<PAGE>
As filed with the Securities and Exchange Commission on June 24, 1994.
Registration No. 33-
===============================================================================
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
----------------
FORM S-3
REGISTRATION STATEMENT
Under
The Securities Act Of 1933
----------------
CRIIMI MAE Inc.
(Exact name of Registrant as specified in its charter)
Maryland 52-1622022
(State of incorporation) (I.R.S. Employer Identification No.)
11200 Rockville Pike
Rockville, Maryland 20852
(301) 468-9200
(Address, including zip code, and telephone number, including area code, of
Registrant's principal executive offices)
William B. Dockser
Chairman of the Board
11200 Rockville Pike
Rockville, Maryland 20852
(301) 468-9200
(Name, address, including zip code, and telephone number, including area code,
of agent for service)
Copy to:
Morris F. DeFeo, Jr., Esq.
Arent Fox Kintner Plotkin & Kahn
1050 Connecticut Avenue, N.W.
Washington, DC 20036-5339
Approximate date of commencement of proposed sale to the public: As
soon as practicable on or after the effective date of this Registration
Statement.
---------------
If the only securities being registered on this Form are being offered
pursuant to dividend or interest reinvestment plans, please check the following
box.[ ]
---------------
If any of the securities being registered on this Form are to be
offered on a delayed or continuous basis pursuant to Rule 415 under the
Securities Act of 1933, other than securities offered only in connection with
dividend or interest reinvestment plans, please check the following box.[X]
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CALCULATION OF REGISTRATION FEE
<TABLE>
<CAPTION>
===============================================================================================================
Proposed Proposed
Amount Maximum Maximum Amount of
Title of Each Class of to be Offering Price Aggregate Registration
Securities to be Registered (1) Registered Per Unit Offering Price (2) Fee
- ---------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C>
Debt Securities, Preferred
Stock, par value $.01 per
share, and Common Stock,
par value $.01 per
share................(3) (4) (4) $200,000,000 $68,966
================================================================================================================
</TABLE>
(1) This Registration Statement also covers delayed delivery contracts which
may be issued by the Registrant under which the counterparty may be
required to purchase Debt Securities, Preferred Shares or Common Shares.
Such contracts would be issued with the Debt Securities, Preferred Shares
and/or Common Shares. In addition, any other securities registered
hereunder may be sold separately or as units with other securities
registered hereunder.
(2) Estimated solely for the purpose of calculating the registration fee.
The amount of the filing fee, calculated in accordance with Rule 457(o)
of the rules and regulations under the Securities Act of 1933, as
amended, equals 1/29th of one percentum of the maximum offering price of
all the securities listed above.
(3) There is also being registered hereunder an indeterminate number of
Common Shares and Preferred Shares as may be issued in exchange for, or
upon conversion of, the Debt Securities and an indeterminate number of
Common Shares as may be issued in exchange for, or upon conversion of,
the Preferred Shares. No separate consideration will be received for
Preferred Shares and/or Common Shares issued upon any such exchanges or
conversions.
(4) Not applicable pursuant to General Instruction II.D. of Form S-3 under the
Securities Act of 1933, as amended.
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>
Information contained herein is subject to completion or amendment. A
registration statement relating to these securities has been filed with the
Securities and Exchange Commission. These securities may not be sold nor may
offers to buy be accepted prior to the time the registration statement becomes
effective. This prospectus shall not constitute an offer to sell or the
solicitation of an offer to buy, nor shall there be any sale of these securities
in any State in which such offer, solicitation or sale would be unlawful prior
to registration or qualification under the securities laws of any such State.
Subject to Completion, dated June 23, 1994
CRIIMI MAE Inc.
$200,000,000
Debt Securities, Preferred Shares and Common Shares
CRIIMI MAE Inc. ("CRIIMI MAE") may from time to time offer in one or more
series its unsecured subordinated debt securities (the "Debt Securities"),
shares of its preferred stock, par value $.01 per share (the "Preferred
Shares"), and shares of its common stock, par value $.01 per share (the "Common
Shares"), with an aggregate public offering price of up to $200,000,000 (or its
equivalent based on the exchange rate at the time of sale) in amounts, at prices
and on terms to be determined at the time of offering. The Debt Securities,
Preferred Shares and Common Shares (collectively, the "Securities") may be
offered, separately or together, in separate series in amounts, at prices and on
terms to be set forth in supplements to this Prospectus (a "Prospectus
Supplement").
The Debt Securities will be direct unsecured obligations of CRIIMI MAE
subordinated to existing and future senior indebtedness, as defined. See
"Description of Debt Securities."
The specific terms of the Securities in respect of which this Prospectus is
being delivered will be set forth in the applicable Prospectus Supplement and
will include, where applicable: (i) in the case of Debt Securities, the specific
title, ranking, aggregate principal amount, currency, form (which may be
registered or bearer, or certificated or global), authorized denominations,
maturity, rate (or manner of calculation thereof) and time of payment of
interest, terms for redemption at the option of CRIIMI MAE or repayment at the
option of the holder, terms for sinking fund payments, terms for conversion into
Preferred Shares or Common Shares, covenants and any initial public offering
price; (ii) in the case of Preferred Shares, the specific title and stated
value, any dividend, liquidation, redemption, conversion, voting and other
rights, and any initial public offering price; and (iii) in the case of Common
Shares, any public offering price. In addition, such specific terms may include
limitations on direct or beneficial ownership and restrictions on transfer of
the Securities, in each case as may be appropriate to preserve the status of
CRIIMI MAE as a real estate investment trust ("REIT") for federal income tax
purposes.
The applicable Prospectus Supplement will also contain information, where
applicable, about certain United States federal income tax considerations
relating to, and any listing on a securities exchange of, the Securities covered
by such Prospectus Supplement.
The Securities may be offered directly, through agents designated from time
to time by CRIIMI MAE, or to or through underwriters or dealers. If any agents
or underwriters are involved in the sale of any of the Securities, their names,
and any applicable purchase price, fee, commission or discount arrangement
between or among them, will be set forth, or will be calculable from the
information set forth, in the applicable Prospectus Supplement. See "Plan of
Distribution." No Securities may be sold without delivery of the applicable
Prospectus Supplement describing the method and terms of the offering of such
series of Securities.
CRIIMI MAE's Common Shares are traded on the New York Stock Exchange (the
"NYSE") under the symbol "CMM." On June 22, 1994, the closing sale price of the
Common Shares on the NYSE was $10.50 per share.
_______________________
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 date of this Prospectus is ____________, 1994.
<PAGE>
AVAILABLE INFORMATION
CRIIMI MAE and its subsidiary, CRI Liquidating REIT, Inc. ("CRI
Liquidating"), are subject to the informational requirements of the Securities
Exchange Act of 1934, as amended (the "Exchange Act"), and in accordance
therewith file reports, proxy statements and other information with the
Securities and Exchange Commission (the "SEC"). Reports, proxy statements and
other information filed by CRIIMI MAE and CRI Liquidating can be inspected and
copied at the SEC's Public Reference Room, 450 Fifth Street, N.W., Washington,
D.C. 20549 and the SEC's Regional Offices at 7 World Trade Center, 13th Floor,
New York, New York 10048 and 500 West Madison Street, Suite 1400, Chicago,
Illinois 60661; and copies of such material can be obtained from the Public
Reference Section of the SEC, 450 Fifth Street, N.W., Washington, D.C. 20549, at
prescribed rates. In addition, reports, proxy material and other information
concerning CRIIMI MAE and CRI Liquidating may be inspected at the NYSE, 20 Broad
Street, New York, New York 10005.
This Prospectus constitutes part of a Registration Statement on Form S-3
(together with all amendments and exhibits, the "Registration Statement") filed
by CRIIMI MAE with the SEC under the Securities Act of 1933, as amended (the
"Securities Act"). This Prospectus does not contain all of the information
included in the Registration Statement, certain parts of which are omitted in
accordance with the rules and regulations of the SEC. Reference is made to the
Registration Statement for further information with respect to CRIIMI MAE and
the Securities. Statements contained in this Prospectus and any accompanying
Prospectus Supplement concerning the provisions or contents of any contract,
agreement or any other document referred to herein are not necessarily complete.
With respect to each such contract, agreement or document filed as an exhibit to
the Registration Statement, reference is made to such exhibit for a more
complete description of the matters involved, and each such statement shall be
deemed qualified in its entirety by such reference to the copy of the applicable
document filed with the Commission. The Registration Statement including the
exhibits and schedules thereto, may be inspected without charge at the
Commission's principal office at 450 Fifth Street, N.W., Washington, D.C. and
copies of it or any part thereof may be obtained from such office, upon payment
of the fees prescribed by the Commission.
INCORPORATION OF CERTAIN DOCUMENTS BY REFERENCE
The following documents heretofore filed by CRIIMI MAE with the SEC (File
No. 1-10360) are incorporated herein by reference:
1. Annual Report on Form 10-K for the year ended December 31, 1993, as
filed with the SEC on February 16, 1994, and as amended by Amendment on
Form 10-K/A, filed with the SEC on March 11, 1994.
2. Quarterly Report on Form 10-Q for the quarter ended March 31, 1994,
as filed with the SEC on May 16, 1994.
3. Definitive Proxy Statement dated April 6, 1993.
4. Form 8-A, as filed with the SEC on April 8, 1994.
5. Form 8-A, as filed with the SEC on October 16, 1989.
6. Form 8-B, as filed with the SEC on October 27, 1993.
All documents filed by CRIIMI MAE pursuant to Sections 13(a), 13(c), 14 or
15(d) of the Exchange Act after the date of this Prospectus and prior to the
termination of the offering of the Securities offered hereby shall be deemed to
be incorporated by reference in this Prospectus from the date of filing of 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 other 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.
CRIIMI MAE will provide without charge to each person, including any
beneficial owner, to whom a copy of this Prospectus has been delivered, on the
written or oral request of any such person, a copy of any or all of the
documents referred to above which have been or may be incorporated in this
Prospectus by reference, other than exhibits to such documents, unless such
exhibits are specifically incorporated by reference. Requests for such copies
should be directed to: CRIIMI MAE Inc., Investor Services, The CRI Building,
11200 Rockville Pike, Rockville, Maryland 20852, or telephone (301) 468-9200 or
toll-free (800) 678-1116.
2
<PAGE>
PROSPECTUS SUMMARY
The following summary is qualified in its entirety by, and should be read in
conjunction with, the more detailed information appearing elsewhere in this
Prospectus. References to CRIIMI MAE appearing in this Prospectus shall not
include CRI Liquidating, unless the context otherwise requires.
CRIIMI MAE
CRIIMI MAE, an infinite-life, actively managed real estate investment trust
("REIT"), is the largest multifamily mortgage REIT. CRIIMI MAE invests
selectively, focusing primarily on high-quality multifamily mortgage
investments, including government insured or guaranteed mortgage investments
secured by multifamily housing complexes ("Government Insured Multifamily
Mortgages") and government-insured or guaranteed multifamily construction loans
located throughout the United States. CRIIMI MAE's principal objectives are to
provide stable or growing quarterly cash distributions to its stockholders while
preserving and protecting its capital. CRIIMI MAE has sought to achieve these
objectives by investing primarily in Government Insured Multifamily Mortgages
using a combination of debt and equity financing.
CRIIMI MAE has invested primarily in two types of Government Insured
Multifamily Mortgages: loans insured by the Federal Housing Administration (the
"FHA") pursuant to provisions of the National Housing Act, which are first or
second liens on residential apartment, nursing home or townhouse complexes
("FHA-Insured Loans"); and mortgage-backed securities which are guaranteed by
the Government National Mortgage Association ("GNMA") as to the monthly payment
of the outstanding principal of, and interest on, the underlying multifamily
mortgages ("GNMA Securities"). As of May 31, 1994, CRIIMI MAE owned directly
165 Government Insured Multifamily Mortgages with an amortized cost of
approximately $666.5 million. As of May 31, 1994, the weighted average coupon
rate of CRIIMI MAE's Government Insured Multifamily Mortgages was approximately
8.1% and the weighted average maturity thereof was approximately 33 years. See
"CRIIMI MAE--Description of Assets."
In addition to its portfolio of Government Insured Multifamily Mortgages and
other assets, CRIIMI MAE also owns approximately 57% of the issued and
outstanding common stock of CRI Liquidating, a finite-life, self-liquidating
REIT which owns Government Insured Multifamily Mortgages. CRI Liquidating's
common stock is listed on the NYSE under the symbol "CFR". As of May 31, 1994,
CRI Liquidating owned 51 Government Insured Multifamily Mortgages with an
amortized cost of approximately $154.4 million. As of May 31, 1994, the
weighted average coupon rate of CRI Liquidating's Government Insured Multifamily
Mortgages was approximately 7.6% and the weighted average maturity thereof was
approximately 27 years. See "CRIIMI MAE--Description of Assets."
In addition to investing in FHA-Insured Loans and GNMA Securities, CRIIMI
MAE's investment policies also permit CRIIMI MAE to invest in Government Insured
Multifamily Mortgages which are not FHA-insured or GNMA-guaranteed ("Other
Insured Mortgages") and in certain other multifamily mortgage investments which
are not federally insured or guaranteed ("Other Multifamily Mortgages"). As of
June 23, 1994, CRIIMI MAE had not invested in any Other Insured Mortgages or
Other Multifamily Mortgages. However, CRIIMI MAE is actively exploring
opportunities to sponsor and/or participate in securitization arrangements
involving the pooling primarily of Other Multifamily Mortgages, and in certain
instances mortgages on commercial properties, to further enhance potential
returns to CRIIMI MAE's stockholders.
CRIIMI MAE may apply all or part of the net proceeds from any offering or
series of offerings of securities made pursuant to this Registration Statement
to acquire additional mortgage investments, including Government Insured
Multifamily Mortgages, Other Insured Mortgages and/or Other Multifamily
Mortgages,
3
<PAGE>
to sponsor and/or participate in securitized mortgage programs and to make other
investments and/or acquisitions relating to CRIIMI MAE's mortgage business.
CRIIMI MAE's use of leverage carries with it the risk that the cost of its
borrowings could increase relative to the return on its mortgage investments,
which could result in reduced net income or a net loss and thereby reduce the
return to stockholders. CRIIMI MAE has entered into interest rate hedging
agreements which partially limit the adverse effects of rising interest rates.
CRIIMI MAE actively reviews its asset/liability management techniques in an
effort to make optimal use of its borrowing ability based on market conditions
and opportunities. In certain adverse interest rate environments, including a
sustained period of rising interest rates, CRIIMI MAE could be required to
liquidate a portion of its assets at a loss in order to comply with certain
covenants under its financing facilities. CRIIMI MAE's dividends are affected
by numerous other factors, including the dividends which CRIIMI MAE receives on
its shares of CRI Liquidating.
CRIIMI MAE's portfolio and day-to-day operations are managed by an affiliate
of C.R.I., Inc. ("CRI"), an international real estate investment firm which is
currently ranked as the sixth largest real estate asset manager in the United
States. In its 20 years as an investor in, and manager of, debt and equity
investments in multifamily properties, CRI has used its expertise to assemble
one of the largest multifamily portfolios in the United States.
RECENT DEVELOPMENTS
In connection with the settlement of certain class action litigation
involving CRIIMI MAE and certain of its affiliates, CRIIMI MAE entered into a
settlement agreement on September 24, 1993 providing, among other things, for
the issuance of warrants, exercisable for 18 months from issuance, to purchase
Common Shares at an exercise price of $13.17 per share (the "Settlement
Agreement"). Based on proofs of claim submitted as of the submission date
required by the Settlement Agreement (the "Submission Date"), CRIIMI MAE
expects to issue approximately 334,000 warrants pursuant to the Settlement
Agreement. See "Recent Developments."
4
<PAGE>
CRIIMI MAE
General
CRIIMI MAE, an infinite-life, actively managed REIT, is the largest
multifamily mortgage REIT. CRIIMI MAE invests selectively, focusing primarily
on high-quality multifamily mortgage investments, including Government Insured
Multifamily Mortgages and government-insured or guaranteed multifamily
construction loans. CRIIMI MAE's principal objectives are to provide stable or
growing quarterly cash distributions to its stockholders while preserving and
protecting its capital. CRIIMI MAE has sought to achieve these objectives by
investing primarily in Government Insured Multifamily Mortgages using a
combination of debt and equity financing. CRIIMI MAE and CRI Liquidating are
Maryland corporations. The principal executive offices of CRIIMI MAE and CRI
Liquidating are located at the CRI Building, 11200 Rockville Pike, Rockville,
Maryland 20852, and their telephone number is (301) 468-9200.
Background
CRIIMI MAE and its subsidiary, CRI Liquidating, were formed in 1989 to
effect the merger into CRI Liquidating (the "Merger") of three federally
insured mortgage funds sponsored by CRI: CRI Insured Mortgage Investments
Limited Partnership ("CRIIMI I"); CRI Insured Mortgage Investments II, Inc.
("CRIIMI II"); and CRI Insured Mortgage Investments III Limited Partnership
("CRIIMI III" and together with CRIIMI I and CRIIMI II, the "CRIIMI Funds").
The Merger was effected to provide certain potential benefits to investors in
the CRIIMI Funds, including the elimination of unrelated business taxable
income for certain tax-exempt investors, the diversification of investments,
the reduction of general overhead and administrative costs as a percentage of
assets and total income and the simplification of tax-reporting information.
In the Merger, which was approved by investors in each of the CRIIMI Funds and
subsequently consummated on November 27, 1989, investors in the CRIIMI Funds
received, at their option, shares of CRI Liquidating common stock ("CRI
Liquidating Shares") or CRIIMI MAE Common Shares.
Investors in the CRIIMI Funds that received CRIIMI MAE Common Shares became
stockholders in an infinite-life, actively managed REIT having the potential to
increase the size of its portfolio and enhance the returns to its stockholders.
CRIIMI MAE stockholders retained their economic interests in the assets of the
CRIIMI Funds which were transferred to CRI Liquidating through the issuance of
one CRI Liquidating Share to CRIIMI MAE for each CRIIMI MAE Common Share issued
to investors in the Merger. Upon the completion of the Merger, CRIIMI MAE held
a total of 20,361,807 CRI Liquidating Shares, or approximately 67% of the issued
and outstanding CRI Liquidating Shares. As of the date of this Prospectus,
CRIIMI MAE holds a total of 17,199,307 CRI Liquidating Shares, or approximately
57% of the issued and outstanding CRI Liquidating Shares.
Investors in the CRIIMI Funds that received CRI Liquidating Shares, as well as
CRIIMI MAE, became stockholders in a finite-life, self-liquidating REIT the
assets of which consist primarily of Government Insured Multifamily Mortgages
and other assets formerly held by the CRIIMI Funds. CRI Liquidating intends to
hold, manage and dispose of its mortgage investments in accordance with the
objectives and policies of the CRIIMI Funds, including disposing of any
remaining mortgage investments by 1997 through an orderly liquidation.
On September 6, 1991, CRIIMI MAE, through its wholly owned subsidiary
CRIIMI, Inc., acquired from Integrated Resources, Inc. all of the general
partnership interests in four publicly held limited partnerships known as the
American Insured Mortgage Investors Funds (the "AIM Funds"). The AIM Funds own
mortgage investments which are substantially similar to those owned by CRIIMI
MAE and CRI Liquidating. CRIIMI, Inc. receives the general partner's share of
income, loss and distributions (which ranges among the AIM Funds from 2.9% to
4.9%) from each of the AIM Funds. In addition, CRIIMI MAE owns indirectly a
limited partnership interest in the adviser to the AIM Funds, in respect of
which CRIIMI MAE receives a guaranteed return each year.
5
<PAGE>
Asset Management
CRIIMI MAE is governed by a board of directors (the "CRIIMI MAE Board"), a
majority of whom are independent directors with extensive industry related
experience. The adviser to CRIIMI MAE and CRI Liquidating is CRI Insured
Mortgage Associates Adviser Limited Partnership (the "Adviser"), the general
partner of which is CRI and the operations of which are conducted by CRI's
employees. The Adviser manages CRIIMI MAE's portfolio of Government Insured
Multifamily Mortgages and other assets with the goal of maximizing CRIIMI MAE's
value, and conducts CRIIMI MAE's day-to-day operations. Under an Advisory
Agreement between CRIIMI MAE and the Adviser, the Adviser and its affiliates
receive certain fees and expense reimbursements.
CRI is an international real estate investment firm which is currently
ranked as the sixth largest real estate asset manager in the United States.
Established in 1974, CRI offers capital, management and investment expertise
to developers, builders and both institutional and individual investors. CRI
has been active in property acquisitions and dispositions, domestic and
foreign debt and equity placements, asset and property management and leasing,
structuring and sponsorship of real estate investment funds, and management of
real estate investment portfolios and REITs.
Investment Policies
CRIIMI MAE's investment policies, which are overseen by the CRIIMI MAE
Board, are intended to foster CRIIMI MAE's objectives of providing stable or
growing quarterly cash distributions to its stockholders while preserving and
protecting its capital. CRIIMI MAE has sought to achieve these objectives by
investing primarily in Government Insured Multifamily Mortgages issued or sold
pursuant to programs sponsored by the FHA and GNMA. CRIIMI MAE's sources of
capital include borrowings, principal distributions received on its CRI
Liquidating Shares, principal proceeds of CRIIMI MAE mortgage dispositions and
proceeds from equity offerings. Beginning in early 1990, CRIIMI MAE commenced
an acquisition program to buy FHA-insured and GNMA-guaranteed construction
loans. Although all periodic disbursements on such loans are FHA-insured or
GNMA-guaranteed, such loans generally carry higher interest rates than
permanent project loans largely because of the special expertise required to
handle many aspects of these loans, such as the dispersal of funds to
borrowers.
In addition to investing in FHA-Insured Loans and GNMA Securities, CRIIMI
MAE's investment policies also permit CRIIMI MAE to invest in Other Insured
Mortgages and in Other Multifamily Mortgages. Pursuant to CRIIMI MAE's policy,
at the time of their acquisition, Other Multifamily Mortgages must have an
expected yield of at least 150 basis points (1.5%) greater than the yield on
Government Insured Multifamily Mortgages which could be acquired in the then
current market and must meet certain other underwriting guidelines. The CRIIMI
MAE Board has adopted a policy limiting Other Multifamily Mortgages to 20% of
CRIIMI MAE's total consolidated assets. As of June 23, 1994, CRIIMI MAE had not
invested in any Other Insured Mortgages or Other Multifamily Mortgages.
CRIIMI MAE is actively exploring opportunities in connection with the
sponsorship of, and/or participation in, securitization arrangements which
involve the pooling primarily of Other Multifamily Mortgages, and in certain
instances mortgages on commercial properties, to further enhance potential
returns to CRIIMI MAE's stockholders. Such sponsorship and/or participation may
include the investment by CRIIMI MAE in non-investment grade or unrated tranches
of mortgage pools having a high current yield. As of June 23, 1994, CRIIMI MAE
had not participated in or sponsored any such transactions. It is anticipated
that CRIIMI MAE will use the underwriting guidelines established by the CRIIMI
MAE Board for Other Multifamily Mortgages in determining the suitability of
investing in securitized mortgages.
6
<PAGE>
CRIIMI MAE seeks to enhance the return to its stockholders through the use
of leverage. Because CRIIMI MAE's mortgage investments are federally insured
or guaranteed, CRIIMI MAE has been able to arrange secured borrowings at
interest rates which the Adviser believes are attractive. These borrowings
have been invested in Government Insured Multifamily Mortgages with effective
rates which are higher than the interest rates payable on such borrowings. The
Net Positive Spread (as defined below) created by such leverage increases the
return to CRIIMI MAE stockholders. The Adviser continuously monitors CRIIMI
MAE's outstanding borrowings in an effort to ensure that CRIIMI MAE is making
optimal use of its borrowing ability based on market conditions and
opportunities.
CRIIMI MAE expects to continue to use leverage only to the extent that (i)
the proceeds therefrom will be used for investments such as CRIIMI MAE's
current portfolio of Government Insured Multifamily Mortgages or other high
quality assets including Other Insured Mortgages and Other Multifamily
Mortgages; (ii) the risk of adverse changes in interest rates is reduced by
the use of hedging techniques such as those currently employed by CRIIMI MAE;
and (iii) the Adviser believes that after investing all funds from any
specific borrowing, a "Net Positive Spread" (the difference between the yield
on a mortgage investment acquired with borrowings and all incremental
borrowing and operating expenses on a tax basis associated with the
acquisition of such mortgage investment) of at least 40 basis points will be
achievable on such borrowing. However, CRIIMI MAE's use of leverage carries
with it the risk that the cost of its borrowings could increase relative to
the return on CRIIMI MAE's mortgage investments (due to (i) higher borrowing
costs resulting from increased interest rates and/or the expiration or
termination of hedging agreements, and/or (ii) a decrease in the yield on its
mortgage investments because of turnover in the portfolio), which could result
in reduced net income or a net loss and thereby reduce the return to CRIIMI
MAE's stockholders.
CRIIMI MAE's use of leverage carries with it the risk that the cost of its
borrowings could increase relative to the return on its mortgage investments,
which could result in reduced net income or a net loss and thereby reduce the
return to stockholders. To partially limit the adverse effects of rising
interest rates, CRIIMI MAE has entered into a series of interest rate hedging
agreements in an aggregate notional amount approximately equal to all of its
outstanding borrowings and commitments. To the extent CRIIMI MAE has not fully
hedged its portfolio, in periods of rising interest rates CRIIMI MAE's overall
borrowing costs would increase with little or no overall increase in mortgage
investment income, resulting in returns to stockholders that would be lower than
those available if interest rates had remained unchanged.
Although CRIIMI MAE expects the overall life of its mortgage investments to
exceed ten years, CRIIMI MAE's hedging agreements range in maturity from
approximately 3 to 5 years principally because of the high cost of instruments
with maturities greater than 5 years. The average remaining term of these
hedging agreements is approximately 2.7 years. Thus, to the extent CRIIMI MAE
has not completely matched the overall life of its existing mortgage investments
to that of its existing hedging agreements, upon the expiration of these hedging
agreements, CRIIMI MAE would be fully exposed to the adverse effects of rising
interest rates. The Adviser continues to review asset/liability hedging
techniques as CRIIMI MAE's existing hedging agreements approach their expiration
dates and to monitor the life of its hedging agreements relative to its assets.
A reduction in long-term interest rates could increase the level of
prepayments of CRIIMI MAE's Government Insured Multifamily Mortgages. CRIIMI
MAE's yield on mortgage investments will be reduced to the extent CRIIMI MAE
reinvests the proceeds from such prepayments in new mortgage investments with
effective rates which are below the effective rates of the prepaid mortgages.
CRIIMI MAE believes that declining interest rates result in increased
prepayments of single family mortgages to a greater extent than mortgages on
multifamily properties. This is partially due to lockouts (i.e. prepayment
prohibitions), prepayment penalties or difficulties in obtaining refinancing for
multifamily dwellings. Most of CRIIMI MAE's and CRI Liquidating's mortgage
investments are subject to prepayment penalties or prohibitions.
7
<PAGE>
In addition, the fluctuation of long-term interest rates may affect the
value of CRIIMI MAE's Government Insured Multifamily Mortgages. While
decreases in long-term rates could increase the value of CRIIMI MAE's existing
mortgage investments, increases in long-term rates could decrease the value of
such investments and, in certain circumstances, require CRIIMI MAE to pledge
additional collateral in connection with its borrowing facilities. This would
reduce CRIIMI MAE's borrowing capacity and, in an extreme case, may force
CRIIMI MAE to liquidate a portion of its assets at a loss in order to comply
with certain covenants under its financing facilities.
Description of Assets
CRIIMI MAE has invested primarily in Government Insured Multifamily
Mortgages consisting of (i) FHA-Insured Loans and (ii) GNMA Securities. As of
May 31, 1994, CRIIMI MAE owned directly 165 Government Insured Multifamily
Mortgages with an amortized cost of approximately $666.5 million. As of May
31, 1994, the weighted average coupon rate of CRIIMI MAE's Government Insured
Multifamily Mortgages was approximately 8.1% and the weighted average maturity
thereof was approximately 33 years.
The National Housing Act authorizes the U.S. Department of Housing and Urban
Development ("HUD") to establish mortgage loan programs pursuant to which
mortgage loans on properties are insured in whole or in part by HUD. FHA is a
part of HUD and GNMA is a wholly owned corporate instrumentality of the United
States within HUD. These programs insure that the outstanding principal of, and
interest on, a loan, less certain specified deductions, will be paid by HUD if
the borrower defaults on the loan. The National Housing Act authorizes
different mortgage insurance programs based primarily upon types of real estate
for which mortgage loans may be obtained, maximum loan amounts permissible,
maturities of the mortgage loans, amortization schedules, rights of prepayment,
coinsurance and nature of the borrower.
All of the FHA-Insured Loans in which CRIIMI MAE invests are insured by HUD
effectively for 99% of their current face value. Upon default and subsequent
assignment to HUD, 90% of the face value of the mortgage is received by CRIIMI
MAE within approximately 90 days of assignment and 9% of the face value of the
mortgage is received upon final processing by HUD. In certain circumstances,
CRIIMI MAE may receive HUD debentures rather than cash in an amount equal to 99%
of the face value of such mortgage upon final processing by HUD. The GNMA
Securities in which CRIIMI MAE invests are backed by FHA-Insured Loans. In the
event of a default of an FHA-Insured Loan underlying a GNMA Security, the issuer
or GNMA will make timely payments of principal and interest and pay 100% of the
GNMA Security's principal balance to CRIIMI MAE when such mortgage is assigned
to HUD and the issuer receives the insurance proceeds.
As part of its investment strategy, CRIIMI MAE also invests in GNMA-
guaranteed or HUD-insured construction loans relating to the construction or
rehabilitation of multifamily housing projects, including nursing homes and
intermediate care facilities ("Government Insured Construction Mortgages").
Government Insured Construction Mortgages involve a two-tier financing process
in which a short-term loan covering construction costs is converted into a
permanent loan. CRIIMI MAE also becomes the holder of the permanent loan upon
conversion. The construction loan is funded in HUD-approved draws based upon
the progress of construction. The construction draws are GNMA-guaranteed or
insured by HUD. The construction loan generally does not amortize during the
construction period. Amortization begins upon conversion of the construction
loan into a permanent loan, which generally occurs within 24-months from the
initial endorsement by HUD.
Generally, Government Insured Multifamily Mortgages which are purchased
near, at or above par value ("Near Par or Premium Mortgage Investments") will
result in a loss if the mortgage investment is prepaid or assigned prior to
maturity because the amortized cost of the mortgage investment, including
acquisition costs, is approximately the same as or slightly higher than the
insured amount of the mortgage investment. As of
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May 31, 1994, substantially all of the mortgage investments owned directly by
CRIIMI MAE consisted of Government Insured Multifamily Mortgages that are Near
Par or Premium Mortgage Investments.
CRI Liquidating's mortgage investments consist solely of Government Insured
Multifamily Mortgages acquired from the CRIIMI Funds in the Merger. The CRIIMI
Funds invested primarily in Government Insured Multifamily Mortgages comprising
FHA-Insured Loans and GNMA Securities. As of May 31, 1994, CRI Liquidating
owned 51 Government Insured Multifamily Mortgages with an amortized cost of
approximately $154.4 million. As of May 31, 1994, the weighted average coupon
rate of CRI Liquidating's Government Insured Multifamily Mortgages was
approximately 7.6% and the weighted average maturity thereof was approximately
27 years.
The majority of CRI Liquidating's mortgage investments were acquired by the
CRIIMI Funds at a discount to face value ("Discount Mortgage Investments") on
the belief that based on economic, market, legal and other factors, such
Discount Mortgage Investments might be sold for cash, prepaid as a result of a
conversion to condominium housing or otherwise disposed of or refinanced in a
manner requiring prepayment or permitting other profitable disposition three to
twelve years after acquisition by the CRIIMI Funds. CRI Liquidating's business
plan calls for an orderly liquidation of approximately 33% of its estimated
December 31, 1994 portfolio balance per year through 1997.
RECENT DEVELOPMENTS
On March 22, 1990, a complaint was filed, on behalf of a class comprised of
certain limited partners of CRIIMI III and shareholders of CRIIMI II (the
"Plaintiffs"), in the Circuit Court for Montgomery County, Maryland against
CRIIMI MAE, CRI Liquidating, CRIIMI I and its general partner, CRIIMI II, CRIIMI
III and its general partner, CRI and William B. Dockser, H. William Willoughby
and Martin C. Schwartzberg (the "Defendants"). On November 18, 1993, the Court
entered an order granting final approval of the Settlement Agreement between the
Plaintiffs and the Defendants pursuant to which CRIIMI MAE was to issue to class
members, including certain former limited partners of CRIIMI I, up to 2.5
million warrants, exercisable for 18 months after issuance, to purchase Common
Shares at an exercise price of $13.17 per share. In addition, the settlement
included a payment of $1.4 million for settlement administration costs and the
Plaintiff's attorneys' fees and expenses. Insurance provided $1.15 million of
the $1.4 million cash payment, and the balance was paid by CRIIMI MAE.
The number of warrants to be issued is based on the number of class members
who submitted proofs of claim by the Submission Date. Based on the proofs of
claim submitted as of such date, CRIIMI MAE expects to issue approximately
334,000 warrants pursuant to the Settlement Agreement.
Based on the Adviser's initial estimate that up to 2.5 million warrants
would be issued, CRIIMI MAE accrued a total provision of $1.5 million (which
included the uninsured portion of the cash settlement) in its consolidated
statement of income for the year ended December 31, 1993. Because the actual
number of warrants expected to be issued pursuant to the Settlement Agreement
is significantly lower than the initial estimate, CRIIMI MAE has reduced this
provision to approximately $950,000.
The exercise of the warrants will not result in a charge to CRIIMI MAE's tax
basis income. Further, the Adviser believes that the exercise of the warrants
will not have a material adverse effect on CRIIMI MAE's tax basis income per
share or annualized cash dividends per share because CRIIMI MAE intends to
invest the proceeds from any exercise of the warrants in accordance with its
investment policy to purchase Government Insured Multifamily Mortgages and other
authorized investments. However, in the case of a significant decline in the
yield on mortgage investments and a significant decrease in the Net Positive
Spread which CRIIMI MAE could achieve on its borrowings, the exercise of the
warrants may have a dilutive effect on tax basis income per share and cash
dividends per share. Receipt of the proceeds from the exercise of the warrants
will increase CRIIMI MAE's shareholders' equity.
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USE OF PROCEEDS
Unless otherwise specified in the applicable Prospectus Supplement for any
offering of Securities, CRIIMI MAE intends to use the majority of the net
proceeds from the sale of Securities (i) to acquire additional mortgage
investments, including Government Insured Multifamily Mortgages, Other Insured
Mortgages and Other Multifamily Mortgages, (ii) to sponsor and/or participate in
securitized mortgage programs, (iii) to make other investments and/or
acquisitions relating to CRIIMI MAE's mortgage business and/or (iv) for other
general corporate purposes, including working capital. Pending their use for
the foregoing purposes, the net proceeds will be invested in short term,
interest-bearing investments.
RATIOS OF EARNINGS TO FIXED CHARGES
The following table sets forth CRIIMI MAE's consolidated ratios of
earnings to fixed charges for the periods shown :
<TABLE>
<CAPTION>
Three Months
Years Ended December 31, Ended March 31,
------------------------------------------- ---------------
1989 1990 1991 1992 1993 1993 1994
------ ------ ------ ------ ------ ------ ------
<S> <C> <C> <C> <C> <C> <C>
18.20 /(1)/ 1.82 1.61 1.69 1.48 1.74 2.18
</TABLE>
______________________
(1) All financial information of CRIIMI MAE for the periods prior to the Merger
on November 27, 1989 has been presented in a manner similar to a pooling of
interests, which effectively combines the historical results of the CRIIMI
Funds. The dividends and net income per share amounts for the year ended
December 31, 1989 reflect the weighted average shares outstanding as if the
Merger had been consummated on January 1, 1989.
The ratios of earnings to fixed charges were computed by dividing
earnings, as defined below, by fixed charges. For this purpose, earnings
consist of CRIIMI MAE's consolidated net income (including any derived from
the ownership of CRI Liquidating Shares), plus fixed charges, extraordinary
items and loss from investment in limited partnership. Fixed charges consist
of gross interest expense including amortization of debt expense, discount or
premium. To date, CRIIMI MAE has not issued any Preferred Shares; therefore,
the ratios of earnings to combined fixed charges and preferred share dividends
are unchanged from the ratios presented in this section.
DESCRIPTION OF DEBT SECURITIES
General
The Debt Securities are to be issued under an indenture (the "Indenture")
between CRIIMI MAE and a trustee (the "Trustee"). The form of the Indenture is
filed as an exhibit to the Registration Statement of which this Prospectus is a
part. The Indenture is subject to and governed by the Trust Indenture Act of
1939, as amended (the "TIA"). The statements made under this heading relating
to the Debt Securities and the Indenture, as modified or suspended by any
applicable Prospectus Supplement, are summaries of the provisions thereof and do
not purport to be complete and are qualified in their entirety by reference to
the Indenture and such Debt Securities.
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The Debt Securities will be direct, unsecured obligations of CRIIMI MAE and,
as set forth below under "--Subordination," will be subordinate in right of
payment to Senior Debt (as defined below) of CRIIMI MAE. In addition to the
terms of the Indenture and any specific, express terms of the Debt Securities
described below, the issuance of the Debt Securities will be limited by, and
subject to certain terms of, CRIIMI MAE's existing financing facilities.
As of May 31, 1994, CRIIMI MAE had outstanding borrowings of approximately
$560 million under the three financing facilities described below. As of May
31, 1994, CRIIMI MAE owned directly Government Insured Multifamily Mortgages
with an estimated fair market value of approximately $647.1 million, of which
mortgage investments with an aggregate estimated fair market value of
approximately $575.0 million secure borrowings under the Master Repurchase
Agreements and the Revolving Credit Agreement described below. In addition, as
of May 31, 1994, approximately 13,124,000 of the total 17,199,307 CRI
Liquidating Shares held by CRIIMI MAE secure borrowings under the Bank Term
Loan described below.
Master Repurchase Agreements. On April 30, 1993 and November 30, 1993,
CRIIMI MAE entered into master repurchase agreements (the "Master Repurchase
Agreements") with Nomura Securities International, Inc. and Nomura Asset
Capital Corporation (collectively, "Nomura") which provide CRIIMI MAE with an
aggregate of $500.0 million of available financing for three-year terms.
Pursuant to the terms of the Master Repurchase Agreements, CRIIMI MAE's debt-
to-equity ratio may not exceed 2.5:1 and it is required to obtain prior
written approval from Nomura in order to pledge any of its assets as
collateral.
Revolving Credit Agreement. CRIIMI MAE entered into a revolving credit
agreement (the "Revolving Credit Agreement") on February 28, 1994 with a group
of banks under which the banks have agreed to loan CRIIMI MAE an aggregate
principal amount of $110 million. On June 1, 1994, an additional $25 million
was made available for borrowing by CRIIMI MAE under this facility. The terms
of the Revolving Credit Agreement, as amended, prohibit CRIIMI MAE or its
subsidiaries from: (i) creating, incurring, or permitting any lien on any
assets of CRIIMI MAE or its subsidiaries; (ii) incurring, subject to certain
exceptions, any debt not expressly approved by the lending banks; and (iii)
permitting the debt-to-equity ratio to exceed 2.5:1.
Bank Term Loan. On October 23, 1991, CRIIMI MAE entered into a credit
agreement with two banks for a reducing term loan facility (the "Bank Term
Loan") in an aggregate amount not to exceed $85.0 million, subject to certain
terms and conditions. In December 1992, the credit agreement was amended to
increase the Bank Term Loan to $100 million. Certain terms of the Bank Term
Loan prohibit CRIIMI MAE or its subsidiaries from incurring any additional debt
unless expressly approved by the lending banks. The Bank Term Loan also
requires that CRIIMI MAE's debt-to-equity ratio cannot exceed 2.5:1.
Terms
The Indenture will provide that the Debt Securities may be issued without
limit as to aggregate principal amount, in one or more series, in each case as
established from time to time in or pursuant to authority granted by a
resolution of the CRIIMI MAE Board or as established in one or more indentures
supplemental to such 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 issuances of additional Debt Securities of such series.
The Indenture will also provide that there may be more than one Trustee
thereunder, each with respect to one or more series of Debt Securities. Any
Trustee under the Indenture may resign or be removed with respect to one or more
series of Debt Securities, and a successor Trustee may be appointed to act with
respect to such series. In the event that two or more persons are acting as
Trustee with respect to different series of Debt Securities, each such Trustee
shall be a Trustee of a trust under the Indenture separate and apart from the
trust administered by any other Trustee, and, except as otherwise indicated
therein, any action described
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therein to be taken by the Trustee may be taken by each such Trustee with
respect to, and only with respect to, the one or more series of Debt Securities
for which it is Trustee under the Indenture.
Reference is made to the Prospectus Supplement relating to the series of
Debt Securities being offered for the specific terms thereof, including:
(1) the title of such Debt Securities;
(2) the aggregate principal amount of such Debt Securities and any limit on
such aggregate principal amount;
(3) the percentage of the principal amount at which such Debt Securities
will be issued and, if other than the principal amount thereof, the portion of
the principal amount thereof payable upon declaration of acceleration of the
maturity thereof, or (if applicable) the portion of the principal amount of
such Debt Securities that is convertible into Common Shares or Preferred
Shares, or the method by which any such portion shall be determined;
(4) if convertible, in connection with the preservation of CRIIMI MAE's
status as a REIT, any applicable limitations on the ownership or transferability
of the Common Shares or Preferred Shares into which such Debt Securities are
convertible;
(5) the date or dates, or the method for determining such 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 such date or dates,
from which any such interest will accrue, the interest payment dates on which
any such interest will be payable, the regular record dates for such interest
payment dates, or the method by which 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) and
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 CRIIMI MAE in respect of such
Debt Securities and the Indenture may be served;
(9) the period or periods within which, the price or prices at which and
the other terms and conditions upon which such Debt Securities may be
redeemed, as a whole or in part, at the option of CRIIMI MAE, if CRIIMI MAE is
to have such an option;
(10) the obligation, if any, of CRIIMI MAE 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 other 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;
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(12) whether the amount of payments of principal of (and premium, if any)
or interest, if any, on such Debt Securities may be determined with reference
to an index, formula or other method (which index, formula or method may, but
need not be, based on a currency, currencies, currency unit or units or
composite currency or currencies) and the manner in which such amounts shall
be determined;
(13) whether such Debt Securities will be issued in the form of one or more
global securities and whether such global securities are to be issuable in a
temporary global form or permanent global form;
(14) 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 Indenture;
(15) whether such Debt Securities will be issued in certificated or book-
entry form;
(16) whether such Debt Securities will be in registered or bearer form and,
if in registered form, the denominations thereof if other than $1,000 and any
integral multiple thereof and, if in bearer form, the denominations thereof and
terms and conditions relating thereto;
(17) the applicability, if any, of the defeasance and covenant defeasance
provisions of the Indenture;
(18) the terms, if any, upon which such Debt Securities may be convertible
into Common Shares or Preferred Shares 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;
(19) whether and under what circumstances CRIIMI MAE will pay additional
amounts on such Debt Securities in respect of any tax, assessment or
governmental charge and, if so, whether CRIIMI MAE will have the option to
redeem such Debt Securities in lieu of making such payment; and
(20) any other terms of such Debt Securities not inconsistent with the
provisions of the Indenture.
The Debt Securities may provide for less than the entire principal amount
thereof to be payable upon declaration of acceleration of the maturity thereof
("Original Issue Discount Securities") or that the principal amount thereof
payable at their stated maturity may be more or less than the principal amount
thereof at original issuance ("Indexed Securities"). Special U.S. federal
income tax, accounting and other considerations applicable to Original Issue
Discount Securities or Indexed Securities will be described in the applicable
Prospectus Supplement.
Except as may be set forth in any Prospectus Supplement, the Debt Securities
will not contain any provisions that would limit the ability of CRIIMI MAE to
incur indebtedness or that would afford holders of Debt Securities protection in
the event of a highly leveraged or similar transaction involving CRIIMI MAE or
in the event of a change of control. Restrictions on ownership and transfers of
CRIIMI MAE's Common Shares and Preferred Shares are designed to preserve its
status as a REIT and, therefore, may act to prevent or hinder a change of
control. See "Description of Capital Stock." Reference is made to the
applicable Prospectus Supplement for information with respect to any deletions
from, modifications of, or additions to, the events of default or covenants of
CRIIMI MAE 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.
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Unless otherwise specified in the applicable Prospectus Supplement, the
principal of (and applicable premium, if any) and interest on any series of Debt
Securities will be payable at the corporate trust office of the Trustee;
provided that, at the option of CRIIMI MAE, payment of interest may be made by
check mailed to the address of the person entitled thereto as it appears in the
register to be maintained by the Trustee 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 interest
payment date with respect to a Debt Security ("Defaulted Interest") will
forthwith cease to be payable to the holder on the applicable 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 whereof shall be given to each holder of such Debt
Security not less than 10 days prior to such Special Record Date, or may be
paid at any time in any other lawful manner, all as more completely described
in the Indenture.
Subject to certain limitations imposed upon Debt Securities issued in book-
entry form, the Debt Securities of any series will be exchangeable for other
Debt Securities of the same series and of a like aggregate principal amount and
tenor of different authorized denominations upon surrender of such Debt
Securities at the corporate trust office of the applicable Trustee. In
addition, subject to certain limitations imposed upon Debt Securities issued in
book-entry form, the Debt Securities of any series may be surrendered for
conversion or registration of transfer thereof at the corporate trust office of
the applicable Trustee. Every Debt Security tendered for conversion,
registration of transfer or exchange shall be duly endorsed or accompanied by a
written instrument of transfer. No service charge will be made for any
registration of transfer or exchange of any Debt Securities, but CRIIMI MAE may
require payment of a sum sufficient to cover any tax or other governmental
charge payable in connection therewith. If the applicable Prospectus Supplement
refers to any transfer agent (in addition to the applicable Trustee) initially
designated by CRIIMI MAE with respect to any series of Debt Securities, CRIIMI
MAE may at any time rescind the designation of any such transfer agent or
approve a change in the location through which any such transfer agent acts,
except that CRIIMI MAE will be required to maintain a transfer agent in each
place of payment for such series. CRIIMI MAE may at any time designate
additional transfer agents with respect to any series of Debt Securities.
To protect CRIIMI MAE's status as a REIT, CRIIMI MAE may refuse to effect a
transfer of Debt Securities if, as a result of such transfer, any person would
beneficially own, either directly or indirectly, more than 9.8% of CRIIMI MAE's
outstanding capital stock. Neither CRIIMI MAE nor any Trustee shall be required
to (i) 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) 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) issue, register the transfer of or exchange any Debt
Security that 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
The Indenture will provide that CRIIMI MAE may consolidate with, or sell,
lease or convey all or substantially all of its assets to, or merge with or
into, any other corporation or trust or other entity provided that (a) either
CRIIMI MAE shall be the continuing corporation, or the successor corporation (if
other than CRIIMI MAE) formed by or resulting from any such consolidation or
merger or which shall have received the transfer of such assets shall expressly
assume payment of the principal of (and premium, if any) and interest on all of
the Debt Securities and the due and punctual performance and observance of all
of the covenants and conditions contained in the Indenture; (b) immediately
after giving effect to such transaction and treating any indebtedness that
becomes an obligation of CRIIMI MAE or any subsidiary as a result thereof as
having been incurred by CRIIMI MAE or such subsidiary at the time of such
transaction, no event
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of default under the 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 officers' certificate and legal opinion covering such
conditions shall be delivered to each Trustee.
Certain Covenants
Existence. Except as permitted under "--Merger, Consolidation or Sale,"
CRIIMI MAE will do or cause to be done all things necessary to preserve and keep
in full force and effect its corporate existence, rights (charter and statutory)
and franchises; provided, however, that CRIIMI MAE shall not be required to
preserve any right or franchise if it determines that the preservation thereof
is no longer desirable in the conduct of its business.
Maintenance of Properties. CRIIMI MAE 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 CRIIMI MAE may be necessary so that the business
carried on in connection therewith may be properly and advantageously conducted
at all times; provided, however, that CRIIMI MAE and its subsidiaries shall not
be prevented from selling or otherwise disposing for value its mortgage
investments and other assets in the ordinary course of business.
Payment of Taxes and Other Claims. CRIIMI MAE will pay or discharge or
cause to be paid or discharged, before the same shall become delinquent, (i) all
taxes, assessments and governmental charges levied or imposed upon it or any
subsidiary or upon the income, profits or property of CRIIMI MAE or any
subsidiary, and (ii) all lawful claims for labor, materials and supplies which,
if unpaid, might by law become a lien upon the property of CRIIMI MAE or any
subsidiary; provided, however, that CRIIMI MAE 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.
Additional Covenants. Any additional covenants of CRIIMI MAE with respect
to any series of Debt Securities will be set forth in the Prospectus Supplement
relating thereto.
Events of Default, Notice and Waiver
The Indenture 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 when due and payable, at maturity, upon
redemption or otherwise which continues for five business days; (c) default in
making any sinking fund payment as required for any Debt Security of such series
which continues for five business days; (d) default in the performance or breach
of any other covenant or warranty of CRIIMI MAE contained in the Indenture
(other than a covenant added to the Indenture solely for the benefit of a series
of Debt Securities issued thereunder other than such series), continued for 60
days after written notice as provided in the Indenture; (e) a default not being
contested in good faith by CRIIMI MAE under any bond, debenture, note or other
evidence of indebtedness for money borrowed by CRIIMI MAE (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 CRIIMI MAE (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 by CRIIMI MAE, whether such indebtedness now exists or shall
hereafter be created which default shall have resulted in such indebtedness
becoming or being declared due and payable
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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; (f) certain events of bankruptcy, insolvency or
reorganization, or court appointment of a receiver, liquidator or trustee of
CRIIMI MAE or any Significant Subsidiary or either of its properties; and (g)
any other Event of Default provided with respect to a particular series of Debt
Securities. The term "Significant Subsidiary" means each significant subsidiary
(as defined in Regulation S-X promulgated under the Securities Act) of CRIIMI
MAE.
If an Event of Default under the Indenture with respect to Debt Securities
of any series at the time outstanding occurs and is continuing, then in every
such case the applicable Trustee or the holders of not less than a majority 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 the Debt Securities of
that series to be due and payable immediately by written notice thereof to
CRIIMI MAE (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
the Indenture, as the case may be) has been made, but before a judgment or
decree for payment of the money due has been obtained by the applicable
Trustee, the holders of not less than a majority in principal amount of
outstanding Debt Securities of such series (or of all Debt Securities then
outstanding under the Indenture, as the case may be) may rescind and annul
such declaration and its consequences if (a) CRIIMI MAE shall have paid or
deposited with the applicable Trustee all required payments of the principal
of (and premium, if any) and interest on the Debt Securities of such series
(or of all Debt Securities then outstanding under the applicable Indenture, as
the case may be), plus certain fees, expenses, disbursements and advances of
the applicable Trustee and (b) all Events of Default, other than the non-
payment of accelerated principal (or specified portion thereof), with respect
to Debt Securities of such series (or of all Debt Securities then outstanding
under the Indenture, as the case may be) have been cured or waived as provided
in the Indenture. The Indenture will also provide that the holders of not less
than a majority in principal amount of the outstanding Debt Securities of any
series (or of all Debt Securities then outstanding under the Indenture, as the
case may be) may waive any past default with respect to such series and its
consequences, except a default (x) in the payment of the principal of (or
premium, if any) or interest on any Debt Security of such series or (y) in
respect of a covenant or provision contained in the Indenture that cannot be
modified or amended without the consent of the holder of each outstanding Debt
Security affected thereby.
Each Trustee will be required to give notice to the holders of Debt
Securities within 90 days of a default under the Indenture unless such default
shall have been cured or waived; provided, however, that such Trustee may
withhold notice to the holders of any series of Debt Securities of any default
with respect to such series (except a default in the payment of the principal
of (or premium, if any) or interest 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 designated officers of such Trustee consider such withholding
to be in the interest of such holders.
The right of any holder to institute a proceeding with respect to the
Indenture will be subject to certain conditions precedent including notice and
indemnity to the Trustee, but the holder has an absolute right to receipt of
principal of (and premium, if any) and interest on such holder's Debt Security
on or after the respective due dates expressed in the Debt Security, and to
institute suit for the enforcement of any such payments.
Subject to provisions in the Indenture relating to its duties in case of
default, no Trustee will be under an obligation to exercise any of its rights or
powers under the Indenture at the request or direction of any holders of any
series of Debt Securities then outstanding under the Indenture, unless such
holders shall have offered to the Trustee thereunder reasonable security or
indemnity. The holders of not less than a majority in aggregate principal
amount of the outstanding Debt Securities of any series (or of all Debt
Securities then outstanding under the Indenture, as the case may be) shall have
the right to direct the time, method and place of conducting any proceeding for
any remedy available to the applicable Trustee, or of exercising any trust
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or power conferred upon such Trustee. However, each Trustee may refuse to
follow any direction which is in conflict with any law or the 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, CRIIMI MAE will be
required to deliver to each Trustee a certificate, signed by one of several
specified officers, stating whether or not such officer has knowledge of any
default under the Indenture and, if so, specifying each such default and the
nature and status thereof.
Modification of the Indentures
Modifications and amendments of the Indenture may be made only with the
consent of the holders of not less than a majority in aggregate principal amount
of all outstanding Debt Securities issued under such Indenture 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 or amount of interest
on, or any premium payable on redemption of, any such Debt Security, or reduce
the amount of principal of an Original Issue Discount Security that would be due
and payable upon declaration of acceleration of the maturity thereof or would be
provable in bankruptcy, or adversely affect any right of repayment of the holder
of any such Debt Security; (c) change the place of payment, or the coin or
currency, for payment of principal of, premium, if any, or interest on any such
Debt Security; (d) impair the right to institute suit for the enforcement of any
payment on or with respect to any such Debt Security; (e) reduce the above-
stated percentage of outstanding Debt Securities of any series necessary to
modify or amend the Indenture, to waive compliance with certain provisions
thereof or certain defaults and consequences thereunder or to reduce the quorum
or voting requirements set forth in the Indenture; or (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.
The holders of not less than a majority in principal amount of outstanding
Debt Securities issued under the Indenture have the right to waive compliance by
CRIIMI MAE with certain covenants in such Indenture.
Modifications and amendments of the Indenture may be made by CRIIMI MAE and
the respective Trustee thereunder without the consent of any holder of Debt
Securities for any of the following purposes: (i) to evidence the succession of
another person to CRIIMI MAE as obligor under such Indenture; (ii) to add to the
covenants of CRIIMI MAE for the benefit of the holders of all or any series of
Debt Securities or to surrender any right or power conferred upon CRIIMI MAE in
such Indenture; (iii) to add Events of Default for the benefit of the holders of
all or any series of Debt Securities; (iv) to add or change any provisions of
the Indenture to facilitate the issuance of, or to liberalize certain terms of,
Debt Securities in bearer form, or to permit or facilitate the issuance of Debt
Securities in uncertificated form, provided that such action shall not adversely
affect the interests of the holders of the Debt Securities of any series in any
material respect; (v) to change or eliminate any provisions of the Indenture,
provided that any such change or elimination shall become effective only when
there are no Debt Securities outstanding of any series created prior thereto
which are entitled to the benefit of such provision; (vi) to secure the Debt
Securities; (vii) to establish the form or terms of Debt Securities of any
series, including the provisions and procedures, if applicable, for the
conversion of such Debt Securities into Common Shares or Preferred Shares;
(viii) to provide for the acceptance of appointment by a successor Trustee or
facilitate the administration of the trusts under the Indenture by more than one
Trustee; (ix) to cure any ambiguity, defect or inconsistency in the Indenture,
provided that such action shall not adversely affect the interests of holders of
Debt Securities of any series issued under such Indenture in any material
respect; or (x) to supplement any of the provisions of the Indenture to the
extent necessary to permit or facilitate defeasance and discharge of any series
of such Debt
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Securities, provided that such action shall not adversely affect the interests
of the holders of the Debt Securities of any series in any material respect.
The Indenture will provide that in determining whether the holders of the
requisite principal amount of outstanding Debt Securities of a series have given
any request, demand, authorization, direction, notice, consent or waiver
thereunder or whether a quorum is present at a meeting of holders of Debt
Securities, (i) the principal amount of an Original Issue Discount Security that
shall be deemed to be outstanding shall be the amount of the principal thereof
that would be due and payable as of the date of such determination upon
declaration of acceleration of the maturity thereof, (ii) the principal amount
of a Debt Security denominated in a foreign currency that shall be deemed
outstanding shall be the U.S. dollar equivalent, determined on the issue date
for such Debt Security, of the principal amount (or, in the case of an Original
Issue Discount Security, the U.S. dollar equivalent on the issue date of such
Debt Security of the amount determined as provided in (i) above), (iii) the
principal amount of an Indexed Security that shall be deemed outstanding shall
be the principal face amount of such Indexed Security at original issuance,
unless otherwise provided with respect to such Indexed Security pursuant to the
Indenture, and (iv) Debt Securities owned by CRIIMI MAE or any other obligor
upon the Debt Securities or any affiliate of CRIIMI MAE 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. A meeting may be called at any time by
the applicable Trustee, and also, upon request, by CRIIMI MAE or the holders
of at least 25% in principal amount of the outstanding Debt Securities of such
series, in any such case upon notice given as provided in the Indenture.
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 to adopt a resolution, and at any reconvened meeting, will be
persons holding or representing a majority in principal amount of the
outstanding Debt Securities of a series; provided, however, that if any action
is to be taken at such meeting with respect to a consent or waiver which may
be given by the holders of not less than a specified percentage in principal
amount of the outstanding Debt Securities of a series, the persons holding or
representing such specified percentage in principal amount of the outstanding
Debt Securities of such series will constitute a quorum.
Notwithstanding the foregoing provisions, if any action is to be taken at a
meeting of holders of Debt Securities of any series with respect to any request,
demand, authorization, direction, notice, consent, waiver or other action that
the Indenture expressly provides may be made, given or taken by the holders of a
specified percentage in principal amount of all outstanding Debt Securities
affected thereby, or of the holders of such series and one or more additional
series: (i) there shall be no minimum quorum requirement for such meeting and
(ii) the principal amount of the outstanding Debt Securities of such series that
vote in favor of such request, demand, authorization, direction, notice,
consent, waiver or other action shall be taken into account in determining
whether such request, demand, authorization, direction, notice, consent, waiver
or other action has been made, given or taken under the Indenture.
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Subordination
Upon any distribution to creditors of CRIIMI MAE in a liquidation,
dissolution or reorganization, the payment of the principal of and interest on
the Debt Securities will be subordinated in right of payment to the prior
payment in full of all "Senior Debt" (as defined below), but the obligation of
CRIIMI MAE to make payment of the principal and interest on the Debt
Securities will not otherwise be affected. No payment of principal or interest
may be made on the Debt Securities at any time if a default on Senior Debt
exists that permits the holders of such Senior Debt to accelerate its maturity
and the default is the subject of judicial proceedings or CRIIMI MAE receives
notice of the default. After all Senior Debt is paid in full and until the
Debt Securities are paid in full, holders will be subrogated to the rights of
holders of Senior Debt to the extent that distributions otherwise payable to
holders have been applied to the payment of Senior Debt. By reason of such
subordination, in the event of a distribution of assets upon insolvency,
certain general creditors of CRIIMI MAE may recover more, ratably, than
holders of the Debt Securities.
"Senior Debt" will be defined in the Indenture as the principal of and
interest on, or substantially similar payments to be made by CRIIMI MAE in
respect of, the following, whether outstanding at the date of execution of the
Indenture or thereafter incurred, created or assumed: (a) indebtedness of CRIIMI
MAE for money borrowed or represented by purchase-money obligations, (b)
indebtedness of CRIIMI MAE evidenced by notes, debentures, or bonds, or other
securities issued under the provisions of an indenture, fiscal agency agreement
or other instrument, (c) obligations of CRIIMI MAE as lessee under leases of
property either made as part of any sale and leaseback transaction to which
CRIIMI MAE is a party or otherwise, (d) indebtedness of any partnerships or
joint ventures which is included in the consolidated financial statements of
CRIIMI MAE, (e) indebtedness, obligations and liabilities of others in respect
of which CRIIMI MAE is liable contingently or otherwise to pay or advance money
or property or as guarantor, endorser or otherwise or which CRIIMI MAE has
agreed to purchase or otherwise acquire, and (f) any binding commitment of
CRIIMI MAE to fund any mortgage investment or to fund any investment in any
entity making such mortgage investment, in each case other than (1) any such
indebtedness, obligation or liability referred to in clauses (a) through (f)
above as to which, in the instrument creating or evidencing the same pursuant to
which the same is outstanding, it is provided that such indebtedness, obligation
or liability is not superior in right of payment to the Debt Securities or rank
pari passu with the Debt Securities, (2) any such indebtedness, obligation or
liability which is subordinated to indebtedness of CRIIMI MAE to substantially
the same extent as or to a greater extent than the Debt Securities are
subordinated, and (3) the Debt Securities. Senior Debt includes indebtedness
arising under the Master Repurchase Agreements, the Revolving Credit Agreement
and the Bank Term Loan. See "--General." There will be no restrictions in the
Indenture upon the creation of additional Senior Debt.
Discharge, Defeasance and Covenant Defeasance
Under the Indenture, CRIIMI MAE will be able to discharge certain
obligations to holders of any series of Debt Securities issued thereunder that
have not already been delivered to the applicable Trustee for cancellation and
that either have become due and payable or will become due and payable within
one year (or scheduled for redemption within one year) by irrevocably
depositing with the applicable Trustee, in trust, 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 provide that, under certain circumstances, CRIIMI MAE may
elect either (a) to defease and be discharged from any and all obligations with
respect to such Debt Securities (except for the obligation to pay additional
amounts, if any, upon the occurrence of certain events of tax, assessment or
governmental charge with respect to payments on such Debt Securities and the
obligations to register the transfer or exchange of such Debt Securities, to
replace temporary or mutilated, destroyed, lost or stolen Debt Securities,
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to maintain an office or agency in respect of such Debt Securities and to hold
moneys for payment in trust) ("defeasance") or (b) to be released from its
obligations with respect to such Debt Securities under the Indenture or, under
certain circumstances, 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 CRIIMI MAE 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 be established only if, among other things, CRIIMI MAE has
delivered to the applicable Trustee an opinion of counsel (as specified in each
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 U.S. federal income tax law occurring after the date of the
Indenture.
"Government Obligations" means securities which are (i) direct obligations
of the United States of America or the government which issued the foreign
currency in which the Debt Securities of a particular series are payable, for
the payment of which its full faith and credit is pledged or (ii) obligations
of a person controlled or supervised by and acting as an agency or
instrumentality of the United States of America or such government which
issued the foreign currency in which the Debt Securities of such series are
payable, the payment of which is unconditionally guaranteed as a full faith
and credit obligation by the United States of America or such other
government, which, in either case, are not callable or redeemable at the
option of the issuer thereof, and shall also include a depository receipt
issued by a bank or trust company as custodian with respect to any such
Government Obligation or a specific payment of interest on or principal of any
such Government Obligation held by such custodian for the account of the
holder of a depository receipt, provided that (except as required by law) such
custodian is not authorized to make any deduction from the amount payable to
the holder of such depository receipt from any amount received by the
custodian in respect of the Government Obligation or the specific payment of
interest on or principal of the Government Obligation evidenced by such
depository receipt.
Unless otherwise provided in the applicable Prospectus Supplement, if after
CRIIMI MAE 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 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 transactions by a central bank or other public
institutions of or within the international banking community, (ii) the European
Currency Unit ("ECU") both within the European Monetary System established by
the Resolution of December 5, 1978 of the council of the European Economic
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Community, European Coal and Steel Community and the European Atomic Energy
Community (collectively, the "European Communities") 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 provided in the
applicable Prospectus Supplement, all payments of principal of (and premium, if
any) and interest on any Debt Security that is payable in a foreign currency
that ceases to be used by its government of issuance shall be made in U.S.
dollars.
The applicable Prospectus Supplement may further describe the provisions, if
any, permitting such defeasance or covenant defeasance, including any
modifications of the provisions described above, with respect to the Debt
Securities of or within a particular series.
Conversion Rights
The terms and conditions, if any, upon which the Debt Securities are
convertible into Common Shares or Preferred Shares will be set forth in the
applicable Prospectus Supplement relating thereto. Such terms will include
whether such Debt Securities are convertible into Common Shares or Preferred
Shares, the conversion price (or manner of calculation thereof), the conversion
period, provisions as to whether conversion will be at the option of the holders
or CRIIMI MAE, the events requiring an adjustment of the conversion price and
provisions affecting conversion in the event of the redemption of such Debt
Securities.
To protect CRIIMI MAE's status as a REIT, CRIIMI MAE may refuse to effect a
conversion of the Debt Securities if, as a result of such conversion, any person
would beneficially own, either directly or indirectly, more than 9.8% of CRIIMI
MAE's outstanding capital stock. See "Description of Capital Stock -- Common
Shares -- Restrictions on Ownership and Transfer."
Global Securities
The Debt Securities of a series may be issued in whole or in part in the
form of one or more global securities (the "Global Securities") that will be
deposited with, or on behalf of, a depositary identified in the applicable
Prospectus Supplement relating to such series. Global Securities may be issued
in either registered or bearer form and in either temporary or permanent form.
The specific terms of the depositary arrangement with respect to a series of
Debt Securities will be described in the applicable Prospectus Supplement
relating to such series.
DESCRIPTION OF CAPITAL STOCK
The authorized capital stock of CRIIMI MAE comprises 60 million Common
Shares and 25 million Preferred Shares. As of June 23, 1994, there were issued
and outstanding 25,183,533 Common Shares and no Preferred Shares. The Common
Shares are currently listed and are trading on the NYSE, and CRIIMI MAE will
seek to list with the NYSE any Common Shares offered in any Prospectus
Supplement hereto.
Preferred Shares
General. The following description of the Preferred Shares sets forth
certain general terms and provisions of the Preferred Shares to which any
Prospectus Supplement may relate. The statements below describing the
Preferred Shares are in all respects subject to and qualified in their
entirety by reference to the applicable provisions of CRIIMI MAE's Articles of
Incorporation, as amended (the "Articles of Incorporation") and Bylaws and
applicable articles supplementary relating to any offering of Preferred Shares
("Articles Supplementary").
Terms. Subject to the limitations prescribed by the Articles of
Incorporation, the CRIIMI MAE Board is authorized to fix the number of shares
constituting each series of Preferred Shares and the designations and
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powers, preferences and relative, participating, optional or other special
rights and qualifications, limitations or restrictions thereof, including such
provisions as may be desired concerning voting, redemption, dividends,
dissolution or the distribution of assets, conversion or exchange, and such
other subjects or matters as may be fixed by resolution of the CRIIMI MAE Board.
The Preferred Shares will, when issued, be fully paid and nonassessable by
CRIIMI MAE and will have no preemptive rights.
Reference is made to the Prospectus Supplement relating to the Preferred
Shares offered thereby for specific terms, including:
(1) The title and stated value of such Preferred Shares;
(2) The number of such Preferred Shares offered, the liquidation preference
per share and the offering price of such Preferred Shares;
(3) The dividend rate(s), period(s) and/or payment date(s) or method(s) of
calculation thereof applicable to such Preferred Shares;
(4) The date from which dividends on such Preferred Shares shall
accumulate, if applicable;
(5) The procedures for any auction and remarketing, if any, for such
Preferred Shares;
(6) The provision for a sinking fund, if any, for such Preferred Shares;
(7) The provision for redemption, if applicable, of such Preferred Shares;
(8) Any listing of such Preferred Shares on any securities exchange;
(9) The terms and conditions, if applicable, upon which such Preferred
Shares will be convertible into Common Shares, including the conversion price
(or manner of calculation thereof);
(10) Any other specific terms, preferences, rights, limitations or
restrictions of such Preferred Shares;
(11) A discussion of federal income tax considerations applicable to such
Preferred Shares;
(12) The relative ranking and preferences of such Preferred Shares as to
dividend rights and rights upon liquidation, dissolution or winding up of the
affairs of CRIIMI MAE;
(13) Any limitations on issuance of any series of Preferred Shares ranking
senior to or on a parity with such series of Preferred Shares as to dividend
rights and rights upon liquidation, dissolution or winding up of the affairs of
CRIIMI MAE; and
(14) Any limitations on direct or beneficial ownership and restrictions on
transfer, in each case as may be appropriate to preserve the status of CRIIMI
MAE as a REIT.
Rank. Unless otherwise specified in the Prospectus Supplement, the
Preferred Shares will, with respect to dividend rights and rights upon
liquidation, dissolution or winding up of CRIIMI MAE, rank (i) senior to all
classes or series of Common Shares and to all equity securities ranking junior
to such Preferred Shares with respect to dividend rights or rights upon
liquidation, dissolution or winding up of CRIIMI MAE; (ii) on a parity with
all equity securities issued by CRIIMI MAE the terms of which specifically
provide that such equity securities rank on a parity with the Preferred Shares
with respect to dividend rights or rights upon liquidation, dissolution or
winding up of CRIIMI MAE; and (iii) junior to all equity securities issued by
CRIIMI MAE the terms of which specifically provide that such equity securities
rank senior to the Preferred Shares with
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respect to dividend rights or rights upon liquidation, dissolution or winding up
of CRIIMI MAE. The term "equity securities" does not include convertible debt
securities.
Dividends. Holders of the Preferred Shares of each series will be
entitled to receive, when, as and if declared by the CRIIMI MAE Board, out of
assets of CRIIMI MAE legally available for payment, cash dividends at such
rates and on such dates as will be set forth in the applicable Prospectus
Supplement. Each such dividend shall be payable to holders of record as they
appear on the share transfer books of CRIIMI MAE on such record dates as shall
be fixed by the CRIIMI MAE Board.
Dividends on any series of the Preferred Shares may be cumulative or non-
cumulative, as provided in the applicable Prospectus Supplement. Dividends, if
cumulative, will be cumulative from and after the date set forth in the
applicable Prospectus Supplement. If the CRIIMI MAE Board fails to declare a
dividend payable on a dividend payment date on any series of the Preferred
Shares for which dividends are noncumulative, then the holders of such series of
the Preferred Shares will have no right to receive a dividend in respect of the
dividend period ending on such dividend payment date, and CRIIMI MAE will have
no obligation to pay the dividend accrued for such period, whether or not
dividends on such series are declared payable on any future dividend payment
date.
If Preferred Shares of any series are outstanding, no dividends will be
declared or paid or set apart for payment on the Preferred Shares of any other
series ranking, as to dividends, on a parity with or junior to the Preferred
Shares of such series for any period unless (i) if such series of Preferred
Shares has a cumulative dividend, full cumulative dividends have been or
contemporaneously are declared and paid or declared and a sum sufficient for the
payment thereof set apart for such payment on the Preferred Shares of such
series for all past dividend periods and the then current dividend period or
(ii) if such series of Preferred Shares does not have a cumulative dividend,
full dividends for the then current dividend period have been or
contemporaneously are declared and paid or declared and a sum sufficient for the
payment thereof set apart for such payment on the Preferred Shares of such
series. When dividends are not paid in full (or a sum sufficient for such full
payment is not so set apart) upon Preferred Shares of any series and the shares
of any other series of Preferred Shares ranking on a parity as to dividends with
the Preferred Shares of such series, all dividends declared upon Preferred
Shares of such series and any other series of Preferred Shares ranking on a
parity as to dividends with such Preferred Shares shall be declared pro rata so
that the amount of dividends declared per Preferred Share of such series and
such other series of Preferred Shares shall in all cases bear to each other the
same ratio that accrued dividends per share on the Preferred Shares of such
series (which shall not include any accumulation in respect of unpaid dividends
for prior dividend periods if such Preferred Shares do not have a cumulative
dividend) and such other series of Preferred Shares bear to each other. No
interest, or sum of money in lieu of interest, shall be payable in respect of
any dividend payment or payments on Preferred Shares of such series which may be
in arrears.
Except as provided in the immediately preceding paragraph, unless (i) if
such series of Preferred Shares has a cumulative dividend, full cumulative
dividends on the Preferred Shares of such series have been or
contemporaneously are declared and paid or declared and a sum sufficient for
the payment thereof set apart for payment for all past dividend periods and
the then current dividend period and (ii) if such series of Preferred Shares
does not have a cumulative dividend, full dividends on the Preferred Shares of
such series have been or contemporaneously are declared and paid or declared
and a sum sufficient for the payment thereof set apart for payment for the
then current dividend period, no dividends (other than in Common Shares or
other capital shares ranking junior to the Preferred Shares of such series as
to dividends and upon liquidation) shall be declared or paid or set aside for
payment or other distribution shall be declared or made upon the Common
Shares, or any other capital shares of CRIIMI MAE ranking junior to or on a
parity with the Preferred Shares of such series as to dividends or upon
liquidation, nor shall any Common Shares, or any other capital shares of
CRIIMI MAE ranking junior to or on a parity with the Preferred Shares of such
series as to dividends or upon liquidation be redeemed, purchased or otherwise
acquired for any consideration (or any moneys be paid to or made available for
a sinking fund for the redemption of any such shares) by CRIIMI
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MAE (except by conversion into or exchange for other capital shares of CRIIMI
MAE ranking junior to the Preferred Shares of such series as to dividends and
upon liquidation).
Any dividend payment made on shares of a series of Preferred Shares shall
first be credited against the earliest accrued but unpaid dividend due with
respect to shares of such series which remains payable.
Redemption. If so provided in the applicable Prospectus Supplement, the
Preferred Shares will be subject to mandatory redemption or redemption at the
option of CRIIMI MAE, as a whole or in part, in each case upon the terms, at the
times and at the redemption prices set forth in such Prospectus Supplement.
The Prospectus Supplement relating to a series of Preferred Shares that is
subject to mandatory redemption will specify the number of such Preferred Shares
that shall be redeemed by CRIIMI MAE in each year commencing after a date to be
specified, at a redemption price per share to be specified, together with an
amount equal to all accrued and unpaid dividends thereon (which shall not, if
such Preferred Shares do not have a cumulative dividend, include any
accumulation in respect of unpaid dividends for prior dividend periods) to the
date of redemption. The redemption price may be payable in cash or other
property, as specified in the applicable Prospectus Supplement. If the
redemption price for Preferred Shares of any series is payable only from the net
proceeds of the issuance of capital shares of CRIIMI MAE, the terms of such
Preferred Shares may provide that, if no such capital shares shall have been
issued or to the extent the net proceeds from any issuance are insufficient to
pay in full the aggregate redemption price then due, such Preferred Shares shall
automatically and mandatorily be converted into the applicable capital shares of
CRIIMI MAE pursuant to conversion provisions specified in the applicable
Prospectus Supplement.
Notwithstanding the foregoing, unless (i) if such series of Preferred Shares
has a cumulative dividend, full cumulative dividends on all shares of any series
of Preferred Shares shall have been or contemporaneously are declared and paid
or declared and a sum sufficient for the payment thereof set apart for payment
for all past dividend periods and the then current dividend period and (ii) if
such series of Preferred Shares does not have a cumulative dividend, full
dividends on the Preferred Shares of any series have been or contemporaneously
are declared and paid or declared and a sum sufficient for the payment thereof
set apart for payment for the then current dividend period, no shares of any
series of Preferred Shares shall be redeemed unless all outstanding Preferred
Shares of such series are simultaneously redeemed; provided, however, that the
foregoing shall not prevent the purchase or acquisition of Preferred Shares of
such series to preserve the REIT status of CRIIMI MAE or pursuant to a purchase
or exchange offer made on the same terms to holders of all outstanding Preferred
Shares of such series, and, unless (i) if such series of Preferred Shares has a
cumulative dividend, full cumulative dividends on all outstanding shares of any
series of Preferred Shares have been or contemporaneously are declared and paid
or declared and a sum sufficient for the payment thereof set apart for payment
for all past dividend periods and the then current dividend period and (ii) if
such series of Preferred Shares does not have a cumulative dividend, full
dividends on the Preferred Shares of any series have been or contemporaneously
are declared and paid or declared and a sum sufficient for the payment thereof
set apart for payment for the then current dividend period, CRIIMI MAE shall not
purchase or otherwise acquire directly or indirectly any Preferred Shares of
such series (except by conversion into or exchange for capital shares of CRIIMI
MAE ranking junior to the Preferred Shares of such series as to dividends and
upon liquidation); provided, however, that the foregoing shall not prevent the
purchase or acquisition of Preferred Shares of such series to preserve the REIT
status of CRIIMI MAE or pursuant to a purchase or exchange offer made on the
same terms to holders of all outstanding Preferred Shares of such series.
If fewer than all of the outstanding Preferred Shares of any series are to
be redeemed, the number of shares to be redeemed will be determined by CRIIMI
MAE and such shares may be redeemed pro rata from the holders of record of
such shares in proportion to the number of such shares held by such holders
(with adjustments to avoid redemption of fractional shares) or any other
equitable method determined by CRIIMI MAE.
24
<PAGE>
Notice of redemption will be mailed at least 30 days but not more than 60
days before the redemption date to each holder of record of Preferred Shares
of any series to be redeemed at the address shown on the share transfer books
of CRIIMI MAE. Each notice shall state: (i) the redemption date; (ii) the
number of shares and series of the Preferred Shares to be redeemed; (iii) the
redemption price; (iv) the place or places where certificates for such
Preferred Shares are to be surrendered for payment of the redemption price;
(v) that dividends on the shares to be redeemed will cease to accrue on such
redemption date; and (vi) the date upon which the holder's conversion rights,
if any, as to such shares shall terminate. If fewer than all the Preferred
Shares of any series are to be redeemed, the notice mailed to each such holder
thereof shall also specify the number of Preferred Shares to be redeemed from
each such holder. If notice of redemption of any Preferred Shares has been
given and if the funds necessary for such redemption have been set aside by
CRIIMI MAE in trust for the benefit of the holders of any Preferred Shares so
called for redemption, then from and after the redemption date dividends will
cease to accrue on such Preferred Shares, such Preferred Shares shall no
longer be deemed outstanding and all rights of the holders of such shares will
terminate, except the right to receive the redemption price. Any moneys so
deposited which remain unclaimed by the holders of the Preferred Shares at the
end of two years after the redemption date will be returned by such bank or
trust company to CRIIMI MAE.
Liquidation Preference. Upon any voluntary or involuntary liquidation,
dissolution or winding up of the affairs of CRIIMI MAE, then, before any
distribution or payment shall be made to the holders of any Common Shares or any
other class or series of capital shares of CRIIMI MAE ranking junior to the
Preferred Shares in the distribution of assets upon any liquidation, dissolution
or winding up of CRIIMI MAE, the holders of each series of Preferred Shares
shall be entitled to receive out of assets of CRIIMI MAE legally available for
distribution to stockholders, liquidating distributions in the amount of the
liquidation preference per share (set forth in the applicable Prospectus
Supplement), plus an amount equal to all dividends accrued and unpaid thereon
(which shall not include any accumulation in respect of unpaid dividends for
prior dividend periods if such Preferred Shares do not have a cumulative
dividend). After payment of the full amount of the liquidating distributions to
which they are entitled, the holders of Preferred Shares will have no right or
claim to any of the remaining assets of CRIIMI MAE. In the event that, upon any
such voluntary or involuntary liquidation, dissolution or winding up, the
available assets of CRIIMI MAE are insufficient to pay the amount of the
liquidating distributions on all outstanding Preferred Shares and the
corresponding amounts payable on all shares of other classes or series of
capital shares of CRIIMI MAE ranking on a parity with the Preferred Shares in
the distribution of assets upon liquidation, dissolution or winding up, then the
holders of the Preferred Shares and all other such classes or series of capital
shares shall share ratably in any such distribution of assets in proportion to
the full liquidating distributions to which they would otherwise be respectively
entitled.
If liquidating distributions shall have been made in full to all holders of
Preferred Shares, the remaining assets of CRIIMI MAE shall be distributed among
the holders of any other classes or series of capital shares ranking junior to
the Preferred Shares upon liquidation, dissolution or winding up, according to
their respective rights and preferences and in each case according to their
respective number of shares. For such purposes, the consolidation or merger of
CRIIMI MAE with or into any other corporation, trust or entity, or the sale,
lease or conveyance of all or substantially all of the property or business of
CRIIMI MAE, shall not be deemed to constitute a liquidation, dissolution or
winding up of CRIIMI MAE.
Voting Rights. Holders of the Preferred Shares will not have any voting
rights, except as set forth below or as otherwise from time to time required by
law or as indicated in the applicable Prospectus Supplement.
Unless provided otherwise for any series of Preferred Shares, so long as any
Preferred Shares remain outstanding, CRIIMI MAE will not, without the
affirmative vote or consent of the holders of at least a majority of the shares
of each series of Preferred Shares outstanding at the time, given in person or
by proxy, either in writing or at a meeting (such series voting separately as a
class), (i) authorize or create, or increase the authorized or issued amount of,
any class or series of capital shares ranking prior to such series of
25
<PAGE>
Preferred Shares with respect to payment of dividends or the distribution of
assets upon liquidation, dissolution or winding up or reclassify any authorized
capital shares of CRIIMI MAE into any such shares, or create, authorize or issue
any obligation or security convertible into or evidencing the right to purchase
any such shares; or (ii) amend, alter or repeal the provisions of CRIIMI MAE's
Articles of Incorporation or the Articles Supplementary for such series of
Preferred Shares, whether by merger, consolidation or otherwise (an "Event"), so
as to materially and adversely affect any right, preference, privilege or voting
power of such series of Preferred Shares or the holders thereof; provided,
however, with respect to the occurrence of any of the Events set forth in (ii)
above, so long as the Preferred Shares remain outstanding with the terms thereof
materially unchanged, taking into account that upon the occurrence of an Event,
CRIIMI MAE may not be the surviving entity, the occurrence of any such Event
shall not be deemed to materially and adversely affect such rights, preferences,
privileges or voting power of holders of Preferred Shares, and provided further
that (x) any increase in the amount of the authorized Common Shares or Preferred
Shares or the authorization, creation or issuance of any other series of
Preferred Shares or any other class or series of capital shares, or (y) any
increase in the amount of authorized shares of such series or any other series
of Preferred Shares or any other class or series of capital shares, in each case
ranking on a parity with or junior to the Preferred Shares of such series with
respect to payment of dividends or the distribution of assets upon liquidation,
dissolution or winding up, shall not be deemed to materially and adversely
affect such rights, preferences, privileges or voting powers.
The foregoing voting provisions will not apply if, at or prior to the time
when the act with respect to which such vote would otherwise be required shall
be effected, all outstanding shares of such series of Preferred Shares shall
have been redeemed or called for redemption and sufficient funds shall have been
deposited in trust to effect such redemption.
Conversion Rights. The terms and conditions, if any, upon which any
series of Preferred Shares are convertible into Common Shares will be set
forth in the applicable Prospectus Supplement relating thereto. Such terms
will include the number of Common Shares into which the Preferred Shares are
convertible, the conversion price (or manner of calculation thereof), the
conversion period, provisions as to whether conversion will be at the option
of the holders of the Preferred Shares or CRIIMI MAE, the events requiring an
adjustment of the conversion price and provisions affecting conversion in the
event of the redemption of such Preferred Shares.
Restrictions on Ownership and Transfer. As discussed below under "--Common
Shares--Restrictions on Ownership and Transfer," for CRIIMI MAE to qualify as a
REIT under the Internal Revenue Code of 1986, as amended (the "Code"), not more
than 50% in value of its outstanding capital shares may be owned, directly or
constructively, by five or fewer individuals (as defined in the Code to include
certain entities) during the last half of a taxable year. To assist CRIIMI MAE
in meeting this requirement, CRIIMI MAE may take certain actions to limit the
beneficial ownership, directly or indirectly, by a single person of more than
9.8% of CRIIMI MAE's outstanding capital stock, including any Preferred Shares
of CRIIMI MAE. Therefore, the Articles Supplementary for each series of
Preferred Shares will contain certain provisions restricting the ownership and
transfer of the Preferred Shares. The applicable Prospectus Supplement will
specify any additional ownership limitation relating to a series of Preferred
Shares.
Common Shares
The following description of the Common Shares is summarized from relevant
portions of CRIIMI MAE's Articles of Incorporation and Bylaws, as amended. A
more complete description of the Common Shares may be obtained by reference to
such documents and to the documents incorporated by reference in this
Prospectus. The following statements are qualified in their entirety by such
reference.
26
<PAGE>
General. Stockholders are entitled to one vote for each Common Share held
on all matters presented for a vote to stockholders. The CRIIMI MAE Board
serves in staggered three-year terms. Directors may be removed only for cause,
upon the affirmative vote of holders of a majority of the Common Shares voting
together as a single class. Except as otherwise provided in the Articles of
Incorporation, in meetings where a quorum is present, a majority of the votes
cast by stockholders is required to adopt a provision. Stockholders are
entitled to receive all assets available for distribution to the stockholders,
subject to any preferential rights of the holders of any Preferred Shares. The
Common Shares, when issued, will be fully paid and nonassessable and will not
be subject to redemption, except as provided in the Articles of Incorporation,
nor will they have any preference, conversion, exchange, preemptive or
cumulative voting rights.
The transfer agent and register for the Common Shares is Registrar and
Transfer Company.
Restrictions on Ownership and Transfer. The Code provides that a
corporation may not qualify as a REIT if more than 50% in value of the shares
of the corporation are owned, directly or indirectly, by five or fewer
individuals, which for this purpose, includes pension funds and certain other
tax-exempt entities. Provisions of the Articles of Incorporation, intended to
prevent concentrated ownership of the capital stock of CRIIMI MAE that might
jeopardize its qualification as a REIT, authorize the CRIIMI MAE Board to
refuse to effect a transfer of shares of capital stock of CRIIMI MAE to any
person who as a result would own in excess of 9.8% of the outstanding shares
of capital stock of CRIIMI MAE ("Excess Shares") and to redeem such Excess
Shares.
27
<PAGE>
CERTAIN UNITED STATES TAX CONSIDERATIONS
The following summary of certain federal income tax considerations to CRIIMI
MAE is based on current law, is for general information only, and is not tax
advice. The tax treatment of a holder of any of the Securities will vary
depending upon the terms of the specific Securities acquired by such holder, as
well as his particular situation, and this discussion does not attempt to
address any aspects of federal income taxation relating to holders of
Securities. Certain federal income tax considerations relevant to holders of
the Securities will be provided in the applicable Prospectus Supplement relating
thereto.
This discussion does not consider specific facts and circumstances that
may be relevant to a particular holder's tax position, and does not consider
U.S. state and local or non-U.S. tax consequences. Furthermore, the following
discussion is based on provisions of the Code and administrative and judicial
interpretations, all of which are subject to change, possibly on a retroactive
basis.
EACH INVESTOR IS ADVISED TO CONSULT THE APPLICABLE PROSPECTUS SUPPLEMENT,
AS WELL AS HIS OWN TAX ADVISOR, REGARDING THE TAX CONSEQUENCES TO HIM OF THE
ACQUISITION, OWNERSHIP AND SALE OF THE SECURITIES, INCLUDING THE FEDERAL,
STATE, LOCAL, FOREIGN AND OTHER TAX CONSEQUENCES OF SUCH ACQUISITION,
OWNERSHIP AND SALE AND OF POTENTIAL CHANGES IN APPLICABLE TAX LAWS.
CRIIMI MAE and CRI Liquidating have qualified, and intend to continue to
qualify, as REITs under the Code. Qualification for treatment as a REIT
requires CRIIMI MAE and CRI Liquidating each to meet certain criteria including
certain requirements regarding the nature of its ownership, assets, income and
distributions of taxable income. A REIT generally is not subject to federal
income tax on that portion of its ordinary income or capital gains that is
distributed currently to stockholders. CRIIMI MAE and CRI Liquidating have
distributed and intend to continue to distribute substantially all of their
taxable income to stockholders and to meet distribution requirements to continue
to qualify as REITs. CRIIMI MAE and CRI Liquidating will each generally be
subject to federal income tax at normal corporate rates on its undistributed
income and to a 4% excise tax under the Code on the amount, if any, by which 85%
of its REIT taxable income (including accrued but unpaid interest income) and
95% of any net capital gain exceed the amount actually distributed to its
stockholders during the year (or declared as a dividend during October, November
or December of a calendar year, if distributed during the following January as
ordinary income dividends). Accrued income for each quarter is generally
received within 30 days after the end of the quarter. CRIIMI MAE and CRI
Liquidating are not aware of any present circumstances that would cause them to
fail to qualify as REITs, nor do they anticipate any such circumstances in the
reasonably foreseeable future. If the U.S. Internal Revenue Service ("IRS")
successfully challenged the tax status of CRIIMI MAE or CRI Liquidating as a
REIT, CRIIMI MAE and CRI Liquidating's earnings would become subject to federal
income tax (including any applicable minimum tax) at corporate rates.
To protect CRIIMI MAE's qualification as a REIT under the Code, CRIIMI MAE's
Articles of Incorporation provide that no person or persons acting as a group
(defined to include partnerships, corporations, trusts and other entities), with
the exception of CRI or its affiliates, shall at any time directly or indirectly
acquire ownership of more than 9.8% of the outstanding shares of CRIIMI MAE's
capital stock.
28
<PAGE>
PLAN OF DISTRIBUTION
CRIIMI MAE may sell Securities to or through one or more underwriters, and
also may sell Securities directly to other purchasers or through agents.
The distribution of the Securities may be effected from time to time in
one or more transactions at a fixed price or prices, which may be changed, at
market prices prevailing at the time of sale, at prices related to such
prevailing market prices or at negotiated prices.
In connection with the sale of Securities, underwriters may receive
compensation from CRIIMI MAE or from purchasers of Securities, for whom they may
act as agents, in the form of discounts, concessions, or commissions.
Underwriters may sell Securities to or through dealers, and such dealers may
receive compensation in the form of discounts, concessions, or commissions from
the underwriters and/or commissions from the purchasers for whom they may act as
agents. Underwriters, dealers, and agents that participate in the distribution
of Securities may be deemed to be underwriters, and any discounts or commissions
they receive from CRIIMI MAE, and any profit on the resale of Securities they
realize may be deemed to be underwriting discounts and commissions, under the
Securities Act. Any such underwriter or agent will be identified, and any such
compensation received from CRIIMI MAE will be described, in the Prospectus
Supplement.
Unless otherwise specified in the related Prospectus Supplement, each series
of Securities will be a new issue with no established trading market, other than
the Common Shares which are listed on the NYSE. Any Common Shares sold pursuant
to a Prospectus Supplement are expected to be listed on such exchange, subject
to official notice of issuance. CRIIMI MAE may elect to list any series of Debt
Securities or Preferred Shares on an exchange, but is not obligated to do so.
It is possible that one or more underwriters may make a market in a series of
Securities, but will not be obligated to do so and may discontinue any market
making at any time without notice. Therefore, no assurance can be given as to
the liquidity of the trading market for any Securities.
Under agreements CRIIMI MAE may enter into, underwriters, dealers, and
agents who participate in the distribution of Securities may be entitled to
indemnification by CRIIMI MAE against certain liabilities, including
liabilities under the Securities Act.
Underwriters, dealers and agents may engage in transactions with, or perform
services for, or be customers of, CRIIMI MAE in the ordinary course of business.
If so indicated in the Prospectus Supplement, CRIIMI MAE will authorize
underwriters or other persons acting as CRIIMI MAE's agents to solicit offers by
certain institutions to purchase Securities from CRIIMI MAE pursuant to
contracts providing for payment and delivery on a future date. Institutions
with which such contracts may be made include commercial and savings banks,
insurance companies, pension funds, investment companies, educational and
charitable institutions and others, but in all cases such institutions must be
approved by CRIIMI MAE. The obligations of any purchaser under any such
contract will be subject to the condition that the purchase of the Securities
shall not at the time of delivery be prohibited under the laws of the
jurisdiction to which such purchaser is subject. The underwriters and such
other agents will not have any responsibility in respect of the validity or
performance of such contracts.
LEGAL MATTERS
Certain matters relating to the validity of the Securities will be passed
upon for CRIIMI MAE by Arent Fox Kintner Plotkin & Kahn, Washington, D.C.
29
<PAGE>
EXPERTS
The financial statements and schedules included in CRIIMI MAE's Annual
Report on Form 10-K, as amended, incorporated herein by reference, have been
audited by Arthur Andersen & Co., independent public accountants, as indicated
in its reports with respect thereto, and have been incorporated by reference
herein in reliance upon the authority of said firm as experts in accounting
and auditing.
30
<PAGE>
================================================================================
No dealer, salesperson or other person is authorized in connection with any
offering made hereby to give any information or to make any representation other
than those contained or incorporated by reference in this Prospectus or any
Prospectus Supplement and, if given or made, such information or representation
must not be relied upon as having been authorized. This Prospectus and any
Prospectus Supplement do not constitute an offer to sell or a solicitation of an
offer to buy any security other than the securities offered hereby, nor do they
constitute an offer to sell or a solicitation of any offer to buy any of the
securities offered hereby to any person in any jurisdiction in which it is
unlawful to make such an offer or solicitation. Neither the delivery of this
Prospectus nor any sale made hereunder and thereunder shall, under any
circumstances, create any implication that the information contained herein or
therein is correct as of any date subsequent to the date hereof or thereof.
TABLE OF CONTENTS
Page
----
Available Information.........................................................
Incorporation of Certain Documents by Reference...............................
Prospectus Summary............................................................
CRIIMI MAE....................................................................
Ratio of Earnings to Fixed Charges............................................
Use of Proceeds...............................................................
Description of Debt Securities................................................
Description of Capital Stock..................................................
Certain United States Tax Considerations......................................
Plan of Distribution..........................................................
Legal Matters.................................................................
Experts.......................................................................
================================================================================
================================================================================
$200,000,000
CRIIMI MAE Inc.
Debt Securities, Preferred Stock,
Common Stock
____________________
PROSPECTUS
____________________
================================================================================
<PAGE>
PART II
INFORMATION NOT REQUIRED IN PROSPECTUS
Item 14. Other Expenses of Issuance and Distribution
All of the expenses set forth below, except the SEC registration fee, are
estimated.
<TABLE>
<CAPTION>
<S> <C>
SEC registration fee................................ $ 68,966.00
New York Stock Exchange listing fee................. *
Rating Agency fees.................................. *
Printing and engraving expenses..................... *
Accounting fees and expenses........................ *
Legal fees and expenses............................. *
Blue Sky fees and expenses (including legal fees)... *
Transfer agent and registrar fees................... *
Trustees fees....................................... *
Miscellaneous....................................... *
-----------
Total............................................. $ *
===========
</TABLE>
___________
* To be completed by amendment.
Item 15. Indemnification of Directors and Officers
Under Maryland law, a corporation formed under Maryland law is permitted to
limit, by provisions in its articles of incorporation, the liability of its
directors and officers to the corporation or its stockholders for money damages
except for (i) actual receipt of an improper benefit or profit in money,
property or services or (ii) active and deliberate dishonesty established by a
final judgment as being material to the cause of action. CRIIMI MAE's Articles
of Incorporation include such a provision which limits such liability to the
fullest extent permitted by Maryland law.
CRIIMI MAE's Bylaws provide that CRIIMI MAE shall indemnify its directors,
officers and adviser, and may indemnify other persons who may be indemnified, to
the fullest extent permitted by Maryland law against any liability and related
expenses (including attorneys' fees) incurred in conjunction with any proceeding
or threatened proceeding in which any of them may be involved, or threatened to
be involved, as a party or otherwise, arising out of or incidental to CRIIMI
MAE's business. CRIIMI MAE has purchased and maintains liability insurance
against liabilities that may be asserted against such persons in connection with
CRIIMI MAE, whether or not indemnification against such liabilities would be
permitted under the provisions of CRIIMI MAE's Articles of Incorporation.
Section 2-418 of the General Corporation Law of the State of Maryland
provides, together with the Bylaws described above, for the indemnification of
directors, officers and other corporate agents in terms sufficiently broad to
indemnify such persons, under certain circumstances, for liabilities (including
reimbursements of expenses incurred) arising under the Securities Act.
II-1
<PAGE>
Item 16. Exhibits
(a) Exhibits.
Exhibit
Number Description
------ -----------
*1.1 --Form of Underwriting Agreement for Common Shares and Preferred
Shares
*1.2 --Form of Underwriting Agreement for Debt Securities
**4.1 --Articles of Incorporation, as amended, of CRIIMI MAE Inc.
**4.2 --Bylaws, as amended, of CRIIMI MAE Inc.
4.3 --Form of Indenture for Debt Securities
*4.4 --Form of Articles Supplementary with respect to Preferred Shares
*4.5 --Form of specimen certificate representing Preferred Shares
**4.6 --Form of specimen certificate representing Common Shares
5 --Opinion of Arent Fox Kintner Plotkin & Kahn regarding validity of
securities being registered
8 --Tax Opinion of Arent Fox Kintner Plotkin & Kahn (included in
Exhibit 5)
12.1 --Computation of Ratio of Earnings to Fixed Charges and Ratio of
Earnings to Combined Fixed Charges and Preferred Dividends of
CRIIMI MAE
23.1 --Consent of Arthur Andersen & Co.
23.2 --Consent of Arent Fox Kintner Plotkin & Kahn (included in Exhibit
5)
24 --Power of Attorney (included on signature page)
*26.1 --Statement of Eligibility of Trustee on Form T-1
*26.2 --Statement of Eligibility of Trustee on Form T-2.
- -----------------------------
* To be filed by amendment or incorporated by reference in connection
with the offering of Securities.
** Incorporated herein by reference to CRIIMI MAE's Registration Statement
on Form S-3 (File No. 33-50679), as amended.
II-2
<PAGE>
Item 17. Undertakings
The undersigned registrant hereby undertakes: (1) To file, during any
period in which offers or sales are being made, a post-effective amendment to
this registration statement to include any material information with respect to
the plan of distribution not previously disclosed in the registration statement
or any material change to such information in the registration statement; and
(2) To remove from registration by means of a post-effective amendment any of
the securities being registered which remain unsold at the termination of the
offering.
The undersigned registrant also hereby undertakes that, for purposes of
determining any liability under the Securities Act of 1933, each filing of the
registrant's annual report pursuant to Section 13(a) or Section 15(d) of the
Securities Exchange Act of 1934 that is incorporated by reference in the
registration statement shall be deemed to be a new registration statement
relating to the securities offered therein, and the offering of such securities
at that time shall be deemed to be the initial bona fide offering thereof.
Insofar as indemnification for liabilities arising under the Securities Act
of 1933 may be permitted to directors, officers and controlling persons of the
registrant pursuant to the provisions described in Item 15, 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
Securities Act of 1933 and is, therefore, unenforceable. If a claim for
indemnification against such liabilities (other than the payment by the
registrant of expenses incurred or paid by a director, officer or controlling
person of the registrant in the successful defense of any action, suit or
proceeding) is asserted by such director, officer or controlling person in
connection with the securities being registered, the registrant will, unless in
the opinion of its counsel the matter has been settled by controlling precedent,
submit to a court of appropriate jurisdiction the question whether such
indemnification by it is against public policy as expressed in the Securities
Act of 1933 and will be governed by the final adjudication of such issue.
The undersigned registrant hereby undertakes to file an application for the
purpose of determining the eligibility of the Trustee to act under subsection
(a) of section 310 of the Trust Indenture Act (the "TIA") in accordance with the
rules and regulations prescribed by the Commission under section 305(b)(2) of
the TIA.
The undersigned registrant hereby further undertakes that: (l) 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; and (2) For the purpose of determining any liability under
the Securities Act, each post-effective amendment that contains a form of
prospectus shall be deemed to be a new registration statement relating to the
securities offered therein, and the offering of such securities at that time
shall be deemed to be the initial bona fide offering thereof.
II-3
<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 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 Rockville, State of Maryland, on the 23 day of June,
1994.
CRIIMI MAE INC.
By: /s/ William B. Dockser
------------------------
William B. Dockser
Chairman of the Board
POWER OF ATTORNEY
KNOW ALL PERSONS BY THESE PRESENTS, that each person whose signature
appears below constitutes and appoints William B. Dockser and H. William
Willoughby, and each of them severally, as 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, to sign any and all
amendments (including posteffective amendments) to this registration statement,
and to file the same, with all exhibits thereto, and other documents in
connection therewith, with the Securities and Exchange Commission, granting unto
said attorneys-in-fact and agents, full power and authority to do and perform
each and every act and thing requisite and necessary to be done in connection
therewith, as fully to all intents and purposes as he or she might or could do
in person, hereby ratifying and confirming all that said attorneys-in-fact and
agents or any of them, or of his or her substitute or substitutes, may lawfully
do or cause to be done by virtue hereof
Pursuant to the requirements of the Securities Act of 1933, this registration
statement has been signed by the following persons in the capacities and on the
dates indicated.
<TABLE>
<CAPTION>
<S> <C> <C>
/s/ William B. Dockser Chairman of the Board (Principal June 23, 1994
- --------------------------- Executive Officer and Director)
William B. Dockser
/s/ H. William Willoughby Director, President and Secretary June 23, 1994
- ---------------------------
H. William Willoughby
Director
- ---------------------------
Garrett G.Carlson
/s/ G. Richard Dunnells Director June 23, 1994
- ---------------------------
G. Richard Dunnells
Director
- ---------------------------
Robert F. Tardio
/s/ Cynthia O. Azzara Chief Financial Officer June 23, 1994
- --------------------------- (Principal Financial and
Cynthia O. Azzara Accounting Officer)
</TABLE>
II-4
<PAGE>
EXHIBIT INDEX
Exhibit
Number Description
------ -----------
*1.1 --Form of Underwriting Agreement for Common Shares and Preferred
Shares
*1.2 --Form of Underwriting Agreement for Debt Securities
**4.1 --Articles of Incorporation, as amended, of CRIIMI MAE Inc.
**4.2 --Bylaws, as amended, of CRIIMI MAE Inc.
4.3 --Form of Indenture for Debt Securities
*4.4 --Form of Articles Supplementary with respect to Preferred Shares
*4.5 --Form of specimen certificate representing Preferred Shares
**4.6 --Form of specimen certificate representing Common Shares
5 --Opinion of Arent Fox Kintner Plotkin & Kahn regarding validity of
securities being registered
8 --Tax Opinion of Arent Fox Kintner Plotkin & Kahn (included in
Exhibit 5)
12.1 --Computation of Ratio of Earnings to Fixed Charges and Ratio of
Earnings to Combined Fixed Charges and Preferred Dividends of
CRIIMI MAE
23.1 --Consent of Arthur Andersen & Co.
23.2 --Consent of Arent Fox Kintner Plotkin & Kahn (included in Exhibit
5)
24 --Power of Attorney (included on signature page)
*26.1 --Statement of Eligibility of Trustee on Form T-1
*26.2 --Statement of Eligibility of Trustee on Form T-2.
- -----------------------------
* To be filed by amendment or incorporated by reference in connection
with the offering of Securities.
** Incorporated herein by reference to CRIIMI MAE's Registration Statement
on Form S-3 (File No. 33-50679), as amended.
II-5
<PAGE>
Exhibit 4.3
CRIIMI MAE INC.
TO
----------------------------------------
Trustee
------------------------------
Indenture
Dated as of , 199
------------- --
-----------------------------
Subordinated Debt Securities
<PAGE>
Table of Contents
-----------------
<TABLE>
<CAPTION>
Page
<S> <C> <C>
ARTICLE ONE DEFINITIONS AND OTHER PROVISIONS OF GENERAL
APPLICATION....................................... 1
SECTION 101. Definitions....................................... 1
SECTION 102. Compliance Certificates and Opinions.............. 9
SECTION 103. Form of Documents Delivered to Trustee............ 10
SECTION 104. Acts of Holders................................... 10
SECTION 105. Notices, etc., to Trustee and Company............. 12
SECTION 106. Notice to Holders; Waiver......................... 12
SECTION 107. Effect of Headings and Table of Contents.......... 13
SECTION 108. Successors and Assigns............................ 13
SECTION 109. Separability Clause............................... 13
SECTION 110. Benefits of Indenture............................. 13
SECTION 111. Governing Law..................................... 13
SECTION 112. Legal Holidays.................................... 13
SECTION 113. Immunity of Stockholders, Trustees, Officers
and Agents of the Company......................... 14
ARTICLE TWO SECURITIES FORMS.................................. 14
SECTION 201. Forms of Securities............................... 14
SECTION 202. Form of Trustee's Certificate of
Authentication.................................... 14
SECTION 203. Securities Issuable in Global Form................ 15
ARTICLE THREE THE SECURITIES.................................... 16
SECTION 301. Amount Unlimited; Issuable in Series.............. 16
SECTION 302. Denominations..................................... 19
SECTION 303. Execution, Authentication, Delivery
and Dating........................................ 19
SECTION 304. Temporary Securities.............................. 21
SECTION 305. Registration, Registration of Transfer
and Exchange...................................... 23
SECTION 306. Mutilated, Destroyed, Lost and Stolen Securities.. 26
SECTION 307. Payment of Interest; Interest Rights Preserved.... 27
SECTION 308. Persons Deemed Owners............................. 29
SECTION 309. Cancellation...................................... 30
SECTION 310. Computation of Interest........................... 30
ARTICLE FOUR SATISFACTION AND DISCHARGE........................ 30
SECTION 401. Satisfaction and Discharge of Indenture........... 30
SECTION 402. Application of Trust Funds........................ 32
</TABLE>
-i-
<PAGE>
<TABLE>
<CAPTION>
<S> <C> <C>
ARTICLE FIVE REMEDIES 32
SECTION 501. Events of Default................................. 32
SECTION 502. Acceleration of Maturity; Rescission
and Annulment..................................... 33
SECTION 503. Collection of Indebtedness and Suits for
Enforcement by Trustee............................ 34
SECTION 504. Trustee May File Proofs of Claim.................. 35
SECTION 505. Trustee May Enforce Claims Without Possession
of Securities or Coupons.......................... 36
SECTION 506. Application of Money Collected.................... 36
SECTION 507. Limitation on Suits............................... 36
SECTION 508. Unconditional Right of Holders to Receive
Principal, Premium, if any, Interest and
Additional Amounts................................ 37
SECTION 509. Restoration of Rights and Remedies................ 37
SECTION 510. Rights and Remedies Cumulative.................... 37
SECTION 511. Delay or Omission Not Waiver...................... 38
SECTION 512. Control by Holders of Securities.................. 38
SECTION 513. Waiver of Past Defaults........................... 38
SECTION 514. Waiver of Usury, Stay or Extension Laws........... 38
SECTION 515. Undertaking for Costs............................. 39
ARTICLE SIX THE TRUSTEE....................................... 39
SECTION 601 Notice of Defaults................................ 39
SECTION 602. Certain Rights of Trustee......................... 39
SECTION 603. Not Responsible for Recitals or Issuance
of Securities..................................... 41
SECTION 604. May Hold Securities............................... 41
SECTION 605. Money Held in Trust............................... 41
SECTION 606. Compensation and Reimbursement.................... 41
SECTION 607. Corporate Trustee required; Eligibility;
Conflicting Interests............................. 42
SECTION 608. Resignation and Removal; Appointment
of Successor...................................... 42
SECTION 609. Acceptance of Appointment by Successor............ 43
SECTION 610. Merger, Conversion, Consolidation or
Succession to Business............................ 44
SECTION 611. Appointment of Authenticating Agent............... 45
ARTICLE SEVEN HOLDERS' LISTS AND REPORTS BY TRUSTEE
AND COMPANY....................................... 46
SECTION 701. Disclosure of Names and Addresses of Holders...... 46
SECTION 702. Reports by Trustee................................ 46
</TABLE>
-ii-
<PAGE>
<TABLE>
<CAPTION>
<S> <C> <C>
SECTION 703. Reports by Company................................ 46
SECTION 704. Company to Furnish Trustee Names and Addresses
of Holders........................................ 47
ARTICLE EIGHT CONSOLIDATION, MERGER, SALE, LEASE OR
CONVEYANCE........................................ 47
SECTION 801. Consolidations and Mergers of Company and Sales,
Leases and Conveyances Permitted Subject to
Certain Conditions................................ 47
SECTION 802. Rights and Duties of Successor Corporation........ 48
SECTION 803. Officers' Certificate and Opinion of Counsel...... 48
ARTICLE NINE SUPPLEMENTAL INDENTURES........................... 48
SECTION 901. Supplemental Indentures without Consent of Holders 48
SECTION 902. Supplemental Indentures with Consent of Holders... 50
SECTION 903. Execution of Supplemental Indentures.............. 51
SECTION 904. Effect of Supplemental Indentures................. 51
SECTION 905. Conformity with Trust Indenture Act............... 51
SECTION 906. Reference in Securities to Supplemental Indentures 51
ARTICLE TEN COVENANTS......................................... 51
SECTION 1001. Payment of Principal, Premium, if any, Interest
and Additional Amounts............................ 51
SECTION 1002. Maintenance of Office or Agency................... 52
SECTION 1003. Money for Securities Payments to Be Held in Trust. 53
SECTION 1004. Existence......................................... 54
SECTION 1005. Maintenance of Properties......................... 55
SECTION 1006. Insurance......................................... 55
SECTION 1007. Payment of Taxes and Other Claims................. 55
SECTION 1008. Reserved.......................................... 55
SECTION 1009. Statement as to Compliance........................ 55
SECTION 1010. Additional Amounts................................ 55
SECTION 1011. Waiver of Certain Covenants....................... 56
ARTICLE ELEVEN REDEMPTION OF SECURITIES.......................... 56
SECTION 1101. Applicability of Article.......................... 56
SECTION 1102. Election to Redeem; Notice to Trustee............. 56
SECTION 1103. Selection by Trustee of Securities To Be Redeemed. 57
SECTION 1104. Notice of Redemption.............................. 57
SECTION 1105. Deposit of Redemption Price....................... 58
SECTION 1106. Securities Payable on Redemption Date............. 59
SECTION 1107. Securities Redeemed in Part....................... 59
</TABLE>
-iii-
<PAGE>
<TABLE>
<CAPTION>
<S> <C> <C>
ARTICLE TWELVE SINKING FUNDS..................................... 60
SECTION 1201. Applicability of Article.......................... 60
SECTION 1202. Satisfaction of Sinking Fund Payments
with Securities................................... 60
SECTION 1203. Redemption of Securities for Sinking Fund......... 60
ARTICLE THIRTEEN REPAYMENT AT THE OPTION OF HOLDERS................ 61
SECTION 1301. Applicability of Article.......................... 61
SECTION 1302. Repayment of Securities........................... 61
SECTION 1303. Exercise of Option................................ 61
SECTION 1304. When Securities Presented for Repayment Become
Due and Payable................................... 62
SECTION 1305. Securities Repaid in Part......................... 63
ARTICLE FOURTEEN DEFEASANCE AND COVENANT DEFEASANCE................ 63
SECTION 1401. Applicability of Article; Company's Option to
Effect Defeasance or Covenant Defeasance.......... 63
SECTION 1402. Defeasance and Discharge.......................... 63
SECTION 1403. Covenant Defeasance............................... 64
SECTION 1404. Conditions to Defeasance or Covenant Defeasance... 64
SECTION 1405. Deposited Money and Government Obligations To Be
Held in Trust; Other Miscellaneous Provisions..... 66
ARTICLE FIFTEEN MEETINGS OF HOLDERS OF SECURITIES................. 67
SECTION 1501. Purposes for Which Meetings May Be Called......... 67
SECTION 1502. Call, Notice and Place of Meetings................ 67
SECTION 1503. Persons Entitled to Vote at Meetings.............. 67
SECTION 1504. Quorum; Action.................................... 67
SECTION 1505. Determination of Voting Rights; Conduct and
Adjournment of Meetings........................... 68
SECTION 1506. Counting Votes and Recording Action of Meetings... 69
ARTICLE SIXTEEN SUBORDINATION..................................... 70
SECTION 1601. Agreement to Subordinate.......................... 70
SECTION 1602. Liquidation; Dissolution; Bankruptcy.............. 70
SECTION 1603. Default on Senior Debt............................ 70
SECTION 1604. Acceleration of Securities........................ 71
SECTION 1605. When Distribution Must Be Paid Over............... 71
SECTION 1606. Notice by Company................................. 71
SECTION 1607. Subrogation....................................... 71
SECTION 1608. Relative Rights................................... 71
SECTION 1609. Subordination May Not Be Impaired by Trust........ 71
</TABLE>
-iv-
<PAGE>
<TABLE>
<CAPTION>
<S> <C> <C>
SECTION 1610. Distribution or Notice to Representative.......... 71
SECTION 1611. Rights of Trustee and Paying Agent................ 72
</TABLE>
TESTIMONIUM
SIGNATURES AND SEALS
ACKNOWLEDGEMENTS
EXHIBIT A - FORMS OF CERTIFICATION
CRIIMI MAE INC.
Reconciliation and tie between Trust Indenture Act of 1939, as amended (the
"TIA"), and the Indenture, dated as of __________, 199__.
Trust Indenture Act Section Indenture Section
<TABLE>
<CAPTION>
<S> <C>
Sec. 310(a)(1)............................. 607
(a)(2)............................. 607
(b)............................. 607, 608
Sec. 312(a)............................. 704
Sec. 312(c)............................. 701
Sec. 313(a)............................. 702
(c)............................. 702
Sec. 314(a)............................. 703
(a)(4)............................. 1009
(c)(1)............................. 102
(c)(2)............................. 102
(e)............................. 102
Sec. 315(b)............................. 601
Sec. 316(a) (last Sentence)................ 101 ("Outstanding")
(a)(1)(A)............................. 512
(a)(1)(B)............................. 513
(b)............................. 508
Sec. 317(a)(1)............................. 503
(a)(2)............................. 504
Sec. 318(a)............................. 111
(c)............................. 111
</TABLE>
- ------------------------------
NOTE: This reconciliation and tie shall not, for any purpose, be deemed to
be a part of the Indenture.
-v-
<PAGE>
Attention should also be directed to Section 318(c) of the TIA, which
provides that the provisions of Section 310 to and including 317 of the TIA are
a part of and govern every qualified indenture, whether or not physically
contained therein.
-vi-
<PAGE>
INDENTURE, dated as of _________, 199__, between CRIIMI MAE Inc., a
corporation organized under the laws of the State of Maryland (hereinafter
called the "Company"), having its principal office at the CRI Building, 11200
Rockville Pike, Rockville, Maryland 20852 and _______________________________, a
____________ organized under the laws of ____________________, as Trustee
hereunder (hereinafter called the "Trustee"), having its Corporate Trust Office
at __________________________________.
RECITALS OF THE COMPANY
The Company deems it necessary and advisable to issue from time to time for
its lawful purposes subordinated debt securities (hereinafter called the
"Securities") evidencing its unsecured and unsubordinated indebtedness, and has
duly authorized the execution and delivery of this Indenture to provide for the
issuance from time to time of the Securities, unlimited as to principal amount,
to bear interest at the rates or formulas, to mature at such times and to have
such other provisions as shall be fixed as hereinafter provided.
This Indenture is subject to the provisions of the Trust Indenture Act of
1939, as amended (the "TIA"), that are deemed to be incorporated into this
Indenture and shall, to the extent applicable, be governed by such provisions.
All things necessary to make this Indenture a valid agreement of the
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 ("Holders"), it is mutually covenanted and agreed, for
the equal and proportionate benefit of all Holders of the Securities, as
follows:
ARTICLE ONE
DEFINITIONS AND OTHER PROVISIONS OF GENERAL APPLICATION
SECTION 101. Definitions. For all purposes of this Indenture, except as
-----------
otherwise expressly provided or unless the context otherwise requires:
(1) the terms defined in this Article have the meanings assigned to
them in this Article, and include the plural as well as the singular;
(2) all other terms used herein which are defined in the TIA, either
directly or by reference therein, have the meanings assigned to them
therein, and the terms "cash transaction" and "self-liquidating paper," as
used in TIA Section 311, shall have the meanings assigned to them in the
rules of the Commission adopted under the TIA;
(3) all accounting terms not otherwise defined herein have the
meanings assigned to them in accordance with GAAP; and
<PAGE>
(4) the words "herein," "hereof" and "hereunder" and other words of
similar import refer to this Indenture as a whole and not to any particular
Article, Section or other subdivision.
"Act," when used with respect to any Holder, has the meaning specified in
Section 104.
"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" of any specified Person means any other Person directly or
indirectly controlling or controlled by or under direct or indirect common
control with such specified Person. For the purposes of this definition,
"control" when used with respect to any specified Person means the power to
direct the management and policies of such Person, directly or indirectly,
whether through the ownership of voting securities, by contract or otherwise;
and the terms "controlling" and "controlled" have meanings correlative to the
foregoing.
"Authenticating Agent" means any authenticating agent appointed by the
Trustee pursuant to Section 611.
"Authorized Newspaper" means a newspaper, printed in the English language
or in an official language of the country of publication, customarily published
on each Business Day, whether or not published on Saturday, 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 re-quirements and in each case on any
Business Day.
"Bankruptcy Law" has the meaning specified in Section 501.
"Bearer Security" means any Security established pursuant to Section 201
which is payable to bearer.
"Board of Directors" means the board of directors of the Company, the
executive committee or any committee of that board duly authorized to act
hereunder.
"Board Resolution" mans 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.
"Business Day," when used with respect to any Place of Payment or any other
particular location referred to in this Indenture or in the Securities, means,
unless otherwise specified with respect to any Securities pursuant to Section
301, any day, other than a Saturday or Sunday, that is neither a legal holiday
nor a day on which banking institutions in that Place of Payment or particular
location are authorized or required by law, regulation or executive order to
close.
"CEDEL" means Centrale de Livraison de Valeurs Mobilieres, S.A., or its
successor.
-2-
<PAGE>
"Commission" means the Securities and Exchange Commission, as from time to
time constituted, created under the Securities Exchange Act of 1934, 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, the body
performing such duties on such date.
"Common Shares" means the common stock, par value $0.01 per share, of the
Company.
"Company" means the Person named as the "Company" in the first paragraph of
this instrument until a successor Person shall have become such pursuant to the
applicable provisions of this Indenture, and thereafter "Company" shall mean
such successor corporation.
"Company Request" and "Company Order" mean, respectively, a written request
or order signed in the name of the Company by one executive officer of the
Company, and delivered to the Trustee.
"Conversion Event" means the cessation of use of (i) a Foreign Currency
both by the government of the country which issued such currency and for the
settlement of transactions by a central bank or other public institutions of or
within the international banking community, (ii) the ECU both within the
European Monetary System and for the settlement of transactions by public
institutions of or within the European Communities or (iii) any currency unit
(or composite currency) other than the ECU for the purposes for which it was
established.
"Corporate Trust Office" means the office of the Trustee at which, at any
particular time, its corporate trust business shall be principally administered,
which office at the date hereof is located at ________.
"Corporation" includes corporations, associations, partnerships, companies
and business trusts.
"Coupon" means any interest coupon appertaining to a Bearer Security.
"Custodian" has the meaning specified in Section 501.
"Defaulted Interest" has the meaning specified in Section 307.
"Dollar" or "$" 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.
"ECU" means the European Currency Unit as defined and revised from time to
time by the Council of the European Communities.
"Euroclear" means Morgan Guaranty Trust Company of New York, Brussels
Office, or its successor as operator of the Euroclear System.
"European Communities" means the European Economic Community, the European
Coal and Steel Community and the European Atomic Energy Community.
-3-
<PAGE>
"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.
"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.
"Government Obligations" means securities which are (i) direct obligations
of the United States of America or the government which issued the Foreign
Currency in which the Securities of a particular series are payable, for the
payment of which its full faith and credit is pledged or (ii) obligations of a
Person controlled or supervised by and acting as an agency or instrumentality of
the United States of America or such government which issued the foreign
currency in which the Securities of such series are payable, the payment of
which is unconditionally guaranteed as a full faith and credit obligation by the
United States of America or such other government, which, in either case, are
not callable or redeemable at the option of the issuer thereof, and shall also
include a depository receipt issued by a bank or trust company as custodian with
respect to any such Government Obligation or a specific payment of interest on
or principal of any such Government Obligation held by such custodian for the
account of the holder of a depository receipt, provided that (except as required
by law) such custodian is not authorized to make any deduction from the amount
payable to the holder of such depository receipt from any amount received by the
custodian in respect of the Government Obligation or the specific payment of
interest on or principal of the Government Obligation evidenced by such
depository receipt or (iii) issued by a money market fund that invests 100% of
its assets in the direct obligations of the government of the United States of
America.
"Holder" means, in the case of a Registered Security, the Person in whose
name a Security is registered in the Security Register and, in the case of a
Bearer Security, the bearer thereof and, when used with respect to any coupon,
shall mean the bearer thereof.
"Indenture" means this instrument as originally executed or as it may from
time to time be supplemented or amended by one or more indentures supplemental
hereto entered into pursuant to the applicable provisions hereof, and shall
include the terms of particular series of Securities established as contemplated
by Section 301; provided, however, that, if at any time more than one Person is
acting as Trustee under this instrument, "indenture" shall mean, with respect to
any one or more series of Securities for which such Person is Trustee, this
instrument as originally executed or as it may from time to time be supplemented
or amended by one or more indentures supplemental hereto entered into pursuant
to the applicable provisions hereof and shall include the terms of the or those
particular series of Securities for which such Person is Trustee established as
contemplated by Section 301, exclusive, however, of any provisions or terms
which relate solely to other series of Securities for which such Person is not
Trustee, regardless of when such terms or provisions were adopted, and exclusive
of any provisions or terms adopted by means of one or more indentures
supplemental hereto executed and delivered after such Person had become such
Trustee but to which such Person, as such Trustee, was not a party.
-4-
<PAGE>
"Indexed Security" means a Security the terms of which provide that the
principal amount thereof payable at Stated Maturity may be more or less than the
principal face amount thereof at original issuance.
"Interest," when used with respect to an Original Issue Discount Security
which by its terms bears interest only after Maturity, shall mean interest
payable after Maturity, and, when used with respect to a Security which provides
for the payment of Additional Amounts pursuant to Section 1010, 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 an executive officer
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 be acceptable to the Trustee.
"Original Issue Discount Security" means any Security which provides for an
amount less than the principal amount thereof to be due and payable upon a
declaration of acceleration of the Maturity thereof pursuant to Section 502.
"Outstanding," when used with respect to Securities, means, as of the date
of determination, all Securities theretofore authenticated and delivered under
this Indenture, except:
(i) Securities theretofore cancelled by the Trustee or delivered to
the Trustee for cancellation;
(ii) Securities, or portions thereof, for whose payment or redemption
or repayment at the option of the Holder money in the necessary amount has
been theretofore deposited with the Trustee or any Paying Agent (other than
the 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 that, if such
Securities are to be redeemed, notice of such redemption has been duly
given pursuant to this Indenture or provision therefor satisfactory to the
Trustee has been made;
(iii) Securities, except to the extent provided in Sections 1402 and
1403, with respect to which the Company has effected defeasance and/or
covenant defeasance as provided in Article Fourteen:
(iv) Securities which have been paid pursuant to Section 306 or in
exchange for or in lieu of which other Securities have been authenticated
and delivered pursuant to this
-5-
<PAGE>
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
(v) Securities which have been delivered to the Trustee for
conversion pursuant to or in accordance with this Indenture if the terms of
such Securities provide for convertibility pursuant to Section 301;
provided, however, that in determining whether the Holders of the requisite
principal amount of the Outstanding Securities have given any request, demand,
authorization, direction, notice, consent or waiver hereunder or are present at
a meeting of Holders for quorum purposes, and for the purpose of making the
calculations required by TIA Section 313, (i) the principal amount of an
Original Issue Discount Security that may be counted in making such
determination or calculation and that shall be deemed to be Outstanding for such
purpose shall be equal to the amount of principal thereof that would be (or
shall have been declared to be) due and payable, at the time of such
determination, upon a declaration of acceleration of the maturity thereof
pursuant to Section 502, (ii) the principal amount of any Security denominated
in a Foreign Currency that may be counted in making such determination or
calculation and that shall be deemed Outstanding for such purpose shall be equal
to the Dollar equivalent, determined pursuant to Section 301 as of the date such
Security is originally issued by the Company, of the principal amount (or, in
the case of an Original Issue Discount Security, the Dollar equivalent as of
such date of original issuance of the amount determined as provided in clause
(i) above) of such Security, (iii) the principal amount of any Indexed Security
that may be counted in making such determination or calculation and that shall
be deemed outstanding for such purpose shall be equal to the principal face
amount of such Indexed Security at original issuance, unless otherwise provided
with respect to such Security pursuant to Section 301, and (iv) Securities owned
by the Company or 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 so owned which
have been pledged in good faith may be regarded as Outstanding if the pledgee
establishes to the satisfaction of the Trustee the pledgee's right so to act
with respect to such Securities and that the pledgee is not the 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 under Sections 301
and 1002.
"Predecessor Security" of any particular Security means every previous
Security evidencing all or a portion of the same debt as that evidenced by such
particular Security; and, for the purposes
-6-
<PAGE>
of this definition, any Security authenticated and delivered under Section 306
in exchange for or in lieu of a mutilated, destroyed, lost or stolen Security or
a Security to which a mutilated, destroyed, lost or stolen coupon appertains
shall be deemed to evidence the same debt as the mutilated, destroyed, lost or
stolen Security or the Security to which the mutilated, destroyed, lost or
stolen coupon appertains.
"Preferred Shares" means the preferred stock, par value $0.01, of the
Company.
"Redemption Date," when used with respect to any Security to be redeemed,
in whole or in part, means the date fixed for such redemption by or pursuant to
this Indenture.
"Redemption Price," when used with respect to any Security to be redeemed,
means the price at which it is to be redeemed pursuant to this Indenture.
"Registered Security" shall mean any Security which is registered in the
Security Register.
"Regular Record Date," for the interest payable on any Interest Payment
Date on the Registered Securities of or within any series, means the date
specified for that purpose as contemplated by Section 301, 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.
"Repayment Price" means, when used with respect to any Security to be
repaid at the option of the Holder, the price at which it is to be repaid by or
pursuant to this Indenture.
"Representative" means the indenture trustee or other trustee, agent or
representative for an issue of Senior Debt.
"Responsible Officer," when used with respect to the Trustee, means the
chairman or vice-chairman of the board of directors, the chairman or vice-
chairman of the executive committee of the board of directors, the president,
any vice president (whether or not designated by a number or a word or words
added before or after the title "vice president"), the secretary, any assistant
secretary, the treasurer, any assistant treasurer, any corporate trust officer
or 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.
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<PAGE>
"Security Register" and "Security Registrar" have the respective meanings
specified in Section 305.
"Senior Debt" means the principal of and interest on, or substantially
similar payments to be made by the Company in respect of, the following, whether
outstanding at the date of execution of this Indenture or thereafter incurred,
created or assumed: (a) indebtedness of the Company for money borrowed or
represented by purchase-money obligations, (b) indebtedness of the Company
evidenced by notes, debentures, or bonds, or other securities issued under the
provisions of an indenture, fiscal agency agreement or other instrument, (c)
obligations of the Company as lessee under leases of property either made as
part of any sale and lease-back transaction to which the Company is a party or
otherwise, (d) indebtedness of partnerships and joint ventures which is included
in the Company's consolidated financial statements, (e) indebtedness,
obligations and liabilities of others in respect of which the Company is liable
contingently or otherwise to pay or advance money or property or as guarantor,
endorser or otherwise or which the Company has agreed to purchase or otherwise
acquire, and (f) any binding commitment of the Company to fund any mortgage
investment or to fund any investment in any entity making such mortgage
investment; but excluding, however, (1) any such indebtedness, obligation or
liability referred to in clauses (a) through (f) above as to which, in the
instrument creating or evidencing the same or pursuant to which the same is
outstanding, it is provided that such indebtedness, obligation or liability is
not superior in right of payment to the Securities, or ranks pari passu with the
Securities, (2) any such indebtedness, obligation or liability which is
subordinated to indebtedness of the Company to substantially the same extent as
or to a greater extent than the Securities are subordinated and (3) the
Securities. As used in the preceding sentence the term "purchase-money
obligations" shall mean indebtedness or obligations evidenced by a note,
debenture, bond or other instrument (whether or not secured by any lien or other
security interest but excluding indebtedness or obligations for which recourse
is limited to the property purchased) issued or assumed as all or a part of the
consideration for the acquisition of property, whether by purchase, merger,
consolidation or otherwise, but shall not include any trade accounts payable. A
distribution may consist of cash, securities or other property.
"Significant Subsidiary" means any Subsidiary which is a "significant
subsidiary" (as defined in Article I, Rule 1-02 of Regulation S-X, promulgated
under the Securities Act of 1933) of the 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 Trustee
pursuant to Section 307.
"Stated Maturity," when used with respect to any Security or any
installment of principal thereof or interest thereon, means the date specified
in such Security 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 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.
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<PAGE>
"Trust Indenture Act" or "TIA" means the Trust Indenture Act of 1939, as
amended and as in force at the date as of which this Indenture was executed,
except as provided in Section 905.
"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 301, the United States of America (including the
states and the District of Columbia), its territories, its possessions and other
areas subject to its jurisdiction.
"United States person" means, unless otherwise specified with respect to
any Securities pursuant to Section 301, an individual who is a citizen or
resident of the United States, a corporation, partnership or other entity
created or organized in or under the laws of the United States or an estate or
trust the income of which is subject to United States federal income taxation
regardless of its source.
"Yield to Maturity" means the yield to maturity, computed at the time of
issuance of a Security (or, if applicable, at the most recent redetermination of
interest on such Security) and as set forth in such Security in accordance with
generally accepted United States bond yield computation principles.
SECTION 102. Compliance Certificates and Opinions. Upon any application
------------------------------------
or request by the 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 1009) shall include:
(1) a statement that each individual signing such certificate or
opinion has read such condition or covenant and the definitions herein
relating thereto;
(2) a brief statement as to the nature and scope of the examination
or investigation upon which the statements or opinions contained in such
certificate or opinion are based;
(3) a statement that, in the opinion of each such individual, he has
made such examination or investigation as is necessary to enable him to
express an informed opinion as to whether or not such condition or covenant
has been complied with; and
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<PAGE>
(4) a statement as to whether, in the opinion of each such individual,
such condition or covenant has been complied with.
SECTION 103. Form of Documents Delivered to Trustee. In any case where
--------------------------------------
several matters are required to be certified by, or covered by an opinion of,
any specified Person, it is not necessary that all such matters be certified by,
or covered by the opinion of, only one such Person, or that they be so certified
or covered by only one document, but one such Person may certify or give an
opinion as to some matters and one or more other such Persons as to other
matters, and any such Person may certify or give an opinion as to such matters
in one or several documents.
Any certificate or opinion of an officer of the 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 of reasonable care should know, that the opinion, certificate or
representations with respect to the matters upon which his certificate or
opinion is based are erroneous. Any such Opinion of Counsel or certificate or
representations may be based, insofar as it relates to factual matters, upon a
certificate or opinion of, or representations by, an officer or officers of the
Company stating that the information as to such factual matters is in the
possession of the Company, unless such counsel knows that the certificate or
opinion or representations as to such matters are erroneous.
Where any Person is required to make, give or execute two or more
applications, requests, consents, certificates, statements, opinions or other
instruments under this Indenture, they may, but need not, be consolidated and
form one instrument.
SECTION 104. Acts of Holders. (a) Any request, demand, authorization,
---------------
direction, notice, consent, waiver or other action provided by this Indenture to
be given or taken by Holders of the Outstanding Securities of all series or one
or more series, as the case may be, may be embodied in and evidenced by one or
more instruments of substantially similar tenor signed by such Holders in person
or by agents duly appointed in writing. If Securities of a series are issuable
as Bearer Securities, any request, demand, authorization, direction, notice,
consent, waiver or other action provided by this Indenture to be given or taken
by Holders of Securities of such series may, alternatively, be embodied in and
evidenced by the record of Holders of Securities of such series voting in favor
thereof, 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 Fifteen, or a combination of such
instruments and any such record. Except as herein otherwise expressly provided,
such action shall become effective when such instrument or instruments or record
or both 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. The record of any meeting of
Holders of Securities shall be proved in the manner provided in Section 1506.
(b) The fact and date of the execution by any Person of any such
instrument or writing may be proved by the affidavit of a witness of such
execution or by a certificate of a notary public or other officer authorized by
law to take acknowledgments of deeds, certifying that the individual signing
such instrument or writing acknowledged to him the execution thereof. Where
such
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<PAGE>
execution is by a signer acting in a capacity other than his individual
capacity, such certificate or affidavit shall also constitute sufficient proof
of his authority. The fact and date of the execution of any such instrument or
writing, or the authority of the Person executing the same, may also be proved
in any other reasonable manner which the Trustee deems sufficient.
(c) The ownership of Registered Securities shall be proved by the Security
Register.
(d) The ownership of Bearer Securities may be proved by the production of
such Bearer Securities or by a certificate executed, as depositary, by any trust
company, bank, banker or other depositary, wherever situated, if such
certificate shall be deemed by the Trustee to be satisfactory, showing that at
the date therein mentioned such Person had on deposit with such depositary, or
exhibited to it, the Bearer Securities therein 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.
(e) 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 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 that no such authorization, agreement or consent by
the Holders on such record date shall be deemed effective unless it shall become
effective pursuant to the provisions of this Indenture not later than eleven
months after the record date.
In the absence of any such record date fixed by the Company, regardless as
to whether a solicitation of the Holders is occurring on behalf of the Company
or any Holder, the Trustee may, at its option, fix in advance a record date for
the determination of such Holders entitled to give such request, demand,
authorization, direction, notice, consent, waiver or other Act, but the Trustee
shall have no obligation to do so. Any such record date shall be a date not
more than 30 days prior to the first solicitation of Holders generally in
connection therewith and not later than the date of such solicitation.
(f) Any request, demand, authorization, direction, notice, consent, waiver
or other Act of the Holder of any Security shall bind every future Holder of the
same Security and the Holder of
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<PAGE>
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 105. 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 ________________________ Attention: _________.
(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.
SECTION 106. 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, 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 Securi-ties 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 301, where this Indenture provides
for notice to Holders of Bearer Securities of any event, such notice shall be
sufficiently given if published in an Authorized Newspaper in New York City and
in such other city or cities as may be specified in such Securities on a
Business Day, such publication to be not later than the latest date, and not
earlier than the earliest date, prescribed for the giving of such notice. Any
such notice shall be deemed to have been given on the date of such publication
or, if published more than once, on the date of the first such publication.
If by reason of the suspension of publication of any Authorized Newspaper
or Authorized Newspapers or by reason of any other cause it shall be
impracticable to publish any notice to Holders of Bearer Securities as provided
above, then such notification to Holders of Bearer
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<PAGE>
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 Trustee, but such filing
shall not be a condition precedent to the validity of any action taken in
reliance upon such waiver.
SECTION 107. Effect of Headings and Table of Contents. The Article and
----------------------------------------
Section headings herein and the Table of Contents are for convenience only and
shall not affect the construction hereof.
SECTION 108. Successors and Assigns. All covenants and agreements in this
----------------------
Indenture by the Company shall bind its successors and assigns, whether so
expressed or not.
SECTION 109. Separability Clause. In case any provision in this Indenture
-------------------
or in any Security or coupon shall be invalid, illegal or unenforceable, the
validity, legality and enforceability of the remaining provisions shall not in
any way be affected or impaired thereby.
SECTION 110. Benefits of Indenture. Nothing in this Indenture or in the
---------------------
Securities or coupons, express or implied, shall give to any Person, other than
the parties hereto, any Security Registrar, any Paying Agent, any Authenticating
Agent and their successors hereunder and the Holders any benefit or any legal or
equitable right, remedy or claim under this Indenture.
SECTION 111. Governing Law. This Indenture and the Securities and coupons
-------------
shall be governed by and construed in accordance with the law of the State of
New York, without regard to principles of conflicts of law. 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 112. Legal Holidays. In any case where any Interest Payment Date,
--------------
Redemption Date, Repayment Date, sinking fund payment date, Stated Maturity or
Maturity of any Security shall not be a Business Day at any Place of Payment or
at the principal Corporate Trust Office of the Trustee, then (notwithstanding
any other provision of this Indenture or any Security or coupon other than a
provision in the Securities of any series which specifically states that such
provision shall apply in lieu hereof), payment of interest or any Additional
Amounts or principal (and premium, if any) need not be made at such Place of
Payment on such date, but may be made on the next succeeding Business Day at
such Place of Payment with the same force and effect as if made on the Interest
Payment Date, Redemption Date, Repayment Date or sinking fund payment date, or
at the Stated Maturity or Maturity, provided that no interest shall accrue on
the amount so payable for the period
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<PAGE>
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 113. Immunity of Stockholders, Trustees, Officers and Agents of
----------------------------------------------------------
the Company. In accordance with Section _____ of the Articles of Incorporation
- -----------
of the Company (the "Articles of Incorporation"), the Trustee recognizes and
agrees that the obligations of the Company under the Indenture and the
Securities and all documents delivered in the name of the Company in connection
herewith and therewith do not and shall not constitute personal obligations of
the directors, officers, employees, agents or stockholders of the Company or any
of them, and shall not involve any claim against or personal liability on the
part of any of them, and that all persons including the Trustee shall look
solely to the assets of the Company for the payment of any claim thereunder or
for the performance thereof and shall not seek recourse against such directors,
officers, employees, agents or shareholders of the Company or any of them or any
of their personal assets for such satisfaction. The performance of the
obligations of the Company under the Indenture and the Securities and all
documents delivered in the name of the Company in connection therewith shall not
be deemed a waiver of any rights or powers of the Company, trustees or
shareholders under the Articles of Incorporation or Bylaws of the Company.
ARTICLE TWO
SECURITIES FORMS
SECTION 201. Forms of Securities. The Registered Securities, if any, of
-------------------
each series and the Bearer Securities, if any, of each series and related
coupons shall be in substantially the forms as shall be established in one or
more indentures supplemental hereto or approved from time to time by or pursuant
to a Board Resolution in accordance with Section 301, 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 or with any rule or
regulation made pursuant thereto or with any rule or regulation of any stock
exchange on which the Securities may be listed, or to conform to usage.
Unless otherwise specified as contemplated by Section 301, Bearer
Securities shall have interest coupons attached.
The definitive Securities and coupons shall be printed, lithographed or
engraved or produced by any combination of these methods on a steel engraved
border or steel engraved borders or may be produced in any other manner, all as
determined by the officers executing such Securities or coupons, as evidenced by
their execution of such Securities or coupons.
SECTION 202. Form of Trustee's Certificate of Authentication. Subject to
-----------------------------------------------
Section 611, the Trustee's certificate of authentication shall be in
substantially the following form:
This is one of the Securities of the series designated therein referred to
in the within-mentioned Indenture.
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<PAGE>
-------------------------
as Trustee
By
---------------------------------
Authorized Signatory
SECTION 203. Securities Issuable in Global Form. If Securities of or
----------------------------------
within a series are issuable in global form, as specified as contemplated by
Section 301, then, notwithstanding clause (8) of Section 301 and the provisions
of Section 302, any such Security shall represent such of the Outstanding
Securities of such series as shall be specified therein and may provide that it
shall represent the aggregate amount of Outstanding Securities of such series
from time to time endorsed thereon and that the aggregate amount of Outstanding
Securities of such series represented thereby may from time to time be increased
or decreased to reflect exchanges. Any endorsement of a Security in global form
to reflect the amount, or any increase or decrease in the amount, of Outstanding
Securities represented thereby shall be made by the Trustee in such manner and
upon instructions given by such Person or Persons as shall be specified therein
or in the Company Order to be delivered to the Trustee pursuant to Section 303
or 304. Subject to the provisions of Section 303 and, if applicable, Section
304, the Trustee shall deliver and redeliver any Security in permanent global
form in the manner and upon instructions given by the Person or Persons
specified therein or in the applicable Company Order. If a Company Order
pursuant to Section 303 or 304 has been, or simultaneously is, delivered, any
instructions by the Company with respect to endorsement or delivery or
redelivery of a Security in global form shall be in writing but need not comply
with Section 102 and need not be accompanied by an Opinion of Counsel.
The provisions of the last sentence of Section 303 shall apply to any
Security represented by a Security in global form if such Security was never
issued and sold by the Company and the Company delivers to the Trustee the
Security in global form together with written instructions (which need not
comply with Section 102 and need not be accompanied by an Opinion of Counsel)
with regard to the reduction in the principal amount of Securities represented
thereby, together with the written statement contemplated by the last sentence
of Section 303.
Notwithstanding the provisions of Section 307, unless otherwise specified
as contemplated by Section 301, payment of principal of and any premium and
interest on any Security in permanent global form shall be made to the Person or
Persons specified therein.
Notwithstanding the provisions of Section 308 and except as provided in the
preceding paragraph, the 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 (i) in the case of a
permanent global Security in registered form, the Holder of such permanent
global Security in registered form, or (ii) in the case of a permanent global
Security in bearer form, Euroclear or CEDEL
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<PAGE>
ARTICLE THREE
THE SECURITIES
SECTION 301. Amount Unlimited; Issuable in Series. The aggregate
------------------------------------
principal amount of Securities which may be authenticated and delivered under
this Indenture is unlimited.
The Securities may be issued in one or more series. There shall be
established in one or more Board Resolutions or pursuant to authority granted by
one or more Board Resolutions and, subject to Section 303, set forth, or
determined in the manner provided, in an Officers' Certificate, or established
in one or more indentures supplemental hereto, prior to the issuance of
Securities of any series, any or all of the following, as applicable (each of
which (except for the matters set forth in clauses (1), (2) and (15) below), if
so provided, may be determined from time to time by the Company with respect to
unissued Securities of the series when issued from time to time):
(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 304, 305, 306, 906, 1107 or 1305);
(3) the date or dates, or the method by which such date or dates will
be determined, on which the principal of the Securities of 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
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<PAGE>
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 Registered Securities of the series
shall be issuable and, if other than the denomination of $5,000, the
denomination or denominations in which any Bearer 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 thereof pursuant to Section 502
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) or interest or
Additional Amounts, if any, on the Securities of the series shall be
payable or in which the Securities of the series shall be denominated;
(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
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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 cir-cumstances under which any such exchanges may
occur, if other than in the manner provided in Section 305, and, if
Registered Securities of the series are to be issuable as a global
Security, the identity of the depositary for such series;
(17) the date as of which any Bearer Securities of 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 304;
(19) the applicability, if any, of Sections 1402 and/or 1403 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 Fourteen;
(20) if the Securities of such series are to be issuable in
definitive form (whether upon original issue or upon exchange of a
temporary Security of such series) only upon receipt of certain
certificates or other documents or satisfaction of other conditions, then
the form and/or terms of such certificates, documents or conditions;
(21) whether and under what circumstances the Company will pay
Additional Amounts as contemplated by Section 1010 on the Securities of the
series to any Holder who is not a United States person (including any
modification to the definition of such term) in respect of any tax,
assessment or governmental charge and, if so, whether the Company will have
the option to redeem such Securities rather than pay such Additional
Amounts (and the terms of any such option);
(22) the obligation, if any, of the Company to permit the conversion
of the Securities of such series into the Company's Common Shares or
Preferred Shares, as the case may be, and the terms and conditions upon
which such conversion shall be effected (including,
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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 purposes of
conversion); and
(23) 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 denomination and except as may otherwise be
provided in or pursuant to such Board Resolution (subject to Section 303) 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 prior to the
delivery of the Officers' Certificate setting forth the terms of the Securities
of such series.
SECTION 302. Denominations. The Securities of each series shall be
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issuable in such denominations as shall be specified as contemplated by Section
301. With respect to Securities of any series denominated in Dollars, in the
absence of any such provisions with respect to the Securities of any series, the
Registered Securities of such series, other than Registered Securities issued in
global form (which may be of any denomination), shall be issuable in
denominations of $1,000 and any integral multiple thereof and the Bearer
Securities of such series, other than Bearer Securities issued in global form
(which may be of any denomination) shall be issuable in a denomination of
$5,000.
SECTION 303. Execution, Authentication, Delivery and Dating. The
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Securities and any coupons appertaining thereto shall be executed on behalf of
the Company by a trustee and an executive officer of the Company and attested by
its Secretary or one of its Assistant Secretaries. The signature of any of
these individuals on the Securities and coupons may be manual or facsimile
signatures of the present or any future such authorized officer and trustee and
may be imprinted or otherwise reproduced on the Securities.
Securities or coupons bearing the manual or facsimile signatures 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 prior to the authentication and delivery of such Securities or
did not hold such offices at the date of such Securities or coupons.
At any time and from time to time after the execution and delivery of this
Indenture, the 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
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United States; and provided further that, unless otherwise specified with
respect to any series of Securities pursuant to Section 301, a Bearer Security
may be delivered in connection with its original issuance only if the Person
entitled to receive such Bearer Security shall have furnished a certificate to
Euroclear or Cedel, as the case may be, in the form set forth in Exhibit A-1 to
this Indenture or such other certificate as may be specified with respect to any
series of Securities pursuant to Section 301, dated no earlier than 15 days
prior to the earlier of the date on which such Bearer Security is delivered and
the date on which any temporary Security first becomes exchangeable for such
Bearer Security in accordance with the terms of such temporary Security and this
Indenture. If any Security shall be represented by a permanent global Bearer
Security, then, for purposes of this Section and Section 304, 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 306,
the Trustee shall not authenticate and deliver any Bearer Security unless all
appurtenant coupons for interest then matured have been detached and cancelled.
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,
(i) 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, reorganization and other similar
laws of general applicability relating to or affecting the enforcement
of creditors' right generally and to general equitable principles; and
(ii) 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.
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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 301 and of the preceding
paragraph, if all the Securities of any series are not to be issued at one time,
it shall not be necessary to deliver an Officers' Certificate otherwise required
pursuant to Section 301 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 301.
No Security or coupon shall be entitled to any benefit under this Indenture
or be valid or obligatory for any purpose unless there appears on such Security
or Security to which such coupon appertains a certificate of authentication
substantially in the form provided for herein duly executed by the Trustee by
manual signature of an authorized signatory, and such certificate upon any
Security shall be conclusive evidence, and the only evidence, that such Security
has been duly authenticated and delivered hereunder and is entitled to the
benefits of this Indenture. Notwithstanding the foregoing, if any Security
shall have been authenticated and delivered hereunder but never issued and sold
by the Company, and the Company shall deliver such Security to the Trustee for
cancellation as provided in Section 309 together with a written statement (which
need not comply with Section 102 and need not be accompanied by an Opinion of
Counsel) stating that such Security has never been issued 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 304. Temporary Securities. (a) 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 in global form (which shall be
exchanged in accordance with Section 304(b) or as otherwise provided in or
pursuant to a Board Resolution), if temporary Securities of any series are
issued, the 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
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non-matured 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 303. Until
so exchanged, the temporary Securities of any series shall in all respects be
entitled to the same benefits under this Indenture as definitive Securities of
such series.
(b) Unless otherwise provided in or pursuant to a Board Resolution, this
Section 304(b) shall govern the exchange of temporary Securities issued in
global form other than through the facilities of The Depository Trust Company.
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 301, and, if any combination
thereof is so specified, as requested by the beneficial owner thereof; provided,
however, that, unless otherwise specified in such temporary global Security,
upon such presentation by the Common Depositary, such temporary global Security
is accompanied by a certificate dated the Exchange Date or a subsequent date and
signed by Euroclear as to the portion of such temporary global Security held for
its account then to be exchanged and a certificate dated the Exchange Date or a
subsequent date and signed by CEDEL as to the portion of such temporary global
Security held for its account then to be exchanged, each in the form set forth
in Exhibit A-2 to this Indenture or in such other form as may be established
pursuant to Section 301; and provided further that definitive Bearer Securities
shall be delivered in exchange for a portion of a temporary global Security only
in compliance with the requirements of Section 303.
Unless otherwise specified in such temporary global Security, the interest
of a beneficial owner of Securities of a series in a temporary global Security
shall be exchanged for definitive Securities of the same series and of like
tenor following the Exchange Date when the account holder instructs Euroclear or
CEDEL, as the case may be, to request such exchange on his behalf and delivers
to Euroclear or CEDEL, as the case may be, a certificate in the form set forth
in Exhibit A-1 to this Indenture (or in such other form as may be established
pursuant to Section 301), dated no earlier than 15 days prior to the Exchange
Date, copies of which certificate shall be available
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from the offices of Euroclear and CEDEL, the Trustee, any Authenticating Agent
appointed for such series of Securities and each Paying Agent. Unless otherwise
specified in such temporary global Security, any such exchange shall be made
free of charge to the beneficial owners of such temporary global Security,
except that a Person receiving definitive Securities must bear the cost of
insurance, postage, transportation and the like unless such Person takes
delivery of such definitive Securities in person at the offices of Euroclear or
CEDEL. Definitive Securities in bearer form to be delivered in exchange for any
portion of a temporary global Security shall be delivered only outside the
United States.
Until exchanged in full as hereinabove provided, the temporary Securities
of any series shall in all respects be entitled to the same benefits under this
Indenture as definitive Securities of the same series and of like tenor
authenticated and delivered hereunder, except that, unless otherwise specified
as contemplated by Section 301, interest payable on a temporary global Security
on an Interest Payment Date for Securities of such series occurring prior to the
applicable Exchange Date shall be payable to Euroclear and CEDEL on such
Interest Payment Date upon delivery by Euroclear and CEDEL to the Trustee of a
certificate or certificates in the form set forth in Exhibit A-2 to this
Indenture (or in such other forms as may be established pursuant to Section
301), for credit without further interest on or after such Interest Payment Date
to the respective accounts of Persons who are the beneficial owners of such
temporary global Security on such Interest Payment Date and who have each
delivered to Euroclear or CEDEL, as the case may be, a certificate dated no
earlier than 15 days prior to the Interest Payment Date occurring prior to such
Exchange Date in the form set forth as Exhibit A-1 to this Indenture (or in such
other forms as may be established pursuant to Section 301). Notwithstanding
anything to the contrary herein contained, the certifications made pursuant to
this paragraph shall satisfy the certification requirements of the preceding two
paragraphs of this Section 304(b) and of the third paragraph of Section 303 of
this Indenture and the interests of the Persons who are the beneficial owners of
the temporary global Security with respect to which such certification was made
will be exchanged for definitive Securities of the same series and of like tenor
on the Exchange Date or the date of certification if such date occurs after the
Exchange Date, without further act or deed by such beneficial owners. Except as
otherwise provided in this paragraph, no payments of principal or interest owing
with respect to a beneficial interest in a temporary global Security will be
made unless and until such interest in such temporary global Security shall have
been exchanged for an interest in a definitive Security. Any interest so
received by Euroclear and CEDEL and not paid as herein provided shall be
returned to the Trustee prior to the expiration of two years after such Interest
Payment Date in order to be repaid to the Company.
SECTION 305. 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 prescribe, the Company shall provide for the
registration of Registered Securities and of transfers of Registered Securities.
The Security Register shall be in written form or any other form capable of
being converted into written form within a reasonable time. The Trustee, at its
Corporate Trust Office, is hereby appointed "Security Registrar" for the purpose
of registering Registered Securities and transfers of Registered Securities on
such Security Register as herein provided. In the event that the Trustee shall
cease to be Security Registrar, it shall have the right to examine the Security
Register at all reasonable times.
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Subject to the provisions of this Section 305, upon surrender for
registration of transfer of any Registered Security of any series at any office
or agency of the 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 Registered Securities
of the same series, of any authorized denominations and of a like aggregate
principal amount, bearing a number not contemporaneously outstanding, and
containing identical terms and provisions.
Subject to the provisions of this Section 305, at the option of the Holder,
Registered Securities of any series may be exchanged for other Registered
Securities of the same series, of any authorized denomination or denominations
and of a like aggregate principal amount, containing identical terms and
provisions, upon surrender of the Registered Securities to be exchanged at any
such office or agency. Whenever any such Registered Securities are so
surrendered for exchange, the Company shall execute, and the Trustee shall
authenticate and deliver, the Registered Securities which the Holder making the
exchange is entitled to receive. Unless otherwise specified with respect to any
series of Securities as contemplated by Section 301, Bearer Securities may not
be issued in exchange for Registered Securities.
If (but only if) permitted by the applicable Board Resolution and (subject
to Section 303) set forth in the applicable Officers' Certificate, or in any
indenture supplemental hereto, delivered as contemplated by Section 301, at the
option of the Holder, Bearer Securities of any series may be exchanged for
Registered Securities of the same series of any authorized denominations and of
a like aggregate principal amount and tenor, upon surrender of the Bearer
Securities to be exchanged at any such office or agency, with all unmatured
coupons and all matured coupons in default thereto appertaining. If the Holder
of a Bearer Security is unable to produce any such unmatured coupon or coupons
or matured coupon or coupons in default, any such permitted exchange may be
effected if the Bearer Securities are accompanied by payment in funds acceptable
to the 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, except as otherwise provided in Section 1002, interest
represented by coupons shall be payable only upon presentation and surrender of
those coupons at an office or agency located outside the United States.
Notwithstanding the foregoing, in case a Bearer Security of any series is
surrendered at any such office or agency in a permitted exchange for a
Registered Security of the same series and like tenor after the close of
business at such office or agency on (i) any Regular Record Date and before the
opening of business at such office or agency on the relevant Interest Payment
Date, or (ii) any Special Record Date and before the opening of business at such
office or agency on the related proposed date for payment of Defaulted Interest,
such Bearer Security shall be surrendered without the coupon relating to such
Interest Payment Date or proposed date for payment, as the case may be, and
interest or Defaulted Interest, as the case may be, will not be payable on such
Interest Payment Date or proposed date for payment, as the case may be, in
respect of the Registered Security issued in exchange for such Bearer Security,
but will be payable only to the Holder of such coupon when due in accordance
with the provisions of this Indenture. Whenever any Securities are so
surrendered for exchange, the Company shall execute, and the Trustee shall
authenticate and deliver, the Securities which the Holder making the exchange is
entitled to receive.
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Notwithstanding the foregoing, except as otherwise specified as
contemplated by Section 301, any permanent global Security shall be exchangeable
only as provided in this paragraph. If the depositary for any permanent global
Security is The Depository Trust Company ("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 Securities Exchange Act of 1934, as
amended, if so required by applicable law or regulation, the Company shall
appoint a successor depositary with respect to such global Security or
Securities. If (x) a successor depositary for such global Security or
Securities is not appointed by the Company within 90 days after the Company
receives such notice or becomes aware of such unwillingness, inability or
ineligibility, (y) an Event of Default has occurred and is continuing and the
beneficial owners representing a majority in principal amount of the applicable
series of Securities represented by such global Security or Securities advise
DTC to cease acting as depositary for such global Security or Securities or (z)
the 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 301 and provided that any applicable notice provided in the permanent
global Security shall have been given, then without unnecessary delay but in any
event not later than the earliest date on which such interest may be so
exchanged, the Company shall execute, and the Trustee shall authenticate and
deliver definitive Securities in aggregate principal amount equal to the
principal amount of such beneficial owner's interest in such permanent global
Security. On or after the earliest date on which such interests may be so
exchanged, such permanent global Security shall be surrendered for exchange by
DTC or such other depositary as shall be specified in the 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.
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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 which 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 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 304, 906, 1107 or 1305 not involving any transfer.
The Company or the Trustee, as applicable, shall not be required (i) to
issue, register the transfer of or exchange any Security if such Security may be
among those selected for redemption during a period beginning at the opening of
business 15 days before selection of the Securities to be redeemed under Section
1103 and ending at the close of business on (A) if such Securities are issuable
only as Registered Securities, the day of the mailing of the relevant notice of
redemption and (B) if such Securities are issuable as Bearer Securities, the day
of the first publication of the relevant notice of redemption or, if such
Securities are also issuable as Registered Securities and there is no
publication, the mailing of the relevant notice of redemption, or (ii) to
register the transfer of or exchange any Registered Security so selected for
redemption in whole or in part, except, in the case of any Registered Security
to be redeemed in part, the portion thereof not to be redeemed, or (iii) to
exchange any Bearer Security so selected for redemption except that such a
Bearer Security may be exchanged for a Registered Security of that series and
like tenor, provided that such Registered Security shall be simultaneously
surrendered for redemption, or (iv) to issue, register the transfer of or
exchange any Security which has been surrendered for repayment at the option of
the Holder, except the portion, if any, of such Security not to be so repaid.
SECTION 306. Mutilated, Destroyed, Lost and Stolen Securities. If any
------------------------------------------------
mutilated Security or a Security with a mutilated coupon appertaining to it is
surrendered to the Trustee or the 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 then 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 (i) evidence
to their satisfaction of the destruction, loss or theft of any Security or
coupon, and (ii) such security or indemnity as may be required by them to save
each of them and any agent of either of them harmless, then, in the absence of
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
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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 1002, be payable only at an
office or agency located outside the United States and, unless otherwise
specified as contemplated by Section 301, any interest on Bearer Securities
shall be payable only upon presentation and surrender of the coupons
appertaining thereto.
Upon the issuance of any new Security under this Section, the 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 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 are exclusive and shall preclude (to the
extent lawful) all other rights and remedies with respect to the replacement or
payment of mutilated, destroyed, lost or stolen Securities or coupons.
SECTION 307. Payment of Interest; Interest Rights Preserved. Except as
----------------------------------------------
otherwise specified with respect to a series of Securities in accordance with
the provisions of Section 301, interest on any Registered Security that is
payable, and is punctually paid or duly provided for, on any Interest Payment
Date shall be paid to the Person in whose name that Security (or one or more
Predecessor Securities) is registered at the close of business on the Regular
Record Date for such interest at the office or agency of the Company maintained
for such purpose pursuant to Section 1002; provided, however, that each
installment of interest on any Registered Security may at the Company's option
be paid by (i) mailing a check for such interest, payable to or upon the written
order of the Person entitled thereto pursuant to Section 308, to the address of
such Person as it appears on the Security Register or (ii) transfer to an
account maintained by the payee located inside the United States.
Unless otherwise provided as contemplated by Section 301 with respect to
the Securities of any series, payment of interest may be made, in the case of a
Bearer Security, by transfer to an account maintained by the payee with a bank
located outside the United States.
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Unless otherwise provided as contemplated by Section 301, every permanent
global Security will provide that interest, if any, payable on any Interest
Payment Date will be paid to DTC, Euroclear and/or CEDEL, as the case may be,
with respect to that portion of such permanent global Security held for its
account by Cede & Co. or the Common Depositary, as the case may be, for the
purpose of permitting such party to credit the interest received by it in
respect of such permanent global Security to the accounts of the beneficial
owners thereof.
In case a Bearer Security of any series is surrendered in exchange for a
Registered Security of such series after the close of business (at an office or
agency in a Place of Payment for such series) on any Regular Record Date and
before the opening of business (at such office or agency) on the next succeeding
Interest Payment Date, such Bearer Security shall be surrendered without the
coupon relating to such Interest Payment Date and interest will not be payable
on such Interest Payment Date in respect of the Registered Security issued in
exchange for such Bearer Security, but will be payable only to the Holder of
such coupon when due in accordance with the provisions of this Indenture.
Except as otherwise specified with respect to a series of Securities in
accordance with the provisions of Section 301, any interest on any Registered
Security of any series that is payable, but is not punctually paid or duly
provided for, on any Interest Payment Date (herein called "Defaulted Interest")
shall forthwith cease to be payable to the registered Holder thereof on the
relevant Regular Record Date by virtue of having been such Holder, and such
Defaulted Interest may be paid by the 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 Registered Securities of such series (or
their respective Predecessor Securities) are registered at the close of
business on a Special Record Date for the payment of such Defaulted
Interest, which shall be fixed in the following manner. The 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 301 for the Securities of such series) equal to the aggregate
amount proposed to be paid in respect of such Defaulted Interest or shall
make arrangements satisfactory to the Trustee for such deposit on or prior
to the date of the proposed payment, such money when deposited to be held
in trust for the benefit of the Persons entitled to such Defaulted Interest
as in this clause provided. Thereupon the Trustee shall fix a Special
Record Date for the payment of such Defaulted Interest which shall be not
more than 15 days and not less than 10 days prior to the date of the
proposed 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 Registered Securities of
such series at his address as it appears in the Security Register not less
than 10 days prior to such Special Record Date. The Trustee may, in its
discretion, in the name and at the expense of the Company, cause a similar
notice to be published at least once in an Authorized Newspaper in each
place of payment, but such
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publications shall not be a condition precedent to the establishment of
such Special Record Date. Notice of the proposed payment of such Defaulted
Interest and the Special Record Date therefor having been mailed as
aforesaid, such Defaulted Interest shall be paid to the Persons in whose
names the Registered Securities of such series (or their respective
Predecessor Securities) are registered at the close of business on such
Special Record Date and shall no longer be payable pursuant to the
following clause (2). In case a Bearer Security of any series is
surrendered at the office or agency in a Place of Payment for such series
in exchange for a Registered Security of such series after the close of
business at such office or agency on any Special Record Date and before the
opening of business at such office or agency on the related proposed date
for payment of Defaulted Interest, such Bearer Security shall be
surrendered without the coupon relating to such proposed date of an Event
and Defaulted Interest will not be payable on such proposed date of payment
in respect of the Registered Security issued or 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
Registered Securities of any series in any other lawful manner not
inconsistent with the requirements of any securities exchange on which such
Securities may be listed, and upon such notice as may be required by such
exchange, if, after notice given by the 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 and Section 305, each
Security delivered under this Indenture upon registration of transfer of or in
exchange for or in lieu of any other Security shall carry the rights to interest
accrued and unpaid, and to accrue, which where carried by such other Security.
SECTION 308. 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 305 and 307) 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.
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 event of the Company or the Trustee shall be affected by notice
to the contrary.
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 Security in global form or for maintaining, supervising or
reviewing any records relating to such be official ownership interests.
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<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 309. Cancellation. All Securities and coupons surrendered for
------------
payment, redemption, repayment at the option of the Holder, registration of
transfer or exchange or for credit against any sinking 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 cancelled by it;
provided, however, where the Place of Payment is located outside of the United
States, the Paying Agent at such Place of Payment may cancel the Securities
surrendered to it for such purposes prior to delivering the Securities to the
Trustee. The 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 cancelled 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 cancelled as provided
in this Section except as expressly permitted by this Indenture. Cancelled
Securities and coupons held by the Trustee shall be destroyed by the Trustee and
the Trustee shall deliver a certificate of such destruction to the Company,
unless by a Company Order the Company directs their return to it.
SECTION 310. Computation of Interest. Except as otherwise specified as
-----------------------
contemplated by Section 301 with respect to Securities of any series, interest
on the Securities of each series shall be computed on the basis of a 360-day
year consisting of twelve 30-day months.
ARTICLE FOUR
SATISFACTION AND DISCHARGE
SECTION 401. Satisfaction and Discharge of Indenture. This Indenture
---------------------------------------
shall upon 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 1010), and the Trustee, upon receipt of a
Company Order, and at the expense of the Company, shall execute proper
instruments acknowledging satisfaction and discharge of this Indenture as to
such series when
(1) either
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(A) all Securities of such series theretofore authenticated and
delivered and all coupons, if any, appertaining thereto (other than (i)
coupons appertaining to Bearer Securities surrendered for exchange for
Registered Securities and maturing after such exchange, whose surrender is
not required or has been waived as provided in Section 305, (ii) Securities
and coupons of such series which have been destroyed, lost or stolen and
which have been replaced or paid as provided in Section 306, (iii) coupons
appertaining to Securities called for redemption and maturing after the
relevant Redemption Date, whose surrender has been waived as provided in
Section 1106, and (iv) Securities and Coupons of such series for whose
payment money has theretofore been deposited in trust or segregated and
held in trust by the Company and thereafter repaid to the Company or
discharged from such trust, as provided in Section 1003) have been
delivered to the Trustee for cancellation: or
(B) all Securities of such series and, in the case of (i) 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 the purpose an amount in the currency or currencies, currency
unit or units or composite currency or currencies in which the Securities
of such series are payable sufficient to pay and discharge the entire
indebtedness on such Securities and such coupons not theretofore delivered
to the Trustee for cancellation, for principal (and premium, if any) 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
(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 606, the obligations of the Company to any Authenticating Agent under
Section 611 and, if money shall have been deposited with and held by the Trustee
pursuant to subclause (B) of clause (1) of this Section the obligations of the
Trustee under Section 402 and the last paragraph of Section 1003 shall survive.]
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SECTION 402. Application of Trust Funds. Subject to the provisions of the
--------------------------
last paragraph of Section 1003, all money deposited with the Trustee pursuant to
Section 401 shall be held in trust and applied by it, in accordance with the
provisions of the Securities, the coupons and this Indenture, to the payment,
either directly or through any Paying Agent (including the 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 FIVE
REMEDIES
SECTION 501. 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, which default continues for a period of 30 days;
or
(2) default in the payment of the principal of (or premium, if any,
on) any Security of that series when it becomes due and payable at its
Maturity, which default continues for a period of five Business Days; or
(3) default in the deposit of any sinking fund payment, when and as
due by the terms of any Security of that series, which default continues
for a period of five Business Days; or
(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 specifically dealt
with or a covenant solely for the benefit of a series of Securities other
than such series), which default or breach continues 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 a majority 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 not being contested in good faith by the Company under
any bond, debenture, note or other evidence of indebtedness for money
borrowed by the Company (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
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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 (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 by the Company, whether such indebtedness now
exists or shall hereafter be created, which default shall have resulted in
such indebtedness becoming or being declared due 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 its property,
or
(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 501, the term "Bankruptcy Law" means title 11, U.S. Code
or any similar Federal or State Law for the relief of debtors and the term
"Custodian" means any receiver, trustee, assignee, liquidator or other similar
official under any Bankruptcy Law.
SECTION 502. Acceleration of Maturity; Rescission and Annulment. If an
--------------------------------------------------
Event of Default with respect to Outstanding Securities of any series occurs and
is continuing, then, and in every such case the Trustee or the Holders of not
less than a majority in principal amount of the Outstanding Securities of that
series may declare the principal (or, if any Securities are Original Issue
Discount Securities or Indexed Securities, such portion of the principal as may
be specified in the terms thereof) of all the Securities of that series to be
due and payable immediately, by a
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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 judgement or decree for
payment of the money due has been obtained by the Trustee as hereinafter in this
Article provided, the Holders of not less than 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 and its consequences if:
(1) the Company has paid or deposited with the Trustee a sum
sufficient to pay in the currency or currency unit or composite currency in
which the Securities of such series are payable (except as otherwise
specified pursuant to Section 301 for the Securities of such series);
(A) all overdue installments of interest on and any Additional
Amounts payable in respect of all Outstanding Securities of that
series and any related coupons,
(B) the principal of (and premium, 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
(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 513.
No such rescission shall affect any subsequent default or impair any right
consequent thereon.
SECTION 503. Collection of Indebtedness and Suits for Enforcement by
-------------------------------------------------------
Trustee. The 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,
which default continues for a period of 30 days, or
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(2) default is made in the payment of the principal of (or Premium, if
any, on) any Security of any series at its Maturity, which default
continues for a period of five Business Days,
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,
its agents and counsel.
If the Company fails to pay such amounts forthwith upon such demand, the
Trustee, in its own name and as trustee of an express trust, may institute a
judicial proceeding for the collection of the sums so due and unpaid, and 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 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 expertise of any power granted herein, or to enforce any other proper
remedy.
SECTION 504. Trustee May File Proofs of Claim. In case of the pendency
--------------------------------
of any receivership, insolvency, liquidation, bankruptcy, reorganization,
arrangement, adjustment, composition or other judicial proceeding relative to
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:
(i) to file and prove a claim for the whole amount, or such lesser
amount as may be provided for in the Securities of such series, of
principal (and premium, if any) and interest and Additional Amounts, if
any, owing and unpaid in respect of the Securities and to file such other
papers or documents as may be necessary or advisable in order to have the
claims of the Trustee (including any claim for the reasonable compensation,
expenses, disbursements and advances of the Trustee, its agents and
counsel) and of the Holders allowed in such judicial proceeding, and
(ii) to collect and receive any moneys or other property payable or
deliverable on any such claims and to distribute the same;
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and any custodian, receiver, assignee, trustee, liquidator, sequestrator (or
other similar official) in any such judicial proceeding is hereby authorized by
each Holder of Securities of such series and coupons to make such payments to
the Trustee, and in the event that the Trustee shall consent to the making of
such payments directly to the Holders, to pay to the Trustee any amount due to
it for the reasonable compensation, expenses, disbursements and advances of the
Trustee and any predecessor Trustee, their agents and counsel, and any other
amounts due the Trustee or any predecessor Trustee under Section 606.
Nothing herein contained shall be deemed to authorize the Trustee to
authorize or consent to or accept or adopt on behalf of any Holder of a Security
or coupon any plan of reorganization, arrangement, adjustment or composition
affecting the Securities or coupons or the rights of any Holder thereof, or to
authorize the Trustee to vote in respect of the claim of any Holder of a
Security or coupon in any such proceeding.
SECTION 505. Trustee May Enforce Claims Without Possession of Securities
-----------------------------------------------------------
or Coupons. All rights of action and claims under this Indenture or any of the
- ----------
Securities or coupons may be prosecuted and enforced by the Trustee without the
possession of any of the Securities or coupons or the production thereof in any
proceeding relating thereto, and any such proceeding instituted by the Trustee
shall be brought in its own name as trustee of an express trust, and any
recovery of judgment shall, after provision for the payment of the reasonable
compensation, expenses, disbursements and advances of the Trustee, its agents
and counsel, be for the ratable benefit of the Holders of the Securities and
coupons in respect of which such judgment has been recovered.
SECTION 506. Application of Money Collected. Any money collected by the
------------------------------
Trustee pursuant to this Article shall be applied in the following order, at the
date or dates fixed by the Trustee and, in case of the distribution of such
money on account of principal (or premium, if any) or interest and any
Additional Amounts, upon presentation of the Securities or coupons, or both, as
the case may be, and the notation thereon of the payment if only partially paid
and upon surrender thereof if fully paid:
FIRST: To the payment of all amounts due the Trustee and any
predecessor Trustee under Section 606;
SECOND: To the payment of the amounts then due and unpaid upon the
Securities and coupons for principal (and premium, 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 507. Limitation on Suits. No Holder of any Security of any
-------------------
series or any related coupon shall have any right to institute any proceeding,
judicial or otherwise, with respect to this Indenture, or for the appointment of
a receiver or trustee, or for any other remedy hereunder, unless:
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(1) such Holder has previously given written notice to the Trustee of
a continuing Event of Default with respect to the Securities of that
series;
(2) the Holders of not less than a majority in principal amount of
the Outstanding Securities of that series shall have 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; and
(4) the Trustee for 60 days after its receipt of such notice, request
and offer of indemnity has failed to institute any such proceeding;
it being understood and intended that no one or more of such Holders shall have
any right in any manner whatever by virtue of, or by availing of, any provision
of this Indenture to affect, disturb or prejudice the rights of any other of
such Holders, or to obtain or to seek to obtain priority or preference over any
other of such Holders or to enforce any right under this Indenture, except in
the manner herein provided and for the equal and ratable benefit of all such
Holders.
SECTION 508. Unconditional Right of Holders to Receive Principal,
----------------------------------------------------
Premium, 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 305 and 307) interest on, and any
Additional Amounts in respect of, such Security or payment of such coupon on the
respective due dates expressed in such Security or coupon (or, in the case of
redemption, on the Redemption Date) and to institute suit for the enforcement of
any such payment, and such rights shall not be impaired without the consent of
such Holder.
SECTION 509. Restoration of Rights and Remedies. If the Trustee or any
----------------------------------
Holder of a Security or coupon has instituted any proceeding to enforce any
right or remedy under this Indenture and such proceeding has been discontinued
or abandoned for any reason, or has been determined adversely to the Trustee or
to such Holder, then and in every such case, the 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 510. Rights and Remedies Cumulative. Except as otherwise provided
------------------------------
with respect to the replacement or payment of mutilated, destroyed, lost or
stolen Securities or coupons in the last paragraph of Section 306, no right or
remedy herein conferred upon or reserved to the Trustee or to the Holders of
Securities or coupons is intended to be exclusive of any other right or remedy,
and every right and remedy shall, to the extent permitted by law, be cumulative
and in addition to every other right and remedy given hereunder or now or
hereafter existing at law or in equity or otherwise. The assertion or
employment of any right or remedy hereunder, or otherwise, shall not prevent the
concurrent assertion or employment of any other appropriate right or remedy.
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SECTION 511. Delay or Omission Not Waiver. No delay or omission of the
----------------------------
Trustee or of any Holder of any Security or coupon to exercise any right or
remedy occurring upon any Event of Default shall impair any such right or remedy
or constitute a waiver of any such Event of Default or an acquiescence therein.
Every right and remedy given by this Article or by law to the Trustee or to the
Holders may be exercised from time to time, and as often as may be deemed
expedient, by the Trustee or by the Holders of Securities or coupons, as the
case may be.
SECTION 512. Control by Holders of Securities. The Holders of not less
--------------------------------
than a majority in principal amount of the Outstanding Securities of any series
shall have the right to direct the time, method and place of conducting any
proceeding for any remedy available to the Trustee or exercising any trust or
power conferred on the Trustee with respect to the Securities of such series,
provided that
(1) such direction shall not be in conflict with any rule of law or
with this Indenture,
(2) the Trustee may take any other action deemed proper by the
Trustee which is not inconsistent with such direction, and
(3) the Trustee need not take any action which might involve it in
personal liability or be unduly prejudicial to the Holders of Securities of
such series not joining therein.
SECTION 513. Waiver of Past Defaults. The Holders of not less than a
-----------------------
majority in principal amount of the Outstanding Securities of any series may on
behalf of the Holders of all the Securities of such series and any related
coupons waive any past default hereunder with respect to such series and its
consequences, except a default
(1) in the payment of the principal of (or premium, 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 waiver shall extend to any subsequent or other
default or Event of Default or impair any right consequent thereon.
SECTION 514. Waiver of Usury, Stay or Extension Laws. The 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
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impede the execution of any power herein granted to the Trustee, but will suffer
and permit the execution of every such power as though no such law had been
enacted.
SECTION 515. Undertaking for Costs. All parties to this Indenture agree,
---------------------
and each Holder of any Security by his acceptance thereof shall be deemed to
have agreed, that any court may in its discretion require, in any suit for the
enforcement of any right or remedy under this Indenture, or in any suit against
the Trustee for any action taken or omitted by it as Trustee, the filing by any
party litigant in such suit of any undertaking to pay the costs of such suit,
and that such court may in its discretion assess reasonable costs, including
reasonable attorneys' fees, against any party litigant in such suit having due
regard to the merits and good faith of the litigant in such suit having due
regard to the merits and good faith of the claims or defenses made by such party
litigant; but the provisions of this Section shall not apply to any suit
instituted by the Trustee, to any suit instituted by any Holder, or group of
Holders, holding in the aggregate more than 10% in principal amount of the
Outstanding Securities, or to any suit instituted by any Holder for the
enforcement of the payment of the principal of (or premium, if any) or interest
on any Security on or after the respective Stated Maturities expressed in such
Security (or, in the case of redemption, on or after the Redemption Date).
ARTICLE SIX
THE TRUSTEE
SECTION 601 Notice of Defaults. Within 90 days after the occurrence of
------------------
any default hereunder with respect to the Securities of any series, the Trustee
shall transmit in the manner and to the extent provided in TIA Section 313(c),
notice of such default hereunder known to the Trustee unless such default shall
have been cured or waived; provided, however, that, except in the case of a
default in the payment of the principal of (or premium, if any) or interest on
or any Additional Amounts with respect to any Security of such series, or in the
payment of any sinking fund installment with respect to the Securities of such
series, the Trustee shall be protected in withholding such notice if and so long
as Responsible Officers of the Trustee in good faith determine that the
withholding of such notice is in the interests of the Holders of the Securities
and coupons of such series; and provided further that in the case of any default
or breach of the character specified in Sections 501(1), (2), (3) and (4) with
respect to the Securities and coupons of such series, no such notice to Holders
shall be given until the expiration of the respective time periods set forth in
such subsections. For the purpose of this Section and subject to the foregoing,
the term "default" means any event which is, or after notice or lapse of time or
both would become, an Event of Default with respect to the Securities of such
series.
SECTION 602. Certain Rights of Trustee. Subject to the provisions of TIA
-------------------------
Section 315(a) through 315(d):
(1) the Trustee 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 in
good faith to be genuine and to have been signed or presented by the
property party or parties;
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(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 303
which shall be sufficiently evidenced as provided therein) and any
resolution of the Board of Directors may be sufficiently evidenced by a
Board Resolution;
(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 advice of such
counsel or any Opinion of Counsel shall be full and complete authorization
and protection in respect of any action taken, suffered or omitted by it
hereunder in good faith and in reliance thereon;
(5) the Trustee shall be under no obligation to exercise any of the
rights or powers vested in it by this Indenture at the request or direction
of any of the Holders of Securities of any series or any related coupons
pursuant to this Indenture, unless such Holders shall have offered to the
Trustee security or indemnity reasonably satisfactory to the Trustee
against the costs, expenses and liabilities which might be incurred by it
in compliance with such request or direction;
(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, but the Trustee,
in its discretion, may make such further inquiry or investigation into such
facts or matters as it may see fit, and, if the Trustee shall determine to
make such further inquiry or investigation, it shall be entitled to make
reasonable examination of the books, records and premises of the Company,
personally or by agent or attorney following reasonable notice to the
Company;
(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 or rights or powers conferred upon it by this
Indenture.
The Trustee shall not be required to expend or risk its own funds or
otherwise incur any financial liability in the performance of any of its duties
hereunder, or in the exercise of any of its right 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.
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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 603. Not Responsible for Recitals or Issuance of Securities. The
------------------------------------------------------
recitals contained herein and in the Securities, except the Trustee's
certificate of authentication, and in any coupons shall be taken as the
statements of the 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 604. 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, 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.
SECTION 605. Money Held in Trust. Money held by the Trustee in trust
-------------------
hereunder need not be segregated from other funds except to the extent required
by law. The Trustee shall be under no liability for interest on any money
received by it hereunder except as otherwise agreed with the Company.
SECTION 606. 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 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 administrative 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 501(6) or Section 501(7), the expenses
(including the reasonable charges and
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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, the Trustee shall have a lien prior to the Securities upon all
property and funds held or collected by the Trustee as such, except funds held
in trust for the payment of principal of (or premium, if any) or interest on
particular Securities or any coupons.
The provisions of this Section shall survive the termination of this
Indenture.
SECTION 607. Corporate Trustee required; Eligibility; Conflicting
----------------------------------------------------
Interests. There shall at all times be a Trustee hereunder which shall be
- ---------
eligible to act as Trustee under TIA Section 310(a)(1) and shall have a combined
capital and surplus of at least $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, the combined capital and
surplus of such corporation shall be deemed to be its combined capital and
surplus as set forth in its most recent report of condition so published. If at
any time the Trustee shall cease to be eligible in accordance with the
provisions of this Section, it shall resign immediately in the manner and with
the effect hereinafter specified in this Article.
SECTION 608. Resignation and Removal; Appointment of Successor.
-------------------------------------------------
(a) No resignation or removal of the Trustee and no appointment of a
successor Trustee pursuant to this Article shall become effective until the
acceptance of appointment by the successor Trustee in accordance with the
applicable requirements of Section 609.
(b) The Trustee may resign at any time with respect to the Securities of
one or more series by giving written notice thereof to the 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 of resignation, the
resigning Trustee may petition any court of competent jurisdiction for the
appointment of a successor Trustee.
(c) The Trustee may be removed at any time with respect to the Securities
of any series by Act of the Holders of a majority in principal amount of the
Outstanding Securities of such series delivered to the Trustee and to the
Company.
(d) If at any time:
(1) the Trustee shall fail to comply with the provisions of TIA
Section 310(b) after written request therefor by the 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 607 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
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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 competent
jurisdiction for the removal of the Trustee with respect to all Securities and
the appointment of a successor Trustee or Trustees.
(e) If the Trustee shall resign, be removed or become incapable of acting,
or if a vacancy shall occur in the office of Trustee for any cause with respect
to the Securities of one or more series, the 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.
(f) 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 106. Each notice
shall include the name of the successor Trustee with respect to the Securities
of such series and the address of its Corporate Trust Office.
SECTION 609. Acceptance of Appointment by Successor. (a) In case of the
--------------------------------------
appointment hereunder of a successor Trustee with respect to all Securities,
every such successor Trustee shall execute, acknowledge and deliver to the
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 606.
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(b) In case of the appointment hereunder of a successor Trustee with
respect to the Securities of one or more (but not all) series, the 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 hereof, wherein each successor Trustee shall accept
such appointment and which (1) shall contain such provisions as shall be
necessary or desirable to transfer and confirm to, and to vest in, each
successor Trustee all the rights, powers, trusts and duties of the retiring
Trustee with respect to the Securities of that or those series to which the
appointment of such successor Trustee relates, (2) if the retiring Trustee is
not retiring with respect to all Securities, shall contain such provisions as
shall be deemed necessary or desirable to confirm that all the rights, powers,
trusts and duties of the retiring Trustee with respect to the Securities of that
or those series as to which the retiring Trustee is not retiring shall continue
to be vested in the retiring Trustee, and (3) shall add to or change any of the
provisions of this Indenture as shall be necessary to provide for or facilitate
the administration of the trusts hereunder by more than one Trustee, it being
understood that nothing herein or in such supplemental indenture shall
constitute such Trustees co-trustees of the same trust and that each such
Trustee shall be trustee of a trust or trusts hereunder separate and apart from
any trust or trusts hereunder administered by any other such Trustee; and upon
the execution and delivery of such supplemental indenture the resignation or
removal of the retiring Trustee shall become effective to the extent provided
therein and each such successor Trustee, without any further act, deed or
conveyance, shall become vested with all the rights, powers, trusts and duties
of the retiring Trustee with respect to the Securities of that or those series
to which the appointment of such successor Trustee relates; but, on request of
the Company or any successor Trustee, such retiring Trustee shall, upon payment
of its charges with respect to the Securities of that or the series to which the
appointment of such successor Trustee relates, execute and deliver an instrument
transferring to such successor Trustee all of 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
with respect to the Securities of that or those series to which the appointment
of such successor Trustee relates.
(c) Upon the reasonable 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 paragraph (a) or (b) of this Section, as the case may be.
(d) No successor Trustee shall accept its appointment unless at the time
of such acceptance such successor Trustee shall be qualified and eligible under
this Article, including being qualified and eligible under the TIA.
SECTION 610. Merger, Conversion, Consolidation or Succession to Business.
-----------------------------------------------------------
Any corporation into which the Trustee may be merged or converted or with which
it may be consolidated, or any corporation resulting from any merger, conversion
or consolidation to which the Trustee shall be a party, or any corporation
succeeding to all or substantially all of the corporate trust business of the
Trustee, shall be the successor of the Trustee hereunder, provided such
corporation shall be otherwise qualified and eligible under this Article and the
TIA, without the execution or filing of any paper or any further act on the part
of any of the parties hereto. In case any Securities or coupons shall have been
authenticated, but not delivered, by the Trustee then in office, any successor
by merger, conversion or consolidation to such authenticating Trustee may adopt
such authentication and deliver the Securities or coupons so authenticated with
the same effect as if such successor Trustee had itself authenticated such
Securities or coupons. In case any
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Securities or coupons shall not have been authenticated by such predecessor
Trustee, any such successor Trustee may authenticate and deliver such Securities
or coupons, in either its own name or that of its predecessor Trustee, with the
full force and effect which this Indenture provides for the certificate of
authentication of the Trustee.
SECTION 611. Appointment of Authenticating Agent. At any time when any of
-----------------------------------
the Securities remain Outstanding, the Trustee may appoint an Authenticating
Agent or Agents with respect to one or more series of Securities which shall be
authorized to act on behalf of the Trustee to authenticate Securities of such
series issued upon exchange, registration of transfer or partial redemption or
repayment thereof, and Securities so authenticated shall be entitled to the
benefits of this Indenture and shall be valid and obligatory for all purposes as
if authenticated by the Trustee hereunder. Any such appointment shall be
evidenced by an instrument in writing signed by a Responsible Officer of the
Trustee, a copy of which instrument shall be promptly furnished to the 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 of America or of any State or
the District of Columbia, authorized under such laws to act as Authenticating
Agent, having a combined capital and surplus of not less than $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, the combined capital and surplus of such
Authenticating Agent shall be deemed to be its combined capital and surplus as
set forth in its most recent report of condition so published. In case at any
time an Authenticating Agent shall cease to be eligible in accordance with the
provisions of this Section, such Authenticating Agent shall resign immediately
in the manner and with the effect specified in this Section.
Any corporation into which an Authenticating Agent may be merged or
converted or with which it may be consolidated, or any corporation resulting
from any merger, conversion or consolidation to which such Authenticating Agent
shall be a party, or any corporation succeeding to the corporate agency or
corporate trust business of an Authenticating Agent, shall continue to be an
Authenticating Agent, provided such corporation shall be otherwise eligible
under this Section, without the execution or filing of any paper or further act
on the part of the Trustee or the Authenticating Agent.
An Authenticating Agent for any series of Securities may at any time resign
by giving written notice of resignation to the Trustee for such series and to
the 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, the Trustee for such series may appoint a successor
Authenticating Agent which shall be 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 106. Any successor Authenticating Agent upon acceptance of its
appointment hereunder shall become vested with all
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the rights, powers and duties of its predecessor hereunder, with like effect as
if originally named as an Authenticating Agent herein. No successor
Authenticating Agent shall be appointed unless eligible under the provisions of
this Section.
The 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.
If an appointment with respect to one or more series is made pursuant to
this Section, the Securities of such series may have endorsed thereon, in
addition to or in lieu of the Trustee's certificate of authentication, an
alternate certificate of authentication substantially in the following form:
This is one of the Securities of the series designated therein referred to
in the within-mentioned Indenture.
------------------------------------------------
as Trustee
By:
-------------------------------------------
as Authenticating Agent
By:
-------------------------------------------
Authorized Signatory
ARTICLE SEVEN
HOLDERS' LISTS AND REPORTS BY TRUSTEE AND COMPANY
SECTION 701. 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).
SECTION 702. Reports by Trustee. Within 60 days after May 15 of each year
------------------
commencing with the first May 15 after the first issuance of Securities pursuant
to this Indenture, the Trustee shall transmit by mail to all Holders of
Securities as provided in TIA Section 313(c) a brief report dated as of such May
15 if required by TIA Section 313(a).
SECTION 703. Reports by Company. The Company will:
------------------
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(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 Securities Exchange Act of 1934,
as amended; 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,
in accordance with rules and regulations prescribed from time to time by the
Commission, such of the supplementary and periodic information, documents and
reports which may be required pursuant to Section 13 of the Securities Exchange
Act of 1934, as amended, 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 paragraphs (1) and (2) of this
Section as may be required by rules and regulations prescribed from time to time
by the Commission.
SECTION 704. Company to Furnish Trustee Names and Addresses of Holders.
---------------------------------------------------------
The Company will furnish or cause to be furnished to the Trustee:
(a) semi-annually, not later than 15 days after the Regular Record Date
for interest for each series of Securities, a list, in such form as the Trustee
may reasonably require, of the names and addresses of the Holders of Registered
Securities of such series as of such Regular Record Date, or if there is no
Regular Record Date for interest for such series of Securities, semi-annually,
upon such dates as are set forth in the Board Resolution or indenture
supplemental hereto authorizing such series, and
(b) at such other times as the Trustee may request in writing, within 30
days after the receipt by the 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 EIGHT
CONSOLIDATION, MERGER, SALE, LEASE OR CONVEYANCE
SECTION 801. 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 corporation, provided that in any
such case, (1) either the Company shall be the continuing corporation, or the
successor corporation shall be a corporation organized and existing under the
laws of the United
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States or a state thereof and such successor corporation shall expressly assume
the due and punctual payment of the principal of (and premium, if any) and any
interest (including all Additional Amounts, if any, payable pursuant to Section
1010) 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 Nine hereof, reasonably satisfactory to the Trustee,
executed and delivered to the Trustee by such corporation and (2) immediately
after giving effect to such transaction and treating any indebtedness with
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 802. Rights and Duties of Successor Corporation. In case of any
------------------------------------------
such consolidation, merger, sale, lease or conveyance and upon any such
assumption by the successor 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 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 any such consolidation, merger, sale, lease or conveyance, such
changes in phraseology and form (but not in substance) may be made in the
Securities thereafter to be issued as may be appropriate.
SECTION 803. Officers' Certificate and Opinion of Counsel. Any
--------------------------------------------
consolidation, merger, sale, lease or conveyance permitted under Section 801 is
also subject to the condition that the Trustee receive an Officers' Certificate
and an Opinion of Counsel to the effect that any such consolidation, merger,
sale, lease or conveyance, and the assumption by any successor corporation,
complies with the provisions of this Article and that all conditions precedent
herein provided for relating to such transaction have been complied with.
ARTICLE NINE
SUPPLEMENTAL INDENTURES
SECTION 901. 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
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<PAGE>
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;
(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;
(3) to add any additional Events of Default for the benefit of the Holders
of all or any series of Securities (and if such Events of Default are to be for
the benefit of less than all series of Securities, stating that such Events of
Default are expressly being included solely for the benefit of such series);
provided, however, that in respect of any such additional Events of Default
such supplemental indenture may provide for a particular period of grace after
default (which period may be shorter or longer than that allowed in the case
of other defaults) or may provide for an immediate enforcement upon such
default or may limit the remedies available to the Trustee upon such default
or may limit the right of the Holders of a majority in aggregate principal
amount of that or those series of Securities to which such additional Events
of Default apply to waive such default;
(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 Registered Securities, to permit Bearer Securities to be issued in
exchange for Bearer Securities of other authorized denominations or to permit or
facilitate the issuance of Securities in uncertificated form, provided that any
such action shall not adversely affect the interests of the Holders of
Securities of any series or any related coupons in any material respect;
(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;
(6) to secure the Securities;
(7) to establish the form or terms of Securities of any series and any
related coupons as permitted by Sections 201 and 301, including the provisions
and procedures relating to Securities convertible into Common Shares or
Preferred Shares, as the case may be;
(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;
(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
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respect to matters or questions arising under this Indenture which shall not be
inconsistent with the provisions of this Indenture, provided such provisions
shall not adversely affect in any material respect the interests of the Holders
of Securities of any series or any related coupons; and/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 401, 1402 and 1403; provided that
any such action shall not adversely affect in any material respect the interests
of the Holders of Securities of such series and any related coupons or any other
series of Securities.
SECTION 902. Supplemental Indentures with Consent of Holders. With the
-----------------------------------------------
consent of the Holders of not less than a majority in principal amount of all
Outstanding Securities affected by such supplemental indenture, by Act of said
Holders delivered to the 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 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 1010 (except as contemplated by Section 801(1) and
permitted by Section 901(1)), or reduce the amount of the principal of an
Original Issue Discount Security that would be due and payable upon a
declaration of acceleration of the Maturity thereof pursuant to Section 502 or
the amount thereof provable in bankruptcy pursuant to Section 504, or adversely
affect any right of repayment at the option of the Holder of any Security, or
change any Place of Payment where, or the currency or currencies, currency unit
or units or composite currency or currencies in which, 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 1504 for quorum or
voting, or
(3) modify any of the provisions of this Section, Section 513 or Section
1011, 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.
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<PAGE>
It shall not be necessary for any Act of Holders under this Section to
approve the particular form of any proposed supplemental indenture, but it shall
be sufficient if such Act shall approve the substance thereof.
A supplemental indenture which changes or eliminates any covenant or other
provision of this Indenture which has expressly been included solely for the
benefit of one or more particular series of Securities, or which modifies the
rights of the Holders of Securities of such series with respect to such covenant
or other provision, shall be deemed not to affect the rights under this
Indenture of the Holders of Securities of any other series.
SECTION 903. Execution of Supplemental Indentures. In executing, or
------------------------------------
accepting the additional trusts created by, any supplemental indenture permitted
by this Article or the modification thereby of the trusts created by this
Indenture, the Trustee shall be entitled to receive, and shall be fully
protected in relying upon, an Opinion of Counsel stating that the execution of
such supplemental indenture is authorized or permitted by this Indenture. The
Trustee may, but shall not be obligated to, enter into any such supplemental
indenture which affects the Trustee's own rights, duties or immunities under
this Indenture or otherwise.
SECTION 904. Effect of Supplemental Indentures. Upon the execution of any
---------------------------------
supplemental indenture under this Article, this Indenture shall be modified in
accordance therewith, and such supplemental indenture shall form a part of this
Indenture for all purposes; and every Holder of Securities theretofore or
thereafter authenticated and delivered hereunder and of any coupon appertaining
thereto shall be bound thereby.
SECTION 905. Conformity with Trust Indenture Act. Every supplemental
-----------------------------------
indenture executed pursuant to this Article shall conform to the requirements of
the Trust Indenture Act as then in effect.
SECTION 906. Reference in Securities to Supplemental Indentures.
--------------------------------------------------
Securities of any series authenticated and delivered after the execution of any
supplemental indenture pursuant to this Article may, and shall, if required by
the Trustee, bear a notation in form approved by the Trustee as to any matter
provided for in such supplemental indenture. If the 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 TEN
COVENANTS
SECTION 1001. 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 301 with
respect to any series of Securities, any interest due
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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 1010 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 301, 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 1002. 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: (A) in the Borough of Manhattan, New York City, an office or agency
where any Registered Securities of that series may be presented or surrendered
for payment or conversion, where any Registered Securities of that series may be
surrendered for registration of transfer, where Securities of that series may be
surrendered for exchange, where notices and demands to or upon the 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); (B) subject to any laws or regulations
applicable thereto, in a Place of Payment for that series which is located
outside the United States, an office or agency where Securities of that series
and related coupons may be presented and surrendered for payment (including
payment of any Additional Amounts payable on Securities of that series pursuant
to Section 1010) or conversion; provided, however, that if the Securities of
that series are listed on the Luxembourg Stock Exchange or any other 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 Luxembourg or any other required city located outside the United
States, as the case may be, so long as the Securities of that series are listed
on such exchange; and (C) subject to any laws or regulations applicable thereto,
in a Place of Payment for that series located outside the United States an
office or agency where any Registered Securities of that series may be
surrendered for registration of transfer, where Securities of that series may be
surrendered for exchange and where notices and demands to or upon the 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 1010) or conversion, at the offices specified in the Security, in
_______________, and the Company hereby appoints the same as its agent to
receive such respective presentations, surrenders, notices and demands, and 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 301, no payment of principal, premium or interest on or Additional
Amounts in respect of Bearer Securities shall be
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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 1010) shall be
made at the office of the designated agent of the Company's Paying Agent in the
Borough of Manhattan, New York City, if (but only if) payment in Dollars of the
full amount of such principal, premium, interest or Additional Amounts, as the
case may be, at all offices or agencies outside the United States maintained for
the purpose by the 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. Illness otherwise specified with respect to
any Securities pursuant to Section 301 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 301, if and so long as the Securities of any series (i) are denominated
in a Foreign Currency, or (ii) may be payable in a Foreign Currency or so long
as it is required under any other provision of the Indenture, then the Company
will maintain with respect to each such series of Securities, or as so required,
at least one exchange rate agent.
SECTION 1003. Money for Securities Payments to Be Held in Trust. If the
-------------------------------------------------
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 301 for the Securities of such series) sufficient to pay the
principal (and premium, if any) or interest or Additional Amounts so becoming
due until such sums shall be paid to such Persons or otherwise disposed of as
herein provided, and will promptly notify the Trustee of its action or failure
so to act.
Whenever the Company shall have one or more Paying Agents for any series of
Securities and any related coupons, it will, before each due date of the
principal of (and premium, if any), or interest on or Additional Amounts in
respect of, any Securities of that series, deposit with a Paying Agent a sum (in
the currency or currencies, currency unit or units or composite currency or
currencies described in the preceding paragraph) sufficient to pay the principal
(and premium, if any) or interest or Additional Amounts, so becoming due, such
sum to be held in trust for the benefit of the Persons entitled to such
principal, premium or interest or Additional Amounts and
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(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, that such Paying
Agent will
(1) hold all sums held by it for the payment of principal of (and
premium, if any) or interest on Securities or Additional Amounts in trust
for the benefit of the persons entitled thereto until such sums shall be
paid to such Persons or otherwise disposed of as herein provided;
(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 or Additional Amounts; 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 trusts 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 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 by the Company.
SECTION 1004. Existence. Subject to Article Eight, the Company will do or
---------
cause to be done all things necessary to preserve and keep in full force and
effect its corporate existence, rights (charter and statutory) and 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.
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SECTION 1005. 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, reasonable wear and tear excepted, and supplied with all
necessary equipment and will cause to be made all necessary repairs, renewals,
replacements, betterments and improvements thereof, all as in the judgment of
the Company may be necessary so that the business carried on in connection
therewith may be properly and advantageously conducted at all times.
SECTION 1006. Insurance. The Company will, and will cause each of its
---------
Subsidiaries to, keep all of its insurable properties insured against loss or
damage at least equal to their then full insurable value.
SECTION 1007. 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.
SECTION 1008. Reserved.
--------
SECTION 1009. 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 1009, such compliance shall be determined without
regard to any period of grace or requirement of notice under this Indenture.
SECTION 1010. 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 301. Whenever in this Indenture
there is mentioned, in any context except in the case of Section 502(1), the
payment of the principal of 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 301 to the extent
that, in such context, Additional Amounts are, were or would be payable in
respect thereof pursuant to such terms and express mention of the payment of
Additional Amounts (if applicable) in any provisions hereof shall not be
construed as excluding Additional Amounts in those provisions hereof where such
express mention is not made.
Except as otherwise specified as contemplated by Section 301, if the
Securities of a series provide for the payment of Additional Amounts, at least
10 days prior to the first Interest Payment Date with respect to that series of
Securities (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
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least 10 days prior to each date of payment of principal and any premium or
interest if there has been any change with respect to the matters set forth in
the below-mentioned Officers' Certificate, 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 the Company will pay to the Trustee
or such Paying Agent the Additional Amounts required by the terms of such
Securities. In the event that the Trustee or any Paying Agent, as the case may
be, shall not so receive the above-mentioned certificate, then the Trustee or
such Paying Agent shall be entitled (i) to assume that no such withholding or
deduction is required with respect to any payment of principal or interest with
respect to any Securities of a series or related coupons until it shall have
received a certificate advising otherwise and (ii) to make all payments of
principal and interest with respect to the Securities of a series or related
coupons without withholding or deductions until otherwise advised. The 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 or in reliance on the Company's
not furnishing such an Officers' Certificate.
SECTION 1011. Waiver of Certain Covenants. The Company may omit in any
---------------------------
particular instance to comply with any term, provision or condition set forth in
Sections 1004 to 1007, 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 ELEVEN
REDEMPTION OF SECURITIES
SECTION 1101. Applicability of Article. Securities of any series which
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are redeemable before their Stated Maturity shall be redeemable in accordance
with their terms and (except as otherwise specified as contemplated by Section
301 for Securities of any series) in accordance with this Article.
SECTION 1102. Election to Redeem; Notice to Trustee. The election of the
-------------------------------------
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 30 days
prior to the giving of the notice of redemption in Section 1104 (unless a
shorter notice shall be satisfactory to the Trustee), notify the Trustee of such
Redemption Date and of the principal amount of Securities of such series to be
redeemed. In the case of any redemption of Securities prior to the expiration
of any restriction on such redemption provided in
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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 1103. Selection by Trustee of Securities To Be Redeemed. If less
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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 1104. Notice of Redemption. Notice of redemption shall be given
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in the manner provided in Section 106, not less than 30 days nor more than 60
days prior to the Redemption Date, unless a shorter period is specified by the
terms of such series established pursuant to Section 301, to each Holder of
Securities to be redeemed, but failure to give such notice in the manner herein
provided to the Holder of any Security designated for redemption as a whole or
in part, or any defect in the notice to any such Holder, shall not affect the
validity of the proceedings for the redemption of any other such Security or
portion thereof.
Any notice that is mailed to the Holders of Registered Securities in the
manner herein provided shall be conclusively presumed to have been duly given,
whether or not the Holder receives the notice.
All notices of redemption shall state:
(1) the Redemption Date,
(2) the Redemption Price, accrued interest to the Redemption Date
payable as provided in Section 1106, if any, and Additional Amounts, if
any,
(3) if less than all Outstanding Securities of any series are to be
redeemed, the identification (and, in the case of partial redemption, the
principal amount) of the particular Security of Securities to be redeemed,
(4) in case any Security is to be redeemed in part only, the notice
which related to such Security shall state that on and after the Redemption
Date, upon surrender of such
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Security, the holder will receive, without a charge, a new Security or
Securities of authorized denominations for the principal amount thereof
remaining unredeemed,
(5) that on the Redemption Date the Redemption Price and accrued
interest to the Redemption Date payable as provided in Section 1106, if
any, will become due and payable upon each such Security, or the portion
thereof, to be redeemed and, if applicable, that interest thereon shall
cease to accrue on and after said date,
(6) the Place or Places of Payment where such Securities, together in
the case of Bearer Securities with all coupons appertaining thereto, if
any, maturing after the Redemption Date, are to be surrendered for payment
of the Redemption Price and accrued interest, if any, 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
Registered Securities of such series are not to be redeemed, and if such
Bearer Securities may be exchanged for Registered Securities not subject to
redemption on this Redemption Date pursuant to Section 305 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, and the date and time when the option to convert shall expire.
Notice of redemption of Securities to be redeemed shall be given by the
Company or, at the Company's request, by the Trustee in the name and at the
expense of the Company.
SECTION 1105. Deposit of Redemption Price. At least one Business Day
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prior to 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 Twelve, segregate
and hold in trust as provided in Section 1003) an amount of money in the
currency or currencies, currency unit or units or composite currency or
currencies in which the Securities of such series are payable (except as
otherwise specified pursuant to Section 301 for the Securities of such series)
sufficient to pay on the Redemption Date the Redemption Price of, and (except if
the Redemption Date shall be an Interest Payment Date) accrued interest on, all
the Securities or portions thereof which are to be redeemed on that date.
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SECTION 1106. Securities Payable on Redemption Date. Notice of redemption
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having been given as aforesaid, the Securities so to be redeemed shall, on the
Redemption Date, become due and payable at the Redemption Price therein
specified in the currency or currencies, currency unit or units or composite
currency or currencies in which the Securities of such series are payable
(except as otherwise specified pursuant to Section 301 for the Securities of
such series) (together with accrued interest, if any, to the Redemption Date),
and from and after such date (unless the 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 1002) and, unless otherwise specified
as contemplated by Section 301, 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 Shares or Preferred Shares,
installments of interest on Registered Securities whose Stated Maturity is on or
prior to the Redemption Date shall be payable to the Holders of such Securities,
or one or more Predecessor Securities, registered as such as the close of
business on the relevant Record Dates according to their terms and the
provisions of Section 307.
If any Bearer Security surrendered for redemption shall not be accompanied
by all appurtenant coupons maturing after the Redemption Date, such Security may
be paid after deducting from the Redemption Price an amount equal to the face
amount of all such missing coupons, or the surrender of such missing coupon or
coupons may be waived by the 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 a deduction shall have been made from the Redemption Price, such Holder
shall be entitled to receive the amount so deducted; provided, however, that
interest represented by coupons shall be payable only at an office or agency
located outside the United States (except as otherwise provided in Section 1002)
and, unless otherwise specified as contemplated by Section 301, only upon
presentation and surrender of those coupons.
If any Security called for redemption shall not be so paid upon surrender
thereof for redemption, the principal (and premium, if any) shall, until paid,
bear interest from the Redemption Date at the rate borne by the Security.
SECTION 1107. Securities Redeemed in Part. Any Registered Security which
---------------------------
is to be redeemed only in part (pursuant to the provisions of this Article or of
Article Twelve) shall be surrendered at a Place of Payment therefor (with, if
the Company and the Trustee so required, 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 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
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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.
ARTICLE TWELVE
SINKING FUNDS
SECTION 1201. Applicability of Article. The provisions of this Article
------------------------
shall be applicable to any sinking fund for the retirement of Securities of a
series except as otherwise specified as contemplated by Section 301 for
Securities of such series.
The minimum amount of any sinking fund payment provided for by the terms of
Securities of any series is herein referred to as a "mandatory sinking fund
payment," and any payment in excess of such minimum amount provided for by the
terms of such Securities of any series is herein referred to as an "optional
sinking fund payment." If provided for by the terms of any Securities of any
series, the cash amount of any mandatory sinking fund payment may be subject to
reduction as provided in Section 1202. Each sinking fund payment shall be
applied to the redemption of Securities of any series as provided for by the
terms of Securities of such series.
SECTION 1202. Satisfaction of Sinking Fund Payments with Securities. The
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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 that such Securities so delivered or applied as a credit have
not been previously so credited. Such Securities shall be received and credited
for such purpose by the Trustee at the applicable Redemption Price specified in
such Securities for redemption through operation of the sinking fund and the
amount of such mandatory sinking fund payment shall be reduced accordingly.
SECTION 1203. Redemption of Securities for Sinking Fund. Not less than 45
-----------------------------------------
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 301 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 1202, and the optional amount, if any, to be added in cash to the next
ensuing mandatory sinking fund payment, and will also deliver to the Trustee any
Securities to be so delivered and credited. If such Officers' Certificate shall
specify an optional amount to be added in cash to the next ensuing mandatory
sinking fund payment, the 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 1103 and cause notice of
the redemption thereof to be given in the name of and
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at the expense of the Company in the manner provided in Section 1104. Such
notice having been duly given, the redemption of such Securities shall be made
upon the terms and in the manner stated in Sections 1106 and 1107.
ARTICLE THIRTEEN
REPAYMENT AT THE OPTION OF HOLDERS
SECTION 1301. Applicability of Article. Repayment of Securities of any
------------------------
series before their Stated Maturity at the option of Holders thereof shall be
made in accordance with the terms of such Securities, if any, and (except as
otherwise specified by the terms of such series established pursuant to Section
301) in accordance with this Article.
SECTION 1302. Repayment of Securities. Securities of any series subject
-----------------------
to repayment in whole or in part at the option of the Holders thereof will,
unless otherwise provided in the terms of such Securities, be repaid at a price
equal to the principal amount 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 at least one Business Day 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 1003) an amount of money in the currency or currencies,
currency unit or units or composite currency or currencies in which the
Securities of such series are payable (except as otherwise specified pursuant to
Section 301 for the Securities of such series) sufficient to pay the principal
(or, if so provided by the terms of the Securities of any series, a percentage
of the principal) of, and (except if the Repayment Date shall be an Interest
Payment Date) accrued interest on, all the Securities or portions thereof, as
the case may be, to be repaid on such date.
SECTION 1303. Exercise of Option. Securities of any series subject to
------------------
repayment at the option of the Holders thereof will contain an "Option to Elect
Repayment" form on the reverse of such Securities. In order for any Security to
be repaid at the option of the Holder, the Trustee must receive at the Place of
Payment therefor specified in the terms of such Security (or at such other place
or places of 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 payment together with the
"Option to Elect Repayment" form on the reverse thereof duly completed by the
Holder (or by the Holder's attorney duly authorized in writing) or (2) a
telegram, telex, facsimile transmission or a letter from a member of a national
securities exchange, or the National Association of Securities Dealers, Inc.
("NASD"), or a commercial bank or trust company in the United States setting
forth the name of the Holder of the Security, the principal amount of the
Security, the principal amount of the Security to be repaid, the CUSIP number,
if any, or a description of the tenor and terms of the Security, a statement
that the option to elect repayment is being exercised thereby and a guarantee
that the Security to be repaid, together with the duly completed form entitled
"Option to Elect Repayment" on the reverse of the Security, will be received by
the Trustee not later than the fifth Business Day after the date of such
telegram, telex, facsimile transmission or letter; provided, however, that such
telegram, telex, facsimile transmission or letter shall only be effective if
such Security and form duly completed are received by the Trustee by such fifth
Business Day. If less than the entire principal amount of such Security is to
be repaid in accordance with the terms of such Security, the principal amount of
such
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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
of the repayment option by the Holder shall be irrevocable unless waived by the
Company.
SECTION 1304. When Securities Presented for Repayment Become Due and
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Payable. If Securities of any series providing for repayment at the option of
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the Holders thereof shall have been surrendered as provided in this Article and
as provided by or pursuant to the terms of such Securities, such Securities or
the portions thereof, as the case may be, to be repaid shall become due and
payable and shall be paid by the 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 1002) and, unless
otherwise specified pursuant to Section 301, only upon presentation and
surrender of those coupons; and provided further that, in the case of Registered
Securities, installments of interest, if any, whose Stated Maturity is on or
prior to the Repayment Date shall be payable (but without interest thereon,
unless the 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 307.
If any Bearer Security surrendered for repayment shall not be accompanied
by all appurtenant coupons maturing after the Repayment Date, such Security may
be paid after deducting from the amount payable therefor as provided in Section
1302 an amount equal to the face amount of all such missing coupons, or the
surrender of such missing coupon or coupons may be waived by the 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 a deduction shall have been made as
provided in the preceding sentence, such Holder shall be entitled to receive the
amount so deducted; provided, however, that interest represented by coupons
shall be payable only at an office or agency located outside the United States
(except as otherwise provided in Section 1002) and, unless otherwise specified
as contemplated by Section 301, only upon presentation and surrender of such
coupons; and provided further that, in the case of Registered Securities,
installments of interest, if any, whose Stated Maturity is on or prior to the
Repayment Date shall be payable (but without interest thereon, unless the
Company shall default in the payment thereof) to the Holders of such Securities,
or one or more Predecessor Securities,
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registered as such at the close of business on the relevant Record Dates
according to their terms and the provisions of Section 307.
If the principal amount of any Security surrendered for repayment shall not
be so repaid upon surrender thereof, such principal amount (together with
interest, if any, thereon accrued to such Repayment Date) shall, until paid,
bear interest from the Repayment Date at the rate of interest or Yield to
Maturity (in the case of Original Issue Discount Securities) set forth in such
Security.
SECTION 1305. Securities Repaid in Part. Upon surrender of any Registered
-------------------------
Security which is to be repaid in part only, the 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 FOURTEEN
DEFEASANCE AND COVENANT DEFEASANCE
SECTION 1401. Applicability of Article; Company's Option to Effect
----------------------------------------------------
Defeasance or Covenant Defeasance. If, pursuant to Section 301, provision is
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made for either or both of (a) defeasance of the Securities of or within a
series under Section 1402 or (b) covenant defeasance of the Securities of or
within a series under Section 1403, then the provisions of such Section or
Sections, as the case may be, together with the other provisions of this Article
(with such modifications thereto as may be specified pursuant to Section 301
with respect to any Securities), shall be applicable to such Securities and any
coupons appertaining thereto, and the 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 1402 (if applicable) or Section 1403
(if applicable) be applied to such Outstanding Securities and any coupons
appertaining thereto upon compliance with the conditions set forth below in this
Article.
SECTION 1402. Defeasance and Discharge. 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 deemed to have been discharged from its
obligations with respect to such Outstanding Securities and any coupons
appertaining thereto on the date the conditions set forth in Section 1404 are
satisfied (hereinafter, "defeasance"). For this purpose, such defeasance means
that the 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 1405 and the other Sections of this Indenture
referred to in clauses (A) and (B) below, and to have satisfied all of its other
obligations under such Securities and any coupons appertaining thereto and this
Indenture insofar as such Securities and any coupons appertaining thereto are
concerned (and the Trustee, at the expense of the Company, shall execute proper
instruments acknowledging the same), except for the following which shall
survive until otherwise terminated or discharged hereunder: (A) the rights of
Holders of such Outstanding Securities and any coupons appertaining thereto to
receive, solely from the trust fund described in Section 1404 and as more fully
set forth in such Section, payments in respect of the
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principal of (and premium, if any) and interest, if any, on such Securities and
any coupons appertaining thereto when such payments are due, (B) the Company's
obligations with respect to such Securities under Sections 305, 306, 1002 and
1003 and with respect to the payment of Additional Amounts, if any, on such
Securities as contemplated by Section 1010, (C) the rights, powers, trusts,
duties and immunities of the Trustee hereunder and (D) this Article. Subject to
compliance with this Article Fourteen, the Company may exercise its option under
this Section notwithstanding the prior exercise of its option under Section 1403
with respect to such Securities and any coupons appertaining thereto.
SECTION 1403. 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 1004 to 1007, inclusive, and, if specified pursuant to Section 301, its
obligations under any other covenant, with respect to such Outstanding
Securities and any coupons appertaining thereto on and after the date the
conditions set forth in Section 1404 are satisfied (hereinafter, "covenant
defeasance"), and such Securities and any coupons appertaining thereto shall
thereafter be deemed to be not "Outstanding" for the purposes of any direction,
waiver, consent or declaration or Act of Holders (and the consequences of any
thereof) in connection with Sections 1004 to 1007, 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.
SECTION 1404. Conditions to Defeasance or Covenant Defeasance. The
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following shall be the conditions to application of Section 1402 or Section 1403
to any Outstanding Securities of or within a series and any coupons appertaining
thereto:
(a) The Company shall irrevocably have deposited or caused to be
deposited with the Trustee (or another trustee satisfying the requirements
of Section 607 who shall agree to comply with the provisions of this
Article Fourteen applicable to it) as trust funds in trust for the purpose
of making the following payments, specifically pledged as security for, and
dedicated solely to, the benefit of the Holders of such Securities and any
coupons appertaining thereto, (1) an amount in such currency, currencies or
currency unit in which such Securities and any coupons appertaining thereto
are then specified as payable at Stated Maturity, or (2) Government
Obligations applicable to such Securities and coupons appertaining thereto
(determined on the basis of the currency, currencies or currency unit in
which such Securities and coupons appertaining thereto are then specified
as payable at Stated Maturity) which through the scheduled payment of
principal and interest in respect thereof in accordance with their terms
will provide, not later than one day before the due date of any payment of
principal of (and premium, if any) and interest, if any, on such Securities
and any coupons appertaining thereto, money in an amount, or (3) a
combination thereof, in any case, in an amount, sufficient, without
consideration of any reinvestment of
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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.
(b) Such defeasance or covenant defeasance shall not result in a
breach or violation of, or constitute a default under, this Indenture or
any other material agreement or instrument to which the Company is a party
or by which it is bound.
(c) No Event of Default or event which with notice or lapse of time
or both would become an Event of Default with respect to such Securities
and any coupons appertaining thereto shall have occurred and be continuing
on the date of such deposit or, insofar as Sections 501(6) and 501(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).
(d) In the case of an election under Section 1402 the Company shall
have delivered to the Trustee an Opinion of Counsel stating that (i) the
Company has received from, or there has been published by, the Internal
Revenue Service a ruling, or (ii) since the date of execution of this
Indenture there has been a change in the applicable Federal income tax law,
in either case to the effect that, and based thereon such opinion shall
confirm that, the Holders of such Outstanding Securities and any coupons
appertaining thereto will not recognize income, gain or loss for Federal
income tax purposes as a result of such defeasance and will be subject to
Federal income tax on the same amounts, in the same manner and at the same
times as would have been the case if such defeasance had not occurred.
(e) In the case of an election under Section 1403, the 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.
(f) 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 1402 or the covenant defeasance
under Section 1403 (as the case may be) have been complied with and an
Opinion of Counsel to the effect that either (i) as a result of a deposit
pursuant to subsection (a) above and the related exercise of the Company's
option under Section 1402 or Section 1403 (as the case may be),
registration is not required under the Investment Company Act of 1940, as
amended, by the Company, with respect to the trust
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funds representing such deposit or by the Trustee for such trust funds or
(ii) all necessary registrations under said Act have been effected.
(g) Notwithstanding any other provisions of this Section such
defeasance or covenant defeasance shall be effected in compliance with any
additional or substitute terms conditions or limitations which may be
imposed on the Company in connection therewith pursuant to Section 301.
SECTION 1405. Deposited Money and Government Obligations To Be Held in
--------------------------------------------------------
Trust; Other Miscellaneous Provisions. Subject to the provisions of the last
- -------------------------------------
paragraph of Section 1003, all money and Government Obligations (or other
property as may be provided pursuant to Section 301) (including the proceeds
thereof) deposited with the Trustee (or other qualifying trustee, collectively
for purposes of this Section 1405, the "Trustee") pursuant to Section 1404 in
respect of any Outstanding Securities of any series and any coupons appertaining
thereto shall be held in trust and applied by the Trustee, in accordance with
the provisions of such Securities and any coupons appertaining thereto and this
Indenture, to the payment, either directly or through any Paying Agent
(including the 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
301, if, after a deposit referred to in Section 1404(a) has been made, (a) the
Holder of a Security in respect of which such deposit was made is entitled to,
and does, elect pursuant to Section 301 or the terms of such Security to receive
payment in a currency or currency unit other than that in which the deposit
pursuant to Section 1404(a) has been made in respect of such Security, or (b) a
Conversion Event occurs in respect of the currency or currency unit in which the
deposit pursuant to Section 1404(a) has been made, the indebtedness represented
by such Security and any coupons appertaining thereto shall be deemed to have
been, and will be, fully discharged and satisfied through the payment of the
principal of (and premium, if any), and interest, if any, on such Security 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 1404 or the principal and interest received in respect
thereof other than any such tax, fee or other charge which by law is for the
account of the Holders of such Outstanding Securities and any coupons
appertaining thereto.
Anything in this Article to the contrary notwithstanding, subject to
Section 606, 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 1404 which, in the
opinion of a nationally recognized firm of independent public accountants
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<PAGE>
expressed in a written certification thereof delivered to the Trustee, are in
excess of the amount thereof which would then be required to be deposited to
effect a defeasance or covenant defeasance, as applicable, in accordance with
this Article.
ARTICLE FIFTEEN
MEETINGS OF HOLDERS OF SECURITIES
SECTION 1501. Purposes for Which Meetings May Be Called. A meeting of
-----------------------------------------
Holders of Securities of any series may be called at any time and from time to
time pursuant to this Article to make give or take any request, demand,
authorization, direction, notice, consent, waiver or other action provided by
this Indenture to be made given or taken by Holders of Securities of such
series.
SECTION 1502. Call, Notice and Place of Meetings. (a) The Trustee may at
----------------------------------
any time call a meeting of Holders of Securities of any series for any purpose
specified in Section 1501, to be held at such time and at such place in
__________________, or in _________________ as the Trustee shall determine.
Notice of every meeting of Holders of Securities of any series setting forth the
time and the place of such meeting and in general terms the action proposed to
be taken at such meeting shall be given in the manner provided in Section 106,
not less than 21 nor more than 180 days prior to the date fixed for the meeting.
(b) In case at any time the Company, pursuant to a Board Resolution, or
the Holders of at least 25% in principal amount of the Outstanding Securities of
any series shall have requested the Trustee to call a meeting of the Holders of
Securities of such series for any purpose specified in Section 1501, by written
request setting forth in reasonable detail the action proposed to be taken at
the meeting, and the Trustee shall not have made the first publication of the
notice of such meeting within 21 days after receipt of such request or shall not
thereafter proceed to cause the meeting to be held as provided herein, then the
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 in
___________, or in _______________ for such meeting and may call such meeting
for such purposes by giving notice thereof as provided in subsection (a) of this
Section.
SECTION 1503. Persons Entitled to Vote at Meetings. To be entitled to
------------------------------------
vote at any meeting of Holders of Securities of any series a Person shall be (1)
a Holder of one or more Outstanding Securities of such series or (2) a Person
appointed by an instrument in writing as proxy for a Holder or Holders of one or
more Outstanding Securities of such series by such Holder or Holders. The only
Persons who shall be entitled to be present or to speak at any meeting of
Holders of Securities of any series shall be the Persons entitled to vote at
such meeting and their counsel, any representatives of the Trustee and its
counsel and any representatives of the Company and its counsel.
SECTION 1504. Quorum; Action. The Persons entitled to vote a majority in
--------------
principal amount of the Outstanding Securities of a series shall constitute a
quorum for a meeting of Holders of Securities of such series; provided however
that if any action is to be taken at such meeting with respect to a consent or
waiver which this Indenture expressly provides may be given by the Holders of
not less than a specified percentage in principal amount of the Outstanding
Securities of a series, the Persons entitled to vote such specified percentage
in principal amount of the Outstanding
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<PAGE>
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 Securities at the time outstanding 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 1502(a), except that such notice need be given only
once not less than five days prior to the date on which the meeting is scheduled
to be reconvened.
Except as limited by the proviso to Section 902, any resolution presented
to a meeting or adjourned meeting duly reconvened at which a quorum is present
as aforesaid may be adopted by the affirmative vote of the persons entitled to
vote a majority in aggregate principal amount of the Outstanding Securities
represented at such meeting; provided, however, that, except as limited by the
provision to Section 902, any resolution with respect to any request, demand,
authorization, direction, notice, consent, waiver or other action which this
Indenture expressly provides may be made given or taken by the Holders of a
specified percentage, which is less than a majority, in principal amount of the
Outstanding Securities of a series may be adopted at a meeting or an adjourned
meeting duly reconvened and at which a quorum is present as aforesaid by the
affirmative vote of the Holders of such specified percentage in principal amount
of the Outstanding Securities of that series.
Any resolution passed or decision taken at any meeting of Holders of
Securities of any series duly held in accordance with this Section shall be
binding on all the Holders of Securities of such series and the related coupons,
whether or not present or represented at the meeting.
Notwithstanding the foregoing provisions of this Section 1504, if any
action is to be taken at a meeting of Holders of Securities of any series with
respect to any request, demand, authorization, direction, notice, consent,
waiver or other action that this Indenture expressly provides may be made given,
or taken by the Holders of a specified percentage in principal amount of all
Outstanding Securities affected thereby, or of the Holders of such series and
one or more additional series:
(i) there shall be no minimum quorum requirement for such meeting;
and
(ii) the principal amount of the Outstanding Securities of such
series that vote in favor of such request, demand, authorization,
direction, notice, consent, waiver or other action shall be taken into
account in determining whether such request, demand, authorization,
direction, notice, consent, waiver or other action has been made, given or
taken under this Indenture.
SECTION 1505. Determination of Voting Rights; Conduct and Adjournment of
----------------------------------------------------------
Meetings. (a) Notwithstanding any provisions of this Indenture, the Trustee
- --------
may make such reasonable regulations as it may deem advisable for any meeting of
Holders of Securities of a series in regard to proof of the holding of
Securities of such series and of the appointment of proxies and in regard
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<PAGE>
to the appointment and duties of inspectors of votes, the submission and
examination of proxies, certificates and other evidence of the right to vote,
and such other matters concerning the conduct of the meeting as it shall deem
appropriate. Except as otherwise permitted or required by any such regulations,
the holding of Securities shall be proved in the manner specified in Section 104
and the appointment of any proxy shall be proved in the manner specified in
Section 104 or by having the signature of the Person executing the proxy
witnessed or guaranteed by any trust company, bank or banker authorized by
Section 104 to certify to the holding of Bearer Securities. Such regulations
may provide that written instruments appointing proxies, regular on their, face
may be presumed valid and genuine without the proof specified in Section 104 or
other proof.
(b) The Trustee shall, by an instrument in writing appoint a temporary
chairman of the meeting unless the meeting shall have been called by the Company
or by Holders of Securities as provided in Section 1502(b), 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.
(c) At any meeting each Holder of a Security of such series or proxy shall
be entitled to one vote for each $1,000 principal amount of the Outstanding
Securities of such series held or represented by him; provided, however, that no
vote shall be cast or counted at any meeting in respect of any Security
challenged as not Outstanding and ruled by the chairman of the meeting to be not
Outstanding. The chairman of the meeting shall have no right to vote except as
a Holder of a Security of such series or proxy.
(d) Any meeting of Holders of Securities of any series duly called
pursuant to Section 1502 at which a quorum is present may be adjourned from time
to time by Persons entitled to vote a majority in principal amount of the
Outstanding Securities of such series represented at the meeting, and the
meeting may be held as so adjourned without further notice.
SECTION 1506. Counting Votes and Recording Action of Meetings. The vote
-----------------------------------------------
upon any resolution submitted to any meeting of Holders of Securities of any
series shall be by written ballots on which shall be subscribed the signatures
of the Holders of Securities of such series or of their representatives by proxy
and the principal amounts and serial numbers of the Outstanding Securities of
such series held or represented by them. The permanent chairman of the meeting
shall appoint two inspectors of votes who shall count all votes cast at the
meeting for or against any resolution and who shall make and file with the
secretary of the meeting their verified written reports in duplicate of all
votes cast at the meeting. A record at least in duplicate of the proceedings of
each meeting of Holders of Securities of any Series shall be prepared by the
secretary of the meeting and there shall be attached to said record the original
reports of the inspectors of votes on any vote by ballot taken thereat and
affidavits by one or more persons having knowledge of the fact setting forth a
copy of the notice of the meeting and showing that said notice was given as
provided in Section 1502 and, if applicable, Section 1504. Each copy shall be
signed and verified by the affidavits of the permanent chairman and secretary of
the meeting and one such copy shall be delivered to the Company and another to
the Trustee to be preserved by the Trustee, the latter to nave attached thereto
the ballots voted at the meeting. Any record so signed and verified shall be
conclusive evidence of the matters therein stated.
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<PAGE>
ARTICLE SIXTEEN
SUBORDINATION
SECTION 1601. Agreement to Subordinate. The Company agrees and each
------------------------
Holder by accepting a Security agrees, that the indebtedness evidenced by the
Securities is subordinated in right of payment to the extent and in the manner
provided in this Article to the prior payment in full of all Senior Debt and
that the subordination is for the benefit of the holders of Senior Debt.
SECTION 1602. Liquidation; Dissolution; Bankruptcy. Upon any distribution
------------------------------------
to creditors of the Company in a liquidation or dissolution of the Company or in
a bankruptcy, reorganization, insolvency, receivership, or similar proceeding
relating to the Company or its property:
(1) holders of Senior Debt shall be entitled to receive payment in
full in cash of the principal of and interest (including interest accruing
after the commencement of any such proceeding) to the date of payment on
the Senior Debt before Holders shall be entitled to receive any payment of
principal of or interest on Securities;
(2) until the Senior Debt is paid in full in cash, any distribution
to which Holders would be entitled but for this Article shall be made to
holders of Senior Debt as their interests may appear except that Holders
may receive securities that are subordinated to Senior Debt to at least the
same extent as the Securities; and
(3) the Trustee is entitled to rely upon an order or decree of a
court of competent jurisdiction or a certificate of a bankruptcy trustee or
other similar official for the purpose of ascertaining the persons entitled
to participate in such distribution, the holders of Senior Debt and other
Company debt, the amount thereof or payable thereon and all other pertinent
facts relating to the Trustee's obligations under this Article Sixteen.
SECTION 1603. Default on Senior Debt. The Company may not pay principal
----------------------
of or interest on the Securities and may not acquire any Securities for cash or
property other than capital stock of the Company if:
(1) a default on Senior Debt occurs and is continuing that permits
holders of such Senior Debt to accelerate its maturity, and
(2) the default is the subject of judicial proceedings or the Company
receives a notice of the default from a person who may give it pursuant to
Section 1611. If the Company receives any such notice a similar notice,
received within nine months thereafter, relating to the same default on the
same issue of Senior Debt shall not be effective for purposes of this
Section.
The Company may resume payments on the Securities and may acquire them
when:
(a) the default is cured or waived, or
(b) 120 days pass after the notice is given if the default is not the
subject of judicial proceedings,
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<PAGE>
if this Article otherwise permits the payment or acquisition at that time.
SECTION 1604. Acceleration of Securities. If payment of the Securities is
--------------------------
accelerated because of an Event of Default, the Company shall promptly notify
holders of Senior Debt of the acceleration. The Company may pay the Securities
when 120 days pass after the acceleration occurs if this Article permits the
payment at that time.
SECTION 1605. When Distribution Must Be Paid Over. If a distribution is
-----------------------------------
made to Holders that because of this Article should not have been made to them,
the Holders who receive the distribution shall hold it in trust for holders of
Senior Debt and pay it over to them as their interests may appear.
SECTION 1606. Notice by Company. The Company shall promptly notify the
-----------------
Trustee and any Paying Agent of any facts known to the Company that would cause
a payment of principal of or interest on Securities to violate this Article.
SECTION 1607. Subrogation. After all Senior Debt is paid in full and
-----------
until the Securities are paid in full, Holders shall be subrogated to the rights
of holders of Senior Debt to receive distributions applicable to Senior Debt to
the extent that distributions otherwise payable to the Holders have been applied
to the payment of Senior Debt. A distribution made under this Article to
holders of Senior Debt which otherwise would have been made to Holders is not,
as between the Company and Holders, a payment by the Company on Senior Debt.
SECTION 1608. Relative Rights. This Article defines the relative rights
---------------
of Holders and holders of Senior Debt. Nothing in this Indenture shall:
(1) impair, as between the Company and Holders, the obligation of the
Company, which is absolute and unconditional, to pay principal of and
interest on the Securities in accordance with their terms;
(2) affect the relative rights of Holders and creditors of the
Company other than holders of Senior Debt; or
(3) prevent the Trustee or any Holder from exercising its available
remedies upon an Event of Default, subject to the rights of holders of
Senior Debt to receive distributions otherwise payable to Holders.
If the Company fails because of this Article to pay principal of or
interest on a Security on the due date, the failure is still a default.
SECTION 1609. Subordination May Not Be Impaired by Trust. No right of any
------------------------------------------
holder of Senior Debt to enforce the subordination of the indebtedness evidenced
by the Securities shall be impaired by any act or failure to act by the Company
or by its failure to comply with this Indenture.
SECTION 1610. Distribution or Notice to Representative. Whenever a
----------------------------------------
distribution is to be made or a notice given to holders of Senior Debt, the
distribution may be made and the notice given to their Representative.
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<PAGE>
SECTION 1611. Rights of Trustee and Paying Agent. The Trustee or any
----------------------------------
Paying Agent may continue to make payments on the Securities until it receives
written notice of facts that would cause a payment of principal of or interest
on the Securities to violate this Article. Only the Company, a Representative
or a holder of an issue of Senior Debt that has no Representative may give the
written notice.
The Trustee has no fiduciary duty to the holders of Senior Debt other than
as created under this Indenture. The Trustee in its individual or any other
capacity may hold Senior Debt with the same rights it would have if it were not
Trustee.
The Company's obligation to pay, and the Company's payment of, the
Trustee's fees pursuant to Section 606 are excluded from the operation of this
Article Sixteen.
* * *
This Indenture may be executed in any number of counterparts, each of which
so executed shall be deemed to be an original, but all such counterparts shall
together constitute but one and the same Indenture.
IN WITNESS WHEREOF, the parties hereto have caused this Indenture to be
duly executed all as of the day and year first above written.
CRIIMI MAE INC.
By:
----------------------------------
Title:
Attest:
- -------------------------
Title:
--------------------------------------
as Trustee
By: ---------------------------------
Title:
Attest:
- -------------------------
Title:
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<PAGE>
STATE OF MARYLAND )
) ss:
COUNTY OF MONTGOMERY )
On the _____ day of ________ 199__, before me personally came
___________________, to me known, who, being by me duly sworn, did depose and
say that he/she resides at __________________________,
__________________________, that he/she is ____________________ of CRIIMI MAE
INC., one of the parties described in and which executed the foregoing
instrument, and that he/she signed his/her name thereto by authority of the
Board of Directors.
Notarial Seal
----------------------------------
Notary Public
COMMISSION EXPIRES
STATE OF )
) ss:
COUNTY OF )
On the _____ day of _______________ 199_, before me personally came
________________, to me known, who, being by me duly sworn, did depose and say
that he/she resides at ______________________, that he/she is a _______________
of ____________________________, one of the parties described in and which
executed the foregoing instrument, and that he/she signed his/her name thereto
by authority of the Board of Directors.
Notarial Seal
----------------------------------
Notary Public
COMMISSION EXPIRES
-73-
<PAGE>
EXHIBIT A
FORMS OF CERTIFICATION
EXHIBIT A-1
FORM OF CERTIFICATE TO BE GIVEN BY PERSON ENTITLED
TO RECEIVE BEARER SECURITY OR TO OBTAIN INTEREST
PAYABLE PRIOR TO THE EXCHANGE DATE
CERTIFICATE
[Insert title or sufficient description of Securities to be delivered.]
This is to certify that, as of the date hereof, and except as set forth
below, the above-captioned Securities held by you for our account (i) are owned
by person(s) that are not citizens or residents of the United States, domestic
partnerships, domestic corporations or any estate or trust the income of which
is subject to United States federal income taxation regardless of its source
("United States person(s)"), (ii) are owned by United States person(s) that are
(a) foreign branches of United States financial institutions (financial
institutions, as defined in United States Treasury Regulations Section 2.165-
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 CRIIMI MAE 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"
including Puerto Rico, the U.S. Virgin Islands, Guam, American Samoa, Wake
Island and the Northern Mariana Islands.
We undertake to advise you promptly by tested telex on or prior to the date
on which you intend to submit your certification relating to the above-captioned
Securities held by you for our account in accordance with your Operating
Procedures if any applicable statement herein is not correct on such date, and
in the absence of any such notification it may be assumed that this
certification applies as of such date.
This certificate excepts and does not relate to [U.S. $]_______________ of
such interest in the above-captioned Securities in respect of which we are not
able to certify and as to which we
A-1
<PAGE>
understand an exchange for an interest in a Permanent Global Security or an
exchange for and delivery of definitive Securities (or, if relevant, collection
of any interest) cannot be made until we do so certify.
We understand that this certificate may be required in connection with
certain tax legislation in the United States. If administrative or legal
proceedings are commenced or threatened in connection with which this
certificate is or would be relevant, we irrevocably authorize you to produce
this certificate or a copy thereof to any interested party in such proceedings.
Dated: _________________, 19____
[To be dated no earlier than the ___ 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 Signature)
Name:
Title:
A-2
<PAGE>
EXHIBIT A-2
FORM OF CERTIFICATE TO BE GIVEN BY EUROCLEAR
AND CEDEL S.A. IN CONNECTION WITH THE EXCHANGE OF
A PORTION OF A TEMPORARY GLOBAL SECURITY OR TO
OBTAIN INTEREST PAYABLE PRIOR TO THE EXCHANGE DATE
CERTIFICATE
[Insert title or sufficient description of Securities to be delivered.]
This is to certify that, based solely on written certifications that we
have received in writing, by tested telex or by electronic transmission from
each of the persons appearing in our records as persons entitled to a portion of
the principal amount set forth below (our "Member Organizations") substantially
in the form attached hereto, as of the date hereof, [U.S. $]_________________
principal amount of the above-captioned Securities (i) is owned by person(s)
that are not citizens or residents of the United States, domestic partnerships,
domestic corporations or any estate or trust the income of which is subject to
United States Federal income taxation regardless of its source ("United States
person(s)"), (ii) is owned by United States person(s) that are (a) foreign
branches of United States financial institutions (financial institutions, as
defined in U.S. 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 State 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 CRIIMI MAE 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) is 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, to the further effect, that financial institutions
described in clause (iii) above (whether or not also described in clause (i) or
(ii)) have certified that they have not acquired the Securities for purposes of
resale directly or indirectly to a United States person or to a person within
the United States or its possessions.
As used herein "United States" means the United States of America
(including the States and the District of Columbia); and its "possessions"
including 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 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
A-3
<PAGE>
connection with which this certificate is or would be relevant, we irrevocably
authorize you to produce this certificate or a copy thereof to any interested
party in such proceedings.
Dated: _________________, 19____
[To be dated no earlier than the Exchange Date or the relevant Interest Payment
Date occurring prior to the Exchange Date, as applicable.]
Morgan Guaranty Trust Company of New York,
Brussels Office, as Operator of the Euroclear
System Cedel S.A.
By:
-----------------------------------
A-4
<PAGE>
Exhibit 5
---------
Arent Fox
1050 Connecticut Avenue, NW
Washington, DC 20036-5339
Morris F. DeFeo, Jr. June 22, 1994
Tel: 202/857-6223
Fax: 202/857-6395
The Board of Directors
CRIIMI MAE Inc.
The CRI Building
11200 Rockville Pike
Rockville, Maryland
Re: Registration Statement on Form S-3
----------------------------------
Gentlemen:
We have acted as counsel to CRIIMI MAE Inc., a Maryland corporation (the
"Company"), with respect to the Company's Registration Statement on Form S-3
(the "Registration Statement") filed with the Securities and Exchange
Commission, in connection with the registration under the Securities Act of
1933, as amended, of up to $200,000,000 in aggregate public offering price of
the Company's unsecured Debt Securities, Preferred Stock, par value $.01 per
share, and Common Stock, par value $.01 per share (collectively, the
"Securities").
As counsel to the Company, we have examined the Company's Articles of
Incorporation and such Company records, certificates and other documents and
relevant statutes, regulations, published rulings and such questions of law as
we considered necessary or appropriate for the purpose of this opinion. The
actual method of operation of the Company to date and the proposed continuing
method of operation of the Company, as set forth in the Prospectus (included
in the Registration Statement), have also been reviewed.
In our examination, we have assumed the authenticity of original documents,
the accuracy of copies and the genuineness of signatures. We have relied upon
the representations and statements of officers and other representatives of
the Company with respect to the factual determinations underlying the legal
conclusions set forth herein. We have not attempted to verify independently
such representations and statements.
The Securities to be sold from time to time by the Company will be legally
issued, fully paid and nonassessable.
If the Company continues to operate in the manner in which it has to date, and
if the Company is operated according to the policies and in the manner stated
in the Prospectus (included in the Registration Statement), the Company will
continue to qualify as a real estate investment trust pursuant to the Internal
Revenue Code of 1986, as amended. We have reviewed the discussion in the
Prospectus under the caption
<PAGE>
The Board of Directors
June 22, 1994
Page 2
"Certain United States Tax Considerations." To the extent such discussion
covers matters of law or legal conclusions relating to federal income tax
matters, such discussion reflects our opinion as to such matters of law or
legal conclusions. However, to the extent that the discussion addresses the tax
treatment of the stockholders of the Company, it is general in nature and does
not purport to address the specific tax treatment of any particular
stockholder.
We hereby consent to the filing of this opinion as an exhibit to the
Registration Statement and to all references to our firm in the Registration
Statement.
Very truly yours,
/s/ Arent Fox Kintner Plotkin & Kahn
ARENT FOX KINTNER PLOTKIN & KAHN
<PAGE>
Exhibit 12.1
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CRIIMI MAE Inc.
Ratio of Earnings to Fixed Charges
<TABLE>
<CAPTION>
For the three months For the years
ended March 31, ended December 31,
------------------------ ----------------------------------------------------------
1994 1993 1993 1992 1991 1990 1989/(1)/
<S> <C> <C> <C> <C> <C> <C> <C>
EARNINGS
Net income 9,982,050 4,431,388 15,757,505 16,041,231 9,000,559 18,373,233 19,539,761
Plus:
Extraordinary item 0 0 0 0 6,642,450 0 0
Interest expense 6,524,903 5,326,580 28,915,282 21,142,010 24,866,931 21,601,109 1,097,951
Amortization of debt costs 1,994,548 671,687 3,983,234 3,249,891 923,666 744,580 37,799
Loss from investment in limited 54,372 0 0 731,951 0 0 0
partnership ---------- ---------- ---------- ---------- ---------- ---------- ----------
Total earnings 18,555,873 10,429,655 48,656,021 41,165,083 41,433,606 40,718,922 20,675,511
---------- ---------- ---------- ---------- ---------- ---------- ----------
FIXED CHARGES
Interest expense 6,524,903 5,326,580 28,915,282 21,142,010 24,866,931 21,601,109 1,097,951
Amortization of debt costs 1,994,548 671,687 3,983,234 3,249,891 923,666 744,580 37,799
---------- ---------- ---------- ---------- ---------- ---------- ----------
Total fixed charges 8,519,451 5,998,267 32,898,516 24,391,901 25,790,597 22,345,689 1,135,750
---------- ---------- ---------- ---------- ---------- ---------- ----------
Ratio of earnings to fixed charges 2.18 1.74 1.48 1.69 1.61 1.82 18.20
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</TABLE>
(1) All financial information of CRIIMI MAE for the periods prior to the Merger
on November 27, 1989 has been presented in a manner similar to a pooling of
interests, which effectively combines the historical results of the CRIIMI
Funds. The dividends and net income per share amounts for the year ended
December 31, 1989 reflect the weighted average shares outstanding as if the
Merger had been consummated on January 1, 1989.
<PAGE>
Exhibit 23.1
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CONSENT OF INDEPENDENT PUBLIC ACCOUNTANTS
As independent public accountants, we hereby consent to the incorporation by
reference in this registration statement of our report dated February 11,
1994, included in the Annual Report of CRIIMI MAE Inc. on Form 10-K for the
year ended December 31, 1993, as amended, and to all references to our Firm
included in or made a part of this registration statement.
/s/ ARTHUR ANDERSEN & CO.
Washington, D.C.
June 23, 1994
