<PAGE>
As filed with the Securities and Exchange Commission on July 20, 1995
Registration No. 33-
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
--------------------------
FORM S-3
REGISTRATION STATEMENT
UNDER THE SECURITIES ACT OF 1933
--------------------------
COMMERCIAL NET LEASE REALTY, INC.
(Exact name of registrant as specified in its charter)
MARYLAND 56-1431377
(State or other jurisdiction of incorporation) (IRS Employer Identification No.)
400 East South Street, Suite 500
Orlando, Florida 32801
TELEPHONE: (407) 422-1574
----------------------------
(Address, including zip code and telephone number, including area code, of
registrant's principal executive offices)
--------------------------
ROBERT A. BOURNE, PRESIDENT
Commercial Net Lease Realty, Inc.
400 East South Street, Suite 500
Orlando, Florida 32801
Telephone: (407) 422-1574
(Name, address, including zip code and telephone number, including area code of
agent for service)
-------------------------------------
Copies to:
THOMAS H. MCCORMICK, ESQ.
Shaw, Pittman, Potts & Trowbridge
2300 N Street, N.W.
Washington, D.C. 20037
(202) 663-8000
-------------------------------------
APPROXIMATE DATE OF COMMENCEMENT OF PROPOSED SALE OF THE
SECURITIES TO THE PUBLIC:
As soon as practicable following the effective date of this
Registration Statement.
--------------------------------------
If the only securities being registered on this form are being offered
pursuant to dividend or interest reinvestment plans, please check the following
box. / /
If any of the securities being registered on this Form are to be offered on
a delayed or continuous basis pursuant to Rule 415 under the Securities Act of
1933, other than securities offered only in connection with dividend or interest
reinvestment plans, check the following box. /X/
CALCULATION OF REGISTRATION FEE
<TABLE>
<CAPTION>
- ------------------------------------------------------------------------------------------------------------------------------------
- ------------------------------------------------------------------------------------------------------------------------------------
Type of Each Class of Securities to Amount Being Proposed Maximum Proposed Maximum Amount Of
be Registered (1) Registered (2) Offering Price (3) Aggregate Offering Price (2)(3) Registration Fee
- ------------------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C>
Debt Securities
Common Stock, $.01 par value(4) $200,000,000 (5) $200,000,000 $68,966(7)
Common Stock Warrants
- ------------------------------------------------------------------------------------------------------------------------------------
- ------------------------------------------------------------------------------------------------------------------------------------
</TABLE>
(FOOTNOTES ON FOLLOWING PAGE)
---------------------------------
THE REGISTRANT HEREBY AMENDS THIS REGISTRATION STATEMENT ON SUCH DATE OR DATES
AS MAY BE NECESSARY TO DELAY ITS EFFECTIVE DATE UNTIL THE REGISTRANT SHALL FILE
A FURTHER AMENDMENT WHICH SPECIFICALLY STATES THAT THIS REGISTRATION STATEMENT
SHALL THEREAFTER BECOME EFFECTIVE IN ACCORDANCE WITH SECTION 8(a) OF THE
SECURITIES ACT OF 1933 OR UNTIL THE REGISTRATION STATEMENT SHALL BECOME
EFFECTIVE ON SUCH DATE AS THE COMMISSION, ACTING PURSUANT TO SAID SECTION 8(a),
MAY DETERMINE.
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
<PAGE>
(FOOTNOTES TO CALCULATION OF REGISTRATION FEE TABLE)
(1) Offered Securities registered hereunder may be sold separately,
together or as units with other Offered Securities registered
hereunder.
(2) In U.S. Dollars or the equivalent thereof at the time of sale for any
Debt Security denominated in one or more foreign currencies or units
of two or more foreign currencies or composite currencies (such as
European Currency Units).
(3) Estimated solely for purposes of calculating the registration fee. No
separate consideration will be received for shares of Common Stock
that are issued upon conversion of Debt Securities. The aggregate
maximum public offering price of all Offered Securities issued
pursuant to this Registration Statement will not exceed $200,000,000.
Debt Securities may be issued with original issue discount such that
the aggregate initial public offering price will not exceed
$200,000,000.
(4) Including such indeterminate number of shares of Common Stock as may
from time to time be issued at indeterminate prices or issuable upon
exercise of the Common Stock Warrants to purchase Common Stock
registered hereunder, as the case may be.
(5) Omitted pursuant to General Instruction II.D of Form S-3 under the
Securities Act of 1933, as amended.
(6) Calculated pursuant to Rule 457(o) of the rules and regulations under
the Securities Act of 1933, as amended.
<PAGE>
COMMERCIAL NET LEASE REALTY, INC.
CROSS-REFERENCE SHEET
PURSUANT TO RULE 404 AND ITEM 501 OF REGULATION S-K
<TABLE>
<CAPTION>
ITEM LOCATION IN PROSPECTUS
---- ----------------------
<S> <C>
1. Forepart of Registration Statement and Outside Front Cover Page of Prospectus
Cover Page
2. Inside Front and Outside Back Cover Pages Cover of Prospectus
of Prospectus
3. Summary Information, Risk Factors and Prospectus Summary, Ratios of Earnings to Fixed Charges
Ratio of Earnings to Fixed Charges
4. Use of Proceeds Use of Proceeds
5. Determination of Offering Price Not Applicable
6. Dilution Not Applicable
7. Selling Security Holders Not Applicable
8. Plan of Distribution Underwriting
9. Description of Securities to be Registered Description of Debt Securities, Description of Common Stock,
Description of Common Stock Warrants
10. Interests of Named Experts and Counsel Not Applicable
11. Material Changes Not Applicable
12. Incorporation of Certain Information by Incorporation of Certain Documents by Reference
Reference
13. Disclosure of Commission Position on Not Applicable
Indemnification for Securities Act
Liabilities
</TABLE>
<PAGE>
SUBJECT TO COMPLETION
PRELIMINARY PROSPECTUS DATED JULY 20, 1995
[LOGO]
COMMERCIAL NET LEASE REALTY, INC.
$200,000,000
DEBT SECURITIES, COMMON STOCK AND COMMON STOCK WARRANTS
Commercial Net Lease Realty, Inc. (the "Company") may from time to time
offer in one or more series (i) its debt securities (the "Debt Securities),
which may be senior debt securities or subordinated debt securities, (ii) Common
Stock, par value $.01 per share (the "Common Stock"), or (iii) warrants to
purchase Common Stock (the "Common Stock Warrants"), with an aggregate public
offering price of up to $200,000,000 on terms to be determined at the time or
times of offering. The Debt Securities, Common Stock or Common Stock Warrants
(collectively, the "Offered Securities") may be offered, separately or together,
in separate classes or series in amounts, at prices and on terms to be set forth
in a supplement to this Prospectus (a "Prospectus Supplement").
The specific terms of the Offered Securities in respect of which this
Prospectus is being delivered will be set forth in the applicable Prospectus
Supplement and will include, where applicable: (i) in the case of Debt
Securities, the specific title, aggregate principal amount, ranking, currency,
form (which may be registered or bearer, or certified or global), authorized
denominations, maturity, rate (or manner of calculation thereof) and time of
payment of interest, terms for redemption at the option of the Company or
repayment at the option of the holder thereof, terms for sinking fund payments,
terms for conversion into Common Stock or other securities of the Company, and
any initial public offering price; (ii) in the case of Common Stock, any initial
public offering price; and (iii) in the case of Common Stock Warrants, the
duration, offering price, exercise price and detachability. In addition, such
specific terms may include limitations on direct or beneficial ownership and
restrictions on transfer of the Offered Securities, in each case as may be
appropriate to preserve the status of the Company as a real estate investment
trust ("REIT") for federal income tax purposes.
The applicable Prospectus Supplement will also contain information, where
applicable, about certain United States federal income tax considerations
relating to, and any listing on a securities exchange of, the Offered Securities
covered by such Prospectus Supplement.
The Offered Securities may be offered directly, through agents designated
from time to time by the Company, or to or through underwriters or dealers. If
any agents or underwriters are involved in the sale of any of the Offered
Securities, their names and any applicable purchase price, fee, commission or
discount arrangement between or among them will be set forth or will be
calculable from the information set forth in the applicable Prospectus
Supplement. See "Plan of Distribution." No Offered Securities may be sold
without delivery of the applicable Prospectus Supplement describing the method
and terms of the offering of such class or series of Offered Securities.
____________________
THESE SECURITIES HAVE NOT BEEN APPROVED OR DISAPPROVED BY THE SECURITIES
AND EXCHANGE COMMISSION OR ANY STATE SECURITIES COMMISSION NOR HAS
THE SECURITIES AND EXCHANGE COMMISSION OR ANY STATE SECURITIES
COMMISSION PASSED UPON THE ACCURACY OR ADEQUACY OF THIS
PROSPECTUS. ANY REPRESENTATION TO THE CONTRARY
IS A CRIMINAL OFFENSE.
____________________
THE ATTORNEY GENERAL OF THE STATE OF NEW YORK HAS NOT PASSED ON OR
ENDORSED THE MERITS OF THIS OFFERING. ANY REPRESENTATION
TO THE CONTRARY IS UNLAWFUL.
____________________
THE DATE OF THIS PROSPECTUS IS , 1995.
----------
<PAGE>
AVAILABLE INFORMATION
The Company is subject to the informational requirements of the Securities
Exchange Act of 1934, as amended (the "Exchange Act"), and the rules and
regulations promulgated thereunder and in accordance therewith files reports,
proxy statements and other information with the Securities and Exchange
Commission (the "Commission"). Such reports, proxy statements and other
information filed by the Company with the Commission, may be inspected and
copied at the public reference facilities maintained by the Commission at Room
1024, Judiciary Plaza, 450 Fifth Street, N.W., Washington, D.C. 20549, Seven
World Trade Center, 13th Floor, New York, New York 10048 and Suite 1400,
Northwestern Atrium Center, 500 West Madison Street, Chicago, Illinois 60661.
Copies of such material also can be obtained from the Public Reference Section
of the Commission at Judiciary Plaza, 450 Fifth Street, N.W., Washington, D.C.
20549, at prescribed rates. The Company's Common Stock is listed on the New
York Stock Exchange under the ticker symbol "NNN." Reports, proxy statements
and other information concerning the Company also may be inspected at the New
York Stock Exchange, 20 Broad Street, New York, New York 10005.
The Company has filed with the Commission a registration statement (the
"Registration Statement") (of which this Prospectus is a part) on Form S-3 under
the Securities Act of 1933, as amended (the "Securities Act"), with respect to
the Offered Securities. This Prospectus does not contain all of the information
set forth in the Registration Statement, including the exhibits and schedules
thereto, certain parts of which are omitted as permitted by the rules and
regulations of the Commission. Statements contained in this Prospectus as to
the contents of any document are necessarily summaries of such documents, and in
each instance reference is made to the copy of such documents filed with the
Commission, each such statement being qualified in all respects by such
reference. For further information regarding the Company and the Offered
Securities, reference is hereby made to the Registration Statement and to the
exhibits and schedules filed or incorporated as a part thereof which may be
obtained from the Commission at its principle office in Washington, D.C. upon
payment of the fees prescribed by the Commission.
INCORPORATION OF CERTAIN DOCUMENTS BY REFERENCE
The documents listed below have been filed by the Company under the
Exchange Act with the Commission and are incorporated herein by reference:
a. Annual Report on Form 10-K for the fiscal year ended December 31,
1994; and
b. Quarterly Report on Form 10-Q for the quarter ended March 31,
1995.
All documents filed by the Company pursuant to Sections 13(a), 13(c), 14
and 15(d) of the Exchange Act subsequent to the date of this Prospectus and
prior to the termination of the offering of the Offered Securities shall be
deemed to be incorporated by reference in this Prospectus and to be part hereof
from the date of filing such documents.
Any statement contained herein, or in a document incorporated or deemed to
be incorporated by reference herein, shall be deemed to be modified or
superseded for purposes of this Prospectus to the extent that a statement
contained herein or in any subsequently filed document which also is or is
deemed to be incorporated by reference herein, modifies or supersedes such
statement. Any such statement so modified or superseded shall not be deemed,
except as so modified or superseded, to constitute a part of this Prospectus.
The Company will provide without charge to each person, including any
beneficial owner, to whom a copy of this Prospectus is delivered, on the written
request of any such person, a copy of any or all of the documents incorporated
herein by reference, except the exhibits to such documents (unless such exhibits
are specifically incorporated by reference in such documents). Requests for
such copies should be directed to Kevin B. Habicht, Commercial Net Lease Realty,
Inc., 400 East South Street, Suite 500, Orlando, Florida 32801 (telephone
number: 407/ 422-1574).
-2-
<PAGE>
THE COMPANY
Commercial Net Lease Realty, Inc., a Maryland corporation (the "Company"),
is a real estate investment trust (a "REIT") formed in 1984 that acquires, owns
and manages a diversified portfolio of high-quality, single-tenant, freestanding
properties leased to major retail businesses under full-credit, long-term
commercial net leases. As of June 30, 1995, the Company owned 142 properties
acquired for an aggregate purchase price of approximately $194 million and
having an annualized current cash on cost return (on an Inclusive Cost basis as
defined below) of approximately 10.29%. For the purposes of the Prospectus,
"Inclusive Cost" means all costs related to acquisitions, including but not
limited to the purchase price, legal and accounting fees and expenses,
commissions and title insurance.
The Company focuses on acquiring freestanding properties that are located
within intensive commercial corridors near traffic generators, such as regional
malls, business developments and major thoroughfares. These properties, which
generally have purchase prices of up to $5 million, attract a wide array of
established retail tenants. Consequently, management believes that such
properties offer attractive opportunities for stable current return and
potential capital appreciation. In addition, management believes that the
location and design of properties in this niche provide flexibility in use and
tenant selection and an increased likelihood of advantageous re-lease terms.
The Company has been successful in attracting tenants that operate in a
variety of retail segments, including Eckerd Drug, Marshalls and Burger King,
and "category killer" retailers such as Barnes & Noble Bookstores, OfficeMax,
Computer City and Linens 'n Things. "Category killer" retailers offer an
extensive variety of merchandise in a defined product category at competitive
prices through a "superstore" format, providing the convenience of in-depth
product selection in a single location. The Company intends to continue leasing
properties it acquires in the future to "category killer" retailers or other
major national or regional retail businesses.
CNL Realty Advisors, Inc. (the "Advisor") is the Company's advisor. The
Advisor is a wholly owned subsidiary of CNL Group, Inc. ("CNL Group"), a
diversified real estate company with expertise in commercial net leased
investments that currently owns and manages, either directly or through
affiliates (collectively, "CNL Affiliates"), a property portfolio with a cost in
excess of $600 million. Under the direction of the Company's Board of
Directors, the Advisor has responsibility for the day-to-day operations of the
Company, including investment analysis and development, acquisitions, due
diligence, and asset management and accounting services. Management of the
Company believes that the Advisor's extensive experience and long-term
relationships throughout the commercial net leased property industry benefits
the Company in selecting, acquiring and managing its properties. In focusing on
acquiring freestanding properties that are located within intensive commercial
corridors which have been successful in attracting a variety of retail tenants,
including "category killer" retailers, management of the Company also believes
that the Advisor provides the Company with a competitive advantage in the
management and operation of its real estate assets and in the identification of
attractive investments. At the time the Company retained the Advisor in July
1992 the Company owned 28 properties leased to one tenant. The aggregate cost
of such properties was approximately $12.8 million. As of June 30, 1995, the
Company had acquired 117 additional properties leased to 28 tenants for an
aggregate purchase price of approximately $182.7 million, which currently
provide an annualized cash on cost return (on an Inclusive Cost basis) of
approximately 10.42% percent.
The principal office of the Company is located at 400 East South Street,
Suite 500, Orlando, Florida 32801 and the Company's telephone number is 407/
422-1574.
USE OF PROCEEDS
Unless otherwise described in the applicable Prospectus Supplement, the
Company intends to use the net proceeds from the sale of the Offered Securities
for general corporate purposes, which may include the repayment of certain
indebtedness outstanding at such time, the acquisition of single tenant
freestanding properties as suitable opportunities arise and the expansion and
improvement of certain properties in the Company's portfolio.
-3-
<PAGE>
RATIOS OF EARNINGS TO FIXED CHARGES
The Company's ratio of earnings to fixed charges for the three months ended
March 31, 1995 was 7.56, and for the years ended December 31, 1994, 1993 and
1992 was 12.86, 9.77 and 6.18, respectively. The Company had no debt for the
fiscal years ending December 31, 1991 and 1990. For the purposes of computing
these ratios, earnings have been calculated by adding fixed charges (excluding
capitalized interest) to income (loss) before taxes and extraordinary items.
Fixed charges consist of interest costs, whether expensed or capitalized, and
amortization of debt expense and discount or premium relating to any
indebtedness, whether expensed or capitalized.
DESCRIPTION OF DEBT SECURITIES
GENERAL
The Debt Securities will be direct obligations of the Company, which may be
secured or unsecured, and which may be senior or subordinated indebtedness of
the Company. The Debt Securities may be issued under one or more indentures,
each dated as of a date before the issuance of the Debt Securities to which it
relates and in the form that has been filed as an exhibit to the Registration
Statement of which this Prospectus is a part, subject to such amendments or
supplements as may be adopted from time to time. Each such indenture
(collectively, the "Indenture") will be entered into between the Company and a
trustee (the "Trustee"), which may be the same Trustee. The Indenture will be
subject to, and governed by, the Trust Indenture Act of 1939, as amended. The
statements made hereunder relating to the Indenture and the Debt Securities are
summaries of the anticipated provisions thereof, do not purport to be complete
and are subject to, and are qualified in their entirety by reference to, all
provisions of the Indenture and such Debt Securities. Capitalized terms used
but not defined herein shall have the respective meanings set forth in the
Indenture.
TERMS
The particular terms of the Debt Securities offered by a Prospectus
Supplement will be described in the particular Prospectus Supplement, along with
any applicable modifications of or additions to the general terms of the Debt
Securities as described herein and in the applicable Indenture and any
applicable federal income tax considerations. Accordingly, for a description of
the terms of any series of Debt Securities, reference must be made to both the
Prospectus Supplement relating thereto and the description of the Debt
Securities set forth in this Prospectus.
Except as set forth in any Prospectus Supplement, the Debt Securities may
be issued without limits as to aggregate principal amount, in one or more
series, in each case as established from time to time by the Company's Board of
Directors or as set forth in the applicable Indenture or one or more indentures
supplemental to the Indenture. All Debt Securities of one series need not be
issued at the same time and, unless otherwise provided, a series may be
reopened, without the consent of the holders of the Debt Securities of such
series, for issuance of additional Debt Securities of such series.
Each Indenture will provide that the Company may, but need not, designate
more than one Trustee thereunder, each with respect to one or more series of
Debt Securities. Any Trustee under an Indenture may resign or be removed with
respect to one or more series of Debt Securities, and a successor trustee may be
appointed to act with respect to such series. If two or more persons are acting
as Trustee with respect to different series of Debt Securities, each such
Trustee shall be a Trustee of a trust under the applicable Indenture separate
and apart from the trust administered by any other Trustee and, except as
otherwise indicated herein, any action described herein to be taken by a Trustee
may be taken by each such Trustee with respect to, and only with respect to, the
one or more series of Debt Securities for which it is Trustee under the
applicable Indenture.
The following summaries set forth certain general terms and provisions of
the Indenture and the Debt Securities. The Prospectus Supplement relating to
the series of Debt Securities being offered will contain further terms of such
Debt Securities, including the following specific terms:
(1) the title of such Debt Securities;
-4-
<PAGE>
(2) the aggregate principal amount of such Debt Securities and any limit
on such aggregate principal amount;
(3) the percentage of the principal amount at which such Debt Securities
will be issued and, if other than the principal amount thereof, the portion of
the principal amount thereof payable upon declaration of acceleration of the
maturity thereof, or (if applicable) the portion of the principal amount of such
Debt Securities which is convertible into Common Stock or other equity
securities of the Company, or the method by which any such portion shall be
determined;
(4) if such Debt Securities are convertible, any limitation to the
ownership or transferability of the Common Stock or other equity securities of
the Company into which such Debt Securities are convertible in connection with
the preservation of the Company's status as a REIT;
(5) the date or dates, or the method for determining the date or dates, on
which the principal of such Debt Securities will be payable;
(6) the rate or rates (which may be fixed or variable), or the method by
which such rate or rates shall be determined, at which such Debt Securities will
bear interest, if any;
(7) the date or dates, or the method for determining the date or dates,
from which any such interest will accrue, the dates upon which any such interest
will be payable, the record dates for payment of such interest or the method by
which any such dates shall be determined, the persons to whom such interest
shall be payable, and the basis upon which interest shall be calculated if other
than that of a 360-day year of twelve 30-day months;
(8) the place or places where the principal of (and premium, if any) or
interest, if any, on such Debt Securities will be payable, where such Debt
Securities may be surrendered for conversion or registration of transfer or
exchange, and where notices or demands to or upon the Company in respect to such
Debt Securities and the applicable Indenture may be served;
(9) the period or periods within which, the price or prices at which, and
the terms and conditions upon which such Debt Securities may be redeemed, as a
whole or in part, at the option of the Company, if the Company is to have such
an option;
(10) the obligation, if any, of the Company to redeem, repay or purchase
such Debt Securities pursuant to any sinking fund or analogous provision or at
the option of a holder thereof, and the period or periods within which, the
price or prices at which and the terms and conditions upon which such Debt
Securities will be redeemed, repaid or purchased, as a whole or in part,
pursuant to such obligation;
(11) if other than U.S. dollars, the currency or currencies in which such
Debt Securities are denominated and payable, which may be a foreign currency or
units of two or more foreign currencies or a composite currency or currencies,
and the terms and conditions relating thereto;
(12) whether the amount of payments of principal (and premium, if any) or
interest, if any, on such Debt Securities may be determined with reference to an
index, formula or other method (which index, formula or method may, but need not
be, based on a currency, currencies, currency unit or units or composite
currency or currencies) and the manner in which such amounts shall be
determined;
(13) any additions to, modifications of or deletions from the terms of such
Debt Securities with respect to the events of default or covenants set forth in
the applicable Indenture;
(14) whether such Debt Securities will be issued in certificated or book-
entry form;
(15) whether such Debt Securities will be in registered or bearer form or
both and, if and to the extent in registered form, the denominations thereof if
other than $1,000 and any integral multiple thereof and, if and to the extent in
bearer form, the denominations thereof and terms and conditions relating
thereto;
(16) the applicability, if any, of the defeasance and covenant defeasance
provisions described herein or set forth in the applicable Indenture, or any
modification thereof;
-5-
<PAGE>
(17) the terms, if any, upon which such Debt Securities may be convertible
into Common Stock or other equity securities of the Company (and the class
thereof) and the terms and conditions upon which such conversion will be
effected, including, without limitation, the initial conversion price or rate
and the conversion period;
(18) whether and under what circumstances the Company will pay additional
amounts on such Debt Securities in respect of any tax, assessment or
governmental charge and, if so, whether the Company will have the option to
redeem such Debt Securities in lieu of making such payment;
(19) the provisions, if any, relating to the security provided for such
Debt Securities; and
(20) any other terms of such Debt Securities not inconsistent with the
provisions of the applicable Indenture.
The Debt Securities may provide for less than the entire principal amount
thereof to be payable upon declaration of acceleration of the maturity thereof
("Original Issue Discount Securities"). Any special U.S. federal income tax,
accounting and other considerations applicable to Original Issue Discount
Securities will be described in the applicable Prospectus Supplement.
Except as may be set forth in the applicable Prospectus Supplement, the
Debt Securities will not contain any provisions that would limit the ability of
the Company to incur indebtedness or that would afford holders of Debt
Securities protection in a highly leveraged or similar action involving the
Company or in the event of a change of control of the Company. However, certain
restrictions on ownership and transfers of the Company's Common Stock and the
Company's other equity securities designed to preserve its status as a REIT may
act to prevent or hinder a change of control. See "Description of Common Stock
- -- Restrictions on Ownership." Reference is made to the applicable Prospectus
Supplement for information with respect to any deletion from, modification of or
addition to the events of default or covenants of the Company that are described
below, including any addition of a covenant or other provision providing event
risk or similar protection.
DENOMINATIONS, INTEREST, REGISTRATION AND TRANSFER
Unless otherwise described in the applicable Prospectus Supplement, the
Debt Securities of any series will be issuable in denominations of $1,000 and
integral multiples thereof.
Unless otherwise specified in the applicable Prospectus Supplement, the
principal of (and premium, if any) and interest on any series of Debt Securities
will be payable at the applicable Trustee's corporate trust office, the address
of which will be set forth in the applicable Prospectus Supplement; PROVIDED,
HOWEVER, that, at the Company's option, payment of interest may be made by check
mailed to the address of the person entitled thereto as it appears in the
applicable register for such Debt Securities or by wire transfer of funds to
such person at an account maintained within the United States.
Any interest not punctually paid or duly provided for on any date upon
which interest is payable with respect to a Debt Security ("Defaulted Interest")
will forthwith cease to be payable to the holder on the applicable regular
record date and may either be paid to the person in whose name such Debt
Security is registered at the close of business on a special record date (the
"Special Record Date") for the payment of such Defaulted Interest to be fixed by
the applicable Trustee, notice of which shall be given to the holder of such
Debt Security not less than 10 days prior to such Special Record Date, or may be
paid at any time in any other lawful manner, all as more completely described in
the applicable Indenture.
Subject to certain limitations applicable to Debt Securities issued in
book-entry form, the Debt Securities of any series will be exchangeable for
other Debt Securities of the same series and of a like aggregate principal
amount and tenor of different authorized denominations upon surrender of such
Debt Securities at the corporate trust office of the applicable Trustee. In
addition, subject to certain limitations applicable to Debt Securities issued in
book-entry form, the Debt Securities of any series may be surrendered for
conversion or registration of transfer thereof at the corporate trust office of
the applicable Trustee. Every Debt Security surrendered for conversion,
registration of transfer or exchange must be duly endorsed or accompanied by a
written instrument of transfer. No service charge will be made for any
registration of transfer or exchange of any Debt Securities, but the Company may
require payment of a sum sufficient to cover any tax or other governmental
charge payable in connection therewith. If the
-6-
<PAGE>
applicable Prospectus Supplement refers to any transfer agent (in addition to
the Trustee) initially designated by the Company with respect to any series of
Debt Securities, the Company may at any time rescind the designation of any such
transfer agent or approve a change in the location at which any such transfer
agent acts, except that the Company will be required to maintain a transfer
agent in each place of payment for such series. The Company may at any time
designate additional transfer agents with respect to any series of Debt
Securities.
Neither the Company nor any Trustee will be required (i) to issue, register
the transfer of or exchange Debt Securities of any series during a period
beginning at the opening of business 15 days before any selection of Debt
Securities of that series to be redeemed and ending at the close of business on
the day of mailing of the relevant notice of redemption; (ii) to register the
transfer of or exchange any Debt Security, or portion thereof, called for
redemption, except the unredeemed portion of any Debt Security being redeemed in
part; or (iii) to issue, register the transfer of or exchange any Debt Security
which has been surrendered for repayment at the option of the holder, except the
portion, if any, of such Debt Security not to be so repaid.
MERGER, CONSOLIDATION OR SALE
Each Indenture provides that the Company may consolidate with, or sell,
lease or convey all or substantially all of its assets to, or merge with or
into, any other corporation, provided that (a) either the Company must be the
continuing corporation, or the successor corporation (if other than the Company)
formed by or resulting from any such consolidation or merger or which shall have
received the transfer of such assets must expressly assume payment of the
principal of (and premium, if any), and interest on, all of the outstanding Debt
Securities and the due and punctual performance and observance of all of the
covenants and conditions contained in the applicable Indenture; (b) immediately
after giving effect to such transaction and treating any indebtedness which
becomes an obligation of the Company or any subsidiary as a result thereof as
having been incurred by the Company or such subsidiary at the time of such
transaction, no event of default under the applicable Indenture, and no event
which, after notice or the lapse of time, or both, would become such an event of
default, shall have occurred and be continuing; and (c) an officer's certificate
and legal opinion concerning such conditions shall be delivered to the Trustee.
CERTAIN COVENANTS
EXISTENCE. Except as permitted under " -- Merger, Consolidation or Sale,"
the Indenture will require the Company to do or cause to be done all things
necessary to preserve and keep in full force and effect its corporate existence,
rights (by articles of incorporation, bylaws or statute) and franchises;
PROVIDED, HOWEVER, that the Company will not be required to preserve any right
or franchise if it determines that the preservation thereof is no longer
desirable in the conduct of its business.
MAINTENANCE OF PROPERTIES. The Indenture will require the Company to 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 and must
cause to be made all necessary repairs, renewals, replacements, betterments and
improvements thereof, all as in the judgment of the Company may be necessary so
that the business carried on in connection therewith may be properly and
advantageously conducted at all times; PROVIDED, HOWEVER, that the Company and
its subsidiaries will not be prevented from selling or otherwise disposing for
value its properties in the ordinary course of business.
INSURANCE. The Indenture will require the Company to, and to cause each of
its subsidiaries to, keep or cause to be kept in force upon all of its
properties and operations policies of insurance carried with responsible
companies in such amounts and covering all such risks as shall be customary in
the industry in accordance with prevailing market conditions and availability.
PAYMENT OF TAXES AND OTHER CLAIMS. The Indenture will require the Company
to pay or discharge or cause to be paid or discharged (or, if applicable, cause
to be transferred to bond or other security), before the same shall become
delinquent, (a) all taxes, assessments and governmental charges levied or
imposed upon it or any subsidiary or upon the income, profits or property of the
Company or any subsidiary, and (b) all lawful claims for labor, materials and
supplied which, if unpaid, might by law become a lien upon the property of the
Company or any subsidiary, PROVIDED, HOWEVER, that the Company will not be
required to pay or discharge (or transfer to bond or other
-7-
<PAGE>
security) or cause to be paid or discharged any such tax, assessment, charge or
claim whose amount, applicability or validity it being contested in good faith
by appropriate proceedings.
PROVISION OF FINANCIAL INFORMATION. Whether or not the Company is subject
to Section 13 or 15(d) of the Exchange Act, the Indenture will require the
Company, within 15 days after each of the respective dates by which the Company
would have been required to file annual reports, quarterly reports and other
documents with the Commission if the Company were so subject, (a) to transmit by
mail to all holders of Debt Securities, as their names and addresses appear in
the applicable register for such Debt Securities, without cost to such holders,
copies of the annual reports, quarterly reports and other documents that the
Company would have been required to file with the Commission pursuant to Section
13 or 15(d) of the Exchange Act if the Company were subject to such Sections,
(b) to file with the Trustee copies of the annual reports, quarterly and other
documents that the Company would have been required to file with the Commission
pursuant to Section 13 or 15(d) of the Exchange Act if the Company were subject
to such Sections, and (c) to supply promptly upon written request and payment of
the reasonable cost of duplication and delivery, copies of such documents to any
prospective holder of Debt Securities.
ADDITIONAL COVENANTS. Any additional covenants of the Company with respect
to any of the series of Debt Securities will be set forth in the Prospectus
Supplement relating thereto.
EVENTS OF DEFAULT, NOTICE AND WAIVER
Unless otherwise provided in the applicable indenture, the Indenture will
provide that the following events are "Events of Default" with respect to any
series of Debt Securities issued thereunder: (a) default for 30 days in the
payment of any installment of interest on any Debt Security of such series; (b)
default in the payment of the principal of (or premium, if any, on) any Debt
Security of such series at its maturity; (c) default in making any sinking fund
payment as required for any Debt Security of such series; (d) default in the
performance of any other covenant of the Company contained in the applicable
Indenture (other than a covenant added to such Indenture solely for the benefit
of a series of Debt Securities issued thereunder other than such series),
continued for 60 days after written notice as provided in such Indenture; (e)
default under any evidence of indebtedness of the Company or any mortgage,
indenture or other instrument under which such indebtedness is issued or by
which such indebtedness is secured which results in the acceleration of
indebtedness in an aggregate principal amount exceeding $10,000,000, but only if
such indebtedness is not discharged or such acceleration is not rescinded or
annulled as provided in the applicable Indenture; (f) certain events of
bankruptcy, insolvency or reorganization, or court appointment of a receiver,
liquidator or trustee, of the Company or of any Significant Subsidiary or of the
respective property of either; and (g) any other event of default provided with
respect to that series of Debt Securities. The term "Significant Subsidiary"
means each significant subsidiary (as defined in Regulation S-X promulgated
under the Securities Act) of the Company.
If an Event of Default under any Indenture with respect to Debt Securities
of any series issued thereunder at the time outstanding occurs and is
continuing, then in every such case the applicable Trustee or the holders of not
less than 25% in principal amount of the outstanding Debt Securities of that
series may declare the principal amount (or, if the Debt Securities of that
series are Original Issue Discount Securities or indexed securities, such
portion of the principal amount as may be specified in the terms thereof) of all
of the Debt Securities of that series to be due and payable immediately by
written notice thereof to the Company (and to the applicable Trustee if given by
the holders). However, at any time after such a declaration of acceleration
with respect to Debt Securities of such series (or of all Debt Securities then
outstanding under such Indenture, as the case may be) has been made, the holders
of not less than a majority in principal amount of Debt Securities of such
series (or of each series of Debt Securities then outstanding under such
Indenture, as the case may be) may rescind and annul such declaration and its
consequences if (a) the Company shall have deposited with such Trustee all
required payments of the principal of (and premium, if any) and interest on the
Debt Securities of such series (or of all Debt Securities then outstanding under
such Indenture, as the case may be), plus certain fees, expenses, disbursements
and advances of the applicable Trustee and (b) all events of default, other than
the nonpayment of accelerated principal (or specified portion thereof) with
respect to Debt Securities of such series (or of all Debt Securities then
outstanding under such Indenture, as the case may be) have been cured or waived
as provided in such Indenture. The Indenture will also provide that the holders
of not less than a majority in principal amount of the Debt Securities of any
series (or of each series of Debt Securities then outstanding under the
applicable Indenture, as the case may be) may waive any past default with
-8-
<PAGE>
respect to such series and its consequences, except a default (x) in the payment
of the principal of (or premium, if any) or interest on any Debt Security of
such series or (y) in respect of a covenant or provision contained in such
Indenture that cannot be modified or amended without the consent of the holder
of each outstanding Debt Security affected thereby.
The Indenture will provide that the Trustee thereunder is required to give
notice to the holders of Debt Securities issued thereunder within 90 days of a
default under the Indenture unless such default shall have been cured or waived;
PROVIDED, HOWEVER, that such Trustee may withhold notice to the holders of any
such series of Debt Securities of any default with respect to such series
(except a default in the payment of the principal of (or premium, if any) or
interest on any Debt Security of such series or in the payment of any sinking
fund installment in respect of any Debt Security of such series) if specified
responsible officers of the Trustee consider such withholding to be in the
interest of such holders.
The Indenture will provide that no holder of Debt Securities of any series
issued thereunder may institute any proceeding, judicial or otherwise, with
respect to such Indenture or for any remedy thereunder, except in the case of
the failure of the applicable Trustee, for 60 days, to act after it has received
a written request to institute proceedings in respect of an event of default
from the holders of not less than 25% in principal amount of the outstanding
Debt Securities of such series, as well as an offer of reasonable indemnity.
This provision will not prevent, however, any holder of Debt Securities from
instituting suit for the enforcement of payment of the principal of (and
premium, if any) and interest on the Debt Securities held by that holder at the
respective due dates thereof.
Subject to provisions in the Indenture relating to its duties in case of
default, the Trustee thereunder is under no obligation to exercise any of its
rights or powers under such Indenture at the request or direction of any holders
of any series of Debt Securities then outstanding under such Indenture, unless
such holders shall have offered to such Trustee reasonable security or
indemnity. The holders of not less than a majority in principal amount of the
outstanding Debt Securities of any series (or of each series of Debt Securities
then outstanding under such Indenture, as the case may be) shall have the right
to direct the time, method and place of conducting any proceeding for any remedy
available to such Trustee, or of exercising any trust or power conferred upon
such Trustee. However, such Trustee may refuse to follow any direction which is
in conflict with any law or such Indenture, which may involve such Trustee in
personal liability or which may be unduly prejudicial to the holders of Debt
Securities of such series not joining therein.
Within 120 days after the close of each fiscal year, the Company must
delivery to each Trustee under the Indentures a certificate, signed by one of
several specified officers, stating whether such officer has knowledge of any
default under the Indenture and, if so, specifying each such default and the
nature and status thereof.
MODIFICATION OF THE INDENTURES
Modifications and amendments of any Indenture may be made only with the
consent of the holders of not less than a majority in principal amount of all
outstanding Debt Securities issued thereunder which are affected by such
modification or amendment; PROVIDED, HOWEVER, that no such modification or
amendment may, without the consent of the holder of each such Debt Security
affected thereby, (a) change the stated maturity of the principal of, or any
installment of interest (or premium, if any) on, any such Debt Security; (b)
reduce the principal amount of, or the rate of amount of interest on, or any
premium payable on redemption of, any such Debt Security, or reduce the amount
of principal of an Original Issue Discount Security that would be due and
payable upon declaration of acceleration of the maturity thereof or would be
provable in bankruptcy, or adversely affect any right of repayment of the holder
of any such Debt Security; (c) change the place of payment, or the currency or
currencies, for payment of principal of, or premium, if any, or interest on any
such Debt Security; (d) impair the right to institute suit for the enforcement
of any payment on or with respect to any such Debt Security; (e) reduce the
percentage of outstanding Debt Securities of any series necessary to modify or
amend the applicable Indenture, to waive compliance with certain provisions
thereof or certain defaults and consequences thereunder or to reduce the quorum
or voting requirements set forth in such Indenture; or (f) modify any of the
foregoing provisions or any of the provisions relating to the waiver of certain
past defaults or certain covenants, except to increase the required percentage
to effect such action or to provide that certain other provisions may not be
modified or waived without the consent of the holder of such Debt Security.
-9-
<PAGE>
The holders of a majority in aggregate principal amount of outstanding Debt
Securities of each series may, on behalf of all holders of Debt Securities of
that series, waive, insofar as that series is concerned, compliance by the
Company with certain covenants in the applicable Indenture, including those
described in " -- Certain Covenants."
Modifications and amendments of the Indenture may be made by the Company
and the Trustee without the consent of any holder of Debt Securities issued
thereunder for any of the following purposes: (a) to evidence the succession of
another person to the Company as obligor under such Indenture; (b) to add to the
covenants of the Company for the benefit of the holders of all or any series of
Debt Securities issued thereunder or to surrender any right or power conferred
upon the Company in such Indenture; (c) to add events of default for the benefit
of the holders of all or any series of Debt Securities issued thereunder; (d) to
add or change any provisions of such Indenture to facilitate the issuance of, or
to liberalize certain terms of, Debt Securities issued thereunder in bearer
form, or to permit or facilitate the issuance of such Debt Securities in
uncertificated form, provided that such action shall not adversely affect the
interests of the holders of such Debt Securities of any series in any material
respect; (e) to change or eliminate any provision of such Indenture, provided
that any such change or elimination shall become effective only when there are
no Debt Securities outstanding of any series issued thereunder created prior
thereto which are entitled to the benefit of such provision; (f) to secure the
Debt Securities issued thereunder; (g) to establish the form or terms of Debt
Securities of any series issued thereunder, including the provisions and
procedures, if applicable, for the conversion of such Debt Securities into
Common Stock of the Company; (h) to provide for the acceptance of appointment by
a successor Trustee or facilitate the administration of the trusts under such
Indenture by more than one Trustee; (i) to cure any ambiguity, defect or
inconsistency in such Indenture, provided that such action shall not adversely
affect the interests of holders of Debt Securities of any series issued
thereunder in any material respect; or (j) to supplement any of the provisions
of such Indenture to the extent necessary to permit or facilitate defeasance and
discharge of any series of such Debt Securities issued thereunder, provided that
such action shall not adversely affect the interests of the holders of the Debt
Securities of any series issued thereunder in any material respect.
The Indenture will provide that in determining whether the holders of the
requisite principal amount of outstanding Debt Securities of a series issued
thereunder have given any request, demand, authorization, direction, notice,
consent or waiver thereunder or whether a quorum is present at a meeting of
holders of such Debt Securities, (a) the principal amount of an Original Issue
Discount Security that shall be deemed to be outstanding shall be the amount of
the principal thereof that would be due and payable as of the date of such
determination upon declaration of acceleration of the maturity thereof; (b) the
principal amount of a Debt Security denominated in a foreign currency that shall
be deemed outstanding shall be the U.S. dollar equivalent, determined on the
issue date for such Debt Security, of the principal amount (or, in the case of
an Original Issue Discount Security, the U.S. dollar equivalent on the issue
date of such Debt Security of the amount determined as provided in (a) above);
(c) the principal amount of an indexed security that shall be deemed outstanding
shall be the principal face amount of such indexed security at original
issuance, unless otherwise provided with respect to such indexed security in the
applicable Indenture; and (d) Debt Securities owned by the Company or any other
obligor upon the Debt Securities or any affiliate of the Company or of such
other obligor shall be disregarded.
The Indenture will contain provisions for convening meetings of the holders
of Debt Securities of a series issued thereunder. A meeting may be called at
any time by the Trustee and also, upon request, by the Company or the holders of
at least 10% in principal amount of the outstanding Debt Securities of such
series, in any such case upon notice given as provided in the applicable
Indenture. Except for any consent that must be given by the holder of each Debt
Security affected by certain modifications and amendments of the Indenture, any
resolution presented at a meeting or adjourned meeting duly reconvened at which
a quorum is present may be adopted by the affirmative vote of the holders of a
majority in principal amount of the outstanding Debt Securities of that series;
PROVIDED, HOWEVER, that, except as referred to above, any resolution with
respect to any request, demand, authorization, direction, notice, consent,
waiver or other action that may be made, given or taken by the holders of a
specified percentage which is less than a majority in principal amount of the
outstanding Debt Securities of a series may be adopted at a meeting or adjourned
meeting duly reconvened at which a quorum is present by the affirmative vote of
the holders of such specified percentage in principal amount of the outstanding
Debt Securities of that series. Any resolution passed or decision taken at any
meeting of holders of Debt Securities of any series duly held in accordance with
the Indenture will be binding on all holders of Debt Securities of that series.
The quorum at any meeting called
-10-
<PAGE>
to adopt a resolution, and at any reconvened meeting, will be persons holding or
representing a majority in principal amount of the outstanding Debt Securities
of a series; PROVIDED, HOWEVER, that if any action is to be taken at such
meeting with respect to a consent or waiver which may be given by the holders of
not less than a specified percentage in principal amount of the outstanding Debt
Securities of a series, the persons holding or representing such specified
percentage in principal amount of the outstanding Debt Securities of such series
will constitute a quorum.
Notwithstanding the provisions described above, if any action is to be
taken at a meeting of holders of Debt Securities of any series with respect to
any request, demand, authorization, direction, notice, consent, waiver or other
action that the applicable Indenture expressly provides may be made, given or
taken by the holders of a specified percentage in principal amount of all
outstanding Debt Securities affected thereby, or of the holders of such series
and one or more additional series: (a) there shall be no minimum quorum
requirement for such meeting and (b) the principal amount of the outstanding
Debt Securities of such series that vote in favor of such request, demand,
authorization, direction, notice, consent, waiver or other action shall be taken
into account in determining whether such request, demand, authorization,
direction, notice, consent, waiver or other action has been made, given or taken
under the Indenture.
DISCHARGE, DEFEASANCE AND COVENANT DEFEASANCE
Unless otherwise indicated in the applicable Prospectus Supplement, the
Company may discharge certain obligations to holders of any series of Debt
Securities that have not already been delivered to the Trustee for cancellation
and that either have become due and payable or will become due and payable
within one year (or scheduled for redemption within one year) by irrevocably
depositing with such Trustee, in trust, funds in such currency or currencies,
currency unit or units or composite currency or currencies in which such Debt
Securities are payable in an amount sufficient to pay the entire indebtedness on
such Debt Securities in respect of principal (and premium, if any) and interest
to the date of such deposit (if such Debt Securities have become due and
payable) or to the stated maturity or redemption date, as the case may be.
The Indenture will provides that, unless otherwise indicated in the
applicable Prospectus Supplement, the Company may elect either (a) to defease
and be discharged from any and all obligations (except for the obligation to pay
additional amounts, if any, upon the occurrence of certain events of tax,
assessment or governmental charge with respect to payments on such Debt
Securities and the obligations to register the transfer or exchange of such Debt
Securities, to replace temporary or mutilated, destroyed, lost or stolen Debt
Securities, to maintain an office or agency in respect of such Debt Securities
and to hold moneys for payment in trust) with respect to such Debt Securities
("defeasance") or (b) to be released from its obligations with respect to such
Debt Securities under the applicable Indenture (being the restrictions described
under the caption "-- Certain Covenants") or if provided in the applicable
Prospectus Supplement, its obligations with respect to any other covenant, and
any omission to comply with such obligations shall not constitute a default or
an event of default with respect to such Debt Securities ("covenant
defeasance"), in either case upon the irrevocable deposit by the Company with
the applicable Trustee, in trust, of an amount, in such currency or currencies,
currency unit or units or composite currency or currencies in which such Debt
Securities are payable at stated maturity, or Government Obligations (as defined
below), or both, applicable to such Debt Securities which through the scheduled
payment of principal and interest in accordance with their terms will provide
money in an amount sufficient to pay the principal of (and premium, if any) and
interest on such Debt Securities, and any mandatory sinking fund or analogous
payments thereon, on the scheduled due dates therefor.
Such a trust may only be established if, among other things, the Company
has delivered to the applicable Trustee an opinion of Counsel (as specified in
the applicable Indenture) to the effect that the holders of such Debt Securities
will not recognize income, gain or loss for U.S. federal income tax purposes as
a result of such defeasance or covenant defeasance and will be subject to U.S.
federal income tax on the same amounts, in the same manner and at the same times
as would have been the case if such defeasance or covenant defeasance had not
occurred, and such opinion of Counsel, in the case of defeasance, must refer to
and be based upon a ruling of the Internal Revenue Service or a change in
applicable United States federal income tax law occurring after the date of such
Indenture. In the event of such defeasance, the holders of such Debt Securities
would thereafter be able to look only to such trust fund for payment of
principal (and premium, if any) and interest.
-11-
<PAGE>
"Government Obligations" means securities which are (a) direct obligations
of the United States of America or the government which issued the foreign
currency in which the Debt Securities of a particular series are payable, for
the payment of which its full faith and credit is pledged, or (b) obligations of
a person controlled or supervised by and acting as an agency or instrumentality
of the United States of America or such government which issued the foreign
currency in which the Debt Securities of such series are payable, the payment of
which is unconditionally guaranteed as a full faith and credit obligation by the
United States of America or such other government, which, in either case, are
not callable or redeemable at the option of the issuer thereof, and shall also
include a depository receipt issued by a bank or trust company as custodian with
respect to any such Government Obligation or a specific payment of interest on
or principal of any such Government Obligation held by such custodian for the
account of the holder of a depository receipt, provided that (except as required
by law) such custodian is not authorized to make any deduction from the amount
payable to the holder of such depository receipt from any amount received by the
custodian in respect of the Government Obligation or the specific payment of
interest on or principal of the Government Obligation evidenced by such
depository receipt.
Unless otherwise provided in the applicable Prospectus Supplement, if after
the Company has deposited funds and/or Government Obligations to effect
defeasance or covenant defeasance with respect to Debt Securities of any series,
(a) the holder of a Debt Security of such series is entitled to, and does, elect
pursuant to the applicable Indenture or the terms of such Debt Security to
receive payment in a currency, currency unit or composite currency other than
that in which such deposit has been made in respect of such Debt Security, or
(b) a Conversion Event (as defined below) occurs in respect of the currency,
currency unit or composite currency in which such deposit has been made, the
indebtedness represented by such Debt Security shall be deemed to have been, and
will be, fully discharged and satisfied through the payment of the principal of
(and premium, if any) and interest on such Debt Security as they become due out
of the proceeds yielded by converting the amount so deposited in respect of such
Debt Security into the currency, currency unit or composite currency in which
such Debt Security becomes payable as a result of such election or such
cessation of usage based on the applicable market exchange rate. "Conversion
Event" means the cessation of use of (i) a currency, currency unit or composite
currency both by the government of the country which issued such currency and
for the settlement of actions by a central bank or other public institution of
or within the international banking community, (ii) the ECU both within the
European Monetary System and for the settlement of transactions by public
institutions of or within the European Communities or (iii) any currency unit or
composite currency other than the ECU for the purposes for which it was
established. Unless otherwise described in the applicable Prospectus
Supplement, all payments of principal of (and premium, if any) and interest on
any Debt Security that is payable in a Foreign Currency that ceases to be used
by its government of issuance shall be made in U.S. dollars.
In the event the Company effects covenant defeasance with respect to any
Debt Securities and such Debt Securities are declared due and payable because of
the occurrence of any event of default, other than the event of default
described in clause (d) under "-- Events of Default, Notice and Waiver" with
respect to the specified sections in the applicable Indenture (which Sections
would no longer be applicable to such Debt Securities) or clause (g) thereunder
with respect to any other covenants as to which there has been covenant
defeasance, the amount in such currency, currency unit or composite currency in
which such Debt Securities are payable and Government Obligations on deposit
with the applicable Trustee, will be sufficient to pay amounts due on such Debt
Securities at the time of their stated maturity but may not be sufficient to pay
amounts due on such Debt Securities at the time of the acceleration resulting
from such event of default. In any such event, the Company would remain liable
to make payments of such amounts due at the time of acceleration.
The applicable Prospectus Supplement may further describe the provisions,
if any, permitting such defeasance or covenant defeasance, including any
modifications to the provisions described above, with respect to the Debt
Securities of or within a particular series.
CONVERTIBLE DEBT SECURITIES
The terms and conditions, if any, upon which the Debt Securities are
convertible into Common Stock will be set forth in the applicable Prospectus
Supplement relating thereto. Such terms will include whether such Debt
Securities are convertible into Common Stock, the conversion price (or manner of
calculation thereof), the conversion period, provisions as to whether conversion
will be at the option of the holders or the Company, the events
-12-
<PAGE>
requiring an adjustment of the conversion price and provisions affecting
conversion in the event of the redemption of such Debt Securities and any
restrictions on conversion, including restrictions directed at maintaining the
Company's REIT status.
Reference is made to the section captioned "Description of Common Stock"
for a general description of the Common Stock to be acquired upon the conversion
of Debt Securities, including a description of certain restrictions on the
ownership of the Common Stock.
BOOK-ENTRY DEBT SECURITIES
The Debt Securities of a series may be issued in whole or in part in the
form of one or more global securities (the "Global Securities") that will be
deposited with, or on behalf of, a depositary identified in the applicable
Prospectus Supplement relating to such series. Global Securities may be issued
in either registered or bearer form and in either temporary or permanent form.
The specific terms of the depositary arrangement with respect to a series of
Debt Securities will be described in the applicable Prospectus Supplement
relating to such series.
DESCRIPTION OF COMMON STOCK
The authorized capital stock of the Company consists of 30,000,000 shares
of Common Stock, par value $0.01 per share, as well as 30,000,000 shares of
Excess Stock, par value $0.01 per share, issuable in exchange for Common Stock
as described in the Company's articles of incorporation. At June 30, 1995, the
Company had outstanding 11,633,672 shares of Common Stock. All issued and
outstanding shares of Common Stock are duly authorized, validly issued, fully
paid and nonassessable.
GENERAL
The following description of the Common Stock sets forth certain general
terms and provisions of the Common Stock to which any Prospectus Supplement may
relate, including a Prospectus Supplement providing that Common Stock will be
issuable upon conversion of Debt Securities or upon the exercise of the Warrants
to purchase Common Stock issued by the Company. The statements below describing
the Common Stock are in all respects subject to and qualified in their entirety
by reference to the applicable provisions of the Company's articles of
incorporation and bylaws.
COMMON STOCK
The holders of Common Stock elect all directors and are entitled to one
vote per share on all matters submitted to a vote of the stockholders.
Stockholders are entitled to receive dividends when, as and if declared by the
Board of Directors out of funds legally available for that purpose. Upon any
liquidation, dissolution or winding up of the Company, holders of Common Stock
are entitled to share pro rata in any distribution to stockholders. Holders of
Common Stock have no preemptive, subscription or conversion rights. The Common
Stock will, when issued, be fully paid and nonassessable and will not be subject
to preemptive or other similar rights.
The Company purchased from six limited partnerships and one general
partnership 14 properties in July 1992, and purchased from a trust one property
in August 1993, in exchange for the issuance to the partnerships and the trust
of an aggregate of 346,172 shares of Common Stock (the "CNL Transaction"). All
of the shares issued in connection with the CNL Transaction are subject to
piggyback registration rights under certain circumstances.
RESTRICTIONS ON OWNERSHIP
For the Company to qualify as a REIT, not more than 50 percent in value of
its outstanding Common Stock may be owned, directly or indirectly, by five or
fewer individuals (as defined in the Code to include certain entities) during
the last half of a taxable year; the shares must be beneficially owned (without
reference to any rules of attribution) by 100 or more persons during at least
335 days of a taxable year of 12 months or during a proportionate
-13-
<PAGE>
part of a shorter taxable year; and certain other requirements must be
satisfied. See "Federal Income Tax Considerations--Taxation of the Company."
To ensure that five or fewer individuals do not own more than 50 percent in
value of the outstanding Common Stock, the Company's articles of incorporation
provide that, subject to certain exceptions, no holder may own, or be deemed to
own by virtue of the attribution provisions of the Code, more than 9.8 percent
in value (the "Ownership Limit") of the outstanding Common Stock. The Board of
Directors may waive the Ownership Limit if evidence satisfactory to the Company
and the Company's tax counsel is presented that such ownership will not then or
in the future jeopardize the Company's status as a REIT. As a condition of such
waiver, the Board of Directors may require opinions of counsel satisfactory to
it and/or an undertaking from the applicant with respect to preserving the
status of the company as a REIT.
The Ownership Limit will not be automatically removed even if the REIT
provisions of the Code are changed so as to no longer contain any ownership
concentration limitation or if the ownership concentration limitation is
increased. In addition to preserving the Company's status as a REIT, the
Ownership Limit may prevent any person or small group of persons from acquiring
unilateral control of the Company.
If the ownership, transfer or acquisition of shares of Common Stock, or
change in capital structure of the Company or other event or transaction would
result in (a) any Person (as defined below) owning (applying certain attribution
rules) Common Stock in excess of the Ownership Limit, (b) fewer than 100 Persons
owning the Common Stock, (c) the Company being "closely held" within the meaning
of Section 856(h) of the Code, or (d) the Company failing any of the gross
income requirements of Section 856(c) of the Code or otherwise failing to
qualify as a REIT, then the ownership, transfer or acquisition, or change in
capital structure or other event or transaction that would have such effect will
be void as to the purported transferee or owner, and the purported transferee or
owner will not have or acquire any rights to the Common Stock to the extent
required to avoid such a result. Common Stock owned, transferred or proposed to
be transferred in excess of the Ownership Limit or which would otherwise
jeopardize the Company's status as a REIT will automatically be converted to
Excess Stock. A holder of Excess Stock is not entitled to distributions, voting
rights, and other benefits with respect to such shares except for the right to
payment of the purchase price for the shares (or, in the case of a devise or
gift or similar event which results in the issuance of Excess Stock, the fair
market value at the time of such devise or gift or event) and the right to
certain distributions upon liquidation. Any dividend or distribution paid to a
proposed transferee or holder of Excess Stock shall be repaid to the Company
upon demand. Excess Stock shall be subject to repurchase by the Company at its
election. The purchase price of any Excess Stock shall be equal to the lesser
of (i) the price paid in such purported transaction (or, in the case of a devise
or gift or similar event resulting in the issuance of Excess Stock, the fair
market value at the time of such devise or gift or event), or (ii) the fair
market value of such Common Stock on the date on which the Company or its
designee determines to exercise its repurchase right. If the foregoing transfer
restrictions are determined to be void or invalid by virtue of any legal
decision, statute, rule or regulation, then the purported transferee of any
Excess Stock may be deemed, at the option of the Company, to have acted as an
agent on behalf of the Company in acquiring such Excess Stock and to hold such
Excess Stock on behalf of the Company.
For purposes of the Company's articles of incorporation, the term "Person"
shall mean an individual, corporation, partnership, estate, trust (including a
trust qualified under Section 401(a) or 501(c)(17) of the Code), a portion of a
trust permanently set aside to be used exclusively for the purposes described in
Section 642(c) of the Code, association, private foundation within the meaning
of Section 509(a) of the Code, joint stock company or other entity, or a group
as that term is used for purposes of Section 13(d)(3) of the Exchange Act; but
does not include an underwriter which participated in a public offering of
Common Stock for a period of sixty (60) days following the purchase by such
underwriter of Common Stock therein, provided that the foregoing exclusions
shall apply only if the ownership of such Common Stock by such underwriter would
not cause the Company to fail to qualify as a REIT by reason of being "closely
held" within the meaning of Section 856(a) of the Code or otherwise cause the
Company to fail to qualify as a REIT.
All certificates representing Common Stock will bear a legend referring to
the restrictions described above.
The articles of incorporation of the Company provide that all persons who
own, directly or by virtue of the attribution provisions of the Code, more than
5.0 percent of the outstanding Common Stock, or such lower
-14-
<PAGE>
percentage as may be required pursuant to regulations under the Code or as may
be requested by the Board of Directors, must file a written notice with the
Company no later than January 31 of each year with respect to the prior year
containing (a) the name and address of such owner, (b) the number of shares of
Common Stock owned by such holder and (c) a description of how such shares are
held. In addition, each stockholder shall be required to disclose, upon demand,
to the Company in writing such information with respect to the direct indirect
and constructive ownership of shares as the directors deem necessary to comply
with the provisions of the Code as applicable to a REIT or to comply with the
requirements of any taxing authority or governmental agency.
The ownership limitations described above may have the effect of precluding
acquisitions of control of the Company by a third party.
TRANSFER AGENT
First Union National Bank of North Carolina is the Transfer Agent of the
Common Stock.
DESCRIPTION OF COMMON STOCK WARRANTS
The Company may issue Common Stock Warrants for the purchase of Common
Stock. Common Stock Warrants may be issued independently or together with any
other Offered Securities offered by any Prospectus Supplement and may be
attached to or separate from such Offered Securities. Each series of Common
Stock Warrants will be issued under a separate warrant agreement (each, a
"Warrant Agreement") to be entered into between the Company and a warrant agent
specified in the applicable Prospectus Supplement (the "Warrant Agent"). The
Warrant Agent will act solely as an agent of the Company in connection with the
Common Stock Warrants of such series and will not assume any obligation or
relationship of agency or trust for or with any holders or beneficial owners of
Common Stock Warrants. The following sets forth certain general terms and
provisions of the Common Stock Warrants offered hereby. Further terms of the
Common Stock Warrants and the applicable Warrant Agreements will be set forth in
the applicable Prospectus Supplement.
The applicable Prospectus Supplement will describe the terms of the Common
Stock Warrants in respect of which this Prospectus is being delivered,
including, where applicable, the following: (a) the title of such Common Stock
Warrants; (b) the aggregate number of such Common Stock Warrants; (c) the price
or prices at which such Common Stock Warrants will be issued; (d) the number of
shares of Common Stock purchasable upon exercise of such Common Stock Warrants;
(e) the designation and terms of the other Offered Securities with which such
Common Stock Warrants are issued and the number of such Common Stock Warrants
issued with each such Offered Security; (f) the date, if any, on and after which
such Common Stock Warrants and the related Common Stock will be separately
transferable; (g) the price at which each share of Common Stock purchasable upon
exercise of such Common Stock Warrants may be purchased; (h) the date on which
the right to exercise such Common Stock Warrants shall commence and the date on
which such right shall expire; (i) the minimum or maximum amount of such Common
Stock Warrants which may be exercised at any one time; (j) information with
respect to book-entry procedures, if any; (k) any limitations on the
acquisition or ownership of such Common Stock Warrants which may be required in
order to maintain the status of the Company as a REIT; (l) a discussion of
certain federal income tax considerations; and (m) any other terms of such
Common Stock Warrants, including terms, procedures and limitations relating to
the exchange and exercise of such Common Stock Warrants.
Reference is made to the section captioned "Description of Common Stock"
for a general description of the Common Stock to be acquired upon the exercise
of the Common Stock Warrants, including a description of certain restrictions on
the ownership of Common Stock.
FEDERAL INCOME TAX CONSIDERATIONS
INTRODUCTION
The following is a summary of the material federal income tax consequences
of the ownership of the Common Stock of the Company, prepared by Shaw, Pittman,
Potts & Trowbridge, tax counsel to the Company ("Tax
-15-
<PAGE>
Counsel"). This discussion is based upon the laws, regulations, and reported
rulings and decisions in effect as of the date of this Prospectus (or, in the
case of certain regulations, proposed as of such date), all of which are subject
to change, retroactively or prospectively, and to possibly differing
interpretations. This discussion does not purport to deal with the federal
income tax consequences applicable to all investors in light of their particular
investment circumstances, or to all categories of investors, some of whom may be
subject to special rules (including, for example, insurance companies, tax-
exempt organizations, financial institutions, broker-dealers, foreign
corporations and persons who are not citizens or residents of the United
States). No ruling on the federal, state or local tax considerations relevant
to the operation of the Company, or to the purchase, ownership or disposition of
the Common Stock, has been requested from the Internal Revenue Service (the
"Service") or other tax authority. Tax Counsel has rendered certain opinions
discussed herein and believes that if the Service were to challenge the
conclusions of Tax Counsel, such conclusions should prevail in court. However,
opinions of counsel are not binding on the Service or on the courts, and no
assurance can be given that the conclusions reached by Tax Counsel would be
sustained in court. Investors should consult their own tax advisors in
determining the federal, state, local, foreign and other tax consequences to
them of the purchase, ownership and disposition of the Common Stock of the
Company.
TAXATION OF THE COMPANY
GENERAL. Since its inception, the Company has elected, and believes it has
qualified, to be taxed as a REIT for federal income tax purposes, as defined in
Sections 856 through 860 of the Code. The provisions of the Code pertaining to
REITs are highly technical and complex. If various conditions imposed by the
Code are met, a REIT is, with limited exceptions, not taxed at the corporate
level on income that is currently distributed to the REIT's stockholders.
Undistributed income is taxed at regular corporate rates and may be subject to a
4 percent excise tax. In addition, a REIT may be subject to the "alternative
minimum tax" on its items of tax preference and is subject to income tax at the
highest corporate rate on income from foreclosure property and to penalty taxes
on excessive unqualified income and prohibited transactions.
If the Company fails to qualify as a REIT for any taxable year and certain
relief provisions do not apply, the Company will be subject to federal income
tax (including alternative minimum tax) as an ordinary corporation on its
taxable income at regular corporate rates without any deduction or adjustment
for distributions to holders of Common Stock. To the extent that the Company
would, as a consequence, be subject to tax liability for any such year, the
amount of cash available for satisfaction of its liabilities and for
distribution to holders of Common Stock would be reduced. Distributions to
holders of Common Stock generally would be taxable as ordinary income to the
extent of current and accumulated earnings and profits and, subject to certain
limitations, would be eligible for the corporate dividends received deduction,
but there can be no assurance that any such distributions would be made. The
Company would not be eligible to elect REIT status for the four subsequent
taxable years, unless its failure to qualify was due to reasonable cause and not
willful neglect and unless certain other requirements were satisfied.
OPINION OF TAX COUNSEL. Based upon representations made by officers of the
Company with respect to relevant factual matters, upon the existing Code
provisions, rules and regulations promulgated thereunder (including proposed
regulations) and reported administrative and judicial interpretations thereof,
upon Tax Counsel's independent review of such documents and other information as
Tax Counsel deemed relevant in the circumstances and upon the assumption that
the Company will operate in the manner described in this Prospectus, Tax Counsel
has advised the Company that, in its opinion, (a) the Company has, for the years
1984 through 1994, met the requirements for qualification and taxation as a REIT
and (b) the Company's proposed method of operation will enable it to meet the
requirements for qualification and taxation as a REIT for 1995. It must be
emphasized, however, that the Company's ability to qualify as a REIT is
dependent upon actual operating results and future actions and events by the
Company and others, and no assurance can be given that the actual results of the
Company's operations and the future actions and events will enable the Company
to satisfy in any given year the requirements for qualification and taxation as
a REIT.
REQUIREMENTS FOR QUALIFICATION AS A REIT. As discussed more fully below,
the Code defines a REIT as a corporation (a) which is managed by one or more
trustees or directors; (b) the beneficial ownership of which is evidenced by
transferable shares, or by transferable certificates of beneficial interest; (c)
which would be taxable, but for Sections 856 through 860 of the Code, as a
domestic corporation; (d) which is neither a financial institution nor an
insurance company; (e) the beneficial ownership of which is held by 100 or more
persons; (f) which is not
-16-
<PAGE>
closely held; and (g) which meets certain other tests regarding the nature of
its assets and income and the amount of its distributions.
OWNERSHIP TESTS. More specifically, the ownership requirements of a REIT
are that (a) during the last half of each taxable year not more than 50 percent
of the Company's outstanding shares may be owned, directly or indirectly, by
five or fewer individuals and (b) there must be at least 100 stockholders on at
least 335 days of such 12-month taxable year (or a proportionate number of days
of a short taxable year). In order to meet these requirements, or to otherwise
obtain, maintain or reestablish REIT status, and for no other purpose, the
Company's articles of incorporation empowers the Board of Directors to redeem,
at its option, a sufficient number of shares or to restrict the transfer thereof
to bring or to maintain the ownership of shares of the Company in conformity
with the requirements of the Code. The redemption price to be paid will be fair
market value as reflected in the latest quotations, or, if no quotations are
available, the net asset value of the shares as determined by the Board of
Directors.
Under the Company's articles of incorporation, each holder of common stock
is required, upon demand, to disclose to the Board of Directors in writing such
information with respect to direct and indirect ownership of shares of the
Company as the Board of Directors deems necessary to comply with provisions of
the Code applicable to the Company, or to comply with the requirements of any
other appropriate taxing authority. Certain Treasury regulations govern the
method by which the Company is required to demonstrate compliance with these
stock ownership requirements and the failure to satisfy such regulations could
cause the Company to fail to qualify as a REIT. The Company has represented
that it has met, and expects to meet, these stock ownership requirements for
each taxable year.
ASSET TESTS. At the end of each quarter of a REIT's taxable year, at least
75 percent of the value of its total assets must consist of "real estate
assets," cash and cash items (including receivables) and government securities.
The balance of a REIT's assets generally may be invested without restriction,
except that holdings of securities not within the 75 percent class of assets
generally must not, with respect to any issuer, exceed 5 percent of the value of
the REIT's assets or 10 percent of the issuer's outstanding voting securities.
The term "real estate assets" includes real property, interests in real
property, leaseholds of land or improvements thereon, and any property
attributable to the temporary investment of new capital (but only if such
property is stock or a debt instrument and only for the one-year period
beginning on the date the REIT receives such capital). The Company has
represented that at the end of each quarter it has met, and expects in the
future to continue to meet, this asset test.
INCOME TESTS. A REIT also must meet three separate tests with respect to
its sources of income for each taxable year.
(i) THE 75 PERCENT AND 95 PERCENT TESTS. In general, at least 75 percent
of a REIT's gross income (excluding income from prohibited transactions) for
each taxable year must be from rents from real property, interest on obligations
secured by mortgages on real property, gains from the sale or other disposition
of real property and certain other sources. In addition, a REIT must derive at
least 95 percent of its gross income (excluding income from prohibited
transactions) for each taxable year from any combination of the items of income
which qualify under the 75 percent test, from dividends and interest and from
gains from the sale, exchange or other disposition of certain stocks and
securities.
Rents received by a REIT will qualify as "rents from real property" in
satisfying the gross income requirements described above only if several
conditions are met. First, the amount of rent must not be based in whole or in
part on the income or profits of any person. However, an amount received or
accrued generally will not be excluded from the term "rents from real property"
solely by reason of being based on a fixed percentage or percentages of receipts
of sales. The Company's leases provide for either fixed rent, sometimes with
scheduled escalations, or a fixed minimum rent and a percentage of gross
receipts in excess of some threshold. Second, the Code provides that rents
received from a tenant will not qualify as "rents from real property" in
satisfying the gross income tests if the Company, or an owner of 10 percent or
more of the Company, directly or constructively owns 10 percent or more of such
tenant (a "Related Party Tenant"). Third, if rent attributable to personal
property, leased in connection with a lease of real property, is greater than 15
percent of the total rent received under the lease, then the portion of rent
attributable to such personal property will not qualify as "rents from real
property." The Company anticipates that none of its gross annual income will be
considered attributable to rents that are based in whole or in part on the
-17-
<PAGE>
income or profits of any person; that no more than a DE MINIMIS amount of its
gross annual income will be considered attributable to the rental of personal
property; and that none of its gross annual income will be from Related Party
Tenants. Finally, for rents received to qualify as "rents from real property,"
the Company generally must not operate or manage the property or furnish or
render services to tenants, other than through an "independent contractor" from
whom the Company derives no revenue. The "independent contractor" requirement,
however, does not apply to the extent the services provided by the Company are
"usually or customarily rendered" in connection with the rental space for
occupancy only and are not otherwise considered "rendered to the occupant." The
Company or CNL Advisors will provide certain services with respect to the
Properties. The Company does not anticipate that any of these services will be
(a) of a type other than those usually or customarily rendered in connection
with the rental space for occupancy only or (b) of a type considered rendered to
any of the occupants of the Properties.
Should an entity fail to satisfy either or both of the 75 percent or 95
percent tests for any taxable year, it may still qualify as a REIT if (a) such
failure is due to reasonable cause and not willful neglect; (b) it reports the
nature and amount of each item of its income on a schedule attached to its tax
return for such year; and (c) the reporting of any incorrect information is not
due to fraud with intent to evade tax. However, even if these three
requirements were met and the REIT were not disqualified, a penalty tax of 100
percent would be imposed by reference to the amount by which the REIT failed the
75 percent or 95 percent test (whichever amount is greater). No mitigation
provision applies if the 30 percent income test, described below, is failed. In
such case, the Company will cease to qualify as a REIT.
(ii) THE 30 PERCENT TEST. In addition to the 75 percent and 95 percent
tests, a REIT must derive less than 30 percent of its gross income (including
gross income from prohibited transactions) from the sale or other disposition of
(i) real property held for less than four years (other than foreclosure property
or property involuntarily or compulsorily converted through destruction,
condemnation or similar events ); (ii) stocks or securities held for less than
one year; and (iii) property sold or otherwise disposed of in a prohibited
transaction. The Company has represented that it has not recognized and does
not expect that it will recognize gross income of a type, in an amount or at a
time which would cause it to fail the 30 percent test.
DISTRIBUTION REQUIREMENTS. A REIT must distribute annually to its
stockholders ordinary income dividends in an amount equal to at least (a) 95
percent of the sum of (i) its "real estate investment trust taxable income"
(before deduction of dividends paid and excluding any net capital gains) and
(ii) the excess of net income from foreclosure property over the tax on such
income, minus (b) certain excess non-cash income. Real estate investment trust
taxable income generally is the taxable income of a REIT computed as if it were
an ordinary corporation, with certain adjustments. Distributions must be made
in the taxable year to which they relate or, if declared before the timely
filing of the REIT's tax return for such year and paid not later than the first
regular dividend payment after such declaration, in the following taxable year.
To the extent that the Company does not distribute all of its net capital gain
or distributes at least 95 percent, but less than 100 percent, of its real
estate investment trust taxable income, as adjusted, it will be subject to tax
thereon at regular ordinary and capital gain corporate tax rates. Furthermore,
if the Company should fail to distribute during each calendar year at least the
sum of (x) 85 percent of its ordinary income, (y) 95 percent of its net capital
gain net income for such year and (z) any undistributed taxable income from
prior periods, the Company would be subject to a 4 percent excise tax on the
excess of such required distribution over the amounts actually distributed.
The Company has represented that it has made and intends to make
distributions to stockholders that will be sufficient to meet the annual
distribution requirements. Under some circumstances, however, it is possible
that the Company may not have sufficient funds from its operations to pay cash
dividends to satisfy these distribution requirements. If the cash available to
the Company is insufficient, the Company might raise cash in order to make the
distributions by borrowing funds, issuing new securities or selling assets. If
the Company ultimately were unable to satisfy the 95 percent distribution
requirement, it would fail to qualify as a REIT and, as a result, would be
subject to federal income tax as an ordinary corporation without any deduction
or adjustment for distributions to holders of the Common Stock.
If the Company were to fail to meet the 95 percent distribution requirement
as a result of an adjustment to the Company's tax returns by the Service, the
Company could maintain its qualification as a REIT by paying a "deficiency
dividend" (plus a penalty and interest) within a specified period which will be
permitted as a deduction in the taxable year with respect to which the
adjustment is made.
-18-
<PAGE>
TAXATION OF TAXABLE DOMESTIC STOCKHOLDERS. For any taxable year in which
the Company qualifies as a REIT for federal income tax purposes, distributions
by the Company to its stockholders that are United States persons (generally,
any person other than a nonresident alien individual, a foreign trust or estate
or a foreign partnership or corporation) generally will be taxed as ordinary
income. Amounts received by such United States persons that are properly
designated as capital gain dividends by the Company generally will be taxed as
long-term capital gain (to the extent that they do not exceed the Company's
actual net capital gain for the taxable year) without regard to the period for
which the stockholder has held his Common Stock. However, corporate
stockholders may be required to treat up to 20 percent of certain capital gain
dividends as ordinary income. Such ordinary income and capital gain are not
eligible for the dividends received deduction allowed to corporations.
Distributions to such United States persons in excess of the Company's current
or accumulated earnings and profits will be considered first a tax-free return
of capital, reducing the tax basis of each stockholder's Common Stock, and then,
to the extent the distribution exceeds each stockholder's basis, a gain realized
from the sale of Common Stock. The Company will notify each stockholder as to
the portions of each distribution which, in its judgment, constitute ordinary
income, capital gain or return of capital. Any dividend that is (a) declared by
the Company in October, November or December of any calendar year and payable to
stockholders of record on a specified date in such months and (b) actually paid
by the Company in January of the following year, shall be deemed to have been
both paid by the Company and received by the stockholders on December 31 of such
calendar year and, as a result, will be includable in gross income of the
stockholders for the taxable year which includes such December 31.
Stockholders may not deduct on their income tax returns any net operating
or net capital losses of the Company. Net operating losses may be carried
forward by the Company for 15 years and used to reduce taxable income and the
amounts that the Company will be required to distribute in order to remain
qualified as a REIT. Net capital losses may be carried forward by the Company
for five years and used to reduce capital gains. Losses not used within the
relevant period expire.
Upon the sale or other disposition of the Company's Common Stock, a
stockholder generally will recognize capital gain or loss equal to the
difference between this amount realized on the sale or other disposition and the
adjusted basis of the shares involved in the transaction. Such gain or loss
will be long-term capital gain or loss if, at the time of sale or other
disposition, the shares involved have been held for more than one year. In
addition, if a stockholder receives a capital gain dividend with respect to a
share of Common Stock which he has held for six months or less at the time of
sale or other disposition, any loss recognized by the stockholder will be
treated as long-term capital loss to the extent of the amount of the capital
gain dividend that was treated as long-term capital gain.
Distributions from the Company and gain from the disposition of Common
Stock will not be treated as passive activity income and, therefore,
stockholders will not be able to apply any "passive activity losses" against
such income. Dividends from the Company (to the extent they do not constitute a
return of capital or capital gain dividends) and, on an elective basis, capital
gain dividends and gain from the disposition of Common Stock generally will be
treated as investment income for purposes of the investment income limitation.
The state and local income tax treatment of the Company and its
stockholders may not conform to the federal income tax treatment described
above. (For example, in most states, individual stockholders who are residents
of the state will be subject to state income tax on dividends and gains on their
shares in the Company, but the state of Delaware -- unlike most, if not all,
other states -- also taxes nonresident stockholders of a REIT on dividends and
gains from the REIT to the extent, if any, that such income is attributable to
property located in Delaware.) As a result, investors should consult their own
tax advisors for an explanation of how other state and local tax laws would
affect their investment in Common Stock.
BACKUP WITHHOLDING. The Company will report to its stockholders and the
IRS the amount of distributions paid during each calendar year, and the amount
of tax withheld, if any. Under the backup withholding rules, a stockholder may
be subject to backup withholding at a rate of 31 percent with respect to
distributions paid unless such other holder (i) is a corporation or comes within
certain other exempt categories and, when required, demonstrates this fact, or
(ii) provides a taxpayer identification number, certifies as to no loss of
exemption from backup withholding and otherwise complies with applicable
requirements of the backup withholding rules. A stockholder that does not
provide the Company with his correct taxpayer identification number also may be
subject to penalties
-19-
<PAGE>
imposed by the IRS. Any amount paid as backup withholding will be creditable
against the stockholder's income tax liability.
TAXATION OF TAX-EXEMPT STOCKHOLDERS. Distributions by the Company to a
stockholder that is a tax-exempt entity generally will not constitute "unrelated
business taxable income" ("UBTI") as defined in Section 512(a) of the Code,
provided that the tax-exempt entity has not financed the acquisition of its
shares with "acquisition indebtedness" within the meaning of the Code and the
shares are not otherwise used in an unrelated trade or business of the tax-
exempt entity. For taxable years beginning after December 31, 1993, however,
qualified trusts that hold more than 10 percent (by value) of the shares of
certain REITs may be required to treat a certain percentage of the distributions
of such REITs as UBTI. The conditions which trigger this requirement do not
currently exist, and the Company does not anticipate that they will ever exist.
This requirement will apply only if (a) the REIT would not qualify as such for
federal income tax purposes but for the application of a "look-through"
exception to the five or fewer requirement applicable to shares being held by
qualified trusts and (b) the REIT is "predominantly held" by qualified trusts.
A REIT is predominantly held if either (i) a single qualified trust holds more
than 25 percent by value of the REIT interests or (ii) one or more qualified
trusts, each owning more than 10 percent by value of the REIT interests, hold in
the aggregate more than 50 percent of the REIT interests. The percentage of any
REIT dividend treated as UBTI is equal to the ratio of (i) the UBTI earned by
the REIT (treating the REIT as if it were a qualified trust and therefore
subject to tax on UBTI) to (ii) the total gross income (less certain associated
expenses of the REIT). A DE MINIMIS exception applies where the ratio set forth
in the preceding sentence is less than 5 percent for any year. For these
purposes, a qualified trust is any trust described in Section 401(a) of the Code
and exempt from tax under Section 501(a) of the Code. The provisions requiring
qualified trusts to treat a portion of REIT distributions as UBTI will not apply
if the REIT is able to satisfy the five or fewer requirements without relying
upon the "look-through" exception. The existing restrictions on ownership of
shares in the articles of incorporation will prevent the application of the
provisions treating a portion of the REIT distributions as UBTI to tax-exempt
entities purchasing shares pursuant to the Offering, absent a waiver of the
restrictions by the Board of Directors.
ERISA CONSIDERATIONS
THE FOLLOWING IS A SUMMARY OF MATERIAL CONSIDERATIONS ARISING UNDER THE
EMPLOYEE RETIREMENT INCOME SECURITY ACT OF 1974, AS AMENDED ("ERISA ") AND THE
PROHIBITED TRANSACTION PROVISIONS OF SECTION 4975 OF THE CODE THAT MAY BE
RELEVANT TO PROSPECTIVE INVESTORS. THIS DISCUSSION DOES NOT PURPORT TO DEAL
WITH ALL ASPECTS OF ERISA OR THE CODE THAT MAY BE RELEVANT TO PARTICULAR
INVESTORS IN LIGHT OF THEIR PARTICULAR CIRCUMSTANCES. A PROSPECTIVE INVESTOR
THAT IS AN EMPLOYEE BENEFIT PLAN SUBJECT TO ERISA, A TAX-QUALIFIED RETIREMENT
PLAN, AN IRA, OR A GOVERNMENTAL, CHURCH, OR OTHER PLAN THAT IS EXEMPT FROM ERISA
IS ADVISED TO CONSULT ITS OWN LEGAL ADVISOR REGARDING THE SPECIFIC
CONSIDERATIONS ARISING UNDER APPLICABLE PROVISIONS OF ERISA, THE CODE, AND STATE
LAW WITH RESPECT TO THE PURCHASE, OWNERSHIP, OR SALE OF THE OFFERED SECURITIES
BY SUCH PLAN OR IRA.
FIDUCIARY DUTIES AND PROHIBITED TRANSACTIONS
A fiduciary of a pension, profit-sharing, retirement or other employee
benefit plan subject to ERISA (an "ERISA Plan") should consider the fiduciary
standards under ERISA in the context of the ERISA Plan's particular
circumstances before authorizing an investment of any portion of the ERISA
Plan's assets in the Offered Securities. Accordingly, such fiduciary should
consider (a) whether the investment satisfies the diversification requirements
of Section 404(a)(1)(C) of ERISA; (b) whether the investment is in accordance
with the documents and instruments governing the ERISA Plan as required by
Section 404(a)(1)(D) of ERISA; (c) whether the investment is prudent under
Section 404(a)(1)(B) of ERISA; and (d) whether the investment is solely in the
interests of the ERISA Plan participants and beneficiaries and for the exclusive
purpose of providing benefits to the ERISA Plan participants and beneficiaries
and defraying reasonable administrative expenses of the ERISA Plan as required
by Section 404(a)(1)(A) of ERISA.
In addition to the imposition of fiduciary standards, ERISA and Section
4975 of the Code prohibit a wide range of transactions between an ERISA Plan, an
IRA, or certain other plans (collectively, a "Plan") and persons
-20-
<PAGE>
who have certain specified relationships to the Plan ("parties in interest"
within the meaning of ERISA and "disqualified persons" within the meaning of the
Code). Thus, a Plan fiduciary or person making an investment decision for a
Plan also should consider whether the acquisition or the continued holding of
the Offered Securities might constitute or give rise to a direct or indirect
prohibited transaction.
PLAN ASSETS
The prohibited transaction rules of ERISA and the Code apply to
transactions with a Plan and also to transactions with the "plan assets" of a
Plan. The "plan assets" of a Plan include the Plan's interest in an entity in
which the Plan invests and, in certain circumstances, the assets of the entity
in which the Plan holds such interest. The term "plan assets" is not
specifically defined in ERISA or the Code, nor, as of the date hereof, has it
been interpreted definitively by the courts in litigation. On November 13,
1986, the United States Department of Labor, the governmental agency primarily
responsible for administering ERISA, adopted a final regulation (the "DOL
Regulation") setting out the standards it will apply in determining whether an
equity investment in an entity will cause the assets of such entity to
constitute "plan assets." The DOL Regulation applies for purposes of both ERISA
and Section 4975 of the Code.
Under the DOL Regulation, if a Plan acquires an equity interest in an
entity, which equity interest is not a "publicly-offered security," the Plan's
assets generally would include both the equity interest and an undivided
interest in each of the entity's underlying assets unless certain specified
exceptions apply. The DOL Regulation defines a publicly-offered security as a
security that is "widely held," "freely transferable," and either part of a
class of securities registered under Section 12(b) or 12(g) of the Securities
Exchange Act of 1934, as amended (the "Exchange Act"), or sold pursuant to an
effective registration statement under the Securities Act (provided the
securities are registered under the Exchange Act within 120 days after the end
of the fiscal year of the issuer during which the offering occurred). The
Common Stock is being sold in an offering registered under the Securities Act
and will be registered within the relevant time period under Section 12(b) of
the Exchange Act.
The DOL Regulation provides that a security is "widely held" only if it is
part of a class of securities that is owned by 100 or more investors independent
of the issuer and of one another. However, a class of securities will not fail
to be "widely held" solely because the number of independent investors falls
below 100 subsequent to a public offering as a result of events beyond the
issuer's control. The Company expects the Common Stock to be "widely held."
The DOL Regulation provides that whether a security is "freely
transferable" is a factual question to be determined on the basis of all the
relevant facts and circumstances. The DOL Regulation further provides that when
a security is part of an offering in which the minimum investment is $10,000 or
less, as is the case with this Offering, certain restrictions ordinarily will
not affect, alone or in combination, the finding that such securities are freely
transferable. The Company believes that the restrictions imposed under the
articles of incorporation on the transfer of the Common Stock are limited to
restrictions on transfer generally permitted under the DOL Regulation and are
not likely to result in the failure of the Common Stock to be "freely
transferable." See "Description of Common Stock-Restrictions on Transfer." The
DOL Regulation only establishes a presumption in favor of a finding of free
transferability and, therefore, no assurance can be given that the Department of
Labor and the U.S. Treasury Department would not reach a contrary conclusion
with respect to the Common Stock.
Assuming that the Common Stock will be "widely held" and "freely
transferable," the Company believes that the Common Stock will be publicly-
offered securities for purposes of the DOL Regulation and that the assets of the
Company will not be deemed to be "plan assets" of any plan that invests in the
Common Stock.
Additional ERISA considerations that apply to the acquisition or continued
holding of Offered Securities that are Common Stock Warrants or Debt Securities
which are convertible into equity securities will be contained in the applicable
Prospectus Supplement.
-21-
<PAGE>
PLAN OF DISTRIBUTION
The Company may sell the Offered Securities to one or more underwriters for
public offering and sale by them or may sell the Offered Securities to investors
directly or through agents. Any such underwriter or agent involved in the offer
and sale of the Offered Securities will be named in the applicable Prospectus
Supplement.
Underwriters may offer and sell the Offered Securities at a fixed price or
prices, which may be changed, related to the prevailing market prices at the
time of sale, or at negotiated prices. The Company also may offer and sell the
Offered Securities in exchange for one or more of its then outstanding issues of
debt or convertible debt securities. The Company also may, from time to time,
authorize underwriters acting as the Company's agents to offer and sell the
Offered Securities upon the terms and conditions set forth in an applicable
Prospectus Supplement. In connection with the sale of Offered Securities,
underwriters may be deemed to have received compensation from the Company in the
form of underwriting discounts or commissions and may also receive commissions
from purchasers of Offered Securities for whom they may act as agent.
Underwriters may sell Offered Securities to or through dealers, and such dealers
may receive compensation in the form of discounts, concessions from the
underwriters or commissions from the purchasers for whom they may act as agent.
Any underwriting compensation paid by the Company to underwriters or agents
in connection with the offering of Offered Securities and any discounts,
concessions or commissions allowed by underwriters to participating dealers will
be set forth in the applicable Prospectus Supplement. Underwriters, dealers and
agents participating in the distribution of the Offered Securities may be deemed
to be underwriters, and any discounts and commissions received by them and any
profit realized by them on resale of the Offered Securities may be deemed to be
underwriting discounts and commissions under the Securities Act. Underwriters,
dealers and agents may be entitled, under agreements entered into with the
Company, to indemnification against and contribution toward certain civil
liabilities, including liabilities under the Securities Act.
If so indicated in the applicable Prospectus Supplement, the Company will
authorize dealers acting as the Company's agents to solicit offers by certain
institutions to purchase Offered Securities from the Company at the public
offering price set forth in such Prospectus Supplement pursuant to delayed
delivery contracts ("Contracts") providing for payment and delivery on the date
or dates stated in such Prospectus Supplement. Each Contract will be for an
amount not less than, and the aggregate principal amount of Securities sold
pursuant to Contracts shall be not less or more than, the respective amounts
stated in the applicable Prospectus Supplement. Institutions with whom
Contracts, when authorized, may be made include commercial and savings banks,
insurance companies, pension funds, investment companies, educational and
charitable institutions, and other institutions, but will in all cases be
subject to the approval of the Company. Contracts will not be subject to any
conditions except (i) the purchase by an institution of the Offered Securities
covered by its Contracts shall not at the time of delivery be prohibited under
the laws of any jurisdiction in the United States to which such institution is
subject and (ii) if the Offered Securities are being sold to underwriters, the
Company shall have sold to such underwriters the total principal amount of the
Offered Securities less the principal amount thereof covered by Contracts.
Certain of the underwriters and their affiliates may be customers of,
engage in transactions with and perform services for the Company and its
subsidiaries in the ordinary course of business.
EXPERTS
The financial statements incorporated in this Prospectus by reference from
the Company's Annual Report on Form 10-K have been audited by KPMG Peat Marwick
LLP, independent auditors, as stated in their report, which is incorporated
herein by reference, and have been so incorporated in reliance upon the report
of such firm given upon the their authority as experts in accounting and
auditing.
LEGAL MATTERS
The validity of the Offered Securities will be passed upon for the Company
by Shaw, Pittman, Potts & Trowbridge, Washington, D.C., a partnership including
professional corporations. In addition, the description of
-22-
<PAGE>
federal income tax consequences contained in this Prospectus is based upon the
opinion of Shaw, Pittman, Potts & Trowbridge.
-23-
<PAGE>
PART II
INFORMATION NOT REQUIRED IN PROSPECTUS
ITEM 14. OTHER EXPENSES OF ISSUANCE AND DISTRIBUTION
Set forth below are the amounts of fees and expenses (other than
underwriting discounts and commissions) to be paid by the Company in connection
with the offering of the Offered Securities. All amounts set forth below, with
the exception of the SEC Registration Fee and the NASD Filing, are estimated.
SEC Registration Fee $ 68,966
NASD Filing Fee $ 20,500
Printing and Mailing Costs $ *
Accounting Fees and Expenses $ 30,000
Legal Fees and Expenses $ 150,000
Blue Sky Fees and Expenses $ *
Miscellaneous $ *
---------
Total $ *
---------
---------
* To be Completed.
ITEM 15. INDEMNIFICATION OF DIRECTORS AND OFFICERS
The Company's Articles of Incorporation provide that the liability of the
directors and officers of the Company for money damages shall be eliminated to
the maximum extent permitted by Maryland law. Under current Maryland law, the
directors are liable to the Company or its stockholders for money damages only
for liability resulting from (i) acts or omissions committed in bad faith
involving active and deliberate dishonesty that were material to the cause of
action adjudicated, as established by a final judgment or (ii) actual receipt of
an improper benefit or profit in money, property or services. The Articles of
Incorporation also provide that no amendment thereto may limit or eliminate this
limitation of liability with respect to events occurring prior to the effective
date of such amendment.
The Company's Articles of Incorporation and Bylaws require the Company to
indemnify its directors and officers to the fullest extent permitted by Maryland
law. Under current Maryland law, the Company will indemnify (i) any director or
officer who has been successful, on the merits or otherwise, in the defense of a
proceeding to which he was made a party by reason of his service in that
capacity, against reasonable expense incurred by him in connection with the
proceeding and (ii) any present or former director or officer against any claim
or liability unless it is established that (a) his act or omission was material
to the matter giving rise to the proceeding and was committed in bad faith or
was the result of active and deliberate dishonesty; (b) he actually received an
improper personal benefit in money, property or services; or (c) in the case of
a criminal proceeding, he had reasonable cause to believe that his act or
omission was unlawful. In addition, the Company's Bylaws require it to pay or
reimburse, in advance of the final disposition of a proceeding, reasonable
expenses incurred by a present or former director or officer or any person who
is or was serving at the request of the Company as a director, officer, employee
or agent of another corporation, partnership, joint venture, trust or other
enterprise, who is made a party to a proceeding by reason of his status as a
director, officer, employee or agent, to the fullest extent provided by Maryland
law. Current Maryland law provides that the Company shall have received, before
providing any such payment or reimbursement, (i) a written affirmation by the
director or officer of his good faith belief that he has met the standard of
conduct necessary for indemnification by the Company as authorized by Maryland
law and the Bylaws and (ii) a written undertaking by or on his behalf to repay
the amount paid or reimbursed by the Company if it shall ultimately
II-1
<PAGE>
be determined that the standard of conduct was not met. The Company's Bylaws
also permit the Company to provide indemnification, payment or reimbursement of
expenses to any employee or agent of the Company in such capacity.
Insofar as indemnification for liabilities arising under the Securities Act
of 1933, as amended, (the "Securities Act") may be permitted to directors,
officers and controlling persons of the Registrant pursuant to the foregoing
provisions, or otherwise, the Registrant has been advised that in the opinion of
the Securities and Exchange Commission such indemnification is against public
policy as expressed in the Act and is, therefore, unenforceable. In the event
that a claim for indemnification against such liabilities (other than the
payment by the Registrant of expenses incurred or paid by a director, officer or
controlling person of the Registrant in a successful defense of any action, suit
or proceeding) is asserted by such director, officer or controlling person in
connection with the securities being registered, the Registrant will, unless in
the opinion of its counsel the matter has been settled by controlling precedent,
submit to a court of appropriate jurisdiction the question of whether such
indemnification by it is against public policy as expressed in the Act and will
be governed by the final adjudication of such issue.
ITEM 16. EXHIBITS
The following exhibits, as noted, are filed herewith, previously have been
filed, or will be filed by amendment.
EXHIBIT NO.
(PER EXHIBIT
TABLES IN
ITEM 601 OF
REGULATION S-K) DESCRIPTION
- --------------- -----------
*1.1 Form of Underwriting Agreement for Debt Securities.
*1.2 Form of Underwriting Agreement for Equity Securities.
3.1 Articles of Incorporation of the Registrant (filed as
Exhibit 3.3(i) to the Registrant's Registration Statement
No. 1-11290 on Form 8-B, and incorporated herein by
reference).
3.2 Bylaws of the Registrant (filed as Exhibit 3(ii) to the
Registrant's Registration Statement No. 33-83110 on Form
S-3, and incorporated herein by reference).
4.1 Specimen Certificate of Common Stock, par value $.01 per
share, of the Registrant (filed as Exhibit 3.4 to the
Registrant's Registration Statement No. 1-11290 on Form 8-B,
and incorporated herein by reference).
4.2 Form of Indenture. Filed herewith.
4.3 Form of Debt Security (included in Exhibit 4.2)
*4.4 Form of Common Stock Warrant Agreement.
5 Opinion of Counsel, including consent. Filed herewith.
*8 Opinion of Counsel regarding Tax Matters, including consent.
10.1 Stock Purchase Agreement dated as of January 23, 1992, by
and among the Registrant, CNL Group, Inc. and certain
entities affiliated therewith (filed as Exhibit 10.4 to the
Registrant's Annual Report on Form 10-K for the year ended
December 31, 1991 (the "1991 Form 10-K"), and incorporated
herein by reference).
II-2
<PAGE>
EXHIBIT NO.
(PER EXHIBIT
TABLES IN
ITEM 601 OF
REGULATION S-K) DESCRIPTION
- --------------- -----------
10.2 Letter Agreement dated July 10, 1992, amending Stock
Purchase Agreement dated January 23, 1992 (filed as Exhibit
10.34 to the Registrant's Quarterly Report on Form 10-Q for
the quarter ended June 30, 1992, and incorporated herein by
reference).
10.3 Form of Advisory Agreement between Registrant and CNL Realty
Advisors, Inc. (filed as Exhibit 10.21 to the Registrant's
Report on Form 8 dated April 29, 1992, amending the 1991
Form 10-K, and incorporated herein by reference).
10.4 Advisory Agreement between Registrant and CNL Realty
Advisors, Inc. effective as of April 1, 1993 and renewed as
of January 1, 1994 (filed as Exhibit 10.04 to Amendment No.
1 to the Registrant's Registration Statement No. 33-61214 on
Form S-2, and incorporated herein by reference).
10.5 Revolving Loan Agreement, dated as of August 24, 1993, by
and between Registrant and SouthTrust Bank of Alabama,
National Association (filed as Exhibit 10.05 to the
Registrant's Registration Statement No. 33-69072 on Form
S-2, and incorporated herein by reference).
10.6 Commitment letter dated September 14, 1993 from First Union
National Bank of Florida relating to a $20,000,000 loan
(filed as Exhibit 10.06 to the Registrant's Registration
Statement No. 33-69072 on Form S-2, and incorporated herein
by reference).
10.7 Revolving Line of Credit and Security Agreement, dated as of
September 28, 1993, by and between Registrant and First
Union National Bank of Florida (filed as Exhibit 10.07 to
Amendment No. 2 to the Registrant's Registration Statement
No. 33-69072 on Form S-2, and incorporated herein by
reference).
10.8 Intercreditor Agreement by and between SouthTrust Bank of
Alabama, National Association, and First Union National Bank
of Florida (filed as Exhibit 10.08 to Amendment No. 2 to the
Registrant's Registration Statement No. 33-69072 on Form
S-2, and incorporated herein by reference).
10.9 Revolving Line of Credit and Security Agreement, dated as of
July 25, 1994, among Registrant, certain lenders listed
therein and First Union National Bank of Florida, as the
Agent, relating to a $100,000,000 loan (filed as Exhibit
10.11 to the Registrant's Quarterly Report on Form 10-Q for
the quarter ended June 30, 1994, and incorporated herein by
reference).
10.10 1992 Commercial Net Lease Realty, Inc. Stock Option Plan
(filed as Exhibit 10(x) to the Registrant's Registration
Statement No. 33-83110 on Form S-3, and incorporated herein
by reference).
10.11 Interest Rate Cap Agreement dated February 28, 1994 by and
between the Registrant and First Union National Bank of
North Carolina (filed as Exhibit 10(xi) to the Registrant's
Registration Statement No. 33-83110 on Form S-3, and
incorporated herein by reference).
12 Statement of Computation of Ratios of Earnings to Fixed
Charges. Filed herewith.
24.1 Power of Attorney (contained on the signature page hereto).
II-3
<PAGE>
EXHIBIT NO.
(PER EXHIBIT
TABLES IN
ITEM 601 OF
REGULATION S-K) DESCRIPTION
- --------------- -----------
24.2 Consent of KPMG Peat Marwick. Filed herewith.
24.3 Consent of Counsel. To be included in Exhibits 5 and 8.
*25 Statement of Eligibility of Trustee on Form T-1(1).
___________________________
* To be filed by amendment or incorporated by reference in connection with
the offering of the Offered Securities.
ITEM 17. UNDERTAKINGS.
(a) See Item 15 for Registrant's undertaking with respect to indemnification.
(b) The undersigned Registrant hereby undertakes that:
(1) For purposes of determining any liability under the Securities Act,
the information omitted from the form of prospectus filed as part of
this Registration Statement in reliance upon Rule 430A and contained
in a form of prospectus filed by the Registrant pursuant to Rule
424(b)(1) or (4) or 497(h) under the Securities Act shall be deemed to
be part of this Registration Statement as of the time it was declared
effective.
(2) For purposes of determining any liability under the Securities Act,
each post-effective amendment that contains a form of prospectus shall
be deemed to be a new registration statement relating to the
securities offered therein, and the offering of such securities at
that time shall be deemed to be the initial bona fide offering
thereof.
(3) For purposes of determining any liability under the Securities Act,
each filing of the Registrant's annual report pursuant to Section
13(a) or Section 15(d) of the Securities Exchange Act of 1934 that is
incorporated by reference in the registration statement shall be
deemed to be a new registration statement relating to the securities
offered therein, and the offering of such securities at that time
shall be deemed to be the initial bona fide offering thereof.
II-4
<PAGE>
SIGNATURES
Pursuant to the requirements of the Securities Act of 1933, the Registrant
certifies that it has reasonable grounds to believe that it meets all of the
requirements for filing on Form S-3 and has duly caused this Registration
Statement to be signed on its behalf by the undersigned, thereunto duly
authorized, in the City of Orlando, State of Florida on July 20, 1995.
COMMERCIAL NET LEASE REALTY, INC.
(Registrant)
By: /s/ James M. Seneff, Jr.
-----------------------------------
James M. Seneff, Jr.
Chairman of the Board
POWER OF ATTORNEY
KNOW ALL MEN BY THESE PRESENTS, that each of the undersigned hereby
constitutes and appoints Robert A. Bourne and James M. Seneff, Jr. and each of
them, his true and lawful attorneys-in-fact and agents, with full power of
substitution and resubstitution, for him and in his name, place and stead, in
any and all capacities, with full power to act alone, to sign any and all
documents (including both pre- and post-effective amendments in connection with
this Registration Statement), and to file the same, with all exhibits thereto,
and all documents in connection therewith, with the Securities and Exchange
Commission, granting onto said attorneys-in-fact and agents and each of them,
full power and authority to do and perform each and every act and thing
requisite and necessary to be done in and about the premises, as fully to all
intents and purposes as he might or could do in person, hereby ratifying and
confirming all that said attorneys-in-fact and agents, or either of them, or
their or his substitutes or substitute, may lawfully do or cause to be done by
virtue thereof.
II-5
<PAGE>
Pursuant to the requirements of the Securities Act of 1933, this
Registration Statement has been signed by the following persons in the capacity
and on the dates indicated.
SIGNATURE TITLE DATE
Chairman of the Board
/s/ James M. Seneff, Jr. (Principal Executive Officer) July 20., 1995
- ------------------------------
James M. Seneff, Jr.
/s/ Robert A. Bourne Director and President July 20., 1995
- ------------------------------
Robert A. Bourne
Executive Vice President and
Chief Financial Officer
/s/ Kevin B. Habicht (Principal Financial Officer) July 20., 1995
- ------------------------------
Kevin B. Habicht
Secretary/Treasurer
/s/ Lynn E. Rose (Principal Accounting Officer) July 20., 1995
- ------------------------------
Lynn E. Rose
/s/ Edward Clark Director July 20., 1995
- ------------------------------
Edward Clark
/s/ Willoughby T. Cox, Jr. Director July 20., 1995
- ------------------------------
Willoughby T. Cox, Jr.
/s/ Clifford R. Hinkle Director July 20., 1995
- ------------------------------
Clifford R. Hinkle
/s/ Ted B. Lanier Director July 20., 1995
- ------------------------------
Ted B. Lanier
II-6
<PAGE>
EXHIBITS
SEQUENTIAL
EXHIBIT NO. DOCUMENT PAGE NO.
- ----------- -------- -------
*1.1 Form of Underwriting Agreement for Debt Securities.
*1.2 Form of Underwriting Agreement for Equity Securities.
3.1 Articles of Incorporation of the Registrant (filed as Exhibit
3.3(i) to the Registrant's Registration Statement No. 1-11290 on
Form 8-B, and incorporated herein by reference).
3.2 Bylaws of the Registrant. (filed as Exhibit 3.3(ii) to the
Registrant's Registration Statement No. 33-83110 on Form S-3,
and incorporated herein by reference).
4.1 Specimen Certificate of Common Stock, par value $.01 per share,
of the Registrant (filed as Exhibit 3.4 to the Registrant's
Registration Statement No. 1-11290 on Form 8-B, and incorporated
herein by reference).
4.2 Form of Indenture. Filed herewith.
4.3 Form of Debt Security (included in Exhibit 4.2)
*4.4 Form of Common Stock Warrant Agreement.
5 Opinion of Counsel, including consent. Filed herewith.
*8 Opinion of Counsel regarding Tax Matters, including consent.
10.1 Stock Purchase Agreement dated as of January 23, 1992, by and
among the Registrant, CNL Group, Inc. and certain entities
affiliated therewith (filed as Exhibit 10.4 to the Registrant's
Annual Report on Form 10-K for the year ended December 31, 1991
(the "1991 Form 10-K"), and incorporated herein by reference).
10.2 Letter Agreement dated July 10, 1992, amending Stock Purchase
Agreement dated January 23, 1992 (filed as Exhibit 10.34 to the
Registrant's Quarterly Report on Form 10-Q for the quarter ended
June 30, 1992, and incorporated herein by reference).
10.3 Form of Advisory Agreement between Registrant and CNL Realty
Advisors, Inc. (filed as Exhibit 10.21 to the Registrant's Report
on Form 8 dated April 29, 1992, amending the 1991 Form 10-K, and
incorporated herein by reference).
10.4 Advisory Agreement between Registrant and CNL Realty Advisors,
Inc. effective as of April 1, 1993 and renewed as of January 1,
1994 (filed as Exhibit 10.04 to Amendment No. 1 to the
Registrant's Registration Statement No. 33-61214 on Form S-2, and
incorporated herein by reference).
10.5 Revolving Loan Agreement, dated as of August 24, 1993, by and
between Registrant and SouthTrust Bank of Alabama, National
Association (filed as Exhibit 10.05 to the Registrant's
Registration Statement No. 33-69072 on Form S-2, and incorporated
herein by reference).
10.6 Commitment letter dated September 14, 1993 from First Union
National Bank of Florida relating to a $20,000,000 loan (filed as
Exhibit 10.06 to the Registrant's Registration Statement
No. 33-69072 on Form S-2, and incorporated herein by reference).
II-7
<PAGE>
SEQUENTIAL
EXHIBIT NO. DOCUMENT PAGE NO.
- ----------- -------- -------
10.7 Revolving Line of Credit and Security Agreement, dated as of
September 28, 1993, by and between Registrant and First Union
National Bank of Florida (filed as Exhibit 10.07 to Amendment
No. 2 to the Registrant's Registration Statement No. 33-69072 on
Form S-2, and incorporated herein by reference).
10.8 Intercreditor Agreement by and between SouthTrust Bank of
Alabama, National Association, and First Union National Bank of
Florida (filed as Exhibit 10.08 to Amendment No. 2 to the
Registrant's Registration Statement No. 33-69072 on Form S-2, and
incorporated herein by reference).
10.9 Revolving Line of Credit and Security Agreement, dated as of July
25, 1994, among Registrant, certain lenders listed therein and
First Union National Bank of Florida, as the Agent, relating to a
$100,000,000 loan (filed as Exhibit 10.11 to the Registrant's
Quarterly Report on Form 10-Q for the quarter ended June 30,
1994, and incorporated herein by reference).
10.10 1992 Commercial Net Lease Realty, Inc. Stock Option Plan (filed
as Exhibit 10(x) to the Registrant's Registration Statement No.
33-83110 on Form S-3, and incorporated herein by reference).
10.11 Interest Rate Cap Agreement dated February 28, 1994 by and
between the Registrant and First Union National Bank of North
Carolina (filed as Exhibit 10(xi) to the Registrant's
Registration Statement No. 33-83110 on Form S-3, and incorporated
herein by reference).
12 Statement of Computation of Ratios of Earnings to Fixed Charges.
Filed herewith.
24.1 Power of Attorney (contained on the signature page hereto).
24.2 Consent of KPMG Peat Marwick. Filed herewith.
24.3 Consent of Counsel. To be included in Exhibits 5 and 8.
*25 Statement of Eligibility of Trustee on Form T-1(1).
___________________________
* To be filed by amendment or incorporated by reference in connection with
the offering of the Offered Securities.
II-8
<PAGE>
EXHIBIT 4.2
COMMERCIAL NET LEASE REALTY, INC.
TO
[NAME OF TRUSTEE],
TRUSTEE
----------------------------------------------
INDENTURE
DATED AS OF ,
---------------- ------
----------------------------------------------
DEBT SECURITIES
<PAGE>
TABLE OF CONTENTS
PAGE
----
ARTICLE I - DEFINITIONS AND OTHER PROVISIONS OF GENERAL
APPLICATION. . . . . . . . . . . . . . . . . . . . . 1
Section 1.1 Definitions. . . . . . . . . . . . . . . . . . . . 1
Section 1.2 Compliance Certificates And Opinions . . . . . . . 9
Section 1.3 Form Of Documents Delivered To Trustee . . . . . . 10
Section 1.4 Acts Of Holders. . . . . . . . . . . . . . . . . . 10
Section 1.5 Notices, Etc., To Trustee And Company. . . . . . . 12
Section 1.6 Notice To Holders; Waiver. . . . . . . . . . . . . 13
Section 1.7 Counterparts; Effect Of Headings And
Table Of Contents . . . . . . . . . . . . . . . . 14
Section 1.8 Successors And Assigns . . . . . . . . . . . . . . 14
Section 1.9 Severability Clause. . . . . . . . . . . . . . . . 14
Section 1.10 Benefits Of Indenture . . . . . . . . . . . . . . 14
Section 1.11 Governing Law . . . . . . . . . . . . . . . . . . 14
Section 1.12 Legal Holidays. . . . . . . . . . . . . . . . . . 14
Section 1.13 Immunity Of Stockholders, Directors, Offices And
Agents Of The Company . . . . . . . . . . . . . 15
Section 1.14 Conflict With Trust Indenture Act . . . . . . . . 15
ARTICLE II - SECURITIES FORMS . . . . . . . . . . . . . . . . . . . 15
Section 2.1 Forms Of Securities . . . . . . . . . . . . . . . . 15
Section 2.2 Form Of Trustee's Certificate
Of Authentication . . . . . . . . . . . . . . . . 15
Section 2.3 Securities Issuable In Global Form . . . . . . . . 16
ARTICLE III - THE SECURITIES . . . . . . . . . . . . . . . . . . . . 17
Section 3.1 Amount Unlimited; Issuable In Series . . . . . . . 17
Section 3.2 Denominations . . . . . . . . . . . . . . . . . . . 21
Section 3.3 Execution, Authentication, Delivery And Dating. . . 21
Section 3.4 Temporary Securities . . . . . . . . . . . . . . . 23
Section 3.5 Registration, Registration Of Transfer
And Exchange . . . . . . . . . . . . . . . . . . 26
Section 3.6 Mutilated, Destroyed, Lost And Stolen
Securities . . . . . . . . . . . . . . . . . . . 29
Section 3.7 Payment Of Interest; Interest Rights
Preserved . . . . . . . . . . . . . . . . . . . . 30
Section 3.8 Persons Deemed Owners . . . . . . . . . . . . . . . 32
Section 3.9 Cancellation . . . . . . . . . . . . . . . . . . . 33
Section 3.10 Computation Of Interest . . . . . . . . . . . . . 33
ARTICLE IV - SATISFACTION AND DISCHARGE . . . . . . . . . . . . . . 33
Section 4.1 Satisfaction And Discharge Of Indenture . . . . . . 33
Section 4.2 Application Of Trust Funds . . . . . . . . . . . . 35
-i-
<PAGE>
PAGE
----
ARTICLE V - REMEDIES . . . . . . . . . . . . . . . . . . . . . . . . 35
Section 5.1 Events Of Default . . . . . . . . . . . . . . . . . 35
Section 5.2 Acceleration Of Maturity; Rescission
And Annulment . . . . . . . . . . . . . . . . . . 37
Section 5.3 Collection Of Indebtedness And Suits For
Enforcement By Trustee . . . . . . . . . . . . . 38
Section 5.4 Trustee May File Proofs Of Claim . . . . . . . . . 39
Section 5.5 Trustee May Enforce Claims Without Possession Of
Securities Or Coupons . . . . . . . . . . . . . . 39
Section 5.6 Application Of Money Collected . . . . . . . . . . 40
Section 5.7 Limitation On Suits. . . . . . . . . . . . . . . . 40
Section 5.8 Unconditional Rights Of Holders To Receive
Principal, Premium, If Any, Interest And
Additional Amounts . . . . . . . . . . . . . . . 41
Section 5.9 Restoration Of Rights And Remedies . . . . . . . . 41
Section 5.10 Rights And Remedies Cumulative . . . . . . . . . . 41
Section 5.11 Delay Or Omission Not Waiver . . . . . . . . . . . 41
Section 5.12 Control By Holders Of Securities . . . . . . . . . 42
Section 5.13 Waiver Of Past Defaults . . . . . . . . . . . . . 42
Section 5.14 Waiver Of Usury, Stay Or Extension Laws . . . . . 43
Section 5.15 Undertaking For Costs . . . . . . . . . . . . . . 43
ARTICLE VI - THE TRUSTEE . . . . . . . . . . . . . . . . . . . . . . 43
Section 6.1 Notice Of Defaults . . . . . . . . . . . . . . . . 43
Section 6.2 Certain Rights Of Trustee . . . . . . . . . . . . . 44
Section 6.3 Not Responsible For Recitals Or Issuance
Of Securities . . . . . . . . . . . . . . . . . . 45
Section 6.4 May Hold Securities . . . . . . . . . . . . . . . . 45
Section 6.5 Money Held In Trust . . . . . . . . . . . . . . . . 46
Section 6.6 Compensation And Reimbursement. . . . . . . . . . . 46
Section 6.7 Corporate Trustee Required; Eligibility;
Conflicting Interests . . . . . . . . . . . . . . 46
Section 6.8 Resignation And Removal; Appointment
Of Successor . . . . . . . . . . . . . . . . . . 47
Section 6.9 Acceptance Of Appointment By Successor . . . . . . 48
Section 6.10 Merger, Conversion, Consolidation Or Succession
To Business . . . . . . . . . . . . . . . . . . 49
Section 6.11 Appointment Of Authenticating Agent . . . . . . . 50
ARTICLE VII - HOLDERS' LISTS AND REPORTS BY TRUSTEE AND COMPANY . . 51
Section 7.1 Disclosure Of Names And Addresses Of Holders . . . 51
Section 7.2 Reports By Trustee . . . . . . . . . . . . . . . . 51
Section 7.3 Reports By Company . . . . . . . . . . . . . . . . 52
Section 7.4 Company To Furnish Trustee Names And Addresses
Of Holders . . . . . . . . . . . . . . . . . . . 52
-ii-
<PAGE>
PAGE
----
ARTICLE VIII - CONSOLIDATION, MERGER, SALE, LEASE OR CONVEYANCE . . 53
Section 8.1 Consolidations And Mergers Of Company And Sales,
Leases And Conveyances Permitted Subject To
Certain Conditions . . . . . . . . . . . . . . . 53
Section 8.2 Rights And Duties Of Successor Corporation . . . . 53
Section 8.3 Officers' Certificate And Opinion Of Counsel . . . 54
ARTICLE IX - SUPPLEMENTAL INDENTURES . . . . . . . . . . . . . . . . 54
Section 9.1 Supplemental Indentures Without Consent
Of Holders . . . . . . . . . . . . . . . . . . . 54
Section 9.2 Supplemental Indentures With Consent Of Holders . . 55
Section 9.3 Execution Of Supplemental Indentures . . . . . . . 57
Section 9.4 Effect Of Supplemental Indentures . . . . . . . . . 57
Section 9.5 Conformity With Trust Indenture Act . . . . . . . . 57
Section 9.6 Reference In Securities To Supplemental
Indentures . . . . . . . . . . . . . . . . . . . 57
ARTICLE X - COVENANTS . . . . . . . . . . . . . . . . . . . . . . . 57
Section 10.1 Payment Of Principal, Premium, If Any, Interest
And Additional Amounts . . . . . . . . . . . . . 57
Section 10.2 Maintenance Of Office Or Agency . . . . . . . . . 58
Section 10.3 Money For Securities Payments To Be Held In
Trust . . . . . . . . . . . . . . . . . . . . . 59
Section 10.4 Existence . . . . . . . . . . . . . . . . . . . . 61
Section 10.5 Maintenance Of Properties . . . . . . . . . . . . 61
Section 10.6 Insurance . . . . . . . . . . . . . . . . . . . . 61
Section 10.7 Payment Of Taxes And Other Claims . . . . . . . . 61
Section 10.8 Provision Of Financial Information . . . . . . . . 62
Section 10.9 Statement As To Compliance . . . . . . . . . . . . 62
Section 10.10 Additional Amounts . . . . . . . . . . . . . . . 62
Section 10.11 Waiver Of Certain Covenants . . . . . . . . . . . 63
ARTICLE XI - REDEMPTION OF SECURITIES . . . . . . . . . . . . . . . 63
Section 11.1 Applicability Of Article . . . . . . . . . . . . . 63
Section 11.2 Election To Redeem; Notice To Trustee . . . . . . 64
Section 11.3 Selection By Trustee Of Securities To Be
Redeemed . . . . . . . . . . . . . . . . . . . . 64
Section 11.4 Notice Of Redemption . . . . . . . . . . . . . . . 64
Section 11.5 Deposit Of Redemption Price . . . . . . . . . . . 66
Section 11.6 Securities Payable On Redemption Date . . . . . . 66
Section 11.7 Securities Redeemed In Part . . . . . . . . . . . 67
ARTICLE XII - SINKING FUNDS . . . . . . . . . . . . . . . . . . . . 68
Section 12.1 Applicability Of Article . . . . . . . . . . . . . 68
Section 12.2 Satisfaction Of Sinking Fund Payments With
Securities . . . . . . . . . . . . . . . . . . . 68
-iii-
<PAGE>
Section 12.3 Redemption Of Securities For Sinking Fund . . . . 68
ARTICLE XIII - REPAYMENT AT THE OPTION OF HOLDERS . . . . . . . . . 69
Section 13.1 Applicability Of Article . . . . . . . . . . . . . 69
Section 13.2 Repayment Of Securities . . . . . . . . . . . . . 69
Section 13.3 Exercise Of Option . . . . . . . . . . . . . . . . 69
Section 13.4 When Securities Presented For Repayment Become
Due And Payable . . . . . . . . . . . . . . . . 70
Section 13.5 Securities Repaid In Part. . . . . . . . . . . . . 71
ARTICLE XIV - DEFEASANCE AND COVENANT DEFEASANCE . . . . . . . . . . 71
Section 14.1 Applicability Of Article; Company's Option To
Effect Defeasance Or Covenant Defeasance . . . . 71
Section 14.2 Defeasance And Discharge . . . . . . . . . . . . . 71
Section 14.3 Covenant Defeasance . . . . . . . . . . . . . . . 72
Section 14.4 Conditions To Defeasance Or Covenant Defeasance. . 73
Section 14.5 Deposited Money And Government Obligations To Be
Held In Trust; Other Miscellaneous Provisions. . 74
ARTICLE XV - MEETINGS OF HOLDERS OF SECURITIES . . . . . . . . . . . 75
Section 15.1 Purposes For Which Meetings May Be Called. . . . . 75
Section 15.2 Call, Notice And Place Of Meetings . . . . . . . . 75
Section 15.3 Persons Entitled To Vote At Meetings . . . . . . . 76
Section 15.4 Quorum; Action . . . . . . . . . . . . . . . . . . 76
Section 15.5 Determination Of Voting Rights, Conduct And
Adjournment 04 Meetings . . . . . . . . . . . . 77
Section 15.6 Counting Votes And Recording Action Of Meetings. . 78
SIGNATURES AND SEALS . . . . . . . . . . . . . . . . . . . . . . . . 79
Exhibit A Form of Debt Security A-1
Exhibit B-1 Form of Certification B-1-1
Exhibit B-2 Form of Certification B-2-1
-iv-
<PAGE>
COMMERCIAL NET LEASE REALTY, INC.
Reconciliation and tie between Trust Indenture Act of 1939 and Indenture dated
as of ______________________, 199_.
<TABLE>
<CAPTION>
Trust Indenture Act Section Indenture Section
--------------------------- -----------------
<S> <C>
Section 310(a)(1) ....................................... 6.7
Section 310(b) .......................................... 6.4,6.8
Section 311 ............................................. 1.1,6.4
Section 312(b) .......................................... 7.1
Section 312 ............................................. 7.1
Section 313 ............................................. 1.1
Section 313(a) .......................................... 7.2
Section 313(c) .......................................... 6.1,7.2,7.3
Section 312(a) - (d) .................................... 3.3,6.2
Section 315(e) .......................................... 6.8
Section 316(c) .......................................... 1.4
<FN>
- -------------------
NOTE: This reconciliation and tie shall not, for any purpose, be deemed to be
a part of the Indenture.
</TABLE>
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.
-v-
<PAGE>
THIS INDENTURE, dated as of _______________________, between
COMMERCIAL NET LEASE REALTY, INC., a Maryland corporation (the "Company"),
having its principal office at 400 E. South Street, Suite 500, Orlando, Florida
32801-2878, and _________________, a corporation organized under the laws of the
State of ___________________, as Trustee hereunder (the "Trustee"), having its
Corporate Trust Office at _______________________.
RECITALS OF THE COMPANY
The Company deems it necessary to issue from time to time for its lawful
purposes debt Securities (hereinafter called the "Securities") evidencing its
indebtedness, and has duly authorized the execution and delivery of this
Indenture to provide for the issuance from time to time of the Securities, to be
issued in one or more series as provided in this Indenture.
This Indenture is subject to the provisions of the Trust Indenture Act of
1939, as amended, that are deemed to be incorporated into this Indenture and
shall, to the extent applicable, be governed by such provisions.
All things necessary to make this Indenture a valid agreement of the
Company, in accordance with its terms, have been done.
NOW, THEREFORE, THIS INDENTURE WITNESSETH:
For and in consideration of the premises and the purchase of the Securities
by the Holders thereof, it is mutually covenanted and agreed, for the equal and
proportionate benefit of all Holders of the Securities, as follows:
ARTICLE I
DEFINITIONS AND OTHER PROVISIONS OF GENERAL APPLICATION
Section 1.1 DEFINITIONS
For all purposes of this Indenture, except as otherwise expressly provided
of unless the context otherwise requires:
(1) the terms defined in this Article I have the meanings
assigned to them in this Article I, 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;
<PAGE>
(3) all accounting terms not otherwise defined herein have the
meanings assigned to them in accordance with GAAP; and
(4) the words "herein," "hereof" and "hereunder" and other words
of similar import refer to this Indenture as a whole and not to any particular
Article, Section or other subdivision.
"ACT," when used with respect to any Holder, has the meaning specified in
Section 1.4.
"ADDITIONAL AMOUNTS" means any additional amounts which are required by a
Security or by or pursuant to a Board Resolution, under circumstances specified
therein, to be paid by the Company in respect of certain taxes imposed on
certain Holders and which are owing to such Holders.
"AFFILIATE" or any specified Person means any other Person directly or
indirectly controlling or controlled by or under direct or indirect common
control with such specified Person. For the purposes of this definition,
"control" when used with respect to any specified Person means the power to
direct the management and policies of such Person, directly or indirectly,
whether through the ownership of voting Securities, by contract or otherwise;
and the terms "controlling" and "controlled" have meanings correlative to the
foregoing.
"AUTHENTICATING AGENT" means any authenticating agent appointed by the
Trustee pursuant to Section 6.11 to act on behalf of the Trustee to authenticate
Securities.
"AUTHORIZED NEWSPAPER" means a newspaper, printed in the English language
or in an official language of the country of publication, customarily published
on each Business Day, whether or not published on Saturdays, Sundays or
holidays, and of general circulation in each place in connection with which the
term is used or in the financial community of each such place. Whenever
successive publications are required to be made in Authorized Newspapers, the
successive publications may be made in the same or in different Authorized
Newspapers in the same city meeting the foregoing requirements and in each case
on any Business Day.
"BANKRUPTCY LAW" has the meaning specified in Section 5.1.
"BEARER SECURITY" means any Security established pursuant to Section 2.1
which is payable to bearer.
"BOARD OF DIRECTORS" means the board of directors of the Company, or any
committee of that board duly authorized to act hereunder.
"BOARD RESOLUTION" means a copy of a resolution certified by the Secretary
or an Assistant Secretary of the Company to have been duly adopted by the Board
of Directors and to be in full force and effect on the date of such
certification, and delivered to the Trustee.
-2-
<PAGE>
"BUSINESS DAY," when used with respect to any Place of Payment or any other
particular location referred to in this Indenture of in the Securities, means,
unless otherwise specified with respect to any Securities pursuant to Section
3.1, any day, other than a Saturday or Sunday, that is not a day on which
banking institutions in that Place of Payment or particular location are
authorized or required by law, regulation or executive order to close.
"CEDEL" means Centrale de Livraison de Valeurs Mobilieres, S.A., or its
successor.
"COMMISSION" means the Securities and Exchange Commission, as from time to
time constituted, created under the Securities Exchange Act of 1934 (the
Exchange Act"), as amended, 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.
"COMMON STOCK" means, with respect to any Person, all shares of capital
stock issued by such Person other than Preferred Stock.
"COMPANY" means the Person named as the "Company" in the first paragraph of
this Indenture until a successor corporation shall have become such pursuant to
the applicable provisions of this Indenture, and thereafter "Company" shall mean
such successor corporation.
"COMPANY REQUEST" and "COMPANY ORDER" mean, respectively, a written request
or order signed in the name of the Company by its Chairman of the Board, the
President, any Senior Vice President or Vice President and by its Treasurer, an
Assistant Treasurer, the Secretary or an Assistant Secretary, and delivered to
the Trustee.
"CONVERSION EVENT" means the cessation of use of (1) a Foreign Currency
both by the government of the country which issued such currency and for the
settlement of transactions by a central bank or other public institutions of or
within the international banking community, (2) the ECU both within the European
Monetary System and for the settlement of transactions by public institutions of
or within the European Community, or (3) any currency unit (or composite
currency) other than the ECU for the purposes for which it was established.
"CORPORATE TRUST OFFICE" means the office of the Trustee at which, at any
particular time, its corporate trust business shall be principally administered,
which office at the date hereof is located at _________________________________.
"CORPORATION" includes corporations, associations, companies and business
trusts.
"COUPON" means any interest coupon appertaining to a Bearer Security.
"CUSTODIAN" has the meaning specified in Section 5.1.
"DEFAULTED INTEREST" has the meaning specified in Section 3.7.
-3-
<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 the payment of public and private debts.
"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.
"ECU" means the European Currency Unit as defined and revised from time to
time by the Council of the European Community.
"FOREIGN CURRENCY" means any currency, currency unit or composite currency,
including, without limitation, the ECU, issued by the government of one or more
countries other than the United States of America or by any recognized
confederation or association of such governments.
"GAAP" means generally accepted accounting principles, as in effect from
time to time, as used in the United States applied on a consistent basis.
"GLOBAL SECURITY" means a security evidencing all or a part of a series of
Securities issued to and registered in the name of the depositary for such
series, or its nominee, in accordance with Section 3.5, and bearing the legend
prescribed in Section 2.3.
"GOVERNMENT OBLIGATIONS" means Securities which are (1) direct obligations
of the United States 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 (2) obligations of a Person
controlled or supervised by and acting as an agency or instrumentality of the
United States 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 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, HOWEVER, that (except as required by law) such
custodian is not authorized to make any deduction from the amount payable to the
holder of such depositary receipt from any amount received by tile 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.
-4-
<PAGE>
"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 be
supplemented or amended from time to time by one or more indentures supplemental
hereto entered into pursuant to the applicable provisions hereof, and shall
include the terms of particular series of Securities established as contemplated
by Section 3.1; PROVIDED, HOWEVER, that, if at any time more than one Person is
acting as Trustee under this 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 be supplemented or amended from
time to time 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 Trustee, regardless of when such terms or provisions were
adopted, and exclusive of any provisions of 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, means interest payable
after Maturity, and, when used with respect to a Security which provides for the
payment of Additional Amounts pursuant to Section 10.10, includes such
Additional Amounts.
"INTEREST PAYMENT DATE," when used with respect to any Security, means the
Stated Maturity of an installment of interest on such Security.
"MATURITY," when used with respect to any Security, means the date on which
the principal of such Security or an installment of principal becomes due and
payable as therein or herein provided, whether at the Stated Maturity or by
declaration of acceleration, notice of redemption, notice of option to elect
repayment or otherwise.
"OFFICERS' CERTIFICATE" means a certificate signed by the Chairman of the
Board of Directors, the President, any Senior Vice President or Vice President
and by the Treasurer, an Assistant Treasurer, the Secretary or an Assistant
Secretary of the Company, and delivered to the Trustee.
"OPINION OF COUNSEL" means a written opinion of counsel, who may be counsel
for the Company or who may be an employee of or other Counsel for the Company
and who shall he satisfactory to the Trustee.
-5-
<PAGE>
"ORIGINAL ISSUE DISCOUNT SECURITY" means any Security which provides for an
amount less than the principal amount thereof to be due and payable upon a
declaration of acceleration of the Maturity thereof Pursuant to Section 5.2.
"OUTSTANDING," when used with respect to Securities, means, as of the date
of determination, all Securities therefore authenticated and delivered under
this Indenture, EXCEPT:
(1) Securities theretofore canceled by the Trustee or delivered to
the Trustee for cancellation;
(2) Securities, or portions thereof, for whose payment or redemption
(including repayment at the option of the Holder) money in the necessary amount
has been theretofore been deposited with the Trustee or any Paying Agent (other
than the Company) in trust or set aside and segregated in trust by the Company
(if the Company shall act as its own Paying Agent) for the Holders of such
Securities and any coupons appertaining thereto; PROVIDED, HOWEVER, that, if
such Securities are to be redeemed, notice of such redemption has been duly
given pursuant to this Indenture or provision therefor satisfactory to the
Trustee has been made;
(3) Securities, except to the extent provided in Sections 14.2 and
14.3, with respect to which the Company has effected defeasance and/or covenant
defeasance as provided in Article XIV;
(4) Securities which have been paid pursuant to Section 3.6 or in
exchange for or in lieu of which other Securities have been authenticated and
delivered pursuant to this Indenture, other than any such Securities in respect
of which there shall have been presented to the Trustee proof satisfactory to it
that such Securities are held by a bona fide purchaser in whose hands such
Securities are valid obligations of the Company; and
(5) Securities converted into Common Stock or Preferred Stock
pursuant to or in accordance with this Indenture if the terms of such Securities
provide for convertibility pursuant to Section 3.1;
PROVIDED, HOWEVER, that in determining whether the Holders of the requisite
principal amount of the Outstanding Securities have given any request, demand,
authorization, direction, notice, consent or waiver hereunder or are present at
a meeting of Holders for quorum purposes, and for the purpose of making the
calculation 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
for equal to the amount of principal thereof that would tie (or shall have been
declared to be) due and payable, at the time of such determination, upon a
declaration of acceleration of the maturity thereof pursuant to Section 5.2,
(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 3.1 as of the date such Security is originally
issued by the Company, of the principal amount (or, in the case of an Original
Issue Discount Security, the Dollar equivalent as or such date of original
issuance
-6-
<PAGE>
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 Security
pursuant to Section 3.1, and (iv) Securities owned by the Company or of any
other obligor upon the Securities or any Affiliate of the Company or of such
other obligor shall be disregarded and deemed not to be Outstanding, except
that, in determining whether the Trustee shall be protected in making such
calculation or in relying upon any such request, demand, authorization,
direction, notice, consent or waiver, only Securities which the Trustee knows to
be so owned shall be so disregarded. Securities owned as provided in clause
(iv) above which have been pledged in good faith may be regarded as Outstanding
if the pledgee establishes to the satisfaction of the Trustee the pledgee's
right so to act with respect to such Securities and that the pledgee is not the
Company or any other obligor upon the Securities or any Affiliate of the Company
or of such other obligor.
"PAYING AGENT" means any Person authorized by the Company to pay the
principal of (and premium, if any) or interest on any Securities or coupons on
behalf of the Company.
"PERSON" means any individual, corporation, partnership, joint venture,
association, joint-stock company, trust, unincorporated organization or
government or any agency or political subdivision thereof.
"PLACE OF PAYMENT," when used with respect to the Securities of or within
any series, means the place or places where the principal of (and premium, if
any) and interest on such Securities are payable as specified as contemplated by
Sections 3.1 and 10.1.
"PREDECESSOR SECURITY" of any particular Security means every previous
Security evidencing all or a portion of the same debt as that evidenced by such
particular Security; and, for the purposes of this definition, any Security
authenticated and delivered under Section 3.6 in exchange for or in lieu of a
mutilated, destroyed, lost or stolen Security or a Security to which a
mutilated, destroyed, lost or stolen coupon appertains shall be deemed to
evidence the same debt as the mutilated, destroyed, lost or stolen Security or
the Security to which the mutilated, destroyed, lost or stolen coupon
appertains.
"PREFERRED STOCK" means, with respect to any Person, all capital stock
issued by such Person that are entitled to a preference or priority over any
other capital Stock issued by such Person with respect to any distribution of
such Person's assets, whether by dividend or upon any voluntary or involuntary
liquidation, dissolution or winding up.
"REDEMPTION DATE," when used with respect to any Security to be redeemed,
in whole or in part, means the date fixed for such redemption by or pursuant to
this Indenture.
"REDEMPTION PRICE," when used with respect to any Security to the redeemed,
means the price at which it is to be redeemed pursuant to this Indenture.
-7-
<PAGE>
"REGISTERED SECURITY" shall mean any Security which is registered in the
Security Register.
"REGULAR RECORD DATE" for the interest payable on any Interest Payment Date
on the Registered Securities of or within any series means the date specified
for that purpose as contemplated by Section 3.1, whether or not a Business Day.
"REPAYMENT DATE" means, when used with respect to any Security to be repaid
at the option of the Holder, the date fixed for such repayment by or pursuant to
this Indenture.
"RESPONSIBLE OFFICER," when used with respect to the Trustee, means the
chairman or vice-chairman of the board of directors, the chairman or vice
chairman of the executive committee of the board of directors, the president,
any vice president (whether or not designated by a number or a word or words
added before or after the title "vice presidents"), the secretary, any assistant
secretary, the treasurer, any assistant treasurer, the cashier, any assistant
cashier, any trust officer or assistant trust officer, the controller or any
other officer of the Trustee customarily performing functions similar to those
performed by any of the above-designated officers and also means, with respect
to a particular corporate trust matter, any other officer to whom such matter is
referred because of such officer's knowledge and familiarity with the particular
subject.
"SECURITY" has the meaning stated in the first recital of this Indenture
and, more particularly, means any Security or Securities authenticated and
delivered under this Indenture; PROVIDED, HOWEVER, that, if at any time there is
more than one Person acting as Trustee under this Indenture, "Securities" with
respect to the Indenture as to which such Person is Trustee shall have the
meaning stated in the first recital of this Indenture and shall more
particularly mean Securities authenticated and delivered under this Indenture,
exclusive, however, of Securities of any series as to which such Person is not
Trustee.
"SECURITY REGISTER" and "SECURITY REGISTRAR" have the respective meanings
specified in Section 3.5.
"SIGNIFICANT SUBSIDIARY" means any Subsidiary which is a "significant
subsidiary" (as defined in Article I, Rule 1-02 of Regulation S-X promulgated
under the Securities Act of 1933, as amended) of the Company.
"SPECIAL RECORD DATE" for the payment of any Defaulted Interest on the
Registered Securities of or within any series means a date fixed by the Company
pursuant to Section 3.7.
"STATED MATURITY," when used with respect to any Security or any
installment of principal thereof or interest thereon, means the date specified
in such Security or a coupon representing such installment of interest as the
fixed date on which the principal of such Security or such installment of
principal or interest is due and payable.
"SUBSIDIARY" means a corporation a majority of the outstanding voting stock
of which is owned, directly or indirectly, by the Company or by one or more
other Subsidiaries of the
-8-
<PAGE>
Company. For the purposes of this definition, "voting stock" means stock having
voting power for the election of directors, whether at all times or only so long
as no senior class of stock has such voting power by reason of any contingency.
"TRUST INDENTURE ACT" or "TIA" means the Trust Indenture Act of 1939, as
amended and as in force at the date as of which this Indenture was executed,
except as provided in Section 9.5.
"TRUSTEE" means the Person named as the "Trustee" in the first paragraph of
this Indenture until a successor Trustee shall have become such pursuant to the
applicable provisions of this Indenture, and thereafter "Trustee" shall mean or
include each Person who is then a Trustee hereunder; PROVIDED, HOWEVER, that if
at any time there is more than one such Person, "Trustee" as used with respect
to the Securities of any series shall mean only the Trustee with respect to
Securities of that series.
"UNITED STATES" means, unless otherwise specified with respect to any
Securities pursuant to Section 3.1, the United States of America (including the
states and the District of Columbia), its territories, its possessions and other
areas subject to its jurisdiction.
"UNITED STATES PERSON" means, unless otherwise specified with respect to
any Securities pursuant to Section 3.1, an individual who is a citizen or
resident of the United States, a corporation, partnership or other entity
created 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 1.2 COMPLIANCE CERTIFICATES AND OPINIONS
Upon any application or request by the Company to the Trustee to take any
action under any provision of this Indenture, the Company shall furnish to the
Trustee an Officers' Certificate stating that all conditions precedent, if any,
provided for in this Indenture relating to the proposed action have been
complied with and an Opinion of Counsel stating that in the opinion of such
counsel all such conditions precedent, if any, have been complied with, except
that in the case of any such application or request as to which the furnishing
of such documents is specifically required by any provision of this Indenture
relating to such particular application or request, no additional certificate or
opinion need be furnished.
Every certificate or opinion with respect to compliance with a condition or
covenant provided for in this Indenture (including certificates delivered
pursuant to Section 10.9) shall include:
-9-
<PAGE>
(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 1.3 FORM OF DOCUMENTS DELIVERED TO TRUSTEE
In any case where several matters are required to be certified by, or
covered by an opinion of, any specified Person, it is not necessary that all
such matters be certified by, or covered by the opinion of, only one 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 Company may be based,
insofar as it relates to legal matters, upon an Opinion of Counsel, or a
certificate or representations by counsel, unless such officer knows, or in the
exercise or reasonable care should know, that the opinion, certificate or
representations with respect to the matters upon which his certificate or
opinion is based are erroneous. Any such Opinion of Counsel or certificate or
representations may be based, insofar as it relates to factual matters, upon a
certificate or opinion of, or representations by, an officer or officers of the
Company stating that the information as to such factual matters is in the
possession of the Company, unless such counsel knows that the certificate,
opinion or representations as to such matters are erroneous.
Where any Person is required to make, give or execute two or more
applications, requests, consents, certificates, statements, opinions or other
instruments under this Indenture, they may, but need not, be consolidated and
form one instrument.
Section 1.4 ACTS OF HOLDERS
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
-10-
<PAGE>
Indenture to be given or taken by Holders of Securities of such series may,
alternatively, be embodied in and evidenced by the record of Holders of
Securities of such series voting in favor thereof, either in person or by
proxies duly appointed in writing, at any meeting of Holders of Securities of
such series duly called and held in accordance with the provisions of Article
XV, or a combination of such instruments and any such record. Except as herein
otherwise expressly provided, such action shall become effective when such
instrument or instruments or record or both are delivered to the Trustee and,
where it is hereby expressly required, to the Company. Such instrument or
instruments and any such record (and the action embodied therein and evidenced
thereby) are herein sometimes referred to as the "Act" of the Holders signing
such instrument or instruments or so voting at any such meeting. Proof of
execution of any such instrument or of a writing appointing any such agent, or
of the holding by any Person of a Security, shall be sufficient for any purpose
of this Indenture and conclusive in favor of the Trustee and the Company and any
agent of the Trustee or the Company, if made in the manner provided in this
Section 1.4. The record of any meeting of Holders of Securities shall be proved
in the manner provided in Section 15.6.
The fact and date of the execution by any person of any such instrument or
writing may be proved by the affidavit of a witness of such execution or by a
certificate of a notary public or other officer authorized by law to take
acknowledgments of deeds, certifying that the individual signing such instrument
of 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.
The ownership of Registered Securities shall be proved by the Security
Register. As to any matter relating to beneficial ownership interests in any
Global Security, the appropriate depositary's records shall be dispositive for
purposes of this Indenture.
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, whenever 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
the date therein mentioned such Person had on deposit with such depositary, or
exhibited to it, the Bearer Securities therein described; or such facts may be
proved by the certificate or affidavit of the Person holding such Bearer
Securities, if such certificate or affidavit is deemed by the Trustee to be
satisfactory. The Trustee and the Company may assume that such ownership of any
Bearer Security continues until (1) another certificate or affidavit bearing a
later date issued in respect of the same Bearer Security is produced or (2) such
Bearer Security is produced to the Trustee by some other Person or (3) such
Bearer Security is surrendered in exchange for a Registered Security or (4) such
Bearer Security is no longer Outstanding. The ownership of Bearer Securities
may also be proved in any other manner which the Trustee deems sufficient.
If the Company shall solicit from the Holders of Registered Securities any
request, demand, authorization, direction, notice, consent, waiver or other Act,
the Company may, at its
-11-
<PAGE>
option, in or pursuant to a Board Resolution, fix in advance a record date for
the determination of Holders entitled to give such request, demand,
authorization, direction, notice, consent, waiver or other Act, but the Company
shall have no obligation to do so. Notwithstanding TIA Section 316(c), such
record date shall be the record date specified in or pursuant to such Board
Resolution, which shall be a date not earlier than the date 30 days prior to the
first solicitation of Holders generally in connection therewith and not later
than the date such solicitation is completed. If such a record date is fixed,
such request, demand, authorization, direction, notice, consent, waiver or other
Act may be given before or after such record date, but only the Holders of
record at the close of business on such record date shall be deemed to be
Holders for the purposes of determining whether Holders of the requisite
proportion of Outstanding 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, HOWEVER, 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
then eleven months after the record date.
Any request, demand, authorization, direction, notice, consent, waiver or
other Act of the Holder of any Security shall bind every future Holder of the
same Security and the Holder of every Security issued upon the registration of
transfer thereof or in exchange therefor or in lieu thereof in respect of
anything done, omitted or suffered to be done by the Trustee, any Security
Registrar, any Paying Agent, any Authenticating Agent or the Company in reliance
thereon, whether or not notation of such action is made upon such Security.
Section 1.5 NOTICES, ETC., TO TRUSTEE AND COMPANY
Any request, demand, authorization, direction, notice, consent, waiver or
Act of Holders or other document provided or permitted by this Indenture to be
made upon, given or furnished to, or filed with,
(1) the Trustee by any Holder or by the Company shall be sufficient
for every purpose hereunder if made, given, furnished or filed in writing to or
with the Trustee at ________________; or
(2) the Company by the Trustee or by any Holder shall be sufficient
for every purpose hereunder (unless otherwise herein expressly provided) if in
writing and mailed, first-class postage prepaid, to the Company addressed to it
at the address of its principal office specified in the first paragraph of this
Indenture or at any other address previously furnished in writing to the Trustee
by the Company, Attention: Chief Financial Officer (with a copy to the
Company's general counsel); or
(3) either the Trustee or the Company, by the other party shall be
sufficient for every purpose hereunder if given by facsimile transmission,
receipt confirmed by telephone followed by an original copy delivered by
guaranteed overnight courier; if to the Trustee at facsimile number
____________; and if to the Company at facsimile number ____________.
-12-
<PAGE>
Section 1.6 NOTICE TO HOLDERS; WAIVER
Where this Indenture provides for notice of any event to Holders of
Registered Securities by the Company or the Trustee, such notice shall be
sufficiently given (unless otherwise herein expressly provided) if in writing
and mailed, first-class postage prepaid, to each such Holder affected by such
event, at his address as it appears in the Security Register, not later than the
latest date, and not earlier than the earliest date, if any, prescribed for the
giving of such notice. In any case where notice to Holders of Registered
Securities is given by mail, neither the failure to mail such notice, nor any
defect in any notice so mailed, to any particular Holder 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 specified with
respect to any Securities pursuant to Section 3.1, where this Indenture provides
for notice to Holders of Bearer Securities of any event, such notice shall be
sufficiently given if published in an Authorized Newspaper in the
_________________ and the City of Orlando and in such other city or cities as
may be specified in such Securities on a Business Day, such publication to be
not later than the latest date, and not earlier than the earliest date, if any,
prescribed for the giving of such notice. Any such notice shall be deemed to
have been given on the date of such publication or, if published more than once,
on the date of the first such publication.
If by reason of the suspension of publication of any Authorized Newspaper
or Authorized Newspapers or by reason of any other cause it shall be
impracticable to publish any notice to Holders of Bearer Securities as provided
above, then such notification to Holders of Bearer Securities as shall be given
with the approval of the Trustee shall constitute sufficient notice to such
Holders for every purpose hereunder. Neither the failure to give notice by
publication to any particular Holder of Bearer Securities as provided above, nor
any defect in any notice so published, shall affect the sufficiency of such
notice with respect to other Holders of Bearer Securities or the sufficiency of
any notice to Holders of Registered Securities given as provided herein.
Any request, demand, authorization, direction, notice, consent or waiver
required or permitted under this Indenture shall be in the English language,
except that any published notice may be in an official language of the country
of publication.
Where this Indenture provides for notice in any manner, such notice may be
waived in writing by the Person entitled to receive such notice, either before
or after the event, and such waiver shall be the equivalent of such notice.
Waivers of notice by Holders shall be filed with the
-13-
<PAGE>
Trustee, but such filing shall not be a condition precedent to the validity of
any action taken in reliance upon such waiver.
Section 1.7 COUNTERPARTS; EFFECT OF HEADINGS AND TABLE OF CONTENTS
This Indenture may be executed in any number of counterparts, each of which
when executed shall be deemed to be an original, but all such counterparts shall
together constitute but one and the same Indenture. The Article and Section
headings herein and the Table of Contents are for convenience only and shall not
affect the construction hereof.
Section 1.8 SUCCESSORS AND ASSIGNS
All covenants and agreements in this Indenture by the Company shall bind
its successors and assigns, whether so expressed or not.
Section 1.9 SEVERABILITY CLAUSE
In case any provision in this Indenture or in any Security or coupon shall
be invalid, illegal or unenforceable, the validity, legality and enforceability
of the remaining provisions shall not in any way be affected or impaired
thereby.
Section 1.10 BENEFITS OF INDENTURE
Nothing in this Indenture or in the Securities or coupons, express or
implied, shall 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 1.11 GOVERNING LAW
This indenture and the Securities and coupons shall be governed by and
construed in accordance with the law of the State of Washington. This Indenture
is subject to the provisions of the TIA that are required to be part of this
Indenture and shall, to the extent applicable, be governed by such provisions.
Section 1.12 LEGAL HOLIDAYS
In any case where any Interest Payment Date, Redemption Date, Repayment
Date, sinking fund payment date, Stated Maturity or Maturity of any Security or
the last date on which a Holder has the right to convert or exchange a Security
shall not be a Business Day at any Place of Payment, then (notwithstanding any
other provision of this Indenture of any Security or coupon other than a
provision in the Securities of any series which specifically states that such
provision shall apply in lieu hereof), payment of interest or any Additional
Amounts or principal (and premium, if any) or conversion or exchange of such
security need not be made at such Place of Payment on such date but (except as
otherwise provided in the supplemental indenture with
-14-
<PAGE>
respect to such Security) 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, or on such last day of conversion or
exchange, 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.
Section 1.13 IMMUNITY OF STOCKHOLDERS, DIRECTORS, OFFICES AND AGENTS OF THE
COMPANY
No recourse under or upon any obligation, covenant or agreement contained
in this Indenture, or in any Security, or because of any indebtedness evidenced
thereby, shall be had against any past, present or future stockholder, employee,
officer or director, as such, of the Company or of any successor, either
directly or through the Company or any successor, under any rule of law, statute
or constitutional provision or by the enforcement of any assessment or by any
legal or equitable proceeding or otherwise, all such liability being expressly
waived and released by the acceptance of the Securities by the Holders and as
part of the consideration for the issue of the Securities.
Section 1.14 CONFLICT WITH TRUST INDENTURE ACT
If any provision hereof limits, qualifies or conflicts with another
provision hereof which is required or deemed to be included in this Indenture by
any of the provisions of the Trust Indenture Act, such required provision shall
control. If any provision of this Indenture modifies or excludes any provision
of the Trust Indenture Act that may be so modified or excluded, the latter
provision shall be deemed to apply to this Indenture as so modified or to be
excluded, as the case may be.
ARTICLE II
SECURITIES FORMS
Section 2.1 FORMS OF SECURITIES
The Registered Securities, if any, of each series and the Bearer
Securities, if any, of each series and related coupons shall be substantially in
the form of Exhibit A hereto or in such other form as shall be established in
one or more indentures supplemental hereto or approved from time to time by or
pursuant to a Board Resolution in accordance with Section 3.1, shall have such
appropriate insertions, omissions, substitutions and other variations as are
required or permitted by this Indenture or any indenture supplemental hereto,
and may have such letters, numbers or other marks of identification or
designation and such legends or endorsements placed thereon as the Company may
deem appropriate and as are not inconsistent with the provisions of this
Indenture, or as may be required to comply with any law 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.
-15-
<PAGE>
Unless otherwise specified as contemplated by Section 3.1, Bearer
Securities shall have interest coupons attached.
Subject to Section 3.4, 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 mechanically
reproduced on safety paper or may be produced in any other manner, all as
determined by the officers of the Company executing such Securities or coupons,
as evidenced by their execution of such Securities or coupons.
Section 2.2 FORM OF TRUSTEE'S CERTIFICATE OF AUTHENTICATION
Subject to Section 6.11, the Trustee's certificate of authentication shall
be in substantially the following form:
This is one of the Securities of the series designated therein referred to
in the within-mentioned Indenture.
[NAME OF TRUSTEE],
as Trustee
By:
------------------------------------
Authorized Signatory
Section 2.3 SECURITIES ISSUABLE IN GLOBAL FORM
If Securities of or within a series are issuable in the form of one or more
Global Securities, then, notwithstanding clause (8) of Section 3.1 and the
provisions of Section 3.2, any such Global Security or Securities may provide
that it or they shall represent the aggregate amount of all Outstanding
Securities of such series (or such lesser amount as is permitted by the terms
thereof) from time to time endorsed thereon and may also provide that the
aggregate amount of Outstanding Securities of such series represented thereby
may from time to time be increased or decreased to reflect exchanges. Any
endorsement of any Global Security to reflect the amount, or any increase or
decrease in the amount, or changes in the rights of Holders thereof, of
Outstanding Securities represented thereby shall be made by the Trustee in such
manner or by such Person or Persons as shall be specified therein or in the
Company Order to be delivered to the Trustee pursuant to Section 3.3 or 3.4.
Subject to the provisions of Section 3.3 and, if applicable, Section 3.4, the
Trustee shall deliver and redeliver any Global Security in permanent global form
in the manner and upon instructions given by the Person or Persons specified
therein or in the applicable Company Order. If a Company Order pursuant to
Section 3.3 or 3.4 has been, or simultaneously is, delivered, any instructions
by the Company with respect to endorsement or delivery or redelivery of a Global
Security shall be in writing but need not comply with Section 1.2 and need not
be accompanied by an Opinion of Counsel.
-16-
<PAGE>
The provisions of the last sentence of Section 3.3 shall apply to any
Security represented by a Global Security if such Security was never issued and
sold by the Company and the Company delivers to the Trustee the Global Security
together with written instructions (which need not comply with Section 1.2 and
need not be accompanied by an Opinion of Counsel) with regard to the reduction
in the principal amount of Securities represented thereby, together with the
written statement contemplated by the last sentence of Section 3.3.
Notwithstanding the provisions of Section 3.7, unless otherwise specified
as contemplated by Section 3.1, payment of principal of and any premium and
interest on any Global Security shall be made to the person or Persons
specified.
Notwithstanding the provisions of Section 3.8 and except as provided in the
preceding paragraph, the Company, the Trustee and any agent of the Company and
the Trustee shall treat as the Holder of such principal amount of Outstanding
Securities represented by a permanent Global Security (1) in the case of a
permanent Global Security in registered form, the Holder of such permanent
Global Security in registered form or (2) in the case of a permanent Global
Security in bearer form, Euroclear or CEDEL.
Any Global Security authenticated and delivered hereunder shall bear a
legend in substantially the following form:
This Security is a Global Security within the meaning set forth in the
Indenture hereinafter referred to and is registered in the name of a
Depositary or a nominee of a Depositary. This Security is
exchangeable for Securities registered in the name of a person other
than the Depositary or its nominee only in the limited circumstances
described in the Indenture, and may not be transferred except as a
whole by the Depositary to a nominee of the Depositary or by a nominee
of the Depositary to the Depositary or another nominee of the
Depositary or by the Depositary or its nominee to a successor
Depositary or its nominee.
ARTICLE III
THE SECURITIES
Section 3.1 AMOUNT UNLIMITED; ISSUABLE IN SERIES
The aggregate principal amount of Securities which may be authenticated and
delivered under this Indenture is unlimited.
The Securities may be issued in one or more series. There shall be
established in one or more Board Resolutions or pursuant to authority granted by
one or more Board Resolutions and, subject to Section 3.3, set forth in an
Officer's Certificate, or established in one or more indentures supplemental
hereto, prior to the issuance of Securities of any series:
-17-
<PAGE>
(1) the title of the Securities of 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 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 the series pursuant
to Section 3.4, 3.5, 3.6, 9.6, 11.0 or 13.5);
(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 the series shall be
payable;
(4) the rate or rates at which the Securities of the series shall
bear interest, if any, or the method by which such rate or rates shall be
determined, the date or dates from which such interest shall accrue or the
method by which such date or dates shall be determined, the Interest Payment
Dates on which such interest will be payable and the Regular Record Date, if
any, for the interest payable on any Registered Security on any Interest Payment
Date, or the method by which such date shall be determined, and the basis upon
which interest shall be calculated if other than that of a 360-day year of
twelve 30-day months;
(5) the place or places where the principal of (and premium, if any),
interest, if any, on, and Additional Amounts, if any, payable in respect of,
Securities of the series shall be payable, any Registered Securities of the
series may be surrendered for registration of transfer, exchange or conversion
and notices or demands to or upon the Company in respect of the Securities of
the series and this Indenture may be served;
(6) the period or periods within which, the price or prices at which,
the currency or currencies, currency unit or units or composite currency or
currencies in which, and other terms and conditions upon which Securities of the
series may be redeemed, in whole or in part, at the option of the Company, if
the Company is to have the option;
(7) the obligation, if any, of the Company to redeem, repay or
purchase Securities of 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 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 Securities of 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 the series that shall be payable upon
declaration of acceleration of the Maturity
-18-
<PAGE>
thereof pursuant to Section 5.2 or, if applicable, the portion of the principal
amount of Securities of the series that is convertible in accordance with the
provisions of this Indenture, or the method by which such portion shall be
determined;
(11) if other than Dollars, the Foreign Currency or Currencies in
which payment of the principal of (and premium, if any) and interest or
Additional Amounts, if any, on the Securities of the series shall be payable or
in which the Securities of the series shall be denominated and the manner of
determining the equivalent thereof in Dollars for purposes of the definition of
"Outstanding" in Section 1.1;
(12) whether the amount of payments of principal of (and premium, if
any) or interest, if any, on the Securities of the series may be determined with
reference to an index, formula or other method (which index, formula or method
may be based, without limitation, on one or more currencies, currency units,
composite currencies, commodities, equity indices or other indices), and the
manner in which such amounts shall be determined;
(13) whether the principal of (and premium, if any) or interest or
Additional Amounts, if any, on the Securities of the series are to be payable,
at the election of the Company or a Holder thereof, in a currency or currencies,
currency unit or units or composite currency or currencies other than that in
which such Securities are denominated or stated to be payable, the period or
periods within which, 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 the series upon the occurrence of such events as may be specified;
(15) any deletions from, modifications of or additions to the Events
of Default or covenants of the Company with respect to Securities of 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 the series are to be issuable as Registered
Securities, Bearer Securities (with or without coupons) or both, any
restrictions applicable to the offer, sale or delivery of Bearer Securities and
the terms upon which Bearer Securities of the series may be exchanged for
Registered Securities of the series and vice versa (if permitted by applicable
laws and regulations), whether any Securities of the series are to be issuable
initially in temporary global form and whether any Securities of the series are
to be issuable in permanent global form with or without coupons and, if so,
whether beneficial owners of interests in any such permanent Global Security may
exchange such interests for Securities of such series and of like tenor of any
authorized form and denomination and the circumstances under which any such
exchanges may occur, if other than in the manner provided in Section 3.5, and,
if Registered Securities of the series are to be issuable as a Global Security,
the identity of the depositary for such series;
-19-
<PAGE>
(17) the date as of which any Bearer Securities of the series and any
temporary Global Security representing Outstanding Securities of the series
shall be dated if other than the date of original issuance of the first Security
of the series to be issued;
(18) the Person to whom any interest on any Registered Security of the
series shall be payable, if other than the Person in whose name that Security or
one or more Predecessor Securities) is registered at the close of business on
the Regular Record Date for such interest, the manner in which, or the Person to
whom, any interest on any Bearer Security of the series shall be payable, if
otherwise than upon presentation and surrender of the coupons appertaining
thereto as they severally mature, and the extent to which, or the manner in
which, any interest payable on a temporary Global Security on an Interest
Payment Date will be paid if other than in the manner provided in Section 3.4;
(19) the applicability, if any, of Sections 14.2 and/or 14.3 to the
Securities of the series and any provisions in modification of, in addition to
or in lieu of any of the provisions of Article XIV;
(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 the series are to be issued upon the
exercise of warrants, the time, manner and place for such Securities to be
authenticated and delivered;
(22) whether and under what circumstances the Company will pay
Additional Amounts as contemplated by Section 10.10 on the Securities of the
series to any Holder who is not a United States Person (including any
modification to the definition of such term) in respect of any tax, assessment
or governmental charge and, if so, whether the Company will have the option to
redeem such Securities rather than pay such Additional Amounts (and the terms of
any such option);
(23) the obligation, if any, of the Company to permit the conversion
of the Securities of such series into the Company's Common Stock or Preferred
Stock, as the case may be, and the terms and conditions upon which such
conversion shall be effected (including, without limitation, the initial
conversion price or rate, the conversion period, any adjustment of the
applicable conversion price and any requirements relative to the reservation of
such shares for purpose of conversion) and applicable limitations on the
ownership or transferability of the Common Stock or Preferred Stock into which
such Securities are convertible; 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 shall be substantially identical except, in the case
of Registered Securities, as to
-20-
<PAGE>
denomination and except as may otherwise be provided in or pursuant to such
Board Resolution (subject to Section 3.3) and set forth in such Officers'
Certificate or in any such indenture supplemental hereto. All Securities of any
one series need not be issued at the same time and, unless otherwise provided, a
series may be reopened, without the consent of the Holders, for issuances of
additional Securities of such series.
If any of the terms of the Securities of any series are established by
action taken pursuant to one or more Board Resolutions, a copy of an appropriate
record of such action(s) shall be certified by the Secretary or an Assistant
Secretary of the Company and delivered to the Trustee at or before the delivery
of the Officers' Certificate setting forth the terms of the Securities of such
series.
Section 3.2 DENOMINATIONS
The Securities of each series shall be issuable in such denominations as
shall be specified as contemplated by Section 3.1. With respect to Securities
of any series denominated in Dollars, in the absence of any such provisions with
respect to the Securities or any series, the Securities of such series, other
than Securities issued in global form (which may be of any denomination), shall
be issuable in denominations of $1,000 and any integral multiple thereof.
Section 3.2 EXECUTION, AUTHENTICATION, DELIVERY AND DATING
The Securities and any coupons appertaining thereto shall be executed on
behalf of the Company by its Chairman of the Board, its President or one of its
Senior Vice Presidents, under its corporate seal reproduced thereon, and
attested by its Secretary or one of its Assistant Secretaries. The signature of
any of these officers on the Securities and coupons may be manual or facsimile
signatures of the present or any future such authorized officer and may be
imprinted or otherwise reproduced on the Securities.
Securities or coupons bearing the manual or facsimile signature of
individuals who were at any time the proper officers of the Company shall bind
the Company, notwithstanding that such individuals or any of them have ceased to
hold such offices before the authentication and delivery of such Securities or
did not hold such offices at the date of such Securities or coupons.
At any time and from time to time after the execution and delivery of this
Indenture, the Company may deliver Securities of any series, together with any
coupon appertaining thereto, executed by the Company to the Trustee for
authentication, together with a Company Order for the authentication and
delivery of such Securities, and the Trustee in accordance with the Company
Order shall authenticate and deliver such Securities; PROVIDED, HOWEVER, that,
in connection with its original issuance, no Bearer Security shall be mailed or
otherwise delivered to any location in the United States; and PROVIDED FURTHER
that, unless otherwise specified with respect to any series of Securities
pursuant to Section 3.1, 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 B-1 to this Indenture or such other
certificate as may be specified with respect
-21-
<PAGE>
to any series of Securities pursuant to Section 3.1, dated no earlier than 15
days before 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. If any Security shall be represented by a permanent global Bearer
Security, then, for purposes of this Section 3.3 and Section 3.4, the notation
of a beneficial owner's interest therein upon original issuance of such Security
or upon exchange of a portion of a temporary Global Security shall be deemed to
be delivery in connection with its original issuance of such beneficial owner's
interest in such permanent Global Security. Except as permitted by Section 3.6,
the Trustee shall not authenticate and deliver any Bearer Security unless all
appurtenant coupons for interest then matured have been detached and canceled.
If all the Securities of any series are not to be issued at one time and if
the Board Resolution or supplemental indenture establishing such series shall so
permit, such Company Order may set forth procedures acceptable to the Trustee
for the issuance of such Securities and determining the terms of particular
Securities of such series, such as interest rate or formula, maturity date, date
of issuance and date from which interest shall accrue. 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,
(1) an Opinion of Counsel stating that:
(A) the form or forms of such Securities and any coupons have been
established in conformity with the provisions of this Indenture;
(B) the terms of such Securities and any coupons have been
established in conformity with the provisions of this Indenture; and
(C) such Securities, together with any coupons appertaining
thereto, when completed by appropriate insertions and executed and
delivered by the Company to the Trustee for authentication in accordance
with this Indenture, authenticated and delivered by the Trustee in
accordance with this Indenture and issued by the Company in the manner
and subject to any conditions specified in such Opinion of Counsel, will
constitute legal, valid and binding obligations of the Company,
enforceable in accordance with their terms, subject to applicable
bankruptcy, insolvency, fraudulent transfer, reorganization and other
similar laws of general applicability relating to or affecting the
enforcement of creditors' rights generally and to general equitable
principles; and
(2) an Officers' Certificate stating that all conditions precedent
provided for in this Indenture relating to the issuance of the Securities have
been complied with and that, to the best of the knowledge of the signers of such
certificate, no Event of Default with respect to any of the Securities shall
have occurred and be continuing.
-22-
<PAGE>
If such form or terms have been so established, the Trustee shall not be
required to authenticate such Securities if the issue of such Securities
pursuant to this Indenture will affect the Trustee's own rights, duties,
obligations or immunities under the Securities and this Indenture or otherwise
in a manner which is not reasonably acceptable to the Trustee.
Notwithstanding the provisions of Section 3.1 and of the preceding
paragraph, if all the Securities of any series are not to be issued at one time,
it shall not be necessary to deliver an Officers' Certificate otherwise required
pursuant to Section 3.1 or a Company Order, or an Opinion of Counsel or an
Officers' Certificate otherwise required pursuant to the preceding paragraph at
the time of issuance of each Security of such series, but such order, opinion
and certificates, with appropriate modifications to cover such future issuances,
shall be delivered at or before the time of issuance of the first Security of
such series.
Each Registered Security shall be dated the date of its authentication
and each Bearer Security shall be dated as of the date specified as contemplated
by Section 3.1.
No Security or coupon shall be entitled to any benefit under this
Indenture or be valid or obligatory for any purpose unless there appears on such
Security or Security to which such coupon appertains a certificate of
authentication substantially in the form provided for herein duly executed by
the Trustee by manual signature of an authorized signatory, and such certificate
upon any Security shall be conclusive evidence, and the only evidence, that such
security has been duly authenticated and delivered hereunder and is entitled to
the benefits of this Indenture. Notwithstanding the foregoing, if any Security
(including a Global Security) shall have been authenticated and delivered
hereunder but never issued and sold by the Company, and the Company shall
deliver such Security to the Trustee for cancellation as provided in Section 3.9
together with a written statement (which need not comply with Section 1.2 and
need not be accompanied by an Opinion of Counsel) stating that such Security has
never been issued and sold by the Company, for all purposes of this Indenture
such Security shall be deemed never to have been authenticated and delivered
hereunder and shall never be entitled to the benefits of this Indenture.
Section 3.4 TEMPORARY SECURITIES
Pending the preparation of definitive Securities of any series, the
Company may execute, and upon Company Order the Trustee shall authenticate and
deliver, temporary Securities which are printed, lithographed, typewritten,
mimeographed or otherwise produced, in any authorized denomination,
substantially of the tenor of the definitive Securities in lieu of which they
are issued, in registered form, or, if authorized, in bearer form with one or
more coupons or without coupons, and with such appropriate insertions,
omissions, substitutions and other variations as the officers executing such
Securities may determine, as conclusively evidenced by their execution of such
Securities. In the case of Securities of any series, such temporary Securities
may be in global form.
Except in the case of temporary Securities (which shall be exchanged as
otherwise provided herein or as otherwise provided in or pursuant to a Board
Resolution), if temporary
-23-
<PAGE>
Securities of any series are issued, the Company will cause definitive
Securities of that series to be prepared without unreasonable delay. After the
preparation of definitive Securities of such series, the temporary Securities of
such series shall be exchangeable for definitive Securities of such series upon
surrender of the temporary Securities of such series at the office or agency of
the Company in a Place of Payment for that series, without charge to the Holder.
Upon surrender for cancellation of any one or more temporary Securities of any
series (accompanied by any nonmatured coupons appertaining thereto), the Company
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 3.3. 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.
Unless otherwise provided in or pursuant to a Board Resolution, the
following provisions of this Section 3.4 shall govern the exchange of temporary
Securities other than through the facilities of The Depository Trust Company
("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, for credit to the
respective accounts of the beneficial owners of such Securities (or to such
other accounts as they may direct).
Without unnecessary delay but in any event not later than the date
specified in, or determined pursuant to the terms of, any such temporary Global
Security (the "Exchange Date"), the Company shall deliver to the Trustee
definitive Securities, in aggregate principal amount equal to the principal
amount of such temporary Global Security, executed by the Company. On or after
the Exchange Date, such temporary Global Security shall be surrendered by the
Common Depositary to the Trustee, as the Company's agent for such purpose, to be
exchanged, in whole or from time to time in part, for definitive Securities
without charge, and the Trustee shall authenticate and deliver, in exchange for
each portion of such temporary Global Security, an equal aggregate principal
amount of definitive Securities of 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 3.1, 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 B-2 to this Indenture or in such other form as may be established
pursuant to Section 3.1; and PROVIDED
-24-
<PAGE>
FURTHER that definitive Bearer Securities shall be delivered in exchange for a
portion of a temporary Global Security only in compliance with the requirements
of Section 3.3.
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 B-1 to this Indenture (or in such other form as may be
established pursuant to Section 3.1), 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 the 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 been 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 3.1, 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 B-2-1 to this
Indenture (for in such other other forms as may be established pursuant to
Section 3.1), 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 in Exhibit B-1-1 to This Indenture (or in
such other forms as may be established pursuant to Section 3.1).
Notwithstanding anything to the contrary herein contained, the certifications
made pursuant to this paragraph shall satisfy the certification requirements
of the preceeding two paragraphs and of the third paragraph or Section 3.3 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 shall
have been exchanged for an interest in a definitive Security. Any interest so
received by Euroclear and CEDEL and not paid as herein provided shall be
returned to the Trustee prior to the expiration of two years after such
Interest Payment Date in order to be repaid to the Company.
-25-
<PAGE>
Section 3.5 REGISTRATION, REGISTRATION OF TRANSFER AND EXCHANGE
The Company shall cause to be kept at the Corporate Trust Office of the
Trustee or in any office or agency of the Company in a Place of Payment a
register for each series of Securities (the registers maintained in such office
or in any such office or agency of the Company in a Place of Payment being
herein sometimes referred to collectively as the "Security Register") in which,
subject to such reasonable regulations as it may prescribed, the Company shall
provide for the registration of Securities and of transfers of Securities. The
Security Register shall be in written form or any other form capable of being
converted into written form within a reasonable time. The Trustee, at its
Corporate Trust Office, is hereby initially appointed "Security Registrar" for
the purpose of registering Securities and transfers of Securities on such
Security Register as herein provided. If the Trustee shall cease to be Security
Registrar, it shall have the right to examine the Security Register at all
reasonable times.
Subject to the provisions of this Section 3.5, upon surrender for
registration of transfer of any Registered Security of any series at any office
or agency of the Company in a Place of Payment for that series, the Company
shall execute, and the Trustee shall authenticate and deliver, in the name of
the designated transferee or transferees, one or more new Securities of the same
series, of any authorized denominations and of a like aggregate principal
amount, bearing a number not contemporaneously outstanding, and containing
identical term and provisions.
Subject to the provisions of this Section 3.5, at the option of the
Holder, Securities of any series may be exchanged for other 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 Securities to be exchanged at any such office or agency.
Whenever any such Securities are so surrendered for exchange, the Company shall
execute, and the Trustee shall authenticate and deliver, the Securities which
the Holder making the exchange is entitled to receive. Unless otherwise
specified with respect to any series of Securities as contemplated by Section
3.1, Bearer Securities may not be issued in exchange for Securities.
If (but only if) permitted by the applicable Board Resolution and
(subject to Section 3.3) set forth in the applicable Officers' Certificate, or
in any indenture supplemental hereto, delivered as contemplated by Section 3.1,
at the option of the Holder, Bearer Securities of any series may be exchanged
for 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 Company
in an amount equal to the face amount of such missing coupon or coupons, or the
surrender of such missing coupon or coupons may be waived by the Company and the
Trustee if there is furnished to them such security or indemnity as they may
require to save each of them and any Paying Agent harmless. If thereafter the
Holder of such Security shall surrender to any Paying Agent any such missing
coupon in respect of which such a payment shall have been made, such Holder
shall be entitled to receive the amount of such payment; PROVIDED, HOWEVER,
that,
-26-
<PAGE>
except as otherwise provided in Section 10.2, 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
(1) any Regular Record Date and before the opening of business at such office or
agency on the relevant Interest Payment Date, or (2) any Special Record Date and
before the opening of business at such office or agency on the related proposed
date for payment of Defaulted Interest, such Bearer Security shall be
surrendered without the coupon relating to such Interest Payment Date or
proposed date for payment as the case may be, and interest or Defaulted
Interest, as the case may be, will not be payable on such Interest Payment Date
or proposed date for payment, as the case may be, in respect of the Registered
Security issued in exchange for such Bearer Security, but will be payable only
to the Holder of such coupon when due in accordance with the provisions of this
Indenture. Whenever any Securities are so surrendered for exchange, the Company
shall execute, and the Trustee shall authenticate and deliver, the Securities
which the Holder making the exchange is entitled to receive.
Notwithstanding the foregoing, except as otherwise specified as
contemplated by Section 3.1, any permanent Global Security shall be exchangeable
only as provided in this paragraph. If the depositary for any permanent Global
Security is DTC, then, unless the terms of such Global Security expressly permit
such Global Security to be exchanged in whole or in part for definitive
Securities, a Global Security may be transferred, in whole but not in part, only
to a nominee of DTC, or by a nominee of DTC to DTC, or to a successor to DTC for
such Global Security selected or approved by the Company or to a nominee of such
successor to DTC. If at any time DTC notifies the Company that it is unwilling
or unable to continue as depositary for the applicable Global Security or
Securities or if at any time DTC ceases to be a clearing agency registered under
the Exchange Act, if so required by applicable law or regulation, the Company
shall appoint a successor depositary with respect to such Global Security or
Securities. If (1) a successor depositary for such Global Security or
Securities is not appointed by the Company within 90 days after the Company
receives such notice or becomes aware of such unwillingness, inability or
ineligibility, (2) 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
(3) the Company, in its sole discretion, determines at any time that all
Outstanding Securities (but not less than all) of any series issued or issuable
in the form of one or more Global Securities shall no longer be represented by
such Global Security or Securities, then the Company shall execute, and the
Trustee shall authenticate and deliver, definitive Securities of like series,
rank, tenor and terms in definitive form in an aggregate principal amount equal
to the principal amount of such Global Security or Securities. If any
beneficial owner of an interest in a permanent Global Security is otherwise
entitled to exchange such interest for Securities of such series and of like
tenor and principal amount of another authorized form and denomination, as
specified as contemplated by Section 3.1 and provided that any applicable notice
provided in the permanent Global Security shall have been given, then without
unnecessary delay but in any event not later than the earliest date on which
such interest may be so exchanged, the Company shall execute, and the Trustee
shall authenticate and deliver,
-27-
<PAGE>
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 amy be so exchanged, such
permanent Global Security shall be surrendered for exchange by DTC or such other
depositary as shall be specified in the Company Order with respect thereto to
the Trustee, as the Company's agent for such purpose; PROVIDED, HOWEVER, that no
such exchanges may occur during a period beginning at the opening of business 15
days before any selection of Securities to be redeemed and ending on the
relevant Redemption Date if the Security for which exchange is requested may be
among those selected for redemption; and PROVIDED FURTHER that no Bearer
Security delivered in exchange for a portion of a permanent Global Security
shall be mailed or otherwise delivered to any location in the United States. If
a Registered Security is issued in exchange for any portion of a permanent
Global Security after the close of business at the office or agency where such
exchange occurs on (i) any Regular Record Date and before the opening of
business at such office or agency on the relevant Interest Payment Date or
(ii) any Special Record Date and the opening of business at such office or
agency on the related proposed date for payment of Defaulted Interest, interest
or Defaulted Interest, as the case may be, will not be payable on such Interest
Payment Date or proposed date for payment, as the case may be, in respect of
such Registered Security, but will be payable on such Interest Payment Date or
proposed date for payment, as the case may be, only to the Person to whom
interest in respect of such portion of such permanent Global Security is payable
in accordance with the provisions of this Indenture.
All Securities issued upon any registration of transfer or exchange of
Securities shall be the valid obligations of the Company, evidencing the same
debt, and entitled to the same benefits under this Indenture, as the Securities
surrendered upon such registration of transfer or exchange.
Every Registered Security presented or surrendered for registration of
transfer or for exchange or redemption shall (if so required by the Company or
the Security Registrar) be duly endorsed, or be accompanied by a written
instrument of transfer (including evidence of title and identity) in form
satisfactory to the Company and the Security Registrar, duly executed by the
Holder thereof or his attorney duly authorized in writing.
No service charge shall be made for any registration of transfer or
exchange of Securities, but the Company may require payment of a sum sufficient
to cover any tax or other governmental charge that may be imposed in connection
with any registration of transfer or exchange of Securities, other than
exchanges pursuant to Section 3.4, 9.6, 11.7 or 13.5 not involving any transfer.
The Company or the Trustee, as applicable, shall not be required to
(1) issue, register the transfer of or exchange any Security if such Security
may be among those selected for redemption during a period beginning at the
opening of business 15 days before selection of the Securities to be redeemed
under Section 11.3 and ending at the close of business on (A) if such Securities
are issuable only 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 Securities and there is no publication, the
mailing of the relevant notice of redemption, or (2) register the transfer of or
exchange any
-28-
<PAGE>
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 (3) exchange any Bearer Security so selected for
redemption, except that such Bearer Security may be exchanged for a Registered
Security of that series and like tenor; PROVIDED, HOWEVER, that such Registered
Security shall be simultaneously surrendered for redemption, or (4) issue,
register the transfer of or exchange any Security which has been surrendered for
repayment at the option of the Holder, except the portion, if any, of such
Security not to be so repaid.
Section 3.6 MUTILATED, DESTROYED, LOST AND STOLEN SECURITIES
If any mutilated Security or a Security with a mutilated coupon
appertaining to it is surrendered to the Trustee or the Company, together with,
in proper cases, such security or indemnity as may be required by the Company or
the Trustee to save each of them or any agent of either of them harmless, the
Company shall execute and the Trustee shall authenticate and deliver in exchange
therefor a new Security of the same series and principal amount, containing
identical terms and provisions and bearing a number not contemporaneously
outstanding, with coupons corresponding to the coupons, if any, appertaining to
the surrendered Security.
If there shall be delivered to the Company and to the Trustee
(1) evidence to their satisfaction of the destruction, loss or theft of any
Security or coupon and (2) such security or indemnity as may be required by them
to save each of them and any agent of either of them harmless, then, in the
absence of notice to the Company or the Trustee that such Security or coupon has
been acquired by a bona fide purchaser, the Company shall execute and upon its
request the Trustee shall authenticate and deliver, in lieu of any such
destroyed, lost or stolen Security or in exchange for the Security to which a
destroyed, lost or stolen coupon appertains (with all appurtenant coupons not
destroyed, lost or stolen), a new security of the same series and principal
amount, containing identical terms and provisions and bearing a number not
contemporaneously outstanding, with coupons corresponding to the coupons, if
any, appertaining to such destroyed, lost or stolen Security or to the Security
to which such destroyed, lost or stolen coupon appertains.
Notwithstanding the provisions of the previous two paragraphs, in case
any such mutilated, destroyed, lost or stolen Security or coupon has become or
is about to become due and payable, the Company in its discretion may, instead
of issuing a new Security, with coupons corresponding to the coupons, if any,
appertaining to such destroyed, lost or stolen Security or to the Security to
which such destroyed, lost or stolen coupon appertains, pay such Security or
coupon; PROVIDED, HOWEVER, that payment of principal of (and premium, if any),
any interest on and any Additional Amounts with respect to Bearer Securities
shall, except as otherwise provided in Section 10.2, be payable only at an
office or agency located outside the United States and, unless otherwise
specified as contemplated by Section 3.1, any interest on Bearer Securities
shall be payable only upon presentation and surrender of the coupons
appertaining thereto.
-29-
<PAGE>
Upon the issuance of any new Security under this Section 3.6, the Company
may require the payment of a sum sufficient to cover any tax or other
governmental charge that may be imposed in relation thereto and any other
expenses (including the fees and expenses of the Trustee) connected therewith.
Every new Security of any series with its coupons, if any, issued
pursuant to this Section 3.6 in lieu of any destroyed, lost or stolen Security,
or in exchange for a Security to which a destroyed, lost or stolen coupon
appertains, shall constitute an original additional contractual obligation of
the Company, whether or not the destroyed, lost or stolen Security and its
coupons, if any, or the destroyed, lost or stolen coupon shall be at any time
enforceable by anyone, and shall be entitled to all the benefits of this
Indenture equally and proportionately with any and all other Securities of that
series and their coupons, if any, duly issued hereunder.
The provisions of this Section 3.6 are exclusive and shall preclude (to
the extent lawful) all other rights and remedies with respect to the replacement
or payment of mutilated, destroyed, lost or stolen Securities or coupons.
Section 3.7 PAYMENT OF INTEREST; INTEREST RIGHTS PRESERVED
Except as otherwise specified with respect to a series of Securities in
accordance with the provisions of Section 3.1, interest on any Registered
Security that is payable, and is punctually paid or duly provided for, on any
Interest Payment Date shall be paid to the Person in whose name that Security
(or one or more Predecessor Securities) is registered at the close of business
on the Regular Record Date for such interest at the office or agency of the
Company maintained for such purpose pursuant to Section 10.2; PROVIDED, HOWEVER,
that each installment of interest on any Registered Security may at the
Company's option be paid by (1) mailing a check for such interest, payable to or
upon the written order of the Person entitled thereto pursuant to Section 3.8,
to the address of such Person as it appears on the Security Register or
(2) transfer to an account maintained by the payee located inside the United
States.
Unless otherwise provided as contemplated by Section 3.1 with respect to
the Securities of any series, payment of interest may be made, in the case of a
Bearer Security, by transfer to an account maintained by the payee with a bank
located outside the United States.
Unless otherwise provided as contemplated by Section 3.1, every permanent
Global Security will provide that interest, if any, payable on any Interest
Payment Date will be paid to DTC, 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
-30-
<PAGE>
without the coupon relating to such Interest Payment Date and interest will not
be payable on such Interest Payment Date in respect of the Registered Security
issued in exchange for such Bearer Security, but will be payable only to the
Holder of such coupon when due in accordance with the provisions of this
Indenture.
Except as otherwise specified with respect to a series of Securities in
accordance with the provisions of Section 3.1, any interest on any Registered
Security of any series that is payable, but is not punctually paid or duly
provided for, on any Interest Payment Date (herein called "Defaulted Interest")
shall forthwith cease to be payable to the registered Holder thereof on the
relevant Regular Record Date by virtue of having been such Holder, and such
Defaulted Interest may be paid by the Company, at its election, in each case as
provided in clause (1) or (2) below:
(1) The Company may elect to make payment of any Defaulted Interest
to the Persons in whose names the Securities of such series (or their respective
Predecessor Securities) are registered at the close of business on a Special
Record Date for the payment of such Defaulted Interest, which shall be fixed in
the following manner. The Company shall notify the Trustee in writing of the
amount of Defaulted Interest proposed to be paid on each Registered Security of
such series and the date of the proposed payment (which shall not be less than
20 days after such notice is received by the Trustee), and at the same time the
Company shall deposit with the Trustee an amount of money in the currency or
currencies, currency unit or units or composite currency or currencies in which
the Securities of such series are payable (except as otherwise specified
pursuant to Section 3.1 for the Securities of such series) equal to the
aggregate amount proposed to be paid in respect of such Defaulted Interests 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 for the Persons entitled to such Defaulted Interest as in
this clause provided. Thereupon the Trustee shall fix a Special Record Date for
the payment of such Defaulted Interest which shall be not more than 15 days and
not less than 10 days prior to the date of the proposed payment and not less
than 10 days after the receipt by the Trustee of the notice of the proposed
payment. The Trustee shall promptly notify the Company of such Special Record
Date and, in the name and at the expense of the Company, shall cause notice of
the proposed payment of such Defaulted Interest and the Special Record Date
therefor to be mailed, first-class postage prepaid, to each Holder of Securities
of such series at his address as it appears in the Security Register not less
than 10 days prior to such Special Record Date. The Trustee may, in its
discretion, in the name and at the expense of the Company, cause a similar
notice to be published at least once in an Authorized Newspaper in each Place of
Payment, but such publications shall not be a condition precedent to the
establishment of such Special Record Date. Notice of the proposed payment of
such Defaulted Interest and the Special Record Date therefor having been mailed
as aforesaid, such Defaulted Interest shall be paid to the Persons in whose
names the 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
-31-
<PAGE>
such proposed date of payment and Defaulted Interest will not be payable on such
proposed date of payment in respect of the Registered Security issued in
exchange for such Bearer Security, but will be payable only to the Holder of
such coupon when due in accordance with the provisions of this Indenture.
(2) The Company may make payment of any Defaulted Interest on the
Securities of any series in any other lawful manner not inconsistent with the
requirements of any Securities exchange on which such Securities may be listed,
and upon such notice, as may be required by such exchange, if, after notice
given by the Company to the Trustee of the, proposed payment pursuant to this
clause, such manner of payment shall be deemed practicable by the Trustee.
Subject to the foregoing provisions of this Section 3.7 and Section 3.5,
each Security delivered under this Indenture, upon registration of transfer of
or in exchange for or in lieu of any other Security shall carry the rights to
interest accrued and unpaid, and to accrue, which were carried by such other
Security.
Section 3.8 PERSONS DEEMED OWNERS
Prior to due presentment of a Registered Security for registration of
transfer, the Company, the Trustee and any agent of the Company or the Trustee
may treat the Person in whose name such Registered Security is registered as the
owner of such Security for the purpose of receiving payment of principal of (and
premium, if any), and (subject to Sections 3.5 and 3.7) interest on, such
Registered Security and for all other purposes whatsoever, whether or not such
Registered Security be overdue, and neither the Company, the Trustee nor any
agent of the Company or the Trustee shall be affected by notice to the contrary.
All such payments so made to any such Person, or upon such Person's order, be
valid, and, shall to the extent of the sum or sums so paid, effectual to satisfy
and discharge the liability for money payable upon any such Security.
Title to any Bearer Security and any coupons appertaining thereto shall
pass by delivery. The Company, the Trustee and any agent of the Company or the
Trustee may treat the Holder of any Bearer Security and the Holder of any coupon
as the absolute owner of such Security or coupon for the purpose of receiving
payment thereof or on account thereof and for all other purposes whatsoever,
whether or not such Security or coupon be overdue, and neither the Company, the
Trustee nor any agent of the Company or the Trustee shall be affected by notice
to the contrary.
No Holder of any beneficial interest in any Global Security held on its
behalf by a depositary shall have any rights under this Indenture with respect
to such Global Security and such depositary shall be treated by the Company, the
Trustee, and any agent of the Company or the Trustee as the owner of such Global
Security for all purposes whatsoever. None of the Company, the Trustee, any
Paying Agent or the Security Registrar will have any responsibility or liability
for any aspect of the records relating to or payments made on account of
beneficial ownership interests of a Global Security or for maintaining,
supervising or reviewing any records relating to such beneficial ownership
interests.
-32-
<PAGE>
Notwithstanding the foregoing, with respect to any Global Security,
nothing herein shall prevent the Company, the Trustee, or any agent of the
Company or the Trustee, from giving effect to any written certification, proxy
or other authorization furnished by any depositary, as a Holder, with respect to
such Global Security or impair, as between such depositary and owners of
beneficial interests in such Global Security, the operation of customary
practices governing the exercise of the rights of such depositary (or its
nominee) as Holder of such Global Security.
Section 3.9 CANCELLATION
All Securities and coupons surrendered for payment, redemption, repayment
at the option of the Holder, registration of transfer or exchange or conversion
or for credit against any sinking fund payment shall, if surrendered to any
Person other than the Trustee, be delivered to the Trustee, and any such
Securities and coupons and Securities and coupons surrendered directly to the
Trustee for any such purpose shall be promptly canceled by it. The Company may
at any time deliver to the Trustee for cancellation any Securities previously
authenticated and delivered hereunder which the Company may have acquired in any
manner whatsoever, and may deliver to the Trustee (or to any other Person for
delivery to the Trustee) for cancellation any Securities previously
authenticated hereunder which the Company has not issued and sold, and all
Securities so delivered shall be promptly canceled by the Trustee. If the
Company shall so acquire any of the Securities, however, such acquisition shall
not operate as a redemption or satisfaction of the indebtedness represented by
such Securities unless and until the same are surrendered to the Trustee for
cancellation. No Securities shall be authenticated in lieu of or in exchange
for any Securities canceled as provided in this Section 3.9, except as expressly
permitted by this Indenture. Canceled Securities and coupons held by the
Trustee shall be destroyed by the Trustee and the Trustee shall deliver a
certificate of such destruction to the Company, unless the Trustee is otherwise
directed by a Company Order.
Section 3.10 COMPUTATION OF INTEREST
Except as otherwise specified as contemplated by Section 3.1 with respect
to Securities of any series, interest on the Securities of each series shall be
computed on the basis of a 360-day year consisting of twelve 30-day months.
ARTICLE IV
SATISFACTION AND DISCHARGE
Section 4.1 SATISFACTION AND DISCHARGE OF INDENTURE
This Indenture shall upon Company Request cease to be of further effect
with respect to any series of Securities specified in such Company Request
(except as to any surviving rights of registration of transfer or exchange of
Securities of such series herein expressly provided for and any right to receive
Additional Amounts, as provided in Section 10.10), and the Trustee, upon receipt
of a Company Order, and at the expense of the Company, shall execute instruments
in
-33-
<PAGE>
form and substance satisfactory to the Trustee and the Company 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, Securities and maturing after such exchange, whose
surrender is not required or has been waived as provided in Section
3.5, (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 3.6, (iii) Coupons appertaining to Securities
called for redemption and maturing after the relevant Redemption
Date, whose surrender has been waived as, provided in Section 11.6,
and (iv) Securities and coupons of such series for whose payment
money has theretofore been deposited in trust or segregated and
held in trust by the Company and thereafter repaid to the Company
or discharged from such trust, as provided in Section 10.3) have
been delivered to the Trustee for cancellation or
(B) all Securities of such series and, in the case of (i) or
(ii) below, any coupons appertaining thereto not theretofore
delivered to the Trustee for cancellation
(i) have become due and payable or
(ii) will become due and payable at their Stated Maturity
within one year or
(iii) if redeemable at the option of the Company, are to be
called for redemption within one year under arrangements
satisfactory to the Trustee for the giving of notice of
redemption by the Trustee in the name, and at the expense, of
the Company,
and the Company, in the case of (i), (ii) or (iii) above, has irrevocably
deposited or caused to be deposited with the Trustee as trust funds in trust for
such purpose an amount in the currency or currencies, currency unit or units or
composite currency or currencies in which the Securities of such series are
payable, sufficient to pay and discharge the entire indebtedness on such
Securities and such coupons not theretofore delivered to the Trustee for
cancellation, for principal (and premium, if any) 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 to the Stated Maturity
or Redemption Date, as the case may be;
(2) the Company has paid or caused to be paid all other sums
payable hereunder by the Company; and
-34-
<PAGE>
(3) the Company has delivered to the Trustee an Officers'
Certificate and an Opinion of Counsel, each stating that all conditions
precedent herein provided for relating to the satisfaction and discharge of this
Indenture as to such series have been complied with.
Notwithstanding the satisfaction and discharge of this Indenture, the
obligations of the Company to the Trustee and any predecessor Trustee under
Section 6.6, the obligations of the Company to any Authenticating Agent under
Section 6.11 and, if money shall have been deposited with and held by the
Trustee pursuant to subclause (B) of clause (1) of this Section 4.1, the
obligations of the Trustee under Section 4.2 and the last paragraph or Section
10.3 shall survive.
Section 4.2 APPLICATION OF TRUST FUNDS
Subject to the provisions of the last paragraph of Section 10.3, all
money deposited with the Trustee pursuant to Section 4.1 shall be held in trust
and applied by it, in accordance with the provisions of the Securities, the
coupons and this Indenture, to the payment, either directly or through any
Paying Agent (including the Company acting as its own Paying Agent) as the
Trustee may determine, to the Persons entitled thereto of the principal (and
premium, if any) and any interest and Additional Amounts for whose payment such
money has been deposited with or received by the Trustee, but such money need
not be segregated from other funds except to the extent required by law.
ARTICLE V
REMEDIES
Section 5.1 EVENTS OF DEFAULT
"Event of Default," wherever used herein with respect to any particular
series of Securities, means any one of the following events (whatever the reason
for such Event of Default and whether or not it shall be voluntary or
involuntary or be effected by operation of law or pursuant to any judgment,
decree or order of any court or any order, rule or regulation of any
administrative or governmental body):
(1) default in the payment of any interest upon or any Additional
Amounts payable in respect of any Security of that series or of any coupon
appertaining thereto, when such interest, Additional Amounts or coupon becomes
due and payable, and continuance of such default for a period of 30 days; or
(2) default in the payment of the principal of (or premium, if any,
on) any Security of that series when it becomes due and payable at its Maturity;
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
-35-
<PAGE>
(4) default in the performance, or breach, of any covenant or
warranty of the Company in this Indenture with respect to any Security of that
series (other than a covenant or warranty a default in whose performance or
whose breach is elsewhere in this Section 5.1 specifically dealt with), and
continuance of such default or breach for a period of 60 days after there has
been given, by registered or certified mail, to the Company by the Trustee or to
the Company and the Trustee by the Holders of at least 25% in principal amount
of the Outstanding Securities of that series a written notice specifying such
default or breach and requiring it to be remedied and stating that such notice
is a "Notice of Default" hereunder; or
(5) default under any bond, debenture, note or other evidence of
indebtedness for money borrowed by the Company or any of its Subsidiaries
(including obligations under leases required to be capitalized on the balance
sheet of the lessee under generally accepted accounting principles, but not
including any indebtedness or obligations for which recourse is limited to
property purchased) in an aggregate principal amount in excess of $10,000,000 or
under any mortgage, indenture or instrument under which there may be issued or
by which there may be secured or evidenced any indebtedness for money borrowed
by the Company or any of its Subsidiaries (including such leases, but not
including such indebtedness or obligations for which recourse is limited to
property purchased) in an aggregate principal amount in excess of $10,000,000,
whether such indebtedness now exists or shall hereafter be created. which
default shall have resulted in such indebtedness becoming or being declared
during and payable prior to the date on which it would otherwise have become due
and payable or such obligations being accelerated, without such acceleration
having been rescinded or annulled; or
(6) the Company or any Significant Subsidiary pursuant to or within
the meaning of any Bankruptcy Law:
(A) commences a voluntary case;
(B) consents to the entry of an order for relief against it in
an involuntary case;
(C) consents to the appointment of a Custodian of it or for
all or substantially all of its property; or
(D) makes a general assignment for the benefit of its
creditors; or
(7) a court of competent jurisdiction enters an order or decree
under any Bankruptcy Law that:
(A) is for relief against the Company or any Significant
Subsidiary in an involuntary case;
(B) appoints a Custodian of the Company or any Significant
Subsidiary or for all or substantially all of either of their
property; or
-36-
<PAGE>
(C) orders the liquidation of the Company or any Significant
Subsidiary, and the order or decree remains unstayed and in effect
for 90 days; or
(8) any other Event of Default provided with respect to Securities
of that series.
As used in this Section 5.1, the term "Bankruptcy Law" means Title 11, U.S. Code
or any similar federal or state law for the relief of debtors and the term
"Custodian" means any receiver, Trustee, assignee, liquidator or other similar
official under any Bankruptcy Law.
Section 5.2 ACCELERATION OF MATURITY; RESCISSION AND ANNULMENT
If an Event of Default with respect to Securities of any series at the
time Outstanding occurs and is continuing, then and in every such case the
Trustee or the Holders of not less than 25% in principal amount of the
Outstanding Securities of that series may declare the principal amount (or, if
Securities of that series are Original Issue Discount Securities or Indexed
Securities, such portion of the principal as may be specified in the terms
thereof) of all the Securities of that series to be due and payable immediately,
by a notice in writing to the Company (and to the Trustee if given by the
Holders), and upon any such declaration such principal or specified portion
thereof shall become immediately due and payable.
At any time after such a declaration of acceleration with respect to
Securities of any series has been made and before a judgment or decree for
payment of the money due has been obtained by the Trustee as hereinafter in this
Article Five provided, the Holders of a majority in principal amount of the
Outstanding Securities of that series, by written notice to the Company and the
Trustee, may rescind and annul such declaration of acceleration and its
consequences if:
(1) the Company has paid or deposited with the Trustee a sum
sufficient to pay in the currency unit or composite currency in which the
Securities of such series are payable (except as otherwise specified pursuant to
Section 3.1 for the Securities of such series):
(A) all overdue installments of interest on any Additional
Amounts payable in respect of all Outstanding Securities of that
series and any related coupons;
(B) the principal of (and premium, if any, on) any Outstanding
Securities of that series which have become due otherwise than by
such declaration of acceleration and interest thereon at the rate
or rates borne by or provided for in such Securities;
(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
-37-
<PAGE>
(2) all Events of Default with respect to Securities of that
series, other than the nonpayment of the principal of (or premium, if any) or
interest on Securities of that series which have become due solely by such
declaration of acceleration, have been cured or waived as provided in Section
5.13.
No such rescission shall affect any subsequent default or impair any right
consequent thereon.
Section 5.3 COLLECTION OF INDEBTEDNESS AND SUITS FOR ENFORCEMENT BY TRUSTEE
The Company covenants that if:
(1) default is made in the payment of any installment of interest
or Additional Amounts, if any, on any Security of any series and any related
coupon when such interest or Additional Amount becomes due and payable and such
default continues for a period of 30 days or
(2) default is made in the payment of the principal of (or premium,
if any, on) any Security of any series at its Maturity,
then the Company will, upon demand of the Trustee, pay to the Trustee, for the
benefit of the Holders of such Securities of such series and coupons, the whole
amount then due and payable on such Securities and coupons for principal (and
premium, if any) and interest and Additional Amounts, with interest upon any
overdue principal (and premium, if any) and, to the extent that payment of such
interest shall be legally enforceable, upon any overdue installments of interest
or Additional Amounts, if any, at the rate or rates borne by or provided for in
such Securities, and, in addition thereto, such further amount as shall be
sufficient to, cover the costs and expenses of collection, including the
reasonable compensation, expenses, disbursements and advances of the Trustee and
its agents and counsel.
If the Company the fails to pay such amounts forthwith upon such demand,
the Trustee, in its own name and as Trustee of an express trust, may institute a
judicial proceeding for the collection of the sums so due and unpaid, may
prosecute such proceeding to judgment or final decree, and may enforce the same
against the Company 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 Company or any other obligor upon such Securities
of such series, wherever situated.
If an Event of Default with respect to Securities of any series occurs
and is continuing, the Trustee may in its discretion proceed to protect and
enforce its rights and the rights of the Holders of Securities of such series
and any related coupons by any 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.
-38-
<PAGE>
Section 5.4 TRUSTEE MAY FILE PROOFS OF CLAIM
In case of the pendency of any receivership, insolvency, liquidation,
bankruptcy, reorganization, arrangement, adjustment, composition or other
judicial proceeding relative to the Company or any other obligor upon the
Securities or the property of the Company or of such other obligor or their
creditors, the Trustee (irrespective of whether the principal of the Securities
of any series shall then be due and payable as therein expressed or by
declaration or otherwise and irrespective of whether the Trustee shall have made
any demand on the Company for the payment of overdue principal, premium, if any,
or interest) shall be entitled and empowered, by intervention in such proceeding
or otherwise:
(1) to file and prove a claim for the whole amount, or such lesser
amount as may be provided for in the Securities of such series, of principal
(and premium, if any) and interest and Additional Amounts, if any, owing and
unpaid in respect of the Securities and to file such other 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 and its agents and counsel) and of the Holders
allowed in such judicial proceeding and
(2) to collect and receive any money 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
if the Trustee shall consent to the making of such payments directly to the
Holders, to pay to the Trustee any amount due to it for the reasonable
compensation, expenses, disbursements and advances of the Trustee and any
predecessor Trustee, their agents and counsel, and any other amounts due the
Trustee or any predecessor Trustee under Section 6.6.
Nothing herein contained shall be deemed to authorize the Trustee to
authorize 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.
In any proceedings brought by the Trustee (and also any proceedings
involving the interpretation of any provision of this Indenture to which the
Trustee shall be a party), the Trustee shall be held to represent all the
Holders of the Securities, and it shall not be necessary to make any Holders of
the Securities parties to any such proceedings.
Section 5.5 TRUSTEE MAY ENFORCE CLAIMS WITHOUT POSSESSION OF SECURITIES OR
COUPONS
All rights of action and claims under this Indenture or any of the
Securities or coupons may be prosecuted and enforced by the Trustee without the
possession of any of the Securities or coupons or the production thereof in any
proceeding relating thereto, and any such proceeding instituted by the Trustee
shall be brought in its own name as trustee of an express trust, and any
-39-
<PAGE>
recovery of judgment shall, after provision for the payment of the reasonable
compensation, expenses, disbursements and advances of the Trustee and its agents
and counsel, be for the ratable benefit of the Holders of the Securities and
coupons in respect of which such judgment has been recovered.
Section 5.6 APPLICATION OF MONEY COLLECTED
Any money collected by the Trustee pursuant to this Article Five shall be
applied in the following order, at the date or dates fixed by the Trustee and,
in case of the distribution of such money on account of principal (or premium,
if any) or interest and any Additional Amounts, upon presentation of the
Securities or coupons, or both, as the case may be, and the notation thereon of
the payment if only partially paid and upon surrender thereof if fully paid:
FIRST: To the payment of all amounts due the Trustee and any
predecessor Trustee under Section 6.6;
SECOND: To the payment of the amounts then due and unpaid upon the
Securities and coupons for the principal (and premium, if any) and
interest and any Additional Amounts payable, in respect of which or for
the benefit of which such money has been collected, ratably, without
preference or priority of any kind, according to the aggregate amounts
due and payable on such Securities and coupons for principal (and
premium, if any), interest and Additional Amounts, respectively; and
THIRD: To the payment of the remainder, if any, to the Company.
Section 5.7 LIMITATION ON SUITS
No Holder of any Security of any series or any related coupon shall have
any right to institute any proceeding, judicial or otherwise, with respect to
this Indenture, 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 indemnity
reasonably satisfactory to the Trustee 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
-40-
<PAGE>
(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 5.8 UNCONDITIONAL RIGHTS OF HOLDERS TO RECEIVE PRINCIPAL, PREMIUM, IF
ANY, INTEREST AND ADDITIONAL AMOUNTS
Notwithstanding any other provision in this Indenture, the Holder of any
Security or coupon shall have the right, which is absolute and unconditional, to
receive payment of the principal of (and premium, if any) and (subject to
Sections 3.5 and 3.7) interest on, and any Additional Amounts in respect of,
such Security or payment of such coupon on the respective due dates expressed in
such Security or coupon (or, in the case of redemption, on the Redemption Date)
and to institute suit for the enforcement of any such payment, and such rights
shall not be impaired without the consent of such Holder.
Section 5.9 RESTORATION OF RIGHTS AND REMEDIES
If the Trustee or any Holder of a Security or coupon has instituted any
proceeding to enforce any right or remedy under this Indenture and such
proceeding has been discontinued or abandoned for any reason, or has been
determined adversely to the Trustee or to such Holder, then and in every such
case, the Company, the Trustee and the Holders of Securities and coupons shall,
subject to any determination in such proceeding, be restored severally and
respectively to their former positions hereunder and thereafter all rights and
remedies of the Trustee and the Holders shall continue as though no such
proceeding had been instituted.
Section 5.10 RIGHTS AND REMEDIES CUMULATIVE
Except as otherwise provided with respect to the replacement or payment
of mutilated, destroyed, lost or stolen Securities or coupons in the last
paragraph of Section 3.6, no right or remedy herein conferred upon or reserved
to the Trustee or to the Holders of Securities or coupons is intended to be
exclusive of any other right or remedy, and every right and remedy shall, to the
extent permitted by law be cumulative and in addition to every other right and
remedy given 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 of employment of any
right or remedy hereunder, or otherwise, shall not prevent the concurrent
assertion or employment of any other appropriate right or remedy.
-41-
<PAGE>
Section 5.11 DELAY OR OMISSION NOT WAIVER
No delay or omission of the Trustee or of any Holder of any Security or
coupon to exercise any right or remedy accruing upon any Event of Default shall
impair any such right or remedy or constitute a waiver of any such Event of
Default or an acquiescence therein. Every right and remedy given by this
Article Five or by law to the Trustee or to the, Holders may be exercised from
time to time, and as often as may be deemed expedient, by the Trustee or by the
Holders of Securities or coupons, as the case may be.
Section 5.12 CONTROL BY HOLDERS OF SECURITIES
The Holders of not less than a majority in principal amount of the
Outstanding Securities of any series shall have the right to direct the time,
method and place of conducting any proceeding for any remedy available to the
Trustee or exercising any trust or power conferred on the Trustee with respect
to the Securities of such series, provided that
(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.
Nothing in this Indenture shall impair the right of the Trustee in its
discretion to take any action deemed proper by the Trustee and which is not
inconsistent with such direction by Holders.
Section 5.13 WAIVER OF PAST DEFAULTS
The Holders of not less than a majority in principal amount of the
Outstanding Securities of any series may on behalf of the Holders of all the
Securities of such series 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, 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
-42-
<PAGE>
waiver shall extend to any subsequent or other default or Event of Default or
impair any right consequent thereon.
Section 5.14 WAIVER OF USURY, STAY OR EXTENSION LAWS
The Company covenants (to the extent that it may lawfully do so) that it
will not at any time insist upon, or plead, or in any manner whatsoever claim or
take the benefit or advantage of, any usury, stay or extension law wherever
enacted, now or at any time hereafter in force, which may affect the covenants
or the performance of this Indenture; and the Company (to the extent that it may
lawfully do so) hereby expressly waives all benefit or advantage of any such
law, and covenants that it will not hinder, delay or impede the execution of any
power herein granted to the Trustee, but will suffer and permit the execution of
every such power as though no such law had been enacted.
Section 5.15 UNDERTAKING FOR COSTS
All parties to this Indenture agree, and each Holder of any Security by
his acceptance thereof shall be deemed to have agreed, that any court may in its
discretion require, in any suit for the enforcement of any right or remedy 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 5.15 shall not apply to any suit instituted by the Trustee, to
any suit instituted by any Holder, or group of Holders, holding in the aggregate
more than 10% in principal amount of the Outstanding Securities of any series,
or to any suit instituted by any Holder for the enforcement of the payment of
the principal of (or premium, if any) or interest on any Security on or after
the respective Stated Maturities expressed in such Security (or, in the case of
redemption, on or after the Redemption Date).
ARTICLE VI
THE TRUSTEE
Section 6.1 NOTICE OF DEFAULTS
Within 90 days after the occurrence of any default hereunder with respect
to the Securities of any series, the Trustee shall transmit in the manner and to
extent provided in TIA Section 313(c), notice of such default hereunder known to
the Trustee, unless such default shall have been cured or waived; PROVIDED,
HOWEVER, that, except in the case of a default in the payment of the principal
of (or premium, if any) or interest on or any Additional Amounts with respect to
any Security of such series, or in the payment of any sinking fund installment
with respect to the Securities of such series, the Trustee shall be protected in
withholding such notice if and so long as Responsible Officers of the Trustee in
good faith determine that the withholding of such notice is in the interest of
the Holders of the Securities and coupons of such series; and PROVIDED
-43-
<PAGE>
FURTHER that in the case of any default or breach of the character specified in
Section 5.1(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 6.1, the term "default"
means any event which is, or after notice or lapse of time or both would become,
an Event of Default with respect to the Securities of such series.
Section 6.2 CERTAIN RIGHTS OF TRUSTEE
Subject to the provisions of TIA Section 315(a) through 315(d):
(1) 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;
(2) any request or direction of the Company mentioned herein shall
be sufficiently evidenced by a Company Request or Company Order (other than
delivery of any Security, together with any coupons appertaining thereto, to the
Trustee for authentication and delivery pursuant to Section 3.3 which shall be
sufficiently evidenced as provided therein) and any resolution of the Board of
Directors may be sufficiently evidenced by a Board Resolution;
(3) whenever in the administration of this Indenture the Trustee
shall deem it desirable that a matter be proved or established prior to taking,
suffering or omitting any action hereunder, the Trustee (unless other evidence
be herein specifically prescribed) may, in the absence of bad faith on its part,
rely upon an Officers' Certificate;
(4) the Trustee may consult with counsel and the written advice of
such counsel 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;
(5) the Trustee shall be under no obligation to exercise any of the
rights or power vested in it by this Indenture at the request or direction of
any of the Holders of Securities of any series or any related coupons pursuant
to this Indenture, unless such Holders shall have offered to the Trustee
security or indemnity reasonably satisfactory to the Trustee against the costs,
expenses and liabilities which might be incurred by it in compliance with such
request or direction.
(6) 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, unless requested in writing
so to do by the Holders of not less than a majority in aggregate principal
amount of the Outstanding Securities of any series; PROVIDED that, if the
payment within a reasonable time to the Trustee of the costs, expenses or
liabilities likely to be incurred by it in the making of such investigation is,
in the opinion of the Trustee, not reasonably assured to the Trustee by the
security afforded to it by the terms of this Indenture, the Trustee may require
reasonable indemnity against such expenses or liabilities as a condition to
proceeding; the
-44-
<PAGE>
reasonable expenses or liabilities as a condition to proceeding; the reasonable
expenses of every such examination shall be paid by the Holders or, if paid by
the Trustee shall be repaid by the Holders upon demand. 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 such facts or
matters as it may see fit, and, if the Trustee shall determine to make such
further inquiry or investigation, it shall be entitled to examine the books,
records and premises of the Company, relevant to the facts or matters that are
the subject of its inquiry, personally or by agent or attorney;
(7) 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
(8) the Trustee shall not be liable for any action taken, suffered
or omitted by it in good faith and reasonably believed by it to be authorized or
within the discretion, rights or power conferred upon it by this Indenture.
The Trustee shall not be required to expend or risk its own funds or
otherwise incur any financial liability in the performance of any of its duties
hereunder, or in the exercise of any of its rights or powers, if it shall have
reasonable grounds for believing that repayment of such funds or adequate
indemnity against such risk or liability is not reasonably assured to it.
Except during the continuance of an Event of Default, the Trustee
undertakes to perform only such duties as are specifically set forth in this
Indenture, and no implied covenants or obligations shall be read into this
Indenture against the Trustee.
Section 6.3 NOT RESPONSIBLE FOR RECITALS OR ISSUANCE OF SECURITIES
The recitals contained herein and in the Securities, except the Trustee's
certificate of authentication, and in any coupons shall be taken as the
statements of the Company, and neither the Trustee nor any Authenticating Agent
assumes any responsibility for their correctness. The Trustee makes no
representations as to the validity or sufficiency of this Indenture or of the
Securities or coupons, except that the Trustee represents that it is duly
authorized to execute and deliver this Indenture, authenticate the Securities
and perform its obligations hereunder. Neither the Trustee nor any
Authenticating Agent shall be accountable for the use or application by the
Company of Securities or the proceeds thereof.
Section 6.4 MAY HOLD SECURITIES
The Trustee, any Paying Agent, Security Registrar, Authenticating Agent
or any other agent of the Company, in its individual or any other capacity, may
become the owner or pledgee of Securities and coupons and subject to TIA
Sections 310(b) and 311, and may otherwise deal with the Company with the same
rights it would have if it were not Trustee, Paying Agent, Security Registrar,
Authenticating Agent or such other agent.
-45-
<PAGE>
Section 6.5 MONEY HELD IN TRUST
Money held by the Trustee in trust hereunder need not be segregated from
other funds except to the extent required by law. The Trustee shall be under no
liability for interest on any money received by it hereunder except as otherwise
agreed with Company.
Section 6.6 COMPENSATION AND REIMBURSEMENT
The Company agrees:
(1) to pay to the Trustee from time to time reasonable compensation
for all services rendered by it hereunder (which compensation shall not be
limited by any provision of law in regard to the compensation of a trustee of an
express trust);
(2) except as otherwise expressly provided herein, to reimburse
each of the Trustee and any predecessor Trustee upon its request for all
reasonable expenses, disbursements and advances incurred or made by the Trustee
in accordance with any provision of this Indenture (including the reasonable
compensation and the reasonable expenses and disbursements of its agents and
counsel), except any such expense, disbursement or advance as may be
attributable to its negligence or bad faith; and
(3) to indemnify each of the Trustee and any predecessor Trustee
for, and to hold it harmless against, any loss, liability or expense incurred
without negligence or bad faith on its own part, arising out of or in connection
with the acceptance or administration of the trust or trusts hereunder,
including the costs and expenses of defending itself against any claim or
liability in connection with the exercise or performance of any of its powers or
duties hereunder.
When the Trustee incurs expenses or renders services in connection with
an Event of Default specified in Section 5.1(5) or Section 5.1(6), the expenses
(including the reasonable charges and expenses of its counsel) and the
compensation for the services are intended to constitute expenses of
administration under any applicable federal or state bankruptcy, insolvency or
other similar law.
As security for the performance of the obligations of the Company under
this Section 6.6, the Trustee shall have a lien prior to the Securities upon all
property and money held or collected by the Trustee as such, except money held
in trust for the payment of principal of (or premium, if any) or interest on
particular Securities or any coupons.
The provisions of this Section 6.6 shall survive the termination of this
Indenture.
Section 6.7 CORPORATE TRUSTEE REQUIRED; ELIGIBILITY; CONFLICTING INTERESTS
There shall at all times be a Trustee hereunder which shall be eligible
to act as Trustee under TIA Section 310(a)(1) and shall have a combined capital
and Surplus of at least
-46-
<PAGE>
$50,000,000. If such corporation publishes reports of condition at least
annually, pursuant to law or the requirements of federal, state, territorial or
District of Columbia supervising or examining authority, then for the purposes
of this Section 6.7, the combined capital and surplus of such corporation shall
be deemed to be its combined capital and Surplus as set forth in its most recent
report of condition so published. If at any time the Trustee shall cease to be
eligible in accordance with the provisions of this Section 6.7, it shall resign
immediately in the manner and with the effect hereinafter specified in this
Article VI. Neither the Company nor any Person directly or indirectly
controlling or controlled by, or under common control with, the Company shall
serve as Trustee.
Section 6.8 RESIGNATION AND REMOVAL; APPOINTMENT OF SUCCESSOR
No resignation or removal of the Trustee and no appointment of a
successor Trustee pursuant to this Article VI shall become effective until the
acceptance of appointment by the successor Trustee in accordance with the
applicable requirements of Section 6.9.
The Trustee may resign at any time with respect to the Securities of one
or more series by giving written notice thereof to the Company. If an
instrument of acceptance by a successor Trustee shall not have been delivered to
the Trustee within 30 days after the giving of such notice or resignation, the
resigning Trustee may petition any court of competent jurisdiction for the
appointment of a successor Trustee.
The Trustee may be removed at any time with respect to the Securities of
any series by Act of the Holders of a majority in principal amount of the
Outstanding Securities of such series delivered to the Trustee and to the
Company.
If at any time:
(1) the Trustee shall fail to comply with the provisions of TIA
Section 310(b) after written request therefor by the Company or by any Holder of
a Security who has been a bona fide Holder of a Security for at least six
months; or
(2) the Trustee shall cease to be eligible under Section 6.7 and
shall fail to resign after written request therefor by the Company or by any
Holder of a Security who has been a bona fide Holder of a Security for at least
six months; or
(3) the Trustee shall become incapable of acting or shall be
adjudged a bankrupt or insolvent or a receiver of the Trustee or of its property
shall be appointed or any public officer shall take charge or control of the
Trustee or of its property or affairs for the purpose of rehabilitation,
conservation or liquidation,
then, in any such case, (i) the Company by or pursuant to a Board Resolution may
remove the Trustee and appoint a successor Trustee with respect to all
Securities or (ii) subject to TIA Section 315(e), any Holder of a Security who
has been a bona fide Holder of a Security for at least six months may, on behalf
of himself and all others similarly situated, petition any court of
-47-
<PAGE>
competent jurisdiction for the removal of the Trustee with respect to all
Securities and the appointment of a successor Trustee or Trustees.
If the Trustee shall resign, be removed or become incapable of acting, or
if a vacancy shall occur in the office of Trustee for any cause with respect to
the Securities of one or more series, the Company, by or pursuant to a Board
Resolution, shall promptly appoint a successor Trustee or Trustees with respect
to the Securities of that or those series (it being understood that any such
successor Trustee may be appointed with respect to the Securities of one or more
or all of such series and that at any time there shall be only one Trustee with
respect to the Securities of any particular series). If, within one year after
such resignation, removal or incapability, or the occurrence of such vacancy, a
successor Trustee with respect to the Securities of any series shall be
appointed by Act of the Holders of a majority in principal amount of the
Outstanding Securities of such series delivered to the Company and the retiring
Trustee, the successor Trustee so appointed shall, forthwith upon its acceptance
of such appointment, become the successor Trustee with respect to the Securities
of such series and to that extent supersede the successor Trustee appointed by
the Company. If no successor Trustee with respect to the Securities of any
series shall have been so appointed by the Company or the Holders of Securities
and accepted appointment in the manner hereinafter provided, any Holder of a
Security who has been a bona fide Holder of a Security of such series for at
least six months may, on behalf of himself and all others similarly situated,
petition any court of competent jurisdiction for the appointment of a successor
Trustee with respect to Securities of such series.
The Company shall give notice of each resignation and each removal of the
Trustee with respect to the Securities of any series and each appointment of a
successor Trustee with respect to the Securities of any series in the manner
provided for notices to the Holders of Securities in Section 1.6. Each notice
shall include the name of the successor Trustee with respect to the Securities
of such series and the address of its Corporate Trust Office.
Section 6.9 ACCEPTANCE OF APPOINTMENT BY SUCCESSOR
In case of the appointment hereunder of a successor Trustee with respect
to all Securities, every such successor Trustee shall execute, acknowledge and
deliver to the Company and to the retiring Trustee an instrument accepting such
appointment, and thereupon the resignation or removal of the retiring Trustee
shall become effective and such successor Trustee, without any further act, deed
or conveyance, shall become vested with all the rights, powers, trusts and
duties of the retiring Trustee; but, on request of the Company or the successor
Trustee, such retiring Trustee shall, upon payment of its charges, execute and
deliver an instrument transferring to such successor Trustee all the rights,
powers and trusts of the retiring Trustee, and shall duly assign, transfer and
deliver to such successor Trustee all property and money held by such retiring
Trustee hereunder, subject nevertheless to its claim, if any, provided for in
Section 6.6.
In case of the appointment hereunder of a successor Trustee with respect
to the Securities of one or more (but not all) series, the Company, the retiring
Trustee and each successor Trustee with respect to the Securities of one or more
series shall execute and deliver an indenture supplemental hereto, pursuant to
Article Nine, wherein each successor Trustee shall accept such
-48-
<PAGE>
appointment and which (1) shall contain such provisions as shall be necessary or
desirable to transfer and confirm to, and to vest in, each successor Trustee all
the rights, powers, trusts and duties of the retiring Trustee with respect to
the Securities of that or those series to which the appointment of such
successor Trustee relates, (2) if the retiring Trustee is not retiring with
respect to all Securities, shall contain such provisions as shall be deemed
necessary or desirable to confirm that all the rights, powers, trusts and duties
of the retiring Trustee with respect to the Securities of that or those series
as to which the retiring Trustee is not retiring shall continue to be vested in
the retiring Trustee, and (3) shall add to or change any of the provisions of
this Indenture as shall be necessary to provide for or facilitate the
administration of the trusts hereunder by more than one Trustee, it being
understood that nothing herein or in such supplemental indenture shall
constitute such Trustees co-Trustees of the same trust and that each such
Trustee shall be Trustee of a trust or trusts hereunder separate and apart from
any trust or trusts hereunder administered by any other such Trustee; and upon
the execution and delivery of such supplemental indenture the resignation or
removal of the retiring Trustee shall become effective to the extent provided
therein and each such successor Trustee, without any further act, deed or
conveyance, shall become vested with all the rights, powers, trusts and duties
of the retiring Trustee with respect to the Securities of that or those series
to which the appointment of such successor Trustee relates; but, on request of
the Company or any successor Trustee, such retiring Trustee shall duly assign,
transfer and deliver to such successor Trustee all property and money held by
such retiring Trustee hereunder with respect to the Securities of that or those
series to which the appointment of such successor Trustee relates.
Upon request of any such successor Trustee, the Company shall execute any
and all instruments for more fully and certainly vesting in and confirming to
such successor Trustee all such rights, powers and trusts referred to in this
Section 6.9, as the case may be.
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 Six.
Section 6.10 MERGER, CONVERSION, CONSOLIDATION OR SUCCESSION TO BUSINESS
Any corporation into which the Trustee may be merged or converted or with
which it may be consolidated, or any corporation resulting from any merger,
conversion or consolidation to which the Trustee shall be a party, or any
corporation succeeding to all or substantially all of the corporate trust
business of the Trustee, shall be the successor of the Trustee hereunder;
PROVIDED such corporation shall be otherwise qualified and eligible under this
Article Six, without the execution or filing of any paper or any further act on
the part 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
-49-
<PAGE>
either its own name or that of its predecessor Trustee, with the full force and
effect which this Indenture provides for the certificate of authentication of
the Trustee.
Section 6.11 APPOINTMENT OF AUTHENTICATING AGENT
At any time when any of the Securities remain Outstanding, the Trustee
may appoint an Authenticating Agent or Agents with respect to one or more series
of Securities which shall be authorized to act on behalf of the Trustee to
authenticate Securities of such series issued upon exchange, registration of
transfer or partial redemption or repayment thereof, and Securities so
authenticated shall be entitled to the benefits of this Indenture and shall be
valid and obligatory for all purposes as if authenticated by the Trustee
hereunder. Any such appointment shall be evidenced by an instrument in writing
signed by a Responsible Officer of the Trustee, a copy of which instrument shall
be promptly furnished to the Company. Wherever reference is made in this
Indenture to the authentication and delivery of Securities by the Trustee or the
Trustee's certificate of authentication, such reference shall be deemed to
include authentication and delivery on behalf of the Trustee by an
Authenticating Agent and a certificate of authentication executed on behalf of
the Trustee by an Authenticating Agent. Each Authenticating Agent shall be
acceptable to the Company and 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 or of any state or the District of Columbia authorized under
such laws to act as Authenticating Agent, having a combined capital and surplus
of not less than $50,000,000 and subject to supervision or examination by
federal or state authorities. If such Authenticating Agent publishes reports of
condition at least annually, pursuant to law or the requirements of the
aforesaid supervising or examining authority, then for the purposes of this
Section 6.11, the combined capital and surplus of such Authenticating Agent
shall be deemed to be its combined capital and surplus as set forth in its most
recent report of condition so published. In case at any time an Authenticating
Agent shall cease to be eligible in accordance with the provisions of this
Section 6.11, such Authenticating Agent shall resign immediately in the manner
and with the effect specified in this Section 6.11.
Any corporation into which an Authenticating Agent may be merged or
converted or with which it may be consolidated, or any corporation resulting
from any merger, conversion or consolidation to which such Authenticating Agent
shall be a party, or any corporation succeeding to the corporate agency or
corporate trust business of an Authenticating Agent, shall continue to be an
Authenticating Agent, provided such corporation shall be otherwise eligible
under this Section 6.11, without the execution or filing of any paper or further
act on the part of the Trustee or the Authenticating Agent.
An Authenticating Agent for any series of Securities may at any time
resign by giving written notice of resignation to the Trustee for such series
and to the Company. The Trustee for any series of Securities may at any time
terminate the agency of an Authenticating Agent by giving written notice of
termination to such Authenticating Agent and to the Company. Upon receiving
such a notice of resignation or upon such a termination, or in case at any time
such Authenticating Agent shall cease to be eligible in accordance with the
provisions of this Section 6.11, the Trustee for such series may appoint a
successor Authenticating Agent which shall be
-50-
<PAGE>
acceptable to the Company and shall give notice of such appointment to all
Holders of Securities of the series with respect to which such Authenticating
Agent will serve in the manner set forth in Section 1.6. Any successor
Authenticating Agent upon acceptance of its appointment hereunder shall become
vested with all the rights, powers and duties of its predecessor hereunder, with
like effect as if originally named as an Authenticating Agent herein. No
successor Authenticating Agent shall be appointed unless eligible under the
provisions of this Section 6.11.
The Company agrees to pay to each Authenticating Agent from time to time
reasonable compensation, including reimbursement of its reasonable expenses for
its services under this Section 6.11.
If an appointment with respect to one or more series is made pursuant to
this Section 6.11, the Securities of such series may have endorsed thereon, in
addition to or in lieu of the Trustee's certificate of authentication, an
alternate certificate of authentication substantially in the following form:
This is one of the Securities of the series designated therein referred
to in the within-mentioned Indenture.
[NAME OF THE TRUSTEE], as Trustee
By: ___________________________________
as Authenticating Agent
By: ___________________________________
Authorized Signatory
ARTICLE VII
HOLDERS' LISTS AND REPORTS BY TRUSTEE AND COMPANY
Section 7.1 DISCLOSURE OF NAMES AND ADDRESSES OF HOLDERS
Every Holder of Securities or coupons, by receiving and holding the same,
agrees with the Company and the Trustee that neither the Company nor the Trustee
nor any Authenticating Agent nor any Paying Agent nor any Security Registrar
shall be held accountable by reason of the disclosure of any information as to
the names and addresses of the Holders of Securities in accordance with TIA
Section 312, regardless of the source from which such information was derived,
and that the Trustee shall not be held accountable by reason of mailing any
material pursuant to a request made under TIA Section 312(b).
-51-
<PAGE>
Section 7.2 REPORTS BY TRUSTEE
Within 60 days after [DATE] of each year commencing with the first [DATE]
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 [DATE] if required by TIA Section 313(a).
Section 7.3 REPORTS BY COMPANY
The Company will:
(1) file with the Trustee, within 15 days after the Company is
required to file the same with the Commission, copies of the annual reports and
of the information, documents and other reports (or copies of such portions of
any of the foregoing as the Commission may from time to time by rules and
regulations prescribe) which the Company may be required to file with the
Commission pursuant to Section 13 or Section 15(d) of the the Exchange Act; or,
if the Company is not required to file information, documents or reports
pursuant to either of such Sections, then it will file with the Trustee and the
Commission, in accordance with rules and regulations prescribed from time to
time by the Commission, such of the supplementary and periodic information,
documents and reports which may be required pursuant to Section 13 of the the
Exchange Act, in respect of a security listed and registered on a national
securities exchange as may be prescribed from time to time in such rules and
regulations;
(2) file with the Trustee and the Commission, in accordance with
rules and regulations prescribed from time to time by the Commission, such
additional information, documents and reports with respect to compliance by the
Company with the conditions and covenants of this Indenture as may be required
from time to time by such rules and regulations; and
(3) transmit by mail to the Holders of Securities, within 30 days
after the filing thereof with the Trustee, in the manner and to the extent
provided in TIA Section 313(c), such summaries of any information, documents and
reports required to be filed by the Company pursuant to clauses (1) and (2) of
this Section 7.3 as may be required by rules and regulations prescribed from
time to time by the Commission.
Section 7.4 COMPANY TO FURNISH TRUSTEE NAMES AND ADDRESSES OF HOLDERS
The Company will furnish or cause to be furnished to the Trustee:
(1) semiannually, not later than 15 days after the Regular Record
Date for interest for each series of Securities, a list, in such form as the
Trustee may reasonably require, of the names and addresses of the Holders of
Securities of such series as of such Regular Record Date or, if there is no
Regular Record Date for interest for such series of Securities, semiannually,
-52-
<PAGE>
upon such dates as are set forth in the Board Resolution or indenture
supplemental hereto authorizing such series, and
(2) at such other times as the Trustee may request in writing,
within 30 days after the receipt by the Company of any such request, a list of
similar form and content as of a date not more than 15 days prior to the time
such list is furnished,
PROVIDED, HOWEVER, that, so long as the Trustee is the Security Registrar, no
such list shall be required to be furnished.
ARTICLE VIII
CONSOLIDATION, MERGER, SALE, LEASE OR CONVEYANCE
Section 8.1 CONSOLIDATIONS AND MERGERS OF COMPANY AND SALES, LEASES AND
CONVEYANCES PERMITTED SUBJECT TO CERTAIN CONDITIONS
The Company may consolidate with, or sell, lease or convey all or
substantially all of its assets to, or merge with or into any other entity,
provided that in any such case (1) either the Company shall be the continuing
entity, or the successor entity shall be an entity 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,
if any) and any interest (including all Additional Amounts, if any, payable
pursuant to Section 10.10) on all of the Securities, according to their tenor,
and the due and punctual performance and observance of all of the covenants and
conditions of this Indenture to be performed by the Company by supplemental
indenture, complying with Article IX, satisfactory to the Trustee, executed and
delivered to the Trustee by such entity and (2) immediately after giving effect
to such transaction and treating any indebtedness which becomes an obligation of
the Company or any Subsidiary as a result thereof as having been incurred by the
Company or such Subsidiary at the time of such transaction, no Event of Default,
and no event which, after notice or the lapse of time, or both, would become an
Event of Default, shall have occurred and be continuing.
Section 8.2 RIGHTS AND DUTIES OF SUCCESSOR CORPORATION
In case of any such consolidation, merger, sale, lease or conveyance and
upon any such assumption by the successor corporation, such successor
corporation shall succeed to and be substituted for the Company, with the same
effect as if it had been named herein as the party of the first part, and the
predecessor corporation, except in the event of a lease, shall be relieved of
any further obligation under this Indenture and the Securities. Such successor
corporation thereupon may cause to be signed, and may issue either in its own
name or in the name of the Company, any or all of the Securities issuable
hereunder which theretofore shall not have been signed by the Company and
delivered to the Trustee; and, upon the order of such successor corporation,
instead of the Company, and subject to all the terms, conditions and limitations
in this Indenture prescribed, the Trustee shall authenticate and shall deliver
any Securities which previously shall have been signed and delivered by the
officers of the Company to the Trustee for
-53-
<PAGE>
authentication, and any Securities which such successor corporation thereafter
shall cause to be signed and delivered to the Trustee for that purpose. All the
Securities so issued shall in all respects have the same legal rank and benefit
under this Indenture as the Securities theretofore or thereafter issued in
accordance with the terms of this Indenture as though all of such Securities had
been issued at the date of the execution hereof.
In case of any such consolidation, merger, sale, lease or conveyance,
such changes in phraseology and form (but not in substance) may be made in the
Securities thereafter to be issued as may be appropriate.
Section 8.3 OFFICERS' CERTIFICATE AND OPINION OF COUNSEL
Any consolidation, merger, sale, lease or conveyance permitted under
Section 8.1 is also subject to the condition that the Trustee receive an
Officers' Certificate and an Opinion of Counsel to the effect that any such
consolidation, merger, sale, lease or conveyance, and the assumption by any
successor corporation, complies with the provisions of this Article VIII and
that all conditions precedent herein provided for relating to such transaction
have been complied with.
ARTICLE IX
SUPPLEMENTAL INDENTURES
Section 9.1 SUPPLEMENTAL INDENTURES WITHOUT CONSENT OF HOLDERS
Without the consent of any Holders of Securities or coupons, the Company,
when authorized by or pursuant to a Board Resolution, and the Trustee, at any
time and from time to time, may enter into one or more indentures supplemental
hereto, in form satisfactory to the Trustee, for any of the following purposes:
(1) to evidence the succession of another Person to the Company and
the assumption by any such successor of the covenants of the Company herein and
in the Securities contained; or
(2) to add to the covenants of the Company for the benefit of the
Holders of all or any series of Securities (and if such covenants are to be for
the benefit of less than all series of Securities, stating that such covenants
are expressly being included solely for the benefit of such series) or to
surrender any right or power herein conferred upon the Company; or
(3) to add any additional Events of Default for the benefit of the
Holders of all or any series of Securities (and if such Events of Default are to
be for the benefit of less than all series of Securities, stating that such
Events of Default are expressly being included solely for the benefit of such
series); PROVIDED, HOWEVER, that in respect of any such additional Events of
Default such supplemental indenture may provide for a particular period of grace
after default (which period may be shorter or longer than that allowed in the
case of other defaults), may provide for an immediate enforcement upon such
default, may limit the remedies available to the
-54-
<PAGE>
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 or
interest on Bearer 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, HOWEVER,
that any such action shall not adversely affect the interests of the Holders of
Securities of any series or any related coupons in any material respect; or
(5) to change or eliminate any of the provisions of this Indenture,
PROVIDED that any such change or elimination shall become effective only when
there is no Security Outstanding of any series created prior to the execution of
such supplemental indenture which is entitled to the benefit of such provision;
or
(6) to secure the Securities; or
(7) to establish the form or terms of Securities of any series and
any related coupons as permitted by Sections 2.1 and 3.1, including the
provisions and procedures relating to Securities convertible into Common Stock
or Preferred Stock, as the case may be; 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; PROVIDED, HOWEVER, that 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 supplement any of the provisions of this Indenture to such
extent as shall be necessary to permit or facilitate the defeasance and
discharge of any series of Securities pursuant to Sections 4.1, 14.2 and 14.3;
PROVIDED, HOWEVER, that any such action shall not adversely affect the interests
of the Holders of Securities of such series and any related coupons or any other
series of Securities in any material respect.
Section 9.2 SUPPLEMENTAL INDENTURES WITH CONSENT OF HOLDERS
With the consent of the Holders of not less than a majority in principal
amount of all Outstanding Securities affected by such supplemental indenture, by
Act of said Holders delivered
-55-
<PAGE>
to the Company and the Trustee, the Company, when authorized by or pursuant to a
Board Resolution, and the Trustee may enter into an indenture or indentures
supplemental hereto for the purpose of adding any provisions to or changing in
any manner or eliminating any of the provisions of this Indenture or of
modifying in any manner the rights of the Holders of Securities and any related
coupons under this Indenture; PROVIDED, HOWEVER, that no such supplemental
indenture shall, without the consent of the Holder of each Outstanding Security
affected thereby:
(1) change the Stated Maturity of the principal of (or premium, if
any, on) or any installment of principal of or interest on, any Security; or
reduce the principal amount thereof or state the rate or amount of interest
thereon or any Additional Amounts payable in respect thereof, or any premium
payable upon the redemption thereof, or change any obligation of the Company to
pay Additional Amounts pursuant to Section 10.10 (except as contemplated by
Section 8.1(1) and permitted by Section 9.1(1)), or reduce the amount of the
principal of an Original Issue Discount Security that would be due and payable
upon a declaration of acceleration of the Maturity thereof pursuant to
Section 5.2 or the amount thereof provable in bankruptcy pursuant to Section
5.4, or adversely affect any right of repayment at the option of the Holder of
any Security, or change any Place of Payment where, or the currency or
currencies, currency unit or units or composite currency or currencies in which,
any Security or any premium or the interest thereon is payable, or impair the
right to institute suit for the enforcement of any such payment on or after the
Stated Maturity thereof (or, in the case of redemption or repayment at the
option of the Holder, on or after the Redemption Date or the Repayment Date, as
the case may be), 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 15.4 for quorum or
voting, or
(3) modify any of the provisions of this Section 9.2, Section 5.13
or 10.11, except to increase the required percentage to effect such action or to
provide that certain other provisions of this Indenture cannot be modified or
waived without the consent of the Holder of each Outstanding Security affected
thereby.
It shall not be necessary for any Act of Holders under this Section 9.2
to approve the particular form of any proposed supplemental indenture, but it
shall be sufficient if such Act shall approve the substance thereof.
A supplemental indenture which changes or eliminates any covenant or
other provision of this Indenture which has expressly been included solely for
the benefit of one or more particular series of Securities, or which modifies
the rights of the Holders of Securities of such series with respect to such
covenant or other provision, shall be deemed not to affect the rights under this
Indenture of the Holders of Securities of any other series.
-56-
<PAGE>
Section 9.3 EXECUTION OF SUPPLEMENTAL INDENTURES
In executing, or accepting the additional trusts created by, any
supplemental indenture permitted by this Article IX or the modification thereby
of the trusts created by this Indenture, the Trustee shall be entitled to
receive, and shall be fully protected in relying upon, an Opinion of Counsel
stating that the execution of such supplemental indenture is authorized or
permitted by this Indenture. The Trustee may, but shall not be obligated to,
enter into any such supplemental indenture which affects the Trustee's own
rights, duties or immunities under this Indenture or otherwise.
Section 9.4 EFFECT OF SUPPLEMENTAL INDENTURES
Upon the execution of any supplemental indenture under this Article IX,
this Indenture shall be modified in accordance therewith, and such supplemental
indenture shall form a part of this Indenture for all purposes; and every Holder
of Securities that are theretofore or thereafter authenticated and delivered
hereunder and of any coupon appertaining thereto shall be bound thereby.
Section 9.5 CONFORMITY WITH TRUST INDENTURE ACT
Every supplemental indenture executed pursuant to this Article IX shall
conform to the requirements of the Trust Indenture Act as then in effect.
Section 9.6 REFERENCE IN SECURITIES TO SUPPLEMENTAL INDENTURES
Securities of any series authenticated and delivered after the execution
of any supplemental indenture pursuant to this Article IX may, and shall, if
required by the Trustee, bear a notation in form approved by the Trustee as to
any matter provided for in such supplemental indenture. If the Company shall so
determine, new Securities of any series so modified as to conform, in the
opinion of the Trustee and the Company, to any such supplemental indenture may
be prepared and executed by the Company and authenticated and delivered by the
Trustee in exchange for Outstanding Securities of such series.
ARTICLE X
COVENANTS
Section 10.1 PAYMENT OF PRINCIPAL, PREMIUM, IF ANY, INTEREST AND ADDITIONAL
AMOUNTS
The Company covenants and agrees for the benefit of the Holders of each
series of Securities that it will duly and punctually pay the principal of (and
premium, if any) and interest on and any Additional Amounts payable in respect
of the Securities of that series in accordance with the terms of such series of
Securities, any coupons appertaining thereto and this Indenture. Unless
otherwise specified as contemplated by Section 3.1 with respect to any series of
Securities,
-57-
<PAGE>
any interest due on and any Additional Amounts payable in respect of Bearer
Securities on or before Maturity, other than Additional Amounts, if any, payable
as provided in Section 10.10 in respect of principal of (or premium, if any, on)
such a Security, shall be payable only upon presentation and surrender of the
several coupons for such interest installments as are evidenced thereby as they
severally mature. Unless otherwise specified with respect to Securities of any
series pursuant to Section 3.1, at the option of the Company, all payments of
principal may be paid by check to the registered Holder of the Registered
Security or other person entitled thereto against surrender of such Security.
Section 10.2 MAINTENANCE OF OFFICE OR AGENCY
If Securities of a series are issuable only as Registered Securities, the
Company shall maintain in each Place of Payment for any series of Securities an
office or agency where Securities of that series may be presented or surrendered
for payment or conversion, where Securities of that series may be surrendered
for registration of transfer or exchange and where notices and demands to or
upon the Company in respect of the Securities of that series and this Indenture
may be served. If Securities of a series are issuable as Bearer Securities, the
Company will maintain: (1) in the Borough of Manhattan, the City of New York,
an office or agency where any Securities of that series may be presented or
surrendered for payment or conversion, where any Securities of that series may
be surrendered for registration of transfer, where Securities of that series may
be surrendered for exchange, where notices and demands to or upon the Company in
respect of the Securities of that series and this Indenture may be served and
where Bearer Securities of that series and related coupons may be presented or
surrendered for payment or conversion in the circumstances described in the
following paragraph (and not otherwise); (2) subject to any laws or regulations
applicable thereto, in a Place of Payment for that series which is located
outside the United States, an office or agency where Securities of that series
and related coupons may be presented and surrendered for payment (including
payment of any Additional Amounts payable on Securities of that series pursuant
to Section 10.10) or conversion; PROVIDED, HOWEVER, that if the Securities of
that series are listed on any stock exchange located outside the United States
and such stock exchange shall so require, the Company will maintain a Paying
Agent for the Securities of that series in any required city located outside the
United States, as the case may be, so long as the Securities of that series are
listed on such exchange; and (3) subject to any laws or regulations applicable
thereto, in a Place of Payment for that series located outside the United States
an office or agency where any Securities of that series may be surrendered for
registration of transfer, where Securities of that series may be surrendered for
exchange and where notices and demands to or upon the Company in respect of the
Securities of that series and this Indenture may be served. The Company will
give prompt written notice to the Trustee of the location, and any change in the
location, of each such office or agency. If at any time the Company shall fail
to maintain any such required office or agency or shall fail to furnish the
Trustee with the address thereof, such presentations, surrenders, notices and
demands may be made or served at the Corporate Trust Office of the Trustee,
except that Bearer Securities of that series and the related coupons may be
presented and surrendered for payment (including payment of any Additional
Amounts payable on Bearer Securities of that series pursuant to Section 10.10)
or conversion at the offices specified in the Security, in London, England, and
the Company hereby appoints the same as its agent to receive such respective
presentations, surrenders, notices and demands, and
-58-
<PAGE>
the Company hereby appoints the Trustee its agent to receive all such
presentations, surrenders, notices and demands.
Unless otherwise specified with respect to any Securities pursuant to
Section 3.1, no payment of principal, premium or interest on or Additional
Amounts in respect of Bearer Securities shall be made at any office or agency of
the Company in the United States or by check mailed to any address in the United
States or by transfer to an account maintained with a bank located in the United
States; PROVIDED, HOWEVER, that, if the Securities of a series are payable in
Dollars, payment of principal of and any premium and interest on any Bearer
Security (including any Additional Amounts payable on Securities of such series
pursuant to Section 10.10) shall be made at the office of the Company'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 or
Additional Amounts, as the case may be, at all offices or agencies outside the
United States maintained for the purpose by the Company in accordance with this
Indenture is illegal or effectively precluded by exchange controls or other
similar restrictions.
The Company may from time to time designate one or more other offices or
agencies where the Securities of one or more series may be presented or
surrendered for any or all of such purposes, and may from time to time rescind
such designations; PROVIDED, HOWEVER, that no such designation or rescission
shall in any manner relieve the Company of its obligation to maintain an office
or agency in accordance with the requirements set forth above for Securities of
any series for such purposes. The Company will give prompt written notice to
the Trustee of any such designation or rescission and of any change in the
location of any such other office or agency. Unless otherwise specified with
respect to any Securities pursuant to Section 3.1 with respect to a series of
Securities, the Company hereby designates as a Place of Payment for each series
of Securities the office or agency of the Company in the Borough of Manhattan,
the City of New York, and initially appoints the Trustee at its Corporate Trust
Office as Paying Agent in such city and as its agent to receive all such
presentations, surrenders, notices and demands.
Unless otherwise specified with respect to any Securities pursuant to
Section 3.1, if and so long as the Securities of any series (1) are denominated
in a Foreign Currency or (2) may be payable in a Foreign Currency, or so long as
it is required under any other provision of this Indenture, then the Company
will maintain with respect to each series of Securities, or as so required, at
least one exchange rate agent.
Section 10.3 MONEY FOR SECURITIES PAYMENTS TO BE HELD IN TRUST
If the Company shall at any time act as its own Paying Agent with respect
to any series of any Securities and any related coupons, it will, on or before
each due date of the principal of (and premium, if any), or interest on or
Additional Amounts in respect of, any of the Securities of that series,
segregate and hold in trust for the benefit of the Persons entitled thereto a
sum in the currency or currencies, currency unit or units or composite currency
or currencies in which the Securities of such series are payable (except as
otherwise specified pursuant to Section 3.1 for the Securities of such series)
sufficient to pay the principal (and premium, if any) or interest or Additional
Amounts so becoming due until such sums shall be paid to such Persons or
otherwise
-59-
<PAGE>
disposed of as herein provided, and will promptly notify the Trustee of its
action or failure so to act.
Whenever the Company shall have one or more Paying Agents for any series
of Securities and any related coupons, it will, on or before each due date of
the principal of (and premium, if any), or interest on or Additional Amounts in
respect of, any Securities of that series, deposit with a Paying Agent a sum (in
the currency or currencies, currency unit or units or composite currency or
currencies described in the preceding paragraph) sufficient to pay the principal
(and premium, if any) or interest or Additional Amounts so becoming due, such
sum to be held in trust for the benefit of the Persons entitled to such
principal, premium or interest or Additional Amounts and (unless such Paying
Agent is the Trustee) the Company will promptly notify the Trustee of its action
or failure so to act.
The Company will cause each Paying Agent other than the Trustee to
execute and deliver to the Trustee an instrument in which such Paying Agent
shall agree with the Trustee, subject to the provisions of this Section 10.3,
that such Paying Agent will
(1) hold all sums held by it for the payment of principal of (and
premium, if any) or interest or Additional Amounts on Securities in trust for
the benefit of the Persons entitled thereto until such sums shall be paid to
such Persons or otherwise disposed of as herein provided;
(2) give the Trustee notice of any default by the Company (or any
other obligor upon the Securities) in the making of any such payment of
principal (and premium, if any) or interest on the Securities of that series;
and
(3) at any time during the continuance of any such default upon
the written request of the Trustee, forthwith pay to the Trustee all sums so
held in trust by such Paying Agent.
The Company may at any time, for the purpose of obtaining the
satisfaction and discharge of this Indenture or for any other purpose, pay, or
by Company Order direct any Paying Agent to pay, to the Trustee all sums held in
trust by the Company or such Paying Agent, such sums to be held by the Trustee
upon the same terms as those upon which such sums were held by the Company or
such Paying Agent; and, upon such payment by any Paying Agent to the Trustee,
such Paying Agent shall be released from all further liability with respect to
such sums.
Except as otherwise provided in the Securities of any series, any money
deposited with the Trustee or any Paying Agent, or then held by the Company, in
trust for the payment of the principal of (and premium, if any) or interest on,
or any Additional Amounts in respect of, any Security of any series and
remaining unclaimed for two years after such principal (and premium, if any),
interest or Additional Amounts has become due and payable shall be paid to the
Company upon Company Request or (if then held by the Company) shall be
discharged from such trust; and the Holder of such Security shall thereafter, as
an unsecured general creditor, look only to the Company for payment of such
principal of (and premium, if any) or interest on, or any Additional Amounts in
respect of, any Security, without interest thereon, and all liability of the
Trustee or
-60-
<PAGE>
such Paying Agent with respect to such trust money, and all liability of the
Company as Trustee thereof, shall thereupon cease; PROVIDED, HOWEVER, that the
Trustee or such Paying Agent, before being required to make any such repayment,
may at the expense of the Company cause to be published once, in an Authorized
Newspaper, notice that such money remains unclaimed and that, after a date
specified therein, which shall not be less than 30 days from the date of such
publication, any unclaimed balance of such money then remaining will be repaid
to the Company.
Section 10.4 EXISTENCE
Subject to Article VIII, the Company will do or cause to be done all
things necessary to preserve and keep in full force and effect its corporate
existence, all material rights (by certificate of incorporation, by-laws and
statute) and material franchises; PROVIDED, HOWEVER, that the Company 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 Company.
Section 10.5 MAINTENANCE OF PROPERTIES
The Company will cause all of its material properties used or useful in
the conduct of its business or the business of any Subsidiary to be maintained
and kept in good condition, repair and working order and supplied with all
necessary equipment and will cause to be made all necessary repairs, renewals,
replacements, betterments and improvements thereof, all as in the judgment of
the Company may be necessary so that the business carried on in connection
therewith may be properly and advantageously conducted at all times; PROVIDED,
HOWEVER, that the Company and its Subsidiaries shall not be prevented from
selling or otherwise disposing for value of their properties in the ordinary
course of their business.
Section 10.6 INSURANCE
The Company will, and will cause each of its Subsidiaries to, keep in
force upon all of its properties and operations policies of insurance carried
with responsible companies in such amounts and covering all such risks as shall
be customary in the industry in accordance with prevailing market conditions and
availability.
Section 10.7 PAYMENT OF TAXES AND OTHER CLAIMS
The Company will pay or discharge or cause to be paid or discharged,
before the same shall become delinquent, (1) all taxes, assessments and
governmental charges levied or imposed upon it or any Subsidiary or upon the
income, profits or property of the Company or any Subsidiary and (2) all lawful
claims for labor, materials and supplies which, if unpaid, might by law become a
lien upon the property of the Company or any Subsidiary; PROVIDED, HOWEVER, that
the Company shall not be required to pay or discharge or cause to be paid or
discharged any such tax, assessment, charge or claim whose amount, applicability
or validity is being contested in good faith by appropriate proceedings.
-61-
<PAGE>
Section 10.8 PROVISION OF FINANCIAL INFORMATION
Whether or not the Company is subject to Section 13 or 15(d) of the
Exchange Act, the Company will, within 15 days after each of the respective
dates by which the Company would have been required to file annual reports,
quarterly reports and other documents with the Commission if the Company were so
subject, (1) 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, quarterly reports and other documents which the Company would
have been required to file with the Commission pursuant to Section 13 or 15(d)
of the Exchange Act, if the Company were subject to such Sections, and (2) file
with the Trustee copies of the annual reports, quarterly reports and other
documents which the Company would have been required to file with the Commission
pursuant to Section 13 or 15(d) of the Exchange Act, if the Company were subject
to such Sections, and (3) promptly upon written request and payment of the
reasonable cost of duplication and delivery, supply copies of such documents to
any prospective Holder.
Section 10.9 STATEMENT AS TO COMPLIANCE
The Company will deliver to the Trustee, within 120 days after the end of
each fiscal year, a brief certificate from the principal executive officer,
principal financial officer or principal accounting officer as to his or her
knowledge of the Company's compliance with all conditions and covenants under
this Indenture and, in the event of any noncompliance, specifying such
noncompliance and the nature and status thereof. For purposes of this Section
10.9, such compliance shall be determined without regard to any period of grace
or requirement of notice under this Indenture.
Section 10.10 ADDITIONAL AMOUNTS
If any Securities of a series provide for the payment of Additional
Amounts, the Company will pay to the Holder of any Security of such series or
any coupon appertaining thereto Additional Amounts as may be specified as
contemplated by Section 3.1. Whenever in this Indenture there is mentioned, in
any context except in the case of Section 5.2(l), the payment of the principal
of or any premium or interest on, or in respect of, any Security of any series
or payment of any related coupon or the net proceeds received on the sale or
exchange of any Security of any series, such mention shall be deemed to include
mention of the payment of Additional Amounts provided by the terms of such
series established pursuant to Section 3.1 to the extent that, in such context,
Additional Amounts are, were or would be payable in respect thereof pursuant to
such terms and express mention of the payment of Additional Amounts (if
applicable) in any provisions hereof shall not be construed as excluding
Additional Amounts in those provisions hereof where such express mention is not
made.
Except as otherwise specified as contemplated by Section 3.1, if the
Securities of a series provide for the payment of Additional Amounts, at least
10 days prior to the first Interest Payment Date with respect to that series of
Securities (or if the Securities of that series will not bear interest prior to
Maturity, the first day on which a payment of principal and any premium is
made), and at least 10 days prior to each date of payment of principal and any
premium or interest
-62-
<PAGE>
if there has been any change with respect to the matters set forth in the
below-mentioned Officers' Certificate, the Company will furnish the Trustee and
the Company's principal Paying Agent or Paying Agents, if other than the
Trustee, with an Officers' Certificate instructing the Trustee and such Paying
Agent or Paying Agents whether such payment of principal of and any premium or
interest on the Securities of that series shall be made to Holders of Securities
of that series or any related coupons who are not United States Persons without
withholding for or on account of any tax, assessment or other governmental
charge described in the Securities of the series. If any such withholding shall
be required, then such Officers' Certificate shall specify by Country the
amount, if any, required to be withheld on such payments to such Holders of
Securities of that series or related coupons and the Company will pay to the
Trustee or such Paying Agent the Additional Amounts required by the terms of
such Securities. If the Trustee or any Paying Agent, as the case may be, shall
not so receive the above-mentioned Officers' Certificate, then the Trustee or
such Paying Agent shall be entitled (1) 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 (2) to make all payments of
principal and interest with respect to the Securities of a series or related
coupons without withholding or deductions until otherwise advised. The Company
covenants to indemnify the Trustee and any Paying Agent for, and to hold them
harmless against, any loss, liability or expense reasonably incurred without
negligence or bad faith on their part arising out of or in connection with
actions taken or omitted by any of them or in reliance on any Officers'
Certificate furnished pursuant to this Section 10.10 or in reliance on the
Company's not furnishing such an Officers' Certificate.
Section 10.11 WAIVER OF CERTAIN COVENANTS
The Company may omit in any particular instance to comply with any term,
provision or condition set forth in Sections 10.4 to 10.8, inclusive, if before
or after the time for such compliance the Holders of at least a majority in
principal amount of all outstanding Securities of such series, by act of such
Holders, either waive such compliance in such instance or generally waive
compliance with such covenant or condition, but no such waiver shall extend to
or affect such covenant or condition except to the extent so expressly waived,
and, until such waiver shall become effective, the obligations of the Company
and the duties of the Trustee in respect of any such term, provision or
condition shall remain in full force and effect.
ARTICLE XI
REDEMPTION OF SECURITIES
Section 11.1 APPLICABILITY OF ARTICLE
Securities of any series which are redeemable before their Stated
Maturity shall be redeemable in accordance with their terms and (except as
otherwise specified as contemplated by Section 3.1 for Securities of any series)
in accordance with this Article XI.
-63-
<PAGE>
Section 11.2 ELECTION TO REDEEM; NOTICE TO TRUSTEE
The election of the Company to redeem any Securities shall be evidenced
by or pursuant to a Board Resolution. In case of any redemption at the election
of the Company of less than all of the Securities of any series, the Company
shall, at least 45 days prior to the giving of the notice of redemption in
Section 11.4 (unless a shorter notice shall be satisfactory to the Trustee),
notify the Trustee of such Redemption Date and of the principal amount of
Securities of such series to be redeemed. In the case of any redemption of
Securities prior to the expiration of any restriction on such redemption
provided in the terms of such Securities or elsewhere in this Indenture, the
Company shall furnish the Trustee with an Officers' Certificate evidencing
compliance with such restriction.
Section 11.3 SELECTION BY TRUSTEE OF SECURITIES TO BE REDEEMED
If less than all the Securities of any series issued on the same day with
the same terms are to be redeemed, the particular Securities to be redeemed
shall be selected not more than 60 days prior to the Redemption Date by the
Trustee, from the Outstanding Securities of such series issued on such date with
the same terms not previously called for redemption, by such method as the
Trustee shall deem fair and appropriate and which may provide for the selection
for redemption of portions (equal to the minimum authorized denomination for
Securities of that series or any integral multiple thereof) of the principal
amount of Securities of such series of a denomination larger than the minimum
authorized denomination for Securities of that series.
The Trustee shall promptly notify the Company and the Security Registrar
(if other than itself) in writing of the Securities selected for redemption and,
in the case of any Securities selected for partial redemption, the principal
amount thereof to be redeemed.
For all purposes of this Indenture, unless the context otherwise
requires, all provisions relating to the redemption of Securities shall relate,
in the case of any Security redeemed or to be redeemed only in part, to the
portion of the principal amount of such Security which has been or is to be
redeemed.
Section 11.4 NOTICE OF REDEMPTION
Notice of redemption shall be given in the manner provided in Section
1.6, not less than 30 days nor more than 60 days prior to the Redemption Date,
unless a shorter period is specified by the terms of such series established
pursuant to Section 3.1, to each Holder of Securities to be redeemed, but
failure to give such notice in the manner herein provided to the Holder of any
Security designated for redemption as a whole or in part, or any defect in the
notice to any such Holder, shall not affect the validity of the proceedings for
the redemption of any other such Security or portion thereof.
Any notice that is mailed to the Holders of Securities in the manner
herein provided shall be conclusively presumed to have been duly given, whether
or not the Holder receives the notice.
-64-
<PAGE>
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 11.6, if any, and Additional Amounts, if any;
(3) if less than all Outstanding Securities of any series are to
be redeemed, the identification (and, in the case of partial redemption, the
principal amount) of the particular Security or Securities to be redeemed;
(4) in case any Security is to be redeemed in part only, the
notice which relates to such Security shall state that on and after the
Redemption Date, upon surrender of such Security, the holder will receive,
without a charge, a new Security or Securities or 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 11.6, if any,
will become due and payable upon each such Security, or the portion thereof to
be redeemed and, if applicable, that interest thereon shall cease to accrue on
and after said date;
(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, or for conversion;
(7) that the redemption is for a sinking fund, if such is the
case;
(8) that, unless otherwise specified in such notice, Bearer
Securities of any series, if any, surrendered for redemption must be accompanied
by all coupons maturing subsequent to the date fixed for redemption or the
amount of any such missing coupon or coupons will be deducted from the
Redemption Price, Unless security or indemnity satisfactory to the Company, the
Trustee for such series and any Paying Agent is furnished;
(9) if Bearer Securities of any series are to be redeemed and any
Securities of such series are not to be redeemed, and if such Bearer Securities
may be exchanged for Securities not subject to redemption on this Redemption
Date pursuant to Section 3.5 or otherwise, the last date, as determined by the
Company, on which such exchanges may be made;
(10) the CUSIP number of such Security, if any; and
(11) if applicable, that a Holder of Securities who desires to
convert Securities for redemption must satisfy the requirements for conversion
contained in such Securities, the then-existing conversion price or rate, the
place or places where such Securities may be surrendered for conversion, and the
date and time when the option to convert shall expire.
-65-
<PAGE>
Notice of redemption of Securities to be redeemed at the election of the
Company shall be given by the Company or, at the Company's request, by the
Trustee in the name and at the expense of the Company.
Section 11.5 DEPOSIT OF REDEMPTION PRICE
On or before any Redemption Date, the Company shall deposit with the
Trustee or with a Paying Agent (or, if the Company is acting as its own Paying
Agent which it may not do in the case of a sinking fund payment under Article
XII, segregate and hold in trust as provided in Section 10.3) an amount of money
in the currency or currencies, currency unit or units or composite currency or
currencies in which the Securities of such series are payable (except as
otherwise specified pursuant to Section 3.1 for the Securities of such series)
sufficient to pay on the Redemption Date the Redemption Price of, and (except if
the Redemption Date shall be an Interest Payment Date) accrued interest on, all
the Securities or portions thereof which are to be redeemed on that date.
If any Securities called for redemption is converted, any money deposited
with the Trustee or with any Paying Agent or so segregated and held in trust for
the redemption of such Security shall be paid to the Company upon Company
Request or, if then held by the Company, shall be discharged from such trust.
Section 11.6 SECURITIES PAYABLE ON REDEMPTION DATE
Notice of redemption having been given as aforesaid, the Securities so to
be redeemed shall, on the Redemption Date, become due and payable at the
Redemption Price therein specified in the currency or currencies, currency unit
or units or composite currency or currencies in which the Securities of such
series are payable (except as otherwise specified pursuant to Section 3.1 for
the Securities of such series) (together with accrued interest, if any, to the
Redemption Date), and from and after such date (unless the Company shall default
in the payment of the Redemption Price and accrued interest) such Securities
shall, if the same were interest-bearing, cease to bear interest and the coupons
for such interest appertaining to any Bearer Securities so to be redeemed,
except to the extent provided below, shall be void. Upon surrender of any such
Security for redemption in accordance with said notice, together with all
coupons, if any, appertaining thereto maturing after the Redemption Date, such
Security shall be paid by the Company at the Redemption Price, together with
accrued interest, if any, to the Redemption Date; PROVIDED, HOWEVER, that
installments of interest on Bearer Securities whose Stated Maturity is on or
prior to the Redemption Date shall be payable only at an office or agency
located outside the United States (except as otherwise provided in Section 10.2)
and, unless otherwise specified as contemplated by Section 3.1, only upon
presentation and surrender of coupons for such interest; and PROVIDED FURTHER
that, except as otherwise provided with respect to Securities convertible into
Common Stock or Preferred Stock, installments of interest on Securities whose
Stated Maturity is on or prior to the Redemption Date shall be payable to the
Holders of such Securities, or one or more Predecessor Securities, registered as
such at the close of business on the relevant record dates according to their
terms and the provisions of Section 3.7.
-66-
<PAGE>
If any Bearer Security surrendered for redemption shall not be
accompanied by all appurtenant coupons maturing after the Redemption Date, such
Security may be paid after deducting from the Redemption Price an amount equal
to the face amount of all such missing coupons, or the surrender of such missing
coupon or coupons may be waived by the Company and the Trustee if there be
furnished to them such security or indemnity as they may require to save each of
them and any Paying Agent harmless. If thereafter the Holder of such Security
shall surrender to the Trustee or any Paying Agent any such missing coupon in
respect of which deduction shall have been made from the Redemption Price, such
Holder shall be entitled to receive the amount so deducted; PROVIDED, HOWEVER,
that interest represented by coupons shall be payable only at an office or
agency located outside the United States (except as otherwise provided in
Section 10.2) and, unless otherwise specified as contemplated by Section 3.1,
only upon presentation and surrender of those coupons.
If any Security called for redemption shall not be so paid upon surrender
thereof for redemption, the principal (and premium, if any) shall, until paid,
bear interest from the Redemption Date at the rate borne by the Security.
Section 11.7 SECURITIES REDEEMED IN PART
Any Registered Security which is to be redeemed only in part (pursuant to
the provisions of this Article XI or of Article XII) shall be surrendered at a
Place of Payment therefor (with, if the Company or the Trustee so requires, due
endorsement by, or a written instrument of transfer in form satisfactory to the
Company and the Trustee duly executed by, the Holder thereof or his or her
attorney duly authorized in writing) and the Company shall execute and the
Trustee shall authenticate and deliver to the Holder of such Security without
service charge a new Security or Securities of the same series of any authorized
denomination as requested by such Holder in aggregate principal amount equal to
and in exchange for the unredeemed portion of the principal of the Security so
surrendered. If a Global Security is so surrendered, the Company shall execute
and the Trustee shall authenticate and deliver to the depositary, without
service charge, a new Global Security in a denomination equal to and in exchange
for the unredeemed portion of the principal of the Global Security so
surrendered.
ARTICLE XII
SINKING FUNDS
Section 12.1 APPLICABILITY OF ARTICLE
The provisions of this Article Twelve shall be applicable to any sinking
fund for the retirement of Securities of a series except as otherwise specified
as contemplated by Section 3.1 for Securities of such series.
The minimum amount of any sinking fund payment provided for by the terms
of Securities of any series is herein referred to as a "mandatory sinking fund
payment," and any payment in excess of such minimum amount provided for by the
terms of such Securities of any series is
-67-
<PAGE>
herein referred to as an "optional sinking fund payment." If provided for by the
terms of any Securities of any series, the cash amount of any mandatory sinking
fund payment may be subject to reduction as provided in Section 12.2. Each
sinking fund payment shall be applied to the redemption of Securities of any
series as provided for by the terms of Securities of such series.
Section 12.2 SATISFACTION OF SINKING FUND PAYMENTS WITH SECURITIES
The Company may, in satisfaction of all or any part of any mandatory
sinking fund payment with respect to the Securities of a series, (1) deliver
Outstanding Securities of such series (other than any previously called for
redemption) together, in the case of any Bearer Securities of such series, with
all unmatured coupons appertaining thereto and (2) apply as a credit Securities
of such series which have been redeemed either at the election of the Company
pursuant to the terms of such Securities or through the application of permitted
optional sinking fund payments pursuant to the terms of such Securities, as
provided for by the terms of such Securities, or which have otherwise been
acquired by the Company; PROVIDED, HOWEVER, that such Securities so delivered or
applied as a credit have not been previously so credited. Such Securities shall
be received and credited for such purpose by the Trustee at the applicable
Redemption Price specified in such Securities for redemption through operation
of the sinking fund and the amount of such mandatory sinking fund payment shall
be reduced accordingly.
Section 12.3 REDEMPTION OF SECURITIES FOR SINKING FUND
Not less than 60 days prior to each sinking fund payment date for
Securities of any series, the Company will deliver to the Trustee an Officers'
Certificate specifying the amount of the next ensuing mandatory sinking fund
payment for that series pursuant to the terms of that series, the portion
thereof, if any, which is to be satisfied by payment of cash in the currency or
currencies, currency unit or units or composite currency or currencies in which
the Securities of such series are payable (except as otherwise specified
pursuant to Section 3.1 for the Securities of such series) and the portion
thereof, if any, which is to be satisfied by delivering and crediting Securities
of that series pursuant to Section 12.2, and the optional amount, if any, to be
added in cash to the next ensuing mandatory sinking fund payment, and will also
deliver to the Trustee any Securities to be so delivered and credited. If such
Officers' Certificate shall specify an optional amount to be added in cash to
the next ensuing mandatory sinking fund payment, the Company shall thereupon be
obligated to pay the amount therein specified. Not less than 30 days before
each such sinking fund payment date the Trustee shall select the Securities to
be redeemed upon such sinking fund payment date in the manner specified in
Section 11.3 and cause notice of the redemption thereof to be given in the name
of and at the expense of the Company in the manner provided in Section 11.4.
Such notice having been duly given, the redemption of such Securities shall be
made upon the terms and in the manner stated in Sections 11.6 and 11.7.
-68-
<PAGE>
ARTICLE XIII
REPAYMENT AT THE OPTION OF HOLDERS
Section 13.1 APPLICABILITY OF ARTICLE
Repayment of Securities of any series before their Stated Maturity at the
option of Holders thereof shall be made in accordance with the terms of such
Securities, if any, and (except as otherwise specified by the terms of such
series established pursuant to Section 3.1) in accordance with this Article
XIII.
Section 13.2 REPAYMENT OF SECURITIES
Securities of any series subject to repayment in whole or in part at the
option of the Holders thereof will, unless otherwise provided in the terms of
such Securities, be repaid at a price equal to the principal amount thereof,
together with interest, if any, thereon accrued to the Repayment Date specified
in or pursuant to the terms of such Securities. The Company covenants that on
or prior to the Repayment Date it will deposit with the Trustee or with a Paying
Agent (or if the Company is acting as its own Paying Agent, segregate and hold
in trust as provided in Section 10.3) an amount of money in the currency or
currencies, currency unit or units or composite currency or currencies in which
the Securities of such series are payable (except as otherwise specified
pursuant to Section 3.1 for the Securities of such series) sufficient to pay 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 13.3 EXERCISE OF OPTION
Securities of any series subject to repayment at the option of the
Holders thereof will contain an "Option to Elect Repayment" form on the reverse
of such Securities. In order for any Security to be repaid at the option of the
Holder, the Trustee must receive at the Place of Payment therefor specified in
the terms of such Security (or at such other place or places of which the
Company shall from time to time notify the Holders of such Securities) not
earlier than 60 days nor later than 30 days prior to the Repayment Date (1) the
Security so providing for such repayment together with the "Option to Elect
Repayment" form on the reverse thereof duly completed by the Holder (or by the
Holder's attorney duly authorized in writing) or (2) a telegram, telex,
facsimile transmission or letter from a member of a national securities
exchange, or the National Association of Securities Dealers, Inc., or a
commercial bank or trust company in the United States setting forth the name of
the Holder of the Security, the principal amount of the Security, the principal
amount of the Security to be repaid, the CUSIP number, if any, or a description
of the tenor and terms of the Security, a statement that the option to elect
repayment is being exercised thereby and a guarantee that the Security to be
repaid, together with the duly completed form entitled "Option to Elect
Repayment" 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
-69-
<PAGE>
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 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 or the repayment option by the Holder shall be
irrevocable unless waived by the Company.
Section 13.4 WHEN SECURITIES PRESENTED FOR REPAYMENT BECOME DUE AND PAYABLE
If Securities of any series providing for repayment at the option of the
Holders thereof shall have been surrendered as provided in this Article XIII and
as provided by or pursuant to the terms of such Securities, such Securities or
the portions thereof, as the case may be, to be repaid shall become due and
payable and shall be paid by the Company on the Repayment Date therein
specified, and on and after such Repayment Date (unless the Company shall
default in the payment of such Securities on such Repayment Date) such
Securities shall, if the same were interest-bearing, cease to bear interest and
the coupons for such interest appertaining to any Bearer Securities so to be
repaid, except to the extent provided below, shall be void. Upon surrender of
any such Security for repayment in accordance with such provisions, together
with all coupons, if any, appertaining thereto maturing after the Repayment
Date, the principal amount of such Security so to be repaid shall be paid by the
Company, together with accrued interest, if any, to the Repayment Date;
PROVIDED, HOWEVER, that coupons whose Stated Maturity is on or prior to the
Repayment Date shall be payable only at an office or agency located outside the
United States (except as otherwise provided in Section 10.2) and, unless
otherwise specified pursuant to Section 3.1, only upon presentation and
surrender of such coupons; and PROVIDED FURTHER that, in the case of Securities,
installments of interest, if any, whose Stated Maturity is on or prior to the
Repayment Date shall be payable (but without interest thereon, unless the
Company shall default in the payment thereof) to the Holders of such Securities,
or one or more Predecessor Securities, registered as such at the close of
business on the relevant record dates according to their terms and the
provisions of Section 3.7.
If any Bearer Security surrendered for repayment shall not be accompanied
by all appurtenant coupons maturing after the Repayment Date, such Security may
be paid after deducting from the amount payable therefor as provided in Section
13.2 an amount equal to the face amount of all such missing coupons, or the
surrender of such missing coupon or coupons may be waived by the Company and the
Trustee if there be furnished to them such security or indemnity as they may
require to save each of them and any Paying Agent harmless. If thereafter the
Holder of such Security shall surrender to the Trustee or any Paying Agent any
such missing
-70-
<PAGE>
coupon in respect of which a deduction shall have been made as provided in the
preceding sentence, such Holder shall be entitled to receive the amount so
deducted; PROVIDED, HOWEVER, that interest represented by coupons shall be
payable only at an office or agency located outside the United States (except as
otherwise provided in Section 10.2) and, unless otherwise specified as
contemplated by Section 3.1, only upon presentation and surrender of those
coupons.
If the principal amount of any Security surrendered for repayment shall
not be so repaid upon surrender thereof, such principal amount (together with
interest, if any, thereon accrued to such Repayment Date) shall, until paid,
bear interest from the Repayment Date at the rate of interest or Yield to
Maturity (in the case of Original Issue Discount Securities) set forth in such
Security.
Section 13.5 SECURITIES REPAID IN PART
Upon surrender of any Registered Security which is to be repaid in part
only, the Company shall execute and the Trustee shall authenticate and deliver
to the Holder of such Security, without service charge and at the expense of the
Company, a new Registered Security or Securities of the same series, of any
authorized denomination specified by the Holder, in an aggregate principal
amount equal to and in exchange for the portion of the principal of such
Security so surrendered which is not to be repaid.
ARTICLE XIV
DEFEASANCE AND COVENANT DEFEASANCE
Section 14.1 APPLICABILITY OF ARTICLE; COMPANY'S OPTION TO EFFECT DEFEASANCE OR
COVENANT DEFEASANCE
If, pursuant to Section 3.1, provision is made for either or both of
(1) defeasance of the Securities of or within a series under Section 14.2 or
(2) covenant defeasance of the Securities of or within a series under Section
14.3, then the provisions of such Section or Sections, as the case may be,
together with the other provisions of this Article XIV (with such modifications
thereto as may be specified pursuant to Section 3.1 with respect to any
Securities), shall be applicable to such Securities and any coupons appertaining
thereto, and the Company may at its option by Board Resolution, at any time,
with respect to such Securities and any coupons appertaining thereto, elect to
have Section 14.2 (if applicable) or Section 14.3 (if applicable) be applied to
such Outstanding Securities and any coupons appertaining thereto upon compliance
with the conditions set forth below in this Article XIV.
Section 14.2 DEFEASANCE AND DISCHARGE
Upon the Company's exercise of the above option applicable to this
Section 14.2 with respect to any Securities of or within a series, the Company
shall be deemed to have been discharged from its obligations with respect to
such Outstanding Securities and any coupons
-71-
<PAGE>
appertaining thereto on the date the conditions set forth in Section 14.4 are
satisfied (hereinafter, "defeasance"). For this purpose, such defeasance means
that the Company shall be deemed to have paid and discharged the entire
indebtedness represented by such Outstanding Securities and any coupons
appertaining thereto, which shall thereafter be deemed to be "Outstanding" only
for the purposes of Section 14.5 and the other Sections of this Indenture
referred to in clauses (1) and (2) below, and to have satisfied all of its other
obligations under such Securities and any coupons appertaining thereto and this
Indenture insofar as such Securities and any coupons appertaining thereto are
concerned (and the Trustee, at the expense of the Company, shall execute proper
instruments acknowledging the same), except for the following which shall
survive until otherwise terminated or discharged hereunder: (1) the rights of
Holders of such Outstanding Securities and any coupons appertaining thereto to
receive, solely from the trust fund described in Section 14.4 and as more fully
set forth in such Section, payments in respect of the principal of (and premium,
if any) and interest, if any, on such Securities and any coupons appertaining
thereto when such payments are due, (2) the Company's obligations with respect
to such Securities under Sections 3.5, 3.6, 10.2 and 10.3 and with respect to
the payment of Additional Amounts, if any, on such Securities as contemplated by
Section 10.10, (3) the rights, powers, trusts, duties and immunities of the
Trustee hereunder, and (4) this Article XIV. Subject to compliance with this
Article XIV, the Company may exercise its option under this Section 14.2
notwithstanding the prior exercise of its option under Section 14.3 with respect
to such Securities and any coupons appertaining thereto.
Section 14.3 COVENANT DEFEASANCE
Upon the Company's exercise of the above option applicable to this
Section with respect to any Securities of or within a series, the Company shall
be released from its obligations under Sections 10.4 to 10.8, inclusive and, if
specified pursuant to Section 3.1, its obligations under any other covenant,
with respect to such Outstanding Securities and any coupons appertaining thereto
on and after the date the conditions set forth in Section 14.4 are satisfied
(hereinafter, "covenant defeasance"), and such Securities and any coupons
appertaining thereto shall thereafter be deemed to be not "Outstanding" for the
purposes of any direction, waiver, consent or declaration or Act of Holders (and
the consequences of any thereof) in connection with Sections 10.4 to 10.8,
inclusive, or such other covenant, but shall continue to be deemed "Outstanding"
for all other purposes hereunder. For this purpose, such covenant defeasance
means that, with respect to such Outstanding Securities and any coupons
appertaining thereto, the Company may omit to comply with and shall have no
liability in respect of any term, condition or limitation set forth in any such
Section or such other covenant, whether directly or indirectly, by reason of any
reference elsewhere herein to any such Section or such other covenant or by
reason of reference in any such Section or such other covenant to any other
provision herein or in any other document, and such omission to comply shall not
constitute a default or an Event of Default under Section 501(4) or 501(8) or
otherwise, as the case may be, but, except as specified above, the remainder of
this Indenture and such Securities and any coupons appertaining thereto shall be
unaffected thereby.
-72-
<PAGE>
Section 14.4 CONDITIONS TO DEFEASANCE OR COVENANT DEFEASANCE
The following shall be the conditions to application of Section 14.2 or
Section 14.3 to any Outstanding Securities of or within a series and any coupons
appertaining thereto:
(1) The Company shall irrevocably have deposited or caused to be
deposited with the Trustee (or another Trustee satisfying the requirements of
Section 6.7 who shall agree to comply with the provisions of this Article XIV
applicable to it) as trust funds in trust for the purpose of making the
following payments, specifically pledged as security for, and dedicated solely
to, the benefit of the Holders of such Securities and any coupons appertaining
thereto, (A) 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 (B) Government Obligations applicable to such
Securities and coupons appertaining thereto (determined on the basis of the
currency, currencies or currency unit in which such Securities and coupons
appertaining thereto are then specified as payable at Stated Maturity) which
through the scheduled payment of principal and interest in respect thereof in
accordance with their terms will provide, not later than one day before the due
date of any payment of principal of (and premium, if any) and interest, if any,
on such Securities and any coupons appertaining thereto, or (C) a combination
thereof, in any case, in an amount sufficient, without consideration of any
reinvestment of such principal and interest, in the opinion of a nationally
recognized firm of independent public accountants expressed in a written
certification thereof delivered to the Trustee, to pay and discharge, and which
shall be applied by the Trustee (or other qualifying Trustee) to pay and
discharge, (i) the principal of (and premium, 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.
(2) Such defeasance or covenant defeasance shall not result in a
breach or violation of, or constitute a default under, this Indenture or any
other material agreement or instrument to which the Company is a party or by
which it is bound.
(3) No Event of Default or event which with notice or lapse of
time or both would become an Event of Default with respect to such Securities
and any coupons appertaining thereto shall have occurred and be continuing on
the date of such deposit or, insofar as Sections 5.1(6) and 5.1(7) are
concerned, at any time during the period ending on the 91st day after the date
of such deposit (it being understood that this condition shall not be deemed
satisfied until the expiration of such period).
(4) In the case of an election under Section 14.2, the Company
shall have delivered to the Trustee an opinion of Counsel stating that (A) the
Company has received from, or there has been published by, the Internal Revenue
Service a ruling or (B) 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
-73-
<PAGE>
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.
(5) In the case of an election under Section 14.3, the Company
shall have delivered to the Trustee an Opinion of Counsel to the effect that the
Holders of such Outstanding Securities and any coupons appertaining thereto will
not recognize income, gain or loss for federal income tax purposes as a result
of such covenant defeasance and will be subject to federal income tax on the
same amounts, in the same manner and at the same times as would have been the
case if such covenant defeasance had not occurred.
(6) The Company shall have delivered to the Trustee an Officers'
Certificate and an Opinion of Counsel, each stating that all conditions
precedent to the defeasance under Section 14.2 or the covenant defeasance under
Section 14.3 (as the case may be) I have been complied with and an Opinion of
Counsel to the effect that either (A) as a result of a deposit pursuant to
clause (1) above and the related exercise of the Company's option under Section
14.2 or 14.3 (as the case may be), registration is not required under the
Investment Company Act of 1940, as amended, by the Company, with respect to the
trust funds representing such deposit or by the Trustee for such trust funds or
(B) all necessary registrations under said act have been effected.
(7) Notwithstanding any other provisions of this Section 14.4,
such defeasance or covenant defeasance shall be effected in compliance with any
additional or substitute terms, conditions or limitations which may be imposed
on the Company in connection therewith pursuant to Section 3.1.
Section 14.5 DEPOSITED MONEY AND GOVERNMENT OBLIGATIONS TO BE HELD IN TRUST;
OTHER MISCELLANEOUS PROVISIONS
Subject to the provisions of the last paragraph of Section 10.3, all
money and Government Obligations (or other property as may be provided pursuant
to Section 3.1) (including the proceeds thereof) deposited with the Trustee (or
other qualifying Trustee, collectively for purposes of this Section 14.5, the
"Trustee") pursuant to Section 14.4 in respect of any Outstanding Securities of
any series and any coupons appertaining thereto shall be held in trust and
applied by the Trustee, in accordance with the provisions of such Securities and
any coupons appertaining thereto and this Indenture, to the payment, either
directly or through any Paying Agent (including the Company acting as its own
Paying Agent) as the Trustee may determine, to the Holders of such Securities
and any coupons appertaining thereto of all sums due and to become due thereon
in respect of principal (and premium, 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 3.1, if, after a deposit referred to in Section 14.4(l) has been made,
(1) the Holder of a Security in respect of which such deposit was made is
entitled to, and does, elect pursuant to Section 3.1 or the terms of
-74-
<PAGE>
such Security to receive payment in a currency or currency unit other than that
in which the deposit pursuant to Section 14.4(l) has been made in respect of
such Security or (2) a Conversion Event occurs in respect of the currency or
currency unit in which the deposit pursuant to Section 14.4(l) 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, if any), and
interest, if any, on such Security as the same becomes due out of the proceeds
yielded by converting (from time to time as specified below in the case of any
such election) the amount or other property deposited in respect of such
Security into the currency or currency unit in which such Security becomes
payable as a result of such election or Conversion Event based on the applicable
market exchange rate for such currency or currency unit in effect on the second
Business Day prior to each payment date, except, with respect to a Conversion
Event, for such currency or currency unit in effect (as nearly as feasible) at
the time of the Conversion Event.
The Company shall pay and indemnify the Trustee against any tax, fee or
other charge imposed on or assessed against the Government Obligations deposited
pursuant to Section 14.4 or the principal and interest received in respect
thereof other than any such tax, fee or other charge which by-law is for the
account of the Holders of such Outstanding Securities and any coupons
appertaining thereto.
Anything in this Article XIV to the contrary notwithstanding, subject to
Section 6.6, the Trustee shall deliver or pay to the Company from time to time
upon Company Request any money or Government Obligations (or other property and
any proceeds therefrom) held by it as provided in Section 14.4 which, in the
opinion of a nationally recognized firm of independent public accountants
expressed in a written certification thereof delivered to the Trustee, are in
excess of the amount thereof which would then be required to be deposited to
effect a defeasance or covenant defeasance, as applicable, in accordance with
this Article XIV.
ARTICLE XV
MEETINGS OF HOLDERS OF SECURITIES
Section 15.1 PURPOSES FOR WHICH MEETINGS MAY BE CALLED
A meeting of Holders of Securities of any series may be called at any
time and from time to time pursuant to this Article XV to make, give or take any
request, demand, authorization, direction, notice, consent, waiver or other
action provided by this Indenture to be made, given or taken by Holders of
Securities of such Series.
Section 15.2 CALL, NOTICE AND PLACE OF MEETINGS
(1) The Trustee may at any time call a meeting of Holders of
Securities of any series for any purpose specified in Section 15.1, to be held
at such time and at such place 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
-75-
<PAGE>
at such meeting, shall be given, in the manner provided in Section 1.6, not less
than 20 nor more than 180 days prior to the date fixed for the meeting.
(2) In case at any time the Company, pursuant to a Board
Resolution, or the Holders of at least [10]% in principal amount of the
Outstanding Securities of any series shall have requested the Trustee to call a
meeting of the Holders of Securities of such series for any purpose specified in
Section 15.1, by written request setting forth in reasonable detail the action
proposed to be taken at the meeting, and the Trustee shall not have made the
first publication of the notice of such meeting within 20 days after receipt of
such request or shall not thereafter proceed to cause the meeting to be held as
provided herein, then the Company or the Holders of Securities of such series in
the amount above specified, as the case may be, may determine the time and the
place for such meeting and may call such meeting for such purposes by giving
notice thereof as provided in clause (1) of this Section 15.2.
Section 15.3 PERSONS ENTITLED TO VOTE AT MEETINGS
To be entitled to vote at any meeting of Holders of Securities of any
series, a Person shall be (1) a Holder of one or more Outstanding Securities of
such series or (2) a Person appointed by an instrument in writing as proxy for a
Holder or Holders of one or more Outstanding Securities of such series by such
Holder or Holders. The only Persons who shall be entitled to be present or to
speak at any meeting of Holders of Securities of any series shall be the Persons
entitled to vote at such meeting and their counsel, any representatives of the
Trustee and its Counsel and any representatives of the Company and its counsel.
Section 15.4 QUORUM; ACTION
The Persons entitled to vote a majority in principal amount of the
Outstanding Securities of a series shall constitute a quorum for a meeting of
Holders of Securities of such series; PROVIDED, HOWEVER, that if any action is
to be taken at such meeting with respect to a consent or waiver which this
Indenture expressly provides may be given by the Holders of not less than a
specified percentage in principal amount of the Outstanding Securities of a
series, the Persons entitled to vote such specified percentage in principal
amount of the Outstanding Securities of such series shall constitute a quorum.
In the absence of a quorum within 30 minutes after the time appointed for any
such meeting, the meeting shall, if convened at the request of Holders of
Securities of such series, be dissolved. In any other case the meeting may be
adjourned for a period of not less than 10 days as determined by the chairman of
the meeting prior to the adjournment of such meeting. In the absence of a
quorum at the reconvening of any such adjourned meeting, such adjourned meeting
may be further adjourned for a period of not less than 10 days; at the
reconvening of any meeting adjourned or further adjourned for lack of a quorum,
the persons entitled to vote [25% in aggregate principal amount of the then
Outstanding Securities shall constitute a quorum for the taking of any action
set forth in the notice of the original meeting. Notice of the reconvening of
any adjourned meeting shall be given as provided in Section 15.2(2), 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.
-76-
<PAGE>
Except as limited by the proviso to Section 9.2, any resolution presented
to a meeting or adjourned meeting duly reconvened at which a quorum is present
as aforesaid may be adopted by the affirmative vote of the 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 9.2, any resolution
with respect to any request, demand, authorization, direction, notice, consent,
waiver or other action which this Indenture expressly provides may be made,
given or taken by the Holders of a specified percentage, which is less than a
majority, in principal amount of the Outstanding Securities of a series may be
adopted at a meeting or an adjourned meeting duly reconvened and at which a
quorum is present as aforesaid by the affirmative vote of the Holders of such
specified percentage in principal amount of the Outstanding Securities of that
series.
Any resolution passed or decision taken at any meeting of Holders of
Securities of any series duly held in accordance with this Section 15.4 shall be
binding on all the Holders of Securities of such series and the related coupons,
whether or not present or represented at the meeting.
Notwithstanding the foregoing provisions of this Section 15.4, if any
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:
(1) there shall be no minimum quorum requirement for such
meeting and
(2) the principal amount of the Outstanding Securities of such
series that vote in favor of such request, demand, authorization, direction,
notice, consent, waiver or other action shall be taken into account in
determining whether such request, demand, authorization, direction, notice,
consent, waiver or other action has been made, given or taken under this
Indenture.
Section 15.5 DETERMINATION OF VOTING RIGHTS, CONDUCT AND ADJOURNMENT 0F
MEETINGS
(1) 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 inspector of elections, the submission and
examination of proxies, certificates and other evidence of the right to vote,
and such other matters concerning the conduct of the meeting as it shall deem
appropriate. Except as otherwise permitted or required by any such regulations,
the holding of Securities shall be proved in the manner specified in Section 1.4
and the appointment of any proxy shall be proved in the manner specified in
Section 1.4 or by having the signature of the Person executing the proxy
witnessed or guaranteed by any trust company, bank or banker authorized by
Section 1.4 to certify to the holding of Bearer Securities. Such regulations
may provide that written instruments appointing
-77-
<PAGE>
proxies, regular on their face, may be presumed valid and genuine without the
proof specified in Section 1.4 or other proof.
(2) The Trustee shall, by an instrument in writing appoint a
temporary chairman of the meeting, unless the meeting shall have been called by
the Company or by Holders of Securities as provided in Section 15.2(2), in which
case the Company or the Holders of Securities of the series calling the meeting,
as the case may be, shall in like manner appoint a temporary chairman. A
permanent chairman and a permanent secretary of the meeting shall be elected by
vote of the Persons entitled to vote a majority in principal amount of the
Outstanding Securities of such series represented at the meeting.
(3) 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.
(4) Any meeting of Holders of Securities of any series duly
called pursuant to Section 15.2 at which a quorum is present may be adjourned
from time to time by Persons entitled to vote a majority in principal amount of
the Outstanding Securities of such series represented at the meeting, and the
meeting may be held as so adjourned without further notice.
Section 15.6 COUNTING VOTES AND RECORDING ACTION OF MEETINGS
The vote upon any resolution submitted to any meeting of Holders of
Securities of any series shall be by written ballots on which shall be
subscribed the signatures of the Holders of Securities of such series or of
their representatives by proxy and the principal amounts and serial numbers of
the Outstanding Securities of such series held or represented by them. The
permanent chairman of the meeting shall appoint two inspectors of votes who
shall count all votes cast at the meeting for or against any resolution and who
shall make and file with the secretary of the meeting their verified written
reports in duplicate of all votes cast at the meeting. A record, at least in
duplicate, of the proceedings of each meeting of Holders of Securities of any
series shall be prepared by the secretary of the meeting and there shall be
attached to said record the original reports of the inspectors of votes on any
vote by ballot taken thereat and affidavits by one or more persons having
knowledge of the fact, setting forth a copy of the notice of the meeting and
showing that said notice was given as provided in Section 15.2 and, if
applicable, Section 15.4. Each copy shall be signed and verified by the
affidavits of the permanent chairman and secretary of the meeting and one such
copy shall be delivered to the Company and another to the Trustee to be
preserved by the Trustee, the latter to have attached thereto the ballots voted
at the meeting. Any record so signed and verified shall be conclusive evidence
of the matters therein stated.
-78-
<PAGE>
SIGNATURES AND SEALS
IN WITNESS WHEREOF, the parties hereto have caused this Indenture to be
duly executed all as of the day and year first above written.
COMMERCIAL NET LEASE REALTY, INC.,
INC.
By: __________________________________
[SEAL] Title:
Attest:
____________________________________
Title:
[Name of Trustee], as Trustee
By: __________________________________
[SEAL] Title:
Attest:
____________________________________
Title:
-79-
<PAGE>
STATE OF )
) ss.
COUNTY OF __________________)
On this ____ day of ____________________, 19__, before me, the
undersigned, a Notary Public in and for the State of , duly
commissioned and sworn, personally appeared ______________________________ and
______________________________, to me known to be the persons who signed as
______________________________ and ______________________________, respectively,
of COMMERCIAL NET LEASE REALTY, INC., the corporation that executed the within
and foregoing instrument, and acknowledged said instrument to be the free and
voluntary act and deed of said corporation for the uses and purposes therein
mentioned, and on oath stated that they were duly elected, qualified and acting
as said officers of the corporation, that they were authorized to execute said
instrument and that the seal affixed, if any, is the corporate seal of said
corporation.
IN WITNESS WHEREOF I have hereunto set my hand and official seal the day
and year first above written.
_______________________________________
(Signature of Notary)
_______________________________________
(Print or stamp name of Notary)
NOTARY PUBLIC in and for the State of
, residing at _______________.
My Appointment Expires: _______________.
STATE OF ___________________)
) ss.
COUNTY OF __________________)
On this ____ day of ____________________, 19__, before me, the undersigned,
a Notary Public in and for the State of , duly commissioned and sworn,
personally appeared ______________________________ and
______________________________, to me known to be the persons who signed as
______________________________ and ______________________________, respectively,
of ______________________________, the corporation that executed the within and
foregoing instrument, and acknowledged said instrument to be the free and
voluntary act and deed of said corporation for the uses and purposes therein
mentioned, and on oath stated that they were duly elected, qualified and acting
as said officers of the corporation, that they were authorized to execute said
instrument and that the seal affixed, if any, is the corporate seal of said
corporation.
IN WITNESS WHEREOF I have hereunto set my hand and official seal the day
and year first above written.
-80-
<PAGE>
_______________________________________
(Signature of Notary)
_______________________________________
(Print or stamp name of Notary)
NOTARY PUBLIC in and for the State of
, residing at _______________.
My Appointment Expires: _ _____________.
-81-
<PAGE>
EXHIBIT A
FORM OF REDEEMABLE OR NONREDEEMABLE SECURITY
[FACE OF SECURITY]
[If the Holder of this Security (as indicated below it) is The Depository Trust
Company ("DTC") or a nominee of DTC, this Security is a Global Security and the
following two legends apply;
UNLESS THIS SECURITY IS PRESENTED BY AN AUTHORIZED REPRESENTATIVE OF THE
DEPOSITORY TRUST COMPANY ("DTC"), 55 WATER STREET, NEW YORK, NEW YORK TO THE
ISSUER OR ITS AGENT FOR REGISTRATION OF TRANSFER, EXCHANGE OR PAYMENT, AND SUCH
SECURITY ISSUED IS REGISTERED IN THE NAME OF CEDE & CO., OR SUCH OTHER NAME AS
REQUESTED BY AN AUTHORIZED REPRESENTATIVE OF DTC, ANY TRANSFER, PLEDGE OR OTHER
USE HEREOF FOR VALUE OR OTHERWISE BY OR TO ANY PERSON IS WRONGFUL, SINCE THE
REGISTERED OWNER HEREOF, CEDE & CO., HAS AN INTEREST HEREIN.
UNLESS AND UNTIL THIS SECURITY IS EXCHANGED IN WHOLE OR IN PART FOR SECURITIES
IN CERTIFICATED FORM, THIS SECURITY MAY NOT BE TRANSFERRED EXCEPT AS A WHOLE BY
DTC TO A NOMINEE THEREOF OR BY AS NOMINEE THEREOF TO DTC OR ANOTHER NOMINEE OF
DTC OR BY DTC OR ANY SUCH NOMINEE TO A SUCCESSOR OF DTC OR A NOMINEE OF SUCH
SUCCESSOR.]
[IF THIS SECURITY IS AN ORIGINAL ISSUE DISCOUNT SECURITY, INSERT - FOR PURPOSES
OF SECTIONS 1273 AND 1275 OF THE UNITED STATES INTERNAL REVENUE CODE, THE AMOUNT
OF ORIGINAL ISSUE DISCOUNT ON THIS SECURITY IS ___% OF ITS PRINCIPAL AMOUNT, THE
ISSUE DATE IS ______________________, 19__ [AND] THE YIELD TO MATURITY IS ____%.
[THE METHOD USED TO DETERMINE THE AMOUNT OF ORIGINAL ISSUE DISCOUNT APPLICABLE
TO THE SHORT ACCRUAL PERIOD OF _________________, 19__ TO ________________,
19__, IS ____% OF THE PRINCIPAL AMOUNT OF THIS SECURITY.]
COMMERCIAL NET LEASE REALTY, INC.
[Designation of Series]
No. ______ $_____
COMMERCIAL NET LEASE REALTY, INC., a Delaware corporation (herein referred to as
the "Company," which term includes any successor corporations under the
Indenture referred to on the reverse hereof), for value received, hereby
promises to pay to _________________________ or registered assigns the principal
sum of ______________ Dollars on ____________________
A-1
<PAGE>
(the "Stated Maturity Date") [OR INSERT DATE FIXED FOR EARLIER REDEMPTION (the
"Redemption Date") and, together with the Stated Maturity Date with respect to
principal repayable on such date, the "Maturity Date")].
[IF THE SECURITY IS TO BEAR INTEREST PRIOR TO MATURITY, INSERT - and to pay
interest thereon from __________________ or from the most recent interest
payment date to which interest has been paid or duly provided for, semi-annually
on _____________ and ______________ in each year (each, an "Interest Payment
Date"), commencing _____________, at the rate of ____% per annum, until the
principal hereof is paid or duly provided for. The interest so payable, and
punctually paid or duly provided for, on any Interest Payment Date will, as
provided in such Indenture, be paid to the Holder in whose name this Security
(or one or more Predecessor Securities) is registered at the close of business
on the Regular Record Date for such interest, which shall be the _______________
or ______________ (whether or not a Business Day, as defined below), as the case
may be, next preceding such Interest Payment Date [at the office or agency of
the Company maintained for such purpose; PROVIDED, HOWEVER, that such interest
may be paid, at the Company's option, by mailing a check to such Holder at his
registered address or by transfer of funds to an account maintained by such
Holder within the United States]. Any such interest not so punctually paid or
duly provided for shall forthwith cease to be payable to the Holder on such
Regular Record Date, and may be paid to the Holder in whose name this Security
(or one or more Predecessor Securities) is registered at the close of business
on a Special Record Date for the payment of such Defaulted Interest to be fixed
by the Trustee, notice whereof shall be given to Holders of Securities of this
series not less than 10 days prior to such Special Record Date, or may be paid
at any time in any other lawful manner not inconsistent with the requirements of
any securities exchange on which the Securities of this series may be listed,
and upon such notice as may be required by such exchange, all as more fully
provided in the Indenture. Interest will be computed on the basis of a 360-day
year of twelve 30-day months.]
[IF THE SECURITY IS NOT TO BEAR INTEREST PRIOR TO MATURITY, INSERT - The
principal of this Security shall not bear interest except in the case of a
default in payment of principal upon acceleration, upon redemption or at the
[Stated] Maturity Date and in such case the overdue principal of this Security
shall bear interest at the rate of ____% per annum (to the extent that the
payment such interest shall be legally enforceable), which shall accrue from the
date of such default in payment to the date payment of such principal has been
made or duly provided for. Interest on any overdue principal shall be payable
on demand. Any such interest on any overdue principal that is not so paid on
demand shall bear interest at the rate of ____% per annum (to the extent that
the payment of such interest shall be legally enforceable), which shall accrue
from the date of such demand for payment to the date payment of such interest
has been made or duly provided for, and such interest shall also be payable on
demand.]
The principal of this Security payable on the [Stated] Maturity Date [or the
principal of, premium, if any, and, if the Redemption Date is not an Interest
Payment Date, interest on this Security payable on the Redemption Date] will be
paid against presentation of this Security at the office or agency of the
Company maintained for that purpose in ________________, in such coin or
A-2
<PAGE>
currency of the United States as at the time of payment is legal tender for the
payment of public and private debts.
Interest payable on this Security on any Interest Payment Date and on the
[Stated] Maturity Date [or Redemption Date, as the case may be,] will include
interest accrued from and including the next preceding Interest Payment Date in
respect of which interest has been paid or duly provided for (or from and
including __________________, if no interest has been paid on this Security) to
but excluding such Interest Payment Date or the [Stated] Maturity Date [or
Redemption Date, as the case may be]. If any Interest Payment Date or the
[Stated] Maturity Date [or Redemption Date] falls on a day that is not a
Business Day, principal, premium if any, and/or interest payable with respect to
such Interest Payment Date or [Stated] Maturity Date [or Redemption Date, as the
case may be,] will be paid on the next succeeding Business Day with the same
force and effect as if it were paid on the date such payment was due, and no
interest shall accrue on the amount so payable for the period from and after
such Interest Payment Date or [Stated] Maturity Date [or Redemption Date, as the
case may be]. "Business Day" means any day, other than a Saturday or Sunday, on
which banks in New York are not required or authorized by law or executive order
to close.
[IF THIS SECURITY IS A GLOBAL SECURITY, INSERT -- All payments of principal,
premium, if any, and interest in respect of this Security will be made by the
Company in immediately available funds.]
Reference is hereby made to the further provisions of this Security set forth on
the reverse hereof, which further provisions shall for all purposes have the
same effect as if set forth at this place.
Unless the Certificate of Authentication hereon has been executed by the Trustee
by manual signature of one of its authorized signatories, this Security shall
not be entitled to any benefit under the Indenture, or be valid or obligatory
for any purpose.
IN WITNESS WHEREOF, the Company has caused this instrument to be duly executed
under its [facsimile] corporate seal.
Dated: COMMERCIAL NET LEASE REALTY, INC.
------------------------------
Attest: By:
----------------------------------
- --------------------------------------
Secretary
A-3
<PAGE>
[Reverse of Security]
COMMERCIAL NET LEASE REALTY, INC.
This Security is one of a duly authorized issue of securities of the Company,
issued and to be issued in one or more series under an Indenture, dated as of
_______________, 199_ (herein called the "Indenture") between the Company and
______________________, as Trustee (herein called the "Trustee," which term
includes any successor trustee under the Indenture with respect to the series of
which this Security is a part), 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 Security is on
of the duly authorized series of Securities designated on the face hereof
(collectively, the "Securities"), [IF APPLICABLE, INSERT -- and the aggregate
principal amount of the securities to be issued under such series is limited to
$___________ (except for Securities authenticated and delivered upon transfer
of, or in exchange for, or in lieu of other Securities).] All terms used in
this Security which are defined in the Indenture shall have the meanings
assigned to them in the Indenture.
If an Event of Default shall occur and be continuing, the principal of the
Securities of this series may be declared due and payable in the manner and with
the effect provided in the Indenture.
[IF APPLICABLE, INSERT -- The Securities may not be redeemed prior to the
[Stated] Maturity Date.]
[IF APPLICABLE, INSERT -- The Securities are subject to redemption [(1) [IF
APPLICABLE, INSERT -- on ___________ in any year commencing with the year _____
and ending with the year _____ through operation of the sinking fund for this
series at a Redemption Price equal to 100% of the principal amount and (2) ] [IF
APPLICABLE, INSERT -- at any time [on or after _________________], as a whole or
in part, at the election of the Company, at the following Redemption Prices
(expressed as percentages of the principal amount): If redeemed on or before
_______________, ____% and if redeemed during the 12-month period beginning
______________ of the years indicated, at the Redemption Prices indicated below.
`
YEAR REDEMPTION PRICE YEAR REDEMPTION PRICE
and thereafter at a Redemption Price equal to ____% of the principal amount,
together, in the case of any such redemption [IF APPLICABLE, INSERTS -- (whether
through operation of the sinking fund or otherwise)], with accrued interest to
the Redemption Date; PROVIDED, HOWEVER, that installments of interest on this
Security whose Stated Maturity is on or prior to such Redemption Date will be
payable to the Holder of this Security, or one or more Predecessor Securities,
of record at the close of business on the relevant Record Dates referred to on
the face hereof, all as provided in the Indenture.]
A-4
<PAGE>
[IF APPLICABLE, INSERT -- The Securities are subject to redemption
(1) on ____________ in any year commencing with the year ____ and
ending with the year ____ through operation of the sinking fund for
this series at the Redemption Prices for redemption through operation
of the sinking fund (expressed as percentages of the principal amount)
set forth in the table below and (2) at any time [on or after
________________], as a whole or in part, at the election of the
Company, at the Redemption Prices for redemption otherwise than
through operation of the sinking fund (expressed as percentages of the
principal amount) set forth in the table below: If redeemed during
the 12-month period beginning _____________ of the years indicated,
Redemption Price for Redemption Price for
Redemption Through Redemption Otherwise
Operation of the Than Through Operation
Year Sinking Fund of the Sinking Fund
---- ------------ -------------------
and thereafter at a Redemption Price equal to ____% of the principal
amount, together, in the case of any such redemption (whether through
operation of the sinking fund or otherwise), with accrued interest to
the Redemption Date; PROVIDED, HOWEVER, that installments of interest
on this Security whose Stated Maturity is on or prior to such
Redemption Date will be payable to the Holder of this Security, or one
or more Predecessor Securities, of record at the close of business on
the relevant record dates referred to on the face hereof, all as
provided in the Indenture.]
[IF APPLICABLE, INSERT -- Notwithstanding the foregoing, the Company
may not, prior to _____________, redeem any Securities as contemplated
by [clause (2) of] the preceding paragraph as a part of, or in
anticipation of, any refunding operation by the application, directly
or indirectly, of money borrowed having an interest cost to the
Company (calculated in accordance with generally accepted financial
practice) of less than ____% per annum.]
[IF APPLICABLE, INSERT -- The sinking fund for the Securities provides
for the redemption on ___________ in each year, beginning with the
year ____ and ending with the year ____, of [not less than]
$__________] [("mandatory sinking fund") and not more than $______]
aggregate principal amount of the Securities. [The Securities
acquired or redeemed by the Company otherwise against subsequent
[mandatory] sinking fund payments otherwise required to be made in the
[DESCRIBE ORDER] order in which they become due.]]
Notice of redemption will be given by mail to Holders of Securities,
not less than 30 nor more than 60 days prior to the Redemption Date,
all as provided in the Indenture.
A-5
<PAGE>
In the event of redemption of the Security in part only, a new
Security or Securities for the unredeemed portion hereof shall be
issued in the name of the Holder hereof upon the cancellation hereof.
[IF APPLICABLE, INSERT CONVERSION PROVISIONS SET FORTH IN ANY BOARD
RESOLUTION OR INDENTURE SUPPLEMENTAL TO THE INDENTURE.]
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 under the Indenture 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 issued
under the Indenture 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, on behalf of the
Holders of all such Securities, to waiver 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, in
certain instances, of the Outstanding Securities of any series 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 Security shall be conclusive and binding upon such Holder and
upon all future Holders of this Security and other Securities issued upon the
registration of transfer hereof or in exchange herefor or in lieu hereof,
whether or not notation of such consent of waiver is made upon this Security.
No reference herein to the Indenture and no provision of this Security
or of the Indenture shall alter or impair the obligation of the
Company, which is absolute and unconditional, to pay the principal of
(and premium, if any) and interest on this Security at the times,
places and rate, 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 Security is
registrable in the Security Register of the Company upon surrender of
this security for registration of transfer at the office or agency of
the Company in any place where the principal of (and premium, if any)
and interest on this Security 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 Securities, of authorized denominations and for the
same aggregate principal amount, will be issued to the designated
transferee or transferees.
As provided in the Indenture and subject to certain limitations
therein [and herein] set forth, this Security is exchangeable for a
like aggregate principal amount of Securities of different authorized
denominations but otherwise having the same terms and conditions, as
requested by the Holder hereof surrendering the same.
A-6
<PAGE>
The Securities of this series are issuable only in registered form
[without coupons] in denominations of $________ and any integral
multiple thereof. 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 Security for registration of
transfer, the Company, the Trustee and any agent of the Company or the
Trustee may treat the Person in whose name this Security is registered
as the owner hereof for all purposes, whether or not this Security be
overdue, and neither the Company, the Trustee nor any such agent shall
be affected by notice to the contrary.
No recourse shall be had for the payment of the principal of or
premium, if any, or the interest on this Security, or for any claim
based hereon, or otherwise in respect hereof, or based on or in
respect of the Indenture or any indenture supplemental thereto,
against any past, present or future stockholder, employee, officer or
director, as such, of the Company or of any successor, either directly
or through the Company or any successor, whether by virtue of any
constitution, statute or rule of law or by the enforcement of any
assessment or penalty or otherwise, all such liability being, by the
acceptance hereof and as part of the consideration for the issue
hereof, expressly waived and released.
The Indenture and the Securities shall be governed by and construed in
accordance with the laws of the State of Washington applicable to
agreements made and to be performed entirely in such State.
TRUSTEE'S CERTIFICATE OF AUTHENTICATION
This is one of the Securities of the series designated therein referred to
in the within-mentioned Indenture.
[NAME OF TRUSTEE
as Trustee
By: __________________________________
Authorized Signatory
A-7
<PAGE>
EXHIBIT B
FORMS OF CERTIFICATION
EXHIBIT B-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 are owned by
(i) 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 the United States federal income taxation regardless of its source
("United States Person(s)"), (ii) 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
Commercial Net Lease Realty, Inc. or its agent that such financial institution
will comply with the requirements of Section 165(j)(3)(A), (B) or (C) of the
United States Internal Revenue Code of 1986, as amended, and the regulations
thereunder), or (iii) are owned by United States or foreign financial
institution(s) for purposes of resale during the restricted period (as defined
in United States Treasury Regulations Section 1.163-5(c)(2)(i)(D)(7)), and, in
addition, if the owner is a United States or foreign financial institution
described in clause (iii) above (whether or not also described in clause (i) or
(ii)), this is to further certify that such financial institution has not
acquired the Securities for purposes of resale directly or indirectly to a
United States Person or to a person within the United States or its possessions.
As used herein, "United States" means the United States of America
(including the states and the District of Columbia); and its "possessions"
include Puerto Rico, the U.S. Virgin Islands, Guam, American Samoa, Wake Island
and the Northern Mariana Islands.
We undertake to advise 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
B-1-1
<PAGE>
account in accordance with your Operating Procedures if any applicable statement
herein is not correct on such date, and in the absence of any such notification
it may be assumed that this certification applies as of such date.
This certificate excepts and does not relate to [US $______________] 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: ____________________, _________
[To be dated no earlier than the 15th
day prior to (i) the Exchange Date or
(ii) the relevant Interest Payment Date
occurring prior to the Exchange Date,
as applicable]
[Name of Person Making Certification]
_______________________________________
(Authorized Signator)
Name:
Title:
B-1-2
<PAGE>
EXHIBIT B-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 is owned by (i) 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 sources ("United States
Person(s)"), (ii) United States Person(s) that are (a) foreign branches of
United States financial institutions (financial institutions, as defined in
Unites 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 of (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 Commercial Net Lease
Realty, Inc. or its agent that such financial institution will 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) United States or
foreign financial institution(s) for purposes of resale during the restricted
period (as defined in United States Treasury Regulations Section
1.163-5(c)(2)(i)(D)(7), and, to the further effect, that financial institutions
described in clause (iii) (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 with
B-2-1
<PAGE>
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: ____________________, _________
[To be dated no earlier than the Exchange
Date or (ii) 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: __________________________________
B-2-2
<PAGE>
EXHIBIT 5
[LETTERHEAD OF SHAW, PITTMAN, POTTS & TROWBRIDGE]
July 20, 1995
Commercial Net Lease Realty, Inc.
400 East South Street
Suite 500
Orlando, Florida 32801
RE: COMMERCIAL NET LEASE REALTY, INC.
Ladies and Gentleman:
We have acted as counsel to Commercial Net Lease Realty, Inc., a
Maryland corporation (the "Company"), in connection with the Registration
Statement on Form S-3 filed by the Company on July 20, 1995, with the Securities
and Exchange Commission under the Securities Act of 1933, as amended to date
(the "Registration Statement"), relating to the offering by the Company from
time to time of (i) one or more series of debt securities (the "Debt
Securities"), (ii) shares of common stock, par value $.01 per share (the "Common
Stock"), and (iii) warrants to purchase Common Stock (the "Common Stock
Warrants"), with an aggregate initial public offering price of up to
$200,000,000. The Debt Securities, Common Stock and Common Stock Warrants are
collectively referred to herein as the "Offered Securities."
In our capacity as counsel in connection with such registration, we
are familiar with the proceedings taken and proposed to be taken by the Company
in connection with the authorization and issuance of the Offered Securities, and
for purpose of this opinion have assumed that such proceedings will be timely
completed in the manner presently proposed. In addition, we have made such
legal and factual examinations and inquiries, including an examination of
originals or copies, certified or otherwise identified to our satisfaction, of
such documents, corporate records and instruments as we have deemed necessary or
appropriate for purposes of this opinion. Among such documents are the
Registration Statement, the charter of the Company certified as of a recent date
by the State Department of Assessments and Taxation of Maryland (the "Charter"),
the by-laws of the Company, Resolutions adopted by the Board of Directors of the
Company (the "Board of Directors") in connection with the matters contemplated
by the Registration Statement, and the form of Indenture (the "Indenture") to be
entered into between the Company and a financial institution organized under the
laws of the United States of America (the "Trustee").
The Debt Securities will be issued pursuant to the Indenture and the
Common Stock Warrants will be issued under one or more warrant agreements (each,
a "Warrant Agreement"), each to be between the Company and a financial
institution identified therein as warrant agent (each, a "Warrant Agent").
<PAGE>
Subject to the foregoing and the other matters set forth herein, it is our
opinion, that, as of the date hereof:
1. The issuance of the Debt Securities by the Company has been duly
authorized by the Board of Directors and, (i) when the Debt Securities have been
duly established by the Indenture (including, without limitation, the adoption
by the Board of Directors of a resolution duly authorizing the issuance and
delivery of the Debt Securities), (ii) when the Debt Securities have been duly
authenticated by the Trustee and (iii) when the Debt Securities have been duly
executed and delivered on behalf of the Company against payment therefor in
accordance with the terms and provisions of the Indenture and as contemplated by
the Registration Statement and the applicable Prospectus Supplement, the Debt
Securities will constitute legally valid and binding obligations of the Company,
enforceable against the Company in accordance with their terms.
2. The Company has the authority, pursuant to its Charter, to issue up to
30,000,000 shares of Common Stock. Upon adoption by the Board of Directors of a
resolution in form and content as required by applicable law, and upon issuance
and delivery of and payment for such shares in the manner contemplated by the
Registration Statement and the applicable Prospectus Supplement and by such
resolution, such shares of Common Stock will be validly issued, fully paid and
nonassessable.
3. The issuance of the Common Stock Warrants by the Company has been duly
authorized by the Board of Directors and, (i) when the final terms of the Common
Stock Warrants and applicable Warrant Agreement have been duly established in
accordance with the Charter and applicable law, (ii) upon the adoption by the
Board of Directors of a resolution duly authorizing the issuance and delivery of
the Common Stock Warrants and (iii) when duly executed and delivered by the
Company against payment therefor and countersigned by the applicable Warrant
Agent in accordance with the applicable Warrant Agreement and delivered to and
paid for by the purchasers of the Common Stock Warrants in the manner
contemplated by the Registration Statement and the applicable Prospectus
Supplement, the Common Stock Warrants will constitute legally valid and binding
obligations of the Company, enforceable against the Company in accordance with
their terms.
We consent to your filing of this opinion as an exhibit to the Registration
Statement and to the reference to our firm under the caption "Legal Matters" in
the prospectus included therein.
Very truly yours,
/s/ Shaw, Pittman, Potts & Trowbridge
Shaw, Pittman, Potts & Trowbridge
<PAGE>
EXHIBIT 12
COMMERCIAL NET LEASE REALTY, INC.
STATEMENT OF COMPUTATION OF RATIOS OF EARNINGS TO FIXED CHARGES
<TABLE>
<CAPTION>
QUARTER ENDED YEAR ENDED DECEMBER 31,
MARCH 31, 1995 1994 1993 1992
-------------- --------- --------- ---------
<S> <C> <C> <C> <C>
Net Income Before 3,058,853 8,915,373 3,521,914 1,561,682
Extraordinary Item
Fixed Charges:
Interest 415,645 497,670 381,075 301,761
Amortization of Loan Costs 50,509 254,080 20,421 0
--------- --------- --------- ---------
466,154 751,750 401,496 301,761
Net Income Before Extraordinary
Item and Fixed Charges 3,525,007 9,667,123 3,923,410 1,863,443
Divided by Fixed Charges 466,154 751,750 401,496 301,761
--------- --------- --------- ---------
Ratio of Earnings to Fixed Charges 7.56 12.86 9.77 6.18
--------- --------- --------- ---------
--------- --------- --------- ---------
</TABLE>
<PAGE>
Exhibit 24.2
[KPMG Peat Marwick LLP--letterhead]
The Board of Directors
Commercial Net Lease Realty, Inc.
We consent to the use of our reports incorporated herein by reference and to
the reference to our firm under the heading "Experts" in the prospectus.
/s/ KPMG Peat Marwick LLP
Orlando, Florida
July 18, 1995
