As filed with the Securities and Exchange Commission on August 27, 1997
REGISTRATION NO. 333-
================================================================================
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
FORM S-3
REGISTRATION STATEMENT UNDER
THE SECURITIES ACT OF 1933
---------
CORNERSTONE REALTY INCOME TRUST, INC.
VIRGINIA 54-1589139
(State of Incorporation) (I.R.S. Employer Identification No.)
---------
306 East Main Street
Richmond, Virginia 23219
---------
(804) 643-1761
(Address, including zip code, and telephone number, including area
code, of registrant's principal executive offices)
GLADE M. KNIGHT
306 EAST MAIN STREET
RICHMOND, VIRGINIA 23219
(804) 643-1761
(Name, address, including zip code, and telephone number, including area code,
of agent for service)
---------
with a copy to:
LESLIE A. GRANDIS, ESQ.
MCGUIRE, WOODS, BATTLE & BOOTHE, L.L.P.
ONE JAMES CENTER, 901 EAST CARY STREET
RICHMOND, VIRGINIA 23219
(804) 775-4322
---------
APPROXIMATE DATE OF COMMENCEMENT OF PROPOSED SALE TO THE PUBLIC. From time to
time after the effective date of this registration statement in light of market
conditions and other factors.
If the only securities being registered on this Form are being offered pursuant
to dividend or interest reinvestment plans, please check the following box. [ ]
If any of the securities being registered on this Form are to be offered on a
delayed or continuous basis pursuant to Rule 415 under the Securities Act of
1933, other than securities offered only in connection with dividend or interest
reinvestment plans, check the following box. [x]
If this Form is filed to register additional securities for an offering pursuant
to Rule 462(b) under the Securities Act, please check the following box and list
the Securities Act registration statement number of the earlier effective
registration statement for the same offering. [ ]
If this Form is a post-effective amendment filed pursuant to Rule 462(c) under
the Securities Act, check the following box and list the Securities Act
registration statement number of the earlier effective registration statement
for the same offering. [ ]
If delivery of the prospectus is expected to be made pursuant to Rule 434,
please check the following box. [ ]
<TABLE>
<CAPTION>
CALCULATION OF REGISTRATION FEE
- ----------------------------------------------------------------------------------------------------------------
AGGREGATE PROPOSED PROPOSED MAXIMUM AMOUNT OF
TITLE OF EACH CLASS OF AMOUNT TO BE MAXIMUM OFFERING AGGREGATE OFFERING REGISTRATION
SECURITIES TO BE REGISTERED(1) REGISTERED(2) PRICE PER UNIT PRICE(2)(3) FEE(5)
- -------------------------------- --------------- ------------------ -------------------- -------------
<S> <C> <C> <C> <C>
Debt Securities ...............
Common Shares ............... $200,000,000 (4) $200,000,000 $68,965.52
Preferred Shares ............
- ----------------------------------------------------------------------------------------------------------------
</TABLE>
(1) This registration statement also covers delayed delivery contracts that may
be issued by the registrant under which the party purchasing such contracts
may be required to purchase Debt Securities, Common Shares or Preferred
Shares. Such contracts may be issued together with the specific Offered
Securities to which they relate. In addition, Offered Securities registered
hereunder may be sold either separately or as units comprising more than
one type of Offered Security registered hereunder.
(2) In U.S. dollars or the equivalent thereof in one or more foreign currencies
or units of two or more foreign currencies or composite currencies (such as
European Currency Units).
(3) Estimated solely for purposes of calculating the registration fee. No
separate consideration will be received for Common Shares or Preferred
Shares as may from time to time be issued upon conversion of Debt
Securities or Preferred Shares.
(4) Omitted pursuant to General Instruction II.D of Form S-3 under the
Securities Act of 1933.
(5) The registration fee has been calculated in accordance with Rule 457(o)
under the Securities Act of 1933.
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 BECOMES EFFECTIVE IN ACCORDANCE WITH SECTION 8(A) OF
THE SECURITIES ACT OF 1933 OR UNTIL THIS REGISTRATION STATEMENT SHALL BECOME
EFFECTIVE ON SUCH DATE AS THE COMMISSION, ACTING PURSUANT TO SAID SECTION 8(A),
MAY DETERMINE.
================================================================================
<PAGE>
SUBJECT TO COMPLETION
PRELIMINARY PROSPECTUS DATED AUGUST 27, 1997
$200,000,000
CORNERSTONE REALTY INCOME TRUST, INC.
DEBT SECURITIES
COMMON SHARES
PREFERRED SHARES
------------
Cornerstone realty income trust, inc. (the "Company") may issue from time
to time its (i) unsecured senior or subordinated debt securities (the "Debt
Securities"), (ii) Common Shares, no par value ("Common Shares"), or (iii)
Preferred Shares, no par value ("Preferred Shares"), having an aggregate initial
public offering price not to exceed $200,000,000 or the equivalent thereof in
one or more foreign currencies or composite currencies, including European
Currency Units, on terms to be determined at the time of sale. The Debt
Securities, the Common Shares and the Preferred Shares offered hereby
(collectively, the "Offered Securities") may be offered, separately or as units
with other Offered Securities, in separate series in amounts, at prices and on
terms to be determined at the time of sale and to be set forth in a supplement
to this Prospectus (a "Prospectus Supplement").
The Debt Securities will be direct unsecured obligations of the Company and
may be either senior Debt Securities ("Senior Securities") or subordinated Debt
Securities ("Subordinated Securities"). The Senior Securities will rank equally
with all other unsecured and unsubordinated indebtedness of the Company. The
Subordinated Securities will be subordinated to all existing and future Senior
Debt of the Company, as defined. See "Description of Debt Securities."
The specific terms of the Offered Securities in respect of which this
Prospectus is being delivered will be set forth in the applicable Prospectus
Supplement and will include, where applicable, (i) in the case of Debt
Securities, the specific designation, aggregate principal amount, currency,
denominations, maturity, priority, interest rate, time of payment of principal
and interest, terms of redemption at the option of the Company or repayment at
the option of the holder or for sinking fund payments, terms for conversion into
or exchange for other Offered Securities and the initial public offering price;
(ii) in the case of Common Shares, the number of Common Shares and the initial
public offering price; (iii) in the case of Preferred Shares, the series
designation and number of shares and the dividend, liquidation, redemption,
conversion, voting and other rights and the initial public offering price; and
(iv) in the case of all Offered Securities, whether such Offered Securities will
be offered separately or as a unit with other Offered Securities. In addition,
such specific terms may include limitations on direct or beneficial ownership
and restrictions on transfer of the Offered Securities, in each case as may be
appropriate to preserve the status of the Company as a qualified real estate
investment trust ("REIT") under the Internal Revenue Code of 1986, as amended
(the "Code").
The applicable Prospectus Supplement will also contain information, where
applicable, concerning certain United States federal income tax considerations
relating to, and any listing on a securities exchange of, the Offered Securities
covered thereby.
The Offered Securities may be offered directly, through agents designated
from time to time by the Company or to our through underwriters or dealers. If
any designated agents or any underwriters are involved in the sale of Offered
Securities, they will be identified and their compensation will be described in
the applicable Prospectus Supplement. See "Plan of Distribution." No Offered
Securities may be sold without delivery of the applicable Prospectus Supplement
describing such Offered Securities and the method and terms of the offering
thereof.
------------
THESE SECURITIES HAVE NOT BEEN APPROVED OR DISAPPROVED BY THE SECURITIES AND
EXCHANGE COMMISSION NOR HAS THE COMMISSION PASSED UPON THE ACCURACY OR ADEQUACY
OF THIS PROSPECTUS. ANY REPRESENTATION TO THE CONTRARY IS A CRIMINAL OFFENSE.
------------
THIS PROSPECTUS MAY NOT BE USED TO CONSUMMATE SALES
OF SECURITIES UNLESS ACCOMPANIED BY A PROSPECTUS SUPPLEMENT
------------
THE DATE OF THIS PROSPECTUS IS , 1997.
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 ANY OFFER TO BUY NOR SHALL THERE BY 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.
<PAGE>
AVAILABLE INFORMATION
The Company, with principal executive offices at 306 East Main Street,
Richmond, Virginia 23219, telephone number (804) 643-1761, is subject to the
informational requirements of the Securities Exchange Act of 1934, as amended
(the "Exchange Act"), and in accordance therewith files reports, proxy
statements and other information with the Securities and Exchange Commission
(the "Commission"). Reports, proxy statements and other information filed by the
Company can be inspected and copied at the public reference facilities
maintained by the Commission at Room 1024, Judiciary Plaza, 450 Fifth Street,
N.W., Washington, D.C. 20549, and at the following regional offices of the
Commission: Seven World Trade Center, Suite 1300, New York, New York, 10048; and
500 West Madison Street, Suite 1400, Chicago, Illinois 60661. Such documents can
also be inspected and copied at the offices of the New York Stock Exchange (the
"NYSE"), 20 Broad Street, New York, New York 10005 and also from the Public
Reference Section of the Commission at Judiciary Plaza, 450 Fifth Street, N.W.,
Washington, D.C. 20549, at prescribed rates. The Company files reports, proxy
statements and other information with the Commission electronically. The
Commission maintains a Web site that contains reports, proxy and information
statements and other information regarding registrants that file electronically
with the Commission. The address of the Web site is: http://www.sec.gov.
The Company has filed with the Commission, 450 Fifth Street, N.W.,
Washington, D.C. 20549, a Registration Statement on Form S-3 (the "Registration
Statement") under the Securities Act of 1933, as amended, with respect to the
securities offered hereby. This Prospectus does not contain all the information
set forth in the Registration Statement, certain items of which are contained in
schedules and exhibits to the Registration Statement as permitted by the rules
and regulations of the Commission. For further information, reference is hereby
made to the Registration Statement, including the schedules and exhibits filed
as a part thereof, which may be obtained from the Commission upon payment of the
fees prescribed by the Commission.
INCORPORATION OF CERTAIN INFORMATION BY REFERENCE
The Company's Annual Report on Form 10-K for the year ended December 31,
1996, the Company's Current Reports on Form 8-K dated October 31, 1996
(including Amendment No. 1 thereto on Form 8-K/A), March 27, 1997 (including
Amendment No. 1 thereto on Form 8-K/A), and May 14, 1997, the Company's
Quarterly Reports on Form 10-Q for the quarters ended March 31, 1997 and June
30, 1997, and the Company's Registration Statements on Form 8-A under the
Exchange Act, each of which has been filed by the Company with the Commission,
are incorporated herein by reference.
All documents filed by the Company with the Commission pursuant to Section
13(a), 13(c), 14 or 15(d) of the Exchange Act after the date of this Prospectus
and prior to the termination of the Offering shall be deemed to be incorporated
by reference in this Prospectus and to be a part hereof from the date of filing
of such documents. Any statement contained herein or in a document incorporated
or deemed to be incorporated by reference in this Prospectus 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.
Information relating to the Company contained in this Prospectus
summarizes, is based upon, or refers to, information and financial statements
contained in one or more of the documents incorporated by reference herein;
accordingly, such information contained herein is qualified in its entirety by
reference to such documents and should be read in conjunction therewith.
The Company will provide without charge to each person to whom this
Prospectus is delivered, upon written or oral request of such person, a copy of
any document incorporated by reference in this Prospectus, other than exhibits
to any such document unless such exhibits are specifically incorporated by
reference into the information in this Prospectus. Requests for such documents
should be directed to Cornerstone Realty Income Trust, Inc., 306 East Main
Street, Richmond, Virginia 23219, Attention: Investor Relations (telephone
number (804) 643-1761)).
3
<PAGE>
THE COMPANY
Cornerstone Realty Income Trust, Inc. (the "Company"), a self-administered
and self-managed equity real estate investment trust ("REIT") headquartered in
Richmond, Virginia, is a fully integrated real estate organization with
expertise in the acquisition, renovation and management of apartment
communities. The Company focuses on the ownership of apartment communities
located in growing markets in Virginia, North Carolina, South Carolina and
Georgia. On June 30, 1997, the Company owned 47 apartment complexes comprising
10,636 apartment units.
The Company's executive offices are located at 306 East Main Street,
Richmond, Virginia 23219 and its telephone number is (804) 643-1761. The Company
has six regional property management offices, located in Blacksburg and Virginia
Beach, Virginia; Raleigh, Charlotte and Wilmington, North Carolina; and
Columbia, South Carolina. The Company currently has approximately 300 employees,
including specialists in acquisition, management, marketing, leasing,
development, accounting and information systems.
OPERATING STRATEGIES
The Company maintains an intense focus on the operations of its Properties
to generate consistent, sustained growth in net operating income, which it
believes is the key to growing funds from operations.
The Company seeks to grow net operating income and increase Company value
through active property management, which includes keeping rents at or above
market levels, maintaining high economic occupancy through tenant retention,
creating a property identity and effectively marketing each property, and
controlling operating expenses at the property level.
The Company also seeks to generate growth in net operating income and
Company value through acquisitions by acquiring under-performing assets at less
than replacement cost, correcting operational problems, and making selected
renovations. The Company undertakes such activities with a view toward raising
rents while maintaining or increasing economic occupancy at its properties. In
markets that it targets for acquisition opportunities, the Company attempts to
gain a significant local presence in order to achieve operating efficiencies. In
analyzing acquisition opportunities, the Company considers acquisitions of
property portfolios as well as individual properties.
FINANCING POLICY
The Company's objective is to seek capital as needed at the lowest possible
cost. The Company may seek capital through the issuance of Debt Securities,
Common Shares, Preferred Shares, some combination of the foregoing, and in other
ways. Historically, the Company has obtained capital principally through the
public issuance of Common Shares and through unsecured lines of credit from a
bank. The Company is not precluded from engaging in secured borrowings, although
its current policy is to hold its properties on an unmortgaged basis, and as of
the date of this Prospectus, it has no secured debt.
On February 14, 1997, the Company obtained a $100 million unsecured line of
credit (the "Unsecured Line of Credit") from a consortium of three banks headed
by First Union National Bank of Virginia. The Unsecured Line of Credit may be
used only for property acquisitions. The Unsecured Line of Credit bears interest
equal to one-month LIBOR plus 1.60% (subject to certain other possible
adjustments). The interest rate is adjusted monthly. In addition, the Company is
obligated to pay the lenders a quarterly commitment fee equal to 0.25% per annum
of the unused portion of the loan commitment. The entire balance of the
Unsecured Line of Credit is due on June 30, 1998.
The Company has also obtained from First Union National Bank of Virginia a
$7.5 million unsecured line of credit for general corporate purposes (the
"General Corporate Line"). This line of credit also bears interest at LIBOR plus
1.60%, adjusted monthly, and is due on March 31, 1998.
In connection with the acquisition of the Trolley Square East Apartments in
1996, the Company issued the seller a $5.5 million unsecured promissory note
(the "Trolley Square Note"), which bears interest at an effective rate of 6.65%
per annum and is due on June 1, 1999.
4
<PAGE>
The Company intends to maintain a debt policy (the "Debt Limitation")
limiting the Company's total combined indebtedness plus its pro rata share of
indebtedness of any unconsolidated investments ("Joint Venture Debt") to 40% of
the Company's total equity market capitalization plus its combined indebtedness
(including its pro rata share of Joint Venture Debt) ("Total Market
Capitalization").
USE OF PROCEEDS
Unless otherwise set forth in the applicable Prospectus Supplement, the net
proceeds from the sale of the Offered Securities will be used for general
corporate purposes, which may include repayment of indebtedness, making
improvements to properties, and the acquisition and development of additional
properties.
CERTAIN RATIOS
The following table sets forth the Company's ratios of earnings to fixed
charges for the periods indicated:
<TABLE>
<CAPTION>
SIX MONTHS
ENDED YEAR ENDED DECEMBER 31,
JUNE 30, 1997 1996 1995 1994 1993
-------------- --------- ------- -------- -------
<S> <C> <C> <C> <C> <C>
Ratio of Earnings to Fixed Charges
Actual 3.79 (a) 17.77 188.36 203.56
Supplemental Pro Forma (b) 3.82 3.42
</TABLE>
(a) Earnings for the year ended December 31, 1996 were inadequate to cover
fixed charges. The amount of coverage deficiency was $4,169,849 for the
year ended December 31, 1996.
(b) To give effect to both the acquisition of twenty of twenty-one properties
acquired during 1996 and five of seven properties acquired during 1997 and
expenses amounting to $16,526,021 related to the termination of external
management contracts incurred during 1996.
DESCRIPTION OF DEBT SECURITIES
GENERAL
The Senior Securities, if and when issued, will be issued under an
indenture (the "Senior Indenture"), between the Company and one or more trustees
meeting the requirements of a trustee under the Trust Indenture Act of 1939, as
amended (the "TIA") (the "Senior Indenture Trustee"), and the Subordinated
Securities, if and when issued, will be issued under an indenture (the
"Subordinated Indenture"), between the Company and one or more trustees meeting
the requirements of a trustee under the TIA (the "Subordinated Indenture
Trustee"). The term "Trustee," as used herein, shall refer to the Senior
Indenture Trustee or the Subordinated Indenture Trustee, as appropriate. The
forms of the Senior Indenture and the Subordinated Indenture (being sometimes
referred to herein collectively as the "Indentures and individually as an
"Indenture") are filed as exhibits to the Registration Statement and will be
available for inspection at the respective Corporate Trust Office (as such term
is defined in the Indentures) of the Senior Indenture Trustee and the
Subordinated Indenture Trustee, or as described under "Available Information."
The Indentures will be subject to, qualified under, and governed by, the TIA.
The statements made herein relating to the Indentures and the Debt Securities
are summaries of certain provisions thereof, do not purport to be complete and
are subject to, and are qualified in their entirety by reference to, all
provisions of the Indentures and the Debt Securities. All section references
appearing herein are to sections of the Indentures, and capitalized terms used
but not defined herein have the respective meanings set forth in the Indentures
and the Debt Securities.
TERMS
The Debt Securities will be direct, unsecured obligations of the Company.
The indebtedness represented by the Senior Securities will rank equally with all
other unsecured and unsubordinated indebtedness of the Company. The indebtedness
represented by the Subordinated Securities will be subordinated in right of
payment to the prior payment in full of the Senior Debt of the Company, as
described under "Subordination."
5
<PAGE>
Each Indenture provides 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 Board of Directors of the Company or as established in one or
more indentures supplemental to such Indenture. Debt Securities may be issued
with terms different from those of Debt Securities previously issued. 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 (Section 301 of each Indenture).
Each Indenture provides that there may be more than one Trustee thereunder,
each with respect to one or more series of Debt Securities. Any Trustee under
either Indenture may resign or be removed with respect to one or more series of
Debt Securities, and a successor Trustee may be appointed to act with respect to
such series (Section 608 of each Indenture). 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 applicable
Indenture separate and apart from the trust administered by any other Trustee
(Sections 101 and 609 of each Indenture), and, except as otherwise indicated
herein, any action described herein to be taken by the Company may be taken by
each such Trustee with respect to, and only with respect to, the one or more
series of Debt Securities for which it is Trustee under the applicable
Indenture.
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 and whether such Debt Securities
are Senior Securities or Subordinated Securities;
(2) the aggregate principal amount of such Debt Securities and any limit
on such 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 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 Capital Shares of the Company,
or the method by which any such portion will be determined;
(4) if convertible, in connection with the preservation of the Company's
status as a REIT, any applicable limitations on the ownership or
transferability of the Capital Shares of the Company into which such Debt
Securities are convertible;
(5) the date or dates, or the method by which such date or dates will be
determined, on which the principal of such Debt Securities will be payable
and the amount of principal payable thereon;
(6) The rate or rates (which may be fixed or variable) at which such Debt
Securities will bear interest, if any, or the method by which such rate or
rates will be determined, the date or dates from which such interest will
accrue or the method by which such date or dates will be determined, the
Interest Payment Dates on which any such interest will be payable and the
Regular Record Dates for such Interest Payment Dates or the method by which
such Dates will be determined, and the basis upon which interest will be
calculated if other than that of a 360-day year consisting of twelve 30-day
months;
(7) the place or places where the principal of (and premium or Make-Whole
Amount (as defined in each Indenture), if any), interest, if any, on, and
Additional Amounts, if any, payable in respect of, such Debt Securities will
be payable, where such Debt Securities may be surrendered for registration of
transfer or exchange and where notices or demands to or upon the Company in
respect of such Debt Securities and the applicable Indenture may be served;
(8) the period or periods within which, the price or prices (including
premium or Make-Whole Amount, if any) at which, the currency or currencies,
currency unit or units or composite currency or currencies in which, and
other terms and conditions upon which, such Debt Securities may be redeemed
in whole or in part, at the option of the Company, if the Company is to have
the option;
6
<PAGE>
(9) the obligation, if any, of the Company to redeem, repay or purchase
such Debt Securities pursuant to any sinking fund or analogous provision or
at the option of a Holder thereof, and the period or periods within which or
the date or dates on which, the price or process at which, the currency or
currencies, currency unit or units or composite currency or currencies in
which, and other terms and conditions upon which such Debt Securities will be
redeemed, repaid or purchased, in whole or in part, pursuant to such
obligation;
(10) whether such Debt Securities will be in registered or bearer form
and terms and conditions relating thereto, and, if other than $1,000 and any
integral multiple thereof, the denominations in which any registered Debt
Securities will be issuable and, if other than $5,000, the denomination or
denominations in which any bearer Debt Securities will be issuable;
(11) if other than United States dollars, the currency or currencies in
which such Debt Securities will be denominated and payable, which may be a
foreign currency or units of two or more foreign currencies or a composite
currency or currencies;
(12) whether the amount of payments of principal of (and premium or
Make-Whole Amount, 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 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 will be determined;
(13) whether the principal of (and premium or Make-Whole Amount, if any)
or interest or Additional Amounts, if any, on such Debt Securities 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 Debt 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 Debt 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 Debt
Securities are to be so payable;
(14) provisions, if any, granting special rights to the Holders of such
Debt Securities 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 such Debt Securities,
whether or not such Events of Default or covenants are consistent with the
Events of Default or covenants set forth in the applicable Indenture;
(16) whether such Debt Securities will be issued in certificated or
book-entry form;
(17) the applicability, if any, of the defeasance and covenant
defeasance provisions of Article Fourteen of the applicable Indenture;
(18) whether and under what circumstances the Company will pay Additional
Amounts as contemplated in the applicable Indenture on such Debt Securities
in respect of any tax, assessment or governmental charge and, if so, whether
the Company will have the option to redeem such Debt Securities rather than
pay such Additional Amounts (and the terms of any such option);
(19) the obligation, if any, of the Company to permit the conversion of
the Debt Securities of such series into Common or Preferred Shares of the
Company and the terms and conditions upon which such conversion shall be
effected; and
(20) any other terms of such Debt Securities not inconsistent with the
provisions of the applicable Indenture (Section 301 of each 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") (Section 502 of each Indenture). Special
United States federal income tax, accounting and other considerations applicable
to Original Issue Discount Securities will be described in the applicable
Prospectus Supplement.
7
<PAGE>
DENOMINATION, INTEREST, REGISTRATION AND TRANSFER
Unless otherwise specified in the applicable Prospectus Supplement, the
Debt Securities of any series issued in registered form will be issuable in
denominations of $1,000 and integral multiples thereof. Unless otherwise
specified in the applicable Prospectus Supplement, the Debt Securities of any
series issued in bearer form will be issuable in denominations of $5,000
(Section 302 of each Indenture).
Unless otherwise specified in the applicable Prospectus Supplement, the
principal of (and premium or Make-Whole Amount, if any) and interest on any
series of Senior Securities will be payable at the corporate trust office of the
Senior Indenture Trustee and the principal of (and premium or Make-Whole Amount,
if any) and interest on any series of Subordinated Securities will be payable at
the corporate trust office of the Subordinated Indenture Trustee; provided that
at the option of the Company payment of interest on any series of Debt
Securities may be made by check mailed to the address of the Person entitled
thereto as it appears in the Security Register for such series or by wire
transfer of funds to such Person at an account maintained within the United
States (Sections 301, 305, 306, 307 and 1002 of each Indenture).
Any interest not punctually paid or duly provided for on any Interest
Payment Date with respect to a Debt Security ("Defaulted Interest") will
forthwith cease to be payable to the Holder on the applicable Regular Record
Date and may either be paid to the Person in whose name such Debt Security is
registered at the close of business on a special record date (the "Special
Record Date") for the payment of such Defaulted Interest to be fixed by the
Company, notice whereof shall be given to the Holder of such Debt Security not
less than 10 days prior to such Special Record Date, or may be paid at any time
in any other lawful manner, all as more completely described in the applicable
Indenture (Section 307 of each 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 referred
to above. 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 referred to above. Every Debt Security
surrendered 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 or transfer or exchange of any Debt
Securities, but the Company may require payment of a sum sufficient to cover any
tax or other governmental charge payable in connection therewith (Section 305 of
each Indenture). If the applicable Prospectus Supplement refers to any transfer
agent (in addition to the applicable Trustee) initially designated by the
Company with respect to any series of Debt Securities, the Company may at any
time rescind the designation of any such transfer agent or approve a change in
the location through which such transfer agent acts, except that the Company
will be required to maintain a transfer agent in each Place of Payment for such
series. The Company may at any time designate additional transfer agents with
respect to any series of Debt Securities (Section 1002 of each Indenture).
Neither the Company nor either 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 or 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
which has been surrendered for repayment at the option of the Holder, except the
portion, if any, of such Debt Security not to be so repaid (Section 305 of each
Indenture).
MERGER, CONSOLIDATION OR SALE
The Company may consolidate with, or sell, lease or convey all or
substantially all of its assets to, or merge with or into, any other entity,
provided that (a) either the Company shall be the continuing entity, or the
successor entity (if other than the Company) formed by or resulting from any
such consolidation
8
<PAGE>
or merger or which shall have received the transfer of such assets is a Person
organized and existing under the laws of the United States or any State thereof
and shall expressly assume payment of the principal of (and premium or
Make-Whole Amount, 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 each Indenture; (b) immediately after giving effect to
such transaction and treating any indebtedness which becomes an obligation of
the Company or any Subsidiary as a result thereof as having been incurred by the
Company or such Subsidiary at the time of such transaction, no Event of Default
under an 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 the Company (Sections 801 and 803 of each
Indenture).
CERTAIN COVENANTS
The Indentures do not contain any provisions that would limit the ability
of the Company to incur indebtedness or that would afford Holders of the Debt
Securities protection in the event of a highly leveraged or similar transaction
involving the Company or in the event of a change of control. However, the
Bylaws of the Company include provisions for redemption and stopping transfer of
its Common Shares designed to preserve the Company's status as a REIT. The Code
provides that concentration of more than 50% in value of direct or indirect
ownership of Common Shares in five or fewer individual shareholders during the
last six months of any year will result in disqualification of the Company as a
REIT. Enforcement of the provisions of the Company's Bylaws would prevent such
concentration and, therefore, prevent or hinder a change of control. 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 the Company that are described herein, including any addition of a
covenant or other provision providing event risk or similar protection.
Existence. Except as described above under "-- Merger, Consolidation or
Sale," the Company will do or cause to be done all things necessary to preserve
and keep in full force and effect the existence, rights (charter and statutory)
and franchises of the Company and its Subsidiaries; provided, however, that the
Company 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 the business of the Company and its Subsidiaries as a whole and that the loss
thereof is not disadvantageous in any material respect to the Holders of the
Debt Securities of any series (Section 1005 of each Indenture).
Maintenance of Properties. The Company will cause all of its properties
used or useful in the conduct of its business or the business of any Subsidiary
to be maintained and kept in good condition, repair and working order and
supplied with all necessary equipment and will cause to be made all necessary
repairs, renewals, replacements, betterments and improvements thereof, all as in
the judgment of the Company may be necessary so that the business carried on in
connection therewith may be properly and advantageously conducted at all times;
provided, however, that the Company and its Subsidiaries shall not be prevented
from selling or otherwise disposing of for value their properties in the
ordinary course of business (Section 1006 of each Indenture).
Insurance. The Company will, and will cause each of its Subsidiaries to,
keep all of its insurable properties insured against loss or damage in an amount
at least equal to their then full insurable value with financially sound and
reputable insurance companies (Section 1007 of each Indenture).
Payment of Taxes and Other Claims. The Company will pay or discharge or
cause to be paid or discharged, before the same become delinquent, (ii) 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 (ii) all lawful claims for labor, materials and supplies which,
if unpaid, might by law become a lien upon the property of the Company or any
Subsidiary; provided, however, that the Company shall not be required to pay or
discharge or cause to be paid or discharged any such tax, assessment, charge or
claim whose amount, applicability or validity is being contested in good faith
by appropriate proceedings (Section 1008 of each Indenture).
9
<PAGE>
EVENTS OF DEFAULT, NOTICE AND WAIVER
Each Indenture provides 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 or Additional Amounts
payable on any Debt Security of such series; (b) default in the payment of the
principal of (or premium or Make-Whole Amount, if any, on) any Debt Security of
such series at its Maturity; (c) default in making any sinking fund payment as
required for any Debt Security of such series; (d) default in the performance of
any other covenant of the Company contained in the 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) default under any bond,
debenture, note, mortgage, indenture or instrument under which there may be
issued or by which there may be secured or evidenced any indebtedness for money
borrowed by the Company (or by any Subsidiary, the repayment of which the
Company has guaranteed or for which the Company is directly responsible or
liable as obligor or guarantor) having an aggregate principal amount outstanding
of at least $10,000,000, whether such indebtedness now exists or shall hereafter
be created, which default shall have resulted in such indebtedness being
declared due and payable prior to the date on which it would otherwise have
become due and payable, without such acceleration having been rescinded or
annulled within 10 days after written notice as provided in the Indenture; (f)
the entry by a court of competent jurisdiction of one or more judgments, orders
or decrees against the Company or any Subsidiary in an aggregate amount
(excluding amounts fully covered by insurance) in excess of $10,000,000 and such
judgments, orders or decrees remain undischarged, unstayed and unsatisfied in an
aggregate amount (excluding amounts fully covered by insurance) in excess of
$10,000,000 for a period of 30 consecutive days; (g) certain events of
bankruptcy, insolvency or reorganization, or court appointment of a receiver,
liquidator or trustee of the Company or any Significant Subsidiary or for all or
substantially all of either of its property; and (h) any other Event of Default
provided with respect to such series of Debt Securities (Section 501 of each
Indenture). The term "Significant Subsidiary" means each significant subsidiary
(as defined in Regulation S-X promulgated under the Securities Act) of the
Company.
If an Event of Default under either Indenture with respect to Debt
Securities of any series at the time Outstanding occurs and is continuing, then
in every such case the Trustee or the Holders of not less than 25% in principal
amount of the Outstanding Debt Securities of that series may declare the
principal amount (or, if the Debt Securities of that series are Original Issue
Discount Securities or Indexed Securities, such portion of the principal amount
as may be specified in the terms thereof) of, and premium or Make-Whole Amount,
if any, on, all of the Debt Securities of that series to be due and payable
immediately by written notice thereof to the Company. However, at any time after
such declaration of acceleration with respect to Debt Securities of such series
(or of all Debt Securities then Outstanding under the applicable Indenture, as
the case may be) has been made, but before a judgment or decree for payment of
the money due has been obtained by the Trustee, the Holders of not less than a
majority in principal amount of the Outstanding Debt Securities of such series
(or of all Debt Securities then Outstanding under the applicable Indenture, as
the case may be) may rescind and annul such declaration and its consequences if
(a) the Company shall have deposited with the Trustee all required payments of
the principal of (and premium or Make-Whole Amount, if any) and interest, and
any Additional Amounts, 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 Trustee and (b)
all Events of Default, other than the nonpayment of accelerated principal (or
specified portion thereof and the premium or Make-Whole Amount, if any) or
interest, with respect to the Debt Securities of such series (or of all Debt
Securities then Outstanding under the applicable Indenture, as the case may be)
have been cured or waived as provided in the Indenture (Section 502 of each
Indenture). Each Indenture also provides that the Holders of not less than a
majority in principal amount of the Outstanding Debt Securities of any series
(or of all Debt Securities then Outstanding under the applicable 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 or Make-Whole Amount, if any) or interest or Additional Amounts payable
on any Debt Security of such series or (y) in respect of a covenant or provision
contained in the applicable Indenture that cannot be modified or
10
<PAGE>
amended without the consent of the Holder of each Outstanding Debt Security
affected thereby (Section 513 of each Indenture).
Each Trustee is required to give notice to the Holders of Debt Securities
within 90 days of a default under the applicable Indenture; 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 or Make-Whole Amount, if any) or
interest or Additional Amounts payable 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 the Responsible Officers of such Trustee consider such
withholding to be in the interest of such Holders (Section 601 of each
Indenture).
Each Indenture provides that no Holders of Debt Securities of any series
may institute any proceedings, judicial or otherwise, with respect to such
Indenture or for any remedy thereunder, except in the case of failure of the
Trustee, for 60 days, to act after it has received a written request to
institute proceedings in respect of an Event of Default from the Holders of not
less than 25% in principal amount of the Outstanding Debt Securities of such
series, as well as an offer of reasonable indemnity (Section 507 of each
Indenture). This provision will not prevent, however, any Holder of Debt
Securities from instituting suit for the enforcement of payment of the principal
of (and premium of Make-Whole Amount, if any), interest on and Additional
Amounts payable with respect to, such Debt Securities at the respective due
dates thereof (Section 508 of each Indenture).
MODIFICATION OF THE INDENTURES
Modifications and amendments of either Indenture may be made with the
consent of the Holders of not less than a majority in principal amount of all
Outstanding Debt Securities issued under such Indenture that 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 premium
or Make-Whole Amount, if any), or any installment of principal of or interest or
Additional Amounts payable on, any such Debt Security; (b) reduce the principal
amount of, or the rate or amount of interest on, or any premium or Make-Whole
Amount payable on redemption of, or any Additional Amounts payable with respect
to, any such Debt Security, or reduce the amount of principal of an Original
Issue Discount Security or Make-Whole Amount, if any, 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 (and premium or Make-Whole Amount, if
any), or interest on, or any Additional Amounts payable with respect to, any
such Debt Security; (d) impair the right to institute suit for the enforcement
of any payment on or with respect to any such Debt Security; (e) reduce the
percentage of Outstanding Debt Securities of any series necessary to modify or
amend the applicable Indenture, to waive compliance with certain provisions
thereof or certain defaults and consequences thereunder or to reduce the quorum
or voting requirements set forth in 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
(Section 902 of each Indenture).
The Holders of not less than a majority in principal amount of Outstanding
Debt Securities issued under either Indenture have the right to waive compliance
by the Company with certain covenants in such Indenture (Section 1012 of each
Indenture).
SUBORDINATION
Upon any distribution to creditors of the Company in a liquidation,
dissolution or reorganization, the payment of the principal of and interest on
the Subordinated Securities will be subordinated to the extent provided in the
Subordinated Indenture in right of payment to the prior payment in full of all
Senior Debt (Sections 1601 and 1602 of the Subordinated Indenture), but the
obligation of the Company to make payment of the principal and interest on the
Subordinated Securities will not otherwise be
11
<PAGE>
affected (Section 1608 of the Subordinated Indenture). No payment of principal
or interest may be made on the Subordinated 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 the
Company receives notice of the default (Section 1603 of the Subordinated
Indenture). After all Senior Debt is paid in full and until the Subordinated
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 (Section 1607 of the
Subordinated Indenture). By reason of such subordination, in the event of a
distribution of assets upon insolvency, certain general creditors of the Company
may recover more, ratably, than holders of the Subordinated Securities.
Senior Debt is defined in the Subordinated Indenture as 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 the
Subordinated 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 leaseback
transaction to which the Company is a party or otherwise, (d) indebtedness of
partnerships and joint ventures that is included in the consolidated financial
statements of the Company, (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 real estate investment or to fund any
investment in any entity making such real estate 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
Subordinated Securities or ranks pari passu with the Subordinated 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 Subordinated Securities are subordinated and (3) the
Subordinated Securities (Section 101 of the Subordinated Indenture). There are
no restrictions in the Senior Indenture or the Subordinated Indenture upon the
creation of additional Senior Debt.
DISCHARGE, DEFEASANCE AND COVENANT DEFEASANCE
Under each Indenture, the Company may 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 or Make-Whole Amount, if any)
and interest and any Additional Amounts payable to the date of such deposit (if
such Debt Securities have become due and payable) or to the Stated Maturity or
Redemption Date, as the case may be (Section 401 of each Indenture).
Each Indenture provides that, if the provisions of Article Fourteen thereof
are made applicable to the Debt Securities of or within any series pursuant to
Section 301 of such Indenture, the Company 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, to maintain an office or agency in
respect of such Debt Securities and to hold moneys for payment in trust)
("defeasance") (Section 1402 of each Indenture) or (b) to be released from its
obligations with respect to such Debt Securities under provisions of each
Indenture described under "-- Certain Covenants," or, if provided pursuant to
Section 301 of each Indenture, its obligations with respect to any other
covenant, and any omission to comply with such
12
<PAGE>
obligations shall not constitute a default or an Event or Default with respect
to such Debt Securities ("covenant defeasance") (Section 1403 of each
Indenture), in either case upon the irrevocable deposit by the Company with the
applicable Trustee, in trust, of an amount, in such currency or currencies,
currency unit or currency 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
or Make-Whole Amount, if any) and interest on such Debt Securities, and any
mandatory sinking fund or analogous payments thereon, on the scheduled due dates
therefor.
Such a trust may only be established if, among other things, the Company
has delivered to the applicable Trustee an Opinion of Counsel (as specified in
each Indenture) to the effect that the Holders of such Debt Securities will not
recognize income, gain or loss for United States federal income tax purposes as
a result of such defeasance or covenant defeasance and will be subject to United
States federal income tax on the same amounts, in the same manner and at the
same times as would have been the case if such defeasance or covenant defeasance
had not occurred, and such Opinion of Counsel, in the case of defeasance, must
refer to and be based upon a ruling of the Internal Revenue Service or a change
in applicable United States federal income tax laws occurring after the date of
such Indenture (Section 1404 of each 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 the 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 (Section 101 of each Indenture).
Unless otherwise provided in the applicable Prospectus Supplement, if after
the Company has deposited funds and/or Government Obligations to effect
defeasance or covenant defeasance with respect to Debt Securities of any series,
(a) the Holder of a Debt Security of such series is entitled to, and does, elect
pursuant to Section 301 of either 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 or Make-Whole Amount, 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 (Section 1405 of each Indenture). "Conversion Event" means the cessation of
use of (i) a currency, currency unit or composite currency (other than the ECU
or other currency unit) both by the government of the country that 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. Unless otherwise provided in the
applicable Prospectus Supplement, all payments of principal of (and premium or
Make-
13
<PAGE>
Whole Amount, 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 United States dollars (Section 101 of each Indenture).
In the event the Company effects covenant defeasance with respect to any
Debt Securities and such Debt Securities are declared due and payable because of
the occurrence of any Event of Default other than the Event of Default described
in clause (d) under "-- Events of Default, Notice and Waiver" with respect to
Sections 1004 to 1009, inclusive, of either Indenture (which Sections would no
longer be applicable to such Debt Securities) or described in clause (g) under
"-- Events of Default, Notice and Waiver" with respect to a covenant as to which
there has been covenant defeasance, the amount in such currency, currency unit
or composite currency in which such Debt Securities are payable, and Government
Obligations on deposit with the Company, will be sufficient to pay amounts due
on such Debt Securities at the time of their Stated Maturity but may not be
sufficient to pay amounts due on such Debt Securities at the time of the
acceleration resulting from such Event of Default. However, the Company would
remain liable to make payment of such amounts due at the time of acceleration.
The applicable Prospectus Supplement may further describe the provisions,
if any, permitting such defeasance or covenant defeasance, including any
modifications to the provisions described above, with respect to the Debt
Securities of or within a particular series.
CONVERSION RIGHTS
The terms and conditions, if any, upon which the Debt Securities are
convertible into Capital Stock will be set forth in the applicable Prospectus
Supplement relating thereto. Such terms will include whether such Debt
Securities are convertible into Capital Stock of the Company, the conversion
price (or manner of calculation thereof), the conversion period, provisions as
to whether conversion will be at the option of the Holders or the Company, the
events requiring an adjustment of the conversion price and provisions affecting
conversion in the event of the redemption of such Debt Securities.
BOOK-ENTRY SYSTEM
The Debt Securities of a series may be issued in whole or in part in the
form of one or more global securities ("Global Securities") that will be
deposited with, or on behalf of a depository (the "Depository") identified in
the Prospectus Supplement relating to such series. Global Securities, if any,
are expected to be deposited with The Depository Trust Company, as Depository.
Global Securities may be issued in fully registered form and may be issued in
either temporary or permanent form. Unless and until it is exchanged in whole or
in part for the individual Debt Securities represented thereby, a Global
Security may not be transferred except as a whole by the Depository for such
Global Security to a nominee of such Depository or by a nominee of such
Depository to such Depository or another nominee of such Depository or by such
Depository or any nominee of such Depository to a successor Depository or any
nominee of such successor.
The specific terms of the depository arrangement with respect to a series
of Debt Securities will be described in the Prospectus Supplement relating to
such series. The Company expects that unless otherwise indicated in the
applicable Prospectus Supplement the following provisions will apply to
depository arrangements.
Upon the issuance of a Global Security, the Depository for such Global
Security or its nominee will credit on its book-entry registration and transfer
system the respective principal amounts of the individual Debt Securities
represented by such Global Security to the accounts of persons that have
accounts with such Depository ("Participants"). Such accounts shall be
designated by the underwriters, dealers or agents with respect to such Debt
Securities or by the Company if such Debt Securities are offered directly by the
Company. Ownership of beneficial interests in such Global Security will be
limited to Participants or persons that may hold interests through Participants.
Ownership of beneficial interests in such Global Security will be shown on, and
the transfer of that ownership will be effected only through, records maintained
by the Depository for such Global Security or its nominee (with respect to
beneficial interests of Participants) and records of Participants (with respect
to beneficial interests of persons who
14
<PAGE>
hold through Participants). The laws of some states require that certain
purchasers of securities take physical delivery of such securities in definitive
form. Such limits and laws may impair the ability to own, pledge or transfer
beneficial interest in a Global Security.
So long as the Depository for a Global Security or its nominee is the
registered owner of such Global Security, such Depository or such nominee, as
the case may be, will be considered the sole owner or holder of the Debt
Securities represented by such Global Security for all purposes under the
applicable Indenture. Except as described below or in the applicable Prospectus
Supplement, owners of beneficial interest in a Global Security will not be
entitled to have any of the individual Debt Securities represented by such
Global Security registered in their names, will not receive or be entitled to
receive physical delivery of any such Debt Securities in definitive form and
will not be considered the owners or holders thereof under the applicable
Indenture.
Payments of principal of, any premium or Make-Whole Amount and any interest
on, or any Additional Amount payable with respect to, individual Debt Securities
represented by a Global Security registered in the name of a Depository or its
nominee will be made to the Depository or its nominee, as the case may be, as
the registered owner of the Global Security. None of the Company, the Trustee,
any Paying Agent or the Security Registrar for such debt Securities will have
any responsibility or liability for any aspect of the records relating to or
payment made on account of beneficial ownership interests in the Global Security
for such Debt Securities or for maintaining, supervising or reviewing any
records relating to such beneficial ownership interests.
The Company expects that the Depository for any Debt Securities or its
nominee, upon receipt of any payment of principal, premium, Make-Whole Amount,
interest or Additional Amounts in respect of the Global Security representing
such Debt Securities will immediately credit Participants' accounts with
payments in amounts proportionate to their respective beneficial interests in
the principal amount of such Global Security as shown on the records of such
Depository or its nominee. The Company also expects that payments by
Participants to owners of beneficial interests in such Global Security held
through such Participants will be governed by standing instructions and
customary practices, as is the case with securities held for the account of
customers in bearer form or registered in street name. Such payments will be the
responsibility of such Participants.
If a Depository for any Debt Securities is at any time unwilling, unable or
ineligible to continue as depository and a successor depository is not appointed
by the Company within 90 days, the Company will issue individual Debt Securities
in exchange for the Global Security representing such Debt Securities. In
addition, the Company may at any time and in its sole discretion, subject to any
limitations described in the Prospectus Supplement relating to such Debt
Securities, determine not to have any of such Debt Securities represented by one
or more Global Securities and in such event will issue individual Debt
Securities in exchange for the Global Security or Securities representing such
Debt Securities. Individual Debt Securities so issued will be issued in
denominations of $1,000 and integral multiples thereof.
DESCRIPTION OF CAPITAL SHARES
GENERAL
The Company is authorized to issue 50,000,000 Common Shares, no par value.
At August 1, 1997, there were outstanding 34,232,523 Common Shares. Management
of the Company currently plans to submit to its shareholders at the 1998 Annual
Meeting of Shareholders proposed amendments to the Company's Amended and
Restated Articles of Incorporation, as amended (the "Articles") amendments that
would increase the number of authorized Common Shares to 100,000,000 and that
would authorize the issuance of up to 25,000,000 Preferred Shares. There can be
no assurance that such proposals, or similar or other proposals submitted to the
shareholders, would be approved by the shareholders.
The following statements with respect to the capital stock of the Company
are subject to the detailed provisions of the Company's Articles, and bylaws
(the "Bylaws") as currently in effect. These statements do not purport to be
complete, or to give full effect to the terms of the provisions of statutory or
common law, and are subject to, and are qualified in their entirety by reference
to, the terms of the Articles and Bylaws, which are filed as exhibits to the
Registration Statement.
15
<PAGE>
COMMON SHARES
Holders of Common Shares are entitled to receive dividends when and as
declared by the Board of Directors. Holders of Common Shares have one vote per
share and non-cumulative voting rights, which means that holders of more than
50% of the shares voting at a meeting of shareholders at which a quorum is
present can elect all of the directors if they choose to do so, and, in such
event, the holders of the remaining shares will not be able to elect any
directors. In the event of any voluntary or involuntary liquidation or
dissolution of the Company, holders of Common Shares are entitled to share
ratably in the distributable assets of the Company remaining after satisfaction
of all debts and liabilities of the Company. Holders of Common Shares do not
have preemptive rights. When issued, the Common Shares are fully paid and
non-assessable.
The dividend and liquidation rights of holders of the Common Shares would
be subordinate to the interests of holders of Preferred Shares if, subsequent to
the date of this Prospectus, the Articles are amended to permit the issuance of
Preferred Shares and Preferred Shares are issued.
The transfer agent for the Common Shares is First Union National Bank of
North Carolina, Charlotte, North Carolina. The Common Shares are traded on the
NYSE under the symbol "TCR".
REPURCHASE OF COMMON SHARES AND RESTRICTIONS ON TRANSFER
Two of the requirements for qualification for the tax benefits accorded a
REIT under the Code are that (i) at no time during the last half of each
taxable year may more than 50% in value of the outstanding Common Shares be
owned, directly or indirectly, by or for five or fewer individuals, and (ii)
there must be at least 100 shareholders for at least 335 days in any taxable
year, or proportionate part of any shorter taxable year, after its first
taxable year. See Certain Federal Income Tax Considerations."
In order that the Company may meet these requirements at all times, the
Bylaws prohibit any person from acquiring or holding, directly or indirectly,
ownership of a number of Common Shares in excess of 9.8% of all the outstanding
Common Shares. Common Shares owned by a person in excess of such amounts will be
referred to in the Bylaws and herein as "Excess Shares. " For this purpose the
term "ownership" is defined in accordance with the constructive ownership
provisions of Section 544 of the Code (as modified by Section 856(h) of the
Code). Accordingly, Common Shares owned or deemed to be owned by a person who
individually owns less than 9.8 % of the Common Shares outstanding nevertheless
may be Excess Shares.
Holders of Excess Shares are not entitled to voting rights, dividends or
distributions with respect to the Excess Shares. If, after the purported
transfer or other event resulting in an exchange of Common Shares for Excess
Shares and before discovery by the Company of such exchange, dividends or
distributions are paid with respect to Common Shares that were exchanged for
Excess Shares, then such dividends or distributions are to be repaid to the
Company upon demand.
The Bylaws also provide that in the event any person acquires Excess
Shares, such Excess Shares may be redeemed by the Company, at the discretion of
the Board of Directors. Except as set forth below, the redemption price for
redeemed Excess Shares shall be the lesser of (i) the price paid for the Excess
Shares (or if no notice of such purchase price is given, at a price to be
determined by the Board of Directors, in its sole discretion, but no lower than
the lowest market price for the Common Shares during the year prior to the date
the Company exercises its purchase option) and (ii) the fair market value of
such Excess Shares, which shall be the fair market value of the Common Shares as
determined in good faith by the Board of Directors or, if the Common Shares are
listed on a national securities exchange, the closing price (average of closing
bid and asked prices if the Shares are quoted on the NASDAQ National Market
System) on the last business day prior to the redemption date. To redeem Excess
Shares, the Board of Directors must give a notice of redemption to the holder of
such Excess Shares not less than one week prior to the date fixed by the Board
of Directors for redemption. The holder may sell such Excess Shares before the
date fixed for redemption. If he does not, the redemption price for such Excess
Shares shall be paid on the redemption date fixed by the Board of Directors and
included in such notice. From and after the date fixed for redemption of Excess
Shares, such Common
16
<PAGE>
Shares shall cease to be entitled to any distributions and other benefits, other
than the right to payment of the redemption price for such Common Shares. Under
certain circumstances, the proceeds of redemption might be taxed as a
distribution to the recipient.
The constructive ownership provisions applicable under Section 544 of the
Code (as modified by Section 856(h) of the Code) attribute ownership of
securities by a corporation, partnership, estate or trust proportionately to its
shareholders, partners or beneficiaries, attribute ownership of securities owned
by family members to other members of the same family, treat securities with
respect to which a person has an option to purchase as actually owned by that
person, and set forth rules as to when securities constructively owned by a
person are considered to be actually owned for the application of such
attribution provisions (i.e., "reattribution"). Thus, for purposes of
determining whether a person holds Excess Shares, a person will be treated as
owning not only Common Shares actually or beneficially owned, but also any
Common Shares attributed to such person under the attribution rules described
above. Ownership of Common Shares through such attribution is generally referred
to as constructive ownership.
Under the Bylaws any acquisition of Common Shares of the Company that would
result in the disqualification of the Company as a REIT under the Code is void
to the fullest extent permitted by law, and the Board of Directors is authorized
to refuse to transfer Common Shares to a person if, as a result of the transfer,
that person would own Excess Shares. Prior to any transfer or transaction which,
if consummated, would cause a shareholder to own Excess Shares, and in any event
upon demand by the Board of Directors, a shareholder is required to file with
the Company an affidavit setting forth, as to that shareholder, the information
required to be reported in returns filed by shareholders under Treasury
Regulation Section 1.857-9 and in reports filed under Section 13(d) of the
Exchange Act. Additionally, each proposed transferee of Common Shares, upon
demand of the Board of Directors, also may be required to file a statement or
affidavit with the Company setting forth the number of Common Shares already
owned by the transferee and any person to or from whom Common Shares may be
attributed by or to the transferee.
Any certificates evidencing Common Shares will bear a legend referring to
the restrictions described herein. The ownership limitations described above may
have the effect of precluding changes in control of the Company, or preventing a
transaction in which some or all shareholders might receive a premium for sale
of a large or control block of Common Shares.
PREFERRED SHARES
As of the date of this Prospectus, the Articles do not authorize the
issuance of any Preferred Shares. If deemed to be in the best interests of the
Company, the Company may propose amendments to the Articles permitting the
issuance of Preferred Shares. Any such amendments would require the approval of
the holders of a majority of the outstanding Common Shares. There can be no
assurance that the Company will propose amendments to the Articles authorizing
the issuance of Preferred Shares or that such amendments, if proposed, would be
adopted. However, management of the Company currently intends to submit to the
shareholders at the 1998 Annual Meeting of Shareholders a proposed amendment to
the Articles that would authorize the issuance of up to 25,000,000 Preferred
Shares as well as (as described above) increase the number of authorized Common
Shares.
The following description of the terms of Preferred Shares sets forth
certain general terms and provisions of Preferred Shares to which a Prospectus
Supplement may relate. Specific terms of any series of Preferred Shares offered
by a Prospectus Supplement will be described in that Prospectus Supplement. The
description set forth below is subject to and qualified in its entirety by
reference to the Articles of Amendment to the Articles, if any, fixing the
preferences, limitations and relative rights of a particular series of Preferred
Shares.
General. It is expected that Preferred Shares will have the dividend,
liquidation, redemption, conversion and voting rights set forth below unless
otherwise provided in the Prospectus Supplement relating to a particular series
of Preferred Shares. Reference is made to the Prospectus Supplement relating to
the particular series of Preferred Shares offered thereby for specific terms,
including: (i) the title and
17
<PAGE>
liquidation preference per share of such Preferred Shares and the number
offered; (ii) the price at which such series will be issued; (iii) the dividend
rate (or method of calculation), the dates on which dividends shall be payable
and the dates from which dividends shall commence to accumulate; (iv) any
redemption or sinking fund provisions of such series; (v) any conversion
provisions of such series; and (vi) any additional dividend, liquidation,
redemption, sinking fund and other rights, preferences, privileges, limitations
and restrictions of such series.
The Preferred Shares will have no preemptive rights. The Preferred Shares
will, when issued, be fully paid and nonassessable. Unless otherwise specified
in the Prospectus Supplement relating to a particular series of Preferred
Shares, each series will rank on a parity as to dividends and distributions in
the event of a liquidation with each other series of Preferred Shares and, in
all cases, will be senior to the Common Shares.
Dividend Rights. Holders of Preferred Shares of each series will be
entitled to receive, when, as and if declared by the Board of Directors, out of
assets of the Company legally available therefor, cash dividends at such rates
and on such dates as are set forth in the Prospectus Supplement relating to such
series of Preferred Shares. Such rate may be fixed or variable or both and may
be cumulative, noncumulative or partially cumulative.
If the applicable Prospectus Supplement so provides, as long as any
Preferred Shares are outstanding, no dividends will be declared or paid or any
distributions be made on the Common Shares, other than a dividend payable in
Common Shares, unless the accrued dividends on each series of Preferred Shares
have been fully paid or declared and set apart for payment and the Company shall
have set apart all amounts, if any required to be set apart for all sinking
funds, if any, for each series of Preferred Shares.
If the applicable Prospectus Supplement so provides, when dividends are not
paid in full upon any series of Preferred Shares and any other series of
Preferred Shares, ranking on a parity as to dividends with such series of
Preferred Shares, all dividends declared upon such series of Preferred Shares
and any other series of Preferred Shares ranking on a parity as to dividends
will be declared pro rata so that the amount of dividends declared per share on
such series of Preferred Shares and such other series will in all cases bear to
each other the same ratio that accrued dividends per share on such series of
Preferred Shares and such other series bear to each other.
Each series of Preferred Shares will be entitled to dividends as described
in the Prospectus Supplement relating to such series, which may be based upon
one or more methods of determination. Different series of Preferred Shares may
be entitled to dividends at different dividend rates or based upon different
methods of determination. Except as provided in the applicable Prospectus
Supplement, no series of Preferred Shares will be entitled to participate in the
earnings or assets of the Company.
Rights Upon Liquidation. In the event of any voluntary or involuntary
liquidation, dissolution or winding up of the Company, the holders of each
series of Preferred Shares will be entitled to receive out of the assets of the
Company available for distribution to shareholders the amount stated or
determined on the basis set forth in the Prospectus Supplement relating to such
series, which may include accrued dividends, if such liquidation, dissolution or
winding up is involuntary or may equal the current redemption price per share
(otherwise than for the sinking fund, if any, provided for such series) provided
for such series set forth in such Prospectus Supplement, if such liquidation,
dissolution or winding up is voluntary, and on such preferential basis as is set
forth in such Prospectus Supplement. If, upon any voluntary or involuntary
liquidation, dissolution or winding up of the Company, the amounts payable with
respect to Preferred Shares of any series and any other shares of stock of the
Company ranking as to any such distribution on a parity with such series of
Preferred Shares are not paid in full, the holders of Preferred Shares of such
series and of such other shares will share ratably in any such distribution of
assets of the Company in proportion to the full respective preferential amounts
to which they are entitled or on such other basis as is set forth in the
applicable Prospectus Supplement. The rights, if any, of the holders of any
series of Preferred Shares to participate in the assets of the Company remaining
after the holders of other series of Preferred Shares have been paid their
respective specified liquidation preferences upon any liquidation, dissolution
or winding up of the Company will be described in the Prospectus Supplement
relating to such series.
18
<PAGE>
Redemption. A series of Preferred Shares may be redeemable, in whole or in
part, at the option of the Company, and may be subject to mandatory redemption
pursuant to a sinking fund, in each case upon terms, at the times, the
redemption prices and for the types of consideration set forth in the Prospectus
Supplement relating to such series. The Prospectus Supplement relating to a
series of Preferred Shares which is subject to mandatory redemption shall
specify the number of shares of such series that shall be redeemed by the
Company 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 any accrued
and unpaid dividends thereon to the date of redemption.
If, after giving notice of redemption to the holders of a series of
Preferred Shares the Company deposits with a designated bank funds sufficient to
redeem such Preferred Shares, then from and after such deposit, all shares
called for redemption will no longer be outstanding for any purpose, other than
the right to receive the redemption price and the right, if any, to convert such
shares into other classes of capital stock of the Company. The redemption price
will be stated in the Prospectus Supplement relating to a particular series of
Preferred Shares.
Except as indicated in the applicable Prospectus Supplement, the Preferred
Shares will not be subject to any mandatory redemption at the option of the
holder.
Sinking Fund. The Prospectus Supplement for any series of Preferred Shares
will state the terms, if any, of a sinking fund for the purchase or redemption
of that series.
Conversion Rights. The Prospectus Supplement for any series of Preferred
Shares will state the terms, if any, on which shares of that series are
convertible into Common Shares or another series of Preferred Shares. The
Preferred Shares will have no preemptive rights.
Voting Rights. Except as indicated in the Prospectus Supplement relating to
a particular series of Preferred Shares, or except as expressly required by
Virginia law, a holder of Preferred Shares will not be entitled to vote. Except
as indicated in the Prospectus Supplement relating to a particular series of
Preferred Shares, in the event the Company issues full shares of any series of
Preferred Shares, each such share will be entitled to one vote on matters on
which holders of such series of Preferred Shares are entitled to vote.
Under Virginia law, the affirmative vote of the holders of a majority of
the outstanding shares of all series of Preferred Shares, voting as a separate
voting group, will be required for any amendment to the Articles if the
amendment would:
(1) Increase or decrease the aggregate number of authorized Preferred
Shares, provided that the vote of the class as a separate voting group is not
required to decrease the number of authorized Preferred Shares, but not below
the number of Preferred Shares then outstanding and required to be reserved
for issuance;
(2) Effect an exchange or reclassification of all or part of the
Preferred Shares into shares of another class;
(3) Effect an exchange or reclassification, or create the right of
exchange, of all or part of the shares of another class into Preferred
Shares;
(4) Change the designation, rights, preferences, or limitations of all or
part of the Preferred Shares, but the Preferred Shares shall not be entitled
to vote as a separate voting group on an amendment increasing the number of
authorized shares of a subordinate class solely because both such classes
vote on some or all matters as a single voting group;
(5) Change the Preferred Shares into a different number of Preferred
Shares;
(6) Create a new class of shares, or change a class with subordinate and
inferior rights into a class of shares, having rights or preferences with
respect to distributions or to dissolution that are prior, superior, or
substantially equal to the Preferred Shares, or increase the rights,
preferences, or number of authorized shares of any class having rights or
preferences with respect to distributions or to dissolution that are prior,
superior, or substantially equal to the Preferred Shares;
19
<PAGE>
(7) Divide the shares into a series, designate the series, and determine,
or, unless authority was conferred at the time the class was created,
authorize the Board of Directors to determine, variations in the rights, or
preferences and limitations among the shares of the respective series; or
(8) Cancel or otherwise affect rights to distributions or dividends that
have accumulated but not yet been declared on all or part of the Preferred
Shares.
If a proposed amendment would affect a series of Preferred Shares in one or
more of the ways described above, the shares of that series are entitled to vote
as a separate voting group on the proposed amendment. If a proposed amendment
that entitled two or more series of Preferred Shares to vote as separate voting
groups under this section would affect those two or more series in the same or a
substantially similar way, the shares of all the series so affected would vote
together as a single voting group on the proposed amendment. Preferred Shares
that are convertible into shares of another class or series do not have any
right, prior to conversion, to vote on any matter because it affects the class
or series into which such shares are convertible.
Transfer Agent and Registrar. The transfer agent, registrar and dividend
disbursement agent for a series of Preferred Shares will be selected by the
Company and be identified in the applicable Prospectus Supplement. The registrar
for Preferred Shares will send notices to shareholders of any meetings at which
holders of Preferred Shares have the right to vote on any matter.
CERTAIN FEDERAL INCOME TAX CONSIDERATIONS
The following summary of certain material United States federal income tax
considerations is based upon current law which is subject to change, that may be
retroactively applied and alter significantly the tax considerations described
herein. The United Stated federal income tax considerations applicable to
ownership of the Company's Debt Securities will be discussed in an applicable
Prospectus Supplement. The following discussion is for general information only,
is not exhaustive of all possible tax considerations and does not give a
detailed discussion of any state, local or foreign tax considerations. Nor does
it discuss all of the aspects of federal income taxation that may be relevant to
a prospective shareholder in light of his or her particular circumstances or to
certain types of shareholders (including insurance companies, tax-exempt
entities, financial institutions or broker-dealers, foreign corporations, and
persons who are not citizens or residents of the United States) who are subject
to special treatment under the federal income tax laws.
The discussion set forth below assumes the Company qualifies as a REIT
under the Internal Revenue Code of 1986, as amended (the "Code"). If the Company
fails to qualify as a REIT for any taxable year, and certain relief provisions
do not apply, it will be subject to federal income tax (including any applicable
alternative minimum tax) at regular corporate rates and will not receive
deductions for distributions paid to shareholders. As a result the amount of
after-tax earnings available for distribution to shareholders would decrease
substantially.
EACH PROSPECTIVE PURCHASER OF SHARES OF THE COMPANY IS ADVISED TO CONSULT
WITH HIS OR HER OWN TAX ADVISOR REGARDING THE SPECIFIC TAX CONSEQUENCES TO SUCH
PURCHASER OF THE PURCHASE, OWNERSHIP, AND SALE OF SHARES OF THE COMPANY,
INCLUDING THE FEDERAL, STATE, LOCAL, FOREIGN, AND OTHER TAX CONSEQUENCES OF SUCH
PURCHASE, OWNERSHIP AND SALE, AND WITH RESPECT TO POTENTIAL CHANGES IN
APPLICABLE TAX LAWS.
GENERAL
The Company has elected to be treated for federal income tax purposes as a
REIT and intends to conduct its operations in a manner that will permit it to
continue so to qualify. While the Board of Directors intends to cause the
Company to operate in a manner that will enable it to comply with the REIT
requirements, there can be no certainty that such intention will be realized.
Moreover, relevant law may change so as to make compliance with one or more of
the REIT requirements difficult or impracticable. Failure to meet any of the
REIT requirements with respect to a particular taxable year could result in
termination of the Company's election to be a REIT, effective for the year of
such failure and at least the four succeeding taxable years.
20
<PAGE>
The continued qualification of the Company as a REIT will depend on its
continuing to meet various requirements concerning, among other things, its
organization, the ownership of its shares, the nature of its assets, the sources
of its income and the amount of its distributions to shareholders. No assurance
can be given that the actual results of the Company's operation for any taxable
year will satisfy the REIT requirements. As long as the Company qualifies as a
REIT for federal income tax purposes, it generally will not be subject to
federal income tax on any taxable income or gain that is distributed currently
to shareholders. However, any undistributed taxable income or gain will be taxed
to the Company at regular corporate rates. In addition, under certain
circumstances, the Company may be subject to additional taxes.
FEDERAL INCOME TAXATION OF U.S. SHAREHOLDERS
While the Company qualifies for taxation as a REIT, distributions made to
the Company's shareholders from current or accumulated earnings and profits (and
not designated as capital gain dividends) will be includible by U.S.
Shareholders as ordinary income for federal income tax purposes. A "U.S.
Shareholder" means a holder of Common Shares that (for United States federal
income tax purposes) is (i) a citizen or resident of the United States, (ii) a
corporation, partnership or other entity created or organized in or under the
laws of the United States or of any political subdivision thereof, or (iii) an
estate or trust, the income of which is subject to United States federal income
taxation regardless of its source (except, with respect to the tax year of any
trust that begins after December 31, 1996, a trust whose administration is
subject to the primary supervision of a United States court and which has one or
more United States fiduciaries who have authority to control all substantial
decisions of the trust). None of these distributions will be eligible for the
dividends-received deduction for corporate shareholders. Distributions that are
designated as capital gain dividends will be taxed as long-term capital gains
(to the extent they do not exceed the Company's actual net capital gain for the
taxable year) without regard to the period for which the shareholder has held
his or her shares in the Company. Corporate shareholders, however, may be
required to treat up to 20% of certain capital gain dividends as ordinary
income.
Distributions in excess of current and accumulated earnings and profits
will not be taxable to a U.S. Shareholder to the extent that they do not exceed
the adjusted basis of the shareholder's shares. U.S. Shareholders will be
required to reduce the tax basis of their shares by the amount of such
distributions until such basis has been reduced to zero, after which such
distributions will be taxable as capital gain (ordinary income in the case of a
shareholder who holds its shares as a dealer). The tax basis as so reduced will
be used in computing the capital gain or loss, if any, realized upon sale of the
shares. Any loss upon a sale or exchange of shares by a U.S. Shareholder who
held such shares for six months or less (after applying certain holding period
rules) generally will be treated as a long-term capital loss to the extent that
such shareholder previously received capital gain distributions with respect to
such shares. All or a portion of any loss realized upon a taxable disposition of
shares of the Company may be disallowed if other shares of the Company are
purchased (under a dividend reinvestment plan or otherwise) within 30 days
before or after the disposition.
Shareholders may not include in their individual federal income tax returns
any net operating losses or capital losses of the Company. In addition, any
distribution declared by the Company in October, November, or December of any
year and payable to a shareholder of record on a specified date in any such
month shall be treated as both paid by the Company and received by the
shareholder on December 31 of such year, provided that the distribution is
actually paid by the Company no later than January 31 of the following year. The
Company may be required to withhold a portion of capital gain distributions to
any shareholders who fail to certify their non-foreign status to the Company.
BACKUP WITHHOLDING
The Company will report to its U.S. Shareholders and the Internal Revenue
Service the amount of distributions paid during each calendar year and the
amount of tax withheld, if any. Under the backup withholding rules, a
shareholder may be subject to backup withholding at the rate of 31% with respect
to distributions paid unless such holder (i) is a corporation or comes within
certain other exempt categories and, when required, demonstrates this fact or
(ii) has provided a correct taxpayer identification
21
<PAGE>
number, certifies as to no loss of exemption from backup withholding, and
otherwise complies with applicable requirements of the backup withholding rules.
A shareholder that does not provide the Company with a correct taxpayer
identification number may also be subject to penalties imposed by the Internal
Revenue Service. Any amount paid as backup withholding will be creditable
against the shareholder's income tax liability.
STATE AND LOCAL TAXES
Even if the Company qualifies on a continuing basis as a REIT for federal
income tax purposes, the Company and its shareholders may be subject to certain
state and local taxes. This Prospectus does not purport to describe any state or
local tax consequences of an investment in the Company. State and local tax
treatment of the Company and the shareholders may differ substantially from the
federal income tax treatment described in this summary. CONSEQUENTLY, EACH
PROSPECTIVE SHAREHOLDER SHOULD CONSULT WITH HIS OR ITS OWN TAX ADVISOR WITH
REGARD TO THE STATE AND LOCAL TAX CONSEQUENCES OF AN INVESTMENT IN THE COMPANY.
PLAN OF DISTRIBUTION
The Company may sell Offered Securities to or through underwriters or may
sell Offered Securities to investors directly or through designated agents. Any
such underwriter or agent involved in the offer and sale of the Offered
Securities will be named in the applicable Prospectus Supplement.
Underwriters may offer and sell the Offered Securities at a fixed price or
prices, which may be changed, or from time to time at market prices prevailing
at the time of sale, at prices related to such prevailing market prices or at
negotiated prices. The Company also may, from time to time, authorize
underwriters acting as agents to offer and sell the Offered Securities upon the
terms and conditions set forth in any Prospectus Supplement. In connection with
the sale of Offered Securities, underwriters may be deemed to have received
compensation from the Company in the form of underwriting discounts or
commissions and may also receive commissions from purchasers of Offered
Securities for whom they may act as agent. Underwriters may sell Offered
Securities to or through dealers, and such dealers may receive compensation in
the form of discounts, concessions or commissions (which may be changed from
time to time) from the underwriters and/or from the purchasers for whom they may
act as agent.
Any underwriting compensation paid by the Company to underwriters or agents
in connection with the offering of Offered Securities and any discounts,
concessions or commissions allowed by underwriters to participating dealers will
be set forth in the applicable Prospectus Supplement. Underwriters, dealers and
agents participating in the distribution of the Offered Securities may be deemed
to be underwriters, and any discounts and commissions received by them and any
profit realized by them on resale of the Offered Securities may be deemed to be
underwriting discounts and commissions under the Securities Act. Underwriters,
dealers and agents may be entitled, under agreements entered into with the
Company, to indemnification against and contribution toward certain civil
liabilities, including liabilities under the Securities Act.
If so indicated in the applicable Prospectus Supplement, the Company will
authorize dealers acting as the Company's agents to solicit offers by certain
institutions to purchase Offered Securities from the Company at the public
offering price set forth in such Prospectus Supplement pursuant to Delayed
Delivery Contracts ("Contracts") providing for payment and delivery on the date
or dates stated in such Prospectus Supplement. Each Contract will be for an
amount not less than, and the principal amount of Offered Securities sold
pursuant to Contracts shall not be less nor more than, the respective amounts
stated in such Prospectus Supplement. Institutions with which Contracts, when
authorized, may be made include commercial and savings banks, insurance
companies, pension funds, investment companies, educational and charitable
institutions and other institutions, but will in all cases be subject to the
approval of the Company. Contracts will not be subject to any conditions except
(i) the purchase by an institution of the Offered Securities covered by its
Contract shall not at the time of delivery be prohibited under the laws of any
jurisdiction in the United States to which such institution is subject and (ii)
the Company shall have sold to such underwriters the total princi-
22
<PAGE>
pal amount of the Offered Securities less the principal amount thereof covered
by Contracts. A commission indicated in the Prospectus Supplement will be paid
to agents and underwriters soliciting purchases of Offered Securities pursuant
to Contracts accepted by the Company. Agents and underwriters shall have no
responsibility in respect of the delivery or performance of Contracts.
Certain of the underwriters and their affiliates may be customers of,
engage in transactions with and perform services for the Company in the ordinary
course of business.
LEGAL OPINIONS
The validity of the Offered Securities will be passed upon for the Company
by McGuire, Woods, Battle & Boothe, L.L.P., Richmond, Virginia.
EXPERTS
The financial statements of Cornerstone Realty Income Trust, Inc.
incorporated by reference in Cornerstone Realty Income Trust, Inc.'s Annual
Report (Form 10-K) for the year ended December 31, 1996, and the related
financial statement schedule included therein, have been audited by Ernst &
Young LLP, independent auditors, as set forth in their reports thereon included
and incorporated by reference therein and incorporated herein by reference. Such
financial statements are incorporated herein by reference in reliance upon such
report given upon the authority of such firm as experts in accounting and
auditing.
The Statement of Income and Direct Operating Expenses Exclusive of Items
not Comparable to the Proposed Future Operations of the Property Greenbrier
Apartments for the Twelve Month Period Ended September 30, 1996, the Statement
of Income and Direct Operating Expenses Exclusive of Items not Comparable to the
Proposed Future Operations of the Property Deerfield Apartments for the Twelve
Months Ended October 31, 1996, the Statement of Income and Direct Operating
Expenses Exclusive of Items not Comparable to the Proposed Future Operations of
the Property Franklin Towers Apartments for the Twelve Months Ended December 31,
1996, the Statement of Income and Direct Operating Expenses Exclusive of Items
not Comparable to the Proposed Future Operations of the Property Westchase
Apartments for the Twelve Months Ended December 31, 1996, the Statement of
Income and Direct Operating Expenses Exclusive of Items not Comparable to the
Proposed Future Operations of the Property Paces Arbor Apartments for the Twelve
Month Period Ended February 28, 1997, the Statement of Income and Direct
Operating Expenses Exclusive of Items not Comparable to the Proposed Future
Operations of the Property Paces Forest Apartments for the Twelve Month Period
Ended February 28, 1997, the Statement of Income and Direct Operating Expenses
Exclusive of Items not Comparable to the Proposed Future Operations of the
Property Carlyle Club Apartments for the Twelve Month Period Ended March 31,
1997, the Statement of Income and Direct Operating Expenses Exclusive of Items
not Comparable to the Proposed Future Operations of the Property Ashley Run
Apartments for the Twelve Month Period Ended March 31, 1997, and the Statement
of Income and Direct Operating Expenses Exclusive of Items not Comparable to the
Proposed Future Operations of the Property Sununit Charleston Apartments for the
Twelve Month Period Ended April 30, 1997, incorporated by reference herein, have
been incorporated herein in reliance on the reports of L.P. Martin & Company,
P.C., independent certified public accountants, also incorporated by reference
herein, and upon the authority of said firm as experts in accounting and
auditing.
23
<PAGE>
<TABLE>
<S> <C>
========================================================== ==========================================================
NO PERSON HAS BEEN AUTHORIZED IN CONNECTION WITH THE
OFFERING MADE HEREBY TO GIVE ANY INFORMATION OR TO MAKE
ANY REPRESENTATIONS NOT CONTAINED IN THIS PROSPECTUS AND,
IF GIVEN OR MADE, SUCH INFORMATION OR REPRESENTATIONS MUST $200,000,000
NOT BE RELIED UPON AS HAVING BEEN AUTHORIZED BY THE
COMPANY OR ANY UNDERWRITER. THIS PROSPECTUS DOES NOT
CONSTITUTE AN OFFER TO SELL OR A SOLICITATION OF ANY OFFER
TO BUY ANY OF THE SECURITIES OFFERED HEREBY TO ANY PERSON
OR BY ANYONE IN ANY JURISDICTION IN WHICH IT IS UNLAWFUL CORNERSTONE REALTY
TO MAKE SUCH OFFER OR SOLICITATION. NEITHER THE DELIVERY INCOME TRUST, INC.
OF THIS PROSPECTUS NOR ANY SALE MADE HEREUNDER SHALL,
UNDER ANY CIRCUMSTANCES, CREATE ANY IMPLICATION THAT THE
INFORMATION CONTAINED HEREIN IS CORRECT AS OF ANY DATE
SUBSEQUENT TO THE DATE HEREOF.
DEBT SECURITIES
COMMON SHARES
PREFERRED SHARES
--------------------------
TABLE OF CONTENTS
--------------------------
PROSPECTUS
PAGE --------------------------
-----
Available Information ..................
Incorporation of Certain Information by
Reference ...........................
The Company ...........................
Use of Proceeds ........................
Certain Ratios ........................ , 1997
Description of Debt Securities .........
Description of Capital Shares .........
Certain Federal Income Tax Considerations
Plan of Distribution ..................
Legal Opinions ........................
Experts .................................
========================================================== ==========================================================
</TABLE>
<PAGE>
PART II. INFORMATION NOT REQUIRED IN PROSPECTUS
ITEM 14. OTHER EXPENSES OF ISSUANCE AND DISTRIBUTION.
The following are estimates of the expenses (other than underwriting
commissions and discounts) to be incurred in connection with the issuance and
distribution of the securities to be registered:
SEC registration fee ............... $ 68,966
Printing and engraving fees ......... *
Legal fees and expenses ............ *
Accounting fees and expenses ...... *
Trustees' fees and expense ......... *
Miscellaneous ..................... *
---------
Total ........................... $ *
=========
- ----------
* To be provided by amendment
ITEM 15. INDEMNIFICATION OF DIRECTORS AND OFFICERS.
The Company has obtained, and pays the cost of, directors' and officers'
liability insurance coverage in the amount of $5 million (subject to a retention
or "deductible" of $250,000). Directors' and officers' insurance insures (i) the
directors and officers of the Company from any claim arising out of an alleged
wrongful act by the directors and officers of the Company in their respective
capacities as directors and officers of the Company, and (ii) the Company to the
extent that the Company has indemnified the directors and officers for such
loss.
The Virginia Stock Corporation Act (the "Virginia Act") permits, and the
Registrant's Articles of Incorporation require, indemnification of the
Registrant's directors and officers in a variety of circumstances, which may
include liabilities under the Securities Act of 1933. Under Section 13.1-697 of
the Virginia Act, a Virginia corporation generally is authorized to indemnify
its directors in civil or criminal actions if they acted in good faith and
believed their conduct to be in the best interests of the corporation and, in
the case of criminal actions, had no reasonable cause to believe that the
conduct was unlawful. The Registrant's Articles of Incorporation require
indemnification of officers and directors with respect to any action if the
directors (other than the indemnified party) determine in good faith that the
indemnified party's course of conduct was undertaken in good faith within what
the indemnified party reasonably believed to be the scope of his authority and
for a purpose he reasonably believed to be in the best interests of the
Registrant or its shareholders, except in the case of misconduct, bad faith,
negligence, reckless disregard of duties or violation of the criminal law. In
addition, the Registrant may carry insurance on behalf of directors, officers,
employees or agents that may cover liabilities under the Securities Act of 1933.
The Registrant's Articles of Incorporation, as permitted by the Virginia Act,
eliminate the damages that may be assessed against a director or officer of the
Registrant in a shareholder or derivative proceeding. This limit on liability
will not apply in the event of willful misconduct or a knowing violation of the
criminal law or of federal or state securities laws. Reference also is made to
the indemnification provisions set forth in the forms of Underwriting Agreement
filed as Exhibit 1 hereto.
II-1
<PAGE>
ITEM 16. EXHIBITS.
**1.1 Form of Underwriting Agreement for Debt Securities.
**1.2 Form of Underwriting Agreement for Common Shares and Preferred
Shares.
*4.1 Amended and Restated Articles of Incorporation of Cornerstone
Realty Income Trust, Inc., as amended (Incorporated by reference
to Exhibit 3.1 included in the Registrant's Report on Form 10-Q
for the Quarter ended June 30, 1995; File No. 0-23954).
*4.2 Bylaws of Cornerstone Realty Income Trust, Inc. (Amended through
March 31, 1997) (Incorporated by reference to Exhibit 4.2
included in the Registrant's Registration Statement on Form S-3;
File No. 333-23693).
***4.4 Loan Agreement between the Company and First Union National
Bank.
**4.5 Form of Senior Indenture.
**4.6 Form of Subordinated Indenture.
**4.7 Form of Senior Security.
**4.8 Form of Subordinated Security.
**5 Opinion of McGuire, Woods, Battle & Boothe, L.L.P.
**12 Statement regarding computation of ratios
**23.1 Consent of Ernst & Young LLP
**23.2 Consent of L.P. Martin & Company, P.C.
23.3 Consent of McGuire, Woods, Battle & Boothe, L.L.P. (included in
Exhibit 5)
24 Powers of Attorney (included on signature page)
***25.1 Statement of Eligibility and Qualification under the Trust
Indenture Act of 1939 on Form T-1, filed by Senior Trustee, as
Trustee under the Senior Indenture (to be filed in accordance
with Rule 305 (b)(2) of the Trust Indenture Act of 1939).
***25.2 Statement of Eligibility and Qualification under the Trust
Indenture Act of 1939 on Form T-1, filed by Subordinated Trustee,
as Trustee under the Subordinated Indenture (to be filed in
accordance with Rule 305 (b)(2) of the Trust Indenture Act of
1939).
- ----------
* Previously filed, or Incorporated by reference herein.
** Filed herewith.
*** To be filed by amendment or incorporated by reference when required in
connection with the offering of the Offered Securities.
ITEM 17. UNDERTAKINGS
The undersigned registrant hereby undertakes:
(1) To file, during any period in which offers or sales are being made of
the securities registered hereby, a post-effective amendment to this
registration statement.
(ii) to include any prospectus required by Section 10(a)(3) of the
Securities Act of 1933;
(ii) to reflect in the prospectus any facts or events arising after the
effective date of the registration statement (or the most recent
post-effective amendment thereof) which, individually or in the aggregate,
represent a fundamental change in the information set forth in the
registration statement; provided, however, any increase or decrease in volume
of securities offered (if the total dollar value of securities offered would
not exceed that which was registered) and any deviation from the high end of
the estimated maximum offering range may be reflected in the form of
prospectus filed
II-2
<PAGE>
with the Commission pursuant to Rule 424(b) if, in the aggregate, the changes
in volume and price represent no more than 20 percent change in the maximum
aggregate offering price set forth in the "Calculation of Registration Fee'
table in the effective registration statement; and
(iii) to include any material information with respect to the plan of
distribution not previously disclosed in the registration statement or any
material change to such information in the registration statement; provided,
however, that the undertakings set forth in subparagraphs (i) and (ii) above
do not apply if the information required to be included in a post-effective
amendment by those paragraphs is contained in periodic reports filed with or
furnished to the Commission by the registrant pursuant to Section 13 or 15(d)
of the Securities Exchange Act of 1934 that are incorporated by reference in
this registration statement;
(2) That, for the purpose of determining any liability under the Securities
Act of 1933, each such post-effective amendment shall be deemed to be a new
registration statement relating to the securities offered therein, and the
offering of such securities at that time shall be deemed to be the initial bona
fide offering thereof;
(3) To remove from registration by means of a post-effective amendment any
of the securities being registered which remain unsold at the termination of the
offering.
The undersigned registrant hereby undertakes that, for purposes of
determining any liability under the Securities Act of 1933, each filing of the
registrant's annual report pursuant to Section 13(a) or 15(d) of the Securities
Exchange Act of 1934 (and, where applicable, each filing of an employee benefit
plan's annual report pursuant to Section 15(d) of the Securities Exchange Act of
1934) that is incorporated by reference in this 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; and
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 under Item 15 above or
otherwise, the registrant has been advised that the in the opinion of the
Securities and Exchange Commission such indemnification is against public policy
as expressed in the Act and is, therefore, unenforceable. In the event that a
claim for indemnification against such liabilities (other than the payment by
the registrant of expenses incurred or paid by a director, officer or
controlling person of the registrant in the successful defense of any action,
suit or proceeding) is asserted against the registrant 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 Act and will be governed by the final adjudication of such
issue.
The undersigned registrant hereby undertakes that:
(1) For purposes of determining any liability under the Securities Act of
1933, the information omitted from the form of prospectus filed as a part of
this registration statement in reliance upon Rule 430A and contained in the form
of prospectus filed by the registrant pursuant to Rule 424(b)(1) or (4) or
497(h) under the Securities Act shall be deemed to be part of this registration
statement as of the time it was declared effective.
(2) For the purpose of determining any liability under the Securities Act
of 1933, 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.
The undersigned registrant hereby undertakes to file an application for
purposes of determining the eligibility of the trustee to act under subsection
(a) of Section 310 of the Trust Indenture Act in accordance with the rules and
regulations prescribed by the Commission under Section 305(b)(2) of the Act.
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 all of the
requirements for filing on Form S-3 and has duly caused this registration
statement to be signed on its behalf by the undersigned, thereunto duly
authorized, in the City of Richmond, Commonwealth of Virginia on the 27th day of
August, 1997.
CORNERSTONE REALTY INCOME TRUST, INC.
By /s/ STANLEY J. OLANDER, JR.
---------------------------------------
STANLEY J. OLANDER, JR.
Vice President and Chief
Financial Officer
POWER OF ATTORNEY
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. Each of the undersigned officers and
directors of the registrant hereby constitutes Stanley J. Olander, Jr. and Glade
M. Knight, either of whom may act, his true and lawful attorneys-in-fact with
full power to sign for him and in his name in the capacities indicated below and
to file any and all amendments to the registration statement filed herewith,
making such changes in the registration statement as the registrant deems
appropriate, and generally to do all such things in his name and behalf in his
capacity as an officer and director to enable the registrant to comply with the
provisions of the Securities Act of 1933 and all requirements of the Securities
and Exchange Commission.
<TABLE>
<CAPTION>
SIGNATURE TITLE DATE
- ------------------------------- -------------------------------- ----------------
<S> <C> <C>
/s/ Glade M. Knight Director and Chief Executive August 26, 1997
- ------------------------- Officer
Glade M. Knight
/s/ Stanley J. Olander, Jr. Director, Vice President Chief August 26, 1997
- ------------------------- Financial Officer and Secretary
Stanley J. Olander, Jr.
/s/ Martin Zuckerbrod Director August 26, 1997
- -------------------------
Martin Zuckerbrod
/s/ Harry S. Taubenfeld Director August 26, 1997
- -------------------------
Harry S. Taubenfeld
/s/ Leslie A. Grandis Director August 26, 1997
- -------------------------
Leslie A. Grandis
/s/ Glenn W. Bunting, Jr. Director August 26, 1997
- -------------------------
Glenn W. Bunting, Jr.
Director August , 1997
- -------------------------
Penelope W. Kyle
</TABLE>
II-4
Exhibit 1.1
CORNERSTONE REALTY INCOME TRUST, INC.
(a Virginia Corporation)
Debt Securities
UNDERWRITING AGREEMENT
__________ , 199__
[To the Representatives of the
several Underwriters named in the
respective Pricing Agreements
hereinafter described.]
Ladies and Gentlemen:
From time to time Cornerstone Realty Income Trust, Inc., a Virginia
corporation (the "Company"), proposes to enter into one or more Pricing
Agreements (each a "Pricing Agreement") in the form of Annex I hereto, with such
additions and deletions as the parties thereto may determine, and, subject to
the terms and conditions stated herein and therein, to issue and sell to the
firms named in Schedule I to the applicable Pricing Agreement (such firms
constituting the "Underwriters" with respect to such Pricing Agreement and the
securities specified therein) certain of its debt securities (the "Securities")
specified in Schedule II to such Pricing Agreement (with respect to such Pricing
Agreement, the "Designated Securities").
The terms and rights of any particular issuance of Designated
Securities shall be as specified in the Pricing Agreement relating thereto and
in or pursuant to the indenture (the "Indenture") identified in such Pricing
Agreement.
1. Particular sales of Designated Securities may be made from time to
time to the Underwriters of such Securities, for whom the firms designated as
representatives of the Underwriters of such Securities in the Pricing Agreement
relating thereto will act as representatives (the "Representatives"). The term
"Representatives" also refers to a single firm acting as sole representative of
the Underwriters and to an Underwriter or Underwriters who act without any firm
being designated as its or their representatives. This Underwriting Agreement
shall not be construed as an obligation of the Company to sell any of the
Securities or as an obligation of any of the Underwriters to purchase the
Securities. The obligation of the Company to issue and sell any of the
Securities and the obligation of any of the Underwriters to purchase any of the
Securities shall be evidenced by the Pricing Agreement with respect to the
Designated Securities specified therein. Each Pricing Agreement shall specify
the aggregate principal amount of such Designated Securities, the initial public
offering price of such Designated
<PAGE>
Securities, the purchase price to the Underwriters of such Designated
Securities, the names of the Underwriters of such Designated Securities, the
names of the Representatives of such Underwriters and the principal amount of
such Designated Securities to be purchased by each Underwriter, and shall set
forth the date, time and manner of delivery of such Designated Securities and
payment therefor. The Pricing Agreement shall also specify (to the extent not
set forth in the Indenture and the registration statement and prospectus with
respect thereto) the terms of such Designated Securities. A Pricing Agreement
shall be in the form of an executed writing (which may be in counterparts), and
may be evidenced by an exchange of telegraphic communications or any other rapid
transmission device designed to produce a written record of communications
transmitted. The obligations of the Underwriters under this Agreement and each
Pricing Agreement shall be several and not joint.
2. The Company represents and warrants to, and agrees with, each of the
Underwriters that:
(a) A registration statement on Form S-3 (File No. 333- ____)
(the "Initial Registration Statement") in respect of the Securities has
been filed with the Securities and Exchange Commission (the
"Commission"); the Initial Registration Statement and any
post-effective amendment thereto, each in the form heretofore delivered
or to be delivered to the Representatives and, excluding exhibits to
such registration statements, but including all documents incorporated
by reference in the prospectus contained in the latest registration
statement, to the Representatives for each of the other Underwriters,
have been declared effective by the Commission in such form; other than
a registration statement, if any, increasing the size of the offering
(a "Rule 462(b) Registration Statement"), filed pursuant to Rule 462(b)
under the Securities Act of 1933, as amended (the "Act), which became
effective upon filing, no other document with respect to the Initial
Registration Statement or document incorporated by reference therein
has heretofore been filed or transmitted for filing with the Commission
(other than prospectuses filed pursuant to Rule 424(b) of the rules and
regulations of the Commission under the Act each in the form heretofore
delivered to the Representatives); and no stop order suspending the
effectiveness of the Initial Registration Statement, any post-effective
amendment thereto or the Rule 462(b) Registration Statement, if any,
has been issued and no proceeding for that purpose has been initiated
or threatened by the Commission (any preliminary prospectus included in
the Initial Registration Statement or filed with the
2
<PAGE>
Commission pursuant to Rule 424(a) under the Act, is hereinafter called
a "Preliminary Prospectus"; the various parts of the Initial
Registration Statement and the Rule 462(b) Registration Statement, if
any, including all exhibits thereto and the documents incorporated by
reference in the prospectus contained in the Initial Registration
Statement at the time such part of the registration statement became
effective but excluding Form T-1, each as amended at the time such part
of the Initial Registration Statement became effective or such part of
the Rule 462(b) Registration Statement, if any, became or hereafter
becomes effective, are hereinafter collectively called the
"Registration Statement"; the prospectus relating to the Securities, in
the form in which it has most recently been filed, or transmitted for
filing, with the Commission on or prior to the date of this Agreement,
is hereinafter called the "Prospectus"; any reference herein to any
Preliminary Prospectus or the Prospectus shall be deemed to refer to
and include the documents incorporated by reference therein pursuant to
the applicable form under the Act, as of the date of such Preliminary
Prospectus or Prospectus, as the case may be; any reference to any
amendment or supplement to any Preliminary Prospectus or the Prospectus
shall be deemed to refer to and include any documents filed after the
date of such Preliminary Prospectus or Prospectus, as the case may be,
under the Securities Exchange Act of 1934, as amended (the "Exchange
Act"), and incorporated by reference in such Preliminary Prospectus or
Prospectus, as the case may be; any reference to any amendment to the
Registration Statement shall be deemed to refer to and include any
annual report of the Company filed pursuant to Sections 13(a) or 15(d)
of the Exchange Act after the effective date of the Registration
Statement that is incorporated by reference in the Registration
Statement; any reference to the Prospectus as amended or supplemented
shall be deemed to refer to the Prospectus as amended or supplemented
in relation to the applicable Designated Securities in the form in
which it is filed with the Commission pursuant to Rule 424(b) under the
Act in accordance with Section 5(a) hereof, including any documents
incorporated by reference therein as of the date of such filing; and if
the Company elects to rely on Rule 434 under the Act, any reference to
the Prospectus shall be deemed to include, without limitation, the form
of prospectus and the abbreviated term sheet, taken together, provided
to the Underwriters by the Company in reliance on Rule 434 under the
Act (the "Rule 434 Prospectus"));
(b) The documents incorporated by reference in the Prospectus,
when they became effective or were filed with
3
<PAGE>
the Commission, as the case may be, conformed in all material respects
to the requirements of the Act or the Exchange Act, as applicable, and
the rules and regulations of the Commission thereunder, and none of
such documents contained an untrue statement of a material fact or
omitted to state a material fact required to be stated therein or
necessary to make the statements therein not misleading; and any
further documents so filed and incorporated by reference in the
Prospectus or any further amendment or supplement thereto, when such
documents become effective or are filed with the Commission, as the
case may be, will conform in all material respects to the requirements
of the Act or the Exchange Act, as applicable, and the rules and
regulations of the Commission thereunder and will not contain an untrue
statement of a material fact or omit to state a material fact required
to be stated therein or necessary to make the statements therein not
misleading; provided, however, that this representation and warranty
shall not apply to any statements or omissions made in reliance upon
and in conformity with information furnished in writing to the Company
by an Underwriter of Designated Securities through the Representatives
expressly for use in the Prospectus as amended or supplemented relating
to such Securities;
(c) The Registration Statement and the Prospectus conform, and
any further amendments or supplements to the Registration Statement or
the Prospectus will conform, in all material respects to the
requirements of the Act and the Trust Indenture Act of 1939, as amended
(the "Trust Indenture Act") and the rules and regulations of the
Commission thereunder and do not and will not, as of the applicable
effective date as to the Registration Statement and any amendment
thereto and as of the applicable filing date as to the Prospectus and
any amendment or supplement thereto, contain an untrue statement of a
material fact or omit to state a material fact required to be stated
therein or necessary to make the statements therein not misleading;
provided, however, that this representation and warranty shall not
apply to any statements or omissions made in reliance upon and in
conformity with information furnished in writing to the Company by an
Underwriter of Designated Securities through the Representatives
expressly for use in the Prospectus as amended or supplemented relating
to such Securities;
(d) The Company has been duly organized and is validly
existing as a corporation in good standing under the laws of the
Commonwealth of Virginia, with full power and authority to own, lease
and operate its properties and conduct its
4
<PAGE>
business as described in the Prospectus; and the Company is duly
qualified to transact business in all jurisdictions in which the
conduct of its business requires such qualification except where the
failure so to qualify would not have a material adverse effect on the
condition, financial or otherwise, or the earnings, business affairs or
business prospects of the Company;
(e) Each subsidiary of the Company (as defined on Annex III)
has been duly organized and is validly existing as a corporation,
limited liability company, limited partnership or real estate
investment trust in good standing under the laws of the jurisdiction of
its incorporation or organization, with power and authority to own,
lease and operate its properties and conduct its business as described
in the Prospectus except where the failure so to be in good standing
would not have a material adverse effect on the condition, financial or
otherwise, or the earnings, business affairs or business prospects of
the Company and its subsidiaries, considered as one enterprise; each
such subsidiary is duly qualified to transact business in all
jurisdictions in which the conduct of its business requires such
qualification, or in which the failure to qualify would have a
materially adverse effect upon the business of such subsidiary; all of
the issued and outstanding shares or other beneficial interests owned
by the Company in any such subsidiary have been duly authorized and
validly issued, are fully paid and non-assessable and are owned by the
Company free and clear of any security interest, mortgage, pledge,
lien, encumbrance, or other claim;
(f) Neither the Company nor any of its subsidiaries has
sustained since the date of the latest audited financial statements
included or incorporated by reference in the Prospectus any material
loss or interference with its business from fire, explosion, flood or
other calamity, whether or not covered by insurance, or from any labor
dispute or court or governmental action, order or decree, otherwise
than as set forth or contemplated in the Prospectus; and, since the
respective dates as of which information is given in the Registration
Statement and the Prospectus, there has not been any material change in
the capital stock, total assets or long-term debt of the Company or any
of its subsidiaries or any material adverse change, or any development
involving a prospective material adverse change, in or affecting the
general affairs, management, financial position, shareholders' equity
or results of operations of the Company and its subsidiaries, otherwise
than as set forth or contemplated in the Prospectus;
5
<PAGE>
(g) The Company has an authorized capitalization as set forth
in the Prospectus, and all of the issued shares of the Company have
been duly and validly authorized and issued and are fully paid and
non-assessable;
(h) The Securities have been duly and validly authorized, and,
when Designated Securities are issued and delivered pursuant to this
Agreement and the Pricing Agreement with respect to such Designated
Securities, such Designated Securities will have been duly executed,
authenticated, issued and delivered and will constitute valid and
legally binding obligations of the Company entitled to the benefits
provided by the Indenture, which will be substantially in the form
filed as an exhibit to the Registration Statement; the Indenture has
been duly authorized and duly qualified under the Trust Indenture Act
and, at the Time of Delivery for such Designated Securities (as defined
in Section 4 hereof), the Indenture will constitute a valid and legally
binding instrument, enforceable in accordance with its terms, subject,
as to enforcement, to bankruptcy, insolvency, reorganization and other
laws of general applicability relating to or affecting creditors'
rights and to general equity principles; and the Indenture conforms,
and the Designated Securities will conform, to the descriptions thereof
contained in the Prospectus as amended or supplemented with respect to
such Designated Securities;
(i) The issue and sale of the Securities and the compliance by
the Company with all of the provisions of the Securities, the
Indenture, this Agreement and any Pricing Agreement, and the
consummation of the transactions herein and therein contemplated will
not conflict with or result in a breach or violation of any of the
terms or provisions of, or constitute a default under, any indenture,
mortgage, deed of trust, loan agreement or other agreement or
instrument to which the Company is a party or by which the Company is
bound or to which any of the property or assets of the Company is
subject, nor will such action result in any violation of the provisions
of the Articles of Incorporation or By-laws of the Company or any
statute or any order, rule or regulation of any court or governmental
agency or body having jurisdiction over the Company or any of its
properties; and no consent, approval, authorization, order,
registration or qualification of or with any such court or governmental
agency or body is required for the issue and sale of the Securities or
the consummation by the Company of the transactions contemplated by
this Agreement or any Pricing Agreement or the Indenture, except such
as have
6
<PAGE>
been, or will have been prior to the Time of Delivery, obtained under
the Act and the Trust Indenture Act and such consents, approvals,
authorizations, registrations or qualifications as may be required
under state securities or Blue Sky laws in connection with the purchase
and distribution of the Securities by the Underwriters;
(j) The statements set forth in the Prospectus under the
caption "Description of Debt Securities," insofar as they purport to
constitute a summary of the terms of the Securities, and under the
captions "Description of Capital Shares" and "Plan of Distribution,"
insofar as they purport to describe the provisions of the laws and
documents referred to therein, are accurate, complete and fair;
(k) Neither the Company nor any of its subsidiaries is in
violation of its Articles of Incorporation or By-laws or in default in
the performance or observance of any material obligation, agreement,
covenant or condition contained in any indenture, mortgage, deed of
trust, loan agreement, lease or other agreement or instrument to which
it is a party or by which it or any of its properties may be bound;
(l) Other than as set forth in the Prospectus, there are no
legal or governmental proceedings pending to which the Company or any
of its subsidiaries is a party or of which any property of the Company
or any of its subsidiaries is the subject which, if determined
adversely to the Company or any of its subsidiaries, would individually
or in the aggregate have a material adverse effect on the current or
future consolidated financial position, shareholders' equity or results
of operations of the Company and its subsidiaries; and, to the best of
the Company's knowledge, no such proceedings are threatened or
contemplated by governmental authorities or threatened by others;
(m) The financial statements together with related notes and
schedules of the Company and its subsidiaries as set forth or
incorporated by reference in the Registration Statement present fairly
the financial position and the results of operations of the Company and
its subsidiaries at the indicated dates and for the indicated periods.
Such financial statements have been prepared in accordance with
generally accepted principles of accounting, consistently applied
throughout the periods involved, and all adjustments necessary for a
fair presentation of results for such periods have been made. The
summary financial and statistical data included in the Prospectus
present fairly
7
<PAGE>
the information shown therein and have been compiled on a basis
consistent with the financial statements presented therein;
(n) The Company and its subsidiaries have good and marketable
title to, or valid and enforceable leasehold estates in, all items of
real and personal property referred to in the Prospectus as owned or
leased by them, in each case free and clear of all liens, encumbrances,
claims, security interests and defects, other than those referred to in
the Prospectus or which are not material in amount;
(o) The Company has filed all Federal, state, local and
foreign income tax returns which have been required to be filed and has
paid all taxes indicated by said returns and all assessments received
by it to the extent that such taxes have become due and are not being
contested in good faith;
(p) The Company and each of its subsidiaries hold all material
licenses, certificates and permits from governmental authorities which
are necessary to the conduct of their respective businesses; and
neither the Company nor any of its subsidiaries has infringed any
patents, patent rights, trade names, trademarks or copyrights, which
infringement is material to the business of the Company or any of its
subsidiaries;
(q) With respect to all tax periods regarding which the
Internal Revenue Service is or will be entitled to assert any claim,
the Company has met the requirements for qualification as a real estate
investment trust under Sections 856 through 860 of the Internal Revenue
Code of 1986, as amended (the "Code"), and the Company's present and
contemplated operations, assets and income continue to meet such
requirements;
(r) The conditions for use of registration statements on Form
S-3 set forth in the General Instructions on Form S- 3 have been
satisfied and the Company is entitled to use such form for the
transaction contemplated herein;
(s) The Company has no knowledge of (a) the unlawful presence
of any hazardous substances, hazardous materials, toxic substances or
waste materials (collectively, "Hazardous Materials") on any of the
properties owned by it or any of its subsidiaries, or of (b) any
unlawful spills, releases, discharges or disposal of Hazardous
Materials that have occurred or are presently occurring off such
properties as a result of any construction on or operation and use of
8
<PAGE>
such properties which presence or occurrence would materially adversely
affect the condition, financial or otherwise, or the earnings, business
affairs or business prospects of the Company or any of its
subsidiaries. In connection with the construction on or operation and
use of the properties owned by the Company or any of its subsidiaries,
the Company represents that it has no knowledge of any material failure
to comply with all applicable local, state and federal environmental
laws, regulations, ordinances and administrative and judicial orders
relating to the generation, recycling, reuse, sale, storage, handling,
transport and disposal of any Hazardous Materials;
(t) The Company is not and, after giving effect to the
offering and sale of the Securities, will not be an "investment
company" or an entity "controlled" by an "investment company", as such
terms are defined in the Investment Company Act of 1940, as amended
(the "Investment Company Act");
(u) Ernst & Young LLP, who have certified certain financial
statements of the Company and its subsidiaries, [and list of other
accountants whose reports appear or are incorporated by reference in
the Registration Statement or the Prospectus, who have certified
certain financial statements of [names of all other applicable
properties and entities]] are [each] independent public accountants as
required by the Act and the rules and regulations of the Commission
thereunder.
3. Upon the execution of the Pricing Agreement applicable to any
Designated Securities and authorization by the Representatives of the release of
such Designated Securities, the several Underwriters propose to offer such
Designated Securities for sale upon the terms and conditions set forth in the
Prospectus as amended or supplemented.
4. Designated Securities to be purchased by each Underwriter pursuant
to the Pricing Agreement relating thereto, in the form specified in such Pricing
Agreement, and in such authorized denominations and registered in such names as
the Representatives may request upon at least twenty-four hours' prior notice to
the Company, shall be delivered by or on behalf of the Company to the
Representatives for the account of such Underwriter, against payment by such
Underwriter or on its behalf of the purchase price therefor by certified or
official bank check or checks, payable to the order of the Company in the funds
specified in such Pricing Agreement, all in the manner and at the place and
9
<PAGE>
time and date specified in such Pricing Agreement or at such other place and
time and date as the Representatives and the Company may agree upon in writing,
such time and date being herein called the "Time of Delivery" for such
Securities.
5. The Company agrees with each of the Underwriters of any Designated
Securities:
(a) If the Company does not elect to rely on Rule 434 under
the Act, immediately following execution and delivery of the applicable
Pricing Agreement, to prepare the Prospectus as amended or supplemented
in relation to the applicable Designated Securities in a form approved
by the Representatives and to file such Prospectus pursuant to Rule
424(b) under the Act not later than the Commission's close of business
on the business day following the execution and delivery of the Pricing
Agreement relating to the applicable Designated Securities or, if
applicable, such earlier time as may be required by Rule 424(b), or if
the Company elects to rely on Rule 434 under the Act, immediately
following execution and delivery of the applicable Pricing Agreement,
to prepare an abbreviated term sheet relating to the Designated
Securities in a form approved by the Representatives that complies with
the requirements of Rule 434 under the Act and to file such form of
Rule 434 Prospectus complying with Rule 434(c)(2) of the Act pursuant
to Rule 424(b) under the Act not later than the Commission's close of
business on the business day following the execution and delivery of
the Pricing Agreement relating to the applicable Designated Securities
or if applicable, such earlier time as may be required by Rule 424(b);
to make no further amendment or any supplement to the Registration
Statement or Prospectus as amended or supplemented after the date of
the Pricing Agreement relating to such Securities and prior to the Time
of Delivery for such Securities which shall be disapproved by the
Representatives for such Securities promptly after reasonable notice
thereof; to advise the Representatives promptly of any such amendment
or supplement after such Time of Delivery and furnish the
Representatives with copies thereof; to file promptly all reports and
any definitive proxy or information statements required to be filed by
the Company with the Commission pursuant to Section 13(a), 13(c), 14 or
15(d) of the Exchange Act for so long as the delivery of a prospectus
is required in connection with the offering or sale of such Securities,
and during such same period to advise the Representatives, promptly
after it receives notice thereof, of the time when any amendment to the
Registration Statement has been filed or becomes effective or any
supplement to the
10
<PAGE>
Prospectus or any amended Prospectus has been filed with the
Commission, of the issuance by the Commission of any stop order or of
any order preventing or suspending the use of any prospectus relating
to the Securities, of the suspension of the qualification of such
Securities for offering or sale in any jurisdiction, of the initiation
or threatening of any proceeding for any such purpose, or of any
request by the Commission for the amending or supplementing of the
Registration Statement or Prospectus or for additional information;
and, in the event of the issuance of any such stop order or of any such
order preventing or suspending the use of any prospectus relating to
the Securities or suspending any such qualification, to promptly use
its best efforts to obtain the withdrawal of such order;
(b) If applicable, promptly from time to time to take such
action as the Representatives may reasonably request to qualify such
Securities for offering and sale under the securities laws of such
jurisdictions as the Representatives may request and to comply with
such laws so as to permit the continuance of sales and dealings therein
in such jurisdictions for as long as may be necessary to complete the
distribution of such Securities, provided that in connection therewith
the Company shall not be required to qualify as a foreign corporation
or to file a general consent to service of process in any jurisdiction;
(c) Prior to 10:00 a.m. New York City time on the New York business day
next succeeding the date of the applicable Pricing Agreement and from
time to time, to furnish the Underwriters with copies of the Prospectus
in New York City as amended or supplemented in such quantities as the
Representatives may reasonably request, and, if the delivery of a
prospectus is required at any time in connection with the offering or
sale of the Securities and if at such time any event shall have
occurred as a result of which the Prospectus as then amended or
supplemented would include an untrue statement of a material fact or
omit to state any material fact necessary in order to make the
statements therein, in the light of the circumstances under which they
were made when such Prospectus is delivered, not misleading, or, if for
any other reason it shall be necessary during such same period to amend
or supplement the Prospectus or to file under the Exchange Act any
document incorporated by reference in the Prospectus in order to comply
with the Act, the Exchange Act or the Trust Indenture Act, to notify
the Representatives and upon their request to file such document and to
prepare and furnish without charge to each Underwriter and to any
dealer in securities as many copies as the Representatives may from
time to time reasonably request of an amended
11
<PAGE>
Prospectus or a supplement to the Prospectus which will correct such
statement or omission or effect such compliance;
(c) To make generally available to its security holders as
soon as practicable, but in any event not later than eighteen months
after the effective date of the Registration Statement (as defined in
Rule 158(c) under the Act), an earnings statement of the Company and
its subsidiaries (which need not be audited) complying with Section
11(a) of the Act and the rules and regulations of the Commission
thereunder (including, at the option of the Company, Rule 158);
(d) During the period beginning from the date of the Pricing
Agreement for such Designated Securities and continuing to and
including the later of (i) the termination of trading restrictions for
such Designated Securities, as notified to the Company by the
Representatives and (ii) the Time of Delivery for such Designated
Securities, not to offer, sell, contract to sell or otherwise dispose
of any debt securities of the Company which mature more than one year
after such Time of Delivery and which are substantially similar to such
Designated Securities, without the prior written consent of the
Representatives;
(e) To use the net proceeds received by it from the sale of
the Securities in the manner specified in the Prospectus under the
caption "Use of Proceeds"; and
(f) To continue to elect to qualify as a "real estate
investment trust" under the Code, and to use its best efforts to
continue to meet the requirements to qualify as a "real estate
investment trust."
6. The Company covenants and agrees with the several Underwriters that
the Company will pay or cause to be paid the following: (i) the fees,
disbursements and expenses of the Company's counsel and accountants in
connection with the registration of the Securities under the Act and all other
expenses in connection with the preparation, printing and filing of the
Registration Statement, any Preliminary Prospectus and the Prospectus and
amendments and supplements thereto (including each abbreviated term sheet
delivered by the Company pursuant to Rule 434 under the Act) and the mailing and
delivering of copies thereof to the Underwriters and dealers; (ii) the cost of
printing or producing any Agreement among Underwriters, this Agreement, any
Pricing Agreement, any Indenture, any Blue Sky and Legal Investment Surveys,
closing documents (including any
12
<PAGE>
compilation thereof) and any other documents in connection with the offering,
purchase, sale and delivery of the Securities; (iii) if applicable, all expenses
in connection with the qualification of the Securities for offering and sale
under state securities laws as provided in Section 5(b) hereof, but not
including the fees and disbursements of counsel for the Underwriters in
connection with such qualification and in connection with the Blue Sky and Legal
Investment Surveys; (iv) any fees charged by securities rating services for
rating the Securities; (v) any filing fees incident to, but not the fees and
disbursements of counsel for the Underwriters in connection with, any required
review by the National Association of Securities Dealers, Inc. of the terms of
the sale of the Securities; (vi) the cost of preparing the Securities; (vii) the
fees and expenses of any Trustee any agent of any Trustee, but excluding the
fees and disbursements of counsel for any Trustee in connection with any
Indenture and the Securities; and (viii) all other costs and expenses incident
to the performance of its obligations hereunder which are not otherwise
specifically provided for in this Section. It is understood, however, that,
except as provided in this Section, and Sections 8 and 11 hereof, the
Underwriters will pay all of their own costs and expenses, including the fees of
their counsel, transfer taxes on resale of any of the Securities by them, and
any advertising expenses connected with any offers they may make.
7. The obligations of the Underwriters of any Designated Securities
under the Pricing Agreement relating to such Designated Securities shall be
subject, in the discretion of the Representatives, to the condition that all
representations and warranties and other statements of the Company in or
incorporated by reference in the Pricing Agreement relating to such Designated
Securities are, at and as of the Time of Delivery for such Designated
Securities, true and correct, the condition that the Company shall have
performed all of its obligations hereunder theretofore to be performed, and the
following additional conditions:
(a) The Prospectus as amended or supplemented in relation to
the applicable Designated Securities shall have been filed with the
Commission pursuant to Rule 424(b) within the applicable time period
prescribed for such filing by the rules and regulations under the Act
and in accordance with Section 5(a) hereof; no stop order suspending
the effectiveness of the Registration Statement or any part thereof
shall have been issued and no proceeding for that purpose shall have
been initiated or threatened by the Commission; and all requests for
additional information on
13
<PAGE>
the part of the Commission shall have been complied with to the
Representatives' reasonable satisfaction;
(b) _______________________, counsel for the Underwriters,
shall have furnished to the Representatives such opinion or opinions,
dated the Time of Delivery for such Designated Securities, with respect
to the matters covered in paragraphs (i), (vi), (vii), (viii), (x),
(xi) and (xiv) of subsection (c) below as well as such other related
matters as the Representatives may reasonably request, and such counsel
shall have received such papers and information as they may reasonably
request to enable them to pass upon such matters;
(c) McGuire, Woods, Battle & Boothe, L.L.P., counsel for the
Company, shall have furnished to the Representatives their written
opinion, dated the Time of Delivery for such Designated Securities, in
form and substance satisfactory to the Representatives, to the effect
that:
(i) The Company has been duly organized and is
validly existing as a corporation in good standing under the
laws of the Commonwealth of Virginia, with corporate power and
authority to own its properties and conduct its business as
described in the Prospectus as amended or supplemented;
(ii) The Company has an authorized capitalization as
set forth in the Prospectus as amended or supplemented and all
of the issued shares of the Company have been duly and validly
authorized and issued and are fully paid and non-assessable;
(iii) The Company is duly qualified to transact
business in all jurisdictions in which the conduct of its
business requires such qualification, or in which the failure
to qualify would have a materially adverse effect upon the
business of the Company;
(iv) Each subsidiary of the Company has been duly
organized and is validly existing as a corporation, limited
liability company, limited partnership or real estate
investment trust in good standing under the laws of the
jurisdiction of its incorporation or organization, with power
and authority to own its properties and conduct its business
as described in the Prospectus as amended or supplemented
except where the failure to so be in good standing would not
have a material adverse effect on the condition, financial or
14
<PAGE>
otherwise, or the earnings, business affairs or business
prospects of the Company and its subsidiaries, considered as
one enterprise; each such subsidiary is duly qualified to
transact business in all jurisdictions in which the conduct of
its business requires such qualification, or in which the
failure to qualify would have a materially adverse effect upon
the business of such subsidiary; all of the issued and
outstanding shares or other beneficial interests owned by the
Company in any such subsidiary have been duly authorized and
validly issued, are fully paid and non-assessable and are
owned by the Company free and clear of any security interest,
mortgage, pledge, lien, encumbrance, or other claim;
(v) To the best of such counsel's knowledge and other
than as set forth in the Prospectus, there are no legal or
governmental proceedings pending to which the Company or any
of its subsidiaries is a party or of which any property of the
Company or any of its subsidiaries is the subject which, if
determined adversely to the Company or any of its
subsidiaries, would individually or in the aggregate have a
material adverse effect on the current or future consolidated
financial position, shareholders' equity or results of
operations of the Company and its subsidiaries; and, to the
best of such counsel's knowledge, no such proceedings are
threatened or contemplated by governmental authorities or
threatened by others;
(vi) This Agreement and the Pricing Agreement with
respect to the Designated Securities have been duly
authorized, executed and delivered by the Company;
(vii) The Designated Securities have been duly
authorized, executed, authenticated, issued and delivered and
constitute valid and legally binding obligations of the
Company entitled to the benefits provided by the Indenture;
and the Designated Securities and the Indenture conform to the
descriptions thereof in the Prospectus as amended or
supplemented;
(viii) The Indenture has been duly authorized,
executed and delivered by the parties thereto and constitutes
a valid and legally binding instrument, enforceable in
accordance with its terms, subject, as to enforcement, to
bankruptcy, insolvency, reorganization and other laws of
general applicability
15
<PAGE>
relating to or affecting creditors' rights and to general
equity principles; and the Indenture has been duly qualified
under the Trust Indenture Act;
(ix) The issue and sale of the Designated Securities
being delivered at such Time of Delivery and the compliance by
the Company with all of the provisions of the Designated
Securities, the Indenture, this Agreement and the Pricing
Agreement with respect to the Designated securities and the
consummation of the transactions herein and therein
contemplated will not conflict with or result in a breach or
violation of any of the terms or provisions of, or constitute
a default under, any indenture, mortgage, deed of trust, loan
agreement or other agreement or instrument known to such
counsel to which the Company is a party or by which the
Company is bound or to which any of the property or assets of
the Company is subject, nor will such actions result in any
violation of the provisions of the Articles of Incorporation
or By-laws of the Company or any statute or any order, rule or
regulation known to such counsel of any court or governmental
agency or body having jurisdiction over the Company or any of
its properties;
(x) No consent, approval, authorization, order,
registration or qualification of or with any court or
governmental agency or body is required for the issue and sale
of the Designated Securities being delivered at such Time of
Delivery or the consummation by the Company of the
transactions contemplated by this Agreement or such Pricing
Agreement or the Indenture, except such as have been obtained
under the Act and the Trust Indenture Act and such consents,
approvals, authorizations, orders, registrations or
qualifications as may be required under state securities or
Blue Sky laws in connection with the purchase and distribution
of the Designated Securities by the Underwriters;
(xi) The statements set forth in the Prospectus under
the captions "Description of Debt Securities", insofar as they
constitute a summary of documents referred to therein or
matters of law are accurate summaries and fairly and correctly
present the information called for with respect to such
documents and matters;
(xii) The Company is not required to be registered
under the Investment Company Act;
16
<PAGE>
(xiii) The documents incorporated by reference in the
Prospectus as amended or supplemented (other than the
financial statements, schedules and other financial or
statistical data included or incorporated therein or excluded
therefrom, as to which such counsel need express no opinion),
when they became effective or were filed with the Commission,
as the case may be, complied as to form in all material
respects with the requirements of the Act or the Exchange Act,
as applicable, and the rules and regulations of the Commission
thereunder; and they have no reason to believe that any of
such documents, when they became effective or were so filed,
as the case may be, contained, in the case of a registration
statement which became effective under the Act, an untrue
statement of a material fact or omitted to state a material
fact required to be stated therein or necessary to make the
statements therein not misleading, or, in the case of other
documents which were filed under the Act or the Exchange Act
with the Commission, an untrue statement of a material fact or
omitted to state a material fact necessary in order to make
the statements therein, in the light of the circumstances
under which they were made when such documents were so filed,
not misleading; and
(xiv) The Registration Statement and the Prospectus
as amended or supplemented and any further amendments and
supplements thereto made by the Company prior to the Time of
Delivery for the Designated Securities (other than the
financial statements, schedules and other financial or
statistical data included or incorporated therein or excluded
therefrom as to which such counsel need express no opinion)
comply as to form in all material respects with the
requirements of the Act and the Trust Indenture Act and the
rules and regulations thereunder; if applicable, the Rule 434
Prospectus complies as to form in all material respects with
the requirements of Rule 434 under the Act; although they do
not assume any responsibility for the accuracy, completeness
or fairness of the statements contained in the Registration
Statement or the Prospectus, except for those referred to in
the opinion in subsection (xi) of this Section 7(c), they have
no reason to believe that, as of its effective date, the
Registration Statement or any further amendment thereto made
by the Company prior to the Time of Delivery (other than any
financial or statistical data included or incorporated therein
or
17
<PAGE>
excluded therefrom, as to which such counsel need express no
opinion) contained an untrue statement of a material fact or
omitted to state a material fact required to be stated therein
or necessary to make the statements therein not misleading or
that, as of its date, the Prospectus as amended or
supplemented or any further amendment or supplement thereto
made by the Company prior to the Time of Delivery (other than
the financial statements, schedules and other financial or
statistical data included or incorporated therein or excluded
therefrom, as to which such counsel need express no opinion)
contained an untrue statement of a material fact or omitted to
state a material fact necessary to make the statements
therein, in the light of the circumstances under which they
were made, not misleading or that, as of the Time of Delivery,
either the Registration Statement or the Prospectus as amended
or supplemented or any further amendment or supplement thereto
made by the Company prior to the Time of Delivery (other than
the financial statements, schedules and other financial or
statistical data included or incorporated therein or excluded
therefrom, as to which such counsel need express no opinion)
contains an untrue statement of a material fact or omits to
state a material fact necessary to make the statements
therein, in the light of the circumstances under which they
were made, not misleading; and they do not know of any
amendment to the Registration Statement required to be filed
or any contracts or other documents of a character required to
be filed as an exhibit to the Registration Statement or
required to be incorporated by reference into the Prospectus
as amended or supplemented or required to be described in the
Registration Statement or the Prospectus as amended or
supplemented which are not filed or incorporated by reference
or described as required;
(d) McGuire, Woods, Battle & Boothe, L.L.P., counsel for the
Company, shall have furnished to the Representatives their written
opinion, dated the Time of Delivery for such Designated Securities, in
form and substance satisfactory to the Representatives, to the effect
that the Company has qualified to be taxed as a real estate investment
trust pursuant to Sections 856 through 860 of the Code for its most
recently ended fiscal year and for the four fiscal years immediately
preceding such year, and the Company's organization and contemplated
method of operation are such as to enable it to continue to so qualify
for its current fiscal year;
18
<PAGE>
(e) On the date of the Pricing Agreement for such Designated
Securities at a time prior to the execution of the Pricing Agreement
with respect to such Designated Securities and at the Time of Delivery
for such Designated Securities, the independent accountants of the
Company who have certified the financial statements of the Company and
its subsidiaries included or incorporated by reference in the
Registration Statement shall have furnished to the Representatives a
letter, dated the effective date of the Registration Statement or the
date of the most recent report filed with the Commission containing
financial statements and incorporated by reference in the Registration
Statement, if the date of such report is later than such effective
date, and a letter dated such Time of Delivery, respectively, to the
effect set forth in Annex II hereto, and with respect to such letter
dated such Time of Delivery, as to such other matters as the
Representatives may reasonably request and in form and substance
satisfactory to the Representatives;
(f) (i) Neither the Company nor any of its subsidiaries shall
have sustained since the date of the latest audited financial
statements included or incorporated by reference in the Prospectus as
amended prior to the date of the Pricing Agreement relating to the
Designated Securities any loss or interference with its business from
fire, explosion, flood or other calamity, whether or not covered by
insurance, or from any labor dispute or court or governmental action,
order or decree, otherwise than as set forth or contemplated in the
Prospectus as amended prior to the date of the Pricing Agreement
relating to the Designated Securities, and (ii) since the respective
dates as of which information is given in the Prospectus as amended
prior to the date of the Pricing Agreement relating to the Designated
Securities there shall not have been any change in the capital stock,
total assets or long-term debt of the Company or any of its
subsidiaries or any change, or any development involving a prospective
change, in or affecting the general affairs, management, financial
position, shareholders' equity or results of operations of the Company
and its subsidiaries, otherwise than as set forth or contemplated in
the Prospectus as amended prior to the date of the Pricing Agreement
relating to the Designated Securities, the effect of which, in any such
case described in Clause (i) or (ii), is in the judgment of the
Representatives so material and adverse as to make it impracticable or
inadvisable to proceed with the public offering or the delivery of the
Designated Securities on the terms and in the manner
19
<PAGE>
contemplated in the Prospectus as first amended or supplemented
relating to the Designated Securities;
(g) On or after the date of the Pricing Agreement relating to
the Designated Securities (i) no downgrading shall have occurred in the
rating accorded the Company's debt securities or preferred shares by
any "nationally recognized statistical rating organization", as that
term is defined by the Commission for purposes of Rule 436(g)(2) under
the Act, and (ii) no such organization shall have publicly announced
that it has under surveillance or review, with possible negative
implications, its rating of any of the Company's debt securities or
preferred shares;
(h) On or after the date of the Pricing Agreement relating to
the Designated Securities there shall not have occurred any of the
following: (i) a suspension or material limitation in trading in
securities generally on the New York Stock Exchange; (ii) a suspension
or material limitation in trading in the Company's securities on the
New York Stock Exchange; (iii) a general moratorium on commercial
banking activities in New York declared by either Federal or New York
State authorities; or (iv) the outbreak or escalation of hostilities
involving the United States or the declaration by the United States of
a national emergency or war, if the effect of any such event specified
in this Clause (iv) in the reasonable judgment of the Representatives
makes it impracticable or inadvisable to proceed with the public
offering or the delivery of the Designated Securities on the terms and
in the manner contemplated in the Prospectus as amended or
supplemented;
(i) The Company shall have complied with the provisions of
Section 5(c) hereof with respect to the furnishing of prospectuses on
the New York business day next succeeding the date of the applicable
Pricing Agreement; and
(j) The Company shall have furnished or caused to be furnished
to the Representatives at the Time of Delivery for the Designated
Securities a certificate or certificates of officers of the Company
satisfactory to the Representatives as to the accuracy of the
representations and warranties of the Company herein at and as of such
Time of Delivery, as to the performance by the Company of all of its
obligations hereunder to be performed at or prior to such Time of
Delivery, as to the matters set forth in subsections (a) and (f) of
this Section and as to such other matters as the Representatives may
reasonably request.
20
<PAGE>
8. (a) The Company will indemnify and hold harmless each Underwriter
against any losses, claims, damages or liabilities, joint or several, to which
such Underwriter may become subject, under the Act or otherwise, insofar as such
losses, claims, damages or liabilities (or actions in respect thereof) arise out
of or are based upon an untrue statement or alleged untrue statement of a
material fact contained in any Preliminary Prospectus, any preliminary
prospectus supplement, the Registration Statement, the Prospectus as amended or
supplemented and any other prospectus relating to the Securities, or any
amendment or supplement thereto (including the information deemed to be a part
of the Registration Statement pursuant to Rule 434 under the Act, if
applicable), or arise out of or are based upon the omission or alleged omission
to state therein a material fact required to be stated therein or necessary to
make the statements therein not misleading, and will reimburse each Underwriter
for any legal or other expenses reasonably incurred by such Underwriter in
connection with investigating or defending any such action or claim as such
expenses are incurred; provided, however, that the Company shall not be liable
in any such case to the extent that any such loss, claim, damage or liability
arises out of or is based upon an untrue statement or alleged untrue statement
or omission or alleged omission made in any Preliminary Prospectus, any
preliminary prospectus supplement, the Registration Statement, the Prospectus as
amended or supplemented and any other prospectus relating to the Securities, or
any such amendment or supplement in reliance upon and in conformity with written
information furnished to the Company by any Underwriter of Designated Securities
through the Representatives expressly for use in the Prospectus as amended or
supplemented relating to such Securities.
(b) Each Underwriter will indemnify and hold harmless the Company
against any losses, claims, damages or liabilities to which the Company may
become subject, under the Act or otherwise, insofar as such losses, claims,
damages or liabilities (or actions in respect thereof) arise out of or are based
upon any breach of this Agreement or any Pricing Agreement or an untrue
statement or alleged untrue statement of a material fact contained in any
Preliminary Prospectus, any preliminary prospectus supplement, the Registration
Statement, the Prospectus as amended or supplemented and any other prospectus
relating to the Securities, or any amendment or supplement thereto (including
the information deemed to be a part of the Registration Statement pursuant to
Rule 434 under the Act, if applicable), or arise out of or are based upon the
omission or alleged omission to state therein a material fact required to be
stated therein or necessary to make the statements therein not misleading, in
each case to the extent, but only to the extent, that such untrue statement or
alleged untrue statement or omission or alleged
21
<PAGE>
omission was made in any Preliminary Prospectus, any preliminary prospectus
supplement, the Registration Statement, the Prospectus as amended or
supplemented and any other prospectus relating to the Securities, or any such
amendment or supplement in reliance upon and in conformity with written
information furnished to the Company by such Underwriter through the
Representatives expressly for use therein; and will reimburse the Company for
any legal or other expenses reasonably incurred by the Company in connection
with investigating or defending any such action or claim as such expenses are
incurred.
(c) Promptly after receipt by an indemnified party under subsection (a)
or (b) above of notice of the commencement of any action, such indemnified party
shall, if a claim in respect thereof is to be made against the indemnifying
party under such subsection, notify the indemnifying party in writing of the
commencement thereof; but the omission so to notify the indemnifying party shall
not relieve it from any liability which it may have to any indemnified party
otherwise than under such subsection. In case any such action shall be brought
against any indemnified party and it shall notify the indemnifying party of the
commencement thereof, the indemnifying party shall be entitled to participate
therein and, to the extent that it shall wish, jointly with any other
indemnifying party similarly notified, to assume the defense thereof, with
counsel satisfactory to such indemnified party (who shall not, except with the
consent of the indemnified party, be counsel to the indemnifying party), and,
after notice from the indemnifying party to such indemnified party of its
election so to assume the defense thereof, the indemnifying party shall not be
liable to such indemnified party under such subsection for any legal expenses of
other counsel or any other expenses, in each case subsequently incurred by such
indemnified party, in connection with the defense thereof other than reasonable
costs of investigation. No indemnifying party shall, without the written consent
of the indemnified party, effect the settlement or compromise of, or consent to
the entry of any judgment with respect to, any pending or threatened action or
claim in respect of which indemnification or contribution may be sought
hereunder (whether or not the indemnified party is an actual or potential party
to such action or claim) unless such settlement, compromise or judgment (i)
includes an unconditional release of the indemnified party from all liability
arising out of such action or claim and (ii) does not include a statement as to
or an admission of fault, culpability or a failure to act by or on behalf of any
indemnified party.
(d) If the indemnification provided for in this Section 8 is
unavailable to or insufficient to hold harmless an indemnified
22
<PAGE>
party under subsection (a) or (b) above in respect of any losses, claims,
damages or liabilities (or actions in respect thereof) referred to therein, then
each indemnifying party shall contribute to the amount paid or payable by such
indemnified party as a result of such losses, claims, damages or liabilities (or
actions in respect thereof) in such proportion as is appropriate to reflect the
relative benefits received by the Company on the one hand and the Underwriters
of the Designated Securities on the other from the offering of the Designated
Securities to which such loss, claim, damage or liability (or action in respect
thereof) relates. If, however, the allocation provided by the immediately
preceding sentence is not permitted by applicable law or if the indemnified
party failed to give the notice required under subsection (c) above, then each
indemnifying party shall contribute to such amount paid or payable by such
indemnified party in such proportion as is appropriate to reflect not only such
relative benefits but also the relative fault of the Company on the one hand and
the Underwriters of the Designated Securities on the other in connection with
the statements or omissions which resulted in such losses, claims, damages or
liabilities (or actions in respect thereof), as well as any other relevant
equitable considerations. The relative benefits received by the Company on the
one hand and such Underwriters on the other shall be deemed to be in the same
proportion as the total net proceeds from such offering (before deducting
expenses) received by the Company bear to the total underwriting discounts and
commissions received by such Underwriters. The relative fault shall be
determined by reference to, among other things, whether the untrue or alleged
untrue statement of a material fact or the omission or alleged omission to state
a material fact relates to information supplied by the Company on the one hand
or such Underwriters on the other and the parties' relative intent, knowledge,
access to information and opportunity to correct or prevent such statement or
omission. The Company and the Underwriters agree that it would not be just and
equitable if contribution pursuant to this subsection (d) were determined by pro
rata allocation (even if the Underwriters were treated as one entity for such
purpose) or by any other method of allocation which does not take account of the
equitable considerations referred to above in this subsection (d). The amount
paid or payable by an indemnified party as a result of the losses, claims,
damages or liabilities (or actions in respect thereof) referred to above in this
subsection (d) shall be deemed to include any legal or other expenses reasonably
incurred by such indemnified party in connection with investigating or defending
any such action or claim. Notwithstanding the provisions of this subsection (d),
no Underwriter shall be required to contribute any amount in excess of the
amount by which the total price at which the applicable
23
<PAGE>
Designated Securities underwritten by it and distributed to the public were
offered to the public exceeds the amount of any damages which such Underwriter
has otherwise been required to pay by reason of such untrue or alleged untrue
statement or omission or alleged omission. No person guilty of fraudulent
misrepresentation (within the meaning of Section 11(f) of the Act) shall be
entitled to contribution from any person who was not guilty of such fraudulent
misrepresentation. The obligations of the Underwriters of Designated Securities
in this subsection (d) to contribute are several in proportion to their
respective underwriting obligations with respect to such Securities and not
joint.
(e) The obligations of the Company under this Section 8 shall be in
addition to any liability which the Company may otherwise have and shall extend,
upon the same terms and conditions, to each person, if any, who controls any
Underwriter within the meaning of the Act; and the obligations of the
Underwriters under this Section 8 shall be in addition to any liability which
the respective Underwriters may otherwise have and shall extend, upon the same
terms and conditions, to each officer and director of the Company and to each
person, if any, who controls the Company within the meaning of the Act.
9. (a) If any Underwriter shall default in its obligation to purchase
the Designated Securities which it has agreed to purchase under the Pricing
Agreement relating to such Designated Securities, the Representatives may in
their discretion arrange for themselves or another party or other parties to
purchase such Designated Securities on the terms contained herein. If within
thirty-six hours after such default by any Underwriter the Representatives do
not arrange for the purchase of such Designated Securities, then the Company
shall be entitled to a further period of thirty-six hours within which to
procure another party or other parties satisfactory to the Representatives to
purchase such Designated Securities on such terms. In the event that, within the
respective prescribed period, the Representatives notify the Company that they
have so arranged for the purchase of such Designated Securities, or the Company
notifies the Representatives that it has so arranged for the purchase of such
Designated Securities, the Representatives or the Company shall have the right
to postpone the Time of Delivery for such Designated Securities for a period of
not more than seven days, in order to effect whatever changes may thereby be
made necessary in the Registration Statement or the Prospectus as amended or
supplemented, or in any other documents or arrangements, and the Company agrees
to file promptly any amendments or supplements to the Registration Statement or
the Prospectus which in the opinion of the Representatives may
24
<PAGE>
thereby be made necessary. The term "Underwriter" as used in this Agreement
shall include any person substituted under this Section with like effect as if
such person had originally been a party to the Pricing Agreement with respect to
such Designated Securities.
(b) If, after giving effect to any arrangements for the purchase of the
Designated Securities of a defaulting Underwriter or Underwriters by the
Representatives and the Company as provided in subsection (a) above, the
aggregate principal amount of such Designated Securities which remains
unpurchased does not exceed one-eleventh of the aggregate principal amount of
the Designated Securities, then the Company shall have the right to require each
non-defaulting Underwriter to purchase the principal amount of Designated
Securities which such Underwriter agreed to purchase under the Pricing Agreement
relating to such Designated Securities and, in addition, to require each
non-defaulting Underwriter to purchase its pro rata share (based on the
principal amount of Designated Securities which such Underwriter agreed to
purchase under such Pricing Agreement) of the Designated Securities of such
defaulting Underwriter or Underwriters for which such arrangements have not been
made; but nothing herein shall relieve a defaulting Underwriter from liability
for its default.
(c) If, after giving effect to any arrangements for the purchase of the
Designated Securities of a defaulting Underwriter or Underwriters by the
Representatives and the Company as provided in subsection (a) above, the
aggregate principal amount of Designated Securities which remains unpurchased
exceeds one- eleventh of the aggregate principal amount of the Designated
Securities, as referred to in subsection (b) above, or if the Company shall not
exercise the right described in subsection (b) above to require non-defaulting
Underwriters to purchase Designated Securities of a defaulting Underwriter or
Underwriters, then the Pricing Agreement relating to such Designated Securities
shall thereupon terminate, without liability on the part of any non-defaulting
Underwriter or the Company, except for the expenses to be borne by the Company
and the Underwriters as provided in Section 6 hereof and the indemnity and
contribution agreements in Section 8 hereof; but nothing herein shall relieve a
defaulting Underwriter from liability for its default.
10. The respective indemnities, agreements, representations, warranties
and other statements of the Company and the several Underwriters, as set forth
in this Agreement or made by or on behalf of them, respectively, pursuant to
this Agreement, shall remain in full force and effect, regardless of any
investigation (or any statement as to the results thereof) made by or on behalf
of any Underwriter or any controlling person of any Underwriter,
25
<PAGE>
or the Company, or any officer or director or controlling person of the Company,
and shall survive delivery of and payment for the Securities.
11. In all dealings hereunder, the Representatives of the Underwriters
of Designated Securities shall act on behalf of each of such Underwriters, and
the parties hereto shall be entitled to act and rely upon any statement,
request, notice or agreement on behalf of any Underwriter made or given by such
Representatives jointly or by such of the Representatives, if any, as may be
designated for such purpose in the Pricing Agreement.
12. All statements, requests, notices and agreements hereunder shall be
in writing, and if to the Underwriters shall be delivered or sent by mail, telex
or facsimile transmission to the address of the Representatives as set forth in
the Pricing Agreement; and if to the Company shall be delivered or sent by mail,
telex or facsimile transmission to the address of the Company set forth in the
Registration Statement: Attention: Secretary; provided, however, that any notice
to an Underwriter pursuant to Section 8(c) hereof shall be delivered or sent by
mail, telex or facsimile transmission to such Underwriter at its address set
forth in its Underwriters' Questionnaire, or telex constituting such
Questionnaire, which address will be supplied to the Company by the
Representatives upon request. Any such statements, requests, notices or
agreements shall take effect upon receipt thereof.
13. This Agreement and each Pricing Agreement shall be binding upon,
and inure solely to the benefit of, the Underwriters, the Company and, to the
extent provided in Sections 8 and 10 hereof, the officers and directors of the
Company and each person who controls the Company or any Underwriter, and
26
<PAGE>
their respective heirs, executors, administrators, successors and assigns, and
no other person shall acquire or have any right under or by virtue of this
Agreement or any such Pricing Agreement. No purchaser of any of the Securities
from any Underwriter shall be deemed a successor or assign by reason merely of
such purchase.
14. Time shall be of the essence of each Pricing Agreement. As used
herein, "business day" shall mean any day when the Commission's office in
Washington, D.C. is open for business.
15. This Agreement and each Pricing Agreement shall be governed by and
construed in accordance with the laws of the Commonwealth of Virginia.
16. This Agreement and each Pricing Agreement may be executed by any
one or more of the parties hereto and thereto in any number of counterparts,
each of which shall be deemed to be an original, but all such respective
counterparts shall together constitute one and the same instrument.
If the foregoing is in accordance with your understanding, please sign
and return to us [one for the Company and each of the Representatives plus one
for each counsel] counterparts hereof.
Very truly yours,
Cornerstone Realty Income Trust, Inc.
By:..................................
Name:
Title:
Accepted as of the date hereof:
[Name of Representative]
27
<PAGE>
ANNEX I
Pricing Agreement
[Names of Representative(s)]
As Representatives of the several
Underwriters named in Schedule I hereto,
[Name and Address of Representative]
__________, 19__
Dear Sirs:
Cornerstone Realty Income Trust, Inc., a Virginia corporation (the
"Company"), proposes, subject to the terms and conditions stated herein and in
the Underwriting Agreement, dated ___________, 199_ (the "Underwriting
Agreement"), between the Company on the one hand and [names of Representatives
named therein] on the other hand, to issue and sell to the Underwriters named in
Schedule I hereto (the "Underwriters") the Securities specified in Schedule II
hereto (the "Designated Securities"). Each of the provisions of the Underwriting
Agreement is incorporated herein by reference in its entirety, and shall be
deemed to be a part of this Agreement to the same extent as if such provisions
had been set forth in full herein; and each of the representations and
warranties set forth therein shall be deemed to have been made at and as of the
date of this Pricing Agreement, except that each representation and warranty
which refers to the Prospectus in Section 2 of the Underwriting Agreement shall
be deemed to be a representation or warranty as of the date of the Underwriting
Agreement in relation to the Prospectus (as therein defined), and also a
representation and warranty as of the date of this Pricing Agreement in relation
to the Prospectus as amended or supplemented relating to the Designated
Securities which are the subject of this Pricing Agreement. Each reference to
the Representatives herein and in the provisions of the Underwriting Agreement
so incorporated by reference shall be deemed to refer to you. Unless otherwise
defined herein, terms defined in the Underwriting Agreement are used herein as
therein defined. The Representatives designated to act on behalf of the
Representatives and on behalf of each of the
AI-1
<PAGE>
Underwriters of the Designated Securities pursuant to Section 12 of the
Underwriting Agreement and the address of the Representatives referred to in
such Section 12 are set forth at the end of Schedule II hereto.
An amendment to the Registration Statement, or a supplement to the
Prospectus, as the case may be, relating to the Designated Securities, in the
form heretofore delivered to you is now proposed to be filed with the
Commission.
Subject to the terms and conditions set forth herein and in the
Underwriting Agreement incorporated herein by reference, the Company agrees to
issue and sell to each of the Underwriters, and each of the Underwriters agrees,
severally and not jointly, to purchase from the Company, at the time and place
and at the purchase price to the Underwriters set forth in Schedule II hereto,
the principal amount of Designated Securities set forth opposite the name of
such Underwriter in Schedule I hereto.
If the foregoing is in accordance with your understanding, please sign
and return to us [one for the Company and each of the Representatives plus one
for each counsel] counterparts hereof, and upon acceptance hereof by you, on
behalf of each of the Underwriters, this letter and such acceptance hereof,
including the provisions of the Underwriting Agreement incorporated herein by
reference, shall constitute a binding agreement between each of the Underwriters
and the Company. It is understood that your acceptance of this letter on behalf
of each of the Underwriters is or will be pursuant to the authority set forth in
a form of
AI-2
<PAGE>
Agreement among Underwriters, the form of which shall be submitted to the
Company for examination upon request, but without warranty on the part of the
Representatives as to the authority of the signers thereof.
Very truly yours,
Cornerstone Realty Income Trust, Inc.
By:............................
Name:
Title:
Accepted as of the date hereof:
......................................
[(Name(s) of Co-Representative(s)]
On behalf of each of the Underwriters
AI-3
<PAGE>
SCHEDULE I
Principal
Amount of
Designated
Securities
to be
Underwriter Purchased
-----------
$
Total
------------
$
=================
SI-1
<PAGE>
SCHEDULE II
Title of Designated Securities:
[ %] [Floating Rate] [Zero Coupon] [Notes]
[Debentures] due
Aggregate principal amount:
[$]
Price to Public:
% of the principal amount of the Designated Securities, plus
accrued interest from to [and
accrued amortization, if any, from to ]
Purchase Price by Underwriters:
% of the principal amount of the Designated Securities, plus
accrued interest from to [and accrued
amortization, if any, from to ]
Form of Designated Securities:
Specified funds for payment of purchase price:
[New York] Clearing House funds
Indenture:
Indenture dated , 199_, between the
Company and ________________________________, as Trustee
Maturity:
Interest Rate:
[ %] [Zero Coupon] [See Floating Rate Provisions]
Interest Payment Dates:
[months and dates]
SII-1
<PAGE>
Redemption Provisions:
[No provisions for redemption]
[The Designated Securities may be redeemed, otherwise than through the
sinking fund, in whole or in part at the option of the Company, in the
amount of [$ ] or an integral multiple thereof, [on or after , at the
following redemption prices (expressed in percentages of principal
amount). If [redeemed on or before , %, and if] redeemed during the
12-month period beginning ,
Redemption
Year Price
and thereafter at 100% of their principal amount, together in each case
with accrued interest to the redemption date.] [on any interest payment
date falling on or after , , at the election of the Company, at a
redemption price equal to the principal amount thereof, plus accrued
interest to the date of redemption.]
[Other possible redemption provisions, such as mandatory redemption
upon occurrence of certain events or redemption for changes in tax law]
[Restriction on refunding]
Sinking Fund Provisions:
[No sinking fund provisions]
[The Designated Securities are entitled to the benefit of a sinking
fund to retire [$ ] principal amount of Designated Securities on in
each of the years through at 100% of their principal amount plus
accrued interest] [, together with [cumulative] [noncumulative]
redemptions at the option of the Company to retire an additional [$ ]
principal amount of Designated Securities in the years through at 100%
of their principal amount plus accrued interest].
[If Securities are extendable Debt Securities, insert--
Extendable provisions:
Securities are repayable on , [insert date and years],
at the option of the holder, at their principal amount with
SII-2
<PAGE>
accrued interest. Initial annual interest rate will be %, and
thereafter annual interest rate will be adjusted on , and to a rate not
less than % of the effective annual interest rate on U.S. Treasury
obligations with -year maturities as of the [insert date 15 days prior
to maturity date] prior to such [insert maturity date].]
[If Securities are Floating Rate Debt Securities, insert--
Floating rate provisions:
Initial annual interest rate will be % through [and thereafter
will be adjusted [monthly] [on each , , and ] [to an annual rate of
% above the average rate for -year
[month][securities][certificates of deposit] issued by and
[insert names of banks].] [and the annual interest rate [thereafter]
[from through ] will be the interest yield equivalent of the
weekly average per annum market discount rate for -month Treasury bills
plus % of Interest Differential (the excess, if any, of (i)
then current weekly average per annum secondary market yield for
-month certificates of deposit over (ii) then current interest yield
equivalent of the weekly average per annum market discount rate for
-month Treasury bills); [from and thereafter the rate will be the
then current interest yield equivalent plus % of Interest
Differential].]
Defeasance provisions:
Time of Delivery:
Closing Location for Delivery of Securities:
Names and addresses of Representatives:
Designated Representatives:
Address for Notices, etc.:
[Other Terms]*:
* A description of particular tax, accounting or other unusual features
(such as the addition of event risk provisions) of the Securities should be set
forth, or referenced to an attached and accompanying description, if necessary
to ensure agreement as to the terms of the Securities to be purchased and
SII-3
<PAGE>
sold. Such a description might appropriately be in the form in which such
features will be described in the Prospectus Supplement for the offering.
SII-4
<PAGE>
ANNEX II
Pursuant to Section 7(e) of the Underwriting Agreement, the accountants
shall furnish letters to the Underwriters to the effect that:
(i) They are independent certified public accountants with respect to
the Company and its subsidiaries within the meaning of the Act and the
applicable published rules and regulations thereunder;
(ii) In their opinion, the financial statements and any supplementary
financial information and schedules audited (and, if applicable, financial
forecasts and/or pro forma financial information) examined by them and included
or incorporated by reference in the Registration Statement or the Prospectus
comply as to form in all material respects with the applicable accounting
requirements of the Act or the Exchange Act, as applicable, and the related
published rules and regulations thereunder; and, if applicable, they have made a
review in accordance with standards established by the American Institute of
Certified Public Accountants of the consolidated interim financial statements,
selected financial data, pro forma financial information, financial forecasts
and/or condensed financial statements derived from audited financial statements
of the Company for the periods specified in such letter, as indicated in their
reports thereon, copies of which have been separately furnished to the
representative or representatives of the Underwriters (the "Representatives")
such term to include an Underwriter or Underwriters who act without any firm
being designated as its or their representatives;
(iii) They have made a review in accordance with standards established
by the American Institute of Certified Public Accountants of the unaudited
condensed consolidated statements of income, consolidated balance sheets and
consolidated statements of cash flows included in the Prospectus and/or included
in the Company's quarterly report on Form 10-Q incorporated by reference into
the Prospectus as indicated in their reports thereon copies of which have been
separately furnished to the Representatives; and on the basis of specified
procedures including inquiries of officials of the Company who have
responsibility for financial and accounting matters regarding whether the
unaudited condensed consolidated financial statements referred to in paragraph
(vi)(A)(i) below comply as to form in all material respects with the applicable
accounting requirements of the Act and the Exchange Act and the related
published rules and regulations, nothing came to their attention that caused
them to believe that
AII-1
<PAGE>
the unaudited condensed consolidated financial statements do not comply as to
form in all material respects with the applicable accounting requirements of the
Act and the Exchange Act and the related published rules and regulations;
(iv) The unaudited selected financial information with respect to the
consolidated results of operations and financial position of the Company for the
five most recent fiscal years (or, if applicable, such shorter period as the
Company has had operations) included in the Prospectus and included or
incorporated by reference in Item 6 of the Company's Annual Report on Form 10-K
for the most recent fiscal year agrees with the corresponding amounts (after
restatement where applicable) in the audited consolidated financial statements
for such fiscal years which were included or incorporated by reference in the
Company's Annual Reports on Form 10-K for such fiscal years;
(v) They have compared the information in the Prospectus under selected
captions with the disclosure requirements of Regulation S-K and on the basis of
limited procedures specified in such letter nothing came to their attention as a
result of the foregoing procedures that caused them to believe that this
information does not conform in all material respects with the disclosure
requirements of Items 301, 302, 402 and 503(d), respectively, of Regulation S-K;
(vi) On the basis of limited procedures, not constituting an
examination in accordance with generally accepted auditing standards, consisting
of a reading of the unaudited financial statements and other information
referred to below, a reading of the latest available interim financial
statements of the Company and its subsidiaries, inspection of the minute books
of the Company and its subsidiaries since the date of the latest audited
financial statements included or incorporated by reference in the Prospectus,
inquiries of officials of the Company and its subsidiaries responsible for
financial and accounting matters and such other inquiries and procedures as may
be specified in such letter, nothing came to their attention that caused them to
believe that:
(A) (i) the unaudited condensed consolidated statements of
income, consolidated balance sheets and consolidated statements of cash
flows included in the Prospectus and/or included or incorporated by
reference in the Company's Quarterly Reports on Form 10-Q incorporated
by reference in the Prospectus do not comply as to form in all material
respects with the applicable accounting requirements of the Exchange
Act and the related published rules and regulations, or (ii) any
material modifications should be
AII-2
<PAGE>
made to the unaudited condensed consolidated statements of income,
consolidated balance sheets and consolidated statements of cash flows
included in the Prospectus or included in the Company's Quarterly
Reports on Form 10-Q incorporated by reference in the Prospectus for
them to be in conformity with generally accepted accounting principles;
(B) any other unaudited income statement data and balance
sheet items included in the Prospectus do not agree with the
corresponding items in the unaudited consolidated financial statements
from which such data and items were derived, and any such unaudited
data and items were not determined on a basis substantially consistent
with the basis for the corresponding amounts in the audited
consolidated financial statements included or incorporated by reference
in the Company's Annual Report on Form 10-K for the most recent fiscal
year;
(C) the unaudited financial statements which were not included
in the Prospectus but from which were derived the unaudited condensed
financial statements referred to in clause (A) and any unaudited income
statement data and balance sheet items included in the Prospectus and
referred to in Clause (B) were not determined on a basis substantially
consistent with the basis for the audited financial statements included
or incorporated by reference in the Company's Annual Report on Form
10-K for the most recent fiscal year;
(D) any unaudited pro forma consolidated condensed financial
statements included or incorporated by reference in the Prospectus do
not comply as to form in all material respects with the applicable
accounting requirements of the Act and the published rules and
regulations thereunder or the pro forma adjustments have not been
properly applied to the historical amounts in the compilation of those
statements;
(E) as of a specified date not more than three days prior to
the date of such letter, there have been any changes in the
consolidated capital stock (other than issuances of capital stock upon
exercise of options and stock appreciation rights, upon earn-outs of
performance shares and upon conversions of convertible securities, in
each case which were outstanding on the date of the latest balance
sheet included or incorporated by reference in the Prospectus) or any
increase in the consolidated long-term debt of the Company and its
subsidiaries, or any decreases in consolidated net current assets or
stockholders' equity
AII-3
<PAGE>
or other items specified by the Representatives, or any increases in
any items specified by the Representatives, in each case as compared
with amounts shown in the latest balance sheet included or incorporated
by reference in the Prospectus, except in each case for changes,
increases or decreases which the Prospectus discloses have occurred or
may occur or which are described in such letter; and
(F) for the period from the date of the latest financial
statements included or incorporated by reference in the Prospectus to
the specified date referred to in Clause (E) there were any decreases
in consolidated net revenues, rental income or operating profit or the
total or per share amounts of consolidated net income or income before
gains (losses) on investments and extraordinary items or other items
specified by the Representatives, or any increases in any items
specified by the Representatives, in each case as compared with the
comparable period of the preceding year and with any other period of
corresponding length specified by the Representatives, except in each
case for increases or decreases which the Prospectus discloses have
occurred or may occur or which are described in such letter; and
(vii) In addition to the audit referred to in their report(s) included
or incorporated by reference in the Prospectus and the limited procedures,
inspection of minute books, inquiries and other procedures referred to in
paragraphs (iii) and (vi) above, they have carried out certain specified
procedures, not constituting an audit in accordance with generally accepted
auditing standards, with respect to certain amounts, percentages and financial
information specified by the Representatives which are derived from the general
accounting records of the Company and its subsidiaries, which appear in the
Prospectus (excluding documents incorporated by reference), or in Part II of, or
in exhibits and schedules to, the Registration Statement specified by the
Representatives or in documents incorporated by reference in the Prospectus
specified by the Representatives, and have compared certain of such amounts,
percentages and financial information with the accounting records of the Company
and its subsidiaries and have found them to be in agreement.
All references in this Annex II to the Prospectus shall be
deemed to refer to the Prospectus (including the documents incorporated by
reference therein) as defined in the Underwriting Agreement as of the date of
the letter delivered on the date of the Pricing Agreement for purposes of such
letter and to the Prospectus as amended or supplemented (including the documents
incorporated by reference therein) in relation to the applicable
AII-4
<PAGE>
Designated Securities for purposes of the letter delivered at the Time of
Delivery for such Designated Securities.
(1029)V:\CORNER\UNDER2.AGT
AII-5
Exhibit 1.2
CORNERSTONE REALTY INCOME TRUST, INC.
(a Virginia corporation)
Common Shares and Preferred Shares
UNDERWRITING AGREEMENT
______________, 199__
[Name[s] of Representative[s]]
Dear Sirs:
Cornerstone Realty Income Trust, Inc., a Virginia corporation (the
"Company"), proposes to issue and sell its common shares, no par value (the
"Common Shares"), and its preferred shares, no par value (the "Preferred
Shares") from time to time, in one or more offerings on terms to be determined
at the time of sale. Each series of Preferred Shares may vary as to the specific
number of shares, title, stated value, liquidation preference, issuance price,
ranking, dividend rate or rates (or method of calculation), dividend payment
dates, any redemption or sinking fund requirements, any conversion provisions
and any other variable terms as set forth in the applicable Articles of
Amendment to the Company's Articles of Incorporation (each, the "Articles of
Amendment") relating to such series of Preferred Shares. As used herein,
"Securities" shall mean the Common Shares and the Preferred Shares. As used
herein, "you" and "your", unless the context otherwise requires, shall mean the
parties to whom this Agreement is addressed together with the other parties, if
any, identified in the applicable Terms Agreement (as hereinafter defined) as
additional co-managers with respect to Underwritten Securities (as hereinafter
defined) purchased pursuant thereto.
Whenever the Company determines to make an offering of Securities
through you or through an underwriting syndicate managed by you, the Company
will enter into an agreement (the "Terms Agreement") providing for the sale of
such Securities (the "Underwritten Securities") to, and the purchase and
offering thereof by, you and such other underwriters, if any, selected by you as
have authorized you to enter into such Terms Agreement on
<PAGE>
their behalf (the "Underwriters", which term shall include you whether acting
alone in the sale of the Underwritten Securities or as a member of an
underwriting syndicate and any Underwriter substituted pursuant to Section 10
hereof). The Terms Agreement relating to the offering of Underwritten Securities
shall specify the number of Underwritten Securities of each class or series to
be initially issued (the "Initial Underwritten Securities"), the names of the
Underwriters participating in such offering (subject to substitution as provided
in Section 10 hereof), the number of Initial Underwritten Securities which each
such Underwriter severally agrees to purchase, the names of such of you or such
other Underwriters acting as co-managers, if any, in connection with such
offering, the price at which the Initial Underwritten Securities are to be
purchased by the Underwriters from the Company, the initial public offering
price, the time, date and place of delivery and payment, any delayed delivery
arrangements and any other variable terms of the Initial Underwritten Securities
(including, but not limited to, any current ratings (in the case of Preferred
Shares only), designations, liquidation preferences, conversion provisions,
redemption provisions and sinking fund requirements). In addition, each Terms
Agreement shall specify whether the Company has agreed to grant to the
Underwriters an option to purchase additional Underwritten Securities to cover
over-allotments, if any, and the number of Underwritten Securities subject to
such option (the "Option Securities"). As used herein, the term "Underwritten
Securities" shall include the Initial Underwritten Securities and all or any
portion of the Option Securities agreed to be purchased by the Underwriters as
provided herein, if any. The Terms Agreement, which shall be substantially in
the form of Exhibit A hereto, may take the form of an exchange of any standard
form of written telecommunication between you and the Company. Each offering of
Underwritten Securities through you or through an underwriting syndicate managed
by you will be governed by this Agreement, as supplemented by the applicable
Terms Agreement.
The Company has filed with the Securities and Exchange Commission (the
"Commission") a registration statement on Form S-3 (No. 333-_______) for the
registration of the Securities (including the Underwritten Securities) and
certain of the Company's debt securities under the Securities Act of 1933, as
amended (the "1933 Act"), and the offering thereof from time to time in
accordance with Rule 415 of the rules and regulations of the Commission under
the 1933 Act (the "1933 Act Regulations"), and the Company has filed such
amendments thereto as may have been required prior to the execution of the
applicable Terms Agreement. Such registration statement (as amended, if
applicable) has been declared effective by the Commission. Such
2
<PAGE>
registration statement (as amended, if applicable), on the one hand, and the
prospectus constituting a part thereof and each prospectus supplement relating
to the offering of Underwritten Securities provided to the Underwriters for use
(whether or not such prospectus supplement is required to be filed by the
Company pursuant to Rule 424(b) of the 1933 Act Regulations) (the "Prospectus
Supplement"), on the other hand, including in each case all documents
incorporated therein by reference and the information, if any, deemed to be a
part thereof pursuant to Rule 430A(b) or Rule 434 of the 1933 Act Regulations,
as from time to time amended or supplemented pursuant to the 1933 Act, the
Securities Exchange Act of 1934, as amended (the "1934 Act"), or otherwise, are
referred to herein as the "Registration Statement" and the "Prospectus",
respectively; provided, however, that a Prospectus Supplement shall be deemed to
have supplemented the Prospectus only with respect to the offering of
Underwritten Securities to which it relates. All references in this Agreement to
financial statements and schedules and other information which is "contained,"
"included" or "stated" in the Registration Statement or the Prospectus (and all
other references of like import) shall be deemed to mean and include all such
financial statements and schedules and other information which is or is deemed
to be incorporated by reference in the Registration Statement or the Prospectus,
as the case may be; and all references in this Agreement to amendments or
supplements to the Registration Statement or the Prospectus shall be deemed to
mean and include, without limitation, any document filed under the 1934 Act
which is or is deemed to be incorporated by reference in the Registration
Statement or the Prospectus, as the case may be. If the Company elects to rely
on Rule 434 under the 1933 Act Regulations, all references to the Prospectus
shall be deemed to include, without limitation, the form of prospectus and the
abbreviated term sheet, taken together, provided to the Underwriters by the
Company in reliance on Rule 434 under the 1933 Act (the "Rule 434 Prospectus").
If the Company files a registration statement to register a portion of the
Securities and relies on Rule 462(b) for such registration statement to become
effective upon filing with the Commission (the "Rule 462 Registration
Statement"), then any reference to "Registration Statement" herein shall be
deemed to be to both the registration statement referred to above (No.
333-_____) and the Rule 462 Registration Statement, as each such registration
statement may be amended pursuant to the 1933 Act.
Section 1. Representations and Warranties.
(a) The Company represents and warrants to you, as of the date hereof,
and to you and each other Underwriter named in the
3
<PAGE>
applicable Terms Agreement, as of the date thereof (such latter date being
referred to herein as a "Representation Date"), as follows:
(i) The Registration Statement and the Prospectus, at the time
the Registration Statement became effective, complied, and as of the
applicable Representation Date will comply, in all material respects
with the requirements of the 1933 Act and 1933 Act Regulations; the
Registration Statement, at the time the Registration Statement became
effective, did not and as of the applicable Representation Date will
not, contain an untrue statement of a material fact or omit to state a
material fact required to be stated therein or necessary to make the
statements therein not misleading; the Prospectus, as of the date
hereof does not, and as of the applicable Representation Date and at
Closing Time (as hereinafter defined) will not, include an untrue
statement of a material fact or omit to state a material fact necessary
in order to make the statements therein, in the light of the
circumstances under which they were made, not misleading; provided,
however, that the representations and warranties in this subsection
shall not apply to statements in or omissions from the Registration
Statement or the Prospectus made in reliance upon and in conformity
with information furnished to the Company in writing by any Underwriter
through you expressly for use in the Registration Statement or the
Prospectus.
(ii) The documents incorporated or deemed to be incorporated
by reference in the Prospectus pursuant to Item 12 of Form S-3 under
the 1933 Act, at the time they were or hereafter are filed with the
Commission, complied and will comply in all material respects with the
requirements of the 1934 Act and the rules and regulations of the
Commission under the 1934 Act (the "1934 Act Regulations"), and, when
read together with the other information in the Prospectus, at the time
the Registration Statement became effective and as of the applicable
Representation Date or Closing Time or during the period specified in
Section 3(f), did not and will not include an untrue statement of a
material fact or omit to state a material fact required to be stated
therein or necessary to make the statements therein, in light of the
circumstances under which they were made, not misleading.
(iii) The accountants who certified the financial statements
and supporting schedules included in, or incorporated by reference
into, the Registration Statement and the Prospectus are independent
public accountants as required by the 1933 Act and the 1933 Act
Regulations.
4
<PAGE>
(iv) The financial statements and supporting schedules
included in, or incorporated by reference into, the Registration
Statement and the Prospectus present fairly in all material respects
the financial position of the Company and its subsidiaries as of the
dates indicated and the results of their operations for the periods
specified; except as otherwise stated in the Registration Statement and
the Prospectus, said financial statements have been prepared in
conformity with generally accepted accounting principles applied on a
consistent basis; and the supporting schedules included or incorporated
by reference in the Registration Statement and the Prospectus present
fairly in all material respects the information required to be stated
therein.
(v) Since the respective dates as of which information is
given in the Registration Statement and the Prospectus, except as
otherwise stated therein, (A) there has been no material adverse change
or development involving a prospective material adverse change in or
affecting the condition, financial or otherwise, or in the earnings,
business affairs or business prospects of the Company and its
subsidiaries considered as one enterprise, whether or not occurring in
the ordinary course of business, (B) there have been no transactions or
acquisitions entered into by the Company or any of its subsidiaries
other than those arising in the ordinary course of business, and (C)
except for regular quarterly dividends on the Company's common shares,
or dividends declared, paid or made in accordance with the terms of any
series of the Company's preferred shares, there has been no dividend or
distribution of any kind declared, paid or made by the Company on any
series of its common shares or preferred shares.
(vi) The Company has been duly organized and is validly
existing as a corporation in good standing under the laws of the
Commonwealth of Virginia, with full power and authority to own, lease
and operate its properties and conduct its business as described in the
Prospectus; and the Company is duly qualified to transact business in
all jurisdictions in which the conduct of its business requires such
qualification except where the failure so to qualify would not have a
material adverse effect on the condition, financial or otherwise, or
the earnings, business affairs or business prospects of the Company.
(vii) Each subsidiary of the Company (as defined on Exhibit C)
has been duly organized and is validly existing as a corporation,
limited liability company, limited partnership or real estate
5
<PAGE>
investment trust in good standing under the laws of the jurisdiction of
its incorporation or organization, with power and authority to own,
lease and operate its properties and conduct its business as described
in the Prospectus except where the failure so to be in good standing
would not have a material adverse effect on the condition, financial or
otherwise, or the earnings, business affairs or business prospects of
the Company and its subsidiaries, considered as one enterprise; each
such subsidiary is duly qualified to transact business in all
jurisdictions in which the conduct of its business requires such
qualification, or in which the failure to qualify would have a
materially adverse effect upon the business of such subsidiary; all of
the issued and outstanding shares or other beneficial interests owned
by the Company in any such subsidiary have been duly authorized and
validly issued, are fully paid and non-assessable and are owned by the
Company free and clear of any security interest, mortgage, pledge,
lien, encumbrance, or other claim.
(viii) The authorized, issued and outstanding common and
preferred shares of the Company are as set forth in the Prospectus
under "Capitalization" (except for subsequent issuances, if any,
pursuant to reservations, agreements or the conversion of convertible
securities referred to in the Registration Statement including, without
limitation, the exercise or grant of stock options pursuant to the
Company's stock option plan or the issuance of shares pursuant to the
Company's dividend reinvestment plan, stock purchase and loan plan or
employees' stock purchase plan); and such common shares and preferred
shares of the Company have been duly authorized and validly issued and
are fully paid and non-assessable and are not subject to preemptive or
other similar rights.
(ix) The applicable Underwritten Securities have been duly
authorized by the Company for issuance and sale pursuant to this
Agreement and, when issued and delivered pursuant to this Agreement
against payment of the consideration therefor specified in the
applicable Terms Agreement or any Delayed Delivery Contract (as
hereinafter defined), such Underwritten Securities will be duly and
validly issued, fully paid and non-assessable; the Preferred Shares, if
applicable, conforms to the provisions of the Articles of Amendment;
such Underwritten Securities conform in all material respects to all
statements relating thereto contained in the Prospectus; and the
issuance of such Underwritten Securities is not subject to preemptive
or
6
<PAGE>
other similar rights.
(x) If applicable, the Common Shares issuable upon conversion
of any of the Preferred Shares will have been duly and validly
authorized and reserved for issuance upon such conversion or exercise
by all necessary corporate action and such shares, when issued upon
such conversion or exercise, will be duly and validly issued, fully
paid and non-assessable, and the issuance of such shares upon such
conversion or exercise will not be subject to preemptive or other
similar rights; the Common Shares so issuable conform in all material
respects to all statements relating thereto contained in the
Prospectus.
(xi) Neither the Company nor any of its subsidiaries is in
violation of its Articles of Incorporation or Bylaws or in default in
the performance or observance of any obligation, agreement, covenant or
condition contained in any contract, indenture, mortgage, loan
agreement, note, lease (other than as disclosed in the Prospectus) or
other instrument to which the Company or any of its subsidiaries is a
party or by which it or any of them may be bound, or to which any of
the property or assets of the Company or any of its subsidiaries is
subject and which default is of material significance in respect of the
business or financial condition of the Company and its subsidiaries
considered as one enterprise; and the execution, delivery and
performance of this Agreement and the applicable Terms Agreement and
the consummation of the transactions contemplated herein and therein
and compliance by the Company with its obligations hereunder and
thereunder have been duly authorized by all necessary corporate action
on the part of the Company, and will not conflict with or constitute a
breach of, or default under, or result in the creation or imposition of
any lien, charge or encumbrance upon any property or assets of the
Company or any of its subsidiaries pursuant to any contract, indenture,
mortgage, loan agreement, note, lease or other instrument to which the
Company or any of its subsidiaries is a party or by which it or any of
them may be bound, or to which any property or assets of the Company or
any of its subsidiaries is subject, or result in any violation of the
Articles of Incorporation or By-Laws of the Company or any law,
administrative regulation or administrative or court decree.
(xii) With respect to all tax periods regarding which the
Internal Revenue Service is or will be entitled to assert any claim,
the Company has met the requirements for
7
<PAGE>
qualification as a real estate investment trust under Sections 856
through 860 of the Internal Revenue Code of 1986, as amended (the
"Code"), and the Company's present and contemplated operations, assets
and income continue to meet such requirements.
(xiii) The Company is not and, after giving effect to the
offering and sale of the Underwritten Securities, will not be an
"investment company" or an entity "controlled" by an "investment
company" within the meaning of the Investment Company Act of 1940, as
amended (the "1940 Act").
(xiv) The conditions for use of registration statements on
Form S-3 set forth in the General Instructions on Form S-3 have been
satisfied and the Company is entitled to use such form for the
transaction contemplated herein and in any applicable Terms Agreement.
(xv) There is no action, suit or proceeding before or by any
court or governmental agency or body, domestic or foreign, now pending,
or, to the knowledge of the Company, threatened against the Company or
any of its subsidiaries which is required to be disclosed in the
Prospectus (other than as disclosed therein) or which might result in
any material adverse change in the condition, financial or otherwise,
or in the earnings, business affairs or business prospects of the
Company and its subsidiaries considered as one enterprise, or which
might materially and adversely affect the properties or assets thereof
or which might materially and adversely affect the consummation of this
Agreement or the applicable Terms Agreement or the transactions
contemplated herein and therein; all pending legal or governmental
proceedings to which the Company or any of its subsidiaries is a party
or of which any of their respective property is the subject which are
not described in the Prospectus, including ordinary routine litigation
incidental to the business, are, considered in the aggregate, not
material; and there are no contracts or documents of the Company or any
of its subsidiaries which would be required to be filed as exhibits to
the Registration Statement by the 1933 Act or by the 1933 Act
Regulations which have not been filed as exhibits to the Registration
Statement.
(xvi) No authorization, approval or consent of any
governmental authority or agency is necessary in connection with the
consummation by the Company of the transactions contemplated by this
Agreement or the applicable Terms
8
<PAGE>
Agreement, except such as may be required under the 1933 Act or the
1933 Act Regulations or state securities or Blue Sky laws.
(xvii) The Company has full right, power and authority to
enter into this Agreement, the applicable Terms Agreement and the
Delayed Delivery Contracts, if any, and this Agreement has been, and as
of the applicable Representation Date, the applicable Terms Agreement
and the Delayed Delivery Contracts, if any, will have been, duly
authorized, executed and delivered by the Company.
(xviii) The Company and its subsidiaries have good and
marketable title to, or valid and enforceable leasehold estates in, all
items of real and personal property referred to in the Prospectus as
owned or leased by them, in each case free and clear of all liens,
encumbrances, claims, security interests and defects, other than those
referred to in the Prospectus or which are not material in amount.
(xix) The Company has filed all Federal, state, local and
foreign income tax returns which have been required to be filed and has
paid all taxes indicated by said returns and all assessments received
by it to the extent that such taxes have become due and are not being
contested in good faith.
(xx) The Company and each of its subsidiaries hold all
material licenses, certificates and permits from governmental
authorities which are necessary to the conduct of their respective
businesses; and neither the Company nor any of its subsidiaries has
infringed any patents, patent rights, trade names, trademarks or
copyrights, which infringement is material to the business of the
Company or any of its subsidiaries.
(xxi) The Company has no knowledge of (a) the unlawful
presence of any hazardous substances, hazardous materials, toxic
substances or waste materials (collectively, "Hazardous Materials") on
any of the properties owned by it or any of its subsidiaries, or of (b)
any unlawful spills, releases, discharges or disposal of Hazardous
Materials that have occurred or are presently occurring off such
properties as a result of any construction on or operation and use of
such properties which presence or occurrence would materially adversely
affect the condition, financial or otherwise, or the earnings, business
affairs or business prospects of the Company or any of its
subsidiaries. In
9
<PAGE>
connection with the construction on or operation and use of the
properties owned by the Company or any of its subsidiaries, the Company
represents that it has no knowledge of any material failure to comply
with all applicable local, state and federal environmental laws,
regulations, ordinances and administrative and judicial orders relating
to the generation, recycling, reuse, sale, storage, handling, transport
and disposal of any Hazardous Materials.
(b) Any certificate signed by any officer of the Company and delivered
to you or to counsel for the Underwriters in connection with the offering of the
Underwritten Securities shall be deemed a representation and warranty by the
Company to each Underwriter participating in such offering as to the matters
covered thereby on the date of such certificate and, unless subsequently amended
or supplemented, at the applicable Representation Date subsequent thereto.
Section 2. Purchase and Sale.
(a) The several commitments of the Underwriters to purchase the
Underwritten Securities pursuant to the applicable Terms Agreement shall be
deemed to have been made on the basis of the representations and warranties
herein contained and shall be subject to the terms and conditions herein set
forth.
(b) In addition, on the basis of the representations and warranties
herein contained and subject to the terms and conditions herein set forth, the
Company may grant, if so provided in the applicable Terms Agreement relating to
the Initial Underwritten Securities, an option to the Underwriters named in such
Terms Agreement, severally and not jointly, to purchase up to the number of
Option Securities set forth therein at the same price per Option Security as is
applicable to the Initial Underwritten Securities less an amount equal to any
dividend paid by the Company and payable on the Initial Underwritten Securities
and not payable on such Option Securities. Such option, if granted, will expire
30 days (or such lesser number of days as may be specified in the applicable
Terms Agreement) after the Representation Date relating to the Initial
Underwritten Securities, and may be exercised in whole or in part from time to
time only for the purpose of covering over-allotments which may be made in
connection with the offering and distribution of the Initial Underwritten
Securities upon notice by you to the Company setting forth the number of Option
Securities as to which the several Underwriters are then exercising the option
and the time and date of payment and
10
<PAGE>
delivery for such Option Securities. Any such time, date and place of delivery
(a "Date of Delivery") shall be determined by you, but shall not be later than
seven full business days nor earlier than two full business days after the
exercise of said option, nor in any event prior to Closing Time, unless
otherwise agreed upon by you and the Company. If the option is exercised as to
all or any portion of the Option Securities, each of the Underwriters, acting
severally and not jointly, will purchase that proportion of the total number of
Option Securities then being purchased which the number of Initial Underwritten
Securities each such Underwriter has severally agreed to purchase as set forth
in the applicable Terms Agreement bears to the total number of Initial
Underwritten Securities (except as otherwise provided in the applicable Terms
Agreement), subject to such adjustments as you in your discretion shall make to
eliminate any sales or purchases of fractional Underwritten Securities.
(c) Payment of the purchase price for, and delivery of, the
Underwritten Securities to be purchased by the Underwriters shall be made at the
office of ____________________________________________, or at such other place
as shall be agreed upon by you and the Company, at 10:00 A.M., New York City
time, on the third business day (unless postponed in accordance with the
provisions of Section 10 herein) following the date of the applicable Terms
Agreement or, if pricing takes place after 4:30 P.M., New York City time, on the
date of the applicable Terms Agreement, on the fourth business day (unless
postponed in accordance with the provisions of Section 10) following the date of
the applicable Terms Agreement or at such other time as shall be agreed upon by
you and the Company (each such time and date of payment and delivery being
referred to herein as the "Closing Time"). In addition, in the event that any or
all of the Option Securities are purchased by the Underwriters, payment of the
purchase price for, and delivery of certificates representing, such Option
Securities, shall be made at the above-mentioned offices of
_______________________________, or at such other place as shall be agreed upon
by you and the Company on each Date of Delivery as specified in the notice from
you to the Company. Unless otherwise specified in the applicable Terms
Agreement, payment shall be made to the Company by certified or official bank
check or checks in New York Clearing House funds payable to the order of the
Company against delivery to you for the respective accounts of the Underwriters
of the certificates for the Underwritten Securities to be purchased by them. The
Underwritten Securities shall be in such authorized denominations and registered
in such names as you may request in writing at least one business day prior to
the Closing Time or Date of Delivery, as the case may
11
<PAGE>
be. The Underwritten Securities, which may be in temporary form, will be made
available for examination and packaging by you on or before 3:00 P.M. on the
first business day prior to the Closing Time or the Date of Delivery, as the
case may be.
If authorized by the applicable Terms Agreement, the Underwriters named
therein may solicit offers to purchase Underwritten Securities from the Company
pursuant to delayed delivery contracts ("Delayed Delivery Contracts")
substantially in the form of Exhibit B hereto with such changes therein as the
Company may approve. As compensation for arranging Delayed Delivery Contracts,
the Company will pay to you at Closing Time, for the respective accounts of the
Underwriters, a fee specified in the applicable Terms Agreement for each of the
Underwritten Securities for which Delayed Delivery Contracts are made at the
Closing Time as is specified in the applicable Terms Agreement. Any Delayed
Delivery Contracts are to be with institutional investors of the types described
in the Prospectus. At the Closing Time, the Company will enter into Delayed
Delivery Contracts (for not less than the minimum number of Underwritten
Securities per Delayed Delivery Contract specified in the applicable Terms
Agreement) with all purchasers proposed by the Underwriters and previously
approved by the Company as provided below, but not for an aggregate number of
Underwritten Securities in excess of that specified in the applicable Terms
Agreement. The Underwriters will not have any responsibility for the validity or
performance of Delayed Delivery Contracts.
You shall submit to the Company, at least two business days prior to
the Closing Time, the names of any institutional investors with which it is
proposed that the Company will enter into Delayed Delivery Contracts and the
number of Underwritten Securities to be purchased by each of them, and the
Company will advise you, at least one business day prior to the Closing Time, of
the names of the institutions with which the making of Delayed Delivery
Contracts is approved by the Company and the number of Underwritten Securities
to be covered by each such Delayed Delivery Contract.
The number of Underwritten Securities agreed to be purchased by the
several Underwriters pursuant to the applicable Terms Agreement shall be reduced
by the number of Underwritten Securities covered by Delayed Delivery Contracts,
as to each Underwriter as set forth in a written notice delivered by you to the
Company; provided, however, that the total number of Underwritten Securities to
be purchased by all Underwriters shall be the total number of Underwritten
Securities covered by the applicable Terms Agreement, less the number of
Underwritten
12
<PAGE>
Securities covered by Delayed Delivery Contracts.
SECTION 3. Covenants of the Company. The Company covenants with you,
and with each Underwriter participating in the offering of Underwritten
Securities, as follows:
(a) If the Company does not elect to rely on Rule 434 under the 1933
Act Regulations, immediately following the execution of the applicable Terms
Agreement, the Company will prepare a Prospectus Supplement setting forth the
number of Underwritten Securities covered thereby and their terms not otherwise
specified in the Prospectus pursuant to which the Underwritten Securities are
being issued, the names of the Underwriters participating in the offering and
the number of Underwritten Securities which each severally has agreed to
purchase, the names of the Underwriters acting as co-managers in connection with
the offering, the price at which the Underwritten Securities are to be purchased
by the Underwriters from the Company, the initial public offering price, if any,
the selling concession and reallowance, if any, any delayed delivery
arrangements, and such other information as you and the Company deem appropriate
in connection with the offering of the Underwritten Securities; and the Company
will promptly transmit copies of the Prospectus Supplement to the Commission for
filing pursuant to Rule 424(b) of the 1933 Act Regulations and will furnish to
the Underwriters named therein as many copies of the Prospectus (including such
Prospectus Supplement) as you shall reasonably request. If the Company elects to
rely on Rule 434 under the 1933 Act Regulations, immediately following the
execution of the applicable Terms Agreement, the Company will prepare an
abbreviated term sheet that complies with the requirements of Rule 434 under the
1933 Act Regulations and will provide the Underwriters with copies of the form
of Rule 434 Prospectus, in such number as you shall reasonably request, and, if
necessary, promptly file or transmit for filing with the Commission the form of
Prospectus complying with Rule 434(c)(2) of the 1933 Act Regulations in
accordance with Rule 424(b) of the 1933 Act Regulations.
(b) The Company will notify you immediately, and confirm such notice in
writing, of (i) the effectiveness of any amendment to the Registration
Statement, (ii) the transmittal to the Commission for filing of any Prospectus
Supplement or other supplement or amendment to the Prospectus to be filed
pursuant to the 1934 Act, (iii) the receipt of any comments from the Commission,
(iv) any request by the Commission for any amendment to the Registration
Statement or any amendment or supplement to the Prospectus or for additional
information, and (v) the
13
<PAGE>
issuance by the Commission of any stop order suspending the effectiveness of the
Registration Statement or the initiation of any proceedings for that purpose;
and the Company will make every reasonable effort to prevent the issuance of any
such stop order and, if any stop order is issued, to obtain the lifting thereof
at the earliest possible moment.
(c) At any time when the Prospectus is required to be delivered under
the 1933 Act or the 1934 Act in connection with sales of the Underwritten
Securities, the Company will give you notice of its intention to file or prepare
any amendment to the Registration Statement or any amendment or supplement to
the Prospectus, whether pursuant to the 1933 Act, 1934 Act or otherwise
(including any revised prospectus which the Company proposes for use by the
Underwriters in connection with an offering of Underwritten Securities which
differs from the Prospectus on file at the Commission at the time the
Registration Statement first becomes effective, whether or not such revised
prospectus is required to be filed pursuant to Rule 424(b) of the 1933 Act
Regulations, or any abbreviated term sheet prepared in reliance on Rule 434 of
the 1933 Act Regulations), and will furnish you with copies of any such
amendment or supplement or other documents proposed to be used or filed a
reasonable amount of time prior to such proposed filing and, unless required by
law, will not file or use any such amendment or supplement or other documents in
a form to which you or counsel for the Underwriters shall reasonably object.
(d) The Company will deliver to each Underwriter a signed copy of the
Registration Statement as originally filed and of each amendment thereto
(including exhibits filed therewith and documents incorporated by reference
therein pursuant to Item 12 of Form S-3 under the 1933 Act) as you reasonably
request and will also deliver to each Underwriter a conformed copy of the
Registration Statement as originally filed and of each amendment thereto
(including documents incorporated by reference but without exhibits).
(e) The Company will furnish to each Underwriter, from time to time
during the period when the Prospectus is required to be delivered under the 1933
Act or the 1934 Act in connection with sales of the Underwritten Securities,
such number of copies of the Prospectus (as amended or supplemented) as such
Underwriter may reasonably request for the purposes contemplated by the 1933
Act, the 1933 Act Regulations, the 1934 Act or the 1934 Act Regulations.
(f) If at any time when the Prospectus is required to be
14
<PAGE>
delivered under the 1933 Act or the 1934 Act in connection with sales of the
Underwritten Securities any event shall occur or condition exist as a result of
which it is necessary, in the opinion of counsel for the Underwriters, to amend
or supplement the Prospectus in order that the Prospectus will not include an
untrue statement of a material fact or omit to state any material fact necessary
in order to make the statements therein not misleading in the light of the
circumstances existing at the time it is delivered to a purchaser, or if it
shall be necessary, in the opinion of such counsel, at any such time to amend or
supplement the Registration Statement or the Prospectus in order to comply with
the requirements of the 1933 Act or the 1933 Act Regulations, then the Company
will promptly prepare and file with the Commission such amendment or supplement,
whether by filing documents pursuant to the 1933 Act, the 1934 Act or otherwise,
as may be necessary to correct such untrue statement or omission or to make the
Registration Statement and Prospectus comply with such requirements.
(g) If applicable, the Company will endeavor, in cooperation with the
Underwriters, to qualify the Underwritten Securities and the Common Shares
issuable upon conversion of the Preferred Shares, if any, for offering and sale
under the applicable securities laws and real estate syndication laws of such
states and other jurisdictions of the United States as you may designate; and in
each jurisdiction in which the Underwritten Securities and the Common Shares
issuable upon conversion of the Preferred Shares, if any, have been so
qualified, the Company will file such statements and reports as may be required
by the laws of such jurisdiction to continue such qualification in effect for so
long as may be required for the distribution of the Underwritten Securities and
the Common Shares issuable upon conversion of the Preferred Shares, if any;
provided, however, that the Company shall not be obligated to qualify as a
foreign corporation in any jurisdiction where it is not so qualified.
(h) With respect to each sale of Underwritten Securities, the Company
will make generally available to its security holders as soon as practicable,
but not later than 90 days after the close of the period covered thereby, an
earnings statement (in form complying with the provisions of Rule 158 of the
1933 Act Regulations) covering a twelve month period beginning not later than
the first day of the Company's fiscal quarter next following the "effective
date" (as defined in such Rule 158) of the Registration Statement.
(i) The Company will continue to elect to qualify as a "real estate
investment trust" under the Code and will use its best
15
<PAGE>
efforts to continue to meet the requirements to qualify as a "real estate
investment trust."
(j) The Company, during the period when the Prospectus is required to
be delivered under the 1933 Act or the 1934 Act in connection with sales of the
Underwritten Securities, will file promptly all documents required to be filed
with the Commission pursuant to Section 13, 14 or 15 of the 1934 Act within the
time periods prescribed by the 1934 Act and the 1934 Act Regulations.
(k) The Company will not, during a period of 90 days from the date of
the applicable Terms Agreement, with respect to the Underwritten Securities
covered thereby, without your prior written consent, offer or sell, grant any
option for the sale of, or enter into any agreement to sell, any securities of
the same class or series or ranking on a parity with such Underwritten
Securities (other than the Underwritten Securities which are to be sold pursuant
to such Terms Agreement), or if such Terms Agreement relates to Preferred Shares
that are convertible into Common Shares, any Common Shares or any security
convertible into Common Shares (except for Common Shares issued pursuant to
reservations, agreements, employee benefit plans, dividend reinvestment plans,
or employee and director stock option plans), except as may otherwise be
provided in the applicable Terms Agreement.
(l) If the applicable Terms Agreement relates to Common Shares, the
Company will cause each officer of the Company who owns Common Shares to agree
not to offer for sale, sell or otherwise dispose of any shares of Common Shares
during the 90 days following the date of such Terms Agreement without your prior
written consent.
(m) If the Preferred Shares are convertible into Common Shares, the
Company will reserve and keep available at all times, free of preemptive rights
or other similar rights, a sufficient number of Common Shares for the purpose of
enabling the Company to satisfy any obligations to issue such shares upon
conversion of the Preferred Shares.
(n) If the Preferred Shares are convertible into Common Shares, the
Company will use its best efforts to list the Common Shares issuable upon
conversion of the Preferred Stock on the New York Stock Exchange or such other
national exchange on which the Company's Common Shares are then listed.
(o) The Company will use its best efforts to list the Underwritten
Securities on the New York Stock Exchange.
16
<PAGE>
(p) The Company will use the net proceeds received by it from the sale
of the Underwritten Securities in the manner specified in the Prospectus under
the caption "Use of Proceeds."
Section 4. Payment of Expenses. The Company will pay all expenses
incident to the performance of its obligations under this Agreement or the
applicable Terms Agreement, including (i) the printing and filing of the
Registration Statement as originally filed and of each amendment thereto, (ii)
the cost of printing, filing and distributing to the Underwriters copies of this
Agreement and the applicable Terms Agreement, (iii) the preparation, issuance
and delivery of the Underwritten Securities to the Underwriters, (iv) the fees
and disbursements of the Company's counsel and accountants, (v) if applicable,
the qualification of the Underwritten Securities and the Common Shares issuable
upon conversion of the Preferred Shares, if any, under securities laws and real
estate syndication laws in accordance with the provisions of Section 3(g),
including filing fees but not including the fees and disbursements of counsel
for the Underwriters in connection therewith and in connection with the
preparation of the Blue Sky Survey, (vi) the printing and delivery to the
Underwriters of copies of the Registration Statement as originally filed and of
each amendment thereto, and of the Prospectus and any amendments or supplements
thereto, including each abbreviated term sheet delivered by the Company pursuant
to Rule 434 of the 1933 Act Regulations, (vii) the cost of reproducing and
distributing to the Underwriters copies of the Blue Sky Survey, (viii) any fees
charged by nationally recognized statistical rating organizations for the rating
of the Underwritten Securities, (ix) the fees and expenses, if any, incurred
with respect to the listing of the Underwritten Securities or the Common Shares
issuable upon conversion of the Preferred Shares, if any, on any national
securities exchange, and (x) the fees and expenses, if any, incurred with
respect to any filing with the National Association of Securities Dealers, Inc.
If the applicable Terms Agreement is canceled or terminated by you in
accordance with the provisions of Section 5 or Section 9(b)(i), the Company
shall reimburse the Underwriters named in such Terms Agreement for all of their
out-of-pocket expenses, including the reasonable fees and disbursements of
counsel for the Underwriters.
Section 5. Conditions of Underwriters' Obligations. The several
obligations of the Underwriters to purchase Underwritten Securities pursuant to
the applicable Terms Agreement are subject to the accuracy of the
representations and warranties of the
17
<PAGE>
Company herein contained, to the accuracy of the statements of the Company's
officers made in any certificate pursuant to the provisions hereof, to the
performance by the Company of all of its covenants and other obligations
hereunder, and to the following further conditions:
(a) At Closing Time, (i) no stop order suspending the effectiveness of
the Registration Statement shall have been issued under the 1933 Act or
proceedings therefor initiated or threatened by the Commission and (ii) if
Preferred Stock is being offered, the rating assigned by any nationally
recognized statistical rating organization to any preferred stock of the Company
as of the date of the applicable Terms Agreement shall not have been lowered
since such date nor shall any such rating organization have publicly announced
that it has placed the Company on what is commonly termed a "watch list" for
possible downgrading.
(b) At Closing Time, you shall have received:
(1) The favorable opinion, dated as of Closing Time,
of McGuire, Woods, Battle & Boothe, L.L.P., counsel for the
Company, in form and substance satisfactory to counsel for the
Underwriters, to the effect that:
(i) The Company has been duly organized and
is validly existing as a corporation and in good
standing under the laws of the Commonwealth of
Virginia, with corporate power and authority to own
its properties and conduct its business as described
in the Prospectus as amended or supplemented.
(ii) The Company is duly qualified to
transact business in all jurisdictions in which the
conduct of its business requires such qualification,
or in which the failure to qualify would have a
materially adverse effect upon the business of the
Company.
(iii) Each subsidiary of the Company has
been duly organized and is validly existing as a
corporation, limited liability company, limited
partnership or real estate investment trust in good
standing under the laws of the jurisdiction of its
incorporation or organization, with power and
authority to own its properties and conduct
18
<PAGE>
its business as described in the Prospectus as
amended or supplemented except where the failure to
so be in good standing would not have a material
adverse effect on the condition, financial or
otherwise, or the earnings, business affairs or
business prospects of the Company and its
subsidiaries, considered as one enterprise; each such
subsidiary is duly qualified to transact business in
all jurisdictions in which the conduct of its
business requires such qualification, or in which the
failure to qualify would have a materially adverse
effect upon the business of such subsidiary; all of
the issued and outstanding shares or other beneficial
interests owned by the Company in any such subsidiary
have been duly authorized and validly issued, are
fully paid and non-assessable and are owned by the
Company free and clear of any security interest,
mortgage, pledge, lien, encumbrance, or other claim.
(iv) The Company has authorized and
outstanding capital stock as set forth in the
Prospectus under "Capitalization" (except for
subsequent issuances, if any, pursuant to
reservations, agreements or the conversion of
convertible securities referred to in the
Registration Statement including, without limitation,
the exercise or grant of stock options pursuant to
the Company's stock option plan or the issuance of
shares pursuant to the Company's dividend
reinvestment plan, stock purchase and loan plan or
employees' stock purchase plan); the authorized
capital stock of the Company has been duly
authorized; and the outstanding shares of capital
stock of the Company have been duly authorized and
validly issued and are fully paid and non-assessable
and are not subject to preemptive or other similar
rights arising by operation of law or, to the best of
such counsel's knowledge, otherwise.
(v) The applicable Underwritten Securities
have been duly and validly authorized by all
necessary corporate action and, when issued and
delivered pursuant to this Agreement against payment
of the consideration therefor specified in the
applicable Terms Agreement or the Delayed Delivery
Contracts, the applicable Underwritten
19
<PAGE>
Securities will be validly issued, fully paid and
non-assessable; the Underwritten Securities are not
subject to preemptive or other similar rights arising
by operation of law or, to the best of such counsel's
knowledge, otherwise; and the Preferred Shares, if
applicable, conform to the provisions of the Articles
of Amendment.
(vi) If applicable, the Common Shares
issuable upon conversion of any of the Preferred
Shares have been duly and validly authorized and
reserved for issuance upon such conversion or
exercise by all necessary corporate action and such
shares, when issued upon such conversion or exercise,
will be duly and validly issued and will be fully
paid and non-assessable, and the issuance of such
shares upon such conversion or exercise will not be
subject to preemptive or other similar rights arising
by operation of law or, to the best of such counsel's
knowledge, otherwise.
(vii) Each of this Agreement, the applicable
Terms Agreement and the Delayed Delivery Contracts,
if any, has been duly authorized, executed and
delivered by the Company.
(viii) The Registration Statement is
effective under the 1933 Act and, to the best of such
counsel's knowledge, no stop order suspending the
effectiveness of the Registration Statement has been
issued under the 1933 Act or proceedings therefor
initiated or threatened by the Commission.
(ix) The Registration Statement and the
Prospectus, excluding the documents incorporated by
reference therein, as of their respective effective
or issue dates, comply as to form in all material
respects with the requirements of the 1933 Act and
the 1933 Act Regulations; it being understood,
however, that no opinion need be rendered with
respect to the financial statements, schedules and
other financial and statistical data included or
incorporated by reference in the Registration
Statement or the Prospectus or excluded therefrom. If
applicable, the Rule 434 Prospectus conforms in all
material aspects to the requirements of Rule 434
under the 1933 Act
20
<PAGE>
Regulations.
(x) Each document filed pursuant to the 1934
Act (other than the financial statements, schedules
and other financial and statistical data included
therein or excluded therefrom, as to which no opinion
need be rendered) and incorporated or deemed to be
incorporated by reference in the Prospectus complied
when so filed (or as when amended prior to the
Representation Date) as to form in all material
respects with the 1934 Act and the 1934 Act
Regulations.
(xi) If applicable, the relative rights,
preferences, interests and powers of the Preferred
Shares are as set forth in the Articles of Amendment
relating thereto, and all such provisions are valid
under applicable Virginia law; and the form of
certificate used to evidence the Preferred Shares is
in due and proper form under applicable Virginia law,
and complies in all material respects with all
applicable statutory requirements.
(xii) The Underwritten Securities and, if
applicable, the Common Shares issuable upon
conversion of the Preferred Shares conform in all
material respects to the statements relating thereto
contained in the Prospectus.
(xiii) To the best of such counsel's
knowledge and information, there are no legal or
governmental proceedings pending or threatened which
are required to be disclosed in the Prospectus, other
than those disclosed therein, and all pending legal
or governmental proceedings to which the Company or
any of its subsidiaries is a party or of which any of
the property of the Company or its subsidiaries is
the subject which are not described in the
Prospectus, including ordinary routine litigation
incidental to the business, are, considered in the
aggregate, not material to the business of the
Company and its subsidiaries considered as one
enterprise.
(xiv) To the best of such counsel's
knowledge and information, there are no contracts,
indentures, mortgages, loan agreements, notes,
21
<PAGE>
leases or other instruments required to be described
or referred to in the Registration Statement or the
Prospectus or to be filed as exhibits to the
Registration Statement other than those described or
referred to therein or filed as exhibits thereto, the
descriptions thereof or references thereto are
correct, and, to the best of such counsel's knowledge
and information, no default exists in the due
performance or observance of any obligation,
agreement, covenant or condition contained in any
contract, indenture, mortgage, loan agreement, note,
lease or other instrument so described, referred to
or filed which would have a material adverse effect
on the condition, financial or otherwise, or on the
earnings, business affairs or business prospects of
the Company and its subsidiaries considered as one
enterprise.
(xv) No authorization, approval or consent
of any court or governmental authority or agency is
required that has not been obtained in connection
with the consummation by the Company of the
transactions contemplated by this Agreement and the
applicable Terms Agreement, except such as may be
required under the 1933 Act, the 1934 Act and state
securities laws or real estate syndication laws.
(xvi) To the best of such counsel's
knowledge and information, the execution and delivery
of this Agreement and the applicable Terms Agreement
and the consummation of the transactions contemplated
herein and therein and compliance by the Company with
its obligations hereunder and thereunder will not
conflict with or constitute a breach of, or default
under or result in the creation or imposition of any
lien, charge or encumbrance upon any property or
assets of the Company or any of its subsidiaries
pursuant to any contract, indenture, mortgage, loan
agreement, note, lease or other instrument to which
the Company or any of its subsidiaries is a party or
by which they may be bound or to which any of the
property or assets of the Company or any of its
subsidiaries is subject, nor will such action result
in violation of the provisions of the Articles of
Incorporation or By-Laws of the
22
<PAGE>
Company or any law, administrative regulation or
court decree.
(xvii) The Company is not required to be
registered under the 1940 Act.
(xviii) The statements under the caption
"Description of Capital Shares" in the Prospectus,
insofar as such statements constitute a summary of
documents referred to therein or matters of law, are
accurate summaries and fairly and correctly present
the information called for with respect to such
documents and matters.
(2) The favorable opinion, dated as of Closing Time, of
McGuire, Woods, Battle & Boothe, L.L.P., counsel for the Company, in
form and substance satisfactory to counsel for the Underwriters, to the
effect that the Company has qualified to be taxed as a real estate
investment trust pursuant to Sections 856 through 860 of the Code for
its most recently ended fiscal year and for the four fiscal years
immediately preceding such year, and the Company's organization and
contemplated method of operation are such as to enable it to continue
to so qualify for its current fiscal year.
(3) The favorable opinion, dated as of the Closing
Time, of _____________________, counsel for the Underwriters,
with respect to the due organization of the Company and the
matters set forth in (v) to (ix), inclusive, and (xii), (xv)
and (xviii) of subsection (b)(1) of this Section. In rendering
their opinion, ____________________ may rely as to matters of
Virginia law upon the opinion of Hunton & Williams.
(4) In giving their opinions required by subsections
(b)(1) and (b)(3), respectively, of this Section, McGuire,
Woods, Battle & Boothe, L.L.P. and _______________________
shall each additionally state that nothing has come to their
attention that would lead them to believe that the
Registration Statement or any amendment thereto (excluding the
financial statements and financial schedules included or
incorporated by reference therein, or excluded therefrom, as
to which such counsel need express no belief), at the time it
became effective or at the time an Annual Report on Form 10-K
was filed by the Company with the Commission (whichever is
later), or at the
23
<PAGE>
Representation Date, contained an untrue statement of a
material fact or omitted to state a material fact required to
be stated therein or necessary to make the statements therein
not misleading or that the Prospectus or any amendment or
supplement thereto (excluding the financial statements and
financial schedules included or incorporated by reference
therein, or excluded therefrom, as to which such counsel need
express no belief), at the Representation Date or at Closing
Time, included or includes an untrue statement of a material
fact or omitted or omits to state a material fact necessary in
order to make the statements therein, in the light of the
circumstances under which they were made, not misleading.
(c) At Closing Time, there shall not have been, since the date of the
applicable Terms Agreement or since the respective dates as of which information
is given in the Prospectus, any material adverse change in the condition,
financial or otherwise, or in the earnings, business affairs or business
prospects of the Company and its subsidiaries considered as one enterprise,
whether or not arising in the ordinary course of business; and you shall have
received a certificate of the President and Chief Executive Officer and the
Chief Financial Officer of the Company, dated as of such Closing Time, to the
effect that (i) there has been no such material adverse change and (ii) the
representations and warranties in Section 1 are true and correct with the same
force and effect as though such Closing Time were a Representation Date. As used
in this Section 5(c), the term "Prospectus" means the Prospectus in the form
first used to confirm sales of the Underwritten Securities.
(d) At the time of execution of the applicable Terms Agreement, you
shall have received from Ernst & Young LLP a letter dated such date, in form and
substance satisfactory to you, to the effect that (i) they are independent
accountants with respect to the Company and its subsidiaries within the meaning
of the 1933 Act and the 1934 Act and the applicable published rules and
regulations thereunder; (ii) it is their opinion that the consolidated financial
statements and supporting schedules of the Company and its subsidiaries included
or incorporated by reference in the Registration Statement and the Prospectus
and covered by their opinions therein comply in form in all material respects
with the applicable accounting requirements of the 1933 Act and the 1934 Act and
the related published rules and regulations thereunder; (iii) based upon limited
procedures set forth in detail in such letter (which shall include, without
limitation, the procedures specified by the American Institute of
24
<PAGE>
Certified Public Accountants for a review of interim financial information as
described in SAS No. 71, Interim Financial Information, with respect to the
unaudited condensed consolidated financial statements of the Company and its
subsidiaries included or incorporated by reference in the Registration
Statement), nothing came to their attention that caused them to believe that (A)
any material modifications should be made to the unaudited financial statements
and financial statement schedules of the Company and its subsidiaries included
or incorporated by reference in the Registration Statement and the Prospectus
for them to be in conformity with generally accepted accounting principles, (B)
the unaudited financial statements and financial statement schedules of the
Company included or incorporated by reference in the Registration Statement and
the Prospectus do not comply as to form in all material respects with the
applicable accounting requirements of the 1934 Act and the related published
rules and regulations thereunder, or (C) at a specified date not more than three
days prior to the date of the applicable Terms Agreement, there has been any
change in the capital stock of the Company or in the notes payable or mortgage
notes payable of the Company or any decrease in the total assets of the Company,
as compared with the amounts shown in the most recent consolidated balance sheet
included or incorporated by reference in the Registration Statement and the
Prospectus or, during the period from the date of the most recent consolidated
statement of operations included or incorporated by reference in the
Registration Statement and the Prospectus to a specified date not more than
three days prior to the date of the applicable Terms Agreement, there were any
decreases, as compared with the corresponding period in the preceding year, in
rental income or in the total or per share amounts of net income or income
before gains (losses) on investments and extraordinary items of the Company,
except in all instances for changes, increases or decreases which the
Registration Statement and the Prospectus disclose have occurred or may occur;
(iv) they have compared the information in the Prospectus under selected
captions with the disclosure requirements of Regulation S-K and on the basis of
limited procedures specified in such letter nothing came to their attention as a
result of the foregoing procedures that caused them to believe that this
information does not conform in all material respects with the disclosure
requirements of Items 301, 402 and 503(d) of Regulation S-K; and (v) in addition
to the audit referred to in their opinions and the limited procedures referred
to in clause (iii) above, they have carried out certain specified procedures,
not constituting an audit, with respect to certain amounts, percentages and
financial information which are included or incorporated by reference in the
Registration Statement and the Prospectus and which are specified by you, and
25
<PAGE>
have found such amounts, percentages and financial information to be in
agreement with the relevant accounting, financial and other records of the
Company and its subsidiaries identified in such letter.
(e) At Closing Time, you shall have received from Ernst & Young LLP a
letter dated as of such Closing Time to the effect that they reaffirm the
statements made in the letter furnished pursuant to subsection (d) of this
Section, except that the "specified date" referred to shall be a date not more
than three days prior to such Closing Time.
(f) At Closing Time, counsel for the Underwriters shall have been
furnished with such documents and opinions as they may reasonably require for
the purpose of enabling them to pass upon the issuance and sale of the
Underwritten Securities as herein contemplated and related proceedings, or in
order to evidence the accuracy of any of the representations or warranties, or
the fulfillment of any of the conditions, herein contained; and all proceedings
taken by the Company in connection with the issuance and sale of the
Underwritten Securities as herein contemplated shall be satisfactory in form and
substance to you and counsel for the Underwriters.
(g) In the event the Underwriters exercise their option provided in a
Terms Agreement as set forth in Section 2(b) hereof to purchase all or any
portion of the Option Securities, the representations and warranties of the
Company contained herein and the statements in any certificates furnished by the
Company hereunder shall be true and correct as of each Date of Delivery, and you
shall have received:
(1) A certificate, dated such Date of Delivery, of the
President and Chief Executive Officer and the Chief Financial Officer
of the Company, in their capacities as such, confirming that the
certificate delivered at Closing Time pursuant to Section 5(c) hereof
remains true and correct as of such Date of Delivery.
(2) The favorable opinions of McGuire, Woods, Battle & Boothe,
L.L.P., counsel for the Company, in form and substance satisfactory to
counsel for the Underwriters, dated such Date of Delivery, relating to
the Option Securities and otherwise substantially to the same effect as
the opinions required by Sections 5(b)(1) and 5(b)(2) hereof.
(3) The favorable opinion of _____________________,
26
<PAGE>
counsel for the Underwriters, dated such Date of Delivery, relating to
the Option Securities and otherwise to the same effect as the opinion
required by Section 5(b)(3) hereof.
(4) A letter from Ernst & Young LLP, in form and substance
satisfactory to you and dated such Date of Delivery, substantially the
same in scope and substance as the letter furnished to you pursuant to
Section 5(e) hereof, except that the "specified date" in the letter
furnished pursuant to this Section 5(g)(4) shall be a date not more
than three days prior to such Date of Delivery.
If any condition specified in this Section shall not have been
fulfilled when and as required to be fulfilled, the applicable Terms Agreement
may be terminated by you by notice to the Company at any time at or prior to the
Closing Time, and such termination shall be without liability of any party to
any other party except as provided in Section 4 hereof.
Section 6. Indemnification. (a) The Company agrees to indemnify and
hold harmless each Underwriter and each person, if any, who controls any
Underwriter within the meaning of Section 15 of the 1933 Act as follows:
(1) against any and all loss, liability, claim, damage and
expense whatsoever, as incurred, arising out of any untrue statement or
alleged untrue statement of a material fact contained in the
Registration Statement (or any amendment thereto), including the
information deemed to be a part of the Registration Statement pursuant
to Rule 430A(b) or Rule 434 of the 1933 Act Regulations, if applicable,
or the omission or alleged omission therefrom of a material fact
required to be stated therein or necessary to make the statements
therein not misleading or arising out of any untrue statement or
alleged untrue statement of a material fact included in any preliminary
prospectus or the Prospectus (or any amendment or supplement thereto)
or the omission, or alleged omission therefrom, of a material fact
necessary in order to make the statements therein, in the light of the
circumstances under which they were made, not misleading;
(2) against any and all loss, liability, claim, damage and
expense whatsoever, as incurred, to the extent of the aggregate amount
paid in settlement of any litigation, or investigation or proceeding by
any governmental agency or body, commenced or threatened, or of any
claim whatsoever based upon any such untrue statement or omission
referred to
27
<PAGE>
in subsection (1) above, or any such alleged untrue statement or
omission, if such settlement is effected with the written consent of
the Company; and
(3) against any and all expense whatsoever, as incurred
(including, the fees and disbursements of counsel chosen by you),
reasonably incurred in investigating, preparing or defending against
any litigation, or any investigation or proceedings by any governmental
agency or body, commenced or threatened, or any claim whatsoever based
upon any such untrue statement or omission, or any such alleged untrue
statement or omission, to the extent that any such expense is not paid
under (1) or (2) above;
provided, however, that this indemnity agreement shall not apply to any loss,
liability, claim, damage or expense to the extent arising out of any untrue
statement or omission or alleged untrue statement or omission made in reliance
upon and in conformity with written information furnished to the Company by any
Underwriter through you expressly for use in the Registration Statement (or any
amendment thereto) or any preliminary prospectus or the Prospectus (or any
amendment or supplement thereto).
(b) Each Underwriter severally agrees to indemnify and hold harmless
the Company, its directors, each of its officers who signed the Registration
Statement and each person, if any, who controls the Company within the meaning
of Section 15 of the 1933 Act, against any and all loss, liability, claim,
damage and expense arising from breach of this Agreement or any Terms Agreement
or described in the indemnity contained in subsection (a) of this Section, but
only with respect to untrue statements or omissions, or alleged untrue
statements or omissions, made in the Registration Statement (or any amendment
thereto) or any preliminary prospectus or the Prospectus (or any amendment or
supplement thereto) in reliance upon and in conformity with written information
furnished to the Company by such Underwriter through you expressly for use in
the Registration Statement (or any amendment thereto) or any preliminary
prospectus or the Prospectus (or any amendment or supplement thereto).
(c) Each indemnified party shall give notice as promptly as reasonably
practicable to each indemnifying party of any action commenced against it in
respect of which indemnity may be sought hereunder, but failure to so notify an
indemnifying party shall not relieve such indemnifying party from any liability
which it may have otherwise than on account of this indemnity agreement. An
indemnifying party may participate at its own expense in the defense of such
action. In no event shall the indemnifying
28
<PAGE>
parties be liable for fees and expenses of more than one counsel (in addition to
any local counsel) separate from their own counsel for all indemnified parties
in connection with any one action or separate but similar or related actions in
the same jurisdiction arising out of the same general allegations or
circumstances.
Section 7. Contribution. In order to provide for just and equitable
contribution in circumstances in which the indemnity agreement provided for in
Section 6 is for any reason held to be unenforceable by the indemnified parties
although applicable in accordance with its terms, the Company and the
Underwriters with respect to the offering of the Underwritten Securities shall
contribute to the aggregate losses, liabilities, claims, damages and expenses of
the nature contemplated by said indemnity agreement incurred by the Company and
one or more of the Underwriters in respect of such offering, as incurred, in
such proportions that the Underwriters are responsible for that portion
represented by the percentage that the underwriting discount appearing on the
cover page of the applicable Prospectus Supplement in respect of such offering
bears to the initial public offering price appearing thereon and the Company is
responsible for the balance; provided, however, that no person guilty of
fraudulent misrepresentation (within the meaning of Section 11(f) of the 1933
Act) shall be entitled to contribution from any person who was not guilty of
such fraudulent misrepresentation. Notwithstanding the provisions of this
Section 7, no Underwriter shall be required to contribute any amount in excess
of the amount by which the total price at which the Underwritten Securities
purchased by it pursuant to the applicable Terms Agreement and distributed to
the public were offered to the public exceeds the amount of any damages which
such Underwriter has otherwise been required to pay in respect of such losses,
liabilities, claims, damages and expenses. For purposes of this Section 7, each
person, if any, who controls an Underwriter within the meaning of Section 15 of
the 1933 Act shall have the same rights to contribution as such Underwriter, and
each director of the Company, each officer of the Company who signed the
Registration Statement, and each person, if any, who controls the Company within
the meaning of Section 15 of the 1933 Act shall have the same rights to
contribution as the Company.
Section 8. Representations, Warranties and Agreements to Survive
Delivery. All representations, warranties and agreements contained in this
Agreement or the applicable Terms Agreement, or contained in certificates of
officers of the Company submitted pursuant hereto, shall remain operative and in
full force and effect, regardless of any termination of this Agreement, or
29
<PAGE>
investigation made by or on behalf of any Underwriter or any controlling person,
or by or on behalf of the Company and shall survive delivery of and payment for
the Underwritten Securities to the Underwriters.
Section 9. Termination of Agreement. (a) This Agreement (excluding the
applicable Terms Agreement) may be terminated for any reason at any time by the
Company or by you upon the giving of 30 days' written notice of such termination
to the other party hereto; provided that this Agreement may not be terminated
prior to the Closing Time set forth in any applicable Terms Agreement.
(b) You may also terminate the applicable Terms Agreement, by notice to
the Company, at any time at or prior to the Closing Time (i) if there has been,
since the date of such Terms Agreement or since the respective dates as of which
information is given in the Prospectus, any material adverse change in the
condition, financial or otherwise, or in the earnings, business affairs or
business prospects of the Company and its subsidiaries considered as one
enterprise, whether or not arising in the ordinary course of business, or (ii)
if there has occurred any material adverse change in the financial markets in
the United States or any outbreak of hostilities or other calamity or crisis or
escalation of any existing hostilities, the effect of which is such as to make
it, in your reasonable judgment, impracticable to market the Underwritten
Securities or enforce contracts for the sale of the Underwritten Securities, or
(iii) if trading in any of the securities of the Company has been suspended by
the Commission or the New York Stock Exchange, or if trading generally on either
the New York Stock Exchange or the American Stock Exchange has been suspended,
or minimum or maximum prices for trading have been fixed, or maximum ranges for
prices for securities have been required, by either of said exchanges or by
order of the Commission or any other governmental authority, or if a banking
moratorium has been declared by Federal, New York or Virginia authorities, or
(iv) if Preferred Shares are being offered and the rating assigned by any
nationally recognized statistical rating organization to any preferred stock or
debt of the Company as of the date of the applicable Terms Agreement shall have
been lowered since such date or if any such rating organization shall have
publicly announced that it has placed any preferred stock or debt of the Company
on what is commonly termed a "watch list" for possible downgrading. As used in
this Section 9(b), the term "Prospectus" means the Prospectus in the form first
used to confirm sales of the Underwritten Securities.
(c) In the event of any such termination, (x) the covenants set forth
in Section 3 with respect to any offering of
30
<PAGE>
Underwritten Securities shall remain in effect so long as any Underwriter owns
any such Underwritten Securities purchased from the Company pursuant to the
applicable Terms Agreement and (y) the covenant set forth in Section 3(h)
hereof, the provisions of Section 4 hereof, the indemnity and contribution
agreements set forth in Sections 6 and 7 hereof, and the provisions of Sections
8 and 13 hereof shall remain in effect.
Section 10. Default by One or More of the Underwriters. If one or more
of the Underwriters shall fail at the Closing Time to purchase the Underwritten
Securities which it or they are obligated to purchase under the applicable Terms
Agreement (the "Defaulted Securities"), then you shall have the right, within 48
hours thereafter, to make arrangements for one or more of the non-defaulting
Underwriters, or any other underwriters, to purchase all, but not less than all,
of the Defaulted Securities in such amounts as may be agreed upon and upon the
terms herein set forth; if, however, you shall not have completed such
arrangements within such 48-hour period, then:
(a) if the total number of Defaulted Securities does not exceed 10% of
the total number of Underwritten Securities to be purchased pursuant to such
Terms Agreement, the non-defaulting Underwriters named in such Terms Agreement
shall be obligated to purchase the full amount thereof in the proportions that
their respective underwriting obligations hereunder bear to the underwriting
obligations of all non-defaulting Underwriters, or
(b) if the total number of Defaulted Securities exceeds 10% of the
total number of Underwritten Securities to be purchased pursuant to such Terms
Agreement, the applicable Terms Agreement shall terminate without liability on
the part of any non-defaulting Underwriter.
No action taken pursuant to this Section shall relieve any defaulting
Underwriter from liability in respect of its default under this Agreement and
the applicable Terms Agreement.
In the event of any such default which does not result in a termination
of the applicable Terms Agreement, either you or the Company shall have the
right to postpone the Closing Time for a period not exceeding seven days in
order to effect any required changes in the Registration Statement or the
Prospectus or in any other documents or arrangements.
Section 11. Notices. All notices and other communications hereunder
shall be in writing and shall be deemed to have been duly given if mailed or
transmitted by any standard form of
31
<PAGE>
telecommunication. Notices to the Underwriters shall be directed c/o [name and
address of Representative], attention of ______________________________; and
notices to the Company shall be directed to it at 306 East Main Street,
Richmond, Virginia 23219, attention of Glade M. Knight, President and Chief
Executive Officer.
Section 12. Parties. This Agreement and the applicable Terms Agreement
shall inure to the benefit of and be binding upon you and the Company and any
Underwriter who becomes a party to such Terms Agreement, and their respective
successors. Nothing expressed or mentioned in this Agreement or the applicable
Terms Agreement is intended or shall be construed to give any person, firm or
corporation, other than those referred to in Sections 6 and 7 and their heirs
and legal representatives, any legal or equitable right, remedy or claim under
or in respect of this Agreement or such Terms Agreement or any provision herein
or therein contained. This Agreement and the applicable Terms Agreement and all
conditions and provisions hereof and thereof are intended to be for the sole and
exclusive benefit of the parties hereto and thereto and their respective
successors and said controlling persons and officers and directors and their
heirs and legal representatives, and for the benefit of no other person, firm or
corporation. No purchaser of Underwritten Securities from any Underwriter shall
be deemed to be a successor by reason merely of such purchase.
Section 13. Governing Law and Time. This Agreement and the applicable
Terms Agreement shall be governed by and construed in accordance with the laws
of the Commonwealth of Virginia applicable to agreements made and to be
performed in said State. Specified times of day refer to Richmond, Virginia
time.
Section 14. Counterparts. This Agreement and the applicable Terms
Agreement may be executed in one or more counterparts, and if executed in more
than one counterpart the executed counterparts shall constitute a single
instrument.
32
<PAGE>
If the foregoing is in accordance with your understanding of our
agreement, please sign and return to the Company a counterpart hereof, whereupon
this instrument along with all counterparts will become a binding agreement
between you and the Company in accordance with its terms.
Very truly yours,
CORNERSTONE REALTY INCOME TRUST, INC.
By:__________________________________
Name:
Title:
CONFIRMED AND ACCEPTED,
as of the date first
above written:
[Names[s] of Representative[s]]
By:________________________________
33
<PAGE>
Exhibit A
_______ Shares
CORNERSTONE REALTY INCOME TRUST, INC.
(a Virginia corporation)
[Title of Securities]
TERMS AGREEMENT
Dated: _____________, 199__
To: Cornerstone Realty Income Trust, Inc.
306 East Main Street
Richmond, Virginia 23219
Attention: President and Chief Executive Officer
Dear Sirs:
We (the "Representative[s]") understand that Cornerstone Realty Income
Trust, Inc., a Virginia corporation (the "Company"), proposes to issue and sell
the number of its [common shares (the "Common Shares")] [preferred shares (the
"Preferred Shares")] (such [Common Shares]) [Preferred Shares] being
collectively hereinafter [also] referred to as the "Underwritten Securities").
Subject to the terms and conditions set forth or incorporated by reference
herein, the underwriters named below (the "Underwriters") offer to purchase,
severally and not jointly, the respective numbers of [Initial Underwritten
Securities (as defined in the Underwriting Agreement referred to below)] set
forth below opposite their respective names, and a proportionate share of Option
Securities (as defined in the Underwriting Agreement referred to below) to the
extent any are purchased, at the purchase price set forth below.
(1029)V:\CORNER\STOCK.AGT
34
<PAGE>
Number of Shares
of Initial Underwriter
Underwritten Securities
------------------------
Total $
=======================
A-1
<PAGE>
The Underwritten Securities shall have the following terms:
[Common Shares] [Preferred Shares]
Title of Securities:
Number of Shares:
[Current Ratings:]
[Dividend Rate: [$ ] [ %], Payable:]
[Stated Value:]
[Liquidation Preference:]
[Ranking:]
Public Offering Price Per Share: $ [, plus accumulated
dividends, if any, from , 19 .]
Purchase Price Per Share: $ [, plus accumulated dividends,
if any, from , 19 .]
[Conversion Provisions:]
[Redemption Provisions:]
[Sinking Fund Requirements:]
Number of Option Securities, if any, that may be purchased by the
Underwriters:
Delayed Delivery Contracts: [authorized] [not authorized] [Date
of Delivery:
Minimum Contract:
Maximum Number of Shares:
Fee:] Additional co-managers, if any:
Other terms:
Closing time, date and location:
All the provisions contained in the document attached as Annex A hereto
entitled "Cornerstone Realty Income Trust, Inc.- Common Shares and Preferred
Shares-Underwriting Agreement" are hereby incorporated by reference in their
entirety herein and shall be deemed to be a part of this Terms Agreement to the
same extent as if such provisions had been set forth in full herein. Terms
defined in such document are used herein as therein defined.
Please accept this offer no later than ____ o'clock P.M. (Richmond,
Virginia time) on by signing a copy of this Terms
A-2
<PAGE>
Agreement in the space set forth below and returning the signed copy to us.
Very truly yours,
[NAME[S] OF REPRESENTATIVE[S]
By:_________________________
Acting on behalf of
[itself] [themselves] and
the other named
Underwriters.
Accepted:
CORNERSTONE REALTY INCOME TRUST, INC.
By:_________________________
Name:
Title:
A-3
<PAGE>
Exhibit B
CORNERSTONE REALTY INCOME TRUST, INC.
(a Virginia corporation)
[Title of Securities]
DELAYED DELIVERY CONTRACT
_____________, 19__
Cornerstone Realty Income Trust, Inc.
306 East Main Street
Richmond, Virginia 23219
Attention: President and Chief Executive Officer
Dear Sirs:
The undersigned hereby agrees to purchase from Cornerstone Realty
Income Trust, Inc. (the "Company"), and the Company agrees to sell to the
undersigned on __________, 19__ (the "Delivery Date"), of the Company's [insert
title of security] (the "Securities"), offered by the Company's Prospectus dated
__________, 19__, as supplemented by its Prospectus Supplement dated
___________, 19__, receipt of which is hereby acknowledged, at a purchase price
of [$__________], on the Delivery Date, and on the further terms and conditions
set forth in this contract.
Payment for the Securities which the undersigned has agreed to purchase
on the Delivery Date shall be made to the Company or its order by certified or
official bank check in New York Clearing House funds at the office of , on the
Delivery Date, upon delivery to the undersigned of the Securities to be
purchased by the undersigned in definitive form and in such denominations and
registered in such names as the undersigned may designate by written or
telegraphic communication addressed to the Company not less than five full
business days prior to the Delivery Date.
The obligation of the undersigned to take delivery of and make payment
for Securities on the Delivery Date shall be subject only to the conditions that
(1) the purchase of Securities to be
A-4
<PAGE>
made by the undersigned shall not on the Delivery Date be prohibited under the
laws of the jurisdiction to which the undersigned is subject and (2) the
Company, on or before __________, 199_, shall have sold to the Underwriters of
the Securities (the "Underwriters") such principal amount of the Securities as
is to be sold to them pursuant to the Terms Agreement dated __________, 199_
between the Company and the Underwriters. The obligation of the undersigned to
take delivery of and make payment for Securities shall not be affected by the
failure of any purchaser to take delivery of and make payments for Securities
pursuant to other contracts similar to this contract. The undersigned represents
and warrants to you that its investment in the Securities is not, as of the date
hereof, prohibited under the laws of any jurisdiction to which the undersigned
is subject and which govern such investment.
Promptly after completion of the sale to the Underwriters, the Company
will mail or deliver to the undersigned at its address set forth below notice to
such effect, accompanied by a copy of the opinion of counsel for the Company
delivered to the Underwriters in connection therewith.
By the execution hereof, the undersigned represents and warrants to the
Company that all necessary action for the due execution and delivery of this
contract and the payment for and purchase of the Securities has been taken by it
and no further authorization or approval of any governmental or other regulatory
authority is required for such execution, delivery, payment or purchase, and
that, upon acceptance hereof by the Company and mailing or delivery of a copy as
provided below, this contract will constitute a valid and binding agreement of
the undersigned in accordance with its terms.
This contract will inure to the benefit of and be binding upon the
parties hereto and their respective successors, but will not be assignable by
either party hereto without the written consent of the other.
It is understood that the Company will not accept Delayed Delivery
Contracts for a number of Securities in excess of ________ and that the
acceptance of any Delayed Delivery Contract is in the Company's sole discretion
and, without limiting the foregoing, need not be on a first-come, first-served
basis. If this contract is acceptable to the Company, it is requested that the
Company sign the form of acceptance on a copy hereof and mail or deliver a
signed copy hereof to the undersigned at its address set forth below. This will
become a binding contract between the Company and the undersigned when such copy
is so mailed or
A-5
<PAGE>
delivered.
This Agreement shall be governed by the laws of the State of New York.
Yours very truly,
-----------------------------
(Name of Purchaser)
By:__________________________
(Title)______________________
(Address)____________________
Accepted as of the date first above written.
CORNERSTONE REALTY INCOME TRUST, INC.
By:__________________________
(Title)
PURCHASER-PLEASE COMPLETE AT TIME OF SIGNING
The name and telephone number of the representative of the Purchaser
with whom details of delivery on the Delivery Date may be discussed are as
follows: (Please print.)
Telephone No.
Name (including Area Code
--------------------
A-6
Exhibit 4.5
CORNERSTONE REALTY INCOME TRUST, INC.
TO
[_____________________________________,]
TRUSTEE
Indenture dated as of ______________, 1997
Senior Debt Securities
i
<PAGE>
<TABLE>
<CAPTION>
TABLE OF CONTENTS
Page
ARTICLE ONE
DEFINITIONS AND OTHER PROVISIONS OF GENERAL APPLICATION
<S> <C>
SECTION 101. Definitions ............................................................................ 1
Acquired Debt ............................................................................. 2
Act..................................................................................................... 2
Additional Amounts...................................................................................... 2
Affiliate............................................................................................... 2
Annual Service Charge................................................................................... 2
Authenticating Agent.................................................................................... 2
Authorized Newspaper.................................................................................... 2
Bankruptcy Law.......................................................................................... 2
Bearer Security......................................................................................... 3
Board of Directors...................................................................................... 3
Board Resolution........................................................................................ 3
Business Day............................................................................................ 3
Capital Stock........................................................................................... 3
CEDEL................................................................................................... 3
Commission.............................................................................................. 3
Consolidated Income Available for Debt Service.......................................................... 3
Conversion Event........................................................................................ 3
Corporate Trust Office.................................................................................. 3
Corporate Trust Operations Office....................................................................... 3
Corporation............................................................................................. 4
Coupon.................................................................................................. 4
Custodian............................................................................................... 4
Debt.................................................................................................... 4
Defaulted Interest...................................................................................... 4
Disqualified Stock...................................................................................... 4
Dollar or $............................................................................................. 5
DTC..................................................................................................... 5
ECU..................................................................................................... 5
Euroclear............................................................................................... 5
European Communities.................................................................................... 5
European Monetary System................................................................................ 5
Event of Default........................................................................................ 5
Exchange Act............................................................................................ 5
ii
<PAGE>
Foreign Currency....................................................................................... 5
Funds from Operations.................................................................................. 5
GAAP................................................................................................... 5
Government Obligations................................................................................. 6
Holder................................................................................................. 6
Indenture.............................................................................................. 6
Indexed Security....................................................................................... 6
Interest............................................................................................... 6
Interest Payment Date.................................................................................. 7
Make-Whole Amount...................................................................................... 7
Maturity............................................................................................... 7
Officers' Certificate.................................................................................. 7
Opinion of Counsel..................................................................................... 7
Original Issue Discount Security....................................................................... 7
Outstanding............................................................................................ 7
Paying Agent........................................................................................... 9
Person................................................................................................. 9
Place of Payment....................................................................................... 9
Predecessor Security................................................................................... 9
Redemption Date........................................................................................ 9
Redemption Price....................................................................................... 9
Registered Security.................................................................................... 9
Regular Record Date.................................................................................... 9
Repayment Date......................................................................................... 9
Repayment Price........................................................................................ 9
Responsible Officer.................................................................................... 9
Securities Act......................................................................................... 10
Security............................................................................................... 10
Security Register and Security Registrar............................................................... 10
Significant Subsidiary................................................................................. 10
Special Record Date.................................................................................... 10
Stated Maturity........................................................................................ 10
Subsidiary............................................................................................. 10
Total Assets........................................................................................... 10
Trust.................................................................................................. 10
Trust Indenture Act or TIA............................................................................. 10
Trust Request and Trust Order.......................................................................... 11
Trustee................................................................................................ 11
Undepreciated Real Estate Assets....................................................................... 11
United States.......................................................................................... 11
United States person................................................................................... 11
Yield to Maturity...................................................................................... 11
iii
<PAGE>
SECTION 102. Compliance Certificates and Opinions.............................................. 11
SECTION 103. Form of Documents Delivered to Trustee............................................
SECTION 104. Acts of Holders...................................................................
SECTION 105. Notices, etc., to Trustee and Trust............................................... 14
SECTION 106. Notice to Holders; Waiver......................................................... 15
SECTION 107. Effect of Headings and Table of Contents.......................................... 16
SECTION 108. Successors and Assigns............................................................ 16
SECTION 109. Separability Clause............................................................... 16
SECTION 110. Benefits of Indenture............................................................. 16
SECTION 111. No Personal Liability............................................................. 16
SECTION 112. Governing Law..................................................................... 17
SECTION 113. Legal Holidays.................................................................... 17
ARTICLE TWO
SECURITIES FORMS
SECTION 201. Forms of Securities............................................................... 18
SECTION 202. Form of Trustee's Certificate of Authentication................................... 18
SECTION 203. Securities Issuable in Global Form................................................ 19
ARTICLE THREE
THE SECURITIES
SECTION 301. Amount Unlimited; Issuable in Series.............................................. 20
SECTION 302. Denominations..................................................................... 24
SECTION 303. Execution, Authentication Delivery and Dating..................................... 24
SECTION 304. Temporary Securities.............................................................. 26
SECTION 305. Registration, Registration of Transfer and Exchange............................... 29
SECTION 306. Mutilated, Destroyed, Lost and Stolen Securities.................................. 32
SECTION 307. Payment of Interest; Interest Rights Preserved.................................... 33
SECTION 308. Persons Deemed Owners............................................................. 35
SECTION 309. Cancellation...................................................................... 36
SECTION 310. Computation of Interest........................................................... 37
ARTICLE FOUR
SATISFACTION AND DISCHARGE
SECTION 401. Satisfaction and Discharge of Indenture........................................... 37
SECTION 402. Application of Trust Funds........................................................ 38
iv
<PAGE>
ARTICLE FIVE
REMEDIES
SECTION 501. Events of Default................................................................. 39
SECTION 502. Acceleration of Maturity; Rescission and Annulment................................ 41
SECTION 503. Collection of Indebtedness and Suits for Enforcement by Trustee................... 42
SECTION 504. Trustee May File Proofs of Claim.................................................. 43
SECTION 505. Trustee May Enforce Claims Without Possession of Securities or Coupons............ 43
SECTION 506. Application of Money Collected.................................................... 44
SECTION 507. Limitation on Suits............................................................... 44
SECTION 508. Unconditional Right of Holders to Receive Principal, Premium or
Make-Whole Amount, if any, Interest and Additional Amounts..................... 45
SECTION 509. Restoration of Rights and Remedies................................................ 45
SECTION 510. Rights and Remedies Cumulative.................................................... 45
SECTION 511. Delay or Omission Not Waiver...................................................... 46
SECTION 512. Control by Holders of Securities.................................................. 46
SECTION 513. Waiver of Past Defaults........................................................... 46
SECTION 514. Waiver of Usury, Stay or Extension Laws........................................... 47
SECTION 515. Undertaking for Costs............................................................. 47
ARTICLE SIX
THE TRUSTEE
SECTION 601. Notice of Defaults................................................................ 48
SECTION 602. Certain Rights of Trustee......................................................... 48
SECTION 603. Not Responsible for Recitals or Issuance of Securities............................ 49
SECTION 604. May Hold Securities............................................................... 50
SECTION 605. Money Held in Trust............................................................... 50
SECTION 606. Compensation and Reimbursement.................................................... 50
SECTION 607. Corporate Trustee Required; Eligibility; Conflicting Interests.................... 51
SECTION 608. Resignation and Removal; Appointment of Successor................................. 51
SECTION 609. Acceptance of Appointment By Successor............................................ 53
SECTION 610. Merger, Conversion, Consolidation or Succession to Business....................... 54
SECTION 611. Appointment of Authenticating Agent............................................... 54
ARTICLE SEVEN
HOLDERS' LISTS AND REPORTS BY TRUSTEE AND TRUST
SECTION 701. Disclosure of Names and Addresses of Holders...................................... 56
SECTION 702. Reports by Trustee................................................................ 56
SECTION 703. Reports by Trust.................................................................. 56
SECTION 704. Trust to Furnish Trustee Names and Addresses of Holders........................... 57
v
<PAGE>
ARTICLE EIGHT
CONSOLIDATION, MERGER, SALE, LEASE OR CONVEYANCE
SECTION 801. Consolidations and Mergers of Trust and Sales, Leases and
Conveyances Permitted Subject to Certain Conditions......................... 58
SECTION 802. Rights and Duties of Successor Corporation........................................ 58
SECTION 803. Officers' Certificate and Opinion of Counsel...................................... 59
ARTICLE NINE
SUPPLEMENTAL INDENTURES
SECTION 901. Supplemental Indentures Without Consent of Holders................................ 60
SECTION 902. Supplemental Indentures with Consent of Holders................................... 61
SECTION 903. Execution of Supplemental Indentures.............................................. 63
SECTION 904. Effect of Supplemental Indentures................................................. 63
SECTION 905. Conformity with Trust Indenture Act............................................... 63
SECTION 906. Reference in Securities to Supplemental Indentures................................ 63
SECTION 907. Notice of Supplemental Indentures................................................. 63
ARTICLE TEN
COVENANTS
SECTION 1001. Payment of Principal, Premium or Make-Whole Amount,
if any, Interest and Additional Amounts..................................... 64
SECTION 1002. Maintenance of Office or Agency.................................................... 64
SECTION 1003. Money for Securities Payments to Be Held in Trust.................................. 66
SECTION 1004. [Reserved]......................................................................... 67
SECTION 1005. Existence.......................................................................... 69
SECTION 1006. Maintenance of Properties.......................................................... 69
SECTION 1007. Insurance.......................................................................... 69
SECTION 1008. Payment of Taxes and Other Claims.................................................. 69
SECTION 1009. [Reserved]......................................................................... 69
SECTION 1010. Statement as to Compliance......................................................... 70
SECTION 1011. Additional Amounts................................................................. 70
SECTION 1012. Waiver of Certain Covenants........................................................ 71
vi
<PAGE>
ARTICLE ELEVEN
REDEMPTION OF SECURITIES
SECTION 1101. Applicability of Article........................................................... 72
SECTION 1102. Election to Redeem; Notice to Trustee.............................................. 72
SECTION 1103. Selection by Trustee of Securities to Be Redeemed.................................. 72
SECTION 1104. Notice of Redemption............................................................... 72
SECTION 1105. Deposit of Redemption Price........................................................ 74
SECTION 1106. Securities Payable on Redemption Date.............................................. 74
SECTION 1107. Securities Redeemed in Part........................................................ 75
ARTICLE TWELVE
SINKING FUNDS
SECTION 1201. Applicability of Article........................................................... 76
SECTION 1202. Satisfaction of Sinking Fund Payments with Securities.............................. 76
SECTION 1203. Redemption of Securities for Sinking Fund.......................................... 76
ARTICLE THIRTEEN
REPAYMENT AT THE OPTION OF HOLDERS
SECTION 1301. Applicability of Article........................................................... 77
SECTION 1302. Repayment of Securities............................................................ 77
SECTION 1303. Exercise of Option................................................................. 77
SECTION 1304. When Securities Presented for Repayment Become Due and Payable..................... 78
SECTION 1305. Securities Repaid in Part.......................................................... 79
ARTICLE FOURTEEN
DEFEASANCE AND COVENANT DEFEASANCE
SECTION 1401. Applicability of Article; Trust's Option to Effect Defeasance or
Covenant Defeasance................................................................ 80
SECTION 1402. Defeasance and Discharge........................................................... 80
SECTION 1403. Covenant Defeasance................................................................ 81
SECTION 1404. Conditions to Defeasance or Covenant Defeasance.................................... 81
SECTION 1405. Deposited Money and Government Obligations to Be Held
in Trust; Other Miscellaneous Provisions.................................... 83
ARTICLE FIFTEEN
vii
<PAGE>
MEETINGS OF HOLDERS OF SECURITIES
SECTION 1501. Purposes for Which Meetings May Be Called.......................................... 84
SECTION 1502. Call, Notice and Place of Meetings................................................. 84
SECTION 1503. Persons Entitled to Vote at Meetings............................................... 85
SECTION 1504. Quorum; Action..................................................................... 85
SECTION 1505. Determination of Voting Rights; Conduct and Adjournment
of Meetings................................................................. 86
SECTION 1506. Counting Votes and Recording Action of Meetings.................................... 87
SECTION 1507. Evidence of Action Taken by Holders................................................ 87
SECTION 1508. Proof of Execution of Instruments.................................................. 88
</TABLE>
TESTIMONIUM
SIGNATURES AND SEALS
ACKNOWLEDGMENTS
EXHIBIT A -- FORMS OF CERTIFICATION
viii
<PAGE>
CORNERSTONE REALTY INCOME TRUST, INC.
Reconciliation and tie between Trust Indenture Act of 1939, as amended (the
"1939 Act"), and Indenture, dated as of ________________, 1997
Trust Indenture Act Section Indenture Section
ss. 310 (a)(1)..................................................607(a)
(a)(2)..................................................607(a)
(b)................................................607(b), 608
ss. 312 (c)........................................................701
ss. 314 (a)........................................................703
(a)(4)....................................................1011
(c)(1).....................................................102
(c)(2).....................................................102
(e)........................................................102
ss. 315 (b)........................................................601
ss. 316 (a) (last sentence)........................101 ("Outstanding")
(a)(1)(A).............................................502, 512
(a)(1)(B)..................................................513
(b)........................................................508
ss. 317 (a)(1).....................................................503
(a)(2).....................................................504
ss. 318 (a)........................................................112
(c)........................................................112
- --------------------
NOTE: This reconciliation and tie shall not, for any purpose, be
deemed to be a part of the Indenture.
Attention should also be directed to Section 318(c) of the
1939 Act, which provides that the provisions of Sections 310
to and including 317 of the 1939 Act are a part of and govern
every qualified indenture, whether or not physically contained
therein.
ix
<PAGE>
INDENTURE, dated as of _________________, 1997, between CORNERSTONE
REALTY INCOME TRUST, INC., a Virginia corporation (hereinafter called the
"Trust"), having its principal office at 306 East Main Street, Richmond,
Virginia 23219, and [_____________________________________, a national banking
association,] as Trustee hereunder (hereinafter called the "Trustee"), having
its Corporate Trust Office at [______________________________________________.]
RECITALS OF THE TRUST
The Trust deems it necessary to issue from time to time for its lawful
purposes senior debt securities (hereinafter called the "Securities") evidencing
its unsecured and unsubordinated indebtedness, and has duly authorized the
execution and delivery of this Indenture to provide for the issuance from time
to time of the Securities, unlimited as to aggregate principal amount, to bear
interest at the rates or formulas, to mature at such times and to have such
other provisions as shall be fixed therefor as hereinafter provided.
All things necessary to make this Indenture a valid agreement of the
Trust, in accordance with its terms, have been done.
NOW, THEREFORE, THIS INDENTURE WITNESSETH:
For and in consideration of the premises and the purchase of the
Securities by the Holders thereof, it is mutually covenanted and agreed, for the
equal and proportionate benefit of all Holders of the Securities, as follows:
ARTICLE ONE
DEFINITIONS AND OTHER PROVISIONS OF GENERAL APPLICATION
SECTION 101. Definitions.
For all purposes of this Indenture, except as otherwise expressly
provided or the context otherwise requires:
(1) the terms defined in this Article have the meanings
assigned to them in this Article, and include the plural as well as the
singular;
(2) all other terms used herein which are defined in the TIA,
either directly or by reference therein, have the meanings assigned to
them therein, and the terms "cash transaction" and "self-liquidating
paper," as used in TIA Section 311, shall have the meanings assigned to
them in the rules of the Commission adopted under the TIA;
1
<PAGE>
(3) all accounting terms not otherwise defined herein have the
meanings assigned to them in accordance with GAAP; and
(4) the words "herein," "hereof" and "hereunder" and other
words of similar import refer to this Indenture as a whole and not to
any particular Article, Section or other subdivision.
Certain terms, used principally in Article Three, Article Five, Article
Six and Article Ten, are defined in those Articles. In addition, the following
terms shall have the indicated respective meanings:
"Acquired Debt" means Debt of a Person (i) existing at the time such
Person becomes a Subsidiary or (ii) assumed in connection with the acquisition
of assets from such Person, in each case, other than Debt incurred in connection
with, or in contemplation of, such Person becoming a Subsidiary or such
acquisition. Acquired Debt shall be deemed to be incurred on the date of the
related acquisition of assets from any Person or the date the acquired Person
becomes a Subsidiary.
"Act" has the meaning specified in Section 104.
"Additional Amounts" means any additional amounts which are required by
a Security, under circumstances specified therein, to be paid by the Trust in
respect of certain taxes imposed on certain Holders and which are owing to such
Holders.
"Affiliate" of any specified Person means any other Person directly or
indirectly controlling or controlled by or under direct or indirect common
control with such specified Person. For the purposes of this definition,
"control" when used with respect to any specified Person means the power to
direct the management and policies of such Person, directly or indirectly,
whether through the ownership of voting securities, by contract or otherwise;
and the terms "controlling" and "controlled" have meanings correlative to the
foregoing.
"Annual Service Charge" as of any date means the maximum amount which
is payable in any period for interest on, and original issue discount of, Debt
of the Trust and its Subsidiaries and the amount of dividends which are payable
in respect of any Disqualified Stock.
"Authenticating Agent" means any authenticating agent appointed by the
Trustee pursuant to Section 611.
"Authorized Newspaper" means a newspaper, printed in the English
language or in an official language of the country of publication, customarily
published on each Business Day, whether or not published on Saturdays, Sundays
or holidays, and of general circulation in each place in connection with which
the term is used or in the financial community of each such
2
<PAGE>
place. Whenever successive publications are required to be made in Authorized
Newspapers, the successive publications may be made in the same or in different
Authorized Newspapers in the same city meeting the foregoing requirements and in
each ease on any Business Day.
"Bankruptcy Law" has the meaning specified in Section 501.
"Bearer Security" means a Security which is payable to bearer.
"Board of Directors" means the Board of Directors of the Trust, the
executive committee or any other committee of that board duly authorized to act
for it in respect hereof.
"Board Resolution" means a copy of a resolution certified by the
Secretary or an Assistant Secretary of the Trust to have been duly adopted by
the Board of Directors, and to be in full force and effect on the date of such
certification, and delivered to the Trustee.
"Business Day," when used with respect to any Place of Payment or any
other particular location referred to in this Indenture or in the Securities,
means, unless otherwise specified with respect to any Securities pursuant to
Section 301, any day, other than a Saturday or Sunday, that is neither a legal
holiday nor a day on which banking institutions in that Place of Payment or
particular location are authorized or required by law, regulation or executive
order to close.
"Capital Stock" means, with respect to any Person, any capital stock
(including preferred stock), shares, interests, participations or other
ownership interests (however designated) of such Person and any rights (other
than debt securities convertible or exchangeable for corporate stock), warrants
or options to purchase any thereof.
"CEDEL" means Centrale de Livraison de Valeurs Mobilieres, S.A., or its
successor.
"Commission" means the Securities and Exchange Commission, as from time
to time constituted, created under the Exchange Act, or, if at any time after
execution of this instrument such Commission is not existing and performing the
duties now assigned to it under the Trust Indenture Act, then the body
performing such duties on such date.
"Consolidated Income Available for Debt Service" for any period means
Funds from Operations of the Trust and its Subsidiaries plus amounts which have
been deducted for interest on Debt of the Trust and its Subsidiaries.
"Conversion Event" means the cessation of use of (i) a Foreign Currency
(other than the ECU or other currency unit) both by the government of the
country which issued such currency and for the settlement of transactions by a
central bank or other public institutions of or within the international banking
community, (ii) the ECU both within the European Monetary System and for the
settlement of transactions by public institutions of or within the
3
<PAGE>
European Communities or (iii) any currency unit (or composite currency) other
than the ECU for the purposes for which it was established.
"Corporate Trust Office" means the office of the Trustee at which, at
any particular time, its corporate trust business shall be principally
administered and at which notices or demands to or upon the Trust in respect of
the Securities of or within a series and this Indenture may be served, which
office at the date hereof is located at [____________________________________
________________________.]
"Corporate Trust Operations Office" means the office of the Trustee at
which, at any particular time, the principal of (and Make-Whole Amount, if any),
interest, if any, on, and Additional Amounts, if any, payable in respect of,
Securities of or within a series shall be payable and any Registered Securities
of or within such series may be surrendered for registration of transfer or
exchange, which office at the date hereof is located at [_______________________
_______________________________.]
"Corporation" includes corporations, associations, companies and
business trusts.
"Coupon" means any interest coupon appertaining to a Bearer Security.
"Custodian" has the meaning set forth in Section 501.
"Debt" of the Trust or any Subsidiary means any indebtedness of the
Trust or any Subsidiary, whether or not contingent, in respect of (without
duplication) (i) borrowed money or evidenced by bonds, notes, debentures or
similar instruments, (ii) indebtedness secured by any mortgage, pledge, lien,
charge, encumbrance or any security interest existing on property owned by the
Trust or any Subsidiary, (iii) the reimbursement obligations, contingent or
otherwise, in connection with any letters of credit actually issued or amounts
representing the balance deferred and unpaid of the purchase price of any
property or services, except any such balance that constitutes an accrued
expense or trade payable, or all conditional sale obligations or obligations
under any title retention agreement, (iv) the principal amount of all
obligations of the Trust or any Subsidiary with respect to redemption, repayment
or other repurchase of any Disqualified Stock or (v) any lease of property by
the Trust or any Subsidiary as lessee which is reflected on the Trust's
consolidated balance sheet as a capitalized lease in accordance with GAAP to the
extent, in the case of items of indebtedness under (i) through (iii) above, that
any such items (other than letters of credit) would appear as a liability on the
Trust's consolidated balance sheet in accordance with GAAP, and also includes,
to the extent not otherwise included, any obligation by the Trust or any
Subsidiary to be liable for, or to pay, as obligor, guarantor or otherwise
(other than for purposes of collection in the ordinary course of business), Debt
of another Person (other than the Trust or any Subsidiary).
"Defaulted Interest" has the meaning specified in Section 307.
4
<PAGE>
"Disqualified Stock" means, with respect to any Person, any Capital
Stock of such Person which by the terms of such Capital Stock (or by the terms
of any security into which it is convertible or for which it is exchangeable or
exercisable), upon the happening of any event or otherwise (i) matures or is
mandatorily redeemable, pursuant to a sinking fund obligation or otherwise, (ii)
is convertible into or exchangeable or exercisable for Debt or Disqualified
Stock or (iii) is redeemable at the option of the holder thereof, in whole or in
part, in each case on or prior to the Stated Maturity of the series of Debt
Securities.
"Dollar" or "$" means a dollar or other equivalent unit in such coin or
currency of the United States of America as at the time shall be legal tender
for payment of public and private debts.
"DTC" means The Depository Trust Company.
"ECU" means the European Currency Unit as defined and revised from time
to time by the Council of the European Communities.
"Euroclear" means Morgan Guaranty Trust Company of New York, Brussels
Office, or its successor as operator of the Euroclear System.
"European Communities" means the European Economic Community, the
European Coal and Steel Community and the European Atomic Energy Community.
"European Monetary System" means the European Monetary System
established by the Resolution of December 5, 1978 of the Council of the European
Communities.
"Event of Default" has the meaning specified in Article Five.
"Exchange Act" means the Securities Exchange Act of 1934, as amended,
and the rules and regulations promulgated thereunder by the Commission.
"Foreign Currency" means any currency, currency unit or composite
currency, including, without limitation, the ECU, issued by the government of
one or more countries other than the United States of America or by any
recognized confederation or association of such governments.
"Funds from Operations" for any period means income before gains
(losses) on investments and extraordinary items plus amounts which have been
deducted, and minus amounts which have been added, for the following items
(without duplication): (a) provision for Preferred Stock dividends, (b)
provision for property depreciation and amortization and (c) the effect of any
adjustments for significant non-recurring items, including any noncash charge
resulting from a change in accounting principles in determining income before
gains (losses) on investments and extraordinary items for such period, as
reflected in the financial statements
5
<PAGE>
of the Trust and its Subsidiaries for such period determined on a consolidated
basis in accordance with GAAP.
"GAAP" means generally accepted accounting principles as used in the
United States applied on a consistent basis as in effect from time to time;
provided, that solely for purposes of any calculation required by the financial
covenants contained herein, "GAAP" shall mean generally accepted accounting
principles as used in the United States on the date hereof, applied on a
consistent basis.
"Government Obligations" means securities which are (i) direct
obligations of the United States of America or the government which issued the
Foreign Currency in which the Securities of a particular series are payable, for
the payment of which its full faith and credit is pledged or (ii) obligations of
a Person controlled or supervised by and acting as an agency or instrumentality
of the United States of America or such government which issued the Foreign
Currency in which the Securities of such series are payable, the payment of
which is unconditionally guaranteed as a full faith and credit obligation by the
United States of America or such other government, which, in either case, are
not callable or redeemable at the option of the issuer thereof, and shall also
include a depository receipt issued by a bank or trust company as custodian with
respect to any such Government Obligation or a specific payment of interest on
or principal of any such Government Obligation held by such custodian for the
account of the holder of a depository receipt, provided that (except as required
by law) such custodian is not authorized to make any deduction from the amount
payable to the holder of such depository receipt from any amount received by the
custodian in respect of the Government Obligation or the specific payment of
interest on or principal of the Government Obligation evidenced by such
depository receipt.
"Holder" means, in the case of a Registered Security, the Person in
whose name a Security is registered in the Security Register and, in the case of
a Bearer Security, the bearer thereof and, when used with respect to any coupon,
shall mean the bearer thereof.
"Indenture" means this instrument as originally executed or as it may
from time to time be supplemented or amended by one or more indentures
supplemental hereto entered into pursuant to the applicable provisions hereof,
and shall include the terms of particular series of Securities established as
contemplated by Section 301; provided, however, that, if at any time more than
one Person is acting as Trustee under this instrument, "Indenture" shall mean,
with respect to any one or more series of Securities for which such Person is
Trustee, this instrument as originally executed or as it may from time to time
be supplemented or amended by one or more indentures supplemental hereto entered
into pursuant to the applicable provisions hereof and shall include the terms of
the or those particular series of Securities for which such Person is Trustee
established as contemplated by Section 301, exclusive, however, of any
provisions or terms which relate solely to other series of Securities for which
such Person is not Trustee, regardless of when such terms or provisions were
adopted, and exclusive of any provisions or terms adopted by means of one or
more indentures supplemental
6
<PAGE>
hereto executed and delivered after such Person had become such Trustee but to
which such Person, as such Trustee, was not a party.
"Indexed Security" means a Security the terms of which provide that the
principal amount thereof payable at Stated Maturity may be more or less than the
principal face amount thereof at original issuance.
"Interest" when used with respect to an Original Issue Discount
Security which by its terms bears interest only after Maturity, shall mean
interest payable after Maturity, and, when used with respect to a Security which
provides for the payment of Additional Amounts pursuant to Section 1011,
includes such Additional Amounts.
"Interest Payment Date" means, when used with respect to any Security,
the Stated Maturity of an installment of interest on such Security.
"Make-Whole Amount" means the amount, if any, in addition to principal
which is required by a Security, under the terms and conditions specified
therein or as otherwise specified as contemplated by Section 301, to be paid by
the Trust to the Holder thereof in connection with any optional redemption or
accelerated payment of such Security.
"Maturity" means, when used with respect to any Security, the date on
which the principal of such Security or an installment of principal become due
and payable as therein or herein provided, whether at the Stated Maturity or by
declaration of acceleration, notice of redemption, notice of option to elect
repayment, repurchase or otherwise.
"Officers' Certificate" means a certificate signed by the Chief
Executive Officer and by the Chief Financial Officer of the Trust, and delivered
to the Trustee.
"Opinion of Counsel" means a written opinion of counsel, who may be an
employee of or counsel for the Trust or other counsel satisfactory to the
Trustee.
"Original Issue Discount Security" means any Security which provides
for an amount less than the principal amount thereof to be due and payable upon
a declaration of acceleration of the Maturity thereof pursuant to Section 502.
"Outstanding," when used with respect to Securities, means, as of the
date of determination, all Securities theretofore authenticated and delivered
under this Indenture, except:
(i) Securities theretofore cancelled by the Trustee
or delivered to the Trustee for cancellation;
(ii) Securities, or portions thereof, for whose
7
<PAGE>
payment or redemption or repayment at the option of the Holder money in
the necessary amount has been theretofore deposited with the Trustee or
any Paying Agent (other than the Trust) in trust or set aside and
segregated in trust by the Trust (if the Trust shall act as its own
Paying Agent) for the holders of such Securities and any coupons
appertaining thereto; provided that, if such Securities are to be
redeemed, notice of such redemption has been duly given pursuant to
this Indenture or other provision therefor satisfactory to the Trustee
has been made;
(iii) Securities, except solely to the extent
provided in Sections 1402 or 1403, as applicable, with respect to which
the Trust has effected defeasance and/or covenant defeasance as
provided in Article Fourteen;
(iv) Securities which have been paid pursuant to
Section 306 or in exchange for or in lieu of which other Securities
have been authenticated and delivered pursuant to this Indenture, other
than any such Securities in respect of which there shall have been
presented to the Trustee proof satisfactory to it that such Securities
are held by a bona fide purchaser in whose hands such Securities are
valid obligations of the Trust; and
(v) Securities converted into Capital Stock of the
Trust pursuant to or in accordance with this Indenture if the terms of
such Securities provide for convertibility pursuant to Section 301;
provided, however, that in determining whether the Holders of the requisite
principal amount of the Outstanding Securities have given any request, demand,
authorization, direction, notice, consent or waiver hereunder or are present at
a meeting of Holders for quorum purposes, and for the purpose of making the
calculations required by TIA Section 313, (i) the principal amount of an
Original Issue Discount Security that may be counted in making such
determination or calculation and that shall be deemed to be Outstanding for such
purpose shall be equal to the amount of principal thereof that would be (or
shall have been declared to be) due and payable, at the time of such
determination, upon a declaration of acceleration of the maturity thereof
pursuant to Section 502, (ii) the principal amount of any Security denominated
in a Foreign Currency that may be counted in making such determination or
calculation and that shall be deemed Outstanding for such purpose shall be equal
to the Dollar equivalent, determined pursuant to Section 301 as of the date such
Security is originally issued by the Trust, of the principal amount (or, in the
case of an Original Issue Discount Security, the Dollar equivalent as of such
date of original issuance of the amount determined as provided in clause (i)
above) of such Security, (iii) the principal amount of any Indexed Security that
may be counted in making such determination or calculation and that shall be
deemed
8
<PAGE>
outstanding for such purpose shall be equal to the principal face amount of such
Indexed Security at original issuance, unless otherwise provided with respect to
such Indexed Security pursuant to Section 301, and (iv) Securities owned by the
Trust or any other obligor upon the Securities or any Affiliate of the Trust or
of such other obligor shall be disregarded and deemed not to be Outstanding,
except that, in determining whether the Trustee shall be protected in making
such calculation or in relying upon any such request, demand, authorization,
direction, notice, consent or waiver, only Securities which the Trustee knows to
be so owned shall be so disregarded. Securities so owned which have been pledged
in good faith may be regarded as Outstanding if the pledgee establishes to the
satisfaction of the Trustee the pledgee's right so to act with respect to such
Securities and that the pledgee is not the Trust or any other obligor upon the
Securities or any Affiliate of the Trust or of such other obligor.
"Paying Agent" means any Person authorized by the Trust to pay the
principal of (and premium or Make-Whole Amount, if any) or interest on any
Securities or coupons on behalf of the Trust, or if no such Person is
authorized, the Trust.
"Person" means any individual, corporation, partnership, limited
liability company, joint venture, association, joint-stock company, trust,
unincorporated organization or government or any agency or political subdivision
thereof.
"Place of Payment" means, when used with respect to the Securities of
or within any series, the place or places where the principal of (and premium or
Make-Whole Amount, if any) and interest on such Securities are payable as
specified in or pursuant to Sections 301 and 1002.
"Predecessor Security" of any particular Security means every previous
Security evidencing all or a portion of the same debt as that evidenced by such
particular Security; and, for the purposes of this definition, any Security
authenticated and delivered under Section 306 in exchange for or in lieu of a
mutilated, destroyed, lost or stolen Security or a Security to which a
mutilated, destroyed, lost or stolen coupon appertains shall be deemed to
evidence the same debt as the mutilated, destroyed, lost or stolen Security or
the Security to which the mutilated, destroyed, lost or stolen coupon
appertains.
"Redemption Date" means, when used with respect to any Security to be
redeemed in whole or in part, the date fixed for such redemption by or pursuant
to this Indenture.
"Redemption Price" means, when used with respect to any Security to be
redeemed, the price at which it is to be redeemed pursuant to this Indenture.
"Registered Security" means any Security which is registered in the
Security Register.
"Regular Record Date" for the installment of interest payable on any
Interest Payment
9
<PAGE>
Date on the Registered Securities of or within any series means the date
specified for that purpose as contemplated by Section 301, whether or not a
Business Day.
"Repayment Date" means, when used with respect to any Security to be
repaid or repurchased at the option of the Holder, the date fixed for such
repayment or repurchase by or pursuant to this Indenture.
"Repayment Price" means, when used with respect to any Security to be
repaid or purchased at the option of the Holder, the price at which it is to be
repaid or repurchased by or pursuant to this Indenture.
"Responsible Officer" means, when used with respect to the Trustee, any
officer of the Trustee assigned by the Trustee to administer its corporate trust
matters.
"Securities Act" means the Securities Act of 1933, as amended, and the
rules and regulations promulgated thereunder by the Commission.
"Security" has the meaning stated in the first recital of this
Indenture and, more particularly, means any Security or Securities authenticated
and delivered under this Indenture; provided, however, that, if at any time
there is more than one Person acting as Trustee under this Indenture,
"Securities" with respect to the Indenture as to which such Person is Trustee
shall have the meaning stated in the first recital of this Indenture and shall
more particularly mean Securities authenticated and delivered under this
Indenture, exclusive, however, of Securities of or within any series as to which
such Person is not Trustee.
"Security Register" and "Security Registrar" have the respective
meanings specified in Section 305.
"Significant Subsidiary" means any Subsidiary which is a "significant
subsidiary" (within the meaning of Regulation S-X, promulgated under the
Securities Act) of the Trust.
"Special Record Date" for the payment of any Defaulted Interest on the
Registered Securities of or within any series means a date fixed by the Trustee
pursuant to Section 307.
"Stated Maturity" means, when used with respect to any Security or any
installment of principal thereof or interest thereon, the date specified in such
Security or a coupon representing such installment of interest as the fixed date
on which the principal of such Security or such installment of principal or
interest is due and payable.
"Subsidiary" means, with respect to any Person, any corporation or
other entity of which a majority of (a) the voting power of the voting equity
securities or (b) the outstanding equity interests of which are owned, directly
or indirectly, by such Person. For the purposes of this definition, "voting
equity securities" means equity securities having voting power for the
10
<PAGE>
election of directors, whether at all times or only so long as no senior class
of security has such voting power by reason of any contingency.
"Total Assets" as of any date means the sum of (i) the Trust's
Undepreciated Real Estate Assets and (ii) all other assets of the Trust
determined in accordance with GAAP (but excluding intangibles).
"Trust" means the Person named as the "Trust" in the first paragraph of
this Indenture until a successor corporation shall have become such pursuant to
the applicable provisions of this Indenture, and thereafter "Trust" shall mean
such successor corporation.
"Trust Indenture Act" or "TIA" means the Trust Indenture Act of 1939,
as amended and as in force at the date as of which this Indenture was executed,
except as provided in Section 905.
"Trust Request" and "Trust Order" mean, respectively, a written request
or order signed in the name of the Trust by the President or a Vice President of
the Trust, and by the Treasurer, an Assistant Treasurer, the Secretary or an
Assistant Secretary of the Trust, and delivered to the Trustee.
"Trustee" means the Person named as the "Trustee" in the first
paragraph of this Indenture until a successor Trustee shall have become such
pursuant to the applicable provisions of this Indenture, and thereafter
"Trustee" shall mean or include each Person who is then a Trustee hereunder;
provided, however, that if at any time there is more than one such Person,
"Trustee" as used with respect to the Securities of or within any series shall
mean only the Trustee with respect to the Securities of that series.
"Undepreciated Real Estate Assets" as of any date means the cost
(original cost plus capital improvements) of real estate assets of the Trust and
its Subsidiaries on such date, before depreciation and amortization determined
on a consolidated basis in accordance with GAAP.
"United States" means, unless otherwise specified with respect to any
Securities pursuant to Section 301, the United States of America (including the
states and the District of Columbia), its territories, its possessions and other
areas subject to its jurisdiction.
"United States person" means, unless otherwise specified with respect
to any Securities pursuant to Section 301, an individual who is a citizen or
resident of the United States, a corporation, partnership or other entity
created or organized in or under the laws of the United States or an estate or
trust the income of which is subject to United States federal income taxation on
a net income basis regardless of its source.
"Yield to Maturity" means the yield to maturity, computed at the time
of issuance of a
11
<PAGE>
Security (or, if applicable, at the most recent redetermination of interest on
such Security) and as set forth in such Security in accordance with generally
accepted United States bond yield computation principles.
SECTION 102. Compliance Certificates and Opinions.
Upon any application or request by the Trust to the Trustee to take any
action under any provision of this Indenture, the Trust shall furnish to the
Trustee an Officers' Certificate stating that all conditions precedent, if any,
provided for in this Indenture (including covenants, compliance with which
constitute conditions precedent) relating to the proposed action have been
complied with and an Opinion of Counsel stating that in the opinion of such
counsel all such conditions precedent, if any, have been complied with, except
that in the case of any such application or request as to which the furnishing
of such documents is specifically required by any provision of this Indenture
relating to such particular application or request, no additional certificate or
opinion need be furnished.
Every certificate or opinion with respect to compliance with a
condition or covenant provided for in this Indenture (excluding certificates
delivered pursuant to Section 1010) shall include:
(1) a statement that each individual signing such certificate
or opinion has read such condition or covenant and the definitions
herein relating thereto;
(2) a brief statement as to the nature and scope of the
examination or investigation upon which the statements or opinions
contained in such certificate or opinion are based;
(3) a statement that, in the opinion of each such individual,
he has made such examination or investigation as is necessary to enable
him to express an informed opinion as to whether or not such condition
or covenant has been complied with; and
(4) a statement as to whether, in the opinion of each such
individual, such condition or covenant has been complied with.
SECTION 103. Form of Documents Delivered to Trustee.
In any case where several matters are required to be certified by, or
covered by an opinion of, any specified Person, it is not necessary that all
such matters be certified by, or covered by the opinion of, only one such
Person, or that they be so certified or covered by only one document, but one
such Person may certify or give an opinion as to some matters and one or more
other such Persons as to other matters, and any such Person may certify or give
12
<PAGE>
an opinion as to such matters in one or several documents.
Any certificate or opinion of an officer of the Trust may be based,
insofar as it relates to legal matters, upon an Opinion of Counsel, or a
certificate or representations by counsel, unless such officer knows, or in the
exercise of reasonable care should know, that the opinion, certificate or
representations with respect to the matters upon which his certificate or
opinion is based are erroneous. Any such Opinion of Counsel or certificate or
representations may be based, insofar as it relates to factual matters, upon a
certificate or opinion of, or representations by, an officer or officers of the
Trust stating that the information as to such factual matters is in the
possession of the Trust, unless such counsel knows that the certificate or
opinion or representations as to such matters are erroneous.
Where any Person is required to make, give or execute two or more
applications, requests, consents, certificates, statements, opinions or other
instruments under this Indenture, they may, but need not, be consolidated and
form one instrument.
SECTION 104. Acts of Holders.
(a) Any request, demand, authorization, direction, notice,
consent, waiver or other action provided by this Indenture to be given
or taken by Holders of the Outstanding Securities of all series or one
or more series, as the case may be, may be embodied in and evidenced by
one or more instruments of substantially similar tenor signed by such
Holders in person or by agents duly appointed in writing. If Securities
of a series are issuable as Bearer Securities, any request, demand,
authorization, direction, notice, consent, waiver or other action
provided by this Indenture to be given or taken by Holders of
Securities of such series may, alternatively, be embodied in and
evidenced by the record of Holders of Securities of such series voting
in favor thereof, whether in person or by proxies duly appointed in
writing, at any meeting of Holders of Securities of such series duly
called and held in accordance with the provisions of Article Fifteen,
or a combination of such instruments and any such record. Except as
herein otherwise expressly provided, such action shall become effective
when such instrument or instruments or record or both instruments or
record or both are delivered to the Trustee and, where it is hereby
expressly required, to the Trust. Such instrument or instrument and any
such record (and the action embodied therein and evidenced thereby) are
herein sometimes referred to as the "Act" of the Holders signing such
instrument or instruments or so voting at any such meeting. Proof of
execution of any such instrument or of a writing appointing any such
agent, or of the holding by any Person of a Security, shall be
sufficient for any purpose of this Indenture and conclusive in favor of
13
<PAGE>
the Trustee and the Trust and any agent of the Trustee or the Trust, if
made in the manner provided in this Section. The record of any meeting
of Holders of Securities shall be proved in the manner provided in
Section 1506.
(b) The fact and date of the execution by any Person of any
such instrument or writing may be proved by the affidavit of a witness
of such execution or by a certificate of a notary public or other
officer authorized by law to take acknowledgements of deeds, certifying
that the individual signing such instrument or writing acknowledged to
him the execution thereof. Where such execution is by a signer acting
in a capacity other than his individual capacity, such certificate or
affidavit shall also constitute sufficient proof of his authority. The
fact and date of the execution of any such instrument or writing, or
the authority of the Person executing the same, may also be proved in
any other reasonable manner which the Trustee deems sufficient.
(c) The ownership of Registered Securities shall be proved by
the Security Register.
(d) The ownership of Bearer Securities may be proved by the
production of such Bearer Securities or by a certificate executed, as
depositary, by any trust company, bank, banker or other depositary,
wherever situated, if such certificate shall be deemed by the Trustee
to be satisfactory, showing that at the date therein mentioned such
Person had on deposit with such depositary, or exhibited to it, the
Bearer Securities therein described; or such facts may be proved by the
certificate or affidavit of the Person holding such Bearer Securities,
if such certificate or affidavit is deemed by the Trustee to be
satisfactory. The Trustee and the Trust may assume that such ownership
of any Bearer Security continues until (1) another certificate or
affidavit bearing a later date issued in respect of the same Bearer
Security is produced, or (2) such Bearer Security is produced to the
Trustee by some other Person, or (3) such Bearer Security is
surrendered in exchange for a Registered Security, or (4) such Bearer
Security is no longer Outstanding. The ownership of Bearer Securities
may also be proved in any other manner which the Trustee deems
sufficient.
(e) If the Trust shall solicit from the Holders of Registered
Securities any request, demand, authorization, direction, notice,
consent, waiver or other Act, the Trust may, at its option, in or
pursuant to a Board Resolution, fix in advance a record date for the
determination of Holders entitled to give such request, demand,
14
<PAGE>
authorization, direction, notice, consent, waiver or other Act, but the
Trust shall have no obligation to do so. Notwithstanding TIA Section
316(c), such record date shall be the record date specified in or
pursuant to such Board Resolution, which shall be a date not earlier
than the date 30 days prior to the first solicitation of Holders
generally in connection therewith and not later than the date such
solicitation is completed. If such a record date is fixed, such
request, demand, authorization, direction, notice, consent, waiver or
other Act may be given before or after such record date, but only the
Holders of record at the close of business on such record date shall be
deemed to be Holders for the purposes of determining whether Holders of
the requisite proportion of Outstanding Securities have authorized or
agreed or consented to such request, demand, authorization, direction,
notice, consent, waiver or other Act, and for that purpose the
Outstanding Securities shall be computed as of such record date;
provided that no such authorization, agreement or consent by the
Holders on such record date shall be deemed effective unless it shall
become effective pursuant to the provisions of this Indenture not later
than eleven months after the record date.
(f) Any request, demand, authorization, direction, notice,
consent, waiver or other Act of the Holder of any Security shall bind
every future Holder of the same Security and the Holder of every
Security issued upon the registration of transfer thereof or in
exchange therefor or in lieu thereof in respect of anything done,
omitted or suffered to be done by the Trustee, any Security Registrar,
any Paying Agent, any Authenticating Agent or the Trust in reliance
thereon, whether or not notation of such action is made upon such
Security.
SECTION 105. Notices, etc., to Trustee and Trust.
Any request, demand, authorization, direction, notice, consent, waiver
or Act of Holders or other document provided or permitted by this Indenture to
be made upon, given or furnished to, or filed with,
(1) the Trustee by any Holder or by the Trust shall be
sufficient for every purpose hereunder if made, given, furnished or
filed in writing to or with the Trustee at its Corporate Trust Office,
Attention: Corporate Trust Operations, or
(2) The Trust by the Trustee or by any Holder shall be
sufficient for every purpose hereunder (unless otherwise herein
15
<PAGE>
expressly provided) if in writing and mailed, first class postage
prepaid, to the Trust addressed to it at the address of its principal
office specified in the first paragraph of this Indenture or at any
other address previously furnished in writing to the Trustee by the
Trust.
SECTION 106. Notice to Holders; Waiver.
Where this Indenture provides for notice of any event to Holders of
Registered Securities by the Trust or the Trustee, such notice shall be
sufficiently given (unless otherwise herein expressly provided) if in writing
and mailed, first-class postage prepaid, to each such Holder affected by such
event, at his address as it appears in the Security Register, not later than the
latest date, and not earlier than the earliest date, prescribed for the giving
of such notice. In any case where notice to Holders of Registered Securities is
given by mail, neither the failure to mail such notice, nor any defect in any
notice so mailed, to any particular Holder shall affect the sufficiency of such
notice with respect to other Holders of Registered Securities or the sufficiency
of any notice to Holders of Bearer Securities given as provided herein. Any
notice mailed to a Holder in the manner herein prescribed shall be conclusively
deemed to have been received by such Holder, whether or not such Holder actually
receives such notice.
If by reason of the suspension of or irregularities in regular mail
service or by reason of any other cause it shall be impracticable to give such
notice by mail, then such notification to Holders of Registered Securities as
shall be made with the approval of the Trustee shall constitute a sufficient
notification to such Holders for every purpose hereunder.
Except as otherwise expressly provided herein or otherwise qualified
with respect to any Securities pursuant to Section 301, where this Indenture
provides for notice to Holders of Bearer Securities of any event, such notices
shall be sufficiently given if published in an Authorized Newspaper in The City
of New York and in such other city or cities as may be specified in such
Securities, and if the Securities of such series are listed on any stock
exchange outside the United States, in any place at which such Securities are
listed on a securities exchange to the extent that such securities exchange so
requires, on a Business Day, such publication to be not later than the latest
date, and not earlier than the earliest date, prescribed for the giving of such
notice. Any such notice shall be deemed to have been given on the date of such
publication or, if published more than once, on the date of the first such
publication.
If by reason of the suspension of publication of any Authorized
Newspaper or Authorized Newspapers or by reason of any other cause it shall be
impracticable to publish any notice to Holders of Bearer Securities as provided
above, then such notification to Holders of Bearer Securities as shall be given
with the approval of the Trustee shall constitute sufficient notice to 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
16
<PAGE>
any notice so published, shall affect the sufficiency of such notice with
respect to other Holders of Bearer Securities or the sufficiency of any notice
to Holders of Registered Securities given as provided herein.
Any request, demand, authorization, direction, notice, consent or
waiver required or permitted under this Indenture shall be in the English
language, except that any published notice may be in an official language of the
country of publication.
Where this Indenture provides for notice in any manner, such notice may
be waived in writing by the Person entitled to receive such notice, either
before or after the event, and such waiver shall be the equivalent of such
notice. Waivers of notice by Holders shall be filed with the Trustee, but such
filing shall not be a condition precedent to the validity of any action taken in
reliance upon such waiver.
SECTION 107. Effect of Headings and Table of Contents.
The Article and Section headings herein and the Table of Contents are
for convenience only and shall not affect the construction hereof.
SECTION 108. Successors and Assigns.
All covenants and agreements in this Indenture by the Trust shall bind
its successors and assigns, whether so expressed or not.
SECTION 109. Separability Clause.
In case any provision in this Indenture or in any Security or coupon
shall be invalid, illegal or unenforceable, the validity, legality and
enforceability of the remaining provisions shall not in any way be affected or
impaired thereby.
SECTION 110. Benefits of Indenture.
Nothing in this Indenture or in the Securities or coupons appertaining
thereto, express or implied, shall give to any Person, other than the parties
hereto, any Security Registrar, any Paying Agent, any Authenticating Agent and
their successors hereunder and the Holders any benefit or any legal or equitable
right, remedy or claim under this Indenture.
SECTION 111. No Personal Liability.
No recourse under or upon any obligation, covenant or agreement
contained in this Indenture, in any Security or coupon appertaining thereto, or
because of any indebtedness evidenced thereby, shall be had against any
promoter, as such or, against any past, present or future shareholder, officer
or director, as such, of the Trust or of any successor, either directly
17
<PAGE>
or through the Trust or any successor, under any rule of law, statute or
constitutional provision or by the enforcement of any assessment or by any legal
or equitable proceeding or otherwise, all such liability being expressly waived
and released by the acceptance of the Securities by the Holders thereof and as
part of the consideration for the issue of the Securities.
SECTION 112. Governing Law.
This Indenture and the Securities and coupons shall be governed by and
construed in accordance with the law of the Commonwealth of Virginia. This
Indenture is subject to the provisions of the TIA that are required to be part
of this Indenture and shall, to the extent applicable, be governed by such
provisions.
SECTION 113. Legal Holidays.
In any case where any Interest Payment Date, Redemption Date, Repayment
Date, sinking fund payment date, Stated Maturity or Maturity of any Security
shall not be a Business Day at any Place of Payment, then (notwithstanding any
other provision of this Indenture or any Security or coupon other than a
provision in the Securities of any series which specifically states that such
provision shall apply in lieu hereof), payment of interest or any Additional
Amounts or principal (and premium or Make-Whole Amount, if any) need not be made
at such Place of Payment on such date, but may be made on the next succeeding
Business Day at such Place of Payment with the same force and effect as if made
on the Interest Payment Date, Redemption Date, Repayment Date or sinking fund
payment date, or at the Stated Maturity or Maturity, provided that no interest
shall accrue on the amount so payable for the period from and after such
Interest Payment Date, Redemption Date, Repayment Date, sinking fund payment
date, Stated Maturity or Maturity, as the case may be.
ARTICLE TWO
SECURITIES FORMS
SECTION 201. Forms of Securities.
The Registered Securities, if any, of each series and the Bearer
Securities, if any, and related coupons of each series, shall be in
substantially the forms as shall be established in or pursuant to one or more
indentures supplemental hereto or Board Resolutions, shall have such appropriate
insertions, omissions, substitutions and other variations as are required or
permitted by this Indenture or any indenture supplemental hereto, and may have
such letters, numbers or other marks of identification or designation and such
legends or endorsements placed thereon as the Trust may deem appropriate and as
are not inconsistent with the provisions of this Indenture, or as may be
required to comply with any law or with any rule or regulation made pursuant
thereto or with any rule or regulation of any stock exchange on which the
Securities may be listed, or to conform to usage.
18
<PAGE>
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.
[_____________________________________],
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 Trust Order to be delivered
to the Trustee pursuant to Section 303 or 304. Subject to the provisions of
Section 303 and, if applicable, the Trustee shall deliver and redeliver any
Security in permanent global form in the manner and upon instructions given by
the Person or Persons specified therein or in the applicable Trust Order. If a
Trust Order pursuant to Section 303 or 304 has been, or simultaneously is,
delivered, any instructions by the Trust with respect to endorsement or delivery
or redelivery of a Security in global form shall be in writing but need not
comply with Section 102 and need not be accompanied by an Opinion of Counsel.
19
<PAGE>
The provisions of the last sentence of Section 303 shall apply to any
Security represented by a Security in global form if such Security was never
issued and sold by the Trust and the Trust delivers to the Trustee the Security
in global form together with written instructions (which need not comply with
Section 102 and need not be accompanied by an Opinion of Counsel) with regard to
the reduction in the principal amount of Securities represented thereby,
together with the written statement contemplated by the last sentence of Section
303.
Notwithstanding the provisions of Section 307, unless otherwise
specified as contemplated by Section 301, payment of principal of and any
premium or Make-Whole Amount and interest on any Security in permanent global
form shall be made to the Person or Persons specified therein.
Notwithstanding the provisions of Section 308 and except as provided in
the preceding paragraph, the Trust, the Trustee and any agent of the Trust and
the Trustee shall treat as the Holder of such principal amount of Outstanding
Securities represented by a permanent global Security (i) in the case of a
permanent global Security in registered form, the Holder of such permanent
global Security in registered form, or (ii) in the case of a permanent global
Security in bearer form, Euroclear or CEDEL.
ARTICLE THREE
THE SECURITIES
SECTION 301. Amount Unlimited; Issuable in Series.
The aggregate principal amount of Securities which may be authenticated
and delivered under this Indenture is unlimited.
The Securities may be issued in one or more series. There shall be
established in or pursuant to one or more Board Resolutions, or indentures
supplemental hereto, prior to the issuance of Securities of any series, any or
all of the following, as applicable (each of which (except for the matters set
forth in clauses (1), (2) and (15) below), if so provided, may be determined
from time to time by the Trust with respect to unissued Securities of or within
the series when issued from time to time):
(1) the title of the Securities of or within the series (which
shall distinguish the Securities of such series from all other series
of Securities);
(2) any limit upon the aggregate principal amount of the
Securities of or within the series that may be authenticated and
20
<PAGE>
delivered under this Indenture (except for Securities authenticated and
delivered upon registration of transfer of, or in exchange for, or in
lieu of, other Securities of or within the series pursuant to Section
304, 305, 306, 906, 1107 or 1305);
(3) the date or dates, or the method by which such date or
dates will be determined, on which the principal of the Securities of
or within the series shall be payable and the amount of principal
payable thereon;
(4) the rate or rates at which the Securities of or within the
series shall bear interest, if any, or the method by which such rate or
rates shall be determined, the date or dates from which such interest
shall accrue or the method by which such date or dates shall be
determined, the Interest Payment Dates on which such interest will be
payable and the Regular Record Date, if any, for the interest payable
on any Registered Security on any Interest Payment Date, or the method
by which such date shall be determined, and the basis upon which
interest shall be calculated if other than that of a 360-day year
consisting of twelve 30-day months;
(5) the place or places, if any, other than or in addition to
the Borough of Manhattan, The City of New York, where the principal of
(and premium or Make-Whole Amount, if any), interest, if any, on, and
Additional Amounts, if any, payable in respect of, Securities of or
within the series shall be payable, any Registered Securities of or
within the series may be surrendered for registration of transfer or
exchange and notices or demands to or upon the Trust in respect of the
Securities of or within the series and this Indenture may be served;
(6) the period or periods within which, the price or prices
(including the premium or Make-Whole Amount, if any) at which, the
currency or currencies, currency unit or units or composite currency or
currencies in which and other terms and conditions upon which
Securities of or within the series may be redeemed in whole or in part,
at the option of the Trust, if the Trust is to have the option;
(7) the obligation, if any, of the Trust to redeem, repay or
purchase Securities of or within the series pursuant to any sinking
fund or analogous provision or at the option of a Holder thereof, and
the period or periods within which or the date or dates on which, the
price or prices at which, the currency or currencies, currency unit or
units or composite currency or currencies in which, and other terms and
21
<PAGE>
conditions upon which Securities of or within the series shall be
redeemed, repaid or purchased, in whole or in part, pursuant to such
obligation;
(8) if other than denominations of $1,000 and any integral
multiple thereof, the denominations in which any Registered Securities
of or within the series shall be issuable and, if other than the
denomination of $5,000, the denomination or denominations in which any
Bearer Securities of or within the series shall be issuable;
(9) if other than the Trustee, the identity of each Security
Registrar and/or Paying Agent;
(10) if other than the principal amount thereof, the portion
of the principal amount of Securities of or within the series that
shall be payable upon declaration of acceleration of the maturity
thereof pursuant to Section 502, or the method by which such portion
shall be determined;
(11) if other than Dollars, the Foreign Currency or Currencies
in which payment of the principal of (and premium or Make-Whole Amount,
if any) or interest or Additional Amounts, if any, on the Securities of
or within the series shall be payable or in which the Securities of or
within the series shall be denominated;
(12) whether the amount of payments of principal of (and
premium or Make-Whole Amount, if any) or interest, if any, on the
Securities of or within the series may be determined with reference to
an index, formula or other method (which index, formula or method may
be based, without limitation, on one or more currencies, currency
units, composite currencies, commodities, equity indices or other
indices), and the manner in which such amounts shall be determined;
(13) whether the principal of (and premium or Make-Whole
Amount, if any) or interest or Additional Amounts, if any, on the
Securities of or within the series are to be payable at the election of
the Trust or a Holder thereof, in a currency or currencies, currency
unit or units or composite currency or currencies other than that in
which such Securities are denominated or stated to be payable, the
period or periods within which, and the terms and conditions upon
which, such election may be made, and the time and manner of, and
identity of the exchange rate agent with responsibility for,
determining the exchange rate between the currency or currencies,
currency unit or units or composite currency
22
<PAGE>
or currencies in which such Securities are denominated or stated to be
payable and the currency or currencies, currency unit or units or
composite currency or currencies in which such Securities are to be so
payable;
(14) provisions, if any, granting special rights to the
Holders of Securities of or within the series upon the occurrence of
such events as may be specified;
(15) any deletions from, modifications of or additions to the
Events of Default or covenants of the Trust with respect to Securities
of or within the series, whether or not such Events of Default or
covenants are consistent with the Events of Default or covenants set
forth herein;
(16) whether Securities of or within the series are to be
issuable as Registered Securities, Bearer Securities (with or without
coupons) or both, any restrictions applicable to the offer, sale or
delivery of Bearer Securities and the terms upon which Bearer
Securities of or within the series may be exchanged for Registered
Securities of or within the series and vice versa (if permitted by
applicable laws and regulations), whether any Securities of or within
the series are to be issuable initially in temporary global form and
whether any Securities of or within the series are to be issuable in
permanent global form (with or without coupons) and, if so, whether
beneficial owners of interests in any such permanent global Security
may exchange such interests for Securities of such series and of like
tenor of any authorized form and denomination and the circumstances
under which any such exchanges may occur, if other than in the manner
provided in Section 305, and, if Registered Securities of or within the
series are to be issuable as a global Security, the identity of the
depositary for such series;
(17) the date as of which any Bearer Securities of or within
the series and any temporary global Security representing Outstanding
Securities of or within the series shall be dated if other than the
date of original issuance of the first Security of the series to be
issued;
(18) the Person to whom any interest on any Registered
Security of the series shall be payable, if other than the Person in
whose name that Security (or one or more Predecessor Securities) is
registered at the close of business on the Regular Record Date for such
23
<PAGE>
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 or within the series and any provisions in
modification of, in addition to or in lieu of any of the provisions of
Article Fourteen;
(20) if the Securities of such series are to be issuable in
definitive form (whether upon original issue or upon exchange of a
temporary Security of such series) only upon receipt of certain
certificates or other documents or satisfaction of other conditions,
then the form and/or terms of such certificates, documents or
conditions;
(21) if the Securities of or within the series are to be
issued upon the exercise of debt warrants, the time, manner and place
for such Securities to be authenticated and delivered;
(22) whether and under what circumstances the Trust will pay
Additional Amounts as contemplated by Section 1011 on the Securities of
or within the series to any Holder who is not a United States person
(including any modification to the definition of such term) in respect
of any tax, assessment or governmental charge and, if so, whether the
Trust will have the option to redeem such Securities rather than pay
such Additional Amounts (and the terms of any such option);
(23) the obligation, if any, of the Trust to permit the
conversion of the Securities of such series into shares of Capital
Stock of the Trust and the terms and conditions upon which such
conversion shall be effected (including, without limitation, the
initial conversion price or rate, the conversion period, any adjustment
of the applicable conversion price or rate and any requirements
relative to the reservation of such shares for purposes of conversion);
and
(24) any other terms of the series (which terms shall not be
inconsistent with the provisions of this Indenture).
24
<PAGE>
All Securities of any one series and the coupons appertaining to any
Bearer Securities of such series, if any, shall be substantially identical
except, in the case of Registered or Bearer Securities issued in global form, as
to denomination and except as may otherwise be provided in or pursuant to such
Board Resolution or in any such indenture supplemental hereto. All Securities of
any one series need not be issued at the same time and unless otherwise
provided, a series may be reopened, without the consent of the Holders, for
issuances of additional Securities of such series.
If any of the terms of the Securities of any series are established by
action taken pursuant to one or more Board Resolutions or supplemental
indentures, a copy of an appropriate record of such action(s) shall be certified
by the Secretary or an Assistant Secretary of the Trust and delivered to the
Trustee at or prior to the delivery of the Trust Order for authentication and
delivery of such Securities.
SECTION 302. Denominations.
The Securities of each series shall be issuable in such denominations
as shall be specified as contemplated by Section 301. With respect to Securities
of any series denominated in Dollars, in the absence of any such provisions with
respect to the Securities of any series, the Registered Securities of such
series, other than Registered Securities issued in global form (which may be of
any denomination), shall be issuable in denominations of $1,000 and any integral
multiple thereof and the Bearer Securities of such series other than Bearer
Securities issued in global form (which may be of any denomination), shall be
issuable in denominations of $5,000.
SECTION 303. Execution, Authentication Delivery and Dating.
The Securities and any coupons appertaining thereto shall be executed
on behalf of the Trust by its President or a Vice President, under its corporate
seal reproduced thereon, and attested by its Secretary or an Assistant
Secretary. The signature of any of these officers on the Securities and coupons
may be manual or facsimile signatures of the present or any future such
authorized officer and may be imprinted or otherwise reproduced on the
Securities.
Securities or coupons appertaining thereto bearing the manual or
facsimile signatures of individuals who were at any time the proper officers of
the Trust shall bind the Trust, notwithstanding that such individuals or any of
them have ceased to hold such offices prior to the authentication and delivery
of such Securities or did not hold such offices at the date of such Securities
or coupons.
At any time and from time to time after the execution and delivery of
this Indenture, the Trust may deliver Securities of any series, together with
any coupon appertaining thereto, executed by the Trust to the Trustee for
authentication, together with a Trust Order for the authentication and delivery
of such Securities, and the Trustee in accordance with the Trust
25
<PAGE>
Order shall authenticate and deliver such Securities; provided, however, that,
in connection with its original issuance, no Bearer Security shall be mailed or
otherwise delivered to any location in the United States; and provided further
that, unless otherwise specified with respect to any series of Securities
pursuant to Section 301 a Bearer Security may be delivered in connection with
its original issuance only if the Person entitled to receive such Bearer
Security shall have furnished a certificate to Euroclear or CEDEL, as the case
may be, in the form set forth in Exhibit A-1 to this Indenture or such other
certificate as may be specified with respect to any series of Securities
pursuant to Section 301, dated no earlier than 15 days prior to the earlier of
the date on which such Bearer Security is delivered and the date on which any
temporary Security first becomes exchangeable for such Bearer Security in
accordance with the terms of such temporary Security and this Indenture. Except
as permitted by Section 306, the Trustee shall not authenticate and deliver any
Bearer Security unless all appurtenant coupons for interest then matured have
been detached and cancelled.
If all of the Securities of any series are not to be issued at one time
and if the Board Resolution or supplemental indenture establishing such series
shall so permit, such Trust Order may set forth procedures acceptable to the
Trustee for the issuance of such Securities and determining the terms of
particular Securities of such series, such as interest rate or formula, maturity
date, date of issuance and date from which interest shall accrue. In
authenticating such Securities, and accepting the additional responsibilities
under this Indenture in relation to such Securities, the Trustee shall be
entitled to receive, and (subject to TIA Section 315(a) through 315(d)) shall be
fully protected in relying upon:
(i) an Opinion of Counsel complying with Section 102 and
stating that:
(a) the form or forms of such Securities and any
coupons have been, or will have been upon compliance with such
procedures as may be specified therein, established in
conformity with the provisions of this Indenture;
(b) the terms of such Securities and any coupons have
been, or will have been upon compliance with such procedures
as may be specified therein, established in conformity with
the provisions of this Indenture; and
(c) such Securities, together with any coupons
appertaining thereto, when completed pursuant to such
procedures as may be specified therein, and executed and
delivered by the Trust to the Trustee for authentication in
accordance with this Indenture, authenticated and delivered by
the Trustee in accordance with this Indenture and issued by
the Trust in the manner and subject to any conditions
26
<PAGE>
specified in such Opinion of Counsel, will constitute legal,
valid and binding obligations of the Trust, enforceable in
accordance with their terms, subject to applicable bankruptcy,
insolvency, reorganization and other similar laws of general
applicability relating to or affecting the enforcement of
creditors' rights generally and to general equitable
principles and to such other matters as may be specified
therein; and
(ii) an Officers' Certificate complying with Section 102 and
stating that all conditions precedent provided for in this Indenture
relating to the issuance of such Securities have been, or will have
been upon compliance with such procedures as may be specified therein,
complied with and that, to the best of the knowledge of the signers of
such certificate, no Event of Default with respect to such Securities
shall have occurred and be continuing.
The Trustee shall not be required to authenticate such Securities if the issue
of such Securities pursuant to this Indenture will affect the Trustee's own
rights, duties, obligations or immunities under the Securities and this
Indenture or otherwise in a manner which is not reasonably acceptable to the
Trustee.
Notwithstanding the provisions of Section 301 and of the preceding
paragraph, if all the Securities of any series are not to be issued at one time,
it shall not be necessary to deliver a Trust Order, an Opinion of Counsel or an
Officers' Certificate otherwise required pursuant to the preceding paragraph at
the time of issuance of each Security of such series, but such order, opinion
and certificate, with appropriate modifications to cover such future issuances,
shall be delivered at or before the time of issuance of the first Security of
such series.
Each Registered Security shall be dated the date of its authentication
and each Bearer Security shall be dated as of the date specified as contemplated
by Section 301.
No Security or coupon appertaining thereto shall be entitled to any
benefit under this Indenture or be valid or obligatory for any purpose unless
there appears on such Security or the Security to which such coupon appertains a
certificate of authentication substantially in the form provided for herein duly
executed by the Trustee by manual signature of an authorized officer, and such
certificate upon any Security shall be conclusive evidence, and the only
evidence, that such Security has been duly authenticated and delivered hereunder
and is entitled to the benefits of this Indenture. Notwithstanding the
foregoing, if any Security shall have been authenticated and delivered hereunder
but never issued and sold by the Trust, and the Trust shall deliver such
Security to the Trustee for cancellation as provided in Section 309 together
with a written statement (which need not comply with Section 102 and need not be
accompanied by an Opinion of Counsel) stating that such Security has never been
issued or
27
<PAGE>
sold by the Trust, for all purposes of this Indenture such Security shall be
deemed never to have been authenticated and delivered hereunder and shall never
be entitled to the benefits of this Indenture.
SECTION 304. Temporary Securities.
(a) Pending the preparation of definitive Securities of any
series, the Trust may execute, and upon Trust Order the Trustee shall
authenticate and deliver, temporary Securities which are printed,
lithographed, typewritten, mimeographed or otherwise produced, in any
authorized denomination; substantially of the tenor of the definitive
Securities in lieu of which they are issued, in registered form, or, if
authorized, in bearer form with one or more coupons or without coupons,
and with such appropriate insertions, omissions, substitutions and
other variations as the officers executing such Securities may
determine, as conclusively evidenced by their execution of such
Securities. In the case of Securities of any series, such temporary
Securities may be in global form.
Except in the case of temporary Securities in global form
(which shall be exchanged in accordance with Section 304(b) or as
otherwise provided in or pursuant to a Board Resolution), if temporary
Securities of any series are issued, the Trust will cause definitive
Securities of that series to be prepared without unreasonable delay.
After the preparation of definitive Securities of such series, the
Temporary Securities of such series shall be exchangeable for
definitive Securities of such series upon surrender of the temporary
Securities of such series at the office or agency of the Trust in a
Place of Payment for that series, without charge to the Holder. Upon
surrender for cancellation of any one or more temporary Securities of
any series (accompanied by any non-matured coupons appertaining
thereto), the Trust shall execute and the Trustee shall authenticate
and deliver in exchange therefor a like principal amount of definitive
Securities of the same series of authorized denominations; provided,
however, that no definitive Bearer Security shall be delivered in
exchange for a temporary Registered Security; and provided further that
a definitive Bearer Security shall be delivered in exchange for a
temporary Bearer Security only in compliance with the conditions set
forth in Section 303. Until so exchanged, the temporary Securities of
any series shall in all respects be entitled to the same benefits under
this Indenture as definitive Securities of such series.
(b) Unless otherwise provided as contemplated in Section 301,
28
<PAGE>
this Section 304(b) shall govern the exchange of temporary Securities
issued in global form other than through the facilities of DTC. If any
such temporary Security is issued in global form, then such temporary
global Security shall, unless otherwise provided therein, be delivered
to the London office of a depositary or common depositary (the "Common
Depositary"), for the benefit of Euroclear and CEDEL.
Without unnecessary delay but in any event not later than the date
specified in, or determined pursuant to the terms of, any such temporary global
Security (the "Exchange Date"), the Trust shall deliver to the Trustee
definitive Securities, in an aggregate principal amount equal to the principal
amount of such temporary global Security, executed by the Trust. On or after the
Exchange Date, such temporary global Security shall be surrendered by the Common
Depositary to the Trustee, as the Trust's agent for such purpose, to be
exchanged, in whole or from time to time in part, for definitive Securities
without charge, and the Trustee shall authenticate and deliver, in exchange for
each portion of such temporary global Security, an equal aggregate principal
amount of definitive Securities of or within the same series of authorized
denominations and of like tenor as the portion of such temporary global Security
to be exchanged. The definitive Securities to be delivered in exchange for any
such temporary global Security shall be in bearer form, registered form,
permanent global bearer form or permanent global registered form, or any
combination thereof, as specified as contemplated by Section 301, and, if any
combination thereof is so specified, as requested by the beneficial owner
thereof, provided, however, that, unless otherwise specified in such temporary
global Security, upon such presentation by the Common Depositary, such temporary
global Security is accompanied by a certificate dated the Exchange Date or a
subsequent date and signed by Euroclear as to the portion of such temporary
global Security held for its account then to be exchanged and a certificate
dated the Exchange Date or a subsequent date and signed by CEDEL as to the
portion of such temporary global Security held for its account then to be
exchanged, each in the form set forth in Exhibit A-2 to this Indenture or in
such other form as may be established pursuant to Section 301; and provided
further that definitive Bearer Securities shall be delivered in exchange for a
portion of a temporary global Security only in compliance with the requirements
of Section 303.
Unless otherwise specified in such temporary global Security, the
interest of a beneficial owner of Securities of a series in a temporary global
Security shall be exchanged for definitive Securities of the same series and of
like tenor following the Exchange Date when the account holder instructs
Euroclear or CEDEL, as the case may be, to request such exchange on his behalf
and delivers to Euroclear or CEDEL, as the case may be, a certificate in the
form set forth in Exhibit A-1 to this Indenture (or in such other form as may be
established pursuant to Section 301), dated no earlier than 15 days prior to the
Exchange Date, copies of which certificate shall be available from the offices
of Euroclear and CEDEL, the Trustee, any Authenticating Agent appointed for such
series of Securities and each Paying Agent. Unless otherwise specified in such
temporary global Security, any such exchange shall be made free of charge to the
beneficial owners of such temporary global Security, except that a Person
29
<PAGE>
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 Trust.
SECTION 305. Registration, Registration of Transfer and Exchange.
The Trust shall cause to be kept at the Corporate Trust Operations
Office of the Trustee or in any office or agency of the Trust in a Place of
Payment a register for each series of Securities (the registers maintained in
such office or in any such office or agency of the Trust in a Place of Payment
being herein sometimes referred to collectively as the "Security Register") in
which, subject to such reasonable regulations as it may prescribe, the Trust
shall provide for the registration of Registered Securities and of transfers of
Registered Securities. The Security Register shall be in written form or any
other form capable of being converted into written form within a reasonable
time. The Trustee, at its Corporate Trust Operations
30
<PAGE>
Office, is hereby initially appointed "Security Registrar" for the purpose of
registering Registered Securities and transfers of Registered Securities on such
Security Register as herein provided. In the event that the Trustee shall cease
to be Security Registrar, it shall have the right to examine the Security
Register at all reasonable times.
Subject to the provisions of this Section 305, upon surrender for
registration of transfer of any Registered Security of any series at any office
or agency of the Trust in a Place of Payment for that series, the Trust shall
execute, and the Trustee shall authenticate and deliver, in the name of the
designated transferee or transferees, one or more new Registered Securities of
the same series, of any authorized denominations and of a like aggregate
principal amount, being a number not contemporaneously outstanding, and
containing identical terms and provisions.
Subject to the provisions of this Section 305, at the option of the
Holder, Registered Securities of any series may be exchanged for other
Registered Securities of the same series, of any authorized denomination or
denominations and of a like aggregate principal amount, containing identical
terms and provisions, upon surrender of the Registered Securities to be
exchanged at any such office or agency. Whenever any such Registered Securities
are so surrendered for exchange, the Trust shall execute, and the Trustee shall
authenticate and deliver, the Registered Securities which the Holder making the
exchange is entitled to receive. Unless otherwise specified with respect to any
series of Securities as contemplated by Section 301, Bearer Securities may not
be issued in exchange for Registered Securities.
If (but only if) permitted as contemplated by Section 301, at the
option of the Holder, Bearer Securities of any series may be exchanged for
Registered Securities of the same series of any authorized denominations and of
a like aggregate principal amount and tenor, upon surrender of the Bearer
Securities to be exchanged at any such office or agency, with all unmatured
coupons and all matured coupons in default thereto appertaining. If the Holder
of a Bearer Security is unable to produce any such unmatured coupon or coupons
or matured coupon or coupons in default, any such permitted exchange may be
effected if the Bearer Securities are accompanied by payment in funds acceptable
to the Trust in an amount equal to the face amount of such missing coupon or
coupons, or the surrender of such missing coupon or coupons may be waived by the
Trust and the Trustee if there is furnished to them such security or indemnity
as they may require to save each of them and any Paying Agent harmless. If
thereafter the Holder of such Security shall surrender to any Paying Agent any
such missing coupon in respect of which such a payment shall have been made,
such Holder shall be entitled to receive the amount of payment; provided,
however, that, except as otherwise provided in Section 1002, interest
represented by coupons shall be payable only upon presentation and surrender of
those coupons at an office or agency located outside the United States.
Notwithstanding the foregoing, in case a Bearer Security of any series is
surrendered at any such office or agency in a permitted exchange for a
Registered Security of the same series and like tenor after the close of
business at such office or agency on (i) any Regular Record Date and before the
Opening of business at such office or agency on the
31
<PAGE>
relevant Interest Payment Date, or (ii) any Special Record Date and before the
opening of business at such office or agency on the related proposed date for
payment of Defaulted Interest, such Bearer Security shall be surrendered without
the coupon relating to such Interest Payment Date or proposed date for payment,
as the case may be, and interest or Defaulted Interest, as the case may be, will
not be payable on such Interest Payment Date or proposed date for payment, as
the case may be, in respect of the Registered Security issued in exchange for
such Bearer Security, but will be payable only to the Holder of such coupon when
due in accordance with the provisions of this Indenture. Whenever any Securities
are so surrendered for exchange, the Trust shall execute, and the Trustee shall
authenticate and deliver, the Securities which the holder making the exchange is
entitled to receive.
Notwithstanding the foregoing, except as otherwise specified as
contemplated by Section 301, any permanent global Security shall be exchangeable
only as provided in this paragraph. If the depositary for any permanent global
Security is DTC, then, unless the terms of such global Security expressly permit
such global Security to be exchanged in whole or in part for definitive
Securities, a global Security may be transferred, in whole but not in part, only
to a nominee of DTC, or by a nominee of DTC to DTC, or to a successor to DTC for
such global Security selected and approved by the Trust or to a nominee of such
successor to DTC. If at any time DTC notifies the Trust that it is unwilling or
unable to continue as depositary for the applicable global Security or
Securities or if at any time DTC ceases to be a clearing agency registered under
the Exchange Act if so required by applicable law or regulation, the Trust shall
appoint a successor depositary with respect to such global Security or
Securities. If (x) a successor depositary for such global Security or Securities
is not appointed by the Trust within 90 days after the Trust receives such
notice or becomes aware of such unwillingness, inability or ineligibility, (y)
an Event of Default has occurred and is continuing and the beneficial owners
representing a majority in principal amount of the applicable series of
Securities represented by such global Security or Securities advise DTC to cease
acting as depositary for such global Security or Securities or (z) the Trust, in
its sole discretion, determines at any time that all Outstanding Securities (but
not less than all) Securities of any series issued or issuable in the form of
one or more global Securities shall no longer be represented by such global
Security or Securities (provided, however, the Trust may not make such
determination during the 40-day restricted period provided by Regulation S under
the Securities Act or during any other similar period during which the
Securities must be held in global form as may be required by the Securities
Act), then the Trust shall execute, and the Trustee shall authenticate and
deliver definitive Securities of like series, rank, tenor and terms in
definitive form in an aggregate principal amount equal to the principal amount
of such global Security or Securities. If any beneficial owner of an interest in
a permanent global Security is otherwise entitled to exchange such interest for
Securities of such series and of like tenor and principal amount of another
authorized form and denomination, as specified as contemplated by Section 301
and provided that any applicable notice provided in the permanent global
Security shall have been given, then without unnecessary delay but in any event
not later than the earliest date on which such interest may be so exchanged, the
Trust shall execute, and the Trustee shall authenticate and deliver definitive
Securities in aggregate principal amount equal to the principal amount of
32
<PAGE>
such beneficial owner's interest in such permanent global Security. On or after
the earliest date on which such interests may be so exchanged, such permanent
global Security shall be surrendered for exchange by DTC or such other
depositary as shall be specified in the Trust Order with respect thereto to the
Trustee, as the Trust's agent for such purpose; provided, however, that no such
exchanges may occur during a period beginning at the opening of business 15 days
before any selection of Securities to be redeemed and ending on the relevant
Redemption Date if the Security for which exchange is requested may be among
those selected for redemption; and provided further that no Bearer Security
delivered in exchange for a portion of a permanent global Security shall be
mailed or otherwise delivered to any location in the United States. If a
Registered Security is issued in exchange for any portion of a permanent global
Security after the close of business at the office or agency where such exchange
occurs on (i) any Regular Record Date and before the opening of business at such
office or agency on the relevant Interest Payment Date, or (ii) any Special
Record Date and the opening of business at such office or agency on the related
proposed date for payment of Defaulted Interest, interest or Defaulted Interest,
as the case may be, will not be payable on such Interest Payment Date or
proposed date for payment, as the case may be, in respect of such Registered
Security, but will be payable on such Interest Payment Date or proposed date for
payment, as the case may be, only to the Person to whom interest in respect of
such portion of such permanent global Security is payable in accordance with the
provisions of this Indenture.
All Securities issued upon any registration of transfer or exchange of
Securities shall be the valid obligations of the Trust, evidencing the same
debt, and entitled to the same benefits under this Indenture, as the Securities
surrendered upon such registration of transfer or exchange.
Every Registered Security presented or surrendered for registration of
transfer or for exchange or redemption shall be duly endorsed, or be accompanied
by a written instrument of transfer in form satisfactory to the Security
Registrar, duly executed by the Holder thereof or his attorney duly authorized
in writing.
No service charge shall be made for any registration of transfer or
exchange of Securities, but the Trust may require payment of a sum sufficient to
cover any tax or other governmental charge that may be imposed in connection
with any registration of transfer or exchange of Securities, other than
exchanges pursuant to Section 304, 906, 1107 or 1305 not involving any transfer.
The Trust or the Trustee, as applicable, shall not be required (i) to
issue, register the transfer of or exchange any Security if such Security may be
among those selected for redemption during a period beginning at the opening of
business 15 days before selection of the Securities to be redeemed under Section
1103 and ending at the close of business on (A) if such Securities are issuable
only as Registered Securities, the day of the mailing of the relevant notice of
redemption and (B) if such Securities are issuable as Bearer Securities, the day
of the
33
<PAGE>
first publication of the relevant notice of redemption or, if such Securities
are also issuable as Registered Securities and there is no publication, the
mailing of the relevant notice of redemption, or (ii) to register the transfer
of or exchange any Registered Security so selected for redemption in whole or in
part, except, in the case of any Registered Security to be redeemed in part, the
portion thereof not to be redeemed, or (iii) to exchange any Bearer Security so
selected for redemption except that such a Bearer Security may be exchanged for
a Registered Security of that series and like tenor; provided that such
Registered Security shall be simultaneously surrendered for redemption, or (iv)
to issue, register the transfer of or exchange any Security which has been
surrendered for repayment at the option of the Holder, except the portion, if
any, of such Security not to be so repaid.
SECTION 306. Mutilated, Destroyed, Lost and Stolen Securities.
If any mutilated Security or a Security with a mutilated coupon
appertaining to it is surrendered to the Trustee or the Trust, together with, in
proper cases, such security or indemnity as may be required by the Trust or the
Trustee to save each of them or any agent of either of them harmless, the Trust
shall execute and the Trustee shall authenticate and deliver in exchange
therefor a new Security of the same series and principal amount, containing
identical terms and provisions and bearing a number not contemporaneously
outstanding, with coupons corresponding to the coupons, if any, appertaining to
the surrendered Security.
If there shall be delivered to the Trust and to the Trustee (i)
evidence to their satisfaction of the destruction, loss or theft of any Security
or coupon, and (ii) such security or indemnity as may be required by them to
save each of them and any agent of either of them harmless, then, in the absence
of actual notice to the Trust or the Trustee that such Security or coupon has
been acquired by a bona fide purchaser, the Trust shall execute and upon its
request the Trustee shall authenticate and deliver, in lieu of any such
destroyed, lost or stolen Security or in exchange for the Security to which a
destroyed, lost or stolen coupon appertains (with all appurtenant coupons not
destroyed, lost or stolen), a new Security of the same series and principal
amount, containing identical terms and provisions and bearing a number not
contemporaneously outstanding, with coupons corresponding to the coupons, if
any, appertaining to such destroyed, lost or stolen Security or to the Security
to which such destroyed, lost or stolen coupon appertains.
Notwithstanding the provisions of the previous two paragraphs, in case
any such mutilated, destroyed, lost or stolen Security or coupon has become or
is about to become due and payable, the Trust in its discretion may, instead of
issuing a new Security, with coupons corresponding to the coupons, if any,
appertaining to such destroyed, lost or stolen Security or to the Security to
which such destroyed, lost or stolen coupon appertains, pay such Security or
coupon; provided, however, that payment of principal of (and premium or
Make-Whole Amount, if any), any interest on and any Additional Amounts with
respect to, Bearer Securities shall, except as otherwise provided in Section
1002, be payable only at an office or agency located outside the United States
and, unless otherwise specified as contemplated by
34
<PAGE>
Section 301, any interest on Bearer Securities shall be payable only upon
presentation and surrender of the coupons appertaining thereto.
Upon the issuance of any new Security under this Section, the Trust may
require the payment of a sum sufficient to cover any tax or other governmental
charge that may be imposed in relation thereto and any other expenses (including
the fees and expenses of the Trustee) connected therewith.
Every new Security of any series with its coupons, if any, issued
pursuant to this Section in lieu of any destroyed, lost or stolen Security, or
in exchange for a Security to which a destroyed, lost or stolen coupon
appertains, shall constitute an original additional contractual obligation of
the Trust, whether or not the destroyed, lost or stolen Security and its
coupons, if any, or the destroyed, lost or stolen coupon shall be at any time
enforceable by anyone, and shall be entitled to all the benefits of this
Indenture equally and proportionately with any and all other Securities of that
series and their coupons, if any, duly issued hereunder.
The provisions of this Section are exclusive and shall preclude (to the
extent lawful) all other rights and remedies with respect to the replacement or
payment of mutilated, destroyed, lost or stolen Securities or coupons.
SECTION 307. Payment of Interest; Interest Rights Preserved.
Except as otherwise specified with respect to a series of Securities in
accordance with the provisions of Section 301, interest on any Registered
Security that is payable, and is punctually paid or duly provided for, on any
Interest Payment Date shall be paid to the Person in whose name that Security
(or one or more Predecessor Securities) is registered at the close of business
on the Regular Record Date for such interest at the office or agency of the
Trust maintained for such purpose pursuant to Section 1002; provided, however,
that each installment of interest on any Registered Security may at the Trust's
option be paid by (i) mailing a check for such interest, payable to or upon the
written order of the Person entitled thereto pursuant to Section 308, to the
address of such Person as it appears on the Security Register or (ii) transfer
to an account maintained by the payee located inside the United States.
Unless otherwise provided as contemplated by Section 301 with respect
to the Securities of any series, payment of interest may be made, in the case of
a Bearer Security, by transfer to an account maintained by the payee with a bank
located outside the United States.
Unless otherwise provided as contemplated by Section 301, every
permanent global Security will provide that interest, if any, payable on any
Interest Payment Date will be paid to DTC, Euroclear and/or CEDEL, as the case
may be, with respect to that portion of such permanent global Security held for
its account by Cede & Co. or the Common Depositary, as the case may be, for the
purpose of permitting such party to credit the interest received by it in
respect of such permanent global Security to the accounts of the beneficial
owners thereof.
35
<PAGE>
In case a Bearer Security of any series is surrendered in exchange for
a Registered Security of such series after the close of business (at an office
or agency in a Place of Payment for such series) on any Regular Record Date and
before the opening of business (at such office or agency) on the next succeeding
Interest Payment Date, such Bearer Security shall be surrendered without the
coupon relating to such Interest Payment Date and interest will not be payable
on such Interest Payment Date in respect of the Registered Security issued in
exchange for such Bearer Security, but will be payable only to the Holder of
such coupon when due in accordance with the provisions of this Indenture.
Except as otherwise specified with respect to a series of Securities in
accordance with the provisions of Section 301, any interest on any Registered
Security of any series that is payable, but is not punctually paid or duly
provided for, on any Interest Payment Date (herein called "Defaulted Interest")
shall forthwith cease to be payable to the registered Holder thereof on the
relevant Regular Record Date by virtue of having been such Holder, and such
Defaulted Interest may be paid by the Trust, at its election in each case, as
provided in clause (1) or (2) below:
(1) The Trust may elect to make payment of any Defaulted
Interest to the Persons in whose names the Registered Securities of
such series (or their respective Predecessor Securities) are registered
at the close of business on a Special Record Date for the payment of
such Defaulted Interest, which shall be fixed in the following manner.
The Trust shall notify the Trustee in writing of the amount of
Defaulted Interest proposed to be paid on each Registered Security of
such series and the date of the proposed payment (which shall not be
less than 20 days after such notice is received by the Trustee), and at
the same time the Trust shall deposit with the Trustee an amount of
money in the currency or currencies, currency unit or units or
composite currency or currencies in which the Securities of such series
are payable (except as otherwise specified pursuant to Section 301 for
the Securities of such series) equal to the aggregate amount proposed
to be paid in respect of such Defaulted Interest or shall make
arrangements satisfactory to the Trustee for such deposit on or prior
to the date of the proposed payment, such money when deposited to be
held in trust for the benefit of the Persons entitled to such Defaulted
Interest as in this clause provided. Thereupon the Trustee shall fix a
Special Record Date for the payment of such Defaulted Interest which
shall be not more than 15 days and not less than 10 days prior to the
date of the proposed payment and not less than 10 days after the
receipt by the Trustee of the notice of the proposed payment. The
Trustee shall promptly notify the Trust of such Special Record Date
and, in the name and at the expense of the Trust, shall cause notice of
the proposed payment of such Defaulted Interest and the Special Record
Date therefor to be
36
<PAGE>
mailed, first-class postage prepaid, to each Holder of Registered
Securities of such series at his address as it appears in the Security
Register not less than 10 days prior to such Special Record Date. The
Trustee may, in its discretion, in the name and at the expense of the
Trust, cause a similar notice to be published at least once in an
Authorized Newspaper in each place of payment, but such publications
shall not be a condition precedent to the establishment of such Special
Record Date. Notice of the proposed payment of such Defaulted Interest
and the Special Record Date therefor having been mailed as aforesaid,
such Defaulted Interest shall be paid to the Persons in whose names the
Registered Securities of such series (or their respective Predecessor
Securities) are registered at the close of business on such Special
Record Date and shall no longer be payable pursuant to the following
clause (2). In case a Bearer Security of any series is surrendered at
the office or agency in a Place of Payment for such series in exchange
for a Registered Security of such series after the close of business at
such office or agency on any Special Record Date and before the opening
of business at such office or agency on the related proposed date for
payment of Defaulted Interest, such Bearer Security shall be
surrendered without the coupon relating to such proposed date of
payment and Defaulted Interest will not be payable on such proposed
date of payment in respect of the Registered Security issued in
exchange for such Bearer Security, but will be payable only to the
Holder of such coupon when due in accordance with the provisions of
this Indenture.
(2) The Trust may make payment of any Defaulted Interest on
the Registered Securities of any series in any other lawful manner not
inconsistent with the requirements of any securities exchange on which
such Securities may be listed, and upon such notice as may be required
by such exchange, if, after notice given by the Trust to the Trustee of
the proposed payment pursuant to this clause, such manner of payment
shall be deemed practicable by the Trustee.
Subject to the foregoing provisions of this Section and Section 305,
each Security delivered under this Indenture upon registration of transfer of or
in exchange for or in lieu of any other Security shall carry the rights to
interest accrued and unpaid, and to accrue, which were carried by such other
Security.
SECTION 308. Persons Deemed Owners.
Prior to due presentment of a Registered Security for registration of
transfer, the Trust, the Trustee and any agent of the Trust or the Trustee may
treat the Person in whose name such
37
<PAGE>
Registered Security is registered as the owner of such Security for the purpose
of receiving payment of principal of (and premium or Make-Whole Amount, if any),
and (subject to Sections 305 and 307) interest on, such Registered Security and
for all other purposes whatsoever, whether or not such Registered Security be
overdue, and neither the Trust, the Trustee nor any agent of the Trust or the
Trustee shall be affected by notice to the contrary.
Title to any Bearer Security and any coupons appertaining thereto shall
pass by delivery. The Trust, the Trustee and any agent of the Trust or the
Trustee may treat the Holder of any Bearer Security and the Holder of any coupon
as the absolute owner of such Security or coupon for the purpose of receiving
payment thereof or on account thereof and for all other purposes whatsoever,
whether or not such Security or coupon be overdue, and neither the Trust, the
Trustee nor any agent of the Trust or the Trustee shall be affected by notice to
the contrary.
None of the Trust, the Trustee, any Paying Agent or the Security
Registrar will have any responsibility or liability for any aspect of the
records relating to or payments made on account of beneficial ownership
interests of a Security in global form or for maintaining, supervising or
reviewing any records relating to such beneficial ownership interests.
Notwithstanding the foregoing, with respect to any global Security,
nothing herein shall prevent the Trust, the Trustee, or any agent of the Trust
or the Trustee, from giving effect to any written certification, proxy or other
authorization furnished by any depositary, as a Holder, with respect to such
global Security or impair, as between such depositary and owners of beneficial
interests in such global Security, the operation of customary practices
governing the exercise of the rights of such depositary (or its nominee) as
Holder of such global Security.
SECTION 309. Cancellation.
All Securities and coupons surrendered for payment, redemption,
repayment at the option of the Holder, registration of transfer or exchange or
for credit against any sinking find payment shall, if surrendered to any Person
other than the Trustee, be delivered to the Trustee, and any such Securities and
coupons and Securities and coupons surrendered directly to the Trustee for any
such purpose shall be promptly cancelled by it. The Trust may at any time
deliver to the Trustee for cancellation any Securities previously authenticated
and delivered hereunder which the Trust may have acquired in any manner
whatsoever, and may deliver to the Trustee (or to any other Person for delivery
to the Trustee) for cancellation any Securities previously authenticated
hereunder which the Trust has not issued and sold, and all Securities so
delivered shall be promptly cancelled by the Trustee. If the Trust shall so
acquire any of the Securities, however, such acquisition shall not operate as a
redemption or satisfaction of the indebtedness represented by such Securities
unless and until the same are surrendered to the Trustee for cancellation. No
Securities shall be authenticated in lieu of or in exchange for any Securities
cancelled as provided in this Section, except as expressly permitted by this
Indenture. Cancelled Securities and coupons held by the Trustee shall be
destroyed by the
38
<PAGE>
Trustee and the Trustee shall deliver a certificate of such destruction to the
Trust, unless by a Trust Order the Trust directs their return to it.
SECTION 310. Computation of Interest.
Except as otherwise specified as contemplated by Section 301 with
respect to Securities of any series, interest on the Securities of each series
shall be computed on the basis of a 360- day year consisting of twelve 30-day
months.
ARTICLE FOUR
SATISFACTION AND DISCHARGE
SECTION 401. Satisfaction and Discharge of Indenture.
This Indenture shall upon Trust Request cease to be of further effect
with respect to any series of Securities specified in such Trust Request (except
as to any surviving rights of registration of transfer or exchange of Securities
of such series herein expressly provided for and any right to receive Additional
Amounts, as provided in Section 1011), and the Trustee, upon receipt of a Trust
Order, and at the expense of the Trust, shall execute proper instruments
acknowledging satisfaction and discharge of this Indenture as to such series
when
(1) either
(A) all Securities of such series theretofore
authenticated and delivered and all coupons, if any,
appertaining thereto (other than (i) coupons appertaining to
Bearer Securities surrendered for exchange for Registered
Securities and maturing after such exchange, whose surrender
is not required or has been waived as provided in Section 305,
(ii) Securities and coupons of such series which have been
destroyed, lost or stolen and which have been replaced or paid
as provided in Section 306, (iii) coupons appertaining to
Securities called for redemption and maturing after the
relevant Redemption Date, whose surrender has been waived as
provided in Section 1106, and (iv) Securities and coupons of
such series for whose payment money has theretofore been
deposited in trust or segregated and held in trust by the
Trust and thereafter repaid to the Trust for discharge from
such trust, as provided in Section 1003) have been delivered
to the Trustee for cancellation; or
39
<PAGE>
(B) all Securities of such series and, in the case of
(i) and (ii) below, any coupons appertaining thereto not
theretofore delivered to the Trustee for cancellation
(i) have become due and payable, or
(ii) will become due and payable at their
Stated Maturity within one year, or
(iii) if redeemable at the option of the
Trust, are to be called for redemption within one
year under arrangements satisfactory to the Trustee
for the giving of notice of redemption by the Trustee
in the name, and at the expense, of the Trust,
and the Trust, in the case of (i), (ii) or (iii) above, has
irrevocably deposited or caused to be deposited with the
Trustee as trust funds in trust for the purpose an amount in
the currency or currencies, currency unit or units or
composite currency or currencies in which the Securities of
such series are payable, sufficient to pay and discharge the
entire indebtedness on such Securities and such coupons not
theretofore delivered to the Trustee for cancellation, for
principal (and premium or Make-Whole Amount, if any) and
interest, and any Additional Amounts with respect thereto, to
the date of such deposit (in the case of Securities which have
become due and payable) or the Stated Maturity or Redemption
Date, as the case may be;
(2) The Trust has paid or caused to be paid all other sums
payable hereunder by the Trust; and
(3) The Trust has delivered to the Trustee an Officers'
Certificate and an Opinion of Counsel, each stating that all conditions
precedent herein provided for relating to the satisfaction and
discharge of this Indenture as to such series have been complied with.
Notwithstanding the satisfaction and discharge of this Indenture, the
obligations of the Trust to the Trustee and any predecessor Trustee under
Section 606, the obligations of the Trust to any Authenticating Agent under
Section 611 and, if money shall have been deposited with and held by the Trustee
pursuant to subclause (B) of clause (1) of this Section, the obligations of the
Trustee under Section 402 and the last paragraph of Section 1003, shall survive.
40
<PAGE>
SECTION 402. Application of Trust Funds.
Subject to the provisions of the last paragraph of Section 1003, all
money deposited with the Trustee pursuant to Section 401 shall be held in trust
and applied by it, in accordance with the provisions of the Securities, the
coupons and this Indenture, to the payment, either directly or through any
Paying Agent (including the Trust acting as its own Paying Agent) as the Trustee
may determine, to the Persons entitled thereto, of the principal (and premium or
Make-Whole Amount, if any), and any interest and Additional Amounts for whose
payment such money has been deposited with or received by the Trustee, but such
money need not be segregated from other funds except to the extent required by
law.
ARTICLE FIVE
REMEDIES
SECTION 501. Events of Default.
Subject to any modifications, additions or deletions relating to any
series of Securities as contemplated pursuant to Section 301, "Event of
Default," wherever used herein with respect to any particular series of
Securities, means any one of the following events (whatever the reason for such
Event of Default and whether or not it shall be voluntary or involuntary or be
effected by operation of law or pursuant to any judgment, decree or order of any
court or any order, rule or regulation of any administrative or governmental
body):
(1) default in the payment of any interest upon or any
Additional Amounts payable in respect of any Security of or within that
series or of any coupon appertaining thereto, when such interest,
Additional Amounts or coupon becomes due and payable, and continuance
of such default for a period of 30 days; or
(2) default in the payment of the principal of (or premium or
Make-Whole Amount, if any, on) any Security of that series when due and
payable at its Maturity; or
(3) default in the deposit of any sinking fund payment, when
and as due by the terms of any Security of that series; or
(4) default in the performance, or breach, of any covenant or
warranty of the Trust in this Indenture with respect to any Security of
that series (other than a covenant or warranty a default in whose
performance or whose breach is elsewhere in this Section specifically
dealt with), and continuance of such default or breach for a period of
60 days after there has been given, by registered or certified mail, to
41
<PAGE>
the Trust by the Trustee or to the Trust and the Trustee by the Holders
of at least 25% in principal amount of the Outstanding Securities of
that series a written notice specifying such default or breach and
requiring it to be remedied and stating that such notice is a "Notice
of Default" hereunder; or
(5) default under any bond, debenture, note, mortgage,
indenture or instrument under which there may be issued or by which
there may be secured or evidenced any indebtedness of the Trust for
money borrowed by the Trust (or by any Subsidiary, the repayment of
which the Trust has guaranteed or for which the Trust is directly
responsible or liable as obligor or guarantor), having an aggregate
principal amount outstanding of at least $10,000,000, whether such
indebtedness now exists or shall hereafter be created, which default
shall have resulted in such indebtedness being declared due and payable
prior to the date on which it would otherwise have become due and
payable, without such indebtedness having been discharged, or such
acceleration having been rescinded or annulled, within a period of 10
days after there shall have been given, by registered or certified
mail, to the Trust by the Trustee or to the Trust and the Trustee by
the Holders of at least 10% in principal amount of the Outstanding
Securities of that series a written notice specifying such default and
requiring the Trust to cause such indebtedness to be discharged or
cause such acceleration to be rescinded or annulled and stating that
such notice is a "Notice of Default" hereunder; or
(6) the entry by a court of competent jurisdiction of one or
more judgments, orders or decrees against the Trust or any of its
Subsidiaries in an aggregate amount (excluding amounts covered by
insurance) in excess of $10,000,000 and such judgments, orders or
decrees remain undischarged, unstayed and unsatisfied in an aggregate
amount (excluding amounts covered by insurance) in excess of
$10,000,000 for a period of 30 consecutive days; or
(7) the Trust or any Significant Subsidiary pursuant to
or within the meaning of any Bankruptcy Law:
(A) commences a voluntary case,
(B) consents to the entry of an order for relief
against it in an involuntary case,
(C) consents to the appointment of a Custodian
of it or for all or substantially all of its property, or
42
<PAGE>
(D) makes a general assignment for the benefit
of its creditors; or
(8) a court of competent jurisdiction enters an order or
decree under any Bankruptcy Law that:
(A) is for relief against the Trust or any
Significant Subsidiary in an involuntary case,
(B) appoints a Custodian of the Trust or any
Significant Subsidiary or for all or substantially all of
either of its property, or
(C) orders the liquidation of the Trust or any
Significant Subsidiary
and the order or decree remains unstayed and in effect for 90 days; or
(9) any other Event of Default provided with respect to
Securities of that series.
As used in this Section 501, the term "Bankruptcy Law" means Title 11, U.S. Code
or any similar Federal or state law for the relief of debtors and the term
"Custodian" means any receiver, trustee, assignee, liquidator or other similar
official under any Bankruptcy Law.
SECTION 502. Acceleration of Maturity; Rescission and Annulment.
If an Event of Default with respect to Securities of any series at the
time Outstanding occurs and is continuing, then and in every such case the
Trustee or the Holders of not less than 25% in principal amount of the
Outstanding Securities of that series may declare the principal (or, if any
Securities are Original Issue Discount Securities or Indexed Securities, such
portion of the principal as may be specified in the terms thereof) of, and the
Make-Whole Amount, if any, on, all the Securities of that series to be due and
payable immediately, by a notice in writing to the Trust (and to the Trustee if
given by the Holders), and upon any such declaration such principal or specified
portion thereof shall become immediately due and payable.
At any time after such a declaration of acceleration with respect to
Securities of any series has been made and before a judgment or decree for
payment of the money due has been obtained by the Trustee as hereinafter in this
Article provided, the Holders of a majority in principal amount of the
Outstanding Securities of that series, by written notice to the Trust and the
Trustee, may rescind and annul such declaration and its consequences if:
(1) The Trust has paid or deposited with the Trustee a sum
sufficient to pay in the currency, currency unit or composite currency
43
<PAGE>
in which the Securities of such series is payable (except as otherwise
specified pursuant to Section 301 for the Securities of such series):
(A) all overdue installments of interest on and any
Additional Amounts payable in respect of all Outstanding
Securities of that series and any related coupons;
(B) the principal of (and premium or Make-Whole
Amount, if any, on) any Outstanding Securities of that series
which have become due otherwise than by such declaration of
acceleration and interest thereon at the rate or rates borne
by or provided for in such Securities;
(C) to the extent that payment of such interest is
lawful, interest upon overdue installments of interest and any
Additional Amounts at the rate or rates borne by or provided
for in such Securities; and
(D) all sums paid or advanced by the Trustee
hereunder and the reasonable compensation, expenses,
disbursements and advances of the Trustee, its agents and
counsel; and
(2) all Events of Default with respect to Securities of that
series, other than the nonpayment of the principal of (or premium or
Make-Whole Amount, if any) or interest on Securities of that series
which have become due solely by such declaration of acceleration, have
been cured or waived as provided in Section 513.
No such rescission shall affect any subsequent default or impair any right
consequent thereon.
SECTION 503. Collection of Indebtedness and Suits for Enforcement by
Trustee.
The Trust covenants that if:
(1) default is made in the payment of any installment of
interest or Additional Amounts, if any, on any Security of any series
and any related coupon when such interest or Additional Amount becomes
due and payable and such default continues for a period of 30 days, or
(2) default is made in the payment of the principal of (or
premium or Make- Whole Amount, if any, on) any Security of any series
at its Maturity,
then the Trust will, upon demand of the Trustee, pay to the Trustee, for the
benefit of the
44
<PAGE>
Holders of such Securities of such series and coupons, the whole amount then due
and payable on such Securities and coupons for principal (and premium or
Make-Whole Amount, if any) and interest and Additional Amount, with interest
upon any overdue principal (and premium or Make-Whole Amount, if any) and, to
the extent that payment of such interest shall be legally enforceable, upon any
overdue installments of interest or Additional Amounts, if any, at the rate or
rates borne by or provided for in such Securities, and, in addition thereto,
such further amount as shall be sufficient to cover the costs and expenses of
collection, including the reasonable compensation, expenses, disbursements and
advances of the Trustee, its agents and counsel.
If the Trust fails to pay such amounts forthwith upon such demand, the
Trustee, in its own name and as trustee of an express trust, may institute a
judicial proceeding for the collection of the sums so due and unpaid, and may
prosecute such proceeding to judgment or final decree, and may enforce the same
against the Trust or any other obligor upon such Securities of such series and
collect the moneys adjudged or decreed to be payable in the manner provided by
law out of the property of the Trust or any other obligor upon such Securities
of such series, wherever situated.
If an Event of Default with respect to Securities of any series occurs
and is continuing, the Trustee may in its discretion proceed to protect and
enforce its rights and the rights of the Holders of Securities of such series
and any related coupons by such appropriate judicial proceedings as the Trustee
shall deem most effectual to protect and enforce any such rights, whether for
the specific enforcement of any covenant or agreement in this Indenture or in
aid of the exercise of any power granted herein, or to enforce any other proper
remedy.
SECTION 504. Trustee May File Proofs of Claim.
In case of the pendency of any receivership, insolvency, liquidation,
bankruptcy, reorganization, arrangement, adjustment, composition or other
judicial proceeding relative to the Trust or any other obligor upon the
Securities or the property of the Trust or of such other obligor or their
creditors, the Trustee (irrespective of whether the principal of the Securities
of any series shall then be due and payable as therein expressed or by
declaration or otherwise and irrespective of whether the Trustee shall have made
any demand on the Trust for the payment of overdue principal, premium or
Make-Whole Amount, if any, or interest) shall be entitled and empowered, by
intervention in such proceeding or otherwise:
(i) to file and prove a claim for the whole amount, or such
lesser amount as may be provided for in the Securities of such series,
of principal (and premium or Make- Whole Amount, if any) and interest
and Additional Amounts, if any, owing and unpaid in respect of the
Securities and to file such other papers or documents as may be
necessary or advisable in order to have the claims of the Trustee
(including any claim, for the reasonable compensation, expenses,
disbursements and advances of the Trustee, its agents and counsel) and
45
<PAGE>
of the Holders allotted in such judicial proceeding, and
(ii) to collect and receive any moneys or other property
payable or deliverable on any such claims and to distribute the same;
and any custodian, receiver, assignee, trustee, liquidator, sequestrator (or
other similar official) in any such judicial proceeding is hereby authorized by
each Holder of Securities of such series and coupons to make such payments to
the Trustee, and in the event that the Trustee shall consent to the making of
such payments directly to the Holders, to pay to the Trustee any amount due to
it for the reasonable compensation, expenses, disbursements and advances of the
Trustee and any predecessor Trustee, their agents and counsel, and any other
amounts due the Trustee or any predecessor Trustee under Section 606.
Nothing herein contained shall be deemed to authorize the Trustee to
authorize or consent to or accept or adopt on behalf of any Holder of a Security
or coupon any plan of reorganization, arrangement, adjustment or composition
affecting the Securities or coupons or the rights of any Holder thereof, or to
authorize the Trustee to vote in respect of the claim of any Holder of a
Security or coupon in any such proceeding.
SECTION 505. Trustee May Enforce Claims Without Possession of
Securities or Coupons.
All rights of action and claims under this Indenture or any of the
Securities or coupons may be prosecuted and enforced by the Trustee without the
possession of any of the Securities or coupons or the production thereof in any
proceeding relating thereto, and any such proceeding instituted by the Trustee
shall be brought in its own name as trustee of an express trust, and any
recovery of judgment shall, after provision for the payment of the reasonable
compensation, expenses, disbursements and advances of the Trustee, its agents
and counsel, be for the ratable benefit of the Holders of the Securities and
coupons in respect of which such judgment has been recovered.
SECTION 506. Application of Money Collected.
Any money collected by the Trustee pursuant to this Article shall be
applied in the following order, at the date or dates fixed by the Trustee and,
in case of the distribution of such money on account of principal (or premium or
Make-Whole Amount, if any) or interest and any Additional Amounts, upon
presentation of the Securities or coupons, or both, as the case may be, and the
notation thereon of the payment if only partially paid and upon surrender
thereof if fully paid:
FIRST: To the payment of all amounts due the Trustee and any
predecessor Trustee under Section 606,
46
<PAGE>
SECOND: To the payment of the amounts then due and unpaid upon
the Securities and coupons for principal (and premium or Make-Whole
Amount, if any) and interest and any Additional Amounts payable, in
respect of which or for the benefit of which such money has been
collected, ratably, without preference or priority of any kind,
according to the aggregate amounts due and payable on such Securities
and coupons for principal (and premium or Make-Whole Amount, if any),
interest and Additional Amounts, respectively, and
THIRD: To the payment of the remainder, if any, to the Trust.
SECTION 507. Limitation on Suits.
No Holder of any Security of any series or any related coupon shall
have any right to institute any proceeding, judicial or otherwise, with respect
to this Indenture, or for the appointment of a receiver or trustee, or for any
other remedy hereunder, unless:
(1) such Holder has previously given written notice to the
Trustee of a continuing Event of Default with respect to the Securities
of that series;
(2) the Holders of not less than 25% in principal amount of
the Outstanding Securities of that series shall have made written
request to the Trustee to institute proceedings in respect of such
Event of Default in its own name as Trustee hereunder;
(3) such Holder or Holders have offered to the Trustee
reasonable indemnity against the costs, expenses and liabilities to be
incurred in compliance with such request;
(4) the Trustee for 60 days after its receipt of such notice,
request and offer of indemnity has failed to institute any such
proceeding; and
(5) no direction inconsistent with such written request has
been given to the Trustee during such 60-day period by the Holders of a
majority in principal amount of the Outstanding Securities of that
series;
it being understood and intended that no one or more of such Holders shall have
any right in any manner whatever by virtue of, or by availing of, any provision
of this Indenture to affect, disturb or prejudice the rights of any other of
such Holders, or to obtain or to seek to obtain priority or preference over any
other of such Holders or to enforce any right under this
47
<PAGE>
Indenture, except in the manner herein provided and for the equal and ratable
benefit of all such Holders.
SECTION 508. Unconditional Right of Holders to Receive Principal,
Premium or Make-Whole Amount, if any, Interest and
Additional Amounts.
Notwithstanding any other provision in this Indenture, the Holder of
any Security or coupon shall have the right which is absolute and unconditional
to receive payment of the principal of (and premium or Make-Whole Amount, if
any) and (subject to Sections 305 and 307) interest on, and any Additional
Amounts in respect of, such Security or payment of such coupon on the respective
due dates expressed in such Security or coupon (or, in the case of redemption,
on the Redemption Date) and to institute suit for the enforcement of any such
payment, and such rights shall not be impaired without the consent of such
Holder.
SECTION 509. Restoration of Rights and Remedies.
If the Trustee or any Holder of a Security or coupon has instituted any
proceeding to enforce any right or remedy under this Indenture and such
proceeding has been discontinued or abandoned for any reason, or has been
determined adversely to the Trustee or to such Holder, then and in every such
case the Trust, the Trustee and the Holders of Securities and coupons shall,
subject to any determination in such proceeding, be restored severally and
respectively to their former positions hereunder and thereafter all rights and
remedies of the Trustee and the Holders shall continue as though no such
proceeding had been instituted.
SECTION 510. Rights and Remedies Cumulative.
Except as otherwise provided with respect to the replacement or payment
of mutilated, destroyed, lost or stolen Securities or coupons in the last
paragraph of Section 306, no right or remedy herein conferred upon or reserved
to the Trustee or to the Holders of Securities or coupons is intended to be
exclusive of any other right or remedy, and every right and remedy shall, to the
extent permitted by law, be cumulative and in addition to every other right and
remedy given hereunder or now or hereafter existing at law or in equity or
otherwise. The assertion or employment of any right or remedy hereunder, or
otherwise, shall not prevent the concurrent assertion or employment of any other
appropriate right or remedy.
SECTION 511. Delay or Omission Not Waiver.
No delay or omission of the Trustee or of any Holder of any Security or
coupon to exercise any right or remedy accruing upon any Event of Default shall
impair any such right or remedy or constitute a waiver of any such Event of
Default or an acquiescence therein. Every right and remedy given by this Article
or by law to the Trustee or to the Holders may be exercised front time to time,
and as often as may be deemed expedient, by the Trustee or by
48
<PAGE>
the Holders of Securities or coupons, as the case may be.
SECTION 512. Control by Holders of Securities.
The Holders of not less than a majority in principal amount of the
Outstanding Securities of any series shall have the right to direct the time,
method and place of conducting any proceeding for any remedy available to the
Trustee or exercising any trust or power conferred on the Trustee with respect
to the Securities of such series, provided that
(1) such direction shall not be in conflict with any rule of
law or with this Indenture,
(2) the Trustee may take any other action deemed proper by the
Trustee which is not inconsistent with such direction, and
(3) the Trustee need not take any action which might involve
it in personal liability or be unduly prejudicial to the Holders of
Securities of such series not joining therein (but the Trustee shall
have no obligation as to the determination of such undue prejudice).
SECTION 513. Waiver of Past Defaults.
The Holders of not less than a majority in principal amount of the
Outstanding Securities of any series may on behalf of the Holders of all the
Securities of such series and any related coupons waive any past default
hereunder with respect to such series and its consequences, except a default
(1) in the payment of the principal of (or premium or
Make-Whole Amount, if any) or interest on or Additional Amounts payable
in respect of any Security of such series or any related coupons, or
(2) in respect of a covenant or provision hereof which under
Article Nine cannot be modified or amended without the consent of the
Holder of each Outstanding Security of such series affected.
Upon any such waiver, such default shall cease to exist, and any Event
of Default arising therefrom shall be deemed to have been cured, for every
purpose of this Indenture; but no such waiver shall extend to any subsequent or
other default or Event of Default or impair any right consequent thereon.
SECTION 514. Waiver of Usury, Stay or Extension Laws.
The Trust covenants (to the extent that it may lawfully do so) that it
will not at any time
49
<PAGE>
insist upon, or plead, or in any manner whatsoever claim or take the benefit or
advantage of, any usury, stay or extension law wherever enacted, now or at any
time hereafter in force, which may affect the covenants or the performance of
this Indenture; and the Trust (to the extent that it may lawfully do so) hereby
expressly waives all benefit or advantage of any such law, and covenants that it
will not hinder, delay or impede the execution of any power herein granted to
the Trustee, but will suffer and permit the execution of every such power as
though no such law had been enacted.
SECTION 515. Undertaking for Costs.
All parties to this Indenture agree, and each Holder of any Security by
his acceptance thereof shall be deemed to have agreed, that any court may in its
discretion require, in any suit for the enforcement of any right or remedy under
this Indenture, or in any suit against the Trustee for any action taken or
omitted by it as Trustee, the filing by any party litigant in such suit of any
undertaking to pay the costs of such suit, and that such court may in its
discretion assess reasonable costs, including reasonable attorneys' fees,
against any party litigant in such suit having due regard to the merits and good
faith of the claims or defenses made by such party litigant; but the provisions
of this Section shall not apply to any suit instituted by the Trustee, to any
suit instituted by any Holder, or group of Holders, holding in the aggregate
more than 10% in principal amount of the Outstanding Securities, or to any suit
instituted by any Holder for the enforcement of the payment of the principal of
(or premium or Make- Whole Amount, if any) or interest on or Additional Amounts
payable with respect to any Security on or after the respective Stated
Maturities expressed in such Security (or, in the case of redemption, on or
after the Redemption Date).
ARTICLE SIX
THE TRUSTEE
SECTION 601. Notice of Defaults.
Within 90 days after the occurrence of any default hereunder with
respect to the Securities of any series, the Trustee shall transmit in the
manner and to the extent provided in TIA Section 313(c), notice of such default
hereunder known to the Trustee, unless such default shall have been cured or
waived; provided, however, that, except in the case of a default in the payment
of the principal of (or premium or Make-Whole Amount, if any) or interest on or
any Additional Amounts with respect to any Security of such series, or in the
payment of any sinking fund installment with respect to the Securities of such
series, the Trustee shall be protected in withholding such notice if and so long
as Responsible Officers of the Trustee in good faith determine that the
withholding of such notice is in the interests of the Holders of the Securities
and coupons of such series; and provided further that in the case of any default
or breach of the character specified in Section 501(4) with respect to the
Securities and coupons of such series, no such notice to Holders shall be given
until at least 60 days after the
50
<PAGE>
occurrence thereof. For the purpose of this Section, the term "default" means
any event which is, or after notice or lapse of time or both would become, an
Event of Default with respect to the Securities of such series.
SECTION 602. Certain Rights of Trustee.
Subject to the provisions of TIA Section 315(a) through 315(d):
(1) the Trustee shall perform only such duties as are
expressly undertaken by it to perform under this Indenture;
(2) the Trustee may rely and shall be protected in acting or
refraining from acting upon any resolution, certificate, statement,
instrument, opinion, report, notice, request, direction, consent,
order, bond, debenture, note, coupon or other paper or document
believed by it to be genuine and to have been signed or presented by
the proper party or parties;
(3) any request or direction of the Trust mentioned herein
shall be sufficiently evidenced by a Trust Request or Trust Order
(other than delivery of any Security, together with any coupons
appertaining thereto, to the Trustee for authentication and delivery
pursuant to Section 303 which shall be sufficiently evidenced as
provided therein) and any resolution of the Board of Directors may be
sufficiently evidenced by a Board Resolution;
(4) whenever in the administration of this Indenture the
Trustee shall deem it desirable that a matter be proved or established
prior to taking, suffering or omitting any action hereunder, the
Trustee (unless other evidence be herein specifically prescribed) may,
in the absence of bad faith on its part, rely upon an Officers'
Certificate;
(5) the Trustee may consult with counsel and as a condition to
the taking, suffering or omission of any action hereunder may demand an
Opinion of Counsel, and the advice of such counsel or any Opinion of
Counsel shall be full and complete authorization and protection in
respect of any action taken, suffered or omitted by it hereunder in
good faith and in reliance thereon;
(6) the Trustee shall be under no obligation to exercise any
of the rights or powers vested in it by this Indenture at the request
or direction of any of the Holders of Securities of any series or any
related coupons pursuant to this Indenture, unless such Holders shall
51
<PAGE>
have offered to the Trustee reasonable security or indemnity against
the costs, expenses and liabilities which might be incurred by it in
compliance with such request or direction;
(7) the Trustee shall not be bound to make any investigation
into the facts or matters stated in any resolution, certificate,
statement, instrument, opinion, report, notice, request, direction,
consent, order, bond, debenture, note, coupon or other paper or
document, but the Trustee, in its discretion, may make such further
inquiry or investigation into such facts or matters as it may see fit,
and, if the Trustee shall determine to make such further inquiry or
investigation, it shall be entitled to examine the books, records and
premises of the Trust, personally or by agent or attorney;
(8) the Trustee may execute any of the trusts or powers
hereunder or perform any duties hereunder either directly or by or
through agents or attorneys and the Trustee shall not be responsible
for any misconduct or negligence on the part of any agent or attorney
appointed with due care by it hereunder; and
(9) the Trustee shall not be liable for any action taken,
suffered or omitted by it in good faith and reasonably believed by it
to be authorized or within the discretion or rights or powers conferred
upon it by this Indenture.
The Trustee shall not be required to expend or risk its own funds or
otherwise incur any financial liability in the performance of any of its duties
hereunder, or in the exercise of any of its rights or powers, if it shall have
reasonable grounds for believing that repayment of such funds or adequate
indemnity against such risk or liability is not reasonably assured to it.
SECTION 603. Not Responsible for Recitals or Issuance of Securities.
The recitals contained herein and in the Securities, except the
Trustee's certificate of authentication, and in any coupons shall be taken as
the statements of the Trust, and neither the Trustee nor any Authenticating
Agent assumes any responsibility for their correctness. The Trustee makes no
representations as to the validity or sufficiency of this Indenture or of the
Securities or coupons, except that the Trustee represents that it is duly
authorized to execute and deliver this Indenture, authenticate the Securities
and perform its obligations hereunder. Neither the Trustee nor any
Authenticating Agent shall be accountable for the use or application by the
Trust of Securities or the proceeds thereof.
SECTION 604. May Hold Securities.
52
<PAGE>
The Trustee, any Paying Agent, Security Registrar, Authenticating Agent
or any other agent of the Trust, in its individual or any other capacity, may
become the owner or pledgee of Securities and coupons and, subject to TIA
Sections 310(b) and 311, may otherwise deal with the Trust with the same rights
it would have if it were not Trustee, Paying Agent, Security Registrar,
Authenticating Agent or such other agent.
SECTION 605. Money Held in Trust.
Money held by the Trustee in trust hereunder need not be segregated
from other funds except to the extent required by law. The Trustee shall be
under no liability for interest on, or investment of, any money received by it
hereunder.
SECTION 606. Compensation and Reimbursement.
The Trust agrees:
(1) to pay to the Trustee from time to time reasonable
compensation for all services rendered by it hereunder, including
extraordinary services rendered in connection with or during the
continuation of a default hereunder (which compensation shall not be
limited by any provision of law in regard to the compensation of a
trustee of an express trust);
(2) except as otherwise expressly provided herein, to
reimburse each of the Trustee and any predecessor Trustee upon its
request for all reasonable expenses, disbursements and advances
incurred or made by it in accordance with any provision of this
Indenture (including the reasonable compensation and the expenses and
disbursements of its agents and counsel), except to the extent any such
expense, disbursement or advance may be attributable to its negligence
or bad faith; and
(3) to indemnify each of the Trustee and any predecessor
Trustee for, and to hold it harmless against, any loss, liability or
expense, arising out of or in connection with the acceptance or
administration of the trust or trusts or the performance of its duties
hereunder, including the costs and expenses of defending itself against
any claim or liability in connection with the exercise or performance
of any of its powers or duties hereunder except to the extent any such
loss, liability or expense may be attributable to its own negligence or
bad faith.
As security for the performance of the obligations of the Trust under
this Section, the
53
<PAGE>
Trustee shall have a lien prior to the Securities upon all property and funds
held or collected by the Trustee as such, except funds held in trust for the
payment of principal of (or premium or Make-Whole Amount, if any) or interest on
particular Securities or any coupons.
The provisions of this Section shall survive the termination of this
Indenture.
SECTION 607. Corporate Trustee Required; Eligibility; Conflicting
Interests.
There shall at all times be a Trustee hereunder which shall be eligible
to act as Trustee under TIA Section 310(a)(1) and shall have a combined capital
and surplus of at least $25,000,000. If such corporation publishes reports of
condition at least annually, pursuant to law or the requirements of Federal,
State, Territorial or District of Columbia supervising or examining authority,
then for the purposes of this Section, the combined capital and surplus of such
corporation shall be deemed to be its combined capital and surplus as set forth
in its most recent report of condition so published. If at any time the Trustee
shall cease to be eligible in accordance with the provisions of this Section, it
shall resign immediately in the manner and with the effect hereinafter specified
in this Article.
SECTION 608. Resignation and Removal; Appointment of Successor.
(a) No resignation or removal of the Trustee and no
appointment of a successor Trustee pursuant to this Article shall
become effective until the acceptance of appointment by the successor
Trustee in accordance with the applicable requirements of Section 609.
(b) The Trustee may resign at any time with respect to the
Securities of one or more series by giving written notice thereof to
the Trust. If an instrument of acceptance by a successor Trustee shall
not have been delivered to the Trustee within 30 days after the giving
of such notice of resignation, the resigning Trustee may petition any
court of competent jurisdiction for the appointment of a successor
Trustee.
(c) The Trustee may be removed at any time with respect to the
Securities of any series by Act of the Holders of a majority in
principal amount of the Outstanding Securities of such series delivered
to the Trustee and to the Trust.
(d) If at any time:
(1) the Trustee shall fail to comply with the
provisions of TIA Section 310(b) after written request
54
<PAGE>
therefor by the Trust or by any Holder of a Security who has
been a bona fide Holder of a Security for at least six months,
or
(2) the Trustee shall cease to be eligible under
Section 607(a) and shall fail to resign after written request
therefor by the Trust or by any Holder of a Security who has
been a bona fide Holder of a Security for at least six months,
or
(3) the Trustee shall become incapable of acting or
shall be adjudged a bankrupt or insolvent or a receiver of the
Trustee or of its property shall be appointed or any public
officer shall take charge or control of the Trustee or of its
property or affairs for the purpose of rehabilitation,
conservation or liquidation,
then, in any such case, (i) the Trust by or pursuant to a Board
Resolution may remove the Trustee and appoint a successor Trustee with
respect to all Securities, or (ii) subject to TIA Section 315(e), any
Holder of a Security who has been a bona fide Holder of a Security for
at least six months may, on behalf of himself and all others similarly
situated, petition any court of competent jurisdiction for the removal
of the Trustee with respect to all Securities and the appointment of a
successor Trustee or Trustees.
(e) If the Trustee shall resign, be removed or become
incapable of acting, or if a vacancy shall occur in the office of
Trustee for any cause with respect to the Securities of one or more
series, the Trust, by or pursuant to a Board Resolution, shall promptly
appoint a successor Trustee or Trustees with respect to the Securities
of that or those series (it being understood that any such successor
Trustee may be appointed with respect to the Securities of one or more
or all of such series and that at any time there shall be only one
Trustee with respect to the Securities of any particular series). If,
within one year after such resignation, removal or incapability, or the
occurrence of such vacancy, a successor Trustee with respect to the
Securities of any series shall be appointed by Act of the Holders of a
majority in principal amount of the Outstanding Securities of such
series delivered to the Trust and the retiring Trustee, the successor
Trustee so appointed shall, forthwith upon its acceptance of such
appointment, become the successor Trustee with respect to the
Securities of such series and to that extent supersede the successor
55
<PAGE>
Trustee appointed by the Trust. If no successor Trustee with respect to
the Securities of any series shall have been so appointed by the Trust
or the Holders of Securities and accepted appointment in the manner
hereinafter provided, any Holder of a Security who has been a bona fide
Holder of a Security of such series for at least six months may, on
behalf of himself and all others similarly situated, petition any court
of competent jurisdiction for the appointment of a successor Trustee
with respect to Securities of such series.
(f) The Trust shall give notice of each resignation and each
removal of the Trustee with respect to the Securities of any series and
each appointment of a successor Trustee with respect to the Securities
of any series in the manner provided for notices to the Holders of
Securities in Section 106. Each notice shall include the name of the
successor Trustee with respect to the Securities of such series and the
address of its Corporate Trust Office.
SECTION 609. Acceptance of Appointment By Successor.
(a) In case of the appointment hereunder of a successor
Trustee with respect to all Securities, every such successor Trustee
shall execute, acknowledge and deliver to the Trust and to the retiring
Trustee an instrument accepting such appointment, and thereupon the
resignation or removal of the retiring Trustee shall become effective
and such successor Trustee, without any further act, deed or
conveyance, shall become vested with all the rights, powers, trusts and
duties of the retiring Trustee; but, on request of the Trust or the
successor Trustee, such retiring Trustee shall, upon payment of its
charges, execute and deliver an instrument transferring to such
successor Trustee all the rights, powers and trusts of the retiring
Trustee, and shall duly assign, transfer and deliver to such successor
Trustee all property and money held by such retiring Trustee hereunder,
subject nevertheless to its claim, if any, provided for in Section 606.
(b) In case of the appointment hereunder of a successor
Trustee with respect to the Securities of one or more (but not all)
series, the Trust, the retiring Trustee and each successor Trustee with
respect to the Securities of one or more series shall execute and
deliver an indenture supplemental hereto, pursuant to Article Nine
hereof, wherein each successor Trustee shall accept such appointment
and which (1) shall contain such provisions as shall be necessary or
desirable to transfer and confirm to, and to vest in, each successor
Trustee all the rights, powers, trusts and duties of the retiring
56
<PAGE>
Trustee with respect to the Securities of that or those series to which
the appointment of such successor Trustee relates, (2) if the retiring
Trustee is not retiring with respect to all Securities, shall contain
such provisions as shall be deemed necessary or desirable to confirm
that all the rights, powers, trusts and duties of the retiring Trustee
with respect to the Securities of that or those series as to which the
retiring Trustee is not retiring shall continue to be vested in the
retiring Trustee, and (3) shall add to or change any of the provisions
of this Indenture as shall be necessary to provide for or facilitate
the administration of the trusts hereunder by more than one Trustee, it
being understood that nothing herein or in such supplemental indenture
shall constitute such Trustees co-trustees of the same trust and that
each such Trustee shall be trustee of a trust or trusts hereunder
separate and apart from any trust or trusts hereunder administered by
any other such Trustee; and upon the execution and delivery of such
supplemental indenture the resignation or removal of the retiring
Trustee shall become effective to the extent provided therein and each
such successor Trustee, without any further act, deed or conveyance,
shall become vested with all the rights, powers, trusts and duties of
the retiring Trustee with respect to the Securities of that or those
series to which the appointment of such successor Trustee relates; but,
on request of the Trust or any successor Trustee, such retiring Trustee
shall duly assign, transfer and deliver to such successor Trustee all
property and money held by such retiring Trustee hereunder with respect
to the Securities of that or those series to which the appointment of
such successor Trustee relates.
(c) Upon request of any such successor Trustee, the Trust
shall execute any and all instruments for more fully and certainly
vesting in and confirming to such successor Trustee all such rights,
powers and trusts referred to in paragraph (a) or (b) of this Section,
as the case may be.
(d) No successor Trustee shall accept its appointment unless
at the time of such acceptance such successor Trustee shall be
qualified and eligible under this Article.
SECTION 610. Merger, Conversion, Consolidation or Succession to
Business.
Any corporation into which the Trustee may be merged or converted or
with which it may be consolidated, or any corporation resulting from any merger,
conversion or consolidation to which the Trustee shall be a party, or any
corporation succeeding to all or
57
<PAGE>
substantially all of the corporate trust business of the Trustee, shall be the
successor of the Trustee hereunder, provided such corporation shall be otherwise
qualified and eligible under this Article, without the execution or filing of
any paper or any further act on the part of any of the parties hereto. In case
any Securities or coupons shall have been authenticated, but not delivered, by
the Trustee then in office, any successor by merger, conversion or consolidation
to such authenticating Trustee may adopt such authentication and deliver the
Securities or coupons so authenticated with the same effect as if such successor
Trustee had itself authenticated such Securities or coupons. In case any
Securities or coupons shall not have been authenticated by such predecessor
Trustee, any such successor Trustee may authenticate and deliver such Securities
or coupons, in either its own name or that of its predecessor Trustee, with the
full force and effect which this Indenture provides for the certificate of
authentication of the Trustee.
SECTION 611. Appointment of Authenticating Agent.
At any time when any of the Securities remain Outstanding, the Trustee
may appoint an Authenticating Agent or Agents with respect to one or more series
of Securities which shall be authorized to act on behalf of the Trustee to
authenticate Securities of such series issued upon exchange, registration of
transfer or partial redemption or repayment thereof, and Securities so
authenticated shall be entitled to the benefits of this Indenture and shall be
valid and obligatory for all purposes as if authenticated by the Trustee
hereunder. Any such appointment shall be evidenced by an instrument in writing
signed by a Responsible Officer of the Trustee, a copy of which instrument shall
be promptly furnished to the Trust. Wherever reference is made in this Indenture
to the authentication and delivery of Securities by the Trustee or the Trustee's
certificate of authentication, such reference shall be deemed to include
authentication and delivery on behalf of the Trustee by an Authenticating Agent
and a certificate of authentication executed on behalf of the Trustee by an
Authenticating Agent. Each Authenticating Agent shall be acceptable to the Trust
and, except as may otherwise be provided pursuant to Section 301, shall at all
times be a bank or trust company or corporation organized and doing business and
in good standing under the laws of the United States of America or of any State
or the District of Columbia, authorized under such laws to act as Authenticating
Agent, having a combined capital and surplus of not less than $25,000,000 and
subject to supervision or examination by 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
58
<PAGE>
succeeding to the corporate agency or corporate trust business of an
Authenticating Agent, shall continue to be an Authenticating Agent, provided
such corporation shall be otherwise eligible under this Section, without the
execution or filing of any paper or further act on the part of the Trustee or
the Authenticating Agent.
An Authenticating Agent for any series of Securities may at any time
resign by giving written notice of resignation to the Trustee for such series
and to the Trust. The Trustee for any series of Securities may at any time
terminate the agency of an Authenticating Agent by giving written notice of
termination to such Authenticating Agent and to the Trust. Upon receiving such a
notice of resignation or upon such a termination, or in case at any time such
Authenticating Agent shall cease to be eligible in accordance with the
provisions of this Section, the Trustee for such series may appoint a successor
Authenticating Agent which shall be acceptable to the Trust and shall give
notice of such appointment to all Holders of Securities of or within the series
with respect to which such Authenticating Agent will serve in the manner set
forth in Section 106. Any successor Authenticating Agent upon acceptance of its
appointment hereunder shall become vested with all the rights, powers and duties
of its predecessor hereunder, with like effect as if originally named as an
Authenticating Agent herein. No successor Authenticating Agent shall be
appointed unless eligible under the provisions of this Section.
The Trust agrees to pay to each Authenticating Agent from time to time
reasonable compensation including reimbursement of its reasonable expenses for
its services under this Section.
If an appointment with respect to one or more series is made pursuant
to this Section, the Securities of such series may have endorsed thereon, in
addition to or in lieu of the Trustee's certificate of authentication, an
alternate certificate of authentication substantially in the following form:
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 Officer
59
<PAGE>
ARTICLE SEVEN
HOLDERS' LISTS AND REPORTS BY TRUSTEE AND TRUST
SECTION 701. Disclosure of Names and Addresses of Holders.
Every Holder of Securities or coupons, by receiving and holding the
same, agrees with the Trust and the Trustee that neither the Trust nor the
Trustee nor any Authenticating Agent nor any Paying Agent nor any Security
Registrar shall be held accountable by reason of the disclosure of any
information as to the names and addresses of the Holders of Securities in
accordance with TIA Section 312, regardless of the source from which such
information was derived, and that the Trustee shall not be held accountable by
reason of mailing any material pursuant to a request made under TIA Section
312(b).
SECTION 702. Reports by Trustee.
Within 60 days after April 1 of each year commencing with the first
April 1 after the first issuance of Securities pursuant to this Indenture, the
Trustee shall transmit by mail to all Holders of Securities as provided in TIA
Section 313(c) a brief report dated as of such April 1 if required by TIA
Section 313(a).
SECTION 703. Reports by Trust.
The Trust will:
(1) file with the Trustee, within 15 days after the Trust is
required to file the same with the Commission, copies of the annual
reports and of the information, documents and other reports (or copies
of such portions of any of the foregoing as the Commission may from
time to time by rules and regulations prescribe) which the Trust may be
required to file with the Commission pursuant to Section 13 or Section
15(d) of the Exchange Act; or, if the Trust is not required to file
information, documents or reports pursuant to either of such Sections,
then it will file with the Trustee and the Commission, in accordance
with rules and regulations prescribed from time to time by the
Commission, such of the supplementary and periodic information,
documents and reports which may be required pursuant to Section 13 of
the Exchange Act in respect of a security listed and registered on a
national securities exchange as may be prescribed from time to time in
such rules and regulations;
(2) file with the Trustee and the Commission, in accordance
with rules and regulations prescribed from time to time by the
60
<PAGE>
Commission, such additional information, documents and reports with
respect to compliance by the Trust with the conditions and covenants of
this Indenture as may be required from time to time by such rules and
regulations; and
(3) transmit by mail to the Holders of Securities, within 30
days after the filing thereof with the Trustee, in the manner and to
the extent provided in TIA Section 313(c), such summaries of any
information, documents and reports required to be filed by the Trust
pursuant to paragraphs (1) and (2) of this Section as may be required
by rules and regulations prescribed from time to time by the
Commission.
SECTION 704. Trust to Furnish Trustee Names and Addresses of Holders.
The Trust will furnish or cause to be furnished to the Trustee:
(a) semi-annually, not later than 15 days after the Regular
Record Date for interest for each series of Securities, a list, in such
form as the Trustee may reasonably require, of the names and addresses
of the Holders of Registered Securities of such series as of such
Regular Record Date, or if there is no Regular Record Date for interest
for such series of Securities, semi-annually, upon such dates as are
set forth in the Board Resolution or indenture supplemental hereto
authorizing such series, and
(b) at such other times as the Trustee may request in writing,
within 30 days after the receipt by the Trust of any such request, a
list of similar form and content as of a date not more than 15 days
prior to the time such list is furnished,
provided, however, that, so long as the Trustee is the Security Registrar, no
such list shall be required to be furnished.
ARTICLE EIGHT
CONSOLIDATION, MERGER, SALE, LEASE OR CONVEYANCE
SECTION 801. Consolidations and Mergers of Trust and Sales, Leases and
Conveyances Permitted Subject to Certain Conditions.
The Trust may consolidate with, or sell, lease or convey all or
substantially all of its assets to, or merge with or into any other Person,
provided that in any such case, (i) either the
61
<PAGE>
Trust shall be the continuing entity, or the successor (if other than the Trust)
entity shall be a Person organized and existing under the laws of the United
States or a State thereof and such successor entity shall expressly assume the
due and punctual payment of the principal of (and premium or Make-Whole Amount,
if any) and any interest (including all Additional Amounts, if any, payable
pursuant to Section 1011) on all of the Securities, according to their tenor,
and the due and punctual performance and observance of all of the covenants and
conditions of this Indenture to be performed by the Trust by supplemental
indenture, complying with Article Nine hereof, satisfactory to the Trustee,
executed and delivered to the Trustee by such Person and (ii) immediately after
giving effect to such transaction and treating any indebtedness which becomes an
obligation of the Trust or any Subsidiary as a result thereof as having been
incurred by the Trust or such Subsidiary at the time of such transaction, no
Event of Default, and no event which, after notice or the lapse of time, or
both, would become an Event of Default, shall have occurred and be continuing.
SECTION 802. Rights and Duties of Successor Corporation.
In case of any such consolidation, merger, sale, lease or conveyance
and upon any such assumption by the successor entity, such successor entity
shall succeed to and be substituted for the Trust, with the same effect as if it
had been named herein as the party of the first part, and the predecessor
entity, except in the event of a lease, shall be relieved of any further
obligation under this Indenture and the Securities. Such successor entity
thereupon may cause to be signed, and may issue either in its own name or in the
name of the Trust, any or all of the Securities issuable hereunder which
theretofore shall not have been signed by the Trust and delivered to the
Trustee; and, upon the order of such successor entity, instead of the Trust, and
subject to all the terms, conditions and limitations in this Indenture
prescribed, the Trustee shall authenticate and shall deliver any Securities
which previously shall have been signed and delivered by the officers of the
Trust to the Trustee for authentication, and any Securities which such successor
entity thereafter shall cause to be signed and delivered to the Trustee for that
purpose. All the Securities so issued shall in all respects have the same legal
rank and benefit under this Indenture as the Securities theretofore or
thereafter issued in accordance with the terms of this Indenture as though all
of such Securities had been issued at the date of the execution hereof.
In case of any such consolidation, merger, sale, lease or conveyance,
such changes in phraseology and form (but not in substance) may be made in the
Securities thereafter to be issued as may be appropriate.
SECTION 803. Officers' Certificate and Opinion of Counsel.
Any consolidation, merger, sale, lease or conveyance permitted under
Section 801 is also subject to the condition that the Trustee receive an
Officers' Certificate and an Opinion of Counsel to the effect that any such
consolidation, merger, sale, lease or conveyance, and the assumption by any
successor entity, complies with the provisions of this Article and that all
62
<PAGE>
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 Trust,
when authorized by or pursuant to a Board Resolution, and the Trustee, at any
time and from time to time, may enter into one or more indentures supplemental
hereto, in form satisfactory to the Trustee, for any of the following purposes:
(1) to evidence the succession of another Person to the Trust
and the assumption by any such successor of the covenants of the Trust
herein and in the Securities contained; or
(2) to add to the covenants of the Trust for the benefit of
the Holders of all or any series of Securities (and, if such covenants
are to be for the benefit of less than all series of Securities,
stating that such covenants are expressly being included solely for the
benefit of such series) or to surrender any right or power herein
conferred upon the Trust; or
(3) to add any additional Events of Default for the benefit of
the Holders of all or any series of Securities (and if such Events of
Default are to be for the benefit of less than all series of
Securities, stating that such Events of Default are expressly being
included solely for the benefit of such series); provided, however,
that in respect of any such additional Events of Default such
supplemental indenture may provide for a particular period of grace
after default (which period may be shorter or longer than that allowed
in the case of other defaults) or may provide for an immediate
enforcement upon such default or may limit the remedies available to
the Trustee upon such default or may limit the right of the Holders of
a majority in aggregate principal amount of that or those series of
Securities to which such additional Events of Default apply to waive
such default; or
(4) to add to or change any of the provisions of this
Indenture to provide that Bearer Securities may be registrable as to
principal, to change or eliminate any restrictions on the payment of
principal of or any premium, Make-Whole Amount or interest on Bearer
63
<PAGE>
Securities, to permit Bearer Securities to be issued in exchange for
Registered Securities, to permit Bearer Securities to be issued in
exchange for Bearer Securities of other authorized denominations or to
permit or facilitate the issuance of Securities in uncertificated form,
provided that any such action shall not adversely affect the interests
of the Holders of Securities of any series or any related coupons in
any material respect; or
(5) to change or eliminate any of the provisions of this
Indenture, provided that any such change or elimination shall become
effective only when there is no Security Outstanding of any series
created prior to the execution of such supplemental indenture which is
entitled to the benefit of such provision; or
(6) to secure the Securities; or
(7) to establish the form or terms of Securities of any series
and any related coupons as permitted by Sections 201 and 301; or
(8) to evidence and provide for the acceptance of appointment
hereunder by a successor Trustee with respect to the Securities of one
or more series and to add to or change any of the provisions of this
Indenture as shall be necessary to provide for or facilitate the
administration of the trusts hereunder by more than one Trustee; or
(9) to cure any ambiguity, to correct or supplement any
provision herein which may be defective or inconsistent with any other
provision herein, or to make any other provisions with respect to
matters or questions arising under this Indenture which shall not be
inconsistent with the provisions of this Indenture or to make any other
changes, provided that in each case, such provisions shall not
adversely affect the interests of the Holders of Securities of any
series or any related coupons in any material respect; or
(10) to close this Indenture with respect to the
authentication and delivery of additional series of Securities or to
qualify, or maintain qualification of, this Indenture under the TIA; or
(11) to supplement any of the provisions of this Indenture to
such extent as shall be necessary to permit or facilitate the
defeasance and discharge of any series of Securities pursuant to
Sections 401, 1402 and 1403; provided in each case that any such action
shall not adversely affect the interests of the Holders of Securities
64
<PAGE>
of such series and any related coupons or any other series of
Securities in any material respect.
SECTION 902. Supplemental Indentures with Consent of Holders.
With the consent of the Holders of not less than a majority in
principal amount of all Outstanding Securities affected by such supplemental
indenture, by Act of said Holders delivered to the Trust and the Trustee, the
Trust, when authorized by or pursuant to a Board Resolution, and the Trustee may
enter into an indenture or indentures supplemental hereto for the purpose of
adding any provisions to or changing in any manner or eliminating any of the
provisions of this Indenture or of modifying in any manner the rights of the
Holders of Securities and any related coupons under this Indenture; provided,
however, that no such supplemental indenture shall, without the consent of the
Holder of each Outstanding Security affected thereby:
(1) change the Stated Maturity of the principal of (or premium
or Make-Whole Amount, if any, on) or any installment of principal of or
interest on, any Security; or reduce the principal amount thereof or
the rate or amount of interest thereon or any Additional Amounts
payable in respect thereof, or any premium or Make-Whole Amount payable
upon the redemption thereof, or change any obligation of the Trust to
pay Additional Amounts pursuant to Section 1011 (except as contemplated
by Section 801(1) and permitted by Section 901(1)), or reduce the
amount of the principal of an Original Issue Discount Security or
Make-Whole Amount, if any, that would be due and payable upon a
declaration of acceleration of the Maturity thereof pursuant to Section
502 or the amount thereof provable in bankruptcy pursuant to Section
504; or adversely affect any right of repayment at the option of the
Holder of any Security, or change any Place of Payment where, or the
currency or currencies, currency unit or units or composite currency or
currencies in which, the principal of any Security or any premium or
Make- Whole Amount or any Additional Amounts payable in respect thereof
or the interest thereon is payable; or impair the right to institute
suit for the enforcement of any such payment on or after the Stated
Maturity thereof (or, in the case of redemption or repayment at the
option of the Holder, on or after the Redemption Date or the Repayment
Date, as the case may be); or
(2) reduce the percentage in principal amount of the
Outstanding Securities of any series, the consent of whose Holders is
required for any such supplemental indenture, or the consent of whose
Holders is required for any waiver with respect to such series (or
compliance with certain provisions of this Indenture or certain
65
<PAGE>
defaults hereunder and their consequences) provided for in this
Indenture, or reduce the requirements of Section 1504 for quorum or
voting; or
(3) modify any of the provisions of this Section, Section 513
or Section 1012, except to increase the required percentage to effect
such action or to provide that certain other provisions of this
Indenture cannot be modified or waived without the consent of the
Holder of each Outstanding Security affected thereby.
It shall not be necessary for any Act of Holders under this Section to
approve the particular form of any proposed supplemental indenture, but it shall
be sufficient if such Act shall approve the substance thereof.
A supplemental indenture which changes or eliminates any covenant or
other provision of this Indenture which has expressly been included for the
benefit of one or more particular series of Securities, or which modifies the
rights of the Holders of Securities of such series with respect to such covenant
or other provision, shall be deemed not to affect the rights under this
Indenture of the Holders of Securities of any other series.
SECTION 903. Execution of Supplemental Indentures.
In executing, or accepting the additional trusts created by, any
supplemental indenture permitted by this Article or the modification thereby of
the trusts created by this Indenture, the Trustee shall be entitled to receive,
and shall be fully protected in relying upon, an Opinion of Counsel stating that
the execution of such supplemental indenture is authorized or permitted by this
Indenture and that all conditions precedent to the execution of such
supplemental indenture have been complied with. The Trustee may, but shall not
be obligated to, enter into any such supplemental indenture which affects the
Trustees own rights, duties or immunities under this Indenture or otherwise.
SECTION 904. Effect of Supplemental Indentures.
Upon the execution of any supplemental indenture under this Article,
this Indenture shall be modified in accordance therewith, and such supplemental
indenture shall form a part of this Indenture for all purposes; and every Holder
of Securities theretofore or thereafter authenticated and delivered hereunder
and of any coupon appertaining thereto shall be bound thereby.
SECTION 905. Conformity with Trust Indenture Act.
Every supplemental indenture executed pursuant to this Article shall
conform to the requirements of the Trust Indenture Act as then in effect.
66
<PAGE>
SECTION 906. Reference in Securities to Supplemental Indentures.
Securities of any series authenticated and delivered after the
execution of any supplemental indenture pursuant to this Article may, and shall,
if required by the Trustee, bear a notation in form approved by the Trustee as
to any matter provided for in such supplemental indenture. If the Trust shall so
determine, new Securities of any series so modified as to conform, in the
opinion of the Trustee and the Trust, to any such supplemental indenture may be
prepared and executed by the Trust and authenticated and delivered by the
Trustee in exchange for Outstanding Securities of such series.
SECTION 907. Notice of Supplemental Indentures.
Promptly after the execution by the Trust and the Trustee of any
supplemental indenture pursuant to the provisions of Section 902, the Trust
shall give notice thereof to the Holders of each Outstanding Security affected,
in the manner provided for in Section 106, setting forth in general terms the
substance of such supplemental indenture.
ARTICLE TEN
COVENANTS
SECTION 1001. Payment of Principal, Premium or Make-Whole Amount, if
any, Interest and Additional Amounts.
The Trust covenants and agrees for the benefit of the Holders of each
series of Securities that it will duly and punctually pay the principal of (and
premium or Make-Whole Amount, if any) and interest on and any Additional Amounts
payable in respect of the Securities of that series in accordance with the terms
of such series of Securities, any coupons appertaining thereto and this
Indenture. Unless otherwise specified as contemplated by Section 301 with
respect to any series of Securities, any interest due on and any Additional
Amounts payable in respect of Bearer Securities on or before Maturity, other
than Additional Amounts, if any, payable as provided in Section 1011 in respect
of principal of (or premium or Make- Whole Amount, if any, on) such a Security,
shall be payable only upon presentation and surrender of the several coupons for
such interest installments as are evidenced thereby as they severally mature.
Unless otherwise specified with respect to Securities of any series pursuant to
Section 301, at the option of the Trust, all payments of principal may be paid
by check to the registered Holder of the Registered Security or other person
entitled thereto against surrender of such Security.
SECTION 1002. Maintenance of Office or Agency.
If Securities of a series are issuable only as Registered Securities,
the Trust shall
67
<PAGE>
maintain in each Place of Payment for any series of Securities an office or
agency where Securities of that series may be presented or surrendered for
payment, where Securities of that series may be surrendered for registration of
transfer or exchange and where notices and demands to or upon the Trust in
respect of the Securities of that series and this Indenture may be served,
provided, however, that such functions of such office or agency may be allocated
among the Corporate Trust and Corporate Trust Operations Offices of the Trustee
and any other office of the Trustee which becomes a Place of Payment pursuant to
this Section. If Securities of a series are issuable as Bearer Securities, the
Trust will maintain: (A) in the Borough of Manhattan, The City of New York, an
office or agency where any Registered Securities of that series may be presented
or surrendered for payment, where any Registered Securities of that series may
be surrendered for exchange, where notices and demands to or upon the Trust in
respect of the Securities of that series and this Indenture may be served and
where Bearer Securities of that series and related coupons may be presented or
surrendered for payment in the circumstances described in the following
paragraph (and not otherwise); (B) subject to any laws or regulations applicable
thereto, in a Place of Payment for that series which is located outside the
United States, an office or agency where Securities of that series and related
coupons may be presented and surrendered for payment (including payment of any
Additional Amounts payable on Securities of that series pursuant to Section
1011); provided, however, that if the Securities of that series are listed on
the Luxembourg Stock Exchange, The International Stock Exchange or any other
stock exchange located outside the United States and such stock exchange shall
so require, the Trust will maintain a Paying Agent for the Securities of that
series in Luxembourg, London or any other required city located outside the
United States, as the case may be, so long as the Securities of that series are
listed in such exchange; and (C) subject to any laws or regulations applicable
thereto, in a Place of Payment for that series located outside the United States
an office or agency where any Securities of that series may be surrendered for
registration of transfer, where Securities of that series may be surrendered for
exchange and where notices and demands to or upon the Trust in respect of the
Securities of that series and this Indenture may be served. The Trust will give
prompt written notice to the Trustee of the location, and any change in the
location, of each such office or agency. If at any time the Trust shall fail to
maintain any such required office or agency or shall fail to furnish the Trustee
with the address thereof, such presentations and surrenders may be made or
served at the Corporate Trust Operations Office of the Trustee and such notices
and demands may be made or served at the Corporate Trust Office of the Trustee,
except that Bearer Securities of that series and the related coupons may be
presented and surrendered for payment (including payment of any Additional
Amounts payable on Bearer Securities of that series pursuant to Section 1011) at
the offices specified in the Security, in London, England, and the Trust hereby
appoints the same as its agent to receive such respective presentations,
surrenders, notices and demands, and the Trust hereby appoints the Trustee its
agent to receive all such presentations, surrenders, notices and demands.
Unless otherwise specified with respect to any Securities pursuant to
Section 301, no payment of principal, premium, Make-Whole Amount or interest on
or Additional Amounts in respect of Bearer Securities shall be made at any
office or agency of the Trust in the United
68
<PAGE>
States or by check mailed to any address in the United States or by transfer to
an account maintained with a bank located in the United States; provided,
however, that, if the Securities of a series are payable in Dollars, payment of
principal of and any premium and interest on any Bearer Security (including any
Additional Amounts or Make-Whole Amount payable on Securities of such series
pursuant to Section 1011) shall be made at the office of the Trust's Paying
Agent in the Borough of Manhattan, The City of New York, if (but only if)
payment in Dollars of the full amount of such principal, premium, interest,
Additional Amounts or Make- Whole Amount, as the case may be, at all offices or
agencies outside the United States maintained for the purpose by the Trust in
accordance with this Indenture, is illegal or effectively precluded by exchange
controls or other similar restrictions.
The Trust may from time to time designate one or more other offices or
agencies where the Securities of one or more series and related coupons, if any,
may be presented or surrendered for any or all of such purposes, and may from
time to time rescind such designations; provided, however, that no such
designation or rescission shall in any manner relieve the Trust of its
obligation to maintain an office or agency in accordance with the requirements
set forth above for Securities of any series for such purposes. The Trust will
give prompt written notice to the Trustee of any such designation or rescission
and of any change in the location of any such other office or agency. Unless
otherwise specified with respect to any Securities pursuant to Section 301 with
respect to a series of Securities, the Trust hereby designates as Places of
Payment for each series of Securities the Corporate Trust Operations Office of
the Trustee and the office or agency of the Trustee at 40 Broad Street, Suite
55, New York, New York 10004, in the Borough of Manhattan, The City of New York,
initially appoints the Trustee as a Paying Agent in Charlotte, North Carolina,
and in the Borough of Manhattan, The City of New York, and appoints the Trustee
as its agent to receive all such presentations, surrenders, notices and demands.
Unless otherwise specified with respect to any Securities pursuant to
Section 301, if and so long as the Securities of any series (i) are denominated
in a Foreign Currency or (ii) may be payable in a Foreign Currency, or so long
as it is required under any other provision of the Indenture, then the Trust
will maintain with respect to each such series of Securities, or as so required,
at least one exchange rate agent.
SECTION 1003. Money for Securities Payments to Be Held in Trust.
If the Trust shall at any time act as its own Paying Agent with respect
to any series of any Securities and any related coupons, it will, on or before
each due date of the principal of (and premium or Make-Whole Amount, if any), or
interest on or Additional Amounts in respect of, any of the Securities of that
series, segregate and hold in trust for the benefit of the Persons entitled
thereto a sum in the currency or currencies, currency unit or units or composite
currency or currencies in which the Securities of such series are payable
(except as otherwise specified pursuant to Section 301 for the Securities of
such series) sufficient to pay the principal (and premium or Make-Whole Amount,
if any) or interest or Additional Amounts
69
<PAGE>
so becoming due until such sums shall be paid to such Persons or otherwise
disposed of as herein provided, and will promptly notify the Trustee of its
action or failure so to act.
Whenever the Trust shall have one or more Paying Agents for any series
of Securities and any related coupons, it will, on or before each due date of
the principal of (and premium or Make-Whole Amount, if any), or interest on or
Additional Amounts in respect of, any Securities of that series, deposit with a
Paying Agent a sum (in the currency or currencies, currency unit or units or
composite currency or currencies described in the preceding paragraph)
sufficient to pay the principal (and premium or Make-Whole Amount, if any) or
interest or Additional Amounts, so becoming due, such sum to be held in trust
for the benefit of the Persons entitled to such principal, premium, Make-Whole
Amount or interest or Additional Amounts and (unless such Paying Agent is the
Trustee) the Trust will promptly notify the Trustee of its action or failure so
to act.
The Trust will cause each Paying Agent other than the Trustee to
execute and deliver to the Trustee an instrument in which such Paying Agent
shall agree with the Trustee, subject to the provisions of this Section, that
such Paying Agent will
(1) hold all sums held by it for the payment of principal of
(and premium or Make-Whole Amount, if any) or interest on Securities in
trust for the benefit of the Persons entitled thereto until such sums
shall be paid to such Persons or otherwise disposed of as herein
provided;
(2) give the Trustee notice of any default by the Trust (or
any other obligor upon the Securities) in the making of any such
payment of principal (and premium or Make-Whole Amount, if any) or
interest; and
(3) at any time during the continuance of any such default
upon the written request of the Trustee, forthwith pay to the Trustee
all sums so held in trust by such Paying Agent.
The Trust may at any time, for the purpose of obtaining the
satisfaction and discharge of this Indenture or for any other purpose, pay, or
by Trust Order direct any Paying Agent to pay, to the Trustee all sums held in
trust by the Trust or such Paying Agent, such sums to be held by the Trustee
upon the same trusts as those upon which such sums were held by the Trust or
such Paying Agent; and, upon such payment by any Paying Agent to the Trustee,
such Paying Agent shall be released from all further liability with respect to
such sums.
Except as otherwise provided in the Securities of any series, any money
deposited with the Trustee or any Paying Agent, or then held by the Trust, in
trust for the payment of the principal of (and premium or Make-Whole Amount, if
any) or interest on, or any Additional
70
<PAGE>
Amounts in respect of, any Security of any series and remaining unclaimed for
two years after such principal (and premiums or Make-Whole Amount, if any),
interest or Additional Amounts has become due and payable shall be paid to the
Trust upon Trust Request or (if then held by the Trust) shall be discharged from
such trust; and the Holder of such Security shall thereafter, as an unsecured
general creditor, look only to the Trust for payment of such principal of (and
premium or Make-Whole Amount, if any) or interest on, or any Additional Amounts
in respect of, any Security, without interest thereon, and all liability of the
Trustee or such Paying Agent with respect to such trust money, and all liability
of the Trust as trustee thereof, shall thereupon cease; provided, however, that
the Trustee or such Paying Agent, before being required to make any such
repayment, may at the expense of the Trust cause to be published once, in an
Authorized Newspaper, notice that such money remains unclaimed and that, after a
date specified therein, which shall not be less than 30 days from the date of
such publication, any unclaimed balance of such money then remaining will be
repaid to the Trust.
SECTION 1004. [Reserved]
SECTION 1005. Existence.
Subject to Article Eight, the Trust will do or cause to be done all
things necessary to preserve and keep in full force and effect the existence,
rights (charter and statutory) and franchises of the Trust and its Subsidiaries;
provided, however, that the Trust shall not be required to preserve any right or
franchise if the Board of Directors shall determine that the preservation
thereof is no longer desirable in the conduct of the business of the Trust and
its Subsidiaries as a whole and that the loss thereof is not disadvantageous in
any material respect to the Holders of Securities of any series.
SECTION 1006. Maintenance of Properties.
The Trust will cause all of its properties used or useful in the
conduct of its business or the business of any Subsidiary to be maintained and
kept in good condition, repair and working order and supplied with all necessary
equipment and will cause to be made all necessary repairs, renewals,
replacements, betterments and improvements thereof, all as in the judgment of
the Trust may be necessary so that the business carried on in connection
therewith may be properly and advantageously conducted at all times; provided,
however, that nothing in this Section shall prevent the Trust or any Subsidiary
from selling or otherwise disposing of for value its properties in the ordinary
course of its business.
SECTION 1007. Insurance.
The Trust will, and will cause each of its Subsidiaries to, keep all of
its insurable properties insured against loss or damage at least equal to their
then full insurable value with financially sound and reputable insurance
companies.
71
<PAGE>
SECTION 1008. Payment of Taxes and Other Claims.
The Trust will pay or discharge or cause to be paid or discharged,
before the same shall become delinquent, (1) all taxes, assessments and
governmental charges levied or imposed upon it or any Subsidiary or upon the
income, profits or property of the Trust or any Subsidiary, and (2) all lawful
claims for labor, materials and supplies which, if unpaid, might by law become a
lien upon the property of the Trust or any Subsidiary; provided, however, that
the Trust shall not be required to pay or discharge or cause to be paid or
discharged any such tax, assessment, charge or claim whose amount, applicability
or validity is being contested in good faith by appropriate proceedings.
SECTION 1009. [Reserved]
SECTION 1010. Statement as to Compliance.
The Trust will deliver to the Trustee within 120 days after the end of
each fiscal year, a brief certificate from the principal executive officer,
principal financial officer or principal accounting officer as to his or her
knowledge of the Trust's compliance with all conditions and covenants under this
Indenture and, in the event of any noncompliance, specifying such noncompliance
and the nature and status thereof. For purposes of this Section 1010, such
compliance shall be determined without regard to any period of grace or
requirement of notice under this Indenture.
72
<PAGE>
SECTION 1011. Additional Amounts.
If any Securities of a series provide for the payment of Additional
Amounts, the Trust will pay to the Holder or any Security of such series or any
coupon appertaining thereto Additional Amounts as may be specified as
contemplated by Section 301. Whenever in this Indenture there is mentioned, in
any context except in the case of Section 502(1), the payment of the principal
or of any premium, Make-Whole Amount or interest on, or in respect of, any
Security of any series or payment of any related coupon or the net proceeds
received on the sale or exchange of any Security of any series, such mention
shall be deemed to include mention of the payment of Additional Amounts provided
by the terms of such series established pursuant to Section 301 to the extent
that, in such context, Additional Amounts are, were or would be payable in
respect thereof pursuant to such terms and express mention of the payment of
Additional Amounts (if applicable) in any provisions hereof shall not be
construed as excluding Additional Amounts in those provisions hereof where such
express mention is not made.
Except as otherwise specified as contemplated by Section 301, if the
Securities of a series provide for the payment of Additional Amounts, at least
10 days prior to the first Interest Payment Date with respect to that series of
Securities (or if the Securities of that series will not bear interest prior to
Maturity, the first day on which a payment of principal and any premium is
made), and at least 10 days prior to each date of payment of principal and any
premium or Make-Whole Amount or interest if there has been any change with
respect to the matters set forth in the below-mentioned Officers' Certificate,
the Trust will furnish the Trustee and the Trust's principal Paying Agent or
Paying Agents, if other than the Trustee, with an Officers' Certificate
instructing the Trustee and such Paying Agent or Paying Agents whether such
payment of principal of and any premium or interest on the Securities of that
series shall be made to Holders of Securities of that series or any related
coupons who are not United States persons without withholding for or on account
of any tax, assessment or other governmental charge described in the Securities
of or within the series. If any such withholding shall be required, then such
Officers' Certificate shall specify by country the amount, if any, required to
be withheld on such payments to such Holders of Securities of that series or
related coupons and the Trust will pay to the Trustee or such Paying Agent the
Additional Amounts required by the terms of such Securities. In the event that
the Trustee or any Paying Agent, as the case may be, shall not so receive the
above-mentioned certificate, then the Trustee or such Paying Agent shall be
entitled (i) to assume that no such withholding or deduction is required with
respect to any payment of principal or interest with respect to any Securities
of a series or related coupons until it shall have received a certificate
advising otherwise and (ii) to make all payments of principal and interest with
respect to the Securities of a series or related coupons without withholding or
deductions until otherwise advised. The Trust covenants to indemnify the Trustee
and any Paying Agent for, and to hold them harmless against, any loss, liability
or expense reasonably incurred without negligence or bad faith on their part
arising out of or in connection with actions taken or omitted by any of them in
reliance on any Officers' Certificate furnished pursuant to this Section or in
reliance on the
73
<PAGE>
Trust's not furnishing such an Officers' Certificate.
SECTION 1012. Waiver of Certain Covenants.
The Trust may omit in any particular instance to comply with any term,
provision or condition set forth in Sections 1004 to 1009, inclusive, and with
any other term, provision or condition with respect to the Securities of any
series specified in accordance with Section 301 (except any such term, provision
or condition which could not be amended without the consent of all Holders of
Securities of such series pursuant to Section 902), if before or after the time
for such compliance the Holders of at least a majority in principal amount of
all outstanding Securities of such series, by Act of such Holders, either waive
such compliance in such instance or generally waive compliance with such
covenant or condition, but no such waiver shall extend to or affect such
covenant or condition except to the extent so expressly waived, and, until such
waiver shall become effective, the obligations of the Trust and the duties of
the Trustee in respect of any such term, provision or condition shall remain in
full force and effect.
ARTICLE ELEVEN
REDEMPTION OF SECURITIES
SECTION 1101. Applicability of Article.
Securities of any series which are redeemable before their Stated
Maturity shall be redeemable in accordance with their terms and (except as
otherwise specified as contemplated by Section 301 for Securities of any series)
in accordance with this Article.
SECTION 1102. Election to Redeem; Notice to Trustee.
The election of the Trust to redeem any Securities shall be evidenced
by or pursuant to a Board Resolution. In case of any redemption at the election
of the Trust of less than all of the Securities of any series, the Trust shall,
at least 45 days prior to the giving of the notice of redemption in Section 1104
(unless a shorter notice shall be satisfactory to the Trustee), notify the
Trustee of such Redemption Date and of the principal amount of Securities of
such series to be redeemed. In the case of any redemption of Securities prior to
the expiration of any restriction on such redemption provided in the terms of
such Securities or elsewhere in this Indenture, the Trust shall furnish the
Trustee with an Officers' Certificate evidencing compliance with such
restriction.
SECTION 1103. Selection by Trustee of Securities to Be Redeemed.
If less than all the Securities of any series issued on the same day
with the same terms are to be redeemed, the particular Securities to be redeemed
shall be selected not more than 60
74
<PAGE>
days prior to the Redemption Date by the Trustee, from the Outstanding
Securities of such series issued on such date with the same terms not previously
called for redemption, by such method as the Trustee shall deem fair and
appropriate and which may provide for the selection for redemption of portions
(equal to the minimum authorized denomination for Securities of that series or
any integral multiple thereof) of the principal amount of Securities of such
series of a denomination larger than the minimum authorized denomination for
Securities of that series.
The Trustee shall promptly notify the Trust and the Security Registrar
(if other than itself) in writing of the Securities selected for redemption and,
in the case of any Securities selected for partial redemption, the principal
amount thereof to be redeemed.
For all purposes of this Indenture, unless the context otherwise
requires, all provisions relating to the redemption of Securities shall relate,
in the case of any Security redeemed or to be redeemed only in part, to the
portion of the principal amount of such Security which has been or is to be
redeemed.
SECTION 1104. Notice of Redemption.
Notice of redemption shall be given in the manner provided in Section
106, not less than 30 days nor more than 60 days prior to the Redemption Date,
unless a shorter period is specified by the terms of such series established
pursuant to Section 301, to each Holder of Securities to be redeemed, but
failure to give such notice in the manner herein provided to the Holder of any
Security designated for redemption as a whole or in part, or any defect in the
notice to any such Holder, shall not affect the validity of the proceedings for
the redemption of any other such Security or portion thereof.
Any notice that is mailed to the Holders of Registered Securities in
the manner herein provided shall be conclusively presumed to have been duly
given, whether or not the Holder receives the notice.
All notices of redemption shall state:
(1) the Redemption Date;
(2) the Redemption Price, accrued interest to the Redemption
Date payable as provided in Section 1106, if any, and Additional
Amounts, if any;
(3) if less than all Outstanding Securities of any series are
to be redeemed, the identification (and, in the case of partial
redemption, the principal amount) of the particular Security or
Securities to be redeemed;
75
<PAGE>
(4) in case any Security is to be redeemed in part only, that
on and after the Redemption Date, upon surrender of such Security, the
holder will receive, without a charge, a new Security or Securities of
authorized denominations for the principal amount thereof remaining
unredeemed;
(5) that on the Redemption Date the Redemption Price and
accrued interest to the Redemption Date payable as provided in Section
1106, if any, will become due and payable upon each such Security, or
the portion thereof, to be redeemed and, if applicable, that interest
thereon shall cease to accrue on and after said date;
(6) the Place or Places of Payment where such Securities,
together in the case of Bearer Securities with all coupons appertaining
thereto, if any, maturing after the Redemption Date, are to be
surrendered for payment of the Redemption Price and accrued interest,
if any;
(7) that the redemption is for a sinking fund, if such is the
case;
(8) that, unless otherwise specified in such notice, Bearer
Securities of any series, if any, surrendered for redemption must be
accompanied by all coupons maturing subsequent to the date fixed for
redemption or the amount of any such missing coupon or coupons will be
deducted from the Redemption Price, unless security or indemnity
satisfactory to the Trust, the Trustee for such series and any Paying
Agent is furnished;
(9) if Bearer Securities of any series are to be redeemed and
any Registered Securities of such series are not to be redeemed, and if
such Bearer Securities may be exchanged for Registered Securities not
subject to the redemption on this Redemption Date pursuant to Section
305 or otherwise, the last date, as determined by the Trust, on which
such exchanges may be made;
(10) the CUSIP number of such Security, if any, provided that
neither the Trust nor the Trustee shall have any responsibility for any
such CUSIP number; and
(11) if applicable, that a Holder of Securities who desires to
convert Securities to be redeemed must satisfy the requirements for
conversion contained in such Securities, the then existing conversion
price or rate and the date and time when the option to convert shall
76
<PAGE>
expire.
Notice of redemption of Securities to be redeemed shall be given by the
Trust or, at the Trust request, by the Trustee in the name and at the expense of
the Trust.
SECTION 1105. Deposit of Redemption Price.
On or prior to any Redemption Date, the Trust shall deposit with the
Trustee or with a Paying Agent (or, if the Trust is acting as its own Paying
Agent, which it may not do in the case of a sinking fund payment under Article
Twelve, segregate and hold in trust as provided in Section 1003) an amount of
money in the currency or currencies, currency unit or units or composite
currency or currencies in which the Securities of such series are payable
(except as otherwise specified pursuant to Section 301 for the Securities of
such series) sufficient to pay on the Redemption Date the Redemption Price of,
and (except if the Redemption Date shall be an Interest Payment Date) accrued
interest on, all the Securities or portions thereof which are to be redeemed on
that date.
SECTION 1106. Securities Payable on Redemption Date.
Notice of redemption having been given as aforesaid, the Securities so
to be redeemed shall, on the Redemption Date, become due and payable at the
Redemption Price therein specified in the currency or currencies, currency unit
or units or composite currency or currencies in which the Securities of such
series are payable (except as otherwise specified pursuant to Section 301 for
the Securities of such series) (together with accrued interest, if any, to the
Redemption Date), and from and after such date (unless the Trust shall default
in the payment of the Redemption Price and accrued interest) such Securities
shall, if the same were interest-bearing, cease to bear interest and the coupons
for such interest appertaining to any Bearer Securities so to be redeemed,
except to the extent provided below, shall be void. Upon surrender of any such
Security for redemption in accordance with said notice, together with all
coupons, if any, appertaining thereto maturing after the Redemption Date, such
Security shall be paid by the Trust at the Redemption Price, together with
accrued interest, if any, to the Redemption Date; provided, however, that
installments of interest on Bearer Securities whose Stated Maturity is on or
prior to the Redemption Date shall be payable only at an office or agency
located outside the United States (except as otherwise provided in Section 1002)
and, unless otherwise specified as contemplated by Section 301, only upon
presentation and surrender of coupons for such interest; and provided further
that, installments of interest on Registered Securities whose Stated Maturity is
on or prior to the Redemption Date shall be payable to the Holders of such
Securities, or one or more Predecessor Securities, registered as such at the
close of business on the relevant Record Dates according to their terms and the
provisions of Section 307.
If any Bearer Security surrendered for redemption shall not be
accompanied by all appurtenant coupons maturing after the Redemption Date, such
Security may be paid after
77
<PAGE>
deducting from the Redemption Price an amount equal to the face amount of all
such missing coupons, or the surrender of such missing coupon or coupons may be
waived by the Trust and the Trustee if there be furnished to them such security
or indemnity as they may require to save each of them and any Paying Agent
harmless. If thereafter the Holder of such Security shall surrender to the
Trustee or any Paying Agent any such missing coupon in respect of which a
deduction shall have been made from the Redemption Price, such Holder shall be
entitled to receive the amount so deducted; provided, however, that interest
represented by coupons shall be payable only at an office or agency located
outside the United States (except as otherwise provided in Section 1002) and,
unless otherwise specified as contemplated by Section 301, only upon
presentation and surrender of those coupons.
If any Security called for redemption shall not be so paid upon
surrender thereof for redemption, the principal (and premium or Make-Whole
Amount, if any) shall, until paid, bear interest from the Redemption Date at the
rate borne by the Security.
SECTION 1107. Securities Redeemed in Part.
Any Security which is to be redeemed only in part (pursuant to the
provisions of this Article or of Article Twelve) shall be surrendered at a Place
of Payment therefor (with, if the Trust or the Trustee so requires, due
endorsement by, or a written instrument of transfer in form satisfactory to the
Trust and the Trustee duly executed by, the Holder thereof or his attorney duly
authorized in writing) and the Trust shall execute and the Trustee shall
authenticate and deliver to the Holder of such Security without service charge a
new Security or Securities of the same series, of any authorized denomination as
requested by such Holder in aggregate principal amount equal to and in exchange
for the unredeemed portion of the principal of the Security so surrendered.
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
78
<PAGE>
applied to the redemption of Securities of any series as provided for by the
terms of Securities of such series.
SECTION 1202. Satisfaction of Sinking Fund Payments with Securities.
The Trust may, in satisfaction of all or any part of any mandatory
sinking fund with respect to the Securities of a series, (1) deliver Outstanding
Securities of such series (other than any previously called for redemption)
together in the case of any Bearer Securities of such series with all matured
coupons appertaining thereto and (2) apply as a credit Securities of such series
which have been redeemed either at the election of the Trust pursuant to the
terms of such Securities or through the application of permitted optional
sinking fund payments pursuant to the terms of such Securities, as provided for
by the terms of such Securities, or which have otherwise been acquired by the
Trust; provided that such Securities so delivered or applied as a credit have
not been previously so credited. Such Securities shall be received and credited
for such purpose by the Trustee at the applicable Redemption Price specified in
such Securities for redemption through operation of the sinking fund and the
amount of such mandatory sinking fund payment shall be reduced accordingly.
SECTION 1203. Redemption of Securities for Sinking Fund.
Not less than 60 days prior to each sinking payment date for Securities
of any series, the Trust will deliver to the Trustee an Officers' Certificate
specifying the amount of the next ensuing mandatory sinking fund payment for
that series pursuant to the terms of that series, the portion thereof, if any,
which is to be satisfied by payment of cash in the currency or currencies,
currency unit or units or composite currency or currencies in which the
Securities of such series are payable (except as otherwise specified pursuant to
Section 301 for the Securities of such series) and the portion thereof, if any,
which is to be satisfied by delivering and crediting Securities of that series
pursuant to Section 1202, and the optional amount, if any, to be added in cash
to the next ensuing mandatory sinking fund payment, and will also deliver to the
Trustee any Securities to be so delivered and credited. If such Officers'
Certificate shall specify an optional amount to be added in cash to the next
ensuing mandatory sinking fund payment, the Trust shall thereupon be obligated
to pay the amount therein specified. Not less than 30 days before each such
sinking fund payment date the Trustee shall select the Securities to be redeemed
upon such sinking fund payment date in the manner specified in Section 1103 and
cause notice of the redemption thereof to be given in the name of and at the
expense of the Trust in the manner provided in Section 1104. Such notice having
been duly given, the redemption of such Securities shall be made upon the terms
and in the manner stated in Sections 1106 and 1107.
ARTICLE THIRTEEN
REPAYMENT AT THE OPTION OF HOLDERS
79
<PAGE>
SECTION 1301. Applicability of Article.
Repayment of Securities of any series before their Stated Maturity at
the option of Holders thereof shall be made in accordance with the terms of such
Securities, if any, and (except as otherwise specified by the terms of such
series established pursuant to Section 301) in accordance with this Article.
SECTION 1302. Repayment of Securities.
Securities of any series subject to repayment in whole or in part at
the option of the Holders thereof will, unless otherwise provided in the terms
of such Securities, be repaid at a price equal to the principal amount thereon,
together with interest, if any, thereof accrued to the Repayment Date specified
in or pursuant to the terms of such Securities. The Trust covenants that on or
before the Repayment Date it will deposit with the Trustee or with a Paying
Agent (or, if the Trust is acting as its own Paying Agent, segregate and hold in
trust as provided in Section 1003) an amount of money in the currency or
currencies, currency unit or units or composite currency or currencies in which
the Securities of such series are payable (except as otherwise specified
pursuant to Section 301 for the Securities of such series) sufficient to pay the
principal (or, if so provided by the terms of the Securities of any series, a
percentage of the principal) of, and (except if the Repayment Date shall be an
Interest Payment Date) accrued interest on, all the Securities or portions
thereof, as the case may be, to be repaid on such date.
SECTION 1303. Exercise of Option.
Securities of any series subject to repayment at the option of the
Holders thereof will contain an "Option to Elect Repayment" form on the reverse
of such Securities. In order for any Security to be repaid at the option of the
Holder, the Trustee must receive at the Place of Payment therefor specified in
the terms of such Security (or at such other place or places of which the Trust
shall from time to time notify the Holders of such Securities) not earlier than
60 days nor later than 30 days prior to the Repayment Date (1) the Security so
providing for such repayment together with the "Option to Elect Repayment" form
on the reverse thereof duly completed by the Holder (or by the Holder's attorney
duly authorized in writing) or (2) a telegram, telex, facsimile transmission or
a letter from a member of a national securities exchange, or the National
Association of Securities Dealers, Inc. ("NASD"), or a commercial bank or trust
company in the United States setting forth the name of the Holder of the
Security, the principal amount of the Security, the principal amount of the
Security to be repaid, the CUSIP number, if any, or a description of the tenor
and terms of the Security, a statement that the option to elect repayment is
being exercised thereby and a guarantee that the Security to be repaid, together
with the duly completed form entitled "Option to Elect Repayment" on the reverse
of the Security, will be received by the Trustee not later than the fifth
Business Day after the date of such telegram, telex, facsimile transmission or
letter; provided, however, that such telegram, telex, facsimile transmission or
letter shall only be
80
<PAGE>
effective if such Security and form duly completed are received by the Trustee
by such fifth Business Day. If less than the entire principal amount of such
Security is to be repaid in accordance with the terms of such Security, the
principal amount of such Security to be repaid, in increments of the minimum
denomination for Securities of such series, and the denomination or
denominations of the Security or Securities to be issued to the Holder for the
portion of the principal amount of such Security surrendered that is not to be
repaid, must be specified. The principal amount of any Security providing for
repayment at the option of the Holder thereof may not be repaid in part if,
following such repayment, the unpaid principal amount of such Security would be
less than the minimum authorized denomination of Securities of or within the
series of which such Security to be repaid is a part. Except as otherwise may be
provided by the terms of any Security providing for repayment at the option of
the Holder thereof, exercise of the repayment option by the Holder shall be
irrevocable unless waived by the Trust.
SECTION 1304. When Securities Presented for Repayment Become Due and
Payable.
If Securities of any series providing for repayment at the option of
the Holders thereof shall have been surrendered as provided in this Article and
as provided by or pursuant to the terms of such Securities, such Securities or
the portions thereof, as the case may be, to be repaid shall become due and
payable and shall be paid by the Trust on the Repayment Date therein specified,
and on and after such Repayment Date (unless the Trust shall default in the
payment of such Securities on such Repayment Date) such Securities shall, if the
same were interest-bearing, cease to bear interest and the coupons for such
interest appertaining to any Bearer Securities so to be repaid, except to the
extent provided below, shall be void. Upon surrender of any such Security for
repayment in accordance with such provisions, together with all coupons, if any,
appertaining thereto maturing after the Repayment Date, the principal amount of
such security so to be repaid shall be paid by the Trust, together with accrued
interest, if any, to the Repayment Date; provided, however, that coupons whose
Stated Maturity is on or prior to the Repayment Date shall be payable only at an
office or agency located outside the United States (except as otherwise provided
in Section 1002) and, unless otherwise specified pursuant to Section 301, only
upon presentation and surrender of such coupons; and provided further that, in
the case of Registered Securities, installments of interest, if any, whose
Stated Maturity is on or prior to the Repayment Date shall be payable (but
without interest thereon, unless the Trust shall default in the payment thereof)
to the Holders of such Securities, or one or more Predecessor Securities,
registered as such at the close of business on the relevant Record Dates
according to their terms and the provisions of Section 307.
If any Bearer Security surrendered for repayment shall not be
accompanied by all appurtenant coupons maturing after the Repayment Date, such
Security may be paid after deducting from the amount payable therefor as
provided in Section 1302 an amount equal to the face amount of all such missing
coupons, or the surrender of such missing coupon or
81
<PAGE>
coupons may be waived by the Trust and the Trustee if there be furnished to them
such security or indemnity as they may require to save each of them and any
Paying Agent harmless. If thereafter the Holder of such Security shall surrender
to the Trustee or any Paying Agent any such missing coupon in respect of which a
deduction shall have been made as provided in the preceding sentence, such
Holder shall be entitled to receive the amount so deducted; provided, however,
that interest represented by coupons shall be payable only at an office or
agency located outside the United States (except as otherwise provided in
Section 1002) and, unless otherwise specified as contemplated by Section 301,
only upon presentation and surrender of those coupons.
If the principal amount of any Security surrendered for repayment shall
not be so repaid upon surrender thereof, such principal amount (together with
interest, if any, thereon accrued to such Repayment Date) shall, until paid,
bear interest from the Repayment Date at the rate of interest or Yield to
Maturity (in the case of Original Issue Discount Securities) set forth in such
Security.
SECTION 1305. Securities Repaid in Part.
Upon surrender of any Registered Security which is to be repaid in part
only, the Trust shall execute and the Trustee shall authenticate and deliver to
the Holder of such Security, without service charge and at the expense of the
Trust, a new Registered Security or Securities of the same series, of any
authorized denomination specified by the Holder, in an aggregate principal
amount equal to and in exchange for the portion of the principal of such
Security so surrendered which is not to be repaid.
ARTICLE FOURTEEN
DEFEASANCE AND COVENANT DEFEASANCE
SECTION 1401. Applicability of Article; Trust's Option to Effect
Defeasance or Covenant Defeasance.
If, pursuant to Section 301, provision is made for either or both of
(a) defeasance of the Securities of or within a series under Section 1402 or (b)
covenant defeasance of the Securities of or within a series under Section 1403
to be applicable to the Securities of any series, then the provisions of such
Section or Sections, as the case may be, together with the other provisions of
this Article (with such modifications thereto as may be specified pursuant to
Section 301 with respect to any Securities), shall be applicable to such
Securities and any coupons appertaining thereto, and the Trust may at its option
by Board Resolution, at any time, with respect to such Securities and any
coupons appertaining thereto, elect to defease such Outstanding Securities and
any coupons appertaining thereto pursuant to Section 1402 (if applicable) or
Section 1403 (if applicable) upon compliance with the conditions set forth below
in this Article.
82
<PAGE>
SECTION 1402 Defeasance and Discharge.
Upon the Trust's exercise of the above option applicable to this
Section with respect to any Securities of or within a series, the Trust shall be
deemed to have been discharged from its obligations with respect to such
Outstanding Securities and any coupons appertaining thereto on the date the
conditions set forth in Section 1404 are satisfied (hereinafter, "defeasance").
For this purpose, such defeasance means that the Trust shall be deemed to have
paid and discharged the entire indebtedness represented by such Outstanding
Securities and any coupons appertaining thereto, which shall thereafter be
deemed to be "Outstanding" only for the purposes of Section 1405 and the other
Sections of this Indenture referred to in clauses (A) and (B) below, and to have
satisfied all of its other obligations under such Securities and any coupons
appertaining thereto and this Indenture insofar as such Securities and any
coupons appertaining thereto are concerned (and the Trustee, at the expense of
the Trust, shall execute proper instruments acknowledging the same), except for
the following which shall survive until otherwise terminated or discharged
hereunder: (A) the rights of Holders of such Outstanding Securities and any
coupons appertaining thereto to receive, solely from the trust fund described in
Section 1404 and as more fully set forth in such Section, payments in respect of
the principal of (and premium or Make-Whole Amount, if any) and interest, if
any, on such Securities and any coupons appertaining thereto when such payments
are due, (B) the Trust's obligations with respect to such Securities under
Sections 305, 306, 1002 and 1003 and with respect to the payment of Additional
Amounts, if any, on such Securities as contemplated by Section 1011, (C) the
rights, powers, trusts, duties and immunities of the Trustee hereunder and (D)
this Article. Subject to compliance with this Article Fourteen, the Trust may
exercise its option under this Section notwithstanding the prior exercise of its
option under Section 1403 with respect to such Securities and any coupons
appertaining thereto.
SECTION 1403. Covenant Defeasance.
Upon the Trust's exercise of the above option applicable to this
Section with respect to any Securities of or within a series, the Trust shall be
released from its obligations under Sections 1004 to 1009, inclusive, and, if
specified pursuant to Section 301, its obligations under any other covenant,
with respect to such Outstanding Securities and any coupons appertaining thereto
on and after the date the conditions set forth in Section 1404 are satisfied
(hereinafter, "covenant defeasance"), and such Securities and any coupons
appertaining thereto shall thereafter be deemed to be not "Outstanding" for the
purposes of any direction, waiver, consent or declaration or Act of Holders (and
the consequences of any thereof) in connection with Sections 1004 to 1009,
inclusive, or such other covenant, but shall continue to be deemed "Outstanding"
for all other purposes hereunder. For this purpose, such covenant defeasance
means that, with respect to such Outstanding Securities and any coupons
appertaining thereto, the Trust may omit to comply with and shall have no
liability in respect of any term, condition or limitation set forth in any such
Section or such other covenant, whether directly or indirectly, by reason of any
reference elsewhere herein to any such Section or such other covenant or by
reason of reference in any such Section or such other covenant to any other
83
<PAGE>
provision herein or in any other document and such omission to comply shall not
constitute a default or an Event of Default under Section 501(4) or 501(9) or
otherwise, as the case may be, but, except as specified above, the remainder of
this Indenture and such Securities and any coupons appertaining thereto shall be
unaffected thereby.
SECTION 1404. Conditions to Defeasance or Covenant Defeasance.
The following shall be the conditions to application of Section 1402 or
Section 1403 to any Outstanding Securities of or within a series and any coupons
appertaining thereto:
(a) The Trust shall irrevocably have deposited or caused to be
deposited with the Trustee (or another trustee satisfying the
requirements of Section 607 who shall agree to comply with the
provisions of this Article Fourteen applicable to it) as trust funds in
trust for the purpose of making the following payments, specifically
pledged as security for, and dedicated solely to, the benefit of the
Holders of such Securities and any coupons appertaining thereto, (1) an
amount in such currency, currencies or currency unit in which such
Securities and any coupons appertaining thereto are then specified as
payable at Stated Maturity, or (2) Government Obligations applicable to
such Securities and coupons appertaining thereto (determined on the
basis of the currency, currencies or currency unit in which such
Securities and coupons appertaining thereto are then specified as
payable at Stated Maturity) which through the scheduled payment of
principal and interest in respect thereof in accordance with their
terms will provide, not later than one day before the due date of any
payment of principal of (and premium or Make-Whole Amount, if any) and
interest, if any, on such Securities and any coupons appertaining
thereto, money in an amount, or (3) a combination thereof in an amount,
sufficient, without consideration of any reinvestment of such principal
and interest, in the opinion of a nationally recognized firm of
independent public accountants expressed in a written certification
thereof delivered to the Trustee, to pay and discharge, and which shall
be applied by the Trustee (or other qualifying trustee) to pay and
discharge, (i) the principal or interest and (ii) any mandatory sinking
fund payments or analogous payments applicable to such Outstanding
Securities and any coupons appertaining thereto on the day on which
such payments are due and payable in accordance with the terms of this
Indenture and of such Securities and any coupons appertaining thereto;
provided, that the Trustee shall have been irrevocably instructed to
apply such money or the proceeds of such Government Obligations to said
payments with respect to such Securities. Before such a deposit, the
Trust may give to the Trustee, in accordance with Section 1102 hereof,
a notice of its election to redeem all or any portion of such
Outstanding Securities at
84
<PAGE>
a future date in accordance with the terms of the Securities of such
series and Article Eleven hereof, which notice shall be irrevocable.
Such irrevocable redemption notice, if given, shall be given effect in
applying the foregoing.
(b) Such defeasance or covenant defeasance shall not result in
a breach or violation of, or constitute a default under, this Indenture
or any other material agreement or instrument to which the Trust is a
party or by which it is bound (and shall not cause the Trustee to have
a conflicting interest pursuant to Section 310(b) of the TIA with
respect to any Security of the Trust).
(c) No Event of Default or event which with notice or lapse of
time or both would become an Event of Default with respect to such
Securities and any coupons appertaining thereto shall have occurred and
be continuing on the date of such deposit or, insofar as Sections
501(7) and 501(8) are concerned, at any time during the period ending
on the 91st day after the date of such deposit (it being understood
that this condition shall not be deemed satisfied until the expiration
of such period).
(d) In the case of an election under Section 1402, the Trust
shall have delivered to the Trustee an Opinion of Counsel stating that
(i) the Trust has received from, or there has been published by, the
Internal Revenue Service a ruling, or (ii) since the date of execution
of this Indenture, there has been a change in the applicable Federal
income tax law, in either case to the effect that, and based thereon
such opinion shall confirm that, the Holders of such Outstanding
Securities and any coupons appertaining thereto will not recognize
income, gain or loss for Federal income tax purposes as a result of
such defeasance and will be subject to Federal income tax on the same
amounts, in the same manner and at the same times as would have been
the case if such defeasance had not occurred.
(e) In the case of an election under Section 1403, the Trust
shall have delivered to the Trustee an Opinion of Counsel to the effect
that the Holders of such Outstanding Securities and any coupons
appertaining thereto will not recognize income, gain or loss for
Federal income tax purposes as a result of such covenant defeasance and
will be subject to Federal income tax on the same amounts, in the same
manner and at the same times as would have been the case if such
covenant defeasance had not occurred.
85
<PAGE>
(f) The Trust shall have delivered to the Trustee an Officers'
Certificate and an Opinion of Counsel, each stating that all conditions
precedent to the defeasance under Section 1402 or the covenant
defeasance under Section 1403 (as the case may be) have been complied
with and an Opinion of Counsel to the effect that either (i) as a
result of a deposit pursuant to subsection (a) above and the related
exercise of the Trust's option under Section 1402 or Section 1403 (as
the case may be) registration is not required under the Investment
Company Act of 1940, as amended, by the Trust, with respect to the
trust funds representing such deposit or by the Trustee for such trust
funds or (ii) all necessary registrations under said Act have been
effected.
(g) After the 91st day following the deposit, the trust funds
will not be subject to the effect of any applicable bankruptcy,
insolvency, reorganization or similar laws affecting creditors' rights
generally.
(h) Notwithstanding any other provisions of this Section, such
defeasance or covenant defeasance shall be effected in compliance with
any additional or substitute terms, conditions or limitations which may
be imposed on the Trust in connection therewith pursuant to Section
301.
SECTION 1405. Deposited Money and Government Obligations to Be Held in
Trust; Other Miscellaneous Provisions.
Subject to the provisions of the last paragraph of Section 1003, all
money and Government Obligations (or other property as may be provided pursuant
to Section 301) (including the proceeds thereof) deposited with the Trustee (or
other qualifying trustee, collectively for purposes of this Section 1405, the
"Trustee") pursuant to Section 1404 in respect of any Outstanding Securities of
any series and any coupons appertaining thereto shall be held in trust and
applied by the Trustee, in accordance with the provisions of such Securities and
any coupons appertaining thereto and this Indenture, to the payment, either
directly or through any Paying Agent (including the Trust acting as its own
Paying Agent) as the Trustee may determine, to the Holders of such Securities
and any coupons appertaining thereto of all sums due and to become due thereon
in respect of principal (and premium or Make-Whole Amount, if any) and interest
and Additional Amounts, if any, but such money need not be segregated from other
funds except to the extent required by law.
Unless otherwise specified with respect to any Security pursuant to
Section 301, if, after a deposit referred to in Section 1404(a) has been made,
(a) the Holder of a Security in respect of which such deposit was made is
entitled to, and does, elect pursuant to Section 301 or the
86
<PAGE>
terms of such Security to receive payment in a currency or currency unit other
than that in which the deposit pursuant to Section 1404(a) has been made in
respect of such Security, or (b) a Conversion Event occurs in respect of the
currency or currency unit in which the deposit pursuant to Section 1404(a) has
been made, the indebtedness represented by such Security and any coupons
appertaining thereto shall be deemed to have been, and will be, fully discharged
and satisfied through the payment of the principal of (and premium or Make-Whole
Amount, if any), and interest, if any, on such Security as the same becomes due
out of the proceeds yielded by converting (from time to time as specified below
in the case of any such election) the amount or other property deposited in
respect of such Security into the currency or currency unit in which such
Security becomes payable as a result of such election or Conversion Event based
on the applicable market exchange rate for such currency or currency unit in
effect on the second Business Day prior to each payment date, except, with
respect to a Conversion Event, for such currency or currency unit in effect (as
nearly as feasible) at the time of the Conversion Event.
The Trust shall pay and indemnify the Trustee against any tax, fee or
other charge imposed on or assessed against the Government Obligations deposited
pursuant to Section 1404 or the principal and interest received in respect
thereof other than any such tax, fee or other charge which by law is for the
account of the Holders of such Outstanding Securities and any coupons
appertaining thereto.
Anything in this Article to the contrary notwithstanding, the Trustee
shall deliver or pay to the Trust from time to time upon Trust Request any money
or Government Obligations (or other property and any proceeds therefrom) held by
it as provided in Section 1404 which, in the opinion of a nationally recognized
firm of independent public accountants expressed in a written certification
thereof delivered to the Trustee, are in excess of the amount thereof which
would then be required to be deposited to effect a defeasance or covenant
defeasance, as applicable, in accordance with this Article.
ARTICLE FIFTEEN
MEETINGS OF HOLDERS OF SECURITIES
SECTION 1501. Purposes for Which Meetings May Be Called.
A meeting of Holders of Securities of any series may be called at any
time and from time to time pursuant to this Article to make, give or take any
request, demand, authorization, direction, notice, consent, waiver or other
action provided by this Indenture to be made, given or taken by Holders of
Securities of such series.
SECTION 1502. Call, Notice and Place of Meetings.
(a) The Trustee may at any time call a meeting of Holders of
87
<PAGE>
Securities of any series for any purpose specified in Section 1501, to
be held at such time and at such place in [the Borough of Manhattan,
The City of New York, or in London] as the Trustee shall determine.
Notice of every meeting of Holders of Securities of any series, setting
forth the time and the place of such meeting and in general terms the
action proposed to be taken at such meeting, shall be given, in the
manner provided in Section 106, not less than 21 nor more than 180 days
prior to the date fixed for the meeting.
(b) In case at any time the Trust, pursuant to a Board
Resolution, or the Holders of at least 10% in principal amount of the
Outstanding Securities of any series shall have requested the Trustee
to call a meeting of the Holders of Securities of such series for any
purpose specified in Section 1501, by written request setting forth in
reasonable detail the action proposed to be taken at the meeting, and
the Trustee shall not have made the first publication of the notice of
such meeting within 21 days after receipt of such request or shall not
thereafter proceed to cause the meeting to be held as provided herein,
then the Trust or the Holders of Securities of such series in the
amount above specified, as the case may be, may determine the time and
the place in [the Borough of Manhattan, The City of New York, or in
London] for such meeting and may call such meeting for such purposes by
giving notice thereof as provided in subsection (a) of this Section.
SECTION 1503. Persons Entitled to Vote at Meetings.
To be entitled to vote at any meeting of Holders of Securities of any
series, a Person shall be (1) a Holder of one or more Outstanding Securities of
such series, or (2) a Person appointed by an instrument in writing as proxy for
a Holder or Holders of one or more Outstanding Securities of such series by such
Holder or Holders. The only Persons who shall be entitled to be present or to
speak at any meeting of Holders of Securities of any series shall be the Persons
entitled to vote at such meeting and their counsel, any representatives of the
Trustee and its counsel and any representatives of the Trust and its counsel.
SECTION 1504. Quorum; Action.
The Persons entitled to vote a majority in principal amount of the
Outstanding Securities of a series shall constitute a quorum for a meeting of
Holders of Securities of such series; provided, however, that if any action is
to be taken at such meeting with respect to a consent or waiver which this
Indenture expressly provides may be given by the Holders of not less than a
specified percentage in principal amount of the Outstanding Securities of a
series, the Persons entitled to vote such specified percentage in principal
amount of the Outstanding Securities of such series shall constitute a quorum.
In the absence of a quorum within 30
88
<PAGE>
minutes after the time appointed for any such meeting, the meeting shall, if
convened at the request of Holders of Securities of such series, be dissolved.
In any other case the meeting may be adjourned for a period of not less than 10
days as determined by the chairman of the meeting prior to the adjournment of
such meeting. In the absence of a quorum at any such adjourned meeting, such
adjourned meeting may be further adjourned for a period of not less than 10 days
as determined by the chairman of the meeting prior to the adjournment of such
adjourned meeting. Notice of the reconvening of any adjourned meeting shall be
given as provided in Section 1502(a), except that such notice need be given only
once not less than five days prior to the date on which the meeting is scheduled
to be reconvened. Notice of the reconvening of any adjourned meeting shall state
expressly the percentage, as provided above, of the principal amount of the
Outstanding Securities of such series which shall constitute a quorum.
Except as limited by the proviso to Section 902, any resolution
presented to a meeting or adjourned meeting duly reconvened at which a quorum is
present as aforesaid may be adopted by the affirmative vote of the Holders of a
majority in principal amount of the Outstanding Securities of that series;
provided, however, that, except as limited by the proviso to Section 902, any
resolution with respect to any request, demand, authorization, direction,
notice, consent, waiver or other action which this Indenture expressly provides
may be made, given or 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
89
<PAGE>
account in determining whether such request, demand, authorization,
direction, notice, consent, waiver or other action has been made, given
or taken under this Indenture.
SECTION 1505. Determination of Voting Rights; Conduct and Adjournment
of Meetings.
(a) Notwithstanding any provisions of this Indenture, the
Trustee may make such reasonable regulations as it may deem advisable
for any meeting of Holders of Securities of a series in regard to proof
of the holding of Securities of such series and of the appointment of
proxies and in regard to the appointment and duties of inspectors of
votes, the submission and examination of proxies, certificates and
other evidence of the right to vote, and such other matters concerning
the conduct of the meeting as it shall deem appropriate. Except as
otherwise permitted or required by any such regulations, the holding of
Securities shall be proved in the manner specified in Section 104 and
the appointment of any proxy shall be proved in the manner specified in
Section 104 or by having the signature of the Person executing the
proxy witnessed or guaranteed by any trust company, bank or banker
authorized by Section 104 to certify to the holding of Bearer
Securities. Such regulations may provide that written instruments
appointing proxies, regular on their face, may be presumed valid and
genuine without the proof specified in Section 104 or other proof.
(b) The Trustee shall, by an instrument in writing, appoint a
temporary chairman of the meeting, unless the meeting shall have been
called by the Trust or by Holders of Securities as provided in Section
1502(b), in which case the Trust or the Holders of Securities of or
within the series calling the meeting, as the case may be, shall 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.
90
<PAGE>
(d) Any meeting of Holders of Securities of any series duly
called pursuant to Section 1502 at which a quorum is present may be
adjourned from time to time by Persons entitled to vote a majority in
principal amount of the Outstanding Securities of such series
represented at the meeting, and the meeting may be held as so adjourned
without further notice.
SECTION 1506. Counting Votes and Recording Action of Meetings.
The vote upon any resolution submitted to any meeting of Holders of
Securities of any series shall be by written ballots on which shall be
subscribed the signatures of the Holders of Securities of such series or of
their representatives by proxy and the principal amounts and serial numbers of
the Outstanding Securities of such series held or represented by them. The
permanent chairman of the meeting shall appoint two inspectors of votes who
shall count all votes cast at the meeting for or against any resolution and who
shall make and file with the secretary of the meeting their verified written
reports in duplicate of all votes cast at the meeting. A record, at least in
duplicate, of the proceedings of each meeting of Holders of Securities of any
series shall be prepared by the secretary of the meeting and there shall be
attached to said record the original reports of the inspectors of votes on any
vote by ballot taken thereat and affidavits by one or more persons having
knowledge of the fact, setting forth a copy of the notice of the meeting and
showing that said notice was given as provided in Section 1502 and, if
applicable, Section 1504. Each copy shall be signed and verified by the
affidavits of the permanent chairman and secretary of the meeting and one such
copy shall be delivered to the Trust and another to the Trustee to be preserved
by the Trustee, the latter to have attached thereto the ballots voted at the
meeting. Any record so signed and verified shall be conclusive evidence of the
matters therein stated.
SECTION 1507. Evidence of Action Taken by Holders.
Any request, demand, authorization, direction, notice, consent, waiver
or other action provided by this Indenture to be given or taken by a specified
percentage in principal amount of the Holders of any or all series may be
embodied in and evidenced by one or more instruments of substantially similar
tenor signed by such specified percentage of Holders in person or by agent duly
appointed in writing; and, except as herein otherwise expressly provided, such
action shall become effective when such instrument or instruments are delivered
to the Trustee. Proof of execution of any instrument or of a writing appointing
any such agent shall be sufficient for any purpose of this Indenture and
(subject to Article Six) conclusive in favor of the Trustee and the Trust, if
made in the manner provided in this Article.
SECTION 1508. Proof of Execution of Instruments.
91
<PAGE>
Subject to Article Six, the execution of any instrument by a Holder or
his agent or proxy may be proved in accordance with such reasonable rules and
regulations as may be prescribed by the Trustee or in such manner as shall be
satisfactory to the Trustee
* * * * *
This Indenture may be executed in any number of counterparts, each of
which so executed shall be deemed to be an original, but all such counterparts
shall together constitute but one and the same Indenture.
92
<PAGE>
IN WITNESS WHEREOF, the parties hereto have caused this Indenture to be
duly executed by their respective officers hereunto duly authorized, all as of
the day and year first above written.
CORNERSTONE REALTY INCOME TRUST, INC.
By: /s/ ___________________
Name: _________________
Title: __________________
______________________________,
as Trustee
By: /s/ ___________________
Name: _________________
Title: __________________
STATE OF VIRGINIA
CITY OF RICHMOND
The foregoing instrument was acknowledged before me in the City of
Richmond, State of Virginia, by __________________, ___________________________
_________ of Cornerstone Realty Income Trust, Inc. a corporation, on behalf of
the corporation. My commission expires _____________.
/s/ __________________
Notary Public
STATE OF VIRGINIA
CITY OF RICHMOND
93
<PAGE>
The foregoing instrument was acknowledged before me in the City of
Richmond, State of Virginia, by _______________, _______________ of [___________
_________________________], a national banking association, on behalf of the
association.
My commission expires ___________________.
/s/ _________________
Notary Public
94
<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
1.165-12(c)(1)(v) are herein referred to as "financial institutions") purchasing
for their own account or for resale, or (b) United States person(s) who acquired
the Securities through foreign branches of United States financial institutions
and who hold the Securities through such United States financial institutions on
the date hereof (and in either case (a) or (b), each such United States
financial institution hereby agrees, on its own behalf or through its agent,
that you may advise Cornerstone Realty Income Trust, Inc., or its agent that
such financial institution will provide a certificate within a reasonable time
stating that it agrees to comply with the requirements of Section 165(j)(3)(A),
(B) or (C) of the United States Internal Revenue Code of 1986, as amended, and
the regulations thereunder), or (iii) are owned by a financial institution for
purposes of resale during the restricted period (as defined in United States
Treasury Regulations Section 1.163- 5(c)(2)(i)(D)(7)), and, such financial
institution described in clause (iii) above (whether or not also described in
clause (i) or (ii)), certifies that it has not acquired the Securities for
purposes of resale directly or indirectly to a United States person or to a
person within the United States or its possessions.
As used herein, "United States" means the United States of America
(including the States and the District of Columbia); and its "possessions"
include Puerto Rico, the U.S. Virgin Islands, Guam, American Samoa, Wake Island
and the Northern Mariana Islands.
We undertake to advise you promptly by tested telex on or prior to the
date on which you intend to submit your certification relating to the
above-captioned Securities held by you
A-1
<PAGE>
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 related to [U.S.$] of such
interest in the above-captioned Securities in respect of which we are not able
to certify and as to which we understand an exchange for an interest in a
Permanent Global Security or an exchange for and delivery of definitive
Securities (or, if relevant, collection of any interest) cannot be made until we
do so certify.
We understand that this certificate may be required in connection with
certain tax legislation in the United States. If administrative or legal
proceedings are commenced or threatened in connection with which this
certificate is or would be relevant, we irrevocably authorize you to produce
this certificate or a copy thereof to any interested party in such proceedings.
A-2
<PAGE>
Dated: , 19
[To be dated no earlier than the 15th day prior to the earlier of (i) the
Exchange Date or (ii) the relevant Interest Payment Date occurring prior to the
Exchange Date, as applicable]
[Name of Person Making
Certification]
---------------------------
(Authorized Signator)
Name:
Title:
A-3
<PAGE>
EXHIBIT A-2
FORM OF CERTIFICATE TO BE GIVEN BY EUROCLEAR
AND CEDEL S.A. IN CONNECTION WITH THE EXCHANGE OF
A PORTION OF A TEMPORARY GLOBAL SECURITY OR TO
OBTAIN INTEREST PAYABLE PRIOR TO THE EXCHANGE DATE
CERTIFICATE
[Insert title or sufficient description of Securities to be delivered]
This is to certify that, based solely on written certifications that we
have received in writing, by tested telex or by electronic transmission from
each of the persons appearing in our records as persons entitled to a portion of
the principal amount set forth below (our "Member Organizations") substantially
in the form attached hereto, as of the date hereof, [U.S.$] principal amount of
the above-captioned Securities (i) is owned by person(s) that are not citizens
or residents of the United States, domestic partnerships, domestic corporations
or any estate or trust the income of which is subject to United States Federal
income taxation regardless of its source ("United States person(s)"), (ii) is
owned by United States person(s) that are (a) foreign branches of United States
financial institutions (financial institutions, as defined in United States
Treasury Regulations Section 1.165-12(c)(1)(v) are herein referred to as
"financial institutions") purchasing for their own account or for resale, or (b)
United States person(s) who acquired the Securities through foreign branches of
United States financial institutions and who hold the Securities through such
United States financial institutions on the date hereof (and in either case (a)
or (b), each such financial institution has agreed, on its own behalf or through
its agent, that we may advise Cornerstone Realty Income Trust, Inc., or its
agent that such financial institution will provide a certificate within a
reasonable time stating that it agrees to comply with the requirements of
Section 165(j)(3)(A), (B), or (C) of the Internal Revenue Code of 1986, as
amended, and the regulations thereunder), or (iii) is owned by a financial
institution for purposes of resale during the restricted period (as defined in
United States Treasury Regulations Section 1.163-5(c)(2)(i)(D)(7)), and that
such financial institutions described in clause (iii) above (whether or not also
described in clause (i) or (ii)) have certified that they have not acquired the
Securities for purposes of resale directly or indirectly to a United States
person or to a person within the United States or its possessions.
As used herein, "United States" means the United States of America
(including the States and the District of Columbia); and its "possessions"
include Puerto Rico, the U.S. Virgin Islands, Guam, American Samoa, Wake Island
and the Northern Mariana Islands.
We further certify that (i) we are not making available herewith for
exchange (or, if relevant, collection of any interest) any portion of the
temporary global Security representing the above-captioned Securities excepted
in the above-referenced certificates of Member Organizations and (ii) as of the
date hereof we have not received any notification from any of our Member
Organizations to the effect that the statements made by such Member
A-4
<PAGE>
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 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.
A-5
<PAGE>
Dated: , 19
[To be dated no earlier than the earlier of
the Exchange Date or the relevant Interest
Payment Date occurring prior to the Exchange
Date, as applicable]
[Morgan Guaranty Trust
Company of New York,
Brussels Office,] as
Operator of the
Euroclear System
[Cedel S.A.]
By: _______________________
A-6
Exhibit 4.6
CORNERSTONE REALTY INCOME TRUST, INC.
TO
, TRUSTEE
Indenture dated as of , 1997
Subordinated Debt Securities
<PAGE>
<TABLE>
<CAPTION>
TABLE OF CONTENTS
PAGE
<S> <C>
RECITALS OF THE TRUST.............................................................................................1
SECTION 101. Definitions.................................................................................1
Acquired Debt............................................................................................2
Act ................................................................................................2
Additional Amounts.......................................................................................2
Affiliate................................................................................................2
Authenticating Agent.....................................................................................2
Authorized Newspaper.....................................................................................2
Bankruptcy Law...........................................................................................2
Bearer Security..........................................................................................2
Board of Directors.......................................................................................3
Board Resolution.........................................................................................3
Business Day.............................................................................................3
Capital Stock............................................................................................3
CEDEL ................................................................................................3
Commission...............................................................................................3
Conversion Event.........................................................................................3
Corporate Trust Office...................................................................................3
Corporation..............................................................................................3
Coupon ................................................................................................3
Custodian................................................................................................3
Defaulted Interest.......................................................................................4
Dollar ................................................................................................4
DTC ................................................................................................4
ECU ................................................................................................4
Euroclear................................................................................................4
European Communities.....................................................................................4
European Monetary System.................................................................................4
Event of Default.........................................................................................4
Exchange Act.............................................................................................4
Foreign Currency.........................................................................................4
GAAP ................................................................................................4
Government Obligations...................................................................................4
Holder ................................................................................................5
Indenture................................................................................................5
Indexed Security.........................................................................................5
Interest ................................................................................................5
i
<PAGE>
Interest Payment Date....................................................................................5
Make-Whole Amount........................................................................................6
Maturity ................................................................................................6
Officers' Certificate....................................................................................6
Opinion of Counsel.......................................................................................6
Original Issue Discount Security.........................................................................6
Outstanding..............................................................................................6
Paying Agent.............................................................................................7
Person ................................................................................................8
Place of Payment.........................................................................................8
Predecessor Security.....................................................................................8
Redemption Date..........................................................................................8
Regular Record Date......................................................................................8
Repayment Date...........................................................................................8
Repayment Price..........................................................................................8
Representative...........................................................................................8
Securities Act...........................................................................................9
Security ................................................................................................9
Significant Subsidiary..................................................................................10
Special Record Date.....................................................................................10
Subsidiary..............................................................................................10
Trust ...............................................................................................10
Trust Indenture Act.....................................................................................10
Trust Request...........................................................................................10
Trustee ...............................................................................................10
United States...........................................................................................10
United States person....................................................................................11
<S> <C> <C>
SECTION 102. Compliance Certificates and Opinions.......................................................11
SECTION 103. Form of Documents Delivered to Trustee.....................................................12
SECTION 104. Acts of Holders............................................................................12
SECTION 105. Notices, etc., to Trustee and Trust........................................................14
SECTION 106. Notice to Holders; Waiver..................................................................14
SECTION 107. Effect of Headings and Table of Contents...................................................15
SECTION 108. Successors and Assigns.....................................................................16
SECTION 109. Separability Clause........................................................................16
SECTION 110. Benefits of Indenture......................................................................16
SECTION 111. No Personal Liability......................................................................16
SECTION 112. Governing Law..............................................................................16
SECTION 113. Legal Holidays.............................................................................16
ii
<PAGE>
ARTICLE II
SECURITIES FORMS
SECTION 201. Forms of Securities........................................................................17
SECTION 202. Form of Trustee's Certificate of Authentication............................................17
SECTION 203. Securities Issuable in Global Form.........................................................18
ARTICLE III
THE SECURITIES
SECTION 301. Amount Unlimited; Issuable in Series.......................................................19
SECTION 302. Denominations..............................................................................23
SECTION 303. Execution, Authentication Delivery and Dating..............................................23
SECTION 304. Temporary Securities.......................................................................25
SECTION 305. Registration, Registration of Transfer and Exchange........................................28
SECTION 306. Mutilated, Destroyed, Lost and Stolen Securities...........................................31
SECTION 307. Payment of Interest; Interest Rights Preserved.............................................32
SECTION 308. Persons Deemed Owners......................................................................34
SECTION 309. Cancellation...............................................................................35
SECTION 310. Computation of Interest....................................................................36
ARTICLE IV
SATISFACTION AND DISCHARGE
SECTION 401. Satisfaction and Discharge of Indenture....................................................36
SECTION 402. Application of Trust Funds.................................................................37
ARTICLE V
REMEDIES
SECTION 501. Events of Default..........................................................................38
SECTION 502. Acceleration of Maturity; Rescission and Annulment.........................................40
SECTION 503. Collection of Indebtedness and Suits for Enforcement by Trustee............................41
SECTION 504. Trustee May File Proofs of Claim...........................................................42
SECTION 505. Trustee May Enforce Claims Without Possession of Securities or Coupons.....................42
SECTION 506. Application of Money Collected.............................................................43
SECTION 507. Limitation on Suits........................................................................43
iii
<PAGE>
SECTION 508. Unconditional Right of Holders to Receive Principal, Premium or Make-
Whole Amount, if any, Interest and Additional Amounts......................................44
SECTION 509. Restoration of Rights and Remedies.........................................................44
SECTION 510. Rights and Remedies Cumulative.............................................................44
SECTION 511. Delay or Omission Not Waiver...............................................................45
SECTION 512. Control by Holders of Securities...........................................................45
SECTION 513. Waiver of Past Defaults....................................................................45
SECTION 514. Waiver of Usury, Stay or Extension Laws....................................................46
SECTION 515. Undertaking for Costs......................................................................46
ARTICLE VI
THE TRUSTEE
SECTION 601. Notice of Defaults.........................................................................47
SECTION 602. Certain Rights of Trustee..................................................................47
SECTION 603. Not Responsible for Recitals or Issuance of Securities.....................................48
SECTION 604. May Hold Securities........................................................................49
SECTION 605. Money Held in Trust........................................................................49
SECTION 606. Compensation and Reimbursement.............................................................49
SECTION 607. Corporate Trustee Required; Eligibility; Conflicting Interests.............................50
SECTION 608. Resignation and Removal; Appointment of Successor..........................................50
SECTION 609. Acceptance of Appointment By Successor.....................................................51
SECTION 610. Merger, Conversion, Consolidation or Succession to Business................................53
SECTION 611. Appointment of Authenticating Agent........................................................53
ARTICLE VII
HOLDERS' LISTS AND REPORTS BY TRUSTEE AND TRUST
SECTION 701. Disclosure of Names and Addresses of Holders...............................................55
SECTION 702. Reports by Trustee.........................................................................55
SECTION 703. Reports by Trust...........................................................................55
SECTION 704. Trust to Furnish Trustee Names and Addresses of Holders....................................56
ARTICLE VIII
CONSOLIDATION, MERGER, SALE, LEASE OR CONVEYANCE
SECTION 801. Consolidations and Mergers of Trust and Sales, Leases and Conveyances
Permitted Subject to Certain Conditions....................................................56
SECTION 802. Rights and Duties of Successor Corporation.................................................57
SECTION 803. Officers' Certificate and Opinion of Counsel...............................................57
iv
<PAGE>
ARTICLE IX
SUPPLEMENTAL INDENTURES
SECTION 901. Supplemental Indentures Without Consent of Holders.........................................58
SECTION 902. Supplemental Indentures with Consent of Holders............................................59
SECTION 903. Execution of Supplemental Indentures.......................................................60
SECTION 904. Effect of Supplemental Indentures..........................................................61
SECTION 905. Conformity with Trust Indenture Act........................................................61
SECTION 906. Reference in Securities to Supplemental Indentures.........................................61
SECTION 907. Notice of Supplemental Indentures..........................................................61
ARTICLE X
COVENANTS
SECTION 1001. Payment of Principal, Premium or Make-Whole Amount, if any, Interest
and Additional Amounts.....................................................................62
SECTION 1002. Maintenance of Office or Agency............................................................62
SECTION 1003. Money for Securities Payments to Be Held in Trust..........................................64
SECTION 1004. [Reserved].................................................................................64
SECTION 1005. Existence..................................................................................64
SECTION 1006. Maintenance of Properties..................................................................64
SECTION 1007. Insurance..................................................................................65
SECTION 1008. Payment of Taxes and Other Claims..........................................................65
SECTION 1009. [Reserved].................................................................................65
SECTION 1010. Statement as to Compliance.................................................................65
SECTION 1011. Additional Amounts.........................................................................66
SECTION 1012. Waiver of Certain Covenants................................................................67
ARTICLE XI
REDEMPTION OF SECURITIES
SECTION 1101. Applicability of Article....................................................................67
SECTION 1102. Election to Redeem; Notice to Trustee.......................................................67
SECTION 1103. Selection by Trustee of Securities to Be Redeemed...........................................67
SECTION 1104. Notice of Redemption........................................................................68
SECTION 1105. Deposit of Redemption Price.................................................................69
SECTION 1106. Securities Payable on Redemption Date.......................................................70
SECTION 1107. Securities Redeemed in Part.................................................................71
v
<PAGE>
ARTICLE XII
SINKING FUNDS
SECTION 1201. Applicability of Article....................................................................72
SECTION 1202. Satisfaction of Sinking Fund Payments with Securities.......................................72
SECTION 1203. Redemption of Securities for Sinking Fund...................................................73
ARTICLE XIII
REPAYMENT AT THE OPTION OF HOLDERS
SECTION 1301. Applicability of Article....................................................................73
SECTION 1302. Repayment of Securities.....................................................................73
SECTION 1303. Exercise of Option..........................................................................74
SECTION 1304. When Securities Presented for Repayment Become Due and Payable..............................75
SECTION 1305. Securities Repaid in Part...................................................................75
ARTICLE XIV
DEFEASANCE AND COVENANT DEFEASANCE
SECTION 1401. Applicability of Article; Trust's Option to Effect Defeasance or Covenant
Defeasance................................................................................. 76
SECTION 1402. Defeasance and Discharge....................................................................76
SECTION 1403. Covenant Defeasance.........................................................................77
SECTION 1404. Conditions to Defeasance or Covenant Defeasance.............................................77
SECTION 1405. Deposited Money and Government Obligations to Be Held in Trust; Other
Miscellaneous Provisions....................................................................80
ARTICLE XV
MEETINGS OF HOLDERS OF SECURITIES
SECTION 1501. Purposes for Which Meetings May Be Called...................................................81
SECTION 1502. Call, Notice and Place of Meetings..........................................................81
SECTION 1503. Persons Entitled to Vote at Meetings........................................................81
SECTION 1504. Quorum; Action..............................................................................82
SECTION 1505. Determination of Voting Rights; Conduct and Adjournment of Meetings.........................83
SECTION 1506. Counting Votes and Recording Action of Meetings.............................................84
SECTION 1507. Evidence of Action Taken by Holders.........................................................84
SECTION 1508. Proof of Execution of Instruments...........................................................85
vi
<PAGE>
ARTICLE XVI
SUBORDINATION
SECTION 1601. Agreement to Subordinate....................................................................85
SECTION 1602. Liquidation; Dissolution; Bankruptcy........................................................85
SECTION 1603. Default on Senior Debt......................................................................86
SECTION 1604. Acceleration of Securities..................................................................86
SECTION 1605. When Distribution Must Be Paid Over.........................................................86
SECTION 1606. Notice by Trust.............................................................................86
SECTION 1607. Subrogation.................................................................................86
SECTION 1608. Relative Rights.............................................................................87
SECTION 1609. Subordination May Not Be Impaired by Trust..................................................87
SECTION 1610. Distribution or Notice to Representative....................................................87
SECTION 1611. Rights of Trustee and Paying Agent..........................................................87
</TABLE>
TESTIMONIUM
SIGNATURE AND SEALS
ACKNOWLEDGMENTS
EXHIBIT A - FORMS OF CERTIFICATION
vii
<PAGE>
CORNERSTONE REALTY INCOME TRUST, INC.
Reconciliation and tie between Trust Indenture Act of 1939, as amended (the
"1939 Act"), and Indenture, dated as of .
<TABLE>
<CAPTION>
TRUST INDENTURE ACT SECTION INDENTURE SECTION
<S> <C>
(Section) 310 (a)(1).................................................................... 607(a)
(a)(2)......................................................................... 607(a)
(b)............................................................................ 607(b), 608
(Section) 312 (c)....................................................................... 701
(Section) 314 (a)....................................................................... 703
(a)(4)......................................................................... 1011
(c)(1)......................................................................... 102
(c)(2)......................................................................... 102
(e)............................................................................ 102
(Section) 315 (b)....................................................................... 601
(Section) 316 (a) (last sentence)....................................................... 101 ("Outstanding")
(a)(1)(A)...................................................................... 502, 512
(a)(1)(B)...................................................................... 513
(b)............................................................................ 508
(Section) 317 (a)(1).................................................................... 503
(a)(2)......................................................................... 504
(Section) 318 (a)....................................................................... 112
(c)............................................................................ 112
</TABLE>
- --------------------------
NOTE: This reconciliation and tie shall not, for any purpose, be deemed to
be a part of the Indenture.
Attention should also be directed to Section 318(c) of the 1939
Act, which provides that the provisions of Sections 310 to and
including 317 of the 1939 Act are a part of and govern every
qualified indenture, whether or not physically contained therein.
<PAGE>
INDENTURE, dated as of , 1997, between CORNERSTONE REALTY INCOME TRUST,
INC., a Virginia corporation (hereinafter called the "Trust"), having its
principal office at 306 East Main Street, Richmond, Virginia 23219, and
_______________________ a [________ banking corporation], as Trustee hereunder
(hereinafter called the "Trustee"), having its Corporate Trust Office
at_____________________________________________________.
RECITALS OF THE TRUST
The Trust deems it necessary to issue from time to time for its lawful
purposes subordinated debt securities (hereinafter called the "Securities")
evidencing its unsecured subordinated indebtedness, and has duly authorized the
execution and delivery of this Indenture to provide for the issuance from time
to time of the Securities, unlimited as to aggregate principal amount, to bear
interest at the rates or formulas, to mature at such times and to have such
other provisions as shall be fixed therefor as hereinafter provided.
All things necessary to make this Indenture a valid agreement of the
Trust, in accordance with its terms, have been done.
NOW, THEREFORE, THIS INDENTURE WITNESSETH:
For and in consideration of the premises and the purchase of the
Securities by the Holders thereof, it is mutually covenanted and agreed, for the
equal and proportionate benefit of all Holders of the Securities, as follows:
ARTICLE I
DEFINITIONS AND OTHER PROVISIONS OF GENERAL APPLICATION
SECTION 101. Definitions.
For all purposes of this Indenture, except as otherwise expressly
provided or the context otherwise requires:
(1) the terms defined in this Article have the meanings assigned to
them in this Article, and include the plural as well as the singular;
(2) all other terms used herein which are defined in the TIA, either
directly or by reference therein, have the meanings assigned to them therein,
and the terms "cash transaction" and "self-liquidating paper," as used in TA
Section 311, shall have the meanings assigned to them in the rules of the
Commission adopted under the TA;
(3) all accounting terms not otherwise defined herein have the meanings
assigned to them in accordance with GAAP; and
1
<PAGE>
(4) the words "herein," "hereof" and "hereunder" and other words of
similar import refer to this Indenture as a whole and not to any particular
Article, Section or other subdivision.
Certain terms, used principally in Article Three, Article Five, Article
Six and Article Ten, are defined in those Articles. In addition, the following
terms shall have the indicated respective meanings:
"Acquired Debt" means Debt of a Person (i) existing at the time such
Person becomes a Subsidiary or (ii) assumed in connection with the acquisition
of assets from such Person, in each case, other than Debt incurred in connection
with, or in contemplation of, such Person becoming a Subsidiary or such
acquisition. Acquired Debt shall be deemed to be incurred on the date of the
related acquisition of assets from any Person or the date the acquired Person
becomes a Subsidiary.
"Act" has the meaning specified in Section 104.
"Additional Amounts" means any additional amounts which are required by
a Security, under circumstances specified therein, to be paid by the Trust in
respect of certain taxes imposed on certain Holders and which are owing to such
Holders.
"Affiliate" of any specified Person means any other Person directly or
indirectly controlling or controlled by or under direct or indirect common
control with such specified Person. For the purposes of this definition,
"control" when used with respect to any specified Person means the power to
direct the management and policies of such Person, directly or indirectly,
whether through the ownership of voting securities, by contract or otherwise;
and the terms "controlling" and "controlled" have meanings correlative to the
foregoing.
"Authenticating Agent" means any authenticating agent appointed by the
Trustee pursuant to Section 611.
"Authorized Newspaper" means a newspaper, printed in the English
language or in an official language of the country of publication, customarily
published on each Business Day, whether or not published on Saturdays, Sundays
or holidays, and of general circulation in each place in connection with which
the term is used or in the financial community of each such place. Whenever
successive publications are required to be made in Authorized Newspapers, the
successive publications may be made in the same or in different Authorized
Newspapers in the same city meeting the foregoing requirements and in each case
on any Business Day.
"Bankruptcy Law" has the meaning specified in Section 501.
"Bearer Security" means a Security which is payable to bearer.
2
<PAGE>
"Board of Directors" means the Board of Directors of the Trust, the
executive committee or any other committee of that board duly authorized to act
for it in respect hereof.
"Board Resolution" means a copy of a resolution certified by the
Secretary or an Assistant Secretary of the Trust to have been duly adopted by
the Board of Directors, and to be in full force and effect on the date of such
certification, and delivered to the Trustee.
"Business Day," when used with respect to any Place of Payment or any
other particular location referred to in this Indenture or in the Securities,
means, unless otherwise specified with respect to any Securities pursuant to
Section 301, any day, other than a Saturday or Sunday, that is neither a legal
holiday nor a day on which banking institutions in that Place of Payment or
particular location are authorized or required by law, regulation or executive
order to close.
"Capital Stock" means, with respect to any Person, any capital stock
(including preferred stock), shares, interests, participations or other
ownership interests (however designated) of such Person and any rights (other
than debt securities convertible or exchangeable for corporate stock), warrants
or options to purchase any thereof.
"CEDEL" means Centrale de Livraison de Valeurs Mobilieres, S.A., or its
successor.
"Commission" means the Securities and Exchange Commission, as from time
to time constituted, created under the Exchange Act, or, if at any time after
execution of this instrument such Commission is not existing and performing the
duties now assigned to it under the Trust Indenture Act, then the body
performing such duties on such date.
"Conversion Event" means the cessation of use of (i) a Foreign Currency
(other than the ECU or other currency unit) both by the government of the
country which issued such currency and for the settlement of transactions by a
central bank or other public institutions of or within the international banking
community, (ii) the ECU both within the European Monetary System and for the
settlement of transactions by public institutions of or within the European
Communities or (iii) any currency unit (or composite currency) other than the
ECU for the purposes for which it was established.
"Corporate Trust Office" means the office of the Trustee at which, at
any particular time, its corporate trust business shall be principally
administered, which office at the date hereof is located at , Richmond, Virginia
23219.
"Corporation" includes corporations, associations, companies and
business trusts.
"Coupon" means any interest coupon appertaining to a Bearer Security.
"Custodian" has the meaning set forth in Section 501.
3
<PAGE>
"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 payment of public and private debts.
"DTC" means The Depository Trust Company.
"ECU" means the European Currency Unit as defined and revised from time
to time by the Council of the European Communities.
"Euroclear" means Morgan Guaranty Trust Company of New York, Brussels
Office, or its successor as operator of the Euroclear System.
"European Communities" means the European Economic Community, the
European Coal and Steel Community and the European Atomic Energy Community.
"European Monetary System" means the European Monetary System
established by the Resolution of December 5, 1978 of the Council of the European
Communities.
"Event of Default" has the meaning specified in Article Five.
"Exchange Act" means the Securities Exchange Act of 1934, as amended,
and the rules and regulations promulgated thereunder by the Commission.
"Foreign Currency" means any currency, currency unit or composite
currency, including, without limitation, the ECU, issued by the government of
one or more countries other than the United States of America or by any
recognized confederation or association of such governments.
"GAAP" means generally accepted accounting principles as used in the
United States applied on a consistent basis as in effect from time to time;
provided, that solely for purposes of any calculation required by the financial
covenants contained herein, "GAAP" shall mean generally accepted accounting
principles as used in the United States on the date hereof, applied on a
consistent basis.
"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
4
<PAGE>
or such other government, which, in either case, are not callable or redeemable
at the option of the issuer thereof, and shall also include a depository receipt
issued by a bank or trust company as custodian with respect to any such
Government Obligation or a specific payment of interest on or principal of any
such Government Obligation held by such custodian for the account of the holder
of a depository receipt, provided that (except as required by law) such
custodian is not authorized to make any deduction from the amount payable to the
holder of such depository receipt from any amount received by the custodian in
respect of the Government Obligation or the specific payment of interest on or
principal of the Government Obligation evidenced by such depository receipt.
"Holder" means, in the case of a Registered Security, the Person in
whose name a Security is registered in the Security Register and, in the case of
a Bearer Security, the bearer thereof and, when used with respect to any coupon,
shall mean the bearer thereof.
"Indenture" means this instrument as originally executed or as it may
from time to time be supplemented or amended by one or more indentures
supplemental hereto entered into pursuant to the applicable provisions hereof,
and shall include the terms of particular series of Securities established as
contemplated by Section 301; provided, however, that, if at any time more than
one Person is acting as Trustee under this instrument, "Indenture" shall mean,
with respect to any one or more series of Securities for which such Person is
Trustee, this instrument as originally executed or as it may from time to time
be supplemented or amended by one or more indentures supplemental hereto entered
into pursuant to the applicable provisions hereof and shall include the terms of
the or those particular series of Securities for which such Person is Trustee
established as contemplated by Section 301, exclusive, however, of any
provisions or terms which relate solely to other series of Securities for which
such Person is not Trustee, regardless of when such terms or provisions were
adopted, and exclusive of any provisions or terms adopted by means of one or
more indentures supplemental hereto executed and delivered after such Person had
become such Trustee but to which such Person, as such Trustee, was not a party.
"Indexed Security" means a Security the terms of which provide that the
principal amount thereof payable at Stated Maturity may be more or less than the
principal face amount thereof at original issuance.
"Interest" when used with respect to an Original Issue Discount
Security which by its terms bears interest only after Maturity, shall mean
interest payable after Maturity, and, when used with respect to a Security which
provides for the payment of Additional Amounts pursuant to Section 1011,
includes such Additional Amounts.
"Interest Payment Date" means, when used with respect to any Security,
the Stated Maturity of an installment of interest on such Security.
5
<PAGE>
"Make-Whole Amount" means the amount, if any, in addition to principal
which is required by a Security, under the terms and conditions specified
therein or as otherwise specified as contemplated by Section 301, to be paid by
the Trust to the Holder thereof in connection with any optional redemption or
accelerated payment of such Security.
"Maturity" means, when used with respect to any Security, the date on
which the principal of such Security or an installment of principal 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, repurchase or otherwise.
"Officers' Certificate" means a certificate signed by the Chief
Executive Officer or Chief Financial Officer of the Trust, and delivered to the
Trustee.
"Opinion of Counsel" means a written opinion of counsel, who may be an
employee of or counsel for the Trust or other counsel satisfactory to the
Trustee.
"Original Issue Discount Security" means any Security which provides
for an amount less than the principal amount thereof to be due and payable upon
a declaration of acceleration of the Maturity thereof pursuant to Section 502.
"Outstanding," when used with respect to Securities, means, as of the
date of determination, all Securities theretofore authenticated and delivered
under this Indenture, except:
(i) Securities theretofore cancelled by the Trustee or delivered
to the Trustee for cancellation;
(ii) Securities, or portions thereof, for whose payment or
redemption or repayment at the option of the Holder money in the
necessary amount has been theretofore deposited with the Trustee or
any Paying Agent (other than the Trust) in trust or set aside and
segregated in trust by the Trust (if the Trust shall act as its own
Paying Agent) for the Holders of such Securities and any coupons
appertaining thereto; provided that, if such Securities are to be
redeemed, notice of such redemption has been duly given pursuant to
this Indenture or other provision therefor satisfactory to the Trustee
has been made;
(iii) Securities, except solely to the extent provided in
Sections 1402 or 1403, as applicable, with respect to which the Trust
has effected defeasance and/or covenant defeasance as provided in
Article Fourteen;
(iv) Securities which have been paid pursuant to Section 306 or
in exchange for or in lieu of which other Securities have been
authenticated and delivered pursuant to this Indenture, other than any
such Securities in respect of which there shall have
6
<PAGE>
been presented to the Trustee proof satisfactory to it that such
Securities are held by a bona fide purchaser in whose hands such
Securities are valid obligations of the Trust; and
(v) Securities converted into Capital Stock of the Trust pursuant
to or in accordance with this Indenture if the terms of such
Securities provide for convertibility pursuant to Section 301;
provided, however, that in determining whether the Holders of the requisite
principal amount of the Outstanding Securities have given any request, demand,
authorization, direction, notice, consent or waiver hereunder or are present at
a meeting of Holders for quorum purposes, and for the purpose of making the
calculations required by TIA Section 313, (i) the principal amount of an
Original Issue Discount Security that may be counted in making such
determination or calculation and that shall be deemed to be Outstanding for such
purpose shall be equal to the amount of principal thereof that would be (or
shall have been declared to be) due and payable, at the time of such
determination, upon a declaration of acceleration of the maturity thereof
pursuant to Section 502, (ii) the principal amount of any Security denominated
in a Foreign Currency that may be counted in making such determination or
calculation and that shall be deemed Outstanding for such purpose shall be equal
to the Dollar equivalent, determined pursuant to Section 301 as of the date such
Security is originally issued by the Trust, of the principal amount (or, in the
case of an Original Issue Discount Security, the Dollar equivalent as of such
date of original issuance of the amount determined as provided in clause (i)
above) of such Security, (iii) the principal amount of any Indexed Security that
may be counted in making such determination or calculation and that shall be
deemed outstanding for such purpose shall be equal to the principal face amount
of such Indexed Security at original issuance, unless otherwise provided with
respect to such Indexed Security pursuant to Section 301, and (iv) Securities
owned by the Trust or any other obligor upon the Securities or any Affiliate of
the Trust or of such other obligor shall be disregarded and deemed not to be
Outstanding, except that, in determining whether the Trustee shall be protected
in making such calculation or in relying upon any such request, demand,
authorization, direction, notice, consent or waiver, only Securities which the
Trustee knows to be so owned shall be so disregarded. Securities so owned which
have been pledged in good faith may be regarded as Outstanding if the pledgee
establishes to the satisfaction of the Trustee the pledgee's right so to act
with respect to such Securities and that the pledgee is not the Trust or any
other obligor upon the Securities or any Affiliate of the Trust or of such other
obligor.
"Paying Agent" means any Person authorized by the Trust to pay the
principal of (and premium or Make-Whole Amount, if any) or interest on any
Securities or coupons on behalf of the Trust, or if no such Person is
authorized, the Trust.
7
<PAGE>
"Person" means any individual, corporation, partnership, limited
liability company, joint venture, association, joint- stock company, trust,
unincorporated organization or government or any agency or political subdivision
thereof.
"Place of Payment" means, when used with respect to the Securities of
or within any series, the place or places where the principal of (and premium or
Make-Whole Amount, if any) and interest on such Securities are payable as
specified as contemplated by Sections 301 and 1002.
"Predecessor Security" of any particular Security means every previous
Security evidencing all or a portion of the same debt as that evidenced by such
particular Security; and, for the purposes of this definition, any Security
authenticated and delivered under Section 306 in exchange for or in lieu of a
mutilated, destroyed, lost or stolen Security or a Security to which a
mutilated, destroyed, lost or stolen coupon appertains shall be deemed to
evidence the same debt as the mutilated, destroyed, lost or stolen Security or
the Security to which the mutilated, destroyed, lost or stolen coupon
appertains.
"Redemption Date" means, when used with respect to any Security to be
redeemed in whole or in part, the date fixed for such redemption by or pursuant
to this Indenture.
"Redemption Price" means, when used with respect to any Security to be
redeemed, the price at which it is to be redeemed pursuant to this Indenture.
"Registered Security" means any Security which is registered in the
Security Register.
"Regular Record Date" for the installment of interest payable on any
Interest Payment Date on the Registered Securities of or within any series means
the date specified for that purpose as contemplated by Section 301, whether or
not a Business Day.
"Repayment Date" means, when used with respect to any Security to be
repaid or repurchased at the option of the Holder, the date fixed for such
repayment or repurchase by or pursuant to this Indenture.
"Repayment Price" means, when used with respect to any Security to be
repaid or purchased at the option of the Holder, the price at which it is to be
repaid or repurchased by or pursuant to this Indenture.
"Representative" means the indenture trustee or other trustee, agent or
representative for an issue of Senior Debt.
"Responsible Officer" means, when used with respect to the Trustee, any
officer of the Trustee assigned by the Trustee to administer its corporate trust
matters.
8
<PAGE>
"Securities Act" means the Securities Act of 1933, as amended, and the
rules and regulations promulgated thereunder by the Commission.
"Security" has the meaning stated in the first recital of this
Indenture and, more particularly, means any Security or Securities authenticated
and delivered under this Indenture; provided, however, that, if at any time
there is more than one Person acting as Trustee under this Indenture,
"Securities" with respect to the Indenture as to which such Person is Trustee
shall have the meaning stated in the first recital of this Indenture and shall
more particularly mean Securities authenticated and delivered under this
Indenture, exclusive, however, of Securities of or within any series as to which
such Person is not Trustee.
"Security Register" and "Security Registrar" have the respective
meanings specified in Section 305.
"Senior Debt" means the principal of and interest on, or substantially
similar payments to be made by the Trust in respect of, the following, whether
outstanding at the date of execution of this Indenture or thereafter incurred,
created or assumed: (a) indebtedness of the Trust for money borrowed or
represented by purchase-money obligations, (b) indebtedness of the Trust
evidenced by notes, debentures, or bonds, or other securities issued under the
provisions of an indenture, fiscal agency agreement or other instrument, (c)
obligations of the Trust as lessee under leases of property either made as part
of any sale and lease-back transaction to which the Trust is a party or
otherwise, (d) indebtedness of partnerships and joint ventures which is included
in the Trust's consolidated financial statements, (e) indebtedness, obligations
and liabilities of others in respect of which the Trust is liable contingently
or otherwise to pay or advance money or property or as guarantor, endorser or
otherwise or which the Trust has agreed to purchase or otherwise acquire, and
(f) any binding commitment of the Trust to fund any real estate investment or to
fund any investment in any entity making such real estate investment; but
excluding, however, (1) any such indebtedness, obligation or liability referred
to in clauses (a) through (f) above as to which, in the instrument creating or
evidencing the same or pursuant to which the same is outstanding, it is provided
that such indebtedness, obligation or liability is not superior in right of
payment to the Securities, or ranks pari passu with the Securities, (2) any such
indebtedness, obligation or liability which is subordinated to indebtedness of
the Trust to substantially the same extent as or to a greater extent than the
Securities are subordinated and (3) the Securities. As used in the preceding
sentence the term "purchase-money obligations" shall mean indebtedness or
obligations evidenced by a note, debenture, bond or other instrument (whether or
not secured by any lien or other security interest but excluding indebtedness or
obligations for which recourse is limited to the property purchased) issued or
assumed as all or a part of the consideration for the acquisition of property,
whether by purchase, merger, consolidation or otherwise, but shall not include
any trade accounts payable. A distribution may consist of cash, securities or
other property.
9
<PAGE>
"Significant Subsidiary" means any Subsidiary which is a "significant
subsidiary" (within the meaning of Regulation S-X, promulgated under the
Securities Act) of the Trust.
"Special Record Date" for the payment of any Defaulted Interest on the
Registered Securities of or within any series means a date fixed by the Trustee
pursuant to Section 307.
"Stated Maturity" means, when used with respect to any Security or any
installment of principal thereof or interest thereon, the date specified in such
Security or a coupon representing such installment of interest as the fixed date
on which the principal of such Security or such installment of principal or
interest is due and payable.
"Subsidiary" means, with respect to any Person, any corporation or
other entity of which a majority of (a) the voting power of the voting equity
securities or (b) the outstanding equity interests of which are owned, directly
or indirectly, by such Person. For the purposes of this definition, "voting
equity securities" means equity securities having voting power for the election
of directors, whether at all times or only so long as no senior class of
security has such voting power by reason of any contingency.
"Trust" means the Person named as the "Trust" in the first paragraph of
this Indenture until a successor corporation shall have become such pursuant to
the applicable provisions of this Indenture, and thereafter "Trust" shall mean
such successor corporation.
"Trust Indenture Act" or "TIA" means the Trust Indenture Act of 1939,
as amended and as in force at the date as of which this Indenture was executed,
except as provided in Section 905.
"Trust Request" and "Trust Order" mean, respectively, a written request
or order signed in the name of the Trust by the President or a Vice President of
the Trust, and by the Treasurer, an Assistant Treasurer, the Secretary or an
Assistant Secretary of the Trust, and delivered to the Trustee.
"Trustee" means the Person named as the "Trustee" in the first
paragraph of this Indenture until a successor Trustee shall have become such
pursuant to the applicable provisions of this Indenture, and thereafter
"Trustee" shall mean or include each Person who is then a Trustee hereunder;
provided, however, that if at any time there is more than one such Person,
"Trustee" as used with respect to the Securities of or within any series shall
mean only the Trustee with respect to the Securities of that series.
"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.
10
<PAGE>
"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 on
a net income basis regardless of its source.
"Yield to Maturity" means the yield to maturity, computed at the time
of issuance of a Security (or, if applicable, at the most recent redetermination
of interest on such Security) and as set forth in such Security in accordance
with generally accepted United States bond yield computation principles.
SECTION 102. Compliance Certificates and Opinions.
Upon any application or request by the Trust to the Trustee to take any
action under any provision of this Indenture, the Trust shall furnish to the
Trustee an Officers' Certificate stating that all conditions precedent, if any,
provided for in this Indenture (including covenants, compliance with which
constitute conditions precedent) relating to the proposed action have been
complied with and an Opinion of Counsel stating that in the opinion of such
counsel all such conditions precedent, if any, have been complied with, except
that in the case of any such application or request as to which the furnishing
of such documents is specifically required by any provision of this Indenture
relating to such particular application or request, no additional certificate or
opinion need be furnished.
Every certificate or opinion with respect to compliance with a
condition or covenant provided for in this Indenture (excluding certificates
delivered pursuant to Section 1010) shall include:
(1) a statement that each individual signing such certificate or
opinion has read such condition or covenant and the definitions herein relating
thereto;
(2) a brief statement as to the nature and scope of the examination or
investigation upon which the statements or opinions contained in such
certificate or opinion are based;
(3) a statement that, in the opinion of each such individual, he has
made such examination or investigation as is necessary to enable him to express
an informed opinion as to whether or not such condition or covenant has been
complied with; and
(4) a statement as to whether, in the opinion of each such individual,
such condition or covenant has been complied with.
11
<PAGE>
SECTION 103. Form of Documents Delivered to Trustee.
In any case where several matters are required to be certified by, or
covered by an opinion of, any specified Person, it is not necessary that all
such matters be certified by, or covered by the opinion of, only one such
Person, or that they be so certified or covered by only one document, but one
such Person may certify or give an opinion as to some matters and one or more
other such Persons as to other matters, and any such Person may certify or give
an opinion as to such matters in one or several documents.
Any certificate or opinion of an officer of the Trust may be based,
insofar as it relates to legal matters, upon an Opinion of Counsel, or a
certificate or representations by counsel, unless such officer knows, or in the
exercise of reasonable care should know, that the opinion, certificate or
representations with respect to the matters upon which his certificate or
opinion is based are erroneous. Any such Opinion of Counsel or certificate or
representations may be based, insofar as it relates to factual matters, upon a
certificate or opinion of, or representations by, an officer or officers of the
Trust stating that the information as to such factual matters is in the
possession of the Trust, unless such counsel knows that the certificate or
opinion or representations as to such matters are erroneous.
Where any Person is required to make, give or execute two or more
applications, requests, consents, certificates, statements, opinions or other
instruments under this Indenture, they may, but need not, be consolidated and
form one instrument.
SECTION 104. Acts of Holders.
(a) Any request, demand, authorization, direction, notice, consent,
waiver or other action provided by this Indenture to be given or taken by
Holders of the Outstanding Securities of all series or one or more series, as
the case may be, may be embodied in and evidenced by one or more instruments of
substantially similar tenor signed by such Holders in person or by agents duly
appointed in writing. If Securities of a series are issuable as Bearer
Securities, any request, demand, authorization, direction, notice, consent,
waiver or other action provided by this Indenture to be given or taken by
Holders of Securities of such series may, alternatively, be embodied in and
evidenced by the record of Holders of Securities of such series voting in favor
thereof, whether in person or by proxies duly appointed in writing, at any
meeting of Holders of Securities of such series duly called and held in
accordance with the provisions of Article Fifteen, or a combination of such
instruments and any such record. Except as herein otherwise expressly provided,
such action shall become effective when such instrument or instruments or record
or both are delivered to the Trustee and, where it is hereby expressly required,
to the Trust. Such instrument or instruments and any such record (and the action
embodied therein and evidenced thereby) are herein sometimes referred to as the
"Act" of the Holders signing such instrument or instruments or so voting at any
such meeting. Proof of execution of any such instrument or of a writing
appointing any such agent, or of the holding by any Person of a Security, shall
be sufficient for any purpose of this Indenture and
12
<PAGE>
conclusive in favor of the Trustee and the Trust and any agent of the Trustee or
the Trust, if made in the manner provided in this Section. The record of any
meeting of Holders of Securities shall be proved in the manner provided in
Section 1506.
(b) The fact and date of the execution by any Person of any such
instrument or writing may be proved by the affidavit of a witness of such
execution or by a certificate of a notary public or other officer authorized by
law to take acknowledgments of deeds, certifying that the individual signing
such instrument or writing acknowledged to him the execution thereof. Where such
execution is by a signer acting in a capacity other than his individual
capacity, such certificate or affidavit shall also constitute sufficient proof
of his authority. The fact and date of the execution of any such instrument or
writing, or the authority of the Person executing the same, may also be proved
in any other reasonable manner which the Trustee deems sufficient.
(c) The ownership of Registered Securities shall be proved by the
Security Register.
(d) The ownership of Bearer Securities may be proved by the production
of such Bearer Securities or by a certificate executed, as depositary, by any
trust company, bank, banker or other depositary, wherever situated, if such
certificate shall be deemed by the Trustee to be satisfactory, showing that at
the date therein mentioned such Person had on deposit with such depositary, or
exhibited to it, the Bearer Securities therein described; or such facts may be
proved by the certificate or affidavit of the Person holding such Bearer
Securities, if such certificate or affidavit is deemed by the Trustee to be
satisfactory. The Trustee and the Trust may assume that such ownership of any
Bearer Security continues until (1) another certificate or affidavit bearing a
later date issued in respect of the same Bearer Security is produced, or (2)
such Bearer Security is produced to the Trustee by some other Person, or (3)
such Bearer Security is surrendered in exchange for a Registered Security, or
(4) such Bearer Security is no longer Outstanding. The ownership of Bearer
Securities may also be proved in any other manner which the Trustee deems
sufficient.
(e) If the Trust shall solicit from the Holders of Registered
Securities any request, demand, authorization, direction, notice, consent,
waiver or other Act, the Trust may, at its option, in or pursuant to a Board
Resolution, fix in advance a record date for the determination of Holders
entitled to give such request, demand, authorization, direction, notice,
consent, waiver or other Act, but the Trust shall have no obligation to do so.
Notwithstanding TIA Section 316(c), such record date shall be the record date
specified in or pursuant to such Board Resolution, which shall be a date not
earlier than the date 30 days prior to the first solicitation of Holders
generally in connection therewith and not later than the date such solicitation
is completed. If such a record date is fixed, such request, demand,
authorization, direction, notice, consent, waiver or other Act may be given
before or after such record date, but only the Holders of record at the close of
business on such record date shall be deemed to be Holders for the purposes of
determining whether Holders of the requisite proportion of Outstanding
Securities have authorized or agreed or consented to such request, demand,
13
<PAGE>
authorization, direction, notice, consent, waiver or other Act, and for that
purpose the Outstanding Securities shall be computed as of such record date;
provided that no such authorization, agreement or consent by the Holders on such
record date shall be deemed effective unless it shall become effective pursuant
to the provisions of this Indenture not later than eleven months after the
record date. (f) Any request, demand, authorization, direction, notice, consent,
waiver or other Act of the Holder of any Security shall bind every future Holder
of the same Security and the Holder of every Security issued upon the
registration of transfer thereof or in exchange therefor or in lieu thereof in
respect of anything done, omitted or suffered to be done by the Trustee, any
Security Registrar, any Paying Agent, any Authenticating Agent or the Trust in
reliance thereon, whether or not notation of such action is made upon such
Security.
SECTION 105. Notices, etc., to Trustee and Trust.
Any request, demand, authorization, direction, notice, consent, waiver
or Act of Holders or other document provided or permitted by this Indenture to
be made upon, given or furnished to, or filed with,
(1) the Trustee by any Holder or by the Trust shall be sufficient for
every purpose hereunder if made, given, furnished or filed in writing to or with
the Trustee at its Corporate Trust Office, Attention: Corporate Trust
Department, or
(2) The Trust by the Trustee or by any Holder shall be sufficient for
every purpose hereunder (unless otherwise herein expressly provided) if in
writing and mailed, first class postage prepaid, to the Trust addressed to it at
the address of its principal office specified in the first paragraph of this
Indenture or at any other address previously furnished in writing to the Trustee
by the Trust.
SECTION 106. Notice to Holders; Waiver.
Where this Indenture provides for notice of any event to Holders of
Registered Securities by the Trust or the Trustee, such notice shall be
sufficiently given (unless otherwise herein expressly provided) if in writing
and mailed, first-class postage prepaid, to each such Holder affected by such
event, at his address as it appears in the Security Register, not later than the
latest date, and not earlier than the earliest date, prescribed for the giving
of such notice. In any case where notice to Holders of Registered Securities is
given by mail, neither the failure to mail such notice, nor any defect in any
notice so mailed, to any particular Holder shall affect the sufficiency of such
notice with respect to other Holders of Registered Securities or the sufficiency
of any notice to Holders of Bearer Securities given as provided herein. Any
notice mailed to a Holder in the manner herein prescribed shall be conclusively
deemed to have been received by such Holder, whether or not such Holder actually
receives such notice.
14
<PAGE>
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 The City of New York and in such other
city or cities as may be specified in such Securities, and if the Securities of
such series are listed on any stock exchange outside the United States, in any
place at which such Securities are listed on a securities exchange to the extent
that such securities exchange so requires, on a Business Day, such publication
to be not later than the latest date, and not earlier than the earliest date,
prescribed for the giving of such notice. Any such notice shall be deemed to
have been given on the date of such publication or, if published more than once,
on the date of the first such publication.
If by reason of the suspension of publication of any Authorized
Newspaper or Authorized Newspapers or by reason of any other cause it shall be
impracticable to publish any notice to Holders of Bearer Securities as provided
above, then such notification to Holders of Bearer Securities as shall be given
with the approval of the Trustee shall constitute sufficient notice to 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.
15
<PAGE>
SECTION 108. Successors and Assigns.
All covenants and agreements in this Indenture by the Trust shall bind
its successors and assigns, whether so expressed or not.
SECTION 109. Separability Clause.
In case any provision in this Indenture or in any Security or coupon
shall be invalid, illegal or unenforceable, the validity, legality and
enforceability of the remaining provisions shall not in any way be affected or
impaired thereby.
SECTION 110. Benefits of Indenture.
Nothing in this Indenture or in the Securities or coupons appertaining
thereto, express or implied, shall give to any Person, other than the parties
hereto, any Security Registrar, any Paying Agent, any Authenticating Agent and
their successors hereunder and the Holders any benefit or any legal or equitable
right, remedy or claim under this Indenture.
SECTION 111. No Personal Liability.
No recourse under or upon any obligation, covenant or agreement
contained in this Indenture, in any Security or coupon appertaining thereto, or
because of any indebtedness evidenced thereby, shall be had against any
promoter, as such or, against any past, present or future shareholder, officer
or director, as such, of the Trust or of any successor, either directly or
through the Trust or any successor, under any rule of law, statute or
constitutional provision or by the enforcement of any assessment or by any legal
or equitable proceeding or otherwise, all such liability being expressly waived
and released by the acceptance of the Securities by the Holders thereof and as
part of the consideration for the issue of the Securities.
SECTION 112. Governing Law.
This Indenture and the Securities and coupons shall be governed by and
construed in accordance with the law of the Commonwealth of Virginia. This
Indenture is subject to the provisions of the TIA that are required to be part
of this Indenture and shall, to the extent applicable, be governed by such
provisions.
SECTION 113. Legal Holidays.
In any case where any Interest Payment Date, Redemption Date, Repayment
Date, sinking fund payment date, Stated Maturity or Maturity of any Security
shall not be a Business Day at any Place of Payment, then (notwithstanding any
other provision of this Indenture or any Security or coupon other than a
provision in the Securities of any series which specifically states that such
provision shall apply in lieu hereof), payment of interest or any Additional
16
<PAGE>
Amounts or principal (and premium or Make-Whole Amount, if any) need not be made
at such Place of Payment on such date, but may be made on the next succeeding
Business Day at such Place of Payment with the same force and effect as if made
on the Interest Payment Date, Redemption Date, Repayment Date or sinking fund
payment date, or at the Stated Maturity or Maturity, provided that no interest
shall accrue on the amount so payable for the period from and after such
Interest Payment Date, Redemption Date, Repayment Date, sinking fund payment
date, Stated Maturity or Maturity, as the case may be.
ARTICLE II
SECURITIES FORMS
SECTION 201. Forms of Securities.
The Registered Securities, if any, of each series and the Bearer
Securities, if any, and related coupons of each series, shall be in
substantially the forms as shall be established in or pursuant to one or more
indentures supplemental hereto or Board Resolutions, shall have such appropriate
insertions, omissions, substitutions and other variations as are required or
permitted by this Indenture or any indenture supplemental hereto, and may have
such letters, numbers or other marks of identification or designation and such
legends or endorsements placed thereon as the Trust may deem appropriate and as
are not inconsistent with the provisions of this Indenture, or as may be
required to comply with any law or with any rule or regulation made pursuant
thereto or with any rule or regulation of any stock exchange on which the
Securities may be listed, or to conform to usage.
Unless otherwise specified as contemplated by Section 301, Bearer
Securities shall have interest coupons attached.
The definitive Securities and coupons shall be printed, lithographed or
engraved or produced by any combination of these methods on a steel engraved
border or steel engraved borders or may be produced in any other manner, all as
determined by the officers executing such Securities or coupons, as evidenced by
their execution of such Securities or coupons.
SECTION 202. Form of Trustee's Certificate of Authentication.
Subject to Section 611, the Trustee's certificate of authentication
shall be in substantially the following form: This is one of the Securities of
the series designated therein referred to in the within-mentioned Indenture.
17
<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 Trust 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 Trust Order. If a Trust Order pursuant to Section 303 or 304 has
been, or simultaneously is, delivered, any instructions by the Trust with
respect to endorsement or delivery or redelivery of a Security in global form
shall be in writing but need not comply with Section 102 and need not be
accompanied by an Opinion of Counsel.
The provisions of the last sentence of Section 303 shall apply to any
Security represented by a Security in global form if such Security was never
issued and sold by the Trust and the Trust delivers to the Trustee the Security
in global form together with written instructions (which need not comply with
Section 102 and need not be accompanied by an Opinion of Counsel) with regard to
the reduction in the principal amount of Securities represented thereby,
together with the written statement contemplated by the last sentence of Section
303. Notwithstanding the provisions of Section 307, unless otherwise specified
as contemplated by Section 301, payment of principal of and any premium or
Make-Whole Amount and interest on any Security in permanent global form shall be
made to the Person or Persons specified therein.
Notwithstanding the provisions of Section 308 and except as provided in
the preceding paragraph, the Trust, the Trustee and any agent of the Trust and
the Trustee shall treat as the Holder of such principal amount of Outstanding
Securities represented by a permanent global Security (i) in the case of a
permanent global Security in registered form, the Holder of such permanent
global Security in registered form, or (ii) in the case of a permanent global
Security in bearer form, Euroclear or CEDEL.
18
<PAGE>
ARTICLE III
THE SECURITIES
SECTION 301. Amount Unlimited; Issuable in Series.
The aggregate principal amount of Securities which may be authenticated
and delivered under this Indenture is unlimited.
The Securities may be issued in one or more series. There shall be
established in or pursuant to one or more Board Resolutions, or indentures
supplemental hereto, prior to the issuance of Securities of any series, any or
all of the following, as applicable (each of which (except for the matters set
forth in clauses (1), (2) and (15) below), if so provided, may be determined
from time to time by the Trust with respect to unissued Securities of or within
the series when issued from time to time):
(1) the title of the Securities of or within the series (which shall
distinguish the Securities of such series from all other series of Securities);
(2) any limit upon the aggregate principal amount of the Securities of
or within the series that may be authenticated and delivered under this
Indenture (except for Securities authenticated and delivered upon registration
of transfer of, or in exchange for, or in lieu of, other Securities of or within
the series pursuant to Section 304, 305, 306, 906, 1107 or 1305);
(3) the date or dates, or the method by which such date or dates will
be determined, on which the principal of the Securities of or within the series
shall be payable and the amount of principal payable thereon;
(4) the rate or rates at which the Securities of or within the series
shall bear interest, if any, or the method by which such rate or rates shall be
determined, the date or dates from which such interest shall accrue or the
method by which such date or dates shall be determined, the Interest Payment
Dates on which such interest will be payable and the Regular Record Date, if
any, for the interest payable on any Registered Security on any Interest Payment
Date, or the method by which such date shall be determined, and the basis upon
which interest shall be calculated if other than that of a 360-day year
consisting of twelve 30- day months;
(5) the place or places, if any, other than or in addition to the
Borough of Manhattan, The City of New York, where the principal of (and premium
or Make-Whole Amount, if any), interest, if any, on, and Additional Amounts, if
any, payable in respect of, Securities of or within the series shall be payable,
any Registered Securities of or within the series may be surrendered for
registration of transfer, exchange or conversion and notices or
19
<PAGE>
demands to or upon the Trust in respect of the Securities of or within the
series and this Indenture may be served;
(6) the period or periods within which, the price or prices (including
the premium or Make-Whole Amount, if any) at which, the currency or currencies,
currency unit or units or composite currency or currencies in which and other
terms and conditions upon which Securities of or within the series may be
redeemed in whole or in part, at the option of the Trust, if the Trust is to
have the option;
(7) the obligation, if any, of the Trust to redeem, repay or purchase
Securities of or within the series pursuant to any sinking fund or analogous
provision or at the option of a Holder thereof, and the period or periods within
which or the date or dates on which, the price or prices at which, the currency
or currencies, currency unit or units or composite currency or currencies in
which, and other terms and conditions upon which Securities of or within the
series shall be redeemed, repaid or purchased, in whole or in part, pursuant to
such obligation;
(8) if other than denominations of $1,000 and any integral multiple
thereof, the denominations in which any Registered Securities of or within the
series shall be issuable and, if other than the denomination of $5,000, the
denomination or denominations in which any Bearer Securities of or within the
series shall be issuable;
(9) if other than the Trustee, the identity of each Security Registrar
and/or Paying Agent;
(10) if other than the principal amount thereof, the portion of the
principal amount of Securities of or within the series that shall be payable
upon declaration of acceleration of the maturity thereof pursuant to Section 502
or, if applicable, the portion of the principal amount of Securities of or
within 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 or Make-Whole Amount, if any) or
interest or Additional Amounts, if any, on the Securities of or within the
series shall be payable or in which the Securities of or within the series shall
be denominated;
(12) whether the amount of payments of principal of (and premium or
Make-Whole Amount, if any) or interest, if any, on the Securities of or within
the series may be determined with reference to an index, formula or other method
(which index, formula or method may be based, without limitation, on one or more
currencies, currency units, composite currencies, commodities, equity indices or
other indices), and the manner in which such amounts shall be determined;
20
<PAGE>
(13) whether the principal of (and premium or Make- Whole Amount, if
any) or interest or Additional Amounts, if any, on the Securities of or within
the series are to be payable, at the election of the Trust or a Holder thereof,
in a currency or currencies, currency unit or units or composite currency or
currencies other than that in which such Securities are denominated or stated to
be payable, the period or periods within which, and the terms and conditions
upon which, such election may be made, and the time and manner of, and identity
of the exchange rate agent with responsibility for, determining the exchange
rate between the currency or currencies, currency unit or units or composite
currency or currencies in which such Securities are denominated or stated to be
payable and the currency or currencies, currency unit or units or composite
currency or currencies in which such Securities are to be so payable;
(14) provisions, if any, granting special rights to the Holders of
Securities of or within the series upon the occurrence of such events as may be
specified;
(15) any deletions from, modifications of or additions to the Events of
Default or covenants of the Trust with respect to Securities of or within the
series, whether or not such Events of Default or covenants are consistent with
the Events of Default or covenants set forth herein;
(16) whether Securities of or within the series are to be issuable as
Registered Securities, Bearer Securities (with or without coupons) or both, any
restrictions applicable to the offer, sale or delivery of Bearer Securities and
the terms upon which Bearer Securities of or within the series may be exchanged
for Registered Securities of or within the series and vice versa (if permitted
by applicable laws and regulations), whether any Securities of or within the
series are to be issuable initially in temporary global form and whether any
Securities of or within the series are to be issuable in permanent global form
(with or without coupons) and, if so, whether beneficial owners of interests in
any such permanent global Security may exchange such interests for Securities of
such series and of like tenor of any authorized form and denomination and the
circumstances under which any such exchanges may occur, if other than in the
manner provided in Section 305, and, if Registered Securities of or within the
series are to be issuable as a global Security, the identity of the depositary
for such series;
(17) the date as of which any Bearer Securities of or within the series
and any temporary global Security representing Outstanding Securities of or
within the series shall be dated if other than the date of original issuance of
the first Security of the series to be issued;
(18) the Person to whom any interest on any Registered Security of the
series shall be payable, if other than the Person in whose name that Security
(or one or more Predecessor Securities) is registered at the close of business
on the Regular Record Date for such interest, the manner in which, or the Person
to whom, any interest on any Bearer Security of the series shall be payable, if
otherwise than upon presentation and surrender of the coupons appertaining
thereto as they severally mature, and the extent to which, or the manner in
which, any interest
21
<PAGE>
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 or within the series and any provisions in modification of, in
addition to or in lieu of any of the provisions of Article Fourteen;
(20) if the Securities of such series are to be issuable in definitive
form (whether upon original issue or upon exchange of a temporary Security of
such series) only upon receipt of certain certificates or other documents or
satisfaction of other conditions, then the form and/or terms of such
certificates, documents or conditions;
(21) if the Securities of or within the series are to be issued upon
the exercise of debt warrants, the time, manner and place for such Securities to
be authenticated and delivered;
(22) whether and under what circumstances the Trust will pay Additional
Amounts as contemplated by Section 1011 on the Securities of or within the
series to any Holder who is not a United States person (including any
modification to the definition of such term) in respect of any tax, assessment
or governmental charge and, if so, whether the Trust will have the option to
redeem such Securities rather than pay such Additional Amounts (and the terms of
any such option);
(23) the obligation, if any, of the Trust to permit the conversion of
the Securities of such series into shares of Capital Stock of the Trust and the
terms and conditions upon which such conversion shall be effected (including,
without limitation, the initial conversion price or rate, the conversion period,
any adjustment of the applicable conversion price or rate and any requirements
relative to the reservation of such shares for purposes of conversion); and
(24) any other terms of the series (which terms shall not be
inconsistent with the provisions of this Indenture).
All Securities of any one series and the coupons appertaining to any
Bearer Securities of such series, if any, shall be substantially identical
except, in the case of Registered or Bearer Securities issued in global form, as
to denomination and except as may otherwise be provided in or pursuant to such
Board Resolution or in any such indenture supplemental hereto. All Securities of
any one series need not be issued at the same time and, unless otherwise
provided, a series may be reopened, without the consent of the Holders, for
issuances of additional Securities of such series.
If any of the terms of the Securities of any series are established by
action taken pursuant to one or more Board Resolutions, a copy of an appropriate
record of such action(s) shall be certified by the Secretary or an Assistant
Secretary of the Trust and delivered to the
22
<PAGE>
Trustee at or prior to the delivery of the Trust Order for authentication and
delivery of such Securities.
SECTION 302. Denominations.
The Securities of each series shall be issuable in such denominations
as shall be specified as contemplated by Section 301. With respect to Securities
of any series denominated in Dollars, in the absence of any such provisions with
respect to the Securities of any series, the Registered Securities of such
series, other than Registered Securities issued in global form (which may be of
any denomination), shall be issuable in denominations of $1,000 and any integral
multiple thereof and the Bearer Securities of such series other than Bearer
Securities issued in global form (which may be of any denomination), shall be
issuable in denominations of $5,000.
SECTION 303. Execution, Authentication Delivery and Dating.
The Securities and any coupons appertaining thereto shall be executed
on behalf of the Trust by its President or a Vice President, under its corporate
seal reproduced thereon, and attested by its Secretary or an Assistant
Secretary. The signature of any of these officers on the Securities and coupons
may be manual or facsimile signatures of the present or any future such
authorized officer and may be imprinted or otherwise reproduced on the
Securities.
Securities or coupons appertaining thereto bearing the manual or
facsimile signatures of individuals who were at any time the proper officers of
the Trust shall bind the Trust, notwithstanding that such individuals or any of
them have ceased to hold such offices prior to the authentication and delivery
of such Securities or did not hold such offices at the date of such Securities
or coupons.
At any time and from time to time after the execution and delivery of
this Indenture, the Trust may deliver Securities of any series, together with
any coupon appertaining thereto, executed by the Trust to the Trustee for
authentication, together with a Trust Order for the authentication and delivery
of such Securities, and the Trustee in accordance with the Trust Order shall
authenticate and deliver such Securities; provided, however, that, in connection
with its original issuance, no Bearer Security shall be mailed or otherwise
delivered to any location in the United States; and provided further that,
unless otherwise specified with respect to any series of Securities pursuant to
Section 301 a Bearer Security may be delivered in connection with its original
issuance only if the Person entitled to receive such Bearer Security shall have
furnished a certificate to Euroclear or CEDEL, as the case may be, in the form
set forth in Exhibit A-1 to this Indenture or such other certificate as may be
specified with respect to any series of Securities pursuant to Section 301,
dated no earlier than 15 days prior to the earlier of the date on which such
Bearer Security is delivered and the date on which any temporary Security first
becomes exchangeable for such Bearer Security in accordance with the terms of
such temporary Security and this Indenture. Except as permitted by Section 306,
the
23
<PAGE>
Trustee shall not authenticate and deliver any Bearer Security unless all
appurtenant coupons for interest then matured have been detached and cancelled.
If all of the Securities of any series are not to be issued at one time and if
the Board Resolution or supplemental indenture establishing such series shall so
permit, such Trust Order may set forth procedures acceptable to the Trustee for
the issuance of such Securities and determining the terms of particular
Securities of such series, such as interest rate or formula, maturity date, date
of issuance and date from which interest shall accrue. In authenticating such
Securities, and accepting the additional responsibilities under this Indenture
in relation to such Securities, the Trustee shall be entitled to receive, and
(subject to TIA Section 315(a) through 315(d)) shall be fully protected in
relying upon:
(i) an Opinion of Counsel complying with Section 102 and stating
that:
(a) the form or forms of such Securities and any coupons
have been, or will have been upon compliance with such
procedures as may be specified therein, established in
conformity with the provisions of this Indenture;
(b) the terms of such Securities and any coupons have
been, or will have been upon compliance with such procedures
as may be specified therein, established in conformity with
the provisions of this Indenture; and
(c) such Securities, together with any coupons
appertaining thereto, when completed pursuant to such
procedures as may be specified therein, and executed and
delivered by the Trust to the Trustee for authentication in
accordance with this Indenture, authenticated and delivered by
the Trustee in accordance with this Indenture and issued by
the Trust in the manner and subject to any conditions
specified in such Opinion of Counsel, will constitute legal,
valid and binding obligations of the Trust, enforceable in
accordance with their terms, subject to applicable bankruptcy,
insolvency, reorganization and other similar laws of general
applicability relating to or affecting the enforcement of
creditors' rights generally and to general equitable
principles and to such other matters as may be specified
therein; and
(ii) an Officers' Certificate complying with Section 102 and
stating that all conditions precedent provided for in this Indenture
relating to the issuance of such Securities have been, or will have
been upon compliance with such procedures as may be specified therein,
complied with and that, to the best of the knowledge of the signers of
such certificate, no Event of Default with respect to such Securities
shall have occurred and be continuing.
The Trustee shall not be required to authenticate such Securities if the issue
of such Securities pursuant to this Indenture will affect the Trustee's own
rights, duties, obligations or
24
<PAGE>
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 a Trust Order, an Opinion of Counsel or an
Officers' Certificate otherwise required pursuant to the preceding paragraph at
the time of issuance of each Security of such series, but such order, opinion
and certificate, with appropriate modifications to cover such future issuances,
shall be delivered at or before the time of issuance of the first Security of
such series.
Each Registered Security shall be dated the date of its authentication
and each Bearer Security shall be dated as of the date specified as contemplated
by Section 301.
No Security or coupon appertaining thereto shall be entitled to any
benefit under this Indenture or be valid or obligatory for any purpose unless
there appears on such Security or the Security to which such coupon appertains a
certificate of authentication substantially in the form provided for herein duly
executed by the Trustee by manual signature of an authorized officer, and such
certificate upon any Security shall be conclusive evidence, and the only
evidence, that such Security has been duly authenticated and delivered hereunder
and is entitled to the benefits of this Indenture. Notwithstanding the
foregoing, if any Security shall have been authenticated and delivered hereunder
but never issued and sold by the Trust, and the Trust shall deliver such
Security to the Trustee for cancellation as provided in Section 309 together
with a written statement (which need not comply with Section 102 and need not be
accompanied by an Opinion of Counsel) stating that such Security has never been
issued or sold by the Trust, for all purposes of this Indenture such Security
shall be deemed never to have been authenticated and delivered hereunder and
shall never be entitled to the benefits of this Indenture.
SECTION 304. Temporary Securities.
(a) Pending the preparation of definitive Securities of any series, the
Trust may execute, and upon Trust Order the Trustee shall authenticate and
deliver, temporary Securities which are printed, lithographed, typewritten,
mimeographed or otherwise produced, in any authorized denomination;
substantially of the tenor of the definitive Securities in lieu of which they
are issued, in registered form, or, if authorized, in bearer form with one or
more coupons or without coupons; and with such appropriate insertions,
omissions, substitutions and other variations as the officers executing such
Securities may determine, as conclusively evidenced by their execution of such
Securities. In the case of Securities of any series, such temporary Securities
may be in global form.
Except in the case of temporary Securities in global form (which shall
be exchanged in accordance with Section 304(b) or as otherwise provided in or
pursuant to a Board Resolution), if temporary Securities of any series are
issued, the Trust will cause definitive
25
<PAGE>
Securities of that series to be prepared without unreasonable delay. After the
preparation of definitive Securities of such series, the temporary Securities of
such series shall be exchangeable for definitive Securities of such series upon
surrender of the temporary Securities of such series at the office or agency of
the Trust in a Place of Payment for that series, without charge to the Holder.
Upon surrender for cancellation of any one or more temporary Securities of any
series (accompanied by any non-matured coupons appertaining thereto), the Trust
shall execute and the Trustee shall authenticate and deliver in exchange
therefor a like principal amount of definitive Securities of the same series of
authorized denominations; provided, however, that no definitive Bearer Security
shall be delivered in exchange for a temporary Registered Security; and provided
further that a definitive Bearer Security shall be delivered in exchange for a
temporary Bearer Security only in compliance with the conditions set forth in
Section 303. Until so exchanged, the temporary Securities of any series shall in
all respects be entitled to the same benefits under this Indenture as definitive
Securities of such series.
(b) Unless otherwise provided as contemplated in Section 301, this
Section 304(b) shall govern the exchange of temporary Securities issued in
global form other than through the facilities of DTC. If any such temporary
Security is issued in global form, then such temporary global Security shall,
unless otherwise provided therein, be delivered to the London office of a
depositary or common depositary (the "Common Depositary"), for the benefit of
Euroclear and CEDEL.
Without unnecessary delay but in any event not later than the date
specified in, or determined pursuant to the terms of, any such temporary global
Security (the "Exchange Date"), the Trust shall deliver to the Trustee
definitive Securities, in an aggregate principal amount equal to the principal
amount of such temporary global Security, executed by the Trust. On or after the
Exchange Date, such temporary global Security shall be surrendered by the Common
Depositary to the Trustee, as the Trust's agent for such purpose, to be
exchanged, in whole or from time to time in part, for definitive Securities
without charge, and the Trustee shall authenticate and deliver, in exchange for
each portion of such temporary global Security, an equal aggregate principal
amount of definitive Securities of or within the same series of authorized
denominations and of like tenor as the portion of such temporary global Security
to be exchanged. The definitive Securities to be delivered in exchange for any
such temporary global Security shall be in bearer form, registered form,
permanent global bearer form or permanent global registered form, or any
combination thereof, as specified as contemplated by Section 301, and, if any
combination thereof is so specified, as requested by the beneficial owner
thereof; provided, however, that, unless otherwise specified in such temporary
global Security, upon such presentation by the Common Depositary, such temporary
global Security is accompanied by a certificate dated the Exchange Date or a
subsequent date and signed by Euroclear as to the portion of such temporary
global Security held for its account then to be exchanged and a certificate
dated the Exchange Date or a subsequent date and signed by CEDEL as to the
portion of such temporary global Security held for its account then to be
exchanged, each in the form set forth in Exhibit A-2 to this Indenture or in
such other form as may be established pursuant to Section 301; and provided
26
<PAGE>
further that definitive Bearer Securities shall be delivered in exchange for a
portion of a temporary global Security only in compliance with the requirements
of Section 303.
Unless otherwise specified in such temporary global Security, the
interest of a beneficial owner of Securities of a series in a temporary global
Security shall be exchanged for definitive Securities of the same series and of
like tenor following the Exchange Date when the account holder instructs
Euroclear or CEDEL, as the case may be, to request such exchange on his behalf
and delivers to Euroclear or CEDEL, as the case may be, a certificate in the
form set forth in Exhibit A-1 to this Indenture (or in such other form as may be
established pursuant to Section 301), dated no earlier than 15 days prior to the
Exchange Date, copies of which certificate shall be available from the offices
of Euroclear and CEDEL, the Trustee, any Authenticating Agent appointed for such
series of Securities and each Paying Agent. Unless otherwise specified in such
temporary global Security, any such exchange shall be made free of charge to the
beneficial owners of such temporary global Security, except that a Person
receiving definitive Securities must bear the cost of insurance, postage,
transportation and the like unless such Person takes delivery of such definitive
Securities in person at the offices of Euroclear or CEDEL. Definitive Securities
in bearer form to be delivered in exchange for any portion of a temporary global
Security shall be delivered only outside the United States.
Until exchanged in full as hereinabove provided, the temporary
Securities of any series shall in all respects be entitled to the same benefits
under this Indenture as definitive Securities of the same series and of like
tenor authenticated and delivered hereunder, except that, unless otherwise
specified as contemplated by Section 301, interest payable on a temporary global
Security on an Interest Payment Date for Securities of such series occurring
prior to the applicable Exchange Date shall be payable to Euroclear and CEDEL on
such Interest Payment Date upon delivery by Euroclear and CEDEL to the Trustee
of a certificate or certificates in the form set forth in Exhibit A-2 to this
Indenture (or in such other forms as may be established pursuant to Section
301), for credit without further interest on or after such Interest Payment Date
to the respective accounts of Persons who are the beneficial owners of such
temporary global Security on such Interest Payment Date and who have each
delivered to Euroclear or CEDEL, as the case may be, a certificate dated no
earlier than 15 days prior to the Interest Payment Date occurring prior to such
Exchange Date in the form set forth as Exhibit A-1 to this Indenture (or in such
other forms as may be established pursuant to Section 301). Notwithstanding
anything to the contrary herein contained, the certifications made pursuant to
this paragraph shall satisfy the certification requirements of the preceding two
paragraphs of this Section 304(b) and of the third paragraph of Section 303 of
this Indenture and the interests of the Persons who are the beneficial owners of
the temporary global Security with respect to which such certification was made
will be exchanged for definitive Securities of the same series and of like tenor
on the Exchange Date or the date of certification if such date occurs after the
Exchange Date, without further act or deed by such beneficial owners. Except as
otherwise provided in this paragraph, no payments of principal or interest owing
with respect to a beneficial interest in a temporary global Security will be
made unless and until such interest in such temporary global Security shall have
been exchanged for an interest in a
27
<PAGE>
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
Trust.
SECTION 305. Registration, Registration of Transfer and Exchange.
The Trust shall cause to be kept at the Corporate Trust Office of the
Trustee or in any office or agency of the Trust in a Place of Payment a register
for each series of Securities (the registers maintained in such office or in any
such office or agency of the Trust in a Place of Payment being herein sometimes
referred to collectively as the "Security Register") in which, subject to such
reasonable regulations as it may prescribe, the Trust shall provide for the
registration of Registered Securities and of transfers of Registered Securities.
The Security Register shall be in written form or any other form capable of
being converted into written form within a reasonable time. The Trustee, at its
Corporate Trust Office, is hereby initially appointed "Security Registrar" for
the purpose of registering Registered Securities and transfers of Registered
Securities on such Security Register as herein provided. In the event that the
Trustee shall cease to be Security Registrar, it shall have the right to examine
the Security Register at all reasonable times. Subject to the provisions of this
Section 305, upon surrender for registration of transfer of any Registered
Security of any series at any office or agency of the Trust in a Place of
Payment for that series, the Trust shall execute, and the Trustee shall
authenticate and deliver, in the name of the designated transferee or
transferees, one or more new Registered Securities of the same series, of any
authorized denominations and of a like aggregate principal amount, 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 Trust shall execute, and the Trustee shall
authenticate and deliver, the Registered Securities which the Holder making the
exchange is entitled to receive. Unless otherwise specified with respect to any
series of Securities as contemplated by Section 301, Bearer Securities may not
be issued in exchange for Registered Securities.
If (but only if) permitted as contemplated by Section 301, at the
option of the Holder, Bearer Securities of any series may be exchanged for
Registered Securities of the same series of any authorized denominations and of
a like aggregate principal amount and tenor, upon surrender of the Bearer
Securities to be exchanged at any such office or agency, with all unmatured
coupons and all matured coupons in default thereto appertaining. If the Holder
of a Bearer Security is unable to produce any such unmatured coupon or coupons
or matured coupon or coupons in default, any such permitted exchange may be
effected if the Bearer Securities are accompanied by payment in funds acceptable
to the Trust in an amount equal to
28
<PAGE>
the face amount of such missing coupon or coupons, or the surrender of such
missing coupon or coupons may be waived by the Trust and the Trustee if there is
furnished to them such security or indemnity as they may require to save each of
them and any Paying Agent harmless. If thereafter the Holder of such Security
shall surrender to any Paying Agent any such missing coupon in respect of which
such a payment shall have been made, such Holder shall be entitled to receive
the amount of 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 Trust shall execute, and the Trustee shall
authenticate and deliver, the Securities which the holder making the exchange is
entitled to receive.
Notwithstanding the foregoing, except as otherwise specified as
contemplated by Section 301, any permanent global Security shall be exchangeable
only as provided in this paragraph. If the depositary for any permanent global
Security is DTC, then, unless the terms of such global Security expressly permit
such global Security to be exchanged in whole or in part for definitive
Securities, a global Security may be transferred, in whole but not in part, only
to a nominee of DTC, or by a nominee of DTC to DTC, or to a successor to DTC for
such global Security selected or approved by the Trust or to a nominee of such
successor to DTC. If at any time DTC notifies the Trust that it is unwilling or
unable to continue as depositary for the applicable global Security or
Securities or if at any time DTC ceases to be a clearing agency registered under
the Exchange Act if so required by applicable law or regulation, the Trust shall
appoint a successor depositary with respect to such global Security or
Securities. If (x) a successor depositary for such global Security or Securities
is not appointed by the Trust within 90 days after the Trust receives such
notice or becomes aware of such unwillingness, inability or ineligibility, (y)
an Event of Default has occurred and is continuing and the beneficial owners
representing a majority in principal amount of the applicable series of
Securities represented by such global Security or Securities advise DTC to cease
acting as depositary for such global Security or Securities or (z) the Trust, in
its sole discretion, determines at any time that all Outstanding Securities (but
not less than all) of any series issued or issuable in the form of one or more
global Securities shall no longer be represented by such global Security or
Securities (provided, however, the Trust may not make
29
<PAGE>
such determination during the 40-day restricted period provided by Regulation S
under the Securities Act or during any other similar period during which the
Securities must be held in global form as may be required by the Securities
Act), then the Trust shall execute, and the Trustee shall authenticate and
deliver definitive Securities of like series, rank, tenor and terms in
definitive form in an aggregate principal amount equal to the principal amount
of such global Security or Securities. If any beneficial owner of an interest in
a permanent global Security is otherwise entitled to exchange such interest for
Securities of such series and of like tenor and principal amount of another
authorized form and denomination, as specified as contemplated by Section 301
and provided that any applicable notice provided in the permanent global
Security shall have been given, then without unnecessary delay but in any event
not later than the earliest date on which such interest may be so exchanged, the
Trust shall execute, and the Trustee shall authenticate and deliver definitive
Securities in aggregate principal amount equal to the principal amount of such
beneficial owner's interest in such permanent global Security. On or after the
earliest date on which such interests may be so exchanged, such permanent global
Security shall be surrendered for exchange by DTC or such other depositary as
shall be specified in the Trust Order with respect thereto to the Trustee, as
the Trust's agent for such purpose; provided, however, that no such exchanges
may occur during a period beginning at the opening of business 15 days before
any selection of Securities to be redeemed and ending on the relevant Redemption
Date if the Security for which exchange is requested may be among those selected
for redemption; and provided further that no Bearer Security delivered in
exchange for a portion of a permanent global Security shall be mailed or
otherwise delivered to any location in the United States. If a Registered
Security is issued in exchange for any portion of a permanent global Security
after the close of business at the office or agency where such exchange occurs
on (i) any Regular Record Date and before the opening of business at such office
or agency on the relevant Interest Payment Date, or (ii) any Special Record Date
and the opening of business at such office or agency on the related proposed
date for payment of Defaulted Interest, interest or Defaulted Interest, as the
case may be, will not be payable on such Interest Payment Date or proposed date
for payment, as the case may be, in respect of such Registered Security, but
will be payable on such Interest Payment Date or proposed date for payment, as
the case may be, only to the Person to whom interest in respect of such portion
of such permanent global Security is payable in accordance with the provisions
of this Indenture.
All Securities issued upon any registration of transfer or exchange of
Securities shall be the valid obligations of the Trust, evidencing the same
debt, and entitled to the same benefits under this Indenture, as the Securities
surrendered upon such registration of transfer or exchange.
Every Registered Security presented or surrendered for registration of
transfer or for exchange or redemption shall (if so required by the Trust or the
Security Registrar) be duly endorsed, or be accompanied by a written instrument
of transfer in form satisfactory to the Security Registrar, duly executed by the
Holder thereof or his attorney duly authorized in writing.
30
<PAGE>
No service charge shall be made for any registration of transfer or
exchange of Securities, but the Trust may require payment of a sum sufficient to
cover any tax or other governmental charge that may be imposed in connection
with any registration of transfer or exchange of Securities, other than
exchanges pursuant to Section 304, 906, 1107 or 1305 not involving any transfer.
The Trust or the Trustee, as applicable, shall not be required (i) to
issue, register the transfer of or exchange any Security if such Security may be
among those selected for redemption during a period beginning at the opening of
business 15 days before selection of the Securities to be redeemed under Section
1103 and ending at the close of business on (A) if such Securities are issuable
only as Registered Securities, the day of the mailing of the relevant notice of
redemption and (B) if such Securities are issuable as Bearer Securities, the day
of the first publication of the relevant notice of redemption or, if such
Securities are also issuable as Registered Securities and there is no
publication, the mailing of the relevant notice of redemption, or (ii) to
register the transfer of or exchange any Registered Security so selected for
redemption in whole or in part, except, in the case of any Registered Security
to be redeemed in part, the portion thereof not to be redeemed, or (iii) to
exchange any Bearer Security so selected for redemption except that such a
Bearer Security may be exchanged for a Registered Security of that series and
like tenor; provided that such Registered Security shall be simultaneously
surrendered for redemption, or (iv) to issue, register the transfer of or
exchange any Security which has been surrendered for repayment at the option of
the Holder, except the portion, if any, of such Security not to be so repaid.
SECTION 306. Mutilated, Destroyed, Lost and Stolen Securities.
If any mutilated Security or a Security with a mutilated coupon
appertaining to it is surrendered to the Trustee or the Trust, together with, in
proper cases, such security or indemnity as may be required by the Trust or the
Trustee to save each of them or any agent of either of them harmless, the Trust
shall execute and the Trustee shall authenticate and deliver in exchange
therefor a new Security of the same series and principal amount, containing
identical terms and provisions and bearing a number not contemporaneously
outstanding, with coupons corresponding to the coupons, if any, appertaining to
the surrendered Security.
If there shall be delivered to the Trust and to the Trustee (i)
evidence to their satisfaction of the destruction, loss or theft of any Security
or coupon, and (ii) such security or indemnity as may be required by them to
save each of them and any agent of either of them harmless, then, in the absence
of actual notice to the Trust or the Trustee that such Security or coupon has
been acquired by a bona fide purchaser, the Trust shall execute and upon its
request the Trustee shall authenticate and deliver, in lieu of any such
destroyed, lost or stolen Security or in exchange for the Security to which a
destroyed, lost or stolen coupon appertains (with all appurtenant coupons not
destroyed, lost or stolen), a new Security of the same series and principal
amount, containing identical terms and provisions and bearing a number not
contemporaneously outstanding, with coupons corresponding to the coupons, if
any,
31
<PAGE>
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 Trust in its discretion may, instead of
issuing a new Security, with coupons corresponding to the coupons, if any,
appertaining to such destroyed, lost or stolen Security or to the Security to
which such destroyed, lost or stolen coupon appertains, pay such Security or
coupon; provided, however, that payment of principal of (and premium or
Make-Whole Amount, if any), any interest on and any Additional Amounts with
respect to, Bearer Securities shall, except as otherwise provided in Section
1002, be payable only at an office or agency located outside the United States
and, unless otherwise specified as contemplated by Section 301, any interest on
Bearer Securities shall be payable only upon presentation and surrender of the
coupons appertaining thereto.
Upon the issuance of any new Security under this Section, the Trust may
require the payment of a sum sufficient to cover any tax or other governmental
charge that may be imposed in relation thereto and any other expenses (including
the fees and expenses of the Trustee) connected therewith.
Every new Security of any series with its coupons, if any, issued
pursuant to this Section in lieu of any destroyed, lost or stolen Security, or
in exchange for a Security to which a destroyed, lost or stolen coupon
appertains, shall constitute an original additional contractual obligation of
the Trust, whether or not the destroyed, lost or stolen Security and its
coupons, if any, or the destroyed, lost or stolen coupon shall be at any time
enforceable by anyone, and shall be entitled to all the benefits of this
Indenture equally and proportionately with any and all other Securities of that
series and their coupons, if any, duly issued hereunder.
The provisions of this Section are exclusive and shall preclude (to the
extent lawful) all other rights and remedies with respect to the replacement or
payment of mutilated, destroyed, lost or stolen Securities or coupons.
SECTION 307. Payment of Interest; Interest Rights Preserved.
Except as otherwise specified with respect to a series of Securities in
accordance with the provisions of Section 301, interest on any Registered
Security that is payable, and is punctually paid or duly provided for, on any
Interest Payment Date shall be paid to the Person in whose name that Security
(or one or more Predecessor Securities) is registered at the close of business
on the Regular Record Date for such interest at the office or agency of the
Trust maintained for such purpose pursuant to Section 1002; provided, however,
that each installment of interest on any Registered Security may at the Trust's
option be paid by (i) mailing a check for such interest, payable to or upon the
written order of the Person entitled
32
<PAGE>
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.
Unless otherwise provided as contemplated by Section 301, every
permanent global Security will provide that interest, if any, payable on any
Interest Payment Date will be paid to DTC, Euroclear and/or CEDEL, as the case
may be, with respect to that portion of such permanent global Security held for
its account by Cede & Co. or the Common Depositary, as the case may be, for the
purpose of permitting such party to credit the interest received by it in
respect of such permanent global Security to the accounts of the beneficial
owners thereof.
In case a Bearer Security of any series is surrendered in exchange for
a Registered Security of such series after the close of business (at an office
or agency in a Place of Payment for such series) on any Regular Record Date and
before the opening of business (at such office or agency) on the next succeeding
Interest Payment Date, such Bearer Security shall be surrendered without the
coupon relating to such Interest Payment Date and interest will not be payable
on such Interest Payment Date in respect of the Registered Security issued in
exchange for such Bearer Security, but will be payable only to the Holder of
such coupon when due in accordance with the provisions of this Indenture.
Except as otherwise specified with respect to a series of Securities in
accordance with the provisions of Section 301, any interest on any Registered
Security of any series that is payable, but is not punctually paid or duly
provided for, on any Interest Payment Date (herein called "Defaulted Interest")
shall forthwith cease to be payable to the registered Holder thereof on the
relevant Regular Record Date by virtue of having been such Holder, and such
Defaulted Interest may be paid by the Trust, at its election in each case, as
provided in clause (1) or (2) below:
(1) The Trust may elect to make payment of any Defaulted Interest to
the Persons in whose names the Registered Securities of such series (or their
respective Predecessor Securities) are registered at the close of business on a
Special Record Date for the payment of such Defaulted Interest, which shall be
fixed in the following manner. The Trust shall notify the Trustee in writing of
the amount of Defaulted Interest proposed to be paid on each Registered Security
of such series and the date of the proposed payment (which shall not be less
than 20 days after such notice is received by the Trustee), and at the same time
the Trust shall deposit with the Trustee an amount of money in the currency or
currencies, currency unit or units or composite currency or currencies in which
the Securities of such series are payable (except as otherwise specified
pursuant to Section 301 for the Securities of such series) equal to the
aggregate amount proposed to be paid in respect of such Defaulted Interest or
shall make arrangements satisfactory to the Trustee for such deposit on or prior
to the date of the
33
<PAGE>
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 Trust of such Special Record Date and, in the name and
at the expense of the Trust, shall cause notice of the proposed payment of such
Defaulted Interest and the Special Record Date therefor to be mailed,
first-class postage prepaid, to each Holder of Registered Securities of such
series at his address as it appears in the Security Register not less than 10
days prior to such Special Record Date. The Trustee may, in its discretion, in
the name and at the expense of the Trust, cause a similar notice to be published
at least once in an Authorized Newspaper in each place of payment, but such
publications shall not be a condition precedent to the establishment of such
Special Record Date. Notice of the proposed payment of such Defaulted Interest
and the Special Record Date therefor having been mailed as aforesaid, such
Defaulted Interest shall be paid to the Persons in whose names the Registered
Securities of such series (or their respective Predecessor Securities) are
registered at the close of business on such Special Record Date and shall no
longer be payable pursuant to the following clause (2). In case a Bearer
Security of any series is surrendered at the office or agency in a Place of
Payment for such series in exchange for a Registered Security of such series
after the close of business at such office or agency on any Special Record Date
and before the opening of business at such office or agency on the related
proposed date for payment of Defaulted Interest, such Bearer Security shall be
surrendered without the coupon relating to such proposed date of payment and
Defaulted Interest will not be payable on such proposed date of payment in
respect of the Registered Security issued in exchange for such Bearer Security,
but will be payable only to the Holder of such coupon when due in accordance
with the provisions of this Indenture.
(2) The Trust may make payment of any Defaulted Interest on the
Registered Securities of any series in any other lawful manner not inconsistent
with the requirements of any securities exchange on which such Securities may be
listed, and upon such notice as may be required by such exchange, if, after
notice given by the Trust to the Trustee of the proposed payment pursuant to
this clause, such manner of payment shall be deemed practicable by the Trustee.
Subject to the foregoing provisions of this Section and Section 305,
each Security delivered under this Indenture upon registration of transfer of or
in exchange for or in lieu of any other Security shall carry the rights to
interest accrued and unpaid, and to accrue, which were carried by such other
Security.
SECTION 308. Persons Deemed Owners.
Prior to due presentment of a Registered Security for registration of
transfer, the Trust, the Trustee and any agent of the Trust or the Trustee may
treat the Person in whose name such
34
<PAGE>
Registered Security is registered as the owner of such Security for the purpose
of receiving payment of principal of (and premium or Make-Whole Amount, if any),
and (subject to Sections 305 and 307) interest on, such Registered Security and
for all other purposes whatsoever, whether or not such Registered Security be
overdue, and neither the Trust, the Trustee nor any agent of the Trust or the
Trustee shall be affected by notice to the contrary.
Title to any Bearer Security and any coupons appertaining thereto shall
pass by delivery. The Trust, the Trustee and any agent of the Trust or the
Trustee may treat the Holder of any Bearer Security and the Holder of any coupon
as the absolute owner of such Security or coupon for the purpose of receiving
payment thereof or on account thereof and for all other purposes whatsoever,
whether or not such Security or coupon be overdue, and neither the Trust, the
Trustee nor any agent of the Trust or the Trustee shall be affected by notice to
the contrary.
None of the Trust, the Trustee, any Paying Agent or the Security
Registrar will have any responsibility or liability for any aspect of the
records relating to or payments made on account of beneficial ownership
interests of a Security in global form or for maintaining, supervising or
reviewing any records relating to such beneficial ownership interests.
Notwithstanding the foregoing, with respect to any global Security,
nothing herein shall prevent the Trust, the Trustee, or any agent of the Trust
or the Trustee, from giving effect to any written certification, proxy or other
authorization furnished by any depositary, as a Holder, with respect to such
global Security or impair, as between such depositary and owners of beneficial
interests in such global Security, the operation of customary practices
governing the exercise of the rights of such depositary (or its nominee) as
Holder of such global Security.
SECTION 309. Cancellation.
All Securities and coupons surrendered for payment, redemption,
repayment at the option of the Holder, registration of transfer or exchange or
for credit against any sinking 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. The Trust may at any time
deliver to the Trustee for cancellation any Securities previously authenticated
and delivered hereunder which the Trust may have acquired in any manner
whatsoever, and may deliver to the Trustee (or to any other Person for delivery
to the Trustee) for cancellation any Securities previously authenticated
hereunder which the Trust has not issued and sold, and all Securities so
delivered shall be promptly cancelled by the Trustee. If the Trust shall so
acquire any of the Securities, however, such acquisition shall not operate as a
redemption or satisfaction of the indebtedness represented by such Securities
unless and until the same are surrendered to the Trustee for cancellation. No
Securities shall be authenticated in lieu of or in exchange for any Securities
cancelled as provided in this Section, except as expressly permitted by this
Indenture. Cancelled Securities and coupons held by the Trustee shall be
destroyed by the
35
<PAGE>
Trustee and the Trustee shall deliver a certificate of such destruction to the
Trust, unless by a Trust Order the Trust directs their return to it.
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 IV
SATISFACTION AND DISCHARGE
SECTION 401. Satisfaction and Discharge of Indenture.
This Indenture shall upon Trust Request cease to be of further effect
with respect to any series of Securities specified in such Trust Request (except
as to any surviving rights of registration of transfer or exchange of Securities
of such series herein expressly provided for and any right to receive Additional
Amounts, as provided in Section 1011), and the Trustee, upon receipt of a Trust
Order, and at the expense of the Trust, shall execute proper instruments
acknowledging satisfaction and discharge of this Indenture as to such series
when
(1) either
(A) all Securities of such series theretofore
authenticated and delivered and all coupons, if any,
appertaining thereto (other than (i) coupons appertaining to
Bearer Securities surrendered for exchange for Registered
Securities and maturing after such exchange, whose surrender
is not required or has been waived as provided in Section 305,
(ii) Securities and coupons of such series which have been
destroyed, lost or stolen and which have been replaced or paid
as provided in Section 306, (iii) coupons appertaining to
Securities called for redemption and maturing after the
relevant Redemption Date, whose surrender has been waived as
provided in Section 1106, and (iv) Securities and coupons of
such series for whose payment money has theretofore been
deposited in trust or segregated and held in trust by the
Trust and thereafter repaid to the Trust 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
36
<PAGE>
(ii) will become due and payable at their Stated
Maturity within one year, or
(iii) if redeemable at the option of the Trust, are to
be called for redemption within one year under arrangements
satisfactory to the Trustee for the giving of notice of
redemption by the Trustee in the name, and at the expense,
of the Trust.
And the Trust, in the case of (i), (ii) or (iii) above, has irrevocably
deposited or caused to be deposited with the Trustee as trust funds in trust for
the purpose an amount in the currency or currencies, currency unit or units or
composite currency or currencies in which the Securities of such series are
payable, sufficient to pay and discharge the entire indebtedness on such
Securities and such coupons not theretofore delivered to the Trustee for
cancellation, for principal (and premium or Make-Whole Amount, if any) and
interest, and any Additional Amounts with respect thereto, to the date of such
deposit (in the case of Securities which have become due and payable) or the
Stated Maturity or Redemption Date, as the case may be;
(2) The Trust has paid or caused to be paid all other sums payable
hereunder by the Trust; and
(3) The Trust has delivered to the Trustee an Officers' Certificate and
an Opinion of Counsel, each stating that all conditions precedent herein
provided for relating to the satisfaction and discharge of this Indenture as to
such series have been complied with.
Notwithstanding the satisfaction and discharge of this Indenture, the
obligations of the Trust to the Trustee and any predecessor Trustee under
Section 606, the obligations of the Trust to any Authenticating Agent under
Section 611 and, if money shall have been deposited with and held by the Trustee
pursuant to subclause (B) of clause (1) of this Section, the obligations of the
Trustee under Section 402 and the last paragraph of Section 1003, shall survive.
SECTION 402. Application of Trust Funds.
Subject to the provisions of the last paragraph of Section 1003, all
money deposited with the Trustee pursuant to Section 401 shall be held in trust
and applied by it, in accordance with the provisions of the Securities, the
coupons and this Indenture, to the payment, either directly or through any
Paying Agent (including the Trust acting as its own Paying Agent) as the Trustee
may determine, to the Persons entitled thereto, of the principal (and premium or
Make-Whole Amount, if any), and any interest and Additional Amounts for whose
payment such money has been deposited with or received by the Trustee, but such
money need not be segregated from other funds except to the extent required by
law.
37
<PAGE>
ARTICLE V
REMEDIES
SECTION 501. Events of Default.
Subject to any modifications, additions or deletions relating to any
series of Securities as contemplated pursuant to Section 301, "Event of
Default," wherever used herein with respect to any particular series of
Securities, means any one of the following events (whatever the reason for such
Event of Default and whether or not it shall be voluntary or involuntary or be
effected by operation of law or pursuant to any judgment, decree or order of any
court or any order, rule or regulation of any administrative or governmental
body):
(1) default in the payment of any interest upon or any Additional
Amounts payable in respect of any Security of or within that series or of any
coupon appertaining thereto, when such interest, Additional Amounts or coupon
becomes due and payable, and continuance of such default for a period of 30
days; or
(2) default in the payment of the principal of (or premium or
Make-Whole Amount, if any, on) any Security of that series when it becomes due
and payable at its Maturity; or
(3) default in the deposit of any sinking fund payment, when and as due
by the terms of any Security of that series; or
(4) default in the performance, or breach, of any covenant or warranty
of the Trust in this Indenture with respect to any Security of that series
(other than a covenant or warranty a default in whose performance or whose
breach is elsewhere in this Section specifically dealt with), and continuance of
such default or breach for a period of 60 days after there has been given, by
registered or certified mail, to the Trust by the Trustee or to the Trust and
the Trustee by the Holders of at least 25% in principal amount of the
Outstanding Securities of that series a written notice specifying such default
or breach and requiring it to be remedied and stating that such notice is a
"Notice of Default" hereunder; or
(5) default under any bond, debenture, note, mortgage, indenture or
instrument under which there may be issued or by which there may be secured or
evidenced any indebtedness of the Trust for money borrowed by the Trust (or by
any Subsidiary, the repayment of which the Trust has guaranteed or for which the
Trust is directly responsible or liable as obligor or guarantor), having an
aggregate principal amount outstanding of at least $10,000,000, whether such
indebtedness now exists or shall hereafter be created, which default shall have
resulted in such indebtedness being declared due and payable prior to the date
on which it would otherwise have become due and payable, without such
indebtedness having been discharged, or such acceleration having been rescinded
or annulled, within a period of 10 days after there shall have been given, by
registered or certified mail, to the Trust
38
<PAGE>
by the Trustee or to the Trust and the Trustee by the Holders of at least 10% in
principal amount of the Outstanding Securities of that series a written notice
specifying such default and requiring the Trust to cause such indebtedness to be
discharged or cause such acceleration to be rescinded or annulled and stating
that such notice is a "Notice of Default" hereunder; or
(6) the entry by a court of competent jurisdiction of one or more
judgments, orders or decrees against the Trust or any of its Subsidiaries in an
aggregate amount (excluding amounts covered by insurance) in excess of
$10,000,000 and such judgments, orders or decrees remain undischarged, unstayed
and unsatisfied in an aggregate amount (excluding amounts covered by insurance)
in excess of $10,000,000 for a period of 30 consecutive days; or
(7) the Trust or any Significant Subsidiary pursuant to or within the
meaning of any Bankruptcy Law:
(A) commences a voluntary case,
(B) consents to the entry of an order for relief against it
in an involuntary case,
(C) consents to the appointment of a Custodian of it or for
all or substantially all of its property, or
(D) makes a general assignment for the benefit of its
creditors; or
(8) a court of competent jurisdiction enters an order or decree under
any Bankruptcy Law that:
(A) is for relief against the Trust or any Significant
Subsidiary in an involuntary case,
(B) appoints a Custodian of the Trust or any Significant
Subsidiary or for all or substantially all of either of its
property, or
(C) orders the liquidation of the Trust or any Significant
Subsidiary and the order or decree remains unstayed and in effect
for 90 days; or
(9) any other Event of Default provided with respect to Securities of
that series.
39
<PAGE>
As used in this Section 501, the term "Bankruptcy Law" means Title 11, U.S. Code
or any similar Federal or state law for the relief of debtors and the term
"Custodian" means any receiver, trustee, assignee, liquidator or other similar
official under any Bankruptcy Law.
SECTION 502. Acceleration of Maturity; Rescission and Annulment.
If an Event of Default with respect to Securities of any series at the
time Outstanding occurs and is continuing, then and in every such case the
Trustee or the Holders of not less than 25% in principal amount of the
Outstanding Securities of that series may declare the principal (or, if any
Securities are Original Issue Discount Securities or Indexed Securities, such
portion of the principal as may be specified in the terms thereof) of, and the
Make-Whole Amount, if any, on, all the Securities of that series to be due and
payable immediately, by a notice in writing to the Trust (and to the Trustee if
given by the Holders), and upon any such declaration such principal or specified
portion thereof shall become immediately due and payable.
At any time after such a declaration of acceleration with respect to
Securities of any series has been made and before a judgment or decree for
payment of the money due has been obtained by the Trustee as hereinafter in this
Article provided, the Holders of a majority in principal amount of the
Outstanding Securities of that series, by written notice to the Trust and the
Trustee, may rescind and annul such declaration and its consequences if:
(1) The Trust has paid or deposited with the Trustee a sum sufficient
to pay in the currency, currency unit or composite currency in which the
Securities of such series is payable (except as otherwise specified pursuant to
Section 301 for the Securities of such series):
(A) all overdue installments of interest on and any
Additional Amounts payable in respect of all Outstanding
Securities of that series and any related coupons;
(B) the principal of (and premium or Make-Whole Amount, if
any, on) any Outstanding Securities of that series which have
become due otherwise than by such declaration of acceleration and
interest thereon at the rate or rates borne by or provided for in
such Securities;
(C) to the extent that payment of such interest is lawful,
interest upon overdue installments of interest and any Additional
Amounts at the rate or rates borne by or provided for in such
Securities; and
(D) all sums paid or advanced by the Trustee hereunder and
the reasonable compensation, expenses, disbursements and advances
of the Trustee, its agents and counsel; and
40
<PAGE>
(2) all Events of Default with respect to Securities of that series,
other than the nonpayment of the principal of (or premium or Make-Whole Amount,
if any) or interest on Securities of that series which have become due solely by
such declaration of acceleration, have been cured or waived as provided in
Section 513.
No such rescission shall affect any subsequent default or impair any right
consequent thereon.
SECTION 503. Collection of Indebtedness and Suits for Enforcement by Trustee.
The Trust covenants that if:
(1) default is made in the payment of any installment of interest or
Additional Amounts, if any, on any Security of any series and any related coupon
when such interest or Additional Amount becomes due and payable and such default
continues for a period of 30 days, or
(2) default is made in the payment of the principal of (or premium or
Make-Whole Amount, if any, on) any Security of any series at its Maturity,
then the Trust will, upon demand of the Trustee, pay to the Trustee, for the
benefit of the Holders of such Securities of such series and coupons, the whole
amount then due and payable on such Securities and coupons for principal (and
premium or Make- Whole Amount, if any) and interest and Additional Amounts, with
interest upon any overdue principal (and premium or Make-Whole Amount, if any)
and, to the extent that payment of such interest shall be legally enforceable,
upon any overdue installments of interest or Additional Amounts, if any, at the
rate or rates borne by or provided for in such Securities, and, in addition
thereto, such further amount as shall be sufficient to cover the costs and
expenses of collection, including the reasonable compensation, expenses,
disbursements and advances of the Trustee, its agents and counsel.
If the Trust fails to pay such amounts forthwith upon such demand, the
Trustee, in its own name and as trustee of an express trust, may institute a
judicial proceeding for the collection of the sums so due and unpaid, and may
prosecute such proceeding to judgment or final decree, and may enforce the same
against the Trust or any other obligor upon such Securities of such series and
collect the moneys adjudged or decreed to be payable in the manner provided by
law out of the property of the Trust or any other obligor upon such Securities
of such series, wherever situated.
If an Event of Default with respect to Securities of any series occurs
and is continuing, the Trustee may in its discretion proceed to protect and
enforce its rights and the rights of the Holders of Securities of such series
and any related coupons by such appropriate judicial proceedings as the Trustee
shall deem most effectual to protect and enforce any such rights,
41
<PAGE>
whether for the specific enforcement of any covenant or agreement in this
Indenture or in aid of the exercise of any power granted herein, or to enforce
any other proper remedy.
SECTION 504. Trustee May File Proofs of Claim.
In case of the pendency of any receivership, insolvency, liquidation,
bankruptcy, reorganization, arrangement, adjustment, composition or other
judicial proceeding relative to the Trust or any other obligor upon the
Securities or the property of the Trust or of such other obligor or their
creditors, the Trustee (irrespective of whether the principal of the Securities
of any series shall then be due and payable as therein expressed or by
declaration or otherwise and irrespective of whether the Trustee shall have made
any demand on the Trust for the payment of overdue principal, premium or
Make-Whole Amount, if any, or interest) shall be entitled and empowered, by
intervention in such proceeding or otherwise:
(i) to file and prove a claim for the whole amount, or such
lesser amount as may be provided for in the Securities of such series,
of principal (and premium or Make-Whole Amount, if any) and interest
and Additional Amounts, if any, owing and unpaid in respect of the
Securities and to file such other papers or documents as may be
necessary or advisable in order to have the claims of the Trustee
(including any claim for the reasonable compensation, expenses,
disbursements and advances of the Trustee, its agents and counsel) and
of the Holders 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;
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
42
<PAGE>
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 or
Make-Whole Amount, if any) or interest and any Additional Amounts, upon
presentation of the Securities or coupons, or both, as the case may be, and the
notation thereon of the payment if only partially paid and upon surrender
thereof if fully paid:
FIRST: To the payment of all amounts due the Trustee and any
predecessor Trustee under Section 606,
SECOND: To the payment of the amounts then due and unpaid upon the
Securities and coupons for principal (and premium or Make-Whole Amount, if any)
and interest and any Additional Amounts payable, in respect of which or for the
benefit of which such money has been collected, ratably, without preference or
priority of any kind, according to the aggregate amounts due and payable on such
Securities and coupons for principal (and premium or Make- Whole Amount, if
any), interest and Additional Amounts, respectively, and
THIRD: To the payment of the remainder, if any, to the Trust.
SECTION 507. Limitation on Suits.
No Holder of any Security of any series or any related coupon shall
have any right to institute any proceeding, judicial or otherwise, with respect
to this Indenture, or for the appointment of a receiver or trustee, or for any
other remedy hereunder, unless:
(1) such Holder has previously given written notice to the Trustee of a
continuing Event of Default with respect to the Securities of that series;
(2) the Holders of not less than 25% in principal amount of the
Outstanding Securities of that series shall have made written request to the
Trustee to institute proceedings in respect of such Event of Default in its own
name as Trustee hereunder;
(3) such Holder or Holders have offered to the Trustee reasonable
indemnity against the costs, expenses and liabilities to be incurred in
compliance with such request;
43
<PAGE>
(4) the Trustee for 60 days after its receipt of such notice, request
and offer of indemnity has failed to institute any such proceeding; and
(5) no direction inconsistent with such written request has been given
to the Trustee during such 60-day period by the Holders of a majority in
principal amount of the Outstanding Securities of that series;
It being understood and intended that no one or more of such Holders shall have
any right in any manner whatever by virtue of, or by availing of, any provision
of this Indenture to affect, disturb or prejudice the rights of any other of
such Holders, or to obtain or to seek to obtain priority or preference over any
other of such Holders or to enforce any right under this Indenture, except in
the manner herein provided and for the equal and ratable benefit of all such
Holders.
SECTION 508. Unconditional Right of Holders to Receive Principal, Premium
or Make-Whole Amount, if any, Interest and Additional
Amounts.
Notwithstanding any other provision in this Indenture, the Holder of
any Security or coupon shall have the right which is absolute and unconditional
to receive payment of the principal of (and premium or Make-Whole Amount, if
any) and (subject to Sections 305 and 307) interest on, and any Additional
Amounts in respect of, such Security or payment of such coupon on the respective
due dates expressed in such Security or coupon (or, in the case of redemption,
on the Redemption Date) and to institute suit for the enforcement of any such
payment, and such rights shall not be impaired without the consent of such
Holder.
SECTION 509. Restoration of Rights and Remedies.
If the Trustee or any Holder of a Security or coupon has instituted any
proceeding to enforce any right or remedy under this Indenture and such
proceeding has been discontinued or abandoned for any reason, or has been
determined adversely to the Trustee or to such Holder, then and in every such
case the Trust, the Trustee and the Holders of Securities and coupons shall,
subject to any determination in such proceeding, be restored severally and
respectively to their former positions hereunder and thereafter all rights and
remedies of the Trustee and the Holders shall continue as though no such
proceeding had been instituted.
SECTION 510. Rights and Remedies Cumulative.
Except as otherwise provided with respect to the replacement or payment
of mutilated, destroyed, lost or stolen Securities or coupons in the last
paragraph of Section 306, no right or remedy herein conferred upon or reserved
to the Trustee or to the Holders of Securities or coupons is intended to be
exclusive of any other right or remedy, and every right and remedy shall, to the
extent permitted by law, be cumulative and in addition to every other right and
44
<PAGE>
remedy given hereunder or now or hereafter existing at law or in equity or
otherwise. The assertion or employment of any right or remedy hereunder, or
otherwise, shall not prevent the concurrent assertion or employment of any other
appropriate right or remedy.
SECTION 511. Delay or Omission Not Waiver.
No delay or omission of the Trustee or of any Holder of any Security or
coupon to exercise any right or remedy accruing upon any Event of Default shall
impair any such right or remedy or constitute a waiver of any such Event of
Default or an acquiescence therein. Every right and remedy given by this Article
or by law to the Trustee or to the Holders may be exercised front time to time,
and as often as may be deemed expedient, by the Trustee or by the Holders of
Securities or coupons, as the case may be.
SECTION 512. Control by Holders of Securities.
The Holders of not less than a majority in principal amount of the
Outstanding Securities of any series shall have the right to direct the time,
method and place of conducting any proceeding for any remedy available to the
Trustee or exercising any trust or power conferred on the Trustee with respect
to the Securities of such series, provided that
(1) such direction shall not be in conflict with any rule of law or
with this Indenture,
(2) the Trustee may take any other action deemed proper by the Trustee
which is not inconsistent with such direction, and
(3) the Trustee need not take any action which might involve it in
personal liability or be unduly prejudicial to the Holders of Securities of such
series not joining therein (but the Trustee shall have no obligation as to the
determination of such undue prejudice).
SECTION 513. Waiver of Past Defaults.
The Holders of not less than a majority in principal amount of the
Outstanding Securities of any series may on behalf of the Holders of all the
Securities of such series and any related coupons waive any past default
hereunder with respect to such series and its consequences, except a default
(1) in the payment of the principal of (or premium or Make-Whole
Amount, if any) or interest on or Additional Amounts payable in respect of any
Security of such series or any related coupons, or
45
<PAGE>
(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 Trust covenants (to the extent that it may lawfully do so) that it
will not at any time insist upon, or plead, or in any manner whatsoever claim or
take the benefit or advantage of, any usury, stay or extension law wherever
enacted, now or at any time hereafter in force, which may affect the covenants
or the performance of this Indenture; and the Trust (to the extent that it may
lawfully do so) hereby expressly waives all benefit or advantage of any such
law, and covenants that it will not hinder, delay or impede the execution of any
power herein granted to the Trustee, but will suffer and permit the execution of
every such power as though no such law had been enacted.
SECTION 515. Undertaking for Costs.
All parties to this Indenture agree, and each Holder of any Security by
his acceptance thereof shall be deemed to have agreed, that any court may in its
discretion require, in any suit for the enforcement of any right or remedy under
this Indenture, or in any suit against the Trustee for any action taken or
omitted by it as Trustee, the filing by any party litigant in such suit of any
undertaking to pay the costs of such suit, and that such court may in its
discretion assess reasonable costs, including reasonable attorneys' fees,
against any party litigant in such suit having due regard to the merits and good
faith of the claims or defenses made by such party litigant; but the provisions
of this Section shall not apply to any suit instituted by the Trustee, to any
suit instituted by any Holder, or group of Holders, holding in the aggregate
more than 10% in principal amount of the Outstanding Securities, or to any suit
instituted by any Holder for the enforcement of the payment of the principal of
(or premium or Make- Whole Amount, if any) or interest on or Additional Amounts
payable with respect to any Security on or after the respective Stated
Maturities expressed in such Security (or, in the case of redemption, on or
after the Redemption Date).
46
<PAGE>
ARTICLE VI
THE TRUSTEE
SECTION 601. Notice of Defaults.
Within 90 days after the occurrence of any default hereunder with
respect to the Securities of any series, the Trustee shall transmit in the
manner and to the extent provided in TIA Section 313(c), notice of such default
hereunder known to the Trustee, unless such default shall have been cured or
waived; provided, however, that, except in the case of a default in the payment
of the principal of (or premium or Make-Whole Amount, if any) or interest on or
any Additional Amounts with respect to any Security of such series, or in the
payment of any sinking fund installment with respect to the Securities of such
series, the Trustee shall be protected in withholding such notice if and so long
as Responsible Officers of the Trustee in good faith determine that the
withholding of such notice is in the interests of the Holders of the Securities
and coupons of such series; and provided further that in the case of any default
or breach of the character specified in Section 501(4) with respect to the
Securities and coupons of such series, no such notice to Holders shall be given
until at least 60 days after the occurrence thereof. For the purpose of this
Section, the term "default" means any event which is, or after notice or lapse
of time or both would become, an Event of Default with respect to the Securities
of such series.
SECTION 602. Certain Rights of Trustee.
Subject to the provisions of TIA Section 315(a) through 315(d):
(1) the Trustee shall perform only such duties as are expressly
undertaken by it to perform under this Indenture;
(2) the Trustee may rely and shall be protected in acting or refraining
from acting upon any resolution, certificate, statement, instrument, opinion,
report, notice, request, direction, consent, order, bond, debenture, note,
coupon or other paper or document believed by it to be genuine and to have been
signed or presented by the proper party or parties;
(3) any request or direction of the Trust mentioned herein shall be
sufficiently evidenced by a Trust Request or Trust Order (other than delivery of
any Security, together with any coupons appertaining thereto, to the Trustee for
authentication and delivery pursuant to Section 303 which shall be sufficiently
evidenced as provided therein) and any resolution of the Board of Directors may
be sufficiently evidenced by a Board Resolution;
(4) whenever in the administration of this Indenture the Trustee shall
deem it desirable that a matter be proved or established prior to taking,
suffering or omitting any
47
<PAGE>
action hereunder, the Trustee (unless other evidence be herein specifically
prescribed) may, in the absence of bad faith on its part, rely upon an Officers'
Certificate;
(5) the Trustee may consult with counsel and as a condition to the
taking, suffering or omission of any action hereunder may demand an Opinion of
Counsel, and the advice of such counsel or any Opinion of Counsel shall be full
and complete authorization and protection in respect of any action taken,
suffered or omitted by it hereunder in good faith and in reliance thereon;
(6) the Trustee shall be under no obligation to exercise any of the
rights or powers vested in it by this Indenture at the request or direction of
any of the Holders of Securities of any series or any related coupons pursuant
to this Indenture, unless such Holders shall have offered to the Trustee
reasonable security or indemnity against the costs, expenses and liabilities
which might be incurred by it in compliance with such request or direction;
(7) the Trustee shall not be bound to make any investigation into the
facts or matters stated in any resolution, certificate, statement, instrument,
opinion, report, notice, request, direction, consent, order, bond, debenture,
note, coupon or other paper or document, but the Trustee, in its discretion, may
make such further inquiry or investigation into such facts or matters as it may
see fit, and, if the Trustee shall determine to make such further inquiry or
investigation, it shall be entitled to examine the books, records and premises
of the Trust, personally or by agent or attorney;
(8) the Trustee may execute any of the trusts or powers hereunder or
perform any duties hereunder either directly or by or through agents or
attorneys and the Trustee shall not be responsible for any misconduct or
negligence on the part of any agent or attorney appointed with due care by it
hereunder; and
(9) the Trustee shall not be liable for any action taken, suffered or
omitted by it in good faith and reasonably believed by it to be authorized or
within the discretion or rights or powers conferred upon it by this Indenture.
The Trustee shall not be required to expend or risk its own funds or
otherwise incur any financial liability in the performance of any of its duties
hereunder, or in the exercise of any of its rights or powers, if it shall have
reasonable grounds for believing that repayment of such funds or adequate
indemnity against such risk or liability is not reasonably assured to it.
SECTION 603. Not Responsible for Recitals or Issuance of Securities.
The recitals contained herein and in the Securities, except the
Trustee's certificate of authentication, and in any coupons shall be taken as
the statements of the Trust, and neither the Trustee nor any Authenticating
Agent assumes any responsibility for their correctness. The Trustee makes no
representations as to the validity or sufficiency of this Indenture or of the
48
<PAGE>
Securities or coupons, except that the Trustee represents that it is duly
authorized to execute and deliver this Indenture, authenticate the Securities
and perform its obligations hereunder. Neither the Trustee nor any
Authenticating Agent shall be accountable for the use or application by the
Trust of Securities or the proceeds thereof.
SECTION 604. May Hold Securities.
The Trustee, any Paying Agent, Security Registrar, Authenticating Agent
or any other agent of the Trust, in its individual or any other capacity, may
become the owner or pledgee of Securities and coupons and, subject to TIA
Sections 310(b) and 311, may otherwise deal with the Trust with the same rights
it would have if it were not Trustee, Paying Agent, Security Registrar,
Authenticating Agent or such other agent.
SECTION 605. Money Held in Trust.
Money held by the Trustee in trust hereunder need not be segregated
from other funds except to the extent required by law. The Trustee shall be
under no liability for interest on, or investment of, any money received by it
hereunder.
SECTION 606. Compensation and Reimbursement.
The Trust agrees:
(1) to pay to the Trustee from time to time reasonable compensation for
all services rendered by it hereunder, including extraordinary services rendered
in connection with or during the continuation of a default hereunder (which
compensation shall not be limited by any provision of law in regard to the
compensation of a trustee of an express trust);
(2) except as otherwise expressly provided herein, to reimburse each of
the Trustee and any predecessor Trustee upon its request for all reasonable
expenses, disbursements and advances incurred or made by it in accordance with
any provision of this Indenture (including the reasonable compensation and the
expenses and disbursements of its agents and counsel), except to the extent any
such expense, disbursement or advance may be attributable to its negligence or
bad faith; and
(3) to indemnify each of the Trustee and any predecessor Trustee for,
and to hold it harmless against, any loss, liability or expense, arising out of
or in connection with the acceptance or administration of the trust or trusts or
the performance of its duties hereunder, including the costs and expenses of
defending itself against any claim or liability in connection with the exercise
or performance of any of its powers or duties hereunder except to the extent any
such loss, liability or expense may be attributable to its own negligence or bad
faith. As security for the performance of the obligations of the Trust under
this Section, the Trustee shall have a lien prior to the Securities upon all
property and funds held or collected by the
49
<PAGE>
Trustee as such, except funds held in trust for the payment of principal of (or
premium or Make-Whole Amount, if any) or interest on particular Securities or
any coupons.
The provisions of this Section shall survive the termination of this
Indenture.
SECTION 607. Corporate Trustee Required; Eligibility; Conflicting Interests.
There shall at all times be a Trustee hereunder which shall be eligible
to act as Trustee under TIA Section 310(a)(1) and shall have a combined capital
and surplus of at least $25,000,000. If such corporation publishes reports of
condition at least annually, pursuant to law or the requirements of Federal,
State, Territorial or District of Columbia supervising or examining authority,
then for the purposes of this Section, the combined capital and surplus of such
corporation shall be deemed to be its combined capital and surplus as set forth
in its most recent report of condition so published. If at any time the Trustee
shall cease to be eligible in accordance with the provisions of this Section, it
shall resign immediately in the manner and with the effect hereinafter specified
in this Article.
SECTION 608. Resignation and Removal; Appointment of Successor.
(a) No resignation or removal of the Trustee and no appointment of a
successor Trustee pursuant to this Article shall become effective until the
acceptance of appointment by the successor Trustee in accordance with the
applicable requirements of Section 609.
(b) The Trustee may resign at any time with respect to the Securities
of one or more series by giving written notice thereof to the Trust. If an
instrument of acceptance by a successor Trustee shall not have been delivered to
the Trustee within 30 days after the giving of such notice of resignation, the
resigning Trustee may petition any court of competent jurisdiction for the
appointment of a successor Trustee.
(c) The Trustee may be removed at any time with respect to the
Securities of any series by Act of the Holders of a majority in principal amount
of the Outstanding Securities of such series delivered to the Trustee and to the
Trust.
(d) If at any time:
(i) the Trustee shall fail to comply with the provisions of
TIA Section 310(b) after written request therefor by the Trust or by
any Holder of a Security who has been a bona fide Holder of a Security
for at least six months, or
(ii) the Trustee shall cease to be eligible under Section 607
and shall fail to resign after written request therefor by the Trust or
by any Holder of a Security who has been a bona fide Holder of a
Security for at least six months, or
50
<PAGE>
(iii) the Trustee shall become incapable of acting or shall be
adjudged a bankrupt or insolvent or a receiver of the Trustee or of its
property shall be appointed or any public officer shall take charge or
control of the Trustee or of its property or affairs for the purpose of
rehabilitation, conservation or liquidation,
then, in any such case, (i) the Trust by or pursuant to a Board Resolution may
remove the Trustee and appoint a successor Trustee with respect to all
Securities, or (ii) subject to TIA Section 315(e), any Holder of a Security who
has been a bona fide Holder of a Security for at least six months may, on behalf
of himself and all others similarly situated, petition any court of competent
jurisdiction for the removal of the Trustee with respect to all Securities and
the appointment of a successor Trustee or Trustees.
(e) If the Trustee shall resign, be removed or become incapable of
acting, or if a vacancy shall occur in the office of Trustee for any cause with
respect to the Securities of one or more series, the Trust, by or pursuant to a
Board Resolution, shall promptly appoint a successor Trustee or Trustees with
respect to the Securities of that or those series (it being understood that any
such successor Trustee may be appointed with respect to the Securities of one or
more or all of such series and that at any time there shall be only one Trustee
with respect to the Securities of any particular series). If, within one year
after such resignation, removal or incapability, or the occurrence of such
vacancy, a successor Trustee with respect to the Securities of any series shall
be appointed by Act of the Holders of a majority in principal amount of the
Outstanding Securities of such series delivered to the Trust and the retiring
Trustee, the successor Trustee so appointed shall, forthwith upon its acceptance
of such appointment, become the successor Trustee with respect to the Securities
of such series and to that extent supersede the successor Trustee appointed by
the Trust. If no successor Trustee with respect to the Securities of any series
shall have been so appointed by the Trust or the Holders of Securities and
accepted appointment in the manner hereinafter provided, any Holder of a
Security who has been a bona fide Holder of a Security of such series for at
least six months may, on behalf of himself and all others similarly situated,
petition any court of competent jurisdiction for the appointment of a successor
Trustee with respect to Securities of such series.
(f) The Trust shall give notice of each resignation and each removal of
the Trustee with respect to the Securities of any series and each appointment of
a successor Trustee with respect to the Securities of any series in the manner
provided for notices to the Holders of Securities in Section 106. Each notice
shall include the name of the successor Trustee with respect to the Securities
of such series and the address of its Corporate Trust Office.
SECTION 609. Acceptance of Appointment By Successor.
(a) In case of the appointment hereunder of a successor Trustee with
respect to all Securities, every such successor Trustee shall execute,
acknowledge and deliver to the Trust and to the retiring Trustee an instrument
accepting such appointment, and thereupon the
51
<PAGE>
resignation or removal of the retiring Trustee shall become effective and such
successor Trustee, without any further act, deed or conveyance, shall become
vested with all the rights, powers, trusts and duties of the retiring Trustee;
but, on request of the Trust or the successor Trustee, such retiring Trustee
shall, upon payment of its charges, execute and deliver an instrument
transferring to such successor Trustee all the rights, powers and trusts of the
retiring Trustee, and shall duly assign, transfer and deliver to such successor
Trustee all property and money held by such retiring Trustee hereunder, subject
nevertheless to its claim, if any, provided for in Section 606.
(b) In case of the appointment hereunder of a successor Trustee with
respect to the Securities of one or more (but not all) series, the Trust, the
retiring Trustee and each successor Trustee with respect to the Securities of
one or more series shall execute and deliver an indenture supplemental hereto,
pursuant to Article Nine hereof, wherein each successor Trustee shall accept
such appointment and which (1) shall contain such provisions as shall be
necessary or desirable to transfer and confirm to, and to vest in, each
successor Trustee all the rights, powers, trusts and duties of the retiring
Trustee with respect to the Securities of that or those series to which the
appointment of such successor Trustee relates, (2) if the retiring Trustee is
not retiring with respect to all Securities, shall contain such provisions as
shall be deemed necessary or desirable to confirm that all the rights, powers,
trusts and duties of the retiring Trustee with respect to the Securities of that
or those series as to which the retiring Trustee is not retiring shall continue
to be vested in the retiring Trustee, and (3) shall add to or change any of the
provisions of this Indenture as shall be necessary to provide for or facilitate
the administration of the trusts hereunder by more than one Trustee, it being
understood that nothing herein or in such supplemental indenture shall
constitute such Trustees co-trustees of the same trust and that each such
Trustee shall be trustee of a trust or trusts hereunder separate and apart from
any trust or trusts hereunder administered by any other such Trustee; and upon
the execution and delivery of such supplemental indenture the resignation or
removal of the retiring Trustee shall become effective to the extent provided
therein and each such successor Trustee, without any further act, deed or
conveyance, shall become vested with all the rights, powers, trusts and duties
of the retiring Trustee with respect to the Securities of that or those series
to which the appointment of such successor Trustee relates; but, on request of
the Trust or any successor Trustee, such retiring Trustee shall duly assign,
transfer and deliver to such successor Trustee all property and money held by
such retiring Trustee hereunder with respect to the Securities of that or those
series to which the appointment of such successor Trustee relates.
(c) Upon request of any such successor Trustee, the Trust shall execute
any and all instruments for more fully and certainly vesting in and confirming
to such successor Trustee all such rights, powers and trusts referred to in
paragraph (a) or (b) of this Section, as the case may be.
(d) No successor Trustee shall accept its appointment unless at the
time of such acceptance such successor Trustee shall be qualified and eligible
under this Article.
52
<PAGE>
SECTION 610. Merger, Conversion, Consolidation or Succession to Business.
Any corporation into which the Trustee may be merged or converted or
with which it may be consolidated, or any corporation resulting from any merger,
conversion or consolidation to which the Trustee shall be a party, or any
corporation succeeding to all or substantially all of the corporate trust
business of the Trustee, shall be the successor of the Trustee hereunder,
provided such corporation shall be otherwise qualified and eligible under this
Article, without the execution or filing of any paper or any further act on the
part of any of the parties hereto. In case any Securities or coupons shall have
been authenticated, but not delivered, by the Trustee then in office, any
successor by merger, conversion or consolidation to such authenticating Trustee
may adopt such authentication and deliver the Securities or coupons so
authenticated with the same effect as if such successor Trustee had itself
authenticated such Securities or coupons. In case any Securities or coupons
shall not have been authenticated by such predecessor Trustee, any such
successor Trustee may authenticate and deliver such Securities or coupons, in
either its own name or that of its predecessor Trustee, with the full force and
effect which this Indenture provides for the certificate of authentication of
the Trustee.
SECTION 611. Appointment of Authenticating Agent.
At any time when any of the Securities remain Outstanding, the Trustee
may appoint an Authenticating Agent or Agents with respect to one or more series
of Securities which shall be authorized to act on behalf of the Trustee to
authenticate Securities of such series issued upon exchange, registration of
transfer or partial redemption or repayment thereof, and Securities so
authenticated shall be entitled to the benefits of this Indenture and shall be
valid and obligatory for all purposes as if authenticated by the Trustee
hereunder. Any such appointment shall be evidenced by an instrument in writing
signed by a Responsible Officer of the Trustee, a copy of which instrument shall
be promptly furnished to the Trust. Wherever reference is made in this Indenture
to the authentication and delivery of Securities by the Trustee or the Trustee's
certificate of authentication, such reference shall be deemed to include
authentication and delivery on behalf of the Trustee by an Authenticating Agent
and a certificate of authentication executed on behalf of the Trustee by an
Authenticating Agent. Each Authenticating Agent shall be acceptable to the Trust
and, except as may otherwise be provided pursuant to Section 301, shall at all
times be a bank or trust company or corporation organized and doing business and
in good standing under the laws of the United States of America or of any State
or the District of Columbia, authorized under such laws to act as Authenticating
Agent, having a combined capital and surplus of not less than $25,000,000 and
subject to supervision or examination by 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
53
<PAGE>
cease to be eligible in accordance with the provisions of this Section, such
Authenticating Agent shall resign immediately in the manner and with the effect
specified in this Section.
Any corporation into which an Authenticating Agent may be merged or
converted or with which it may be consolidated, or any corporation resulting
from any merger, conversion or consolidation to which such Authenticating Agent
shall be a party, or any corporation succeeding to the corporate agency or
corporate trust business of an Authenticating Agent, shall continue to be an
Authenticating Agent, provided such corporation shall be otherwise eligible
under this Section, without the execution or filing of any paper or further act
on the part of the Trustee or the Authenticating Agent.
An Authenticating Agent for any series of Securities may at any time
resign by giving written notice of resignation to the Trustee for such series
and to the Trust. The Trustee for any series of Securities may at any time
terminate the agency of an Authenticating Agent by giving written notice of
termination to such Authenticating Agent and to the Trust. Upon receiving such a
notice of resignation or upon such a termination, or in case at any time such
Authenticating Agent shall cease to be eligible in accordance with the
provisions of this Section, the Trustee for such series may appoint a successor
Authenticating Agent which shall be acceptable to the Trust and shall give
notice of such appointment to all Holders of Securities of or within the series
with respect to which such Authenticating Agent will serve in the manner set
forth in Section 106. Any successor Authenticating Agent upon acceptance of its
appointment hereunder shall become vested with all the rights, powers and duties
of its predecessor hereunder, with like effect as if originally named as an
Authenticating Agent herein. No successor Authenticating Agent shall be
appointed unless eligible under the provisions of this Section.
The Trust agrees to pay to each Authenticating Agent from time to time
reasonable compensation including reimbursement of its reasonable expenses for
its services under this Section.
If an appointment with respect to one or more series is made pursuant
to this Section, the Securities of such series may have endorsed thereon, in
addition to or in lieu of the Trustee's certificate of authentication, an
alternate certificate of authentication substantially in the following form:
This is one of the Securities of the series designated therein referred
to in the within-mentioned Indenture.
, as Trustee
54
<PAGE>
By:
---------------------------------
as Authenticating Agent
By:
---------------------------------
Authorized Officer
ARTICLE VII
HOLDERS' LISTS AND REPORTS BY TRUSTEE AND TRUST
SECTION 701. Disclosure of Names and Addresses of Holders.
Every Holder of Securities or coupons, by receiving and holding the
same, agrees with the Trust and the Trustee that neither the Trust nor the
Trustee nor any Authenticating Agent nor any Paying Agent nor any Security
Registrar shall be held accountable by reason of the disclosure of any
information as to the names and addresses of the Holders of Securities in
accordance with TIA Section 312, regardless of the source from which such
information was derived, and that the Trustee shall not be held accountable by
reason of mailing any material pursuant to a request made under TIA Section
312(b).
SECTION 702. Reports by Trustee.
Within 60 days after August 1 of each year commencing with the first
August 1 after the first issuance of Securities pursuant to this Indenture, the
Trustee shall transmit by mail to all Holders of Securities as provided in TIA
Section 313(c) a brief report dated as of such August 1 if required by TIA
Section 313(a).
SECTION 703. Reports by Trust.
The Trust will:
(1) file with the Trustee, within 15 days after the Trust is required
to file the same with the Commission, copies of the annual reports and of the
information, documents and other reports (or copies of such portions of any of
the foregoing as the Commission may from time to time by rules and regulations
prescribe) which the Trust may be required to file with the Commission pursuant
to Section 13 or Section 15(d) of the Exchange Act; or, if the Trust is not
required to file information, documents or reports pursuant to either of such
Sections, then it will file with the Trustee and the Commission, in accordance
with rules and regulations prescribed from time to time by the Commission, such
of the supplementary and periodic information, documents and reports which may
be required pursuant to Section 13 of the Exchange Act in respect of a security
listed and registered on a national securities exchange as may be prescribed
from time to time in such rules and regulations;
55
<PAGE>
(2) file with the Trustee and the Commission, in accordance with rules
and regulations prescribed from time to time by the Commission, such additional
information, documents and reports with respect to compliance by the Trust with
the conditions and covenants of this Indenture as may be required from time to
time by such rules and regulations; and
(3) transmit by mail to the Holders of Securities, within 30 days after
the filing thereof with the Trustee, in the manner and to the extent provided in
TIA Section 313(c), such summaries of any information, documents and reports
required to be filed by the Trust pursuant to paragraphs (1) and (2) of this
Section as may be required by rules and regulations prescribed from time to time
by the Commission.
SECTION 704. Trust to Furnish Trustee Names and Addresses of Holders.
The Trust will furnish or cause to be furnished to the Trustee:
(a) semi-annually, not later than 15 days after the Regular Record Date
for interest for each series of Securities, a list, in such form as the Trustee
may reasonably require, of the names and addresses of the Holders of Registered
Securities of such series as of such Regular Record Date, or if there is no
Regular Record Date for interest for such series of Securities, semi-annually,
upon such dates as are set forth in the Board Resolution or indenture
supplemental hereto authorizing such series, and
(b) at such other times as the Trustee may request in writing, within
30 days after the receipt by the Trust of any such request, a list of similar
form and content as of a date not more than 15 days prior to the time such list
is furnished,
provided, however, that, so long as the Trustee is the Security Registrar, no
such list shall be required to be furnished.
ARTICLE VIII
CONSOLIDATION, MERGER, SALE, LEASE OR CONVEYANCE
SECTION 801. Consolidations and Mergers of Trust and Sales, Leases and
Conveyances Permitted Subject to Certain Conditions.
The Trust may consolidate with, or sell, lease or convey all or
substantially all of its assets to, or merge with or into any other Person,
provided that in any such case, (i) either the Trust shall be the continuing
entity, or the successor (if other than the Trust) entity shall be a Person
organized and existing under the laws of the United States or a State thereof
and such successor entity shall expressly assume the due and punctual payment of
the principal of (and
56
<PAGE>
premium or Make-Whole Amount, if any) and any interest (including all Additional
Amounts, if any, payable pursuant to Section 1011) on all of the Securities,
according to their tenor, and the due and punctual performance and observance of
all of the covenants and conditions of this Indenture to be performed by the
Trust by supplemental indenture, complying with Article Nine hereof,
satisfactory to the Trustee, executed and delivered to the Trustee by such
Person and (ii) immediately after giving effect to such transaction and treating
any indebtedness which becomes an obligation of the Trust or any Subsidiary as a
result thereof as having been incurred by the Trust or such Subsidiary at the
time of such transaction, no Event of Default, and no event which, after notice
or the lapse of time, or both, would become an Event of Default, shall have
occurred and be continuing.
SECTION 802. Rights and Duties of Successor Corporation.
In case of any such consolidation, merger, sale, lease or conveyance
and upon any such assumption by the successor entity, such successor entity
shall succeed to and be substituted for the Trust, with the same effect as if it
had been named herein as the party of the first part, and the predecessor
entity, except in the event of a lease, shall be relieved of any further
obligation under this Indenture and the Securities. Such successor entity
thereupon may cause to be signed, and may issue either in its own name or in the
name of the Trust, any or all of the Securities issuable hereunder which
theretofore shall not have been signed by the Trust and delivered to the
Trustee; and, upon the order of such successor entity, instead of the Trust, and
subject to all the terms, conditions and limitations in this Indenture
prescribed, the Trustee shall authenticate and shall deliver any Securities
which previously shall have been signed and delivered by the officers of the
Trust to the Trustee for authentication, and any Securities which such successor
entity thereafter shall cause to be signed and delivered to the Trustee for that
purpose. All the Securities so issued shall in all respects have the same legal
rank and benefit under this Indenture as the Securities theretofore or
thereafter issued in accordance with the terms of this Indenture as though all
of such Securities had been issued at the date of the execution hereof.
In case of any such consolidation, merger, sale, lease or conveyance,
such changes in phraseology and form (but not in substance) may be made in the
Securities thereafter to be issued as may be appropriate.
SECTION 803. Officers' Certificate and Opinion of Counsel.
Any consolidation, merger, sale, lease or conveyance permitted under
Section 801 is also subject to the condition that the Trustee receive an
Officers' Certificate and an Opinion of Counsel to the effect that any such
consolidation, merger, sale, lease or conveyance, and the assumption by any
successor entity, complies with the provisions of this Article and that all
conditions precedent herein provided for relating to such transaction have been
complied with.
57
<PAGE>
ARTICLE IX
SUPPLEMENTAL INDENTURES
SECTION 901. Supplemental Indentures Without Consent of Holders.
Without the consent of any Holders of Securities or coupons, the Trust,
when authorized by or pursuant to a Board Resolution, and the Trustee, at any
time and from time to time, may enter into one or more indentures supplemental
hereto, in form satisfactory to the Trustee, for any of the following purposes:
(1) to evidence the succession of another Person to the Trust and the
assumption by any such successor of the covenants of the Trust herein and in the
Securities contained; or
(2) to add to the covenants of the Trust for the benefit of the Holders
of all or any series of Securities (and, if such covenants are to be for the
benefit of less than all series of Securities, stating that such covenants are
expressly being included solely for the benefit of such series) or to surrender
any right or power herein conferred upon the Trust; or
(3) to add any additional Events of Default for the benefit of the
Holders of all or any series of Securities (and if such Events of Default are to
be for the benefit of less than all series of Securities, stating that such
Events of Default are expressly being included solely for the benefit of such
series); provided, however, that in respect of any such additional Events of
Default such supplemental indenture may provide for a particular period of grace
after default (which period may be shorter or longer than that allowed in the
case of other defaults) or may provide for an immediate enforcement upon such
default or may limit the remedies available to the Trustee upon such default or
may limit the right of the Holders of a majority in aggregate principal amount
of that or those series of Securities to which such additional Events of Default
apply to waive such default; or
(4) to add to or change any of the provisions of this Indenture to
provide that Bearer Securities may be registrable as to principal, to change or
eliminate any restrictions on the payment of principal of or any premium,
Make-Whole Amount or interest on Bearer Securities, to permit Bearer Securities
to be issued in exchange for Registered Securities, to permit Bearer Securities
to be issued in exchange for Bearer Securities of other authorized denominations
or to permit or facilitate the issuance of Securities in uncertificated form,
provided that any such action shall not adversely affect the interests of the
Holders of Securities of any series or any related coupons in any material
respect; or
(5) to change or eliminate any of the provisions of this Indenture,
provided that any such change or elimination shall become effective only when
there is no Security Outstanding of any series created prior to the execution of
such supplemental indenture which is entitled to the benefit of such provision;
or
58
<PAGE>
(6) to secure the Securities; or
(7) to establish the form or terms of Securities of any series and any
related coupons as permitted by Sections 201 and 301, including the provisions
and procedures relating to Securities convertible into Capital Stock; or
(8) to evidence and provide for the acceptance of appointment hereunder
by a successor Trustee with respect to the Securities of one or more series and
to add to or change any of the provisions of this Indenture as shall be
necessary to provide for or facilitate the administration of the trusts
hereunder by more than one Trustee; or
(9) to cure any ambiguity, to correct or supplement any provision
herein which may be defective or inconsistent with any other provision herein,
or to make any other provisions with respect to matters or questions arising
under this Indenture which shall not be inconsistent with the provisions of this
Indenture or to make any other changes, provided that in each case, such
provisions shall not adversely affect the interests of the Holders of Securities
of any series or any related coupons in any material respect; or
(10) to close this Indenture with respect to the authentication and
delivery of additional series of Securities or to qualify, or maintain
qualification of, this Indenture under the TIA; or
(11) to supplement any of the provisions of this Indenture to such
extent as shall be necessary to permit or facilitate the defeasance and
discharge of any series of Securities pursuant to Sections 401, 1402 and 1403;
provided in each case that any such action shall not adversely affect the
interests of the Holders of Securities of such series and any related coupons or
any other series of Securities in any material respect.
SECTION 902. Supplemental Indentures with Consent of Holders.
With the consent of the Holders of not less than a majority in
principal amount of all Outstanding Securities affected by such supplemental
indenture, by Act of said Holders delivered to the Trust and the Trustee, the
Trust, when authorized by or pursuant to a Board Resolution, and the Trustee may
enter into an indenture or indentures supplemental hereto for the purpose of
adding any provisions to or changing in any manner or eliminating any of the
provisions of this Indenture or of modifying in any manner the rights of the
Holders of Securities and any related coupons under this Indenture; provided,
however, that no such supplemental indenture shall, without the consent of the
Holder of each Outstanding Security affected thereby:
(1) change the Stated Maturity of the principal of (or premium or
Make-Whole Amount, if any, on) or any installment of principal of or interest
on, any Security; or reduce
59
<PAGE>
the principal amount thereof or the rate or amount of interest thereon or any
Additional Amounts payable in respect thereof, or any premium or Make-Whole
Amount payable upon the redemption thereof, or change any obligation of the
Trust to pay Additional Amounts pursuant to Section 1011 (except as contemplated
by Section 801(1) and permitted by Section 901(1)), or reduce the amount of the
principal of an Original Issue Discount Security or Make- Whole Amount, if any,
that would be due and payable upon a declaration of acceleration of the Maturity
thereof pursuant to Section 502 or the amount thereof provable in bankruptcy
pursuant to Section 504, or adversely affect any right of repayment at the
option of the Holder of any Security, or change any Place of Payment where, or
the currency or currencies, currency unit or units or composite currency or
currencies in which, the principal of any Security or any premium or Make-Whole
Amount or any Additional Amounts payable in respect thereof or the interest
thereon is payable, or impair the right to institute suit for the enforcement of
any such payment on or after the Stated Maturity thereof (or, in the case of
redemption or repayment at the option of the Holder, on or after the Redemption
Date or the Repayment Date, as the case may be); or
(2) reduce the percentage in principal amount of the Outstanding
Securities of any series, the consent of whose Holders is required for any such
supplemental indenture, or the consent of whose Holders is required for any
waiver with respect to such series (or compliance with certain provisions of
this Indenture or certain defaults hereunder and their consequences) provided
for in this Indenture, or reduce the requirements of Section 1504 for quorum or
voting; or
(3) modify any of the provisions of this Section, Section 513 or
Section 1012, except to increase the required percentage to effect such action
or to provide that certain other provisions of this Indenture cannot be modified
or waived without the consent of the Holder of each Outstanding Security
affected thereby.
It shall not be necessary for any Act of Holders under this Section to
approve the particular form of any proposed supplemental indenture, but it shall
be sufficient if such Act shall approve the substance thereof.
A supplemental indenture which changes or eliminates any covenant or
other provision of this Indenture which has expressly been included for the
benefit of one or more particular series of Securities, or which modifies the
rights of the Holders of Securities of such series with respect to such covenant
or other provision, shall be deemed not to affect the rights under this
Indenture of the Holders of Securities of any other series.
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
60
<PAGE>
Counsel stating that the execution of such supplemental indenture is authorized
or permitted by this Indenture and that all conditions precedent to the
execution of such supplemental indenture have been complied with. The Trustee
may, but shall not be obligated to, enter into any such supplemental indenture
which affects the 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 Trust shall so
determine, new Securities of any series so modified as to conform, in the
opinion of the Trustee and the Trust, to any such supplemental indenture may be
prepared and executed by the Trust and authenticated and delivered by the
Trustee in exchange for Outstanding Securities of such series.
SECTION 907. Notice of Supplemental Indentures.
Promptly after the execution by the Trust and the Trustee of any
supplemental indenture pursuant to the provisions of Section 902, the Trust
shall give notice thereof to the Holders of each Outstanding Security affected,
in the manner provided for in Section 106, setting forth in general terms the
substance of such supplemental indenture.
61
<PAGE>
ARTICLE X
COVENANTS
SECTION 1001. Payment of Principal, Premium or Make-Whole Amount, if
any, Interest and Additional Amounts.
The Trust covenants and agrees for the benefit of the Holders of each
series of Securities that it will duly and punctually pay the principal of (and
premium or Make-Whole Amount, if any) and interest on and any Additional Amounts
payable in respect of the Securities of that series in accordance with the terms
of such series of Securities, any coupons appertaining thereto and this
Indenture. Unless otherwise specified as contemplated by Section 301 with
respect to any series of Securities, any interest due on and any Additional
Amounts payable in respect of Bearer Securities on or before Maturity, other
than Additional Amounts, if any, payable as provided in Section 1011 in respect
of principal of (or premium or Make- Whole Amount, if any, on) such a Security,
shall be payable only upon presentation and surrender of the several coupons for
such interest installments as are evidenced thereby as they severally mature.
Unless otherwise specified with respect to Securities of any series pursuant to
Section 301, at the option of the Trust, all payments of principal may be paid
by check to the registered Holder of the Registered Security or other person
entitled thereto against surrender of such Security.
SECTION 1002. Maintenance of Office or Agency.
If Securities of a series are issuable only as Registered Securities,
the Trust shall maintain in each Place of Payment for any series of Securities
an office or agency where Securities of that series may be presented or
surrendered for payment 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 Trust 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 Trust will maintain: (A) in the Borough of Manhattan, The City
of New York, an office or agency where any Registered Securities of that series
may be presented or surrendered for payment or conversion, where any Registered
Securities of that series may be surrendered for exchange, where notices and
demands to or upon the Trust in respect of the Securities of that series and
this Indenture may be served and where Bearer Securities of that series and
related coupons may be presented or surrendered for payment 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 1011) or conversion; provided,
however, that if the Securities of that series are listed on the Luxembourg
Stock Exchange, The International Stock Exchange or any other stock exchange
located outside the United States and such stock exchange shall so
62
<PAGE>
require, the Trust will maintain a Paying Agent for the Securities of that
series in Luxembourg, London or any other required city located outside the
United States, as the case may be, so long as the Securities of that series are
listed in such exchange; and (C) subject to any laws or regulations applicable
thereto, in a Place of Payment for that series located outside the United States
an office or agency where any Securities of that series may be surrendered for
registration of transfer, where Securities of that series may be surrendered for
exchange and where notices and demands to or upon the Trust in respect of the
Securities of that series and this Indenture may be served. The Trust will give
prompt written notice to the Trustee of the location, and any change in the
location, of each such office or agency. If at any time the Trust shall fail to
maintain any such required office or agency or shall fail to furnish the Trustee
with the address thereof, such presentations, 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 1011) at the offices
specified in the Security, in London, England, and the Trust hereby appoints the
same as its agent to receive such respective presentations, surrenders, notices
and demands, and the Trust hereby appoints the Trustee its agent to receive all
such presentations, surrenders, notices and demands.
Unless otherwise specified with respect to any Securities pursuant to
Section 301, no payment of principal, premium, Make-Whole Amount or interest on
or Additional Amounts in respect of Bearer Securities shall be made at any
office or agency of the Trust in the United States or by check mailed to any
address in the United States or by transfer to an account maintained with a bank
located in the United States; provided, however, that, if the Securities of a
series are payable in Dollars, payment of principal of and any premium and
interest on any Bearer Security (including any Additional Amounts or Make-Whole
Amount payable on Securities of such series pursuant to Section 1011) shall be
made at the office of the Trust's Paying Agent in the Borough of Manhattan, The
City of New York, if (but only if) payment in Dollars of the full amount of such
principal, premium, interest, Additional Amounts or Make- Whole Amount, as the
case may be, at all offices or agencies outside the United States maintained for
the purpose by the Trust in accordance with this Indenture, is illegal or
effectively precluded by exchange controls or other similar restrictions.
The Trust may from time to time designate one or more other offices or
agencies where the Securities of one or more series and related coupons, if any,
may be presented or surrendered for any or all of such purposes, and may from
time to time rescind such designations; provided, however, that no such
designation or rescission shall in any manner relieve the Trust of its
obligation to maintain an office or agency in accordance with the requirements
set forth above for Securities of any series for such purposes. The Trust will
give prompt written notice to the Trustee of any such designation or rescission
and of any change in the location of any such other office or agency. Unless
otherwise specified with respect to any Securities pursuant to Section 301 with
respect to a series of Securities, the Trust hereby designates as Places of
Payment for each series of Securities the Corporate Trust Office of the
63
<PAGE>
Trustee and the office or agency of Harris Trust Company at 7 Water Street,
Fifth Floor, New York, New York 10005, in the Borough of Manhattan, The City of
New York, initially appoints the Trustee as a Paying Agent in Richmond,
Virginia, and Harris Trust Company as Paying Agent in the Borough of Manhattan,
The City of New York, and appoints each as its agent to receive all such
presentations, surrenders, notices and demands.
Unless otherwise specified with respect to any Securities pursuant to
Section 301, if and so long as the Securities of any series (i) are denominated
in a Foreign Currency or (ii) may be payable in a Foreign Currency, or so long
as it is required under any other provision of the Indenture, then the Trust
will maintain with respect to each such series of Securities, or as so required,
at least one exchange rate agent.
SECTION 1003. Money for Securities Payments to Be Held in Trust.
If the Trust shall at any time act as its own Paying Agent with respect
to any series of any Securities and any related coupons, it will, on or before
each due date of the principal of (and premium or Make-Whole Amount, if any), or
interest on or Additional Amounts in respect of, any of the Securities of that
series, segregate and hold in trust for the benefit of the Persons entitled
thereto a sum in the currency or currencies, currency unit or units or composite
currency or currencies in which the Securities of such series are payable
(except as otherwise specified pursuant to Section 301 for the Securities of
such series) sufficient to pay the principal (and premium or Make-Whole Amount,
if any) or interest or Additional Amounts so becoming due until such sums shall
be paid to such Persons or otherwise disposed of as herein provided, and will
promptly notify the Trustee of its action or failure so to act.
Whenever the Trust shall have one or more Paying Agents for any series
of Securities and any related coupons, it will, on or before each due date of
the principal of (and premium or Make-Whole Amount, if any), or interest on or
Additional Amounts in respect of, any Securities of that series, deposit with a
Paying Agent a sum (in the currency or currencies, currency unit or units or
composite currency or currencies described in the preceding paragraph)
sufficient to pay the principal (and premium or Make-Whole Amount, if any) or
interest or Additional Amounts, so becoming due, such sum to be held in trust
for the benefit of the Persons entitled to such principal, premium, Make-Whole
Amount or interest or Additional Amounts and (unless such Paying Agent is the
Trustee) the Trust will promptly notify the Trustee of its action or failure so
to act.
The Trust will cause each Paying Agent other than the Trustee to
execute and deliver to the Trustee an instrument in which such Paying Agent
shall agree with the Trustee, subject to the provisions of this Section, that
such Paying Agent will
(1) hold all sums held by it for the payment of principal of (and
premium or Make-Whole Amount, if any) or interest on Securities
or Additional Amounts
64
<PAGE>
in trust for the benefit of the Persons entitled thereto until
such sums shall be paid to such Persons or otherwise disposed of
as herein provided;
(2) give the Trustee notice of any default by the Trust (or any other
obligor upon the Securities) in the making of any such payment of
principal (and premium or Make-Whole Amount, 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 Trust may at any time, for the purpose of obtaining the
satisfaction and discharge of this Indenture or for any other purpose, pay, or
by Trust Order direct any Paying Agent to pay, to the Trustee all sums held in
trust by the Trust or such Paying Agent, such sums to be held by the Trustee
upon the same trusts as those upon which such sums were held by the Trust or
such Paying Agent; and, upon such payment by any Paying Agent to the Trustee,
such Paying Agent shall be released from all further liability with respect to
such sums. Except as otherwise provided in the Securities of any series, any
money deposited with the Trustee or any Paying Agent, or then held by the Trust,
in trust for the payment of the principal of (and premium or Make-Whole Amount,
if any) or interest on, or any Additional Amounts in respect of, any Security of
any series and remaining unclaimed for two years after such principal (and
premiums or Make-Whole Amount, if any), interest or Additional Amounts has
become due and payable shall be paid to the Trust upon Trust Request or (if then
held by the Trust) shall be discharged from such trust; and the Holder of such
Security shall thereafter, as an unsecured general creditor, look only to the
Trust for payment of such principal of (and premium or Make-Whole Amount, if
any) or interest on, or any Additional Amounts in respect of, any Security,
without interest thereon, and all liability of the Trustee or such Paying Agent
with respect to such trust money, and all liability of the Trust as trustee
thereof, shall thereupon cease; provided, however, that the Trustee or such
Paying Agent, before being required to make any such repayment, may at the
expense of the Trust cause to be published once, in an Authorized Newspaper,
notice that such money remains unclaimed and that, after a date specified
therein, which shall not be less than 30 days from the date of such publication,
any unclaimed balance of such money then remaining will be repaid to the Trust.
SECTION 1004. [Reserved].
SECTION 1005. Existence.
Subject to Article Eight, the Trust will do or cause to be done all
things necessary to preserve and keep in full force and effect the existence,
rights (charter and statutory) and franchises of the Trust and its Subsidiaries;
provided, however, that the Trust shall not be
65
<PAGE>
required to preserve any right or franchise if the Board of Directors shall
determine that the preservation thereof is no longer desirable in the conduct of
the business of the Trust and its Subsidiaries as a whole and that the loss
thereof is not disadvantageous in any material respect to the Holders of
Securities of any series.
SECTION 1006. Maintenance of Properties.
The Trust will cause all of its properties used or useful in the
conduct of its business or the business of any Subsidiary to be maintained and
kept in good condition, repair and working order and supplied with all necessary
equipment and will cause to be made all necessary repairs, renewals,
replacements, betterments and improvements thereof, all as in the judgment of
the Trust may be necessary so that the business carried on in connection
therewith may be properly and advantageously conducted at all times; provided,
however, that nothing in this Section shall prevent the Trust or any Subsidiary
from selling or otherwise disposing of for value its properties in the ordinary
course of its business.
SECTION 1007. Insurance.
The Trust will, and will cause each of its Subsidiaries to, keep all of
its insurable properties insured against loss or damage at least equal to their
then full insurable value with financially sound and reputable insurance
companies.
SECTION 1008. Payment of Taxes and Other Claims.
The Trust will pay or discharge or cause to be paid or discharged,
before the same shall become delinquent, (1) all taxes, assessments and
governmental charges levied or imposed upon it or any Subsidiary or upon the
income, profits or property of the Trust or any Subsidiary, and (2) all lawful
claims for labor, materials and supplies which, if unpaid, might by law become a
lien upon the property of the Trust or any Subsidiary; provided, however, that
the Trust shall not be required to pay or discharge or cause to be paid or
discharged any such tax, assessment, charge or claim whose amount, applicability
or validity is being contested in good faith by appropriate proceedings.
SECTION 1009. [Reserved]
66
<PAGE>
SECTION 1010. Statement as to Compliance.
The Trust will deliver to the Trustee within 120 days after the end of
each fiscal year, a brief certificate from the principal executive officer,
principal financial officer or principal accounting officer as to his or her
knowledge of the Trust's compliance with all conditions and covenants under this
Indenture and, in the event of any noncompliance, specifying such noncompliance
and the nature and status thereof. For purposes of this Section 1010, such
compliance shall be determined without regard to any period of grace or
requirement of notice under this Indenture.
SECTION 1011. Additional Amounts.
If any Securities of a series provide for the payment of Additional
Amounts, the Trust will pay to the Holder 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, Make-Whole Amount or interest on, or in respect of, any
Security of any series or payment of any related coupon or the net proceeds
received on the sale or exchange of any Security of any series, such mention
shall be deemed to include mention of the payment of Additional Amounts provided
by the terms of such series established pursuant to Section 301 to the extent
that, in such context, Additional Amounts are, were or would be payable in
respect thereof pursuant to such terms and express mention of the payment of
Additional Amounts (if applicable) in any provisions hereof shall not be
construed as excluding Additional Amounts in those provisions hereof where such
express mention is not made.
Except as otherwise specified as contemplated by Section 301, if the
Securities of a series provide for the payment of Additional Amounts, at least
10 days prior to the first Interest Payment Date with respect to that series of
Securities (or if the Securities of that series will not bear interest prior to
Maturity, the first day on which a payment of principal and any premium is
made), and at least 10 days prior to each date of payment of
67
<PAGE>
principal and any premium or Make-Whole Amount or interest if there has been any
change with respect to the matters set forth in the below-mentioned Officers'
Certificate, the Trust will furnish the Trustee and the Trust's principal Paying
Agent or Paying Agents, if other than the Trustee, with an Officers' Certificate
instructing the Trustee and such Paying Agent or Paying Agents whether such
payment of principal of and any premium or interest on the Securities of that
series shall be made to Holders of Securities of that series or any related
coupons who are not United States persons without withholding for or on account
of any tax, assessment or other governmental charge described in the Securities
of or within the series. If any such withholding shall be required, then such
Officers' Certificate shall specify by country the amount, if any, required to
be withheld on such payments to such Holders of Securities of that series or
related coupons and the Trust will pay to the Trustee or such Paying Agent the
Additional Amounts required by the terms of such Securities. In the event that
the Trustee or any Paying Agent, as the case may be, shall not so receive the
above-mentioned certificate, then the Trustee or such Paying Agent shall be
entitled (i) to assume that no such withholding or deduction is required with
respect to any payment of principal or interest with respect to any Securities
of a series or related coupons until it shall have received a certificate
advising otherwise and (ii) to make all payments of principal and interest with
respect to the Securities of a series or related coupons without withholding or
deductions until otherwise advised. The Trust covenants to indemnify the Trustee
and any Paying Agent for, and to hold them harmless against, any loss, liability
or expense reasonably incurred without negligence or bad faith on their part
arising out of or in connection with actions taken or omitted by any of them in
reliance on any Officers' Certificate furnished pursuant to this Section or in
reliance on the Trust's not furnishing such an Officers' Certificate.
SECTION 1012. Waiver of Certain Covenants.
The Trust may omit in any particular instance to comply with any term,
provision or condition set forth in Sections 1004 to 1009, inclusive, and with
any other term, provision or condition with respect to the Securities of any
series specified in accordance with Section 301 (except any such term, provision
or condition which could not be amended without the consent of all Holders of
Securities of such series pursuant to Section 902), if before or after the time
for such compliance the Holders of at least a majority in principal amount of
all outstanding Securities of such series, by Act of such Holders, either waive
such compliance in such instance or generally waive compliance with such
covenant or condition, but no such waiver shall extend to or affect such
covenant or condition except to the extent so expressly waived, and, until such
waiver shall become effective, the obligations of the Trust and the duties of
the Trustee in respect of any such term, provision or condition shall remain in
full force and effect.
68
<PAGE>
ARTICLE XI
REDEMPTION OF SECURITIES
SECTION 1101. Applicability of Article.
Securities of any series which are redeemable before their Stated
Maturity shall be redeemable in accordance with their terms and (except as
otherwise specified as contemplated by Section 301 for Securities of any series)
in accordance with this Article.
SECTION 1102. Election to Redeem; Notice to Trustee.
The election of the Trust to redeem any Securities shall be evidenced
by or pursuant to a Board Resolution. In case of any redemption at the election
of the Trust of less than all of the Securities of any series, the Trust shall,
at least 45 days prior to the giving of the notice of redemption in Section 1104
(unless a shorter notice shall be satisfactory to the Trustee), notify the
Trustee of such Redemption Date and of the principal amount of Securities of
such series to be redeemed. In the case of any redemption of Securities prior to
the expiration of any restriction on such redemption provided in the terms of
such Securities or elsewhere in this Indenture, the Trust shall furnish the
Trustee with an Officers' Certificate evidencing compliance with such
restriction.
SECTION 1103. Selection by Trustee of Securities to Be Redeemed.
If less than all the Securities of any series issued on the same day
with the same terms are to be redeemed, the particular Securities to be redeemed
shall be selected not more than 60 days prior to the Redemption Date by the
Trustee, from the Outstanding Securities of such series issued on such date with
the same terms not previously called for redemption, by such method as the
Trustee shall deem fair and appropriate and which may provide for the selection
for redemption of portions (equal to the minimum authorized denomination for
Securities of that series or any integral multiple thereof) of the principal
amount of Securities of such series of a denomination larger than the minimum
authorized denomination for Securities of that series.
The Trustee shall promptly notify the Trust and the Security Registrar
(if other than itself) in writing of the Securities selected for redemption and,
in the case of any Securities selected for partial redemption, the principal
amount thereof to be redeemed.
For all purposes of this Indenture, unless the context otherwise
requires, all provisions relating to the redemption of Securities shall relate,
in the case of any Security redeemed or to be redeemed only in part, to the
portion of the principal amount of such Security which has been or is to be
redeemed.
69
<PAGE>
SECTION 1104. Notice of Redemption.
Notice of redemption shall be given in the manner provided in Section
106, not less than 30 days nor more than 60 days prior to the Redemption Date,
unless a shorter period is specified by the terms of such series established
pursuant to Section 301, to each Holder of Securities to be redeemed, but
failure to give such notice in the manner herein provided to the Holder of any
Security designated for redemption as a whole or in part, or any defect in the
notice to any such Holder, shall not affect the validity of the proceedings for
the redemption of any other such Security or portion thereof.
Any notice that is mailed to the Holders of Registered Securities in
the manner herein provided shall be conclusively presumed to have been duly
given, whether or not the Holder receives the notice.
All notices of redemption shall state:
(1) the Redemption Date;
(2) the Redemption Price, accrued interest to the Redemption Date
payable as provided in Section 1106, if any, and Additional
Amounts, if any;
(3) if less than all Outstanding Securities of any series are to be
redeemed, the identification (and, in the case of partial
redemption, the principal amount) of the particular Security or
Securities to be redeemed;
(4) in case any Security is to be redeemed in part only, that on and
after the Redemption Date, upon surrender of such Security, the
holder will receive, without a charge, a new Security or
Securities of authorized denominations for the principal amount
thereof remaining unredeemed;
(5) that on the Redemption Date the Redemption Price and accrued
interest to the Redemption Date payable as provided in Section
1106, if any, will become due and payable upon each such
Security, or the portion thereof, to be redeemed and, if
applicable, that interest thereon shall cease to accrue on and
after said date;
(6) the Place or Places of Payment where such Securities, together in
the case of Bearer Securities with all coupons appertaining
thereto, if any, maturing after the Redemption Date, are to be
surrendered for payment of the Redemption Price and accrued
interest, if any, or for conversion;
(7) that the redemption is for a sinking fund, if such is the case;
70
<PAGE>
(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 Trust, the Trustee for
such series and any Paying Agent is furnished;
(9) if Bearer Securities of any series are to be redeemed and any
Registered Securities of such series are not to be redeemed, and
if such Bearer Securities may be exchanged for Registered
Securities not subject to the redemption on this Redemption Date
pursuant to Section 305 or otherwise, the last date, as
determined by the Trust, on which such exchanges may be made;
(10) the CUSIP number of such Security, if any, provided that neither
the Trust nor the Trustee shall have any responsibility for any
such CUSIP number; and (11) if applicable, that a Holder of
Securities who desires to convert Securities to be redeemed must
satisfy the requirements for conversion contained in such
Securities, the then existing conversion price or rate and the
date and time when the option to convert shall expire. Notice of
redemption of Securities to be redeemed shall be given by the
Trust or, at the Trust request, by the Trustee in the name and at
the expense of the Trust.
SECTION 1105. Deposit of Redemption Price.
On or prior to any Redemption Date, the Trust shall deposit with the
Trustee or with a Paying Agent (or, if the Trust is acting as its own Paying
Agent, which it may not do in the case of a sinking fund payment under Article
Twelve, segregate and hold in trust as provided in Section 1003) an amount of
money in the currency or currencies, currency unit or units or composite
currency or currencies in which the Securities of such series are payable
(except as otherwise specified pursuant to Section 301 for the Securities of
such series) sufficient to pay on the Redemption Date the Redemption Price of,
and (except if the Redemption Date shall be an Interest Payment Date) accrued
interest on, all the Securities or portions thereof which are to be redeemed on
that date.
SECTION 1106. Securities Payable on Redemption Date.
Notice of redemption having been given as aforesaid, the Securities so to be
redeemed shall, on the Redemption Date, become due and payable at the Redemption
Price therein specified in the currency or currencies, currency unit or units or
composite currency or currencies in which the Securities of such series are
payable (except as otherwise specified pursuant to Section 301 for the
Securities of such series) (together with accrued interest, if any, to the
Redemption Date), and from and after such date (unless the Trust shall default
in the payment of the Redemption Price and accrued interest) such Securities
shall,
71
<PAGE>
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 Trust at the Redemption Price, together with accrued
interest, if any, to the Redemption Date; provided, however, that installments
of interest on Bearer Securities whose Stated Maturity is on or prior to the
Redemption Date shall be payable only at an office or agency located outside the
United States (except as otherwise provided in Section 1002) and, unless
otherwise specified as contemplated by Section 301, only upon presentation and
surrender of coupons for such interest; and provided further that except as
otherwise provided with respect to Securities convertible into Capital Stock,
installments of interest on Registered Securities whose Stated Maturity is on or
prior to the Redemption Date shall be payable to the Holders of such Securities,
or one or more Predecessor Securities, registered as such at the close of
business on the relevant Record Dates according to their terms and the
provisions of Section 307.
If any Bearer Security surrendered for redemption shall not be
accompanied by all appurtenant coupons maturing after the Redemption Date, such
Security may be paid after deducting from the Redemption Price an amount equal
to the face amount of all such missing coupons, or the surrender of such missing
coupon or coupons may be waived by the Trust and the Trustee if there be
furnished to them such security or indemnity as they may require to save each of
them and any Paying Agent harmless. If thereafter the Holder of such Security
shall surrender to the Trustee or any Paying Agent any such missing coupon in
respect of which a deduction shall have been made from the Redemption Price,
such Holder shall be entitled to receive the amount so deducted; provided,
however, that interest represented by coupons shall be payable only at an office
or agency located outside the United States (except as otherwise provided in
Section 1002) and, unless otherwise specified as contemplated by Section 301,
only upon presentation and surrender of those coupons. If any Security called
for redemption shall not be so paid upon surrender thereof for redemption, the
principal (and premium or Make-Whole Amount, if any) shall, until paid, bear
interest from the Redemption Date at the rate borne by the Security.
SECTION 1107. Securities Redeemed in Part.
Any Security which is to be redeemed only in part (pursuant to the
provisions of this Article or of Article Twelve) shall be surrendered at a Place
of Payment therefor (with, if the Trust or the Trustee so requires, due
endorsement by, or a written instrument of transfer in form satisfactory to the
Trust and the Trustee duly executed by, the Holder thereof or his attorney duly
authorized in writing) and the Trust shall execute and the Trustee shall
authenticate and deliver to the Holder of such Security without service charge a
new Security or Securities of the same series, of any authorized denomination as
requested by
72
<PAGE>
such Holder in aggregate principal amount equal to and in exchange for the
unredeemed portion of the principal of the Security so surrendered.
ARTICLE XII
SINKING FUNDS
SECTION 1201. Applicability of Article.
The provisions of this Article shall be applicable to any sinking fund
for the retirement of Securities of a series except as otherwise specified as
contemplated by Section 301 for Securities of such series.
The minimum amount of any sinking fund payment provided for by the
terms of Securities of any series is herein referred to as a "mandatory sinking
fund payment," and any payment in excess of such minimum amount provided for by
the terms of such Securities of any series is herein referred to as an "optional
sinking fund payment." If provided for by the terms of any Securities of any
series, the cash amount of any mandatory sinking fund payment may be subject to
reduction as provided in Section 1202. Each sinking fund payment shall be
applied to the redemption of Securities of any series as provided for by the
terms of Securities of such series.
SECTION 1202. Satisfaction of Sinking Fund Payments with Securities.
The Trust may, in satisfaction of all or any part of any mandatory
sinking fund 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 Trust
pursuant to the terms of such Securities or through the application of permitted
optional sinking fund payments pursuant to the terms of such Securities, as
provided for by the terms of such Securities, or which have otherwise been
acquired by the Trust; provided that such Securities so delivered or applied as
a credit have not been previously so credited. Such Securities shall be received
and credited for such purpose by the Trustee at the applicable Redemption Price
specified in such Securities for redemption through operation of the sinking
fund and the amount of such mandatory sinking fund payment shall be reduced
accordingly.
SECTION 1203. Redemption of Securities for Sinking Fund.
Not less than 60 days prior to each sinking payment date for Securities
of any series, the Trust will deliver to the Trustee an Officers' Certificate
specifying the amount of the next ensuing mandatory sinking fund payment for
that series pursuant to the terms of that
73
<PAGE>
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 Trust
shall thereupon be obligated to pay the amount therein specified. Not less than
30 days before each such sinking fund payment date the Trustee shall select the
Securities to be redeemed upon such sinking fund payment date in the manner
specified in Section 1103 and cause notice of the redemption thereof to be given
in the name of and at the expense of the Trust in the manner provided in Section
1104. Such notice having been duly given, the redemption of such Securities
shall be made upon the terms and in the manner stated in Sections 1106 and 1107.
ARTICLE XIII
REPAYMENT AT THE OPTION OF HOLDERS
SECTION 1301. Applicability of Article.
Repayment of Securities of any series before their Stated Maturity at
the option of Holders thereof shall be made in accordance with the terms of such
Securities, if any, and (except as otherwise specified by the terms of such
series established pursuant to Section 301) in accordance with this Article.
SECTION 1302. Repayment of Securities.
Securities of any series subject to repayment in whole or in part at
the option of the Holders thereof will, unless otherwise provided in the terms
of such Securities, be repaid at a price equal to the principal amount thereon,
together with interest, if any, thereof accrued to the Repayment Date specified
in or pursuant to the terms of such Securities. The Trust covenants that on or
before the Repayment Date it will deposit with the Trustee or with a Paying
Agent (or, if the Trust is acting as its own Paying Agent, segregate and hold in
trust as provided in Section 1003) an amount of money in the currency or
currencies, currency unit or units or composite currency or currencies in which
the Securities of such series are payable (except as otherwise specified
pursuant to Section 301 for the Securities of such series) sufficient to pay the
principal (or, if so provided by the terms of the Securities of any series, a
percentage of the principal) of, and (except if the Repayment Date shall be an
Interest Payment Date) accrued interest on, all the Securities or portions
thereof, as the case may be, to be repaid on such date.
74
<PAGE>
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 Trust
shall from time to time notify the Holders of such Securities) not earlier than
60 days nor later than 30 days prior to the Repayment Date (1) the Security so
providing for such repayment together with the "Option to Elect Repayment" form
on the reverse thereof duly completed by the Holder (or by the Holder's attorney
duly authorized in writing) or (2) a telegram, telex, facsimile transmission or
a letter from a member of a national securities exchange, or the National
Association of Securities Dealers, Inc. ("NASD"), or a commercial bank or trust
company in the United States setting forth the name of the Holder of the
Security, the principal amount of the Security, the principal amount of the
Security to be repaid, the CUSIP number, if any, or a description of the tenor
and terms of the Security, a statement that the option to elect repayment is
being exercised thereby and a guarantee that the Security to be repaid, together
with the duly completed form entitled "Option to Elect Repayment" on the reverse
of the Security, will be received by the Trustee not later than the fifth
Business Day after the date of such telegram, telex, facsimile transmission or
letter; provided, however, that such telegram, telex, facsimile transmission or
letter shall only be effective if such Security and form duly completed are
received by the Trustee by such fifth Business Day. If less than the entire
principal amount of such Security is to be repaid in accordance with the terms
of such Security, the principal amount of such Security to be repaid, in
increments of the minimum denomination for Securities of such series, and the
denomination or denominations of the Security or Securities to be issued to the
Holder for the portion of the principal amount of such Security surrendered that
is not to be repaid, must be specified. The principal amount of any Security
providing for repayment at the option of the Holder thereof may not be repaid in
part if, following such repayment, the unpaid principal amount of such Security
would be less than the minimum authorized denomination of Securities of or
within the series of which such Security to be repaid is a part. Except as
otherwise may be provided by the terms of any Security providing for repayment
at the option of the Holder thereof, exercise of the repayment option by the
Holder shall be irrevocable unless waived by the Trust.
SECTION 1304. When Securities Presented for Repayment Become Due and Payable.
If Securities of any series providing for repayment at the option of
the Holders thereof shall have been surrendered as provided in this Article and
as provided by or pursuant to the terms of such Securities, such Securities or
the portions thereof, as the case may be, to be repaid shall become due and
payable and shall be paid by the Trust on the Repayment Date therein specified,
and on and after such Repayment Date (unless the Trust shall default in the
payment of such Securities on such Repayment Date) such Securities
75
<PAGE>
shall, if the same were interest-bearing, cease to bear interest and the coupons
for such interest appertaining to any Bearer Securities so to be repaid, except
to the extent provided below, shall be void. Upon surrender of any such Security
for repayment in accordance with such provisions, together with all coupons, if
any, appertaining thereto maturing after the Repayment Date, the principal
amount of such security so to be repaid shall be paid by the Trust, together
with accrued interest, if any, to the Repayment Date; provided, however, that
coupons whose Stated Maturity is on or prior to the Repayment Date shall be
payable only at an office or agency located outside the United States (except as
otherwise provided in Section 1002) and, unless otherwise specified pursuant to
Section 301, only upon presentation and surrender of such coupons; and provided
further that, in the case of Registered Securities, installments of interest, if
any, whose Stated Maturity is on or prior to the Repayment Date shall be payable
(but without interest thereon, unless the Trust shall default in the payment
thereof) to the Holders of such Securities, or one or more Predecessor
Securities, registered as such at the close of business on the relevant Record
Dates according to their terms and the provisions of Section 307.
If any Bearer Security surrendered for repayment shall not be
accompanied by all appurtenant coupons maturing after the Repayment Date, such
Security may be paid after deducting from the amount payable therefor as
provided in Section 1302 an amount equal to the face amount of all such missing
coupons, or the surrender of such missing coupon or coupons may be waived by the
Trust and the Trustee if there be furnished to them such security or indemnity
as they may require to save each of them and any Paying Agent harmless. If
thereafter the Holder of such Security shall surrender to the Trustee or any
Paying Agent any such missing coupon in respect of which a deduction shall have
been made as provided in the preceding sentence, such Holder shall be entitled
to receive the amount so deducted; provided, however, that interest represented
by coupons shall be payable only at an office or agency located outside the
United States (except as otherwise provided in Section 1002) and, unless
otherwise specified as contemplated by Section 301, only upon presentation and
surrender of those coupons.
If the principal amount of any Security surrendered for repayment shall
not be so repaid upon surrender thereof, such principal amount (together with
interest, if any, thereon accrued to such Repayment Date) shall, until paid,
bear interest from the Repayment Date at the rate of interest or Yield to
Maturity (in the case of Original Issue Discount Securities) set forth in such
Security.
SECTION 1305. Securities Repaid in Part.
Upon surrender of any Registered Security which is to be repaid in part
only, the Trust shall execute and the Trustee shall authenticate and deliver to
the Holder of such Security, without service charge and at the expense of the
Trust, a new Registered Security or Securities of the same series, of any
authorized denomination specified by the Holder, in
76
<PAGE>
an aggregate principal amount equal to and in exchange for the portion of the
principal of such Security so surrendered which is not to be repaid.
ARTICLE XIV
DEFEASANCE AND COVENANT DEFEASANCE
SECTION 1401. Applicability of Article; Trust's Option to Effect Defeasance or
Covenant Defeasance.
If, pursuant to Section 301, provision is made for either or both of
(a) defeasance of the Securities of or within a series under Section 1402 or (b)
covenant defeasance of the Securities of or within a series under Section 1403
to be applicable to the Securities of any series, then the provisions of such
Section or Sections, as the case may be, together with the other provisions of
this Article (with such modifications thereto as may be specified pursuant to
Section 301 with respect to any Securities), shall be applicable to such
Securities and any coupons appertaining thereto, and the Trust may at its option
by Board Resolution, at any time, with respect to such Securities and any
coupons appertaining thereto, elect to defease such Outstanding Securities and
any coupons appertaining thereto pursuant to Section 1402 (if applicable) or
Section 1403 (if applicable) upon compliance with the conditions set forth below
in this Article.
SECTION 1402 Defeasance and Discharge.
Upon the Trust's exercise of the above option applicable to this
Section with respect to any Securities of or within a series, the Trust shall be
deemed to have been discharged from its obligations with respect to such
Outstanding Securities and any coupons appertaining thereto on the date the
conditions set forth in Section 1404 are satisfied (hereinafter, "defeasance").
For this purpose, such defeasance means that the Trust shall be deemed to have
paid and discharged the entire indebtedness represented by such Outstanding
Securities and any coupons appertaining thereto, which shall thereafter be
deemed to be "Outstanding" only for the purposes of Section 1405 and the other
Sections of this Indenture referred to in clauses (A) and (B) below, and to have
satisfied all of its other obligations under such Securities and any coupons
appertaining thereto and this Indenture insofar as such Securities and any
coupons appertaining thereto are concerned (and the Trustee, at the expense of
the Trust, shall execute proper instruments acknowledging the same), except for
the following which shall survive until otherwise terminated or discharged
hereunder: (A) the rights of Holders of such Outstanding Securities and any
coupons appertaining thereto to receive, solely from the trust fund described in
Section 1404 and as more fully set forth in such Section, payments in respect of
the principal of (and premium or Make-Whole Amount, if any) and interest, if
any, on such Securities and any coupons appertaining thereto when such payments
are due, (B) the Trust's obligations with respect to such Securities under
Sections 305, 306, 1002 and 1003 and with respect to
77
<PAGE>
the payment of Additional Amounts, if any, on such Securities as contemplated by
Section 1011, (C) the rights, powers, trusts, duties and immunities of the
Trustee hereunder and (D) this Article. Subject to compliance with this Article
Fourteen, the Trust may exercise its option under this Section notwithstanding
the prior exercise of its option under Section 1403 with respect to such
Securities and any coupons appertaining thereto.
SECTION 1403. Covenant Defeasance.
Upon the Trust's exercise of the above option applicable to this
Section with respect to any Securities of or within a series, the Trust shall be
released from its obligations under Sections 1004 to 1009, inclusive, and, if
specified pursuant to Section 301, its obligations under any other covenant,
with respect to such Outstanding Securities and any coupons appertaining thereto
on and after the date the conditions set forth in Section 1404 are satisfied
(hereinafter, "covenant defeasance"), and such Securities and any coupons
appertaining thereto shall thereafter be deemed to be not "Outstanding" for the
purposes of any direction, waiver, consent or declaration or Act of Holders (and
the consequences of any thereof) in connection with Sections 1004 to 1009,
inclusive, or such other covenant, but shall continue to be deemed "Outstanding"
for all other purposes hereunder. For this purpose, such covenant defeasance
means that, with respect to such Outstanding Securities and any coupons
appertaining thereto, the Trust may omit to comply with and shall have no
liability in respect of any term, condition or limitation set forth in any such
Section or such other covenant, whether directly or indirectly, by reason of any
reference elsewhere herein to any such Section or such other covenant or by
reason of reference in any such Section or such other covenant to any other
provision herein or in any other document and such omission to comply shall not
constitute a default or an Event of Default under Section 501(4) or 501(9) or
otherwise, as the case may be, but, except as specified above, the remainder of
this Indenture and such Securities and any coupons appertaining thereto shall be
unaffected thereby.
SECTION 1404. Conditions to Defeasance or Covenant Defeasance.
The following shall be the conditions to application of Section 1402 or
Section 1403 to any Outstanding Securities of or within a series and any coupons
appertaining thereto:
(a) The Trust shall irrevocably have deposited or caused to be
deposited with the Trustee (or another trustee satisfying the
requirements of Section 607 who shall agree to comply with the
provisions of this Article Fourteen applicable to it) as trust
funds in trust for the purpose of making the following payments,
specifically pledged as security for, and dedicated solely to,
the benefit of the Holders of such Securities and any coupons
appertaining thereto, (1) an amount in such currency, currencies
or currency unit in which such Securities and any coupons
appertaining thereto are then specified as payable at Stated
Maturity, or (2) Government Obligations applicable to such
78
<PAGE>
Securities and coupons appertaining thereto (determined on the
basis of the currency, currencies or currency unit in which such
Securities and coupons appertaining thereto are then specified as
payable at Stated Maturity) which through the scheduled payment
of principal and interest in respect thereof in accordance with
their terms will provide, not later than one day before the due
date of any payment of principal of (and premium or Make-Whole
Amount, if any) and interest, if any, on such Securities and any
coupons appertaining thereto, money in an amount, or (3) a
combination thereof in an amount, sufficient, without
consideration of any reinvestment of such principal and interest,
in the opinion of a nationally recognized firm of independent
public accountants expressed in a written certification thereof
delivered to the Trustee, to pay and discharge, and which shall
be applied by the Trustee (or other qualifying trustee) to pay
and discharge, (i) the principal of (and premium or Make-Whole
Amount, if any) and interest, if any, on such Outstanding
Securities and any coupons appertaining thereto on the Stated
Maturity of such principal or installment of principal or
interest and (ii) any mandatory sinking fund payments or
analogous payments applicable to such Outstanding Securities and
any coupons appertaining thereto on the day on which such
payments are due and payable in accordance with the terms of this
Indenture and of such Securities and any coupons appertaining
thereto; provided, that the Trustee shall have been irrevocably
instructed to apply such money or the proceeds of such Government
Obligations to said payments with respect to such Securities.
Before such a deposit, the Trust may give to the Trustee, in
accordance with Section 1102 hereof, a notice of its election to
redeem all or any portion of such Outstanding Securities at a
future date in accordance with the terms of the Securities of
such series and Article Eleven hereof, which notice shall be
irrevocable. Such irrevocable redemption notice, if given, shall
be given effect in applying the foregoing.
(b) Such defeasance or covenant defeasance shall not result in a
breach or violation of, or constitute a default under, this
Indenture or any other material agreement or instrument to which
the Trust is a party or by which it is bound (and shall not cause
the Trustee to have a conflicting interest pursuant to Section
310(b) of the TIA with respect to any Security of the Trust).
(c) No Event of Default or event which with notice or lapse of time
or both would become an Event of Default with respect to such
Securities and any coupons appertaining thereto shall have
occurred and be continuing on the date of such deposit or,
insofar as Sections 501(7) and 501(8) are concerned, at any time
during the period ending on the 91st day after the date of such
deposit (it being understood that this condition shall not be
deemed satisfied until the expiration of such period).
79
<PAGE>
(d) In the case of an election under Section 1402, the Trust shall
have delivered to the Trustee an Opinion of Counsel stating that
(i) the Trust has received from, or there has been published by,
the Internal Revenue Service a ruling, or (ii) since the date of
execution of this Indenture, there has been a change in the
applicable Federal income tax law, in either case to the effect
that, and based thereon such opinion shall confirm that, the
Holders of such Outstanding Securities and any coupons
appertaining thereto will not recognize income, gain or loss for
Federal income tax purposes as a result of such defeasance and
will be subject to Federal income tax on the same amounts, in the
same manner and at the same times as would have been the case if
such defeasance had not occurred.
(e) In the case of an election under Section 1403, the Trust shall
have delivered to the Trustee an Opinion of Counsel to the effect
that the Holders of such Outstanding Securities and any coupons
appertaining thereto will not recognize income, gain or loss for
Federal income tax purposes as a result of such covenant
defeasance and will be subject to Federal income tax on the same
amounts, in the same manner and at the same times as would have
been the case if such covenant defeasance had not occurred.
(f) The Trust shall have delivered to the Trustee an Officers'
Certificate and an Opinion of Counsel, each stating that all
conditions precedent to the defeasance under Section 1402 or the
covenant defeasance under Section 1403 (as the case may be) have
been complied with and an Opinion of Counsel to the effect that
either (i) as a result of a deposit pursuant to subsection (a)
above and the related exercise of the Trust's option under
Section 1402 or Section 1403 (as the case may be) registration is
not required under the Investment Company Act of 1940, as
amended, by the Trust, with respect to the trust funds
representing such deposit or by the Trustee for such trust funds
or (ii) all necessary registrations under said Act have been
effected.
(g) After the 91st day following the deposit, the trust funds will
not be subject to the effect of any applicable bankruptcy,
insolvency, reorganization or similar laws affecting creditors'
rights generally.
(h) Notwithstanding any other provisions of this Section, such
defeasance or covenant defeasance shall be effected in compliance
with any additional or substitute terms, conditions or
limitations which may be imposed on the Trust in connection
therewith pursuant to Section 301.
SECTION 1405. Deposited Money and Government Obligations to Be Held in Trust;
Other Miscellaneous Provisions.
80
<PAGE>
Subject to the provisions of the last paragraph of Section 1003, all
money and Government Obligations (or other property as may be provided pursuant
to Section 301) (including the proceeds thereof) deposited with the Trustee (or
other qualifying trustee, collectively for purposes of this Section 1405, the
"Trustee") pursuant to Section 1404 in respect of any Outstanding Securities of
any series and any coupons appertaining thereto shall be held in trust and
applied by the Trustee, in accordance with the provisions of such Securities and
any coupons appertaining thereto and this Indenture, to the payment, either
directly or through any Paying Agent (including the Trust acting as its own
Paying Agent) as the Trustee may determine, to the Holders of such Securities
and any coupons appertaining thereto of all sums due and to become due thereon
in respect of principal (and premium or Make-Whole Amount, if any) and interest
and Additional Amounts, if any, but such money need not be segregated from other
funds except to the extent required by law.
Unless otherwise specified with respect to any Security pursuant to
Section 301, if, after a deposit referred to in Section 1404(a) has been made,
(a) the Holder of a Security in respect of which such deposit was made is
entitled to, and does, elect pursuant to Section 301 or the terms of such
Security to receive payment in a currency or currency unit other than that in
which the deposit pursuant to Section 1404(a) has been made in respect of such
Security, or (b) a Conversion Event occurs in respect of the currency or
currency unit in which the deposit pursuant to Section 1404(a) has been made,
the indebtedness represented by such Security and any coupons appertaining
thereto shall be deemed to have been, and will be, fully discharged and
satisfied through the payment of the principal of (and premium or Make-Whole
Amount, if any), and interest, if any, on such Security as the same becomes due
out of the proceeds yielded by converting (from time to time as specified below
in the case of any such election) the amount or other property deposited in
respect of such Security into the currency or currency unit in which such
Security becomes payable as a result of such election or Conversion Event based
on the applicable market exchange rate for such currency or currency unit in
effect on the second Business Day prior to each payment date, except, with
respect to a Conversion Event, for such currency or currency unit in effect (as
nearly as feasible) at the time of the Conversion Event. The Trust shall pay and
indemnify the Trustee against any tax, fee or other charge imposed on or
assessed against the Government Obligations deposited pursuant to Section 1404
or the principal and interest received in respect thereof other than any such
tax, fee or other charge which by law is for the account of the Holders of such
Outstanding Securities and any coupons appertaining thereto.
Anything in this Article to the contrary notwithstanding, the Trustee
shall deliver or pay to the Trust from time to time upon Trust Request any money
or Government Obligations (or other property and any proceeds therefrom) held by
it as provided in Section 1404 which, in the opinion of a nationally recognized
firm of independent public accountants expressed in a written certification
thereof delivered to the Trustee, are in excess of the amount thereof which
would then be required to be deposited to effect a defeasance or covenant
defeasance, as applicable, in accordance with this Article.
81
<PAGE>
ARTICLE XV
MEETINGS OF HOLDERS OF SECURITIES
SECTION 1501. Purposes for Which Meetings May Be Called.
A meeting of Holders of Securities of any series may be called at any
time and from time to time pursuant to this Article to make, give or take any
request, demand, authorization, direction, notice, consent, waiver or other
action provided by this Indenture to be made, given or taken by Holders of
Securities of such series.
SECTION 1502. Call, Notice and Place of Meetings.
(a) The Trustee may at any time call a meeting of Holders of
Securities of any series for any purpose specified in Section
1501, to be held at such time and at such place in [the Borough
of Manhattan, The City of New York, or in London] as the Trustee
shall determine. Notice of every meeting of Holders of Securities
of any series, setting forth the time and the place of such
meeting and in general terms the action proposed to be taken at
such meeting, shall be given, in the manner provided in Section
106, not less than 21 nor more than 180 days prior to the date
fixed for the meeting.
(b) In case at any time the Trust, pursuant to a Board Resolution, or
the Holders of at least 10% in principal amount of the
Outstanding Securities of any series shall have requested the
Trustee to call a meeting of the Holders of Securities of such
series for any purpose specified in Section 1501, by written
request setting forth in reasonable detail the action proposed to
be taken at the meeting, and the Trustee shall not have made the
first publication of the notice of such meeting within 21 days
after receipt of such request or shall not thereafter proceed to
cause the meeting to be held as provided herein, then the Trust
or the Holders of Securities of such series in the amount above
specified, as the case may be, may determine the time and the
place in [the Borough of Manhattan, The City of New York, or in
London] for such meeting and may call such meeting for such
purposes by giving notice thereof as provided in subsection (a)
of this Section.
SECTION 1503. Persons Entitled to Vote at Meetings.
To be entitled to vote at any meeting of Holders of Securities of any
series, a Person shall be (1) a Holder of one or more Outstanding Securities of
such series, or (2) a Person appointed by an instrument in writing as proxy for
a Holder or Holders of one or more Outstanding Securities of such series by such
Holder or Holders. The only Persons
82
<PAGE>
who shall be entitled to be present or to speak at any meeting of Holders of
Securities of any series shall be the Persons entitled to vote at such meeting
and their counsel, any representatives of the Trustee and its counsel and any
representatives of the Trust and its counsel.
SECTION 1504. Quorum; Action.
The Persons entitled to vote a majority in principal amount of the
Outstanding Securities of a series shall constitute a quorum for a meeting of
Holders of Securities of such series; provided, however, that if any action is
to be taken at such meeting with respect to a consent or waiver which this
Indenture expressly provides may be given by the Holders of not less than a
specified percentage in principal amount of the Outstanding Securities of a
series, the Persons entitled to vote such specified percentage in principal
amount of the Outstanding Securities of such series shall constitute a quorum.
In the absence of a quorum within 30 minutes after the time appointed for any
such meeting, the meeting shall, if convened at the request of Holders of
Securities of such series, be dissolved. In any other case the meeting may be
adjourned for a period of not less than 10 days as determined by the chairman of
the meeting prior to the adjournment of such meeting. In the absence of a quorum
at any such adjourned meeting, such adjourned meeting may be further adjourned
for a period of not less than 10 days as determined by the chairman of the
meeting prior to the adjournment of such adjourned meeting. Notice of the
reconvening of any adjourned meeting shall be given as provided in Section
1502(a), except that such notice need be given only once not less than five days
prior to the date on which the meeting is scheduled to be reconvened. Notice of
the reconvening of any adjourned meeting shall state expressly the percentage,
as provided above, of the principal amount of the Outstanding Securities of such
series which shall constitute a quorum. Except as limited by the proviso to
Section 902, any resolution presented to a meeting or adjourned meeting duly
reconvened at which a quorum is present as aforesaid may be adopted by the
affirmative vote of the Holders of a majority in principal amount of the
Outstanding Securities of that series; provided, however, that, except as
limited by the proviso to Section 902, any resolution with respect to any
request, demand, authorization, direction, notice, consent, waiver or other
action which this Indenture expressly provides may be made, given or 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.
83
<PAGE>
Notwithstanding the foregoing provisions of this Section 1504, if any
action is to be taken at a meeting of Holders of Securities of any series with
respect to any request, demand, authorization, direction, notice, consent,
waiver or other action that this Indenture expressly provides may be made, given
or taken by the Holders of a specified percentage in principal amount of all
Outstanding Securities affected thereby, or of the Holders of such series and
one or more additional series:
(i) there shall be no minimum quorum requirement for such meeting;
and
(ii) the principal amount of the Outstanding Securities of such series
that vote in favor of such request, demand, authorization,
direction, notice, consent, waiver or other action shall be taken
into account in determining whether such request, demand,
authorization, direction, notice, consent, waiver or other action
has been made, given or taken under this Indenture.
SECTION 1505. Determination of Voting Rights; Conduct and Adjournment of
Meetings.
(a) Notwithstanding any provisions of this Indenture, the Trustee may
make such reasonable regulations as it may deem advisable for any
meeting of Holders of Securities of a series in regard to proof
of the holding of Securities of such series and of the
appointment of proxies and in regard to the appointment and
duties of inspectors of votes, the submission and examination of
proxies, certificates and other evidence of the right to vote,
and such other matters concerning the conduct of the meeting as
it shall deem appropriate. Except as otherwise permitted or
required by any such regulations, the holding of Securities shall
be proved in the manner specified in Section 104 and the
appointment of any proxy shall be proved in the manner specified
in Section 104 or by having the signature of the Person executing
the proxy witnessed or guaranteed by any trust company, bank or
banker authorized by Section 104 to certify to the holding of
Bearer Securities. Such regulations may provide that written
instruments appointing proxies, regular on their face, may be
presumed valid and genuine without the proof specified in Section
104 or other proof.
(b) The Trustee shall, by an instrument in writing, appoint a
temporary chairman of the meeting, unless the meeting shall have
been called by the Trust or by Holders of Securities as provided
in Section 1502(b), in which case the Trust or the Holders of
Securities of or within the series calling the meeting, as the
case may be, shall 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.
84
<PAGE>
(c) At any meeting each Holder of a Security of such series or proxy
shall be entitled to one vote for each $1,000 principal amount of
the Outstanding Securities of such series held or represented by
him; provided, however, that no vote shall be cast or counted at
any meeting in respect of any Security challenged as not
Outstanding and ruled by the chairman of the meeting to be not
Outstanding. The chairman of the meeting shall have no right to
vote, except as a Holder of a Security of such series or proxy.
(d) Any meeting of Holders of Securities of any series duly called
pursuant to Section 1502 at which a quorum is present may be
adjourned from time to time by Persons entitled to vote a
majority in principal amount of the Outstanding Securities of
such series represented at the meeting, and the meeting may be
held as so adjourned without further notice.
SECTION 1506. Counting Votes and Recording Action of Meetings.
The vote upon any resolution submitted to any meeting of Holders of
Securities of any series shall be by written ballots on which shall be
subscribed the signatures of the Holders of Securities of such series or of
their representatives by proxy and the principal amounts and serial numbers of
the Outstanding Securities of such series held or represented by them. The
permanent chairman of the meeting shall appoint two inspectors of votes who
shall count all votes cast at the meeting for or against any resolution and who
shall make and file with the secretary of the meeting their verified written
reports in duplicate of all votes cast at the meeting. A record, at least in
duplicate, of the proceedings of each meeting of Holders of Securities of any
series shall be prepared by the secretary of the meeting and there shall be
attached to said record the original reports of the inspectors of votes on any
vote by ballot taken thereat and affidavits by one or more persons having
knowledge of the fact, setting forth a copy of the notice of the meeting and
showing that said notice was given as provided in Section 1502 and, if
applicable, Section 1504. Each copy shall be signed and verified by the
affidavits of the permanent chairman and secretary of the meeting and one such
copy shall be delivered to the Trust and another to the Trustee to be preserved
by the Trustee, the latter to have attached thereto the ballots voted at the
meeting. Any record so signed and verified shall be conclusive evidence of the
matters therein stated.
SECTION 1507. Evidence of Action Taken by Holders.
Any request, demand, authorization, direction, notice, consent, waiver
or other action provided by this Indenture to be given or taken by a specified
percentage in principal amount of the Holders of any or all series may be
embodied in and evidenced by one or more instruments of substantially similar
tenor signed by such specified percentage of Holders in person or by agent duly
appointed in writing; and, except as herein otherwise expressly provided, such
action shall become effective when such instrument or instruments are delivered
to the Trustee. Proof of execution of any instrument or of a writing appointing
any
85
<PAGE>
such agent shall be sufficient for any purpose of this Indenture and (subject to
Article Six) conclusive in favor of the Trustee and the Trust, if made in the
manner provided in this Article.
SECTION 1508. Proof of Execution of Instruments.
Subject to Article Six, the execution of any instrument by a Holder or
his agent or proxy may be proved in accordance with such reasonable rules and
regulations as may be prescribed by the Trustee or in such manner as shall be
satisfactory to the Trustee.
ARTICLE XVI
SUBORDINATION
SECTION 1601. Agreement to Subordinate.
The Trust 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 Trust in a liquidation or
dissolution of the Trust or in a bankruptcy, reorganization, insolvency,
receivership or similar proceeding relating to the Trust 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 Trust debt,
the amount
86
<PAGE>
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 Trust 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 Trust 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 Trust
receives a notice of the default from a person who may give it
pursuant to Section 1611. If the Trust 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 Trust 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. 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 Trust shall promptly notify holders of Senior Debt of the
acceleration. The Trust 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 Trust.
The Trust shall promptly notify the Trustee and any Paying Agent of any
facts known to the Trust that would cause a payment of principal of or interest
on Securities to violate this Article.
87
<PAGE>
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 Trust and
Holders, a payment by the Trust 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 Trust and Holders, the obligation of the
Trust, 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 Trust
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 Trust 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 Trust 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.
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
88
<PAGE>
or interest on the Securities to violate this Article. Only the Trust, 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 Trust's obligation to pay, and the
Trust'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.
89
<PAGE>
IN WITNESS WHEREOF, the parties hereto have caused this Indenture to be
duly executed by their respective officers hereunto duly authorized, all as of
the day and year first above written.
CORNERSTONE REALTY INCOME TRUST, INC.
By:
--------------------------------------
Name:
--------------------------------
Title:
--------------------------------
__________________________, as Trustee
By:
--------------------------------------
Name:
--------------------------------
Title:
--------------------------------
90
<PAGE>
STATE OF VIRGINIA
CITY OF RICHMOND
The foregoing instrument was acknowledged before me in the City of
Richmond, State of Virginia, by _________________, ___________________________
_________ of Cornerstone Realty Income Trust, Inc., a corporation, on behalf of
the corporation.
My commission expires .
- ------------------------------------
Notary Public
STATE OF
----------------------------
CITY/COUNTY OF
----------------------
The foregoing instrument was acknowledged before me in the City/County
of _____________________________, State of _______________________, by
__________________, _______________________________ of _________________, a
Virginia banking corporation, on behalf of the corporation.
My commission expires .
- ------------------------------------
91
<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
1.165-12(c)(1)(v) are herein referred to as "financial institutions") purchasing
for their own account or for resale, or (b) United States person(s) who acquired
the Securities through foreign branches of United States financial institutions
and who hold the Securities through such United States financial institutions on
the date hereof (and in either case (a) or (b), each such United States
financial institution hereby agrees, on its own behalf or through its agent,
that you may advise Cornerstone Realty Income Trust, Inc. or its agent that such
financial institution will provide a certificate within a reasonable time
stating that it agrees to comply with the requirements of Section 165(j)(3)(A),
(B) or (C) of the United States Internal Revenue Code of 1986, as amended, and
the regulations thereunder), or (iii) are owned by a financial institution for
purposes of resale during the restricted period (as defined in United States
Treasury Regulations Section 1.163- 5(c)(2)(i)(D)(7)), and, such financial
institution described in clause (iii) above (whether or not also described in
clause (i) or (ii)), certifies that it has not acquired the Securities for
purposes of resale directly or indirectly to a United States person or to a
person within the United States or its possessions.
As used herein, "United States" means the United States of America
(including the States and the District of Columbia); and its "possessions"
include Puerto Rico, the U.S. Virgin Islands, Guam, American Samoa, Wake Island
and the Northern Mariana Islands.
We undertake to advise you promptly by tested telex on or prior to the
date on which you intend to submit your certification relating to the
above-captioned Securities held by you for our account in accordance with your
Operating Procedures if any applicable
A-1
<PAGE>
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 related to [U.S.$]
________________ of such interest in the above-captioned Securities in respect
of which we are not able to certify and as to which we understand an exchange
for an interest in a Permanent Global Security or an exchange for and delivery
of definitive Securities (or, if relevant, collection of any interest) cannot be
made until we do so certify.
We understand that this certificate may be required in connection with
certain tax legislation in the United States. If administrative or legal
proceedings are commenced or threatened in connection with which this
certificate is or would be relevant, we irrevocably authorize you to produce
this certificate or a copy thereof to any interested party in such proceedings.
Dated: __________________, 19__
[To be dated no earlier than the 15th day prior
to the earlier of (i) the Exchange Date or
(ii) the relevant Interest Payment Date occurring
prior to the Exchange Date, as applicable]
- --------------------------------
[Name of Person Making Certification]
- ---------------------------
(Authorized Signator)
Name:
Title:
A-2
<PAGE>
EXHIBIT A-2
FORM OF CERTIFICATE TO BE GIVEN BY EUROCLEAR
AND CEDEL S.A. IN CONNECTION WITH THE EXCHANGE OF
A PORTION OF A TEMPORARY GLOBAL SECURITY OR TO
OBTAIN INTEREST PAYABLE PRIOR TO THE EXCHANGE DATE
CERTIFICATE
[Insert title or sufficient description of Securities to be delivered]
This is to certify that, based solely on written certifications that we
have received in writing, by tested telex or by electronic transmission from
each of the persons appearing in our records as persons entitled to a portion of
the principal amount set forth below (our "Member Organizations") substantially
in the form attached hereto, as of the date hereof, [U.S.$] ______________
principal amount of the above-captioned Securities (i) is owned by person(s)
that are not citizens or residents of the United States, domestic partnerships,
domestic corporations or any estate or trust the income of which is subject to
United States Federal income taxation regardless of its source ("United States
person(s)"), (ii) is owned by United States person(s) that are (a) foreign
branches of United States financial institutions (financial institutions, as
defined in United States Treasury Regulations Section 1.165-12(c)(1)(v) are
herein referred to as "financial institutions") purchasing for their own account
or for resale, or (b) United States person(s) who acquired the Securities
through foreign branches of United States financial institutions and who hold
the Securities through such United States financial institutions on the date
hereof (and in either case (a) or (b), each such financial institution has
agreed, on its own behalf or through its agent, that we may advise Cornerstone
Realty Income Trust, Inc. or its agent that such financial institution will
provide a certificate within a reasonable time stating that it agrees to comply
with the requirements of Section 165(j)(3)(A), (B), or (C) of the Internal
Revenue Code of 1986, as amended, and the regulations thereunder), or (iii) is
owned by a financial institution for purposes of resale during the restricted
period (as defined in United States Treasury Regulations Section
1.163-5(c)(2)(i)(D)(7)), and that such financial institutions described in
clause (iii) above (whether or not also described in clause (i) or (ii)) have
certified that they have not acquired the Securities for purposes of resale
directly or indirectly to a United States person or to a person within the
United States or its possessions.
As used herein, "United States" means the United States of America
(including the States and the District of Columbia); and its "possessions"
include Puerto Rico, the U.S. Virgin Islands, Guam, American Samoa, Wake Island
and the Northern Mariana Islands.
We further certify that (i) we are not making available herewith for
exchange (or, if relevant, collection of any interest) any portion of the
temporary global Security
A-3
<PAGE>
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 connection with which this
certificate is or would be relevant, we irrevocably authorize you to produce
this certificate or a copy thereof to any interested party in such proceedings.
Dated: __________________, 19__
[To be dated no earlier than the earlier of
the Exchange Date or the relevant Interest
Payment Date occurring prior to the Exchange
Date, as applicable]
- -------------------------------
[Morgan Guaranty Trust Company
of New York, Brussels Office,] as
Operator of the Euroclear System
[Cedel S.A.]
By: ____________________________
(1029)V:\CORNER\SHELF\4IM.001
A-4
EXHIBIT 4.7
REGISTERED PRINCIPAL AMOUNT No.:
$
CUSIP No.: _________
CORNERSTONE REALTY INCOME TRUST, INC.
[Designation of Senior Security]
CORNERSTONE REALTY INCOME TRUST, INC., a Virginia corporation
(hereinafter called the "Trust," which term shall include any successor
corporation under the Indenture hereinafter referred to), for value received,
hereby promises to pay to , or registered assigns, upon presentation, the
principal sum of DOLLARS on _____________, and to pay interest on the
outstanding principal amount thereon from _____________, or from the most recent
Interest Payment Date to which interest has been paid or duly provided for,
semi-annually in arrears on _______ and _________ in each year, commencing
_______________, at the rate of __% per annum, until the entire principal amount
hereof is paid or made available for payment. The interest so payable, and
punctually paid or duly provided for on any Interest Payment Date will, as
provided in the Indenture, be paid to the Person in whose name this Senior
Security (or one or more Predecessor Senior Securities) is registered at the
close of business on the Regular Record Date for such interest which shall be
the ________ or ________ (whether or not a Business Day), as the case may be,
next preceding such Interest Payment Date. Any such interest not so punctually
paid or duly provided for shall forthwith cease to be payable to the Holder on
such Regular Record Date, and may either be paid to the Person in whose name
this Senior Security (or one or more Predecessor Senior Securities) is
registered at the close of business on a Special Record Date for the payment of
such Defaulted Interest to be fixed by the Trustee, notice whereof shall be
given to Holders of Senior Securities of this series not more than 15 days and
not less than 10 days prior to such Special Record Date, or may be paid at any
time in any other lawful manner not inconsistent with the requirements of any
securities exchange on which the Senior Securities may be listed, and upon such
notice as may be required by such exchange, all as more fully provided in the
Indenture. Payment of the principal of, Make-Whole Amount, if any, on, and
interest on this Senior Security will be made at the office or agency of the
Trust maintained for that purpose in the City of _____________, State of
________, or elsewhere as provided in the Indenture, in such coin or currency of
the United States of America as at the time of payment is legal tender for
payment of public and private debts; provided, however, that at the option of
the Trust payment of interest may be made by (i) check mailed to the address of
the Person entitled thereto as such address
<PAGE>
shall appear in the Security Register kept for the Senior Securities pursuant to
Section 305 of the Indenture (the "Security Register") or (ii) transfer to an
account of the Person entitled thereto located inside the United States.
This Senior Security is one of a duly authorized issue of securities of
the Trust (herein called the "Senior Securities"), issued and to be issued in
one or more series under an Indenture, dated as of __________________, 1997
(herein called the "Indenture"), between the Trust and
_____________________________ (herein called the "Trustee," which term includes
any successor trustee under the Indenture with respect to the Senior
Securities), to which Indenture and all indentures supplemental thereto
reference is hereby made for a statement of the respective rights, limitations
of rights, duties and immunities thereunder of the Trust, the Trustee and the
Holders of the Senior Securities and of the terms upon which the Senior
Securities are, and are to be, authenticated and delivered. This Senior Security
is one of the series designated as the "[designation of Senior Securities],"
limited in aggregate principal amount to $----------.
The Senior Securities may be redeemed at any time at the option of the
Trust, in whole or in part, upon notice of not more than 60 nor less than 30
days prior to the Redemption Date, at a redemption price equal to the sum of (i)
the principal amount of the Senior Securities being redeemed plus accrued
interest thereon to the Redemption Date and (ii) the Make-Whole Amount, if any,
with respect to such Senior Securities.
The following definitions apply with respect to any redemption of the
Senior Securities of this series at the option of the Trust:
"Make-Whole Amount" means, in connection with any optional redemption
or accelerated payment of any Senior Security, the excess, if any, of (i) the
aggregate present value as of the date of such redemption or accelerated payment
of each dollar of principal being redeemed or paid and the amount of interest
(exclusive of any interest accrued to the date of redemption or accelerated
payment) that would have been payable in respect of such dollar if such
redemption or accelerated payment had not been made, determined by discounting,
on a semiannual basis, such principal and interest at the Reinvestment Rate
(determined on the third Business Day preceding the date such notice of
redemption is given or declaration of acceleration is made) from the respective
dates on which such principal and interest would have been payable if such
redemption or accelerated payment had
-2-
<PAGE>
not been made, over (ii) the aggregate principal amount of the Senior Securities
being redeemed or paid.
"Reinvestment Rate" means .25% (one-fourth of one percent) plus the
arithmetic mean of the yields under the respective headings "This Week" and
"Last Week" published in the Statistical Release under the caption "Treasury
Constant Maturities" for the maturity (rounded to the nearest month)
corresponding to the remaining life to maturity, as of the payment date of the
principal being redeemed or paid. If no maturity exactly corresponds to such
maturity, yields for the two published maturities most closely corresponding to
such maturity shall be calculated pursuant to the immediately preceding sentence
and the Reinvestment Rate shall be interpolated or extrapolated from such yields
on a straight-line basis, rounding in each of such relevant periods to the
nearest month. For the purposes of calculating the Reinvestment Rate, the most
recent Statistical Release published prior to the date of determination of the
Make- Whole Amount shall be used.
"Statistical Release" means the statistical release designated "H.15
(519)" or any successor publication which is published weekly by the Federal
Reserve System and which establishes yields on actively traded United States
government securities adjusted to constant maturities or, if such statistical
release is not published at the time of any determination under the Indenture,
then such other reasonably comparable index which shall be designated by the
Trust.
The Indenture contains provisions for defeasance at any time of (a) the
entire indebtedness of the Trust on this Senior Security and (b) certain
restrictive covenants and the related defaults and Events of Default applicable
to the Trust, in each case, upon compliance by the Trust with certain conditions
set forth in the Indenture, which provisions apply to this Senior Security.
If an Event of Default with respect to the Senior Securities shall
occur and be continuing, the principal of, and the Make- Whole Amount, if any,
on, the Senior Securities may be declared due and payable in the manner and with
the effect provided in the Indenture.
As provided in and subject to the provisions of the Indenture, the
Holder of this Senior Security shall not have the right to institute any
proceeding with respect to the Indenture or for the appointment of a receiver or
trustee or for any other remedy thereunder, unless such Holder shall have
previously given the Trustee written notice of a continuing Event of Default
with
-3-
<PAGE>
respect to the Senior Securities, the Holders of not less than 25% in principal
amount of the Senior Securities at the time Outstanding shall have made written
request to the Trustee to institute proceedings in respect of such Event of
Default as Trustee and offered the Trustee reasonable indemnity and the Trustee
shall not have received from the Holders of a majority in principal amount of
the Senior Securities at the time Outstanding a direction inconsistent with such
request, and shall have failed to institute any such proceeding, for 60 days
after receipt of such notice, request and offer of indemnity. The foregoing
shall not apply to any suit instituted by the Holder of this Senior Security for
the enforcement of any payment of principal hereof or any interest on or after
the respective due dates expressed herein.
The Indenture permits, with certain exceptions as therein provided, the
amendment thereof and the modification of the rights and obligations of the
Trust and the rights of the Holders of the Senior Securities under the Indenture
at any time by the Trust and the Trustee with the consent of the Holders of not
less than a majority in principal amount of the Outstanding Senior Securities.
The Indenture also contains provisions permitting the Holders of specified
percentages in principal amount of the Senior Securities at the time
Outstanding, on behalf of the Holders of all Senior Securities, to waive
compliance by the Trust with certain provisions of the Indenture and certain
past defaults under the Indenture and their consequences. Any such consent or
waiver by the Holder of this Senior Security shall be conclusive and binding
upon such Holder and upon all future Holders of this Senior Security and of any
Senior Security issued upon the registration of transfer hereof or in exchange
herefor or in lieu hereof, whether or not notation of such consent or waiver is
made upon this Senior Security.
No reference herein to the Indenture and no provision of this Senior
Security or of the Indenture shall alter or impair the obligation of the Trust,
which is absolute and unconditional, to pay the principal of, Make-Whole Amount,
if any, on, and interest on this Senior Security at the times, place and rate,
and in the coin or currency, herein prescribed.
As provided in the Indenture and subject to certain limitations therein
set forth, the transfer of this Senior Security is registrable in the Security
Register, upon surrender of this Senior Security for registration of transfer at
the office or agency of the Trust in any Place of Payment where the principal
of, Make-Whole Amount, if any, on, and interest on this Senior Security are
payable, duly endorsed by, or accompanied by a written instrument of transfer in
form
-4-
<PAGE>
satisfactory to the Trust and the Security Registrar for the Senior Securities
(the "Security Registrar") duly executed by, the Holder hereof or his attorney
duly authorized in writing, and thereupon one or more new Senior Securities of
this series, of authorized denominations and for the same aggregate principal
amount, will be issued to the designated transferee or transferees.
The Senior Securities of this series are issuable only in registered
form without coupons in denominations of $1,000 and any integral multiple
thereof. As provided in the Indenture and subject to certain limitations therein
set forth, Senior Securities of this series are exchangeable for a like
aggregate principal amount of Senior Securities of this series of a different
authorized denomination, as requested by the Holder surrendering the same.
No service charge shall be made for any such registration of transfer
or exchange, but the Trust may require payment of a sum sufficient to cover any
tax or other governmental charge payable in connection therewith.
Prior to due presentment of this Senior Security for registration of
transfer, the Trust, the Trustee and any agent of the Trust or the Trustee may
treat the Person in whose name this Senior Security is registered as the owner
hereof for all purposes, whether or not this Senior Security be overdue, and
neither the Trust, the Trustee nor any such agent shall be affected by notice to
the contrary.
No recourse under or upon any obligation, covenant or agreement
contained in the Indenture or in this Senior Security, or because of any
indebtedness evidenced thereby, shall be had against any promoter, as such or,
against any past, present or future shareholder, officer or director, as such,
of the Trust or of any successor, either directly or through the Trust or any
successor, under any rule of law, statute or constitutional provision or by the
enforcement of any assessment or by any legal or equitable proceeding or
otherwise, all such liability being expressly waived and released by the
acceptance of this Senior Security by the Holder thereof and as part of the
consideration for the issue of the Senior Securities.
All terms used in this Senior Security which are defined in the
Indenture shall have the meanings assigned to them in the Indenture.
-5-
<PAGE>
THE INDENTURE AND THE SENIOR SECURITIES, INCLUDING THIS SENIOR
SECURITY, SHALL BE GOVERNED BY AND CONSTRUED IN ACCORDANCE WITH THE LAW OF THE
COMMONWEALTH OF VIRGINIA.
Pursuant to a recommendation promulgated by the Committee on Uniform
Security Identification Procedures, the Trust has caused "CUSIP" numbers to be
printed on the Senior Securities as a convenience to the Holders of the Senior
Securities. No representation is made as to the correctness or accuracy of such
CUSIP numbers as printed on the Senior Securities, and reliance may be placed
only on the other identification numbers printed hereon.
Unless the certificate of authentication hereon has been executed by or
on behalf of the Trustee by manual signature, this Senior Security shall not be
entitled to any benefit under the Indenture or be valid or obligatory for any
purpose.
IN WITNESS WHEREOF, the Trust has caused this instrument to be duly
executed under its corporate seal this _____day of ______________, 1997.
CORNERSTONE REALTY INCOME TRUST, INC.
By:
-----------------------------------
Name:
---------------------------------
Title:
--------------------------------
Attest:
By:
-----------------------------------
Name:
---------------------------------
Title:
--------------------------------
[SEAL]
TRUSTEE'S CERTIFICATE OF AUTHENTICATION:
This is one of the Senior Securities of the series designated
"[designation of Senior Securities]" pursuant to the within-mentioned Indenture.
------------------------,
as Trustee
By:
-------------------------
Authorized Signatory
-6-
<PAGE>
- --------------------------------------------------------------------------------
ASSIGNMENT FORM
FOR VALUE RECEIVED, the undersigned hereby
sells, assigns and transfers unto
PLEASE INSERT SOCIAL
SECURITY OR OTHER IDENTIFYING
NUMBER OF ASSIGNEE
................................................................................
................................................................................
(Please Print or Typewrite Name and Address including Zip Code of Assignee)
................................................................................
the within Senior Security of Cornerstone Realty Income Trust, Inc. and
__________ hereby does irrevocably constitute and appoint
................................................................................
Attorney to transfer said Senior Security on the books of the within-named Trust
with full power of substitution in the premises.
Dated:..........................................................................
................................................................................
NOTICE: The signature to this assignment must correspond with the name as it
appears on the first page of the within Senior Security in every particular,
without alteration or enlargement or any change whatever.
- --------------------------------------------------------------------------------
-7-
Exhibit 4.8
REGISTERED PRINCIPAL AMOUNT No.:
$
CUSIP No.: _________
CORNERSTONE REALTY INCOME TRUST, INC.
[Designation of Subordinated Security]
CORNERSTONE REALTY INCOME TRUST, INC., a Virginia corporation
(hereinafter called the "Trust," which term shall include any successor
corporation under the Indenture hereinafter referred to), for value received,
hereby promises to pay to
, or registered assigns, upon presentation, the principal sum of DOLLARS on
_____________, and to pay interest on the outstanding principal amount thereon
from _____________, or from the most recent Interest Payment Date to which
interest has been paid or duly provided for, semi-annually in arrears on _______
and _________ in each year, commencing _______________, at the rate of __% per
annum, until the entire principal amount hereof is paid or made available for
payment. The interest so payable, and punctually paid or duly provided for on
any Interest Payment Date will, as provided in the Indenture, be paid to the
Person in whose name this Subordinated Security (or one or more Predecessor
Subordinated Securities) is registered at the close of business on the Regular
Record Date for such interest which shall be the ________ or ________ (whether
or not a Business Day), as the case may be, next preceding such Interest Payment
Date. Any such interest not so punctually paid or duly provided for shall
forthwith cease to be payable to the Holder on such Regular Record Date, and may
either be paid to the Person in whose name this Subordinated Security (or one or
more Predecessor Subordinated Securities) is registered at the close of business
on a Special Record Date for the payment of such Defaulted Interest to be fixed
by the Trustee, notice whereof shall be given to Holders of Subordinated
Securities of this series not more than 15 days and not less than 10 days prior
to such Special Record Date, or may be paid at any time in any other lawful
manner not inconsistent with the requirements of any securities exchange on
which the Subordinated Securities may be listed, and upon such notice as may be
required by such exchange, all as more fully provided in the Indenture. Payment
of the principal of, Make-Whole Amount, if any, on, and interest on this
Subordinated Security will be made at the office or agency of the Trust
maintained for that purpose in the City of Richmond, State of Virginia, or
elsewhere as provided in the Indenture, in such coin or currency of the United
States of America as at the time of payment is legal tender for payment of
public and private debts; provided, however, that at the option of the Trust
payment of interest may be made by (i) check mailed to the address of the Person
entitled thereto as such address shall appear in the Security Register kept for
the Subordinated Securities pursuant to Section 305 of the Indenture (the
"Security Register") or (ii) transfer to an account of the Person entitled
thereto located inside the United States.
<PAGE>
This Subordinated Security is one of a duly authorized issue of
securities of the Trust (herein called the "Subordinated Securities"), issued
and to be issued in one or more series under an Indenture, dated as of
____________, 1997 (herein called the "Indenture"), between the Trust and
____________ (herein called the "Trustee," which term includes any successor
trustee under the Indenture with respect to the Subordinated Securities), to
which Indenture and all indentures supplemental thereto reference is hereby made
for a statement of the respective rights, limitations of rights, duties and
immunities thereunder of the Trust, the Trustee and the Holders of the
Subordinated Securities and of the terms upon which the Subordinated Securities
are, and are to be, authenticated and delivered. This Subordinated Security is
one of the series designated as the "[designation of Subordinated Securities],"
limited in aggregate principal amount to $__________.
The Subordinated Securities may be redeemed at any time at the option
of the Trust, in whole or in part, upon notice of not more than 60 nor less than
30 days prior to the Redemption Date, at a redemption price equal to the sum of
(i) the principal amount of the Subordinated Securities being redeemed plus
accrued interest thereon to the Redemption Date and (ii) the Make-Whole Amount,
if any, with respect to such Subordinated Securities.
The following definitions apply with respect to any redemption of the
Subordinated Securities of this series at the option of the Trust:
"Make-Whole Amount" means, in connection with any optional redemption
or accelerated payment of any Subordinated Security, the excess, if any, of (i)
the aggregate present value as of the date of such redemption or accelerated
payment of each dollar of principal being redeemed or paid and the amount of
interest (exclusive of any interest accrued to the date of redemption or
accelerated payment) that would have been payable in respect of such dollar if
such redemption or accelerated payment had not been made, determined by
discounting, on a semiannual basis, such principal and interest at the
Reinvestment Rate (determined on the third Business Day preceding the date such
notice of redemption is given or declaration of acceleration is made) from the
respective dates on which such principal and interest would have been payable if
such redemption or accelerated payment had not been made, over (ii) the
aggregate principal amount of the Subordinated Securities being redeemed or
paid.
"Reinvestment Rate" means .25% (one-fourth of one percent) plus the
arithmetic mean of the yields under the respective headings "This Week" and
"Last Week" published in the Statistical Release under the caption "Treasury
Constant Maturities" for the maturity (rounded to the nearest month)
corresponding to the remaining life to maturity, as of the payment date of the
principal being redeemed or paid. If no maturity exactly
2
<PAGE>
corresponds to such maturity, yields for the two published maturities most
closely corresponding to such maturity shall be calculated pursuant to the
immediately preceding sentence and the Reinvestment Rate shall be interpolated
or extrapolated from such yields on a straight-line basis, rounding in each of
such relevant periods to the nearest month. For the purposes of calculating the
Reinvestment Rate, the most recent Statistical Release published prior to the
date of determination of the Make- Whole Amount shall be used.
"Statistical Release" means the statistical release designated "H.15
(519)" or any successor publication which is published weekly by the Federal
Reserve System and which establishes yields on actively traded United States
government securities adjusted to constant maturities or, if such statistical
release is not published at the time of any determination under the Indenture,
then such other reasonably comparable index which shall be designated by the
Trust.
The Indenture contains provisions for defeasance at any time of (a) the
entire indebtedness of the Trust on this Subordinated Security and (b) certain
restrictive covenants and the related defaults and Events of Default applicable
to the Trust, in each case, upon compliance by the Trust with certain conditions
set forth in the Indenture, which provisions apply to this Subordinated
Security.
If an Event of Default with respect to the Subordinated Securities
shall occur and be continuing, the principal of, and the Make-Whole Amount, if
any, on, the Subordinated Securities may be declared due and payable in the
manner and with the effect provided in the Indenture.
As provided in and subject to the provisions of the Indenture, the
Holder of this Subordinated Security shall not have the right to institute any
proceeding with respect to the Indenture or for the appointment of a receiver or
trustee or for any other remedy thereunder, unless such Holder shall have
previously given the Trustee written notice of a continuing Event of Default
with respect to the Subordinated Securities, the Holders of not less than 25% in
principal amount of the Subordinated Securities at the time Outstanding shall
have made written request to the Trustee to institute proceedings in respect of
such Event of Default as Trustee and offered the Trustee reasonable indemnity
and the Trustee shall not have received from the Holders of a majority in
principal amount of the Subordinated Securities at the time Outstanding a
direction inconsistent with such request, and shall have failed to institute any
such proceeding, for 60 days after receipt of such notice, request and offer of
indemnity. The foregoing shall not apply to any suit instituted by the Holder of
this Subordinated Security for the enforcement of any payment of principal
hereof or any interest on or after the respective due dates expressed herein.
3
<PAGE>
The Indenture permits, with certain exceptions as therein provided, the
amendment thereof and the modification of the rights and obligations of the
Trust and the rights of the Holders of the Subordinated Securities under the
Indenture at any time by the Trust and the Trustee with the consent of the
Holders of not less than a majority in principal amount of the Outstanding
Subordinated Securities. The Indenture also contains provisions permitting the
Holders of specified percentages in principal amount of the Subordinated
Securities at the time Outstanding, on behalf of the Holders of all Subordinated
Securities, to waive compliance by the Trust with certain provisions of the
Indenture and certain past defaults under the Indenture and their consequences.
Any such consent or waiver by the Holder of this Subordinated Security shall be
conclusive and binding upon such Holder and upon all future Holders of this
Subordinated Security and of any Subordinated Security issued upon the
registration of transfer hereof or in exchange herefor or in lieu hereof,
whether or not notation of such consent or waiver is made upon this Subordinated
Security.
No reference herein to the Indenture and no provision of this
Subordinated Security or of the Indenture shall alter or impair the obligation
of the Trust, which is absolute and unconditional, to pay the principal of,
Make-Whole Amount, if any, on, and interest on this Subordinated Security at the
times, place and rate, and in the coin or currency, herein prescribed.
As provided in the Indenture and subject to certain limitations therein
set forth, the transfer of this Subordinated Security is registrable in the
Security Register, upon surrender of this Subordinated Security for registration
of transfer at the office or agency of the Trust in any Place of Payment where
the principal of, Make-Whole Amount, if any, on, and interest on this
Subordinated Security are payable, duly endorsed by, or accompanied by a written
instrument of transfer in form satisfactory to the Trust and the Security
Registrar for the Subordinated Securities (the "Security Registrar") duly
executed by, the Holder hereof or his attorney duly authorized in writing, and
thereupon one or more new Subordinated Securities of this series, of authorized
denominations and for the same aggregate principal amount, will be issued to the
designated transferee or transferees.
The Subordinated Securities of this series are issuable only in
registered form without coupons in denominations of $1,000 and any integral
multiple thereof. As provided in the Indenture and subject to certain
limitations therein set forth, Subordinated Securities of this series are
exchangeable for a like aggregate principal amount of Subordinated Securities of
this series of a different authorized denomination, as requested by the Holder
surrendering the same.
No service charge shall be made for any such registration of transfer
or exchange, but the Trust may require payment of a sum
4
<PAGE>
sufficient to cover any tax or other governmental charge payable in connection
therewith.
Prior to due presentment of this Subordinated Security for registration
of transfer, the Trust, the Trustee and any agent of the Trust or the Trustee
may treat the Person in whose name this Subordinated Security is registered as
the owner hereof for all purposes, whether or not this Subordinated Security be
overdue, and neither the Trust, the Trustee nor any such agent shall be affected
by notice to the contrary.
The Holder of this Subordinated Security by the acceptance thereof
agrees that the indebtedness evidenced by this Subordinated Security is
subordinated in right of payment, to the extent and in the manner provided in
Article Sixteen of the Indenture, to the prior payment in full of all Senior
Debt and that the subordination is for the benefit of the holders of Senior
Debt. The Holder hereof authorizes and directs the Trustee on his behalf to take
such action as may be necessary or appropriate to effect such subordination as
provided in the Indenture and appoints the Trustee his attorney-in-fact for such
purpose. "Senior Debt" is defined in the Indenture as the principal of and
interest on, or substantially similar payments to be made by the Trust in
respect of, the following, whether outstanding at the date of execution of this
Indenture or thereafter incurred, created or assumed: (a) indebtedness of the
Trust for money borrowed or represented by purchase-money obligations, (b)
indebtedness of the Trust evidenced by notes, debentures, or bonds, or other
securities issued under the provisions of an indenture, fiscal agency agreement
or other instrument, (c) obligations of the Trust as lessee under leases of
property either made as part of any sale and lease-back transaction to which the
Trust is a party or otherwise, (d) indebtedness of partnerships and joint
ventures which is included in the Trust's consolidated financial statements, (e)
indebtedness, obligations and liabilities of others in respect of which the
Trust is liable contingently or otherwise to pay or advance money or property or
as guarantor, endorser or otherwise or which the Trust has agreed to purchase or
otherwise acquire, and (f) any binding commitment of the Trust to fund any real
estate investment or to fund any investment in any entity making such real
estate investment; but excluding, however, (1) any such indebtedness, obligation
or liability referred to in clauses (a) through (f) above as to which, in the
instrument creating or evidencing the same or pursuant to which the same is
outstanding, it is provided that such indebtedness, obligation or liability is
not superior in right of payment to the Subordinated Securities, or ranks pari
passu with the Subordinated Securities, (2) any such indebtedness, obligation or
liability which is subordinated to indebtedness of the Trust to substantially
the same extent as or to a greater extent than the Subordinated Securities are
subordinated and (3) the Subordinated Securities. As used in the preceding
sentence the term "purchase-money obligations" shall mean indebtedness or
obligations evidenced by a note, debenture,
5
<PAGE>
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.
No recourse under or upon any obligation, covenant or agreement
contained in the Indenture or in this Subordinated Security, or because of any
indebtedness evidenced thereby, shall be had against any promoter, as such or,
against any past, present or future shareholder, officer or director, as such,
of the Trust or of any successor, either directly or through the Trust or any
successor, under any rule of law, statute or constitutional provision or by the
enforcement of any assessment or by any legal or equitable proceeding or
otherwise, all such liability being expressly waived and released by the
acceptance of this Subordinated Security by the Holder thereof and as part of
the consideration for the issue of the Subordinated Securities.
All terms used in this Subordinated Security which are defined in the
Indenture shall have the meanings assigned to them in the Indenture.
THE INDENTURE AND THE SUBORDINATED SECURITIES, INCLUDING THIS
SUBORDINATED SECURITY, SHALL BE GOVERNED BY AND CONSTRUED IN ACCORDANCE WITH THE
LAW OF THE COMMONWEALTH OF VIRGINIA.
Pursuant to a recommendation promulgated by the Committee on Uniform
Security Identification Procedures, the Trust has caused "CUSIP" numbers to be
printed on the Subordinated Securities as a convenience to the Holders of the
Subordinated Securities. No representation is made as to the correctness or
accuracy of such CUSIP numbers as printed on the Subordinated Securities, and
reliance may be placed only on the other identification numbers printed hereon.
Unless the certificate of authentication hereon has been executed by or
on behalf of the Trustee by manual signature, this Subordinated Security shall
not be entitled to any benefit under the Indenture or be valid or obligatory for
any purpose.
IN WITNESS WHEREOF, the Trust has caused this instrument to be duly
executed under its corporate seal this day of , .
CORNERSTONE REALTY INCOME TRUST, INC.
By:
-----------------------------------
Name:
---------------------------------
Title:
--------------------------------
6
<PAGE>
Attest:
By:
-----------------------------------
Name:
---------------------------------
Title:
--------------------------------
[SEAL]
TRUSTEE'S CERTIFICATE OF AUTHENTICATION:
This is one of the Subordinated Securities of the series designated
"[designation of Subordinated Securities]" pursuant to the within-mentioned
Indenture.
- ---------------------------,
as Trustee
By:
------------------------
Authorized Signatory
7
<PAGE>
ASSIGNMENT FORM
FOR VALUE RECEIVED, the undersigned hereby
sells, assigns and transfers unto
PLEASE INSERT SOCIAL
SECURITY OR OTHER IDENTIFYING
NUMBER OF ASSIGNEE
. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
(Please Print or Typewrite Name and Address including
Zip Code of Assignee)
. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . the
within Subordinated Security of Cornerstone Realty Income Trust,
Inc. and __________ hereby does irrevocably constitute and
appoint
. . . . . . . . . . . . . . . . . . . . . . . . . . . . Attorney
to transfer said Subordinated Security on the books of the
within-named Trust with full power of substitution in the
premises.
Dated: . . . . . . . . . . . . . . . . . . . . . . . . . . .
. . . . . . . . . . . . . . . . . . . . . .
NOTICE: The signature to this assignment must correspond with the name as it
appears on the first page of the within Subordinated Security in every
particular, without alteration or enlargement or any change whatever.
8
Exhibit 5
[MWBB Opinion Letterhead]
______ __, 1997
Board of Directors
Cornerstone Realty Income Trust, Inc.
306 East Main Street
Richmond, Virginia 23219
Registration Statement on Form S-3
$200,000,000 of Offered Securities
Gentlemen:
We are acting as counsel for Cornerstone Realty Income Trust, Inc. (the
"Company") in connection with the registration under the Securities Act of 1933
of debt securities ("Debt Securities"), Common Shares, no par value ("Common
Shares"), and Preferred Shares, no par value ("Preferred Shares"), of the
Company having an aggregate maximum public offering price of $200,000,000 (the
"Offered Securities"). The Offered Securities are described in the Registration
Statement on Form S-3 of the Company (the "Registration Statement") to be filed
with the Securities and Exchange Commission (the "Commission") on August 27,
1997. In connection with the filing of the Registration Statement you have
requested our opinion concerning certain corporate matters.
We are of the opinion that:
1. The Company is a corporation duly organized and validly existing
under the laws of the Commonwealth of Virginia.
2. When the Offered Securities have been sold as described in the
Registration Statement, the Offered Securities (to the extent consisting of
Common Shares and/or Preferred Shares) will be legally issued, fully paid and
nonassessable and (to the extent consisting of Debt Securities) will be legally
issued, fully paid and nonassessable and will be binding obligations of the
Company. We expressly note that, as stated in the Registration Statement, as of
the date hereof, the Company's Articles of Incorporation have not been amended
to permit the issuance of Preferred Shares.
We consent to the filing of this opinion with the Commission as an
exhibit to the Registration Statement and to the reference to us in the
Prospectus included therein.
Very truly yours,
McGuire, Woods, Battle & Boothe, L.L.P.
Exhibit 12
CORNERSTONE REALTY INCOME TRUST, INC.
RATIO OF EARNINGS TO FIXED CHARGES
<TABLE>
<CAPTION>
YEAR ENDED DECEMBER 31, SUPPLEMENTAL PRO FORMA (b)
------------------------------------------------------- ----------------------------
SIX MONTHS SIX MONTHS YEAR
ENDED ENDED ENDED
6/30/97 1996 1995 1994 1993 6/30/97 12/31/96
-------------- ------------------ ------------ ------------ ---------- -------------- ------------
<S> <C> <C> <C> <C> <C> <C> <C>
Net Income (loss) ............ $ 8,531,044 $ (4,169,849) $5,229,715 $2,386,303 $496,646 $ 9,241,426 $14,806,154
ADD:
Fixed Charges ............ 3,061,119 1,470,414 311,824 12,737 2,452 3,272,310 6,119,895
------------- ------------- ----------- ----------- --------- ------------- ------------
Earnings ..................... 11,592,163 (2,699,435) 5,541,539 2,399,040 499,098 12,513,736 20,926,049
Fixed Charges: ...............
Interest on indebtedness ... 2,893,125 1,332,190 248,120 -- -- 3,104,316 5,981,671
Amortization of loan costs . 129,165 91,592 43,983 -- --. 129,165 91,592
Portion of rents representa-
tive of interest factor 38,829 46,632 19,721 12,737 2,452 38,829 46,632
Capitalized interest ......... -- -- -- -- -- -- --
------------- ------------- ----------- ----------- --------- ------------- ------------
Fixed Charges ............... 3,061,119 1,470,414 311,824 12,737 2,452 3,272,310 6,119,895
------------- ------------- ----------- ----------- --------- ------------- ------------
Ratio of Earnings to Fixed
Charges ..................... 3.79 (a) 17.77 188.36 203.56 3.82 3.42
============= ============= =========== =========== ========= ============= ============
</TABLE>
(a) Earnings for the year ended December 31, 1996 were inadequate to cover fixed
charges. The amount of coverage deficiency was $4,169,849 for the year ended
December 31, 1996.
(b) To give effect to both the acquisition of twenty of twenty-one properties
acquired during 1996 and five of seven properties acquired during 1997 and
expenses amounting to $16,526,021 related to the termination of external
management contracts incurred during 1996.
Exhibit 23.1
Consent of Independent Auditors
We consent to the reference to our firm under the caption "Experts" in the
Registration Statement (Form S-3 No. 333-00000) and related Prospectus of
Cornerstone Realty Income Trust, Inc. for the registration of $200,000,000 of
debt securities, common shares or preferred shares and to the incorporation by
reference therein of our reports dated January 24, 1997, with respect to the
financial statements of Cornerstone Realty Income Trust, Inc. incorporated by
reference in its Annual Report (Form 10-K) for the year ended December 31, 1996
and the related financial statement schedule included therein, filed with the
Securities and Exchange Commission.
/s/ Ernst & Young LLP
Richmond, Virginia
August 26, 1997
Exhibit 23.2
CONSENT OF INDEPENDENT AUDITORS
Board of Directors
Cornerstone Realty Income Trust, Inc.
Richmond, Virginia
We consent to the use of the following reports prepared by us to be
incorporated into a Registration Statement on Form S-3 to be filed with the
Securities and Exchange Commission by Cornerstone Realty Income Trust, Inc., and
to the references to our firm under the heading "Experts" in the Prospectus
included in such Registration Statement:
(1) The Statement of Income and Direct Operating Expenses Exclusive of
Items not Comparable to the Proposed Future Operations of the Property
Greenbrier Apartments for the Twelve Month Period Ended September 30, 1996, (2)
the Statement of Income and Direct Operating Expenses Exclusive of Items not
Comparable to the Proposed Future Operations of the Property Deerfield
Apartments for the Twelve Months Ended October 31, 1996, (3) the Statement of
Income and Direct Operating Expenses Exclusive of Items not Comparable to the
Proposed Future Operations of the Property Franklin Towers Apartments for the
Twelve Months Ended December 31, 1996, (4) the Statement of Income and Direct
Operating Expenses Exclusive of Items not Comparable to the Proposed Future
Operations of the Property Westchase Apartments for the Twelve Months Ended
December 31, 1996, (5) the Statement of Income and Direct Operating Expenses
Exclusive of Items not Comparable to the Proposed Future Operations of the
Property Paces Arbor Apartments for the Twelve Month Period Ended February 28,
1997, (6) the Statement of Income and Direct Operating Expenses Exclusive of
Items not Comparable to the Proposed Future Operations of the Property Paces
Forest Apartments for the Twelve Month Period Ended February 28, 1997, (7) the
Statement of Income and Direct Operating Expenses Exclusive of Items not
Comparable to the Proposed Future Operations of the Property Carlyle Club
Apartments for the Twelve Month Period Ended March 31, 1997, (8) the Statement
of Income and Direct Operating Expenses Exclusive of Items not Comparable to the
Proposed Future Operations of the Property Ashley Run Apartments for the Twelve
Month Period Ended March 31, 1997, and (9) the Statement of Income and Direct
Operating Expenses Exclusive of Items not Comparable to the Proposed Future
Operations of the Property Summit Charleston Apartments for the Twelve Month
Period Ended April 30, 1997
Richmond, Virginia
August 27, 1997
/s/ L. P. Martin & Company, P.C.
