion
shall be determined;
(11) if other than Dollars, the Foreign Currency or Currencies
in which payment of the principal of (and premium or Make-Whole Amount,
if any) or interest or Additional Amounts, if any, on the Securities of
or within the series shall be payable or in which the Securities of or
within the series shall be denominated;
(12) whether the amount of payments of principal of (and
premium or Make- Whole Amount, if any) or interest, if any, on the
Securities of or within the series may be determined with reference to
an index, formula or other method (which index, formula or method may
be based, without limitation, on one or more currencies, currency
units, composite currencies, commodities, equity indices or other
indices), and the manner in which such amounts shall be determined;
(13) whether the principal of (and premium or Make-Whole
Amount, if any) or interest or Additional Amounts, if any, on the
Securities of or within the series are
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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, and the terms
and conditions upon which, such election may be made, and the time and
manner of, and identity of the exchange rate agent with responsibility
for, determining the exchange rate between the currency or currencies,
currency unit or units or composite currency or currencies in which
such Securities are denominated or stated to be payable and the
currency or currencies, currency unit or units or composite currency or
currencies in which such Securities are to be so payable;
(14) provisions, if any, granting special rights to the
Holders of Securities of or within the series upon the occurrence of
such events as may be specified;
(15) any deletions from, modifications of or additions to the
Events of Default or covenants of the Trust with respect to Securities
of or within the series, whether or not such Events of Default or
covenants are consistent with the Events of Default or covenants set
forth herein;
(16) whether Securities of or within the series are to be
issuable as Registered Securities, Bearer Securities (with or without
coupons) or both, any restrictions applicable to the offer, sale or
delivery of Bearer Securities and the terms upon which Bearer
Securities of or within the series may be exchanged for Registered
Securities of or within the series and vice versa (if permitted by
applicable laws and regulations), whether any Securities of or within
the series are to be issuable initially in temporary global form and
whether any Securities of or within the series are to be issuable in
permanent global form (with or without coupons) and, if so, whether
beneficial owners of interests in any such permanent global Security
may exchange such interests for Securities of such series and of like
tenor of any authorized form and denomination and the circumstances
under which any such exchanges may occur, if other than in the manner
provided in Section 305, and, if Registered Securities of or within the
series are to be issuable as a global Security, the identity of the
depositary for such series;
(17) the date as of which any Bearer Securities of or within
the series and any temporary global Security representing Outstanding
Securities of or within the series shall be dated if other than the
date of original issuance of the first Security of the series to be
issued;
(18) the Person to whom any interest on any Registered
Security of the series shall be payable, if other than the Person in
whose name that Security (or one or more Predecessor Securities) is
registered at the close of business on the Regular Record Date for such
interest, the manner in which, or the Person to whom, any interest on
any Bearer Security of the series shall be payable, if otherwise than
upon presentation and surrender of the coupons appertaining thereto as
they severally mature, and the extent to which, or the manner in which,
any interest payable on a temporary global Security on
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an Interest Payment Date will be paid if other than in the manner
provided in Section 304;
(19) the applicability, if any, of Sections 1402 and/or 1403
to the Securities of or within the series and any provisions in
modification of, in addition to or in lieu of any of the provisions of
Article Fourteen;
(20) if the Securities of such series are to be issuable in
definitive form (whether upon original issue or upon exchange of a
temporary Security of such series) only upon receipt of certain
certificates or other documents or satisfaction of other conditions,
then the form and/or terms of such certificates, documents or
conditions;
(21) if the Securities of or within the series are to be
issued upon the exercise of debt warrants, the time, manner and place
for such Securities to be authenticated and delivered;
(22) whether and under what circumstances the Trust will pay
Additional Amounts as contemplated by Section 1011 on the Securities of
or within the series to any Holder who is not a United States person
(including any modification to the definition of such term) in respect
of any tax, assessment or governmental charge and, if so, whether the
Trust will have the option to redeem such Securities rather than pay
such Additional Amounts (and the terms of any such option);
(23) the obligation, if any, of the Trust to permit the
conversion of the Securities of such series into shares of Capital
Stock of the Trust and the terms and conditions upon which such
conversion shall be effected (including, without limitation, the
initial conversion price or rate, the conversion period, any adjustment
of the applicable conversion price or rate and any requirements
relative to the reservation of such shares for purposes of conversion);
and
(24) any other terms of the series (which terms shall not be
inconsistent with the provisions of this Indenture).
All Securities of any one series and the coupons appertaining to any
Bearer Securities of such series, if any, shall be substantially identical
except, in the case of Registered or Bearer Securities issued in global form, as
to denomination and except as may otherwise be provided in or pursuant to such
Board Resolution or in any such indenture supplemental hereto. All Securities of
any one series need not be issued at the same time and unless otherwise
provided, a series may be reopened, without the consent of the Holders, for
issuances of additional Securities of such series.
If any of the terms of the Securities of any series are established by
action taken pursuant to one or more Board Resolutions or supplemental
indentures, a copy of an appropriate record of such action(s) shall be certified
by the Secretary or an Assistant Secretary of the Trust and
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delivered to the Trustee at or prior to the delivery of the Trust Order for
authentication and delivery of such Securities.
SECTION 302. Denominations.
The Securities of each series shall be issuable in such denominations
as shall be specified as contemplated by Section 301. With respect to Securities
of any series denominated in Dollars, in the absence of any such provisions with
respect to the Securities of any series, the Registered Securities of such
series, other than Registered Securities issued in global form (which may be of
any denomination), shall be issuable in denominations of $1,000 and any integral
multiple thereof and the Bearer Securities of such series other than Bearer
Securities issued in global form (which may be of any denomination), shall be
issuable in denominations of $5,000.
SECTION 303. Execution, Authentication Delivery and Dating.
The Securities and any coupons appertaining thereto shall be executed
on behalf of the Trust by its President or a Vice President, under its corporate
seal reproduced thereon, and attested by its Secretary or an Assistant
Secretary. The signature of any of these officers on the Securities and coupons
may be manual or facsimile signatures of the present or any future such
authorized officer and may be imprinted or otherwise reproduced on the
Securities.
Securities or coupons appertaining thereto bearing the manual or
facsimile signatures of individuals who were at any time the proper officers of
the Trust shall bind the Trust, notwithstanding that such individuals or any of
them have ceased to hold such offices prior to the authentication and delivery
of such Securities or did not hold such offices at the date of such Securities
or coupons.
At any time and from time to time after the execution and delivery of
this Indenture, the Trust may deliver Securities of any series, together with
any coupon appertaining thereto, executed by the Trust to the Trustee for
authentication, together with a Trust Order for the authentication and delivery
of such Securities, and the Trustee in accordance with the Trust Order shall
authenticate and deliver such Securities; provided, however, that, in connection
with its original issuance, no Bearer Security shall be mailed or otherwise
delivered to any location in the United States; and provided further that,
unless otherwise specified with respect to any series of Securities pursuant to
Section 301 a Bearer Security may be delivered in connection with its original
issuance only if the Person entitled to receive such Bearer Security shall have
furnished a certificate to Euroclear or CEDEL, as the case may be, in the form
set forth in Exhibit A-1 to this Indenture or such other certificate as may be
specified with respect to any series of Securities pursuant to Section 301,
dated no earlier than 15 days prior to the earlier of the date on which such
Bearer Security is delivered and the date on which any temporary Security first
becomes exchangeable for such Bearer Security in accordance with the terms of
such temporary Security and this Indenture. Except as permitted by Section 306,
the Trustee
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shall not authenticate and deliver any Bearer Security unless all appurtenant
coupons for interest then matured have been detached and cancelled.
If all of the Securities of any series are not to be issued at one time
and if the Board Resolution or supplemental indenture establishing such series
shall so permit, such Trust Order may set forth procedures acceptable to the
Trustee for the issuance of such Securities and determining the terms of
particular Securities of such series, such as interest rate or formula, maturity
date, date of issuance and date from which interest shall accrue. In
authenticating such Securities, and accepting the additional responsibilities
under this Indenture in relation to such Securities, the Trustee shall be
entitled to receive, and (subject to TIA Section 315(a) through 315(d)) shall be
fully protected in relying upon:
(i) an Opinion of Counsel complying with Section 102 and
stating that:
(a) the form or forms of such Securities and any
coupons have been, or will have been upon compliance with such
procedures as may be specified therein, established in
conformity with the provisions of this Indenture;
(b) the terms of such Securities and any coupons have
been, or will have been upon compliance with such procedures
as may be specified therein, established in conformity with
the provisions of this Indenture; and
(c) such Securities, together with any coupons
appertaining thereto, when completed pursuant to such
procedures as may be specified therein, and executed and
delivered by the Trust to the Trustee for authentication in
accordance with this Indenture, authenticated and delivered by
the Trustee in accordance with this Indenture and issued by
the Trust in the manner and subject to any conditions
specified in such Opinion of Counsel, will constitute legal,
valid and binding obligations of the Trust, enforceable in
accordance with their terms, subject to applicable bankruptcy,
insolvency, reorganization and other similar laws of general
applicability relating to or affecting the enforcement of
creditors' rights generally and to general equitable
principles and to such other matters as may be specified
therein; and
(ii) an Officers' Certificate complying with Section 102 and
stating that all conditions precedent provided for in this Indenture
relating to the issuance of such Securities have been, or will have
been upon compliance with such procedures as may be specified therein,
complied with and that, to the best of the knowledge of the signers of
such certificate, no Event of Default with respect to such Securities
shall have occurred and be continuing.
The Trustee shall not be required to authenticate such Securities if the issue
of such Securities pursuant to this Indenture will affect the Trustee's own
rights, duties, obligations or immunities
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under the Securities and this Indenture or otherwise in a manner which is not
reasonably acceptable to the Trustee.
Notwithstanding the provisions of Section 301 and of the preceding
paragraph, if all the Securities of any series are not to be issued at one time,
it shall not be necessary to deliver a Trust Order, an Opinion of Counsel or an
Officers' Certificate otherwise required pursuant to the preceding paragraph at
the time of issuance of each Security of such series, but such order, opinion
and certificate, with appropriate modifications to cover such future issuances,
shall be delivered at or before the time of issuance of the first Security of
such series.
Each Registered Security shall be dated the date of its authentication
and each Bearer Security shall be dated as of the date specified as contemplated
by Section 301.
No Security or coupon appertaining thereto shall be entitled to any
benefit under this Indenture or be valid or obligatory for any purpose unless
there appears on such Security or the Security to which such coupon appertains a
certificate of authentication substantially in the form provided for herein duly
executed by the Trustee by manual signature of an authorized officer, and such
certificate upon any Security shall be conclusive evidence, and the only
evidence, that such Security has been duly authenticated and delivered hereunder
and is entitled to the benefits of this Indenture. Notwithstanding the
foregoing, if any Security shall have been authenticated and delivered hereunder
but never issued and sold by the Trust, and the Trust shall deliver such
Security to the Trustee for cancellation as provided in Section 309 together
with a written statement (which need not comply with Section 102 and need not be
accompanied by an Opinion of Counsel) stating that such Security has never been
issued or sold by the 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 304. Temporary Securities.
(a) 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, in registered form, or, if
authorized, in bearer form with one or more coupons or without coupons,
and with such appropriate insertions, omissions, substitutions and
other variations as the officers executing such Securities may
determine, as conclusively evidenced by their execution of such
Securities. In the case of Securities of any series, such temporary
Securities may be in global form.
Except in the case of temporary Securities in global form
(which shall be exchanged in accordance with Section 304(b) or as
otherwise provided in or pursuant to a Board Resolution), if temporary
Securities of any series are issued, the Trust will cause definitive
Securities of that series to be prepared without unreasonable delay.
After the
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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
(accompanied by any non-matured coupons appertaining thereto), 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; provided, however, that no
definitive Bearer Security shall be delivered in exchange for a
temporary Registered Security; and provided further that a definitive
Bearer Security shall be delivered in exchange for a temporary Bearer
Security only in compliance with the conditions set forth in Section
303. Until so exchanged, the temporary Securities of any series shall
in all respects be entitled to the same benefits under this Indenture
as definitive Securities of such series.
(b) Unless otherwise provided as contemplated in Section 301,
this Section 304(b) shall govern the exchange of temporary Securities
issued in global form other than through the facilities of DTC. If any
such temporary Security is issued in global form, then such temporary
global Security shall, unless otherwise provided therein, be delivered
to the London office of a depositary or common depositary (the "Common
Depositary"), for the benefit of Euroclear and CEDEL.
Without unnecessary delay but in any event not later than the date
specified in, or determined pursuant to the terms of, any such temporary global
Security (the "Exchange Date"), the Trust shall deliver to the Trustee
definitive Securities, in an aggregate principal amount equal to the principal
amount of such temporary global Security, executed by the Trust. On or after the
Exchange Date, such temporary global Security shall be surrendered by the Common
Depositary to the Trustee, as the Trust's agent for such purpose, to be
exchanged, in whole or from time to time in part, for definitive Securities
without charge, and the Trustee shall authenticate and deliver, in exchange for
each portion of such temporary global Security, an equal aggregate principal
amount of definitive Securities of or within the same series of authorized
denominations and of like tenor as the portion of such temporary global Security
to be exchanged. The definitive Securities to be delivered in exchange for any
such temporary global Security shall be in bearer form, registered form,
permanent global bearer form or permanent global registered form, or any
combination thereof, as specified as contemplated by Section 301, and, if any
combination thereof is so specified, as requested by the beneficial owner
thereof, provided, however, that, unless otherwise specified in such temporary
global Security, upon such presentation by the Common Depositary, such temporary
global Security is accompanied by a certificate dated the Exchange Date or a
subsequent date and signed by Euroclear as to the portion of such temporary
global Security held for its account then to be exchanged and a certificate
dated the Exchange Date or a subsequent date and signed by CEDEL as to the
portion of such temporary global Security held for its account then to be
exchanged, each in the form set forth in Exhibit A-2 to this Indenture or in
such other form as may be established pursuant to Section 301; and provided
further that definitive Bearer Securities shall
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be delivered in exchange for a portion of a temporary global Security only in
compliance with the requirements of Section 303.
Unless otherwise specified in such temporary global Security, the
interest of a beneficial owner of Securities of a series in a temporary global
Security shall be exchanged for definitive Securities of the same series and of
like tenor following the Exchange Date when the account holder instructs
Euroclear or CEDEL, as the case may be, to request such exchange on his behalf
and delivers to Euroclear or CEDEL, as the case may be, a certificate in the
form set forth in Exhibit A-1 to this Indenture (or in such other form as may be
established pursuant to Section 301), dated no earlier than 15 days prior to the
Exchange Date, copies of which certificate shall be available from the offices
of Euroclear and CEDEL, the Trustee, any Authenticating Agent appointed for such
series of Securities and each Paying Agent. Unless otherwise specified in such
temporary global Security, any such exchange shall be made free of charge to the
beneficial owners of such temporary global Security, except that a Person
receiving definitive Securities must bear the cost of insurance, postage,
transportation and the like unless such Person takes delivery of such definitive
Securities in person at the offices of Euroclear or CEDEL. Definitive Securities
in bearer form to be delivered in exchange for any portion of a temporary global
Security shall be delivered only outside the United States.
Until exchanged in full as hereinabove provided, the temporary
Securities of any series shall in all respects be entitled to the same benefits
under this Indenture as definitive Securities of the same series and of like
tenor authenticated and delivered hereunder, except that, unless otherwise
specified as contemplated by Section 301, interest payable on a temporary global
Security on an Interest Payment Date for Securities of such series occurring
prior to the applicable Exchange Date shall be payable to Euroclear and CEDEL on
such Interest Payment Date upon delivery by Euroclear and CEDEL to the Trustee
of a certificate or certificates in the form set forth in Exhibit A-2 to this
Indenture (or in such other forms as may be established pursuant to Section
301), for credit without further interest on or after such Interest Payment Date
to the respective accounts of Persons who are the beneficial owners of such
temporary global Security on such Interest Payment Date and who have each
delivered to Euroclear or CEDEL, as the case may be, a certificate dated no
earlier than 15 days prior to the Interest Payment Date occurring prior to such
Exchange Date in the form set forth as Exhibit A-1 to this Indenture (or in such
other forms as may be established pursuant to Section 301). Notwithstanding
anything to the contrary herein contained, the certifications made pursuant to
this paragraph shall satisfy the certification requirements of the preceding two
paragraphs of this Section 304(b) and of the third paragraph of Section 303 of
this Indenture and the interests of the Persons who are the beneficial owners of
the temporary global Security with respect to which such certification was made
will be exchanged for definitive Securities of the same series and of like tenor
on the Exchange Date or the date of certification if such date occurs after the
Exchange Date, without further act or deed by such beneficial owners. Except as
otherwise provided in this paragraph, no payments of principal or interest owing
with respect to a beneficial interest in a temporary global Security will be
made unless and until such interest in such temporary global Security shall have
been exchanged for an interest in a definitive Security. Any interest so
received by Euroclear and CEDEL and not paid as herein provided shall be
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returned to the Trustee prior to the expiration of two years after such Interest
Payment Date in order to be repaid to the Trust.
SECTION 305. Registration, Registration of Transfer and Exchange.
The Trust shall cause to be kept at the Corporate Trust Operations
Office of the Trustee or in any office or agency of the Trust in a Place of
Payment a register for each series of Securities (the registers maintained in
such office or in any such office or agency of the Trust in a Place of Payment
being herein sometimes referred to collectively as the "Security Register") in
which, subject to such reasonable regulations as it may prescribe, the Trust
shall provide for the registration of Registered Securities and of transfers of
Registered Securities. The Security Register shall be in written form or any
other form capable of being converted into written form within a reasonable
time. The Trustee, at its Corporate Trust Operations Office, is hereby initially
appointed "Security Registrar" for the purpose of registering Registered
Securities and transfers of Registered Securities on such Security Register as
herein provided. In the event that the Trustee shall cease to be Security
Registrar, it shall have the right to examine the Security Register at all
reasonable times.
Subject to the provisions of this Section 305, upon surrender for
registration of transfer of any Registered Security of any series at any office
or agency of the Trust in a Place of Payment for that 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 Registered Securities of
the same series, of any authorized denominations and of a like aggregate
principal amount, being a number not contemporaneously outstanding, and
containing identical terms and provisions.
Subject to the provisions of this Section 305, at the option of the
Holder, Registered Securities of any series may be exchanged for other
Registered Securities of the same series, of any authorized denomination or
denominations and of a like aggregate principal amount, containing identical
terms and provisions, upon surrender of the Registered Securities to be
exchanged at any such office or agency. Whenever any such Registered Securities
are so surrendered for exchange, the Trust shall execute, and the Trustee shall
authenticate and deliver, the Registered Securities which the Holder making the
exchange is entitled to receive. Unless otherwise specified with respect to any
series of Securities as contemplated by Section 301, Bearer Securities may not
be issued in exchange for Registered Securities.
If (but only if) permitted as contemplated by Section 301, at the
option of the Holder, Bearer Securities of any series may be exchanged for
Registered Securities of the same series of any authorized denominations and of
a like aggregate principal amount and tenor, upon surrender of the Bearer
Securities to be exchanged at any such office or agency, with all unmatured
coupons and all matured coupons in default thereto appertaining. If the Holder
of a Bearer Security is unable to produce any such unmatured coupon or coupons
or matured coupon or coupons in default, any such permitted exchange may be
effected if the Bearer Securities are accompanied by payment in funds acceptable
to the Trust in an amount equal to
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the face amount of such missing coupon or coupons, or the surrender of such
missing coupon or coupons may be waived by the Trust and the Trustee if there is
furnished to them such security or indemnity as they may require to save each of
them and any Paying Agent harmless. If thereafter the Holder of such Security
shall surrender to any Paying Agent any such missing coupon in respect of which
such a payment shall have been made, such Holder shall be entitled to receive
the amount of payment; provided, however, that, except as otherwise provided in
Section 1002, interest represented by coupons shall be payable only upon
presentation and surrender of those coupons at an office or agency located
outside the United States. Notwithstanding the foregoing, in case a Bearer
Security of any series is surrendered at any such office or agency in a
permitted exchange for a Registered Security of the same series and like tenor
after the close of business at such office or agency on (i) any Regular Record
Date and before the Opening of business at such office or agency on the relevant
Interest Payment Date, or (ii) any Special Record Date and before the opening of
business at such office or agency on the related proposed date for payment of
Defaulted Interest, such Bearer Security shall be surrendered without the coupon
relating to such Interest Payment Date or proposed date for payment, as the case
may be, and interest or Defaulted Interest, as the case may be, will not be
payable on such Interest Payment Date or proposed date for payment, as the case
may be, in respect of the Registered Security issued in exchange for such Bearer
Security, but will be payable only to the Holder of such coupon when due in
accordance with the provisions of this Indenture. Whenever any Securities are so
surrendered for exchange, the Trust shall execute, and the Trustee shall
authenticate and deliver, the Securities which the holder making the exchange is
entitled to receive.
Notwithstanding the foregoing, except as otherwise specified as
contemplated by Section 301, any permanent global Security shall be exchangeable
only as provided in this paragraph. If the depositary for any permanent global
Security is DTC, then, unless the terms of such global Security expressly permit
such global Security to be exchanged in whole or in part for definitive
Securities, a global Security may be transferred, in whole but not in part, only
to a nominee of DTC, or by a nominee of DTC to DTC, or to a successor to DTC for
such global Security selected and approved by the Trust or to a nominee of such
successor to DTC. If at any time DTC notifies the Trust that it is unwilling or
unable to continue as depositary for the applicable global Security or
Securities or if at any time DTC ceases to be a clearing agency registered under
the Exchange Act if so required by applicable law or regulation, the Trust shall
appoint a successor depositary with respect to such global Security or
Securities. If (x) a successor depositary for such global Security or Securities
is not appointed by the Trust within 90 days after the Trust receives such
notice or becomes aware of such unwillingness, inability or ineligibility, (y)
an Event of Default has occurred and is continuing and the beneficial owners
representing a majority in principal amount of the applicable series of
Securities represented by such global Security or Securities advise DTC to cease
acting as depositary for such global Security or Securities or (z) the Trust, in
its sole discretion, determines at any time that all Outstanding Securities (but
not less than all) Securities of any series issued or issuable in the form of
one or more global Securities shall no longer be represented by such global
Security or Securities (provided, however, the Trust may not make such
determination during the 40-day restricted period provided by Regulation S under
the Securities Act or during any other similar
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period during which the Securities must be held in global form as may be
required by the Securities Act), then the Trust shall execute, and the Trustee
shall authenticate and deliver definitive Securities of like series, rank, tenor
and terms in definitive form in an aggregate principal amount equal to the
principal amount of such global Security or Securities. If any beneficial owner
of an interest in a permanent global Security is otherwise entitled to exchange
such interest for Securities of such series and of like tenor and principal
amount of another authorized form and denomination, as specified as contemplated
by Section 301 and provided that any applicable notice provided in the permanent
global Security shall have been given, then without unnecessary delay but in any
event not later than the earliest date on which such interest may be so
exchanged, the Trust shall execute, and the Trustee shall authenticate and
deliver definitive Securities in aggregate principal amount equal to the
principal amount of such beneficial owner's interest in such permanent global
Security. On or after the earliest date on which such interests may be so
exchanged, such permanent global Security shall be surrendered for exchange by
DTC or such other depositary as shall be specified in the Trust Order with
respect thereto to the Trustee, as the Trust's agent for such purpose; provided,
however, that no such exchanges may occur during a period beginning at the
opening of business 15 days before any selection of Securities to be redeemed
and ending on the relevant Redemption Date if the Security for which exchange is
requested may be among those selected for redemption; and provided further that
no Bearer Security delivered in exchange for a portion of a permanent global
Security shall be mailed or otherwise delivered to any location in the United
States. If a Registered Security is issued in exchange for any portion of a
permanent global Security after the close of business at the office or agency
where such exchange occurs on (i) any Regular Record Date and before the opening
of business at such office or agency on the relevant Interest Payment Date, or
(ii) any Special Record Date and the opening of business at such office or
agency on the related proposed date for payment of Defaulted Interest, interest
or Defaulted Interest, as the case may be, will not be payable on such Interest
Payment Date or proposed date for payment, as the case may be, in respect of
such Registered Security, but will be payable on such Interest Payment Date or
proposed date for payment, as the case may be, only to the Person to whom
interest in respect of such portion of such permanent global Security is payable
in accordance with the provisions of this Indenture.
All Securities issued upon any registration of transfer or exchange of
Securities shall be the valid obligations of the 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 Registered Security presented or surrendered for registration of
transfer or for exchange or redemption shall be duly endorsed, or be accompanied
by a written instrument of transfer in form satisfactory to the Security
Registrar, duly executed by the Holder thereof or his attorney duly authorized
in writing.
No service charge shall be made for any registration of transfer or
exchange of Securities, but the 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
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exchange of Securities, other than exchanges pursuant to Section 304, 906, 1107
or 1305 not involving any transfer.
The Trust or the Trustee, as applicable, shall not be required (i) to
issue, register the transfer of or exchange any Security if such Security may be
among those selected for redemption during a period beginning at the opening of
business 15 days before selection of the Securities to be redeemed under Section
1103 and ending at the close of business on (A) if such Securities are issuable
only as Registered Securities, the day of the mailing of the relevant notice of
redemption and (B) if such Securities are issuable as Bearer Securities, the day
of the first publication of the relevant notice of redemption or, if such
Securities are also issuable as Registered Securities and there is no
publication, the mailing of the relevant notice of redemption, or (ii) to
register the transfer of or exchange any Registered Security so selected for
redemption in whole or in part, except, in the case of any Registered Security
to be redeemed in part, the portion thereof not to be redeemed, or (iii) to
exchange any Bearer Security so selected for redemption except that such a
Bearer Security may be exchanged for a Registered Security of that series and
like tenor; provided that such Registered Security shall be simultaneously
surrendered for redemption, or (iv) to issue, register the transfer of or
exchange any Security which has been surrendered for repayment at the option of
the Holder, except the portion, if any, of such Security not to be so repaid.
SECTION 306. Mutilated, Destroyed, Lost and Stolen Securities.
If any mutilated Security or a Security with a mutilated coupon
appertaining to it is surrendered to the Trustee or the Trust, together with, in
proper cases, such security or indemnity as may be required by the Trust or the
Trustee to save each of them or any agent of either of them harmless, the Trust
shall execute and the Trustee shall authenticate and deliver in exchange
therefor a new Security of the same series and principal amount, containing
identical terms and provisions and bearing a number not contemporaneously
outstanding, with coupons corresponding to the coupons, if any, appertaining to
the surrendered Security.
If there shall be delivered to the Trust and to the Trustee (i)
evidence to their satisfaction of the destruction, loss or theft of any Security
or coupon, and (ii) such security or indemnity as may be required by them to
save each of them and any agent of either of them harmless, then, in the absence
of actual notice to the Trust or the Trustee that such Security or coupon has
been acquired by a bona fide 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 or in exchange for the Security to which a
destroyed, lost or stolen coupon appertains (with all appurtenant coupons not
destroyed, lost or stolen), a new Security of the same series and principal
amount, containing identical terms and provisions and bearing a number not
contemporaneously outstanding, with coupons corresponding to the coupons, if
any, appertaining to such destroyed, lost or stolen Security or to the Security
to which such destroyed, lost or stolen coupon appertains.
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Notwithstanding the provisions of the previous two paragraphs, in case
any such mutilated, destroyed, lost or stolen Security or coupon has become or
is about to become due and payable, the Trust in its discretion may, instead of
issuing a new Security, with coupons corresponding to the coupons, if any,
appertaining to such destroyed, lost or stolen Security or to the Security to
which such destroyed, lost or stolen coupon appertains, pay such Security or
coupon; provided, however, that payment of principal of (and premium or
Make-Whole Amount, if any), any interest on and any Additional Amounts with
respect to, Bearer Securities shall, except as otherwise provided in Section
1002, be payable only at an office or agency located outside the United States
and, unless otherwise specified as contemplated by Section 301, any interest on
Bearer Securities shall be payable only upon presentation and surrender of the
coupons appertaining thereto.
Upon the issuance of any new Security under this Section, the 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 with its coupons, if any, issued
pursuant to this Section in lieu of any destroyed, lost or stolen Security, or
in exchange for a Security to which a destroyed, lost or stolen coupon
appertains, shall constitute an original additional contractual obligation of
the Trust, whether or not the destroyed, lost or stolen Security and its
coupons, if any, or the destroyed, lost or stolen coupon shall be at any time
enforceable by anyone, and shall be entitled to all the benefits of this
Indenture equally and proportionately with any and all other Securities of that
series and their coupons, if any, duly issued hereunder.
The provisions of this Section are exclusive and shall preclude (to the
extent lawful) all other rights and remedies with respect to the replacement or
payment of mutilated, destroyed, lost or stolen Securities or coupons.
SECTION 307. Payment of Interest; Interest Rights Preserved.
Except as otherwise specified with respect to a series of Securities in
accordance with the provisions of Section 301, interest on any Registered
Security that is payable, and is punctually paid or duly provided for, on any
Interest Payment Date shall be paid to the Person in whose name that Security
(or one or more Predecessor Securities) is registered at the close of business
on the Regular Record Date for such interest at the office or agency of the
Trust maintained for such purpose pursuant to Section 1002; provided, however,
that each installment of interest on any Registered Security may at the Trust's
option be paid by (i) mailing a check for such interest, payable to or upon the
written order of the Person entitled thereto pursuant to Section 308, to the
address of such Person as it appears on the Security Register or (ii) transfer
to an account maintained by the payee located inside the United States.
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Unless otherwise provided as contemplated by Section 301 with respect
to the Securities of any series, payment of interest may be made, in the case of
a Bearer Security, by transfer to an account maintained by the payee with a bank
located outside the United States.
Unless otherwise provided as contemplated by Section 301, every
permanent global Security will provide that interest, if any, payable on any
Interest Payment Date will be paid to DTC, Euroclear and/or CEDEL, as the case
may be, with respect to that portion of such permanent global Security held for
its account by Cede & Co. or the Common Depositary, as the case may be, for the
purpose of permitting such party to credit the interest received by it in
respect of such permanent global Security to the accounts of the beneficial
owners thereof.
In case a Bearer Security of any series is surrendered in exchange for
a Registered Security of such series after the close of business (at an office
or agency in a Place of Payment for such series) on any Regular Record Date and
before the opening of business (at such office or agency) on the next succeeding
Interest Payment Date, such Bearer Security shall be surrendered without the
coupon relating to such Interest Payment Date and interest will not be payable
on such Interest Payment Date in respect of the Registered Security issued in
exchange for such Bearer Security, but will be payable only to the Holder of
such coupon when due in accordance with the provisions of this Indenture.
Except as otherwise specified with respect to a series of Securities in
accordance with the provisions of Section 301, any interest on any Registered
Security of any series that is payable, but is not punctually paid or duly
provided for, on any Interest Payment Date (herein called "Defaulted Interest")
shall forthwith cease to be payable to the registered Holder thereof on the
relevant Regular Record Date by virtue of having been such Holder, and such
Defaulted Interest may be paid by the 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 Registered Securities of
such series (or their respective Predecessor Securities) are registered
at the close of business on a Special Record Date for the payment of
such Defaulted Interest, which shall be fixed in the following manner.
The Trust shall notify the Trustee in writing of the amount of
Defaulted Interest proposed to be paid on each Registered Security of
such series and the date of the proposed payment (which shall not be
less than 20 days after such notice is received by the Trustee), and at
the same time the Trust shall deposit with the Trustee an amount of
money in the currency or currencies, currency unit or units or
composite currency or currencies in which the Securities of such series
are payable (except as otherwise specified pursuant to Section 301 for
the Securities of such series) equal to the aggregate amount proposed
to be paid in respect of such Defaulted Interest or shall make
arrangements satisfactory to the Trustee for such deposit on or prior
to the date of the proposed payment, such money when deposited to be
held in trust for the benefit of the Persons entitled to such Defaulted
Interest as in this clause provided. Thereupon the Trustee shall fix a
Special Record Date for the payment of such Defaulted Interest which
shall be not more than 15 days and not less than 10 days prior to the
date of the proposed
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payment and not less than 10 days after the receipt by the Trustee of
the notice of the proposed payment. The Trustee shall promptly notify
the Trust of such Special Record Date and, in the name and at the
expense of the Trust, shall cause notice of the proposed payment of
such Defaulted Interest and the Special Record Date therefor to be
mailed, first-class postage prepaid, to each Holder of Registered
Securities of such series at his address as it appears in the Security
Register not less than 10 days prior to such Special Record Date. The
Trustee may, in its discretion, in the name and at the expense of the
Trust, cause a similar notice to be published at least once in an
Authorized Newspaper in each place of payment, but such publications
shall not be a condition precedent to the establishment of such Special
Record Date. Notice of the proposed payment of such Defaulted Interest
and the Special Record Date therefor having been mailed as aforesaid,
such Defaulted Interest shall be paid to the Persons in whose names the
Registered Securities of such series (or their respective Predecessor
Securities) are registered at the close of business on such Special
Record Date and shall no longer be payable pursuant to the following
clause (2). In case a Bearer Security of any series is surrendered at
the office or agency in a Place of Payment for such series in exchange
for a Registered Security of such series after the close of business at
such office or agency on any Special Record Date and before the opening
of business at such office or agency on the related proposed date for
payment of Defaulted Interest, such Bearer Security shall be
surrendered without the coupon relating to such proposed date of
payment and Defaulted Interest will not be payable on such proposed
date of payment in respect of the Registered Security issued in
exchange for such Bearer Security, but will be payable only to the
Holder of such coupon when due in accordance with the provisions of
this Indenture.
(2) The Trust may make payment of any Defaulted Interest on
the Registered Securities of any series in any other lawful manner not
inconsistent with the requirements of any securities exchange on which
such Securities may be listed, and upon such notice as may be required
by such exchange, if, after notice given by the Trust to the Trustee of
the proposed payment pursuant to this clause, such manner of payment
shall be deemed practicable by the Trustee.
Subject to the foregoing provisions of this Section and Section 305,
each Security delivered under this Indenture upon registration of transfer of or
in exchange for or in lieu of any other Security shall carry the rights to
interest accrued and unpaid, and to accrue, which were carried by such other
Security.
SECTION 308. Persons Deemed Owners.
Prior to due presentment of a Registered Security for registration of
transfer, the Trust, the Trustee and any agent of the Trust or the Trustee may
treat the Person in whose name such Registered Security is registered as the
owner of such Security for the purpose of receiving payment of principal of (and
premium or Make-Whole Amount, if any), and (subject to Sections 305 and 307)
interest on, such Registered Security and for all other purposes whatsoever,
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whether or not such Registered 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.
Title to any Bearer Security and any coupons appertaining thereto shall
pass by delivery. The Trust, the Trustee and any agent of the Trust or the
Trustee may treat the Holder of any Bearer Security and the Holder of any coupon
as the absolute owner of such Security or coupon for the purpose of receiving
payment thereof or on account thereof and for all other purposes whatsoever,
whether or not such Security or coupon be overdue, and neither the Trust, the
Trustee nor any agent of the Trust or the Trustee shall be affected by notice to
the contrary.
None of 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 of a Security in global form or for maintaining, supervising or
reviewing any records relating to such beneficial ownership interests.
Notwithstanding the foregoing, with respect to any global Security,
nothing herein shall prevent the Trust, the Trustee, or any agent of the Trust
or the Trustee, from giving effect to any written certification, proxy or other
authorization furnished by any depositary, as a Holder, with respect to such
global Security or impair, as between such depositary and owners of beneficial
interests in such global Security, the operation of customary practices
governing the exercise of the rights of such depositary (or its nominee) as
Holder of such global Security.
SECTION 309. Cancellation.
All Securities and coupons surrendered for payment, redemption,
repayment at the option of the Holder, registration of transfer or exchange or
for credit against any sinking find payment shall, if surrendered to any Person
other than the Trustee, be delivered to the Trustee, and any such Securities and
coupons and Securities and coupons surrendered directly to the Trustee for any
such purpose shall be promptly cancelled by it. The Trust may at any time
deliver to the Trustee for cancellation any Securities previously authenticated
and delivered hereunder which the Trust may have acquired in any manner
whatsoever, and may deliver to the Trustee (or to any other Person for delivery
to the Trustee) for cancellation any Securities previously authenticated
hereunder which the Trust has not issued and sold, and all Securities so
delivered shall be promptly cancelled by the Trustee. If the Trust shall so
acquire any of the Securities, however, such acquisition shall not operate as a
redemption or satisfaction of the indebtedness represented by such Securities
unless and until the same are surrendered to the Trustee for cancellation. No
Securities shall be authenticated in lieu of or in exchange for any Securities
cancelled as provided in this Section, except as expressly permitted by this
Indenture. Cancelled Securities and coupons held by the Trustee shall be
destroyed by the Trustee and the Trustee shall deliver a certificate of such
destruction to the Trust, unless by a Trust Order the Trust directs their return
to it.
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SECTION 310. Computation of Interest.
Except as otherwise specified as contemplated by Section 301 with
respect to Securities of any series, interest on the Securities of each series
shall be computed on the basis of a 360- day year consisting of twelve 30-day
months.
ARTICLE FOUR
SATISFACTION AND DISCHARGE
SECTION 401. Satisfaction and Discharge of Indenture.
This Indenture shall upon Trust Request cease to be of further effect
with respect to any series of Securities specified in such Trust Request (except
as to any surviving rights of registration of transfer or exchange of Securities
of such series herein expressly provided for and any right to receive Additional
Amounts, as provided in Section 1011), and the Trustee, upon receipt of a Trust
Order, and at the expense of the Trust, shall execute proper instruments
acknowledging satisfaction and discharge of this Indenture as to such series
when
(1) either
(A) all Securities of such series theretofore
authenticated and delivered and all coupons, if any,
appertaining thereto (other than (i) coupons appertaining to
Bearer Securities surrendered for exchange for Registered
Securities and maturing after such exchange, whose surrender
is not required or has been waived as provided in Section 305,
(ii) Securities and coupons of such series which have been
destroyed, lost or stolen and which have been replaced or paid
as provided in Section 306, (iii) coupons appertaining to
Securities called for redemption and maturing after the
relevant Redemption Date, whose surrender has been waived as
provided in Section 1106, and (iv) Securities and coupons of
such series for whose payment money has theretofore been
deposited in trust or segregated and held in trust by the
Trust and thereafter repaid to the Trust for discharge from
such trust, as provided in Section 1003) have been delivered
to the Trustee for cancellation; or
(B) all Securities of such series and, in the case of
(i) and (ii) below, any coupons appertaining thereto not
theretofore delivered to the Trustee for cancellation
(i) have become due and payable, or
(ii) will become due and payable at their
Stated Maturity within one year, or
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(iii) if redeemable at the option of the
Trust, 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,
and the Trust, in the case of (i), (ii) or (iii) above, has
irrevocably deposited or caused to be deposited with the
Trustee as trust funds in trust for the purpose an amount in
the currency or currencies, currency unit or units or
composite currency or currencies in which the Securities of
such series are payable, sufficient to pay and discharge the
entire indebtedness on such Securities and such coupons not
theretofore delivered to the Trustee for cancellation, for
principal (and premium or Make-Whole Amount, if any) and
interest, and any Additional Amounts with respect thereto, to
the date of such deposit (in the case of Securities which have
become due and payable) or the Stated Maturity or Redemption
Date, as the case may be;
(2) The Trust has paid or caused to be paid all other sums
payable hereunder by the Trust; and
(3) The Trust has delivered to the Trustee an Officers'
Certificate and an Opinion of Counsel, each stating that all conditions
precedent herein provided for relating to the satisfaction and
discharge of this Indenture as to such series have been complied with.
Notwithstanding the satisfaction and discharge of this Indenture, the
obligations of the Trust to the Trustee and any predecessor Trustee under
Section 606, the obligations of the Trust to any Authenticating Agent under
Section 611 and, if money shall have been deposited with and held by the Trustee
pursuant to subclause (B) of clause (1) of this Section, the obligations of the
Trustee under Section 402 and the last paragraph of Section 1003, shall survive.
SECTION 402. Application of Trust Funds.
Subject to the provisions of the last paragraph of Section 1003, all
money deposited with the Trustee pursuant to Section 401 shall be held in trust
and applied by it, in accordance with the provisions of the Securities, the
coupons and this Indenture, to the payment, either directly or through any
Paying Agent (including the Trust acting as its own Paying Agent) as the Trustee
may determine, to the Persons entitled thereto, of the principal (and premium or
Make-Whole Amount, if any), and any interest and Additional Amounts for whose
payment such money has been deposited with or received by the Trustee, but such
money need not be segregated from other funds except to the extent required by
law.
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ARTICLE FIVE
REMEDIES
SECTION 501. Events of Default.
Subject to any modifications, additions or deletions relating to any
series of Securities as contemplated pursuant to Section 301, "Event of
Default," wherever used herein with respect to any particular series of
Securities, means any one of the following events (whatever the reason for such
Event of Default and whether or not it shall be voluntary or involuntary or be
effected by operation of law or pursuant to any judgment, decree or order of any
court or any order, rule or regulation of any administrative or governmental
body):
(1) default in the payment of any interest upon or any
Additional Amounts payable in respect of any Security of or within that
series or of any coupon appertaining thereto, when such interest,
Additional Amounts or coupon becomes due and payable, and continuance
of such default for a period of 30 days; or
(2) default in the payment of the principal of (or premium or
Make-Whole Amount, if any, on) any Security of that series when due and
payable at its Maturity; or
(3) default in the deposit of any sinking fund payment, when
and as due by the terms of any Security of that series; or
(4) default in the performance, or breach, of any covenant or
warranty of the 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 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 the Trustee by the Holders
of at least 25% in principal amount of the Outstanding Securities of
that series a written notice specifying such default or breach and
requiring it to be remedied and stating that such notice is a "Notice
of Default" hereunder; or
(5) default under any bond, debenture, note, mortgage,
indenture or instrument under which there may be issued or by which
there may be secured or evidenced any indebtedness of the Trust for
money borrowed by the Trust (or by any Subsidiary, the repayment of
which the Trust has guaranteed or for which the Trust is directly
responsible or liable as obligor or guarantor), having an aggregate
principal amount outstanding of at least $10,000,000, whether such
indebtedness now exists or shall hereafter be created, which default
shall have resulted in such indebtedness being declared due and payable
prior to the date on which it would otherwise have become due and
payable, without such indebtedness having been discharged, or such
acceleration having been rescinded or annulled, within a period of 10
days after there shall have been
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given, by registered or certified mail, to the Trust by the Trustee or
to the Trust and the Trustee by the Holders of at least 10% in
principal amount of the Outstanding Securities of that series a written
notice specifying such default and requiring the Trust to cause such
indebtedness to be discharged or cause such acceleration to be
rescinded or annulled and stating that such notice is a "Notice of
Default" hereunder; or
(6) the entry by a court of competent jurisdiction of one or
more judgments, orders or decrees against the Trust or any of its
Subsidiaries in an aggregate amount (excluding amounts covered by
insurance) in excess of $10,000,000 and such judgments, orders or
decrees remain undischarged, unstayed and unsatisfied in an aggregate
amount (excluding amounts covered by insurance) in excess of
$10,000,000 for a period of 30 consecutive days; or
(7) the Trust or any Significant Subsidiary pursuant to
or within the meaning of any Bankruptcy Law:
(A) commences a voluntary case,
(B) consents to the entry of an order for relief
against it in an involuntary case,
(C) consents to the appointment of a Custodian
of it or for all or substantially all of its property, or
(D) makes a general assignment for the benefit
of its creditors; or
(8) a court of competent jurisdiction enters an order or
decree under any Bankruptcy Law that:
(A) is for relief against the Trust or any
Significant Subsidiary in an involuntary case,
(B) appoints a Custodian of the Trust or any
Significant Subsidiary or for all or substantially all of
either of its property, or
(C) orders the liquidation of the Trust or any
Significant Subsidiary
and the order or decree remains unstayed and in effect for 90 days; or
(9) any other Event of Default provided with respect to
Securities of that series.
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As used in this Section 501, the term "Bankruptcy Law" means Title 11, U.S. Code
or any similar Federal or state law for the relief of debtors and the term
"Custodian" means any receiver, trustee, assignee, liquidator or other similar
official under any Bankruptcy Law.
SECTION 502. Acceleration of Maturity; Rescission and Annulment.
If an Event of Default with respect to Securities of any series at the
time Outstanding occurs and is continuing, then and in every such case the
Trustee or the Holders of not less than 25% in principal amount of the
Outstanding Securities of that series may declare the principal (or, if any
Securities are Original Issue Discount Securities or Indexed Securities, such
portion of the principal as may be specified in the terms thereof) of, and the
Make-Whole Amount, if any, on, all the Securities of that series to be due and
payable immediately, by a notice in writing to the Trust (and to the Trustee if
given by the Holders), and upon any such declaration such principal or specified
portion thereof shall become immediately due and payable.
At any time after such a declaration of acceleration with respect to
Securities of any series has been made and before a judgment or decree for
payment of the money due has been obtained by the Trustee as hereinafter in this
Article provided, the Holders of a majority in principal amount of the
Outstanding Securities of that series, by written notice to the Trust and the
Trustee, may rescind and annul such declaration and its consequences if:
(1) The Trust has paid or deposited with the Trustee a sum
sufficient to pay in the currency, currency unit or composite currency
in which the Securities of such series is payable (except as otherwise
specified pursuant to Section 301 for the Securities of such series):
(A) all overdue installments of interest on and
any Additional Amounts payable in respect of all Outstanding
Securities of that series and any related coupons;
(B) the principal of (and premium or Make-Whole
Amount, if any, on) any Outstanding Securities of that series
which have become due otherwise than by such declaration of
acceleration and interest thereon at the rate or rates borne
by or provided for in such Securities;
(C) to the extent that payment of such interest is
lawful, interest upon overdue installments of interest and any
Additional Amounts at the rate or rates borne by or provided
for in such Securities; and
(D) all sums paid or advanced by the Trustee
hereunder and the reasonable compensation, expenses,
disbursements and advances of the Trustee, its agents and
counsel; and
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(2) all Events of Default with respect to Securities of that
series, other than the nonpayment of the principal of (or premium or
Make-Whole Amount, if any) or interest on Securities of that series
which have become due solely by such declaration of acceleration, have
been cured or waived as provided in Section 513.
No such rescission shall affect any subsequent default or impair any right
consequent thereon.
SECTION 503. Collection of Indebtedness and Suits for Enforcement by
Trustee.
The Trust covenants that if:
(1) default is made in the payment of any installment of
interest or Additional Amounts, if any, on any Security of any series
and any related coupon when such interest or Additional Amount becomes
due and payable and such default continues for a period of 30 days, or
(2) default is made in the payment of the principal of (or
premium or Make- Whole Amount, if any, on) any Security of any series
at its Maturity,
then the Trust will, upon demand of the Trustee, pay to the Trustee, for the
benefit of the Holders of such Securities of such series and coupons, the whole
amount then due and payable on such Securities and coupons for principal (and
premium or Make-Whole Amount, if any) and interest and Additional Amount, with
interest upon any overdue principal (and premium or Make-Whole Amount, if any)
and, to the extent that payment of such interest shall be legally enforceable,
upon any overdue installments of interest or Additional Amounts, if any, at the
rate or rates borne by or provided for in such Securities, and, in addition
thereto, such further amount as shall be sufficient to cover the costs and
expenses of collection, including the reasonable compensation, expenses,
disbursements and advances of the Trustee, its agents and counsel.
If the 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, and may
prosecute such proceeding to judgment or final decree, and may enforce the same
against the Trust or any other obligor upon such Securities of such series and
collect the moneys adjudged or decreed to be payable in the manner provided by
law out of the property of the Trust or any other obligor upon such Securities
of such series, wherever situated.
If an Event of Default with respect to Securities of any series occurs
and is continuing, the Trustee may in its discretion proceed to protect and
enforce its rights and the rights of the Holders of Securities of such series
and any related coupons by such appropriate judicial proceedings as the Trustee
shall deem most effectual to protect and enforce any such rights, whether for
the specific enforcement of any covenant or agreement in this Indenture or in
aid of the exercise of any power granted herein, or to enforce any other proper
remedy.
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SECTION 504. Trustee May File Proofs of Claim.
In case of the pendency of any receivership, insolvency, liquidation,
bankruptcy, reorganization, arrangement, adjustment, composition or other
judicial proceeding relative to the Trust or 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 or by
declaration or otherwise and irrespective of whether the Trustee shall have made
any demand on the Trust for the payment of overdue principal, premium or
Make-Whole Amount, if any, or interest) shall be entitled and empowered, by
intervention in such proceeding or otherwise:
(i) to file and prove a claim for the whole amount, or such
lesser amount as may be provided for in the Securities of such series,
of principal (and premium or Make- Whole Amount, if any) and interest
and Additional Amounts, if any, owing and unpaid in respect of the
Securities and to file such other papers or documents 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 allotted in such judicial proceeding, and
(ii) to collect and receive any moneys or other property
payable or deliverable on any such claims and to distribute the same;
and any custodian, receiver, assignee, trustee, liquidator, sequestrator (or
other similar official) in any such judicial proceeding is hereby authorized by
each Holder of Securities of such series and coupons to make such payments to
the Trustee, and in the event that the Trustee shall consent to the making of
such payments directly to the Holders, to pay to the Trustee any amount due to
it for the reasonable compensation, expenses, disbursements and advances of the
Trustee and any predecessor Trustee, their agents and counsel, and any other
amounts due the Trustee or any predecessor Trustee under Section 606.
Nothing herein contained shall be deemed to authorize the Trustee to
authorize or consent to or accept or adopt on behalf of any Holder of a Security
or coupon any plan of reorganization, arrangement, adjustment or composition
affecting the Securities or coupons or the rights of any Holder thereof, or to
authorize the Trustee to vote in respect of the claim of any Holder of a
Security or coupon in any such proceeding.
SECTION 505. Trustee May Enforce Claims Without Possession of
Securities or Coupons.
All rights of action and claims under this Indenture or any of the
Securities or coupons may be prosecuted and enforced by the Trustee without the
possession of any of the Securities or coupons or the production thereof in any
proceeding relating thereto, and any such proceeding instituted by the Trustee
shall be brought in its own name as trustee of an express trust, and any
recovery of judgment shall, after provision for the payment of the reasonable
compensation,
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expenses, disbursements and advances of the Trustee, its agents and counsel, be
for the ratable benefit of the Holders of the Securities and coupons in respect
of which such judgment has been recovered.
SECTION 506. Application of Money Collected.
Any money collected by the Trustee pursuant to this Article shall be
applied in the following order, at the date or dates fixed by the Trustee and,
in case of the distribution of such money on account of principal (or premium or
Make-Whole Amount, if any) or interest and any Additional Amounts, upon
presentation of the Securities or coupons, or both, as the case may be, and the
notation thereon of the payment if only partially paid and upon surrender
thereof if fully paid:
FIRST: To the payment of all amounts due the Trustee and any
predecessor Trustee under Section 606,
SECOND: To the payment of the amounts then due and unpaid upon
the Securities and coupons for principal (and premium or Make-Whole
Amount, if any) and interest and any Additional Amounts payable, in
respect of which or for the benefit of which such money has been
collected, ratably, without preference or priority of any kind,
according to the aggregate amounts due and payable on such Securities
and coupons for principal (and premium or Make-Whole Amount, if any),
interest and Additional Amounts, respectively, and
THIRD: To the payment of the remainder, if any, to the Trust.
SECTION 507. Limitation on Suits.
No Holder of any Security of any series or any related coupon shall
have any right to institute any proceeding, judicial or otherwise, with respect
to this Indenture, or for the appointment of a receiver or trustee, or for any
other remedy hereunder, unless:
(1) such Holder has previously given written notice to the
Trustee of a continuing Event of Default with respect to the Securities
of that series;
(2) the Holders of not less than 25% in principal amount of
the Outstanding Securities of that series shall have made written
request to the Trustee to institute proceedings in respect of such
Event of Default in its own name as Trustee hereunder;
(3) such Holder or Holders have offered to the Trustee
reasonable indemnity against the costs, expenses and liabilities to be
incurred in compliance with such request;
(4) the Trustee for 60 days after its receipt of such notice,
request and offer of indemnity has failed to institute any such
proceeding; and
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(5) no direction inconsistent with such written request has
been given to the Trustee during such 60-day period by the Holders of a
majority in principal amount of the Outstanding Securities of that
series;
it being understood and intended that no one or more of such Holders shall have
any right in any manner whatever by virtue of, or by availing of, any provision
of this Indenture to affect, disturb or prejudice the rights of any other of
such Holders, or to obtain or to seek to obtain priority or preference over any
other of such Holders or to enforce any right under this Indenture, except in
the manner herein provided and for the equal and ratable benefit of all such
Holders.
SECTION 508. Unconditional Right of Holders to Receive Principal,
Premium or Make- Whole Amount, if any, Interest and
Additional Amounts.
Notwithstanding any other provision in this Indenture, the Holder of
any Security or coupon shall have the right which is absolute and unconditional
to receive payment of the principal of (and premium or Make-Whole Amount, if
any) and (subject to Sections 305 and 307) interest on, and any Additional
Amounts in respect of, such Security or payment of such coupon on the respective
due dates expressed in such Security or coupon (or, in the case of redemption,
on the Redemption Date) and to institute suit for the enforcement of any such
payment, and such rights shall not be impaired without the consent of such
Holder.
SECTION 509. Restoration of Rights and Remedies.
If the Trustee or any Holder of a Security or coupon has instituted any
proceeding to enforce any right or remedy under this Indenture and such
proceeding has been discontinued or abandoned for any reason, or has been
determined adversely to the Trustee or to such Holder, then and in every such
case the Trust, the Trustee and the Holders of Securities and coupons shall,
subject to any determination in such proceeding, be restored severally and
respectively to their former positions hereunder and thereafter all rights and
remedies of the Trustee and the Holders shall continue as though no such
proceeding had been instituted.
SECTION 510. Rights and Remedies Cumulative.
Except as otherwise provided with respect to the replacement or payment
of mutilated, destroyed, lost or stolen Securities or coupons in the last
paragraph of Section 306, no right or remedy herein conferred upon or reserved
to the Trustee or to the Holders of Securities or coupons is intended to be
exclusive of any other right or remedy, and every right and remedy shall, to the
extent permitted by law, be cumulative and in addition to every other right and
remedy given hereunder or now or hereafter existing at law or in equity or
otherwise. The assertion or employment of any right or remedy hereunder, or
otherwise, shall not prevent the concurrent assertion or employment of any other
appropriate right or remedy.
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SECTION 511. Delay or Omission Not Waiver.
No delay or omission of the Trustee or of any Holder of any Security or
coupon to exercise any right or remedy accruing upon any Event of Default shall
impair any such right or remedy or constitute a waiver of any such Event of
Default or an acquiescence therein. Every right and remedy given by this Article
or by law to the Trustee or to the Holders may be exercised front time to time,
and as often as may be deemed expedient, by the Trustee or by the Holders of
Securities or coupons, as the case may be.
SECTION 512. Control by Holders of Securities.
The Holders of not less than a majority in principal amount of the
Outstanding Securities of any series shall have the right to direct the time,
method and place of conducting any proceeding for any remedy available to the
Trustee or exercising any trust or power conferred on the Trustee with respect
to the Securities of such series, provided that
(1) such direction shall not be in conflict with any rule of
law or with this Indenture,
(2) the Trustee may take any other action deemed proper by the
Trustee which is not inconsistent with such direction, and
(3) the Trustee need not take any action which might involve
it in personal liability or be unduly prejudicial to the Holders of
Securities of such series not joining therein (but the Trustee shall
have no obligation as to the determination of such undue prejudice).
SECTION 513. Waiver of Past Defaults.
The Holders of not less than a majority in principal amount of the
Outstanding Securities of any series may on behalf of the Holders of all the
Securities of such series and any related coupons waive any past default
hereunder with respect to such series and its consequences, except a default
(1) in the payment of the principal of (or premium or
Make-Whole Amount, if any) or interest on or Additional Amounts payable
in respect of any Security of such series or any related coupons, or
(2) in respect of a covenant or provision hereof which under
Article Nine cannot be modified or amended without the consent of the
Holder of each Outstanding Security of such series affected.
Upon any such waiver, such default shall cease to exist, and any Event
of Default arising therefrom shall be deemed to have been cured, for every
purpose of this Indenture; but no such
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waiver shall extend to any subsequent or other default or Event of Default or
impair any right consequent thereon.
SECTION 514. Waiver of Usury, Stay or Extension Laws.
The 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 usury, stay or extension law wherever
enacted, now or at any time hereafter in force, which may affect the covenants
or the performance of this Indenture; and the 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.
SECTION 515. Undertaking for Costs.
All parties to this Indenture agree, and each Holder of any Security by
his acceptance thereof shall be deemed to have agreed, that any court may in its
discretion require, in any suit for the enforcement of any right or remedy under
this Indenture, or in any suit against the Trustee for any action taken or
omitted by it as Trustee, the filing by any party litigant in such suit of any
undertaking to pay the costs of such suit, and that such court may in its
discretion assess reasonable costs, including reasonable attorneys' fees,
against any party litigant in such suit having due regard to the merits and good
faith of the claims or defenses made by such party litigant; but the provisions
of this Section shall not apply to any suit instituted by the Trustee, to any
suit instituted by any Holder, or group of Holders, holding in the aggregate
more than 10% in principal amount of the Outstanding Securities, or to any suit
instituted by any Holder for the enforcement of the payment of the principal of
(or premium or Make-Whole Amount, if any) or interest on or Additional Amounts
payable with respect to any Security on or after the respective Stated
Maturities expressed in such Security (or, in the case of redemption, on or
after the Redemption Date).
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ARTICLE SIX
THE TRUSTEE
SECTION 601. Notice of Defaults.
Within 90 days after the occurrence of any default hereunder with
respect to the Securities of any series, the Trustee shall transmit in the
manner and to the extent provided in TIA Section 313(c), notice of such default
hereunder known to the Trustee, unless such default shall have been cured or
waived; provided, however, that, except in the case of a default in the payment
of the principal of (or premium or Make-Whole Amount, if any) or interest on or
any Additional Amounts with respect to any Security of such series, or in the
payment of any sinking fund installment with respect to the Securities of such
series, the Trustee shall be protected in withholding such notice if and so long
as Responsible Officers of the Trustee in good faith determine that the
withholding of such notice is in the interests of the Holders of the Securities
and coupons of such series; and provided further that in the case of any default
or breach of the character specified in Section 501(4) with respect to the
Securities and coupons of such series, no such notice to Holders shall be given
until at least 60 days after the occurrence thereof. For the purpose of this
Section, the term "default" means any event which is, or after notice or lapse
of time or both would become, an Event of Default with respect to the Securities
of such series.
SECTION 602. Certain Rights of Trustee.
Subject to the provisions of TIA Section 315(a) through 315(d):
(1) the Trustee shall perform only such duties as are
expressly undertaken by it to perform under this Indenture;
(2) the Trustee may rely and shall be protected in acting or
refraining from acting upon any resolution, certificate, statement,
instrument, opinion, report, notice, request, direction, consent,
order, bond, debenture, note, coupon or other paper or document
believed by it to be genuine and to have been signed or presented by
the proper party or parties;
(3) any request or direction of the Trust mentioned herein
shall be sufficiently evidenced by a Trust Request or Trust Order
(other than delivery of any Security, together with any coupons
appertaining thereto, to the Trustee for authentication and delivery
pursuant to Section 303 which shall be sufficiently evidenced as
provided therein) and any resolution of the Board of Directors may be
sufficiently evidenced by a Board Resolution;
(4) whenever in the administration of this Indenture the
Trustee shall deem it desirable that a matter be proved or established
prior to taking, suffering or omitting any
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action hereunder, the Trustee (unless other evidence be herein
specifically prescribed) may, in the absence of bad faith on its part,
rely upon an Officers' Certificate;
(5) the Trustee may consult with counsel and as a condition to
the taking, suffering or omission of any action hereunder may demand an
Opinion of Counsel, and the advice of such counsel or any Opinion of
Counsel shall be full and complete authorization and protection in
respect of any action taken, suffered or omitted by it hereunder in
good faith and in reliance thereon;
(6) the Trustee shall be under no obligation to exercise any
of the rights or powers vested in it by this Indenture at the request
or direction of any of the Holders of Securities of any series or any
related coupons pursuant to this Indenture, unless such Holders shall
have offered to the Trustee reasonable security or indemnity against
the costs, expenses and liabilities which might be incurred by it in
compliance with such request or direction;
(7) the Trustee shall not be bound to make any investigation
into the facts or matters stated in any resolution, certificate,
statement, instrument, opinion, report, notice, request, direction,
consent, order, bond, debenture, note, coupon or other paper or
document, but the Trustee, in its discretion, may make such further
inquiry or investigation into such facts or matters as it may see fit,
and, if the Trustee shall determine to make such further inquiry or
investigation, it shall be entitled to examine the books, records and
premises of the Trust, personally or by agent or attorney;
(8) the Trustee may execute any of the trusts or powers
hereunder or perform any duties hereunder either directly or by or
through agents or attorneys and the Trustee shall not be responsible
for any misconduct or negligence on the part of any agent or attorney
appointed with due care by it hereunder; and
(9) the Trustee shall not be liable for any action taken,
suffered or omitted by it in good faith and reasonably believed by it
to be authorized or within the discretion or rights or powers conferred
upon it by this Indenture.
The Trustee shall not be required to expend or risk its own funds or
otherwise incur any financial liability in the performance of any of its duties
hereunder, or in the exercise of any of its rights or powers, if it shall have
reasonable grounds for believing that repayment of such funds or adequate
indemnity against such risk or liability is not reasonably assured to it.
SECTION 603. Not Responsible for Recitals or Issuance of Securities.
The recitals contained herein and in the Securities, except the
Trustee's certificate of authentication, and in any coupons shall be taken as
the statements of the Trust, and neither the Trustee nor any Authenticating
Agent assumes any responsibility for their correctness. The Trustee makes no
representations as to the validity or sufficiency of this Indenture or of the
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Securities or coupons, except that the Trustee represents that it is duly
authorized to execute and deliver this Indenture, authenticate the Securities
and perform its obligations hereunder. Neither the Trustee nor any
Authenticating Agent shall be accountable for the use or application by the
Trust of Securities or the proceeds thereof.
SECTION 604. May Hold Securities.
The Trustee, any Paying Agent, Security Registrar, Authenticating Agent
or any other agent of the Trust, in its individual or any other capacity, may
become the owner or pledgee of Securities and coupons and, subject to TIA
Sections 310(b) and 311, may otherwise deal with the Trust with the same rights
it would have if it were not Trustee, Paying Agent, Security Registrar,
Authenticating Agent or such other agent.
SECTION 605. Money Held in Trust.
Money held by the Trustee in trust hereunder need not be segregated
from other funds except to the extent required by law. The Trustee shall be
under no liability for interest on, or investment of, any money received by it
hereunder.
SECTION 606. Compensation and Reimbursement.
The Trust agrees:
(1) to pay to the Trustee from time to time reasonable
compensation for all services rendered by it hereunder, including
extraordinary services rendered in connection with or during the
continuation of a default hereunder (which compensation shall not be
limited by any provision of law in regard to the compensation of a
trustee of an express trust);
(2) except as otherwise expressly provided herein, to
reimburse each of the Trustee and any predecessor Trustee upon its
request for all reasonable expenses, disbursements and advances
incurred or made by it in accordance with any provision of this
Indenture (including the reasonable compensation and the expenses and
disbursements of its agents and counsel), except to the extent any such
expense, disbursement or advance may be attributable to its negligence
or bad faith; and
(3) to indemnify each of the Trustee and any predecessor
Trustee for, and to hold it harmless against, any loss, liability or
expense, arising out of or in connection with the acceptance or
administration of the trust or trusts or the performance of its duties
hereunder, including the costs and expenses of defending itself against
any claim or liability in connection with the exercise or performance
of any of its powers or duties hereunder except to the extent any such
loss, liability or expense may be attributable to its own negligence or
bad faith.
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As security for the performance of the obligations of the Trust under
this Section, the Trustee shall have a lien prior to the Securities upon all
property and funds held or collected by the Trustee as such, except funds held
in trust for the payment of principal of (or premium or Make-Whole Amount, if
any) or interest on particular Securities or any coupons.
The provisions of this Section shall survive the termination of this
Indenture.
SECTION 607. Corporate Trustee Required; Eligibility; Conflicting
Interests.
There shall at all times be a Trustee hereunder which shall be eligible
to act as Trustee under TIA Section 310(a)(1) and shall have a combined capital
and surplus of at least $25,000,000. If such corporation publishes reports of
condition at least annually, pursuant to law or the requirements of Federal,
State, Territorial or District of Columbia supervising or examining authority,
then for the purposes of this Section, the combined capital and surplus of such
corporation shall be deemed to be its combined capital and surplus as set forth
in its most recent report of condition so published. If at any time the Trustee
shall cease to be eligible in accordance with the provisions of this Section, it
shall resign immediately in the manner and with the effect hereinafter specified
in this Article.
SECTION 608. Resignation and Removal; Appointment of Successor.
(a) No resignation or removal of the Trustee and no
appointment of a successor Trustee pursuant to this Article shall
become effective until the acceptance of appointment by the successor
Trustee in accordance with the applicable requirements of Section 609.
(b) The Trustee may resign at any time with respect to the
Securities of one or more series by giving written notice thereof to
the Trust. If an instrument of acceptance by a successor Trustee shall
not have been delivered to the Trustee within 30 days after the giving
of such notice of resignation, the resigning Trustee may petition any
court of competent jurisdiction for the appointment of a successor
Trustee.
(c) The Trustee may be removed at any time with respect to the
Securities of any series by Act of the Holders of a majority in
principal amount of the Outstanding Securities of such series delivered
to the Trustee and to the Trust.
(d) If at any time:
(1) the Trustee shall fail to comply with the
provisions of TIA Section 310(b) after written request
therefor by the Trust or by any Holder of a Security who has
been a bona fide Holder of a Security for at least six months,
or
(2) the Trustee shall cease to be eligible under
Section 607(a) and shall fail to resign after written request
therefor by the Trust or by any Holder of a
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Security who has been a bona fide Holder of a Security for at
least six months, or
(3) the Trustee shall become incapable of acting or
shall be adjudged a bankrupt or insolvent or a receiver of the
Trustee or of its property shall be appointed or any public
officer shall take charge or control of the Trustee or of its
property or affairs for the purpose of rehabilitation,
conservation or liquidation,
then, in any such case, (i) the Trust by or pursuant to a Board
Resolution may remove the Trustee and appoint a successor Trustee with
respect to all Securities, or (ii) subject to TIA Section 315(e), any
Holder of a Security who has been a bona fide Holder of a Security for
at least six months may, on behalf of himself and all others similarly
situated, petition any court of competent jurisdiction for the removal
of the Trustee with respect to all Securities and the appointment of a
successor Trustee or Trustees.
(e) If the Trustee shall resign, be removed or become
incapable of acting, or if a vacancy shall occur in the office of
Trustee for any cause with respect to the Securities of one or more
series, the Trust, by or pursuant to a Board Resolution, shall promptly
appoint a successor Trustee or Trustees with respect to the Securities
of that or those series (it being understood that any such successor
Trustee may be appointed with respect to the Securities of one or more
or all of such series and that at any time there shall be only one
Trustee with respect to the Securities of any particular series). If,
within one year after such resignation, removal or incapability, or the
occurrence of such vacancy, a successor Trustee with respect to the
Securities of any series shall be appointed by Act of the Holders of a
majority in principal amount of the Outstanding Securities of such
series delivered to the Trust and the retiring Trustee, the successor
Trustee so appointed shall, forthwith upon its acceptance of such
appointment, become the successor Trustee with respect to the
Securities of such series and to that extent supersede the successor
Trustee appointed by the Trust. If no successor Trustee with respect to
the Securities of any series shall have been so appointed by the Trust
or the Holders of Securities and accepted appointment in the manner
hereinafter provided, any Holder of a Security who has been a bona fide
Holder of a Security of such series for at least six months may, on
behalf of himself and all others similarly situated, petition any court
of competent jurisdiction for the appointment of a successor Trustee
with respect to Securities of such series.
(f) The Trust shall give notice of each resignation and each
removal of the Trustee with respect to the Securities of any series and
each appointment of a successor Trustee with respect to the Securities
of any series in the manner provided for notices to the Holders of
Securities in Section 106. Each notice shall include the name of the
successor Trustee with respect to the Securities of such series and the
address of its Corporate Trust Office.
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SECTION 609. Acceptance of Appointment By Successor.
(a) In case of the appointment hereunder of a successor
Trustee with respect to all Securities, every such successor Trustee
shall execute, acknowledge and deliver to the Trust and to the retiring
Trustee an instrument accepting such appointment, and thereupon the
resignation or removal of the retiring Trustee shall become effective
and such successor Trustee, without any further act, deed or
conveyance, shall become vested with all the rights, powers, trusts and
duties of the retiring Trustee; but, on request of the Trust or the
successor Trustee, such retiring Trustee shall, upon payment of its
charges, execute and deliver an instrument transferring to such
successor Trustee all the rights, powers and trusts of the retiring
Trustee, and shall duly assign, transfer and deliver to such successor
Trustee all property and money held by such retiring Trustee hereunder,
subject nevertheless to its claim, if any, provided for in Section 606.
(b) In case of the appointment hereunder of a successor
Trustee with respect to the Securities of one or more (but not all)
series, the Trust, the retiring Trustee and each successor Trustee with
respect to the Securities of one or more series shall execute and
deliver an indenture supplemental hereto, pursuant to Article Nine
hereof, wherein each successor Trustee shall accept such appointment
and which (1) shall contain such provisions as shall be necessary or
desirable to transfer and confirm to, and to vest in, each successor
Trustee all the rights, powers, trusts and duties of the retiring
Trustee with respect to the Securities of that or those series to which
the appointment of such successor Trustee relates, (2) if the retiring
Trustee is not retiring with respect to all Securities, shall contain
such provisions as shall be deemed necessary or desirable to confirm
that all the rights, powers, trusts and duties of the retiring Trustee
with respect to the Securities of that or those series as to which the
retiring Trustee is not retiring shall continue to be vested in the
retiring Trustee, and (3) shall add to or change any of the provisions
of this Indenture as shall be necessary to provide for or facilitate
the administration of the trusts hereunder by more than one Trustee, it
being understood that nothing herein or in such supplemental indenture
shall constitute such Trustees co-trustees of the same trust and that
each such Trustee shall be trustee of a trust or trusts hereunder
separate and apart from any trust or trusts hereunder administered by
any other such Trustee; and upon the execution and delivery of such
supplemental indenture the resignation or removal of the retiring
Trustee shall become effective to the extent provided therein and each
such successor Trustee, without any further act, deed or conveyance,
shall become vested with all the rights, powers, trusts and duties of
the retiring Trustee with respect to the Securities of that or those
series to which the appointment of such successor Trustee relates; but,
on request of the Trust or any successor Trustee, such retiring Trustee
shall duly assign, transfer and deliver to such successor Trustee all
property and money held by such retiring Trustee hereunder with respect
to the Securities of that or those series to which the appointment of
such successor Trustee relates.
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(c) Upon request of any such successor Trustee, the Trust
shall execute any and all instruments for more fully and certainly
vesting in and confirming to such successor Trustee all such rights,
powers and trusts referred to in paragraph (a) or (b) of this Section,
as the case may be.
(d) No successor Trustee shall accept its appointment unless
at the time of such acceptance such successor Trustee shall be
qualified and eligible under this Article.
SECTION 610. Merger, Conversion, Consolidation or Succession to
Business.
Any corporation into which the Trustee may be merged or converted or
with which it may be consolidated, or any corporation resulting from any merger,
conversion or consolidation to which the Trustee shall be a party, or any
corporation succeeding to all or substantially all of the corporate trust
business of the Trustee, shall be the successor of the Trustee hereunder,
provided such corporation shall be otherwise qualified and eligible under this
Article, without the execution or filing of any paper or any further act on the
part of any of the parties hereto. In case any Securities or coupons shall have
been authenticated, but not delivered, by the Trustee then in office, any
successor by merger, conversion or consolidation to such authenticating Trustee
may adopt such authentication and deliver the Securities or coupons so
authenticated with the same effect as if such successor Trustee had itself
authenticated such Securities or coupons. In case any Securities or coupons
shall not have been authenticated by such predecessor Trustee, any such
successor Trustee may authenticate and deliver such Securities or coupons, in
either its own name or that of its predecessor Trustee, with the full force and
effect which this Indenture provides for the certificate of authentication of
the Trustee.
SECTION 611. Appointment of Authenticating Agent.
At any time when any of the Securities remain Outstanding, the Trustee
may appoint an Authenticating Agent or Agents with respect to one or more series
of Securities which shall be authorized to act on behalf of the Trustee to
authenticate Securities of such series issued upon exchange, registration of
transfer or partial redemption or repayment thereof, and Securities so
authenticated shall be entitled to the benefits of this Indenture and shall be
valid and obligatory for all purposes as if authenticated by the Trustee
hereunder. Any such appointment shall be evidenced by an instrument in writing
signed by a Responsible Officer of the Trustee, a copy of which instrument shall
be promptly furnished to the Trust. Wherever reference is made in this Indenture
to the authentication and delivery of Securities by the Trustee or the Trustee's
certificate of authentication, such reference shall be deemed to include
authentication and delivery on behalf of the Trustee by an Authenticating Agent
and a certificate of authentication executed on behalf of the Trustee by an
Authenticating Agent. Each Authenticating Agent shall be acceptable to the Trust
and, except as may otherwise be provided pursuant to Section 301, shall at all
times be a bank or trust company or corporation organized and doing business and
in good standing under the laws of the United States of America or of any State
or the District of Columbia, authorized under such laws to act as Authenticating
Agent, having a combined capital and surplus of not less than $25,000,000 and
subject to supervision or examination by
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Federal or State authorities. If such Authenticating Agent publishes reports of
condition at least annually, pursuant to law or the requirements of the
aforesaid supervising or examining authority, then for the purposes of this
Section, the combined capital and surplus of such Authenticating Agent shall be
deemed to be its combined capital and surplus as set forth in its most recent
report of condition so published. In case at any time an Authenticating Agent
shall cease to be eligible in accordance with the provisions of this Section,
such Authenticating Agent shall resign immediately in the manner and with the
effect specified in this Section.
Any corporation into which an Authenticating Agent may be merged or
converted or with which it may be consolidated, or any corporation resulting
from any merger, conversion or consolidation to which such Authenticating Agent
shall be a party, or any corporation succeeding to the corporate agency or
corporate trust business of an Authenticating Agent, shall continue to be an
Authenticating Agent, provided such corporation shall be otherwise eligible
under this Section, without the execution or filing of any paper or further act
on the part of the Trustee or the Authenticating Agent.
An Authenticating Agent for any series of Securities may at any time
resign by giving written notice of resignation to the Trustee for such series
and to the Trust. The Trustee for any series of Securities may at any time
terminate the agency of an Authenticating Agent by giving written notice of
termination to such Authenticating Agent and to the Trust. Upon receiving such a
notice of resignation or upon such a termination, or in case at any time such
Authenticating Agent shall cease to be eligible in accordance with the
provisions of this Section, the Trustee for such series may appoint a successor
Authenticating Agent which shall be acceptable to the Trust and shall give
notice of such appointment to all Holders of Securities of or within the series
with respect to which such Authenticating Agent will serve in the manner set
forth in Section 106. Any successor Authenticating Agent upon acceptance of its
appointment hereunder shall become vested with all the rights, powers and duties
of its predecessor hereunder, with like effect as if originally named as an
Authenticating Agent herein. No successor Authenticating Agent shall be
appointed unless eligible under the provisions of this Section.
The Trust agrees to pay to each Authenticating Agent from time to time
reasonable compensation including reimbursement of its reasonable expenses for
its services under this Section.
If an appointment with respect to one or more series is made pursuant
to this Section, the Securities of such series may have endorsed thereon, in
addition to or in lieu of the Trustee's certificate of authentication, an
alternate certificate of authentication substantially in the following form:
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This is one of the Securities of the series designated therein referred
to in the within-mentioned Indenture.
FIRST UNION NATIONAL BANK OF VIRGINIA,
as Trustee
By: ___________________________
as Authenticating Agent
By: ___________________________
Authorized Officer
ARTICLE SEVEN
HOLDERS' LISTS AND REPORTS BY TRUSTEE AND TRUST
SECTION 701. Disclosure of Names and Addresses of Holders.
Every Holder of Securities or coupons, by receiving and holding the
same, agrees with the Trust and the Trustee that neither the Trust nor the
Trustee nor any Authenticating Agent nor any Paying Agent nor any Security
Registrar shall be held accountable by reason of the disclosure of any
information as to the names and addresses of the Holders of Securities in
accordance with TIA Section 312, regardless of the source from which such
information was derived, and that the Trustee shall not be held accountable by
reason of mailing any material pursuant to a request made under TIA Section
312(b).
SECTION 702. Reports by Trustee.
Within 60 days after April 1 of each year commencing with the first
April 1 after the first issuance of Securities pursuant to this Indenture, the
Trustee shall transmit by mail to all Holders of Securities as provided in TIA
Section 313(c) a brief report dated as of such April 1 if required by TIA
Section 313(a).
SECTION 703. 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 Commission, copies of the annual
reports and of the information, documents and other reports (or copies
of such portions of any of the foregoing as the
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Commission may from time to time by rules and regulations prescribe)
which the Trust may be required to file with the Commission pursuant to
Section 13 or Section 15(d) of the Exchange Act; or, if the Trust is
not required to file information, documents or reports pursuant to
either of such Sections, then it will file with the Trustee and the
Commission, in accordance with rules and regulations prescribed from
time to time by the Commission, such of the supplementary and periodic
information, documents and reports which may be required pursuant to
Section 13 of the Exchange Act in respect of a security listed and
registered on a national securities exchange as may be prescribed from
time to time in such rules and regulations;
(2) file with the Trustee and the Commission, in accordance
with rules and regulations prescribed from time to time by the
Commission, such additional information, documents and reports with
respect to compliance by the Trust with the conditions and covenants of
this Indenture as may be required from time to time by such rules and
regulations; and
(3) transmit by mail to the Holders of Securities, within 30
days after the filing thereof with the Trustee, in the manner and to
the extent provided in TIA Section 313(c), such summaries of any
information, documents and reports required to be filed by the Trust
pursuant to paragraphs (1) and (2) of this Section as may be required
by rules and regulations prescribed from time to time by the
Commission.
SECTION 704. Trust to Furnish Trustee Names and Addresses of Holders.
The Trust will furnish or cause to be furnished to the Trustee:
(a) semi-annually, not later than 15 days after the Regular
Record Date for interest for each series of Securities, a list, in such
form as the Trustee may reasonably require, of the names and addresses
of the Holders of Registered Securities of such series as of such
Regular Record Date, or if there is no Regular Record Date for interest
for such series of Securities, semi-annually, upon such dates as are
set forth in the Board Resolution or indenture supplemental hereto
authorizing such series, and
(b) at such other times as the Trustee may request in writing,
within 30 days after the receipt by the 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 the Security Registrar, no
such list shall be required to be furnished.
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ARTICLE EIGHT
CONSOLIDATION, MERGER, SALE, LEASE OR CONVEYANCE
SECTION 801. Consolidations and Mergers of Trust and Sales, Leases and
Conveyances Permitted Subject to Certain Conditions.
The Trust may consolidate with, or sell, lease or convey all or
substantially all of its assets to, or merge with or into any other Person,
provided that in any such case, (i) either the Trust shall be the continuing
entity, or the successor (if other than the Trust) entity shall be a Person
organized and existing under the laws of the United States or a State thereof
and such successor entity shall expressly assume the due and punctual payment of
the principal of (and premium or Make-Whole Amount, if any) and any interest
(including all Additional Amounts, if any, payable pursuant to Section 1011) on
all of the Securities, according to their tenor, and the due and punctual
performance and observance of all of the covenants and conditions of this
Indenture to be performed by the Trust by supplemental indenture, complying with
Article Nine hereof, satisfactory to the Trustee, executed and delivered to the
Trustee by such Person and (ii) immediately after giving effect to such
transaction and treating any indebtedness which becomes an obligation of the
Trust or any Subsidiary as a result thereof as having been incurred by the Trust
or such Subsidiary at the time of such transaction, no Event of Default, and no
event which, after notice or the lapse of time, or both, would become an Event
of Default, shall have occurred and be continuing.
SECTION 802. Rights and Duties of Successor Corporation.
In case of any such consolidation, merger, sale, lease or conveyance
and upon any such assumption by the successor entity, such successor entity
shall succeed to and be substituted for the Trust, with the same effect as if it
had been named herein as the party of the first part, and the predecessor
entity, except in the event of a lease, shall be relieved of any further
obligation under this Indenture and the Securities. Such successor entity
thereupon may cause to be signed, and may issue either in its own name or in the
name of the Trust, any or all of the Securities issuable hereunder which
theretofore shall not have been signed by the Trust and delivered to the
Trustee; and, upon the order of such successor entity, instead of the Trust, and
subject to all the terms, conditions and limitations in this Indenture
prescribed, the Trustee shall authenticate and shall deliver any Securities
which previously shall have been signed and delivered by the officers of the
Trust to the Trustee for authentication, and any Securities which such successor
entity thereafter shall cause to be signed and delivered to the Trustee for that
purpose. All the Securities so issued shall in all respects have the same legal
rank and benefit under this Indenture as the Securities theretofore or
thereafter issued in accordance with the terms of this Indenture as though all
of such Securities had been issued at the date of the execution hereof.
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In case of any such consolidation, merger, sale, lease or conveyance,
such changes in phraseology and form (but not in substance) may be made in the
Securities thereafter to be issued as may be appropriate.
SECTION 803. Officers' Certificate and Opinion of Counsel.
Any consolidation, merger, sale, lease or conveyance permitted under
Section 801 is also subject to the condition that the Trustee receive an
Officers' Certificate and an Opinion of Counsel to the effect that any such
consolidation, merger, sale, lease or conveyance, and the assumption by any
successor entity, complies with the provisions of this Article and that all
conditions precedent herein provided for relating to such transaction have been
complied with.
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ARTICLE NINE
SUPPLEMENTAL INDENTURES
SECTION 901. Supplemental Indentures Without Consent of Holders.
Without the consent of any Holders of Securities or coupons, the Trust,
when authorized by or pursuant to a Board Resolution, and the Trustee, at any
time and from time to time, may enter into one or more indentures supplemental
hereto, in form satisfactory to the Trustee, for any of the following purposes:
(1) to evidence the succession of another Person to the Trust
and the assumption by any such successor of the covenants of the Trust
herein and in the Securities contained; or
(2) 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
(3) to add any additional Events of Default for the benefit of
the Holders of all or any series of Securities (and if such Events of
Default are to be for the benefit of less than all series of
Securities, stating that such Events of Default are expressly being
included solely for the benefit of such series); provided, however,
that in respect of any such additional Events of Default such
supplemental indenture may provide for a particular period of grace
after default (which period may be shorter or longer than that allowed
in the case of other defaults) or may provide for an immediate
enforcement upon such default or may limit the remedies available to
the Trustee upon such default or may limit the right of the Holders of
a majority in aggregate principal amount of that or those series of
Securities to which such additional Events of Default apply to waive
such default; or
(4) to add to or change any of the provisions of this
Indenture to provide that Bearer Securities may be registrable as to
principal, to change or eliminate any restrictions on the payment of
principal of or any premium, Make-Whole Amount or interest on Bearer
Securities, to permit Bearer Securities to be issued in exchange for
Registered Securities, to permit Bearer Securities to be issued in
exchange for Bearer Securities of other authorized denominations or to
permit or facilitate the issuance of Securities in uncertificated form,
provided that any such action shall not adversely affect the interests
of the Holders of Securities of any series or any related coupons in
any material respect; or
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(5) to change or eliminate any of the provisions of this
Indenture, provided that any such change or elimination shall become
effective only when there is no Security Outstanding of any series
created prior to the execution of such supplemental indenture which is
entitled to the benefit of such provision; or
(6) to secure the Securities; or
(7) to establish the form or terms of Securities of any series
and any related coupons as permitted by Sections 201 and 301; or
(8) to evidence and provide for the acceptance of appointment
hereunder by a successor Trustee with respect to the Securities of one
or more series and to add to or change any of the provisions of this
Indenture as shall be necessary to provide for or facilitate the
administration of the trusts hereunder by more than one Trustee; or
(9) to cure any ambiguity, to correct or supplement any
provision herein which may be defective or inconsistent with any other
provision herein, or to make any other provisions with respect to
matters or questions arising under this Indenture which shall not be
inconsistent with the provisions of this Indenture or to make any other
changes, provided that in each case, such provisions shall not
adversely affect the interests of the Holders of Securities of any
series or any related coupons in any material respect; or
(10) to close this Indenture with respect to the
authentication and delivery of additional series of Securities or to
qualify, or maintain qualification of, this Indenture under the TIA; or
(11) to supplement any of the provisions of this Indenture to
such extent as shall be necessary to permit or facilitate the
defeasance and discharge of any series of Securities pursuant to
Sections 401, 1402 and 1403; provided in each case that any such action
shall not adversely affect the interests of the Holders of Securities
of such series and any related coupons or any other series of
Securities in any material respect.
SECTION 902. Supplemental Indentures with Consent of Holders.
With the consent of the Holders of not less than a majority in
principal amount of all Outstanding Securities affected by such supplemental
indenture, by Act of said Holders delivered to the Trust and the Trustee, the
Trust, when authorized by or pursuant to a Board Resolution, and the Trustee may
enter into an indenture or indentures supplemental hereto for the purpose of
adding any provisions to or changing in any manner or eliminating any of the
provisions of this Indenture or of modifying in any manner the rights of the
Holders of Securities and any related coupons under this Indenture; provided,
however, that no such supplemental indenture shall, without the consent of the
Holder of each Outstanding Security affected thereby:
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(1) change the Stated Maturity of the principal of (or premium
or Make-Whole Amount, if any, on) or any installment of principal of or
interest on, any Security; or reduce the principal amount thereof or
the rate or amount of interest thereon or any Additional Amounts
payable in respect thereof, or any premium or Make-Whole Amount payable
upon the redemption thereof, or change any obligation of the Trust to
pay Additional Amounts pursuant to Section 1011 (except as contemplated
by Section 801(1) and permitted by Section 901(1)), or reduce the
amount of the principal of an Original Issue Discount Security or
Make-Whole Amount, if any, that would be due and payable upon a
declaration of acceleration of the Maturity thereof pursuant to Section
502 or the amount thereof provable in bankruptcy pursuant to Section
504; or adversely affect any right of repayment at the option of the
Holder of any Security, or change any Place of Payment where, or the
currency or currencies, currency unit or units or composite currency or
currencies in which, the principal of any Security or any premium or
Make- Whole Amount or any Additional Amounts payable in respect thereof
or the interest thereon is payable; or impair the right to institute
suit for the enforcement of any such payment on or after the Stated
Maturity thereof (or, in the case of redemption or repayment at the
option of the Holder, on or after the Redemption Date or the Repayment
Date, as the case may be); or
(2) reduce the percentage in principal amount of the
Outstanding Securities of any series, the consent of whose Holders is
required for any such supplemental indenture, or the consent of whose
Holders is required for any waiver with respect to such series (or
compliance with certain provisions of this Indenture or certain
defaults hereunder and their consequences) provided for in this
Indenture, or reduce the requirements of Section 1504 for quorum or
voting; or
(3) modify any of the provisions of this Section, Section 513
or Section 1012, except to increase the required percentage to effect
such action or to provide that certain other provisions of this
Indenture cannot be modified or waived without the consent of the
Holder of each Outstanding Security affected thereby.
It shall not be necessary for any Act of Holders under this Section to
approve the particular form of any proposed supplemental indenture, but it shall
be sufficient if such Act shall approve the substance thereof.
A supplemental indenture which changes or eliminates any covenant or
other provision of this Indenture which has expressly been included for the
benefit of one or more particular series of Securities, or which modifies the
rights of the Holders of Securities of such series with respect to such covenant
or other provision, shall be deemed not to affect the rights under this
Indenture of the Holders of Securities of any other series.
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SECTION 903. Execution of Supplemental Indentures.
In executing, or accepting the additional trusts created by, any
supplemental indenture permitted by this Article or the modification thereby of
the trusts created by this Indenture, the Trustee shall be entitled to receive,
and shall be fully protected in relying upon, an Opinion of Counsel stating that
the execution of such supplemental indenture is authorized or permitted by this
Indenture and that all conditions precedent to the execution of such
supplemental indenture have been complied with. The Trustee may, but shall not
be obligated to, enter into any such supplemental indenture which affects the
Trustees own rights, duties or immunities under this Indenture or otherwise.
SECTION 904. Effect of Supplemental Indentures.
Upon the execution of any supplemental indenture under this Article,
this Indenture shall be modified in accordance therewith, and such supplemental
indenture shall form a part of this Indenture for all purposes; and every Holder
of Securities theretofore or thereafter authenticated and delivered hereunder
and of any coupon appertaining thereto shall be bound thereby.
SECTION 905. Conformity with Trust Indenture Act.
Every supplemental indenture executed pursuant to this Article shall
conform to the requirements of the Trust Indenture Act as then in effect.
SECTION 906. Reference in Securities to Supplemental Indentures.
Securities of any series authenticated and delivered after the
execution of any supplemental indenture pursuant to this Article may, and shall,
if required by the Trustee, bear a notation in form approved by the Trustee as
to any matter provided for in such supplemental indenture. If the Trust shall so
determine, new Securities of any series so modified as to conform, in the
opinion of the Trustee and the Trust, to any such supplemental indenture may be
prepared and executed by the Trust and authenticated and delivered by the
Trustee in exchange for Outstanding Securities of such series.
SECTION 907. Notice of Supplemental Indentures.
Promptly after the execution by the Trust and the Trustee of any
supplemental indenture pursuant to the provisions of Section 902, the Trust
shall give notice thereof to the Holders of each Outstanding Security affected,
in the manner provided for in Section 106, setting forth in general terms the
substance of such supplemental indenture.
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ARTICLE TEN
COVENANTS
SECTION 1001. Payment of Principal, Premium or Make-Whole Amount, if
any, Interest and Additional Amounts.
The Trust covenants and agrees for the benefit of the Holders of each
series of Securities that it will duly and punctually pay the principal of (and
premium or Make-Whole Amount, if any) and interest on and any Additional Amounts
payable in respect of the Securities of that series in accordance with the terms
of such series of Securities, any coupons appertaining thereto and this
Indenture. Unless otherwise specified as contemplated by Section 301 with
respect to any series of Securities, any interest due on and any Additional
Amounts payable in respect of Bearer Securities on or before Maturity, other
than Additional Amounts, if any, payable as provided in Section 1011 in respect
of principal of (or premium or Make-Whole Amount, if any, on) such a Security,
shall be payable only upon presentation and surrender of the several coupons for
such interest installments as are evidenced thereby as they severally mature.
Unless otherwise specified with respect to Securities of any series pursuant to
Section 301, at the option of the Trust, all payments of principal may be paid
by check to the registered Holder of the Registered Security or other person
entitled thereto against surrender of such Security.
SECTION 1002. Maintenance of Office or Agency.
If Securities of a series are issuable only as Registered Securities,
the Trust shall maintain in each Place of Payment for any series of Securities
an office or agency where Securities of that series may be presented or
surrendered for payment, where Securities of that series may be surrendered for
registration of 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, provided, however, that such functions of such office or agency may be
allocated among the Corporate Trust and Corporate Trust Operations Offices of
the Trustee and any other office of the Trustee which becomes a Place of Payment
pursuant to this Section. If Securities of a series are issuable as Bearer
Securities, the Trust will maintain: (A) in the Borough of Manhattan, The City
of New York, an office or agency where any Registered Securities of that series
may be presented or surrendered for payment, where any Registered Securities of
that series may be surrendered for exchange, where notices and demands to or
upon the Trust in respect of the Securities of that series and this Indenture
may be served and where Bearer Securities of that series and related coupons may
be presented or surrendered for payment in the circumstances described in the
following paragraph (and not otherwise); (B) subject to any laws or regulations
applicable thereto, in a Place of Payment for that series which is located
outside the United States, an office or agency where Securities of that series
and related coupons may be presented and surrendered for payment (including
payment of any Additional Amounts payable on Securities of that series pursuant
to Section 1011); provided, however, that if the Securities of that series are
listed on the Luxembourg Stock Exchange, The International Stock Exchange or any
other
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stock exchange located outside the United States and such stock exchange shall
so require, the Trust will maintain a Paying Agent for the Securities of that
series in Luxembourg, London or any other required city located outside the
United States, as the case may be, so long as the Securities of that series are
listed in such exchange; and (C) subject to any laws or regulations applicable
thereto, in a Place of Payment for that series located outside the United States
an office or agency where any Securities of that series may be surrendered for
registration of transfer, where Securities of that series may be surrendered for
exchange and where notices and demands to or upon the 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 each 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 and surrenders may be made or
served at the Corporate Trust Operations Office of the Trustee and such notices
and demands may be made or served at the Corporate Trust Office of the Trustee,
except that Bearer Securities of that series and the related coupons may be
presented and surrendered for payment (including payment of any Additional
Amounts payable on Bearer Securities of that series pursuant to Section 1011) at
the offices specified in the Security, in London, England, and the Trust hereby
appoints the same as its agent to receive such respective presentations,
surrenders, notices and demands, and the Trust hereby appoints the Trustee its
agent to receive all such presentations, surrenders, notices and demands.
Unless otherwise specified with respect to any Securities pursuant to
Section 301, no payment of principal, premium, Make-Whole Amount or interest on
or Additional Amounts in respect of Bearer Securities shall be made at any
office or agency of the Trust in the United States or by check mailed to any
address in the United States or by transfer to an account maintained with a bank
located in the United States; provided, however, that, if the Securities of a
series are payable in Dollars, payment of principal of and any premium and
interest on any Bearer Security (including any Additional Amounts or Make-Whole
Amount payable on Securities of such series pursuant to Section 1011) shall be
made at the office of the Trust's Paying Agent in the Borough of Manhattan, The
City of New York, if (but only if) payment in Dollars of the full amount of such
principal, premium, interest, Additional Amounts or Make- Whole Amount, as the
case may be, at all offices or agencies outside the United States maintained for
the purpose by the Trust in accordance with this Indenture, is illegal or
effectively precluded by exchange controls or other similar restrictions.
The Trust may from time to time designate one or more other offices or
agencies where the Securities of one or more series and related coupons, if any,
may be presented or surrendered for any or all of such purposes, and may from
time to time rescind such designations; provided, however, that no such
designation or rescission shall in any manner relieve the Trust of its
obligation to maintain an office or agency in accordance with the requirements
set forth above for Securities of any series for such purposes. The 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. Unless
otherwise specified with respect to any Securities pursuant to Section 301 with
respect to a series of Securities, the Trust hereby
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designates as Places of Payment for each series of Securities the Corporate
Trust Operations Office of the Trustee and the office or agency of the Trustee
at 40 Broad Street, Suite 55, New York, New York 10004, in the Borough of
Manhattan, The City of New York, initially appoints the Trustee as a Paying
Agent in Charlotte, North Carolina, and in the Borough of Manhattan, The City of
New York, and appoints the Trustee as its agent to receive all such
presentations, surrenders, notices and demands.
Unless otherwise specified with respect to any Securities pursuant to
Section 301, if and so long as the Securities of any series (i) are denominated
in a Foreign Currency or (ii) may be payable in a Foreign Currency, or so long
as it is required under any other provision of the Indenture, then the Trust
will maintain with respect to each such series of Securities, or as so required,
at least one exchange rate agent.
SECTION 1003. Money for Securities Payments to Be Held in Trust.
If the Trust shall at any time act as its own Paying Agent with respect
to any series of any Securities and any related coupons, it will, on or before
each due date of the principal of (and premium or Make-Whole Amount, if any), or
interest on or Additional Amounts in respect of, any of the Securities of that
series, segregate and hold in trust for the benefit of the Persons entitled
thereto a sum in the currency or currencies, currency unit or units or composite
currency or currencies in which the Securities of such series are payable
(except as otherwise specified pursuant to Section 301 for the Securities of
such series) sufficient to pay the principal (and premium or Make-Whole Amount,
if any) or interest or Additional Amounts so becoming due until such sums shall
be paid to such Persons or otherwise disposed of as herein provided, and will
promptly notify the Trustee of its action or failure so to act.
Whenever the Trust shall have one or more Paying Agents for any series
of Securities and any related coupons, it will, on or before each due date of
the principal of (and premium or Make-Whole Amount, if any), or interest on or
Additional Amounts in respect of, any Securities of that series, deposit with a
Paying Agent a sum (in the currency or currencies, currency unit or units or
composite currency or currencies described in the preceding paragraph)
sufficient to pay the principal (and premium or Make-Whole Amount, if any) or
interest or Additional Amounts, so becoming due, such sum to be held in trust
for the benefit of the Persons entitled to such principal, premium, Make-Whole
Amount or interest or Additional Amounts 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 other than the Trustee to
execute and deliver to the Trustee an instrument in which such Paying Agent
shall agree with the Trustee, subject to the provisions of this Section, that
such Paying Agent will
(1) hold all sums held by it for the payment of principal
of (and premium or Make-Whole Amount, if any) or interest on Securities
in trust for the benefit of the
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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) in the making of any such
payment of principal (and premium or Make-Whole Amount, if any) or
interest; and
(3) at any time during the continuance of any such default
upon the written request of the Trustee, forthwith pay to the Trustee
all sums so held in trust by such Paying Agent.
The 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 trusts 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 sums.
Except as otherwise provided in the Securities of any series, any money
deposited with the Trustee or any Paying Agent, or then held by the Trust, in
trust for the payment of the principal of (and premium or Make-Whole Amount, if
any) or interest on, or any Additional Amounts in respect of, any Security of
any series and remaining unclaimed for two years after such principal (and
premiums or Make-Whole Amount, if any), interest or Additional Amounts has
become due and payable shall be paid to the Trust upon 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 of such principal of (and premium or Make-Whole Amount, if
any) or interest on, or any Additional Amounts in respect of, any Security,
without interest thereon, and all liability of the Trustee or such Paying Agent
with respect to such trust money, and all liability of the 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 an Authorized Newspaper,
notice that such money remains unclaimed and that, after a date specified
therein, which shall not be less than 30 days from the date of such publication,
any unclaimed balance of such money then remaining will be repaid to the Trust.
SECTION 1004. Limitations on Incurrence of Debt.
(a) The Trust will not, and will not permit any Subsidiary to,
incur any Debt if, immediately after giving effect to the incurrence of
such additional Debt and the application of the proceeds thereof, the
aggregate principal amount of all outstanding Debt of the Trust and its
Subsidiaries on a consolidated basis determined in accordance with GAAP
is greater than 60% of the sum of (without duplication) (i) the Trust's
Total Assets as of the end of the calendar quarter covered in the
Trust's Annual Report on Form 10-K or Quarterly Report on Form 10-Q, as
the case may be, most recently filed
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with the Commission (or, if such filing is not permitted under the
Exchange Act, with the Trustee) prior to the incurrence of such
additional Debt and (ii) the purchase price of any real estate assets
or mortgages receivable acquired, and the amount of any securities
offering proceeds received (to the extent such proceeds were not used
to acquire real estate assets or mortgages receivable or used to reduce
Debt), by the Trust or any Subsidiary since the end of such calendar
quarter, including those proceeds obtained in connection with the
incurrence of such additional Debt;
(b) In addition to the limitations set forth in subsection (a)
of this Section 1004, the Trust will not, and will not permit any
Subsidiary to, incur any Debt if the ratio of Consolidated Income
Available for Debt Service to the Annual Service Charge for the four
consecutive fiscal quarters most recently ended prior the date on which
such additional Debt is to be incurred shall have been less than 1.5,
on a pro forma basis after giving effect thereto and to the application
of the proceeds therefrom, and calculated on the assumption that (i)
such Debt and any other Debt incurred by the Trust and its Subsidiaries
since the first day of such four-quarter period and the application of
the proceeds therefrom, including to refinance other Debt, had occurred
at the beginning of such period; (ii) the repayment or retirement of
any other Debt by the Trust and its Subsidiaries since the first day of
such four-quarter period had been incurred, repaid or retired at the
beginning of such period (except that, in making such computation, the
amount of Debt under any revolving credit facility shall be computed
based upon the average daily balance of such Debt during such period);
(iii) in the case of Acquired Debt or Debt incurred in connection with
any acquisition since the first day of such four-quarter period, the
related acquisition had occurred as of the first day of such period
with the appropriate adjustments with respect to such acquisition being
included in such pro forma calculation; and (iv) in the case of any
acquisition or disposition by the Trust or its Subsidiaries of any
asset or group of assets since the first day of such four-quarter
period, whether by merger, stock purchase or sale, or asset purchase or
sale, such acquisition or disposition or any related repayment of Debt
had occurred as of the first day of such period with the appropriate
adjustments with respect to such acquisition or disposition being
included in such pro forma calculation.
(c) In addition to the limitation set forth in subsections (a)
and (b) of this Section 1004, the Trust will not, and will not permit
any Subsidiary to, incur any Debt secured by any mortgage, lien,
charge, pledge, encumbrance or security interest of any kind upon any
of the property of the Trust or any Subsidiary, whether owned at the
date hereof or hereafter acquired, if, immediately after giving effect
to the incurrence of such additional Debt and the application of the
proceeds thereof, the aggregate principal amount of all outstanding
Debt of the Trust and its Subsidiaries on a consolidated basis which is
secured by any mortgage, lien, charge, pledge, encumbrance or security
interest on property of the Trust or any Subsidiary is greater than 40%
of the Trust's Total Assets.
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(d) For purposes of this Section 1004 Debt shall be deemed to
be "incurred" by the Trust or a Subsidiary whenever the Trust or such
Subsidiary shall create, assume, guarantee or otherwise become liable
in respect thereof.
SECTION 1005. Existence.
Subject to Article Eight, the Trust will do or cause to be done all
things necessary to preserve and keep in full force and effect the existence,
rights (charter and statutory) and franchises of the Trust and its Subsidiaries;
provided, however, that the Trust shall not be required to preserve any right or
franchise if the Board of Directors shall determine that the preservation
thereof is no longer desirable in the conduct of the business of the Trust and
its Subsidiaries as a whole and that the loss thereof is not disadvantageous in
any material respect to the Holders of Securities of any series.
SECTION 1006. Maintenance of Properties.
The 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 necessary so that the business carried on in connection
therewith may be properly and advantageously conducted at all times; provided,
however, that nothing in this Section shall prevent the Trust or any Subsidiary
from selling or otherwise disposing of for value its properties in the ordinary
course of its business.
SECTION 1007. Insurance.
The Trust will, and will cause each of its Subsidiaries to, keep all of
its insurable properties insured against loss or damage at least equal to their
then full insurable value with financially sound and reputable insurance
companies.
SECTION 1008. Payment of Taxes and Other Claims.
The Trust will pay or discharge or cause to be paid or discharged,
before the same shall become delinquent, (1) all taxes, assessments and
governmental charges levied or imposed upon it or any Subsidiary or upon the
income, profits or property of the Trust or any Subsidiary, and (2) all lawful
claims for labor, materials and supplies which, if unpaid, might by law become a
lien upon the property of the 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.
SECTION 1009. Provision of Financial Information.
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Whether or not the Trust is subject to Section 13 or 15(d) of the
Exchange Act, the Trust will, to the extent permitted under the Exchange Act,
file with the Commission the annual reports, quarterly reports and other
documents which the Trust would have been required to file with the Commission
pursuant to such Section 13 or 15(d) (the "Financial Statements") if the Trust
were so subject, such documents to be filed with the Commission on or prior to
the respective dates (the "Required Filing Dates") by which the Trust would have
been required so to file such documents if the Trust were so subject.
The Trust will also in any event (x) within 15 days of each Required
Filing Date (i) transmit by mail to all Holders, as their names and addresses
appear in the Security Register, without cost to such Holders, copies of the
annual reports and quarterly reports which the Trust would have been required to
file with the Commission pursuant to Section 13 or 15(d) of the Exchange Act if
the Trust were subject to such Sections, and (ii) file with the Trustee copies
of annual reports, quarterly reports and other documents which the Trust would
have been required to file with the Commission pursuant to Section 13 or 15(d)
of the Exchange Act if the Trust were subject to such Sections and (y) if filing
such documents by the Trust with the Commission is not permitted under the
Exchange Act, promptly upon written request and payment of the reasonable cost
of duplication and delivery, supply copies of such documents to any prospective
Holder.
SECTION 1010. Statement as to Compliance.
The Trust will deliver to the Trustee within 120 days after the end of
each fiscal year, a brief certificate from the principal executive officer,
principal financial officer or principal accounting officer as to his or her
knowledge of the Trust's compliance with all conditions and covenants under this
Indenture and, in the event of any noncompliance, specifying such noncompliance
and the nature and status thereof. For purposes of this Section 1010, such
compliance shall be determined without regard to any period of grace or
requirement of notice under this Indenture.
SECTION 1011. Additional Amounts.
If any Securities of a series provide for the payment of Additional
Amounts, the Trust will pay to the Holder or any Security of such series or any
coupon appertaining thereto Additional Amounts as may be specified as
contemplated by Section 301. Whenever in this Indenture there is mentioned, in
any context except in the case of Section 502(1), the payment of the principal
or of any premium, Make-Whole Amount or interest on, or in respect of, any
Security of any series or payment of any related coupon or the net proceeds
received on the sale or exchange of any Security of any series, such mention
shall be deemed to include mention of the payment of Additional Amounts provided
by the terms of such series established pursuant to Section 301 to the extent
that, in such context, Additional Amounts are, were or would be payable in
respect thereof pursuant to such terms and express mention of the payment of
Additional Amounts (if applicable) in any provisions hereof shall not be
construed as excluding Additional Amounts in those provisions hereof where such
express mention is not made.
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Except as otherwise specified as contemplated by Section 301, if the
Securities of a series provide for the payment of Additional Amounts, at least
10 days prior to the first Interest Payment Date with respect to that series of
Securities (or if the Securities of that series will not bear interest prior to
Maturity, the first day on which a payment of principal and any premium is
made), and at least 10 days prior to each date of payment of principal and any
premium or Make-Whole Amount or interest if there has been any change with
respect to the matters set forth in the below-mentioned Officers' Certificate,
the Trust will furnish the Trustee and the Trust's principal Paying Agent or
Paying Agents, if other than the Trustee, with an Officers' Certificate
instructing the Trustee and such Paying Agent or Paying Agents whether such
payment of principal of and any premium or interest on the Securities of that
series shall be made to Holders of Securities of that series or any related
coupons who are not United States persons without withholding for or on account
of any tax, assessment or other governmental charge described in the Securities
of or within the series. If any such withholding shall be required, then such
Officers' Certificate shall specify by country the amount, if any, required to
be withheld on such payments to such Holders of Securities of that series or
related coupons and the Trust will pay to the Trustee or such Paying Agent the
Additional Amounts required by the terms of such Securities. In the event that
the Trustee or any Paying Agent, as the case may be, shall not so receive the
above-mentioned certificate, then the Trustee or such Paying Agent shall be
entitled (i) to assume that no such withholding or deduction is required with
respect to any payment of principal or interest with respect to any Securities
of a series or related coupons until it shall have received a certificate
advising otherwise and (ii) to make all payments of principal and interest with
respect to the Securities of a series or related coupons without withholding or
deductions until otherwise advised. The Trust covenants to indemnify the Trustee
and any Paying Agent for, and to hold them harmless against, any loss, liability
or expense reasonably incurred without negligence or bad faith on their part
arising out of or in connection with actions taken or omitted by any of them in
reliance on any Officers' Certificate furnished pursuant to this Section or in
reliance on the Trust's not furnishing such an Officers' Certificate.
SECTION 1012. Waiver of Certain Covenants.
The Trust may omit in any particular instance to comply with any term,
provision or condition set forth in Sections 1004 to 1009, inclusive, and with
any other term, provision or condition with respect to the Securities of any
series specified in accordance with Section 301 (except any such term, provision
or condition which could not be amended without the consent of all Holders of
Securities of such series pursuant to Section 902), if before or after the time
for such compliance the Holders of at least a majority in principal amount of
all outstanding Securities of such series, by Act of such Holders, either waive
such compliance in such instance or generally waive compliance with such
covenant or condition, but no such waiver shall extend to or affect such
covenant or condition except to the extent so expressly waived, and, until such
waiver shall become effective, the obligations of the Trust and the duties of
the Trustee in respect of any such term, provision or condition shall remain in
full force and effect.
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ARTICLE ELEVEN
REDEMPTION OF SECURITIES
SECTION 1101. Applicability of Article.
Securities of any series which are redeemable before their Stated
Maturity shall be redeemable in accordance with their terms and (except as
otherwise specified as contemplated by Section 301 for Securities of any series)
in accordance with this Article.
SECTION 1102. Election to Redeem; Notice to Trustee.
The election of the Trust to redeem any Securities shall be evidenced
by or pursuant to a Board Resolution. In case of any redemption at the election
of the Trust of less than all of the Securities of any series, the Trust shall,
at least 45 days prior to the giving of the notice of redemption in Section 1104
(unless a shorter notice shall be satisfactory to the Trustee), notify the
Trustee of such Redemption Date and of the principal amount of Securities of
such series to be redeemed. In the case of any redemption of Securities prior to
the expiration of any restriction on such redemption provided in the terms of
such Securities or elsewhere in this Indenture, the Trust shall furnish the
Trustee with an Officers' Certificate evidencing compliance with such
restriction.
SECTION 1103. Selection by Trustee of Securities to Be Redeemed.
If less than all the Securities of any series issued on the same day
with the same terms are to be redeemed, the particular Securities to be redeemed
shall be selected not more than 60 days prior to the Redemption Date by the
Trustee, from the Outstanding Securities of such series issued on such date with
the same terms not previously called for redemption, by such method as the
Trustee shall deem fair and appropriate and which may provide for the selection
for redemption of portions (equal to the minimum authorized denomination for
Securities of that series or any integral multiple thereof) of the principal
amount of Securities of such series of a denomination larger than the minimum
authorized denomination for Securities of that series.
The Trustee shall promptly notify the Trust and the Security Registrar
(if other than itself) in writing of the Securities selected for redemption and,
in the case of any Securities selected for partial redemption, the principal
amount thereof to be redeemed.
For all purposes of this Indenture, unless the context otherwise
requires, all provisions relating to the redemption of Securities shall relate,
in the case of any Security redeemed or to be redeemed only in part, to the
portion of the principal amount of such Security which has been or is to be
redeemed.
SECTION 1104. Notice of Redemption.
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Notice of redemption shall be given in the manner provided in Section
106, not less than 30 days nor more than 60 days prior to the Redemption Date,
unless a shorter period is specified by the terms of such series established
pursuant to Section 301, to each Holder of Securities to be redeemed, but
failure to give such notice in the manner herein provided to the Holder of any
Security designated for redemption as a whole or in part, or any defect in the
notice to any such Holder, shall not affect the validity of the proceedings for
the redemption of any other such Security or portion thereof.
Any notice that is mailed to the Holders of Registered Securities in
the manner herein provided shall be conclusively presumed to have been duly
given, whether or not the Holder receives the notice.
All notices of redemption shall state:
(1) the Redemption Date;
(2) the Redemption Price, accrued interest to the
Redemption Date payable as provided in Section 1106, if any, and
Additional Amounts, if any;
(3) if less than all Outstanding Securities of any series are
to be redeemed, the identification (and, in the case of partial
redemption, the principal amount) of the particular Security or
Securities to be redeemed;
(4) in case any Security is to be redeemed in part only, that
on and after the Redemption Date, upon surrender of such Security, the
holder will receive, without a charge, a new Security or Securities of
authorized denominations for the principal amount thereof remaining
unredeemed;
(5) that on the Redemption Date the Redemption Price and
accrued interest to the Redemption Date payable as provided in Section
1106, if any, will become due and payable upon each such Security, or
the portion thereof, to be redeemed and, if applicable, that interest
thereon shall cease to accrue on and after said date;
(6) the Place or Places of Payment where such Securities,
together in the case of Bearer Securities with all coupons appertaining
thereto, if any, maturing after the Redemption Date, are to be
surrendered for payment of the Redemption Price and accrued interest,
if any;
(7) that the redemption is for a sinking fund, if such is the
case;
(8) that, unless otherwise specified in such notice, Bearer
Securities of any series, if any, surrendered for redemption must be
accompanied by all coupons maturing subsequent to the date fixed for
redemption or the amount of any such missing coupon
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or coupons will be deducted from the Redemption Price, unless security
or indemnity satisfactory to the Trust, the Trustee for such series and
any Paying Agent is furnished;
(9) if Bearer Securities of any series are to be redeemed and
any Registered Securities of such series are not to be redeemed, and if
such Bearer Securities may be exchanged for Registered Securities not
subject to the redemption on this Redemption Date pursuant to Section
305 or otherwise, the last date, as determined by the Trust, on which
such exchanges may be made;
(10) the CUSIP number of such Security, if any, provided that
neither the Trust nor the Trustee shall have any responsibility for any
such CUSIP number; and
(11) if applicable, that a Holder of Securities who desires to
convert Securities to be redeemed must satisfy the requirements for
conversion contained in such Securities, the then existing conversion
price or rate and the date and time when the option to convert shall
expire.
Notice of redemption of Securities to be redeemed shall be given by the
Trust or, at the Trust request, by the Trustee in the name and at the expense of
the Trust.
SECTION 1105. 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, which it may not do in the case of a sinking fund payment under Article
Twelve, segregate and hold in trust as provided in Section 1003) an amount of
money in the currency or currencies, currency unit or units or composite
currency or currencies in which the Securities of such series are payable
(except as otherwise specified pursuant to Section 301 for the Securities of
such series) sufficient to pay on the Redemption Date the Redemption Price of,
and (except if the Redemption Date shall be an Interest Payment Date) accrued
interest on, all the Securities or portions thereof which are to be redeemed on
that date.
SECTION 1106. Securities Payable on Redemption Date.
Notice of redemption having been given as aforesaid, the Securities so
to be redeemed shall, on the Redemption Date, become due and payable at the
Redemption Price therein specified in the currency or currencies, currency unit
or units or composite currency or currencies in which the Securities of such
series are payable (except as otherwise specified pursuant to Section 301 for
the Securities of such series) (together with accrued interest, if any, to the
Redemption Date), and from and after such date (unless the Trust shall default
in the payment of the Redemption Price and accrued interest) such Securities
shall, if the same were interest-bearing, cease to bear interest and the coupons
for such interest appertaining to any Bearer Securities so to be redeemed,
except to the extent provided below, shall be void. Upon surrender of any such
Security for redemption in accordance with said notice, together with all
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coupons, if any, appertaining thereto maturing after the Redemption Date, such
Security shall be paid by the Trust at the Redemption Price, together with
accrued interest, if any, to the Redemption Date; provided, however, that
installments of interest on Bearer Securities whose Stated Maturity is on or
prior to the Redemption Date shall be payable only at an office or agency
located outside the United States (except as otherwise provided in Section 1002)
and, unless otherwise specified as contemplated by Section 301, only upon
presentation and surrender of coupons for such interest; and provided further
that, installments of interest on Registered Securities whose Stated Maturity is
on or prior to the Redemption Date shall be payable to the Holders of such
Securities, or one or more Predecessor Securities, registered as such at the
close of business on the relevant Record Dates according to their terms and the
provisions of Section 307.
If any Bearer Security surrendered for redemption shall not be
accompanied by all appurtenant coupons maturing after the Redemption Date, such
Security may be paid after deducting from the Redemption Price an amount equal
to the face amount of all such missing coupons, or the surrender of such missing
coupon or coupons may be waived by the Trust and the Trustee if there be
furnished to them such security or indemnity as they may require to save each of
them and any Paying Agent harmless. If thereafter the Holder of such Security
shall surrender to the Trustee or any Paying Agent any such missing coupon in
respect of which a deduction shall have been made from the Redemption Price,
such Holder shall be entitled to receive the amount so deducted; provided,
however, that interest represented by coupons shall be payable only at an office
or agency located outside the United States (except as otherwise provided in
Section 1002) and, unless otherwise specified as contemplated by Section 301,
only upon presentation and surrender of those coupons.
If any Security called for redemption shall not be so paid upon
surrender thereof for redemption, the principal (and premium or Make-Whole
Amount, if any) shall, until paid, bear interest from the Redemption Date at the
rate borne by the Security.
SECTION 1107. Securities Redeemed in Part.
Any Security which is to be redeemed only in part (pursuant to the
provisions of this Article or of Article Twelve) shall be surrendered at a Place
of Payment therefor (with, if the Trust or the Trustee so requires, 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 his 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.
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ARTICLE TWELVE
SINKING FUNDS
SECTION 1201. Applicability of Article.
The provisions of this Article shall be applicable to any sinking fund
for the retirement of Securities of a series except as otherwise specified as
contemplated by Section 301 for Securities of such series.
The minimum amount of any sinking fund payment provided for by the
terms of Securities of any series is herein referred to as a "mandatory sinking
fund payment," and any payment in excess of such minimum amount provided for by
the terms of such Securities of any series is herein referred to as an "optional
sinking fund payment." If provided for by the terms of any Securities of any
series, the cash amount of any mandatory sinking fund payment may be subject to
reduction as provided in Section 1202. Each sinking fund payment shall be
applied to the redemption of Securities of any series as provided for by the
terms of Securities of such series.
SECTION 1202. Satisfaction of Sinking Fund Payments with Securities.
The Trust may, in satisfaction of all or any part of any mandatory
sinking fund with respect to the Securities of a series, (1) deliver Outstanding
Securities of such series (other than any previously called for redemption)
together in the case of any Bearer Securities of such series with all matured
coupons appertaining thereto and (2) apply as a credit Securities of such 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, as provided for
by the terms of such Securities, or which have otherwise been acquired by the
Trust; provided that such Securities so delivered or applied as a credit have
not been previously so credited. Such Securities shall be received and credited
for such purpose by the Trustee at the applicable Redemption Price specified in
such Securities for redemption through operation of the sinking fund and the
amount of such mandatory sinking fund payment shall be reduced accordingly.
SECTION 1203. Redemption of Securities for Sinking Fund.
Not less than 60 days prior to each sinking payment date for Securities
of any series, the Trust will deliver to the Trustee an Officers' Certificate
specifying the amount of the next ensuing mandatory sinking fund payment for
that series pursuant to the terms of that series, the portion thereof, if any,
which is to be satisfied by payment of cash in the currency or currencies,
currency unit or units or composite currency or currencies in which the
Securities of such series are payable (except as otherwise specified pursuant to
Section 301 for the Securities of such series) and the portion thereof, if any,
which is to be satisfied by delivering and crediting
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Securities of that series pursuant to Section 1202, and the optional amount, if
any, to be added in cash to the next ensuing mandatory sinking fund payment, and
will also deliver to the Trustee any Securities to be so delivered and credited.
If such Officers' Certificate shall specify an optional amount to be added in
cash to the next ensuing mandatory sinking fund payment, the Trust shall
thereupon be obligated to pay the amount therein specified. Not less than 30
days before each such sinking fund payment date the Trustee shall select the
Securities to be redeemed upon such sinking fund payment date in the manner
specified in Section 1103 and cause notice of the redemption thereof to be given
in the name of and at the expense of the Trust in the manner provided in Section
1104. Such notice having been duly given, the redemption of such Securities
shall be made upon the terms and in the manner stated in Sections 1106 and 1107.
ARTICLE THIRTEEN
REPAYMENT AT THE OPTION OF HOLDERS
SECTION 1301. Applicability of Article.
Repayment of Securities of any series before their Stated Maturity at
the option of Holders thereof shall be made in accordance with the terms of such
Securities, if any, and (except as otherwise specified by the terms of such
series established pursuant to Section 301) in accordance with this Article.
SECTION 1302. Repayment of Securities.
Securities of any series subject to repayment in whole or in part at
the option of the Holders thereof will, unless otherwise provided in the terms
of such Securities, be repaid at a price equal to the principal amount thereon,
together with interest, if any, thereof accrued to the Repayment Date specified
in or pursuant to the terms of such Securities. The Trust covenants that on or
before the Repayment Date it will 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 1003) an amount of money in the currency or
currencies, currency unit or units or composite currency or currencies in which
the Securities of such series are payable (except as otherwise specified
pursuant to Section 301 for the Securities of such series) sufficient to pay the
principal (or, if so provided by the terms of the Securities of any series, a
percentage of the principal) of, and (except if the Repayment Date shall be an
Interest Payment Date) accrued interest on, all the Securities or portions
thereof, as the case may be, to be repaid on such date.
SECTION 1303. Exercise of Option.
Securities of any series subject to repayment at the option of the
Holders thereof will contain an "Option to Elect Repayment" form on the reverse
of such Securities. In order for any Security to be repaid at the option of the
Holder, the Trustee must receive at the Place of Payment therefor specified in
the terms of such Security (or at such other place or places of
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which the Trust shall from time to time notify the Holders of such Securities)
not earlier than 60 days nor later than 30 days prior to the Repayment Date (1)
the Security so providing for such repayment together with the "Option to Elect
Repayment" form on the reverse thereof duly completed by the Holder (or by the
Holder's attorney duly authorized in writing) or (2) a telegram, telex,
facsimile transmission or a letter from a member of a national securities
exchange, or the National Association of Securities Dealers, Inc. ("NASD"), or a
commercial bank or trust company in the United States setting forth the name of
the Holder of the Security, the principal amount of the Security, the principal
amount of the Security to be repaid, the CUSIP number, if any, or a description
of the tenor and terms of the Security, a statement that the option to elect
repayment is being exercised thereby and a guarantee that the Security to be
repaid, together with the duly completed form entitled "Option to Elect
Repayment" on the reverse of the Security, will be received by the Trustee not
later than the fifth Business Day after the date of such telegram, telex,
facsimile transmission or letter; provided, however, that such telegram, telex,
facsimile transmission or letter shall only be effective if such Security and
form duly completed are received by the Trustee by such fifth Business Day. If
less than the entire principal amount of such Security is to be repaid in
accordance with the terms of such Security, the principal amount of such
Security to be repaid, in increments of the minimum denomination for Securities
of such series, and the denomination or denominations of the Security or
Securities to be issued to the Holder for the portion of the principal amount of
such Security surrendered that is not to be repaid, must be specified. The
principal amount of any Security providing for repayment at the option of the
Holder thereof may not be repaid in part if, following such repayment, the
unpaid principal amount of such Security would be less than the minimum
authorized denomination of Securities of or within the series of which such
Security to be repaid is a part. Except as otherwise may be provided by the
terms of any Security providing for repayment at the option of the Holder
thereof, exercise of the repayment option by the Holder shall be irrevocable
unless waived by the Trust.
SECTION 1304. When Securities Presented for Repayment Become Due and
Payable.
If Securities of any series providing for repayment at the option of
the Holders thereof shall have been surrendered as provided in this Article and
as provided by or pursuant to the terms of such Securities, such Securities or
the portions thereof, as the case may be, to be repaid shall become due and
payable and shall be paid by the Trust on the Repayment Date therein specified,
and on and after such Repayment Date (unless the Trust shall default in the
payment of such Securities on such Repayment Date) such Securities shall, if the
same were interest-bearing, cease to bear interest and the coupons for such
interest appertaining to any Bearer Securities so to be repaid, except to the
extent provided below, shall be void. Upon surrender of any such Security for
repayment in accordance with such provisions, together with all coupons, if any,
appertaining thereto maturing after the Repayment Date, the principal amount of
such security so to be repaid shall be paid by the Trust, together with accrued
interest, if any, to the Repayment Date; provided, however, that coupons whose
Stated Maturity is on or prior to the Repayment Date shall be payable only at an
office or agency located outside the United States (except as otherwise provided
in Section 1002) and, unless otherwise specified pursuant to Section 301, only
upon presentation and surrender of such coupons; and provided further that,
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in the case of Registered Securities, installments of interest, if any, whose
Stated Maturity is on or prior to the Repayment Date shall be payable (but
without interest thereon, unless the Trust shall default in the payment thereof)
to the Holders of such Securities, or one or more Predecessor Securities,
registered as such at the close of business on the relevant Record Dates
according to their terms and the provisions of Section 307.
If any Bearer Security surrendered for repayment shall not be
accompanied by all appurtenant coupons maturing after the Repayment Date, such
Security may be paid after deducting from the amount payable therefor as
provided in Section 1302 an amount equal to the face amount of all such missing
coupons, or the surrender of such missing coupon or coupons may be waived by the
Trust and the Trustee if there be furnished to them such security or indemnity
as they may require to save each of them and any Paying Agent harmless. If
thereafter the Holder of such Security shall surrender to the Trustee or any
Paying Agent any such missing coupon in respect of which a deduction shall have
been made as provided in the preceding sentence, such Holder shall be entitled
to receive the amount so deducted; provided, however, that interest represented
by coupons shall be payable only at an office or agency located outside the
United States (except as otherwise provided in Section 1002) and, unless
otherwise specified as contemplated by Section 301, only upon presentation and
surrender of those coupons.
If the principal amount of any Security surrendered for repayment shall
not be so repaid upon surrender thereof, such principal amount (together with
interest, if any, thereon accrued to such Repayment Date) shall, until paid,
bear interest from the Repayment Date at the rate of interest or Yield to
Maturity (in the case of Original Issue Discount Securities) set forth in such
Security.
SECTION 1305. Securities Repaid in Part.
Upon surrender of any Registered Security which is to be repaid in part
only, the Trust shall execute and the Trustee shall authenticate and deliver to
the Holder of such Security, without service charge and at the expense of the
Trust, a new Registered Security or Securities of the same series, of any
authorized denomination specified by the Holder, in an aggregate principal
amount equal to and in exchange for the portion of the principal of such
Security so surrendered which is not to be repaid.
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ARTICLE FOURTEEN
DEFEASANCE AND COVENANT DEFEASANCE
SECTION 1401. Applicability of Article; Trust's Option to Effect
Defeasance or Covenant Defeasance.
If, pursuant to Section 301, provision is made for either or both of
(a) defeasance of the Securities of or within a series under Section 1402 or (b)
covenant defeasance of the Securities of or within a series under Section 1403
to be applicable to the Securities of any series, then the provisions of such
Section or Sections, as the case may be, together with the other provisions of
this Article (with such modifications thereto as may be specified pursuant to
Section 301 with respect to any Securities), shall be applicable to such
Securities and any coupons appertaining thereto, and the Trust may at its option
by Board Resolution, at any time, with respect to such Securities and any
coupons appertaining thereto, elect to defease such Outstanding Securities and
any coupons appertaining thereto pursuant to Section 1402 (if applicable) or
Section 1403 (if applicable) upon compliance with the conditions set forth below
in this Article.
SECTION 1402 Defeasance and Discharge.
Upon the Trust's exercise of the above option applicable to this
Section with respect to any Securities of or within a series, the Trust shall be
deemed to have been discharged from its obligations with respect to such
Outstanding Securities and any coupons appertaining thereto on the date the
conditions set forth in Section 1404 are satisfied (hereinafter, "defeasance").
For this purpose, such defeasance means that the Trust shall be deemed to have
paid and discharged the entire indebtedness represented by such Outstanding
Securities and any coupons appertaining thereto, which shall thereafter be
deemed to be "Outstanding" only for the purposes of Section 1405 and the other
Sections of this Indenture referred to in clauses (A) and (B) below, and to have
satisfied all of its other obligations under such Securities and any coupons
appertaining thereto and this Indenture insofar as such Securities and any
coupons appertaining thereto are concerned (and the Trustee, at the expense of
the Trust, shall execute proper instruments acknowledging the same), except for
the following which shall survive until otherwise terminated or discharged
hereunder: (A) the rights of Holders of such Outstanding Securities and any
coupons appertaining thereto to receive, solely from the trust fund described in
Section 1404 and as more fully set forth in such Section, payments in respect of
the principal of (and premium or Make-Whole Amount, if any) and interest, if
any, on such Securities and any coupons appertaining thereto when such payments
are due, (B) the Trust's obligations with respect to such Securities under
Sections 305, 306, 1002 and 1003 and with respect to the payment of Additional
Amounts, if any, on such Securities as contemplated by Section 1011, (C) the
rights, powers, trusts, duties and immunities of the Trustee hereunder and (D)
this Article. Subject to compliance with this Article Fourteen, the Trust may
exercise its option under this Section notwithstanding the prior exercise of its
option under Section 1403 with respect to such Securities and any coupons
appertaining thereto.
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SECTION 1403. Covenant Defeasance.
Upon the Trust's exercise of the above option applicable to this
Section with respect to any Securities of or within a series, the Trust shall be
released from its obligations under Sections 1004 to 1009, inclusive, and, if
specified pursuant to Section 301, its obligations under any other covenant,
with respect to such Outstanding Securities and any coupons appertaining thereto
on and after the date the conditions set forth in Section 1404 are satisfied
(hereinafter, "covenant defeasance"), and such Securities and any coupons
appertaining thereto shall thereafter be deemed to be not "Outstanding" for the
purposes of any direction, waiver, consent or declaration or Act of Holders (and
the consequences of any thereof) in connection with Sections 1004 to 1009,
inclusive, or such other covenant, but shall continue to be deemed "Outstanding"
for all other purposes hereunder. For this purpose, such covenant defeasance
means that, with respect to such Outstanding Securities and any coupons
appertaining thereto, the Trust may omit to comply with and shall have no
liability in respect of any term, condition or limitation set forth in any such
Section or such other covenant, whether directly or indirectly, by reason of any
reference elsewhere herein to any such Section or such other covenant or by
reason of reference in any such Section or such other covenant to any other
provision herein or in any other document and such omission to comply shall not
constitute a default or an Event of Default under Section 501(4) or 501(9) or
otherwise, as the case may be, but, except as specified above, the remainder of
this Indenture and such Securities and any coupons appertaining thereto shall be
unaffected thereby.
SECTION 1404. Conditions to Defeasance or Covenant Defeasance.
The following shall be the conditions to application of Section 1402 or
Section 1403 to any Outstanding Securities of or within a series and any coupons
appertaining thereto:
(a) The Trust shall irrevocably have deposited or caused to be
deposited with the Trustee (or another trustee satisfying the
requirements of Section 607 who shall agree to comply with the
provisions of this Article Fourteen applicable to it) as trust funds in
trust for the purpose of making the following payments, specifically
pledged as security for, and dedicated solely to, the benefit of the
Holders of such Securities and any coupons appertaining thereto, (1) an
amount in such currency, currencies or currency unit in which such
Securities and any coupons appertaining thereto are then specified as
payable at Stated Maturity, or (2) Government Obligations applicable to
such Securities and coupons appertaining thereto (determined on the
basis of the currency, currencies or currency unit in which such
Securities and coupons appertaining thereto are then specified as
payable at Stated Maturity) which through the scheduled payment of
principal and interest in respect thereof in accordance with their
terms will provide, not later than one day before the due date of any
payment of principal of (and premium or Make- Whole Amount, if any) and
interest, if any, on such Securities and any coupons appertaining
thereto, money in an amount, or (3) a combination thereof in an amount,
sufficient, without consideration of any reinvestment of such principal
and interest, in the opinion of a nationally recognized firm of
independent public accountants expressed in a written certification
thereof delivered to the Trustee, to pay and discharge, and which shall
be applied by the Trustee (or other qualifying trustee) to pay and
discharge, (i) the
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principal of (and premium or Make-Whole Amount, if any) and interest,
if any, on such Outstanding Securities and any coupons appertaining
thereto on the Stated Maturity of such principal or installment of
principal or interest and (ii) any mandatory sinking fund payments or
analogous payments applicable to such Outstanding Securities and any
coupons appertaining thereto on the day on which such payments are due
and payable in accordance with the terms of this Indenture and of such
Securities and any coupons appertaining thereto; provided, that the
Trustee shall have been irrevocably instructed to apply such money or
the proceeds of such Government Obligations to said payments with
respect to such Securities. Before such a deposit, the Trust may give
to the Trustee, in accordance with Section 1102 hereof, a notice of its
election to redeem all or any portion of such Outstanding Securities at
a future date in accordance with the terms of the Securities of such
series and Article Eleven hereof, which notice shall be irrevocable.
Such irrevocable redemption notice, if given, shall be given effect in
applying the foregoing.
(b) Such defeasance or covenant defeasance shall not result in
a breach or violation of, or constitute a default under, this Indenture
or any other material agreement or instrument to which the Trust is a
party or by which it is bound (and shall not cause the Trustee to have
a conflicting interest pursuant to Section 310(b) of the TIA with
respect to any Security of the Trust).
(c) No Event of Default or event which with notice or lapse of
time or both would become an Event of Default with respect to such
Securities and any coupons appertaining thereto shall have occurred and
be continuing on the date of such deposit or, insofar as Sections
501(7) and 501(8) are concerned, at any time during the period ending
on the 91st day after the date of such deposit (it being understood
that this condition shall not be deemed satisfied until the expiration
of such period).
(d) In the case of an election under Section 1402, the Trust
shall have delivered to the Trustee an Opinion of Counsel stating that
(i) the Trust has received from, or there has been published by, the
Internal Revenue Service a ruling, or (ii) since the date of execution
of this Indenture, there has been a change in the applicable Federal
income tax law, in either case to the effect that, and based thereon
such opinion shall confirm that, the Holders of such Outstanding
Securities and any coupons appertaining thereto will not recognize
income, gain or loss for Federal income tax purposes as a result of
such defeasance and will be subject to Federal income tax on the same
amounts, in the same manner and at the same times as would have been
the case if such defeasance had not occurred.
(e) In the case of an election under Section 1403, the Trust
shall have delivered to the Trustee an Opinion of Counsel to the effect
that the Holders of such Outstanding Securities and any coupons
appertaining thereto will not recognize income, gain or loss for
Federal income tax purposes as a result of such covenant defeasance and
will be subject to Federal income tax on the same amounts, in the same
manner and at the same times as would have been the case if such
covenant defeasance had not occurred.
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(f) The Trust shall have delivered to the Trustee an Officers'
Certificate and an Opinion of Counsel, each stating that all conditions
precedent to the defeasance under Section 1402 or the covenant
defeasance under Section 1403 (as the case may be) have been complied
with and an Opinion of Counsel to the effect that either (i) as a
result of a deposit pursuant to subsection (a) above and the related
exercise of the Trust's option under Section 1402 or Section 1403 (as
the case may be) registration is not required under the Investment
Company Act of 1940, as amended, by the Trust, with respect to the
trust funds representing such deposit or by the Trustee for such trust
funds or (ii) all necessary registrations under said Act have been
effected.
(g) After the 91st day following the deposit, the trust funds
will not be subject to the effect of any applicable bankruptcy,
insolvency, reorganization or similar laws affecting creditors' rights
generally.
(h) Notwithstanding any other provisions of this Section, such
defeasance or covenant defeasance shall be effected in compliance with
any additional or substitute terms, conditions or limitations which may
be imposed on the Trust in connection therewith pursuant to Section
301.
SECTION 1405. Deposited Money and Government Obligations to Be Held in
Trust; Other Miscellaneous Provisions.
Subject to the provisions of the last paragraph of Section 1003, all
money and Government Obligations (or other property as may be provided pursuant
to Section 301) (including the proceeds thereof) deposited with the Trustee (or
other qualifying trustee, collectively for purposes of this Section 1405, the
"Trustee") pursuant to Section 1404 in respect of any Outstanding Securities of
any series and any coupons appertaining thereto shall be held in trust and
applied by the Trustee, in accordance with the provisions of such Securities and
any coupons appertaining thereto and this Indenture, to the payment, either
directly or through any Paying Agent (including the Trust acting as its own
Paying Agent) as the Trustee may determine, to the Holders of such Securities
and any coupons appertaining thereto of all sums due and to become due thereon
in respect of principal (and premium or Make-Whole Amount, if any) and interest
and Additional Amounts, if any, but such money need not be segregated from other
funds except to the extent required by law.
Unless otherwise specified with respect to any Security pursuant to
Section 301, if, after a deposit referred to in Section 1404(a) has been made,
(a) the Holder of a Security in respect of which such deposit was made is
entitled to, and does, elect pursuant to Section 301 or the terms of such
Security to receive payment in a currency or currency unit other than that in
which the deposit pursuant to Section 1404(a) has been made in respect of such
Security, or (b) a Conversion Event occurs in respect of the currency or
currency unit in which the deposit pursuant to Section 1404(a) has been made,
the indebtedness represented by such Security and any coupons appertaining
thereto shall be deemed to have been, and will be, fully discharged and
satisfied through the payment of the principal of (and premium or Make-Whole
Amount, if any), and interest, if any, on such Security as the same becomes due
out of the proceeds yielded by converting (from time to time as specified below
in the case of any such election) the
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amount or other property deposited in respect of such Security into the currency
or currency unit in which such Security becomes payable as a result of such
election or Conversion Event based on the applicable market exchange rate for
such currency or currency unit in effect on the second Business Day prior to
each payment date, except, with respect to a Conversion Event, for such currency
or currency unit in effect (as nearly as feasible) at the time of the Conversion
Event.
The Trust shall pay and indemnify the Trustee against any tax, fee or
other charge imposed on or assessed against the Government Obligations deposited
pursuant to Section 1404 or the principal and interest received in respect
thereof other than any such tax, fee or other charge which by law is for the
account of the Holders of such Outstanding Securities and any coupons
appertaining thereto.
Anything in this Article to the contrary notwithstanding, the Trustee
shall deliver or pay to the Trust from time to time upon Trust Request any money
or Government Obligations (or other property and any proceeds therefrom) held by
it as provided in Section 1404 which, in the opinion of a nationally recognized
firm of independent public accountants expressed in a written certification
thereof delivered to the Trustee, are in excess of the amount thereof which
would then be required to be deposited to effect a defeasance or covenant
defeasance, as applicable, in accordance with this Article.
ARTICLE FIFTEEN
MEETINGS OF HOLDERS OF SECURITIES
SECTION 1501. Purposes for Which Meetings May Be Called.
A meeting of Holders of Securities of any series may be called at any
time and from time to time pursuant to this Article to make, give or take any
request, demand, authorization, direction, notice, consent, waiver or other
action provided by this Indenture to be made, given or taken by Holders of
Securities of such series.
SECTION 1502. Call, Notice and Place of Meetings.
(a) The Trustee may at any time call a meeting of Holders of
Securities of any series for any purpose specified in Section 1501, to
be held at such time and at such place in the Borough of Manhattan, The
City of New York, or in London as the Trustee shall determine. Notice
of every meeting of Holders of Securities of any series, setting forth
the time and the place of such meeting and in general terms the action
proposed to be taken at such meeting, shall be given, in the manner
provided in Section 106, not less than 21 nor more than 180 days prior
to the date fixed for the meeting.
(b) In case at any time the Trust, pursuant to a Board
Resolution, or the Holders of at least 10% in principal amount of the
Outstanding Securities of any series shall have requested the Trustee
to call a meeting of the Holders of Securities of such series for any
purpose specified in Section 1501, by written request setting forth in
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reasonable detail the action proposed to be taken at the meeting, and
the Trustee shall not have made the first publication of the notice of
such meeting within 21 days after receipt of such request or shall not
thereafter proceed to cause the meeting to be held as provided herein,
then the Trust or the Holders of Securities of such series in the
amount above specified, as the case may be, may determine the time and
the place in the Borough of Manhattan, The City of New York, or in
London for such meeting and may call such meeting for such purposes by
giving notice thereof as provided in subsection (a) of this Section.
SECTION 1503. Persons Entitled to Vote at Meetings.
To be entitled to vote at any meeting of Holders of Securities of any
series, a Person shall be (1) a Holder of one or more Outstanding Securities of
such series, or (2) a Person appointed by an instrument in writing as proxy for
a Holder or Holders of one or more Outstanding Securities of such series by such
Holder or Holders. The only Persons who shall be entitled to be present or to
speak at any meeting of Holders of Securities of any series shall be the Persons
entitled to vote at such meeting and their counsel, any representatives of the
Trustee and its counsel and any representatives of the Trust and its counsel.
SECTION 1504. Quorum; Action.
The Persons entitled to vote a majority in principal amount of the
Outstanding Securities of a series shall constitute a quorum for a meeting of
Holders of Securities of such series; provided, however, that if any action is
to be taken at such meeting with respect to a consent or waiver which this
Indenture expressly provides may be given by the Holders of not less than a
specified percentage in principal amount of the Outstanding Securities of a
series, the Persons entitled to vote such specified percentage in principal
amount of the Outstanding Securities of such series shall constitute a quorum.
In the absence of a quorum within 30 minutes after the time appointed for any
such meeting, the meeting shall, if convened at the request of Holders of
Securities of such series, be dissolved. In any other case the meeting may be
adjourned for a period of not less than 10 days as determined by the chairman of
the meeting prior to the adjournment of such meeting. In the absence of a quorum
at any such adjourned meeting, such adjourned meeting may be further adjourned
for a period of not less than 10 days as determined by the chairman of the
meeting prior to the adjournment of such adjourned meeting. Notice of the
reconvening of any adjourned meeting shall be given as provided in Section
1502(a), except that such notice need be given only once not less than five days
prior to the date on which the meeting is scheduled to be reconvened. Notice of
the reconvening of any adjourned meeting shall state expressly the percentage,
as provided above, of the principal amount of the Outstanding Securities of such
series which shall constitute a quorum.
Except as limited by the proviso to Section 902, any resolution
presented to a meeting or adjourned meeting duly reconvened at which a quorum is
present as aforesaid may be adopted by the affirmative vote of the Holders of a
majority in principal amount of the Outstanding Securities of that series;
provided, however, that, except as limited by the proviso to Section 902, any
resolution with respect to any request, demand, authorization, direction,
notice, consent, waiver or other action which this Indenture expressly provides
may be made, given or
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taken by the Holders of a specified percentage, which is less than a majority,
in principal amount of the Outstanding Securities of a series may be adopted at
a meeting or an adjourned meeting duly reconvened and at which a quorum is
present as aforesaid by the affirmative vote of the Holders of such specified
percentage in principal amount of the Outstanding Securities of that series.
Any resolution passed or decision taken at any meeting of Holders of
Securities of any series duly held in accordance with this Section shall be
binding on all the Holders of Securities of such series and the related coupons,
whether or not present or represented at the meeting.
Notwithstanding the foregoing provisions of this Section 1504, if any
action is to be taken at a meeting of Holders of Securities of any series with
respect to any request, demand, authorization, direction, notice, consent,
waiver or other action that this Indenture expressly provides may be made, given
or taken by the Holders of a specified percentage in principal amount of all
Outstanding Securities affected thereby, or of the Holders of such series and
one or more additional series;
(i) there shall be no minimum quorum requirement for such
meeting; and
(ii) the principal amount of the Outstanding Securities of
such series that vote in favor of such request, demand, authorization,
direction, notice, consent, waiver or other action shall be taken into
account in determining whether such request, demand, authorization,
direction, notice, consent, waiver or other action has been made, given
or taken under this Indenture.
SECTION 1505. Determination of Voting Rights; Conduct and Adjournment
of Meetings.
(a) Notwithstanding any provisions of this Indenture, the
Trustee may make such reasonable regulations as it may deem advisable
for any meeting of Holders of Securities of a series in regard to proof
of the holding of Securities of such series and of the appointment of
proxies and in regard to the appointment and duties of inspectors of
votes, the submission and examination of proxies, certificates and
other evidence of the right to vote, and such other matters concerning
the conduct of the meeting as it shall deem appropriate. Except as
otherwise permitted or required by any such regulations, the holding of
Securities shall be proved in the manner specified in Section 104 and
the appointment of any proxy shall be proved in the manner specified in
Section 104 or by having the signature of the Person executing the
proxy witnessed or guaranteed by any trust company, bank or banker
authorized by Section 104 to certify to the holding of Bearer
Securities. Such regulations may provide that written instruments
appointing proxies, regular on their face, may be presumed valid and
genuine without the proof specified in Section 104 or other proof.
(b) The Trustee shall, by an instrument in writing, appoint a
temporary chairman of the meeting, unless the meeting shall have been
called by the Trust or by Holders of Securities as provided in Section
1502(b), in which case the Trust or the Holders of Securities of or
within the series calling the meeting, as the case may be, shall
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in like manner appoint a temporary chairman. A permanent chairman and a
permanent secretary of the meeting shall be elected by vote of the
Persons entitled to vote a majority in principal amount of the
Outstanding Securities of such series represented at the meeting.
(c) At any meeting each Holder of a Security of such series or
proxy shall be entitled to one vote for each $1,000 principal amount of
the Outstanding Securities of such series held or represented by him;
provided, however, that no vote shall be cast or counted at any meeting
in respect of any Security challenged as not Outstanding and ruled by
the chairman of the meeting to be not Outstanding. The chairman of the
meeting shall have no right to vote, except as a Holder of a Security
of such series or proxy.
(d) Any meeting of Holders of Securities of any series duly
called pursuant to Section 1502 at which a quorum is present may be
adjourned from time to time by Persons entitled to vote a majority in
principal amount of the Outstanding Securities of such series
represented at the meeting, and the meeting may be held as so adjourned
without further notice.
SECTION 1506. Counting Votes and Recording Action of Meetings.
The vote upon any resolution submitted to any meeting of Holders of
Securities of any series shall be by written ballots on which shall be
subscribed the signatures of the Holders of Securities of such series or of
their representatives by proxy and the principal amounts and serial numbers of
the Outstanding Securities of such series held or represented by them. The
permanent chairman of the meeting shall appoint two inspectors of votes who
shall count all votes cast at the meeting for or against any resolution and who
shall make and file with the secretary of the meeting their verified written
reports in duplicate of all votes cast at the meeting. A record, at least in
duplicate, of the proceedings of each meeting of Holders of Securities of any
series shall be prepared by the secretary of the meeting and there shall be
attached to said record the original reports of the inspectors of votes on any
vote by ballot taken thereat and affidavits by one or more persons having
knowledge of the fact, setting forth a copy of the notice of the meeting and
showing that said notice was given as provided in Section 1502 and, if
applicable, Section 1504. Each copy shall be signed and verified by the
affidavits of the permanent chairman and secretary of the meeting and one such
copy shall be delivered to the Trust and another to the Trustee to be preserved
by the Trustee, the latter to have attached thereto the ballots voted at the
meeting. Any record so signed and verified shall be conclusive evidence of the
matters therein stated.
SECTION 1507. Evidence of Action Taken by Holders.
Any request, demand, authorization, direction, notice, consent, waiver
or other action provided by this Indenture to be given or taken by a specified
percentage in principal amount of the Holders of any or all series may be
embodied in and evidenced by one or more instruments of substantially similar
tenor signed by such specified percentage of Holders in
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person or by agent duly appointed in writing; and, except as herein otherwise
expressly provided, such action shall become effective when such instrument or
instruments are delivered to the Trustee. Proof of execution of any instrument
or of a writing appointing any such agent shall be sufficient for any purpose of
this Indenture and (subject to Article Six) conclusive in favor of the Trustee
and the Trust, if made in the manner provided in this Article.
SECTION 1508. Proof of Execution of Instruments.
Subject to Article Six, the execution of any instrument by a Holder or
his agent or proxy may be proved in accordance with such reasonable rules and
regulations as may be prescribed by the Trustee or in such manner as shall be
satisfactory to the Trustee
* * * * *
This Indenture may be executed in any number of counterparts, each of
which so executed shall be deemed to be an original, but all such counterparts
shall together constitute but one and the same Indenture.
IN WITNESS WHEREOF, the parties hereto have caused this Indenture to be
duly executed by their respective officers hereunto duly authorized, all as of
the day and year first above written.
UNITED DOMINION REALTY TRUST, INC.
By: /s/ James Dolphin
Name: James Dolphin
Title: Senior Vice President
FIRST UNION NATIONAL BANK OF VIRGINIA,
as Trustee
By: /s/ H. H. Hall, Jr.
Name: H. H. Hall, Jr.
Title: Assistant Vice President
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STATE OF VIRGINIA
CITY OF RICHMOND
The foregoing instrument was acknowledged before me in the City of
Richmond, State of Virginia, by James Dolphin, Senior Vice President of United
Dominion Realty Trust, Inc. a corporation, on behalf of the corporation.
My commission expires 9-30-98.
/s/ Ann Mink
Notary Public
STATE OF VIRGINIA
CITY OF RICHMOND
The foregoing instrument was acknowledged before me in the City of
Richmond, State of Virginia, by H. H. Hall, Jr., Assistant Vice President of
First Union National Bank of Virginia, a national banking association, on behalf
of the association.
My commission expires June 30, 1997.
/s/ Nancy M. Tucker
Notary Public
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EXHIBIT A
FORMS OF CERTIFICATION
EXHIBIT A-1
FORM OF CERTIFICATE TO BE GIVEN BY PERSON ENTITLED
TO RECEIVE BEARER SECURITY OR TO OBTAIN INTEREST
PAYABLE PRIOR TO THE EXCHANGE DATE
CERTIFICATE
[Insert title or sufficient description of Securities to be delivered]
This is to certify that, as of the date hereof, and except as set forth
below, the above-captioned Securities held by you for our account (i) are owned
by person(s) that are not citizens or residents of the United States, domestic
partnerships, domestic corporations or any estate or trust the income of which
is subject to United States federal income taxation regardless of its source
("United States person(s)"), (ii) are owned by United States person(s) that are
(a) foreign branches of United States financial institutions (financial
institutions, as defined in United States Treasury Regulations Section
1.165-12(c)(1)(v) are herein referred to as "financial institutions") purchasing
for their own account or for resale, or (b) United States person(s) who acquired
the Securities through foreign branches of United States financial institutions
and who hold the Securities through such United States financial institutions on
the date hereof (and in either case (a) or (b), each such United States
financial institution hereby agrees, on its own behalf or through its agent,
that you may advise United Dominion Realty Trust, Inc., or its agent that such
financial institution will provide a certificate within a reasonable time
stating that it agrees to comply with the requirements of Section 165(j)(3)(A),
(B) or (C) of the United States Internal Revenue Code of 1986, as amended, and
the regulations thereunder), or (iii) are owned by a financial institution for
purposes of resale during the restricted period (as defined in United States
Treasury Regulations Section 1.163-5(c)(2)(i)(D)(7)), and, such financial
institution described in clause (iii) above (whether or not also described in
clause (i) or (ii)), certifies that it has not acquired the Securities for
purposes of resale directly or indirectly to a United States person or to a
person within the United States or its possessions.
As used herein, "United States" means the United States of America
(including the States and the District of Columbia); and its "possessions"
include Puerto Rico, the U.S. Virgin Islands, Guam, American Samoa, Wake Island
and the Northern Mariana Islands.
We undertake to advise you promptly by tested telex on or prior to the
date on which you intend to submit your certification relating to the
above-captioned Securities held by you for our account in accordance with your
Operating Procedures if any applicable statement herein is not
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correct on such date, and in the absence of any such notification it may be
assumed that this certification applies as of such date.
This certificate excepts and does not related to [U.S.$] of
such interest in the above-captioned Securities in respect of which we are not
able to certify and as to which we understand an exchange for an interest in a
Permanent Global Security or an exchange for and delivery of definitive
Securities (or, if relevant, collection of any interest) cannot be made until we
do so certify.
We understand that this certificate may be required in connection with
certain tax legislation in the United States. If administrative or legal
proceedings are commenced or threatened in connection with which this
certificate is or would be relevant, we irrevocably authorize you to produce
this certificate or a copy thereof to any interested party in such proceedings.
Dated: , 19
[To be dated no earlier than the 15th day prior
to the earlier of (i) the Exchange Date or
(ii) the relevant Interest Payment Date occurring
prior to the Exchange Date, as applicable]
[Name of Person Making
Certification]
---------------------------
(Authorized Signator)
Name:
Title:
A-2
<PAGE>
EXHIBIT A-2
FORM OF CERTIFICATE TO BE GIVEN BY EUROCLEAR
AND CEDEL S.A. IN CONNECTION WITH THE EXCHANGE OF
A PORTION OF A TEMPORARY GLOBAL SECURITY OR TO
OBTAIN INTEREST PAYABLE PRIOR TO THE EXCHANGE DATE
CERTIFICATE
[Insert title or sufficient description of Securities to be delivered]
This is to certify that, based solely on written certifications that we
have received in writing, by tested telex or by electronic transmission from
each of the persons appearing in our records as persons entitled to a portion of
the principal amount set forth below (our "Member Organizations") substantially
in the form attached hereto, as of the date hereof, [U.S.$]
principal amount of the above-captioned Securities (i) is owned by person(s)
that are not citizens or residents of the United States, domestic partnerships,
domestic corporations or any estate or trust the income of which is subject to
United States Federal income taxation regardless of its source ("United States
person(s)"), (ii) is owned by United States person(s) that are (a) foreign
branches of United States financial institutions (financial institutions, as
defined in United States Treasury Regulations Section 1.165-12(c)(1)(v) are
herein referred to as "financial institutions") purchasing for their own account
or for resale, or (b) United States person(s) who acquired the Securities
through foreign branches of United States financial institutions and who hold
the Securities through such United States financial institutions on the date
hereof (and in either case (a) or (b), each such financial institution has
agreed, on its own behalf or through its agent, that we may advise United
Dominion Realty Trust, Inc., or its agent that such financial institution will
provide a certificate within a reasonable time stating that it agrees to comply
with the requirements of Section 165(j)(3)(A), (B), or (C) of the Internal
Revenue Code of 1986, as amended, and the regulations thereunder), or (iii) is
owned by a financial institution for purposes of resale during the restricted
period (as defined in United States Treasury Regulations Section
1.163-5(c)(2)(i)(D)(7)), and that such financial institutions described in
clause (iii) above (whether or not also described in clause (i) or (ii)) have
certified that they have not acquired the Securities for purposes of resale
directly or indirectly to a United States person or to a person within the
United States or its possessions.
As used herein, "United States" means the United States of America
(including the States and the District of Columbia); and its "possessions"
include Puerto Rico, the U.S. Virgin Islands, Guam, American Samoa, Wake Island
and the Northern Mariana Islands.
We further certify that (i) we are not making available herewith for
exchange (or, if relevant, collection of any interest) any portion of the
temporary global Security representing the above-captioned Securities excepted
in the above-referenced certificates of Member Organizations and (ii) as of the
date hereof we have not received any notification from any of our Member
Organizations to the effect that the statements made by such Member
Organizations
A-3
<PAGE>
with respect to any portion of the part submitted herewith for exchange (or, if
relevant, collection of any interest) are no longer true and cannot be relied
upon as of the date hereof.
We understand that this certification is required in connection with
certain tax legislation in the United States. If administrative or legal
proceedings are commenced or threatened in connection with which this
certificate is or would be relevant, we irrevocably authorize you to produce
this certificate or a copy thereof to any interested party in such proceedings.
Dated: , 19
[To be dated no earlier than the earlier of
the Exchange Date or the relevant Interest
Payment Date occurring prior to the Exchange
Date, as applicable]
[Morgan Guaranty Trust
Company of New York,
Brussels Office,] as
Operator of the
Euroclear System
[Cedel S.A.]
By: _______________________
A-4
EXHIBIT 4(ii)(h)(2)
RESOLUTIONS OF THE MTN PRICING COMMITTEE
OF THE BOARD OF DIRECTORS OF
UNITED DOMINION REALTY TRUST, INC.
ADOPTED BY UNANIMOUS WRITTEN CONSENT
The undersigned members of the MTN Pricing Committee established by the
resolutions adopted May 29, 1996 (the "Resolutions") of the Board of Directors
of United Dominion Realty Trust, Inc., by and in accordance with the authority
granted to the MTN Pricing Committee in such resolutions, do hereby adopt, by
unanimous written consent, the following resolutions, terms used therein being
defined in the Resolutions and in resolutions of the MTN Pricing Committee
adopted July 8, 1996:
RESOLVED, that the terms and conditions of the initial issue of $125,000,000 of
Medium-Term Notes set forth in Exhibit A are approved.
RESOLVED, that the Pricing Supplement to be used by the Agents in connection
with such issue of Medium-Term Notes and the filing thereof with the Commission
are ratified, directed and approved.
RESOLVED, that such issue of Medium-Term Notes shall be sold in accordance with
the terms and conditions of sale set forth in the Pricing Supplement.
RESOLVED, that each of the President and Senior Vice President-Finance of the
Company is authorized and directed to instruct the Trustee to complete,
authenticate and deliver the MediumTerm Notes constituting 1996 Issue A against
receipt of payment therefor, all in accordance with the Procedures.
s/ John P. McCann
John P. McCann
Date: July 9, 1996
s/ James Dolphin
James Dolphin
Date: July 9, 1996
<PAGE>
EXHIBIT A - TERMS OF INITIAL ISSUE OF MEDIUM-TERM NOTES
In accordance with Section 301 of the Indenture, the following terms of the
initial issue of Medium Term-Notes ("1996 Issue A") are hereby established
(terms used herein having the same definitions as in the Indenture or in the
forms of the Medium-Term Notes approved in resolutions of the MTN Pricing
Committee adopted July 8, 1996, which latter definitions, in the case of any
inconsistency with Indenture definitions, shall control):
(1) [Intentionally omitted.]
(2) The aggregate principal amount of the Medium-Term Notes
constituting 1996 Issue A that may be authenticated and delivered under
the Indenture (except for such Medium-Term Notes authenticated and
delivered upon registration of transfer of, or in exchange for, or in
lieu of, other such Medium-Term Notes pursuant to Sections 304, 305,
306, 906, 1107 or 1305 of the Indenture) shall be $125,000,000.
(3) The entire outstanding principal of 1996 Issue A shall be
payable on July 12, 2006.
(4) The rate at which 1996 Issue A shall bear interest shall
be 7.95% per annum; the date from which such interest shall accrue
shall be July 12, 1996; the Interest Payment Dates on which such
interest will be payable shall be June 1 and December 1 in each year,
beginning December 1, 1996; and the Regular Record Date for the
interest payable on 1996 Issue A on any Interest Payment Date shall be
the fifteenth calendar day (whether or not a Business Day) next
preceding such Interest Payment Date.
(5) The place in addition to the Borough of Manhattan, The
City of New York, where the principal of and interest on 1996 Issue A
shall be payable shall be the Corporate Trust Operations Office of the
Trustee. The place in addition to the Borough of Manhattan, The City of
New York, where the Medium-Term Notes constituting a part of 1996 Issue
A may be surrendered for registration of transfer or exchange shall be
the Corporate Trust Office of the Trustee. The place in addition to the
Borough of Manhattan, The City of New York, where notices or demands to
or upon the Trust in respect of 1996 Issue A and the Indenture may be
served shall be the Corporate Trust Office of the Trustee.
(6) - (11), inclusive [Intentionally omitted.]
(12) The amount of payments of principal of (and premium or
Make-Whole Amount, if any) and interest on 1996 Issue A shall not be
determined with reference to an index, formula or other method.
(13) Neither the Trust nor any Holder of Medium-Term Notes
constituting 1996 Issue A shall have any right to elect to have
payments on 1996 Issue A made in any currency other than that in which
1996 Issue A is denominated.
<PAGE>
(14) The Holders of 1996 Issue A shall have no special rights
in addition to those provided in the Indenture upon the occurrence of
any particular events.
(15) [Intentionally omitted.]
(16) 1996 Issue A shall be issuable only as Registered
Securities in permanent global form (without coupons). Beneficial
owners of interests in the permanent global Medium-Term Note
representing 1996 Issue A may exchange such interests for Medium- Term
Notes of like tenor of any authorized form and denomination only in the
manner provided in Section 305 of the Indenture. DTC shall be the
depositary with respect to such permanent global Medium-Term Note. The
form of such permanent global Medium-Term Note filed with these
resolutions as Exhibit B is hereby approved.
(17) - (21) [Intentionally omitted.]
(22) The Trust shall not pay Additional Amounts as
contemplated by Section 1011 of the Indenture on 1996 Issue A.
(23) [Intentionally omitted.]
EXHIBIT 4(ii)(h)(3)
[FACE OF NOTE]
UNLESS THIS NOTE IS PRESENTED BY AN AUTHORIZED REPRESENTATIVE OF THE DEPOSITORY
TRUST COMPANY (THE "DEPOSITARY") (55 WATER STREET, NEW YORK, NEW YORK) TO THE
ISSUER HEREOF OR ITS AGENT FOR REGISTRATION OF TRANSFER, EXCHANGE OR PAYMENT,
AND ANY NOTE ISSUED IS REGISTERED IN THE NAME OF CEDE & CO. OR SUCH OTHER NAME
AS REQUESTED BY AN AUTHORIZED REPRESENTATIVE OF THE DEPOSITARY AND ANY PAYMENT
IS MADE TO CEDE & CO., 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.(1)
UNLESS AND UNTIL IT IS EXCHANGED IN WHOLE OR IN PART FOR NOTES IN CERTIFICATED
FORM, THIS NOTE MAY NOT BE TRANSFERRED EXCEPT AS A WHOLE BY THE DEPOSITARY TO A
NOMINEE OF THE DEPOSITARY OR BY A NOMINEE OF THE DEPOSITARY TO THE DEPOSITARY OR
ANOTHER NOMINEE OF THE DEPOSITARY OR BY THE DEPOSITARY OR ANY SUCH NOMINEE TO A
SUCCESSOR DEPOSITARY OR A NOMINEE OF SUCH SUCCESSOR DEPOSITARY.(2)
REGISTERED CUSIP No.: PRINCIPAL AMOUNT:
No. FXR- 91019P AAO
United Dominion Realty Trust, Inc.
MEDIUM-TERM NOTE
(Fixed Rate)
<TABLE>
<S> <C>
ORIGINAL ISSUE DATE: INTEREST RATE: % STATED MATURITY DATE:
July 12, 1996 7.95% July 12, 2006
INTEREST PAYMENT DATE(S) DEFAULT RATE: %
[X] June 1 and December 1 N/A
[ ] Other:
INITIAL REDEMPTION INITIAL REDEMPTION ANNUAL REDEMPTION
DATE: PERCENTAGE: % PERCENTAGE
N/A N/A REDUCTION: %
N/A
OPTIONAL REPAYMENT [ ] CHECK IF AN ORIGINAL
DATE(S): ISSUE DISCOUNT NOTE
N/A Issue Price: %
SPECIFIED CURRENCY: AUTHORIZED DENOMINATION: EXCHANGE RATE
[X] United States dollars [X] $1,000 and integral AGENT:
[ ] Other: multiples thereof N/A
[ ] Other:
ADDENDUM ATTACHED OTHER/ADDITIONAL PROVISIONS:
[ ] Yes
[ ] No
</TABLE>
- --------
1 This paragraph applies to global Notes only.
2 This paragraph applies to global Notes only.
<PAGE>
United Dominion Realty Trust, Inc., a Virginia Corporation (the
"Company", which terms include any successor corporation under the Indenture
hereinafter referred to), for value received, hereby promises to pay to ,
or registered assigns, the principal sum of , on the Stated Maturity
Date specified above (or any Redemption Date or Repayment Date, each as defined
on the reverse hereof) (each such Stated Maturity Date, Redemption Date or
Repayment Date being hereinafter referred to as the "Maturity Date" with respect
to the principal repayable on such date) and to pay interest thereon, at the
Interest Rate per annum specified above, until the principal hereof is paid or
duly made available for payment, and (to the extent that the payment of such
interest shall be legally enforceable) at the Default Rate per annum specified
above on any overdue principal, premium and/or interest. The Company will pay
interest in arrears on each Interest Payment Date, if any, specified above
(each, an "Interest Payment Date"), commencing with the first Interest Payment
Date next succeeding the Original Issue Date specified above, and on the
Maturity Date; provided, however, that if the Original Issue Date occurs between
a Record Date (as defined below) and the next succeeding Interest Payment Date,
interest payments will commence on the second Interest Payment Date next
succeeding the Original Issue Date to the holder of this Note on the Record Date
with respect to such second Interest Payment Date. Interest on this Note will be
computed on the basis of a 360-day year of twelve 30-day months.
Interest on this Note will accrue from, and including, the immediately
preceding Interest Payment Date to which interest has been paid or duly provided
for (or from, and including, the Original Issue Date if no interest has been
paid or duly provided for) to, but excluding, the applicable Interest Payment
Date or the Maturity Date, as the case may be (each, an "Interest Period"). The
interest so payable, and punctually paid or duly provided for, on any Interest
Payment Date will, subject to certain exceptions described herein, be paid to
the person in whose name this Note (or one or more predecessor Notes) is
registered at the close of business on the fifteenth calendar day (whether or
not a Business Day, as defined below) immediately preceding such Interest
Payment Date (the "Record Date"); provided, however, that interest payable on
the Maturity Date will be payable to the person to whom the principal hereof and
premium, if any, hereon shall be payable. Any such interest not so punctually
paid or duly provided for ("Defaulted Interest") will forthwith cease to be
payable to the holder on any Record Date, and shall be paid to the person in
whose name this Note is registered at the close of business on a special record
date (the "Special Record Date") for the payment of such Defaulted Interest to
be fixed by the Trustee hereinafter referred to, notice whereof shall be given
to the holder of this Note by the Trustee not less than 10 calendar 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 this Note may be listed, and upon such notice as may be
2
<PAGE>
required by such exchange, all as more fully provided for in the
Indenture.
Payment of principal, premium, if any, and interest in respect of this
Note due on the Maturity Date will be made in immediately available funds upon
presentation and surrender of this Note (and, with respect to any applicable
repayment of this Note, a duly completed election form as contemplated on the
reverse hereof) at the corporate trust office of the Trustee maintained for that
purpose in the Borough of Manhattan, The City of New York, currently located at
40 Broad Street, Suite 550, New York, New York 10004, or at such other paying
agency in the Borough of Manhattan, The City of New York, as the Company may
determine; provided, however, that if the Specified Currency specified above is
other than United States dollars and such payment is to be made in the Specified
Currency in accordance with the provisions set forth below, such payment will be
made by wire transfer of immediately available funds to an account with a bank
designated by the holder hereof at least 15 calendar days prior to the Maturity
Date, provided that such bank has appropriate facilities therefor and that this
Note (and, if applicable, a duly completed repayment election form) is presented
and surrendered at the aforementioned office of the Trustee in time for the
Trustee to make such payment in such funds in accordance with its normal
procedures. Payment of interest due on any Interest Payment Date other than the
Maturity Date will be made by check mailed to the address of the person entitled
thereto as such address shall appear in the Security Register maintained at the
aforementioned office of the Trustee; provided, however, that a holder of
U.S.$10,000,000 (or, if the Specified Currency is other than United States
dollars, the equivalent thereof in the Specified Currency) or more in aggregate
principal amount of Certificated Notes (whether having identical or different
terms and provisions) will be entitled to receive interest payments on such
Interest Payment Date by wire transfer of immediately available funds if
appropriate wire transfer instructions have been received in writing by the
Trustee not less than 15 calendar days prior to such Interest Payment Date. Any
such wire transfer instructions received by the Trustee shall remain in effect
until revoked by such holder.
If any Interest Payment Date or the Maturity Date falls on a day that
is not a Business Day, the required payment of principal, premium, if any,
and/or interest shall be made on the next succeeding Business Day with the same
force and effect as if made on the date such payment was due, and no interest
shall accrue with respect to such payment for the period from and after such
Interest Payment Date or the Maturity Date, as the case may be, to the date of
such payment on the next succeeding Business Day.
As used herein, "Business Day" means any day, other than a Saturday or
Sunday, that is neither a legal holiday nor a day on which banking institutions
are authorized or required by law, regulation or executive order to close in The
City of New York; provided, however, that if the Specified Currency is other
than
3
<PAGE>
United States dollars and any payment is to be made in the Specified Currency in
accordance with the provisions hereof, such day is also not a day on which
banking institutions are authorized or required by law, regulation or executive
order to close in the Principal Financial Center (as defined below) of the
country issuing the Specified Currency (or, in the case of European Currency
Units ("ECU"), such day is also not a day that appears as an ECU non-settlement
day on the display designated as "ISDE" on the Reuter Monitor Money Rates
Service (or is not a day designated as an ECU non-settlement day by the ECU
Banking Association) or, if ECU non-settlement days do not appear on that page
(and are not so designated), is not a day on which payments in ECU cannot be
settled in the international interbank market). "Principal Financial Center"
means the capital city of the country issuing the Specified Currency or the
Index Currency, except that with respect to United States dollars, Australian
dollars, Deutsche marks, Dutch guilders, Italian lire, Swiss francs and ECU, the
"Principal Financial Center" shall be The City of New York, Sydney, Frankfurt,
Amsterdam, Milan, Zurich and Luxembourg, respectively.
The Company is obligated to make payment of principal, premium, if any,
and interest in respect of this Note in the Specified Currency (or, if the
Specified Currency is not at the time of such payment legal tender for the
payment of public and private debts, in such other coin or currency of the
country which issued the Specified Currency as at the time of such payment is
legal tender for the payment of such debts). If the Specified Currency is other
than United States dollars, except as otherwise provided below, any such amounts
so payable by the Company will be converted by the Exchange Rate Agent specified
above into United States dollars for payment to the holder of this Note.
If the Specified Currency is other than United States dollars, the
holder of this Note may elect to receive such amounts in such Specified
Currency. If the holder of this Note shall not have duly made an election to
receive all or a specified portion of any payment of principal, premium, if any,
and/or interest in respect of this Note in the Specified Currency, any United
States dollar amount to be received by the holder of this Note will be based on
the highest bid quotation in The City of New York received by the Exchange Rate
Agent at approximately 11:00 A.M., New York City time, on the second Business
Day preceding the applicable payment date from three recognized foreign exchange
dealers (one of whom may be the Exchange Rate Agent) selected by the Exchange
Rate Agent and approved by the Company for the purchase by the quoting dealer of
the Specified Currency for United States dollars for settlement on such payment
date in the aggregate amount of the Specified Currency payable to all holders of
Notes scheduled to receive United States dollar payments and at which the
applicable dealer commits to execute a contract. All currency exchange costs
will be borne by the holder of this Note by deductions from such payments. If
three such bid quotations are not available, payments on this Note will be made
in the Specified Currency.
4
<PAGE>
If the Specified Currency is other than United States dollars, the
holder of this Note may elect to receive all or a specified portion of any
payment of principal, premium, if any, and/or interest in respect of this Note
in the Specified Currency by submitting a written request for such payment to
the Trustee at its corporate trust office in The City of New York on or prior to
the applicable Record Date or at least 15 calendar days prior to the Maturity
Date, as the case may be. Such written request may be mailed or hand delivered
or sent by cable, telex or other form of facsimile transmission. The holder of
this Note may elect to receive all or a specified portion of all future payments
in the Specified Currency and need not file a separate election for each
payment. Such election will remain in effect until revoked by written notice to
the Trustee, but written notice of any such revocation must be received by the
Trustee on or prior to the applicable Record Date or at least 15 calendar days
prior to the Maturity Date, as the case may be.
If the Specified Currency is other than United States dollars or a
composite currency and the holder of this Note shall have duly made an election
to receive all or a specified portion of any payment of principal, premium, if
any, and/or interest in respect of this Note in the Specified Currency and if
the Specified Currency is not available due to the imposition of exchange
controls or other circumstances beyond the control of the Company, the Company
will be entitled to satisfy its obligations to the holder of this Note by making
such payment in United States dollars on the basis of the Market Exchange Rate
(as defined below) on the second Business Day prior to such payment date or, if
such Market Exchange Rate is not then available, on the basis of the most
recently available Market Exchange Rate or as otherwise specified on the face
hereof. The "Market Exchange Rate" for the Specified Currency means the noon
dollar buying rate in The City of New York for cable transfers for the Specified
Currency as certified for customs purposes by (or if not so certified, as
otherwise determined by) the Federal Reserve Bank of New York. Any payment made
under such circumstances in United States dollars will not constitute an Event
of Default (as defined in the Indenture).
If the Specified Currency is a composite currency and the holder of
this Note shall have duly made an election to receive all or a specified portion
of any payment of principal, premium, if any, and/or interest in respect of this
Note in the Specified Currency and if such composite currency is unavailable due
to the imposition of exchange controls or other circumstances beyond the control
of the Company, then the Company will be entitled to satisfy its obligations to
the holder of this Note by making such payment in United States dollars. The
amount of each payment in United States dollars shall be computed by the
Exchange Rate Agent on the basis of the equivalent of the composite currency in
United States dollars. The component currencies of the composite currency for
this purpose (collectively, the "Component Currencies" and each, a "Component
Currency") shall be the currency amounts that were components of the composite
currency as of the last day on
5
<PAGE>
which the composite currency was used. The equivalent of the composite currency
in United States dollars shall be calculated by aggregating the United States
dollar equivalents of the Component Currencies. The United States dollar
equivalent of each of the Component Currencies shall be determined by the
Exchange Rate Agent on the basis of the most recently available Market Exchange
Rate for each such Component Currency, or as otherwise specified on the face
hereof.
If the official unit of any Component Currency is altered by way of
combination or subdivision, the number of units of the currency as a Component
Currency shall be divided or multiplied in the same proportion. If two or more
Component Currencies are consolidated into a single currency, the amounts of
those currencies as Component Currencies shall be replaced by an amount in such
single currency equal to the sum of the amounts of the consolidated Component
Currencies expressed in such single currency. If any Component Currency is
divided into two or more currencies, the amount of the original Component
Currency shall be replaced by the amounts of such two or more currencies, the
sum of which shall be equal to the amount of the original Component Currency.
All determinations referred to above made by the Exchange Rate Agent
shall be at its sole discretion and shall, in the absence of manifest error, be
conclusive for all purposes and binding on the holder of this Note.
Reference is hereby made to the further provisions of this Note set
forth on the reverse hereof and, if so specified on the face hereof, in an
Addendum hereto, which further provisions shall have the same force and effect
as if set forth on the face hereof.
Notwithstanding the foregoing, if an Addendum is attached hereto or
"Other/Additional Provisions" apply to this Note as specified above, this Note
shall be subject to the terms set forth in such Addendum or such
"Other/Additional Provisions".
Unless the Certificate of Authentication hereon has been executed by
the Trustee by manual signature, this Note shall not be entitled to any benefit
under the Indenture or be valid or obligatory for any purpose.
6
<PAGE>
IN WITNESS WHEREOF, United Dominion Realty Trust, Inc. has
caused this Note to be duly executed by one of its duly authorized
officers.
UNITED DOMINION REALTY TRUST, INC.
By John P. McCann
Title: President, Chief Executive
Officer and Director
Dated: July 12, 1996
TRUSTEE'S CERTIFICATE OF AUTHENTICATION:
This is one of the Securities of the series designated therein referred to in
the within-mentioned Indenture.
FIRST UNION NATIONAL BANK OF VIRGINIA,
as Trustee
By s/ H. H. Hall, Jr.
Authorized Signatory
7
<PAGE>
[REVERSE OF NOTE]
United Dominion Realty Trust, Inc.
MEDIUM-TERM NOTE
(Fixed Rate)
This Note is one of a duly authorized series of Securities (the
"Securities") of the Company issued and to be issued under an Indenture, dated
as of November 1, 1995, as amended, modified or supplemented from time to time
(the "Indenture"), between the Company and First Union National Bank of
Virginia, as Trustee (the "Trustee", which term includes any successor trustee
under the Indenture), to which Indenture and all indentures supplemental thereto
reference is hereby made for a statement of the respective rights, limitations
of rights, duties and immunities thereunder of the Company, 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 series of
Securities designated as "Medium-Term Notes Due Nine Months or More From Date of
Issue" (the "Notes"). All terms used but not defined in this Note or in an
Addendum hereto shall have the meanings assigned to such terms in the Indenture
or on the face hereof, as the case maybe.
This Note is issuable only in registered form without coupons in
minimum denominations of U.S.$1,000 and integral multiples thereof or the
minimum Authorized Denomination specified on the face hereof.
This Note will not be subject to any sinking fund and, unless otherwise
specified on the face hereof in accordance with the provisions of the following
two paragraphs, will not be redeemable or repayable prior to the Stated Maturity
Date.
This Note will be subject to redemption at the option of the Company on
any date on or after the Initial Redemption Date, if any, specified on the face
hereof, in whole or from time to time in part in increments of U.S.$1,000 or the
minimum Authorized Denomination (provided that any remaining principal amount
hereof shall be at least U.S.$1,000 or such minimum Authorized Denomination), at
the Redemption Price (as defined below), together with unpaid interest accrued
thereon to the date fixed for redemption (each, a "Redemption Date"), on notice
given no more than 60 nor less than 30 calendar days prior to the Redemption
Date and in accordance with the provisions of the Indenture. The "Redemption
Price" shall initially be the Initial Redemption Percentage specified on the
face hereof multiplied by the unpaid principal amount of this Note to be
redeemed. The Initial Redemption Percentage shall decline at each anniversary of
the Initial Redemption Date by the Annual Redemption Percentage Reduction, if
any, specified on the face hereof until the Redemption Price is 100% of unpaid
principal amount to be redeemed. In the event of redemption of this Note in part
only, a new Note of
8
<PAGE>
like tenor for the unredeemed portion hereof and otherwise having the same terms
as this Note shall be issued in the name of the holder hereof upon the
presentation and surrender hereof.
This Note will be subject to repayment by the Company at the option of
the holder hereof on the Optional Repayment Date(s), if any, specified on the
face hereof, in whole or in part in increments of U.S.$1,000 or the minimum
Authorized Denomination (provided that any remaining principal amount hereof
shall be at least U.S.$1,000 or such minimum Authorized Denomination), at a
repayment price equal to 100% of the unpaid principal amount to be repaid,
together with unpaid interest accrued thereon to the date fixed for repayment
(each, a "Repayment Date"). For this Note to be repaid, this Note must be
received, together with the form hereon entitled "Option to Elect Repayment"
duly completed, by the Trustee at its corporate trust office not more than 60
nor less than 30 calendar days prior to the Repayment Date. Exercise of such
repayment option by the holder hereof will be irrevocable. In the event of
repayment of this Note in part only, a new Note of like tenor for the unrepaid
portion hereof and otherwise having the same terms as this Note shall be issued
in the name of the holder hereof upon the presentation and surrender hereof.
If this Note is an Original Issue Discount Note as specified on the
face hereof, the amount payable to the holder of this Note in the event of
redemption, repayment or acceleration of maturity will be equal to the sum of
(1) the Issue Price specified on the face hereof (increased by any accruals of
the Discount, as defined below) and, in the event of any redemption of this Note
(if applicable), multiplied by the Initial Redemption Percentage (as adjusted by
the Annual Redemption Percentage Reduction, if applicable) and (2) any unpaid
interest on this Note accrued from the Original Issue Date to the Redemption
Date, Repayment Date or date of acceleration of maturity, as the case may be.
The difference between the Issue Price and 100% of the principal amount of this
Note is referred to herein as the "Discount".
For purposes of determining the amount of Discount that has accrued as
of any Redemption Date, Repayment Date or date of acceleration of maturity of
this Note, such Discount will be accrued so as to cause the yield on the Note to
be constant. The constant yield will be calculated using a 30-day month, 360-day
year convention, a compounding period that, except for the Initial Period (as
defined below), corresponds to the shortest period between Interest Payment
Dates (with ratable accruals within a compounding period) and an assumption that
the maturity of this Note will not be accelerated. If the period from the
Original Issue Date to the initial Interest Payment Date (the "Initial Period")
is shorter than the compounding period for this Note, a proportionate amount of
the yield for an entire compounding period will be accrued. If the Initial
Period is longer than the compounding period, then such period will be divided
into a regular compounding period and a short period, with the short period
being treated as provided in the preceding sentence.
9
<PAGE>
If an Event of Default, as defined in the Indenture, shall occur and be
continuing, the principal of the Notes may be accelerated in the manner and with
the effect provided in the Indenture.
The Indenture contains provisions for defeasance of (i) the entire
indebtedness of the Notes or (ii) certain covenants and Events of Default with
respect to the Notes, in each case upon compliance with certain conditions set
forth therein, which provisions apply to the Notes.
The Indenture permits, with certain exceptions as therein provided, the
amendment thereof and the modification of the rights and obligations of the
Company and the rights of the holders of the Securities at any time by the
Company and the Trustee with the consent of the holders of not less than a
majority of the aggregate principal amount of all Securities at the time
outstanding and affected thereby. The Indenture also contains provisions
permitting the holders of not less than a majority of the aggregate principal
amount of the outstanding Securities of any series, on behalf of the holders of
all such Securities, to waive compliance by the Company with certain provisions
of the Indenture. Furthermore, provisions in the Indenture permit the holders of
not less than a majority of the aggregate principal amount of the outstanding
Securities of any series, in certain instances, to waive, on behalf of all of
the holders of Securities of such series, certain past defaults under the
Indenture and their consequences. Any such consent or waiver by the holder of
this Note shall be conclusive and binding upon such holder and upon all future
holders of this Note and other Notes issued upon the registration of transfer
hereof or in exchange heretofore or in lieu hereof, whether or not notation of
such consent or waiver is made upon this Note.
No reference herein to the Indenture and no provision of this Note or
of the Indenture shall alter or impair the obligation of the Company, which is
absolute and unconditional, to pay principal, premium, if any, and interest in
respect of this Note at the times, places and rate or formula, and in the coin
or currency, herein prescribed.
As provided in the Indenture and subject to certain limitations therein
and herein set forth, the transfer of this Note is registrable in the Security
Register of the Company upon surrender of this Note for registration of transfer
at the office or agency of the Company in any place where the principal hereof
and any premium or interest hereon are payable, duly endorsed by, or accompanied
by a written instrument of transfer in form satisfactory to the Company and the
Security Registrar duly executed by, the holder hereof or by his attorney duly
authorized in writing, and thereupon one or more new Notes, of authorized
denominations and for the same aggregate principal amount, will be issued to the
designated transferee or transferees.
10
<PAGE>
As provided in the Indenture and subject to certain limitations therein
and herein set forth, this Note is exchangeable for a like aggregate principal
amount of Notes of different authorized denominations but otherwise having the
same terms and conditions, as requested by the holder hereof surrendering the
same.
No service charge shall be made for any such registration of transfer
or exchange, but the Company may require payment of a sum sufficient to cover
any tax or other governmental charge payable in connection therewith.
Prior to due presentment of this Note for registration of transfer, the
Company, the Trustee and any agent of the Company or the Trustee may treat the
holder in whose name this Note is registered as the owner thereof for all
purposes, whether or not this Note be overdue, and neither the Company, the
Trustee nor any such agent shall be affected by notice to the contrary.
The Indenture and this Note shall be governed by and construed in
accordance with the laws of the State of Virginia applicable to agreements made
and to be performed entirely in such State.
11
<PAGE>
ABBREVIATIONS
The following abbreviations, when used in the inscription on the face
of this Note, shall be construed as though they were written out in full
according to applicable laws or regulations:
TEN COM - as tenants in common UNIF GIFT MIN ACT - ______ Custodian _____
TEN ENT - as tenants by the entireties (Cust) (Minor)
JT TEN - as joint tenants with right of under Uniform Gifts to Minors
survivorship and not as tenants Act_____________________
in common (State)
Additional abbreviations may also be used though not in the above list.
----------------------------------
ASSIGNMENT
FOR VALUE RECEIVED, the undersigned hereby sell(s), assign(s) and transfer(s)
unto
PLEASE INSERT SOCIAL SECURITY OR
OTHER
IDENTIFYING NUMBER OF ASSIGNEE
____________________________________________________________________________
(Please print or typewrite name and address including postal zip code of
assignee)
____________________________________________________________________________
this Note and all rights thereunder hereby irrevocably constituting and
appointing _________________________________________________________________
Attorney to transfer this Note on the books of the Trustee, with full power of
substitution in the premises.
Dated: _____________________________
Notice: The signature(s) on this
Assignment must correspond with
the name(s) as written upon the
face of this Note in every
particular, without alteration or
enlargement or any change
whatsoever.
12
<PAGE>
OPTION TO ELECT REPAYMENT
The undersigned hereby irrevocably request(s) and instruct(s) the
Company to repay this Note (or portion hereof specified below) pursuant to its
terms at a price equal to 100% of the principal amount to be repaid, together
with unpaid interest accrued hereon to the Repayment Date, to the undersigned,
at ___________________________________________________________________________
______________________________________________________________________________
(Please print or typewrite name and address of the undersigned)
For this Note to be repaid, the Trustee must receive at its corporate
trust office in the Borough of Manhattan, The City of New York, currently
located at 40 Broad Street, Suite 550, New York, New York 10004, not more than
60 nor less than 30 calendar days prior to the Repayment Date, this Note with
this "Option to Elect Repayment" form duly completed.
If less than the entire principal amount of this Note is to be repaid,
specify the portion hereof (which shall be increments of U.S.$1,000 (or, if the
Specified Currency is other than United States dollars, the minimum Authorized
Denomination specified on the face hereof)) which the holder elects to have
repaid and specify the denomination or denominations (which shall be an
Authorized Denomination) of the Notes to be issued to the holder for the portion
of this Note not being repaid (in the absence of any such specification, one
such Note will be issued for the portion not being repaid).
Principal Amount
to be Repaid: $____________________ ____________________________________
Notice: The signature(s) on this
Option to Elect Repayment must
Date: ______________________________ correspond with the name(s) as
written upon the face of this Note in
every particular, without alteration
or enlargement or any change
whatsoever.
13
EXHIBIT 10(vii)
UNITED DOMINION REALTY TRUST, INC.
Medium-Term Notes
Due Nine Months or More From Date of Issue
DISTRIBUTION AGREEMENT
July 8, 1996
MERRILL LYNCH & CO.
Merrill Lynch, Pierce, Fenner & Smith
Incorporated
World Financial Center
North Tower, 10th Floor
New York, New York 10281-1310
ALEX. BROWN & SONS INCORPORATED
135 E. Baltimore Street
Baltimore, Maryland 21202
GOLDMAN, SACHS & CO.
85 Broad Street
New York, New York 10004
J.P. MORGAN SECURITIES INC.
60 Wall Street
New York, New York 10260
NATIONSBANC CAPITAL MARKETS, INC.
100 North Tyron Street
Charlotte, North Carolina 28255
Ladies and Gentlemen:
United Dominion Realty Trust, Inc., a Virginia corporation (the
"Company"), confirms its agreement with Merrill Lynch & Co., Merrill Lynch,
Pierce, Fenner & Smith Incorporated, Alex. Brown & Sons Incorporated, Goldman,
Sachs & Co., J.P. Morgan Securities Inc. and NationsBanc Capital Markets, Inc.
(each, an "Agent", and collectively, the "Agents") with respect to the issue and
sale by the Company of its Medium-Term Notes Due Nine Months or
<PAGE>
More From Date of Issue (the "Notes"). The Notes are to be issued pursuant to an
Indenture, dated as of November 1, 1995, as amended, supplemented or modified
from time to time (the "Indenture"), between the Company and First Union
National Bank of Virginia, as trustee (the "Trustee"). As of the date hereof,
the Company has authorized the issuance and sale of up to U.S. $200,000,000
aggregate initial offering price (or its equivalent, based upon the applicable
exchange rate at the time of issuance, in such foreign or composite currencies
as the Company shall designate at the time of issuance) of Notes to or through
the Agents pursuant to the terms of this Agreement. It is understood, however,
that the Company may from time to time authorize the issuance of additional
Notes and that such additional Notes may be sold to or through the Agents
pursuant to the terms of this Agreement, all as though the issuance of such
Notes were authorized as of the date hereof.
This Agreement provides both for the sale of Notes by the Company to
one or more Agents as principal for resale to investors and other purchasers and
for the sale of Notes by the Company directly to investors (as may from time to
time be agreed to by the Company and the applicable Agent), in which case such
Agent will act as an agent of the Company in soliciting purchases of the Notes.
The Company has filed with the Securities and Exchange Commission (the
"Commission") a registration statement on Form S-3 (No. 33-64275) (which as
declared effective also constitutes post-effective amendment No. 1 to
registration statement No. 33-55159) for the registration of securities
(including the Notes) under the Securities Act of 1933, as amended (the "1933
Act"), and the offering thereof from time to time in accordance with Rule 415 of
the rules and regulations of the Commission under the 1933 Act (the "1933 Act
Regulations"), and the Company has filed such post-effective amendments thereto
as may have been required prior to the Company's acceptance of an offer to
purchase Notes. Such registration statement (as amended, if applicable) has been
declared effective by the Commission. Such registration statement (as amended,
if applicable), including the information, if any, deemed to be a part thereof
pursuant to Rule 434 of the 1933 Act Regulations, on the one hand, and the
prospectus constituting a part thereof and each prospectus supplement relating
to the offering of Notes first provided to the Agents for use (whether or not
such prospectus supplement is required to be filed by the Company pursuant to
Rule 424(b) of the 1933 Act Regulations) (the "Prospectus Supplement"), on the
other hand, including in each case all documents incorporated therein by
reference, as from time to time amended or supplemented prior to the Company's
acceptance of an offer to purchase Notes pursuant to the 1933 Act, the
Securities Exchange Act of 1934, as amended (the "1934 Act"), or otherwise, are
referred to herein as the "Registration Statement" and the "Prospectus",
respectively; provided, however, that a Prospectus Supplement shall be deemed to
have supplemented the Prospectus only with respect to the offering of Notes to
which it relates. All references in this Agreement to financial statements and
schedules and other information which is "contained," "included" or "stated" in
the Registration Statement or the Prospectus (and all other references of like
import) shall be deemed to mean and include all such financial statements and
schedules and other information which is or is deemed to be incorporated by
reference in the Registration Statement or the Prospectus, as the case may be;
and all references in this Agreement to amendments or supplements to the
Registration Statement or the Prospectus shall be deemed to mean and
2
<PAGE>
include, without limitation, any document filed under the 1934 Act which is or
is deemed to be incorporated by reference in the Registration Statement or the
Prospectus, as the case may be. If the Company elects to rely on Rule 434 under
the 1933 Act Regulations, all references to "Prospectus" shall be deemed to
include, without limitation, the form of prospectus and the abbreviated term
sheet, taken together, provided to the Agents by the Company in reliance on Rule
434 under the 1933 Act (the "Rule 434 Prospectus"). If the Company files a
registration statement to register a portion of the securities and relies on
Rule 462(b) for such registration statement to become effective upon filing with
the Commission (the "Rule 462 Registration Statement"), then any reference to
"Registration Statement" shall be deemed to include the Rule 462 Registration
Statement.
SECTION 1. Appointment as Agents.
(a) Appointment. Subject to the terms and conditions stated herein and
subject to the reservation by the Company of the right to sell Notes directly on
its own behalf, the Company hereby agrees that Notes will be sold exclusively to
or through the Agents. The Company agrees that it will not appoint any other
agents to act on its behalf, or to assist it, in the placement of the Notes.
(b) Sale of Notes. The Company shall not sell or approve the
solicitation of purchases of Notes in excess of the amount which shall be
authorized by the Company from time to time or in excess of the aggregate
initial offering price of Notes registered pursuant to the Registration
Statement. The Agents shall have no responsibility for maintaining records with
respect to the aggregate initial offering price of Notes sold, or of otherwise
monitoring the availability of Notes for sale, under the Registration Statement.
(c) Purchases as Principal. The Agents shall not have any obligation to
purchase Notes from the Company as principal, but one or more Agents may agree
from time to time to purchase Notes as principal for resale to investors and
other purchasers determined by such Agent or Agents. Any such purchase of Notes
by an Agent as principal shall be made in accordance with Section 3(a) hereof.
(d) Solicitations as Agents. If agreed upon by an Agent and the
Company, such Agent, acting solely as agent for the Company and not as
principal, will solicit purchases of the Notes. Such Agent will communicate to
the Company, orally, each offer to purchase Notes solicited by it on an agency
basis, other than those offers rejected by such Agent. Such Agent shall have the
right, in its discretion reasonably exercised, to reject any proposed purchase
of Notes, as a whole or in part, and any such rejection shall not be deemed a
breach of its agreement contained herein. The Company may accept or reject any
proposed purchase of Notes, in whole or in part. Such Agent shall make
reasonable efforts to assist the Company in obtaining performance by each
purchaser whose offer to purchase Notes has been solicited by it and accepted by
the Company. Such Agent shall not have any liability to the Company in the event
that any such purchase is not consummated for any reason. If the Company shall
default on its obligation to deliver Notes to a purchaser whose offer it has
accepted, the Company shall (i) hold such Agent harmless against any loss, claim
or damage arising from or as a result of
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<PAGE>
such default by the Company and (ii) pay to such Agent any commission to which
it would otherwise be entitled absent such default.
(e) Reliance. The Company and the Agents agree that any Notes purchased
by one or more Agents as principal shall be purchased, and any Notes the
placement of which an Agent arranges as agent shall be placed by such Agent, in
reliance on the representations, warranties, covenants and agreements of the
Company contained herein and on the terms and conditions and in the manner
provided herein.
SECTION 2. Representations and Warranties.
(a) The Company represents and warrants to each Agent as of the date
hereof, as of the date of each acceptance by the Company of an offer for the
purchase of Notes (whether to such Agent as principal or through such Agent as
agent), as of the date of each delivery of Notes (whether to such Agent as
principal or through such Agent as agent) (the date of each such delivery to the
Agent as principal being hereafter referred to as a "Settlement Date"), and as
of any time that the Registration Statement or the Prospectus shall be amended
or supplemented or there is filed with the Commission any document incorporated
by reference into the Prospectus (each of the times referenced above being
referred to herein as a "Representation Date"), as follows:
(i) Due Incorporation and Qualification. The Company
has been duly organized and is validly existing as a corporation in
good standing under the laws of the Commonwealth of Virginia, with full
power and authority to own, lease and operate its properties and
conduct its business as described in the Prospectus; and the Company is
duly qualified to transact business in all jurisdictions in which the
conduct of its business requires such qualification except where the
failure to so qualify would not have a material adverse effect on the
condition, financial or otherwise, or the earnings, business affairs or
business prospects of the Company.
(ii) Subsidiaries. Each subsidiary of the Company has
been duly organized and is validly existing as a corporation, limited
liability company or limited partnership in good standing under the
laws of the jurisdiction of its incorporation or organization, with
corporate power and authority or power and authority as a limited
liability company or limited partnership to own, lease and operate its
properties and conduct its business as described in the Prospectus and
is duly qualified to transact business in all jurisdictions in which
the conduct of its business requires such qualification except where
the failure to so qualify would not have a material adverse effect on
the condition, financial or otherwise, or the earnings, business
affairs or business prospects of such subsidiary; all of the issued and
outstanding capital stock of each such corporate subsidiary has been
duly authorized and validly issued, is fully paid and non-assessable
and is owned by the Company free and clear of any security interest,
mortgage, pledge, lien, encumbrance, claim or equity; and the Company
and one such corporate subsidiary are the only members or general
partners of the Company's limited liability company or limited
partnership subsidiaries, as applicable, and own the entire
4
<PAGE>
membership or general partnership interest in each such subsidiary free
and clear of any security interest, mortgage, pledge, lien,
encumbrance, claim or equity.
(iii) Registration Statement and Prospectus. The
Registration Statement and the Prospectus, at the time the Registration
Statement became effective, complied, and as of each Representation
Date will comply, in all material respects with the requirements of the
1933 Act and 1933 Act Regulations; the Registration Statement, at the
time it became effective, did not, and at each time thereafter at which
any amendment to the Registration Statement becomes effective or any
Annual Report on Form 10-K is filed by the Company with the Commission
and as of each Representation Date, will not contain an untrue
statement of a material fact or omit to state a material fact required
to be stated therein or necessary to make the statements therein not
misleading.
(iv) Incorporated Documents. The documents incorporated
by reference in the Prospectus, when they became effective or were
filed with the Commission, as the case may be, conformed in all
material respects to the requirements of the 1933 Act or the 1934 Act,
as applicable, and the rules and regulations of the Commission
thereunder, and none of such documents contained an untrue statement of
a material fact or omitted to state a material fact required to be
stated therein or necessary to make the statements therein not
misleading; and any further documents so filed and incorporated by
reference in the Prospectus or any further amendment or supplement
thereto, when such documents become effective or are filed with the
Commission, as the case may be, will conform in all material respects
to the requirements of the 1933 Act or the 1934 Act, as applicable, and
the rules and regulations of the Commission thereunder and will not
contain an untrue statement of a material fact or omit to state a
material fact required to be stated therein or necessary to make the
statements therein not misleading.
(v) Accountants. The accountants who certified the
financial statements included or incorporated by reference in the
Prospectus are independent public accountants within the meaning of the
1933 Act and the 1933 Act Regulations.
(vi) Financial Statements. The financial statements and
any supporting schedules of the Company and its subsidiaries included
or incorporated by reference in the Registration Statement and the
Prospectus present fairly the consolidated financial position of the
Company and its subsidiaries as of the dates indicated and the
consolidated results of their operations for the periods specified;
except as stated therein, said financial statements have been prepared
in conformity with U.S. generally accepted accounting principles
applied on a consistent basis; and the supporting schedules included or
incorporated by reference in the Registration Statement and the
Prospectus present fairly the information required to be stated
therein. Pro forma financial information (if applicable) included or
incorporated by reference in the Prospectus has been prepared in
accordance with the applicable requirements of the 1933 Act, the 1933
Act Regulations and AICPA guidelines with respect to pro forma
financial information and includes all adjustments necessary to present
fairly the pro forma financial position of the respective
5
<PAGE>
entity or entities presented therein at the respective dates indicated
and the results of their operations for the respective periods
specified.
(vii) Authorization and Validity of this Agreement, the
Indenture and the Notes. This Agreement has been duly authorized,
executed and delivered by the Company and, upon execution and delivery
by the Agents, will be a valid and legally binding agreement of the
Company; the Indenture has been duly authorized, executed and delivered
by the Company and, upon execution and delivery by the Trustee, will be
a valid and legally binding agreement of the Company enforceable in
accordance with its terms, except as enforcement thereof may be limited
by bankruptcy, insolvency, reorganization, moratorium or other laws
relating to or affecting enforcement of creditors' rights generally or
by general equity principles, and except further as enforcement thereof
may be limited by (1) requirements that a claim with respect to any
Notes payable other than in U.S. dollars (or a foreign currency or
composite currency judgment in respect of such claim) be converted into
U.S. dollars at a rate of exchange prevailing on a date determined
pursuant to applicable law or (2) governmental authority to limit,
delay or prohibit the making of payments outside the United States; the
Notes have been duly and validly authorized for issuance, offer and
sale pursuant to this Agreement and, when issued, authenticated and
delivered pursuant to the provisions of this Agreement and the
Indenture against payment of the consideration therefor, the Notes will
constitute valid and legally binding obligations of the Company
enforceable in accordance with their terms, except as enforcement
thereof may be limited by bankruptcy, insolvency, reorganization,
moratorium or other laws relating to or affecting enforcement of
creditors' rights generally or by general equity principles, and except
further as enforcement thereof may be limited by (1) requirements that
a claim with respect to any Notes payable other than in U.S. dollars
(or a foreign currency or composite currency judgment in respect of
such claim) be converted into U.S. dollars at a rate of exchange
prevailing on a date determined pursuant to applicable law or (2)
governmental authority to limit, delay or prohibit the making of
payments outside the United States; the Notes and the Indenture will be
substantially in the form heretofore delivered to the Agents and
conform in all material respects to all statements relating thereto
contained in the Prospectus; and each holder of Notes will be entitled
to the benefits of the Indenture.
(viii) Material Changes or Material Transactions. Since
the respective dates as of which information is given in the
Registration Statement and the Prospectus, except as otherwise stated
therein, (A) there has been no material adverse change or development
involving a prospective material adverse change in or affecting the
condition, financial or otherwise, or in the earnings, business affairs
or business prospects of the Company and its subsidiaries considered as
one enterprise, whether or not occurring in the ordinary course of
business and (B) there have been no transactions or acquisitions
entered into by the Company or any of its subsidiaries other than those
arising in the ordinary course of business.
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<PAGE>
(ix) No Defaults. Neither the Company nor any of its
subsidiaries is in violation of its Articles of Incorporation or
By-Laws or in default in the performance or observance of any
obligation, agreement, covenant or condition contained in any contract,
indenture, mortgage, loan agreement, note, lease (other than as
disclosed in the Prospectus) or other instrument to which the Company
or any of its subsidiaries is a party or by which it or any of them may
be bound, or to which any of the property or assets of the Company or
any of its subsidiaries is subject and which default is of material
significance in respect of the business or financial condition of the
Company and its subsidiaries considered as one enterprise; and the
execution, delivery and performance of this Agreement and the
consummation of the transactions contemplated herein and therein and
compliance by the Company with its obligations hereunder and thereunder
have been duly authorized by all necessary corporate action on the part
of the Company, and will not conflict with or constitute a breach of,
or default under, or result in the creation or imposition of any lien,
charge or encumbrance upon any property or assets of the Company or any
of its subsidiaries pursuant to any contract, indenture, mortgage, loan
agreement, note, lease or other instrument to which the Company or any
of its subsidiaries is a party or by which it or any of them may be
bound, or to which any property or assets of the Company or any of its
subsidiaries is subject, or result in any violation of the Articles of
Incorporation or By-Laws of the Company or any law, administrative
regulation or administrative or court decree.
(x) Regulatory Approvals. No authorization, approval or
consent of any governmental authority or agency is necessary in
connection with the consummation by the Company of the transactions
contemplated by this Agreement or in connection with the sale of Notes
hereunder, except such as may be required under the 1933 Act or the
1933 Act Regulations or state securities laws ("Blue Sky").
(xi) Legal Proceedings. There is no action, suit or
proceeding before or by any court or governmental agency or body,
domestic or foreign, now pending, or, to the knowledge of the Company,
threatened against the Company or any of its subsidiaries which is
required to be disclosed in the Prospectus (other than as disclosed
therein) or which might result in any material adverse change in the
condition, financial or otherwise, or in the earnings, business affairs
or business prospects of the Company and its subsidiaries considered as
one enterprise, or which might materially and adversely affect the
properties or assets thereof or which might materially and adversely
affect the consummation of this Agreement or the transactions
contemplated herein; all pending legal or governmental proceedings to
which the Company or any of its subsidiaries is a party or of which any
of their respective property is the subject which are not described in
the Prospectus, including ordinary routine litigation incidental to the
business, are, considered in the aggregate, not material; and there are
no contracts or documents of the Company or any of its subsidiaries
which would be required to be filed as exhibits to the Registration
Statement by the 1933 Act or by the 1933 Act Regulations which have not
been filed as exhibits to the Registration Statement.
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<PAGE>
(xii) Licenses; Trademarks. The Company and each of its
subsidiaries hold all material licenses, certificates and permits from
governmental authorities which are necessary to the conduct of their
respective businesses; and neither the Company nor any of its
subsidiaries has infringed any patents, patent rights, trade names,
trademarks or copyrights, which infringement is material to the
business of the Company or any of its subsidiaries.
(xiii) Marketable Title; Leasehold Estates. The Company
and its subsidiaries have good and marketable title to, or valid and
enforceable leasehold estates in, all items of real and personal
property referred to in the Prospectus as owned or leased by them, in
each case free and clear of all liens, encumbrances, claims, security
interests and defects, other than those referred to in the Prospectus
or which are not material in amount. Each lease of real property by the
Company or any of its subsidiaries as lessor requiring annual lease
payments in excess of $100,000 is the legal, valid and binding
obligation of the lessee in accordance with its terms (except that the
remedy of specific performance and injunctive and other forms of
equitable relief may be subject to equitable defenses and to the
discretion of the court before which any proceeding therefor may be
brought and to the Bankruptcy Act) and the rents which at present have
remained due and unpaid for more than 30 days are not payable under
leases such that, were no further rental payments to be received under
such leases, the financial condition or results of operations of the
Company and its subsidiaries would be materially adversely affected
thereby. The Company has no reason to believe that the lessee under any
lease (excluding leases for which rent payments due for the remainder
of such lease are less than $500,000) calling for annual lease payments
in excess of $500,000 is not financially capable of performing its
obligations thereunder.
(xiv) Hazardous Materials. The Company has no knowledge
of (a) the unlawful presence of any hazardous substances, hazardous
materials, toxic substances or waste materials (collectively,
"Hazardous Materials") on any of the properties owned by it or any of
its subsidiaries, or of (b) any unlawful spills, releases, discharges
or disposal of Hazardous Materials that have occurred or are presently
occurring off such properties as a result of any construction on or
operation and use of such properties which presence or occurrence would
materially adversely affect the condition, financial or otherwise, or
the earnings, business affairs or business prospects of the Company or
any of its subsidiaries. In connection with the construction on or
operation and use of the properties owned by the Company or any of its
subsidiaries, the Company represents that it has no knowledge of any
material failure to comply with all applicable local, state and federal
environmental laws, regulations, ordinances and administrative and
judicial orders relating to the generation, recycling, reuse, sale,
storage, handling, transport and disposal of any Hazardous Materials.
(xv) Tax Filings. The Company has filed all Federal,
local and foreign income tax returns which have been required to be
filed and has paid all taxes indicated by said returns and all
assessments received by it to the extent that such taxes have become
due and are not being contested in good faith.
8
<PAGE>
(xvi) Statements in Prospectus. The statements set forth
in the Prospectus under the captions "Description of Debt Securities"
and "Description of Notes", insofar as they purport to constitute a
summary of the terms of the Notes, and under the captions "Certain
United States Federal Income Tax Considerations" and "Plan of
Distribution", insofar as they purport to describe the provisions of
the laws and documents referred to therein, are accurate, complete and
fair.
(xvii) REIT Qualification. With respect to all tax periods
regarding which the Internal Revenue Service is or will be entitled to
assert any claim, the Company has met the requirements for
qualification as a real estate investment trust under Sections 856
through 860 of the Internal Revenue Code of 1986, as amended (the
"Code"), and the Company's present and contemplated operations, assets
and income continue to meet such requirements.
(xviii) Use of Form S-3. The conditions for use of
registration statements on Form S-3 set forth in the General
Instructions on Form S-3 have been satisfied and the Company is
entitled to use such form for the transaction contemplated herein.
(xix) Investment Company Act. The Company is not and,
after giving effect to the offering and sale of the Notes as
contemplated herein, will not be an "investment company" or an entity
"controlled" by an "investment company" within the meaning of the
Investment Company Act of 1940, as amended (the "1940 Act").
(xx) Commodity Exchange Act. The Notes, when issued,
authenticated and delivered pursuant to the provisions of this
Agreement and the Indenture, will be excluded or exempted under the
provisions of the Commodity Exchange Act.
(xxi) Doing Business with Cuba. Neither the Company nor
any of its affiliates does business with the government of Cuba or with
any person or affiliate located in Cuba within the meaning of Section
517.075, Florida Statutes.
(xxii) Ratings. The Notes are rated Baa1 by Moody's
Investors Service, Inc. and BBB+ by Standard & Poor's Ratings Group.
(b) Additional Certifications. Any certificate signed by any director
or officer of the Company and delivered to one or more Agents or to counsel for
the Agents in connection with an offering of Notes to one or more Agents as
principal or through an Agent as agent shall be deemed a representation and
warranty by the Company to such Agent or Agents as to the matters covered
thereby on the date of such certificate and at each Representation Date
subsequent thereto.
SECTION 3. Purchases as Principal; Solicitations as Agent.
(a) Purchases as Principal. Unless otherwise agreed by an Agent
and the Company, Notes shall be purchased by one or more Agents as principal in
accordance with terms agreed
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upon by such Agent or Agents and the Company (which terms, unless otherwise
agreed, shall, to the extent applicable, include those terms specified in
Exhibit A hereto and be agreed upon orally, with written confirmation prepared
by such Agent or Agents and mailed to the Company). An Agent's commitment to
purchase Notes as principal shall be deemed to have been made on the basis of
the representations and warranties of the Company herein contained and shall be
subject to the terms and conditions herein set forth. Unless the context
otherwise requires, references herein to "this Agreement" shall include the
applicable agreement of one or more Agents to purchase Notes from the Company as
principal. Each purchase of Notes, unless otherwise agreed, shall be at a
discount from the principal amount of each such Note equivalent to the
applicable commission set forth in Schedule A hereto. The Agents may engage the
services of any other broker or dealer in connection with the resale of the
Notes purchased by them as principal and may allow all or any portion of the
discount received in connection with such purchases from the Company to such
brokers and dealers. At the time of each purchase of Notes by one or more Agents
as principal, such Agent or Agents shall specify the requirements for the
stand-off agreement, officers' certificate, opinions of counsel and comfort
letter pursuant to Sections 4(k), 7(b), 7(c) and 7(d) hereof.
(b) Solicitations as Agent. On the basis of the representations and
warranties herein contained, but subject to the terms and conditions herein set
forth, when agreed by the Company and an Agent, such Agent, as an agent of the
Company, will use its reasonable efforts to solicit offers to purchase the Notes
upon the terms and conditions set forth in the Prospectus. The Agents are not
authorized to appoint sub-agents with respect to Notes sold through them as
agent. All Notes sold through an Agent as agent will be sold at 100% of their
principal amount unless otherwise agreed to by the Company and such Agent.
The Company reserves the right, in its sole discretion, to suspend
solicitation of purchases of the Notes through an Agent, as agent, commencing at
any time for any period of time or permanently. As soon as practicable after
receipt of instructions from the Company, such Agent will suspend solicitation
of purchases from the Company until such time as the Company has advised such
Agent that such solicitation may be resumed.
The Company agrees to pay each Agent a commission, in the form of a
discount, equal to the applicable percentage of the principal amount of each
Note sold by the Company as a result of a solicitation made by such Agent as set
forth in Schedule A hereto.
(c) Administrative Procedures. The purchase price, interest rate or
formula, maturity date and other terms of the Notes (as applicable) specified in
Exhibit A hereto shall be agreed upon by the Company and the applicable Agent or
Agents and specified in a pricing supplement to the Prospectus (each, a "Pricing
Supplement") to be prepared in connection with each sale of Notes. Except as may
be otherwise specified in the applicable Pricing Supplement, the Notes will be
issued in denominations of U.S. $1,000 or any larger amount that is an integral
multiple of U.S. $1,000. Administrative procedures with respect to the sale of
Notes shall be agreed upon from time to time by the Company, the Agents and the
Trustee (the "Procedures"). The Agents and the Company agree to perform, and the
Company agrees to cause the Trustee to
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agree to perform, their respective duties and obligations specifically provided
to be performed by them in the Procedures.
SECTION 4. Covenants of the Company.
The Company covenants with the Agents as follows:
(a) Notice of Certain Events. The Company will notify the Agents
immediately, and confirm such notice in writing, of (i) the effectiveness of any
amendment to the Registration Statement, (ii) the transmittal to the Commission
for filing of any amendment or supplement to the Prospectus or any document to
be filed pursuant to the 1934 Act (other than any amendment, supplement or
document relating solely to securities other than the Notes), (iii) the receipt
of any comments from the Commission with respect to the Registration Statement
or the Prospectus, (iv) any request by the Commission for any amendment to the
Registration Statement or any amendment or supplement to the Prospectus or for
additional information, (v) the issuance by the Commission of any stop order
suspending the effectiveness of the Registration Statement or the initiation of
any proceedings for that purpose and (vi) any change in the rating assigned by
any nationally recognized statistical rating organization to any debt securities
of the Company or the public announcement by any nationally recognized
statistical rating organization that it has under surveillance or review, with
possible negative implications, its rating of any debt securities of the
Company. The Company will make every reasonable effort to prevent the issuance
of any stop order and, if any stop order is issued, to obtain the lifting
thereof at the earliest possible moment.
(b) Notice of Certain Proposed Filings. The Company will give the
Agents advance notice of its intention to file or prepare any additional
registration statement with respect to the registration of additional Notes, any
amendment to the Registration Statement or any amendment or supplement to the
Prospectus (other than an amendment or supplement providing solely for a change
in the interest rate or formula applicable to the Notes or relating solely to
the issuance and/or offering of securities other than the Notes), whether by the
filing of documents pursuant to the 1934 Act or the 1933 Act or otherwise, and
will furnish to the Agents copies of any such amendment or supplement or other
documents proposed to be filed or used a reasonable time in advance of such
proposed filing or use, as the case may be, and will not file any such amendment
or supplement or other documents in a form to which the Agents or counsel for
the Agents shall reasonably object.
(c) Copies of the Registration Statement and the Prospectus. The
Company will deliver to the Agents as many signed and conformed copies of the
Registration Statement (as originally filed) and of each amendment thereto
(including exhibits filed therewith or incorporated by reference therein and
documents incorporated by reference in the Prospectus) as the Agents reasonably
request. The Company will furnish to the Agents as many copies of the Prospectus
(as amended or supplemented) as the Agents reasonably request so long as the
Agents are required to deliver a Prospectus in connection with sales or
solicitations of offers to purchase the Notes.
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(d) Preparation of Pricing Supplements. The Company will prepare, with
respect to any Notes to be sold to or through one or more Agents pursuant to
this Agreement, a Pricing Supplement with respect to such Notes in a form
previously approved by the Agents and will file such Pricing Supplement pursuant
to Rule 424(b)(3) under the 1933 Act not later than the close of business of the
Commission on the fifth business day after the date on which such Pricing
Supplement is first used.
(e) Prospectus Revisions -- Material Changes. Except as otherwise
provided in subsection (l) of this Section, if at any time during the term of
this Agreement any event shall occur or condition exist as a result of which it
is necessary, in the opinion of counsel for the Agents or counsel for the
Company, to amend or supplement the Prospectus in order that the Prospectus will
not include an untrue statement of a material fact or omit to state any material
fact necessary in order to make the statements therein not misleading in the
light of the circumstances existing at the time the Prospectus is delivered to a
purchaser, or if it shall be necessary, in the opinion of either such counsel,
to amend or supplement the Registration Statement or the Prospectus in order to
comply with the requirements of the 1933 Act or the 1933 Act Regulations, the
Company shall give immediate notice, confirmed in writing, to the Agents to
cease the solicitation of offers to purchase the Notes in their capacity as
agents and to cease sales of any Notes they may then own as principal, and the
Company will promptly amend the Registration Statement and the Prospectus,
whether by filing documents pursuant to the 1934 Act or the 1933 Act or
otherwise, as may be necessary to correct such untrue statement or omission or
to make the Registration Statement and Prospectus comply with such requirements.
(f) Prospectus Revisions -- Periodic Financial Information. Except as
otherwise provided in subsection (l) of this Section, on or prior to the date on
which there shall be released to the general public interim financial statement
information related to the Company with respect to each of the first three
quarters of any fiscal year or preliminary financial statement information with
respect to any fiscal year, the Company shall furnish such information to the
Agents, confirmed in writing, and shall cause the Prospectus to be amended or
supplemented, whether by filing documents pursuant to the 1934 Act or the 1933
Act or otherwise, to include or incorporate by reference financial information
with respect thereto and corresponding information for the comparable period of
the preceding fiscal year, as well as such other information and explanations as
shall be necessary for an understanding thereof or as shall be required by the
1933 Act or the 1933 Act Regulations.
(g) Prospectus Revisions -- Audited Financial Information. Except as
otherwise provided in subsection (l) of this Section, on or prior to the date on
which there shall be released to the general public financial information
included in or derived from the audited financial statements of the Company for
the preceding fiscal year, the Company shall furnish such information to the
Agents, confirmed in writing, and shall cause the Registration Statement and the
Prospectus to be amended, whether by the filing of documents pursuant to the
1934 Act or the 1933 Act or otherwise, to include or incorporate by reference
such audited financial statements and the report or reports, and consent or
consents to such inclusion or incorporation by reference, of the independent
accountants with respect thereto, as well as such other information
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and explanations as shall be necessary for an understanding of such financial
statements or as shall be required by the 1933 Act or the 1933 Act Regulations.
(h) Earnings Statements. The Company will make generally available to
its security holders as soon as practicable, but not later than 90 days after
the close of the period covered thereby, an earnings statement (in form
complying with the provisions of Rule 158 of the 1933 Act Regulations) covering
each twelve month period beginning, in each case, not later than the first day
of the Company's fiscal quarter next following the "effective date" (as defined
in such Rule 158) of the Registration Statement with respect to each sale of
Notes.
(i) Blue Sky Qualifications. The Company will endeavor, in cooperation
with the Agents, to qualify the Notes for offering and sale under the applicable
securities laws of such states and other jurisdictions of the United States as
the Agents may designate, and will maintain such qualifications in effect for as
long as may be required for the distribution of the Notes; provided, however,
that the Company shall not be obligated to file any general consent to service
of process or to qualify as a foreign corporation in any jurisdiction in which
it is not so qualified. The Company will file such statements and reports as may
be required by the laws of each jurisdiction in which the Notes have been
qualified as above provided. The Company will promptly advise the Agents of the
receipt by the Company of any notification with respect to the suspension of the
qualification of the Notes for sale in any such state or jurisdiction or the
initiating or threatening of any proceeding for such purpose.
(j) 1934 Act Filings. The Company, during the period when the
Prospectus is required to be delivered under the 1933 Act or the 1934 Act in
connection with sales of the Notes, will file all documents required to be filed
with the Commission pursuant to Sections 13, 14 or 15(d) of the 1934 Act within
the time periods prescribed by the 1934 Act and the rules and regulations of the
Commission thereunder (the "1934 Act Regulations").
(k) Stand-Off Agreement. If specified by the applicable Agent or Agents
in connection with a purchase of Notes from the Company as principal, between
the date of the agreement to purchase such Notes and the Settlement Date with
respect to such purchase, the Company will not, without the prior written
consent of such Agent or Agents, offer or sell, grant any option for the sale
of, or enter into any agreement to sell, any debt securities of the Company
(other than (i) the Notes that are to be sold pursuant to such agreement, (ii)
commercial paper in the ordinary course of business, (iii) refinancing of debt
securities issued in private placements, (iv) assumptions of mortgages on
acquired properties and (v) offerings of tax-exempt bonds).
(l) Suspension of Certain Obligations. The Company shall not be
required to comply with the provisions of subsections (e), (f) or (g) of this
Section during any period from the time (i) the Agents shall have suspended
solicitation of purchases of the Notes in their capacity as agents pursuant to a
request from the Company and (ii) no Agent shall then hold any Notes purchased
as principal pursuant hereto, until the time the Company shall determine that
solicitation of purchases of the Notes should be resumed or an Agent shall
subsequently purchase Notes from the Company as principal.
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(m) Continued REIT Qualification. The Company will continue to
elect to qualify as a "real estate investment trust" under the Code and will use
its best efforts to continue to qualify as a "real estate investment trust."
SECTION 5. Conditions of Obligations.
The obligations of the Agents to purchase Notes from the Company as
principal and to solicit offers to purchase Notes as agent of the Company, and
the obligations of any purchasers of Notes sold through an Agent as agent, will
be subject to the accuracy of the representations and warranties on the part of
the Company herein and to the accuracy of the statements of the Company's
directors or officers made in any certificate furnished pursuant to the
provisions hereof, to the performance and observance by the Company of all its
covenants and agreements herein contained and to the following additional
conditions precedent:
(a) Legal Opinions. On the date hereof, the Agents shall have
received the following legal opinions, dated as of the date hereof and in form
and substance satisfactory to the Agents:
(1) Opinion of Company Counsel. The favorable opinion of
Hunton & Williams, counsel to the Company, to the effect that:
(i) The Company has been duly organized and is
validly existing as a corporation and in good standing under
the laws of the Commonwealth of Virginia, with corporate power
and authority to own its properties and conduct its business
as described in the Prospectus as amended or supplemented.
(ii) The Company is duly qualified to transact
business in all jurisdictions in which the conduct of its
business requires such qualification, or in which the failure
to qualify would have a materially adverse effect upon the
business of the Company.
(iii) Each subsidiary of the Company has been duly
organized and is validly existing as a corporation, limited
liability company or limited partnership in good standing
under the laws of the jurisdiction of its incorporation or
organization, with corporate power and authority or power and
authority as a limited liability company or limited
partnership to own its properties and conduct its business as
described in the Prospectus as amended or supplemented; each
such subsidiary is duly qualified to transact business in all
jurisdictions in which the conduct of its business requires
such qualification, or in which the failure to qualify would
have a materially adverse effect upon the business of such
subsidiary; all of the issued and outstanding capital stock of
each such corporate subsidiary has been duly authorized and
validly issued, is fully paid and non-assessable and is owned
by the Company free and clear of any security interest,
mortgage, pledge, lien, encumbrance, claim or equity; and the
Company and one such corporate subsidiary are the only members
or general partners of the Company's limited liability company
or limited partnership subsidiaries, as
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applicable, and own the entire membership or general
partnership interest in each such subsidiary free and clear of
any security interest, mortgage, pledge, lien, encumbrance,
claim or equity.
(iv) This Agreement has been duly authorized,
executed and delivered by the Company
(v) The Notes, in the form(s) certified by the
Company as of the date hereof, have been duly authorized for
issuance, offer and sale pursuant to this Agreement and, when
issued, authenticated and delivered pursuant to the provisions
of this Agreement and the Indenture against payment of the
consideration therefor, will constitute valid and legally
binding obligations of the Company, enforceable in accordance
with their terms, except as enforcement thereof may be limited
by bankruptcy, insolvency, reorganization, moratorium or other
laws relating to or affecting enforcement of creditors' rights
generally or by general equity principles, and except further
as enforcement thereof may be limited by (1) requirements that
a claim with respect to any Notes payable other than in U.S.
dollars (or a foreign currency or composite currency judgment
in respect of such claim) be converted into U.S. dollars at a
rate of exchange prevailing on a date determined pursuant to
applicable law or (2) governmental authority to limit, delay
or prohibit the making of payments outside the United States;
and each holder of Notes will be entitled to the benefits of
the Indenture.
(vi) The Indenture has been duly authorized,
executed and delivered by the Company and (assuming the
Indenture has been duly authorized, executed and delivered by
the Trustee) constitutes a legal, valid and binding agreement
of the Company, enforceable in accordance with its terms,
except as enforcement thereof may be limited by bankruptcy,
insolvency, reorganization, moratorium or other laws relating
to or affecting enforcement of creditors' rights generally or
by general equity principles, and further as enforcement
thereof may be limited by (1) requirements that a claim with
respect to any Notes payable other than in U.S. dollars (or a
foreign currency or composite currency judgment in respect of
such claim) be converted into U.S. dollars at a rate of
exchange prevailing on a date determined pursuant to
applicable law or (2) governmental authority to limit, delay
or prohibit the making of payments outside the United States.
(vii) The issue and sale of the Notes and the
compliance by the Company with all of the provisions of the
Notes, the Indenture and this Agreement with respect to the
Notes and the consummation of the transactions herein and
therein contemplated will not conflict with or result in a
breach or violation of any of the terms or provisions of, or
constitute a default under, any indenture, mortgage, deed of
trust, loan agreement or other agreement or instrument known
to such counsel to which the Company is a party or by which
the Company is bound or to which any of the property or assets
of the Company is subject, nor will such actions result in any
violation of the provisions of the Articles of Incorporation
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or By-laws of the Company or any statute or any order, rule or
regulation known to such counsel of any court or governmental
agency or body having jurisdiction over the Company or any of
its properties.
(viii) The Registration Statement is effective under
the 1933 Act and, to the best of such counsel's knowledge, no
stop order suspending the effectiveness of the Registration
Statement has been issued under the 1933 Act or proceedings
therefor initiated or threatened by the Commission.
(ix) The Registration Statement and the Prospectus,
excluding the documents incorporated by reference therein, as
of their respective effective or issue dates, comply as to
form in all material respects with the requirements of the
1933 Act and the 1933 Act Regulations; it being understood,
however, that no opinion need be rendered with respect to the
financial statements, schedules and other financial and
statistical data included or incorporated by reference in the
Registration Statement or the Prospectus. If applicable, the
Rule 434 Prospectus conforms in all material aspects to the
requirements of Rule 434 under the 1933 Act Regulations.
(x) Each document filed pursuant to the 1934 Act
(other than the financial statements, schedules and other
financial and statistical data included therein, as to which
no opinion need be rendered) and incorporated or deemed to be
incorporated by reference in the Prospectus complied when so
filed as to form in all material respects with the 1934 Act
and the 1934 Act Regulations.
(xi) The statements set forth in the Prospectus
under the captions "Description of Debt Securities",
"Description of Notes" and "Certain United States Federal
Income Tax Considerations", insofar as they constitute a
summary of documents referred to therein or matters of law are
accurate summaries and fairly and correctly present the
information called for with respect to such documents and
matters.
(xii) To the best of such counsel's knowledge and
information, there are no legal or governmental proceedings
pending or threatened which are required to be disclosed in
the Prospectus, other than those disclosed therein, and all
pending legal or governmental proceedings to which the Company
or any of its subsidiaries is a party or of which any of the
property of the Company or its subsidiaries is the subject
which are not described in the Prospectus, including ordinary
routine litigation incidental to the business, are, considered
in the aggregate, not material to the business of the Company
and its subsidiaries considered as one enterprise.
(xiii) To the best of such counsel's knowledge and
information, there are no contracts, indentures, mortgages,
loan agreements, notes, leases or other instruments required
to be described or referred to in the Registration Statement
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or the Prospectus or to be filed as exhibits to the
Registration Statement other than those described or referred
to therein or filed as exhibits thereto, the descriptions
thereof or references thereto are correct, and, to the best of
such counsel's knowledge and information, no default exists in
the due performance or observance of any obligation,
agreement, covenant or condition contained in any contract,
indenture, mortgage, loan agreement, note, lease or other
instrument so described, referred to or filed which would have
a material adverse effect on the condition, financial or
otherwise, or on the earnings, business affairs or business
prospects of the Company and its subsidiaries considered as
one enterprise.
(xiv) The Notes, in the form(s) certified by the
Company as of the date hereof, when issued, authenticated and
delivered pursuant to the provisions of this Agreement and the
Indenture, will be excluded or exempted from the provisions of
the Commodity Exchange Act.
(xv) Neither the Company nor any of its
subsidiaries is required to be registered under the 1940 Act.
(2) Opinion of Counsel to the Agents. The favorable opinion of
Brown & Wood LLP, counsel to the Agents, covering the matters referred
to in subsection (a)(1) under the subheadings (i), (iv), (v), (vi),
(viii), (ix) and (xi) above. In rendering their opinion, Brown & Wood
LLP may rely as to matters of Virginia law upon the opinion of Hunton &
Williams.
(3) Opinion of Counsel to the Company. The favorable opinion
of Hunton & Williams, counsel for the Company, in form and substance
satisfactory to counsel for the Agents, to the effect that the Company
has qualified to be taxed as a real estate investment trust pursuant to
Sections 856 through 860 of the Code for its most recently ended fiscal
year and for the four fiscal years immediately preceding such year, and
the Company's organization and contemplated method of operation are
such as to enable it to continue to so qualify for its current fiscal
year.
(4) Disclosure Documents. In giving their opinions required by
subsections (a)(1) and (a)(2), respectively, of this Section, Hunton &
Williams and Brown & Wood LLP shall each additionally state that
nothing has come to their attention that would lead them to believe
that the Registration Statement or any amendment thereto (excluding the
financial statements and financial schedules included or incorporated
by reference therein, as to which such counsel need express no belief),
at the time it became effective or at the time an Annual Report on Form
10-K was filed by the Company with the Commission (whichever is later),
contained an untrue statement of a material fact or omitted to state a
material fact required to be stated therein or necessary to make the
statements therein not misleading or that the Prospectus or any
amendment or supplement thereto (excluding the financial statements and
financial schedules included or incorporated by reference therein, as
to which such counsel need express no belief), at the date hereof (or,
if such
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opinion is being delivered in connection with the purchase of Notes
from the Company by one or more Agents as principal pursuant to Section
7(c) hereof, at the date of any agreement by such Agent or Agents to
purchase Notes as principal and at the Settlement Date with respect
thereto, as the case may be) (included or) includes an untrue statement
of a material fact or (omitted or) omits to state a material fact
necessary in order to make the statements therein, in the light of the
circumstances under which they were made, not misleading.
(b) Officer's Certificate. At the date hereof, the Agents shall have
received a certificate of the Chief Executive Officer, President or Vice
President and the principal financial officer or principal accounting officer of
the Company, dated as of the date hereof, to the effect that (i) since the
respective dates as of which information is given in the Prospectus or since the
date of any agreement by one or more Agents to purchase Notes from the Company
as principal, there has not been any material adverse change in the condition,
financial or otherwise, or in the earnings, business affairs or business
prospects of the Company and its subsidiaries considered as one enterprise,
whether or not arising in the ordinary course of business, (ii) the
representations and warranties of the Company contained in Section 2 hereof are
true and correct with the same force and effect as though expressly made at and
as of the date of such certificate and (iii) the Company has performed or
complied with all agreements and satisfied all conditions on its part to be
performed or satisfied at or prior to the date of such certificate.
(c) Comfort Letter of Ernst & Young LLP. On the date hereof, the Agents
shall have received a letter from Ernst & Young LLP, dated as of the date hereof
and in form and substance satisfactory to the Agents, to the effect that:
(i) they are independent accountants with respect to the
Company and its subsidiaries within the meaning of the 1933 Act and the
1934 Act and the applicable published rules and regulations thereunder;
(ii) it is their opinion that the consolidated financial statements and
supporting schedules of the Company and its subsidiaries included or
incorporated by reference in the Registration Statement and the
Prospectus and covered by their opinions therein comply in form in all
material respects with the applicable accounting requirements of the
1933 Act and the 1934 Act and the related published rules and
regulations thereunder; (iii) based upon limited procedures set forth
in detail in such letter (which shall include, without limitation, the
procedures specified by the American Institute of Certified Public
Accountants for a review of interim financial information as described
in SAS No. 71, Interim Financial Information, with respect to the
unaudited condensed consolidated financial statements of the Company
and its subsidiaries included or incorporated by reference in the
Registration Statement), nothing came to their attention that caused
them to believe that (A) any material modifications should be made to
the unaudited financial statements and financial statement schedules of
the Company and its subsidiaries included or incorporated by reference
in the Registration Statement and the Prospectus for them to be in
conformity with generally accepted accounting principles, (B) the
unaudited financial statements and financial statement schedules of the
Company included or incorporated by reference in the Registration
Statement and the Prospectus do not comply as to form in all material
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respects with the applicable accounting requirements of the 1934 Act
and the related published rules and regulations thereunder, or (C) at a
specified date not more than three days prior to the date of such
letter, there has been any change in the capital stock of the Company
or in the notes payable or mortgage notes payable of the Company or any
decrease in the total assets of the Company, as compared with the
amounts shown in the most recent consolidated balance sheet included or
incorporated by reference in the Registration Statement and the
Prospectus or, during the period from the date of the most recent
consolidated statement of operations included or incorporated by
reference in the Registration Statement and the Prospectus to a
specified date not more than three days prior to the date of such
letter, there were any decreases, as compared with the corresponding
period in the preceding year, in rental income or in the total or per
share amounts of net income or income before gains (losses) on
investments and extraordinary items of the Company, except in all
instances for changes, increases or decreases which the Registration
Statement and the Prospectus disclose have occurred or may occur or
except for such exceptions enumerated in such letter as shall have been
agreed to by the Agents and the Company; (iv) they have compared the
information in the Prospectus under selected captions with the
disclosure requirements of Regulation S-K and on the basis of limited
procedures specified in such letter nothing came to their attention as
a result of the foregoing procedures that caused them to believe that
this information does not conform in all material respects with the
disclosure requirements of Items 301, 402 and 503(d) of Regulation S-K;
and (v) in addition to the audit referred to in their opinions and the
limited procedures referred to in clause (iii) and (iv) above, they
have carried out certain specified procedures, not constituting an
audit, with respect to certain amounts, percentages and financial
information which are included or incorporated by reference in the
Registration Statement and the Prospectus and which are specified by
the Agents, and have found such amounts, percentages and financial
information to be in agreement with the relevant accounting, financial
and other records of the Company and its subsidiaries identified in
such letter.
(d) Other Documents. On the date hereof and on each Settlement Date,
counsel to the Agents shall have been furnished with such documents and opinions
as such counsel may reasonably require for the purpose of enabling such counsel
to pass upon the issuance and sale of Notes as herein contemplated and related
proceedings, or in order to evidence the accuracy and completeness of any of the
representations and warranties, or the fulfillment of any of the conditions,
herein contained; and all proceedings taken by the Company in connection with
the issuance and sale of Notes as herein contemplated shall be satisfactory in
form and substance to the Agents and to counsel to the Agents.
If any condition specified in this Section 5 shall not have been
fulfilled when and as required to be fulfilled, this Agreement may be terminated
by the applicable Agent or Agents by notice to the Company at any time and any
such termination shall be without liability of any party to any other party,
except that the covenant regarding provision of an earnings statement set forth
in Section 4(h) hereof, the provisions concerning payment of expenses under
Section 10 hereof, the indemnity and contribution agreement set forth in
Sections 8 and 9 hereof, the provisions concerning the representations,
warranties and agreements to survive delivery of
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Section 11 hereof, the provisions relating to governing law and forum set forth
in Section 14 and the provisions relating to parties set forth in Section 15
hereof shall remain in effect.
SECTION 6. Delivery of and Payment for Notes Sold through an Agent.
Delivery of Notes sold through an Agent as agent shall be made by the
Company to such Agent for the account of any purchaser only against payment
therefor in immediately available funds. In the event that a purchaser shall
fail either to accept delivery of or to make payment for a Note on the date
fixed for settlement, such Agent shall promptly notify the Company and deliver
such Note to the Company and, if such Agent has theretofore paid the Company for
such Note, the Company will promptly return such funds to such Agent. If such
failure occurred for any reason other than default by such Agent in the
performance of its obligations hereunder, the Company will reimburse such Agent
on an equitable basis for its loss of the use of the funds for the period such
funds were credited to the Company's account.
SECTION 7. Additional Covenants of the Company.
The Company covenants and agrees with the Agents that:
(a) Reaffirmation of Representations and Warranties. Each acceptance by
the Company of an offer for the purchase of Notes (whether to one or more Agents
as principal or through an Agent as agent), and each delivery of Notes (whether
to one or more Agents as principal or through an Agent as agent), shall be
deemed to be an affirmation that the representations and warranties of the
Company contained in this Agreement and in any certificate theretofore delivered
to the Agents pursuant hereto are true and correct at the time of such
acceptance or sale, as the case may be, and an undertaking that such
representations and warranties will be true and correct at the time of delivery
to such Agent or Agents or to the purchaser or its agent, as the case may be, of
the Note or Notes relating to such acceptance or sale, as the case may be, as
though made at and as of each such time (and it is understood that such
representations and warranties shall relate to the Registration Statement and
Prospectus as amended and supplemented to each such time).
(b) Subsequent Delivery of Certificates. Each time that (i) the
Registration Statement or the Prospectus shall be amended or supplemented (other
than by an amendment or supplement providing solely for a change in the interest
rate or formula applicable to the Notes or relating solely to the issuance
and/or offering of securities other than the Notes), (ii) there is filed with
the Commission any document incorporated by reference into the Prospectus (other
than any Current Report on Form 8-K relating solely to the issuance and/or
offering of securities other than the Notes, unless the Agents shall otherwise
specify), (iii) (if required in connection with the purchase of Notes from the
Company by one or more Agents as principal) the Company sells Notes to such
Agent or Agents as principal or (iv) the Company sells Notes in a form not
previously certified to the Agents by the Company, the Company shall furnish or
cause to be furnished to the Agent(s), forthwith a certificate dated the date of
filing with the Commission of such supplement or document, the date of
effectiveness of such amendment, or the date of such sale, as the case may be,
in form satisfactory to the Agent(s) to the effect that the
20
<PAGE>
statements contained in the certificate referred to in Section 5(b) hereof which
were last furnished to the Agents are true and correct at the time of such
amendment, supplement, filing or sale, as the case may be, as though made at and
as of such time (except that such statements shall be deemed to relate to the
Registration Statement and the Prospectus as amended and supplemented to such
time) or, in lieu of such certificate, a certificate of the same tenor as the
certificate referred to in Section 5(b) hereof, modified as necessary to relate
to the Registration Statement and the Prospectus as amended and supplemented to
the time of delivery of such certificate.
(c) Subsequent Delivery of Legal Opinions. Each time that (i) the
Registration Statement or the Prospectus shall be amended or supplemented (other
than by an amendment or supplement providing solely for a change in the interest
rate or formula applicable to the Notes, providing solely for the inclusion of
additional financial information, or, unless the Agents shall otherwise specify,
relating solely to the issuance and/or offering of securities other than the
Notes), (ii) there is filed with the Commission any document incorporated by
reference into the Prospectus (other than any Current Report on Form 8-K
relating solely to the issuance and/or offering of securities other than the
Notes, unless the Agents shall otherwise specify), (iii) (if required in
connection with the purchase of Notes from the Company by one or more Agents as
principal) the Company sells Notes to such Agent or Agents as principal or (iv)
the Company sells Notes in a form not previously certified to the Agents by the
Company, the Company shall furnish or cause to be furnished forthwith to the
Agents and to counsel to the Agents the written opinion of Hunton & Williams,
counsel to the Company, or other counsel satisfactory to the Agents, dated the
date of filing with the Commission of such supplement or document, the date of
effectiveness of such amendment, or the date of such sale, as the case may be,
in form and substance satisfactory to the Agents, of the same tenor as the
opinion referred to in Section 5(a)(1) hereof (and including the statement
required by Section 5(a)(4)), but modified, as necessary, to relate to the
Registration Statement and the Prospectus as amended and supplemented to the
time of delivery of such opinion or, in lieu of such opinion, counsel last
furnishing such opinion to the Agents shall furnish the Agents with a letter
substantially to the effect that the Agents may rely on such last opinion to the
same extent as though it was dated the date of such letter authorizing reliance
(except that statements in such last opinion shall be deemed to relate to the
Registration Statement and the Prospectus as amended and supplemented to the
time of delivery of such letter authorizing reliance).
(d) Subsequent Delivery of Comfort Letters. Each time that (i) the
Registration Statement or the Prospectus shall be amended or supplemented to
include additional financial information (other than by an amendment or
supplement relating solely to the issuance and/or offering of securities other
than the Notes), (ii) there is filed with the Commission any document
incorporated by reference into the Prospectus which contains additional
financial information, or (iii) (if required in connection with the purchase of
Notes from the Company by one or more Agents as principal) the Company sells
Notes to such Agent or Agents as principal, the Company shall cause Ernst &
Young LLP forthwith to furnish to the Agents a letter, dated the date of
effectiveness of such amendment, supplement or document with the Commission, or
the date of such sale, as the case may be, in form satisfactory to the Agents,
of the same tenor as the portions of the letter referred to in clauses (i) and
(ii) of Section 5(c) hereof but modified
21
<PAGE>
to relate to the Registration Statement and Prospectus as amended and
supplemented to the date of such letter, and of the same general tenor as the
portions of the letter referred to in clauses (iii) and (iv) of said Section
5(c) with such changes as may be necessary to reflect changes in the financial
statements and other information derived from the accounting records of the
Company.
SECTION 8. Indemnification.
(a) Indemnification of the Agents. The Company agrees to indemnify and
hold harmless each Agent and each person, if any, who controls such Agent within
the meaning of Section 15 of the 1933 Act as follows:
(i) against any and all loss, liability, claim, damage and
expense whatsoever, as incurred, arising out of any untrue statement or
alleged untrue statement of a material fact contained in the
Registration Statement (or any amendment thereto), including the
information deemed to be a part of the Registration Statement pursuant
to Rule 434 of the 1933 Act Regulations, if applicable, or the omission
or alleged omission therefrom of a material fact required to be stated
therein or necessary to make the statements therein not misleading or
arising out of any untrue statement or alleged untrue statement of a
material fact included in the Prospectus (or any amendment or
supplement thereto) or the omission, or alleged omission therefrom, of
a material fact necessary in order to make the statements therein, in
the light of the circumstances under which they were made, not
misleading;
(ii) against any and all loss, liability, claim, damage and
expense whatsoever, as incurred, to the extent of the aggregate amount
paid in settlement of any litigation, or investigation or proceeding by
any governmental agency or body, commenced or threatened, or of any
claim whatsoever based upon any such untrue statement or omission
referred to in subsection (i) above, or any such alleged untrue
statement or omission, if such settlement is effected with the written
consent of the Company; and
(iii) against any and all expense whatsoever, as incurred
(including, the fees and disbursements of counsel chosen by the
Agents), reasonably incurred in investigating, preparing or defending
against any litigation, or any investigation or proceedings by any
governmental agency or body, commenced or threatened, or any claim
whatsoever based upon any such untrue statement or omission, or any
such alleged untrue statement or omission, to the extent that any such
expense is not paid under (i) or (ii) above;
provided, however, that this indemnity agreement shall not apply to any loss,
liability, claim, damage or expense to the extent arising out of any untrue
statement or omission or alleged untrue statement or omission made in reliance
upon and in conformity with written information furnished to the Company by any
Agent expressly for use in the Registration Statement (or any amendment thereto)
or the Prospectus (or any amendment or supplement thereto).
22
<PAGE>
(b) Indemnification of the Company. Each Agent agrees to indemnify and
hold harmless the Company, its directors, each of its officers who signed the
Registration Statement and each person, if any, who controls the Company within
the meaning of Section 15 of the 1933 Act, against any and all loss, liability,
claim, damage and expense described in the indemnity contained in subsection (a)
of this Section, but only with respect to untrue statements or omissions, or
alleged untrue statements or omissions, made in the Registration Statement (or
any amendment thereto) or the Prospectus (or any amendment or supplement
thereto) in reliance upon and in conformity with written information furnished
to the Company by such Agent expressly for use in the Registration Statement (or
any amendment thereto) or the Prospectus (or any amendment or supplement
thereto).
(c) General. Each indemnified party shall give notice as promptly as
reasonably practicable to each indemnifying party of any action commenced
against it in respect of which indemnity may be sought hereunder, but failure to
so notify an indemnifying party shall not relieve such indemnifying party from
any liability which it may have otherwise than on account of this indemnity
agreement. An indemnifying party may participate at its own expense in the
defense of such action. In no event shall the indemnifying parties be liable for
fees and expenses of more than one counsel (in addition to any local counsel)
separate from their own counsel for all indemnified parties in connection with
any one action or separate but similar or related actions in the same
jurisdiction arising out of the same general allegations or circumstances.
SECTION 9. Contribution.
In order to provide for just and equitable contribution in
circumstances in which the indemnity agreement provided for in Section 8 is for
any reason held to be unenforceable by the indemnified parties although
applicable in accordance with its terms, the Company and the Agents shall
contribute to the aggregate losses, liabilities, claims, damages and expenses of
the nature contemplated by said indemnity agreement incurred by the Company and
one or more of the Agents, as incurred, in such proportions that each Agent is
responsible for that portion represented by the percentage that the commission
or underwriting discount received by such Agent bears to the total sales price
from the sale of the Notes sold to or through such Agent that were the subject
of the claim for indemnification and the Company is responsible for the balance;
provided, however, that no person guilty of fraudulent misrepresentation (within
the meaning of Section 11(f) of the 1933 Act) shall be entitled to contribution
from any person who was not guilty of such fraudulent misrepresentation. For
purposes of this Section 9, each person, if any, who controls an Agent within
the meaning of Section 15 of the 1933 Act shall have the same rights to
contribution as such Agent, and each director of the Company, each officer of
the Company who signed the Registration Statement, and each person, if any, who
controls the Company within the meaning of Section 15 of the 1933 Act shall have
the same rights to contribution as the Company.
23
<PAGE>
SECTION 10. Payment of Expenses.
The Company will pay all expenses incident to the performance of its
obligations under this Agreement, including:
(a) The preparation and filing of the Registration Statement and all
amendments thereto and the Prospectus and any amendments or supplements thereto;
(b) The preparation, filing and reproduction of this Agreement;
(c) The preparation, printing, issuance and delivery of the Notes,
including any fees and expenses relating to the eligibility and issuance of
Notes in book-entry form;
(d) The fees and disbursements of the Company's accountants and
counsel, of the Trustee and its counsel, and of any calculation agent or
exchange rate agent;
(e) The reasonable fees and disbursements of counsel to the Agents
incurred in connection with the establishment of the program relating to the
Notes and incurred from time to time in connection with the transactions
contemplated hereby;
(f) The qualification of the Notes under state securities laws in
accordance with the provisions of Section 4(i) hereof, including filing fees and
the reasonable fees and disbursements of counsel for the Agents in connection
therewith and in connection with the preparation of any Blue Sky or Legal
Investment Survey;
(g) The printing and delivery to the Agents in quantities as stated
above of copies of the Registration Statement and any amendments thereto, and of
the Prospectus and any amendments or supplements thereto, and the delivery by
the Agents of the Prospectus and any amendments or supplements thereto in
connection with solicitations or confirmations of sales of the Notes;
(h) The preparation, reproducing and delivery to the Agents of copies
of the Indenture and all amendments, supplements and modifications thereto;
(i) Any fees charged by nationally recognized statistical rating
organizations for the rating of the Notes;
(j) The fees and expenses incurred in connection with any listing of
Notes on a securities exchange;
(k) The fees and expenses incurred with respect to any filing with the
National Association of Securities Dealers, Inc.;
(l) Any advertising and other out-of-pocket expenses of the Agents
incurred with the approval of the Company; and
24
<PAGE>
(m) The cost of providing any CUSIP or other identification numbers for
the Notes.
SECTION 11. Representations, Warranties and Agreements to Survive Delivery.
All representations, warranties and agreements contained in this
Agreement or in certificates of officers of the Company submitted pursuant
hereto or thereto shall remain operative and in full force and effect,
regardless of any investigation made by or on behalf of the Agents or any
controlling person of an Agent, or by or on behalf of the Company, and shall
survive each delivery of and payment for any of the Notes.
SECTION 12. Termination.
(a) Termination of this Agreement. This Agreement (excluding any
agreement by one or more Agents to purchase Notes from the Company as principal)
may be terminated for any reason at any time by the Company or by an Agent, as
to itself, upon the giving of 30 days' written notice of such termination to the
other party hereto.
(b) Termination of Agreement to Purchase Notes as Principal. The
applicable Agent or Agents may also terminate any agreement by such Agent or
Agents to purchase Notes from the Company as principal, by notice to the
Company, at any time at or prior to the Settlement Date relating thereto (i) if
there has been, since the date of such agreement or since the respective dates
as of which information is given in the Prospectus, any material adverse change
in the condition, financial or otherwise, or in the earnings, business affairs
or business prospects of the Company and its subsidiaries considered as one
enterprise, whether or not arising in the ordinary course of business, or (ii)
if there has occurred any material adverse change in the financial markets in
the United States or any outbreak of hostilities or other calamity or crisis or
escalation of any existing hostilities, the effect of which is such as to make
it, in the judgment of such Agent or Agents, impracticable to market the Notes
or enforce contracts for the sale of the Notes, or (iii) if trading in any of
the securities of the Company has been suspended by the Commission or the New
York Stock Exchange, or if trading generally on either the New York Stock
Exchange or the American Stock Exchange has been suspended, or minimum or
maximum prices for trading have been fixed, or maximum ranges for prices for
securities have been required, by either of said exchanges or by order of the
Commission or any other governmental authority, or if a banking moratorium has
been declared by Federal, New York or Virginia authorities, (iv) if the rating
assigned by any nationally recognized statistical rating organization to any
debt securities of the Company as of the date of such agreement shall have been
lowered since that date or if any such rating organization shall have publicly
announced that it has under surveillance or review, with possible negative
implications, its rating of any debt securities of the Company, or (v) if there
shall have come to the attention of such Agent or Agents any facts that would
cause them to believe that the Prospectus, at the time it was required to be
delivered to a purchaser of Notes, included an untrue statement of a material
fact or omitted to state a material fact necessary in order to make the
statements therein, in light of the circumstances existing at the time of such
delivery, not misleading.
25
<PAGE>
(c) General. In the event of any such termination, neither party will
have any liability to the other party hereto, except that (i) the Agents shall
be entitled to any commission earned in accordance with the third paragraph of
Section 3(b) hereof, (ii) if at the time of termination (A) any Agent shall own
any Notes purchased by it as principal with the intention of reselling them or
(B) an offer to purchase any of the Notes has been accepted by the Company but
the time of delivery to the purchaser or his agent of the Note or Notes relating
thereto has not occurred, the covenants set forth in Sections 4 and 7 hereof
shall remain in effect until such Notes are so resold or delivered, as the case
may be, and (iii) the covenant set forth in Section 4(h) hereof, the provisions
of Section 10 hereof, the indemnity and contribution agreements set forth in
Sections 8 and 9 hereof, and the provisions of Sections 11, 14 and 15 hereof
shall remain in effect.
SECTION 13. Notices.
Unless otherwise provided herein, all notices required under the terms
and provisions hereof shall be in writing, either delivered by hand, by mail or
by telex, telecopier or telegram, and any such notice shall be effective when
received at the address specified below.
If to the Company:
United Dominion Realty Trust, Inc.
10 South 6th Street, Suite 203
Richmond, Virginia 23219-3802
Attention: John P. McCann, President and Chief Executive Officer
Telecopy No.: (804) 343-1912
If to the Agents:
Merrill Lynch & Co.
Merrill Lynch, Pierce, Fenner & Smith
Incorporated
World Financial Center
North Tower - 10th Floor
New York, New York 10281-1310
Attention: MTN Product Management
Telecopy No.: (212) 449-2234
Alex. Brown & Sons Incorporated
135 E. Baltimore Street
Baltimore, Maryland 21202
Attention: William G. Byrnes, Managing Director
Telecopy No.: (410) 783-3033
26
<PAGE>
Goldman, Sachs & Co.
85 Broad Street
New York, New York 10004
Attention: Lisa Payne, Vice President
Telecopy No.: (212) 902-3000
J.P. Morgan Securities Inc.
60 Wall Street
New York, New York 10260
Attention: Keysha Bailey, Vice President
Telecopy No.: (212) 648-5151
NationsBanc Capital Markets, Inc.
100 North Tryon Street
Charlotte, North Carolina 28255
Attention: Lynn McConnell, Director of Product Management
Telecopy No.: (704) 388-9939
or at such other address as such party may designate from time to time by notice
duly given in accordance with the terms of this Section 13.
SECTION 14. Governing Law; Forum.
This Agreement and all the rights and obligations of the parties shall
be governed by and construed in accordance with the laws of the State of New
York applicable to agreements made and to be performed in such State. Any suit,
action or proceeding brought by the Company against any Agent in connection with
or arising under this Agreement shall be brought solely in the state or federal
court of appropriate jurisdiction located in the Borough of Manhattan, The City
of New York.
SECTION 15. Parties.
This Agreement shall inure to the benefit of and be binding upon the
Agents and the Company and their respective successors. Nothing expressed or
mentioned in this Agreement is intended or shall be construed to give any
person, firm or corporation, other than the parties hereto and their respective
successors and the controlling persons and officers and directors referred to in
Sections 8 and 9 and their heirs and legal representatives, any legal or
equitable right, remedy or claim under or in respect of this Agreement or any
provision herein contained. This Agreement and all conditions and provisions
hereof are intended to be for the sole and exclusive benefit of the parties
hereto and respective successors and said controlling persons and officers and
directors and their heirs and legal representatives, and for the benefit of no
other person, firm or corporation. No purchaser of Notes shall be deemed to be a
successor by reason merely of such purchase.
27
<PAGE>
SECTION 16. Counterparts.
This Agreement may be executed in one or more counterparts and, if
executed in more than one counterpart, the executed counterparts hereof shall
constitute a single instrument.
28
<PAGE>
If the foregoing is in accordance with the Agents' understanding of our
agreement, please sign and return to the Company a counterpart hereof, whereupon
this instrument along with all counterparts will become a binding agreement
between the Agents and the Company in accordance with its terms.
Very truly yours,
UNITED DOMINION REALTY TRUST, INC.
By: s/ James Dolphin
-------------------------------
Name: James Dolphin
Title: Senior Vice President
Confirmed and Accepted, as of the date first above written:
MERRILL LYNCH, PIERCE, FENNER & SMITH
INCORPORATED
By: S/
-------------------------------
ALEX. BROWN & SONS INCORPORATED
By: S/
- -------------------------------
S/
- -------------------------------
(Goldman, Sachs & Co.)
J.P. MORGAN SECURITIES INC.
By: S/
- -------------------------------
NATIONSBANC CAPITAL MARKETS, INC.
By: S/
- -------------------------------
29
<PAGE>
EXHIBIT A
The following terms, if applicable, shall be agreed to by one or more
Agents and the Company in connection with each sale of Notes:
Principal Amount: $
(or principal amount of foreign currency or composite currency)
Interest Rate or Formula:
If Fixed Rate Note,
Interest Rate:
Default Rate:
Interest Payment Dates:
If Floating Rate Note,
Interest Rate Basis(es):
If LIBOR,
[ ] LIBOR Reuters - Page:
[ ] LIBOR Telerate - Page:
Index Currency:
If CMT Rate,
Designated CMT Telerate Page:
Designated CMT Maturity Index:
Index Maturity:
Spread and/or Spread Multiplier, if any:
Initial Interest Rate, if any:
Initial Interest Reset Date:
Interest Reset Dates:
Interest Payment Dates:
Default Rate:
Maximum Interest Rate, if any:
Minimum Interest Rate, if any:
Fixed Rate Commencement Date, if any:
Fixed Interest Rate, if any:
Calculation Agent:
If Redeemable:
Initial Redemption Date:
Initial Redemption Percentage:
Annual Redemption Percentage Reduction, if any:
If Repayable:
Optional Repayment Date(s):
Original Issue Date:
Stated Maturity Date:
Specified Currency:
Exchange Rate Agent:
Authorized Denomination:
Purchase Price: %, plus accrued interest, if any, from
Settlement Date and Time:
Additional/Other Terms:
<PAGE>
Also, in connection with the purchase of Notes from the Company by one or more
Agents as principal, agreement as to whether the following will be required:
Officers' Certificate pursuant to Section 7(b) of the Distribution
Agreement. Legal Opinions pursuant to Section 7(c) of the Distribution
Agreement. Comfort Letter pursuant to Section 7(d) of the Distribution
Agreement. Stand-off Agreement pursuant to Section 4(k) of the
Distribution Agreement.
<PAGE>
SCHEDULE A
As compensation for the services of the Agents hereunder, the Company
shall pay the applicable Agent, on a discount basis, a commission for the sale
of each Note equal to the principal amount of such Note multiplied by the
appropriate percentage set forth below:
PERCENT OF
MATURITY RANGES PRINCIPAL AMOUNT
From 9 months to less than 1 year............. .125%
From 1 year to less than 18 months............ .150
From 18 months to less than 2 years........... .200
From 2 years to less than 3 years............. .250
From 3 years to less than 4 years............. .350
From 4 years to less than 5 years............. .450
From 5 years to less than 6 years............. .500
From 6 years to less than 7 years............. .550
From 7 years to less than 10 years............ .600
From 10 years to less than 15 years........... .625
From 15 years to less than 20 years........... .700
From 20 years to 30 years..................... .750
Greater than 30 years......................... *
- --------
* As agreed to by the Company and the applicable Agent at the time of
sale.
United Dominion Realty Trust, Inc. EXHIBIT 12
Computation of Ratio of Earnings to Combined
Fixed Charges and Preferred Stock Dividends
(DOLLARS IN THOUSANDS)
<TABLE>
<CAPTION>
Three Months Three Months Six Months Six Months
Ended Ended Ended Ended
June 30, June 30, June 30, June 30,
1995 1996 1995 1996
------------------------------------- -----------------------------------
<S> <C>
Net income $11,569 $8,166 $17,719 $17,725
Add:
Portion of rents representative
of the interest factor 43 88 90 176
Interest on indebtedness 10,135 11,237 20,589 21,883
============ ================= ================== =================
Earnings $21,747 $19,491 $38,398 $39,784
============ ================= ================== =================
Fixed charges and preferred stock dividend:
Interest on indebtedness $10,135 $11,237 $20,589 $21,883
Capitalized interest -- 124 -- 254
Portion of rents representative
of the interest factor 43 88 90 176
------------ ----------------- ------------------ -----------------
Fixed charges 10,178 11,449 20,679 22,313
------------ ----------------- ------------------ -----------------
Add:
Preferred stock dividend 1,781 2,428 1,781 4,856
------------ ----------------- ------------------ -----------------
Combined fixed charges and preferred
stock dividend $11,959 $13,877 $22,460 $27,169
============ ================= ================== =================
Ratio of earnings to fixed charges 2.14x 1.70x 1.86x 1.78x
Ratio of earnings to combined fixed charges
and preferred stock dividend 1.82 1.40 1.71 1.46
</TABLE>
<TABLE> <S> <C>
<ARTICLE> 5
<S> <C>
<PERIOD-TYPE> 6-MOS
<FISCAL-YEAR-END> DEC-31-1995
<PERIOD-END> JUN-30-1996
<CASH> 7,592
<SECURITIES> 0
<RECEIVABLES> 0
<ALLOWANCES> 0
<INVENTORY> 0
<CURRENT-ASSETS> 23,560
<PP&E> 1,286,755
<DEPRECIATION> 146,988
<TOTAL-ASSETS> 1,170,919
<CURRENT-LIABILITIES> 43,936
<BONDS> 617,135
0
105,000
<COMMON> 56,745
<OTHER-SE> 346,096
<TOTAL-LIABILITY-AND-EQUITY> 1,170,919
<SALES> 112,036
<TOTAL-REVENUES> 112,831
<CGS> 0
<TOTAL-COSTS> 48,911
<OTHER-EXPENSES> 25,147
<LOSS-PROVISION> 0
<INTEREST-EXPENSE> 21,883
<INCOME-PRETAX> 8,296
<INCOME-TAX> 0
<INCOME-CONTINUING> 17,725
<DISCONTINUED> 0
<EXTRAORDINARY> 0
<CHANGES> 0
<NET-INCOME> 17,725
<EPS-PRIMARY> .23
<EPS-DILUTED> .23
</TABLE>
