<PAGE>
AS FILED WITH THE SECURITIES AND EXCHANGE COMMISSION ON JUNE 27, 1996
REGISTRATION NO. 333-04519
================================================================================
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
AMENDMENT NO. 1
TO
FORM S-3/A
REGISTRATION STATEMENT UNDER THE SECURITIES ACT OF 1933
CARRAMERICA REALTY CORPORATION
(Exact Name of Registrant as Specified in Its Charter)
Maryland 52-1796339
(State or Other Jurisdiction (I.R.S. Employer Identification No.)
of Incorporation or Organization)
1700 PENNSYLVANIA AVENUE, N.W.
WASHINGTON, D.C. 20006
(202) 624-7500
(ADDRESS, INCLUDING ZIP CODE, AND TELEPHONE NUMBER, INCLUDING AREA CODE, OF
REGISTRANT'S PRINCIPAL EXECUTIVE OFFICES)
THOMAS A. CARR
1700 PENNSYLVANIA AVENUE, N.W.
WASHINGTON, D.C. 20006
(202) 624-7500
(NAME, ADDRESS, INCLUDING ZIP CODE, AND TELEPHONE NUMBER, INCLUDING AREA
CODE, OF AGENT FOR SERVICE)
COPIES TO:
J. WARREN GORRELL, JR.
DAVID W. BONSER
HOGAN & HARTSON L.L.P.
COLUMBIA SQUARE
555 THIRTEENTH STREET, N.W.
WASHINGTON, D.C. 20004-1109
Approximate date of commencement of proposed sale to the public: As soon as
possible after the effective date of this Registration Statement and from time
to time as determined by market conditions.
If the only securities being registered on this Form are being offered
pursuant to dividend or interest reinvestment plans, please check the following
box. [ ]
If any of the securities being registered on this Form are to be offered on a
delayed or continuous basis pursuant to Rule 415 under the Securities Act of
1933, other than securities offered only in connection with dividend or interest
reinvestment plans, please check the following box. [X]
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. [ ]
CALCULATION OF REGISTRATION FEE
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<TABLE>
<CAPTION>
TITLE OF EACH CLASS OF PROPOSED MAXIMUM PROPOSED MAXIMUM AMOUNT OF
SECURITIES TO BE AMOUNT TO BE AGGREGATE PRICE PER AGGREGATE OFFERING REGISTRATION
REGISTERED REGISTERED (1) SECURITY (2) PRICE (2) FEE
- --------------------------- --------------- -------------------- ------------------- -----------------
<S> <C> <C> <C> <C>
Debt Securities
Preferred Stock
Common Stock
Common Stock Warrants $600,000,000 (3) $600,000,000 $206,897 (4)
-----------------------------------------------------------------------------
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(Footnotes on the following page)
The Registrant hereby amends the Registration Statement on such date or dates
as may be necessary to delay its effective date until the Registrant shall file
a further amendment which specifically states that this Registration Statement
shall thereafter become effective in accordance with Section 8(a) of the
Securities Act of 1933 or until the Registration Statement shall become
effective on such date as the Commission, acting pursuant to said Section 8(a),
may determine.
<PAGE>
(Footnotes continued from previous page)
(1) This Registration Statement also covers contracts which may be issued by
the Registrant under which the counterparty may be required to purchase
Debt Securities, Preferred Stock, Common Stock or Common Stock Warrants.
Such contracts would be issued with the Debt Securities, Preferred Stock,
Common Stock and/or Common Stock Warrants covered hereby. In addition,
Securities registered hereunder may be sold separately, together or as
units with other Securities registered hereunder.
(2) Estimated solely for purposes of calculating the registration fee. No
separate consideration will be received for Common Stock or Preferred
Stock issued upon conversion of Debt Securities or Preferred Stock or upon
exercise of Common Stock Warrants registered hereunder, as the case may
be. The aggregate maximum offering price of all Securities issued pursuant
to this Registration Statement will not exceed $600,000,000.
(3) Omitted pursuant to General Instruction II.D of Form S-3 under the
Securities Act of 1993, as amended.
(4) Previously paid.
</TABLE>
<PAGE>
SUBJECT TO COMPLETION
PRELIMINARY PROSPECTUS SUPPLEMENT DATED JUNE 26, 1996
PROSPECTUS SUPPLEMENT
- ------------------------
(TO PROSPECTUS DATED , 1996)
8,400,000 SHARES
[LOGO]
CARRAMERICA REALTY CORPORATION
COMMON STOCK
-------------
CarrAmerica Realty Corporation (the "Company") is a publicly-traded real
estate investment trust (a "REIT") that focuses primarily on the acquisition,
development, ownership and operation of value office properties in select
suburban growth markets across the United States. As of June 14, 1996, the
Company owned interests in a portfolio of 54 operating office properties
containing approximately 8.1 million square feet of space.
All of the shares of common stock, par value $.01 per share ("Common Stock"),
offered hereby (the "Offering") are being sold by the Company. The Common Stock
is listed on the New York Stock Exchange ("NYSE") under the symbol "CRE." The
last reported sale price for the Common Stock on the NYSE on June 21, 1996 was
$24 5/8 per share. Subject to certain limited exceptions, ownership of more than
5% of the Common Stock is restricted in order to preserve the Company's status
as a REIT for federal income tax purposes. See "Description of Common Stock --
Restrictions on Transfer" in the accompanying Prospectus.
A wholly owned subsidiary of Security Capital U.S. Realty (collectively,
"USRealty") currently owns 39.0% of the outstanding shares of Common Stock on a
fully diluted basis. The Company expects that USRealty will purchase 3,600,000
shares of Common Stock directly from the Company at the public offering price
simultaneously with the closing of the Offering. In addition, USRealty has
expressed an interest in purchasing up to 1,076,446 shares of Common Stock in
the Offering at the public offering price (which, combined with the direct
purchase from the Company, would result in an additional total investment by
USRealty in the Company of up to $115.2 million, assuming a public offering
price of $24.625) in order to maintain its 39.0% ownership interest in the
Company on a fully diluted basis. No underwriting discount will be applied to
any shares purchased by USRealty directly from the Company or in the Offering.
See "Risk Factors" beginning on page 3 of the accompanying Prospectus for a
discussion of certain factors relating to an investment in the Common Stock.
THESE SECURITIES HAVE NOT BEEN APPROVED OR DISAPPROVED BY THE SECURITIES AND
EXCHANGE COMMISSION OR ANY STATE SECURITIES COMMISSION NOR HAS THE
SECURITIES AND EXCHANGE COMMISSION OR ANY STATE SECURITIES COMMISSION
PASSED UPON THE ACCURACY OR ADEQUACY OF THIS PROSPECTUS SUPPLEMENT OR THE
PROSPECTUS. ANY REPRESENTATION TO THE CONTRARY IS A CRIMINAL OFFENSE.
-----------------------------------------------------------------------------
Price to Underwriting Proceeds to
Public Discount(1) Company(2)(3)
Per Share.............. $ $ $
Total(2)(4)............ $ $ $
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(1) The Company has agreed to indemnify the several Underwriters against
certain liabilities, including liabilities under the Securities Act of
1933, as amended. See "Underwriting."
(2) No underwriting discount will be applied to any of the 1,076,446 shares
that USRealty may purchase in the Offering; therefore, all of the proceeds
therefrom will be retained by the Company. Total Underwriting Discount and
Proceeds to Company assumes USRealty purchases all such shares.
(3) Before deducting expenses payable by the Company estimated at $ .
(4) The Company has granted the several Underwriters a 30-day option to
purchase up to 1,260,000 additional shares of Common Stock solely to cover
over-allotments, if any. If such option is exercised in full, the total
Price to Public, Underwriting Discount and Proceeds to Company will be $ ,
$ and $ , respectively.
--------------------
THE ATTORNEY GENERAL OF THE STATE OF NEW YORK HAS NOT PASSED ON OR
ENDORSED THE MERITS OF THIS OFFERING. ANY REPRESENTATION TO THE CONTRARY
IS UNLAWFUL.
The Common Stock is offered by the several Underwriters, subject to prior
sale, when, as and if delivered to and accepted by them, subject to approval of
certain legal matters by counsel for the Underwriters and certain other
conditions. The Underwriters reserve the right to withdraw, cancel or modify
such offer and to reject orders in whole or in part. It is expected that
delivery of the Common Stock will be made in New York, New York on or about ,
1996.
--------------------
MERRILL LYNCH & CO.
DEAN WITTER REYNOLDS INC.
J.P. MORGAN & CO.
PRUDENTIAL SECURITIES INCORPORATED
LEGG MASON WOOD WALKER
Incorporated
WHEAT FIRST BUTCHER SINGER
--------------------
The date of this Prospectus Supplement is , 1996.
<PAGE>
[INSIDE FRONT COVER MAP SHOWING LOCATION/PICTURES SHOWING OFFICE BUILDING]
IN CONNECTION WITH THE OFFERING, THE UNDERWRITERS MAY OVER-ALLOT OR EFFECT
TRANSACTIONS WHICH STABILIZE OR MAINTAIN THE MARKET PRICE OF THE COMMON STOCK AT
LEVELS ABOVE THOSE WHICH MIGHT OTHERWISE PREVAIL IN THE OPEN MARKET. SUCH
TRANSACTIONS MAY BE EFFECTED ON THE NEW YORK STOCK EXCHANGE, IN THE
OVER-THE-COUNTER MARKET OR OTHERWISE. SUCH STABILIZING, IF COMMENCED, MAY BE
DISCONTINUED AT ANY TIME.
<PAGE>
PROSPECTUS SUPPLEMENT SUMMARY
The following summary is qualified in its entirety by the more detailed
information and financial statements, including the notes thereto, appearing
elsewhere in this Prospectus Supplement and the accompanying Prospectus or
incorporated herein and therein by reference. Unless indicated otherwise, the
information contained in this Prospectus Supplement assumes that the
Underwriters' over-allotment option is not exercised. As used herein, the term
"Company" includes CarrAmerica Realty Corporation, a Maryland corporation,
and/or one or more of its subsidiaries, as appropriate, and "Common Stock"
refers to the common stock, par value $.01 per share, of the Company.
THE COMPANY
The Company is a publicly-traded real estate investment trust (a "REIT") that
focuses primarily on the acquisition, development, ownership and operation of
value office properties in select suburban growth markets across the United
States. "Value office" property describes office space which combines the
elements of affordability, accessibility and flexibility with regard to customer
needs. As of June 14, 1996, the Company owned interests in a portfolio of 54
operating office properties (collectively, the "Properties") containing
approximately 8.1 million square feet of space. The Company also has entered
into agreements to acquire 14 additional office properties containing
approximately 535,000 square feet of space. The Company expects to close these
transactions within 60 days. As of May 31, 1996, the Company also provided
fee-based real estate services for properties containing in excess of 7.5
million square feet of office space that are owned by third parties.
On February 26, 1996, the stockholders of the Company approved the investment
by a wholly-owned subsidiary of Security Capital U.S. Realty (collectively,
"USRealty") of approximately $250 million in the Company (the "USRealty
Transaction"). The sale and issuance of 11,627,907 shares of Common Stock to
USRealty in a private sale transaction was consummated on April 30, 1996. As of
May 31, 1996, these shares represented a 39.0% ownership interest in the Company
on a fully diluted basis (after giving effect to the conversion of all
outstanding Units (as defined herein) into shares of Common Stock). Concurrently
with the closing of the USRealty Transaction, the Company changed its name from
Carr Realty Corporation to CarrAmerica Realty Corporation. The Company is the
exclusive strategic investment of USRealty in the commercial office property
business in the United States.
The Company and its predecessor, The Oliver Carr Company ("OCCO"), have
traditionally focused on the acquisition, development, ownership and operation
of office properties in the Washington, D.C. metropolitan area. In connection
with the USRealty Transaction, the Company is implementing a national business
strategy that includes acquiring, developing, owning and operating value office
properties throughout the United States in select suburban growth markets. The
Company seeks to provide value office space on a national scale to meet the
changing needs of corporate users of office space.
The Company's business strategy is responsive to the growing trend among
corporate office space users toward relocating their operations from central
business districts to suburban markets in order to reduce operating costs and to
improve their employees' quality of life. The resulting increase in demand for
suburban office space has not been met by a corresponding increase in supply;
rather, the volume of new office construction in suburban markets has declined
dramatically from the end of 1986 to the end of 1995. Office vacancy rates in
the national suburban office market have declined from 23.8% at the end of 1986
to 13.4% at the end of 1995, according to CB Commercial/Torto Wheaton Research,
while central business district vacancy rates have not similarly declined. The
Company is pursuing its business strategy initially by acquiring office
properties in suburban growth markets at what the Company believes are
attractive discounts to replacement cost. In the future, if acquisition costs
approach those of new office development, the Company will consider developing
value office properties in select suburban growth markets. Of the Company's 54
Properties, 35 have been acquired thus far in 1996 as part of the Company's
business strategy.
S-3
<PAGE>
The Company's objective is to achieve long-term sustainable growth by
acquiring and developing value office properties in suburban markets throughout
the United States that exhibit strong growth characteristics. In particular, the
Company seeks markets in which operating costs for businesses are relatively
low, long-term population and job growth are expected to exceed the national
average, and barriers to entry exist for new supply of office space. In
analyzing property acquisitions within target markets, the Company looks for
physical property characteristics that appeal to value office users, including
flexible floor plates, ample parking and proximity to major transportation
arteries. The Company believes that this approach enables it to acquire office
properties that offer customers affordability, accessibility and flexibility.
The following table provides an overview of the Properties owned by the
Company as of June 14, 1996 and the markets in which they are located.
NUMBER OF APPROXIMATE
MARKET AREA PROPERTIES SQUARE FEET
- ------------------ ------------ --------------
Washington, D.C. 15 3,704,000
Northern Virginia 6 1,202,000
Northern California 6 1,082,000
Southeast Denver 6 737,000
Suburban Chicago 2 514,000
Suburban Seattle 10 396,000
Southern California 8 287,000
Suburban Maryland 1 205,000
- ---------
Total 54 8,127,000
== =========
RECENT DEVELOPMENTS
Acquisitions Activity. Consistent with the Company's strategy of acquiring
value office properties in suburban growth markets, the Company has
significantly expanded its portfolio of office properties in 1996, acquiring
thus far 35 office properties across the country for an aggregate purchase price
of approximately $344 million. In addition, the Company has entered into binding
contracts (subject to customary conditions) to acquire an additional 14 office
properties for an aggregate purchase price of approximately $69 million. The
Company expects to close these transactions within 60 days, although there can
be no assurance that any such acquisitions will be consummated. The 35
Properties were purchased at an average capitalization rate of 10.9% (calculated
by dividing the net operating income generated by these Properties on a pro
forma basis for the year ended December 31, 1995, including a deduction for
management fees, by the consideration paid for these Properties). This
capitalization rate is not necessarily indicative of the actual capitalization
rate the Company will realize from these properties. In addition, there can be
no assurance that the capitalization rate with respect to these property
acquisitions will be attained with respect to future acquisitions.
The following table sets forth a summary of the Company's 1996 acquisition
activity to date:
<TABLE>
<CAPTION>
DATE OF NUMBER OF APPROXIMATE
ACQUISITIONS TARGET MARKET ACQUISITION PROPERTIES SQUARE FEET
- ------------ ------------- ----------- ---------- -----------
<S> <C> <C> <C> <C>
Scenic Business Park Southern California March 1996 4 138,000
Harbor Corporate Park Southern California March 1996 4 149,000
AT&T Center Northern California March 1996 6 1,082,000
Reston Quadrangle Northern Virginia March 1996 3 261,000
Harlequin Plaza and Quebec Court Southeast Denver May 1996 4 613,000
The Quorum Southeast Denver June 1996 2 124,000
Parkway North Center Suburban Chicago June 1996 2 514,000
Redmond East Business Campus Suburban Seattle June 1996 10 396,000
Warner Center Business Park Southern California Pending 12 343,000
Plaza PacifiCare Building Southern California Pending 1 104,000
Parkway One Northern Virginia Pending 1 88,000
-- ---------
Total 49 3,812,000
== =========
</TABLE>
S-4
<PAGE>
Financing Activity. In May 1996, the Company obtained an unsecured line of
credit from Morgan Guaranty Trust Company of New York in the amount of up to
$215 million (the "Line of Credit"). The Line of Credit, which has been utilized
to fund a portion of the Company's recent acquisitions, will be used to fund
future acquisitions. In addition, funds from the Line of Credit will be
available to finance future office property development and capital expenditures
and for working capital purposes. A portion of the proceeds of the Offering will
be used to repay amounts previously advanced under the Line of Credit, making
the full amount of the Line of Credit available immediately following the
Offering. Upon consummation of the Offering, the Company will have a
debt-to-total market capitalization ratio of 23.2% (assuming a Common Stock
price of $24.625 per share).
THE OFFERING
Common Stock Offered Hereby (1)............. 8,400,000
Common Stock Offered in Concurrent
USRealty Purchase (2)....................... 3,600,000
Common Stock Outstanding After the Offering
and the Concurrent USRealty Purchase ....... 37,200,469
Common Stock and Units Outstanding After
the Offering and the Concurrent USRealty
Purchase (3)................................ 41,837,805
Use of Proceeds............................. To repay outstanding indebtedness
under the Line of Credit, to fund
acquisitions and for general
corporate purposes.
- ----------
(1) See "Price Range of Common Stock and Dividend History" herein and
"Description of Common Stock" in the accompanying Prospectus. USRealty has
expressed an interest in purchasing up to 1,076,446 shares of Common Stock
in the Offering at the public offering price in order to maintain its
39.0% ownership interest in the Company. See "Underwriting."
(2) The Company expects that USRealty will purchase 3,600,000 shares of Common
Stock directly from the Company at the public offering price
simultaneously with the closing of the Offering (the "Concurrent USRealty
Purchase"). See "Underwriting."
(3) "Units" are units of partnership interest in Carr Realty, L.P. and
CarrAmerica Realty, L.P. (the "Carr Partnerships") that are redeemable for
cash or, at the option of the Company, shares of Common Stock on a
one-for-one basis.
SUMMARY SELECTED FINANCIAL INFORMATION
The following table sets forth selected financial and operating information
for the Company as of and for the three months ended March 31, 1996 and 1995 and
as of and for the years ended December 31, 1995 and 1994. The selected financial
information as of and for the years ended December 31, 1995 and 1994 is derived
from the audited financial statements of the Company incorporated by reference
in the accompanying Prospectus. The selected financial information as of and for
the three months ended March 31, 1996 and 1995 is derived from unaudited
financial statements that, in the opinion of management, include all material
adjustments considered necessary for a fair presentation of the results of the
interim periods.
The following table also sets forth pro forma financial information for the
Company as of and for the three months ended March 31, 1996 and for the year
ended December 31, 1995, giving effect to (i) completion of the Offering and the
Concurrent USRealty Purchase, (ii) the closing of the USRealty Transaction
(which closed on April 30, 1996), (iii) the acquisition of office properties
that have been consummated since the beginning of each period presented and the
acquisition of 14 office properties that the Company expects to consummate in
the near future, and (iv) the repayment of $235 million of indebtedness
outstanding as of March 31, 1996. The pro forma financial information does not
reflect any earnings from the investment of approximately $110 million of the
net proceeds expected to be received from the Offering and the Concurrent
USRealty Purchase. See "Pro Forma Financial Information."
S-5
<PAGE>
The following selected financial and operating information should be read in
conjunction with "Management's Discussion and Analysis of Financial Condition
and Results of Operations."
<TABLE>
<CAPTION>
THREE MONTHS ENDED MARCH 31, YEAR ENDED DECEMBER 31,
---------------------------------- ---------------------------------
PRO FORMA HISTORICAL PRO FORMA HISTORICAL
----------- ---------------- ----------- -----------------
1996 1996 1995 1995 1995 1994
---- ---- ---- ---- ---- ----
(In thousands, except share and property data)
<S> <C> <C> <C> <C> <C> <C>
Operating Data:
Real estate operating revenue:
Rental revenue ....................... $ 39,565 $ 25,350 $ 21,796 $ 156,406 $ 89,539 $ 82,665
Real estate service revenue........... 2,726 2,726 2,480 11,315 11,315 8,890
Real estate operating expenses:
Property operating expenses........... 12,495 8,991 7,519 49,296 31,579 29,707
Interest expense...................... 6,600 6,532 5,257 26,252 21,873 21,366
General and administrative
expenses............................. 3,124 2,748 2,609 11,982 10,711 9,535
Depreciation and amortization......... 9,456 5,484 4,385 36,993 18,495 14,419
Net income............................. 9,621 3,335 3,257 37,162 12,067 (1) 12,097
Dividends paid to stockholders......... N/A 5,914 5,803 N/A 23,344 20,204
Per Share Data:
Net income............................. $ .26 $ .25 $ .25 $ 1.00 $ 0.90 $ 1.06
Dividends paid to stockholders......... N/A .4375 .4375 N/A 1.75 1.75
Weighted average shares outstanding ... 37,214,074 13,523,628 13,269,334 36,977,439 13,338,080 11,387,030
Balance sheet data (at period end):
Real estate, before accumulated
depreciation.......................... $ 892,210 $ 647,825 $ 431,728 $ 480,589 $ 429,537
Total assets........................... 988,764 635,358 411,265 458,860 407,948
Mortgages payable...................... 319,474 324,957 261,208 317,374 254,933
Other indebtedness..................... 0 172,000 0 0 0
Minority interest...................... 35,156 34,876 37,930 34,850 38,644
Total stockholders' equity............. 623,157 93,507 103,791 95,543 106,042
Other Data:
Net cash provided by operating
activities............................ $ 9,001 $ 7,972 $ 35,277 $ 29,908
Net cash used by investing activities.. (169,496) (14,307) (81,635) (67,046)
Net cash provided (used) by financing
activities............................ 171,511 (1,437) 37,113 32,652
Funds from operations before minority
interest of the unitholders of carr
partnerships (2)...................... 19,822 9,501 8,382 76,983 33,190 (1) 30,640
Weighted average shares and units
outstanding (3)....................... 41,822,869 18,183,510 18,156,537 41,795,896 18,156,537 15,878,780
Number of properties (at period end)... 68 36 16 68 18 16
Square footage (at period end)......... 8,662,000 6,479,000 4,006,000 8,662,000 4,626,000 4,006,000
- ----------
<FN>
(1) Includes a non-recurring deduction of approximately $1.9 million related
to the termination of an agreement to acquire the development business of
The Evans Company.
(2) The Company believes that funds from operations is an appropriate measure
of the performance of an equity REIT because industry analysts have
accepted it as a performance measure of equity REITs. In accordance with
the final National Association of Real Estate Investment Trusts (NAREIT)
White Paper on Funds From Operations as approved by the Board of Governors
of NAREIT on March 3, 1995, funds from operations represents net income
(loss) (computed in accordance with generally accepted accounting
principles), excluding gains (or losses) from debt restructuring or sales
of property, plus depreciation and amortization of assets uniquely
significant to the real estate industry and after adjustments for
unconsolidated partnerships and joint ventures. Adjustments for
unconsolidated partnerships and joint ventures are calculated to reflect
funds from operations on the same basis. The Company's funds from
operations in 1994 and for the three months ended March 31, 1995 have been
restated to conform to the new NAREIT definition of funds from operations.
Funds from operations does not represent net income or cash flow generated
from operating activities in accordance with generally accepted accounting
principles and should not be considered an alternative to net income as an
indication of the Company's performance or to cash flows as a measure of
liquidity or the Company's ability to make distributions.
(3) Includes shares of Common Stock outstanding plus Units that are redeemable
for cash or, at the option of the Company, shares of Common Stock on a
one-for-one basis.
</FN>
</TABLE>
S-6
<PAGE>
THE COMPANY
The Company is a publicly-traded REIT that focuses primarily on the
acquisition, development, ownership and operation of value office properties in
select suburban growth markets across the United States. "Value office" property
describes office space which combines the elements of affordability,
accessibility and flexibility with regard to customer needs. As of June 14,
1996, the Company owned interests in a portfolio of 54 operating office
properties containing approximately 8.1 million square feet of space. The
Company has also entered into agreements to acquire 14 additional office
properties containing approximately 535,000 square feet of space. The Company
expects to close these transactions within 60 days. As of May 31, 1996, the
Company also provided fee-based real estate services for properties containing
in excess of 7.5 million square feet of office space that are owned by third
parties.
The Company and its predecessor, OCCO, have traditionally focused on the
acquisition, development, ownership and operation of office properties in the
Washington, D.C. metropolitan area. In connection with the USRealty Transaction,
the Company is implementing a national business strategy that includes
acquiring, developing, owning and operating value office properties throughout
the United States in select suburban growth markets. See "-Business Strategy"
below.
The Company's experienced staff of approximately 450 employees, including 320
on-site building employees, provides a full range of real estate services. The
Company's principal executive offices are located at 1700 Pennsylvania Avenue,
N.W., Washington, D.C. 20006, and its telephone number is (202) 624-7500. The
Company was organized as a Maryland corporation on July 9, 1992.
Business Strategy
National Suburban Office Strategy. The Company believes that the office
sector of the real estate industry has been unable to effectively meet the needs
of a dynamically changing corporate America. The office sector has been
characterized, at the local level, by highly fragmented ownership and merchant
builders with a short-term investment horizon, and, at the national level, by
passive institutional investors who are not familiar with local markets. The
Company is implementing a national business strategy that includes acquiring,
developing, owning and operating value office properties throughout the United
States in select suburban growth markets. The Company seeks to provide value
office space on a national scale to meet the changing needs of corporate users
of office space.
The Company's business strategy is responsive to the growing trend among
corporate office space users toward relocating their operations from central
business districts to suburban markets in order to reduce operating costs and to
improve their employees' quality of life. The resulting increase in demand for
suburban office space has not been met by a corresponding increase in supply;
rather, the volume of new office construction in suburban markets has declined
dramatically from the end of 1986 to the end of 1995. Over the last several
years, positive net absorption has resulted in a decline in national office
vacancy rates in suburban markets from 23.8% at the end of 1986 to 13.4% at the
end of 1995. Vacancy rates in central business districts have not similarly
declined. The Company believes that the demand for suburban office space will
continue.
S-7
<PAGE>
The charts below show national office vacancy rates in suburban markets and
central business districts over the last 10 years and new construction starts
and net absorption in suburban markets over the last 10 years.
CENTRAL BUSINESS DISTRICT (CBD) VS. SUBURBAN OFFICE NEW CONSTRUCTION
SUBURBAN OFFICE VACANCY RATES AND NET ABSORPTION
IMAGE OMITTED
Although positive net absorption declined in 1995 as compared to 1994, the
Company believes that this decline is attributable to, among other things,
severely constrained supply, leaving suburban office space users in certain
markets with little or no vacant space from which to select.
The Company is pursuing its business strategy initially by acquiring office
properties in suburban growth markets at what the Company believes are
attractive discounts to replacement cost. In the future, if acquisition costs
approach those of new office development, the Company will consider developing
value office properties in select suburban growth markets. Of the Company's 54
Properties, 35 have been acquired thus far in 1996 as part of the Company's
business strategy.
Target Market Selection. The Company's objective is to achieve long-term
sustainable growth by acquiring and developing value office properties in
suburban markets throughout the United States that exhibit strong growth
characteristics. In the office sector, the Company believes a key growth factor
is the projected employment growth within a particular market. The Company
generally is focusing its acquisition efforts in the Pacific, Mountain, Central
and Southeast regions of the country. In these regions, employment growth for
the years 1994 to 2004 is projected to be 18.4% (Pacific region), 33.6%
(Mountain region), 19.8% (Central region), and 34.8% (Southeast region), as
compared to the national average of 19.8%. (Source:
Cognetics, Inc.)
Within these general regions, the Company seeks markets in which operating
costs for businesses are relatively low, long-term population and job growth are
expected to exceed the national average, and barriers to entry exist for new
supply of office space. In addition, the Company targets markets that will
enable it to maintain an economically diverse tenant base to reduce the risk
that the Company's operations will be adversely affected by a single industry
recession. It also is important that a target market be large enough to permit
the Company to acquire a critical mass of properties in order to benefit from
certain operational economies of scale resulting from the geographic clustering
of properties. The Company analyzes its target markets on a quarterly basis to
determine if new office supply, or vacating office space, will materially impact
the supply/demand characteristics in the given markets.
Since commencing the implementation of its national business strategy, the
Company has acquired properties in the following markets: Northern California;
suburban Chicago; Southeast Denver; suburban Seattle; Southern California; and
Northern Virginia. These markets fit within the Company's identified parameters
for target market selection and the Company's acquisitions in these markets fall
within its general acquisition guidelines. For a discussion of each of these
markets, see "Recent Developments."
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General Acquisition Guidelines. The Company has established a set of general
guidelines and physical characteristics to evaluate the acquisition
opportunities available to the Company within the Company's identified target
markets. These guidelines include (i) the purchase price of an office property
typically should be at a discount to the replacement cost of a comparable office
property, (ii) rents of existing tenants in the office property typically should
be at or below the current market rents for the given target market, and (iii)
an office property generally should be low-rise, with flexible floor plates that
are conducive to accommodating a variety of office space user needs. The Company
looks for office properties that have ample parking and that are
conveniently-located near amenities and major transportation arteries. The
Company uses its market officers, local brokers and real estate professionals
within its specific target markets to identify the best available locations
within a particular market. The Company believes that use of these guidelines
enables it to more efficiently identify, analyze and act upon acquisition
opportunities.
National Operating System. To execute its national office strategy, the
Company is creating a national operating system consisting of a network of
market officers and a national service and development program.
A key component of the Company's national operating system includes the
creation of a network of market officers in the Company's target markets where
office properties have been or will be acquired. The Company's market officers
are and will be seasoned real estate professionals knowledgeable about the local
real estate conditions in the target market where they are employed. Market
officers are primarily responsible for maximizing the performance of the
Company's office properties in their markets and ensuring that the needs of the
Company's customers are being met. Additionally, market officers are responsible
for identifying new investments in their market, although they do not commit or
deploy the Company's capital. All capital allocation decisions are made by the
Company's management investment committee. The Company recently hired market
officers for its suburban target markets in Southern California, suburban
Seattle and suburban Chicago.
The Company's national service program will provide uniform customer service
and performance standards for all of the Company's Properties. In addition, the
national service program will focus on building on the Company's established
relationships with corporate office space users to understand and be better able
to address the national real estate needs of major corporations. The Company's
national development program will identify build-to-suit and inventory
development opportunities where market conditions warrant such activities. The
Company's goal is to allocate approximately 5% of its capital to be invested in
land suitable for development; however, that percentage may change based on
market conditions.
To create and implement its national operating system, the Company has hired
several real estate professionals with national operational experience. The
Company expects to augment its management team with additional experienced
professionals to meet the requirements of its business strategy and growth
plans. On an interim basis, Security Capital Investment Research Incorporated,
an affiliate of Security Capital Group Incorporated (which is a substantial
shareholder of USRealty), is assisting the Company in sourcing acquisitions in
selected target markets as well as from national institutional owners and by
providing national and market-specific research support, including some of the
market data referred to in this Prospectus Supplement. The Company believes that
its agreement with Security Capital Investment Research Incorporated, which
provides for payment at specified hourly rates for services actually rendered,
is on terms at least as favorable as the Company could obtain from an unrelated
third party. As its national operating system matures, the Company expects that
all acquisition sourcing services will be provided by employees of the Company.
Real Estate Services
Historically, the Company has provided operational services for its
properties, and the Company intends, in the long term, to continue to do so.
Certain facts or circumstances, however, may require that the Company use
third-party real estate service providers for certain properties. In particular,
during a transitional period immediately following the acquisition of a
property, the Company may use a third-party real estate service provider. As of
June 14, 1996, the Company provided its own operational
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services for 38 of the Properties. Fourteen of the 16 Properties for which the
Company did not provide operational services as of June 14, 1996 were recently
acquired. The Company, through certain management subsidiaries, provides
fee-based real estate services for more than 35 office buildings in the
Washington, D.C. metropolitan area for related and unrelated parties.
RECENT DEVELOPMENTS
Security Capital U.S. Realty Transaction
On February 26, 1996, the stockholders of the Company approved the investment
by USRealty of approximately $250 million in the Company. The transaction was
effected through the sale and issuance of 11,627,907 shares of Common Stock to
USRealty in a private sale transaction that was consummated on April 30, 1996.
As of May 31, 1996, USRealty owned approximately 46.1% of the outstanding Common
Stock of the Company (39.0% on a fully diluted basis after giving effect to the
conversion of all outstanding Units into shares of Common Stock). In connection
with the USRealty Transaction, the Company also acquired substantially all of
the economic interest in the development business of OCCO, providing the Company
with resources to enable it to implement its national development program.
Concurrently with the closing of the USRealty Transaction, the Company changed
its name from Carr Realty Corporation to CarrAmerica Realty Corporation.
The Company believes that it has derived a number of significant benefits
from the USRealty Transaction. The capital provided by USRealty enabled the
Company to pursue its national business strategy, as described above in "The
Company -- Business Strategy." In addition, the USRealty Transaction
substantially increased the Company's equity capitalization and reduced its
leverage, which the Company believes will enable it to have greater access to
the capital markets, enhancing the Company's ability to grow. The Company also
believes that it will benefit from its indirect affiliation with Security
Capital Group Incorporated and the access (through USRealty's representatives on
the Company's board of directors) to the market knowledge, operating experience
and research capabilities of Securital Capital Group Incorporated and its
affiliates. The Company is the exclusive strategic investment of USRealty in the
commercial office property business in the United States.
New Acquisitions
Consistent with the Company's strategy of acquiring office properties in
suburban growth markets, the Company has significantly expanded its portfolio of
office properties in 1996, acquiring thus far 35 office properties across the
country for an aggregate purchase price of approximately $344 million. These
Properties were purchased at an average capitalization rate of 10.9% (calculated
by dividing the net operating income generated by these Properties on a pro
forma basis for the year ended December 31, 1995, including a deduction for
management fees, by the consideration paid for these Properties). This
capitalization rate is not necessarily indicative of the actual capitalization
rate the Company will realize from these properties. In addition, there can be
no assurance that the capitalization rate with respect to these property
acquisitions will be attained with respect to future acquisitions. The acquired
properties satisfy the Company's general acquisition guidelines as described in
"The Company -- Business Strategy" above. These properties have been acquired in
six target markets, as described below. Information set forth below with respect
to market data has been provided by CB Commercial/Torto Wheaton Research.
Northern California
AT&T Center. In March 1996, the Company acquired six office buildings in San
Francisco's East Bay Area for an aggregate purchase price of approximately $109
million in cash. The six buildings, which are known as the AT&T Center and were
built in 1988, contain approximately 1,082,000 square feet of space. The entire
portfolio is leased to AT&T. AT&T presently subleases 39% of the space of the
property to other users, including PeopleSoft, a human resources software
producer (181,000 square feet or 17% of the total space), GTE (71,000 square
feet or 8% of the total space) and Pacific Bell
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Mobile Systems (145,000 square feet or 13% of the total space). The lease with
AT&T expires on various dates in 1998 and 1999.
The Company has entered into a letter of intent with AT&T to modify the
existing lease and to enter into a new lease for approximately 463,000 square
feet of office space and 26,000 square feet of storage space. The new AT&T
lease, if executed, would provide for the lease with respect to 213,000 square
feet to expire in December 2008, 140,000 square feet to expire in June 2006 and
110,000 square feet to expire in December 2003. The base office rental rate of
the proposed new lease would be $13.20 per square foot, triple net, which rental
rate would be increased at the end of each three-year period during the term of
the lease by the sum of 6% plus 200% of the consumer price index increase for
the prior three years (with the total not to exceed 12%). The initial base
storage rental rate of the proposed lease would be $6.60 per square foot. In
addition to the new AT&T lease, AT&T and the Company would modify their existing
lease, reducing the square footage covered by this lease to approximately
430,000 square feet. The lease would continue to expire on various dates in 1998
and 1999. All of this space is currently subleased by AT&T to sub-tenants, and
AT&T would assign the existing subleases to the Company. The sub-tenants' base
rental rates with respect to this space average approximately $5.66 per square
foot, triple net. In addition, AT&T would make a supplemental base rental rate
payment with respect to this space equal to approximately $6.40 per square foot,
triple net, over the life of the lease, resulting in a total rent payment with
respect to this space of approximately $12.06 per square foot. The existing
lease by AT&T of the remaining portion of the buildings (approximately 163,000
square feet, which includes the conference center facility and the cafeteria)
would be terminated. There can be no assurance that a binding agreement will be
reached with AT&T regarding a new lease or that, if a binding agreement is
reached, that it will be on the terms set forth above.
Market Description. San Francisco's East Bay has long been an area of strong
population and employment growth because of its diverse economy, relatively
affordable housing, and high quality transportation system. In addition, office
demand in the East Bay area has been strong because occupancy costs and taxes
are reasonable and a highly educated and diversified employment base resides in
the East Bay area. The San Francisco East Bay area office market contains
approximately 39 million square feet. Vacancy rates in this market were 16.4%,
16.0%, 14.2%, 12.3% and 11.2% as of December 31 in each of 1991 through 1995,
respectively. AT&T Center is located in the Pleasanton sub-market within the
East Bay area. This sub-market contains approximately 5 million square feet of
office space. Vacancy rates in this sub-market were 21.0%, 21.0%, 17.7%, 9.4%
and 5.6% as of December 31 in each of 1991 through 1995, respectively. The
Company believes the acquisition of AT&T Center positions the Company to take
advantage of the strategic growth opportunities in this dynamic market.
Suburban Chicago
Parkway North Center. In June 1996, the Company acquired Parkway North
Center, an office park located in suburban Chicago, Illinois, for an aggregate
purchase price of approximately $80 million. The property currently includes two
office buildings, which were built in 1986 to 1989, containing approximately
514,000 square feet of office space. The Company also acquired additional land
which will support the development of up to 900,000 square feet of office space.
As part of the purchase price, the Company assumed approximately $29 million of
mortgage indebtedness that bears interest at an annual rate of 7.96% and matures
in December 2003. The office park was 93.7% leased as of May 31, 1996. The major
tenants at Parkway North Center include Alliant Foodservice, a food products
distributor (107,000 square feet or 21% of the total space), Fujisawa USA, a
pharmaceutical company (135,000 square feet or 26% of the total space), and
Clintec Nutrition Company, a manufacturer of dietary products (80,000 square
feet or 16% of the total space).
Market Description. Chicago is a proven corporate location with over fifty
Fortune 500 companies located in its downtown and suburban markets. Chicago is
expected to continue to attract office users due to its central location in the
United States, its diverse economy and strong infrastructure. The metropolitan
Chicago area office market contains approximately 187 million square feet.
Vacancy rates in this market were 17.6%, 19.3%, 18.8%, 16.9% and 15.2% as of
December 31 in each of 1991 through 1995, respectively. Parkway North Center is
located in Lake County, which has a significantly lower tax rate than
neighboring Cook County, and as a result the Lake County sub-market has
attracted a number
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of large corporate users. The Lake County sub-market contains approximately 6
million square feet of office space. Vacancy rates in this sub-market were
15.3%, 13.5%, 12.0%, 12.3% and 9.6% as of December 31 in each of 1991 through
1995, respectively. The Company believes it is important and consistent with its
national office strategy that it has a presence in the Chicago market because of
the prevalence of corporate headquarters of major national companies in the
area.
Southeast Denver
Harlequin Plaza and Quebec Court. In May 1996, the Company acquired four
office properties located in suburban southeast Denver, Colorado for aggregate
consideration of approximately $47 million. The four properties, known as
Harlequin Plaza North and South and Quebec Court I and II, contain approximately
613,000 square feet of office space. Harlequin Plaza was built in 1981 and
Quebec Court was built in 1979 and 1980. The consideration for these properties
was paid through a combination of cash and the issuance of Units. The properties
were 96.0% leased to 30 tenants as of May 31, 1996. The major tenants of the
portfolio include Intelligent Electronics, a reseller of computer products,
which leases the entire space at Quebec Court I (130,000 square feet), and Alert
Centre, a security monitoring company, which leases 106,000 square feet (or 68%
of the total space) at Quebec Court II.
The Quorum. In June 1996, the Company acquired two buildings known as The
Quorum in southeast Denver, Colorado for an aggregate purchase price of
approximately $10 million in cash. The properties, which were built in 1975,
contain an aggregate of approximately 124,000 square feet of office space. The
Company also acquired additional land which will support the development of up
to 100,000 square feet of office space. Of the 19 tenants in the two buildings,
the major tenants are Chatfield Dean & Company, a stock brokerage firm (27,000
square feet or 21% of the total space), and JRMK Company, Inc., a mortgage
brokerage firm (18,000 square feet or 15% of the total space). The buildings
were 80.8% leased as of May 31, 1996.
Market Description. Denver has experienced rapid population growth over the
past five years, primarily in the southern and western counties of Douglas,
Arapahoe and Jefferson because of their reasonable cost of living and housing.
The metropolitan Denver area office market contains approximately 64 million
square feet. Vacancy rates in this market were 21.1%, 19.1%, 15.9%, 12.8% and
11.8% as of December 31 in each of 1991 through 1995, respectively. Denver's
largest office sub-markets are its Central Business District and the Southeast
I-25 Corridor, which includes major office concentrations in the Denver Tech
Center, Inverness, Meridian and Greenwood Village. The Southeast I-25 Corridor
area office market contains approximately 20 million square feet of office
space. Vacancy rates in this sub-market were 18.2%, 16.9%, 12.4%, 9.7% and 6.1%
as of December 31 in each of 1991 through 1995, respectively. Harlequin Plaza
North and South and Quebec Court I and II are located in Greenwood Village. The
Quorum is located in the Denver Tech Center, across I-25 from Greenwood Village.
With the acquisition of The Quorum, in combination with Harlequin Plaza and
Quebec Court, the Company has made significant progress toward its objective of
obtaining critical mass in one of its target markets.
Suburban Seattle
Redmond East Business Campus. In June 1996, the Company acquired Redmond East
Business Campus, an office park comprised of ten office properties in suburban
Seattle, Washington, for an aggregate purchase price of approximately $40
million in cash. As part of the purchase price, the Company assumed
approximately $28 million in debt that bears interest at an annual rate of
8.375% and matures in January 2006. The properties, which were built from 1988
to 1992, contain an aggregate of approximately 396,000 square feet of office
space. The buildings were 100% leased as of May 31, 1996 to 12 tenants. The two
largest tenants of the office park are Digital Systems International, a provider
of call center software (83,000 square feet or 21% of the total space), and
Incontrol Inc., a medical products company (65,000 square feet or 16% of the
total space).
Market Description. The Seattle metropolitan area has been dominated,
historically, by the aerospace, forest products, defense and international trade
industries. In the 1990's, however, the software, biotechnology, services and
tourism industries have provided growth for the Seattle metropolitan area,
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primarily in the eastern suburban area of King County. The Seattle metropolitan
area office market contains approximately 51 million square feet. Vacancy rates
in this market were 13.8%, 13.2%, 13.0%, 12.3% and 9.3% as of December 31 in
each of 1991 through 1995, respectively. Of Seattle's largest sub-markets, the
Bellevue sub-market has the lowest vacancy rate and has experienced the most
growth in recent years. This sub-market, where the Redmond East Business Campus
is located, is home to such large corporate users as Microsoft, Nintendo and
Eddie Bauer, and contains approximately 16 million square feet of office space.
Vacancy rates in this sub-market were 13.5%, 11.7%, 8.9%, 7.3% and 6.2% as of
December 31 in each of 1991 through 1995, respectively. The Company's
acquisition of Redmond East Business Campus will allow the Company to capitalize
on the growing and diversifying suburban Seattle market.
Southern California
Scenic Business Park and Harbor Corporate Park. In March 1996, the Company
acquired eight office properties in Orange County, California for an aggregate
purchase price of approximately $15 million in cash. The four properties
comprising the Scenic Business Park were built in 1985 and contain a total of
138,000 square feet of office space and the four properties that comprise the
Harbor Corporate Park were built in 1987 and contain a total of 149,000 square
feet of office space. All eight buildings are well-located within a short
distance of Orange County's John Wayne Airport. The two office parks, located
five minutes apart, provide the Company with a strong presence in the Greater
Airport Area sub-market and provide excellent operating management economies of
scale. Scenic Business Park is 89.7% leased to six tenants, including FHP, Inc.,
a regional health maintenance organization that leases 70,000 square feet, or
51% of the total space. Harbor Corporate Park is 49.2% leased to 13 tenants,
including Infotech Development, a software developer (15,000 square feet or 10%
of the total space), and Texaco (17,000 square feet or 12% of the total space).
Market Description. Orange County has rapidly evolved from a rural,
agricultural region to an urbanized high-technology center primarily because of
its strategic location and attractive quality of life. Orange County's office
market contains approximately 48 million square feet, with a vacancy rate of
21.5%, 18.7%, 16.1%, 16.6% and 14.6% as of December 31 in each of 1991 through
1995, respectively. Scenic Business Park and Harbor Corporate Park are located
in the Greater Airport Area sub-market, which is the largest office sub-market
in Orange County. This particular sub-market contains approximately 26 million
square feet of office space. Vacancy rates in this sub-market were 22.4%, 17.9%,
14.7%, 14.3% and 11.5% as of December 31 in each of 1991 through 1995,
respectively. The Company believes that its investments in Orange County will
position the Company to enjoy the benefits of the improving office supply/demand
characteristics in Southern California.
The Los Angeles metropolitan area office market contains approximately 158
million square feet of space and had a vacancy rate of 21.1%, 21.6%, 20.8%,
20.3% and 19.3% as of December 31 in each of 1991 through 1995, respectively.
The Warner Center Business Park, a probable acquisition described below, is
located in the Greater San Fernando Valley sub-market of Los Angeles, which
contains approximately 22 million square feet of office space. Vacancy rates in
this sub-market were 18.3%, 16.6%, 16.7%, 15.1% and 16.4% as of December 31 in
each of 1991 through 1995, respectively. Corporate office users in this
sub-market are heavily concentrated in the insurance and health care industries.
Additionally, while this sub-market historically has not had a heavy
concentration of tenants from the entertainment industry, an entertainment
company has recently leased a large block of space in this sub-market.
Northern Virginia
Reston Quadrangle. In March 1996, the Company acquired three office
properties located in Reston, Virginia (a suburb of Washington, D.C.) and known
as Reston Quadrangle. These properties, which contain approximately 261,000
square feet of office space, were acquired for an aggregate purchase price of
approximately $43 million in cash. The properties, which were built from 1987 to
1989, are located in a mature and established area along the Dulles Airport Toll
Road. The buildings were 99.8% leased to nine tenants as of May 31, 1996.
Software AG of North America, Inc., a developer of software for mainframe
applications, is the largest tenant, occupying 173,000 square feet (or 66.4% of
the total space) at the property.
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Market Description. The Washington, D.C. metropolitan area office market
contains approximately 214 million square feet, with a vacancy rate of 9.6% as
of December 31, 1995. The Company has focused its recent acquisition efforts in
this area in the Northern Virginia sub-market of Washington, D.C., which
includes Tysons Corner, Reston and Herndon. This sub-market contains
approximately 88 million square feet of office space. Vacancy rates in this
sub-market were 18.4%, 15.7%, 13.1%, 10.3% and 7.1% as of December 31 in each of
1991 through 1995, respectively. Demand in Northern Virginia has been fueled by
high-technology government contractors, professional service firms, and the
telecommunications industry.
Probable Acquisitions
The Company has entered into agreements to acquire an additional 14 office
properties containing a total of 535,000 square feet of office space for an
aggregate purchase price of approximately $69 million. Each of these properties
currently is subject to a binding contract that is subject to customary closing
conditions and under which the Company has posted a nonrefundable deposit,
although there can be no assurance that any of these properties will be
acquired.
Southern California
Warner Center Business Park. The Company has entered into a contract to
acquire the 12 buildings which comprise the Warner Center Business Park in
Woodland Hills, California, a suburb of Los Angeles, for an aggregate purchase
price of approximately $52 million in cash. As part of the purchase price, the
Company may assume approximately $26 million in debt that bears interest at an
annual rate of 7.4% and matures in December 2000. The properties, which are
located in the Greater San Fernando Valley sub-market and were built from 1981
to 1985, contain an aggregate of approximately 343,000 square feet of office
space. Closing of the transaction is currently scheduled for July 1996. Warner
Center Business Park is strategically located near the Ventura Freeway and the
405 Freeway, major transportation arteries in the San Fernando Valley area. As
part of the Warner Center mixed-use development, the project is well-served by
retail amenities and is located near affordable and executive housing. The
project is expected to be 95.3% leased at closing to major health care and
insurance companies in addition to other tenants. The United States Bankruptcy
Court is scheduled to commence occupancy of approximately 60,000 square feet, or
17% of the office space, in early July 1996.
Plaza PacifiCare Building. The Company has entered into a contract to acquire
the Plaza PacifiCare Building, located in Cypress, California, for a purchase
price of approximately $10 million in cash. The building, which is in Orange
County, was built in 1986, and contains approximately 104,000 square feet of
office space. Closing of the transaction is currently scheduled for late June
1996. The building is 100% leased to PacifiCare Health Systems, Inc., the ninth
largest HMO in the United States, under a long-term lease.
Northern Virginia
Parkway One. The Company has entered into a contract to acquire Parkway One,
a building located in Herndon, Virginia, for a purchase price of approximately
$7 million in cash. The building contains approximately 88,000 square feet of
office space and was built in 1985. Closing of the transaction is currently
scheduled for late June 1996. Parkway One has excellent access to the Dulles
Toll Road and Dulles International Airport. The two-story brick structure is
84.5% leased, with commitments to lease the remainder of the space. The major
tenant is EIS International, Inc., a provider of call center software and
systems, which occupies 63,000 square feet or 71% of the total office space. The
acquisition of Parkway One, in combination with the Company's other properties
in outer Northern Virginia, should result in operational economies of scale for
the Company.
The Company is continuing to aggressively pursue acquisitions in target
markets that meet the Company's general acquisition guidelines for property
quality, market strength and investment return.
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Downtown Washington, D.C. Real Estate Market
Ten of the Company's consolidated properties (containing 2.4 million square
feet or 43% of the Company's portfolio as of May 31, 1996) are located in the
downtown Washington, D.C. office market. This office market, which is comprised
of 75 million square feet, had a vacancy rate of 10.6%, 10.3%, 9.3%, 8.4%, and
9.8% as of December 31 in each of 1991 through 1995, respectively. The Company's
downtown Washington, D.C. properties are generally considered to be Class A/B+
properties. The Class A vacancy rate in Washington, D.C. was 8.9% at December
31, 1995.
In 1993 and 1994, the Washington, D.C. market had positive net absorption of
895,000 square feet and 669,000 square feet, respectively. In 1995, however,
Washington, D.C. experienced negative net absorption of 741,000 square feet
primarily as a result of the delivery of approximately 510,000 square feet of
new office space and the addition to availability of large and medium-sized
blocks of space. The Washington, D.C. office market is currently experiencing
healthy demand from law firms, professional service firms and associations;
however, the federal government continues to adhere to a moratorium established
in 1995 on leasing new space. Notwithstanding the Washington, D.C. market's
performance in the past year, the Company believes that the supply/demand
characteristics of the Washington, D.C. market will improve and that its
long-term growth prospects are strong.
Financing Activity
In May 1996, the Company entered into a revolving credit agreement with
Morgan Guaranty Trust Company of New York providing for unsecured borrowings of
up to $215 million. The Line of Credit, which has been utilized to fund a
portion of the Company's recent acquisitions, will be used to fund future
acquistions. In addition, funds from the Line of Credit will be available to
finance future office property development and capital expenditures and for
working capital purposes. The facility is scheduled to mature on July 30, 1998,
subject to a one-year extension if requested by the Company and approved by the
lenders. The Company is subject to a number of financial covenants under the
terms of the Line of Credit. See "Properties -- Debt Financing -- Line of
Credit." As of May 31, 1996, approximately $188 million was available for draw
under the Line of Credit, of which $49.0 million had been drawn by the Company.
The Line of Credit bore interest at the rate of 7.19% as of May 31, 1996.
USE OF PROCEEDS
The net proceeds to the Company from the sale of the shares of Common Stock
offered hereby and the Concurrent USRealty Purchase are estimated to be
approximately $_____ million ($____ million if the Underwriters' over-allotment
option is exercised in full), assuming that USRealty purchases 1,076,446 shares
in the Offering, as to which no underwriting discounts will be applied. The
Company intends to use $190 million of the net proceeds to fund acquisitions,
either through direct purchase or repayment of Line of Credit borrowings
incurred to fund acquisitions, and to use the remainder of the net proceeds to
fund acquisition activities and for general corporate purposes. Pending such
uses, the net proceeds may be invested in short-term, income-producing
investments such as commercial paper, government securities or money market
funds that invest in government securities.
Morgan Guaranty Trust Company of New York, an affiliate of J.P. Morgan
Securities Inc., currently is the sole lender under the Line of Credit and is
expected to receive up to $190 million of the net proceeds from the Offering and
the Concurrent USRealty Purchase to repay acquisition-related indebtedness. See
"Underwriting." Thereafter, the Company expects the Line of Credit to be
available primarily to facilitate future acquisitions.
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PRICE RANGE OF COMMON STOCK AND DIVIDEND HISTORY
The shares of Common Stock have been traded on the NYSE under the symbol
"CRE" since February 1993. As of June 20, 1996 there were 401 stockholders of
record. The following table sets forth the high and low sales prices per share
for the periods indicated as reported on the NYSE and the dividends per share
paid by the Company with respect to the periods noted.
CALENDAR PERIOD HIGH LOW DIVIDENDS
--------------- ---- --- ---------
1994:
First Quarter........................ $ 24 1/2 $ 22 1/8 $.4375
Second Quarter....................... $ 23 7/8 $ 21 1/2 $.4375
Third Quarter........................ $ 21 5/8 $ 19 3/4 $.4375
Fourth Quarter....................... $ 20 3/8 $ 17 3/8 $.4375
1995:
First Quarter........................ $ 18 1/4 $ 17 1/8 $.4375
Second Quarter....................... $ 19 3/4 $ 16 3/4 $.4375
Third Quarter........................ $ 19 3/4 $ 17 1/4 $.4375
Fourth Quarter....................... $ 24 5/8 $ 18 1/2 $.4375
1996:
First Quarter........................ $ 24 3/4 $ 23 7/8 $.4375
April 1, 1996 to June 21, 1996....... $ 25 1/4 $ 23 3/4 (1)
- ----------
(1) The dividend for the second quarter has not yet been declared.
The Company, in order to qualify as a REIT, is required to make distributions
(other than capital gain distributions) to its stockholders in amounts at least
equal to (i) the sum of (A) 95% of its "REIT taxable income" (computed without
regard to the dividends paid deduction and its net capital gain) and (B) 95% of
the net income (after tax), if any, from foreclosure property, minus (ii) the
sum of certain items of non-cash income. The Company's distribution strategy is
to distribute what it believes is a conservative percentage of its cash flow,
permitting the Company to retain funds for capital improvements and other
investments while funding its distributions.
For Federal income tax purposes, distributions may consist of ordinary
income, capital gains, nontaxable return of capital or a combination thereof.
Distributions that exceed the Company's current and accumulated earnings and
profits (calculated for tax purposes) constitute a return of capital rather than
a dividend and reduce the stockholder's basis in his or her shares of Common
Stock. To the extent that a distribution exceeds both current and accumulated
earnings and profits and the stockholder's basis in his or her shares, it will
generally be treated as gain from the sale or exchange of that stockholder's
shares. The Company annually notifies stockholders of the taxability of
distributions paid during the preceding year. The following table sets forth the
taxability of distributions paid in 1995, 1994 and 1993:
1995 1994 1993
------ ------ -------
Ordinary income ............. 85% 75% 60%
Capital gain................. -- -- --
Return of capital............ 15% 25% 40%
S-16
<PAGE>
CAPITALIZATION
The following table sets forth the capitalization of the Company as of March
31, 1996 on an historical basis and on a pro forma basis, giving effect to (i)
completion of the Offering and the Concurrent USRealty Purchase, (ii) the
closing of the USRealty Transaction (which closed on April 30, 1996), (iii) the
acquisition of office properties that have been consummated since March 31, 1996
and the acquisition of 14 office properties that the Company expects to
consummate in the near future, and (iv) the repayment of $235 million of
indebtedness outstanding as of March 31, 1996.
March 31, 1996
------------------------
Historical Pro Forma
---------- ---------
(In thousands)
Debt ................................................. $496,957 $319,474
Other liabilities..................................... 10,018 10,977
Minority interest..................................... 34,876 35,156
Stockholders' equity:
Preferred Stock, $.01 par value, 5,000,000 shares
authorized; none issued and outstanding (1)......... 0 0
Common Stock, $.01 par value, 30,000,000 shares
authorized; 13,547,492 issued and outstanding
(2)(3).............................................. 136 372
Additional paid-in capital........................... 127,376 657,408
Cumulative dividends paid in excess of net income ... (34,005) (34,623)
------- -------
Total stockholders' equity........................... 93,507 623,157
------ -------
Total capitalization................................ $635,358 $988,764
======== ========
- -------------
(1) On a pro forma basis, the number of authorized shares of Preferred Stock
increased to 15,000,000 effective April 29, 1996 in connection with the
USRealty Transaction.
(2) Does not include 4,649,954 shares of Common Stock reserved for possible
issuance upon redemption of issued and outstanding Units as of March 31,
1996, respectively.
(3) On a pro forma basis, the number of authorized shares of Common Stock
increased to 90,000,000 effective April 29, 1996 in connection with the
USRealty Transaction, and the number of shares of Common Stock issued and
outstanding increased to 37,175,399.
S-17
<PAGE>
PRO FORMA FINANCIAL INFORMATION
The following tables set forth pro forma financial information for the
Company as of and for the three months ended March 31, 1996 and for the year
ended December 31, 1995, after giving effect to (i) completion of the Offering
and the Concurrent USRealty Purchase, (ii) the closing of the USRealty
Transaction (which closed on April 30, 1996), (iii) the acquisition of office
properties that have been consummated since the beginning of the periods
presented and the acquisition of 14 office properties that the Company expects
to consummate in the near future, and (iv) the repayment of $235 million of
indebtedness outstanding as of March 31, 1996.
The unaudited Pro Forma Condensed Consolidated Balance Sheet is presented as
if the following transactions had been consummated on March 31, 1996: (a) the
purchase of the four office properties known as Harlequin Plaza North and South
and Quebec Court I and II; (b) the purchase of the two office buildings and
additional land which will support the development of up to 100,000 square feet
of office space comprising The Quorum; (c) the purchase of the two office
buildings and additional land which will support the development of up to
900,000 square feet of additional office space comprising the Parkway North
Center; (d) the purchase of the ten office properties comprising the Redmond
East Business Campus; (e) the purchase of the 12 office buildings comprising the
Warner Center Business Park; (f) the purchase of the office building known as
the Plaza PacifiCare Building; (g) the purchase of the office building known as
Parkway One; (h) the USRealty Transaction; and (i) the Offering and the
Concurrent USRealty Purchase.
The unaudited Pro Forma Condensed Consolidated Statements of Operations are
presented as if the following transactions had been consummated as of the
beginning of the respective periods: (a) the purchase of the office building
known as One Rock Spring Plaza; (b) the purchase of the office building known as
Tycon Courthouse; (c) the purchase of an additional 7.58% ownership interest in
Square 24 Associates, the partnership owning the office property located at 2445
M Street, Washington, D.C.; (d) the purchase of the four office properties
comprising the Scenic Business Park; (e) the purchase of the four office
properties comprising the Harbor Corporate Park; (f) the purchase of the six
office properties known as the AT&T Center; (g) the purchase of the three office
properties known as Reston Quadrangle; (h) the purchase of the four office
properties known as Harlequin Plaza North and South and Quebec Court I and II;
(i) the purchase of the two office buildings and additional land which will
support the development of up to 100,000 square feet of office space comprising
The Quorum; (j) the purchase of the two office buildings and additional land
which will support the development of up to 900,000 square feet of additional
office space comprising the Parkway North Center; (k) the purchase of the ten
office properties comprising the Redmond East Business Campus; (l) the purchase
of the 12 office buildings comprising the Warner Center Business Park; (m) the
purchase of the office building known as the Plaza PacifiCare Building; (n) the
purchase of the office building known as Parkway One; (o) the USRealty
Transaction; and (p) the Offering and the Concurrent USRealty Purchase.
In management's opinion, all material adjustments necessary to reflect the
transactions described above are presented in the pro forma adjustments columns,
which are further described in the notes to the unaudited pro forma financial
information.
The unaudited Pro Forma Condensed Consolidated Balance Sheet and the
unaudited Pro Forma Condensed Consolidated Statements of Operations should be
read in conjunction with the Consolidated Financial Statements of the Company
and Notes thereto incorporated by reference in the accompanying Prospectus. The
unaudited Pro Forma Condensed Consolidated Balance Sheet is not necessarily
indicative of what the actual financial position would have been at March 31,
1996, nor does it purport to represent the future financial position of the
Company. The unaudited Pro Forma Condensed Consolidated Statements of Operations
are not necessarily indicative of what actual results of operations of the
Company would have been assuming the transactions described above had been
consummated as of the beginning of the respective periods, nor do they purport
to represent the results of operations for future periods.
S-18
<PAGE>
CARRAMERICA REALTY CORPORATION AND SUBSIDIARIES
PRO FORMA CONDENSED CONSOLIDATED BALANCE SHEET
March 31, 1996
(Unaudited)
<TABLE>
<CAPTION>
PRO FORMA ADJUSTMENTS
--------------------------------------------------------------
OFFERING AND
CONCURRENT
ACQUIRED PROBABLE USREALTY USREALTY PRO FORMA
HISTORICAL(A) PROPERTIES(B) ACQUISITIONS(C) TRANSACTION(D) PURCHASE(E) CONSOLIDATED
------------- --------------- --------------- -------------- --------------- ---------------
(IN THOUSANDS)
<S> <C> <C> <C> <C> <C> <C>
ASSETS
Rental property, net.......... $546,543 $ 175,855 (1) $ 68,530 (7) $ -- $ -- $790,928
Restricted and unrestricted
cash ......................... 22,289 (117,401)(2) (68,530)(8) 10,106 285,733 132,197
Other assets ................. 66,526 302 (3) -- (1,189) -- 65,639
-------- ------------ ----------- ------------ ---------- ---------
Total assets................ $635,358 $ 58,756 $ -- $ 8,917 $285,733 $988,764
======== ============ ========== =========== ========== =========
LIABILITIES
Debt ......................... $496,957 $ 57,517 (4) $ -- $ (235,000) $ -- $319,474
Other liabilities ............ 10,018 959 (5) -- -- -- 10,977
-------- ------------ ---------- ------------ ---------- ---------
Total liabilities........... 506,975 58,476 -- (235,000) -- 330,451
-------- ------------ ---------- ------------ ---------- ---------
Minority interest ............ 34,876 280 (6) -- -- -- 35,156
-------- ------------ ---------- ------------ ---------- ---------
STOCKHOLDERS' EQUITY
Common stock ................. 136 -- -- 116 120 372
Additional paid-in capital .. 127,376 -- -- 244,419 285,613 657,408
Cumulative dividends paid in
excess of net income ......... (34,005) -- -- (618) -- (34,623)
--------- ------------ ---------- ------------ ----------- ----------
Total stockholders' equity.. 93,507 -- -- 243,917 285,733 623,157
--------- ------------ ---------- ------------ ----------- ----------
Total liabilities and stock-
holders' equity............ $635,358 $ 58,756 $ -- $ 8,917 $285,733 $988,764
========= ============ ========== ============ =========== =========
</TABLE>
S-19
<PAGE>
CARRAMERICA REALTY CORPORATION AND SUBSIDIARIES
NOTES TO PRO FORMA CONDENSED CONSOLIDATED
BALANCE SHEET
MARCH 31, 1996
(UNAUDITED)
Adjustments (dollars in thousands):
(A) Reflects the Company's historical consolidated balance sheet as of March
31, 1996.
(B) Reflects the acquisition of: (i) the four office properties known as
Harlequin Plaza North and South and Quebec Court I and II; (ii) the two
office buildings and additional land which will support the development of
up to 100,000 square feet of office space comprising The Quorum; (iii) the
two office buildings and additional land which will support the
development of up to 900,000 square feet of additional office space
comprising Parkway North Center; and (iv) the ten office properties known
as Redmond East Business Campus. Pro forma adjustments reflect:
(1) total acquisition costs of $175,855 ($46,951 related to Harlequin
Plaza North and South and Quebec Court I and II, $9,618 related to
The Quorum, $79,632 related to Parkway North Center, and $39,654
related to Redmond East Business Campus);
(2) cash payment of $117,401 for acquisition of properties;
(3) prepaid assets acquired ($702 related to the acquisition of Parkway
North Center) offset by the transfer of previously capitalized
acquisition costs ($400 related to the acquisition of Redmond East
Business Campus);
(4) the assumption of existing debt ($28,183 related to the acquisition
of Redmond East Business Campus and $29,334 related to the
acquisition of Parkway North Center);
(5) the assumption of accounts payable and accrued expenses existing at
the time of acquisition ($230 related to Redmond East Business
Campus, $487 related to Parkway North Center, and $242 related to
The Quorum); and
(6) the value of 11,452 Units of CarrAmerica Realty, L.P. issued in
connection with the purchase of Harlequin Plaza North and South and
Quebec Court I and II.
(C) Reflects anticipated effects of probable acquisitions of: (i) the 12
office buildings comprising the Warner Center Business Park; (ii) the
office building known as the Plaza PacifiCare Building; and (iii) the
office building known as Parkway One. Pro forma adjustments reflect:
(7) anticipated total acquisition costs of $68,530 ($52,005 related to
Warner Center Business Park, $9,875 related to Plaza PacifiCare, and
$6,650 related to Parkway One); and
(8) anticipated cash payment of $68,530 for acquisition of properties.
(D) Reflects the issuance of 11,627,907 shares of Common Stock to USRealty in
exchange for cash of $249,614, reduced by fees and other costs related to
the transaction of $5,079 ($571 previously capitalized). The Company used
$235,000 of the proceeds to repay debt incurred related to recent
acquisitions. Also reflects the effect of the write-off of deferred
financing costs ($618) of the debt subsequently repaid.
(E) Reflects the effects of the Offering and the Concurrent USRealty Purchase
and the issuance of 8,400,000 and 3,600,000 shares of Common Stock,
respectively, in connection therewith at a price of $24.625 per share.
Transaction costs of $9,767 assume no underwriting discount with respect
to the 1,076,446 shares of Common Stock that USRealty has expressed an
interest in purchasing in the Offering.
S-20
<PAGE>
CARRAMERICA REALTY CORPORATION AND SUBSIDIARIES
PRO FORMA CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS
FOR THE THREE MONTHS ENDED MARCH 31, 1996 AND THE YEAR ENDED DECEMBER 31,
1995
(UNAUDITED)
<TABLE>
<CAPTION>
FOR THE THREE MONTHS ENDED MARCH 31, 1996
------------------------------------------------------------------------------------------
PRO FORMA ADJUSTMENTS
-------------------------------------------------------------
OFFERING AND
CONCURRENT
ACQUIRED PROBABLE USREALTY USREALTY PRO FORMA
HISTORICAL(A) PROPERTIES(B) ACQUISITIONS(C) TRANSACTION(D) PURCHASE(E) CONSOLIDATED
------------- -------------- ---------------- --------------- ------------ -------------
(IN THOUSANDS, EXCEPT PER SHARE DATA)
REAL ESTATE OPERATING
REVENUE:
<S> <C> <C> <C> <C> <C> <C> <C> <C>
RENTAL REVENUE .............. $25,350 $12,377 (1) $1,838 (7) $ -- $ -- $39,565
REAL ESTATE SERVICE INCOME .. 2,726 -- -- -- -- 2,726
----- ------ ----- ------ ----- -------
TOTAL REVENUE .............. 28,076 12,377 1,838 -- -- 42,291
------ ------ ----- ------ ----- ------
REAL ESTATE OPERATING
EXPENSES:
PROPERTY OPERATING EXPENSES . 8,991 2,981 (2) 523 (8) -- -- 12,495
INTEREST EXPENSE ............ 6,532 1,179 (3) --- (1,111)(10) -- (12) 6,600
GENERAL AND ADMINISTRATIVE .. 2,748 321 (1) 55 (7) -- -- 3,124
DEPRECIATION AND AMORTIZATION 5,484 3,622 (4) 400 (9) (50)(11) -- 9,456
----- ----- -- --- ------ ----- -----
TOTAL OPERATING EXPENSES ... 23,755 8,103 978 (1,161) -- 31,675
------ ----- --- ------ ----- ------
REAL ESTATE OPERATING INCOME 4,321 4,274 860 1,161 -- 10,616
OTHER OPERATING INCOME ....... 404 4 (1) -- -- -- (13) 408
------ ----- --- ------ ----- ------
NET OPERATING INCOME BEFORE
MINORITY INTEREST ......... 4,725 4,278 860 1,161 -- 11,024
MINORITY INTEREST ............ (1,390) (13) (5) -- -- -- (1,403)
------ ----- --- ------ ----- ------
NET INCOME ................. $ 3,335 $ 4,265 $ 860 $ 1,161 $ -- $ 9,621
====== ===== === ===== ===== ======
NET INCOME PER COMMON SHARE
(F).......................... $ 0.25 $ 0.26
====== ======
</TABLE>
<TABLE>
<CAPTION>
FOR THE THREE MONTHS ENDED MARCH 31, 1996
------------------------------------------------------------------------------------------
PRO FORMA ADJUSTMENTS
-------------------------------------------------------------
OFFERING AND
CONCURRENT
ACQUIRED PROBABLE USREALTY USREALTY PRO FORMA
HISTORICAL(A) PROPERTIES(B) ACQUISITIONS(C) TRANSACTION(D) PURCHASE(E) CONSOLIDATED
------------- -------------- ---------------- --------------- ------------ -------------
(IN THOUSANDS, EXCEPT PER SHARE DATA)
<S> <C> <C> <C> <C> <C> <C> <C> <C>
REAL ESTATE OPERATING REVENUE:
RENTAL REVENUE ................. $ 89,539 $59,476 (1) $7,391 (7) $ -- $ -- $156,406
REAL ESTATE SERVICE INCOME ..... 11,315 -- -- -- -- 11,315
-------- ------- ------ ------- -------- --------
TOTAL REVENUE ................. 100,854 59,476 7,391 -- -- 167,721
-------- ------- ------ ------- -------- --------
REAL ESTATE OPERATING EXPENSES:
PROPERTY OPERATING EXPENSES..... 31,579 15,466 (2) 2,251 (8) -- -- 49,296
INTEREST EXPENSE ............... 21,873 8,207 (3) -- (3,828)(10) -- (12) 26,252
GENERAL AND ADMINISTRATIVE...... 10,711 946 (1) 325 (7) -- -- 11,982
DEPRECIATION AND AMORTIZATION... 18,495 17,101 (4) 1,597 (9) (200)(11) -- 36,993
-------- ------- ------ ------- -------- --------
TOTAL OPERATING EXPENSES....... 82,658 41,720 4,173 (4,028) -- 124,523
-------- ------- ------ ------- -------- --------
REAL ESTATE OPERATING INCOME... 18,196 17,756 3,218 4,028 -- 43,198
OTHER OPERATING INCOME
(EXPENSES) ..................... (912) 19 (1) -- -- -- (13) (893)
-------- ------- ------ ------- -------- --------
NET OPERATING INCOME BEFORE
MINORITY INTEREST ............ 17,284 17,775 3,218 4,028 -- 42,305
MINORITY INTEREST ............... (5,217) 74 (5)(6) -- -- -- (5,143)
-------- ------- ------ ------- -------- --------
NET INCOME .................... $12,067 $17,849 $3,218 $ 4,028 $ -- $ 37,162
======== ======= ====== ======= ======== ========
NET INCOME PER COMMON SHARE (F) . $ 0.90 $ 1.00
======= ========
</TABLE>
S-21
<PAGE>
CARRAMERICA REALTY CORPORATION AND SUBSIDIARIES
NOTES TO PRO FORMA CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS
FOR THE THREE MONTHS ENDED MARCH 31, 1996 AND THE YEAR ENDED DECEMBER 31,
1995
(Unaudited)
Adjustments (dollars in thousands):
(A) Reflects the Company's historical consolidated statements of operations
for the three months ended March 31, 1996 and the year ended December 31,
1995.
(B) Pro forma adjustments for the purchases of the acquired properties
reflect:
(1) the historical operating activity of the properties acquired;
(2) the historical operating activity of the rental properties acquired
($3,266 for the three months ended March 31, 1996 and $16,861 in
1995) reduced by the elimination of management fee expenses that
will not be incurred by the Company upon purchase of the properties
($285 for the three months ended March 31, 1996 and $1,395 in 1995);
(3) the additional interest expense on the debt and Line of Credit and
interest expense on the assumed debt;
(4) the depreciation expense for the acquisitions based on the new
accounting basis for the rental properties acquired;
(5) the minority interest share of earnings of Harlequin Plaza North and
South and Quebec Court I and II; and
(6) the impact of the additional ownership interest acquired in Square
24 Associates, offset by the minority interest share of earnings of
acquired properties.
(C) Pro forma adjustments for the probable acquisitions reflect:
(7) the historical operating activity of the properties to be acquired;
(8) the historical operating activity of the rental properties to be
acquired ($578 for the three months ended March 31, 1996 and $2,466
in 1995) reduced by the elimination of management fee expenses that
will not be incurred by the Company upon purchase of the properties
($55 for the three months ended March 31, 1996 and $215 in 1995);
and
(9) the depreciation expense for the probable acquisitions based on the
anticipated accounting basis for the rental properties to be
acquired.
(D) In connection with the repayment of debt related to recent acquisitions
with proceeds of the USRealty Transaction, the Company incurred a loss on
write-off of deferred financing costs of $618. This nonrecurring cost was
charged to operations when incurred. This cost has not been included in
the condensed consolidated pro forma statements of operations for the
three months ended March 31, 1996 or for the year ended December 31, 1995.
Pro forma adjustments for the USRealty Transaction reflect:
(10) the reduction in interest expense associated with the subsequent
repayment of certain notes and lines of credit with the proceeds of
the USRealty Transaction; and
(11) the reduction in amortization expense resulting from the write-off
of deferred financing costs of the debt subsequently repaid.
(E) Pro forma adjustments for the Offering and the Concurrent USRealty
Purchase reflect:
(12) no adjustment with respect to interest expense because the interest
expense associated with debt to be repaid with a portion of the
proceeds of the Offering and the Concurrent USRealty Purchase was
incurred after March 31, 1996; and
(13) no adjustment reflecting the investment of $109,878 of the net
proceeds of the Offering and the Concurrent USRealty Purchase.
(F) Based upon 37,214,074 and 36,977,439 pro forma shares of Common Stock
outstanding on a weighted average basis during the three months ended
March 31, 1996 and the year ended December 31, 1995, respectively.
S-22
<PAGE>
MANAGEMENT'S DISCUSSION AND ANALYSIS OF
FINANCIAL CONDITION AND RESULTS OF OPERATIONS
The following discussion and analysis of the consolidated financial condition
and results of operations should be read in conjunction with the Consolidated
and Combined Financial Statements of the Company and Notes thereto incorporated
by reference in the accompanying Prospectus.
General
The following discussion is based primarily on the Consolidated Financial
Statements of the Company as of March 31, 1996, December 31, 1995 and December
31, 1994 and for the three months ended March 31, 1996 and 1995 and the years
ended December 31, 1995 and 1994.
Results of Operations--Three Months Ended March 31, 1996 and 1995
Real Estate Operating Revenue. Total real estate operating revenue increased
$3.8 million, or 15.7%, to $28.1 million for the three months ended March 31,
1996 as compared to $24.3 million for the three months ended March 31, 1995. The
increase in revenue was primarily attributable to a $3.6 million and a $.2
million increase in rental revenue and real estate service revenue,
respectively. The Company experienced net growth in its rental revenue as a
result of its acquisitions since the first quarter of 1995 which contributed
approximately $3.6 million of additional rental revenue in the three month
period ended March 31, 1996. Rental revenue contributed by properties that were
fully operating throughout both periods remained constant at approximately $21.8
million. Real estate service revenues from the Company's core service contracts
increased by $.2 million, or 9.9%, for the three months ended March 31, 1996 to
$2.7 million as compared to $2.5 million for the three months ended March 31,
1995. The increase was primarily as a result of an increase in leasing
commissions earned in the first quarter of 1996.
Real Estate Operating Expenses. Total real estate operating expenses
increased $4.0 million for the three months ended March 31, 1996, or 20.2%, to
$23.8 million as compared to $19.8 million for the three months ended March 31,
1995. The net increase in operating expenses was attributable to a $1.5 million
increase in property operating expenses, a $1.3 million increase in interest
expense, a $.1 million increase in general and administrative expenses, and a
$1.1 million increase in depreciation and amortization. The increase in property
operating expenses was primarily attributable to $1.2 million in operating
expenses associated with property acquisitions since the first quarter of 1995.
Exclusive of operating expenses attributable to new property acquisitions,
property operating expenses increased $.3 million, or 3.7%, for the three months
ended March 31, 1996 predominately as a result of higher real estate tax
assessments. The increase in the Company's interest expense is primarily related
to borrowings for acquisitions. The increase in general and administrative
expenses is predominately a result of the addition of new staff to implement the
Company's new business strategy and inflation. The increase in depreciation and
amortization is predominately a result of additional depreciation and
amortization on the Company's real estate acquisitions.
Other Operating Income (Expense). Other operating income increased $.2
million for the three months ended March 31, 1996 to $.4 million as compared to
$.2 million for the three months ended March 31, 1995, primarily due to the
addition of equity in earnings of CC-JM II Associates. The Company is a 50%
venturer in this entity that constructed the Booz-Allen & Hamilton Building,
which was placed in service in January 1996.
Net Income. Net income of $3.3 million was earned for the three months ended
March 31, 1996 as compared to $3.3 million during the three month period ended
March 31, 1995. The comparability of net income between the two periods is
impacted by the acquisitions the Company made and the other changes described
above.
Cash Flows. Net cash provided by operating activities increased $1.0 million,
or 12.9%, to $9.0 million for the three months ended March 31, 1996 as compared
to $8.0 million for the three months ended March 31, 1995, primarily as a result
of the acquisitions made by the Company. Net cash used by
S-23
<PAGE>
investing activities increased $155.2 million, to $169.5 million for the three
months ended March 31, 1996 as compared to $14.3 million for the three months
ended March 31, 1995, primarily as a result of capital deployed by the Company
for acquisitions of office properties. Net cash provided by financing activities
increased $172.9 million to $171.5 million provided for the three months ended
March 31, 1996 as compared to $1.4 million used for the three months ended March
31, 1995, primarily as a result of the net borrowings necessary for the
Company's acquisitions.
Results of Operations--1995 and 1994
Revenue. Total real estate operating revenue increased $9.3 million, or
10.2%, to $100.9 million in 1995 as compared to $91.6 million in 1994. The
increase in revenue was primarily attributable to a $6.9 million and a $2.4
million increase in rental revenue and real estate service revenue,
respectively. The Company experienced net growth in its rental revenue as a
result of its acquisitions which contributed approximately $8.1 million of
additional rental revenue in 1995. Rental revenue contributed by properties that
were fully operating throughout both periods declined by approximately $1.2
million, or 1.5%. These properties, all of which were located in downtown
Washington, D.C., experienced lower rental revenue in the aggregate during 1995
as a result of (a) lower occupancy rates, (b) the renegotiation of certain
tenants' leases resulting in lower rental rates, and (c) new leases entered into
by the Company at rates lower than the expiring leases' rental rates. The
Company experienced growth in its real estate service income of $1.7 million as
a result of its acquisition of real estate service contracts in 1995. In
addition, real estate service revenues from the Company's core service contracts
increased by $.7 million, or 8.2%, in 1995.
Operating Expenses. Total real estate operating expenses increased $7.7
million, or 10.2%, to $82.7 million as compared to $75.0 million in 1994. The
net increase in operating expenses was attributable to a $1.9 million increase
in property operating expenses, a $.5 million increase in interest expense, a
$1.2 million increase in general and administrative expenses, and a $4.1 million
increase in depreciation and amortization. The increase in property operating
expenses was primarily attributable to $2.4 million in operating expenses
associated with property acquisitions. Exclusive of operating expenses
attributable to new property acquisitions, property operating expenses decreased
$.5 million, or 1.9%, in 1995 predominately as a result of lower real estate tax
assessments. The increase in the Company's interest expense is primarily related
to borrowings for acquisitions. The increase in general and administrative
expenses is predominately a result of general and administrative expenses
associated with the real estate service contracts acquired in 1995 and
inflation. The increase in depreciation and amortization is predominately a
result of additional depreciation and amortization on the Company's real estate
and real estate service contract acquisitions.
Other Operating Income (Expense). In January 1996, the Company terminated an
agreement to acquire the development business of The Evans Company and, as a
result, recognized a $1.9 million non-recurring charge to its earnings in the
fourth quarter of 1995. The Company took this action in order to focus on
implementing its national growth strategy, focusing on value office properties.
Net Income. Net income of $12.1 million was earned during 1995 as compared to
$12.1 million during 1994. The comparability of net income between the two
periods is impacted by the acquisitions the Company made and the other changes
described above.
Cash Flows. Net cash provided by operating activities increased $5.4 million,
or 18.0%, to $35.3 million in 1995 as compared to $29.9 million in 1994,
primarily as a result of the acquisitions made by the Company. Net cash used by
investing activities increased $14.6 million, or 21.8%, to $81.6 million in 1995
as compared to $67.0 million in 1994, primarily as a result of capital deployed
by the Company for acquisitions of office properties and real estate service
contracts. Net cash provided by financing activities increased $4.5 million, or
13.7%, to $37.1 million in 1995 as compared to $32.6 million in 1994, primarily
as a result of the net borrowings for the Company's acquisitions.
Pro Forma Information
Balance Sheet at March 31, 1996. On a pro forma basis, the Company's total
assets increased $353.4 million to $988.8 million. The increase resulted from
the acquisition and probable acquisition of
S-24
<PAGE>
$244.4 million of office properties and the addition of $109.9 million of cash
from the Offering and the Concurrent USRealty Purchase. The Company will use
this cash for future acquisitions and for general corporate purposes.
Results of Operations for the Three Months Ended March 31, 1996. On a pro
forma basis, the Company's net income for the three months ended March 31, 1996
increased $6.3 million to $9.6 million. The pro forma adjustments reflect a $4.3
million increase in net income from the acquisition of office properties, a $.9
million increase in net income from probable acquisitions, and a $1.1 million
increase in net income from reduced interest and amortization expenses resulting
from the repayment of debt. The pro forma operating statement for the three
months ended March 31, 1996 does not reflect any earnings from the investment of
approximately $109.9 million in net proceeds of the Offering and the Concurrent
USRealty Purchase. Earnings per share of Common Stock for the three months ended
March 31, 1996, on a pro forma basis, were $.26 per share, which was $.01 per
share greater than the historical amount.
Results of Operations for the Year Ended December 31, 1995. On a pro forma
basis, the Company's net income for the year ended December 31, 1995 increased
$25.1 million to $37.2 million. The pro forma adjustments reflect a $17.9
million increase in net income from the acquisition of office properties, a $3.2
million increase in net income from probable acquisitions, and a $4.0 million
increase in net income from reduced interest and amortization expenses resulting
from the repayment of debt. The pro forma operating statement for the year ended
December 31, 1995 does not reflect any earnings from the investment of
approximately $109.9 million in net proceeds of the Offering and the Concurrent
USRealty Purchase. Earnings per share of Common Stock for the year ended
December 31, 1995, on a pro forma basis, were $1.00 per share, which was $.10
per share greater than the historical amount.
Pro Forma Indebtedness at March 31, 1996. On a pro forma basis, the Company's
consolidated indebtedness at March 31, 1996 was $319.5 million at a weighted
average interest rate of 8.4% and a weighted average term to maturity of 7.0
years. Based upon the Company's pro forma total market capitalization at March
31, 1996 of $1,323.6 million (based on a Common Stock price at that date of
$24.00 per share), the Company's pro forma debt at March 31, 1996 represented
24.1% of its pro forma total market capitalization. On a pro forma basis, the
Company's consolidated net indebtedness (indebtedness less existing cash) at
March 31, 1996 was $187.3 million and the Company's net total market
capitalization (total market capitalization less cash) at March 31, 1996 was
$1,191.4 million. The Company's pro forma ratio of net indebtedness to net total
market capitalization at March 31, 1996 was 15.7%.
Liquidity and Capital Resources
The Company's total indebtedness at May 31 and March 31, 1996 was $310.7 and
$497.0 million, respectively, of which $49.0 million and $235.0 million, or
15.8% and 47.3%, respectively, bore a LIBOR-based floating interest rate. The
decline in the indebtedness was attributable to the repayment of interim
indebtedness from the proceeds of the USRealty Transaction. Based upon the
Company's total market capitalization at May 31 and March 31, 1996 of $1,064.1
million and $933.7 million, respectively (the Common Stock price was $25.25 and
$24.00 per share, respectively, and the total shares/Units outstanding were
29,837,805 and 18,197,446, respectively), the Company's debt at May 31 and March
31, 1996 represented 29.2% and 53.2%, respectively, of its total market
capitalization.
On May 22, 1996, the Company obtained a $215 million unsecured credit
facility from Morgan Guaranty Trust Company of New York. The Company intends to
use the Line of Credit to finance acquisitions and development activities, for
capital expenditures and for working capital purposes. As of May 31, 1996,
approximately $49.0 million had been advanced under the Line of Credit. Once the
outstanding amount of the Line of Credit has been repaid out of the net proceeds
of the Offering and the Concurrent USRealty Purchase, the Company will have
access to the maximum amount available under the Line of Credit. See "Properties
- -- Debt Financing -- Line of Credit."
The Company's operating properties require periodic investments of capital
for tenant-related capital expenditures and for general capital improvement
projects. Since 1993, the Company's capital investments in its properties have
been $37.14, $22.70, $19.19 and $11.68 per square foot leased for the
S-25
<PAGE>
period from February 16, 1993 (inception of operations) to December 31, 1993,
the years ended December 31, 1994 and 1995, and the three months ended March 31,
1996, respectively, for tenant-related capital expenditures for new leases and
$5.00, $2.09, $.65 and $.11 per square foot for general capital projects for the
period from February 16, 1993 (inception of operations) to December 31, 1993,
the years ended December 31, 1994 and 1995, and the three months ended March 31,
1996, respectively. As a result of large-scale renovations of certain of the
Company's Washington, D.C. properties, the Company's general capital
expenditures during this time were greater than what the Company expects to
spend in the future on a normalized basis. These renovations were undertaken to
improve these properties' market position and to bring the properties into
compliance with certain new local and federal laws. The Company expects that
general capital expenditures for its Washington, D.C. properties will decline in
the future primarily because most of the properties recently have been
extensively renovated. The Company has recently begun renovating several garages
at its Washington, D.C. properties at an estimated total cost of approximately
$3.5 million, or $1.45 per square foot of the Company's Washington, D.C.
properties, to be spent over the next two years. Exclusive of the garage
renovations, general capital expenditures for the Company's Washington, D.C.
properties are expected to be approximately $1.0 million or less annually, or
$.40 or less per square foot. With respect to the Company's recent acquisitions
in select suburban growth markets, the Company expects that the annual capital
expenditures for these properties will be substantially less than the Company
has incurred for its Washington, D.C. properties. The Company anticipates
funding the capital requirements of its Washington, D.C. properties and of its
new acquisitions with cash flow from operations and, if necessary, with proceeds
from the Line of Credit.
Net cash provided by operating activities was $9.0 million for the three
months ended March 31, 1996, compared to $8.0 million for the three months ended
March 31, 1995. The increase in net cash provided by operating activities was
primarily as a result of acquisitions made by the Company.
The Company's investing activities used approximately $169.5 million and
$14.3 million for the three months ended March 31, 1996 and 1995, respectively.
The Company's investment activities included the acquisitions of office
buildings for approximately $168.2 million for the three months ended March 31,
1996, as compared to no acquisition activity in the first quarter of 1995.
Additionally, the Company invested approximately $1.0 million and $2.8 million
in its existing real estate assets for the three months ended March 31, 1996 and
1995, respectively.
Net of distributions to the Company's shareholders, the Company's financing
activities provided net cash of $177.4 million and $4.4 million for the three
months ended March 31, 1996 and 1995, respectively. For the three months ended
March 31, 1996, the Company borrowed approximately $180.0 million to provide
adequate capital for the Company's investing activities, as compared to
approximately $6.7 million for the three months ended March 31, 1995.
Rental revenue and real estate service revenue have been the principal
sources of capital to fund the Company's operating expenses, debt service and
capital expenditures, excluding non-recurring capital expenditures. The Company
believes that rental revenue and real estate service revenue will continue to
provide the necessary funds for its operating expenses and debt service. As
discussed above, the Company expects to fund capital expenditures from cash flow
from operations and the Line of Credit. If these sources of funds are
insufficient, the Company's ability to make expected distributions may be
adversely impacted. At March 31, 1996, the Company had cash of $22.3 million, of
which $2.1 million was restricted.
The Company's dividends are paid quarterly. Amounts accumulated for
distribution are predominantly invested by the Company in short-term investments
that are collateralized by securities of the United States Government or any of
its agencies.
Management believes that the Company will have access to the capital
resources necessary to expand and develop its business. Accordingly, the Company
may seek to obtain funds through additional equity offerings or debt financing
in a manner consistent with its intention to operate with a
S-26
<PAGE>
conservative borrowing policy. The Company anticipates that adequate cash will
be available to fund its operating and administrative expenses, continuing debt
service obligations, the payment of dividends in accordance with REIT
requirements in both the short-term and long-term, and the funding of future
acquisitions and development of rental properties and capital expenditures.
The Company believes that funds from operations is an appropriate measure of
the performance of an equity REIT because industry analysts have accepted it as
a performance measure of equity REITs. In accordance with the final NAREIT White
Paper on Funds From Operations as approved by the Board of Governors of NAREIT
on March 3, 1995, funds from operations represents net income (loss) (computed
in accordance with generally accepted accounting principles), excluding gains
(losses) from debt restructuring or sales of property, plus depreciation and
amortization of assets uniquely significant to the real estate industry and
after adjustments for unconsolidated partnerships and joint ventures.
Adjustments for unconsolidated partnerships and joint ventures are calculated to
reflect funds from operations on the same basis. The Company's funds from
operations presented below conform to the new NAREIT definition of funds from
operations. Funds from operations does not represent net income or cash flows
generated from operating activities in accordance with generally accepted
accounting principles and should not be considered an alternative to net income
as an indication of the Company's performance or to cash flows as a measure of
liquidity or the Company's ability to make distributions.
The following table provides the calculation of the Company's funds from
operations on a pro forma and historical basis for the three months ended March
31, 1996 and for the year ended December 31, 1995:
<TABLE>
<CAPTION>
THREE MONTHS ENDED YEAR ENDED
MARCH 31, 1996 DECEMBER 31, 1995
---------------------- ---------------------
PRO FORMA HISTORICAL PRO FORMA HISTORICAL
--------- ---------- --------- ----------
(IN THOUSANDS)
<S> <C> <C> <C> <C>
Net income before minority interest............ $11,024 $ 4,725 $42,305 $17,284
Adjustments to derive funds from operations:
Add: Depreciation and amortization............ 9,193 5,171 36,262 17,564
Deduct: Minority interests' (non-Unitholders)
share of depreciation, amortization and net
income....................................... (395) (395) (1,584) (1,658)
---- ---- ------ ------
Funds from operations before allocation to the
minority Unitholders ........................ 19,822 9,501 76,983 33,190
------ ----- ------ ------
Less: Funds from operations allocable to the
minority Unitholders ........................ (2,175) (2,164) (8,469) (7,876)
------ ------ ------ ------
Funds from operations allocable to CarrAmerica
Realty Corporation............................ $17,647 $ 7,337 $68,514 $25,314
======= ======= ======= =======
</TABLE>
Changes in funds from operations are largely attributable to changes in net
income between the periods as previously discussed.
S-27
<PAGE>
PROPERTIES
GENERAL
The following table sets forth certain lease-related information about each
Property as of May 31, 1996. For a discussion of the Properties acquired by the
Company in June 1996, see "Recent Developments."
<TABLE>
<CAPTION>
NET AVERAGE
COMPANY'S RENTABLE BASE RENT
NUMBER DATE BUILT EFFECTIVE AREA PER LEASED
OF OR PROPERTY (SQUARE PERCENT SQUARE
PROPERTY PROPERTIES REDEVELOPED OWNERSHIP FEET)(1) LEASED(2) FOOT(3)
-------- ---------- ----------- --------- --------- --------- -------
<S> <C> <C> <C> <C> <C> <C>
Consolidated Properties
Washington, DC:
International Square......................... 3
1850 K Street .............................. 1977 100.0% 375,897 86.6% $33.40
1825 Eye Street ............................ 1982 100.0 374,321 96.5 33.45
1875 Eye Street ............................ 1979 100.0 267,328 84.1 32.83
1730 Pennsylvania Avenue..................... 1 1972 100.0 229,429 96.4 37.90
2550 M Street................................ 1 1978 100.0 187,931 100.0 30.82
1775 Pennsylvania Avenue..................... 1 1975 100.0 143,981 99.1 22.03
900 19th Street.............................. 1 1986 100.0 101,186 84.2 34.91
1747 Pennsylvania Avenue..................... 1 1970 89.7 152,396 78.0 31.00
1255 23rd Street............................. 1 1983 75.0 304,433 70.1 (4) 28.41
2445 M Street................................ 1 1986 74.0 266,902 90.9 28.06
Suburban Maryland:
One Rock Spring Plaza........................ 1 1989 100.0 205,298 94.7 22.23
Northern Virginia:
Tycon Courthouse............................. 1 1983 100.0 415,158 96.4 19.14
Three Ballston Plaza......................... 1 1991 100.0 302,797 99.1 22.94
Reston Quadrangle............................ 3 1987-89 100.0 261,175 99.8 20.48
Southern California:
Scenic Business Park......................... 4 1985 100.0 137,436 89.7 10.50
Harbor Corporate Park........................ 4 1987 100.0 149,382 49.2 12.75
Northern California:
AT&T Center.................................. 6 1988 100.0 1,082,032 100.0 14.95
Southeast Denver:
Harlequin Plaza.............................. 2 1981 100.0 327,623 92.5 12.63
Quebec Court................................. 2 1979/1980 100.0 285,829 100.0 9.43
-- ------- ----- ----
Total Consolidated Properties/Weighted
Average ..................................... 34 5,570,534 92.4 $22.60
-- ------- ----- ----
MAJOR TENANTS (20% OR MORE OF SQUARE FEET)
PROPERTY --------------------------------------------
--------
<S> <C>
Consolidated Properties
Washington, DC:
International Square.........................
1850 K Street .............................. International Monetary Fund (25%)
1825 Eye Street ............................ International Monetary Fund (63%)
1875 Eye Street ............................ International Monetary Fund (39%)
1730 Pennsylvania Avenue..................... Federal Deposit Insurance Corporation (52%);
King & Spalding (26%)
2550 M Street................................ Patton Boggs (86%)
1775 Pennsylvania Avenue..................... Citibank, F.S.B. (81%)
900 19th Street.............................. Potomac Capital Investment Corporation (42%)
1747 Pennsylvania Avenue..................... None occupying 20% or more
1255 23rd Street............................. Seabury & Smith (20%)
2445 M Street................................ Wilmer,Cutler & Pickering (77%)
Suburban Maryland:
One Rock Spring Plaza........................ Sybase (27%); Caterair (22%)
Northern Virginia:
Tycon Courthouse............................. None occupying 20% or more
Three Ballston Plaza......................... CACI (50%); Eastman Kodak (20%)
Reston Quadrangle............................ Software AG (66%)
Southern California:
Scenic Business Park......................... FHP, Inc. (51%)
Harbor Corporate Park........................ None occupying 20% or more
Northern California:
AT&T Center.................................. AT&T (100%)
Southeast Denver:
Harlequin Plaza.............................. None occupying 20% or more
Quebec Court................................. Intelligent Electronics (45%);
Alert Centre (37%)
Total Consolidated Properties/Weighted
Average .....................................
</TABLE>
S-28
<PAGE>
<TABLE>
<CAPTION>
NET AVERAGE
COMPANY'S RENTABLE BASE RENT
NUMBER DATE BUILT EFFECTIVE AREA PER LEASED
OF OR PROPERTY (SQUARE PERCENT SQUARE
PROPERTY BUILDINGS REDEVELOPED OWNERSHIP FEET)(1) LEASED(2) FOOT(3)
- -------- --------- ---------- --------- --------- -------- -------
<S> <C> <C> <C> <C> <C> <C>
Unconsolidated Properties
Washington, DC(5):
AARP Headquarters.............................. 1 1991 24.0 477,187 99.1 34.99
Bond Building.................................. 1 1986 15.0 162,097 100.0 29.08
1776 Eye Street................................ 1 1988 5.0 212,738 97.2 35.15
Willard Office/Hotel........................... 1 1901/1986 5.0 242,787 97.5 39.55
1575 Eye Street................................ 1 1978 2.0 205,441 94.2 23.52
Northern Virginia:
Booz-Allen & Hamilton Building................. 1 1996 50.0 222,989 100.0% 14.40
- ---- ---- ------- ----- -----
Total Unconsolidated Properties/Weighted
Average....................................... 6 1,523,239 98.2% $30.54
- --------- ---- ------
Total All Properties/Weighted Average ......... 40 (6) 7,093,773 93.6% $24.39
== ========= ==== ======
MAJOR TENANTS (20% OR MORE OF SQUARE FEET)
-------------------------------------------
American Association of Retired Persons (98%)
General Services Administration Department
of Justice (93%)
None occupying 20% or more
Vinson & Elkins (27%)
McKenna & Cuneo (60%)
Booz-Allen & Hamilton (100%)
- ----------
<FN>
(1) Includes office and retail space but excludes storage space.
(2) Includes space for leases that have been executed and have commenced as of
May 31, 1996.
(3) Average base rent is based on executed and commenced leases as of May 31,
1996 and is the original base rent, including historical contractual
increases and excluding (i) percentage rents, (ii) additional rent payable
by tenants such as common area maintenance, real estate taxes and other
expense reimbursements, (iii) future contractual or contingent rent
escalations, and (iv) parking rents.
(4) As of May 31, 1996, a tenant vacated 80,000 square feet under an expiring
lease. The Company is in final negotiations to lease 53,000 square feet to
a new tenant with a lease commencement date of October 4, 1996.
(5) Excludes the Company's 50% interest in 1717 Pennsylvania Avenue, N.W., a
property undergoing redevelopment. The renovation at this property is
substantially complete, and the property is currently in lease-up. The
Company contemplates placing the property in service in the fall of 1996.
(6) Excludes 14 properties acquired subsequent to May 31, 1996.
</FN>
</TABLE>
S-29
<PAGE>
TENANT INFORMATION
Lease Expirations. The following table sets forth a schedule of lease
expirations for executed leases as of May 31, 1996, for each of the 10 years
beginning with 1996, for each of the 34 Properties owned by the Company as of
May 31, 1996 and consolidated for financial statement purposes, assuming that no
tenants exercise renewal or early termination options:
<TABLE>
<CAPTION>
2006 and
There-
1996 1997 1998 1999 2000 2001 2002 2003 2004 2005 after
-------- --------- --------- --------- --------- -------- --------- --------- --------- -------- -------
<S> <C> <C> <C> <C> <C> <C> <C> <C> <C> <C> <C>
Downtown Washington, DC:
International Square
Square Feet Expiring..... 8,605 159,672 365,894 121,321 26,258 4,833 186,594 2,388 8,665 24,990 2,181
Current Base Rent Per Sq.
Ft...................... $ 27.32 $ 33.06 $ 34.66 $ 32.43 $ 30.89 $ 41.37 $ 31.81 $ 41.00 $ 31.93 $ 31.55 $40.28
1730 Pennsylvania Avenue
Square Feet Expiring..... -- 3,951 128,804 3,528 5,048 -- 10,575 58,821 928 9,575 --
Current Base Rent Per Sq.
Ft...................... $ 0.00 $ 40.93 $ 37.84 $ 31.97 $ 31.00 $ 0.00 $ 41.07 $ 39.69 $ 32.00 $ 29.36 $ 0.00
2550 M Street
Square Feet Expiring..... -- -- 20,375 5,324 -- 1,004 161,228 -- -- -- --
Current Base Rent Per Sq.
Ft...................... $ 0.00 $ 0.00 $ 21.77 $ 23.48 $ 0.00 $ 38.40 $ 32.16 $ 0.00 $ 0.00 $ 0.00 $ 0.00
1775 Pennsylvania
Square Feet Expiring..... -- 23,584 2,112 137 -- -- -- -- -- -- 116,834
Current Base Rent Per Sq.
Ft...................... $ 0.00 $ 15.17 $ 40.29 $ 93.60 $ 0.00 $ 0.00 $ 0.00 $ 0.00 $ 0.00 $ 0.00 $ 23.00
900 19th Street
Square Feet Expiring..... 55,857 997 1,332 2,420 -- -- 4,764 -- -- 9,852 9,984
Current Base Rent Per Sq.
Ft...................... $ 36.49 $ 35.00 $ 30.01 $ 22.67 $ 0.00 $ 0.00 $ 27.00 $ 0.00 $ 0.00 $ 33.66 $ 34.75
1747 Pennsylvania Avenue
Square Feet Expiring..... 19,420 12,366 17,511 6,440 12,366 13,343 2,579 -- -- -- 34,907
Current Base Rent Per Sq.
Ft...................... $ 29.90 $ 29.88 $ 24.42 $ 29.97 $ 36.60 $ 32.44 $ 26.08 $ 0.00 $ 0.00 $ 0.00 $ 33.33
1255 23rd Street
Square Feet Expiring..... -- 2,764 6,911 -- 72,254 -- 4,479 -- 126,296 -- 783
Current Base Rent Per Sq.
Ft...................... $ 0.00 $ 22.00 $ 22.83 $ 0.00 $ 28.09 $ 0.00 $ 22.50 $ 0.00 $ 29.43 $ 0.00 $ 0.00
2445 M Street
Square Feet Expiring..... 4,392 17,503 7,363 2,078 -- 5,336 -- -- -- -- 205,816
Current Base Rent Per Sq.
Ft...................... $ 30.59 $ 38.77 $ 28.59 $ 26.38 $ 0.00 $ 31.86 $ 0.00 $ 0.00 $ 0.00 $ 0.00 $ 27.00
Total for Downtown
Washington, DC:
Square Feet Expiring..... 88,274 220,837 550,302 141,248 115,926 24,516 370,219 61,209 135,889 44,417 370,505
Current Weighted Average
Base Rent Per Sq. Ft.... $ 33.85 $ 31.43 $ 34.38 $ 31.77 $ 29.76 $ 34.32 $ 32.01 $ 39.74 $ 29.61 $ 31.55 $ 26.56
Suburban Maryland:
One Rock Spring Plaza
Square Feet Expiring..... 9,477 12,636 10,444 57,736 15,750 3,884 -- 5,733 69,769 9,025 --
Current Base Rent Per Sq.
Ft...................... $ 22.01 $ 21.73 $ 20.96 $ 24.26 $ 22.16 $ 21.00 $ 0.00 $ 22.29 $ 21.07 $ 21.15 $ 0.00
Northern Virginia:
Tycon Courthouse
Square Feet Expiring..... 2,427 7,088 21,485 87,781 8,634 25,092 17,002 118,090 10,020 29,940 72,633
Current Base Rent Per Sq.
Ft...................... $ 19.79 $ 14.32 $ 20.43 $ 23.56 $ 15.90 $ 16.26 $ 24.13 $ 18.35 $ 18.02 $ 18.50 $ 15.79
S-30
<PAGE>
<CAPTION>
1996 1997 1998 1999 2000 2001 2002 2003
--------- --------- ----------- --------- --------- --------- --------- ---------
<S> <C> <C> <C> <C> <C> <C> <C> <C>
Three Ballston Plaza
Square Feet Expiring.......... -- 47,385 9,497 3,347 3,578 71,092 122,132 --
Current Base Rent Per Sq. Ft.. $ 0.00 $ 19.81 19.97 $ 21.50 $ 18.50 $ 28.74 $ 20.12 $ 0.00
Reston Quadrangle
Square Feet Expiring.......... -- -- -- 2,590 46,645 29,561 1,749 --
Current Base Rent Per Sq. Ft.. $ 0.00 $ 0.00 $ 0.00 $ 18.65 $ 24.57 $ 25.78 $ 18.50 $ 0.00
Total for Northern Virginia:
Square Feet Expiring.......... 2,427 54,473 30,982 93,718 58,857 125,745 140,883 118,090
Current Weighted Average Base
Rent Per Sq. Ft.............. $ 19.79 $ 19.10 $ 20.29 $ 23.35 $ 22.93 $ 25.55 $ 20.58 $ 18.35
Southern California:
Scenic Business Park
Square Feet Expiring.......... -- -- 3,629 30,619 62,157 10,331 -- 16,596
Current Base Rent Per Sq. Ft.. $ 0.00 $ 0.00 $ 9.00 $ 11.06 $ 11.64 $ 8.78 $ 0.00 $ 6.60
Harbor Corporate Park
Square Feet Expiring.......... 5,843 24,216 7,443 13,102 2,634 20,205 -- --
Current Base Rent Per Sq. Ft.. $ 15.07 $ 13.21 $ 11.74 $ 13.83 $ 0.00 $ 12.87 $ 0.00 $ 0.00
Total for Southern California:
Square Feet Expiring.......... 5,843 24,216 11,072 43,721 64,791 30,536 -- 16,596
Current Weighted Average Base
Rent Per Sq. Ft.............. $ 15.07 $ 13.21 $ 10.84 $ 11.89 $ 11.17 $ 11.49 $ 0.00 $ 6.60
Northern California:
AT&T Center
Square Feet Expiring.......... -- -- 827,209 254,823 -- -- -- --
Current Base Rent Per Sq. Ft.. $ 0.00 $ 0.00 $ 14.79 $ 15.48 $ 0.00 $ 0.00 $ 0.00 $ 0.00
Southeast Denver:
Harlequin Plaza
Square Feet Expiring.......... 5,694 62,193 16,801 104,536 4,041 52,868 -- 56,987
Current Base Rent Per Sq. Ft.. $ 11.00 $ 10.29 $ 12.70 $ 12.47 $ 11.55 $ 16.62 $ 0.00 $ 11.97
Quebec Court
Square Feet Expiring.......... -- -- -- -- -- 285,829 -- --
Current Base Rent Per Sq. Ft.. $ 0.00 $ 0.00 $ 0.00 $ 0.00 $ 0.00 $ 9.43 $ 0.00 $ 0.00
Total for Southeast Denver:
Square Feet Expiring.......... 5,694 62,193 16,801 104,536 4,041 338,697 -- 56,987
Current Weighted Average Base
Rent Per Sq. Ft.............. $ 11.00 $ 10.29 $ 12.70 $ 12.47 $ 11.55 $ 10.55 $ 0.00 $ 11.97
Total for Consolidated
Portfolio:
Square Feet Expiring.......... 111,715 374,355 1,446,810 695,782 259,365 523,378 511,102 258,615
Percent of Total Square
Footage...................... 2.2% 7.3% 28.1% 13.5% 5.0% 10.2% 9.9% 5.0%
Current Weighted Average Base
Rent Per Sq. Ft.............. $ 30.39 $ 24.62 $ 22.35 $ 19.90 $ 22.82 $ 15.40 $ 28.86 $ 21.34
Total Annual Base Rent
Expiring (in thousands)...... $ 3,395 $ 9,216 $ 32,339 $ 13,845 $ 5,919 $ 8,061 $ 14,750 $ 5,519
Percentage of Annual Base Rent
Expiring..................... 2.9% 7.9% 27.8% 11.9% 5.1% 6.9% 12.7% 4.7%
2006 AND
2004 2005 THEREAFTER
--------- --------- ------------
Three Ballston Plaza
Square Feet Expiring.......... -- 13,582 29,402
Current Base Rent Per Sq. Ft.. $ 0.00 $ 16.25 $ 30.43
Reston Quadrangle
Square Feet Expiring.......... -- 170,829 9,336
Current Base Rent Per Sq. Ft.. $ 0.00 $ 18.64 $ 17.72
Total for Northern Virginia:
Square Feet Expiring.......... 10,020 214,351 111,371
Current Weighted Average Base
Rent Per Sq. Ft.............. $ 18.02 $ 18.47 $ 19.82
Southern California:
Scenic Business Park
Square Feet Expiring.......... -- -- --
Current Base Rent Per Sq. Ft.. $ 0.00 $ 0.00 $ 0.00
Harbor Corporate Park
Square Feet Expiring.......... -- -- --
Current Base Rent Per Sq. Ft.. $ 0.00 $ 0.00 $ 0.00
Total for Southern California:
Square Feet Expiring.......... -- -- --
Current Weighted Average Base
Rent Per Sq. Ft.............. $ 0.00 $ 0.00 $ 0.00
Northern California:
AT&T Center
Square Feet Expiring.......... -- -- --
Current Base Rent Per Sq. Ft.. $ 0.00 $ 0.00 $ 0.00
Southeast Denver:
Harlequin Plaza
Square Feet Expiring.......... -- -- --
Current Base Rent Per Sq. Ft.. $ 0.00 $ 0.00 $ 0.00
Quebec Court
Square Feet Expiring.......... -- -- --
Current Base Rent Per Sq. Ft.. $ 0.00 $ 0.00 $ 0.00
Total for Southeast Denver:
Square Feet Expiring.......... -- -- --
Current Weighted Average Base
Rent Per Sq. Ft.............. $ 0.00 $ 0.00 $ 0.00
Total for Consolidated
Portfolio:
Square Feet Expiring.......... 215,678 267,793 481,876
Percent of Total Square
Footage...................... 4.2% 5.2% 9.4%
Current Weighted Average Base
Rent Per Sq. Ft.............. $ 26.31 $ 20.73 $ 25.00
Total Annual Base Rent
Expiring (in thousands)...... $ 5,674 $ 5,552 $ 12,049
Percentage of Annual Base Rent
Expiring..................... 4.9% 4.8% 10.4%
</TABLE>
S-31
<PAGE>
Tenants by Industry. The following table breaks down by industry the tenants
at the 34 Properties that were owned by the Company as of May 31, 1996 and
consolidated for financial statement purposes:
PERCENT ANNUALIZED PERCENT
OF TOTAL BASE RENT OF TOTAL
SQUARE SQUARE (IN ANNUALIZED
INDUSTRY NAME FOOTAGE(1) FOOTAGE THOUSANDS) BASE RENT
- --------------------------- ----------- ---------- -------------- -------------
Technology &
Communications............. 1,672,736 32.5% $27,148 23.2%
Professional Services ..... 1,016,635 19.8 28,802 24.6
Financial Services......... 597,479 11.6 12,751 10.9
Quasi-Governmental......... 446,815 8.7 14,917 12.7
Government Contractors .... 228,441 4.4 4,783 4.1
Government (Federal &
State)..................... 197,057 3.8 6,169 5.3
Not-For-Profit............. 131,474 2.6 3,138 2.6
Retail..................... 120,681 2.3 3,451 2.9
Other...................... 735,151 14.3 16,059 13.7
- --------------
(1) Excludes vacant space of 424,065 square feet.
Ten Largest Tenants. The following table sets forth the ten largest tenants
at the 34 Properties that were owned by the Company as of May 31, 1996 and
consolidated for financial statement purposes:
<TABLE>
<CAPTION>
PERCENT PERCENT
OF TOTAL TOTAL OF TOTAL
PROPERTY SQUARE SQUARE ANNUALIZED ANNUALIZED
TENANT NAME NAME FOOTAGE FOOTAGE BASE RENT(1) BASE RENT
- ----------- ---- ------- ------- ------------ ---------
<S> <C> <C> <C> <C> <C>
AT&T................................ AT&T Center 1,082,032 19.4% $16,180,627 13.6%
International Monetary Fund......... International Square 432,310 7.8 14,627,148 12.2
Wilmer, Cutler & Pickering.......... 2445 M Street 205,816 3.7 5,557,041 4.7
Software AG......................... Reston Quadrangle 173,419 3.1 3,233,287 2.7
Patton Boggs........................ 2550 M Street 161,228 2.9 5,184,420 4.3
CACI................................ Three Ballston Plaza 152,720 2.7 3,072,728 2.6
Intelligent Electronics............. Quebec Court 130,000 2.3 1,495,000 1.3
Federal Deposit Insurance 1730 Pennsylvania
Corporation......................... Avenue 119,731 2.1 4,623,648 3.9
1775 Pennsylvania
Citibank............................ Avenue 116,834 2.1 2,686,921 2.3
Alert Centre........................ Quebec Court 105,820 1.9 952,380 0.8
- ----------
<FN>
(1) Total annualized base rent is based on executed and commenced leases as of
May 31, 1996. Total annualized base rent equals total original base rent,
including historical contractual increases and excluding (i) percentage
rents, (ii) additional rent payable by tenants such as common area
maintenance, real estate taxes, and other expense reimbursements, (iii)
future contractual or contingent rent escalations, and (iv) parking rents.
</FN>
</TABLE>
S-32
<PAGE>
UNCONSOLIDATED PROPERTIES
The following table sets forth certain information related to the seven
Properties in which the Company has an equity investment (in thousands):
SELECTED OPERATING STATEMENT INFORMATION
FOR THE YEAR ENDED DECEMBER 31, 1995
<TABLE>
<CAPTION>
FUNDS FROM
DEPRECIATION NET OPERATIONS
COMPANY'S RENTAL & INTEREST AND OTHER INCOME CONTRIBUTION TO
PROPERTY OWNERSHIP OTHER REVENUE EXPENSE AMORTIZATION EXPENSES (LOSS) THE COMPANY(1)
- ------------------------------ ----------- --------------- ---------- -------------- ---------- --------- ----------------
<S> <C> <C> <C> <C> <C> <C> <C>
AARP Headquarters............. 24% $21,371 $12,593 $3,334 $ 6,114 $ (670) $ 639
1776 Eye Street............... 5 7,943 4,456 1,393 2,599 (504) 30
Willard Office/Hotel.......... 5 43,530 8,315 4,440 28,642 2,132 --
1575 Eye Street............... 2 5,759 2,329 538 2,239 652 --
Bond Building................. 15 5,281 3,620 1,643 1,592 (1,574) --
Booz-Allen & Hamilton
Building...................... 50 (2) (2) (2) (2) (2) --
1717 Pennsylvania Avenue ..... 50 (2) (2) (2) (2) (2) --
</TABLE>
SELECTED BALANCE SHEET INFORMATION
AS OF MARCH 31, 1996
<TABLE>
<CAPTION>
MATURITY OF
COMPANY'S RENTAL TOTAL MORTGAGE INTEREST MORTGAGE
PROPERTY OWNERSHIP PROPERTY, NET CASH ASSETS PAYABLE RATE PAYABLE
- ------------------------------ ----------- --------------- ------- ---------- ---------- ---------- ----------
<S> <C> <C> <C> <C> <C> <C> <C> <C>
AARP Headquarters............. 24% $112,792 $ 767 $136,291 $145,506 8.07% 7/31/02
1776 Eye Street............... 5 35,872 1,155 40,049 44,400 10.00 10/1/23
Willard Office/Hotel.......... 5 68,288 6,417 78,006 88,388 9.40 11/1/01
1575 Eye Street............... 2 8,684 3,319 12,839 22,861 10.15 9/10/21
Bond Building................. 15 9,344 261 16,669 37,934 9.53 11/1/96
Booz-Allen & Hamilton
Building...................... 50 26,833 3,039 33,596 24,675 7.00 8/1/13
1717 Pennsylvania Avenue ..... 50 (2) (2) 29,550 -- -- --
- ---------------
<FN>
(1) Represents the Funds from Operations Contribution to the Company from each
property included in funds from operations before minority interest of
holders of Units as set forth in "Summary -- Summary Selected Financial
Information."
(2) Property was under development.
</FN>
</TABLE>
S-33
<PAGE>
Historical Recurring Capital Expenditures, Tenant Improvement Costs and Tenant
Leasing Costs
The following table sets forth annual and per square foot recurring capital
expenditures, tenant improvement costs and tenant leasing costs to retain
revenues attributable to existing leased space for the period from February 16,
1993 (inception of operations) to December 31, 1993, the years ended December
31, 1994 and 1995, and the quarter ended March 31, 1996 for the Properties
consolidated in the Company's financial statements during the periods presented.
In light of the Company's change in business strategy away from downtown office
buildings and toward suburban office buildings, the Company believes that the
historical capital expenditures, tenant improvement costs and tenant leasing
costs set forth below are not indicative of the Company's future recurring
capital expenditures, tenant improvement costs and tenant leasing costs. See
"Management's Discussion and Analysis of Financial Condition and Results of
Operations -- Liquidity and Capital Resources."
1st Quarter
1993 1994 1995 1996
---- ---- ---- ----
Capital Expenditures:
Capital Expenditures (in thousands)......... $9,964 5,177 1,615 378
Per square foot............................. $ 5.00 2.09 .65 .11
Tenant Improvement Costs and Tenant Leasing
Costs:
Tenant Improvement Costs (in thousands)..... $8,510 5,524 2,582 681
Per square foot leased...................... $32.22 19.65 15.72 8.01
Tenant Leasing Costs (in thousands) ........ $1,757 856 570 312
Per square foot leased...................... $ 4.92 3.05 3.47 3.67
Total per square foot...................... $37.14 22.70 19.19 11.68
Debt Financing
As of May 31, 1996, the Company had outstanding existing long-term
indebtedness in an aggregate principal amount of $310.7 million, of which $49.0
million (all of which represents draws under the Line of Credit), or 15.8%, bore
interest at a floating interest rate. At that date, the Company's fixed rate
debt bore a weighted average interest rate of 8.4% and had a weighted average
maturity of 6.9 years (assuming loans callable before maturity are called as
early as possible).
Mortgage Debt. The existing mortgage indebtedness on the 34 Properties that
were owned by the Company as of May 31, 1996 and consolidated for financial
statement purposes is set forth in the table below:
<TABLE>
<CAPTION>
PRINCIPAL
BALANCE ESTIMATED
AS OF ANNUAL DEBT BALANCE
5/31/96 SERVICE DUE AT
INTEREST (IN (IN MATURITY MATURITY
PROPERTY RATE THOUSANDS) THOUSANDS) DATE (IN THOUSANDS)
- -------- ---- ---------- ---------- ---- --------------
<S> <C> <C> <C> <C> <C>
International Square, 1730 Pennsylvania
Avenue and 1255 23rd Street (1) ..... 8.25% $183,500 $15,148 2/1/03 $170,169
900 19th Street....................... 8.25 17,102 1,656 7/15/19 (3) (3)
1747 Pennsylvania Ave ................ 9.50 15,752 1,730 7/10/17 (2) (2)
2445 M Street......................... 8.90 38,903 4,646 6/1/02 26,925
1775 Pennsylvania Ave ................ 7.50 6,408 586 2/1/99 6,109
-------- -------
Total (4)............................ $261,665 $23,766
======== =======
- ---------------
<FN>
(1) Consists of four loans secured by these three Properties. Interest Rate
represents the weighted average interest rate on the four loans.
(2) Note is callable by the lender after June 30, 2002. The estimated
principal balance at June 30, 2002 will be $13,840,000.
(3) Note is callable by the lender after July 1, 2004. The estimated principal
balance at July 1, 2004 will be $14,262,000.
(4) Excludes debt assumed in connection with the acquisitions of Parkway North
Center and Redmond East Business Campus. The Parkway North loan is in the
principal amount of approximately $29.3 million, bears interest at a rate
of 7.96% per annum and matures in December 2003. The Redmond loan is in
the principal amount of approximately $28.2 million, bears interest at a
rate of 8.38% per annum and matures in January 2006.
</FN>
</TABLE>
S-34
<PAGE>
Line of Credit. In May 1996, the Company entered into a revolving credit
agreement with Morgan Guaranty Trust Company of New York providing for unsecured
borrowings of up to $215 million. Availability under the Line of Credit is
limited to 50% of the Borrowing Base Properties, as defined in the credit
agreement. As of May 31, 1996, $188 million was available to be drawn under the
Line of Credit. Of that available amount, as of May 31, 1996, $49.0 million was
drawn under the Line of Credit.
Borrowings under the Line of Credit bear interest at a floating rate of 175
basis points over LIBOR (which rate will be reduced in the event the Company
obtains an investment grade rating on senior, long-term unsecured debt). The
Line of Credit contains a number of financial and other covenants with which the
Company must comply, including, but not limited to, covenants relating to ratios
of annual EBITDA (earnings before interest, taxes, depreciation and
amortization) to interest expense, annual EBITDA to debt service, and total debt
to tangible fair market value of the Company's assets, and restrictions on the
ability of the Company to make dividend distributions in excess of 90% of funds
from operations. On June 12, 1996, the Company drew down an additional $66
million under the Line of Credit.
S-35
<PAGE>
MANAGEMENT
Directors and Executive Officers
The directors, executive officers and key employees of the Company and their
positions and offices are set forth in the following table:
NAME AGE POSITIONS AND OFFICES HELD
---- --- --------------------------
Oliver T. Carr, Jr. .. 71 Chairman of the Board and Chief Executive Officer
Thomas A. Carr........ 37 President, Chief Operating Officer and Director
President of Carr Real Estate Services, Inc. and
Robert O. Carr........ 46 Director
David Bonderman....... 53 Director
Andrew F. Brimmer..... 69 Director
A. James Clark........ 45 Director
Douglas T. Healy...... 45 Director
Anthony R. Manno, Jr. 43 Director
J. Marshall Peck...... 44 Director
George R. Puskar...... 52 Director
William D. Sanders ... 54 Director
Wesley S. Williams,
Jr.................... 53 Director
Brian K. Fields....... 36 Chief Financial Officer
Philip L. Hawkins..... 40 Managing Director of Asset Management
Robert G. Stuckey..... 34 Managing Director of Acquisitions and Development
Paul R. Adkins........ 37 Vice President -- Acquisitions
Andrea F. Bradley..... 36 Vice President, Secretary and General Counsel
Karen B. Dorigan...... 31 Vice President -- Land Due Diligence
Debra A. Volpicelli .. 32 Treasurer and Controller
Joseph D. Wallace..... 32 Vice President -- Building Due Diligence
Senior Vice President of Carr Development &
Matthew L. Richardson 36 Construction, Inc.
Steven N. Bralower ... 46 Senior Vice President of Carr Realty, L.P.
Senior Vice President of Carr Real Estate Services,
John J. Donovan, Jr. . 52 Inc.
Senior Vice President of Carr Real Estate Services,
Richard W. Greninger . 44 Inc.
S-36
<PAGE>
UNDERWRITING
Subject to the terms and conditions contained in the purchase agreement (the
"Purchase Agreement"), the Company has agreed to sell to the Underwriters named
below, and each of the Underwriters for whom Merrill Lynch, Pierce, Fenner &
Smith Incorporated ("Merrill Lynch"), Dean Witter Reynolds Inc., J.P. Morgan
Securities Inc., Prudential Securities Incorporated, Legg Mason Wood Walker,
Incorporated and Wheat, First Securities, Inc. are acting as representatives
(the "Representatives") has severally agreed to purchase, the respective number
of shares of Common Stock set forth below opposite their respective names. The
Purchase Agreement provides that the obligations of the Underwriters are subject
to certain conditions precedent and that the Underwriters will be obligated to
purchase all of the shares of Common Stock if any are purchased.
NUMBER
UNDERWRITERS OF SHARES
------------ ---------
Merrill Lynch, Pierce, Fenner & Smith
Incorporated......................
Dean Witter Reynolds Inc................
J. P. Morgan Securities Inc.............
Prudential Securities Incorporated .....
Legg Mason Wood Walker, Incorporated ...
Wheat, First Securities, Inc............
--------------
Total............................. 8,400,000
==============
The Representatives have advised the Company that the Underwriters propose
initially to offer the Common Stock to the public at the public offering price
set forth on the cover page of this Prospectus Supplement, and to certain
dealers at such price less a concession not in excess of $per share. The
Underwriters may allow, and such dealers may reallow, a discount not in excess
of $ per share on sales to certain other dealers. After the Offering, the public
offering price, concession and discounts may be changed.
The Company has granted an option to the Underwriters, exercisable during the
30-day period after the date of this Prospectus Supplement, to purchase up to an
aggregate of 1,260,000 additional shares of Common Stock at the price to the
public set forth on the cover page of this Prospectus Supplement, less the
underwriting discount. The Underwriters may exercise this option only to cover
over-allotments, if any. To the extent that the Underwriters exercise this
option, each Underwriter will be obligated, subject to certain conditions, to
purchase the number of additional shares of Common Stock proportionate to such
Underwriter's initial amount reflected in the foregoing table.
The Company and USRealty have agreed that for a period of 90 days from the
date of this Prospectus Supplement they will not, without prior and written
consent of the Representatives, offer, sell or otherwise dispose of any
securities or any security convertible into or exercisable for Common Stock
(except for issuances by the Company pursuant to stock option or dividend
reinvestment plans and certain other agreements).
The Company has agreed to indemnify the Underwriters against certain
liabilities, including liabilities under the Securities Act of 1933, as amended,
or to contribute to payments the Underwriters may be required to make in respect
thereof.
The Company expects that USRealty will purchase 3,600,000 shares of Common
Stock from the Company at the public offering price simultaneously with the
closing of the Offering. In addition, USRealty has expressed an interest in
purchasing 1,076,446 shares of Common Stock in the Offering at the public
offering price (which, combined with the direct purchase from the Company, would
result in an additional total investment by USRealty in the Company of up to
$115.2 million, assuming a public offering price of $24.625) in order to
maintain its 39.0% ownership interest in the Company (on a fully-diluted basis).
Management of USRealty has indicated that it intends to recommend such purchases
for approval by its board of directors, although there can be no assurance that
either of such
S-37
<PAGE>
purchases will occur. No underwriting discounts will be applied to the
Concurrent USRealty Purchase or any purchases of Common Stock by USRealty in the
Offering, and the Company will retain the entire proceeds therefrom. Following
the Offering (and assuming each of the foregoing purchases is consummated),
USRealty will own approximately 43.8% of the outstanding shares of Common Stock
(39.0% on a fully diluted basis).
Certain of the Underwriters and their affiliates have from time to time
performed, and may continue to perform in the future, various investment banking
and commercial banking services for the Company, for which customary
compensation has been received. Morgan Guaranty Trust Company of New York
("MGT"), as lender under the Line of Credit, is expected to receive up to $190
million of the net proceeds of the Offering and the Concurrent USRealty Purchase
(as described under "Use of Proceeds"). MGT is an affiliate of J.P.
Morgan Securities Inc.
Merrill Lynch from time to time provides investment banking and financial
advisory services to the Company. Merrill Lynch was paid a fee of $3.75 million
by the Company in April 1996 for financial advisory services provided by Merrill
Lynch to the Company in connection with the USRealty Transaction.
The Common Stock is listed on the NYSE under the symbol "CRE."
LEGAL MATTERS
The validity of the issuance of the shares of Common Stock pursuant to this
Prospectus Supplement will be passed upon for the Company by Hogan & Hartson
L.L.P., Washington, D.C. Certain legal matters will be passed upon for the
Underwriters by Rogers & Wells, New York, New York.
S-38
<PAGE>
SUBJECT TO COMPLETION, DATED JUNE 26, 1996
PROSPECTUS
$600,000,000
CARRAMERICA REALTY CORPORATION
DEBT SECURITIES, PREFERRED STOCK, COMMON STOCK AND COMMON STOCK WARRANTS
--------------
CarrAmerica Realty Corporation (the "Company") may from time to time offer in
one or more series its (i) unsecured debt securities ("Debt Securities"), (ii)
preferred stock ("Preferred Stock"), (iii) common stock, $.01 par value ("Common
Stock"), and (iv) warrants exercisable for Common Stock ("Common Stock
Warrants"), with an aggregate public offering price of up to $600,000,000 (or
its equivalent based on the exchange rate at the time of sale) in amounts, at
prices and on terms to be determined at the time of offering. The Debt
Securities, Preferred Stock, Common Stock and Common Stock Warrants
(collectively, the "Offered Securities") may be offered, separately or together,
in separate series, in amounts, at prices and on terms to be described in one or
more supplements to this Prospectus (each a "Prospectus Supplement").
The specific terms of the Securities in respect of which this Prospectus is
being delivered will be set forth in the applicable Prospectus Supplement and
will include, where applicable: (i) in the case of Debt Securities, the specific
title, aggregate principal amount, currency, form (which may be registered or
bearer, or certificated or global), authorized denominations, maturity, rate (or
manner of calculation thereof) and time of payment of interest, any terms for
redemption at the option of the Company or repayment at the option of the
holder, any terms for any sinking fund payments, any terms for conversion into
Preferred Stock or Common Stock of the Company, covenants and any public
offering price; (ii) in the case of Preferred Stock, the specific title and
stated value, any dividend, liquidation, redemption, conversion, voting and
other rights, and any public offering price; (iii) in the case of Common Stock,
any public offering price; and (iv) in the case of Common Stock Warrants, the
specific title and aggregate number, the issue price and the exercise price. In
addition, such specific terms may include limitations on direct or beneficial
ownership and restrictions on transfer of the Securities, in each case as may be
appropriate to preserve the status of the Company as a real estate investment
trust for federal income tax purposes.
The applicable Prospectus Supplement also will contain information, where
applicable, about certain U.S. federal income tax considerations relating to,
and any listing on a securities exchange of, the Securities covered by such
Prospectus Supplement.
The Securities may be offered directly, through agents designated from time
to time by the Company, or to or through underwriters or dealers. If any agents
or underwriters are involved in the sale of any of the Securities, their names,
and any applicable purchase price, fee, commission or discount arrangement with,
between or among them, will be set forth, or will be calculable from the
information set forth, in an accompanying Prospectus Supplement. See "Plan of
Distribution." No Securities may be sold without delivery of a Prospectus
Supplement describing the method and terms of the offering of such Securities.
See "Risk Factors" beginning on page 3 for certain factors relating to an
investment in the Securities.
---------------------
THESE SECURITIES HAVE NOT BEEN APPROVED OR DISAPPROVED BY THE SECURITIES AND
EXCHANGE COMMISSION OR ANY STATE SECURITIES COMMISSION NOR HAS THE SECURITIES
AND EXCHANGE COMMISSION OR ANY STATE SECURITIES COMMISSION PASSED UPON THE
ACCURACY OR ADEQUACY OF THIS PROSPECTUS.
ANY REPRESENTATION TO THE CONTRARY IS A CRIMINAL OFFENSE.
---------------------
THE ATTORNEY GENERAL OF THE STATE OF NEW YORK HAS NOT PASSED ON OR ENDORSED
THE MERITS OF THIS OFFERING. ANY REPRESENTATION TO THE CONTRARY IS UNLAWFUL.
The date of this Prospectus is , 1996
<PAGE>
THE COMPANY
CarrAmerica Realty Corporation (the "Company") is a publicly-traded real
estate investment trust (a "REIT") that focuses primarily on the acquisition,
development, ownership and operation of value office properties in select
suburban growth markets across the United States. The Company and its
predecessor, The Oliver Carr Company ("OCCO"), have traditionally focused on the
acquisition, development, ownership and operation of office properties in the
Washington, D.C. metropolitan area. In connection with the USRealty Transaction,
described below, the Company is implementing a national business strategy that
includes acquiring, developing, owning and operating value office properties
throughout the United States in select suburban growth markets. As of June 14,
1996, the Company owned interests in a portfolio of 54 operating office
properties (collectively, the "Properties") containing approximately 8.1 million
square feet of space.
On February 26, 1996, the stockholders of the Company approved the investment
by a wholly-owned subsidiary of Security Capital U.S. Realty (collectively,
"USRealty") of approximately $250 million in the Company (the "USRealty
Transaction"). The sale and issuance of 11,627,907 shares of the Company's
common stock, par value $.01 per share ("Common Stock"), to USRealty in a
private sale transaction was consummated on April 30, 1996.
The Company employed approximately 450 employees, including 320 on-site
building employees, as of June 14, 1996.
The Company is a Maryland corporation that was formed in July 1992. The
principal executive offices of the Company are located at 1700 Pennsylvania
Avenue, Washington, D.C. 20006, and its telephone number is (202) 624-7500.
2
<PAGE>
RISK FACTORS
Prospective investors should carefully consider, among other factors, the
matters described below.
Real Estate Investment Risks
General. Real property investments are subject to varying degrees of risk.
The yields available from equity investments in real estate and the Company's
ability to service debt will depend in large part on the amount of income
generated, expenses incurred and capital expenditures required. The Company's
income from office properties may be adversely affected by a number of factors,
including the general economic climate and local real estate conditions, such as
an oversupply of, or a reduction in demand for, office space in the area and the
attractiveness of the properties to tenants. In addition, income from properties
and real estate values also are affected by such factors as the cost of
compliance with government regulation, including zoning and tax laws, the
potential for liability under applicable laws, interest rate levels and the
availability of financing. Certain significant expenditures associated with each
equity investment by the Company in a property (such as mortgage payments, if
any, real estate taxes and maintenance costs) also are generally not reduced
when circumstances cause a reduction in income from the property.
Debt Financing. The Company is subject to the risks associated with debt
financing, including the risk that the cash provided by the Company's operating
activities will be insufficient to meet required payments of principal and
interest, the risk of rising interest rates on the Company's floating rate debt,
the risk that the Company will not be able to prepay or refinance existing
indebtedness on its properties (which generally will not have been fully
amortized at maturity) or that the terms of such refinancing will not be as
favorable as the terms of existing indebtedness. In the event the Company is
unable to secure refinancing of such indebtedness on acceptable terms, the
Company might be forced to dispose of properties upon disadvantageous terms,
which might result in losses to the Company and might adversely affect the cash
flow available for distribution to equity holders or debt service. In addition,
if a property or properties are mortgaged to secure payment of indebtedness and
the Company is unable to meet mortgage payments, the mortgage securing the
property could be foreclosed upon by, or the property could be otherwise
transferred to, the mortgagee with a consequent loss of income and asset value
to the Company.
Renewal of Leases and Reletting of Space. The Company is subject to the risks
that upon expiration of leases for space located at its properties, the leases
may not be renewed, the space may not be relet or the terms of the renewal or
reletting (including the cost of required renovations or concessions to tenants)
may be less favorable than current lease terms. In particular, as of May 31,
1996, two of the Company's tenants leased space representing approximately 19%
and 8%, respectively, of the total square footage of the Properties pursuant to
leases that expire beginning in 1998. Although the Company has established an
annual budget for renovation and reletting costs that it believes are reasonable
in light of each property's situation, no assurance can be given that this
budget will be sufficient to cover these costs. If the Company is unable to
promptly relet or renew leases for all or substantially all of the space at its
properties, if the rental rates upon such renewal or reletting are significantly
lower than expected, or if the Company's reserves for these purposes prove
inadequate, then the Company's cash provided by operating activities and ability
to make expected distributions to shareholders or debt service payments could be
adversely affected.
Possible Environmental Liabilities. Under various Federal, state and local
laws, ordinances and regulations, a current or previous owner or operator of
real estate may be required to investigate and clean up certain hazardous
substances released at the property, and may be held liable to a governmental
entity or to third parties for property damage and for investigation and cleanup
costs incurred by such parties in connection with the contamination. In
addition, some environmental laws create a lien on the contaminated site in
favor of the government for damages and costs it incurs in connection with the
contamination. The presence of contamination or the failure to remediate
contamination may adversely affect the owner's ability to sell or lease real
estate or to borrow using the real estate as collateral. The owner or operator
of a site may be liable under common law to third parties for damages and
injuries resulting from environmental contamination emanating from the site. The
Company has not been noti
3
<PAGE>
fied by any governmental authority of any material non-compliance, liability or
other claim in connection with any of its properties and the Company is not
aware of any other material environmental condition with respect to any of its
properties. No assurance, however, can be given that no prior owner created any
material environmental condition not known to the Company, that no material
environmental condition with respect to any property has occurred during the
Company's ownership thereof, or that future uses or conditions (including,
without limitation, changes in applicable environmental laws and regulations)
will not result in imposition of environmental liability.
Conflicts of Interest
Certain members of the Company's board of directors (the "Board") and
officers own limited partnership interests ("Units") of Carr Realty, L.P. and,
thus, may have interests that conflict with shareholders with respect to
business decisions affecting the Company and Carr Realty, L.P. In particular, a
holder of Units may suffer different and/or more adverse tax consequences than
the Company upon the sale or refinancing of some of the properties as a result
of unrealized gain attributable to certain properties. These Unit holders and
the Company, therefore, may have different objectives regarding the appropriate
pricing and timing of any sale or refinancing of properties. Although the
Company, as the sole general partner of Carr Realty, L.P., has the exclusive
authority as to whether and on what terms to sell or refinance an individual
property, these Unit holders might seek to influence the Company not to sell or
refinance the properties, even though such sale might otherwise be financially
advantageous to the Company, or may seek to influence the Company to refinance a
property with a higher level of debt than would be in the best interests of the
Company. Although the Company believes that the change in operational structure
from an "UPREIT" to a "DownREIT" should reduce, over time, these potential
conflicts of interest, assets will continue to be owned by Carr Realty, L.P.,
diminishing the effects of this structural modification.
Acquisition and Development Risks
The Company intends to continue acquiring and developing office properties in
markets where it believes that such acquisition or development is consistent
with the business strategies of the Company. Acquisitions entail risks that
investments will fail to perform in accordance with expectations and that
judgments with respect to the costs of improvements to bring an acquired
property up to standards established for the market position intended for that
property will prove inaccurate, as well as general investment risks associated
with any new real estate investment. See "Real Estate Investment Risks" above.
New office development also is subject to a number of risks, including
construction delays or cost overruns that may increase project costs, financing
risks as described above, the failure to meet anticipated occupancy or rent
levels, failure to receive required zoning, occupancy and other governmental
permits and authorizations and changes in applicable zoning and land use laws,
which may result in the incurrence of development costs in connection with
projects that are not pursued to completion. In addition, because the Company
must distribute 95% of its taxable income in order to maintain its qualification
as a REIT, the Company anticipates that new acquisitions and developments will
be financed primarily through periodic equity offerings, lines of credit or
other forms of secured or unsecured construction financing. If permanent debt or
equity financing is not available on acceptable terms to refinance such new
acquisitions or developments are undertaken without permanent financing, further
acquisitions or development activities may be curtailed or cash available for
distribution to shareholders or to meet debt service obligations may be
adversely affected.
Change in Business Strategy; Risks Associated with the Acquisition of
Substantial New Properties
The Company's move toward a more national business focus represents a
significant shift in the business strategy of the Company. Although the Board
believes that such a shift in strategy is warranted in light of the
opportunities that the USRealty Transaction represents, there is no assurance
that the Company's efforts to establish a national office REIT will be
successful.
Consistent with the Company's strategy of acquiring value office properties
in suburban growth markets, the Company has significantly expanded its portfolio
of office properties in 1996, acquiring thus
4
<PAGE>
far 35 office properties across the country for an aggregate purchase price of
approximately $344 million. These properties have a relatively short operating
history under the Company's management and they may have characteristics or
deficiencies unknown to the Company affecting their valuation or revenue
potential.
Dependence on Washington, D.C. Market
Although the Company's business strategy is to move toward a more national
business focus, at June 14, 1996, the Company's Properties located in the
metropolitan Washington, D.C. area represented approximately 46% of the
Properties in terms of square footage. The Company's performance and its ability
to make expected distributions to stockholders could be adversely affected by
economic or other conditions in the Washington, D.C. metropolitan area that are
beyond the control of the Company.
Substantial Ownership of Common Stock
As of May 31, 1996, USRealty owned 46.1% of the outstanding shares of the
Company's common stock (39.0% of the common stock on a fully-diluted basis), and
USRealty has the right to nominate a proportionate number of the directors of
the Board based upon its ownership of stock on a fully-diluted basis, rounded
down to the nearest whole number (but in no event more than 40% of the
directors). As a result, USRealty is the largest single stockholder of the
Company, while no other stockholder is permitted to own more than 5% of the
Company's common stock, subject to certain exceptions set forth in the Articles
of Incorporation or approved by the Board. Although certain standstill
provisions preclude USRealty from increasing its percentage interest in the
Company for a period of at least five years (subject to certain exceptions) and
the Articles of Incorporation preclude it from increasing such percentage
interest thereafter, and USRealty agreed to certain limitations on its voting
rights with respect to its shares of Common Stock, USRealty nonetheless has a
substantial influence over the affairs of the Company as a result of the
USRealty Transaction. This concentration of ownership in one stockholder could
potentially be disadvantageous to other stockholders' interests. In addition, so
long as USRealty owns at least 25% of the outstanding Common Stock of the
Company on a fully diluted basis, USRealty will be entitled (except in certain
limited circumstances), upon compliance with certain specified conditions, to a
participation right to purchase or subscribe for, either as part of such
issuance or in a concurrent issuance, a total number of shares of Common Stock
or Preferred Stock, as the case may be, equal to up to 30% (or 35% in certain
circumstances) of the total number of shares or of Common Stock or Preferred
Stock, as applicable, proposed to be issued by the Company.
Limitations on Corporate Actions
In conjunction with the USRealty Transaction, the Company agreed to certain
limitations on its operations, including restrictions relating to incurrence of
additional indebtedness, retention of third-party managers for the Company's
properties, investments in properties other than office buildings, issuances of
Units by Carr Realty, L.P., and certain other matters. The Company may take
actions relating to these matters only with the consent of USRealty. In
addition, the Company has agreed to certain limitations on the amount of assets
that it owns indirectly through other entities and the manner in which it
conducts its business (including the types of assets that it can acquire and own
and the manner in which such assets are operated). These limitations, which are
intended to permit USRealty to comply with certain requirements of the Internal
Revenue Code and other countries' tax laws applicable to foreign investors,
limit somewhat the flexibility of the Company to structure transactions that
might otherwise be advantageous to the Company. Although the Company does not
believe that the limitations imposed on the Company's activities will materially
impair the Company's ability to conduct its business, there can be no assurance
that these limitations will not adversely affect the Company's operations in the
future.
Management, Leasing and Brokerage Risks
The Company is subject to the risks associated with the property management,
leasing and brokerage businesses. These risks include the risk that management
contracts or service agreements with third-party owners will be lost to
competitors, that a property will be sold and the Company will lose the
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contract, that contracts will not be renewed upon expiration or will not be
renewed on terms consistent with current terms and that leasing and brokerage
activity generally may decline. Each of these developments could adversely
affect the ability of the Company to make expected distributions to shareholders
or debt service payments.
Lack of Voting Control of Operating Subsidiaries
The Company does not have voting control of Carr Real Estate Services, Inc.
("Carr Services, Inc."), Carr Real Estate Services of Northern Virginia, Inc.
("CRESNOVA") or Carr Development & Construction, Inc. ("Carr Development &
Construction") (collectively, the "Operating Subsidiaries"). The capital stock
of Carr Services, Inc., which conducts fee-based management and leasing in the
Washington, D.C. metropolitan area, is divided into two classes: voting common
stock, approximately 92% and 8% of which is held by The Oliver Carr Company
("OCCO") and Carr Realty, L.P., respectively, and nonvoting preferred stock,
approximately 95% and 5% of which is held by Carr Realty, L.P. and OCCO,
respectively. OCCO, as the holder of 92% of the voting common stock, has the
ability to elect the board of directors of Carr Services, Inc.
The capital stock of CRESNOVA, which conducts fee-based management and
leasing in northern Virginia, is divided into two classes: voting common stock,
92% and 8% of which is held by OCCO and Carr Realty, L.P., respectively, and
nonvoting common stock, 100% of which is held by Carr Realty, L.P. OCCO, as the
holder of 92% of the voting common stock, has the ability to elect the board of
directors of CRESNOVA.
The capital stock of Carr Development & Construction, Inc. which conducts
fee-based development, is divided into two classes: voting common stock, 99% and
1% of which is held by OCCO and the Company, respectively, and nonvoting common
stock, 96% and 4% of which is held by the Company and OCCO, respectively. OCCO,
as the holder of 99% of the voting common stock, has the ability to elect the
board of directors of Carr Development & Construction after the terms of the
initial directors expire.
Oliver T. Carr, Jr., who is Chairman of the Board and Chief Executive Officer
and a significant stockholder of the Company, beneficially owns a majority of
the voting stock of OCCO, which will control the election of directors of the
Operating Subsidiaries. Although neither the Company's right to receive
preferred distributions with respect to its preferred stock of Carr Services,
Inc. nor the terms of the promissory notes made by each of the Operating
Subsidiaries and held by Carr Realty, L.P. or the Company, as applicable, can be
changed by OCCO, the Company will not be able to elect directors of each of the
Operating Subsidiaries, and its ability to influence the day-to-day decisions of
the Operating Subsidiaries is limited. As a result, the board of directors and
management of each of the Operating Subsidiaries may implement business policies
or decisions that might not have been implemented by persons elected by the
Company and that are adverse to the interests of the Company or that lead to
adverse financial results, which could adversely impact the Company's operating
income and funds from operations.
Changes in Policies
The major policies of the Company, including its policies with respect to
development, acquisitions, financing, growth, operations, debt capitalization
and distributions, are determined by its Board. Although it has no present
intention to do so, the board may amend or revise these and other policies from
time to time without a vote of the shareholders of the Company. A change in
these policies could adversely affect the Company's financial condition, results
of operations, funds available for distributions to shareholders, debt service
or the market price of the Securities. The Company cannot change its policy of
seeking to maintain its qualification as a REIT without the approval of the
holders of a majority of the Common Stock.
Certain Tax Risks
Tax Liabilities as a Consequence of the Failure to Qualify as a REIT. The
Company believes that it has operated so as to qualify and has qualified as a
REIT under the Internal Revenue Code of 1986, as amended (the "Code"),
commencing with its taxable year ended December 31, 1993, and intends to
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continue to so operate. No assurance, however, can be given that the Company has
so qualified or will be able to remain so qualified. Qualification as a REIT
involves the application of highly technical and complex Code provisions as to
which there are only limited judicial and administrative interpretations.
Certain facts and circumstances that may be wholly beyond the Company's control
may affect its ability to qualify or to continue to qualify as a REIT. In
addition, no assurance can be given that new legislation, Treasury Regulations,
administrative interpretations or court decisions will not significantly change
the tax laws with respect to the qualification as a REIT or the Federal income
consequences of such qualification to the Company. If the Company fails to
qualify as a REIT, it will be subject to Federal income tax (including any
applicable alternative minimum tax) on its taxable income at regular corporate
rates. In addition, unless entitled to relief under certain statutory
provisions, the Company would be disqualified from treatment as a REIT for the
four taxable years following the year during which qualification is lost. The
additional tax incurred in such event would significantly reduce the cash flow
available for distribution to shareholders and to meet debt service obligations.
See "Federal Income Tax Considerations -- Taxation of the Company."
REIT Distribution Requirements and Potential Impact of Borrowings. To obtain
the favorable tax treatment associated with qualifying as a REIT under the Code,
the Company generally is required each year to distribute to its shareholders at
least 95% of its net taxable income. See "Federal Income Tax
Considerations-Taxation of the Company (Annual Distribution Requirements)." In
addition, the Company will be subject to a 4% nondeductible excise tax on the
amount, if any, by which certain distributions paid by it with respect to any
calendar year are less than the sum of 85% of its ordinary income, 95% of its
capital gain net income and 100% of its undistributed income from prior years.
Differences in timing between the receipt of income, the payment of expenses and
the inclusion of such income and the deduction of such expenses in arriving at
taxable income (of the Company or Carr Realty, L.P.), or the effect of
nondeductible capital expenditures, the creation of reserves or required debt or
amortization payments, could require the Company, directly or through Carr
Realty, L.P., to borrow funds on a short-term basis to meet the distribution
requirements that are necessary to achieve the tax benefits associated with
qualifying as a REIT. In such instances, the Company might need to borrow funds
in order to avoid adverse tax consequences even if management believed that then
prevailing market conditions were not generally favorable for such borrowings.
Other Tax Liabilities. Even if the Company qualifies as a REIT, the Company
and certain of its subsidiaries will be subject to certain Federal, state and
local taxes on its income and property. See "Federal Income Tax Considerations
- -- Taxation of the Company and Other Tax Considerations."
Consequences of Failure of the Carr Realty, L.P. to be Treated as a
Partnership. The Company believes that the Carr Realty, L.P. and each other
partnership and limited liability company in which it holds an interest are
properly treated as partnerships for Federal income tax purposes. See "Federal
Income Tax Considerations -- Other Tax Considerations (Effect of Tax Status of
Carr Realty, L.P. and Other Partnerships on REIT Status)." If the Internal
Revenue Service (the "IRS") were to challenge successfully the tax status of
Carr Realty, L.P., or any other partnership in which the Company holds an
interest, as a partnership for Federal income tax purposes, Carr Realty, L.P. or
the affected partnership would be taxable as a corporation. In such event, since
the value of the Company's ownership interest in Carr Realty, L.P. exceeds, and
the value of Carr Realty, L.P.'s ownership interest in the affected partnership
could exceed, 5% of the Company's assets, the Company could cease to qualify as
a REIT. See "Federal Income Tax Considerations -- Taxation of the Company (Asset
Tests)." In addition, the imposition of a corporate tax on Carr Realty, L.P. or
any of the other partnerships in which it holds an interest would reduce the
amount of funds available for distribution to the Company and its stockholders.
Special Considerations for Foreign Investors
In order to assist the Company in qualifying as a "domestically controlled
REIT," the Articles of Incorporation contain certain provisions generally
preventing foreign investors (other than USRealty and its affiliates) from
acquiring additional shares of the Company's capital stock if, as a result of
such acquisition, the Company would fail to qualify as a "domestically
controlled REIT." See "Federal In
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come Tax Considerations -- Taxation of Holders of Common Stock -- Taxation of
Non-U.S. Shareholders." Accordingly, an acquisition of the Company's capital
stock would not likely be a suitable investment for Non-U.S. Shareholders
other than USRealty.
Price Fluctuations of the Common Stock and Trading Volume; Shares Available for
Future Sale
A number of factors may adversely influence the price of the Company's Common
Stock in the public markets, many of which are beyond the control of the
Company. These factors include possible increases in market interest rates,
which may lead purchasers of Common Stock to demand a higher annual yield from
distributions by the Company in relation to the price paid for Common Stock, the
relatively low daily trading volume of REITs in general, including the Common
Stock, and any inability of the Company to invest the proceeds of a future
offering of Securities in a manner that will increase earnings per share. Sales
of a substantial number of shares of Common Stock, or the perception that such
sales could occur, could adversely affect prevailing market prices for shares.
The Company also may issue shares of Common Stock (subject to the Ownership
Limit, as defined below) upon redemption of Units issued in connection with the
formation of the Company and subsequent acquisitions. In addition, 1,416,900
shares of Common Stock of the Company have been issued or reserved for issuance
pursuant to stock and unit options, and these shares will be available for sale
in the public markets from time to time pursuant to exemptions from registration
requirements or upon registration. In connection with the USRealty Transaction,
the Company granted USRealty the right to require the Company to file, at any
time requested by USRealty, a registration statement under the Securities Act of
1933 covering all or any of the shares of Common Stock acquired by USRealty. No
prediction can be made about the effect that future sales of Common Stock will
have on the market prices of shares.
Possible Adverse Consequences of Limits on Ownership of Shares
In order to assist the Company in maintaining its qualification as a REIT,
the Articles of Incorporation contain certain provisions generally limiting the
ownership of shares of capital stock by any single shareholder to 5% of the
outstanding Common Stock and/or 5% of any class or series of Preferred Stock
(with exceptions for persons who received more than 5% of the equity of the
Company pursuant to the contribution of assets to the Company in connection with
the initial public offering of the Company and USRealty and its affiliates). The
Board could waive this restriction if it were satisfied that ownership in excess
of the above ownership limit would not jeopardize the Company's status as a REIT
and the Board otherwise decided such action would be in the best interests of
the Company. Capital stock acquired or transferred in breach of the limitation
will be automatically transferred to a trust for the benefit of a designated
charitable beneficiary. See "Description of Common Stock -- Restrictions on
Transfer" for additional information regarding the limits on ownership of shares
of capital stock.
Restrictions on Acquisition and Change in Control
Various provisions of the Company's Articles of Incorporation, as amended
(the "Articles of Incorporation"), restrict the possibility for acquisition or
change in control of the Company, even if such acquisition or change in control
were in the shareholders' interest, including the Ownership Limit, the staggered
terms of the Company's directors and the ability of the Board to authorize the
issuance of preferred stock without stockholder approval.
USE OF PROCEEDS
Unless otherwise specified in the applicable Prospectus Supplement, the net
proceeds from the sale of the Offered Securities will be used for the
acquisition and development of additional office properties, as suitable
opportunities arise, for the repayment of certain outstanding indebtedness at
such time, for capital improvements to property and for working capital and
other general corporate purposes.
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RATIOS OF EARNINGS TO FIXED CHARGES
The Company's ratio of earnings to fixed charges for the three months ending
March 31, 1996 was 1.64, and for the period from February 16, 1993 (commencement
of operations) to December 31, 1993 and for the years ended December 31, 1994
and 1995 was 1.75, 1.81, and 1.91 respectively.
The ratios of earnings to fixed charges were computed by dividing earnings by
fixed charges. For this purpose, earnings consist of income (loss) before gains
from sales of property and extraordinary items plus fixed charges. Fixed charges
consist of interest expense (including interest costs capitalized), the
amortization of debt issuance costs and rental expense deemed to represent
interest expense. There was no preferred stock outstanding for any of the
periods shown above. Accordingly, the ratio of earnings to combined fixed
charges and preferred stock dividends is identical to the ratio of earnings to
fixed charges.
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DESCRIPTION OF DEBT SECURITIES
The following description sets forth certain general terms and provisions of
the Debt Securities to which this Prospectus and any applicable Prospectus
Supplement may relate. The particular terms of the Debt Securities being offered
and the extent to which such general provisions may apply will be set forth in
the applicable indenture or in one or more indentures supplemental thereto and
described in a Prospectus Supplement relating to such Debt Securities. The forms
of the Senior Indenture (as defined herein) and the Subordinated Indenture (as
defined herein) have been filed as exhibits to the Registration Statement of
which this Prospectus is a part.
General
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 Debt Securities will be issued under
one or more indentures (the "Indentures"). Senior Securities and Subordinated
Securities will be issued pursuant to separate indentures (respectively, a
"Senior Indenture" and a "Subordinated Indenture"), in each case between the
Company and a trustee (a "Trustee"). The Indentures will be subject to and
governed by the Trust Indenture Act of 1939, as amended (the "TIA"). The
statements made under this heading relating to the Debt Securities and the
Indentures are summaries of the anticipated provisions thereof, do not purport
to be complete and are qualified in their entirety by reference to the
Indentures and such Debt Securities. All section references appearing herein are
to sections of each Indenture unless otherwise indicated and capitalized terms
used but not defined below shall have the respective meanings set forth in each
Indenture.
The indebtedness represented by 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."
Except as set forth in the applicable Indenture or in one or more indentures
supplemental thereto and described in a Prospectus Supplement relating thereto,
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 the Company or
as established in the applicable Indenture or in one or more indentures
supplemental to such Indenture. All Debt Securities of one series need not be
issued at the same time and, unless otherwise provided, a series may be
reopened, without the consent of the Holders of the Debt Securities of such
series, for issuances of additional Debt Securities of such series.
It is anticipated that each Indenture will provide that there may be more
than one Trustee thereunder, each with respect to one or more series of Debt
Securities. Any Trustee under an Indenture may resign or be removed with respect
to one or more series of Debt Securities, and a successor Trustee may be
appointed to act with respect to such series. 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 director of a trust under the
applicable Indenture separate and apart from the trust administered by any other
Trustee, and, except as otherwise indicated herein, any action described herein
to be taken by each Trustee may be taken by each such Trustee with respect to,
and only with respect to, the one or more series of Debt Securities for which it
is Trustee under the applicable Indenture.
The Prospectus Supplement relating to any series of Debt Securities being
offered will contain the specific terms thereof, including, without limitation:
(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 aggregate principal amount;
(3) The percentage of the principal amount at which such Debt Securities will
be issued and, if other than the principal amount thereof, the portion of the
principal amount thereof payable upon declaration of acceleration of the
maturity thereof;
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(4) If convertible in whole or in part into Common Stock or Preferred Stock,
the terms on which such Debt Securities are convertible, including the initial
conversion price or rate (or method for determining the same), the portion that
is convertible and the conversion period, and any applicable limitations on the
ownership or transferability of the Common Stock or Preferred Stock receivable
on conversion;
(5) The date or dates, or the method for determining such date or dates, on
which the principal of such Debt Securities will be payable;
(6) The rate or rates (which may be fixed or variable), or the method by
which such rate or rates shall be determined, at which such Debt Securities will
bear interest, if any;
(7) The date or dates, or the method for determining such date or dates, from
which any such interest will accrue, the dates on which any such interest will
be payable, the regular record dates for such interest payment dates, or the
method by which such dates shall be determined, the persons to whom such
interest shall be payable, and the basis upon which interest shall be calculated
if other than that of a 360-day year of twelve 30-day months;
(8) The place or places where the principal of (and premium, if any) and
interest, if any, on such Debt Securities will be payable, where such Debt
Securities may be surrendered for conversion or registration of transfer or
exchange and where notices or demands to or upon the Company in respect of such
Debt Securities and the applicable Indenture may be served;
(9) The period or periods within which, the price or prices at which and the
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 such
an option;
(10) The obligation, if any, of the Company to redeem, repay or purchase such
Debt Securities pursuant to any sinking fund or analogous provision or at the
option of a Holder thereof, and the period or periods within which or the date
and dates on which, the price or prices at which and the other terms and
conditions upon which such Debt Securities will be redeemed, repaid or
purchased, in whole or in part, pursuant to such obligation;
(11) If other than U.S. dollars, the currency or currencies in which such
Debt Securities are denominated and payable, which may be a foreign currency or
units of two or more foreign currencies or a composite currency or currencies,
and the terms and conditions relating thereto;
(12) Whether the amount of payments of principal of (and premium, if any) or
interest, if any, on such Debt Securities may be determined with reference to an
index, formula or other method (which index, formula or method may, but need not
be, based on a currency, currencies, currency unit or units or composite
currency or currencies) and the manner in which such amounts shall be
determined;
(13) Any additions to, modifications of or deletions from the terms of such
Debt Securities with respect to Events of Default or covenants set forth in the
applicable Indenture;
(14) Whether such Debt Securities will be issued in certificate or book-entry
form;
(15) Whether such Debt Securities will be in registered or bearer form and,
if in registered form, the denominations thereof if other than $1,000 and any
integral multiple thereof and, if in bearer form, the denominations thereof and
terms and conditions relating thereto;
(16) The applicability, if any, of the defeasance and covenant defeasance
provisions of Article Fourteen of the applicable Indenture;
(17) Whether and under what circumstances the Company will pay any additional
amounts on such Debt Securities in respect of any tax, assessment or
governmental charge and, if so, whether the Company will have the option to
redeem such Debt Securities in lieu of making such payment; and
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(18) Any other terms of such Debt Securities not inconsistent with the
provisions of the applicable Indenture (Section 301).
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"). Special federal income tax, accounting
and other considerations applicable to Original Issue Discount Securities will
be described in the applicable Prospectus Supplement.
Except as set forth in the applicable Indenture or in one or more indentures
supplemental thereto, the applicable Indenture will not contain any provisions
that would limit the ability of the Company to incur indebtedness or that would
afford Holders of Debt Securities protection in the event of a highly leveraged
or similar transaction involving the Company or in the event of a change of
control. Restrictions on ownership and transfers of the Company's Common Stock
and Preferred Stock are designed to preserve its status as a REIT and,
therefore, may act to prevent or hinder a change of control. See "Description of
Preferred Stock -- Restrictions on Ownership" and "Description of Common Stock
- -- Restrictions on Transfer." 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 below, including any addition of a covenant or other provision
providing event risk or similar protection.
Denomination, Interest, Registration and Transfer
Unless otherwise described in the applicable Prospectus Supplement, the Debt
Securities of any series will be issuable in denominations of $1,000 and
integral multiples thereof (Section 302).
Unless otherwise specified in the applicable Prospectus Supplement, the
principal of (and applicable premium, if any) and interest on any series of Debt
Securities will be payable at the corporate trust office of the Trustee, the
address of which will be stated in the applicable Prospectus Supplement;
provided that, at the option of the Company, payment of interest may be made by
check mailed to the address of the person entitled thereto as it appears in the
applicable register for such Debt Securities or by wire transfer of funds to
such person at an account maintained within the United States (Sections 301,
305, 306, 307 and 1002).
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 Trustee, notice whereof
shall be given to the Holder of such Debt Security not less than ten days prior
to such Special Record Date, or may be paid at any time in any other lawful
manner, all as more completely described in the Indenture (Section 307).
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 or exchange thereof at
the corporate trust office of the applicable Trustee. Every Debt Security
surrendered for conversion, registration of transfer or exchange must be duly
endorsed or accompanied by a written instrument of transfer. No service charge
will be made for any registration of transfer or exchange of any Debt
Securities, but the Company may require payment of a sum sufficient to cover any
tax or other governmental charge payable in connection therewith. If the
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 any
such transfer agent acts, except that the Company will be required to maintain a
transfer agent in each place of payment for such series. The Company may at any
time designate additional transfer agents with respect to any series of Debt
Securities (Section 1002).
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Neither the Company nor any Trustee shall be required to (i) issue, register
the transfer of or exchange Debt Securities of any series during a period
beginning at the opening of business 15 days before any selection of Debt
Securities of that series to be redeemed and ending at the close of business on
the day of mailing of the relevant notice of redemption; (ii) register the
transfer of or exchange any Debt Security, or portion thereof, called for
redemption, except the unredeemed portion of any Debt Security being redeemed in
part; or (iii) issue, register the transfer of or exchange any Debt Security
that has been surrendered for repayment at the option of the Holder, except the
portion, if any, of such Debt Security not to be so repaid (Section 305).
Merger, Consolidation or Sale
The Company will be permitted to 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 or merger or which shall have received the transfer of such
assets shall expressly assume payment of the principal of (and premium, if any)
and interest on all of the Debt Securities and the due and punctual performance
and observance of all of the covenants and conditions contained in each
Indenture; (b) immediately after giving effect to such transaction and treating
any indebtedness that becomes an obligation of the Company or any Subsidiary as
a result thereof as having been incurred by the Company or Subsidiary at the
time of such transaction, no Event of Default under the Indentures, and no event
which, after notice or the lapse of time, or both, would become such an Event of
Default, shall have occurred and be continuing; and (c) an officer's certificate
and legal opinion covering such conditions shall be delivered to each Trustee
(Sections 801 and 803).
Certain Covenants
Existence. Except as described above under "Merger, Consolidation or Sale",
the Company will be required to do or cause to be done all things necessary to
preserve and keep in full force and effect its existence, rights (by articles of
incorporation, by-laws and statute) and franchises; 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 its business and that the loss thereof is not disadvantageous in any material
respect to the Holders of the Debt Securities.
Maintenance of Properties. The Company will be required to cause all of its
material properties used or useful in the conduct of its business or the
business of any Subsidiary to be maintained and kept in good condition, repair
and working order and supplied with all necessary equipment and will cause to be
made all necessary repairs, renewals, replacements, betterments and improvements
thereof, all as in the judgment of the Company may be necessary so that the
business carried on in connection therewith may be properly and advantageously
conducted at all times (Section 1007); provided, however, that the Company shall
not be prevented from selling or otherwise disposing for value its properties in
the ordinary course of business.
Insurance. The Company will be required to, and will be required to cause
each of its Subsidiaries, defined below, to keep all of its insurable properties
insured against loss or damage at least equal to their then full insurable value
with insurers of recognized responsibility and, if described in the applicable
Prospectus Supplement, having a specified rating from a recognized insurance
rating service (Section 1008).
Payment of Taxes and Other Claims. The Company will be required to pay or
discharge or cause to be paid or discharged, before the same shall become
delinquent, (i) all taxes, assessments and governmental charges levied or
imposed upon it or any Subsidiary or upon the income, profits or property of 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 1009).
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Provision of Financial Information. Whether or not the Company is subject to
Section 13 or 15(d) of the Exchange Act, the Company will be required, to the
extent permitted under the Exchange Act, to file with the Commission the annual
reports, quarterly reports and other documents which the Company would have been
required to file with the Commission pursuant to such Sections 13 or 15(d) if
the Company were so subject (the "Financial Information"), such documents to be
filed with the Commission on or prior to the respective dates (the "Required
Filing Dates") by which the Company would have been required so to file such
documents if the Company were so subject. The Company also will in any event (x)
within 15 days of each Required Filing Date (i) transmit by mail to all Holders
of Debt Securities, as their names and addresses appear in the Security
Register, without cost to such Holders, copies of the Financial Information and
(ii) file with the Trustee copies of the Financial Information, and (y) if
filing such documents by the Company with the Commission is not permitted under
the Exchange Act, promptly upon written request and payment of the reasonable
cost of duplication and delivery, supply copies of such documents to any
prospective Holder (Section 1010).
Additional Covenants and/or Modifications to the Covenants Described Above
Any additional covenants of the Company and/or modifications to the covenants
described above with respect to any Debt Securities or series thereof, including
any covenants relating to limitations on incurrence of indebtedness or other
financial covenants, will be set forth in the applicable Indenture or an
indenture supplemental thereto and described in the Prospectus Supplement
relating thereto.
Events of Default, Notice and Waiver
Each Indenture will provide that the following events are "Events of Default"
with respect to any series of Debt Securities issued thereunder: (i) default for
30 days in the payment of any installment of interest on any Debt Security of
such series; (ii) default in the payment of principal of (or premium, if any,
on) any Debt Security of such series at its maturity; (iii) default in making
any sinking fund payment as required for any Debt Security of such series; (iv)
default in the performance or breach of any other covenant or warranty of the
Company contained in the applicable 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 applicable Indenture; (v) default in the payment of an
aggregate principal amount exceeding $10,000,000 of any indebtedness of the
Company or any mortgage, indenture or other instrument under which such
indebtedness is issued or by which such indebtedness is secured, such default
having occurred after the expiration of any applicable grace period and having
resulted in the acceleration of the maturity of such indebtedness, but only if
such indebtedness is not discharged or such acceleration is not rescinded or
annulled; (vi) certain events of bankruptcy, insolvency or reorganization, or
court appointment of a receiver, liquidator or trustee of the Company or any
Significant Subsidiary, as defined below, or either of its property; and (vii)
any other Event of Default provided with respect to a particular series of Debt
Securities (Section 501).
"Significant Subsidiary" means any Subsidiary that is a "significant
subsidiary" (within the meaning of Regulation S-X promulgated under the
Securities Act) of the Company.
"Subsidiary" means a corporation, partnership or entity such as a limited
liability company, in which a majority of the outstanding voting stock or
partnership interests, as the case may be, is owned or controlled, directly or
indirectly, by the Company or by one or more other Subsidiaries of the Company.
For the purposes of this definition, "voting stock" means stock having voting
power for the election of directors, or managers or other voting members of the
governing body of such entities, whether at all times or only so long as no
senior class of stock has such voting power by reason of any contingency. The
term "Subsidiary" does not include Carr Services, Inc., CRESNOVA, or Carr
Development & Construction as the Company does not own or control a majority of
the outstanding voting stock of such entities.
If an Event of Default under any Indenture with respect to Debt Securities of
any series at the time outstanding occurs and is continuing, then in every such
case the applicable Trustee or the Holders of not less than 25% of the principal
amount of the Outstanding Debt Securities of that series will have the
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right to declare the principal amount (or, if the Debt Securities of that series
are Original Issue Discount Securities or indexed securities, such portion of
the principal amount as may be specified in the terms thereof) of all the Debt
Securities of that series to be due and payable immediately by written notice
thereof to the Company (and to the applicable Trustee if given by the Holders).
However, at any time after such a declaration of acceleration with respect to
Debt Securities of such series (or of all Debt Securities then Outstanding under
any Indenture, as the case may be) has been made, but before a judgment or
decree for payment of the money due has been obtained by the applicable Trustee,
the Holders of not less than a majority in principal amount of Outstanding Debt
Securities of such series (or of all Debt Securities then Outstanding under the
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 applicable
Trustee all required payments of the principal of (and premium, if any) and
interest on the Debt Securities of such series (or of all Debt Securities then
Outstanding under the applicable Indenture, as the case may be), plus certain
fees, expenses, disbursements and advances of the applicable Trustee and (b) all
events of default, other than the non-payment of accelerated principal (or
specified portion thereof), with respect to Debt Securities of such series (or
of all Debt Securities then Outstanding under the applicable Indenture, as the
case may be) have been cured or waived as provided in such Indenture (Section
502). Each Indenture also will provide that the Holders of not less than a
majority in principal amount of the Outstanding Debt Securities of any series
(or of all Debt Securities then Outstanding under the 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, if any) or interest 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 amended without the consent of the Holder of each
Outstanding Debt Security affected thereby (Section 513).
Each Trustee will be required to give notice to the Holders of Debt
Securities within 90 days of a default under the applicable Indenture unless
such default shall have been cured or waived; provided, however, that such
Trustee may withhold notice to the Holders of any series of Debt Securities of
any default with respect to such series (except a default in the payment of the
principal of (or premium, if any) or interest on any Debt Security of such
series or in the payment of any sinking fund installment in respect of any Debt
Security of such series) if specified responsible officers of such Trustee
consider such withholding to be in the interest of such Holders (Section 601).
Each Indenture will provide 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 cases of failure of the
applicable Trustee, for 60 days, to act after it has received a written request
to institute proceedings in respect of an Event of Default from the Holders of
not less than 25% in principal amount of the Outstanding Debt Securities of such
series, as well as an offer of indemnity reasonably satisfactory to it (Section
507). This provision will not prevent, however, any Holder of Debt Securities
from instituting suit for the enforcement of payment of the principal of (and
premium, if any) and interest on such Debt Securities at the respective due
dates thereof (Section 508).
Subject to provisions in each Indenture relating to its duties in case of
default, no Trustee will be under any obligation to exercise any of its rights
or powers under an Indenture at the request or direction of any Holders of any
series of Debt Securities then Outstanding under such Indenture, unless such
Holders shall have offered to the Trustee thereunder reasonable security or
indemnity (Section 602). 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 an Indenture, as the case may be) shall have
the right to direct the time, method and place of conducting any proceeding for
any remedy available to the applicable Trustee, or of exercising any trust or
power conferred upon such Trustee. However, a Trustee may refuse to follow any
direction which is in conflict with any law or the applicable Indenture, which
may involve such Trustee in personal liability or which may be unduly
prejudicial to the Holders of Debt Securities of such series not joining therein
(Section 512).
Within 120 days after the close of each fiscal year, the Company will be
required to deliver to each Trustee a certificate, signed by one of several
specified officers, stating whether or not such officer has knowledge of any
default under the applicable Indenture and, if so, specifying each such default
and the nature and status thereof (Section 1011).
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Modification of the Indentures
Modifications and amendments of an Indenture will be permitted to be made
only with the consent of the Holders of not less than a majority in principal
amount of all Outstanding Debt Securities issued under such Indenture which are
affected by such modification or amendment; provided, however, that no such
modification or amendment may, without the consent of the Holder of each such
Debt Security affected thereby, (a) change the stated maturity of the principal
of, or any installment of interest (or premium, if any) on, any such Debt
Security; (b) reduce the principal amount of, or the rate or amount of interest
on, or any premium payable on redemption of, any such Debt Security, or reduce
the amount of principal of an Original Issue Discount Security that would be due
and payable upon declaration of acceleration of the maturity thereof or would be
provable in bankruptcy, or adversely affect any right of repayment of the Holder
of any such Debt Security; (c) change the place of payment, or the coin or
currency, for payment of principal or premium, if any, or interest on any such
Debt Security; (d) impair the right to institute suit for the enforcement of any
payment on or with respect to any such Debt Security; (e) reduce the
above-stated 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 applicable 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).
The Holders of not less than a majority in principal amount of Outstanding
Debt Securities of each series affected thereby will have the right to waive
compliance by the Company with certain covenants in such Indenture (Section
1013).
Modifications and amendments of an Indenture will be permitted to be made by
the Company and the respective Trustee thereunder without the consent of any
Holder of Debt Securities for any of the following purposes: (i) to evidence the
succession of another person to the Company as obligor under such Indenture;
(ii) to add to the covenants of the Company for the benefit of the Holders of
all or any series of Debt Securities or to surrender any right or power
conferred upon the Company in the Indenture; (iii) to add Events of Default for
the benefit of the Holders of all or any series of Debt Securities; (iv) to add
or change any provisions of an Indenture to facilitate the issuance of, or to
liberalize certain terms of, Debt Securities in bearer form, or to permit or
facilitate the issuance of Debt Securities in uncertificated form, provided that
such action shall not adversely affect the interests of the Holders of the Debt
Securities of any series in any material respect; (v) to change or eliminate any
provisions of an Indenture, provided that any such change or elimination shall
become effective only when there are no Debt Securities Outstanding of any
series created prior thereto which are entitled to the benefit of such
provision; (vi) to secure the Debt Securities; (vii) to establish the form or
terms of Debt Securities of any series, including the provisions and procedures,
if applicable, for the conversion of such Debt Securities into Common Stock or
Preferred Stock of the Company; (viii) to provide for the acceptance of
appointment by a successor Trustee or facilitate the administration of the
trusts under an Indenture by more than one Trustee; (ix) to cure any ambiguity,
defect or inconsistency in an Indenture, provided that such action shall not
adversely affect the interests of Holders of Debt Securities of any series
issued under such Indenture in any material respect; or (x) to supplement any of
the provisions of an Indenture to the extent necessary to permit or facilitate
defeasance and discharge of any series of such Debt Securities, provided that
such action shall not adversely affect the interests of the Holders of the Debt
Securities of any series in any material respect (Section 901).
Each Indenture will provide that in determining whether the Holders of the
requisite principal amount of Outstanding Debt Securities of a series have given
any request, demand, authorization, direction, notice, consent or waiver
thereunder or whether a quorum is present at a meeting of Holders of Debt
Securities, (i) the principal amount of an Original Issue Discount Security that
shall be deemed to be Outstanding shall be the amount of the principal thereof
that would be due and payable as of the date of such determination upon
declaration of acceleration of the maturity thereof, (ii) the principal amount
of any Debt Security denominated in a foreign currency that shall be deemed
Outstanding shall
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be the U.S. dollar equivalent, determined on the issue date for such Debt
Security, of the principal amount (or, in the case of an Original Issue Discount
Security, the U.S. dollar equivalent on the issue date of such Debt Security of
the amount determined as provided in (i) above), (iii) the principal amount of
an indexed security that shall be deemed Outstanding shall be the principal face
amount of such indexed security at original issuance, unless otherwise provided
with respect to such indexed security pursuant to the applicable Indenture, and
(iv) Debt Securities owned by the Company or any other obligor upon the Debt
Securities or any affiliate of the Company or of such other obligor shall be
disregarded.
Each Indenture will contain provisions for convening meetings of the Holders
of Debt Securities of a series (Section 501). A meeting will be permitted to be
called at any time by the applicable Trustee, and also, upon request, by the
Company or the Holders of at least 10% in principal amount of the Outstanding
Debt Securities of such series, in any such case upon notice given as provided
in the Indenture. Except for any consent that must be given by the Holder of
each Debt Security affected by certain modifications and amendments of an
Indenture, any resolution presented at a meeting or adjourned meeting duly
reconvened at which a quorum is present may be adopted by the affirmative vote
of the Holders of a majority in principal amount of the Outstanding Debt
Securities of that series; provided, however, that, except as referred to above,
any resolution with respect to any request, demand, authorization, direction,
notice, consent, waiver or other action that may be made, given or taken by the
Holders of a specified percentage, which is less than a majority, in principal
amount of the Outstanding Debt Securities of a series may be adopted at a
meeting or adjourned meeting or adjourned meeting duly reconvened at which a
quorum is present by the affirmative vote of the Holders of such specified
percentage in principal amount of the Outstanding Debt Securities of that
series. Any resolution passed or decision taken at any meeting of Holders of
Debt Securities of any series duly held in accordance with an Indenture will be
binding on all Holders of Debt Securities of that series. The quorum at any
meeting called to adopt a resolution, and at any reconvened meeting, will be
persons holding or representing a majority in principal amount of the
Outstanding Debt Securities of a series; provided, however, that if any action
is to be taken at such meeting with respect to a consent or waiver which may be
given by the Holders of not less than a specified percentage in principal amount
of the Outstanding Debt Securities of a series, the persons holding or
representing such specified percentage in principal amount of the Outstanding
Debt Securities of such series will constitute a quorum.
Notwithstanding the foregoing provisions, each Indenture will provide that if
any action is to be taken at a meeting of Holders of Debt Securities of any
series with respect to any request, demand, authorization, direction, notice,
consent, waiver and other action that such Indenture expressly provides may be
made, given or taken by the Holders of a specified percentage in principal
amount of all Outstanding Debt Securities affected thereby, or the Holders of
such series and one or more additional series: (i) there shall be no minimum
quorum requirement for such meeting, and (ii) the principal amount of the
Outstanding Debt Securities of such series that vote in favor of such request,
demand, authorization, direction, notice, consent, waiver or other action shall
be taken into account in determining whether such request, demand,
authorization, direction, notice, consent, waiver or other action has been made,
given or taken under such Indenture.
Subordination
The terms and conditions, if any, upon which the Debt Securities are
subordinated to other indebtedness of the Company will be set forth in the
applicable Prospectus Supplement relating thereto. Such terms will include a
description of the indebtedness ranking senior to the Debt Securities, the
restrictions on payments to the Holders of such Debt Securities while a default
with respect to such senior indebtedness in continuing, the restrictions, if
any, on payments to the Holders of such Debt Securities following an Event of
Default, and provisions requiring Holders of such Debt Securities to remit
certain payments to holders of senior indebtedness.
Discharge, Defeasance and Covenant Defeasance
The Company may be permitted under the applicable Indenture to discharge
certain obligations to Holders of any series of Debt Securities issued
thereunder that have not already been delivered to the applicable Trustee for
cancellation and that either have become due and payable or will become due and
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payable within one year (or scheduled for redemption within one year) by
irrevocably depositing with the applicable Trustee, in trust, funds in such
currency or currencies, currency unit or units or composite currency or
currencies in which such Debt Securities are payable in an amount sufficient to
pay the entire indebtedness on such Debt Securities in respect of principal (and
premium, if any) and interest to the date of such deposit (if such Debt
Securities have become due and payable) or to the stated maturity or redemption
date, as the case may be.
Each Indenture will provide that, if the provisions of Article Fourteen 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) or (b) to be released from its obligations with
respect to such Debt Securities under certain specified sections of Article Ten
of such Indenture as specified in the applicable Prospectus Supplement and any
omission to comply with such obligations shall not constitute an Event of
Default with respect to such Debt Securities ("covenant defeasance") (Section
1403), in either case upon the irrevocable deposit by the Company with the
applicable Trustee, in trust, of an amount, in such currency or currencies,
currency unit or units or composite currency or currencies in which such Debt
Securities are payable at stated maturity, or Government Obligations (as defined
below), or both, applicable to such Debt Securities which through the scheduled
payment of principal and interest in accordance with their terms will provide
money in an amount sufficient without reinvestment to pay the principal of (and
premium, if any) and interest on such Debt Securities, and any mandatory sinking
fund or analogous payments thereon, on the scheduled due dates therefor.
Such a trust will only be permitted to be established if, among other things,
the Company has delivered to the applicable Trustee an opinion of counsel (as
specified in the applicable Indenture) to the effect that the Holders of such
Debt Securities will not recognize income, gain or loss for federal income tax
purposes as a result of such defeasance or 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 defeasance or covenant defeasance
had not occurred, and such opinion of counsel, in the case of defeasance, will
be required to refer to and be based upon a ruling of the Internal Revenue
Service or a change in applicable U.S. federal income tax law occurring after
the date of the Indenture (Section 1404).
"Government Obligations" means securities which are (i) direct obligations of
the United States of America or the government which issued the foreign currency
in which the Debt Securities of a particular series are payable, for the payment
of which its full faith and credit is pledged or (ii) obligations of a person
controlled or supervised by and acting as an agency or instrumentality of the
United States of America or such government which issued the foreign currency in
which the Debt Securities of such series are payable, the timely payment of
which is unconditionally guaranteed as a full faith and credit obligation of the
United States of America or such 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).
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
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does, elect pursuant to the applicable Indenture or the terms of such Debt
Security to receive payment in a currency, currency unit or composite currency
other than that in which such deposit has been made in respect of such Debt
Security, or (b) a Conversion Event (as defined below) occurs in respect of the
currency, currency unit or composite currency in which such deposit has been
made, the indebtedness represented by such Debt Security will be deemed to have
been, and will be, fully discharged and satisfied through the payment of the
principal of (and premium, if any) and interest on such Debt Security as they
become due out of the proceeds yielded by converting the amount so deposited in
respect of such Debt Security into the currency, currency unit or composite
currency in which such Debt Security becomes payable as a result of such
election or such cessation of usage based on the applicable market exchange
rate. "Conversion Event" means the cessation of use of (i) a currency, currency
unit or composite currency both by the government of the country which issued
such currency and for the settlement of transactions by a central bank or other
public institutions of or within the international banking community, (ii) the
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, if
any) and interest on any Debt Security that is payable in a foreign currency
that ceases to be used by its government of issuance shall be made in U.S.
dollars.
In the event the Company effects covenant defeasance with respect to any Debt
Securities and such Debt Securities are declared due and payable because of the
occurrence of any Event of Default other than the Event of Default described in
clause (iv) under "Events of Default, Notice and Waiver" with respect to certain
specified sections of Article Ten of each Indenture (which sections would no
longer be applicable to such Debt Securities as a result of such covenant
defeasance) or described in clause (vii) under "Events of Default, Notice and
Waiver" with respect to any other 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 applicable Trustee, will be sufficient to pay amounts due on such Debt
Securities at the time of their stated maturity but may not be sufficient to pay
amounts due on such Debt Securities at the time of the acceleration resulting
from such 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 Common Stock or Preferred Stock will be set forth in the
applicable Prospectus Supplement relating thereto. Such terms will include
whether such Debt Securities are convertible into Common Stock or Preferred
Stock, the conversion price (or manner of calculation thereof), the conversion
period, provisions as to whether conversion will be at the option of the Holders
or the Company, the events requiring an adjustment of the conversion price and
provisions affecting conversion in the event of the redemption of such Debt
Securities and any restrictions on conversion, including restrictions directed
at maintaining the Company's REIT status.
Redemption of Securities
The Indenture provides that the Debt Securities may be redeemed at any time
at the option of the Company, in whole or in part, at the redemption price,
except as may otherwise be provided in connection with any Debt Securities or
series thereof.
From and after notice has been given as provided in the Indenture, if funds
for the redemption of any Debt Securities called for redemption shall have been
made available on such redemption date, such Debt Securities will cease to bear
interest on the date fixed for such redemption specified in such notice, and the
only right of the Holders of the Debt Securities will be to receive payment of
the redemption price.
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Notice of any optional redemption of any Debt Securities will be given to
Holders at their addresses, as shown in the Company's books and records, not
more than 60 nor less than 30 days prior to the date fixed for redemption. The
notice of redemption will specify, among other items, the redemption price and
the principal amount of the Debt Securities held by such Holder to be redeemed.
If the Company elects to redeem Debt Securities, it will notify the Trustee
at least 45 days prior to the redemption date (or such shorter period as
satisfactory to the Trustee) of the aggregate principal amount of Debt
Securities to be redeemed and the redemption date. If less than all the Debt
Securities are to be redeemed, the Trustee shall select the Debt Securities to
be redeemed pro rata, by lot or in such manner as it shall deem fair and
appropriate.
Global Securities
The Debt Securities of a series may be issued in whole or in part in the form
of one or more global securities (the "Global Securities") that will be
deposited with, or on behalf of, a depository identified in the applicable
Prospectus Supplement relating to such series. Global Securities may be issued
in either registered or bearer form and in either temporary or permanent form.
The specific terms of the depository arrangement with respect to a series of
Debt Securities will be described in the applicable Prospectus Supplement
relating to such series.
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DESCRIPTION OF PREFERRED STOCK
The Company is authorized to issue 15,000,000 shares of Preferred Stock. As
of May 31, 1996, there were no shares of Preferred Stock outstanding.
Under the Company's Articles of Incorporation, the Board may from time to
time establish and issue one or more series of Preferred Stock. The Board may
classify or reclassify any unissued Preferred Stock by setting or changing the
number, designation, preference, conversion or other rights, voting powers,
restrictions, limitations as to dividends, qualifications and terms or
conditions of redemption of such series (a "Designating Amendment").
The following description of the Preferred Stock sets forth certain general
terms and provisions of the Preferred Stock to which any Prospectus Supplement
may relate. The statements below describing the Preferred Stock are in all
respects subject to and qualified in their entirety by reference to the
applicable provisions of the Company's Articles of Incorporation and the
Company's bylaws (the "Bylaws").
General
The Board is empowered by the Company's Articles of Incorporation to
designate and issue from time to time one or more series of Preferred Stock
without shareholder approval. The Board may determine the relative rights,
preferences and privileges of each series of Preferred Stock so issued. Because
the Board has the power to establish the preferences and rights of each series
of Preferred Stock, it may afford the holders of any series of Preferred Stock
preferences, powers and rights, voting or otherwise, senior to the rights of
holders of Common Stock. The Preferred Stock will, when issued, be fully paid
and nonassessable.
The Prospectus Supplement relating to any Preferred Stock offered thereby
will contain the specific terms thereof, including, without limitation:
(1) The title and stated value of such Preferred Stock;
(2) The number of such shares of Preferred Stock offered, the liquidation
preference per share and the offering price of such Preferred Stock;
(3) The dividend rate(s), period(s) and/or payment date(s) or method(s) of
calculation thereof applicable to such Preferred Stock;
(4) The date from which dividends on such Preferred Stock will accumulate, if
applicable;
(5) The procedures for any auction and remarketing, if any, for such
Preferred Stock;
(6) The provision for a sinking fund, if any, for such Preferred Stock;
(7) The provision for redemption, if applicable, of such Preferred Stock;
(8) Any listing of such Preferred Stock on any securities exchange;
(9) The terms and conditions, if applicable, upon which such Preferred Stock
will be convertible into Common Stock of the Company, including the conversion
price (or manner of calculation thereof);
(10) Any other specific terms, preferences, rights, limitations or
restrictions of such Preferred Stock;
(11) A discussion of federal income tax considerations applicable to such
Preferred Stock;
(12) The relative ranking and preferences of such Preferred Stock as to
dividend rights and rights upon liquidation, dissolution or winding up of the
affairs of the Company;
(13) Any limitations on issuance of any series of Preferred Stock ranking
senior to or on a parity with such series of Preferred Stock as to dividend
rights and rights upon liquidation, dissolution or winding up of the affairs of
the Company; and
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(14) Any limitations on direct or beneficial ownership and restrictions on
transfer, in each case as may be appropriate to preserve the status of the
Company as a REIT.
Rank
Unless otherwise specified in the Prospectus Supplement, the Preferred Stock
will, with respect to dividend rights and rights upon liquidation, dissolution
or winding up of the Company, rank (i) senior to all classes or series of Common
Stock of the Company, and to all equity securities ranking junior to such
Preferred Stock; (ii) on a parity with all equity securities issued by the
Company the terms of which specifically provide that such equity securities rank
on a parity with the Preferred Stock; and (iii) junior to all equity securities
issued by the Company the terms of which specifically provide that such equity
securities rank senior to the Preferred Stock. The term "equity securities" does
not include convertible debt securities.
Dividends
Holders of the Preferred Stock of each series will be entitled to receive,
when, as and if declared by the Board, out of assets of the Company legally
available for payment, cash dividends (or dividends in kind or in other property
if expressly permitted and described in the applicable Prospectus Supplement) at
such rates and on such dates as will be set forth in the applicable Prospectus
Supplement. Each such dividend will be payable to holders of record as they
appear on the stock transfer books of the Company on such record dates as are
fixed by the Board.
Dividends on any series of Preferred Stock may be cumulative or
non-cumulative, as provided in the applicable Prospectus Supplement. Dividends,
if cumulative, will be cumulative from and after the date set forth in the
applicable Prospectus Supplement. If the Board fails to declare a dividend
payable on a dividend payment date on any series of the Preferred Stock for
which dividends are non-cumulative, then the holders of such series of the
Preferred Stock will have no right to receive a dividend in respect of the
dividend period ending on such dividend payment date, and the Company will have
no obligation to pay the dividend accrued for such period, whether or not
dividends on such series are declared payable on any future dividend payment
date.
Unless otherwise specified in the Prospectus Supplement, if any shares of
Preferred Stock of any series are outstanding, no full dividends will be
declared or paid or set apart for payment on any capital stock of the Company of
any other series ranking, as to dividends, on a parity with or junior to the
Preferred Stock of such series for any period unless (i) if such series of
Preferred Stock has a cumulative dividend, full cumulative dividends have been
or contemporaneously are declared and paid or declared and a sum sufficient for
the payment thereof set apart for such payment on the Preferred Stock of such
series for all past dividend periods and the then current dividend period or
(ii) if such series of Preferred Stock does not have a cumulative dividend, full
dividends for the then current dividend period have been or contemporaneously
are declared and paid or declared and a sum sufficient for the payment thereof
set apart for such payment on the Preferred Stock of such series. When dividends
are not paid in full (or a sum sufficient for such full payment is not so set
apart) upon Preferred Stock of any series and the shares of any other series of
Preferred Stock ranking on a parity as to dividends with the Preferred Stock of
such series, all dividends declared upon Preferred Stock of such series and any
other series of Preferred Stock ranking on a parity as to dividends with such
Preferred Stock will be declared pro rata so that the amount of dividends
declared per share of Preferred Stock of such series and such other series of
Preferred Stock will in all cases bear to each other the same ratio that accrued
dividends per share on the Preferred Stock of such series (which will not
include any accumulation in respect of unpaid dividends for prior dividend
periods if such Preferred Stock do not have a cumulative dividend) and such
other series of Preferred Stock bear to each other. No interest, or sum of money
in lieu of interest, will be payable in respect of any dividend payment or
payments on Preferred Stock of such series which may be in arrears.
Except as provided in the immediately preceding paragraph, unless (i) if such
series of Preferred Stock has a cumulative dividend, full cumulative dividends
on the Preferred Stock of such series have been or contemporaneously are
declared and paid or declared and a sum sufficient for the payment
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thereof set apart for payment for all past dividend periods and the then current
dividend period, and (ii) if such series of Preferred Stock does not have a
cumulative dividend, full dividends on the Preferred Stock of such series have
been or contemporaneously are declared and paid or declared and a sum sufficient
for the payment thereof set apart for payment for the then current dividend
period, no dividends (other than in Common Stock or other capital stock ranking
junior to the Preferred Stock of such series as to dividends and upon
liquidation) will be declared or paid or set aside for payment or other
distribution upon the Common Stock, or any other capital stock of the Company
ranking junior to or on a parity with the Preferred Stock of such series as to
dividends or upon liquidation, nor will any Common Stock, or any other capital
stock of the Company ranking junior to or on a parity with the Preferred Stock
of such series as to dividends or upon liquidation be redeemed, purchased or
otherwise acquired for any consideration (or any moneys be paid to or made
available for a sinking fund for the redemption of any such stock) by the
Company (except by conversion into or exchange for other capital stock of the
Company ranking junior to the Preferred Stock of such series as to dividends and
upon liquidation).
If for any taxable year, the Company elects to designate as "capital gains
dividends" (as defined in Section 857 of the Code) any portion (the "Capital
Gains Amount") of the dividends (within the meaning of the Code) paid or made
available for the year to holders of all classes of shares of beneficial
interest (the "Total Dividends"), then the portion of the Capital Gains Amount
that will be allocable to the holders of shares of Preferred Stock will be the
Capital Gains Amount multiplied by a fraction, the numerator of which shall be
the total dividends (within the meaning of the Code) paid or made available to
the holders of shares of Preferred Stock for the year and the denominator of
which shall be the Total Dividends.
Redemption
If so provided in the applicable Prospectus Supplement, the Preferred Stock
will be subject to mandatory redemption or redemption at the option of the
Company, in whole or in part, in each case upon the terms, at the times and at
the redemption prices set forth in such Prospectus Supplement.
The Prospectus Supplement relating to a series of Preferred Stock that is
subject to mandatory redemption will specify the number of shares of such
Preferred Stock that will 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 all accrued and unpaid dividends thereon (which
will not, if such Preferred Stock does not have a cumulative dividend, include
any accumulation in respect of unpaid dividends for prior dividend periods) to
the date of redemption. The redemption price may be payable in cash or other
property, as specified in the applicable Prospectus Supplement. If the
redemption price for Preferred Stock of any series is payable only from the net
proceeds of the issuance of capital stock of the Company, the terms of such
Preferred Stock may provide that, if no such capital stock shall have been
issued or to the extent the net proceeds from any issuance are insufficient to
pay in full the aggregate redemption price then due, such Preferred Stock will
automatically and mandatorily be converted into the applicable capital stock of
the Company pursuant to conversion provisions specified in the applicable
Prospectus Supplement.
Notwithstanding the foregoing, unless (i) if such series of Preferred Stock
has a cumulative dividend, full cumulative dividends on all Preferred Stock of
any series shall have been or contemporaneously are declared and paid or
declared and a sum sufficient for the payment thereof set apart for payment for
all past dividend periods and the current dividend period and (ii) if such
series of Preferred Stock does not have a cumulative dividend, full dividends of
the Preferred Stock of any series have been or contemporaneously are declared
and paid or declared and a sum sufficient for the payment thereof set apart for
payment for the then current dividend period, no Preferred Stock of any series
shall be redeemed unless all outstanding Preferred Stock of such series are
simultaneously redeemed; provided, however, that the foregoing shall not prevent
the purchase or acquisition of Preferred Stock of such series to preserve the
REIT status of the Company or pursuant to a purchase or exchange offer made on
the same terms to holders of all outstanding Preferred Stock of such series. In
addition, unless (i) if such series of Preferred Stock has a cumulative
dividend, full cumulative dividends on all outstanding shares of any series of
Preferred Stock have been or contemporaneously are declared and paid or declared
and
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a sum sufficient for the payment thereof set apart for payment for all past
dividends periods and the then current dividend period, and (ii) if such series
of Preferred Stock does not have a cumulative dividend, full dividends on the
Preferred Stock of any series have been or contemporaneously are declared and
paid or declared and a sum sufficient for the payment thereof set apart for
payment for the then current dividend period, the Company will not purchase or
otherwise acquire directly or indirectly any Preferred Stock of such series
(except by conversion into or exchange for capital stock of the Company ranking
junior to the Preferred Stock of such series as to dividends and upon
liquidation); provided, however, that the foregoing will not prevent the
purchase or acquisition of Preferred Stock of such series to preserve the REIT
status of the Company or pursuant to a purchase or exchange offer made on the
same terms to holders of all outstanding Preferred Stock of such series.
If fewer than all of the outstanding shares of Preferred Stock of any series
are to be redeemed, the number of shares to be redeemed will be determined by
the Company and such shares may be redeemed pro rata from the holders of record
of such shares in proportion to the number of such shares held or for which
redemption is requested by such holder (with adjustments to avoid redemption of
fractional shares) or by lot in a manner determined by the Company.
Notice of redemption will be mailed at least 30 days but not more than 60
days before the redemption date to each holder of record of Preferred Stock of
any series to be redeemed at the address shown on the stock transfer books of
the Company. Each notice will state: (i) the redemption date; (ii) the number of
shares and series of Preferred Stock to be redeemed; (iii) the redemption price;
(iv) the place or places where certificates for such Preferred Stock are to be
surrendered for payment of the redemption price; (v) that dividends on the
shares to be redeemed will cease to accrue on such redemption date; and (vi) the
date upon which the holder's conversion rights, if any, as to such shares shall
terminate. If fewer than all of the Preferred Stock of any series are to be
redeemed, the notice mailed to each such holder thereof will also specify the
number of shares of Preferred Stock to be redeemed from each such holder. If
notice of redemption of any Preferred Stock has been given and if the funds
necessary for such redemption have been set aside by the Company in trust for
the benefit of the holders of any Preferred Stock so called for redemption, then
from and after the redemption date dividends will cease to accrue on such
Preferred Stock, and all rights of the holders of such shares will terminate,
except the right to receive the redemption price.
Liquidation Preference
Upon any voluntary or involuntary liquidation, dissolution or winding up of
the affairs of the Company, then, before any distribution or payment is made to
the holders of any Common Stock or any other class or series of capital stock of
the Company ranking junior to the Preferred Stock in the distribution of assets
upon any liquidation, dissolution or winding up of the Company, the holders of
each series of Preferred Stock shall be entitled to receive out of assets of the
Company legally available for distribution to stockholders liquidating
distributions in the amount of the liquidation preference per share (set forth
in the applicable Prospectus Supplement), plus an amount equal to all dividends
accrued and unpaid thereon (which will not include any accumulation in respect
of unpaid dividends for prior dividend periods if such Preferred Stock does not
have a cumulative dividend). After payment of the full amount of the liquidating
distributions to which they are entitled, the holders of Preferred Stock will
have no right or claim to any of the remaining assets of the Company. In the
event that, upon any such voluntary or involuntary liquidation, dissolution or
winding up, the available assets of the Company are insufficient to pay the
amount of the liquidating distributions on all outstanding Preferred Stock and
the corresponding amounts payable on all shares of other classes or series of
capital stock of the Company ranking on a parity with the Preferred Stock in the
distribution of assets, then the holders of the Preferred Stock and all other
such classes or series of capital stock shall share ratably in any such
distribution of assets in proportion to the full liquidating distributions to
which they would otherwise be respectively entitled.
If liquidating distributions shall have been made in full to all holders of
Preferred Stock, the remaining assets of the Company will be distributed among
the holders of any other classes or series of capital stock ranking junior to
the Preferred Stock upon liquidation, dissolution or winding up, accord
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ing to their respective rights and preferences and in each case according to
their respective number of shares. For such purposes, the consolidation or
merger of the Company with or into any other corporation, trust or entity, or
the sale, lease or conveyance of all or substantially all of the property or
business of the Company, will not be deemed to constitute a liquidation,
dissolution or winding up of the Company.
Voting Rights
Holders of Preferred Stock will not have any voting rights, except as set
forth below or as otherwise from time to time required by law or as indicated in
the applicable Prospectus Supplement.
Whenever dividends on any Preferred Stock shall be in arrears for six or more
consecutive quarterly periods, the holders of such Preferred Stock (voting
separately as a class with all other series of Preferred Stock upon which like
voting rights have been conferred and are exercisable) will be entitled to vote
for the election of two additional directors of the Company at a special meeting
called by the holders of record of at least ten percent (10%) of any series of
Preferred Stock so in arrears (unless such request is received less than 90 days
before the date fixed for the next annual or special meeting of the
shareholders) or at the next annual meeting of shareholders, and at each
subsequent annual meeting until (i) if such series of Preferred Stock has a
cumulative dividend, all dividends accumulated on such shares of Preferred Stock
for the past dividend periods and the then current dividend period shall have
been fully paid or declared and a sum sufficient for the payment thereof set
aside for payment or (ii) if such series of Preferred Stock do not have a
cumulative dividend, four consecutive quarterly dividends shall have been fully
paid or declared and a sum sufficient for the payment thereof set aside for
payment. In such case, the entire Board will be increased by two directors.
Unless provided otherwise for any series of Preferred Stock, so long as any
shares of Preferred Stock remain outstanding, the Company will not, without the
affirmative vote or consent of the holders of at least two-thirds of each series
of shares of Preferred Stock outstanding at the time, given in person or by
proxy, either in writing or at a meeting (such series voting separately as a
class), (i) authorize or create, or increase the authorized or issued amount of,
any class or series of capital stock ranking prior to such series of Preferred
Stock with respect to the payment of dividends or the distribution of assets
upon liquidation, dissolution or winding up or reclassify any authorized capital
stock of the Company into such shares, or create, authorize or issue any
obligation or security convertible into or evidencing the right to purchase any
such shares; or (ii) amend, alter or repeal the provisions of the Company's
Articles of Incorporation or the Designating Amendment for such series of
Preferred Stock, whether by merger, consolidation or otherwise (an "Event"), so
as to materially and adversely affect any right, preference, privilege or voting
power of such series of Preferred Stock or the holders thereof; provided,
however, with respect to the occurrence of any of the Events set forth in (ii)
above, so long as the shares of Preferred Stock remain outstanding with the
terms thereof materially unchanged, taking into account that upon the occurrence
of an Event, the Company may not be the surviving entity, the occurrence of any
such Event will not be deemed to materially and adversely affect such rights,
preferences, privileges or voting power of holders of Preferred Stock and
provided further that (x) any increase in the amount of the authorized Preferred
Stock or the creation or issuance of any other series of Preferred Stock, or (y)
any increase in the amount of authorized shares of such series or any other
series of Preferred Stock, in each case ranking on a parity with or junior to
the Preferred Stock of such series with respect to payment of dividends or the
distribution of assets upon liquidation, dissolution or winding up, will not be
deemed to materially and adversely affect such rights, preferences, privileges
or voting powers.
The foregoing voting provisions will not apply if, at or prior to the time
when the act with respect to which such vote would otherwise be required shall
be effected, all outstanding shares of Preferred Stock of such series shall have
been redeemed or called for redemption and sufficient funds shall have been
deposited in trust to effect such redemption.
Conversion Rights
The terms and conditions, if any, upon which any series of Preferred Stock is
convertible into Common Stock will be set forth in the applicable Prospectus
Supplement relating thereto. Such terms will include the number of shares of
Common Stock into which the Preferred Stock are convertible, the
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conversion price (or manner of calculation thereof), the conversion period,
provisions as to whether conversion will be at the option of the holders of the
Preferred Stock or the Company, the events requiring an adjustment of the
conversion price and provisions affecting conversion in the event of the
redemption of such series of Preferred Stock.
Restrictions on Ownership
As discussed below under "Description of Common Stock -- Restrictions on
Transfer -- Ownership Limits," for the Company to qualify as a REIT under the
Code, not more than 50% in value of its outstanding capital stock may be owned,
directly or indirectly, by five or fewer individuals (as defined in the Code to
include certain entities) during the last half of a taxable year. To assist the
Company in meeting this requirement, the Articles of Incorporation provide that
no holder of Preferred Stock may own, or be deemed to own by virtue of certain
attribution provisions of the Code, more than 5% of any class or series of
Preferred Stock and/or more than 5% of the issued and outstanding shares of
Common Stock, subject to certain exceptions specified in the Articles of
Incorporation. See "Description of Common Stock -- Restrictions on Transfer --
Ownership Limits."
Registrar and Transfer Agent
The Registrar and Transfer Agent for the Preferred Stock will be set forth in
the applicable Prospectus Supplement.
DESCRIPTION OF COMMON STOCK
General
The Company is authorized to issue 90,000,000 shares of Common Stock. The
outstanding Common Stock entitles the holder to one vote on all matters
presented to shareholders for a vote. Holders of Common Stock have no preemptive
rights. At May 31, 1996, there were 25,200,469 shares of Common Stock
outstanding.
Shares of Common Stock currently outstanding are listed for trading on the
New York Stock Exchange (the "NYSE"). The Company will apply to the NYSE to list
the additional Common Stock to be sold pursuant to any Prospectus Supplement,
and the Company anticipates that such shares will be so listed.
Subject to such preferential rights as may be granted by the Board in
connection with the future issuance of Preferred Stock, holders of Common Stock
are entitled to one vote per share on all matters to be voted on by stockholders
and are entitled to receive ratably such dividends as may be declared on the
Common Stock by the Board in its discretion from funds legally available
therefor. In the event of the liquidation, dissolution or winding up of the
Company, holders of Common Stock are entitled to share ratably in all assets
remaining after payment of all debts and other liabilities and any liquidation
preference of the holders of Preferred Stock. Holders of Common Stock have no
subscription, redemption, conversion or preemptive rights. Matters submitted for
stockholder approval generally require a majority vote of the shares present and
voting thereon.
Advance Notice of Director Nominations and New Business. The Bylaws of the
Company provide that, with respect to an annual meeting of stockholders, the
proposal of business to be considered by stockholders may be made only (i) by or
at the direction of the Board or (ii) by a stockholder who is entitled to vote
at the meeting and who has complied with the advance notice procedures set forth
in the Bylaws. In addition, with respect to any meeting of stockholders,
nominations of persons for election to the Board may be made only (i) by or at
the direction of the Board or (ii) by any stockholder of the Company who is
entitled to vote at the meeting and has complied with the advance notice
provisions set forth in the Bylaws.
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Restrictions on Transfer
Ownership Limits. The Company's Articles of Incorporation contain certain
restrictions on the number of shares of Common Stock that individual
shareholders may own. For the Company to qualify as a REIT under the Code, no
more than 50% in value of its outstanding capital stock may be owned, directly
or indirectly, by five or fewer individuals (as defined in the Code to include
certain entities) during the last half of a taxable year (other than the first
year) or during a proportionate part of a shorter taxable year. The capital
stock also must be beneficially owned by 100 or more persons during at least 335
days of a taxable year or during a proportionate part of a shorter taxable year.
Because the Company intends to maintain its qualification as a REIT, the
Company's Articles of Incorporation contain certain restrictions on the
ownership and transfer of capital stock, including Common Stock, intended to
ensure compliance with these requirements.
Subject to certain exceptions specified in the Articles of Incorporation, no
holder may own, or be deemed to own by virtue of certain attribution provisions
of the Code, more than (A) 5% of the issued and outstanding shares of Common
Stock ("Common Stock Ownership Limit") and/or (B) more than 5% of any class or
series of Preferred Stock. (This limit, in addition to the Existing Holder
Limit, the Special Shareholder Limit, and the Non U.S. Shareholder Limit, all as
defined below, are referred to collectively herein as the "Ownership Limits.")
Existing Holders, including Clark Enterprises Inc., The Equitable Life Assurance
Society of the United States, Equitable Variable Life Insurance Company, FW
REIT, L.P., The Oliver Carr Company, Oliver T. Carr, Jr., or A. James Clark, are
not subject to the Common Stock Ownership Limit, but they are subject to special
ownership limitations (the "Existing Holder Limit"). Furthermore, USRealty and
its affiliates are not subject to the Common Stock Ownership Limit, but are
subject to a special ownership limit of 48% of the outstanding shares of Common
Stock and 48% of the outstanding shares of each class or series of preferred
stock of the Company (the "Special Shareholder Limit"). Furthermore, all holders
are prohibited from acquiring any capital stock if such acquisition would cause
five beneficial owners of capital stock to beneficially own in the aggregate
more than 50% in value of the outstanding capital stock.
In addition to the above restrictions on ownership of shares of capital stock
of the Company, in order to assist the Company in qualifying as a "domestically
controlled REIT," the Articles of Incorporation contain certain provisions
preventing any Non-U.S. Shareholder, as defined below (other than USRealty and
its affiliates), from acquiring additional shares of the Company's capital stock
if, as a result of such acquisition, the Company would fail to qualify as a
"domestically controlled REIT" (computed assuming that USRealty owns the maximum
percentage of the Company's capital stock that it is permitted to own under the
Special Shareholder Limit) ("Non-U.S. Shareholder Limit"). A Non-U.S.
Shareholder is a nonresident alien individual, foreign corporation, foreign
partnership and any other foreign shareholder. For a discussion of the taxation
of a Non-U.S. Shareholder and the requirements for the Company to qualify as a
"domestically controlled REIT, see "Federal Income Tax Considerations--Taxation
of Holders of Common Stock--Taxation of Non-U.S. Shareholders." The Company is
unlikely to be able to advise a prospective Non-U.S. Shareholder that its
purchase of any shares of the Company's capital stock would not violate this
prohibition, thereby subjecting such prospective Non-U.S. Shareholder to the
adverse consequences described below under "Violation of Ownership Limitations."
Accordingly, an acquisition of the Company's capital stock would not likely be a
suitable investment for Non-U.S. Shareholders other than USRealty.
The Board may increase the Ownership Limits from time to time, but may not do
so to the extent that after giving effect to such increase five beneficial
owners of shares of capital stock could beneficially own in the aggregate more
than 49.5% of the Company's outstanding shares of capital stock. The Board, in
its sole discretion, may waive the Ownership Limits with respect to a holder if
such holder's ownership will not then or in the future jeopardize the Company's
status as a REIT.
Violation of Ownership Limits. The Articles of Incorporation provide that, if
any holder of capital stock of the Company purports to transfer shares to a
person or there is a change in the capital structure of the Company and either
the transfer or the change in capital structure would result in the Company
failing to qualify as a REIT, or such transfer or the change in capital
structure would cause the trans
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feree to hold shares in excess of the applicable Ownership Limit (including the
Non-U.S. Shareholder Limit), then the capital stock being transferred (or in the
case of an event other than a transfer, the capital stock beneficially owned)
that would cause one or more of the restrictions on ownership or transfer to be
violated will be automatically transferred to a trust for the benefit of a
designated charitable beneficiary. The purported transferee of such shares shall
have no right to receive dividends or other distributions with respect to such
shares and shall have no right to vote such shares. Any dividends or other
distributions paid to such purported transferee prior to the discovery by the
Company that the shares have been transferred to a trust shall be paid upon
demand to the trustee of the trust for the benefit of the charitable
beneficiary. The trustee of the trust will have all rights to dividends with
respect to the shares of capital stock held in trust, which rights will be
exercised for the exclusive benefit of the charitable beneficiary. Any dividends
or distributions paid over to the trustee will be held in trust for the
charitable beneficiary. The trustee shall designate a transferee of such stock
so long as such shares of stock would not violate the Ownership Limitations in
the hands of such designated transferee. Upon the sale of such shares, the
purported transferee shall receive the lesser of (A) (i) the price per share
such purported transferee paid for the capital stock in the purported transfer
that resulted in the transfer of shares of capital stock to the trust, or (ii)
if the transfer or other event that resulted in the transfer of shares of
capital stock to the trust was not a transaction in which the purported record
transferee of shares of capital stock gave full value for such shares, a price
per share equal to the market price on the date of the purported transfer or
other event that resulted in the transfer of the shares to the trust, and (B)
the price per share received by the trustee from the sale or disposition of the
shares held in the trust.
All certificates representing Common Stock will bear a legend referring to
the restrictions described above.
Every owner of more than 5% (or such lower percentage as required by the Code
or regulations thereunder) of the issued and outstanding shares of Common Stock
must file a written notice with the Company containing the information specified
in the Articles of Incorporation no later than December 31 of each year. In
addition, each shareholder shall upon demand be required to disclose to the
Company in writing such information as the Company may request in good faith in
order to determine the Company's status as a REIT.
Registrar and Transfer Agent
The Registrar and Transfer Agent for the Common Stock is Boston EquiServe.
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DESCRIPTION OF COMMON STOCK WARRANTS
The Company may issue Common Stock Warrants for the purchase of Common Stock.
Common Stock Warrants may be issued independently or together with any other
Securities offered by any Prospectus Supplement and may be attached to or
separate from such Securities. Each series of Common Stock Warrants will be
issued under a separate warrant agreement (each, a "Warrant Agreement") to be
entered into between the Company and a warrant agent specified in the applicable
Prospectus Supplement (the "Warrant Agent"). The Warrant Agent will act solely
as an agent of the Company in connection with the Common Stock Warrants of such
series and will not assume any obligation or relationship of agency or trust for
or with any holders or beneficial owners of Common Stock Warrants. The following
sets forth certain general terms and provisions of the Common Stock Warrants
offered hereby. Further terms of the Common Stock Warrants and the applicable
Warrant Agreements will be set forth in the applicable Prospectus Supplement.
The applicable Prospectus Supplement will describe the terms of the Common
Stock Warrants in respect of which this Prospectus is being delivered,
including, where applicable, the following: (1) the title of such Common Stock
Warrants; (2) the aggregate number of such Common Stock Warrants; (3) the price
or prices at which such Common Stock Warrants will be issued; (4) the
designation, number and terms of the shares of Common Stock purchasable upon
exercise of such Common Stock Warrants; (5) the designation and terms of the
other Securities offered thereby with which such Common Stock Warrants are
issued and the number of such Common Stock Warrants issued with each such
Security offered thereby; (6) the date, if any, on and after which such Common
Stock Warrants and the related Common Stock will be separately transferable; (7)
the price at which each of the shares of Common Stock purchasable upon exercise
of such Common Stock Warrants may be purchased; (8) the date on which the right
to exercise such Common Stock Warrants shall commence and the date on which such
right shall expire; (9) the minimum or maximum number of such Common Stock
Warrants which may be exercised at any one time; (10) information with respect
to book entry procedures, if any; (11) a discussion of certain federal income
tax considerations; and (12) any other terms of such Common Stock Warrants,
including terms, procedures and limitations relating to the exchange and
exercise of such Common Stock Warrants.
FEDERAL INCOME TAX CONSIDERATIONS
General
The following is a description of certain Federal income tax consequences to
the Company and the holders of Common Stock, Preferred Stock and Common Stock
Warrants of the treatment of the Company as a REIT under applicable provisions
of the Code. The following discussion, which is not exhaustive of all possible
tax considerations, 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. As used in this section, the term "Company" refers
solely to CarrAmerica Realty Corporation.
EACH PROSPECTIVE PURCHASER IS ADVISED TO CONSULT WITH HIS OR HER OWN TAX
ADVISOR REGARDING THE SPECIFIC TAX CONSEQUENCES TO HIM OR HER OF THE PURCHASE,
OWNERSHIP AND SALE OF STOCK IN AN ENTITY ELECTING TO BE TAXED AS A REIT,
INCLUDING THE FEDERAL, STATE, LOCAL, FOREIGN AND OTHER TAX CONSEQUENCES OF SUCH
PURCHASE, OWNERSHIP, SALE AND ELECTION AND OF POTENTIAL CHANGES IN APPLICABLE
TAX LAWS.
Taxation of the Company
General. The Company, which is considered a corporation for Federal income
tax purposes, has elected to be taxed as a REIT under Sections 856 through 860
of the Code effective as of its taxable year ended December 31, 1993. The
Company believes that it is organized and has operated in such a manner
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so as to qualify for taxation as a REIT under the Code, and the Company intends
to continue to operate in such a manner. No assurance, however, can be given
that the Company has operated in a manner so as to qualify as a REIT or that it
will continue to operate in such a manner in the future. Qualification and
taxation as a REIT depends upon the Company's ability to meet on a continuing
basis, through actual annual operating results, distribution levels and
diversity of stock ownership, the various qualification tests imposed under the
Code on REITs, some of which are summarized below. While the Company intends to
operate so that it qualifies as a REIT, given the highly complex nature of the
rules governing REITs, the ongoing importance of factual determinations, and the
possibility of future changes in circumstances of the Company, no assurance can
be given that the Company satisfies such tests or will continue to do so. See
"Failure to Qualify" below.
The following is a general summary of the Code provisions that govern the
Federal income tax treatment of a REIT and its shareholders. These provisions of
the Code are highly technical and complex. This summary is qualified in its
entirety by the applicable Code provisions, Treasury Regulations and
administrative and judicial interpretations thereof.
If the Company qualifies for taxation as a REIT, it generally will not be
subject to Federal corporate income taxes on net income that it distributes
currently to shareholders. However, the Company will be subject to Federal
income tax on any income that it does not distribute and will be subject to
Federal income tax in certain circumstances on certain types of income even
though that income is distributed.
Requirements for Qualification. The Code defines a REIT as a corporation,
trust or association (1) that is managed by one or more trustees or directors;
(2) the beneficial ownership of which is evidenced by transferable shares of
stock, or by transferable certificates of beneficial interest; (3) that would be
taxable as a domestic corporation, but for Sections 856 through 859 of the Code;
(4) that is neither a financial institution nor an insurance company subject to
certain provisions of the Code; (5) the beneficial ownership of which is held by
100 or more persons; (6) that during the last half of each taxable year not more
than 50% in value of the outstanding stock of which is owned, directly or
indirectly, by five or fewer individuals (as defined in the Code to include
certain entities); and (7) that meets certain other tests, described below,
regarding the nature of its income and assets. The Code provides that conditions
(l) through (4), inclusive, must be met during the entire taxable year and that
condition (5) must be met during at least 335 days of a taxable year of 12
months, or during a proportionate part of a taxable year of less than 12 months.
The Company's Articles of Incorporation contain restrictions regarding the
transfer of its capital stock that are intended to assist the Company in
continuing to satisfy the stock ownership requirements described in (5) and (6)
above. See "Description of Common Stock-Restrictions on Transfer."
Income Tests. In order to maintain qualification as a REIT, there are three
gross income requirements that must be satisfied annually. First, at least 75%
of the REIT's gross income (excluding gross income from prohibited transactions)
for each taxable year must be derived directly or indirectly from investments
relating to real property or mortgages on real property (including "rents from
real property" and, in certain circumstances, interest) or from certain types of
temporary investments. Second, at least 95% of the REIT's gross income
(excluding gross income from prohibited transactions) for each taxable year must
be derived from the same items which qualify under the 75% income test, and from
dividends, interest and gain from the sale or disposition of stock or
securities, or from any combination of the foregoing. Third, short-term gain
from the sale or other disposition of stock or securities, gain from prohibited
transactions and gain on the sale or other disposition of real property held for
less than four years (apart from involuntary conversions and sales of
foreclosure property) must represent less than 30% of the REIT's gross income
(including gross income from prohibited transactions) for each taxable year.
Rents received by the Company will qualify as "rents from real property" in
satisfying the gross income requirements for a REIT described above only if
several conditions (related to the identity of the tenant, the computation of
the rent payable, and the nature of the property leased) are met. The Company
does not anticipate receiving rents in excess of 1% of gross revenue that fail
to meet these
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conditions. In addition, for rents received to qualify as "rents from real
property," the Company generally must not operate or manage the property or
furnish or render services to tenants, other than through an "independent
contractor" from whom the Company derives no revenue. The "independent
contractor" requirement, however, does not apply to the extent the services
provided by the Company are "usually or customarily rendered" in connection with
the rental space for occupancy only and are not otherwise considered "rendered
to the occupant." The Company will provide certain services with respect to the
properties through entities that do not satisfy the "independent contractor"
requirements described above. The Company has received a ruling from the IRS
that the provision of certain services will not cause the rents received with
respect to the properties to fail to qualify as "rents from real property."
Based upon the IRS ruling and its experience in the office rental markets in
which the Company's properties are located, the Company believes that all
services provided to tenants will be considered "usually or customarily
rendered" in connection with the rental of office space for occupancy, although
there is no assurance that the IRS will not contend otherwise. If the Company
contemplates providing services, either directly, or through another entity, in
the future that reasonably might be expected not to meet the "usual or
customary" standard, it will arrange to have such services provided by an
independent contractor from which the Company will receive no income.
The Company may receive fees in consideration of the performance of
management and administrative services with respect to properties that are not
owned entirely by the Company. A portion of such management and administrative
fees (corresponding to that portion of a property owned by a third party)
generally will not qualify under the 75% or 95% gross income tests. The Company
also may receive other types of income with respect to the properties that it
owns that will not qualify for the 75% or 95% gross income tests. The Company
believes, however, that the aggregate amount of such fees and other
non-qualifying income in any taxable year will not cause the Company to exceed
the limits on non-qualifying income under the 75% and 95% gross income tests.
If the Company fails to satisfy one or both of the 75% or the 95% gross
income tests for any taxable year, it may nevertheless qualify as a REIT for
such year if it is entitled to relief under certain provisions of the Code. It
is not possible, however, to state whether in all circumstances the Company
would be entitled to the benefit of these relief provisions. Even if these
relief provisions were to apply, however, a tax would be imposed with respect to
the "excess net income"' attributable to the failure to satisfy the 75% and 95%
gross income tests.
Asset Tests. The Company, at the close of each quarter of its taxable year,
must also satisfy three tests relating to the nature of its assets: (i) at least
75% of the value of the Company's total assets must be represented by "real
estate assets," cash, cash items and government securities; (ii) not more than
25% of the Company's total assets may be represented by securities other than
those in the 75% asset class; and (iii) of the investments included in the 25%
asset class, the value of any one issuer's securities (other than an interest in
a partnership, shares of a "qualified REIT subsidiary" or another REIT, but
including any unsecured debt of Carr Realty, L.P.) owned by the Company may not
exceed 5% of the value of the Company's total assets, and the Company may not
own more than 10% of any one issuer's outstanding voting securities (other than
an interest in a partnership, shares of a "qualified REIT subsidiary" or another
REIT). By virtue of its ownership of Units, the Company will be considered to
own its pro rata share of the assets of Carr Realty, L.P., including the
securities of Carr Services, Inc., and CRESNOVA. (Carr Services, Inc., CRESNOVA
and Carr Development & Construction are referred to collectively herein as the
"Non-qualified REIT Subsidiaries.") Neither Carr Realty, L.P. nor the Company
will own more than 10% of the voting securities of any Non-qualified REIT
Subsidiary. In addition, the Company and its senior management believe that the
Company's pro rata share of the value of the securities of each of such
Non-qualified REIT Subsidiary and of any unsecured debt of Carr Realty, L.P.
owned by the Company will not exceed 5% of the total value of the Company's
assets. There can be no assurance, however, that the IRS might not contend
otherwise. Although the Company plans to take steps to ensure that it continues
to satisfy the 5% test, there can be no assurance that such steps will be
successful or will not require a reduction in the Company's overall interest in
one or more of the Non-qualified REIT Subsidiaries.
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Annual Distribution Requirements. To qualify as a REIT, the Company generally
must distribute to its shareholders at least 95% of its income each year. In
addition, the Company will be subject to tax on the undistributed amount at
regular capital gains and ordinary corporate tax rates and also may be subject
to a 4% excise tax on undistributed income in certain events.
Failure to Qualify. If the Company fails to qualify for taxation as a REIT in
any taxable year, the Company will be subject to tax (including any applicable
alternative minimum tax) on its taxable income at regular corporate rates.
Unless entitled to relief under specific statutory provisions, the Company also
will be disqualified from taxation as a REIT for the four taxable years
following the year during which qualification was lost. It is not possible to
state whether in all circumstances the Company would be entitled to such
statutory relief.
Taxation of Holders of Common Stock
Taxation of Taxable Domestic Shareholders. As long as the Company qualifies
as a REIT, distributions made to the Company's taxable domestic shareholders out
of current or accumulated earnings and profits (and not designated as capital
gain dividends) will be taken into account by them as ordinary income, and
corporate shareholders will not be eligible for the dividends received deduction
as to such amounts. For purposes of determining whether distributions on the
shares of Common Stock are out of current or accumulated earnings and profits,
the earnings and profits of the Company will be allocated first to shares of
Preferred Stock, if any, and second to the shares of Common Stock. There can be
no assurance that the Company will have sufficient earnings and profits to cover
distributions on any shares of Preferred Stock. 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
its stock. However, corporate shareholders may be required to treat up to 20% of
certain capital gain dividends as ordinary income. Distributions in excess of
current or accumulated earnings and profits will not be taxable to a shareholder
to the extent that they do not exceed the adjusted basis of the shareholder's
shares of Common Stock, but rather will reduce the adjusted basis of such shares
of Common Stock. To the extent that such distributions exceed the adjusted basis
of a shareholder's shares of Common Stock, they will be included in income as
long-term capital gain (or short-term capital gain if the shares of Common Stock
have been held for one year or less), assuming the shares of Common Stock are a
capital asset in the hands of the shareholder. In addition, any dividend
declared by the Company in October, November or December of any year payable to
a stockholder of record on a specific date in any such month shall be treated as
both paid by the Company and received by the stockholder on December 31 of such
year, provided that the dividend is actually paid by the Company during January
of the following calendar year. Stockholders may not include in their individual
income tax returns any net operating losses or capital losses of the Company.
In addition, distributions from the Company and gain from the disposition of
shares of Common Stock will not be treated as "passive activity" income and
therefore stockholders will not be able to apply losses from "passive
activities" to offset such income.
In general, a domestic shareholder will realize capital gain or loss on the
disposition of shares of Common Stock equal to the difference between (i) the
amount of cash and the fair market value of any property received on such
disposition and (ii) the shareholder's adjusted basis of such shares of Common
Stock. Such gain or loss generally will constitute long-term capital gain or
loss if the shareholder has held such shares for more than one year. Loss upon a
sale or exchange of shares of Common Stock by a shareholder who has held such
shares of Common Stock for six months or less (after applying certain holding
period rules) will be treated as a long-term capital loss to the extent of
distributions from the Company required to be treated by such shareholder as
long-term capital gain.
Backup Withholding. The Company will report to its domestic shareholders and
the IRS the amount of dividends paid during each calendar year, and the amount
of tax withheld, if any, with respect thereto. Under the backup withholding
rules, a shareholder may be subject to backup withholding at the rate of 31%
with respect to dividends paid unless such holder (a) is a corporation or comes
within certain other exempt categories and, when required, demonstrates this
fact, or (b) provides a taxpayer identification
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number and certifies as to no loss of exemption from backup withholding. Amounts
withheld as backup withholding will be creditable against the stockholder's
income tax liability. In addition, the Company may be required to withhold a
portion of capital gain distributions made to any shareholders who fail to
certify their non-foreign status to the Company. See "--Taxation of Non-U.S.
Shareholders" below. Additional issues may arise pertaining to information
reporting and backup withholding with respect to Non-U.S. Shareholders (persons
other than (i) citizens or residents of the United States, (ii) corporations,
partnerships or other entities created or organized under the laws of the United
States or any political subdivision thereof, and (iii) estates or trusts the
income of which is subject to United States Federal income taxation regardless
of its source) and Non-U.S. Shareholders should consult their tax advisors with
respect to any such information reporting and backup withholding requirements.
The Treasury Department has recently issued proposed regulations regarding
the withholding and information reporting rules discussed above. In general, the
proposed regulations do not alter the substantive withholding and information
reporting requirements but unify current certification procedures and forms and
clarify and modify reliance standards. If finalized in their current form, the
proposed regulations would generally be effective for payments made after
December 31, 1997, subject to certain transition rules.
Taxation of Tax-Exempt Shareholders. As a general rule, amounts distributed
to a tax-exempt entity do not constitute "unrelated business taxable income"
("UBTI"), and thus distributions by the Company to a stockholder that is a
tax-exempt entity should also not constitute UBTI, provided that the tax-exempt
entity has not financed the acquisition of its shares of Common Stock with
"acquisition indebtedness" within the meaning of the Code and the shares of
Common Stock is not otherwise used in an unrelated trade or business of the
tax-exempt entity. However, under the Revenue Reconciliation Act of 1993,
distributions by a REIT to a tax-exempt employee's pension trust that owns more
than 10 percent of the REIT will be treated as UBTI in an amount equal to the
percentage of gross income of the REIT that is derived from an "unrelated trade
or business" (determined as if the REIT were a pension trust) divided by the
gross income of the REIT for the year in which the dividends are paid. This rule
only applies, however, if (i) the percentage of gross income of the REIT that is
derived from an unrelated trade or business for the year in which the dividends
are paid is at least five percent, (ii) the REIT qualifies as a REIT only
because the pension trust is not treated as a single individual for purposes of
the "five-or-fewer rule" (see "--Taxation of the Company (Requirements for
Qualification)" above), and (iii) (A) one pension trust owns more than 25
percent of the value of the REIT or, (B) a group of pension trusts individually
holding more than 10 percent of the value of the REIT collectively own more than
50 percent of the value of the REIT. The Company currently does not expect that
this rule will apply.
Taxation of Non-U.S. Shareholders. The rules governing U.S. Federal income
taxation of Non-U.S. Shareholders are complex, and no attempt will be made
herein to provide more than a limited summary of such rules. Prospective
Non-U.S. Shareholders should consult with their own tax advisors to determine
the impact of U.S. Federal, state and local income tax laws with regard to an
investment in Common Stock, including any reporting requirements.
Distributions that are not attributable to gain from sales or exchanges by
the Company of U.S. real property interests and not designated by the Company as
capital gain dividends will be treated as dividends of ordinary income to the
extent that they are made out of current or accumulated earnings and profits of
the Company. Such distributions, ordinarily, will be subject to a withholding
tax equal to 30% of the gross amount of the distribution unless an applicable
tax treaty reduces that tax. Distributions in excess of current and accumulated
earnings and profits of the Company will not be taxable to a Non-U.S.
Shareholder to the extent that they do not exceed the adjusted basis of the
shareholder's Common Stock, but rather will reduce the adjusted basis of such
Common Stock. To the extent that such distributions exceed the adjusted basis of
a Non-U.S. Shareholder's Common Stock, they will give rise to tax liability if
the Non-U.S. Shareholder would otherwise be subject to tax on any gain from the
sale or disposition of his Common Stock as described below (in which case they
also may be subject to a 30% branch profits tax if the shareholder is a foreign
corporation). If it cannot be determined at the time a distribution is made
whether or not such distribution will be in excess of current or accumulated
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earnings and profits, the entire distribution will be subject to withholding at
the rate applicable to dividends. However, the Non-U.S. Shareholder may seek a
refund of such amounts from the IRS if it is subsequently determined that such
distribution was, in fact, in excess of current or accumulated earnings and
profits of the Company.
For any year in which the Company qualifies as a REIT, distributions that are
attributable to gain from sales or exchanges by the Company of U.S. real
property interests will be taxed to a Non-U.S. Shareholder under the provisions
of the Foreign Investment in Real Property Tax Act of 1980 ("FIRPTA") at the
normal capital gain rates applicable to domestic shareholders (subject to
applicable alternative minimum tax and a special alternative minimum tax in the
case of nonresident alien individuals). Also, distributions subject to FIRPTA
may be subject to a 30% branch profits tax in the hands of a corporate Non-U.S.
Shareholder not entitled to treaty relief or exemption. The Company is required
by applicable Treasury Regulations to withhold 35% of any distribution that is
or could be designated by the Company as a capital gain dividend. The amount
withheld is creditable against the Non-U.S. Shareholder's FIRPTA tax liability.
Gain recognized by a Non-U.S. Shareholder upon a sale of Common Stock
generally will not be taxed under FIRPTA if the Company is a "domestically
controlled REIT," defined generally as a REIT in which at all times during a
specified testing period less than 50% in value of the stock was held directly
or indirectly by foreign persons. Following the USRealty Transaction, USRealty,
a Luxembourg corporation, holds approximately 46.5% in value of the securities
of the Company. In the event that USRealty and other stockholders of the Company
who are Non-U.S. Shareholders own collectively 50% or more, in value, of the
outstanding stock of the Company, the Company would cease to be a "domestically
controlled REIT."
If the Company does not qualify as a "domestically controlled REIT," a
Non-U.S. Shareholder's sale of securities of the Company generally still will
not be subject to U.S. tax under FIRPTA as a sale of a U.S. real property
interest, provided that (i) the securities are "regularly traded" (as defined by
the applicable Treasury regulations) on an established securities market, and
(ii) the selling Non-U.S. Shareholder held 5% or less of the Company's
outstanding securities at all times during a specified testing period. The
Company believes the Common Stock would be considered to be "regularly traded"
for this purpose, and the Company has no actual knowledge of any Non-U.S.
Shareholder (other than USRealty) that holds in excess of 5% of the Company's
stock. In order to assist the Company in qualifying as a "domestically
controlled REIT," the Articles of Incorporation contain certain provisions
preventing any Non-U.S. Shareholder (other than USRealty and its affiliates)
from acquiring additional shares of the Company's capital stock if, as a result
of such acquisition, the Company would fail to qualify as a "domestically
controlled REIT" (computed assuming that USRealty owns the maximum percentage of
the Company's capital stock that it is permitted to own under the Special
Shareholder Limit). The Company is unlikely to be able to advise a prospective
Non-U.S. Shareholder that its purchase of any shares of the Company's capital
stock would not violate this prohibition, thereby subjecting such prospective
Non-U.S. Shareholder to the adverse consequences described under "Description of
Common Stock--Restrictions on Transfer--Violation of Ownership Limitations."
Accordingly, an acquisition of the Company's capital stock would not likely be a
suitable investment for Non-U.S. Shareholders other than USRealty.
If the gain on the sale of Common Stock were to be subject to tax under
FIRPTA, the Non-U.S. Shareholder would be subject to the same treatment as
domestic shareholders with respect to such gain (subject to applicable
alternative minimum tax and a special alternative minimum tax in the case of
nonresident alien individuals), and the purchaser of the Common Stock would be
required to withhold and remit to the IRS 10% of the purchase price.
Finally, Congress is considering legislation that could require the Company,
if it were not to qualify as a "domestically controlled REIT," to withhold and
remit to the IRS 10% of all distributions that are not treated either as
ordinary dividends or "capital gain dividends" and that are made to Non-U.S.
Shareholders who hold more than 5% of the Company's stock. The applicable
Non-U.S. Shareholder could seek a refund of such withheld amounts to the extent
the Non-U.S. Shareholder did not recognize taxable gain as a result of such
distribution.
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Taxation of Holders of Preferred Stock or Common Stock Warrants
Additional Tax Consequences for Holders of Preferred Stock or Common Stock
Warrants. If the Company offers one or more series of Preferred Stock or Common
Stock Warrants, then there may be tax consequences for the holders of such
Securities not discussed herein. For a discussion of any such additional
consequences, see the applicable Prospectus Supplement.
Other Tax Considerations
Effect of Tax Status of Carr Realty, L.P. and Other Partnerships on REIT
Qualification. The Company believes that Carr Realty, L.P., CarrAmerica Realty,
L.P., and each other partnership and limited liability company in which it holds
an interest are properly treated as partnerships for tax purposes (and not as
associations taxable as corporations). If, however, either Carr Realty, L.P. or
CarrAmerica Realty, L.P. were treated as an association taxable as a
corporation, the Company would cease to qualify as a REIT. If any of the other
partnerships were treated as an association taxable as a corporation and the
Company's interest in such partnership exceeded 10% of the partnership's voting
interests or the value of such interest exceeded 5% of the value of the
Company's assets, the Company would cease to qualify as a REIT. Furthermore, in
such a situation, any partnership treated as a corporation would be subject to
corporate income taxes, and distributions from any such partnership to the
Company would be treated as dividends, which are not taken into account in
satisfying the 75% gross income test described above and which therefore could
make it more difficult for the Company to meet the 75% asset test described
above. Finally, in such a situation, the Company would not be able to deduct its
shares of any losses generated by any such partnership in computing its taxable
income.
Tax Allocations with Respect to the Properties. Carr Realty, L.P. was formed
by way of contributions of appreciated property. When property is contributed to
a partnership in exchange for an interest in the partnership, the partnership
generally takes a carryover basis in that property for tax purposes equal to the
adjusted basis of the contributing partner in the property, rather than a basis
equal to the fair market value of the property at the time of contribution (this
difference is referred to as "Book-Tax Difference"). The Carr Realty, L.P.
partnership agreement requires allocations of income, gain, loss and deduction
with respect to the contributed Property be made in a manner consistent with the
special rules in 704(c) of the Code and the regulations thereunder, which will
tend to eliminate the Book-Tax Differences with respect to the contributed
Properties over the life of Carr Realty, L.P. However, because of certain
technical limitations, the special allocation rules of Section 704(c) may not
always entirely eliminate the Book-Tax Difference on an annual basis or with
respect to a specific taxable transaction such as a sale. Thus, the carryover
basis of the contributed Properties in the hands of Carr Realty, L.P. could
cause the Company (i) to be allocated lower amounts of depreciation and other
deductions for tax purposes than would be allocated to the Company if all
Properties were to have a tax basis equal to their fair market value at the time
the Properties were contributed to Carr Realty, L.P., and (ii) possibly to be
allocated taxable gain in the event of a sale of such contributed Properties in
excess of the economic or book income allocated to the Company as a result of
such sale.
Non-Qualified REIT Subsidiaries. The Non-qualified REIT Subsidiaries do not
qualify as REITs and thus pay Federal, state and local income taxes (including
District of Columbia franchise tax) on their net income at normal corporate
rates. To the extent the Non-qualified REIT Subsidiaries are required to pay
Federal, state and local income taxes, the cash available for distribution to
stockholders will be reduced accordingly.
State and Local Taxes; District of Columbia Unincorporated Business Tax. The
Company and its stockholders may be subject to state or local taxation in
various state or local jurisdictions, including those in which it or they
transact business or reside. The state and local tax treatment of the Company
and its stockholders may not conform to the Federal income tax consequences
discussed above. In this regard, the District of Columbia imposes an
unincorporated business income tax, at the rate of 10.25%, on the "District of
Columbia taxable income" of partnerships doing business in the District of
Columbia. Because many of the Properties owned by Carr Realty, L.P. are located
in the District of Columbia, the Company's share of the "District of Columbia
taxable income" of Carr Realty, L.P. will be subject to this tax. Carr Realty,
L.P. has taken steps to attempt to reduce the amount of income that is
considered
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"District of Columbia taxable income," but it is likely that at least some
portion of the income attributable to the Properties located in the District of
Columbia will be subject to the District of Columbia tax. To the extent Carr
Realty, L.P. is required to pay the District of Columbia unincorporated business
income tax, the cash available for distribution to the Company and, therefore,
to its stockholders as dividends will be reduced accordingly. This tax would not
apply if the Company were to own and operate its assets directly, rather than
through Carr Realty, L.P.; however, the Company's ability to eliminate Carr
Realty, L.P. and thus own directly the assets currently owned by Carr Realty,
L.P. is severely limited.
PLAN OF DISTRIBUTION
General
The Company may sell Securities in or through underwriters for public offer
and sale by them, and also may sell Securities offered hereby to investors
directly or through agents. Any such underwriter or agent involved in the offer
and sale of the Securities will be named in the applicable Prospectus
Supplement.
Underwriters may offer and sell the Securities at a fixed price or prices,
which may be changed, at prices related to the prevailing market prices at the
time of sale or at negotiated prices. The Company also may, from time to time,
authorize underwriters acting as the Company's agents to offer and sell
Securities upon terms and conditions set forth in the applicable Prospectus
Supplement. In connection with the sale of the 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 the Securities for whom they may act as agent. Underwriters may
sell Securities to or through dealers, and such dealers may receive compensation
in the form of discounts, concessions or commissions from the underwriters
and/or commissions from the purchasers for whom they may act as agent.
Any underwriting compensation paid by the Company to underwriters or agents
in connection with the offering of the 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 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 Securities may be deemed to be
underwriting discounts and commissions under the Securities Act. Underwriters,
dealers and agents may be entitled, under agreements to be 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 underwriters or other persons acting as the Company's agents to
solicit offers by certain institutions to purchase Securities from the Company
at the public offering price set forth in such Prospectus Supplement pursuant to
delayed delivery contracts ("Contracts") providing for payment and delivery on
the date or dates stated in such Prospectus Supplement. Each Contract will be
for an amount not less than, and the aggregate principal amount of Securities
sold pursuant to Contracts shall be not less nor more than, the respective
amounts stated in the applicable Prospectus Supplement. Institutions with whom
Contracts, when authorized, may be made include commercial and savings banks,
insurance companies, pension funds, investment companies, educational and
charitable institutions, and other institutions but will in all cases be subject
to the approval of the Company. Contracts will not be subject to any conditions
except (i) the purchase by an institution of the Securities covered by its
Contracts shall not at the time of delivery be prohibited under the laws of any
jurisdiction in the United States to which such institution is subject, and (ii)
if the Securities are being sold to underwriters, the Company shall have sold to
such underwriters the total principal amount of the Securities less the
principal amount thereof covered by Contracts.
Certain of the underwriters and their affiliates may be customers of, engage
in transactions with and perform services for the Company and its Subsidiaries
in the ordinary course of business.
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Participation Rights
In conjunction with the USRealty Transaction, so long as USRealty owns at
least 25% of the outstanding Common Stock of the Company on a fully diluted
basis, USRealty will be entitled (except in certain limited circumstances), upon
compliance with certain specified conditions, to a participation right to
purchase or subscribe for, either as part of such issuance or in a concurrent
issuance, a total number of shares of Common Stock or Preferred Stock, as the
case may be, equal to up to 30% (or 35% in certain circumstances) of the total
number of shares or of Common Stock or Preferred Stock, as applicable, proposed
to be issued by the Company pursuant hereto. All purchases pursuant to such
participation rights will be at the same price and on the same terms and
conditions as are applicable to other purchasers hereunder. The Company also may
permit USRealty to purchase additional shares of Common Stock if approved by the
Board.
LEGAL MATTERS
The legality of the Debt Securities, the Preferred Stock, the Common Stock
and the Common Stock Warrants offered hereby will be passed upon for the Company
by Hogan & Hartson L.L.P., Washington, D.C. Certain federal tax matters will be
passed upon for the Company by Hogan & Hartson L.L.P., Washington, D.C.
EXPERTS
The consolidated financial statements and financial statement schedule of the
Company and the combined financial statements of the Carr Group, each
incorporated herein by reference, have been incorporated in reliance upon the
reports of KPMG Peat Marwick LLP, independent certified public accountants,
incorporated by reference herein, and upon the authority of said firm as experts
in accounting and auditing.
AVAILABLE INFORMATION
The Company is subject to the informational requirements of the Securities
Exchange Act of 1934, as amended (the "Exchange Act"), and, in accordance
therewith, files reports and other information with the Securities and Exchange
Commission (the "Commission"). Such reports, proxy statements and other
information can be inspected at the Public Reference Section maintained by the
Commission at Room 1024, 450 Fifth Street, N.W., Washington, D.C. 20549 and the
following regional offices of the Commission: 500 West Madison Street, Suite
1400, Chicago, Illinois 60661-2511 and Seven World Trade Center, 13th Floor, New
York, New York 10048. Copies of such material can be obtained from the Public
Reference Section of the Commission, 450 Fifth Street, N.W., Washington, D.C.
20549, at prescribed rates. In addition, the Company's Common Stock are listed
on the New York Stock Exchange and such reports, proxy statements and other
information concerning the Company can be inspected at the offices of the New
York Stock Exchange, 20 Broad Street, New York, New York 10005.
The Company has filed with the Commission a registration statement on Form
S-3 (the "Registration Statement"), of which this Prospectus is a part, under
the Securities Act of 1933, as amended (the "Securities Act"), with respect to
the Securities offered hereby. This Prospectus does not contain all of the
information set forth in the Registration Statement, certain portions of which
have been omitted as permitted by the rules and regulations of the Commission.
Statements contained in this Prospectus as to the contents of any contract or
other documents are not necessarily complete, and in each instance, reference is
made to the copy of such contract or documents filed as an exhibit to the
Registration Statement, each such statement being qualified in all respects by
such reference and the exhibits and schedules thereto. For further information
regarding the Company and the Securities, reference is hereby made to the
Registration Statement and such exhibits and schedules which may be obtained
from the Commission at its principal office in Washington, D.C. upon payment of
the fees prescribed by the Commission.
37
<PAGE>
INCORPORATION OF CERTAIN DOCUMENTS BY REFERENCE
The documents listed below have been filed by the Company under the Exchange
Act with the Commission and are incorporated herein by reference:
1. The Company's Annual Report on Form 10-K for the year ended December 31,
1995;
2. The Company's Current Report on Form 8-K dated March 29, 1996 and filed
with the Commission on April 10, 1996 pursuant to the Exchange Act, and a Form
8-K/A related thereto and filed with the Commission on May 14, 1996, relating to
the purchase of AT&T Center located in Alameda County, California;
3. The Company's Quarterly Report on Form 10-Q for the quarter ended March
31, 1996;
4. The Company's Current Report on Form 8-K dated April 30, 1996 and filed
with the Commission on May 16, 1996 pursuant to the Exchange Act, relating to
the closing of the USRealty Transaction;
5. The Company's Current Report on Form 8-K dated May 24, 1996 and filed with
the Commission on May 24, 1996 pursuant to the Exchange Act, relating to certain
pro forma financial information; and
6. The Company's Current Report on Form 8-K dated June 26, 1996 and filed
with the Commission on June 26, 1996 pursuant to the Exchange Act, relating to
the purchase of certain properties and the presentation of certain historical
and pro forma financial information.
All documents filed subsequent to the date of this Prospectus pursuant to
Section 13(a), 13(c), 14 or 15(d) of the Exchange Act and prior to termination
of the offering of all Securities to which this Prospectus relates shall be
deemed to be incorporated by reference in this Prospectus and shall be part
hereof from the date of filing of such document.
Any statement contained herein or in a document incorporated or deemed to be
incorporated by reference herein shall be deemed to be modified or superseded
for purposes of this Prospectus to the extent that a statement contained in this
Prospectus (in the case of a statement in a previously filed document
incorporated or deemed to be incorporated by reference herein), in any
accompanying Prospectus Supplement relating to a specific offering of Securities
or in any other subsequently filed document that is also incorporated or 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 or any
accompanying Prospectus Supplement. Subject to the foregoing, all information
appearing in this Prospectus and each accompanying Prospectus Supplement is
qualified in its entirety by the information appearing in the documents
incorporated by reference.
The Company will provide without charge to each person, including any
beneficial owner, to whom a copy of this Prospectus is delivered, upon their
written or oral request, a copy of any or all of the documents incorporated
herein by reference (other than exhibits to such documents, unless such exhibits
are specifically incorporated by reference in such documents). Written requests
for such copies should be addressed to Secretary, CarrAmerica Realty
Corporation, 1700 Pennsylvania Ave., N.W., Washington, D.C. 20006, telephone
number (202) 624-7500.
38
<PAGE>
================================================================================
No dealer, salesperson or other individual has been authorized to give any
information or to make any representations other than those contained or
incorporated by reference in this Prospectus Supplement or the Prospectus in
connection with the offer made by this Prospectus Supplement and the Prospectus
and, if given or made, such information or representations must not be relied
upon as having been authorized by the Company or the Underwriters. Neither the
delivery of this Prospectus Supplement and the Prospectus nor any sale made
hereunder and thereunder shall under any circumstance create an implication that
there has been no change in the affairs of the Company since the date hereof.
This Prospectus Supplement and the Prospectus do not constitute an offer or
solicitation by anyone in any state in which such offer or solicitation is not
authorized or in which the person making such offer or solicitation is not
qualified to do so or to anyone to whom it is unlawful to make such offer or
solicitation.
--------------
TABLE OF CONTENTS
PROSPECTUS SUPPLEMENT
PAGE
----
Prospectus Supplement Summary........... S-3
The Company............................. S-7
Recent Developments..................... S-10
Use of Proceeds......................... S-15
Price Range of Common Stock and
Dividend History...................... S-16
Capitalization.......................... S-17
Pro Forma Financial Information......... S-18
Management's Discussion and Analysis of
Financial Condition and Results of
Operations............................ S-23
Properties.............................. S-28
Management.............................. S-36
Underwriting............................ S-37
Legal Matters........................... S-38
Prospectus
The Company ............................ 2
Risk Factors ........................... 3
Use of Proceeds ........................ 8
Ratios of Earnings to Fixed Charges ... 9
Description of Debt Securities ......... 10
Description of Preferred Stock ......... 21
Description of Common Stock ............ 26
Description of Common Stock Warrants .. 29
Federal Income Tax Considerations ...... 29
Plan of Distribution ................... 36
Legal Matters .......................... 37
Experts ................................ 37
Available Information .................. 37
Incorporation of Certain Documents by
Reference............................... 38
================================================================================
<PAGE>
================================================================================
8,400,000 SHARES
[LOGO]
CARRAMERICA REALTY CORPORATION
COMMON STOCK
------------------
PROSPECTUS SUPPLEMENT
------------------
MERRILL LYNCH & CO.
DEAN WITTER REYNOLDS INC.
J.P. MORGAN & CO.
PRUDENTIAL SECURITIES INCORPORATED
LEGG MASON WOOD WALKER
Incorporated
WHEAT FIRST BUTCHER SINGER
, 1996
================================================================================
<PAGE>
PART II
INFORMATION NOT REQUIRED IN PROSPECTUS
Item 14. Other Expenses of Issuance and Distribution
The following table sets forth the estimated fees and expenses payable by the
Company in connection with the issuance and distribution of the securities being
registered:
SEC Registration Fee.............. $206,897
NASD filing fee .................. 30,500
Printing and Duplicating Expenses *
Legal Fees and Expenses .......... *
Accounting Fees and Expenses .... *
Blue Sky Fees and Expenses ...... *
Miscellaneous .................... *
--------
Total........................... $ *
========
- -------------
*To be supplied by amendment
Item 15. Indemnification of Directors and Officers
The Company's officers and directors are and will be indemnified under
Maryland and Delaware law, the charter and by-laws of the Company, the
partnership agreement of Carr Realty, L.P. and the partnership agreement of
CarrAmerica Realty, L.P.
The charter and by-laws of the Company require that the Company shall, to the
fullest extent permitted by Section 2-418 of the Maryland General Corporation
Law (the "MGCL") as in effect from time to time, indemnify any person who is or
was, or is the personal representative of a deceased person who was, a director
or officer of the Company against any judgments, penalties, fines, settlements
and reasonable expenses and any other liabilities; provided, that, unless
applicable law otherwise requires, indemnification shall be contingent upon a
determination, by the Board by a majority vote of a quorum consisting of
directors not, at the time, parties to the proceeding, or, if such a quorum
cannot be obtained, then by a majority vote of a committee of the Board
consisting solely of two or more directors not, at the time, parties to such
proceeding and who were duly designated to act in the matter by a majority vote
of the full Board in which the designated directors who are parties may
participate or by special legal counsel selected by and if directed by the Board
as set forth above, that indemnification is proper in the circumstances because
such director, officer, employee, or agent has met the applicable standard of
conduct prescribed by Section 2-418(b) of the MGCL.
Under Maryland law, a corporation formed in Maryland is permitted to limit,
by provision in its charter, the liability of directors and officers so that no
director or officer of the Company shall be liable to the Company or to any
shareholder for money damages except to the extent that (i) the director or
officer actually received an improper benefit in money, property or services,
for the amount of the benefit or profit in money, property or services actually
received, or (ii) a judgment or other final adjudication adverse to the director
or officer is entered in a proceeding based on a finding in a proceeding that
the director's or officer's action was the result of active and deliberate
dishonesty and was material to the cause of action adjudicated in the
proceeding.
The partnership agreements of Carr Realty, L.P. and CarrAmerica Realty, L.P.
also provide for indemnification of the Company and their officers and directors
against any and all losses, claims, damages, liabilities, joint or several,
expenses (including legal fees and expenses), judgments, fines, settlements, and
other amounts arising from any and all claims, demands, actions, suits or
proceedings, civil, criminal, administrative or investigative, that relate to
the operations of the partnership as set forth in the partnership agreements in
which any indemnitee may be involved, or is threatened to be involved, unless it
is established that (i) the act or mission of the indemnitee was material to the
matter giving rise
II-1
<PAGE>
to the proceeding and either was committed in bad faith or was the result of
active and deliberate dishonesty, (ii) the indemnitee actually received an
improper personal benefit in money, property or services, or (iii) in the case
of a criminal proceeding, the indemnitee had cause to believe that the act or
omission was unlawful. The termination of any proceeding by judgment, order or
settlement does not create a presumption that the indemnitee did not meet the
requisite standard of conduct set forth in the respective partnership agreement
section on indemnification. The termination of any proceeding by conviction or
upon a plea of nolo contendere or its equivalent, or an entry of an order of
probation prior to judgment creates a rebuttable presumption that the indemnitee
acted in a manner contrary to that specified in the indemnification section of
the partnership agreements. Any indemnification pursuant to one of the
partnership agreements may only be made out of the assets of that respective
partnership.
Item 16. Exhibits
1.1 -- Purchase Agreement by and among CarrAmerica Realty Corporation,
CarrAmerica Realty L.P., Carr Realty L.P. and Merrill Lynch, Pierce,
Fenner & Smith Incorporated
3.1* -- Articles of Amendment and Restatement of Incorporation of the
Company, as amended
3.2* -- Amendment and Restatement of By-laws of the Company, as amended
4.1 -- Form of Senior Indenture between the Company and Trustee
4.2 -- Form of Subordinate Indenture between the Company and Trustee
5.1** -- Opinion of Hogan & Hartson L.L.P.
8.1** -- Opinion of Hogan & Hartson L.L.P. regarding certain tax matters
10.1** -- Credit Agreement between the Company and Morgan Guaranty Trust
Company of New York
12.1** -- Computation of Ratio of Earnings to Fixed Charges
23.1 -- Consent of KMPG Peat Marwick, LLP
23.2** -- Consent of Hogan & Hartson L.L.P. (included in Exhibit 5)
23.3** -- Consent of Hogan & Hartson L.L.P. (included in Exhibit 8.1)
24.1+ -- Powers of Attorney
25.1** -- Statement of Eligibility of Trustee on Form T-1
- ---------------
* Incorporated by reference to the same numbered exhibit to the Company's
Annual Report on Form 10-K for the fiscal year ended December 31, 1995.
** To be filed by amendment.
+ Previously filed.
Item 17. Undertakings
The undersigned registrant hereby undertakes:
(1) To file, during any period in which offers or sales are being made, a
post-effective amendment to this registration statement:
(i) 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.
Notwithstanding the foregoing, any increase or decrease in
volume of securities offered (if the total dollar value of
securities offered
II-2
<PAGE>
would not exceed that which was registered) and any deviation
from the low or high end of the estimated maximum offering
range may be reflected in the form of prospectus filed with the
Commission pursuant to Rule 424(b) if, in the aggregate, the
changes in volume and price represent no more than a 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) Toinclude 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 this
registration statement; provided, however, that subparagraphs
(i) and (ii) above do not apply if the registration statement
is on Form S-3, Form S-8 or Form F-3, and 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 Section 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 Offered Securities offered herein, and
the offering of such Offered 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 Offered Securities being registered which remain unsold at the termination
of the offering.
The undersigned registrant hereby undertakes that, for the purposes of
determining any liability under the Securities Act of 1933, each filing of the
registrant's annual report pursuant to Section 13(a) or Section 15(d) of the
Securities Exchange Act of 1934 that is incorporated by reference in this
registration statement shall be deemed to be a new registration statement
relating to the Offered Securities offered therein, and the offering of such
Offered Securities at that time shall be deemed to be the initial bona fide
offering thereof.
Insofar as indemnification for liabilities arising under the Securities Act
of 1933 may be permitted to directors, officers and controlling persons of the
registrant pursuant to existing provisions or otherwise, the registrant has been
advised that in the opinion of the Securities and Exchange Commission such
indemnification is against public policy as expressed in the Act and is,
therefore, unenforceable. In the event that a claim for indemnification against
such liabilities (other than the payment by the registrant of expenses incurred
or paid by a director, officer or controlling person of the registrant in the
successful defense of any action, suit or proceeding) is asserted by such
director, officer or controlling person in connection with the securities being
registered, the registrant will, unless in the opinion of its counsel the matter
has been settled by controlling precedent, submit to a court of appropriate
jurisdiction the question whether such indemnification by it is against public
policy as expressed in the Act and will be governed by the final adjudication of
such issue.
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 Washington, D.C., on June 26, 1996.
CARRAMERICA REALTY CORPORATION,
a Maryland corporation
By: /s/ Oliver T. Carr, Jr.
---------------------------------
Oliver T. Carr, Jr.
Chairman of the Board of
Directors, Chief Executive
Officer and Director
Pursuant to the requirements of the Securities Act, this Registration
Statement has been signed by the following persons in the capacities indicated
below on June 26, 1996:
Name Title
/s/Oliver T. Carr, Jr.
- --------------------- Chairman of the Board, Chief Executive Officer and
Oliver T. Carr, Jr. Director (principal executive officer)
/s/Thomas A. Carr
- --------------------- President, Chief Operating Officer and
Thomas A. Carr Director
/s/ Brian K. Fields
- --------------------- Chief Financial Officer (principal financial officer
Brian K. Fields and principal accounting officer)
- ---------------------
David Bonderman Director
*
- ---------------------
Andrew F. Brimmer Director
*
- ---------------------
Robert O. Carr Director
*
- ---------------------
A. James Clark Director
*
- ---------------------
Douglas T. Healy Director
<PAGE>
*
- ----------------------
Anthony R. Manno, Jr. Director
- ----------------------
J. Marshall Peck Director
*
- ----------------------
George R. Puskar Director
*
- ----------------------
William D. Sanders Director
*
- ----------------------
Wesley S. Williams Director
*By: /s/ Andrea F. Bradley
---------------------
Andrea F. Bradley
As Attorney-in-Fact
(See Exhibit 24.1)
II-5
<PAGE>
EXHIBIT INDEX
<TABLE>
<CAPTION>
Exhibit Sequentially
Number Description of Exhibit Numbered Page
- ------ ---------------------- -------------
<S> <C>
1.1 -- Purchase Agreement by and among CarrAmerica Realty Corporation,
CarrAmerica Realty L.P., Carr Realty L.P. and Merrill Lynch, Pierce,
Fenner & Smith Incorporated
3.1* -- Articles of Incorporation of the Company, as amended
3.2* -- Amendment and Restatement of By-laws of the Company, as amended
4.1 -- Form of Senior Indenture between the Company and the Trustee
4.2 -- Form of Subordinate Indenture between the Company and Trustee
5.1** -- Opinion of Hogan & Hartson L.L.P.
8.1** -- Opinion of Hogan & Hartson L.L.P. regarding certain tax matters
10.1** -- Credit Agreement between the Company and Morgan Guaranty Trust
Company of New York
12.1** -- Computation of Ratios of Earnings to Fixed Charges
23.1 -- Consent of KMPG Peat Marwick, LLP
23.2** -- Consent of Hogan & Hartson L.L.P. (included in Exhibit 5)
23.3** -- Consent of Hogan & Hartson L.L.P. (included in Exhibit 8.1)
24.1+ -- Powers of Attorney
25.1** -- Statement of Eligibility of Trustee on Form T-1
- --------------------
<FN>
* Incorporated by reference to the same numbered exhibit to the Company's
Annual Report on Form 10-K for the fiscal year ended December 31, 1995,
as filed with the Commission on April 1, 1996.
** To be filed by amendment.
+ Previously filed.
</FN>
</TABLE>
<PAGE>
R&W DRAFT
6/18/96
CARRAMERICA REALTY CORPORATION
(a Maryland corporation)
Common Stock, Preferred Stock, Common Stock Warrants
and Debt Securities
PURCHASE AGREEMENT
------------------
____________, 1996
MERRILL LYNCH & CO.
MERRILL LYNCH, PIERCE, FENNER & SMITH
INCORPORATED
World Financial Center
North Tower
250 Vesey Street
New York, New York 10281-1305
Ladies and Gentlemen:
CarrAmerica Realty Corporation (the "Company") may from time
to time offer in one or more series its (i) unsecured debt securities ("Debt
Securities"), (ii) preferred stock, $.01 par value ("Preferred Stock"), (iii)
common stock, $.01 par value ("Common Stock"), and (iv) warrants exercisable for
Common Stock ("Common Stock Warrants"), with an aggregate public offering price
of up to $600,000,000 (or its equivalent in another currency based on the
exchange rate at the time of sale) in amounts, at prices and on terms to be
determined at the time of offering. The Debt Securities, Preferred Stock, Common
Stock and Common Stock Warrants (collectively, the "Securities") may be offered,
separately or together, in separate series in amounts, at prices and on terms to
be set forth in one or more Prospectus Supplements as hereinafter defined. The
Common Stock Warrants will be issued pursuant to a Common Stock Warrant
Agreement (the "Warrant Agreement") between the Company and a warrant agent (the
"Warrant Agent"). The Debt Securities will be issued under one or more
indentures, as amended or supplemented (each, an "Indenture"), between the
Company and a trustee (a "Trustee"). Each series of Preferred Stock may vary as
to the specific number of shares, title, 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 certificate of
designations (each, a "Certificate of Designations") relating to such Preferred
Stock as issued from time to time. Each series of Debt Securities may vary as to
aggregate principal amount, maturity date, interest rate or formula and timing
of payments thereof, redemption or repayment provisions, conversion provisions
and any other variable terms which the Indenture contemplates may be set forth
in the Debt Securities as issued from time to time. As used herein, "the
Representatives," 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.
<PAGE>
Whenever the Company determines to make an offering of
Securities through the Representatives or through an underwriting syndicate
managed by the Representatives, 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, the Representatives
and such other underwriters, if any, selected by the Representatives as have
authorized the Representatives to enter into such Terms Agreement on their
behalf (the "Underwriters," which term shall include the Representatives 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 amount of Underwritten Securities 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
amount of Initial Underwritten Securities which each such Underwriter severally
agrees to purchase, the names of such of the Representatives 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, if any, of
the Initial Underwritten Securities, the time 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, current ratings,
designations, liquidation preferences, voting and other rights, denominations,
interest rates or formulas, interest payment dates, maturity dates and
conversion, redemption or repayment provisions applicable to the Initial
Underwritten Securities). In addition, each Terms Agreement shall specify
whether the Underwriters will be granted an option to purchase additional
Underwritten Securities to cover over-allotments, if any, and the aggregate
amount 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 the Representatives and the Company. Each offering of
Underwritten Securities through the Representatives or through an underwriting
syndicate managed by the Representatives 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 under the Securities Act of
1933, as amended (the "1933 Act"), and the offering thereof from time to time in
accordance with Rule 430A or 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 and an Indenture has
been qualified under the Trust Indenture Act of 1939, as amended (the "1939
Act"). Such registration statement and the prospectus constituting a part
thereof (including in each case the information, if any, deemed to be part
thereof pursuant to Rule 430A(b) of the 1933 Act Regulations), and each
prospectus supplement relating to the offering of Underwritten Securities
pursuant to Rule 415 of the 1933 Act Regulations (the "Prospectus Supplement"),
including all documents incorporated therein by reference, 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 collectively referred to
herein as the "Registration Statement" and the "Prospectus," respectively;
provided that if any revised Prospectus shall be provided to the Representatives
by the Company for use in connection with the offering of Underwritten
Securities which differs from the Prospectus on file at the Commission at the
time the Registration Statement becomes effective (whether or not such revised
prospectus is required to be filed by the Company pursuant to Rule 424(b) of the
1933 Act Regulations), the term "Prospectus" shall refer to each such revised
prospectus from and after the time it is first provided to the Representatives
for such use; provided, further, 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. Any registration statement
(including any supplement thereto or information which is deemed part thereof)
filed by the Company under Rule 462(b) of the 1933 Act Regulations (a "Rule
462(b) Registration Statement") shall be deemed to be part of the Registration
Statement. Any prospectus (including any amendment or supplement thereto or
information which is deemed part thereof) included in the Rule 462(b)
Registration Statement and any term sheet as contemplated by Rule 434 of the
1933 Act Regulations (a "Term Sheet") shall be deemed to be part of the
Prospectus. All references in this
2
<PAGE>
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 the filing of any document 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. For purposes of this Agreement,
all references to the Registration Statement, any preliminary prospectus,
preliminary prospectus supplement, Prospectus or Prospectus Supplement or any
Term Sheet or any amendment or supplement to the foregoing shall be deemed to
include the copy filed with the Commission pursuant to its Electronic Date
Gathering Analysis and Retrieval System.
The term "Subsidiary" means a corporation or a partnership a
majority of the outstanding voting stock, partnership or membership interests,
as the case may be, of which is owned or controlled, directly or indirectly, by
the Company, Carr Realty, L.P., a Delaware limited partnership ("Carr L.P.") or
CarrAmerica Realty, L.P., a Delaware limited partnership ("CarrAmerica L.P." and
together with Carr, L.P., the "Partnerships"), as the case may be, or by one or
more other Subsidiaries of the Company or either Partnership.
SECTION 1. Representations and Warranties of the Company and the
Partnerships.
(a) The Company and the Partnerships jointly and severally
represent and warrant to the Representatives, as of the date hereof, and to the
Representatives and each other Underwriter named in the applicable Terms
Agreement, as of the date thereof (in each case, a "Representation Date"), as
follows:
(i) The Registration Statement and the Prospectus, at
the time the Registration Statement became effective, complied, and as
of each Representation Date will comply, in all material respects with
the requirements of the 1933 Act Regulations and the 1939 Act and the
rules and regulations thereunder (the "1939 Act Regulations"). The
Registration Statement, at the time the Registration Statement became
effective, did not, and as of each Representation Date, will not,
contain an untrue statement of a material fact or omit to state a
material fact required to be stated therein or necessary to make the
statements therein not misleading. The Prospectus, as of the date
hereof does not, and as of each Representation Date and 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
Prospectus made in reliance upon and in conformity with information
furnished to the Company in writing by any Underwriter through the
Representatives expressly for use in the Registration Statement or
Prospectus or to that part of the Registration Statement which shall
constitute the Statement of Eligibility and Qualification on Form T-1
under the 1939 Act (the "Statement of Eligibility") of a Trustee under
an Indenture. If a Rule 462(b) Registration Statement is required in
connection with the offering and sale of the Securities, the Company
has complied or will comply with the requirements of Rule 111 under the
1933 Act Regulations relating to the payment of filing fees therefor.
(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
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a material fact required to be stated therein or necessary to make the
statements therein, in the 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 Prospectus, are
independent public accountants as required by the 1933 Act and the 1933
Act Regulations.
(iv) The financial statements (including the notes
thereto) included in, or incorporated by reference into, the
Registration Statement and the Prospectus present fairly the financial
position of the respective entity or entities presented therein at the
respective dates indicated and the results of their operations for the
respective periods specified; except as otherwise stated in the
Registration Statement and Prospectus, said financial statements have
been prepared in conformity with generally accepted accounting
principles applied on a consistent basis; the supporting schedules
included or incorporated by reference in the Registration Statement and
the Prospectus present fairly the information required to be stated
therein; and the Company's ratios of earnings to fixed charges (actual
and, if any, proforma) included in the Prospectus under the captions
"Ratios of Earnings to Fixed Charges" and "Selected Consolidated
Financial Data" and in Exhibit 12.1 to the Registration Statement have
been calculated in compliance with Item 503(d) of Regulation S-K of the
Commission. The financial information and data included in the
Registration Statement and the Prospectus present fairly the
information included therein and have been prepared on a basis
consistent with that of the financial statements included or
incorporated by reference in the Registration Statement and the
Prospectus and the books and records of the respective entities
presented therein. Pro forma financial information included in or
incorporated by reference in the Registration Statement and the
Prospectus has been prepared in accordance with the applicable
requirements of the 1933 Act, the 1933 Act Regulations and guidelines
of the American Institute of Certified Public Accountants with respect
to pro forma financial information and includes all adjustments
necessary to present fairly the pro forma financial position of the
Company at the respective dates indicated and the results of operations
for the respective periods specified.
(v) No stop order suspending the effectiveness of the
Registration Statement or any part thereof has been issued and no
proceeding for that purpose has been instituted or, to the knowledge of
the Company or either Partnership, threatened by the Commission or by
the state securities authority of any jurisdiction. No order preventing
or suspending the use of the Prospectus has been issued and no
proceeding for that purpose has been instituted or, to the knowledge of
the Company or either Partnership, threatened by the Commission or by
the state securities authority of any jurisdiction.
(vi) 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
in the condition, financial or otherwise, or in the earnings, assets or
business affairs of the Company, the Partnerships, and the Subsidiaries
considered as one enterprise, whether or not arising in the ordinary
course of business; (B) no material casualty loss or material
condemnation or other material adverse event with respect to any of the
interests held directly or indirectly in any of the real properties
owned, directly or indirectly, by the Company, either Partnership or
any Subsidiary (the "Properties") or any entity wholly or partially
owned by the Company, either Partnership or any Subsidiary has
occurred; (C) there have been no acquisitions or transactions entered
into by the Company, either Partnership or any Subsidiary, other than
those in the ordinary course of business, which are material with
respect to such entities or would result, upon consummation, in any
material inaccuracy in the representations contained in Section
1(a)(iv) above; (D) except for regular quarterly dividends on the
Common Stock and dividends on the Preferred Stock in amounts per share
that are consistent with past practice, there has been no dividend or
distribution of any kind declared, paid or made by the Company on any
class of its capital stock or by either of the Partnerships with
respect to its partnership interests ("Units"); and (E) with the
exception of transactions in connection with stock option and dividend
reinvestment plans, the issuance of shares of Common Stock upon the
exchange of Units and the issuance of Units in connection with the
acquisition of
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real or personal property, there has been no change in the capital
stock or in the partnership interests or membership interests, as the
case may be, of the Company, either of the Partnerships or any
Subsidiary, and no increase in the indebtedness of the Company, either
of the Partnerships, or any Subsidiary, that is material to such
entities considered as one enterprise.
(vii) The Company has been duly formed, and is validly
existing and in good standing as a corporation under the laws of
Maryland with corporate power and authority to conduct the business in
which it is engaged or proposes to engage and to own, lease and operate
its properties as described in the Prospectus and to enter into and
perform its obligations under this Agreement, the Terms Agreement, any
Warrant Agreement and any Indenture.
(viii) Each of the Partnerships and the Subsidiaries has
been duly formed, and is validly existing and in good standing as a
corporation or partnership under the laws of its jurisdiction of
organization, with partnership or corporate power and authority to
conduct the business in which it is engaged or proposes to engage and
to own, lease and operate its properties as described in the
Prospectus.
(ix) Each of the Company, the Partnerships and the
Subsidiaries is duly qualified or registered as a foreign partnership
or corporation in good standing and authorized to do business in each
jurisdiction in which such qualification is required whether by reason
of the ownership, leasing or management of property or the conduct of
business, except where the failure to so qualify would not have a
material adverse effect on the condition, financial or otherwise, or
the earnings, assets or business affairs of the Company, the
Partnerships and the Subsidiaries considered as one enterprise (a
"Material Adverse Effect").
(x) The capital stock of the Company as of the date
specified in the Prospectus is as set forth therein under
"Capitalization." All the issued and outstanding shares of capital
stock of the Company have been duly authorized and are validly issued,
fully paid and non-assessable and have been offered and sold in
compliance with all applicable laws (including, without limitation,
federal, state or foreign securities laws).
(xi) All of the issued and outstanding Units and shares
of capital stock and partnership interests, as the case may be, of each
Partnership and each Subsidiary have been validly issued and fully paid
and, other than as otherwise disclosed in the Prospectus, are owned by
the Company, one of the Partnerships or a Subsidiary, in each case free
and clear of any security interest, mortgage, pledge, lien,
encumbrance, claim or equity.
(xii) Except for transactions described in the Prospectus
and transactions in connection with stock option and dividend
reinvestment plans and exchanges of Units, there are no outstanding
securities convertible into or exchangeable for any capital stock of
the Company and no outstanding options, rights (preemptive or
otherwise) or warrants to purchase or to subscribe for such shares,
Units or other securities of the Company, the Partnerships or the
Subsidiaries.
(xiii) The applicable Underwritten Securities, if such
Underwritten Securities are Common Stock or Preferred Stock have been
duly authorized by the Company for issuance and sale to the
Underwriters pursuant to this Agreement, and, when issued and delivered
by the Company, pursuant to this Agreement and the applicable Terms
Agreement against payment of the consideration set forth in the Terms
Agreement or any Delayed Delivery Contract (as defined in Section 2
hereof), will be validly issued, fully paid and non-assessable. Upon
payment of the purchase price and delivery of such Underwritten
Securities in accordance herewith, each of the Underwriters will
receive good, valid and marketable title to such Underwritten
Securities, free and clear of all security interests, mortgages,
pledges, liens, encumbrances, claims and equities. The terms of such
applicable Underwritten Securities conform to all statements and
descriptions related thereto contained in the Prospectus. The form of
stock certificate to be used to
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<PAGE>
evidence the applicable Underwritten Securities will be in due and
proper form and will comply with all applicable legal requirements. The
issuance of such applicable Underwritten Securities is not subject to
any preemptive or other similar rights, except as described in the
Prospectus.
(xiv) The Common Stock Warrants have been duly authorized
by the Company for issuance and sale to the Underwriters pursuant to
this Agreement, and, when issued and delivered in the manner provided
for in this Agreement and any Terms Agreement and countersigned by the
Warrant Agent as provided in the Warrant Agreement, against payment of
the consideration therefor specified in the applicable Terms Agreement,
will be duly executed, countersigned, issued and delivered and will
constitute valid and legally binding obligations of the Company
entitled to the benefits provided by the Warrant Agreement under which
they are to be issued. Upon payment of the purchase price and delivery
of such Underwritten Securities in accordance herewith, each of the
Underwriters will receive good, valid and marketable title to such
Underwritten Securities, free and clear of all security interests,
mortgages, pledges, liens, encumbrances, claims and equities. The terms
of the Common Stock Warrants conform to all statements and descriptions
related thereto contained in the Prospectus. The issuance of the Common
Stock Warrants is not subject to any preemptive or other similar
rights, except as described in the Prospectus.
(xv) The applicable Underwritten Securities, if such
Underwritten Securities are Debt Securities, are in the form
contemplated by the Indenture, have been duly authorized by the Company
for issuance and sale to the Underwriters pursuant to this Agreement
and, when executed, authenticated, issued and delivered in the manner
provided for in this Agreement, any Terms Agreement and the applicable
Indenture, against payment of the consideration therefor specified in
the applicable Terms Agreement or any Delayed Delivery Contract (as
defined in Section 2 hereof), such Debt Securities will constitute
valid and legally binding obligations of the Company, entitled to the
benefits of the Indenture and such Debt Securities will be enforceable
against the Company in accordance with their terms. Upon payment of the
purchase price and delivery of such Underwritten Securities in
accordance herewith, each of the Underwriters will receive good, valid
and marketable title to such Underwritten Securities, free and clear of
all security interests, mortgages, pledges, liens, encumbrances, claims
and equities. The terms of such applicable Underwritten Securities
conform to all statements and descriptions related thereto in the
Prospectus. Such Underwritten Securities rank and will rank on a parity
with all unsecured indebtedness (other than subordinated indebtedness)
of the Company that is outstanding on the Representation Date or that
may be incurred thereafter, and senior to all subordinated indebtedness
of the Company that is outstanding on the Representation Date or that
may be incurred thereafter, except that such Underwritten Securities
will be effectively subordinated to the prior claims of each secured
mortgage lender to any specific Property which secures such lender's
mortgage.
(xvi) If applicable, the Common Stock issuable upon
conversion of any of the Debt Securities or the Preferred Stock and
upon exercise of the Common Stock Warrants will have been duly and
validly authorized and reserved for issuance upon such conversion or
exercise by all necessary action and such stock, when issued upon such
conversion or exercise, will be duly and validly issued, fully paid and
non-assessable, and the issuance of such stock upon such conversion or
exercise will not be subject to preemptive or other similar rights
except as described in the Prospectus. The Common Stock so issuable
conforms in all material respects to all statements relating thereto
contained in the Prospectus.
(xvii) The applicable Warrant Agreement, if any, will have
been duly authorized, executed and delivered by the Company prior to
the issuance of any applicable Underwritten Securities, and constitutes
a valid and legally binding agreement of the Company enforceable in
accordance with its terms; and the Warrant Agreement, if any, conforms
in all material respects to all statements relating thereto contained
in the Prospectus.
(xviii) (A) This Agreement has been duly and validly
authorized, executed and delivered by the Company and each of the
Partnerships, and, assuming due authorization, execution and delivery
by
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<PAGE>
the Representatives, is a valid and binding agreement of the Company
and each of the Partnerships, enforceable against the Company and each
of the Partnerships in accordance with its terms, and (B) at the
Representation Date, the Terms Agreement and the Delayed Delivery
Contracts (as defined in Section 2 hereof), if any, will have been duly
and validly authorized, executed and delivered by the Company, and,
assuming due authorization, execution and delivery by the
Representatives will be valid and binding agreements, enforceable in
accordance with its or their terms.
(xix) If applicable, the Indenture (A) has been duly
qualified under the 1939 Act, has been duly and validly authorized,
executed and delivered by the Company, and when executed and delivered
by the Trustee, will constitute a valid and binding obligation of the
Company, enforceable in accordance with its terms, and (B) conforms in
all material respects to the description thereof in the Prospectus.
(xx) None of the Company, the Partnerships or any
Subsidiary is in violation of its charter, by-laws, certificate of
limited partnership or partnership agreement, as the case may be, 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 or other instrument to which such entity is
a party or by which such entity may be bound, or to which any of its
property or assets is subject, which default separately or in the
aggregate would have a Material Adverse Effect.
(xxi) The issuance of the Underwritten Securities, the
execution and delivery of this Agreement, the applicable Terms
Agreement, any Warrant Agreement and any Indenture and the performance
of the obligations set forth herein or therein, and the consummation of
the transactions contemplated hereby and thereby or in the Prospectus
will not (A) result in the creation of any lien, charge or encumbrance
upon the Properties and (B) conflict with or constitute a breach or
violation by the parties thereto of, or default under, (1) any material
contract, indenture, mortgage, loan agreement, note, lease, joint
venture or partnership agreement or other instrument or agreement to
which the Company, either of the Partnerships or any Subsidiary is a
party, or by which they, any of them, any of their respective
properties or other assets or any Property (including, without
limitation, partnership and other interests in partnerships or other
entities which own direct or indirect interests therein) is or may be
bound or subject, (2) the charter, by-laws, certificate of limited
partnership, partnership agreement or other organizational document, as
the case may be, of the Company, the Partnerships or any Subsidiary or
(3) any applicable law, rule, order, administrative regulation or
administrative or court decree.
(xxii) 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 and the Partnerships,
threatened against or affecting the Company, either of the
Partnerships, any Subsidiary, any Property or any officer or director
of the foregoing that is required to be disclosed in the Registration
Statement (other than as disclosed therein), and that, if determined
adversely to the Company, the applicable Partnership, any Subsidiary,
any Property, or any such officer or director, would reasonably be
expected to result in any Material Adverse Effect, or which might
materially and adversely affect the consummation of this Agreement, the
applicable Terms Agreement, any Warrant Agreement, the Indenture, if
any, or the transactions contemplated herein and therein. There is no
pending legal or governmental proceeding to which the Company, either
of the Partnerships or any Subsidiary is a party or of which any of
their respective properties or assets or any Property (including,
without limitation, partnership and other interests in partnerships or
other entities which own direct or indirect interests therein), is the
subject, including ordinary routine litigation incidental to the
business or operations of the foregoing, that is or would reasonably be
expected to be, material to the condition, financial or otherwise, or
the earnings, assets, business affairs or business prospects of the
Company, the Partnerships and the Subsidiaries, considered as one
enterprise. There are no contracts or documents of a character which
are required to be filed as exhibits to the Registration Statement by
the 1933 Act or by the 1933 Act Regulations which have not been filed
as exhibits to the Registration Statement.
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<PAGE>
(xxiii) At all times beginning with its taxable period
ended December 31, 1993, the Company has been, and upon the sale of the
applicable Underwritten Securities, the Company will continue to be,
organized and operated in conformity with the requirements for
qualification as a real estate investment trust under the Internal
Revenue Code of 1986, as amended (the "Code"), and its proposed method
of operation will enable it to continue to meet the requirements for
taxation as a real estate investment trust under the Code.
(xxiv) None of the Company, the Partnerships or any
Subsidiary is required to be registered under the Investment Company
Act of 1940, as amended (the "1940 Act"), or is or will become a
"holding company" or a "subsidiary company" of a "registered holding
company" as defined in the Public Utility Holding Company Act of 1935,
as amended.
(xxv) The Company, the Partnerships and the other
Subsidiaries own or possess the trademarks, service marks and trade
names (collectively, "proprietary rights") that are material to the
businesses now operated or proposed to be operated by them and that are
currently employed or proposed to be employed by them in connection
with such businesses, and none of the Company, the Partnerships or any
of the Subsidiaries has received any notice or is otherwise aware of
any infringement of or conflict with asserted rights of others with
respect to any such proprietary rights.
(xxvi) All authorizations, approvals or consents of any
court or government authority or agency or other entity or person that
are necessary in connection with the offering, issuance or sale of the
Underwritten Securities hereunder by the Company have been obtained,
except such as may be required under the 1933 Act or the 1933 Act
Regulations or state securities laws with respect to the Underwritten
Securities.
(xxvii) Each of the Company, the Partnerships and the
Subsidiaries possesses such certificates, authorizations or permits
issued by the appropriate regulatory agencies or bodies necessary to
conduct the business now conducted by it, or proposed to be conducted
by it, and none of the Company, either of the Partnerships or any
Subsidiary has received any notice of proceedings relating to the
revocation or modification of any such certificate, authority or permit
which, singly or in the aggregate, if the subject of an unfavorable
decision, ruling or finding, would materially and adversely affect the
condition, financial or otherwise, or the earnings, assets, business
affairs or business prospects of the Company, the Partnerships and the
Subsidiaries considered as one enterprise.
(xxviii) No material labor dispute with the employees of the
Company, either of the Partnerships or any Subsidiary exists or, to the
knowledge of the Company or either of the Partnerships is imminent.
(xxix) Except as disclosed in the Prospectus, (A) to the
knowledge of the Company, the Environment (as defined below) at each
Property is free of any Hazardous Substance (as defined below) except
for any Hazardous Substance that would not reasonably be expected to
have any material adverse effect on the condition, financial or
otherwise, or on the earnings, assets, business affairs or business
prospects of the Property, the Company, the Partnerships and the
Subsidiaries considered as one enterprise; (B) none of the Company, the
Partnerships or any Subsidiary and, to the knowledge of the Company and
the Partnerships, no prior owner of any Property has caused or suffered
to occur any Release (as defined below) of any Hazardous Substance into
the Environment on, in, under or from any Property in violation of any
Environmental Law applicable to such Property in an amount that would
reasonably be expected to have a material adverse effect on the
condition, financial or otherwise, or on the earnings, assets, business
affairs or business prospects of any Property, the Company, the
Partnerships and the Subsidiaries considered as one enterprise and no
condition exists on, in or under any Property or, to the knowledge of
the Company or the Partnerships, any property adjacent to any Property
that could reasonably be expected to result in the occurrence of
material liabilities under, or any material violations of, any
Environmental
8
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Law (as defined below) applicable to such Property, give rise to the
imposition of any Lien (as defined below) under any Environmental Law,
or cause or constitute an environmental hazard to any property, person
or entity; (C) none of the Company, the Partnerships or any Subsidiary
is engaged in or intends to engage in any manufacturing or any other
similar operations at any Property and, to the knowledge of the Company
and the Partnerships, no prior owner of any Property engaged in any
manufacturing or any similar operations at any Property that (1)
require the use, handling, transportation, storage, treatment or
disposal of any Hazardous Substance (other than paints, stains,
cleaning solvents, insecticides, herbicides, or other substances that
are used in the ordinary course of operating any Property and in
compliance with all applicable Environmental Laws) or (2) require
permits or are otherwise regulated pursuant to any Environmental Law;
(D) none of the Company, the Partnerships or any Subsidiary and, to the
knowledge of the Company and the Partnerships, no prior owner of any
Property has received any notice of a claim under or pursuant to any
Environmental Law applicable to a Property or under common law
pertaining to Hazardous Substances on any Property or pertaining to
other property at which Hazardous Substances generated at any Property
have come to be located; (E) none of the Company, the Partnerships or
any Subsidiary and, to the best knowledge of the Company and the
Partnerships, no prior owner of any Property has received any notice
from any Governmental Authority (as defined below) claiming any
violation of any Environmental Law that is uncured or unremediated as
of the date hereof; and (F) no Property (1) is included or proposed for
inclusion on the National Priorities List issued pursuant to CERCLA (as
defined below) by the United States Environmental Protection Agency
(the "EPA") or on the Comprehensive Environmental Response,
Compensation, and Liability Information System database maintained by
the EPA as a potential CERCLA removal, remedial or response site or (2)
is included or proposed for inclusion on, any similar list of
potentially contaminated sites pursuant to any other applicable
Environmental Law nor has the Company, either of the Partnerships or
any Subsidiary received any written notice from the EPA or any other
Governmental Authority proposing the inclusion of any Property on such
list.
As used herein, "Hazardous Substance" shall include any
hazardous substance, hazardous waste, toxic or dangerous substance,
pollutant, asbestos-containing materials, PCBs, pesticides, explosives,
radioactive materials, dioxins, urea formaldehyde insulation, pollutant
or waste, including any such substance, pollutant or waste identified,
listed or regulated under any Environmental Law (including, without
limitation, materials listed in the United States Department of
Transportation Optional Hazardous Material Table, 49 C.F.R. ss.
172.101, as the same may now or hereafter be amended, or in the EPA's
List of Hazardous Substances and Reportable Quantities, 40 C.F.R. Part
3202, as the same may now or hereafter be amended); "Environment" shall
mean any surface water, drinking water, ground water, land surface,
subsurface strata, river sediment, buildings and structures;
"Environmental Law" shall mean the Comprehensive Environmental
Response, Compensation and Liability Act, as amended (42 U.S.C. ss.
9601, et seq.) ("CERCLA"), the Resource Conservation Recovery Act, as
amended (42 U.S.C. ss. 6901, et seq.), the Clean Air Act, as amended
(42 U.S.C. ss. 7401, et seq.), the Clean Water Act, as amended (33
U.S.C. ss. 1251, et seq.), the Toxic Substances Control Act, as amended
(15 U.S.C. ss. 2601, et seq.), the Toxic Substances Control Act, as
amended (29 U.S.C. ss. 651, et seq.), the Hazardous Materials
Transportation Act, as amended (49 U.S.C. ss. 1801, et seq.), together
with all rules, regulations and orders promulgated thereunder and all
other federal, state and local laws, ordinances, rules, regulations and
orders relating to the protection of the environment from environmental
effects; "Governmental Authority" shall mean any federal, state or
local governmental office, agency or authority having the duty or
authority to promulgate, implement or enforce any Environmental Law;
"Lien" shall mean, with respect to any Property, any material mortgage,
deed of trust, pledge, security interest, lien, encumbrance, penalty,
fine, charge, assessment, judgment or other liability in, on or
affecting such Property; and "Release" shall mean any spilling,
leaking, pumping, pouring, emitting, emptying, discharging, injecting,
escaping, leaching, dumping, emanating or disposing of any Hazardous
Substance into the Environment, including, without limitation, the
abandonment or discard of barrels, containers, tanks (including,
without limitation, underground storage tanks) or other receptacles
containing or previously containing any Hazardous
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Substance or any release, emission, discharge or similar term, as those
terms are defined or used in any Environmental Law.
(xxx) Each of the Company, the Partnerships and the
Subsidiaries has filed all federal, state, local and foreign income and
franchise tax returns which have been required to be filed and each
such tax return was filed on or prior to the date on which such tax
return was required to be filed or, in lieu of such timely filings,
each of the Company, the Partnerships, or the Subsidiaries, as the case
may be, has duly and timely filed such applications for extension as
may be required to effect all necessary extensions (such extensions
having been obtained and remaining in full force and effect) and has
paid all taxes shown thereon as due and payable and any other
assessment, fine or penalty levied against it, to the extent that any
of the foregoing is due and payable, except, in all cases, for any such
tax assessment, fine or penalty that is being contested in good faith
through appropriate proceedings and as to which appropriate reserves
have been established.
(xxxi) Except as disclosed in the Registration Statement,
there are no persons with registration or other similar rights to have
any securities registered pursuant to the Registration Statement or
otherwise registered by the Company under the 1933 Act.
(xxxii) Each of the Company, the Partnerships and the
Subsidiaries (or the partnership or other entity owning the Property)
has obtained title insurance insuring good, marketable and lien free
title to the Properties owned by them (other than the Properties in
which the applicable entity owns less than a majority interest),
subject only to customary easements and encumbrances and other
exceptions to title which do not materially impair the operation,
development or use thereof for the purposes intended therefor as
contemplated by the Prospectus on each of such Properties.
(xxxiii) The Common Stock will be listed on the New York
Stock Exchange on the applicable Representation Date and at the
applicable Closing Time. Unless otherwise agreed upon with reference to
Preferred Stock and Common Stock Warrants, as of the applicable
Representation Date the Preferred Stock and Common Stock Warrants will
have been approved for listing on the New York Stock Exchange upon
notice of issuance.
(xxxiv) The Preferred Stock and Debt Securities will have
an investment grade rating from one or more nationally recognized
statistical rating organizations at the Representation Date and at the
applicable Closing Time.
(xxxv) Immediately following the application of the
proceeds of the sale of the Underwritten Securities in the manner set
forth in the Prospectus, the mortgages and deeds of trust encumbering
the Properties and assets described in the Prospectus will not be
convertible and none of the partnerships or other entities owning an
interest in the Properties nor any person related to or affiliated with
such partnerships or other entities will hold a participating interest
therein and said mortgages and deeds of trust will not be
cross-defaulted or cross-collateralized with any property not owned
directly or indirectly by the Company, the Partnerships or other
subsidiaries.
(xxxvi) Each of the Company, the Partnerships and the
Subsidiaries is insured by insurers of recognized financial
responsibility against such losses and risks and in such amounts as are
prudent and customary in the businesses in which they are engaged; and
none of the Company, the Partnerships and the Subsidiaries has any
reason to believe that it will not be able to renew its existing
insurance coverage as and when such coverage expires or to obtain
similar coverage from similar insurers as may be necessary to continue
its businesses at a cost that would not have a Material Adverse Effect,
except as described in or contemplated by the Registration Statement
and the Prospectus.
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(xxxvii) The Company and the Partnership have not taken and
will not take, directly or indirectly, any action prohibited by Rule
10b-6 under the 1934 Act.
(xxxviii) The assets of the Company and the Partnership do
not constitute "plan assets" under the Employee Retirement Income
Security Act of 1974, as amended.
(b) Any certificate signed by any officer of the Company,
either of the Partnerships or of any of their respective subsidiaries and
delivered to the Representatives or to counsel for the Underwriters shall be
deemed a representation and warranty by such entity to each Underwriter as to
the matters covered thereby.
SECTION 2. Sale and Delivery to Underwriters; Closing.
(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 set forth
herein or in the applicable Terms Agreement.
(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. 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 the Representatives 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
delivery for such Option Securities. Any such time, date and place of delivery
(a "Date of Delivery") shall be determined by the Representatives, 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 the Closing Time,
unless otherwise agreed upon by the Representatives 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 the Representatives in their discretion shall make to eliminate
any sales or purchases of fractional Underwritten Securities.
(c) Payment of the purchase price for, and delivery of
certificates for, the Underwritten Securities to be purchased by the
Underwriters shall be made at the offices of Rogers & Wells, 200 Park Avenue,
New York, New York 10166, or at such other place as shall be agreed upon by the
Representatives and the Company at 10:00 A.M. on the fourth business day (or the
third business day if required under Rule 15c6-1 of the 1934 Act, or 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
the Representatives and the Company (each referred to herein as a "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 for, such Option Securities shall be made at the above-mentioned
offices of Rogers & Wells, or at such other place as shall be agreed upon by the
Representatives and the Company on each Date of Delivery as specified in the
notice from the Representatives to the Company. Payment shall be made to the
Company by certified or official bank check or checks drawn in, or by wire
transfer of, (i) New York Clearing House funds or similar next day funds, if the
Underwritten Securities are either Common Stock, Preferred Stock or Common Stock
Warrants, or (ii) Federal or similar same day funds, if the Underwritten
Securities are Debt Securities, in each case payable to the order of the
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Company against delivery to the Representatives for the respective accounts of
the Underwriters of certificates for the Underwritten Securities to be purchased
by them. Certificates for the Underwritten Securities and the Option Securities,
if any, shall be in such denominations and registered in such names as the
Representatives may request in writing at least two business days before the
Closing Time or the relevant Date of Delivery, as the case may be. It is
understood that each Underwriter has authorized the Representatives, for its
account, to accept delivery of, receipt for, and make payment of the purchase
price for, the Underwritten Securities and the Option Securities, if any, which
it has agreed to purchase. The Representatives, individually and not as
representatives of the Underwriters, may (but shall not be obligated to) make
payment of the purchase price for the Underwritten Securities or the Option
Securities, if any, to be purchased by any Underwriter whose funds have not been
received by the Closing Time or the relevant Date of Delivery, as the case may
be, but any such payment shall not relieve such Underwriter from its obligations
hereunder. The certificates for the Initial Underwritten Securities and the
Option Securities, if any, will be made available for examination and packaging
by the Representatives not later than 10:00 A.M. on the last business day prior
to the Closing Time or the relevant Date of Delivery, as the case may be, in New
York, New York.
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 the Representatives at
Closing Time, for the respective accounts of the Underwriters, a fee equal to
that percentage of the amount of Underwritten Securities for which Delayed
Delivery contracts are made at the applicable 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
applicable Closing Time, the Company will enter into Delayed Delivery Contracts
(for not less than the minimum amount 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 principal amount 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.
The Representatives shall submit to the Company, at least
three business days prior to the applicable Closing Time, the names of any
institutional investors with which it is proposed that the Company will enter
into Delayed Delivery Contracts and the amount of Underwritten Securities to be
purchased by each of them, and the Company will advise the Representatives at
least two business days prior to the applicable Closing Time, of the names of
the institutions with which the making of Delayed Delivery Contracts is approved
by the Company and the amount of Underwritten Securities to be covered by each
such Delayed Delivery Contract.
The amount of Underwritten Securities agreed to be purchased
by the several Underwriters pursuant to the applicable Terms Agreement shall be
reduced by the amount of Underwritten Securities covered by Delayed Delivery
Contracts, as to each Underwriter as set forth in a written notice delivered by
the Representatives to the Company; provided, however, that the total amount of
Underwritten Securities to be purchased by all Underwriters shall be the total
amount of Underwritten Securities covered by the applicable Terms Agreement,
less the amount of Underwritten Securities covered by Delayed Delivery
Contracts.
SECTION 3. Covenants of the Company and the Partnerships. The Company
and the Partnerships jointly and severally covenant with the Representatives and
with each Underwriter participating in the offering of Underwritten Securities,
as follows:
(a) In respect to each offering of Underwritten Securities,
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
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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, and such other information as the Representatives 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 the Representatives shall reasonably
request.
(b) If, at the time the Prospectus Supplement was filed with
the Commission pursuant to Rule 424(b) of the 1933 Act Regulations, any
information shall have been omitted therefrom in reliance upon Rule
430A of the 1933 Act Regulations, then immediately following the
execution of the Terms Agreement, the Company will prepare, and file or
transmit for filing with the Commission in accordance with such Rule
430A and Rule 424(b) of the 1933 Act Regulations, a copy of an amended
Prospectus, or, if required by such Rule 430A, a post-effective
amendment to the Registration Statement (including amended
Prospectuses), containing all information so omitted. If required, the
Company will prepare and file or transmit for filing a Rule 462(b)
Registration Statement not later than the date of execution of the
Terms Agreement. If a Rule 462(b) Registration Statement is filed, the
Company shall make payment of, or arrange for payment of, the
additional registration fee owing to the Commission required by Rule
111 of the 1933 Act Regulations.
(c) The Company will notify the Representatives 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 1933 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 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.
(d) 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 the
Representatives 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, will furnish the Representatives with copies of any such
amendment or supplement 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 the
Representatives or counsel for the Underwriters shall reasonably
object.
(e) The Company will deliver to the Representatives as soon as
available as many signed copies of the Registration Statement as
originally filed and of each amendment thereto (including exhibits
filed therewith or incorporated by reference therein and documents
incorporated by reference therein) as the Representatives may
reasonably request and will also deliver to the Representatives as many
conformed copies of the Registration Statement as originally filed and
of each amendment thereto (including documents incorporated by
reference into the Prospectus) as the Representatives may reasonably
request.
(f) 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, 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 or the
1934 Act or the respective applicable rules and regulations of the
Commission thereunder.
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(g) If any event shall occur as a result of which it is
necessary, in the reasonable opinion of counsel for the Underwriters,
to amend or supplement the Prospectus in order to make the Prospectus
not misleading in the light of the circumstances existing at the time
it is delivered to a purchaser, the Company will forthwith amend or
supplement the Prospectus (in form and substance reasonably
satisfactory to counsel for the Underwriters) so that, as so amended or
supplemented, the Prospectus 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 existing
at the time it is delivered to a purchaser, not misleading, and the
Company will furnish to the Underwriters a reasonable number of copies
of such amendment or supplement.
(h) The Company will endeavor, in cooperation with the
Underwriters, to qualify the Underwritten Securities for offering and
sale under the applicable securities laws and real estate syndication
laws of such states and other jurisdictions as the Representatives may
designate. In each jurisdiction in which the Underwritten Securities
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.
(i) 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 said Rule 158) of the Registration Statement.
(j) 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 "Use of Proceeds."
(k) The Company, during the period when the Prospectus is
required to be delivered under the 1933 Act or the 1934 Act, will file
all documents required to be filed with the Commission pursuant to
Sections 13, 14 or 15 of the 1934 Act within the time periods required
by the 1934 Act and the 1934 Act Regulations.
(l) The Company will file with the New York Stock Exchange all
documents and notices required by the New York Stock Exchange of
companies that have securities listed on such exchange and, unless
otherwise agreed upon with respect to Preferred Stock, Common Stock
Warrants or Debt Securities will use its best efforts to maintain the
listing of any Underwritten Securities listed on the New York Stock
Exchange.
(m) In respect to each offering of Debt Securities, the
Company will qualify an Indenture under the 1939 Act and will endeavor
to have a Statement of Eligibility submitted on behalf of the Trustee.
(n) The Company will take all reasonable action necessary to
enable Standard & Poor's Corporation ("S&P"), Moody's Investors
Service, Inc. ("Moody's") or any other nationally recognized
statistical rating organization to provide their respective credit
ratings of any Underwritten Securities, if applicable.
(o) During a period of 90 days from the date of any Closing
Time, the Company and the Partnerships will not, without the prior
written consent of Merrill Lynch & Co., directly or indirectly, sell,
offer to sell, transfer, hypothecate, grant any option for the sale of,
or otherwise dispose of, (i) any securities of the same class or series
or ranking on a parity with any Underwritten Securities (other than the
Underwritten Securities covered by such Prospectus Supplement) or any
security convertible into or exchangeable for such Underwritten
Securities and (ii) if such Prospectus Supplement relates to Common
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<PAGE>
Stock Warrants or Debt Securities or Preferred Stock that is
convertible into or exchangeable for Common Stock, any Common Stock or
Units or any security convertible into or exchangeable for shares of
Common Stock. This transfer restriction does not apply to (i) grants of
options, and the issuance of shares in respect of such options,
pursuant to a stock option plan; (ii) the issuance of shares pursuant
to a dividend reinvestment plan; (iii) the issuance of Common Stock on
the exchange of Units and (iv) the issuance of shares of Common Stock,
or any security convertible into or exchangeable or exercisable for
Common Stock, in connection with the acquisition of real property or an
interest or interests in real property.
(p) With respect to the Common Stock issuable on exercise of
Common Stock Warrants and the Debt Securities and Preferred Stock if
such securities are convertible into Common Stock, the Company will
reserve and keep available at all times, free of preemptive rights and
other similar rights, a sufficient number of shares of Common Stock for
the purpose of enabling the Company to satisfy any obligations to issue
such Common Stock upon exercise of the Common Stock Warrants and
conversion of the Debt Securities or Preferred Stock.
(q) With respect to the Common Stock issuable on exercise of
Common Stock Warrants and the Debt Securities and Preferred Stock if
such securities or Preferred Stock are convertible into Common Stock,
the Company will use its best efforts to list such Common Stock on the
New York Stock Exchange.
(r) The Company will use its best efforts to continue to meet
the requirements to qualify as a "real estate investment trust" under
the Code.
(s) During the period from the Closing Time until five years
after the Closing Time, the Company will deliver to the
Representatives, (i) promptly upon their becoming available, copies of
all current, regular and periodic reports of the Company mailed to its
stockholders or filed with any securities exchange or with the
Commission or any governmental authority succeeding to any of the
Commission's functions, and (ii) such other information concerning the
Company and the Partnerships as the Representatives may reasonably
request.
SECTION 4. Payment of Expenses. The Company and the Partnerships will
pay all expenses incident to the performance of their obligations under this
Agreement and 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, or reproducing, 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, including capital duties, stamp duties and stock transfer taxes,
if any, payable upon issuance of any of the Underwritten Securities, the sale of
the Underwritten Securities to the Underwriters, their transfer between the
Underwriters pursuant to an agreement between such Underwriters and the fees and
expenses of the transfer agent for the Underwritten Securities; (iv) the fees
and disbursements of the Company's and Partnerships' counsel and accountants;
(v) the qualification of the Underwritten Securities and the Common Stock
issuable upon exercise of Common Stock Warrants and conversion of Debt
Securities or Preferred Stock, if any, under securities laws and real estate
syndication laws in accordance with the provisions of Section 3(h) hereof,
including filing fees and 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, of each preliminary prospectus, and of the Prospectus and any
amendments or supplements thereto; (vii) the cost of printing, or reproducing,
and delivering to the Underwriters copies of the Blue Sky Survey; (viii) the fee
of the National Association of Securities Dealers, Inc.; (ix) the fees and
expenses incurred in connection with the listing of the Underwritten Securities
and the Common Stock issuable upon exercise of the Common Stock Warrants and
conversion of Debt Securities or Preferred Stock, if any, on the New York Stock
Exchange, any other national securities exchange or quotation system; (x) any
fees charged by nationally recognized statistical rating organizations for the
rating of the Preferred Stock or Debt Securities, if any; (xi) the printing and
delivery to the Underwriters of copies of the Indenture; (xii) the fees and
expenses of the Trustee and the Warrant Agent, including the reasonable fees and
disbursements of counsel for the
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Trustee or Warrant Agent in connection with the Warrant Agreement, Indenture and
the Underwritten Securities, (xiii) the preparation, issuance and delivery to
the Depository Trust Company for credit to the accounts of the respective
Underwriters of any global note registered in the name of Cede & Co., as nominee
for the Depository Trust Company; and (xiv) any transfer taxes imposed on the
sale of the Underwritten Securities to the several Underwriters.
If this Agreement is cancelled or terminated by the
Representatives in accordance with the provisions of Section 5, Section 9(a)(i),
Section 9(a)(iv) or Section 9(a)(v) hereof, the Company and the Partnerships
shall reimburse the Underwriters 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 obligations of
the Underwriters hereunder are subject to the accuracy, as of the date hereof
and at Closing Time, of the representations and warranties of the Company herein
contained, to the performance by the Company and the Partnerships of their
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; (ii) if the Company has elected to rely upon Rule 430A
of the 1933 Act Regulations, the public offering price of and the
interest rate on the Underwritten Securities, as the case may be, and
any price-related information previously omitted from the effective
Registration Statement pursuant to such Rule 430A shall have been
transmitted to the Commission for filing pursuant to Rule 424(b) of the
1933 Act Regulations within the prescribed time period, and prior to
the applicable Closing Time, the Company shall have provided evidence
satisfactory to the Representatives of such timely filing, or a
post-effective amendment providing such information shall have been
promptly filed and declared effective in accordance with the
requirements of Rule 430A of the 1933 Act Regulations; (iii) if
Preferred Stock or Debt Securities are being offered, the rating
assigned by any nationally recognized statistical rating organization
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 Preferred Stock or Debt
Securities on what is commonly termed a "watch list" for possible
downgrading; (iv) the rating assigned by any nationally recognized
statistical rating organization to any long-term debt securities 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 any long-term debt
securities of the Company on what is commonly termed a "watch list" for
possible downgrading; and (v) there shall not have come to the
attention of the Representatives any facts that would cause the
Representatives to believe that the Prospectus, together with the
applicable Prospectus Supplement, at the time it was required to be
delivered to purchasers of the Underwritten Securities, included an
untrue statement of a material fact or omitted to state a material fact
necessary in order to make the statements therein, in light of the
circumstances existing at such time, not misleading. If a Rule 462(b)
Registration Statement is required, such Rule 462(b) Registration
Statement shall have been transmitted to the Commission for filing and
have become effective within the prescribed time period, and, prior to
Closing Time, the Company shall have provided to the Underwriters
evidence of such filing and effectiveness in accordance with Rule
462(b) of the 1933 Act Regulations.
(b) At Closing Time the Representatives shall have received:
(1) The favorable opinion, dated as of the applicable
Closing Time, of Hogan & Hartson L.L.P., counsel for the
Company and the Partnerships in form and substance reasonably
satisfactory to counsel for the Underwriters, to the effect
that:
(i) The Company was incorporated and is
existing in good standing as of the date of the
certificate identified elsewhere in the opinion
letter under the laws
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of the State of Maryland. The Company has the
corporate power and corporate authority under its
charter and the Maryland General Corporation Law, as
amended (the "MGCL") to own, lease and operate its
properties, to conduct its business as described in
the Prospectus and to perform it obligations under
this Agreement, the applicable Terms Agreement, any
Warrant Agreement and any Indenture. The Company is
authorized to transact business as a foreign
corporation in the District of Columbia as of the
date of the certificate identified elsewhere in the
opinion letter. The Company is duly qualified as a
foreign corporation to transact business and is in
good standing in each jurisdiction in which such
qualification is required, whether by reason of the
ownership or leasing of property or the conduct of
business, except where the failure to so qualify
would not have a Material Adverse Effect.
(ii) Each of the Partnerships is a
limited partnership formed and existing in good
standing under the Delaware Revised Uniform Limited
Partnership Act, as amended (the "Delaware Act") as
of the date of the certificate identified elsewhere
in the opinion letter. Each Partnership has the
partnership power and partnership authority under its
partnership agreement and the Delaware Act to own,
lease and operate its properties, to conduct its
business as described in the Prospectus and to
perform its obligations under this Agreement and any
Terms Agreement. Each of the Partnerships is duly
qualified or registered as a foreign partnership and
is in good standing in each jurisdiction in which
such qualification or registration is required,
whether by reason of the ownership or leasing of
property or the conduct of business, except where the
failure to so qualify or register would not have a
Material Adverse Effect. The Company is the sole
general partner of each of the Partnerships.
(iii) The capital stock of the Company
is as set forth in the Prospectus under
"Capitalization." All the issued and outstanding
shares of capital stock have been duly authorized and
are validly issued, fully paid and non-assessable. To
the knowledge of such counsel, no shares of capital
stock of the Company are reserved for any purpose
except in connection with stock option and dividend
reinvestment plans and the possible issuance of
shares of Common Stock upon the exchange of Units or
as otherwise disclosed in the Registration Statement.
To the knowledge of such counsel, except as described
in the Prospectus, there are no outstanding
securities convertible into or exchangeable for any
capital stock of the Company, and no outstanding
options, rights or warrants to purchase or to
subscribe for such shares or any other securities of
the Company either of the Partnerships. No holder of
outstanding shares of Common Stock has any preemptive
rights described in Section 2-205(a) of the MGCL, or,
to the knowledge of such counsel, and except as
described in the Prospectus, any contractual right to
subscribe for or purchase any such shares.
(iv) All the issued and outstanding
Units have been duly authorized and are validly
issued, fully paid and non-assessable. No holder of
Units has any statutory preemptive right under the
Delaware Act.
(v) The applicable Underwritten
Securities, if such Underwritten Securities are
Common Stock or Preferred Stock, have been duly
authorized by the Company for issuance and sale to
the Underwriters pursuant to this Agreement, and,
when issued and delivered by the Company, pursuant to
this Agreement and the applicable Terms Agreement
against payment of the consideration set forth in the
Terms Agreement or any Delayed Delivery Contract,
will be validly issued, fully paid and non-assessable
under the MGCL. Upon payment of the purchase price
and delivery of such Underwritten Securities in
accordance herewith, each of the Underwriters will
receive
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good, valid and marketable title to such Underwritten
Securities, which to such counsel's knowledge are
free and clear of all security interests, mortgages,
pledges, liens, encumbrances, claims and equities.
The Preferred Stock, if applicable, conforms to the
provisions of the Certificate of Designation. The
terms of the applicable Underwritten Securities
conform in all material respects to all statements
and descriptions related thereto contained in the
Prospectus. The form of stock certificate to be used
to evidence the applicable Underwritten Securities is
in due and proper form and complies with all
applicable legal requirements. The issuance of the
applicable Underwritten Securities is not subject to
any preemptive or other similar rights, except as
described in the Prospectus.
(vi) The Common Stock Warrants have
been duly authorized by the Company for issuance and
sale to the Underwriters pursuant to this Agreement,
and, when issued and delivered in the manner provided
for in this Agreement and any Terms Agreement and
countersigned by the Warrant Agent as provided in the
Warrant Agreement against payment of the
consideration set forth in the Terms Agreement, will
be duly executed, countersigned, issued and delivered
and will constitute valid and legally binding
obligations of the Company entitled to the benefits
provided by the Warrant Agreement under which they
are to be issued. Upon payment of the purchase price
and delivery of such Underwritten Securities in
accordance herewith, each of the Underwriters will
receive good, valid and marketable title to such
Underwritten Securities, which to such counsel's
knowledge are free and clear of all security
interests, mortgages, pledges, liens, encumbrances,
claims and equities. The terms of the Common Stock
Warrants conform to all statements and descriptions
related thereto contained in the Prospectus. The
issuance of the Common Stock Warrants is not subject
to any preemptive or other similar rights, except as
described in the Prospectus.
(vii) The applicable Underwritten
Securities, if such Underwritten Securities are Debt
Securities, are in the form contemplated in the
Indenture, have been duly authorized by the Company
for issuance and sale to the Underwriters pursuant to
this Agreement and, when executed, authenticated,
issued and delivered in the manner provided for in
this Agreement, the applicable Terms Agreement and
the applicable Indenture, against payment of the
consideration therefor specified in the applicable
Terms Agreement or any Delayed Delivery Contract,
such Debt Securities will constitute valid and
legally binding obligations of the Company entitled
to the benefits of the Indenture and such Debt
Securities will be enforceable against the Company in
accordance with their terms, except as such
enforceability may be (1) limited by bankruptcy,
insolvency, reorganization, liquidation, moratorium
or other similar laws affecting the rights and
remedies of creditors generally and (2) subject to
general principles of equity (regardless of whether
such enforceability is considered in a proceeding in
equity or at law). Upon payment of the purchase price
and delivery of such Underwritten Securities in
accordance herewith, each of the Underwriters will
receive good, valid and marketable title to such
Underwritten Securities, which to such counsel's
knowledge are free and clear of all security
interests, mortgages, pledges, liens, encumbrances,
claims and equities. The terms of the applicable
Underwritten Securities conform in all material
respects to all statements and descriptions related
thereto in the Prospectus. Such Underwritten
Securities rank and will rank on a parity with all
unsecured indebtedness (other than subordinated
indebtedness of the Company that is outstanding on
the Representation Date or that may be incurred
thereafter) and senior to all subordinated
indebtedness of the Company that is outstanding on
the Representation Date or that may be incurred
thereafter, except that such Underwritten Securities
will be effectively subordinated to the
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prior claims of each secured mortgage lender to any
specific Property which secures such lender's
mortgage.
(viii) If applicable, the Common Stock
issuable upon exercise of the Common Stock Warrants
or upon conversion of the Debt Securities or
Preferred Stock will have been duly and validly
authorized and reserved for issuance upon such
conversion or exercise by all necessary action and
such stock, when issued upon such conversion or
exercise, will be duly and validly issued, fully paid
and non-assessable, and the issuance of such stock
upon such conversion or exercise will not be subject
to preemptive or other similar rights, except as
described in the Prospectus; the Common Stock so
issuable conforms in all material respects to all
statements relating thereto contained in the
Prospectus.
(ix) Each of this Agreement, the
applicable Terms Agreement and the Delayed Delivery
Contracts, if any, were duly and validly authorized,
executed and delivered by the Company and the Company
has the power and authority to perform its
obligations hereunder and thereunder.
(x) The applicable Warrant Agreement,
if any, has been duly authorized, executed and
delivered by the Company, and (assuming due
authorization, execution and delivery by the Warrant
Agent) constitutes a valid and legally binding
agreement of the Company, enforceable in accordance
with its terms, except as such enforceability may be
(1) limited by bankruptcy, insolvency,
reorganization, liquidation, moratorium or other
similar laws affecting the rights and remedies of
creditors generally and (2) subject to general
principles of equity (regardless of whether such
enforceability is considered in a proceeding in
equity or at law). The Warrant Agreement, if any,
conforms in all material respects to all statements
relating thereto contained in the Prospectus.
(xi) The Indenture has been duly
qualified under the 1939 Act and has been duly and
validly authorized, executed and delivered by the
Company, and, assuming due authorization, execution
and delivery by the Trustee, constitutes a valid and
binding obligation of the Company, enforceable in
accordance with its terms, except as such
enforceability may be (1) limited by bankruptcy,
insolvency, reorganization, liquidation, moratorium
or other similar laws affecting the rights and
remedies of creditors generally and (2) subject to
general principles of equity (regardless of whether
such enforceability is considered in a proceeding in
equity or at law). The Indenture conforms in all
material respects to the descriptions thereof
contained in the Prospectus.
(xii) Assuming the Company was organized
in conformity with and has satisfied the requirements
for qualification and taxation as a "real estate
investment trust" under the Code for each of its
taxable years from and including the first taxable
year for which the Company made the election to be
taxed as a "real estate investment trust", the
proposed methods of operation of the Company, the
Partnerships and the Subsidiaries as described in the
Registration Statement and the Prospectus Supplement
and as represented by the Company, the Partnerships
and the Subsidiaries will permit the Company to
continue to qualify to be taxed as a "real estate
investment trust" for its current and subsequent
taxable years.
(xiii) None of the Company, either of the
Partnerships or any Subsidiary is required to be
registered under the 1940 Act or is a "holding
company" or
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a "subsidiary company" of a "registered holding
company" as defined in the Public Utility Holding
Company Act of 1935, as amended.
(xiv) No consent, approval,
authorization of or filing with any federal or
Maryland or Delaware state governmental agency or
authority is required in connection with the
offering, issuance or sale of the applicable
Underwritten Securities to the Underwriters
hereunder, except such as may be required under the
1933 Act or the 1933 Act Regulations or the 1939 Act
or the 1939 Act Regulations or state or foreign
securities laws or real estate syndication laws, as
to which such counsel need express no opinion, or
such as have been received prior to the date of this
Agreement.
(xv) 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 filed with the
Commission, complied and will comply as to form in
all material respects with the requirements of the
1934 Act and the 1934 Act Regulations.
(xvi) The Registration Statement is
effective under the 1933 Act and, to the knowledge of
such counsel, 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.
(xvii) At the time the Registration
Statement became effective and at the Representation
Date, (A) the Registration Statement and the
Prospectus (other than the financial statements and
supporting schedules included therein, or the
Statement of Eligibility, as to which no opinion need
be rendered) complied as to form in all material
respects with the requirements of the 1933 Act and
the 1933 Act Regulations and (B) the Prospectus and
the Term Sheet, if any, complied with Rule 434(c)(2).
(xviii) The information in the Prospectus
under "The Company," "Description of Debt
Securities," "Description of Preferred Stock,"
"Description of Common Stock," "Description of Common
Stock Warrants," and the information in the
applicable Prospectus Supplement under similar
sections to the extent that it constitutes matters of
law, summaries of legal matters, documents or
proceedings, or legal conclusions, has been reviewed
by them and is correct in all material respects and
presents fairly the information required to be
disclosed therein.
(xix) There are no statutes, contracts,
indentures, mortgages, loan agreements, notes, leases
or other instruments known to such counsel which are
required to be described or referred to in the
Registration Statement or to be filed as exhibits
thereto by the 1933 Act Regulations other than those
described or referred to therein or filed as exhibits
thereto, the descriptions thereof or references
thereto are correct, and no material default exists
in the due performance or observance of any material
obligation, agreement, covenant or condition
contained in any contract, indenture, mortgage, loan
agreement, note, lease or other instrument so
described, referred to or filed.
(xx) To the knowledge of such counsel,
except as otherwise described in the Registration
Statement, there are no persons with registration or
other similar rights to have any securities
registered pursuant to the Registration Statement or
otherwise registered by the Company under the 1933
Act.
(xxi) The Company satisfies all
conditions and requirements for filing the
Registration Statement on Form S-3 under the 1933 Act
and 1933 Act Regulations.
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(2) The favorable opinion, dated as of the applicable
Closing Time, of Andrea Fish Bradley, Vice President and
General Counsel of the Company, in form and substance
satisfactory to counsel for the Underwriters, to the effect
that:
(i) Each of the Subsidiaries has been
duly formed, and is validly existing and in good
standing as a corporation, partnership or limited
liability entity under the laws of its jurisdiction
of organization, with partnership or corporate power
and authority to conduct the business in which it is
engaged or proposes to engage and to own, lease and
operate its properties as described in the
Prospectus. Each of the Subsidiaries is duly
qualified or registered as a foreign partnership,
corporation or limited liability entity in good
standing and authorized to do business in each
jurisdiction in which such qualification is required
whether by reason of the ownership or leasing of
property or the conduct of business, except where the
failure to so qualify would not have a Material
Adverse Effect.
(ii) All of the issued and outstanding
shares of capital stock and partnership interests, as
the case may be, of each Subsidiary have been validly
issued and fully paid and are owned directly or
indirectly by the Company or the Partnerships in each
case free and clear of any security interest,
mortgage, pledge, lien, encumbrance, claim or equity.
(iii) To the knowledge of such counsel,
none of the Company, either of the Partnerships or
any of the Subsidiaries is in violation of its
charter, by-laws, certificate of limited partnership
or partnership agreement, as the case may be, and
none of the Company or either of the Partnerships or
any of the Subsidiaries is in default in the
performance or observance of any obligation,
agreement, covenant or condition contained in any
contract, indenture, mortgage, loan agreement, note,
lease or other instrument to which such entity is a
party or by which such entity may be bound, or to
which any of the property or assets of such entity is
subject, except for defaults which are not material
to the Company, the Partnerships and the Subsidiaries
considered as one enterprise.
(iv) The execution and delivery of this
Agreement, the applicable Terms Agreement, any
Warrant Agreement, any Indenture and, if applicable,
the Underwritten Securities, the performance of the
obligations set forth herein or therein, and the
consummation of the transactions contemplated hereby
and thereby or in the Prospectus by the Company, the
Partnerships or any of the Subsidiaries, will not
conflict with or constitute a breach or violation by
the Company, the Partnerships or the Subsidiaries of,
or default under, or result in the creation of
imposition of any lien, charge or encumbrance upon
any Property or assets of the Company, the
Partnerships or the Subsidiaries pursuant to any
contract, indenture, mortgage, loan agreement, note,
lease, joint venture or partnership agreement or
other instrument or agreement known to such counsel
to which the Company, the Partnerships or any
Subsidiary is a party or by which they, any of them,
any of their respective properties or other assets or
any Property may be bound or subject which is
material to the Company, the Partnerships and the
Subsidiaries, considered as one enterprise; nor will
such action conflict with or constitute a breach or
violation by the Company, either of the Partnerships
or any of the Subsidiaries of, or default under, (A)
the charter, by-laws, certificate of limited
partnership or partnership agreement or the charter
documents, as the case may be, of the Company, the
Partnerships or any Subsidiary or (B) to the extent
it is material, any applicable law, rule, order,
administrative regulation or administrative or court
decree.
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<PAGE>
(v) To such counsel's knowledge, (i)
each of the Company, the Partnerships and each
Subsidiary possesses such material certificates,
authorizations or permits issued by the appropriate
state, federal or foreign regulatory agencies or
bodies necessary to conduct the business now operated
by it, or proposed to be conducted by it, and (ii)
none of the Company, the Partnerships nor any
Subsidiary has received any notice of proceedings
relating to the revocation or modification of any
such certificate, authority or permit which, singly
or in the aggregate, if the subject of an unfavorable
decision, ruling or finding, would have a Material
Adverse Effect.
(vi) There are no legal or governmental
proceedings pending or, to such counsel's knowledge
and information, threatened which are required to be
disclosed in the Registration Statement or the
Prospectus, other than those disclosed therein, and
all pending legal or governmental proceedings to
which any of the Company, the Partnerships or any
Subsidiary is a party or to which any of their
properties is subject which are not described in the
Registration Statement or the Prospectus, including
ordinary routine litigation incidental to the
business, are, considered in the aggregate, not
material.
(vii) The Company, the Partnerships,
their respective subsidiaries and joint ventures in
which such entities own an interest hold title to the
Properties and assets described in the Prospectus,
subject only to the liens and encumbrances securing
indebtedness reflected in the Prospectus and such
other liens, encumbrances and matters of record which
do not materially and adversely affect the value of
such Properties and assets considered in the
aggregate.
(3) The favorable opinion, dated as of the applicable
Closing Time, of Rogers & Wells, counsel for the Underwriters,
(A) with respect to the matters set forth in Section
5(b)(1)(i) (with respect to the first sentence only), Section
5(b)(1)(v), (with respect to the first and last sentences
only), 5(b)(1)(vi) (with respect to the first sentence only),
Section 5(b)(i)(vii) (with respect to the first clause only),
Section 5(b)(i)(viii), Sections 5(b)(i)(ix) and (x) (first
clauses only), Section 5(b)(1)(xvi) and Section 5(b)(1)(xvii)
and (B) containing a statement similar to the statement
referred to in the first paragraph of Section 5(b)(4).
(4) In giving their opinions required by subsections
(b)(1), (b)(2) and (b)(3), respectively, of this Section,
Hogan & Hartson L.L.P., Andrea Fish Bradley and Rogers & Wells
shall additionally state that such counsel has participated in
conferences with officers and other representatives of the
Company and the independent public accountants for the Company
at which the contents of the Registration Statement and the
Prospectus and related matters were discussed and in the
preparation of the Registration Statement and the Prospectus
and, on the basis of the foregoing, nothing has come to their
attention that would lead them to believe that either the
Registration Statement or any amendment thereto (excluding the
financial statements and financial schedules included or
incorporated by reference therein or the Statement of
Eligibility, 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 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 or financial schedules
included or incorporated by reference therein or the Statement
of Eligibility, as to which such counsel need express no
belief), at the Representation Date or at the 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.
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<PAGE>
In giving their opinions, Hogan & Hartson L.L.P. and
Rogers & Wells may rely upon, or assume the accuracy of, (A)
as to all matters of fact, certificates and written statements
of officers and employees of and accountants for each of the
Company, the Partnerships and the Subsidiaries and (B) as to
the qualification and good standing of each of the Company,
the Partnerships and the Subsidiaries to do business in any
jurisdiction, certificates of appropriate government officials
or opinions of counsel in such jurisdictions, and (C) as to
certain matters of Maryland law, the opinion of
_____________________.
Hogan & Hartson L.L.P. shall additionally state that
the Underwriters may rely on their opinion addressed to the
Company, and attached to the Registration Statement as Exhibit
8.1, as if such opinion were addressed to them.
(c) At Closing Time, (i) no action, suit or proceeding at law
or in equity shall be pending or, to the knowledge of the Company and
the Partnerships, threatened against the Company, the Partnerships and
any Subsidiary which would be required to be set forth in the
Prospectus other than as set forth therein; (ii) 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 Registration
Statement and the Prospectus, any material adverse change in the
condition, financial or otherwise, or in the earnings, assets, business
affairs or business prospects of the Company, the Partnerships and the
Subsidiaries, considered as one enterprise, whether or not arising in
the ordinary course of business; (iii) no proceedings shall be pending
or, to the knowledge of the Company and the Partnerships, threatened
against such entity or any Subsidiary before or by any federal, state
or other commission, board or administrative agency wherein an
unfavorable decision, ruling or finding might result in any material
adverse change in the condition, financial or otherwise, or in the
earnings, assets, business affairs or business prospects of the
Company, the Partnerships and the Subsidiaries, considered as one
enterprise, other than as set forth in the Prospectus; (iv) no stop
order suspending the effectiveness of the Registration Statement or any
part thereof shall have been issued and no proceedings for that purpose
shall have been instituted or threatened by the Commission or by the
state securities authority of any jurisdiction; and (v) the
Representatives shall have received a certificate of the President or a
Vice President of the Company and of the chief financial or chief
accounting officer of the Company, dated as of the Closing Time,
evidencing compliance with the provisions of this subsection (c) and
stating that the representations and warranties in Section 1 hereof are
true and correct with the same force and effect as though expressly
made at and as of Closing Time.
(d) At the time of the execution of the applicable Terms
Agreement, the Representatives shall have received from KPMG Peat
Marwick LLP a letter dated such date, in form and substance
satisfactory to the Representatives, to the effect that: (i) they are
independent public accountants with respect to the Company as required
by the 1933 Act and the 1933 Act Regulations; (ii) it is their opinion
that the financial statements and supporting schedules included in the
Registration Statement, or incorporated by reference therein, and
covered by their opinions therein comply as to form in all material
respects with the applicable accounting requirements of the 1933 Act
and the 1933 Act Regulations and the 1934 Act and the 1934 Act
Regulations; (iii) based upon limited procedures set forth in detail in
such letter, including a reading of the latest available interim
financial statements of the Company a reading of the minute books of
the Company inquiries of officials of the Company responsible for
financial and accounting matters and such other inquiries and
procedures as may be specified in such letter, nothing has come to
their attention which causes them to believe that (A) the unaudited
financial statements of the Company included in the Registration
Statement, or incorporated by reference therein, do not comply as to
form in all material respects with the applicable accounting
requirements of the 1933 Act and the 1933 Act Regulations and the 1934
Act and the 1934 Act Regulations, or material modifications are
required for them to be presented in conformity with generally accepted
accounting principles, (B) the operating data and balance sheet data
set forth in the Prospectus under the caption "Selected Consolidated
Financial Data" were not determined on a basis substantially consistent
with that used in determining the corresponding amounts in the audited
financial statements included or incorporated by reference in the
Registration Statement, (C) the pro forma financial
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<PAGE>
information included or incorporated by reference in the Registration
Statement was not determined on a basis substantially consistent with
that of the audited financial statements included or incorporated by
reference in the Registration Statement or did not comply as to form in
all material respects with the applicable accounting requirements of
Rule 11-02 of Regulation S-X and that the pro forma adjustments have
not been properly applied to the historical amounts in the compilations
of the statements or (D) at a specified date not more than five days
prior to the date of the applicable Terms Agreement, there has been any
change in the capital stock of the Company or any increase in the debt
of the Company or any decrease in the net assets of the Company as
compared with the amounts shown in the most recent consolidated balance
sheet of the Company included in the Registration Statement or
incorporated by reference therein, or, during the period from the date
of the most recent consolidated statement of operations included in the
Registration Statement or incorporated by reference therein to a
specified date not more than five 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 revenues, net income
or funds from operations 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; and (iv) 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 in the Registration Statement and Prospectus and which are
specified by the Representatives, and have found such amounts,
percentages and financial information to be in agreement with the
relevant accounting, financial and other records of the Company
identified in such letter.
(e) At Closing Time, the Representatives shall have received
from KPMG Peat Marwick LLP a letter, dated the 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 five days prior to
Closing Time.
(f) At Closing Time, the Underwritten Securities, if such
Underwritten Securities are Preferred Stock or Debt Securities, shall
be rated investment grade by one or more nationally recognized
statistical rating organizations and the Company shall have delivered
to the Representatives a letter, dated the Closing Time, from each such
rating organization, or other evidence satisfactory to the
Representatives, confirming that such Underwritten Securities have such
ratings; and since the date of this Agreement, there shall not have
occurred a downgrading in the rating assigned to such Underwritten
Securities or any of the Company's other debt securities by any
nationally recognized securities rating organization, and no such
securities rating organization shall have publicly announced that it
has under surveillance or review, with possible negative implications,
its rating of such Underwritten Securities or any of the Company's
other debt securities.
(g) At Closing Time and at each Date of Delivery, if any,
counsel for the Underwriters shall have been furnished with such
documents and opinions as they may require for the purpose of enabling
them to pass upon the issuance and sale of the applicable Underwritten
Securities as contemplated herein, 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 applicable
Underwritten Securities as herein contemplated shall be reasonably
satisfactory in form and substance to the Representatives and counsel
for the Underwriters.
(h) At Closing Time, the Representatives shall have received a
letter agreement from Security Capital U.S. Realty [and from each
director and executive officer] of the Company, wherein Security
Capital U.S. Realty [and each such director or executive officer] shall
agree that during the period of [90] days from the date of any
Prospectus Supplement they and their affiliates will not, without the
prior written consent of Merrill Lynch and the Company (which consent,
in the case of the Company, will be subject to the approval of the
Company's unaffiliated directors), directly or indirectly, sell, offer
to sell, grant any option for the sale of, enter into any agreement to
sell, or otherwise dispose of, (i) any securities of the
24
<PAGE>
same class or series or ranking on a parity with any Underwritten
Securities or any security convertible into or exchangeable for shares
of such Underwritten Securities, and (ii) if such Prospectus Supplement
relates to Common Stock Warrants or Debt Securities or Preferred Stock
that is convertible into or exchangeable for Common Stock, any Common
Stock or Units or any security convertible into or exchangeable for
shares of Common Stock. Such transfer restrictions do not apply to
transfers to members of the family of such director or executive
officer (or an entity for their benefit), or to the granting of a bona
fide security interest to a secured party. Any transferees of such
shares, Units or other securities will be likewise prohibited from
making any transfer of shares, Units or other securities.
(i) In the event that the Underwriters exercise their option
provided 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, at the relevant Date of Delivery, the Representatives
shall have received:
(1) A certificate, dated such Date of Delivery, of
the President or a Vice President of the Company and of the
chief financial or chief accounting officer of the Company
confirming that their respective certificates delivered at
Closing Time pursuant to Section 5(c) hereof remain true and
correct as of such Date of Delivery.
(2) The favorable opinion of Hogan & Hartson L.L.P.
and Andrea Fish Bradley in form and substance satisfactory to
counsel for the Underwriters, dated such Date of Delivery,
relating to the Option Securities to be purchased on such Date
of Delivery and otherwise to the same effect as the opinions
required by Sections 5(b)(1) and (2) hereof (includinmg the
statement of belief required by Section 5(b)(4) hereof.)
(3) The favorable opinion of Rogers & Wells, counsel
for the Underwriters, dated such Date of Delivery, relating to
the Option Securities to be purchased on such Date of Delivery
and otherwise to the same effect as the opinion required by
Section 5(b)(3) hereof.
(4) A letter from KPMG Peat Marwick, in form and
substance satisfactory to the Representatives and dated such
Date of Delivery, substantially the same in form and substance
as the letter furnished to the Representatives pursuant to
Section 5(e) hereof, except that the "specified date" in the
letter furnished pursuant to this Section 5(i)(4) shall be a
date not more than five 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, this Agreement may be terminated
by the Representatives by notice to the Company at any time at or prior to
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) Each of the Company and the Partnerships agrees jointly
and severally 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:
(i) against any and all loss, liability, claim, damage
and expense whatsoever, as incurred, arising out of any untrue
statement or alleged untrue statement of a material fact contained in
the Registration Statement (or any amendment thereto), 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 contained in any
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<PAGE>
preliminary prospectus, Prospectus, preliminary prospectus supplement
or Prospectus Supplement (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; 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 Merrill Lynch
expressly for use under the caption "Plan of Distribution" or
"Underwriting" in the Registration Statement (or any amendment thereto)
or any preliminary prospectus or the Prospectus (or any amendment or
supplement thereto); and provided further that the Company shall not be
required under this subsection (i) to indemnify any Underwriter with
respect to any preliminary prospectus or preliminary prospectus
supplement to the extent that any loss, claim, damage or expense of
such Underwriter results solely from an untrue statement of a material
fact contained in, or the omission of a material fact from, such
preliminary prospectus or preliminary prospectus supplement which
untrue statement or omission was corrected in the Prospectus or
Prospectus Supplement, if the Company shall sustain the burden of
proving that such Underwriter sold Underwritten Securities to a person
alleging such loss, liability, claim, damage or expense without sending
or giving, at or prior to the written confirmation of such sale, a copy
of the Prospectus or Prospectus Supplement (or of the Prospectus or
Prospectus Supplement as then amended or supplemented) if the Company
had previously furnished copies thereof to such Underwriter;
(ii) against any and all loss, liability, claim, damage
and expense whatsoever, as incurred, to the extent of the aggregate
amount paid in settlement of any litigation, or any investigation or
proceeding by any governmental agency or body, commenced or threatened,
or of any claim whatsoever for which indemnification is provided under
subsection (i) above if such settlement is effected with the written
consent of the indemnifying party; and
(iii) against any and all expense whatsoever, as incurred
(including the fees and disbursements of counsel chosen by the
Underwriters), reasonably incurred in investigating, preparing or
defending against any litigation, or any investigation or proceeding by
any governmental agency or body, commenced or threatened, or any claim
whatsoever for which indemnification is provided under subsection (i)
above, to the extent that any such expense is not paid under (i) or
(ii) above.
(b) Each Underwriter severally agrees to indemnify and hold
harmless the Company and each of the Partnerships and each person, if any, who
controls the Company and the Partnerships within the meaning of Section 15 of
the 1933 Act, against any and all loss, liability, claim, damage and expense
described in the indemnity contained in subsection (a) of this Section, as
incurred, 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, preliminary prospectus
Supplement or the Prospectus or Prospectus Supplement (or any amendment or
supplement thereto) in reliance upon and in conformity with written information
furnished to the Company by such Underwriter through Merrill Lynch expressly for
use under the caption "Plan of Distribution" or "Underwriting" in the
Registration Statement (or any amendment thereto) or such preliminary
prospectus, preliminary prospectus supplement or the Prospectus or Prospectus
Supplement (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 any such action. If it so elects within a reasonable time after
receipt of such notice, an indemnifying party, jointly with any other
indemnifying parties receiving such notice, may assume the defense of such
action with counsel chosen by it and reasonably approved by the indemnified
parties defendant in such action, unless such indemnified parties reasonably
object to such assumption on the ground that there may be legal defenses
26
<PAGE>
available to them which are different from or in addition to those available to
such indemnifying party. If an indemnifying party assumes the defense of such
action, the indemnifying parties shall not be liable for any fees and expenses
of counsel for the indemnified parties incurred thereafter in connection with
such action. In no event shall the indemnifying parties be liable for fees and
expenses of more than one counsel (in addition to any local counsel) separate
from their own counsel for all indemnified parties in connection with any one
action or separate but similar or related actions in the same jurisdiction
arising out of the same general allegations or circumstances.
SECTION 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
Partnerships on the one hand and the Underwriters on the other hand 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 the Partnerships, on the
one hand, and one or more of the Underwriters, on the other hand, 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 Prospectus in respect of such
offering bears to the initial public offering price appearing thereon and the
Company and the Partnerships are 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, 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 and the Partnerships within the meaning of Section 15
of the 1933 Act shall have the same rights to contribution as the Company and
the Partnerships.
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 the
officers of the Company or the Partnerships submitted pursuant hereto, shall
remain operative and in full force and effect, regardless of any termination of
the applicable Terms Agreement, or any investigation made by or on behalf of any
Underwriter or controlling person, or by or on behalf of the Company or the
Partnerships and shall survive delivery of the Underwritten Securities to the
Underwriters.
SECTION 9. Termination of Agreement.
(a) The Representatives may terminate the applicable Terms
Agreement, by notice to the Company and the Partnerships, at any time at or
prior to 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, assets, business affairs or business prospects of
the Company, the Partnerships and the 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 internationally or any outbreak of hostilities or
escalation of existing hostilities or other calamity or crisis the effect of
which on the financial markets of the United States or internationally is such
as to make it, in the judgment of the Representatives, impracticable to market
the Underwritten Securities or to enforce contracts for the sale of the
Underwritten Securities; or (iii) if trading in the Common Stock has been
suspended by the Commission 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 either Federal, New York or Maryland
27
<PAGE>
authorities; (iv) if Preferred Stock or Debt Securities are offered and the
rating assigned by any nationally recognized statistical rating organization to
any preferred shares or debt securities 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 shares or debt securities of the Company on what is commonly termed a
"watch list" for possible downgrading; or (v) if the rating assigned by any
nationally recognized statistical rating organization to any long-term debt
securities 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 long-term debt securities of the
Company on what is commonly termed a "watch list" for possible downgrading. As
used in this Section 9(a), the term "Prospectus" means the Prospectus in the
form first used to confirm sales of the Underwritten Securities.
(b) In the event of any such termination, in respect to such
terminated Terms Agreement, (x) the covenants set forth in Section 3 with
respect to any offering of 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(i) 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 Closing Time to purchase the Underwritten
Securities which it or they are obligated to purchase under the applicable Terms
Agreement (the "Defaulted Securities"), the Representatives shall have the
right, within 24 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, the Representatives shall not
have completed such arrangements within such 24-hour period, then:
(a) if the number of Defaulted Securities does not exceed 10%
of the Underwritten Securities to be purchased pursuant to such Terms
Agreement, each of the non-defaulting Underwriters named in such Terms
Agreement shall be obligated, severally and not jointly, 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 number of Defaulted Securities exceeds 10% of the
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, each of the Representatives or
the Company shall have the right to postpone 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 telecommunication. Notices to the
Underwriters shall be directed to the Representatives at Merrill Lynch & Co.,
Merrill Lynch, Pierce Fenner & Smith Incorporated, Merrill Lynch World
Headquarters, North Tower, World Financial Center, New York, N.Y. 10281-1201,
attention of Michael F. Profenius; notices to the Company shall be directed to
1700 Pennsylvania Avenue, N.W., Washington, D.C. 20006, attention of Thomas A.
Carr.
28
<PAGE>
SECTION 12. Parties. This Agreement and the applicable Terms Agreement
shall each inure to the benefit of and be binding upon the parties hereto 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 the applicable 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 Terms
Agreement shall be governed by and construed in accordance with the laws of the
State of New York applicable to agreements made and to be performed in said
State. Specified times of day refer to New York City time.
29
<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
among the Underwriters and the Company in accordance with its terms.
Very truly yours,
CARRAMERICA REALTY CORPORATION
By:
---------------------------------------
Name:
Title:
CARRAMERICA REALTY, L.P.
By: CarrAmerica Realty Corporation, its
General Partner
By:
---------------------------------------
Name:
Title:
CARRAMERICA L.P.
By: CarrAmerica Realty Corporation, its
General Partner
By:
---------------------------------------
Name:
Title:
CONFIRMED AND ACCEPTED,
as of the date first above written:
MERRILL LYNCH, PIERCE, FENNER & SMITH
INCORPORATED
By:
------------------------------------
Name:
Title:
30
<PAGE>
Exhibit A
CARRAMERICA REALTY CORPORATION
(a Maryland Corporation)
[Number and Title of Securities]
TERMS AGREEMENT
Dated: [________], 199[__]
To: CarrAmerica Realty Corporation
1700 Pennsylvania Avenue, N.W.
Washington, D.C. 20006
Attention: Chairman of the Board of Directors
Ladies and Gentlemen:
We (the "Representatives") understand that CarrAmerica Realty
Corporation, a Maryland corporation (the "Company"), proposes to issue and sell
[__________] [of its [shares of common stock ("Common Stock")] [shares of
preferred stock ("Preferred Stock")] [warrants exercisable for shares of common
stock ("Common Stock Warrants")] [aggregate principal amount of its unsecured
debt securities ("Debt Securities")] (such [Common Stock], [Preferred Stock]
[Common Stock Warrants] and [Debt Securities] being collectively hereinafter
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
Purchase Agreement referred to below) set forth below opposite their respective
names, and a proportionate share of Option Securities (as defined in the
Purchase Agreement referred to below) to the extent any are purchased, at the
purchase price set forth below.
A-1
<PAGE>
[Number of Shares]
[Principal Amount]
Of Initial
Underwriter Underwritten Securities
----------- -----------------------
_________
Total $
=========
The Underwritten Securities shall have the following terms:
[Common Stock] [Preferred Stock] [Common Stock Warrants]
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 ,
199 .]
Purchase price per share: $ [, plus accumulated dividends, if any, from ,
199 .]
[Conversion provisions:]
[Voting and other rights:]
Number of Option Securities, if any, that may be purchased by the Underwriters:
Additional co-managers, if any:
Other terms: Closing time, date and location:
The Underwritten Securities shall have the following terms:
[Debt Securities]
Title of Securities:
Currency:
Principal amount to be issued:
Current ratings: Moody's Investors Service, Inc. ______;
Standard & Poor's Corporation ______; [other rating agencies];
Interest rate or formula:
Interest payment dates:
Interest reset dates:
Interest determination date:
Stated maturity date:
Redemption or repayment provisions:
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 aggregate principal amount:
Fee: ___%]
[Initial public offering price: ___%, plus accrued interest,
if any, or amortized original issue discount, if any, from
19__.]
A-2
<PAGE>
Purchase price: ___%, plus accrued interest, if any, or
amortized original issue discount, if any, from
____________, 19__ (payable in [same] [next] day funds).
Other terms:
Closing date and location:
All the provisions contained in the document attached as Annex A hereto
entitled "CarrAmerica Realty Corporation -- Common Stock, Preferred Stock,
Common Stock Warrants and Debt Securities Purchase 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.
A-3
<PAGE>
Please accept this offer no later than [_____] o'clock P.M. (New York
City time) on [_____] by signing a copy of this Terms Agreement in the space set
forth below and returning the signed copy to us.
Very truly yours,
MERRILL LYNCH & CO.
MERRILL LYNCH, PIERCE, FENNER & SMITH
INCORPORATED
[OTHER REPRESENTATIVES]
By: MERRILL LYNCH, PIERCE, FENNER & SMITH
INCORPORATED
By:
-----------------------------------------
For themselves and as Representatives
of the other named Underwriters.
Accepted:
CARRAMERICA REALTY CORPORATION
By:
-----------------------------
Name:
Title:
A-4
<PAGE>
Exhibit B
CARRAMERICA REALTY CORPORATION
(a Maryland Corporation)
[Title of Securities]
DELAYED DELIVERY CONTRACT
-------------------------
Dated: [__________], 199[_]
To: CarrAmerica Realty Corporation
1700 Pennsylvania Avenue, N.W.
Washington, D.C. 20006
Attention: Chairman of the Board of Directors
Ladies and Gentlemen:
The undersigned hereby agrees to purchase from CarrAmerica
Realty Corporation (the "Company"), and the Company agrees to sell to the
undersigned on [__________], 19[__] (the "Delivery Date"), $[__________] amount
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 $[_____ per share] [_____% of the principal
amount thereof, plus accrued interest from [__________], 19[__], to 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] [same day] 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 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
[__________], 19[__], shall have sold to the Underwriters of the Securities (the
"Underwriters") such amount of the Securities as is to be sold to them pursuant
to the Terms Agreement dated [__________], 19[__] 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 opinions 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 corporate action for the due
execution and delivery of this contract and the payment for and purchase of the
B-1
<PAGE>
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 an aggregate amount 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 delivered.
B-2
<PAGE>
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.
CARRAMERICA REALTY CORPORATION
By:
-------------------------------
Name:
Title:
B-3
<PAGE>
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)
---- ---------------------
B-4
<PAGE>
CARRAMERICA REALTY CORPORATION, AS OBLIGOR
AND
[BANK]
AS TRUSTEE
-------------------------
INDENTURE
DATED AS OF __________________ __, 199__
---------------------------------------------------------
SENIOR DEBT SECURITIES
---------------------------------------------------------
<PAGE>
TABLE OF CONTENTS
<TABLE>
<CAPTION>
Page
----
<S> <C>
PARTIES . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 2
RECITALS OF THE COMPANY . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 2
ARTICLE ONE DEFINITIONS AND OTHER PROVISIONS OF GENERAL
APPLICATION . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 2
SECTION 101. Definitions . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 2
Acquisition Lines of Credit . . . . . . . . . . . . . . . . . . . . . . . . . . . 2
Act . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 3
Additional Amounts . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 3
Adjusted Total Assets . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 3
Affiliate . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 3
Authenticating Agent . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 3
Authorized Newspaper . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 3
Bankruptcy Law . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 3
Bearer Security . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 3
Board of Directors . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 3
Board Resolution . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 3
Business Day . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 3
CEDEL . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 3
Commission . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 3
Company . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 4
Company Request . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 4
Consolidated Income Available for Debt Service . . . . . . . . . . . . . . . . . 4
Consolidated Net Income . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 4
Conversion Event . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 4
Corporate Trust Office . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 4
Corporation . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 4
Coupon . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 4
Custodian . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 4
Debt . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 4
Defaulted Interest . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 5
DTC . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 5
Dollar or "$" . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 5
ECU . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 5
Euroclear . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 5
European Communities . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 5
European Monetary System . . . . . . . . . . . . . . . . . . . . . . . . . . . . 5
Event of Default . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 5
Exchange Act . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 5
Foreign Currency . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 5
GAAP . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 5
Government Obligations . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 5
Holder . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 6
Indenture . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 6
Indexed Security . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 6
Interest . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 6
Interest Payment Date . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 6
i
<PAGE>
Make-Whole Amount . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 6
Maturity . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 6
Maximum Annual Service Charge . . . . . . . . . . . . . . . . . . . . . . . . . . 6
Officers' Certificate . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 6
Opinion of Counsel . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 7
Original Issue Discount Security . . . . . . . . . . . . . . . . . . . . . . . . 7
Outstanding . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 7
Paying Agent . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 8
Person . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 8
Place of Payment . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 8
Predecessor Security . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 8
Redemption Date . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 8
Redemption Price . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 8
Registered Security . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 8
Regular Record Date . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 8
Reinvestment Rate . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 8
Repayment Date . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 8
Repayment Price . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 8
Responsible Officer . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 9
Securities Act . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 9
Security . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 9
Security Register and Security Registrar . . . . . . . . . . . . . . . . . . . . 9
Significant Subsidiary . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 9
Special Record Date . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 9
Stated Maturity . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 9
Statistical Release . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 9
Subsidiary . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 9
Total Assets . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 9
Trust Indenture Act or TIA . . . . . . . . . . . . . . . . . . . . . . . . . . . 10
Trustee . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 10
Undepreciated Real Estate Assets . . . . . . . . . . . . . . . . . . . . . . . . 10
United States . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 10
United States Person . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 10
Yield to Maturity . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 10
SECTION 102. Compliance Certificates and Opinions . . . . . . . . . . . . . . . . . . . . 10
SECTION 103. Form of Documents Delivered to Trustee . . . . . . . . . . . . . . . . . . . 11
SECTION 104. Acts of Holders . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 11
SECTION 105. Notices, etc., to Trustee and Company . . . . . . . . . . . . . . . . . . . 12
SECTION 106. Notice to Holders; Waiver . . . . . . . . . . . . . . . . . . . . . . . . . 13
SECTION 107. Effect of Headings and Table of Contents . . . . . . . . . . . . . . . . . . 13
SECTION 108. Successors and Assigns . . . . . . . . . . . . . . . . . . . . . . . . . . . 14
SECTION 109. Separability Clause . . . . . . . . . . . . . . . . . . . . . . . . . . . . 14
SECTION 110. Benefits of Indenture . . . . . . . . . . . . . . . . . . . . . . . . . . . 14
SECTION 111. No Personal Liability . . . . . . . . . . . . . . . . . . . . . . . . . . . 14
SECTION 112. Governing Law . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 14
SECTION 113. Legal Holidays . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 14
ARTICLE TWO SECURITIES FORMS . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 14
SECTION 201. Forms of Securities . . . . . . . . . . . . . . . . . . . . . . . . . . . . 14
SECTION 202. Form of Trustee's Certificate of Authentication . . . . . . . . . . . . . . 15
SECTION 203. Securities Issuable in Global Form . . . . . . . . . . . . . . . . . . . . . 15
ii
<PAGE>
ARTICLE THREE THE SECURITIES . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 16
SECTION 301. Amount Unlimited, Issuable in Series . . . . . . . . . . . . . . . . . . . . 16
SECTION 302. Denominations . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 19
SECTION 303. Execution, Authentication, Delivery and Dating . . . . . . . . . . . . . . . 19
SECTION 304. Temporary Securities . . . . . . . . . . . . . . . . . . . . . . . . . . . . 20
SECTION 305. Registration, Registration of Transfer and Exchange . . . . . . . . . . . . 22
SECTION 306. Mutilated, Destroyed, Lost and Stolen Securities . . . . . . . . . . . . . . 25
SECTION 307. Payment of Interest; Interest Rights Preserved . . . . . . . . . . . . . . . 26
SECTION 308. Persons Deemed Owners . . . . . . . . . . . . . . . . . . . . . . . . . . . 28
SECTION 309. Cancellation . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 28
SECTION 310. Computation of Interest . . . . . . . . . . . . . . . . . . . . . . . . . . 28
ARTICLE FOUR SATISFACTION AND DISCHARGE . . . . . . . . . . . . . . . . . . . . . . . . . . 29
SECTION 401. Satisfaction and Discharge of Indenture . . . . . . . . . . . . . . . . . . 29
SECTION 402. Application of Trust Funds . . . . . . . . . . . . . . . . . . . . . . . . . 30
ARTICLE FIVE REMEDIES . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 30
SECTION 501. Events of Default . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 30
SECTION 502. Acceleration of Maturity; Rescission and Annulment . . . . . . . . . . . . . 31
SECTION 503. Collection of Indebtedness and Suits for Enforcement by Trustee . . . . . . 32
SECTION 504. Trustee May File Proofs of Claim . . . . . . . . . . . . . . . . . . . . . . 33
SECTION 505. Trustee May Enforce Claims Without Possession of Securities or
Coupons . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 33
SECTION 506. Application of Money Collected . . . . . . . . . . . . . . . . . . . . . . . 33
SECTION 507. Limitation on Suits . . . . . . . . . . . . . . . . . . . . . . . . . . . . 34
SECTION 508. Unconditional Right of Holders to Receive Principal, Premium
or Make-Whole Amount, if any, Interest and Additional
Amounts . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 34
SECTION 509. Restoration of Rights and Remedies . . . . . . . . . . . . . . . . . . . . . 35
SECTION 510. Rights and Remedies Cumulative . . . . . . . . . . . . . . . . . . . . . . . 35
SECTION 511. Delay or Omission Not Waiver . . . . . . . . . . . . . . . . . . . . . . . . 35
SECTION 512. Control by Holders of Securities . . . . . . . . . . . . . . . . . . . . . . 35
SECTION 513. Waiver of Past Defaults . . . . . . . . . . . . . . . . . . . . . . . . . . 35
SECTION 514. Waiver of Usury Stay or Extension Laws . . . . . . . . . . . . . . . . . . . 36
SECTION 515. Undertaking for Costs . . . . . . . . . . . . . . . . . . . . . . . . . . . 36
ARTICLE SIX THE TRUSTEE . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 36
SECTION 601. Notice of Defaults . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 36
SECTION 602. Certain Rights of Trustee . . . . . . . . . . . . . . . . . . . . . . . . . 36
SECTION 603. Not Responsible for Recitals or Issuance of Securities . . . . . . . . . . . 37
SECTION 604. May Hold Securities . . . . . . . . . . . . . . . . . . . . . . . . . . . . 38
SECTION 605. Money Held in Trust . . . . . . . . . . . . . . . . . . . . . . . . . . . . 38
SECTION 606. Compensation and Reimbursement . . . . . . . . . . . . . . . . . . . . . . . 38
SECTION 607. Corporate Trustee Required; Eligibility; Conflicting Interests . . . . . . . 38
SECTION 608. Resignation and Removal; Appointment of Successor . . . . . . . . . . . . . 39
SECTION 609. Acceptance of Appointment by Successor . . . . . . . . . . . . . . . . . . . 40
SECTION 610. Merger, Conversion, Consolidation or Succession to Business . . . . . . . . 41
SECTION 611. Appointment of Authentication Agent . . . . . . . . . . . . . . . . . . . . 41
iii
<PAGE>
ARTICLE SEVEN HOLDERS' LISTS AND REPORTS BY TRUSTEE AND
COMPANY . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 42
SECTION 701. Disclosure of Names and Addresses of Holders . . . . . . . . . . . . . . . . 42
SECTION 702. Reports by Trustee . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 42
SECTION 703. Reports by Company . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 42
SECTION 704. The Company to Furnish Trustee Names and Addresses of
Holders . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 43
ARTICLE EIGHT CONSOLIDATION, MERGER, SALE, LEASE OR
CONVEYANCE . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 43
SECTION 801. Consolidations and Mergers of Company and Sales, Leases and
Conveyances Permitted Subject to Certain Conditions . . . . . . . . . . . 43
SECTION 802. Rights and Duties of Successor Entity . . . . . . . . . . . . . . . . . . . 44
SECTION 803. Officers' Certificate and Opinion of Counsel . . . . . . . . . . . . . . . . 44
ARTICLE NINE SUPPLEMENTAL INDENTURES . . . . . . . . . . . . . . . . . . . . . . . . . . . . 44
SECTION 901. Supplemental Indentures Without Consent of Holders . . . . . . . . . . . . . 44
SECTION 902. Supplemental Indentures with Consent of Holders . . . . . . . . . . . . . . 45
SECTION 903. Execution of Supplemental Indentures . . . . . . . . . . . . . . . . . . . . 46
SECTION 904. Effect of Supplemental Indentures . . . . . . . . . . . . . . . . . . . . . 46
SECTION 905. Conformity with Trust Indenture Act . . . . . . . . . . . . . . . . . . . . 46
SECTION 906. Reference in Securities to Supplemental Indentures . . . . . . . . . . . . . 47
ARTICLE TEN COVENANTS . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 47
SECTION 1001. Payment of Principal, Premium (if any), Make-Whole Amount
(if any), Interest and Additional Amounts . . . . . . . . . . . . . . . . 47
SECTION 1002. Maintenance of Office or Agency . . . . . . . . . . . . . . . . . . . . . . 47
SECTION 1003. Money for Securities Payments to Be Held in Trust . . . . . . . . . . . . . 48
SECTION 1004. [Omitted] . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 49
SECTION 1005. [Omitted] . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 50
SECTION 1006. Existence . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 50
SECTION 1007. Maintenance of Properties . . . . . . . . . . . . . . . . . . . . . . . . . 50
SECTION 1008. Insurance . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 50
SECTION 1009. Payment of Taxes and Other Claims . . . . . . . . . . . . . . . . . . . . . 50
SECTION 1010. Provision of Financial Information . . . . . . . . . . . . . . . . . . . . 50
SECTION 1011. Statement as to Compliance . . . . . . . . . . . . . . . . . . . . . . . . 50
SECTION 1012. Additional Amounts . . . . . . . . . . . . . . . . . . . . . . . . . . . . 51
SECTION 1013. Waiver of Certain Covenants . . . . . . . . . . . . . . . . . . . . . . . . 51
ARTICLE ELEVEN REDEMPTION OF SECURITIES . . . . . . . . . . . . . . . . . . . . . . . . . . 52
SECTION 1101. Applicability of Article . . . . . . . . . . . . . . . . . . . . . . . . . 52
SECTION 1102. Election to Redeem; Notice to Trustee . . . . . . . . . . . . . . . . . . . 52
SECTION 1103. Selection by Trustee of Securities to Be Redeemed . . . . . . . . . . . . . 52
SECTION 1104. Notice of Redemption . . . . . . . . . . . . . . . . . . . . . . . . . . . 52
SECTION 1105. Deposit of Redemption Price . . . . . . . . . . . . . . . . . . . . . . . . 53
SECTION 1106. Securities Payable on Redemption Date . . . . . . . . . . . . . . . . . . . 53
SECTION 1107. Securities Redeemed in Part . . . . . . . . . . . . . . . . . . . . . . . . 54
iv
<PAGE>
ARTICLE TWELVE [INTENTIONALLY OMITTED] . . . . . . . . . . . . . . . . . . . . . . . . . . . 55
ARTICLE THIRTEEN REPAYMENT AT THE OPTION OF HOLDERS . . . . . . . . . . . . . . . . . . . . 55
SECTION 1301. Applicability of Article . . . . . . . . . . . . . . . . . . . . . . . . . 55
SECTION 1302. Repayment of Securities . . . . . . . . . . . . . . . . . . . . . . . . . . 55
SECTION 1303. Exercise of Option . . . . . . . . . . . . . . . . . . . . . . . . . . . . 55
SECTION 1304. When Securities Presented for Repayment Become Due and
Payable . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 56
SECTION 1305. Securities Repaid in Part . . . . . . . . . . . . . . . . . . . . . . . . . 56
ARTICLE FOURTEEN DEFEASANCE AND COVENANT DEFEASANCE . . . . . . . . . . . . . . . . . . . . 57
SECTION 1401. Applicability of Article; Company's Option to Effect Defeasance
or Covenant Defeasance . . . . . . . . . . . . . . . . . . . . . . . . . 57
SECTION 1402. Defeasance and Discharge . . . . . . . . . . . . . . . . . . . . . . . . . 57
SECTION 1403. Covenant Defeasance . . . . . . . . . . . . . . . . . . . . . . . . . . . . 57
SECTION 1404. Conditions to Defeasance or Covenant Defeasance . . . . . . . . . . . . . . 58
SECTION 1405. Deposited Money and Government Obligations to Be Held in
Trust; Other Miscellaneous Provisions . . . . . . . . . . . . . . . . . 59
ARTICLE FIFTEEN MEETINGS OF HOLDERS OF SECURITIES . . . . . . . . . . . . . . . . . . . . . . . 60
SECTION 1501. Purposes for Which Meetings May Be Called . . . . . . . . . . . . . . . . . 60
SECTION 1502. Call, Notice and Place of Meetings . . . . . . . . . . . . . . . . . . . . 60
SECTION 1503. Persons Entitled to Vote at Meetings . . . . . . . . . . . . . . . . . . . 60
SECTION 1504. Quorum; Action . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 60
SECTION 1505. Determination of Voting Rights; Conduct and Adjournment of
Meetings . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 61
SECTION 1506. Counting Votes and Recording Action of Meetings . . . . . . . . . . . . . . 62
SECTION 1507. Evidence of Action Taken by Holders . . . . . . . . . . . . . . . . . . . . 62
SECTION 1508. Proof of Execution of Instruments . . . . . . . . . . . . . . . . . . . . . 62
</TABLE>
TESTIMONIUM
SIGNATURES AND SEALS
ACKNOWLEDGMENTS
EXHIBIT A - FORMS OF CERTIFICATION
v
<PAGE>
CARRAMERICA REALTY CORPORATION, AS OBLIGOR
Reconciliation and tie between Trust Indenture Act of 1939 (the
"1939 Act") and this Indenture, dated as of __________ __, 199__.
<TABLE>
<CAPTION>
Trust Indenture Act Section Indenture Section
<S> <C> <C>
Section 310 (a) (1) . . . . . . . . . . . . . . . . . . . . . . . . . . 607
(a) (2) . . . . . . . . . . . . . . . . . . . . . . . . . . 607
(b) . . . . . . . . . . . . . . . . . . . . . . . . . . . . 607, 608
Section 312 (c) . . . . . . . . . . . . . . . . . . . . . . . . . . . . 701
Section 313 (a) . . . . . . . . . . . . . . . . . . . . . . . . . . . . 70
(c) . . . . . . . . . . . . . . . . . . . . . . . . . . . . 702
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) . . . . . . . . . . . . . . . . . . . . . . . . . . . . 111
(c) . . . . . . . . . . . . . . . . . . . . . . . . . . . . 111
- ----------------------
<FN>
NOTE: This reconciliation and tie shall not, for any purpose, be deemed
to be a part of this Indenture.
</FN>
</TABLE>
Attention should also be directed to Section 318 (c) of the 1939
Act, which provides that the provisions of Sections 310 to and including 317 of
the 1939 Act are a part of and govern every qualified indenture, whether or not
physically contained therein.
- 1 -
<PAGE>
Indenture (this "Indenture"), dated as of _________________
__, 199__, by and between CARRAMERICA REALTY CORPORATION, a Maryland corporation
(the "Company") having its principal office at 1700 Pennsylvania Avenue, N.W.,
Washington, D.C. 20006 and [BANK], a national bank organized under the laws of
the United States of America, as Trustee hereunder (the "Trustee"), having its
Corporate Trust Office (as defined below) at
- ------------ -------------.
RECITALS OF THE COMPANY
The Company deems it necessary to issue from time to
time for its lawful purposes senior debt securities (the "Securities")
evidencing its unsecured indebtedness, and has duly authorized the execution and
delivery of this Indenture to provide for the issuance from time to time of the
Securities, unlimited as to principal amount, to bear interest at the rates or
formulas, to mature at such times and to have such other provisions as shall be
fixed as hereinafter provided.
This Indenture is subject to the provisions of the Trust
Indenture Act of 1939, as amended, that are deemed to be incorporated into this
Indenture and shall, to the extent applicable, be governed by such provisions.
All things necessary to make this Indenture a valid agreement
of the Company, in accordance with its terms, have been done.
NOW, THEREFORE, THIS INDENTURE WITNESSETH:
For and in consideration of the premises and the purchase of
the Securities by the Holders thereof, it is mutually covenanted and agreed, for
the equal and proportionate benefit of all Holders of the Securities, as
follows:
ARTICLE ONE
DEFINITIONS AND OTHER PROVISIONS OF GENERAL APPLICATION
SECTION 101. Definitions. For all purposes of this Indenture,
except as otherwise expressly provided or unless the context otherwise requires:
(1) the terms defined in this Article have the meanings
assigned to them in this Article, and include the plural as well as the
singular;
(2) all other terms used herein which are defined in the TIA,
either directly or by reference therein, have the meanings assigned to them
therein, and the terms "cash transaction" and "self-liquidating paper", as used
in TIA Section 311, shall have the meanings assigned to them in the rules of the
Commission adopted under the TIA;
(3) all accounting terms not otherwise defined herein have the
meanings assigned to them in accordance with GAAP; and
(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.
"Acquisition Lines of Credit" means, collectively, any secured
lines of credit of the Company or any Subsidiary, the proceeds of which shall be
used, among other things, to acquire interests, directly or indirectly, in real
estate.
- 2 -
<PAGE>
"Act", when used with respect to any Holder, has the meaning
specified in Section 104.
"Additional Amounts" means any additional amounts which are
required by a Security or by or pursuant to a Board Resolution, under
circumstances specified therein, to be paid by the Company in respect of certain
taxes imposed on certain Holders and which are owing to such Holders.
"Adjusted Total Assets" has the meaning specified in Section
1004.
"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 any Security established pursuant to
Section 201 which is payable to bearer.
"Board of Directors" means the board of directors of the
Company, the executive committee or any committee of that board duly authorized
to act hereunder, as the case may be.
"Board Resolution" means a copy of a resolution of the Company,
certified by the Secretary or an Assistant Secretary of the Company to have been
duly adopted by the Board of Directors and to be in full force and effect on the
date of such certification, and delivered to the Trustee.
"Business Day", when used with respect to any Place of Payment
or any other particular location referred to in this Indenture or in the
Securities, means, unless otherwise specified with respect to any Securities
pursuant to Section 301, any day, other than a Saturday or Sunday, that is
neither a legal holiday nor a day on which banking institutions in that Place of
Payment or particular location are authorized or required by law, regulation or
executive order to close.
"CEDEL" means Centrale de Livraison de Valeurs Mobilieres,
S.A., or its successor.
"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.
- 3 -
<PAGE>
"Company" means the Person named as the "Company" in the first
paragraph of this Indenture until a successor Company shall have become such
pursuant to the applicable provisions of this Indenture, and thereafter
"Company" shall mean such successor Company.
"Company Request" and "Company Order" mean, respectively, a
written request or order signed in the name of and on behalf of the Company by
its Chairman of the Board, the President or a Vice President, and by its
Treasurer or an Assistant Treasurer, the Secretary or an Assistant Secretary of
the Company, and delivered to the Trustee.
"Consolidated Income Available for Debt Service" for any period
means Consolidated Net Income of the Company and its Subsidiaries adjusted (i)
to eliminate gains and losses on property dispositions, refinancings and other
capital transactions, (ii) to reflect payment of deferred charges on a cash
rather than accrual basis, and (iii) to add back all amounts which have been
deducted for (a) interest on Debt of the Company and its Subsidiaries, (b)
provision for taxes of the Company and its Subsidiaries based on income, (c)
amortization of debt discount, (d) depreciation and amortization, and (e) any
noncash charge resulting from a change in accounting principles in determining
Consolidated Net Income for such period.
"Consolidated Net Income" for any period means the amount of
consolidated net income (or loss) of the Company and its Subsidiaries for such
period determined on a consolidated basis in accordance with GAAP.
"Conversion Event" means the cessation of use of (i) a Foreign
Currency both by the government of the country which issued such currency and
for the settlement of transactions by a central bank or other public
institutions of or within the international banking community, (ii) the ECU both
within the European Monetary System and for the settlement of transactions by
public institutions of or within the European Communities or (iii) any currency
unit (or composite currency) other than the ECU for the purposes for which it
was established.
"Corporate Trust Office" means the principal corporate trust
office of the Trustee at which, at any particular time, its corporate trust
business shall be administered, which office at the date hereof is located at
_____________________________, except that for purposes of Section 1002, such
term shall mean the office or agency of the Trustee in the
___________________________, which office at the date hereof is located at
- --------------------------------.
"Corporation" includes corporations, associations, companies,
Companys and business trusts.
"Coupon" means any interest coupon appertaining to a Bearer
Security.
"Custodian" has the meaning specified in Section 501.
"Debt" of the Company or any Subsidiary means any indebtedness
of the Company or any Subsidiary, whether or not contingent, in respect of (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 Company or any
Subsidiary, (iii) letters of credit or amounts representing the balance deferred
and unpaid of the purchase price of any property except any such balance that
constitutes an accrued expense or trade payable or (iv) any lease of property by
the Company or any Subsidiary as lessee which is reflected on the Company's
Consolidated Balance Sheet as a capitalized lease in accordance with GAAP, in
the case of items of indebtedness under (i) through (iii) above to the extent
that any such items (other than letters of credit) would appear as a liability
on the Company's consolidated balance sheet in accordance with GAAP, and also
includes, to the extent not otherwise included, any obligation by the Company or
any Subsidiary to be liable for, or to pay, as obligor, guarantor or otherwise
(other than
- 4 -
<PAGE>
for purposes of collection in the ordinary course of business), indebtedness of
another person (other than the Company or any Subsidiary).
"Defaulted Interest" has the meaning specified in Section 307.
"DTC" means The Depository Trust Company for so long as it
shall be a clearing agency registered under the Exchange Act, or such successor
as the Company shall designate from time to time in an Officer's Certificate
delivered to the Trustee.
"Dollar" or "$" means a dollar or other equivalent unit in such
coin or currency of the United States of America as at the time shall be legal
tender for the payment of public and private debts.
"ECU" means the European Currency Unit as defined and revised
from time to time by the Council of the European Communities.
"Euroclear" means Morgan Guaranty Trust Company of New York,
Brussels Office, or its successor as operator of the Euroclear System.
"European Communities" means the European Economic Community,
the European Coal and Steel Community and the European Atomic Energy Community.
"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 and
any successor statute thereto, in each case as amended from time to time and the
rules and regulations of the Commission thereunder.
"Foreign Currency" means any currency, currency unit or
composite currency, including, without limitation, the ECU issued by the
government of one or more countries other than the United States of America or
by any recognized confederation or association of such governments.
"GAAP" means generally accepted accounting principles, as in
effect from time to time, as used in the United States applied on a consistent
basis; 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
- 5 -
<PAGE>
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 30l; 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 particular series of Securities for which such Person is Trustee established
as contemplated by Section 331, exclusive, however, of any provisions or terms
which relate solely to other series of Securities for which such Person is
Trustee, regardless of when such terms or provisions were adopted, and exclusive
of any provisions 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 1012,
includes such Additional Amounts.
"Interest Payment Date" when used with respect to any Security,
means the Stated Maturity of an installment of interest on such Security.
"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 Company to the Holder thereof in connection with any optional
redemption or accelerated payment of such Security.
"Maturity", when used with respect to any Security, means the
date on which the principal of such Security or an installment of principal
becomes due and payable as therein or herein provided, whether at the Stated
Maturity or by declaration of acceleration, notice of redemption, notice of
option to elect repayment or otherwise.
"Maximum Annual Service Charge" for any period means the amount
payable (including, if determined on a pro forma basis, the maximum amount which
may become payable) in any 12-month period for interest on Debt.
"Officers' Certificate" means a certificate signed by the
Chairman of the Board of Directors, the President or a Vice-President and by the
Treasurer, an Assistant Treasurer, the Secretary or an Assistant Secretary, of
the Company, and delivered to the Trustee.
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"Opinion of Counsel" means a written opinion of counsel, who
may be counsel for the Company or who may be an employee of or other counsel for
the Company and who shall be reasonably 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 canceled by the Trustee or
delivered to the Trustee for cancellation;
(ii) Securities, or portions thereof, for whose payment or
redemption or repayment at the option of the Holder money in the necessary
amount has been theretofore deposited with the Trustee or any Paying Agent
(other than the Company) in trust or set aside and segregated in trust by the
Company (if the Company shall act as its own Paying Agent) for the Holders of
such Securities and any coupons appertaining thereto, provided that, if such
Securities are to be redeemed, notice of such redemption has been duly given
pursuant to this Indenture or provision therefor satisfactory to the Trustee has
been made;
(iii) Securities, except to the extent provided in Sections
1402 and 1403, with respect to which the Company has effected defeasance and/or
covenant defeasance as provided in Article Twelve; and
(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 Company;
provided, however, that in determining whether the Holders of the requisite
principal amount of the Outstanding Securities have given any request, demand,
authorization, direction, notice, consent or waiver hereunder or are present at
a meeting of Holders for quorum purposes, and for the purpose of making the
calculations required by TIA Section 313, (i) the principal amount of an
Original Issue Discount Security that may be counted in making such
determination or calculation and that shall be deemed to be Outstanding for such
purpose shall be equal to the amount of principal thereof that would be (or
shall have been declared to be) due and payable, at the time of such
determination, upon a declaration of acceleration of the maturity thereof
pursuant to Section 502, (ii) the principal amount of any Security denominated
in a Foreign Currency that may be counted in making such determination or
calculation and that shall be deemed Outstanding for such purpose shall be equal
to the Dollar equivalent, determined pursuant to Section 301 as of the date such
Security is originally issued by the Company, of the principal amount (or, in
the case of an Original Issue Discount Security, the Dollar equivalent as of
such date of original issuance of the amount determined as provided in cause (i)
above) of such Security, (iii) the principal amount of any Indexed Security that
may be counted in making such determination or calculation and that shall be
deemed outstanding for such purpose shall be equal to the principal face amount
of such Indexed Security at original issuance, unless otherwise provided with
respect to such Security pursuant to Section 301, and (iv) Securities owned by
the Company or any other obligor upon the Securities or any Affiliate of the
Company or of such other obligor shall be disregarded and deemed not to be
Outstanding, except that, in determining whether the Trustee shall be protected
in making such calculation or in relying upon any such request, demand,
authorization, direction, notice, consent or waiver, only Securities which the
Trustee knows to be so owned shall be so disregarded. Securities so owned which
have
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been pledged in good faith may be regarded as Outstanding if the pledgee
establishes to the satisfaction of the Trustee the pledgee's right so to act
with respect to such Securities and that the pledgee is not the Company or any
other obligor upon the Securities or any Affiliate of the Company or of such
other obligor.
"Paying Agent" means any Person authorized by the Company to
pay the principal of (and premium, if any) or interest on any Securities or
coupons on behalf of the Company.
"Person" means any individual, corporation, Company, joint
venture, association, joint-stock company, trust, unincorporated organization or
government or any agency or political subdivision thereof.
"Place of Payment", when used with respect to the Securities of
or within any series, means the place or places where the principal of (and
premium, if any) and interest on such Securities are payable as specified as
contemplated by Sections 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", when used with respect to any Security to be
redeemed, in whole or in part, means the date fixed for such redemption by or
pursuant to this Indenture.
"Redemption Price", when used with respect to any Security to
be redeemed, means the price at which it is to be redeemed pursuant to this
Indenture.
"Registered Security" shall mean any Security which is
registered in the Security Register.
"Regular Record Date" for the interest payable on any Interest
Payment Date on the Registered Securities of or within any series means the date
specified for that purpose as contemplated by Section 301, whether or not a
Business Day.
"Reinvestment Rate" means .25% (one-fourth of one percent) plus
the yield under the heading "Week Ending" published in the most recent
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 premium shall be used.
"Repayment Date" means, when used with respect to any Security
to be repaid at the option of the Holder, the date fixed for such repayment by
or pursuant to this Indenture.
"Repayment Price" means, when used with respect to any Security
to be repaid at the option of the Holder, the price at which it is to be repaid
by or pursuant to this Indenture.
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"Responsible Officer", when used with respect to the Trustee,
means the chairman or vice-chairman of the board of directors, the chairman or
vice-chairman of the executive committee of the board of directors, the
president, any vice president (whether or not designated by a number or a word
or words added before or after the title "vice president"), the secretary, any
assistant secretary, the treasurer, any assistant treasurer, the cashier, any
assistant cashier, any trust officer or assistant trust officer, the controller
or any other officer of the Trustee customarily performing functions similar to
those performed by any of the above designated officers and also means, with
respect to a particular corporate trust matter, any other officer to whom such
matter is referred because of such officer's knowledge and familiarity with the
particular subject.
"Securities Act" means the Securities Act of 1933 and any
successor statute thereto, in each case as amended from time to time and the
rules and regulations of the Commission thereunder.
"Security" has the meaning stated in the first recital of this
Indenture and, more particularly, means any Security or Securities authenticated
and delivered under this Indenture; provided, however, that, if at any time
there is more than one Person acting as Trustee under this Indenture,
"Securities" with respect to the Indenture as to which such Person is Trustee
shall have the meaning stated in the first recital of this Indenture and shall
more particularly mean Securities authenticated and delivered under this
Indenture, exclusive, however, of Securities of any series as to which such
Person is not Trustee.
"Security Register" and "Security Registrar" have the
respective meanings specified in Section 305.
"Significant Subsidiary" means any Subsidiary which is a
"significant subsidiary" (as defined in Article I, Rule 1-02 of Regulation S-X,
promulgated under the Securities Act) of the Company.
"Special Record Date" for the payment of any Defaulted Interest
on the Registered Securities of or within any series means a date fixed by the
Trustee pursuant to Section 307.
"Stated Maturity," when used with respect to any Security or
any installment of principal thereof or interest thereon, means the date
specified in such Security or a coupon representing such installment of interest
as the fixed date on which the principal of such Security or such installment of
principal or interest is due and payable.
"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 Company.
"Subsidiary" means a corporation or a partnership a majority of
the outstanding voting stock or partnership interests, as the case may be, of
which is owned, directly or indirectly, by the Company or by one or more other
Subsidiaries of the Company. For the purposes of this definition, "voting stock"
means stock having voting power for the election of directors, whether at all
times or only so long as no senior class of stock has such voting power by
reason of any contingency.
"Total Assets" as of any date means the sum of (i) the
Company's and its Subsidiaries' Undepreciated Real Estate Assets and (ii) all
other assets of the Company and its Subsidiaries on a consolidated basis
determined in accordance with GAAP (but excluding intangibles and account
receivables).
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"Trust Indenture Act" or "TIA" means the Trust Indenture Act of
1939, as amended and as in force at the date as of which this Indenture was
executed, except as provided in Section 905.
"Trustee" means the Person named as the "Trustee" in the first
paragraph of this Indenture until a successor Trustee shall have become such
pursuant to the applicable provisions of this Indenture, and thereafter
"Trustee" shall mean or include each Person who is then a Trustee hereunder;
provided, however, that if at any time there is more than one such Person,
"Trustee" as used with respect to the Securities of any series shall mean only
the Trustee with respect to Securities of that series.
"Undepreciated Real Estate Assets" means as of any date the
amount of real estate assets of the Company 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, Company or other entity
created or organized in or under the laws of the United States or an estate or
trust the income of which is subject to United States federal income taxation
regardless of its source.
"Yield to Maturity" means the yield to maturity, computed at
the time of issuance of a Security (or, if applicable, at the most recent
redetermination of interest on such Security) and as set forth in such Security
in accordance with generally accepted United States bond yield computation
principles.
SECTION 102. Compliance Certificates and Opinions. Upon any
application or request by the Company to the Trustee to take any action under
any provision of this Indenture, the Company shall furnish to the Trustee an
Officers' Certificate stating that all conditions precedent, if any, provided
for in this Indenture relating to the proposed action have been complied with
and an Opinion of Counsel stating that in the opinion of such counsel all such
conditions precedent, if any, have been complied with, except that in the case
of any such application or request as to which the furnishing of such documents
is specifically required by any provision of this Indenture relating to such
particular application or request, no additional certificate or opinion need be
furnished.
Every certificate or opinion with respect to compliance with a
condition or covenant provided for in this Indenture (including certificates
delivered pursuant to Section 1011) shall include:
(1) a statement that each individual signing such certificate
or opinion has read such condition or covenant and the definitions herein
relating thereto;
(2) a brief statement as to the nature and scope of the
examination or investigation upon which the statements or opinions contained in
such certificate or opinion are based;
(3) a statement that, in the opinion of each such individual,
he has made such examination or investigation as is necessary to enable him to
express an informed opinion as to whether or not such condition or covenant has
been complied with; and
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(4) a statement as to whether, in the opinion of each such
individual, such condition or covenant has been complied with.
SECTION 103. Form of Documents Delivered to Trustee. In any
case where several matters are required to be certified by, or covered by an
opinion of, any specified Person, it is not necessary that all such matters be
certified by, or covered by the opinion of, only one such Person, or that they
be so certified or covered by only one document, but one such Person may certify
or give an opinion as to some matters and one or more other such Persons as to
other matters, and any such Person may certify or give an opinion as to such
matters in one or several documents.
Any certificate or opinion of an officer of the Company may be
based, insofar as it relates to legal matters, upon an Opinion of Counsel, or a
certificate or representations by counsel, unless such officer knows, or in the
exercise of reasonable care should know, that the opinion, certificate or
representations with respect to the matters upon which his certificate or
opinion is based are erroneous. Any such Opinion of Counsel or certificate or
representations may be based, insofar as it relates to factual matters, upon a
certificate or opinion of, or representations by, an officer or officers of the
Company stating that the information as to such factual matters is in the
possession of the Company, unless such counsel knows that the certificate or
opinion or representations as to such matters are erroneous.
Where any Person is required to make, give or execute two or
more applications, requests, consents, certificates, statements, opinions or
other instruments under this Indenture, they may, but need not, be consolidated
and form one instrument.
SECTION 104. Acts of Holders, (a) Any request, demand,
authorization, direction, notice, consent, waiver or other action provided by
this Indenture to be given or taken by Holders of the Outstanding Securities of
all series or one or more series, as the case may be, may be embodied in and
evidenced by one or more instruments of substantially similar tenor signed by
such Holders in person or by agents duly appointed in writing. If Securities of
a series are issuable as Bearer Securities, any request, demand, authorization,
direction, notice, consent, waiver or other action provided by this Indenture to
be given or taken by Holders of Securities of such series may, alternatively, be
embodied in and evidenced by the record of Holders of Securities of such series
voting in favor thereof, either in person or by proxies duly appointed in
writing, at any meeting of Holders of Securities of such series duly called and
held in accordance with the provisions of Article Fourteen, or a combination of
such instruments and any such record. Except as herein otherwise expressly
provided, such action shall become effective when such instrument or instruments
or record or both are delivered to the Trustee and, where it is hereby expressly
required, to the Company. Such instrument or instruments and any such record
(and the action embodied therein and evidenced thereby) are herein sometimes
referred to as the "Act" of the Holders signing such instrument or instruments
or so voting at any such meeting. Proof of execution of any such instrument or
of a writing appointing any such agent, or of the holding by any Person of a
Security, shall be sufficient for any purpose of this Indenture and conclusive
in favor of the Trustee and the Company and any agent of the Trustee or the
Company, if made in the manner provided in this Section. 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.
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(c) The ownership of Registered Securities shall be proved by
the Security Register.
(d) The ownership of Bearer Securities may be proved by the
production of such Bearer Securities or by a certificate executed, as
depositary, by any trust company, bank, banker or other depositary, wherever
situated, if such certificate shall be deemed by the Trustee to be satisfactory,
showing that at the date therein mentioned such Person had on deposit with such
depositary, or exhibited to it, the Bearer Securities therein described; or such
facts may be proved by the certificate or affidavit of the Person holding such
Bearer Securities, if such certificate or affidavit is deemed by the Trustee to
be satisfactory. The Trustee and the Company may assume that such ownership of
any Bearer Security continues until (1) another certificate or affidavit bearing
a later date issued in respect of the same Bearer Security is produced, or (2)
such Bearer Security is produced to the Trustee by some other Person, or (3)
such Bearer Security is surrendered in exchange for a Registered Security, or
(4) such Bearer Security is no longer Outstanding. The ownership of Bearer
Securities may also be proved in any other manner which the Trustee deems
sufficient.
(e) If the Company shall solicit from the Holders of Registered
Securities any request, demand, authorization, direction, notice, consent,
waiver or other Act, the Company may, at its option, in or pursuant to a Board
Resolution, fix in advance a record date for the determination of Holders
entitled to give such request, demand, authorization, direction, notice,
consent, waiver or other Act, but the Company shall have no obligation to do so.
Notwithstanding TIA Section 316(c), such record date shall be the record date
specified in or pursuant to such Board Resolution, which shall be a date not
earlier than the date 30 days prior to the first solicitation of Holders
generally in connection therewith and not later than the date such solicitation
is completed. If such a record date is fixed, such request, demand,
authorization, direction, notice, consent, waiver or other Act may be given
before or after such record date, but only the Holders of record at the close of
business on such record date shall be deemed to be Holders for the purposes of
determining whether Holders of the requisite proportion of Outstanding
Securities have authorized or agreed or consented to such request, demand,
authorization, direction, notice, consent, waiver or other Act, and for that
purpose the Outstanding Securities shall be computed as of such record date;
provided that no such authorization, agreement or consent by the Holders on such
record date shall be deemed effective unless it shall become effective pursuant
to the provisions of this Indenture not later than eleven months after the
record date.
(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 Company in
reliance thereon, whether or not notation of such action is made upon such
Security.
SECTION 105. Notices, etc., to Trustee and Company. Any
request, demand, authorization, direction, notice, consent, waiver or Act of
Holders or other document provided or permitted by this Indenture to be made
upon, given or furnished to, or filed with,
(1) the Trustee by any Holder or by the Company shall be
sufficient for every purpose hereunder if made, given, furnished or filed in
writing to or with the Trustee at its Corporate Trust Office, or
(2) the Company by the Trustee or by any Holder shall be
sufficient for every purpose hereunder (unless otherwise herein expressly
provided) if in writing and mailed, first class postage prepaid, to the Company
addressed to it at the address of its principal office specified in the
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first paragraph of this Indenture or at any other address previously furnished
in writing to the Trustee by the Company.
SECTION 106. Notice to Holders; Waiver. Where this Indenture
provides for notice of any event to Holders of Registered Securities by the
Company or the Trustee, such notice shall be sufficiently given (unless
otherwise herein expressly provided) if in writing and mailed, first-class
postage prepaid, to each such Holder affected by such event, at his address as
it appears in the Security Register, not later than the latest date, and not
earlier than the earliest date, prescribed for the giving of such notice. In any
case where notice to Holders of Registered Securities is given by mail, neither
the failure to mail such notice, nor any defect in any notice so mailed, to any
particular Holder shall affect the sufficiency of such notice with respect to
other Holders of Registered Securities or the sufficiency of any notice to
Holders of Bearer Securities given as provided herein. Any notice mailed to a
Holder in the manner herein prescribed shall be conclusively deemed to have been
received by such Holder, whether or not such Holder actually receives such
notice.
If by reason of the suspension of or irregularities in regular
mail service or by reason of any other cause it shall be impracticable to give
such notice by mail, then such notification to Holders of Registered Securities
as shall be made with the approval of the Trustee shall constitute a sufficient
notification to such Holders for every purpose hereunder.
Except as otherwise expressly provided herein or otherwise
specified with respect to any Securities pursuant to Section 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 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.
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SECTION 108. Successors and Assigns. All covenants and
agreements in this Indenture by the Company shall be binding on their 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,
in the Securities or coupons, express or implied, shall give to any Person,
other than the Parties hereto, any Security Registrar, any Paying Agent, any
Authenticating Agent and their successors hereunder and the Holders any benefit
or any legal or equitable right, remedy or claim under this Indenture.
SECTION 111. 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
Company or of any successor, either directly or through the Company or any
successor, under any rule of law, statute or constitutional provision or by the
enforcement of any assessment or by any legal or equitable proceeding or
otherwise, all such liability being expressly waived and released by the
acceptance of the Securities by the Holders 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
State of [ ]. 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, 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, of each series and
related coupons shall be in substantially the forms as shall be established in
one or more indentures supplemental hereto or approved from time to time by or
pursuant to a Board Resolution in accordance with this Indenture, shall have
such appropriate insertions, omissions, substitutions and other variations as
are required or permitted by this Indenture or any indenture supplemental
hereto, and may have such letters, numbers or other marks of identification or
designation and such legends or endorsements placed thereon as the Company may
deem appropriate and as are not inconsistent with the provisions of this
Indenture, or as may be required to comply with any law or with any rule or
regulation made pursuant thereto or
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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.
[BANK], as Trustee
By:
------------------------------------
Authorized Signatory
SECTION 203. Securities Issuable in Global Form. If Securities
of or within a series are issuable in global form, as specified as contemplated
by Section 301, then, notwithstanding clause (8) of Section 301 and the
provisions of Section 302, any such Security shall represent such of the
Outstanding Securities of such series as shall be specified therein and may
provide that it shall represent the aggregate amount of Outstanding Securities
of such series from time to time endorsed thereon and that the aggregate amount
of Outstanding Securities of such series represented thereby may from time to
time be increased or decreased to reflect exchanges. Any endorsement of a
Security in global form to reflect the amount, or any increase or decrease in
the amount, of Outstanding Securities represented thereby shall be made by the
Trustee in such manner and upon instructions given by such Person or Persons as
shall be specified therein or in the Company Order to be delivered to the
Trustee pursuant to Section 303 or 304. Subject to the provisions of Section 303
and, if applicable, Section 304, the Trustee shall deliver and redeliver any
Security in permanent global form in the manner and upon instructions given by
the Person or Persons specified therein or in the applicable Company Order. If a
Company Order pursuant to Section 303 or 304 has been, or simultaneously is,
delivered, any instructions by the Company with respect to endorsement or
delivery or redelivery of a Security in global form shall be in writing but need
not comply with Section 102 and need not be accompanied by an Opinion of
Counsel.
The provisions of the last sentence of Section 303 shall apply
to any Security represented by a Security in global form if such Security was
never issued and sold by the Company and the Company delivers to the Trustee the
Security in global form together with written instructions (which need not
comply with Section 102 and need not be accompanied by an Opinion of Counsel)
with regard to the reduction in the principal amount of Securities represented
thereby, together with the written statement contemplated by the last sentence
of Section 303.
Notwithstanding the provisions of Section 307, unless otherwise
specified as contemplated by Section 301, payment of principal of and any
premium and interest on any Security in permanent global form shall be made to
the Person or Persons specified therein.
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Notwithstanding the provisions of Section 308 and except as
provided in the preceding paragraph, the Company, the Trustee and any agent of
the Company and the Trustee shall treat as the Holder of such principal amount
of Outstanding Securities represented by a permanent global Security (i) in the
case of a permanent global Security in registered form, the Holder of such
permanent global Security in registered form, or (ii) in the case of a permanent
global Security in bearer form, Euroclear or CEDEL.
ARTICLE THREE
THE SECURITIES
SECTION 301. Amount Unlimited; Issuable in Series. The
aggregate principal amount of Securities which may be authenticated and
delivered under this Indenture is unlimited.
The Securities may be issued in one or more series. There shall
be established in one or more Board Resolutions or pursuant to authority granted
by one or more Board Resolutions and, subject to Section 303, set forth, or
determined in the manner provided, in an Officers' Certificate, or established
in one or more indentures supplemental hereto, prior to the issuance of
Securities of any series, any or all of the following, as applicable (each of
which (except for the matters set forth in clauses (1), (2) and (15) below), if
so provided, may be determined from time to time by the Company with respect to
unissued Securities of the series when issued from time to time):
(1) the title of the Securities of the series (which shall
distinguish the Securities of such series from all other series of Securities);
(2) any limit upon the aggregate principal amount of the
Securities of the series that may be authenticated and delivered under this
Indenture (except for Securities authenticated and delivered upon registration
of transfer of, or in exchange for, or in lieu of, other Securities of the
series pursuant to Section 304, 305, 306, 906, 1107 or 1305);
(3) the date or dates, or the method by which such date or
dates will be determined, on which the principal of the Securities of the series
shall be payable;
(4) the rate or rates at which the Securities of the series
shall bear interest, if any, or the method by which such rate or rates shall be
determined, the date or dates from which such interest shall accrue or the
method by which such date or dates shall be determined, the Interest Payment
Dates on which such interest will be payable and the Regular Record Date, if
any, for the interest payable on any Registered Security on any Interest Payment
Date, or the method by which such date shall be determined, and the basis upon
which interest shall be calculated if other than that of a 360-day year of
twelve 30-day months;
(5) the place or places, 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 the series shall be
payable, any Registered Securities of the series may be surrendered for
registration of transfer, exchange or conversion and notices or demands to or
upon the Company in respect of the Securities of the series and this Indenture
may be served;
(6) the period or periods within which, the price or prices at
which, the currency or currencies, currency unit or units or composite currency
or currencies in which, and other terms and conditions upon which Securities of
the series may be redeemed, in whole or in part, at the option of the Company,
if the Company is to have the option;
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(7) the obligation, if any, of the Company to redeem, repay or
purchase Securities of the series pursuant to any provision or at the option of
a Holder thereof, and the period or periods within which or the date of dates on
which, the price or prices at which, the currency or currencies, currency unit
or units or composite currency or currencies in which, and other terms and
conditions upon which Securities of the series shall be redeemed, repaid or
purchased (including without limitation whether, and the extent to which, the
premium shall be payable in connection therewith), in whole or in part, pursuant
to such obligation.
(8) if other than denominations of $1,000 and any integral
multiple thereof, the denominations in which any Registered Securities of the
series shall be issuable and, if other than the denomination of $5,000, the
denomination or denominations in which any Bearer Securities of the series shall
be issuable;
(9) if other than the Trustee, the identity of each Security
Registrar and/or Paying Agent;
(10) if other than the principal amount thereof, the portion of
the principal amount of Securities of the series that shall be payable upon
declaration of acceleration of the Maturity thereof pursuant to Section 502 or,
if applicable, the portion of the principal amount of Securities of the series
that is convertible in accordance with the provisions of this Indenture, or the
method by which such portion shall be determined;
(11) if other than Dollars, the Foreign Currency or Currencies
in which payment of the principal of (and premium or Make-Whole Amount, if any)
or interest or Additional Amounts, if any, on the Securities of the series shall
be payable or in which the Securities of the series shall be denominated;
(12) whether the amount of payments of principal of (and
premium or Make-Whole Amount, if any) or interest, if any, on the Securities of
the series may be determined with reference to an index, formula or other method
(which index, formula or method may be based, without limitation, on one or more
currencies, currency units, composite currencies, commodities, equity indices or
other indices), and the manner in which such amounts shall be determined;
(13) whether the principal of (and premium or Make-Whole
Amount, if any) or interest or Additional Amounts, if any, on the Securities of
the series are to be payable, at the election of the Company, or a Holder
thereof, in a currency or currencies, currency unit or units or composite
currency or currencies other than that in which such Securities are denominated
or stated to be payable, the period or periods within which, and the terms and
conditions upon which, such election may be made, and the time and manner of,
and identity of the exchange rate agent with responsibility for, determining the
exchange rate between the currency or currencies, currency unit or units or
composite currency or currencies in which such Securities are denominated or
stated to be payable and the currency or currencies, currency unit or units or
composite currency or currencies in which such Securities are to be so payable;
(14) provisions, if any, granting special rights to the Holders
of Securities of the series upon the occurrence of such events as may be
specified;
(15) any deletions from, modifications of or additions to the
Events of Default or covenants of the Company with respect to Securities of the
series, whether or not such Events of Default or covenants are consistent with
the Events of Default or covenants set forth herein;
(16) whether Securities of the series are to be issuable as
Registered Securities, Bearer Securities (with or without coupons) or both, any
restrictions applicable to the offer, sale or delivery of Bearer Securities and
the terms upon which Bearer Securities of the series may be
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exchanged for Registered Securities of the series and vice versa (if permitted
by applicable laws and regulations), whether any Securities of the series are to
be issuable initially in temporary global form and whether any Securities of the
series are to be issuable in permanent global form with or without coupons and,
if so, whether beneficial owners of interests in any such permanent global
Security may exchange such interests for Securities of such series and of like
tenor of any authorized form and denomination and the circumstances under which
any such exchanges may occur, if other than in the manner provided in Section
305, and, if Registered Securities of the series are to be issuable as a global
Security, the identity of the depositary for such series;
(17) the date as of which any Bearer Securities of the series
and any temporary global Security representing Outstanding Securities of the
series shall be dated if other than the date of original issuance of the first
Security of the series to be issued;
(18) the Person to whom any interest on any Registered Security
of the series shall be payable, if other than the Person in whose name that
Security (or one or more Predecessor Securities) is registered at the close of
business on the Regular Record Date for such interest, the manner in which, or
the Person to whom, any interest on any Bearer Security of the series shall be
payable, if otherwise than upon presentation and surrender of the coupons
appertaining thereto as they severally mature, and the extent to which, or the
manner in which, any interest payable on a temporary global Security on an
Interest Payment Date will be paid if other than in the manner provided in
Section 304;
(19) the applicability, if any, of Sections 1402 and/or 1403 to
the Securities of the series and any provisions in modification of, in addition
to or in lieu of any of the provisions of Article Twelve;
(20) if the Securities of such series are to be issuable in
definitive form (whether upon original issue or upon exchange of a temporary
Security of such series) only upon receipt of certain certificates or other
documents or satisfaction of other conditions, then the form and/or terms of
such certificates, documents or conditions;
(21) if the Securities of the series are to be issued upon the
exercise of warrants, the time, manner and place for such Securities to be
authenticated and delivered;
(22) whether and under what circumstances the Company will pay
Additional Amounts as contemplated by Section 1012 on the Securities of the
series to any Holder who is not a United States person (including any
modification to the definition of such term) in respect of any tax, assessment
or governmental charge and, if so, whether the Company will have the option to
redeem such Securities rather than pay such Additional Amounts (and the terms of
any such option);
(23) any other terms of the series (which terms shall not be
inconsistent with the provisions of this Indenture).
All Securities of any one series and the coupons appertaining
to any Bearer Securities of such series shall be substantially identical except,
in the case of Registered Securities, as to denomination and except as may
otherwise be provided in or pursuant to such Board Resolution (subject to
Section 303) and set forth in such Officers' Certificate or in any such
indenture supplemental hereto. All Securities of any one series need not be
issued at the same time and, unless otherwise provided, a series may be
reopened, without the consent of the Holders, for issuances of additional
Securities of such series.
If any of the terms of the Securities of any series are
established by action taken pursuant to one or more Board Resolutions, a copy of
an appropriate record of such action(s) shall be certified by the Secretary or
an Assistant Secretary of the Company on behalf of the Company and
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delivered to the Trustee at or prior to the delivery of the Officers'
Certificate setting forth the terms of the Securities of such series.
SECTION 302. Denominations. The Securities of each series shall
be issuable in such denominations as shall be specified as contemplated by
Section 301. With respect to Securities of any series denominated in Dollars, in
the absence of any such provisions with respect to the Securities of any series,
the Registered Securities of such series, other than Registered Securities
issued in global form (which may be of any denomination), shall be issuable in
denominations of $1,000 and any integral multiple thereof and the Bearer
Securities of such series, other than Bearer Securities issued in global form
(which may be of any denomination), shall be issuable in a denomination of
$5,000.
SECTION 303. Execution, Authentication, Delivery and Dating.
The Securities and any coupons appertaining thereto shall be executed by the
Company's Chairman of the Board, and President or one of its Senior Vice
Presidents, and its Chief Financial Officer. The signature of any of these
officers on the Securities and coupons may be manual or facsimile signatures of
the present or any future such authorized officer and may be imprinted or
otherwise reproduced on the Securities.
Securities or coupons bearing the manual or facsimile
signatures of individuals who were at any time the proper officers of the
Company shall bind the Company, notwithstanding that such individuals or any of
them have ceased to hold such offices prior to the authentication and delivery
of such Securities did not hold such offices at the date of such Securities or
coupons.
At any time and from time to time after the execution and
delivery of this Indenture, the Company may deliver Securities of any series,
together with any coupon appertaining thereto, executed by the Company to the
Trustee for authentication, together with a Company Order for the authentication
and delivery of such Securities, and the Trustee in accordance with the Company
Order shall authenticate and deliver such Securities; provided, however, that,
in connection with its original issuance, no Bearer Security shall be mailed or
otherwise delivered to any location in the United States; and provided further
that, unless otherwise specified with respect to any series of Securities
pursuant to Section 301, a Bearer Security may be delivered in connection with
its original issuance only if the Person entitled to receive such Bearer
Security shall have furnished a certificate to Euroclear or CEDEL, as the case
may be, in the form set forth in Exhibit A-1 to this Indenture or such other
certificate as may be specified with respect to any series of Securities
pursuant to Section 301, dated no earlier than 15 days prior to the earlier of
the date on which such Bearer Security is delivered and the date on which any
temporary Security first becomes exchangeable for such Bearer Security in
accordance with the terms of such temporary Security and this Indenture. If any
Security shall be represented by a permanent global Bearer Security, then, for
purposes of this Section and Section 304, the notation of a beneficial owner's
interest therein upon original issuance of such Security or upon exchange of a
portion of a temporary global Security shall be deemed to be delivery in
connection with its original issuance of such beneficial owner's interest in
such permanent global Security. Except as permitted by Section 306, the Trustee
shall not authenticate and deliver any Bearer Security unless all appurtenant
coupons for interest then matured have been detached and canceled.
If all the Securities of any series are not to be issued at one
time and if the Board Resolution or supplemental indenture establishing such
series shall so permit, such Company Order may set forth procedures acceptable
to the Trustee for the issuance of such Securities and determining the terms of
particular Securities of such series, such as interest rate or formula, maturity
date, date of issuance and date from which interest shall accrue. In
authenticating such Securities, and accepting the additional responsibilities
under this Indenture in relation to such Securities, the Trustee shall be
entitled to receive, and (subject to TIA Section 315(a) through 315(d)) shall be
fully protected in relying upon,
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(i) an Opinion of Counsel stating that
(a) the form or forms of such Securities and any
coupons have been established in conformity with the provisions of this
Indenture;
(b) the terms of such Securities and any coupons have
been established in conformity with the provisions of this Indenture; and
(c) such Securities, together with any coupons
appertaining thereto, when completed by appropriate insertions and executed and
delivered by the Company to the Trustee for authentication in accordance with
this Indenture, authenticated and delivered by the Trustee in accordance with
this Indenture and issued by the Company in the manner and subject to any
conditions specified in such Opinion of Counsel, will constitute legal, valid
and binding obligations of the Company, enforceable in accordance with their
terms, subject to applicable bankruptcy, insolvency, reorganization and other
similar laws of general applicability relating to or affecting the enforcement
of creditors' rights generally and to general equitable principles; and
(ii) an Officers' Certificate stating that all conditions
precedent provided for in this Indenture relating to the issuance of the
Securities have been complied with and that, to the best of the knowledge of the
signers of such certificate, that no Event of Default with respect to any of the
Securities shall have occurred and be continuing.
If such form or terms have been so established, the Trustee
shall not be required to authenticate such Securities if the issue of such
Securities pursuant to this Indenture will affect the Trustee's own rights,
duties, obligations or immunities under the Securities and this Indenture or
otherwise in a manner which is not reasonably acceptable to the Trustee.
Notwithstanding the provisions of Section 301 and of the
preceding paragraph, if all the Securities of any series are not to be issued at
one time, it shall not be necessary to deliver an Officers' Certificate
otherwise required pursuant to Section 301 or a Company Order, or an Opinion of
Counsel or an Officers' Certificate otherwise required pursuant to the preceding
paragraph at the time of issuance of each Security of such series, but such
order, opinion and certificates, with appropriate modifications to cover such
future issuances, shall be delivered at or before the time of issuance of the
first Security of such series.
Each Registered Security shall be dated the date of its
authentication and each Bearer Security shall be dated as of the date specified
as contemplated by Section 301.
No Security or coupon shall be entitled to any benefit under
this Indenture or be valid or obligatory for any purpose unless there appears on
such Security or Security to which such coupon appertains a certificate of
authentication substantially in the form provided for herein duly executed by
the Trustee by manual signature of an authorized signatory, and such certificate
upon any Security shall be conclusive evidence, and the only evidence, that such
Security has been duly authenticated and delivered hereunder and is entitled to
the benefits of this Indenture. Notwithstanding the foregoing, if any Security
shall have been authenticated and delivered hereunder but never issued and sold
by the Company, and the Company shall deliver such Security to the Trustee for
cancellation as provided in Section 309 together with a written statement (which
need not comply with Section 102 and need not be accompanied by an Opinion of
Counsel) stating that such Security has never been issued and sold by the
Company, for all purposes of this Indenture such Security shall be deemed never
to have been authenticated and delivered hereunder and shall never be entitled
to the benefits of this Indenture.
SECTION 304. Temporary Securities. (a) Pending the preparation
of definitive Securities of any series, the Company may execute, and upon
Company Order, the Trustee shall
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authenticate and deliver, temporary Securities which are printed, lithographed,
typewritten, mimeographed or otherwise produced, in any authorized denomination,
substantially of the tenor of the definitive Securities in lieu of which they
are issued, in registered form, or, if authorized, in bearer form with one or
more coupons or without coupons, and with such appropriate insertions,
omissions, substitutions and other variations as the officers executing such
Securities may determine, as conclusively evidenced by their execution of such
Securities. In the case of Securities of any series, such temporary Securities
may be in global form.
Except in the case of temporary Securities in global form
(which shall be exchanged in accordance with Section 304(b) or as otherwise
provided in or pursuant to a Board Resolution), if temporary Securities of any
series are issued, the Company will cause definitive Securities of that series
to be prepared without unreasonable delay. After the preparation of definitive
securities of such series, the temporary Securities of such series shall be
exchangeable for definitive Securities of such series upon surrender of the
temporary Securities of such series at the office or agency of the Company in a
Place of Payment for that series, without charge to the Holder. Upon surrender
for cancellation of any one or more temporary Securities of any series
(accompanied by any non-matured coupons appertaining thereto), the Company shall
execute and the Trustee shall authenticate and deliver in exchange therefor a
like principal amount of definitive Securities of the same series of authorized
denominations; provided, however, that no definitive Bearer Security shall be
delivered in exchange for a temporary Registered Security; and provided further
that a definitive Bearer Security shall be delivered in exchange for a temporary
Bearer Security only in compliance with the conditions set forth in Section 303.
Until so exchanged, the temporary Securities of any series shall in all respects
be entitled to the same benefits under this Indenture as definitive Securities
of such series.
(b) Unless otherwise provided in or pursuant to a Board
Resolution, this Section 304(b) shall govern the exchange of temporary
Securities issued in global form other than through the facilities of The
Depository Trust Company. If any such temporary Security is issued in global
form, then such temporary global Security shall, unless otherwise provided
therein, be delivered to the London office of a depositary or common depositary
(the "Common Depositary"), for the benefit of Euroclear and CEDEL, for credit to
the respective accounts of the beneficial owners of such Securities (or to such
other accounts as they may direct).
Without unnecessary delay but in any event not later than the
date specified in, or determined pursuant to the terms of, any such temporary
global Security (the "Exchange Date"), the Company shall deliver to the Trustee
definitive Securities, in aggregate principal amount equal to the principal
amount of such temporary global Security, executed by the Company. On or after
the Exchange Date, such temporary global Security shall be surrendered by the
Common Depositary to the Trustee, as the Company's agent for such purpose, to be
exchanged, in whole or from time to time in part, for definitive Securities
without charge, and the Trustee shall authenticate and deliver, in exchange for
each portion of such temporary global Security, an equal aggregate principal
amount of definitive Securities of the same series of authorized denominations
and of like tenor as the portion of such temporary global Security to be
exchanged. The definitive Securities to be delivered in exchange for any such
temporary global Security shall be in bearer form, registered form, permanent
global bearer form or permanent global registered form, or any combination
thereof, as specified as contemplated by Section 301, and, if any combination
thereof is so specified, as requested by the beneficial owner thereof; provided,
however, that, unless otherwise specified in such temporary global Security,
upon such presentation by the Common Depositary, such temporary global Security
is accompanied by a certificate dated the Exchange Date or a subsequent date and
signed by Euroclear as to the portion of such temporary global Security held for
its account then to be exchanged and a certificate dated the Exchange Date or a
subsequent date and signed by CEDEL as to the portion of such temporary global
Security held for its account then to be exchanged, each in the form set forth
in Exhibit A-2 to this Indenture or in such other form as may be established
pursuant to Section 301; and provided further that definitive Bearer Securities
shall be delivered in
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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 he respective accounts of Persons who are the beneficial owners of such
temporary global Security on such Interest Payment Date and who have each
delivered to Euroclear or CEDEL, as the case may be, a certificate dated no
earlier than 15 days prior to the Interest Payment Date occurring prior to such
Exchange Date in the form set forth as Exhibit A-1 to this Indenture (or in such
other forms as may be established pursuant to Section 301). Notwithstanding
anything to the contrary herein contained, the certifications made pursuant to
this paragraph shall satisfy the certification requirements of the preceding two
paragraphs of this Section 304(b) and of the third paragraph of Section 303 of
this Indenture and the interests of the Persons who are the beneficial owners of
the temporary global Security with respect to which such certification was made
will be exchanged for definitive Securities of the same series and of like tenor
on the Exchange Date or the date of certification if such date occurs after the
Exchange Date, without further act or deed by such beneficial owners. Except as
otherwise provided in this paragraph, no payments of principal or interest owing
with respect to a beneficial interest in a temporary global Security will be
made unless and until such interest in such temporary global Security shall have
been exchanged for an interest in a definitive Security. Any interest so
received by Euroclear and CEDEL and not paid as herein provided shall be
returned to the Trustee prior to the expiration of two years after such Interest
Payment Date in order to be repaid to the Company.
SECTION 305. Registration, Registration of Transfer and
Exchange. The Company shall cause to be kept at the Corporate Trust Office of
the Trustee or in any office or agency of the Company in a Place of Payment a
register for each series of Securities (the registers maintained in such office
or in any such office or agency of the Company in a Place of Payment being
herein sometimes referred to collectively as the "Security Register") in which,
subject to such reasonable regulations as it may prescribe, the Company shall
provide for the registration of Registered Securities and of transfers of
Registered Securities. The Security Register shall be in written form or any
other form capable of being converted into written form within a reasonable
time. The Trustee,
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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 Company in a Place of Payment for that series, the
Company shall execute, and the Trustee shall authenticate and deliver, in the
name of the designated transferee or transferees, one or more new Registered
Securities of the same series, of any authorized denominations and of a like
aggregate principal amount, bearing a number not contemporaneously outstanding,
and containing identical terms and provisions.
Subject to the provisions of this Section 305, at the option of
the Holder, Registered Securities of any series may be exchanged for other
Registered Securities of the same series, of any authorized denomination or
denominations and of a like aggregate principal amount, containing identical
terms and provisions, upon surrender of the Registered Securities to be
exchanged at any such office or agency. Whenever any such Registered Securities
are so surrendered for exchange, the Company shall execute, and the Trustee
shall authenticate and deliver, the Registered Securities which the Holder
making the exchange is entitled to receive. Unless otherwise specified with
respect to any series of Securities as contemplated by Section 301, Bearer
Securities may not be issued in exchange for Registered Securities.
If (but only if) permitted by the applicable Board Resolution
and (subject to Section 303) set forth in the applicable Officers' Certificate,
or in any indenture supplemental hereto, delivered as contemplated by Section
301, at the option of the Holder, Bearer Securities of any series may be
exchanged for Registered Securities of the same series of any authorized
denominations and of a like aggregate principal amount and tenor, upon surrender
of the Bearer Securities to be exchanged at any such office or agency, with all
unmatured coupons and all matured coupons in default thereto appertaining. If
the Holder of a Bearer Security is unable to produce any such unmatured coupon
or coupons or matured coupon or coupons in default, any such permitted exchange
may be effected if the Bearer Securities are accompanied by payment in funds
acceptable to the Company in an amount equal to the face amount of such missing
coupon or coupons, or the surrender of such missing coupon or coupons may be
waived by the Company and the Trustee if there is furnished to them such
security or indemnity as they may require to save each of them and any Paying
Agent harmless. If thereafter the Holder of such Security shall surrender to any
Paying Agent any such missing coupon in respect of which such a payment shall
have been made, such Holder shall be entitled to receive the amount of such
payment; provided, however, that, except as otherwise provided in Section 1002,
interest represented by coupons shall be payable only upon presentation and
surrender of those coupons at an office or agency located outside the United
States. Notwithstanding the foregoing, in case a Bearer Security of any series
is surrendered at any such office or agency in a permitted exchange for a
Registered Security of the same series and like tenor after the close of
business at such office or agency on (i) any Regular Record Date and before the
opening of business at such office or agency on the relevant Interest Payment
Date, or (ii) any Special Record Date and before the opening of business at such
office or agency on the related proposed date for payment of Defaulted Interest,
such Bearer Security shall be surrendered without the coupon relating to such
Interest Payment Date or proposed date for payment, as the case may be, and
interest or Defaulted Interest, as the case may be, will not be payable on such
Interest Payment Date or proposed date for payment, as the case may be, in
respect of the Registered Security issued in exchange for such Bearer Security,
but will be payable only to the Holder of such coupon when due in accordance
with the provisions of this Indenture. Whenever any Securities are so
surrendered for exchange, the Company shall execute, and the Trustee shall
authenticate and deliver, the Securities which the Holder making the exchange is
entitled to receive.
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Notwithstanding the foregoing, except as otherwise specified as
contemplated by Section 301, any permanent global Security shall be exchangeable
only as provided in this paragraph. If the depositary for any permanent global
Security is "DTC", then, unless the terms of such global Security expressly
permit such global Security to be exchanged in whole or in part for definitive
Securities, a global Security may be transferred, in whole but not in part, only
to a nominee of DTC, or by a nominee of DTC to DTC, or to a successor to DTC for
such global Security selected or approved by the Company or to a nominee of such
successor to DTC. If at any time DTC notifies the Company that it is unwilling
or unable to continue as depositary for the applicable global Security or
Securities or if at any time DTC ceases to be a clearing agency registered under
the Exchange Act if so required by applicable law or regulation, the Company
shall appoint a successor depositary with respect to such global Security or
Securities. If (x) a successor depositary for such global Security or Securities
is not appointed by the Company within 90 days after the Company receives such
notice or becomes aware of such unwillingness, inability or ineligibility, (y)
an Event of Default has occurred and is continuing and the beneficial owners
representing a majority in principal amount of the applicable series of
Securities represented by such global Security or Securities advise DTC to cease
acting as depositary for such global Security or Securities or (z) the Company,
in its sole discretion, determines at any time that all Outstanding Securities
(but not less than all) of any series issued or issuable in the form of one or
more global Securities shall no longer be represented by such global Security or
Securities, then the Company shall execute, and the Trustee shall authenticate
and deliver definitive Securities of like series, rank, tenor and terms in
definitive form in an aggregate principal amount equal to the principal amount
of such global Security or Securities. If any beneficial owner of an interest in
a permanent global Security is otherwise entitled to exchange such interest for
Securities of such series and of like tenor and principal amount of another
authorized form and denomination, as specified as contemplated by Section 301
and provided that any applicable notice provided in the permanent global
Security shall have been given, then without unnecessary delay but in any event
not later than the earliest date on which such interest may be so exchanged, the
Company shall execute, and the Trustee shall authenticate and deliver definitive
Securities in aggregate principal amount equal to the principal amount of such
beneficial owner's interest in such permanent global Security. On or after the
earliest date on which such interests may be so exchanged, such permanent global
Security shall be surrendered for exchange by DTC or such other depositary as
shall be specified in the Company Order with respect thereto to the Trustee, as
the Company's agent for such purpose; provided, however, that no such exchanges
may occur during a period beginning at the opening of business 15 days before
any selection of Securities to be redeemed and ending on the relevant Redemption
Date if the Security for which exchange is requested may be among those selected
for redemption; and provided further that no Bearer Security delivered in
exchange for a portion of a permanent global Security shall be mailed or
otherwise delivered to any location in the United States. If a Registered
Security is issued in exchange for any portion of a permanent global Security
after the close of business at the office or agency where such exchange occurs
on (i) any Regular Record Date and before the opening of business at such office
or agency on the relevant Interest Payment Date, or (ii) any Special Record Date
and the opening of business at such office or agency on the related proposed
date for payment of Defaulted Interest, interest or Defaulted Interest, as the
case may be, will not be payable on such Interest Payment Date or proposed date
for payment, as the case may be, in respect of such Registered Security, but
will be payable on such Interest Payment Date or proposed date for payment, as
the case may be, only to the Person to whom interest in respect of such portion
of such permanent global Security is payable in accordance with the provisions
of this Indenture.
All Securities issued upon any registration of transfer or
exchange of Securities shall be the valid obligations of the Company, evidencing
the same debt, and entitled to the same benefits under this Indenture, as the
Securities surrendered upon such registration of transfer or exchange.
Every Registered Security presented or surrendered for
registration of transfer or for exchange or redemption shall (if so required by
the Company or the Security Registrar) be duly endorsed, or be accompanied by a
written instrument of transfer in form satisfactory to the Company
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and the Security Registrar, duly executed by the Holder thereof or his attorney
duly authorized in writing.
No service charge shall be made for any registration of
transfer or exchange of Securities, but the Company may require payment of a sum
sufficient to cover any tax or other governmental charge that may be imposed in
connection with any registration of transfer or exchange of Securities, other
than exchanges pursuant to Section 304, 906, 1107 or 1305 not involving any
transfer.
The Company, or the Trustee, as applicable, shall not be
required (i) to issue, register the transfer of or exchange any Security if such
Security may be among those selected for redemption during a period beginning at
the opening of business 15 days before selection of the Securities to be
redeemed under Section 1103 and ending at the close of business on (A) if such
Securities are issuable only as Registered Securities, the day of the mailing of
the relevant notice of redemption and (B) if such Securities are issuable as
Bearer Securities, the day of the first publication of the relevant notice of
redemption or, if such Securities are also issuable as Registered Securities and
there is no publication, the mailing of the relevant notice of redemption, or
(ii) to register the transfer of or exchange any Registered Security so selected
for redemption in whole or in part, except, in the case of any Registered
Security to be redeemed in part, the portion thereof not to be redeemed, or
(iii) to exchange any Bearer Security so selected for redemption except that
such a Bearer Security may be exchanged for a Registered Security of that series
and like tenor, provided that such Registered Security shall be simultaneously
surrendered for redemption, or (iv) to issue, register the transfer of or
exchange any Security which has been surrendered for repayment at the option of
the Holder, except the portion, if any, of such Security not to be so repaid.
SECTION 306. Mutilated, Destroyed, Lost and Stolen Securities.
If any mutilated Security or a Security with a mutilated coupon appertaining to
it is surrendered to the Trustee or the Company, together with, in proper cases,
such security or indemnity as may be required by the Company or the Trustee to
save each of them or any agent of either of them harmless, the Company shall
execute and the Trustee shall authenticate and deliver in exchange therefor a
new Security of the same series and principal amount, containing identical terms
and provisions and bearing a number not contemporaneously outstanding, with
coupons corresponding to the coupons, if any, appertaining to the surrendered
Security.
If there shall be delivered to the Company and to the Trustee
(i) evidence to their satisfaction of the destruction, loss or theft of any
Security or coupon, and (ii) such security or indemnity as may be required by
them to save each of them and any agent of either of them harmless, then, in the
absence of notice to the Company or the Trustee that such Security or coupon has
been acquired by a bona fide purchaser, the Company shall execute and upon its
request the Trustee shall authenticate and deliver, in lieu of any such
destroyed, lost or stolen Security or in exchange for the Security to which a
destroyed, lost or stolen coupon appertains (with all appurtenant coupons not
destroyed, lost or stolen), a new Security of the same series and principal
amount, containing identical terms and provisions and bearing a number not
contemporaneously outstanding, with coupons corresponding to the coupons, if
any, appertaining to such destroyed, lost or stolen Security or to the Security
to which such destroyed, lost or stolen coupon appertains.
Notwithstanding the provisions of the previous two paragraphs,
in case any such mutilated, destroyed, lost or stolen Security or coupon has
become or is about to become due and payable, the Company in its discretion may,
instead of issuing a new Security, with coupons corresponding to the coupons, if
any, appertaining to such destroyed, lost or stolen Security or to the Security
to which such destroyed, lost or stolen coupon appertains, pay such Security or
coupon; provided, however, that payment of principal of (and premium 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
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and, unless otherwise specified as contemplated by Section 301, any interest on
Bearer Securities shall be payable only upon presentation and surrender of the
coupons appertaining thereto.
Upon the issuance of any new Security under this Section, the
Company may require the payment of a sum sufficient to cover any tax or other
governmental charge that may be imposed in relation thereto and any other
expenses (including the fees and expenses of the Trustee) connected therewith.
Every new Security of any series with its coupons, if any,
issued pursuant to this Section in lieu of any destroyed, lost or stolen
Security, or in exchange for a Security to which a destroyed, lost or stolen
coupon appertains, shall constitute an original additional contractual
obligation of the Company, whether or not the destroyed, lost or stolen Security
and its coupons, if any, or the destroyed, lost or stolen coupon shall be at any
time enforceable by anyone, and shall be entitled to all the benefits of this
Indenture equally and proportionately with any and all other Securities of that
series and their coupons, if any, duly issued hereunder.
The provisions of this Section are exclusive and shall preclude
(to the extent lawful) all other rights and remedies with respect to the
replacement or payment of mutilated, destroyed, lost or stolen Securities or
coupons.
SECTION 307. Payment of Interest; Interest Rights Preserved.
Except as otherwise specified with respect to a series of Securities in
accordance with the provisions of Section 301, interest on any Registered
Security that is payable, and is punctually paid or duly provided for, on any
Interest Payment Date shall be paid to the Person in whose name that Security
(or one or more Predecessor Securities) is registered at the close of business
on the Regular Record Date for such interest at the office or agency of the
Company maintained for such purpose pursuant to Section 1002; provided, however,
that each installment of interest on any Registered Security may at the
Company's option be paid by (i) mailing a check for such interest, payable to or
upon the written order of the Person entitled thereto pursuant to Section 308,
to the address of such Person as it appears on the Security Register or (ii)
transfer to an account maintained by the payee located inside the United States.
Unless otherwise provided as contemplated by Section 301 with
respect to the Securities of any series, payment of interest may be made, in the
case of a Bearer Security, by transfer to an account maintained by the payee
with a bank located outside the United States.
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,
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but is not punctually paid or duly provided for, on any Interest Payment Date
(herein called "Defaulted Interest") shall forthwith cease to be payable to the
registered Holder thereof on the relevant Regular Record Date by virtue of
having been such Holder, and such Defaulted Interest may be paid by the Company
at its election in each case, as provided in clause (1) or (2) below:
(1) The Company may elect to make payment of any Defaulted
Interest to the Persons in whose names the Registered Securities of such series
(or their respective Predecessor Securities) are registered at the close of
business on a special Record Date for the payment of such Defaulted Interest,
which shall be fixed in the following manner. The Company shall notify the
Trustee in writing of the amount of Defaulted Interest proposed to be paid on
each Registered Security of such series and the date of the proposed payment
(which shall not be less than 20 days after such notice is received by the
Trustee), and at the same time the Company shall deposit with the Trustee an
amount of money in the currency or currencies, currency unit or units or
composite currency or currencies in which the Securities of such series are
payable (except as otherwise specified pursuant to Section 301 for the
Securities of such series) equal to the aggregate amount proposed to be paid in
respect of such Defaulted Interest or shall make arrangements satisfactory to
the Trustee for such deposit on or prior to the date of the proposed payment,
such money when deposited to be held in trust for the benefit of the Persons
entitled to such Defaulted Interest as in this clause provided. Thereupon the
Trustee shall fix a Special Record Date for the payment of such Defaulted
Interest which shall be not more than 15 days and not less than 10 days prior to
the date of the proposed payment and not less than 10 days after the receipt by
the Trustee of the notice of the proposed payment. The Trustee shall promptly
notify the Company of such Special Record Date and, in the name and at the
expense of the Company, shall cause notice of the proposed payment of such
Defaulted Interest and the Special Record Date therefor to be mailed,
first-class postage prepaid, to each Holder of Registered Securities of such
series at his address as it appears in the Security Register not less than 10
days prior to such Special Record Date. The Trustee may, in its discretion, in
the name and at the expense of the Company, cause a similar notice to be
published at least once in an Authorized Newspaper in each place of payment, but
such 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 Company may make payment of any Defaulted Interest on
the Registered Securities of any series in any other lawful manner not
inconsistent with the requirements of any securities exchange on which such
Securities may be listed, and upon such notice as may be required by such
exchange, if, after notice given by the Company to the Trustee of the proposed
payment pursuant to this clause, such manner of payment shall be deemed
practicable by the Trustee.
Subject to the foregoing provisions of this Section and Section
305, each Security delivered under this Indenture upon registration of transfer
of or in exchange for or in lieu of any other Security shall carry the rights to
interest accrued and unpaid, and to accrue, which were carried by such other
Security.
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SECTION 308. Persons Deemed Owners. Prior to due presentment of
a Registered Security for registration of transfer, the Company, the Trustee and
any agent of the Company or the Trustee may treat the Person in whose name such
Registered Security is registered as the owner of such Security for the purpose
of receiving payment of principal of (and premium 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 none of the Company, the Trustee or any agent of the Company or the
Trustee shall be affected by notice to the contrary.
Title to any Bearer Security and any coupons appertaining
thereto shall pass by delivery. The Company, the Trustee and any agent of the
Company or the Trustee may treat the Holder of any Bearer Security and the
Holder of any coupon as the absolute owner of such Security or coupon for the
purpose of receiving payment thereof or on account thereof and for all other
purposes whatsoever, whether or not such Security or coupon be overdue, and none
of the Company, the Trustee or any agent of the Company or the Trustee shall be
affected by notice to the contrary.
None of the Company, the Trustee, any Paying Agent or the
Security Registrar will have any responsibility or liability for any aspect of
the records relating to or payments made on account of beneficial ownership
interests of a Security in global form or for maintaining, supervising or
reviewing any records relating to such beneficial ownership interests.
Notwithstanding the foregoing, with respect to any global
Security, nothing herein shall prevent the Company, the Trustee, or any agent of
the Company, or the Trustee, from giving effect to any written certification,
proxy or other authorization furnished by any depositary, as a Holder, with
respect to such global Security or impair, as between such depositary and owners
of beneficial interests in such global Security, the operation of customary
practices governing the exercise of the rights of such depositary (or its
nominee) as Holder of such global Security.
SECTION 309. Cancellation. All Securities and coupons
surrendered for payment, redemption, repayment at the option of the Holder,
registration of transfer or exchange or for credit against any sinking fund
payment shall, if surrendered to any Person other than the Trustee, be delivered
to the Trustee, and any such Securities and coupons and Securities and coupons
surrendered directly to the Trustee for any such purpose shall be promptly
canceled by it. The Company may at any time deliver to the Trustee for
cancellation any Securities previously authenticated and delivered hereunder
which the Company may have acquired in any manner whatsoever, and may deliver to
the Trustee (or to any other Person for delivery to the Trustee) for
cancellation any Securities previously authenticated hereunder which the Company
has not issued and sold, and all Securities so delivered shall be promptly
canceled by the Trustee. If the Company shall so acquire any of the Securities,
however, such acquisition shall not operate as a redemption or satisfaction of
the indebtedness represented by such Securities unless and until the same are
surrendered to the Trustee for cancellation. No Securities shall be
authenticated in lieu of or in exchange for any Securities canceled as provided
in this Section, except as expressly permitted by this Indenture. Canceled
Securities and coupons held by the Trustee shall be destroyed by the Trustee and
the Trustee shall deliver a certificate of such destruction to the Company,
unless by the Company Order, the Company directs their return to it.
SECTION 310. Computation of Interest. Except as otherwise
specified as contemplated by Section 301 with respect to Securities of any
series, interest on the Securities of each series shall be computed on the basis
of a 360-day year consisting of twelve 30-day months.
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ARTICLE FOUR
SATISFACTION AND DISCHARGE
SECTION 401. Satisfaction and Discharge of Indenture. This
Indenture shall upon Company Request cease to be of further effect with respect
to any series of Securities specified in such Company Request (except as to any
surviving rights of registration of transfer or exchange of Securities of such
series herein expressly provided for and any right to receive Additional
Amounts, as provided in Section 1012), and the Trustee, upon receipt of a
Company Order, and at the expense of the Company, shall execute proper
instruments acknowledging satisfaction and discharge of this Indenture as to
such series when,
(1) either
(A) all Securities of such series theretofore
authenticated and delivered and all coupons, if any, appertaining thereto (other
than (i) coupons appertaining to Bearer Securities surrendered for exchange for
Registered Securities and maturing after such exchange, whose surrender is not
required or has been waived as provided in Section 305, (ii) Securities and
coupons of such series which have been destroyed, lost or stolen and which have
been replaced or paid as provided in Section 306, (iii) coupons appertaining to
Securities called for redemption and maturing after the relevant Redemption
Date, whose surrender has been waived as provided in Section 1106, and (iv)
Securities and coupons of such series for whose payment money has theretofore
been deposited in trust or segregated and held in trust by the Company and
thereafter repaid to the Company or discharged from such trust, as provided in
Section 1003) have been delivered to the Trustee for cancellation; or
(B) all Securities of such series and, in the case of
(i) or (ii) below, any coupons appertaining thereto not theretofore delivered to
the Trustee for cancellation
(i) have become due and payable, or
(ii) will become due and payable at their
Stated Maturity within one year, or
(iii) if redeemable at the option of the
Company, are to be called for redemption within one year under arrangements
satisfactory to the Trustee for the giving of notice of redemption by the
Trustee in the name, and at the expense of the Company, and the Company, in the
case of (i), (ii) or (iii) above, has irrevocably deposited or caused to be
deposited with the Trustee as trust funds in trust for the purpose an amount in
the currency or currencies, currency unit or units or composite currency or
currencies in which the Securities of such series are payable, sufficient to pay
and discharge the entire indebtedness on such Securities and such coupons not
theretofore delivered to the Trustee for cancellation, for principal (and
premium 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 to the Stated Maturity or Redemption Date,
as the case may be;
(2) the Company has paid or caused to be paid all other sums
payable hereunder by the Company; and
(3) the Company has delivered to the Trustee an Officers'
Certificate and an Opinion of Counsel, each stating that all conditions
precedent herein provided for relating to the satisfaction and discharge of this
Indenture as to such series have been complied with.
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Notwithstanding the satisfaction and discharge of this
Indenture, the obligations of the Company to the Trustee and any predecessor
Trustee under Section 606, the obligations of the Company to any Authenticating
Agent under Section 611 and, if money shall have been deposited with and held by
the Trustee pursuant to subclause (B) of clause (1) of this Section, the
obligations of the Trustee under Section 402 and the last paragraph of Section
1003 shall survive.
SECTION 402. Application of Trust Funds. Subject to the
provisions of the last paragraph of Section 1003, all money deposited with the
Trustee pursuant to Section 401 shall be held in trust and applied by it, in
accordance with the provisions of the Securities, the coupons and this
Indenture, to the payment, either directly or through any Paying Agent
(including the Company acting as its own Paying Agent) as the Trustee may
determine, to the Persons entitled thereto, of the principal (and premium or
Make-Whole Amount, if any), and any interest and Additional Amounts for whose
payment such money has deposited with or received by the Trustee, but such money
need not be segregated from other funds except to the extent required by law.
ARTICLE FIVE
REMEDIES
SECTION 501. Events of Default. "Event of Default," wherever
used herein with respect to any particular series of Securities, means any one
of the following events (whatever the reason for such Event of Default and
whether or not it shall be voluntary or involuntary or be effected by operation
of law or pursuant to any judgment, decree or order of any court or any order,
rule or regulation of any administrative or governmental body):
(1) default in the payment of any interest upon or any
Additional Amounts payable in respect of any Security of that series or of any
coupon appertaining thereto, when such interest, Additional Amounts or coupon
becomes due and payable, 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 performance, or breach, of any covenant or
warranty of the Company in this Indenture with respect to any Security of that
series (other than a covenant or warranty a default in whose performance or
whose breach is elsewhere in this Section specifically dealt with), and
continuance of such default or breach for a period of 60 days after there has
been given, by registered or certified mail to the Company, by the Trustee or to
the Company, and the Trustee by the Holders of at least 25% in principal amount
of the Outstanding Securities of that series a written notice specifying such
default or breach and requiring it to be remedied and stating that such notice
is a "Notice of Default" hereunder; or
(4) a default under any bond, debenture, note or other evidence
of indebtedness of the Company, or under any mortgage, indenture or other
instrument of the Company (including a default with respect to Securities of any
series other than that series) under which there may be issued or by which there
may be secured any indebtedness of 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 on a full recourse basis)
whether such indebtedness now exists or shall hereafter be created, which
default shall constitute a failure to pay an aggregate principal amount
exceeding $10,000,000 of such indebtedness when due and payable after the
expiration of any applicable grace period with respect thereto and shall have
resulted in such indebtedness in an aggregate principal amount exceeding
$10,000,000 becoming or being declared due and payable prior to the date on
which it would otherwise have become due and payable, without such indebtedness
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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 Company by the Trustee or to the Company 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
Company 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
(5) the Company or any Significant Subsidiary pursuant to
or within the meaning of any Bankruptcy Law:
(A) commences a voluntary case,
(B) consents to the entry of an order for relief
against it in an involuntary case,
(C) consents to the appointment of a Custodian of
it or for all or substantially all of its
property, or
(D) makes a general assignment for the benefit of
its creditors; or
(6) a court of competent jurisdiction enters an order or decree
under any Bankruptcy Law that:
(A) is for relief against the Company or any
Significant Subsidiary in an involuntary case,
(B) appoints a Custodian of the Company or any
Significant Subsidiary or for all or
substantially all of either of its property,
or
(C) orders the liquidation of the Company or any
Significant Subsidiary,
and the order or decree remains unstayed and in effect for 90 days; or
(7) 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) and premium
(if any) of all the Securities of that series to be due and payable immediately,
by a notice in writing to the Company, (and to the Trustee if given by the
Holders), and upon any such declaration such principal and premium (if any) 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
Company and the Trustee, may rescind and annul such declaration and its
consequences if:
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(1) the Company 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 are payable (except as otherwise specified
pursuant to Section 301 for the Securities of such series):
(A) all overdue installments of interest on and any
Additional Amounts payable in respect of all Outstanding Securities of that
series and any related coupons,
(B) the principal of (and premium 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 Company covenants that if:
(1) default is made in the payment of any installment of
interest or Additional Amounts, if any, on any Security of any series and any
related coupon when such interest or Additional Amount becomes due and payable
and such default continues for a period of 30 days, or
(2) default is made in the payment of the principal of (or
premium or Make-Whole Amount, if any, on) any Security of any series at its
Maturity, then the Company will, upon demand of the Trustee, pay to the Trustee,
for the benefit of the Holders of such Securities of such series and coupons,
the whole amount then due and payable on such Securities and coupons for
principal (and premium 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 Company fails to pay such amounts forthwith upon such
demand, the Trustee, in its own name and as trustee of an express trust, may
institute a judicial proceeding for the collection of the sums so due and
unpaid, and may prosecute such proceeding to judgment or final decree, and may
enforce the same against the Company, or any other obligor upon such Securities
of such series and collect the moneys adjudged or decreed to be payable in the
manner provided by law out of the property of the Company or any other obligor
upon such Securities of such series, wherever situated.
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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 Company or any other obligor upon the Securities or
the property of the Company or of such other obligor or their creditors, the
Trustee (irrespective of whether the principal of the Securities of any series
shall then be due and payable as therein expressed or by declaration or
otherwise and irrespective of whether the Trustee shall have made any demand on
the Company for the payment of overdue principal, premium 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 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
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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 Company.
SECTION 507. Limitation on Suits. No Holder of any Security of
any series or any related coupon shall have any right to institute any
proceeding, judicial or otherwise, with respect to this Indenture, or for the
appointment of a receiver or trustee, or for any other remedy hereunder, unless:
(1) such Holder has previously given written notice to the
Trustee of a continuing Event of Default with respect to the Securities of that
series;
(2) the Holders of not less than 25% in principal amount of the
Outstanding Securities of that series shall have made written request to the
Trustee to institute proceedings in respect of such Event of Default in its own
name as Trustee hereunder;
(3) such Holder or Holders have offered to the Trustee
indemnity reasonably satisfactory to the Trustee against the costs, expenses and
liabilities to be incurred in compliance with such request;
(4) the Trustee for 60 days after its receipt of such notice,
request and offer of indemnity has failed to institute any such proceeding; and
(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.
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SECTION 509. Restoration of Rights and Remedies. If the Trustee
or any Holder of a Security or coupon has instituted any proceeding to enforce
any right or remedy under this Indenture and such proceeding has been
discontinued or abandoned for any reason, or has been determined adversely to
the Trustee or to such Holder, then and in every such case, the Company, the
Trustee and the Holders of Securities and coupons shall, subject to any
determination in such proceeding, be restored severally and respectively to
their former positions hereunder and thereafter all rights and remedies of the
Trustee and the Holders shall continue as though no such proceeding had been
instituted.
SECTION 510. Rights and Remedies Cumulative. Except as
otherwise provided with respect to the replacement or payment of mutilated,
destroyed, lost or stolen Securities or coupons in the last paragraph of Section
306, no right or remedy herein conferred upon or reserved to the Trustee or to
the Holders of Securities or coupons is intended to be exclusive of any other
right or remedy, and every right and remedy shall, to the extent permitted by
law, be cumulative and in addition to every other right and remedy given
hereunder or now or hereafter existing at law or in equity or otherwise. The
assertion or employment of any right or remedy hereunder, or otherwise, shall
not prevent the concurrent assertion or employment of any other appropriate
right or remedy.
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 from time to time, and as often as may be
deemed expedient, by the Trustee or by the Holders of Securities or coupons, as
the case may be.
SECTION 512. Control by Holders of Securities. The Holders of
not less than a majority in principal amount of the Outstanding Securities of
any series shall have the right to direct the time, method and place of
conducting any proceeding for any remedy available to the Trustee or exercising
any trust or power conferred on the Trustee with respect to the Securities of
such series, provided that
(1) such direction shall not be in conflict with any rule of
law or with this Indenture,
(2) the Trustee may take any other action deemed proper by the
Trustee which is not inconsistent with such direction, and
(3) the Trustee need not take any action which might involve it
in personal liability or be unduly prejudicial to the Holders of Securities of
such series not joining therein.
SECTION 513. Waiver of Past Defaults. The Holders of not less
than a majority in principal amount of the Outstanding Securities of any series
may on behalf of the Holders of all the Securities of such series and any
related coupons waive any past default hereunder with respect to such series and
its consequences, except a default
(1) in the payment of the principal of (or premium 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.
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Upon any such waiver, such default shall cease to exist, and
any Event of Default arising therefrom shall be deemed to have been cured, for
every purpose of this Indenture; but no such waiver shall extend to any
subsequent or other default or Event of Default or impair any right consequent
thereon.
SECTION 514. Waiver of Usury, Stay or Extension Laws. The
Company covenants (to the extent that it may lawfully do so) that it will not at
any time insist upon, or plead, or in any manner whatsoever claim or take the
benefit or advantage of, any usury, stay or extension law wherever enacted, now
or at any time hereafter in force, which may affect the covenants or the
performance of this Indenture; and the Company (to the extent that it may
lawfully do so) hereby expressly waives all benefit or advantage of any such
law, and covenants that it will not hinder, delay or 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 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(3) 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 may rely and shall be protected in acting or
refraining from acting upon any resolution, certificate, statement, instrument,
opinion, report, notice, request,
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direction, consent, order, bond, debenture, note, coupon or other paper or
document believed by it to be genuine and to have been signed or presented by
the proper party or parties;
(2) any request or direction of the Company mentioned herein
shall be sufficiently evidenced by a Company Request or Company Order (other
than delivery of any Security, together with any coupons appertaining thereto,
to the Trustee for authentication and delivery pursuant to Section 303 which
shall be sufficiently evidenced as provided therein) and any resolution of the
Board of Directors may be sufficiently evidenced by a Board Resolution;
(3) whenever in the administration of this Indenture the
Trustee shall deem it desirable that a matter be proved or established prior to
taking, suffering or omitting any action hereunder, the Trustee (unless other
evidence be herein specifically prescribed) may, in the absence of bad faith on
its part, rely upon an Officers' Certificate;
(4) the Trustee may consult with counsel and the advice of such
counsel or any Opinion of Counsel shall be full and complete authorization and
protection in respect of any action taken, suffered or omitted by it hereunder
in good faith and in reliance thereon;
(5) the Trustee shall be under no obligation to exercise any of
the rights or powers vested in it by this Indenture at the request or direction
of any of the Holders of Securities of any series or any related coupons
pursuant to this Indenture, unless such Holders shall have offered to the
Trustee security or indemnity reasonably satisfactory to the Trustee against the
costs, expenses and liabilities which might be incurred by it in compliance with
such request or direction;
(6) the Trustee shall not be bound to make any investigation
into the facts or matters stated in any resolution, certificate, statement,
instrument, opinion, report, notice, request, direction, consent, order, bond,
debenture, note, coupon or other paper or document, but the Trustee, in its
discretion, may make such further inquiry or investigation into such facts or
matters as it may see fit, and, if the Trustee shall determine to make such
further inquiry or investigation, it shall be entitled to examine the books,
records and premises of the Company personally or by agent or attorney;
(7) the Trustee may execute any of the trusts or powers
hereunder or perform any duties hereunder either directly or by or through
agents or attorneys and the Trustee shall not be responsible for any misconduct
or negligence on the part of any agent or attorney appointed with due care by it
hereunder; and
(8) the Trustee shall not be liable for any action taken,
suffered or omitted by it in good faith and reasonably believed by it to be
authorized or within the discretion 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.
Except during the continuance of an Event of Default, the
Trustee undertakes to perform only such duties as are specifically set forth in
this Indenture, and no implied covenants or obligations shall be read into this
Indenture against the Trustee.
SECTION 603. Not Responsible for Recitals or Issuance of
Securities. The recitals contained herein and in the Securities, except the
Trustee's certificate of authentication, and in any coupons shall be taken as
the statements of the Company and neither the Trustee nor any Authenticating
Agent assumes any responsibility for their correctness. The Trustee makes no
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representations as to the validity or sufficiency of this Indenture or of the
Securities or coupons, except that the Trustee represents that it is duly
authorized to execute and deliver this Indenture, authenticate the Securities
and perform its obligations hereunder. Neither the Trustee nor any
Authenticating Agent shall be accountable for the use or application by the
Company of Securities or the proceeds thereof.
SECTION 604. May Hold Securities. The Trustee, any Paying
Agent, Security Registrar, Authenticating Agent or any other agent of the
Company, in its individual or any other capacity, may become the owner or
pledgee of Securities and coupons and, subject to TIA Sections 310(b) and 311,
may otherwise deal with the Company with the same rights it would have if it
were not the Trustee, Paying Agent, Security Registrar, Authenticating Agent or
such other agent.
SECTION 605. Money Held in Trust. Money held by the Trustee in
trust hereunder need not be segregated from other funds except to the extent
required by law. The Trustee shall be under no liability for interest on any
money received by it hereunder except as otherwise agreed with the Company.
SECTION 606. Compensation and Reimbursement. The Company
agrees:
(1) to pay to the Trustee from time to time reasonable
compensation for all services rendered by it hereunder (which compensation shall
not be limited by any provision of law in regard to the compensation of a
trustee of an express trust);
(2) except as otherwise expressly provided herein, to reimburse
each of the Trustee and any predecessor Trustee upon its request for all
reasonable expenses, disbursements and advances incurred or made by the Trustee
in accordance with any provision of this Indenture (including the reasonable
compensation and the expenses and disbursements of its agents and counsel),
except any such expense, disbursement or advance as may be attributable to its
negligence or bad faith; and
(3) to indemnify each of the Trustee and any predecessor
Trustee for, and to hold it harmless against, any loss, liability or expense
incurred without negligence or bad faith on its own part, arising out of or in
connection with the acceptance or administration of the trust or trusts
hereunder, including the costs and expenses of defending itself against any
claim or liability in connection with the exercise or performance of any of its
powers or duties hereunder.
When the Trustee incurs expenses or renders services in
connection with an Event of Default specified in Section 501(5) or Section
501(6), the expenses (including the reasonable charges and expenses of its
counsel) and the compensation for the services are intended to constitute
expenses of administration under any applicable Federal or state bankruptcy,
insolvency or other similar law.
As security for the performance of the obligations of the
Company under this Section, the Trustee shall have a lien prior to the
Securities upon all property and funds held or collected by the Trustee as such,
except funds held in trust for the payment of principal of (or premium or
Make-Whole Amount, if any) or interest on particular Securities or any coupons.
The provisions of this Section shall survive the termination of
this Indenture.
SECTION 607. Corporate Trustee Required; Eligibility;
Conflicting Interests. There shall at all times be a Trustee hereunder which
shall be eligible to act as Trustee under TIA Section 310(a)(1) and shall have a
combined capital and surplus of at least $50,000,000. If such corporation
publishes reports of condition at least annually, pursuant to law or the
requirements of Federal, State, Territorial or District of Columbia supervising
or examining authority, then for the purposes
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of this Section, the combined capital and surplus of such corporation shall be
deemed to be its combined capital and surplus as set forth in its most recent
report of condition so published. If at any time the Trustee shall cease to be
eligible in accordance with the provisions of this Section, it shall resign
immediately in the manner and with the effect hereinafter specified in this
Article.
SECTION 608. Resignation and Removal; Appointment of Successor.
(a) No resignation or removal of the Trustee and no appointment of a successor
Trustee pursuant to this Article shall become effective until the acceptance of
appointment by the successor Trustee in accordance with the applicable
requirements of Section 609.
(b) The Trustee may resign at any time with respect to the
Securities of one or more series by giving written notice thereof to the
Company. If an instrument of acceptance by a successor Trustee shall not have
been delivered to the Trustee within 30 days after the giving of such notice of
resignation, the resigning Trustee may petition any court of competent
jurisdiction for the appointment of a successor Trustee.
(c) The Trustee may be removed at any time with respect to the
Securities of any series by Act of the Holders of a majority in principal amount
of the Outstanding Securities of such series delivered to the Trustee and the
Company.
(d) If at any time:
(1) the Trustee shall fail to comply with the
provisions of TIA Section 310(b) after written request therefor by the Company
or by any Holder of a Security who has been a bona fide Holder of a Security for
at least six months, or
(2) the Trustee shall cease to be eligible under
Section 607 and shall fail to resign after written request therefor by the
Company or by any Holder of a Security who has been a bona fide Holder of a
Security for at least six months, or
(3) the Trustee shall become incapable of acting or
shall be adjudged a bankrupt or insolvent or a receiver of the Trustee or of its
property shall be appointed or any public officer shall take charge or control
of the Trustee or of its property or affairs for the purpose of rehabilitation,
conservation or liquidation, then, in any such case, (i) the Company by or
pursuant to a Board Resolution may remove the Trustee and appoint a successor
Trustee with respect to all Securities, or (ii) subject to TIA Section 315(e),
any Holder of a Security who has been a bona fide Holder of a Security for at
least six months may, on behalf of himself and all others similarly situated,
petition any court of competent jurisdiction for the removal of the Trustee with
respect to all Securities and the appointment of a successor Trustee or
Trustees.
(e) If the Trustee shall resign, be removed or become incapable
of acting, or if a vacancy shall occur in the office of Trustee for any cause
with respect to the Securities of one or more series, the Company, by or
pursuant to a Board Resolution, shall promptly appoint a successor Trustee or
Trustees with respect to the Securities of that or those series (it being
understood that any such successor Trustee may be appointed with respect to the
Securities of one or more or all of such series and that at any time there shall
be only one Trustee with respect to the Securities of any particular series).
If, within one year after such resignation, removal or incapability, or the
occurrence of such vacancy, a successor Trustee with respect to the Securities
of any series shall be appointed by Act of the Holders of a majority in
principal amount of the Outstanding Securities of such series delivered to the
Company and the retiring Trustee, the successor Trustee so appointed shall,
forthwith upon its acceptance or such appointment, become the successor Trustee
with respect to the Securities of such series and to that extent supersede the
successor Trustee appointed by the Company. If no successor Trustee with respect
to the Securities of any series shall have been so appointed by the Company or
the Holders of Securities and accepted appointment in the manner
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hereinafter provided, any Holder of a Security who has been a bona fide Holder
of a Security of such series for at least six months may, on behalf of himself
and all others similarly situated, petition any court of competent jurisdiction
for the appointment of a successor Trustee with respect to Securities of such
series.
(f) The Company shall give notice of each resignation and each
removal of the Trustee with respect to the Securities of any series and each
appointment of a successor Trustee with respect to the Securities of any series
in the manner provided for notices to the Holders of Securities in Section 106.
Each notice shall include the name of the successor Trustee with respect to the
Securities of such series and the address of its Corporate Trust Office.
SECTION 609. Acceptance of Appointment by Successor. (a) In
case of the appointment hereunder of a successor Trustee with respect to all
Securities, every such successor Trustee shall execute, acknowledge and deliver
to the Company and the retiring Trustee an instrument accepting such
appointment, and thereupon the resignation or removal of the retiring Trustee
shall become effective and such successor Trustee, without any further act, deed
or conveyance, shall become vested with all the rights, powers, trusts and
duties of the retiring Trustee; but, on request of the Company or the successor
Trustee, such retiring Trustee shall, upon payment of its charges, execute and
deliver an instrument transferring to such successor Trustee all the rights,
powers and trusts of the retiring Trustee, and shall duly assign, transfer and
deliver to such successor Trustee all property and money held by such retiring
Trustee hereunder, subject nevertheless to its claim, if any, provided for in
Section 606.
(b) In case of the appointment hereunder of a successor Trustee
with respect to the Securities of one or more (but not all) series, the Company,
the retiring Trustee and each successor Trustee with respect to the Securities
of one or more series shall execute and deliver an indenture supplemental
hereto, pursuant to Article Nine hereof, wherein each successor Trustee shall
accept such appointment and which (1) shall contain such provisions as shall be
necessary or desirable to transfer and confirm to, and to vest in, each
successor Trustee all the rights, powers, trusts and duties of the retiring
Trustee with respect to the Securities of that or those series to which the
appointment of such successor Trustee relates, (2) if the retiring Trustee is
not retiring with respect to all Securities, shall contain such provisions as
shall be deemed necessary or desirable to confirm that all the rights, powers,
trusts and duties of the retiring Trustee with respect to the Securities of that
or those series as to which the retiring Trustee is not retiring shall continue
to be vested in the retiring Trustee, and (3) shall add to or change any of the
provisions of this Indenture as shall be necessary to provide for or facilitate
the administration of the trusts hereunder by more than one Trustee, it being
understood that nothing herein or in such supplemental indenture shall
constitute such Trustees co-trustees of the same trust and that each such
Trustee shall be trustee of a trust or trusts hereunder separate and apart from
any trust or trusts hereunder administered by any other such Trustee; and upon
the execution and delivery of such supplemental indenture the resignation or
removal of the retiring Trustee shall become effective to the extent provided
therein and each such successor Trustee, without any further act, deed or
conveyance, shall become vested with all the rights, powers, trusts and duties
of the retiring Trustee with respect to the Securities of that or those series
to which the appointment of such successor Trustee relates; but, on request of
the Company, or any successor Trustee, such retiring Trustee shall 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 Company
shall execute any and all instruments for more fully and certainly vesting in
and confirming to such successor Trustee all such rights, powers and trusts
referred to in paragraph (a) or (b) of this Section, as the case may be.
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(d) No successor Trustee shall accept its appointment unless at
the time of such acceptance such successor Trustee shall be qualified and
eligible under this Article.
SECTION 610. Merger, Conversion, Consolidation or Succession to
Business. Any corporation into which the Trustee may be merged or converted or
with which it may be consolidated, or any corporation resulting from any merger,
conversion or consolidation to which the Trustee shall be a party, or any
corporation succeeding to all or substantially all of the corporate trust
business of the Trustee, shall be the successor of the Trustee hereunder,
provided such corporation shall be otherwise qualified and eligible under this
Article, without the execution or filing of any paper or any further act on the
part of any of the parties hereto. In case any Securities or coupons shall have
been authenticated, but not delivered, by the Trustee then in office, any
successor by merger, conversion or consolidation to such authenticating Trustee
may adopt such authentication and deliver the Securities of 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 Company. Wherever reference is made in this Indenture to the
authentication and delivery of Securities by the Trustee or the Trustee's
certificate of authentication, such reference shall be deemed to include
authentication and delivery on behalf of the Trustee by an Authenticating Agent
and a certificate of authentication executed on behalf of the Trustee by an
Authenticating Agent. Each Authenticating Agent shall be acceptable to the
Company and shall at all times be a bank or trust company or corporation
organized and doing business and in good standing under the laws of the United
States of America or of any State or the District of Columbia, authorized under
such laws to act as Authenticating Agent, having a combined capital and surplus
of not less than $50,000,000 and subject to supervision or examination by
Federal or State authorities. If such Authenticating Agent publishes reports of
condition at least annually, pursuant to law or the requirements of the
aforesaid supervising or examining authority, then for the purposes of this
Section, the combined capital and surplus of such Authenticating Agent shall be
deemed to be its combined capital and surplus as set forth in its most recent
report of condition so published. In case at any time an Authenticating Agent
shall cease to be eligible in accordance with the provisions of this Section,
such Authenticating Agent shall resign immediately in the manner and with the
effect specified in this Section.
Any corporation into which an Authenticating Agent may be
merged or converted or with which it may be consolidated, or any corporation
resulting from any merger, conversion or consolidation to which such
Authenticating Agent shall be a party, or any corporation succeeding to the
corporate agency or corporate trust business of an Authenticating Agent, shall
continue to be an Authenticating Agent, provided such corporation shall be
otherwise eligible under this Section, without the execution or filing of any
paper or further act on the part of the Trustee or the Authenticating Agent.
An Authenticating Agent for any series of Securities may at any
time resign by giving written notice of resignation to the Trustee for such
series and to the Company. The Trustee for any
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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
the Company. Upon receiving such a notice of resignation or upon such a
termination, or in case at any time such Authenticating Agent shall cease to be
eligible in accordance with the provisions of this Section, the Trustee for such
series may appoint a successor Authenticating Agent which shall be acceptable to
the Company and shall give notice of such appointment to all Holders of
Securities of the series with respect to which such Authenticating Agent will
serve in the manner set forth in Section 106. Any successor Authenticating Agent
upon acceptance of its appointment hereunder shall become vested with all the
rights, powers and duties of its predecessor hereunder, with like effect as if
originally named as an Authenticating Agent herein. No successor Authenticating
Agent shall be appointed unless eligible under the provisions of this Section.
The Company agrees to pay to each Authenticating Agent from
time to time reasonable compensation including reimbursement of its reasonable
expenses for its services under this Section.
If an appointment with respect to one or more series is made
pursuant to this Section, the Securities of such series may have endorsed
thereon, in addition to or in lieu of the Trustee's certificate of
authentication, an alternate certificate of authentication substantially in the
following form:
This is one of the Securities of the series designated therein
referred to in the within-mentioned Indenture.
[BANK], as Trustee
By:
----------------------------------
as Authenticating Agent
By:
----------------------------------
Authorized Signatory
ARTICLE SEVEN
HOLDERS' LISTS AND REPORTS BY TRUSTEE AND COMPANY
SECTION 701. Disclosure of Names and Addresses of Holders.
Every Holder of Securities or coupons, by receiving and holding the same, agrees
with the Company and the Trustee that neither the Company nor the Trustee nor
any Authenticating Agent nor any Paying Agent nor any Security Registrar shall
be held accountable by reason of the disclosure of any information as to the
names and addresses of the Holders of Securities in accordance with TIA Section
312, regardless of the source from which such information was derived, and that
the Trustee shall not be held accountable by reason of mailing any material
pursuant to a request made under TIA Section 312(b).
SECTION 702. Reports by Trustee. Within 60 days after October 1
of each year commencing with the first October 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 October 1 if required by TIA Section 313(a).
SECTION 703. Reports by Company. The Company will:
(1) file with the Trustee, within 15 days after the Company is
required to file the same with the Commission, copies of the annual reports and
of the information, documents and other
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reports (or copies of such portions of any of the foregoing as the Commission
may from time to time by rules and regulations prescribe) which the Company may
be required to file with the Commission pursuant to Section 13 or Section 15(d)
of the Exchange Act; or the Company is not required to file information,
documents or reports pursuant to either of such Sections, then it will file with
the Trustee and the Commission, in accordance with rules and regulations
prescribed from time to time by the Commission, such of the supplementary and
periodic information, documents and reports which may be required pursuant to
Section 13 of the Exchange Act in respect of a security listed and registered on
a national securities exchange as may be prescribed from time to time in such
rules and regulations;
(2) file with the Trustee and the Commission, in accordance
with rules and regulations prescribed from time to time by the Commission, such
additional information, documents and reports with respect to compliance by the
Company with the conditions and covenants of this Indenture as may be required
from time to time by such rules and regulations; and
(3) transmit by mail to the Holders of Securities, within 30
days after the filing thereof with the Trustee, in the manner and to the extent
provided in TIA Section 313(c), such summaries of any information, documents and
reports required to be filed by the Company pursuant to 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. The Company to Furnish Trustee Names and Addresses
of Holders. The Company will furnish or cause to be furnished to the Trustee:
(a) semi-annually, not later than 15 days after the Regular
Record Date for interest for each series of Securities, a list, in such form as
the Trustee may reasonably require, of the names and addresses of the Holders of
Registered Securities of such series as of such Regular Record Date, or if there
is no Regular Record Date for interest for such series of Securities,
semi-annually, upon such dates as are set forth in the Board Resolution or
indenture supplemental hereto authorizing such series, and
(b) at such other times as the Trustee may request in Writing,
within 30 days after the receipt by the Company of any such request, a list of
similar form and content as of a date not more than 15 days prior to the time
such list is furnished, provided, however, that, so long as the Trustee is the
Security Registrar, no such list shall be required to be furnished.
ARTICLE EIGHT
CONSOLIDATION, MERGER, SALE, LEASE OR CONVEYANCE
SECTION 801. Consolidations and Mergers of Company and Sales,
Leases and Conveyances Permitted Subject to Certain Conditions. The Company may
consolidate with, or sell, lease or convey all or substantially all of its
assets to, or merge with or into any other entity, provided that in any such
case, (1) either the Company shall be the continuing entity, or the successor
entity shall be an entity organized and existing under the laws of the United
States or a State thereof and such successor entity shall expressly assume the
due and punctual payment of the principal of (and premium or Make-Whole Amount,
if any) and any interest (including all Additional Amounts, if any, payable
pursuant to Section 1012) on all of the Securities, according to their tenor,
and the due and punctual performance and observance of all of the covenants and
conditions of this Indenture to be performed by the Company by supplemental
indenture, complying with Article Nine hereof, satisfactory to the Trustee,
executed and delivered to the Trustee by such entity and (ii) 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
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Company or such Subsidiary at the time or 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 Entity. 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 Company, 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 Company, any
or all of the Securities issuable hereunder which theretofore shall not have
been signed by the Company and delivered to the Trustee; and, upon the order of
such successor entity, instead of the Company, and subject to all the terms,
conditions and limitations in this Indenture prescribed, the Trustee shall
authenticate and shall deliver any Securities which previously shall have been
signed and delivered by the officers of the Company to the Trustee for
authentication, and any Securities which such successor 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.
ARTICLE NINE
SUPPLEMENTAL INDENTURES
SECTION 901. Supplemental Indentures Without Consent of
Holders. Without the consent of any Holders of Securities or coupons, the
Company, when authorized by or pursuant to a Board Resolution, and the Trustee,
at any time and from time to time, may enter into one or more indentures
supplemental hereto, in form satisfactory to the Trustee, for any of the
following purposes:
(1) to evidence the succession of another Person to the Company
and the assumption by any such successor of the covenants of the Company herein
and in the Securities contained; or
(2) to add to the covenants of the Company for the benefit of
the Holders of all or any series of Securities (and if such covenants are to be
for the benefit of less than all series of Securities, stating that such
covenants are expressly being included solely for the benefit of such series) or
to surrender any right or power herein conferred upon the Company; or
(3) to add any additional Events of Default for the benefit of
the Holders of all or any series of Securities (and if such Events of Default
are to be for the benefit of less than all series
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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 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 or 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, provided such provisions shall not adversely affect the
interests of the Holders of Securities of any series or any related coupons in
any material respect; or
(10) to supplement any of the provisions of this Indenture to
such extent as shall be necessary to permit or facilitate the defeasance and
discharge of any series of Securities pursuant to Sections 401, 1402 and 1403;
provided 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 Company and the Trustee, the Company, when
authorized by or pursuant to a Board Resolution, and the Trustee may enter into
an indenture or indentures supplemental hereto for the purpose of adding any
provisions to or changing in any manner or eliminating any of the provisions of
this Indenture or of modifying in any manner the rights of the Holders of
Securities and any related coupons under this Indenture; provided, however, that
no such supplemental indenture shall, without the consent of the Holder of each
Outstanding Security affected thereby:
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(1) change the Stated Maturity of the principal of (or premium
or Make-Whole Amount, if any, on) or any installment of principal of or interest
on, any Security; or reduce the principal amount thereof or the rate or amount
of interest thereon or any Additional Amounts payable in respect thereof, or any
premium payable upon the redemption thereof, or change any obligation of the
Company to pay Additional Amounts pursuant to Section 1012 (except as
contemplated by Section 801(1) and permitted by Section 901(1)), or reduce the
amount of the principal of an Original Issue Discount Security that would be due
and payable upon a declaration of acceleration of the Maturity thereof pursuant
to Section 502 or the amount thereof provable in bankruptcy pursuant to Section
504, or adversely affect any right of repayment at the option of the Holder of
any Security, or change any Place of Payment where, or the currency or
currencies, currency unit or units or composite currency or currencies in which,
any Security or any premium or the interest thereon is payable, or impair the
right to institute suit for the enforcement of any such payment on or after the
Stated Maturity thereof, (or, in the case of redemption or repayment at the
option of the Holder, on or after the Redemption Date or the Repayment Date, as
the case may be), or
(2) reduce the percentage in principal amount of the
Outstanding Securities of any series, the consent of whose Holders is required
for any such supplemental indenture, or the consent of whose Holders is required
for any waiver with respect to such series (or compliance with certain
provisions of this Indenture or certain defaults hereunder and their
consequences) provided for in this Indenture, or reduce the requirements of
Section 1504 for quorum or voting, or
(3) modify any of the provisions of this Section, Section 513
or Section 1013, 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
solely for the benefit of one or more particular series of Securities, or which
modifies the rights of the Holders of Securities of such series with respect to
such covenant or other provision, shall be deemed not to affect the rights under
this Indenture of the Holders of Securities of any other series.
SECTION 903. Execution of Supplemental Indentures. In
executing, or accepting the additional trusts created by, any supplemental
indenture permitted by this Article or the modification thereby of the trusts
created by this Indenture, the Trustee shall be entitled to receive, and shall
be fully protected in relying upon, an Opinion of Counsel stating that the
execution of such supplemental indenture is authorized or permitted by this
Indenture. The Trustee may, but shall not be obligated to, enter into any such
supplemental indenture which affects the Trustee's own rights, duties or
immunities under this Indenture or otherwise.
SECTION 904. Effect of Supplemental Indentures. Upon the
execution of any supplemental indenture under this Article, this Indenture shall
be modified in accordance therewith, and such supplemental indenture shall form
a part of this Indenture for all purposes; and every Holder of Securities
theretofore or thereafter authenticated and delivered hereunder and of any
coupon appertaining thereto shall be bound thereby.
SECTION 905. Conformity with Trust Indenture Act. Every
supplemental indenture executed pursuant to this Article shall conform to the
requirements of the Trust Indenture Act as then in effect.
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SECTION 906. Reference in Securities to Supplemental
Indentures. Securities of any series authenticated and delivered after the
execution of any supplemental indenture pursuant to this Article may, and shall,
if required by the Trustee, bear a notation in form approved by the Trustee as
to any matter provided for in such supplemental indenture. If the Company shall
so determine, new Securities of any series so modified as to conform, in the
opinion of the Trustee and the Company, to any such supplemental indenture may
be prepared and executed by the Company and authenticated and delivered by the
Trustee in exchange for Outstanding Securities of such series.
ARTICLE TEN
COVENANTS
SECTION 1001. Payment of Principal, Premium (if any),
Make-Whole Amount (if any), Interest and Additional Amounts. The Company
covenants and agrees for the benefit of the Holders of each series of Securities
that it will duly and punctually pay the principal of (and premium 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 1012 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 Company, all payments of principal may be paid by check to the registered
Holder of the Registered Security or other person entitled thereto against
surrender of such Security.
SECTION 1002. Maintenance of Office or Agency. If Securities of
a series are issuable only as Registered Securities, the Company shall maintain
in each Place of Payment for any series of Securities an office or agency where
Securities of that series may be presented or surrendered for payment or
conversion, where Securities of that series may be surrendered for registration
of transfer or exchange and where notices and demands to or upon the Company in
respect of the Securities of that series and this Indenture may be served. If
Securities of a series are issuable as Bearer Securities, the Company will
maintain: (A) in the Borough of Manhattan, 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 registration of transfer, where Securities of that
series may be surrendered for exchange, where notices and demands to or upon the
Company in respect of the Securities of that series and this Indenture may be
served and where Bearer Securities of that series and related coupons may be
presented or surrendered for payment or conversion in the circumstances
described in the following paragraph (and not otherwise); (B) subject to any
laws or regulations applicable thereto, in a Place of Payment for that series
which is located outside the United States, an office or agency where Securities
of that series and related coupons may be presented and surrendered for payment
(including payment of any Additional Amounts payable on Securities of that
series pursuant to Section 1012) or conversion; provided, however, that if the
Securities of that series are listed on the Luxembourg Stock Exchange or any
other stock exchange located outside the United States and such stock exchange
shall so require, the Company will maintain a Paying Agent for the Securities of
that series in Luxembourg or any other required city located outside the United
States, as the case may be, so long as the Securities of that series are listed
on such exchange; and (C) subject to any laws or regulations applicable thereto,
in a Place of Payment for that series located outside the United States an
office or agency where any Registered Securities of that series may be
surrendered for registration of transfer, where Securities of that series may be
surrendered for
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exchange and where notices and demands to or upon the Company in respect of the
Securities of that series and this Indenture may be served. The Company will
give prompt written notice to the Trustee of the location, and any change in the
location, of each such office or agency. If at any time the Company shall fail
to maintain any such required office or agency or shall fail to furnish the
Trustee with the address thereof, such presentations, surrenders, notices and
demands may be made or served at the Corporate Trust Office of the Trustee,
except that Bearer Securities of that series and the related coupons may be
presented and surrendered for payment (including payment of any Additional
Amounts payable on Bearer Securities of that series pursuant to Section 1012) or
conversion at the offices specified in the Security, in London, England, and the
Company hereby appoint the same as its agent to receive such respective
presentations, surrenders, notices and demands, and the Company hereby appoint
the Trustee its agent to receive all such presentations, surrenders, notices and
demands.
Unless otherwise specified with respect to any Securities
pursuant to Section 301, no payment of principal, premium or interest on or
Additional Amounts in respect of Bearer Securities shall be made at any office
or agency of the Company in the United States or by check mailed to any address
in the United States or by transfer to an account maintained with a bank located
in the United States; provided, however, that, if the Securities of a series are
payable in Dollars, payment of principal of and any premium and interest on any
Bearer Security (including any Additional Amounts payable on Securities of such
series pursuant to Section 1012) shall be made at the office of the Company's
Paying Agent in the Borough of Manhattan, The City of New York, if (but only if)
payment in Dollars of the full amount of such principal, premium or Make-Whole
Amount, interest or Additional Amounts, as the case may be, at all offices or
agencies outside the United States maintained for the purpose by the Company in
accordance with this Indenture, is illegal or effectively precluded by exchange
controls or other similar restrictions.
The Company may from time to time designate one or more other
offices or agencies where the Securities of one or more series may be presented
or surrendered for any or all of such purposes, and may from time to time
rescind such designations; provided, however, that no such designation or
rescission shall in any manner relieve the Company of its obligation to maintain
an office or agency in accordance with the requirements set forth above for
Securities of any series for such purposes. The Company will give prompt written
notice to the Trustee of any such designation or rescission and of any change in
the location of any such other office or agency. Unless otherwise specified with
respect to any Securities pursuant to Section 301 with respect to a series of
Securities, the Company hereby designates as a Place of Payment for each series
of Securities the office or agency of the Company in the Borough of Manhattan,
The City of New York, and initially appoints the Trustee at its Corporate Trust
Office as Paying Agent in such city and as its agent to receive all such
presentations, surrenders, notices and demands.
Unless otherwise specified with respect to any Securities
pursuant to Section 301, if and so long as the Securities of any series (i) are
denominated in a Foreign Currency or (ii) may be payable in a Foreign Currency,
or so long as it is required under any other provision of the Indenture, then
the Company will maintain with respect to each such series of Securities, or as
so required, at least one exchange rate agent.
SECTION 1003. Money for Securities Payments to Be Held in
Trust. If the Company shall at any time act as its own Paying Agent with respect
to any series of any Securities and any related coupons, it will, on or before
each due date of the principal of (and premium 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
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such Persons or otherwise disposed of as herein provided, and will promptly
notify the Trustee of its action or failure so to act.
Whenever the Company shall have one or more Paying Agents for
any series of Securities and any related coupons, it will, 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 or interest
or Additional Amounts and (unless such Paying Agent is the Trustee) the Company
will promptly notify the Trustee of its action or failure so to act.
The Company will cause each Paying Agent other than the Trustee
to execute and deliver to the Trustee an instrument in which such Paying Agent
shall agree with the Trustee, subject to the provisions of this Section, 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 Company (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 Company may at any time, for the purpose of obtaining the
satisfaction and discharge of this Indenture or for any other purpose, pay, or
by Company Order direct any Paying Agent to pay, to the Trustee all sums held in
trust by the Company or such Paying Agent, such sums to be held by the Trustee
upon the same trusts as those upon which such sums were held by the Company or
such Paying Agent; and, upon such payment by any Paying Agent to the Trustee,
such Paying Agent shall be released from all further liability with respect to
such sums.
Except as otherwise provided in the Securities of any series,
any money deposited with the Trustee or any Paying Agent, or then held by the
Company, in trust for the payment of the principal of (and premium 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 premium or Make-Whole Amount, if any), interest or Additional
Amounts has become due and payable shall be paid to the Company upon Company
Request or (if then held by the Company) shall be discharged from such trust;
and the Holder of such Security shall thereafter, as an unsecured general
creditor, look only to the Company for payment of such principal of (and premium
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 Company as trustee thereof, shall thereupon cease; provided, however,
that the Trustee or such Paying Agent, before being required to make any such
repayment, may at the expense of the Company cause to be published once, in an
Authorized Newspaper, notice that such money remains unclaimed and that, after a
date specified therein, which shall not be less than 30 days from the date of
such publication, any unclaimed balance of such money then remaining will be
repaid to the Company.
SECTION 1004. [Omitted].
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SECTION 1005. [Omitted].
SECTION 1006. Existence. Subject to Article Eight, the Company
will do or cause to be done all things necessary to preserve and keep in full
force and effect its existence, rights and franchises; provided, however, that
the Company shall not be required to preserve any right or franchise if the
Board of Directors shall determine that the preservation thereof is no longer
desirable in the conduct of the business of the Company and that the loss
thereof is not disadvantageous in any material respect to the Holders.
SECTION 1007. 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 nothing in this Section shall
prevent the Company or any Subsidiary from selling or otherwise disposing for
value its properties in the ordinary course of its business.
SECTION 1008. Insurance. The Company will, and will cause each
of its Subsidiaries to, keep all of its insurable properties insured against
loss or damage at least equal to their then full insurable value with
financially sound and reputable insurers.
SECTION 1009. Payment of Taxes and Other Claims. The Company
will pay or discharge or cause to be paid or discharged, before the same shall
become delinquent, (1) all taxes, assessments and governmental charges levied or
imposed upon it or any Subsidiary or upon the income, profits or property of the
Company or any Subsidiary, and (2) all lawful claims for labor, materials and
supplies which, if unpaid, might by law become a lien upon the property of the
Company or any Subsidiary; provided, however, that the Company shall not be
required to pay or discharge or cause to be paid or discharged any such tax,
assessment, charge or claim whose amount, applicability or validity is being
contested in good faith by appropriate proceedings.
SECTION 1010. Provision of Financial Information. Whether or
not the Company is subject to Section 13 or 15(d) of the Exchange Act, the
Company will, to the extent permitted under the Exchange Act, file with the
Commission the annual reports, quarterly reports and other documents which the
Company would have been required to file with the Commission pursuant to such
Section 13 or 15(d) (the "Financial Statements") if the Company were so subject,
such documents to be filed with the Commission on or prior to the respective
dates (the "Required Filing Dates") by which the Company would have been
required so to file such documents if the Company were so subject.
The Company will also in any event (x) within 15 days of each
Required Filing Date (i) transmit by mail to all Holders, as their names and
addresses appear in the Security Register, without cost to such Holders copies
of the annual reports and quarterly reports which the Company would have been
required to file with the Commission pursuant to Section 13 or 15(d) of the
Exchange Act if the Company were subject to such Sections, and (ii) file with
the Trustee copies of the annual reports, quarterly reports and other documents
which the Company would have been required to file with the Commission pursuant
to Section 13 or 15(d) of the Exchange Act if the Company were subject to such
Sections and (y) if filing such documents by the Company with the Commission is
not permitted under the Exchange Act, promptly upon written request and payment
of the reasonable cost of duplication and delivery, supply copies of such
documents to any prospective Holder.
SECTION 1011. Statement as to Compliance. The Company will
deliver to the Trustee, within 120 days after the end of each fiscal year, a
brief certificate from the principal
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executive officer, principal financial officer or principal accounting officer
as to his or her knowledge of the Company's compliance with all conditions and
covenants under this Indenture and, in the event of any noncompliance,
specifying such noncompliance and the nature and status thereof. For purposes of
this Section 1011, such compliance shall be determined without regard to any
period of grace or requirement of notice under this Indenture.
SECTION 1012. Additional Amounts. If any Securities of a series
provide for the payment of Additional Amounts, the Company will pay to the
Holder of any Security of such series or any coupon appertaining thereto
Additional Amounts as may be specified as contemplated by Section 301. Whenever
in this Indenture there is mentioned, in any context except in the case of
Section 502(1), the payment of the principal of or any premium or interest on,
or in respect of, any Security of any series or payment of any related coupon or
the net proceeds received on the sale or exchange of any Security of any series,
such mention shall be deemed to include mention of the payment of Additional
Amounts provided by the terms of such series established pursuant to Section 301
to the extent that, in such context, Additional Amounts are, were or would be
payable in respect thereof pursuant to such terms and express mention of the
payment of Additional Amounts (if applicable) in any provisions hereof shall not
be construed as excluding Additional Amounts in those provisions hereof where
such express mention is not made.
Except as otherwise specified as contemplated by Section 301,
if the Securities of a series provide for the payment of Additional Amounts, at
least 10 days prior to the first Interest Payment Date with respect to that
series of Securities (or if the Securities of that series will not bear interest
prior to Maturity, the first day on which a payment of principal and any premium
is made), and at least 10 days prior to each date of payment of principal and
any premium or interest if there has been any change with respect to the matters
set forth in the below-mentioned Officers' Certificate, the Company will furnish
the Trustee and the Company's principal Paying Agent or Paying Agents, if other
than the Trustee, with an Officers' Certificate instructing the Trustee and such
Paying Agent or Paying Agents whether such payment of principal of and any
premium or interest on the Securities of that series shall be made to Holders of
Securities of that series or any related coupons who are not United States
persons without withholding for or on account of any tax, assessment or other
governmental charge described in the Securities of the series. If any such
withholding shall be required, then such Officers' Certificate shall specify by
country the amount, if any, required to be withheld on such payments to such
Holders of Securities of that series or related coupons and the Company will pay
to the Trustee or such Paying Agent the Additional Amounts required by the terms
of such Securities. If the Trustee or any Paying Agent, as the case may be,
shall not so receive the above-mentioned certificate, then the Trustee or such
Paying Agent shall be entitled (i) to assume that no such withholding or
deduction is required with respect to any payment of principal or interest with
respect to any Securities of a series or related coupons until it shall have
received a certificate advising otherwise and (ii) to make all payments of
principal and interest with respect to the Securities of a series or related
coupons without withholding or deductions until otherwise advised. The Company
covenants to indemnify the Trustee and any Paying Agent for, and to hold them
harmless against, any loss, liability or expense reasonably incurred without
negligence or bad faith on their part arising out of or in connection with
actions taken or omitted by any them or in reliance on any Officers' Certificate
furnished pursuant to this Section or in reliance on the Company's not
furnishing such an Officers' Certificate.
SECTION 1013. Waiver of Certain Covenants. The Company may omit
in any particular instance to comply with any term, provision or condition set
forth in Sections 1004 to 1010, inclusive, if before or after the time for such
compliance the Holders of at least a majority in principal amount of all
outstanding Securities of such series, by Act of such Holders, either waive such
compliance in such instance or generally waive compliance with such covenant or
condition, but no such waiver shall extend to or affect such covenant or
condition except to the extent so expressly waived, and, until such waiver shall
become effective, the obligations of the Company and the duties of the Trustee
in respect of any such term, provision or condition shall remain in full force
and effect.
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ARTICLE ELEVEN
REDEMPTION OF SECURITIES
SECTION 1101. Applicability of Article. Securities of any
series which are redeemable before their Stated Maturity shall be redeemable in
accordance with their terms and (except as otherwise specified as contemplated
by Section 301 for Securities of any series) in accordance with this Article.
SECTION 1102. Election to Redeem; Notice to Trustee. The
election of the Company to redeem any Securities shall be evidenced by or
pursuant to a Board Resolution. In case of any redemption at the election of the
Company of less than all of the Securities of any series, the Company shall, at
least 45 days prior to the giving of the notice of redemption in Section 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 Company shall furnish the
Trustee with an Officers' Certificate evidencing compliance with such
restriction.
SECTION 1103. Selection by Trustee of Securities to Be
Redeemed. If less than all the Securities of any series issued on the same day
with the same terms are to be redeemed, the particular Securities to be redeemed
shall be selected not more than 60 days prior to the Redemption Date by the
Trustee, from the Outstanding Securities of such series issued on such date with
the same terms not previously called for redemption, by such method as the
Trustee shall deem fair and appropriate and which may provide for the selection
for redemption of portions (equal to the minimum authorized denomination for
Securities of that series or any integral multiple thereof) of the principal
amount of Securities of such series of a denomination larger than the minimum
authorized denomination for Securities of that series.
The Trustee shall promptly notify the Company and the Security
Registrar (if other than itself) in writing of the Securities selected for
redemption and, in the case of any Securities selected for partial redemption,
the principal amount thereof to be redeemed.
For all purposes of this Indenture, unless the context
otherwise requires, all provisions relating to the redemption of Securities
shall relate, in the case of any Security redeemed or to be redeemed only in
part, to the portion of the principal amount of such Security which has been or
is to be redeemed.
SECTION 1104. Notice of Redemption. Notice of redemption shall
be given 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,
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(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, the
notice which relates to such Security shall state that on and after the
Redemption Date, upon surrender of such Security, the holder will receive,
without a charge, a new Security or Securities 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, unless otherwise specified in such notice, Bearer
Securities of any series, if any, surrendered for redemption must be accompanied
by all coupons maturing subsequent to the date fixed for redemption or the
amount of any such missing coupon or coupons will be deducted from the
Redemption Price, unless security or indemnity satisfactory to the Company and
the Trustee for such series and any Paying Agent is furnished,
(8) if Bearer Securities of any series are to be redeemed and
any Registered Securities of such series are not to be redeemed, and if such
Bearer Securities may be exchanged for Registered Securities not subject to
redemption on this Redemption Date pursuant to Section 305 or otherwise, the
last date, as determined by the Company, on which such exchanges may be made,
(9) the CUSIP number of such Security, if any, and
(10) if applicable, that a Holder of Securities who desires to
convert Securities for redemption must satisfy the requirements for conversion
contained in such Securities, the then existing conversion price or rate, and
the date and time when the option to convert shall expire.
Notice of redemption of Securities to be redeemed shall be
given by the Company or, at the Company's request, by the Trustee in the name
and at the expense of the Company.
SECTION 1105. Deposit of Redemption Price. At least one
Business Day prior to any Redemption Date, the Company shall deposit with the
Trustee or with a Paying Agent (or, if the Company is acting as its own Paying
Agent, 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,
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currency unit or units or composite currency or currencies in which the
Securities of such series are payable (except as otherwise specified pursuant to
Section 301 for the Securities of such series) (together with accrued interest,
if any, to the Redemption Date), and from and after such date (unless the
Company shall default in the payment of the Redemption Price and accrued
interest) such Securities shall, if the same were interest-bearing, cease to
bear interest and the coupons for such interest appertaining to any Bearer
Securities so to be redeemed, except to the extent provided below, shall be
void. Upon surrender of any such Security for redemption in accordance with said
notice, together with all coupons, if any, appertaining thereto maturing after
the Redemption Date, such Security shall be paid by the Company at the
Redemption Price, together with accrued interest, if any, to the Redemption
Date; provided, however, that installments of interest on Bearer Securities
whose Stated Maturity is on or prior to the Redemption Date shall be payable
only at an office or agency located outside the United States (except as
otherwise provided in Section 1002) and, unless otherwise specified as
contemplated by Section 301, only upon presentation and surrender of coupons for
such interest; and provided further that, 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 Company and the Trustee if there be
furnished to them such security or indemnity as they may require to save each of
them and any Paying Agent harmless. If thereafter the Holder of such Security
shall surrender to the Trustee or any Paying Agent any such missing coupon in
respect of which a deduction shall have been made from the Redemption Price,
such Holder shall be entitled to receive the amount so deducted; provided,
however, that interest represented by coupons shall be payable only at an office
or agency located outside the United States (except as otherwise provided in
Section 1002) and, unless otherwise specified as contemplated by Section 301,
only upon presentation and surrender of those coupons.
If any Security called for redemption shall not be so paid upon
surrender thereof for redemption, the principal (and premium 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 Registered
Security which is to be redeemed only in part (pursuant to the provisions of
this Article) shall be surrendered at a Place of Payment therefor (with, if the
Company or the Trustee so requires, due endorsement by, or a written instrument
of transfer in form satisfactory to the Company and the Trustee duly executed
by, the Holder thereof or his attorney duly authorized in writing) and the
Company shall execute and the Trustee shall authenticate and deliver to the
Holder of such Security without service charge a new Security or Securities of
the same series, of any authorized denomination as requested by such Holder in
aggregate principal amount equal to and in exchange for the unredeemed portion
of the principal of the Security so surrendered.
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ARTICLE TWELVE
[INTENTIONALLY OMITTED]
ARTICLE THIRTEEN
REPAYMENT AT THE OPTION OF HOLDERS
SECTION 1301. Applicability of Article. Repayment of Securities
of any series before their Stated Maturity at the option of Holders thereof
shall be made in accordance with the terms of such Securities, if any, and
(except as otherwise specified by the terms of such series established pursuant
to Section 301) in accordance with this Article.
SECTION 1302. Repayment of Securities. Securities of any series
subject to repayment in whole or in part at the option of the Holders thereof
will, unless otherwise provided in the terms of such Securities, be repaid at a
price equal to the principal amount thereof, together with interest, if any,
thereon accrued to the Repayment Date specified in or pursuant to the terms of
such Securities. The Company covenants that at least one Business Day prior to
the Repayment Date it will deposit with the Trustee or with a Paying Agent (or,
if the Company is acting as its own Paying Agent, segregate and hold in trust as
provided in Section 1003) an amount of money in the currency or currencies,
currency unit or units or composite currency or currencies in which the
Securities of such series are payable (except as otherwise specified pursuant to
Section 301 for the Securities of such series) sufficient to pay the principal
(or, if so provided by the terms of the Securities of any series, a percentage
of the principal) of, and (except if the Repayment Date shall be an Interest
Payment Date) accrued interest on, all the Securities or portions thereof, as
the case may be, to be repaid on such date.
SECTION 1303. Exercise of Option. Securities of any series
subject to repayment at the option of the Holders thereof will contain an
"Option to Elect Repayment" form on the reverse of such Securities. In order for
any Security to be repaid at the option of the Holder, the Trustee must receive
at the Place of Payment there for specified in the terms of such Security (or at
such other place or places of which the Company shall from time to time notify
the Holders of such Securities) not earlier than 60 days nor later than 30 days
prior to the Repayment Date (1) the Security so providing for such repayment
together with the "Option to Elect Repayment" form on the reverse thereof duly
completed by the Holder (or by the Holder's attorney duly authorized in writing)
or (2) a telegram, telex, facsimile transmission or 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
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amount of any Security providing for repayment at the option of the Holder
thereof may not be repaid in part if, following such repayment, the unpaid
principal amount of such Security would be less than the minimum authorized
denomination of Securities of the series of which such Security to be repaid is
a part. Except as otherwise may be provided by the terms of any Security
providing for repayment at the option of the Holder thereof, exercise of the
repayment option by the Holder shall be irrevocable unless waived by the
Company.
SECTION 1304. When Securities Presented for Repayment Become
Due and Payable. If Securities of any series provide 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 portion thereof, as the case may be, to be repaid shall become due and
payable and shall be paid by the Company on the Repayment Date therein
specified, and on and after such Repayment Date (unless the Company shall
default in the payment of such Securities on such Repayment Date) such
Securities shall, if the same were interest-bearing, cease to bear interest and
the coupons for such interest appertaining to any Bearer Securities so to be
repaid, except to the extent provided below, shall be void. Upon surrender of
any such Security for repayment in accordance with such provisions, together
with coupons, if any, appertaining thereto maturing after the Repayment Date,
the principal amount of such Security so to be repaid paid by the Company,
together with accrued interest, if any, Repayment Date; provided, however, that
coupons whose Stated Maturity is on or prior to the Repayment Date shall be
payable 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 with interest thereon, unless the Company shall default in the payment
thereof) to the Holders of such Securities, or one or more Predecessor
Securities, registered as such at the close of business relevant Record Dates
according to their terms and the provisions of Section 307.
If any Bearer Security surrendered for repayment shall not be
accompanied by all appurtenant coupons maturing after the Repayment Date, such
Security may be paid after deducting from the amount payable therefor as
provided in Section 1302 an amount equal to the face amount of all such missing
coupons, or the surrender of such missing coupon or coupons may be waived by the
Company and the Trustee if there be furnished to it such security or indemnity
as they may require to save it 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 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 Company shall
execute and the Trustee shall authenticate and deliver to the Holder of such
Security, without service charge and at the expense of the Company, a new
Registered Security or Securities of the same series, of any authorized
denomination specified by the Holder, in an aggregate principal amount equal to
and in exchange for the portion of the principal of such Security so surrendered
which is not to be repaid.
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ARTICLE FOURTEEN
DEFEASANCE AND COVENANT DEFEASANCE
SECTION 1401. Applicability of Article; Company's Option to
Effect Defeasance or Covenant Defeasance. If, pursuant to Section 301, provision
is made for either or both of (a) defeasance of the Securities of or within a
series under Section 1402 or (b) covenant defeasance of the Securities of or
within a series under Section 1403, then the provisions of such Section or
Sections, as the case may be, together with the other provisions of this Article
(with such modifications thereto as may be specified pursuant to Section 301
with respect to any Securities), shall be applicable to such Securities and any
coupons appertaining thereto, and the Company may at its option by Board
Resolution, at any time, with respect to such Securities and any coupons
appertaining thereto, elect to have Section 1402 (if applicable) or Section 1403
(if applicable) be applied to such Outstanding Securities and any coupons
appertaining thereto upon compliance with the conditions set forth below in this
Article.
SECTION 1402. Defeasance and Discharge. Upon the Company's
exercise of the above option applicable to this Section with respect to any
Securities of or within a series, the Company shall be deemed to have been
discharged from its obligations with respect to such Outstanding Securities and
any coupons appertaining thereto on the date the conditions set forth in Section
1404 are satisfied (hereinafter, "defeasance"). For this purpose, such
defeasance means that the Company shall be deemed to have paid and discharged
the entire indebtedness represented by such Outstanding Securities and any
coupons appertaining thereto, which shall thereafter be deemed to be
"Outstanding" only for the purposes of Section 1405 and the other Sections of
this Indenture referred to in clauses (A) and (B) below, and to have satisfied
all of its other obligations under such Securities and any coupons appertaining
thereto and this Indenture insofar as such Securities and any coupons
appertaining thereto are concerned (and the Trustee, at the expense of the
Company, shall execute proper instruments acknowledging the same), except for
the following which shall survive until otherwise terminated or discharged
hereunder: (A) the rights of Holders of such Outstanding Securities and any
coupons appertaining thereto to receive, solely from the trust fund described in
Section 1404 and as more fully set forth in such Section, payments in respect of
the 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 Company's obligations with respect to such Securities under
Sections 305, 306, 1002 and 1003 and with respect to the payment of Additional
Amounts, if any, on such Securities as contemplated by Section 1012, (C) the
rights, powers, trusts, duties and immunities of the Trustee hereunder and (D)
this Article. Subject to compliance with this Article Fourteen, the Company may
exercise its option under this Section notwithstanding the prior exercise of its
option under Section 1403 with respect to such Securities and any coupons
appertaining thereto.
SECTION 1403. Covenant Defeasance. Upon the Company's exercise
of the above option applicable to this Section with respect to any Securities of
or within a series, the Company shall be released from its obligations under
Sections 1004 to 1010, inclusive and, if specified pursuant to Section 301, its
obligations under any other covenant, with respect to such Outstanding
Securities and coupons appertaining thereto on and after the date the conditions
set forth in Section 1304 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 1010, inclusive, or such other covenant, but
shall continue to be deemed "Outstanding" for all other purposes hereunder. For
this purpose, such covenant defeasance means that, with respect to such
Outstanding Securities and any coupons appertaining thereto, the Company may
omit to comply with and shall have no liability in respect of any term,
condition or limitation set forth in any such Section or such other covenant,
whether directly or indirectly, by reason of any reference elsewhere herein to
any such Section or such other covenant or by reason of
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reference in any 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(3) or 501(7) otherwise, as the case may
be, but, except as specified above, 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 Company shall irrevocably have deposited or caused to
be deposited with the Trustee (or another trustee satisfying the requirements of
Section 607 who shall agree to comply with the provisions of this Article
Fourteen applicable to it) as trust funds in trust for the purpose of making the
following payments, specifically pledged as security for, a 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 the 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, any case, in an amount,
sufficient, without consideration of any reinvestment of such principal and
interest, in the opinion of a nationally recognized firm of independent public
accountants expressed in a written certification thereof delivered the Trustee,
to pay and discharge, and which shall be applied by the Trustee (or other
qualifying trustee) to pay and discharge, 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 or analogous payments applicable to such
Outstanding Securities and any coupons appertaining thereto on the day on which
such payments are due and payable in accordance with the terms of this Indenture
and of such Securities and any coupons appertaining thereto.
(b) Such defeasance or covenant defeasance shall not result in
a breach or violation of, or constitute a default under, this Indenture or any
other material agreement or instrument to which the Company is a party or by
which it is bound.
(c) No Event of Default or event which with notice or lapse of
time or both would become an Event of Default with respect to such Securities
and any coupons appertaining thereto shall have occurred and be continuing on
the date of such deposit or, insofar as Sections 501(6) and 501(7) are
concerned, at any time during the period ending on the 91st day after the date
of such deposit (it being understood that this condition shall not be deemed
satisfied until the expiration of such period).
(d) In the case of an election under Section 1402, the Company
shall have delivered to the Trustee an Opinion of Counsel stating that (i) the
Company has received from, or there has been published by, the Internal Revenue
Service a ruling, or (ii) since the date of execution of this Indenture, there
has been a change in the applicable Federal income tax law, in either case to
the effect that, and based thereon such opinion shall confirm that, the Holders
of such Outstanding Securities and any coupons appertaining thereto will not
recognize income, gain or loss for Federal income tax purposes as a result of
such defeasance and will be subject to Federal income tax on the same amounts,
in the same manner and at the same times as would have been the case if such
defeasance had not occurred.
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(e) In the case of an election under Section 1403, the Company
shall have delivered to the Trustee an Opinion of Counsel to the effect that the
Holders of such Outstanding Securities and any coupons appertaining thereto will
not recognize income, gain or loss for Federal income tax purposes as a result
of such covenant defeasance and will be subject to Federal income tax on the
same amounts, in the same manner and at the same times as would have been the
case if such covenant defeasance had not occurred.
(f) The Company shall have delivered to the Trustee an
Officers' Certificate and an Opinion of Counsel, each stating that all
conditions precedent to the defeasance under Section 1402 or the covenant
defeasance under Section 1403 (as the case may be) have been complied with and
an Opinion of Counsel to the effect that either (i) as a result of a deposit
pursuant to subsection (a) above and the related exercise of the Company's
option under Section 1402 or Section 1403 (as the case may be), registration is
not required under the Investment Company Act of 1940, as amended, by the
Company with respect to the trust funds representing such deposit or by the
Trustee for such trust funds or (ii) all necessary registrations under said Act
have been effected.
(g) Notwithstanding any other provisions of this Section, such
defeasance or covenant defeasance shall be effected in compliance with any
additional or substitute terms, conditions or limitations which may be imposed
on the Company in connection therewith pursuant to Section 301.
SECTION 1405. Deposited Money and Government Obligations to Be
Held in Trust; Other Miscellaneous Provisions. Subject to the provisions of the
last paragraph of Section 1003, all money and Government Obligations (or other
property as may be provided pursuant to Section 301) (including the proceeds
thereof) deposited with the Trustee (or other qualifying trustee, collectively
for purposes of this Section 1405, the "Trustee") pursuant to Section 1404 in
respect of any Outstanding Securities of any series and any coupons appertaining
thereto shall be held in trust and applied by the Trustee, in accordance with
the provisions of such Securities and any coupons appertaining thereto and this
Indenture, to the payment, either directly or through any Paying Agent 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 Company shall pay and indemnify the Trustee against any
tax, fee or other charge imposed on or assessed against the Government
Obligations deposited pursuant to Section 1404 or the principal and interest
received in respect thereof other than any such tax, fee or other
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<PAGE>
charge which by law is for the account of the Holders of such Outstanding
Securities and any coupons appertaining thereto.
Anything in this Article to the contrary notwithstanding,
subject to Section 606, the Trustee shall deliver or pay to the Company from
time to time upon the Company Request any money or Government Obligations (or
other property and any proceeds therefrom) held by it as provided in Section
1404 which, in the opinion of a nationally recognized firm of independent public
accountants expressed in a written certification thereof delivered to the
Trustee, are in excess of the amount thereof which would then be required to be
deposited to effect a defeasance or covenant defeasance, as applicable, in
accordance with this Article.
ARTICLE FIFTEEN
MEETINGS OF HOLDERS OF SECURITIES
SECTION 1501. Purposes for Which Meetings May Be Called. A
meeting of Holders of Securities of any series may be called at any time and
from time to time pursuant to this Article to make, give or take any request,
demand, authorization, direction, notice, consent, waiver or other action
provided by this Indenture to be made, given or taken by Holders of Securities
of such series.
SECTION 1502. Call, Notice and Place of Meetings. (a) The
Trustee may at any time call a meeting of Holders of Securities of any series
for any purpose specified in Section 1501, to be held at such time and at such
place in the Borough of Manhattan, The City of New York, or in London as the
Trustee shall determine. Notice of every meeting of Holders of Securities of any
series, setting forth the time and the place of such meeting and in general
terms the action proposed to be taken at such meeting, shall be given, in the
manner provided in Section 106, not less than 21 nor more than 180 days prior to
the date fixed for the meeting.
(b) In case at any time the Company pursuant to a Board
Resolution, or the Holders of at least 10% in principal amount of the
Outstanding Securities of any series shall have requested the Trustee to call a
meeting of the Holders of Securities of such series for any purpose specified in
Section 1501, by written request setting forth in reasonable detail the action
proposed to be taken at the meeting, and the Trustee shall not have made the
first publication of the notice of such meeting within 21 days after receipt of
such request or shall not thereafter proceed to cause the meeting to be held as
provided herein, then the Company or the Holders of Securities of such series in
the amount above specified, as the case may be, may determine the time and the
place in 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 Company and its counsel.
SECTION 1504. Quorum; Action. The Persons entitled to vote a
majority in principal amount of the Outstanding Securities of a series shall
constitute a quorum for a meeting of Holders of Securities of such series;
provided, however, that if any action is to be taken at such meeting with
respect to a consent or waiver which this Indenture expressly provides may be
given by the Holders of not less than a specified percentage in principal amount
of the Outstanding Securities
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<PAGE>
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 specific percentage, which is
less than a majority, in principal amount 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 act 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 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.
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<PAGE>
Such regulations may provide that written instruments appointing proxies,
regular on their face, may be presumed valid and genuine without the proof
specified in Section 104 or other proof.
(b) The Trustee shall, by an instrument in writing appoint a
temporary chairman of the meeting, unless the meeting shall have been called by
the Company or by Holders of Securities provided in Section 1502(b), in which
case the Company or the Holders of Securities of the series calling the meeting,
as the case may be, shall in like manner appoint a temporary chairman. A
permanent chairman and a permanent secretary of the meeting shall be elected by
vote of the Persons entitled to vote a majority in principal amount of the
Outstanding Securities of such series represented at the meeting.
(c) At any meeting each Holder of a Security of such series or
proxy shall be entitled to one vote for each $1,000 principal amount of the
Outstanding Securities of such series held or represented by him; provided,
however, that no vote shall be cast or counted at any meeting in respect of any
Security challenged as not Outstanding and ruled by the chairman of the meeting
to be not Outstanding. The chairman of the meeting shall have no right to vote,
except as a Holder of a Security of such series or proxy.
(d) Any meeting of Holders of Securities of any series duly
called pursuant to Section 1502 at which a quorum is present may be adjourned
from time to time by Persons entitled to vote a majority in principal amount of
the Outstanding Securities of such series represented at the meeting, and the
meeting may be held as so adjourned without further notice.
SECTION 1506. Counting Votes and Recording Action of Meetings.
The vote upon any resolution submitted to any meeting of Holders of Securities
of any series shall be by written ballots on which shall be subscribed the
signatures of the Holders of Securities of such series or of their
representatives by proxy and the principal amounts and serial numbers of the
Outstanding Securities of such series held or represented by them. The permanent
chairman of the meeting shall appoint two inspectors of votes who shall count
all votes cast at the meeting for or against any resolution and who shall make
and file with the secretary of the meeting their verified written reports in
duplicate of all votes cast at the meeting. A record, at least in duplicate, of
the proceedings of each meeting of Holders of Securities of any Series shall be
prepared by the secretary of the meeting and there shall be attached to said
record the original reports of the inspectors of votes on any vote by ballot
taken thereat and affidavits by one or more persons having knowledge of the
fact, setting forth a copy of the notice of the meeting and showing that said
notice was given as provided in Section 1502 and, if applicable, Section 1504.
Each copy shall be signed and verified by the affidavits of the permanent
chairman and secretary of meeting and one such copy shall be delivered to the
Company and another to the Trustee to be preserved by the Trustee, the latter to
have attached thereto the ballots voted at the meeting. Any record so signed and
verified shall be conclusive evidence of the matters therein stated.
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 and 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 Company, 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
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<PAGE>
such reasonable rules and regulations as may be prescribed by the Trustee or in
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.
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<PAGE>
IN WITNESS WHEREOF, the parties hereto have caused this
Indenture to be duly executed, and their respective corporate seals to be
hereunto affixed and attested, all as of the day and year first above written.
CARRAMERICA REALTY CORPORATION
By:
-------------------------------
Title:
[BANK], as Trustee
By:
-------------------------------
Title: Vice President
ATTEST
By:
--------------------------------
Title: Assistant Vice President
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<PAGE>
STATE OF NEW YORK )
) ss:
COUNTY OF NEW YORK )
On the __th day of __________, 199__, before me personally came
to me known, _____________ who, being by me duly sworn, did depose and say that
he/she resides in _________________________________, that he/she is the
___________________ of CarrAmerica Realty Corporation, one of the parties
described in and which executed the foregoing instrument; and that he/she signed
his/her name thereto by authority of said corporation.
[Notarial Seal]
--------------------------------------
Notary Public
COMMISSION EXPIRES
- 65 -
<PAGE>
STATE OF NEW YORK )
) ss:
COUNTY OF NEW YORK )
On the _________ day of _________, 199__, before me personally
came to me known, _____________________, who, being by me duly sworn, did depose
and say that she/he resides at ___________________________, that she/he is a
__________________ of [Bank], one of the parties described in and which executed
the foregoing instrument; and that he/she signed his/her name thereto by
authority of said corporation.
[Notarial Seal]
--------------------------------------
Notary Public
COMMISSION EXPIRES:
- 66 -
<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 Companys, domestic corporations or any estate or trust the income of
which is subject to United States federal income taxation regardless of its
source ("United States person(s)"), (ii) are owned by United States person(s)
that are (a) foreign branches of United States financial institutions (financial
institutions, as defined in United States Treasury Regulations Section
2.165-12(c)(1)(v) are herein referred to as "financial institutions") purchasing
for their own account or for resale, or (b) United States person(s) who acquired
the Securities through foreign branches of United States financial institutions
and who hold the Securities through such United States financial institutions on
the date hereof (and in either case (a) or (b), each such United States
financial institution hereby agrees, on its own behalf or through its agent,
that you may advise Colonial Prospective Trust or its agent that such financial
institution will comply with the requirements of Section 165(j)(3)(A), (B) or
(C) of the United States Internal Revenue Code of 1986, as amended, and the
regulations thereunder), or (iii) are owned by United States or foreign
financial institution(s) for purposes of resale during the restricted period (as
defined in United States Treasury Regulations Section 1.163-5(c)(2)(i)(D)(7)),
and, in addition, if the owner is a United States or foreign financial
institution described in clause (iii) above (whether or not also described in
clause (i) or (ii)), this is to further certify that such financial institution
has not acquired the Securities for purposes of resale directly or indirectly to
a United States person or to a person within the United States or its
possessions.
As used herein, "United States" means the United States of
America (including the States and the District of Columbia); and "possessions"
include Puerto Rico, the U.S. Virgin Islands, Guam, American Samoa, Wake Island
and the Northern Mariana Islands.
We undertake to advise you promptly by tested telex on or prior
to the date on which you intend to submit your certification relating to the
above-captioned Securities held by you for our account in accordance with your
Operating Procedures if any applicable statement herein is not correct on such
date, and in the absent of any such notification it may be assumed that this
certification applies as of such date.
This certificate excepts and does not relate to [U.S. $]
____________________ of such interest in the above-captioned Securities in
respect of which we are not able to certify and as to which we 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.
<PAGE>
Dated: _________________, 19__
[To be dated no earlier than the 15th day prior to (i) the Exchange Date or (ii)
the relevant Interest Payment Date occurring prior to the Exchange Date, as
applicable]
[Name of Person Making Certification]
-------------------------------------
(Authorized Signatory)
Name:
Title:
- 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 Companys,
domestic corporations or any estate or trust the income of which is subject to
United States Federal income taxation regardless of its source ("United States
person(s)"), (ii) is owned by United States person(s) that are (a) foreign
branches of United States financial institutions (financial institutions, as
defined in U.S. Treasury Regulations Section 1.165-12(c)(1)(v) are herein
referred to as "financial institutions") purchasing for their own account or for
resale, or (b) United 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 Colonial Prospective
Trust or its agent that such financial institution will comply with the
requirements of Section 165(j) (3) (A), (B) or (C) of the Internal Revenue Code
of 1986, as amended, and the regulations thereunder), or (iii) is owned by
United States or foreign financial institution(s) for purposes of resale during
the restricted period (as defined in United States Treasury Regulations Section
1.163-5(c)(2)(i)(D)(7)), and, to the further effect, that financial institutions
described in clause (iii) above (whether or not also described in clause (i) or
(ii)) have certified that they have not acquired the Securities for purposes of
resale directly or indirectly to a United States person or to a person within
the United States or its possessions.
As used herein, "United States" means the United States of
America (including the States and the District of Columbia); and its
"possessions" include Puerto Rico, the U.S. Virgin Islands, Guam, American
Samoa, Wake Island and the Northern Mariana Islands.
We further certify that (i) we are not making available
herewith for exchange (or, if relevant, collection of any interest) any portion
of the temporary global Security representing the above captioned Securities
excepted in the above-referenced certificates of Member Organizations and (ii)
as of the date hereof we have not received any notification from any of our
Member Organizations to the effect that the statements made by such Member
Organizations with 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__
<PAGE>
[To be dated no earlier than the Exchange Date or the relevant Interest Payment
Date occurring prior to the Exchange Date, as applicable]
[Morgan Guaranty Trust Company of
New York, Brussels Office,] as
Operator of the Euroclear System [Cedel S.A.]
By:
------------------------------------------
- 2 -
<PAGE>
CARRAMERICA REALTY CORPORATION, AS OBLIGOR
AND
[BANK]
AS TRUSTEE
-------------------------
INDENTURE
DATED AS OF ___________ __, 199__
- -------------------------------------------------------------------------------
SUBORDINATED DEBT SECURITIES
- -------------------------------------------------------------------------------
<PAGE>
TABLE OF CONTENTS
<TABLE>
<CAPTION>
Page
----
<S> <C>
PARTIES . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 2
RECITALS OF THE COMPANY . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 2
ARTICLE ONE DEFINITIONS AND OTHER PROVISIONS OF GENERAL APPLICATION . . . . . . . . . . . . 2
SECTION 101. Definitions . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 2
Acquisition Lines of Credit . . . . . . . . . . . . . . . . . . . . . . . . . . . 3
Act . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 3
Additional Amounts . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 3
Adjusted Total Assets . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 3
Affiliate . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 3
Authenticating Agent . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 3
Authorized Newspaper . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 3
Bankruptcy Law . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 3
Bearer Security . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 3
Board of Directors . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 3
Board Resolution . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 3
Business Day . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 3
CEDEL . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 3
Commission . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 4
Company . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 4
Company Request . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 4
Consolidated Income Available for Debt Service . . . . . . . . . . . . . . . . . 4
Consolidated Net Income . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 4
Conversion Event . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 4
Corporate Trust Office . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 4
Corporation . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 4
Coupon . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 4
Custodian . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 4
Debt . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 5
Defaulted Interest . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 5
DTC . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 5
Dollar or "$" . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 5
ECU . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 5
Euroclear . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 5
European Communities . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 5
European Monetary System . . . . . . . . . . . . . . . . . . . . . . . . . . . . 5
Event of Default . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 5
Exchange Act . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 5
Foreign Currency . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 5
GAAP . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 5
Government Obligations . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 5
Holder . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 6
Indenture . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 6
Indexed Security . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 6
Interest . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 6
Interest Payment Date . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 6
i
<PAGE>
Make-Whole Amount . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 6
Maturity . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 6
Maximum Annual Service Charge . . . . . . . . . . . . . . . . . . . . . . . . . . 6
Officers' Certificate . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 7
Opinion of Counsel . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 7
Original Issue Discount Security . . . . . . . . . . . . . . . . . . . . . . . . 7
Outstanding . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 7
Paying Agent . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 8
Person . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 8
Place of Payment . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 8
Predecessor Security . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 8
Redemption Date . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 8
Redemption Price . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 8
Registered Security . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 8
Regular Record Date . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 8
Reinvestment Rate . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 8
Repayment Date . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 9
Repayment Price . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 9
Responsible Officer . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 9
Securities Act . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 9
Security . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 9
Security Register and Security Registrar . . . . . . . . . . . . . . . . . . . . 9
Senior Debt . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 9
Significant Subsidiary . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 10
Special Record Date . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 10
Stated Maturity . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 10
Statistical Release . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 10
Subsidiary . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 10
Trust Indenture Act or TIA . . . . . . . . . . . . . . . . . . . . . . . . . . . 10
Trustee . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 10
Undepreciated Real Estate Assets . . . . . . . . . . . . . . . . . . . . . . . . 10
United States . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 10
United States Person . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 11
Yield to Maturity . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 11
SECTION 102. Compliance Certificates and Opinions . . . . . . . . . . . . . . . . . . . . 11
SECTION 103. Form of Documents Delivered to Trustee . . . . . . . . . . . . . . . . . . . 11
SECTION 104. Acts of Holders . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 12
SECTION 105. Notices, etc., to Trustee and Company . . . . . . . . . . . . . . . . . . . 13
SECTION 106. Notice to Holders; Waiver . . . . . . . . . . . . . . . . . . . . . . . . . 13
SECTION 107. Effect of Headings and Table of Contents . . . . . . . . . . . . . . . . . . 14
SECTION 108. Successors and Assigns . . . . . . . . . . . . . . . . . . . . . . . . . . . 14
SECTION 109. Separability Clause . . . . . . . . . . . . . . . . . . . . . . . . . . . . 14
SECTION 110. Benefits of Indenture . . . . . . . . . . . . . . . . . . . . . . . . . . . 14
SECTION 111. No Personal Liability . . . . . . . . . . . . . . . . . . . . . . . . . . . 14
SECTION 112. Governing Law . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 15
SECTION 113. Legal Holidays . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 15
ARTICLE TWO SECURITIES FORMS . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 15
SECTION 201. Forms of Securities . . . . . . . . . . . . . . . . . . . . . . . . . . . . 15
SECTION 202. Form of Trustee's Certificate of Authentication . . . . . . . . . . . . . . 15
SECTION 203. Securities Issuable in Global Form . . . . . . . . . . . . . . . . . . . . . 16
ii
<PAGE>
ARTICLE THREE THE SECURITIES . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 16
SECTION 301. Amount Unlimited, Issuable in Series . . . . . . . . . . . . . . . . . . . . 16
SECTION 302. Denominations . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 19
SECTION 303. Execution, Authentication, Delivery and Dating . . . . . . . . . . . . . . . 20
SECTION 304. Temporary Securities . . . . . . . . . . . . . . . . . . . . . . . . . . . . 21
SECTION 305. Registration, Registration of Transfer and Exchange . . . . . . . . . . . . 23
SECTION 306. Mutilated, Destroyed, Lost and Stolen Securities . . . . . . . . . . . . . . 26
SECTION 307. Payment of Interest; Interest Rights Preserved . . . . . . . . . . . . . . . 27
SECTION 308. Persons Deemed Owners . . . . . . . . . . . . . . . . . . . . . . . . . . . 28
SECTION 309. Cancellation . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 29
SECTION 310. Computation of Interest . . . . . . . . . . . . . . . . . . . . . . . . . . 29
ARTICLE FOUR SATISFACTION AND DISCHARGE . . . . . . . . . . . . . . . . . . . . . . . . . . 29
SECTION 401. Satisfaction and Discharge of Indenture . . . . . . . . . . . . . . . . . . 29
SECTION 402. Application of Trust Funds . . . . . . . . . . . . . . . . . . . . . . . . . 30
ARTICLE FIVE REMEDIES
SECTION 501. Events of Default . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 31
SECTION 502. Acceleration of Maturity; Rescission and Annulment . . . . . . . . . . . . . 33
SECTION 503. Collection of Indebtedness and Suits for Enforcement by Trustee . . . . . . 33
SECTION 504. Trustee May File Proofs of Claim . . . . . . . . . . . . . . . . . . . . . . 33
SECTION 505. Trustee May Enforce Claims Without Possession of Securities or Coupons . . . 34
SECTION 506. Application of Money Collected . . . . . . . . . . . . . . . . . . . . . . . 34
SECTION 507. Limitation on Suits . . . . . . . . . . . . . . . . . . . . . . . . . . . . 35
SECTION 508. Unconditional Right of Holders to Receive Principal,
Premium or Make-Whole Amount, if any, Interest and Additional Amounts . . 35
SECTION 509. Restoration of Rights and Remedies . . . . . . . . . . . . . . . . . . . . . 35
SECTION 510. Rights and Remedies Cumulative . . . . . . . . . . . . . . . . . . . . . . . 35
SECTION 511. Delay or Omission Not Waiver . . . . . . . . . . . . . . . . . . . . . . . . 35
SECTION 512. Control by Holders of Securities . . . . . . . . . . . . . . . . . . . . . . 36
SECTION 513. Waiver of Past Defaults . . . . . . . . . . . . . . . . . . . . . . . . . . 36
SECTION 514. Waiver of Usury Stay or Extension Laws . . . . . . . . . . . . . . . . . . . 36
SECTION 515. Undertaking for Costs . . . . . . . . . . . . . . . . . . . . . . . . . . . 36
ARTICLE SIX THE TRUSTEE . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 37
SECTION 601. Notice of Defaults . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 37
SECTION 602. Certain Rights of Trustee . . . . . . . . . . . . . . . . . . . . . . . . . 37
SECTION 603. Not Responsible for Recitals or Issuance of Securities . . . . . . . . . . . 38
SECTION 604. May Hold Securities . . . . . . . . . . . . . . . . . . . . . . . . . . . . 38
SECTION 605. Money Held in Trust . . . . . . . . . . . . . . . . . . . . . . . . . . . . 38
SECTION 606. Compensation and Reimbursement . . . . . . . . . . . . . . . . . . . . . . . 38
SECTION 607. Corporate Trustee Required; Eligibility; Conflicting Interests . . . . . . . 39
SECTION 608. Resignation and Removal; Appointment of Successor . . . . . . . . . . . . . 39
SECTION 609. Acceptance of Appointment by Successor . . . . . . . . . . . . . . . . . . . 40
SECTION 610. Merger, Conversion, Consolidation or Succession to Business . . . . . . . . 41
SECTION 611. Appointment of Authentication Agent . . . . . . . . . . . . . . . . . . . . 41
iii
<PAGE>
ARTICLE SEVEN HOLDERS' LISTS AND REPORTS BY TRUSTEE AND COMPANY . . . . . . . . . . . . . . 43
SECTION 701. Disclosure of Names and Addresses of Holders . . . . . . . . . . . . . . . . 43
SECTION 702. Reports by Trustee . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 43
SECTION 703. Reports by Company . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 43
SECTION 704. The Company to Furnish Trustee Names and Addresses of Holders . . . . . . . 44
ARTICLE EIGHT CONSOLIDATION, MERGER, SALE, LEASE OR CONVEYANCE . . . . . . . . . . . . . . . 44
SECTION 801. Consolidations and Mergers of Company and Sales,
Leases and Conveyances Permitted Subject to Certain Conditions . . . . . . 44
SECTION 802. Rights and Duties of Successor Entity . . . . . . . . . . . . . . . . . . . 44
SECTION 803. Officers' Certificate and Opinion of Counsel . . . . . . . . . . . . . . . . 45
ARTICLE NINE SUPPLEMENTAL INDENTURES . . . . . . . . . . . . . . . . . . . . . . . . . . . . 45
SECTION 901. Supplemental Indentures Without Consent of Holders . . . . . . . . . . . . . 45
SECTION 902. Supplemental Indentures with Consent of Holders . . . . . . . . . . . . . . 46
SECTION 903. Execution of Supplemental Indentures . . . . . . . . . . . . . . . . . . . . 47
SECTION 904. Effect of Supplemental Indentures . . . . . . . . . . . . . . . . . . . . . 47
SECTION 905. Conformity with Trust Indenture Act . . . . . . . . . . . . . . . . . . . . 47
SECTION 906. Reference in Securities to Supplemental Indentures . . . . . . . . . . . . . 47
SECTION 907. Notice of Supplemental Indentures . . . . . . . . . . . . . . . . . . . . . 47
ARTICLE TEN COVENANTS . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 48
SECTION 1001. Payment of Principal, Premium or Make-Whole Amount, if any,
Interest and Additional Amounts . . . . . . . . . . . . . . . . . . . . . 48
SECTION 1002. Maintenance of Office or Agency . . . . . . . . . . . . . . . . . . . . . . 48
SECTION 1003. Money for Securities Payments to Be Held in Trust . . . . . . . . . . . . . 49
SECTION 1004. [Omitted] . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 49
SECTION 1005. [Omitted] . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 49
SECTION 1006. Existence . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 50
SECTION 1007. Maintenance of Properties . . . . . . . . . . . . . . . . . . . . . . . . . 51
SECTION 1008. Insurance . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 51
SECTION 1009. Payment of Taxes and Other Claims . . . . . . . . . . . . . . . . . . . . . 51
SECTION 1010. Provision of Financial Information . . . . . . . . . . . . . . . . . . . . 51
SECTION 1011. Statement as to Compliance . . . . . . . . . . . . . . . . . . . . . . . . 51
SECTION 1012. Additional Amounts . . . . . . . . . . . . . . . . . . . . . . . . . . . . 51
SECTION 1013. Waiver of Certain Covenants . . . . . . . . . . . . . . . . . . . . . . . . 51
ARTICLE ELEVEN REDEMPTION OF SECURITIES . . . . . . . . . . . . . . . . . . . . . . . . . . 52
SECTION 1101. Applicability of Article . . . . . . . . . . . . . . . . . . . . . . . . . 52
SECTION 1102. Election to Redeem; Notice to Trustee . . . . . . . . . . . . . . . . . . . 53
SECTION 1103. Selection by Trustee of Securities to Be Redeemed . . . . . . . . . . . . . 53
SECTION 1104. Notice of Redemption . . . . . . . . . . . . . . . . . . . . . . . . . . . 53
SECTION 1105. Deposit of Redemption Price . . . . . . . . . . . . . . . . . . . . . . . . 54
SECTION 1106. Securities Payable on Redemption Date . . . . . . . . . . . . . . . . . . . 54
SECTION 1107. Securities Redeemed in Part . . . . . . . . . . . . . . . . . . . . . . . . 55
iv
<PAGE>
ARTICLE TWELVE [INTENTIONALLY OMITTED] . . . . . . . . . . . . . . . . . . . . . . . . . . 55
ARTICLE THIRTEEN REPAYMENT AT THE OPTION OF HOLDERS . . . . . . . . . . . . . . . . . . . . 55
SECTION 1301. Applicability of Article . . . . . . . . . . . . . . . . . . . . . . . . . 55
SECTION 1302. Repayment of Securities . . . . . . . . . . . . . . . . . . . . . . . . . . 56
SECTION 1303. Exercise of Option . . . . . . . . . . . . . . . . . . . . . . . . . . . . 56
SECTION 1304. When Securities Presented for Repayment Become Due and Payable . . . . . . 56
SECTION 1305. Securities Repaid in Part . . . . . . . . . . . . . . . . . . . . . . . . . 57
ARTICLE FOURTEEN DEFEASANCE AND COVENANT DEFEASANCE . . . . . . . . . . . . . . . . . . . . 57
SECTION 1401. Applicability of Article; Company's Option to Effect Defeasance or
Covenant Defeasance . . . . . . . . . . . . . . . . . . . . . . . . . . . 57
SECTION 1402. Defeasance and Discharge . . . . . . . . . . . . . . . . . . . . . . . . . 58
SECTION 1403. Covenant Defeasance . . . . . . . . . . . . . . . . . . . . . . . . . . . . 58
SECTION 1404. Conditions to Defeasance or Covenant Defeasance . . . . . . . . . . . . . . 58
SECTION 1405. Deposited Money and Government Obligations to Be Held in Trust;
Other Miscellaneous Provisions . . . . . . . . . . . . . . . . . . . . . 60
ARTICLE FIFTEEN MEETINGS OF HOLDERS OF SECURITIES . . . . . . . . . . . . . . . . . . . . . 61
SECTION 1501. Purposes for Which Meetings May Be Called . . . . . . . . . . . . . . . . . 61
SECTION 1502. Call, Notice and Place of Meetings . . . . . . . . . . . . . . . . . . . . 61
SECTION 1503. Persons Entitled to Vote at Meetings . . . . . . . . . . . . . . . . . . . 61
SECTION 1504. Quorum; Action . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 61
SECTION 1505. Determination of Voting Rights; Conduct and Adjournment of Meetings . . . . 62
SECTION 1506. Counting Votes and Recording Action of Meetings . . . . . . . . . . . . . . 63
SECTION 1507. Evidence of Action Taken by Holders. . . . . . . . . . . . . . . . . . . . 63
SECTION 1508. Proof of Execution of Instruments. . . . . . . . . . . . . . . . . . . . . 63
ARTICLE SIXTEEN SUBORDINATION . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 63
SECTION 1601. Agreement to Subordinate. . . . . . . . . . . . . . . . . . . . . . . . . . 63
SECTION 1602. Liquidation; Dissolution; Bankruptcy. . . . . . . . . . . . . . . . . . . . 64
SECTION 1603. Default on Senior Debt. . . . . . . . . . . . . . . . . . . . . . . . . . . 64
SECTION 1604. Acceleration of Securities. . . . . . . . . . . . . . . . . . . . . . . . . 64
SECTION 1605. When Distribution Must Be Paid Over. . . . . . . . . . . . . . . . . . . . 64
SECTION 1606. Notice by Company. . . . . . . . . . . . . . . . . . . . . . . . . . . . . 65
SECTION 1607. Subrogation. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 65
SECTION 1608. Relative Rights. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 65
SECTION 1609. Subordination May Not Be Impaired By Company. . . . . . . . . . . . . . . . 65
SECTION 1610. Distribution or Notice to Representative. . . . . . . . . . . . . . . . . . 65
SECTION 1611. Rights of Trustee and Paying Agent. . . . . . . . . . . . . . . . . . . . . 65
</TABLE>
TESTIMONIUM
SIGNATURES AND SEALS
ACKNOWLEDGMENTS
EXHIBIT A - FORMS OF CERTIFICATION
v
<PAGE>
CARRAMERICA REALTY CORPORATION, AS OBLIGOR
Reconciliation and tie between Trust Indenture Act of 1939 (the
"1939 Act") and this Indenture, dated as of ____________ __, 199__.
<TABLE>
<CAPTION>
Trust Indenture Act Section Indenture Section
<S> <C> <C>
Section 310 (a) (1) . . . . . . . . . . . . . . . . . . . . . . . 607
(a) (2) . . . . . . . . . . . . . . . . . . . . . . . 607
(b) . . . . . . . . . . . . . . . . . . . . . . . . . 607, 608
Section 312 (c) . . . . . . . . . . . . . . . . . . . . . . . . . 701
Section 313 (a) . . . . . . . . . . . . . . . . . . . . . . . . . 70
(c) . . . . . . . . . . . . . . . . . . . . . . . . . 702
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) . . . . . . . . . . . . . . . . . . . . . . . . . 111
(c) . . . . . . . . . . . . . . . . . . . . . . . . . 111
- ----------------------
<FN>
NOTE: This reconciliation and tie shall not, for any purpose, be deemed
to be a part of this Indenture.
</FN>
</TABLE>
Attention should also be directed to Section 318 (c) of the 1939
Act, which provides that the provisions of Sections 310 to and including 317 of
the 1939 Act are a part of and govern every qualified indenture, whether or not
physically contained therein.
- 1 -
<PAGE>
Indenture (this "Indenture"), dated as of _______ __, 199_, by
and between CARRAMERICA REALTY CORPORATION, a Maryland corporation (the
"Company") having its principal office at 1700 Pennsylvania Avenue, N.W.,
Washington, D.C. 20006 and [BANK], a national bank organized under the laws of
the United States of America, as Trustee hereunder (the "Trustee"), having its
Corporate Trust Office (as defined below) at ___________________________,
- ------------------------.
RECITALS OF THE COMPANY
The Company deems it necessary to issue from time to
time for its lawful purposes subordinated debt securities (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.
This Indenture is subject to the provisions of the Trust
Indenture Act of 1939, as amended, that are deemed to be incorporated into this
Indenture and shall, to the extent applicable, be governed by such provisions.
All things necessary to make this Indenture a valid agreement
of the Company, in accordance with its terms, have been done.
NOW, THEREFORE, THIS INDENTURE WITNESSETH:
For and in consideration of the premises and the purchase of
the Securities by the Holders thereof, it is mutually covenanted and agreed, for
the equal and proportionate benefit of all Holders of the Securities, as
follows:
ARTICLE ONE
DEFINITIONS AND OTHER PROVISIONS OF GENERAL APPLICATION
SECTION 101. Definitions For all purposes of this Indenture,
except as otherwise expressly provided or unless the context otherwise requires:
(1) the terms defined in this Article have the meanings
assigned to them in this Article, and include the plural as well as the
singular;
(2) all other terms used herein which are defined in the TIA,
either directly or by reference therein, have the meanings assigned to them
therein, and the terms "cash transaction" and "self-liquidating paper", as used
in TIA Section 311, shall have the meanings assigned to them in the rules of the
Commission adopted under the TIA;
(3) all accounting terms not otherwise defined herein
have the meanings assigned to them in accordance with GAAP; and
(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 Aricle Ten, are defined in those Articles. In addition, the
following terms shall have the indicated respective meanings:
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"Acquisition Lines of Credit" means, collectively, any secured
lines of credit of the Company or any Subsidiary, the proceeds of which shall be
used, among other things, to acquire interests, directly or indirectly, in real
estate.
"Act", when used with respect to any Holder, has the meaning
specified in Section 104.
"Additional Amounts" means any additional amounts which are
required by a Security or by or pursuant to a Board Resolution, under
circumstances specified therein, to be paid by the Company in respect of certain
taxes imposed on certain Holders and which are owing to such Holders.
"Adjusted Total Assets" has the meaning specified in Section
1004.
"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 any Security established pursuant to
Section 201 which is payable to bearer.
"Board of Directors" means the board of directors of the
Company, the executive committee or any committee of that board duly authorized
to act hereunder, as the case may be.
"Board Resolution" means a copy of a resolution of the Company,
certified by the Secretary or an Assistant Secretary of the Company to have been
duly adopted by the Board of Directors and to be in full force and effect on the
date of such certification, and delivered to the Trustee.
"Business Day", when used with respect to any Place of Payment
or any other particular location referred to in this Indenture or in the
Securities, means, unless otherwise specified with respect to any Securities
pursuant to Section 301, any day, other than a Saturday or Sunday, that is
neither a legal holiday nor a day on which banking institutions in that Place of
Payment or particular location are authorized or required by law, regulation or
executive order to close.
"CEDEL" means Centrale de Livraison de Valeurs Mobilieres,
S.A., or its successor.
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"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.
"Company" means the Person named as the "Company" in the first
paragraph of this Indenture until a successor Company shall have become such
pursuant to the applicable provisions of this Indenture, and thereafter
"Company" shall mean such successor Company.
"Company Request" and "Company Order" mean, respectively, a
written request or order signed in the name of and on behalf of the Company by
its Chairman of the Board, the President or a Vice President, and by its
Treasurer or an Assistant Treasurer, the Secretary or an Assistant Secretary of
the Company, and delivered to the Trustee.
"Consolidated Income Available for Debt Service" for any period
means Consolidated Net Income of the Company and its Subsidiaries adjusted (i)
to eliminate gains and losses on property dispositions, refinancings and other
capital transactions, (ii) to reflect payment of deferred charges on a cash
rather than accrual basis, and (iii) to add back all amounts which have been
deducted for (a) interest on Debt of the Company and its Subsidiaries, (b)
provision for taxes of the Company and its Subsidiaries based on income, (c)
amortization of debt discount, (d) depreciation and amortization, and (e) any
noncash charge resulting from a change in accounting principles in determining
Consolidated Net Income for such period.
"Consolidated Net Income" for any period means the amount of
consolidated net income (or loss) of the Company and its Subsidiaries for such
period determined on a consolidated basis in accordance with GAAP.
"Conversion Event" means the cessation of use of (i) a Foreign
Currency both by the government of the country which issued such currency and
for the settlement of transactions by a central bank or other public
institutions of or within the international banking community, (ii) the ECU both
within the European Monetary System and for the settlement of transactions by
public institutions of or within the European Communities or (iii) any currency
unit (or composite currency) other than the ECU for the purposes for which it
was established.
"Corporate Trust Office" means the principal corporate trust
office of the Trustee at which, at any particular time, its corporate trust
business shall be administered, which office at the date hereof is located at
_____________________________, except that for purposes of Section 1002, such
term shall mean the office or agency of the Trustee in the
___________________________, which office at the date hereof is located at
- --------------------------------.
"corporation" includes corporations, associations, companies,
real estate investment trusts.
"coupon" means any interest coupon appertaining to a Bearer
Security.
"Custodian" has the meaning specified in Section 501.
"Debt" of the Company or any Subsidiary means any indebtedness
of the Company or any Subsidiary, whether or not contingent, in respect of (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 Company or any
Subsidiary, (iii) letters of credit or amounts representing the balance deferred
and unpaid of the purchase price of any property except any such balance that
constitutes an accrued expense or trade payable or (iv) any lease of property by
the Company or any Subsidiary as lessee which is reflected
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on the Company's Consolidated Balance Sheet as a capitalized lease in accordance
with GAAP, in the case of items of indebtedness under (i) through (iii) above to
the extent that any such items (other than letters of credit) would appear as a
liability on the Company's consolidated balance sheet in accordance with GAAP,
and also includes, to the extent not otherwise included, any obligation by the
Company 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), indebtedness of another person (other than the Company or any
Subsidiary).
"Defaulted Interest" has the meaning specified in Section 307.
"DTC" means The Depository Trust Company for so long as it
shall be a clearing agency registered under the Exchange Act, or such successor
as the Company shall designate from time to time in an Officer's Certificate
delivered to the Trustee.
"Dollar" or "$" means a dollar or other equivalent unit in such
coin or currency of the United States of America as at the time shall be legal
tender for the payment of public and private debts.
"ECU" means the European Currency Unit as defined and revised
from time to time by the Council of the European Communities.
"Euroclear" means Morgan Guaranty Trust Company of New York,
Brussels Office, or its successor as operator of the Euroclear System.
"European Communities" means the European Economic Community,
the European Coal and Steel Community and the European Atomic Energy Community.
"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 and
any successor statute thereto, in each case as amended from time to time and the
rules and regulations of the Commission thereunder.
"Foreign Currency" means any currency, currency unit or
composite currency, including, without limitation, the ECU issued by the
government of one or more countries other than the United States of America or
by any recognized confederation or association of such governments.
"GAAP" means generally accepted accounting principles, as in
effect from time to time, as used in the United States applied on a consistent
basis; 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,
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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 30l; 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 particular series of Securities for which such Person is Trustee established
as contemplated by Section 331, exclusive, however, of any provisions or terms
which relate solely to other series of Securities for which such Person is
Trustee, regardless of when such terms or provisions were adopted, and exclusive
of any provisions 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 1012,
includes such Additional Amounts.
"Interest Payment Date" when used with respect to any Security,
means the Stated Maturity of an installment of interest on such Security.
"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 Company to the Holder therof in connection with any optional
redemption or accelerated payment of such Security.
"Maturity" when used with respect to any Security, means the
date on which the principal of such Security or an installment of principal
becomes due and payable as therein or herein provided, whether at the Stated
Maturity or by declaration of acceleration, notice of redemption, notice of
option to elect repayment or otherwise.
"Maximum Annual Service Charge" for any period means the amount
payable (including, if determined on a pro forma basis, the maximum amount which
may become payable) in any 12-month period for interest on Debt.
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"Officers' Certificate" means a certificate signed by the
Chairman of the Board of Directors, the President or a Vice-President and by the
Treasurer, an Assistant Treasurer, the Secretary or an Assistant Secretary, of
the Company, and delivered to the Trustee.
"Opinion of Counsel" means a written opinion of counsel, who
may be counsel for the Company or who may be an employee of or other counsel for
the Company and who shall be reasonably 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 canceled by the Trustee or delivered
to the Trustee for cancellation;
(ii) Securities, or portions thereof, for whose payment or
redemption or repayment at the option of the Holder money in the necessary
amount has been theretofore deposited with the Trustee or any Paying Agent
(other than the Company) in trust or set aside and segregated in trust by the
Company (if the Company shall act as its own Paying Agent) for the Holders of
such Securities and any coupons appertaining thereto, provided that, if such
Securities are to be redeemed, notice of such redemption has been duly given
pursuant to this Indenture or provision therefor satisfactory to the Trustee has
been made;
(iii) Securities, except to the extent provided in Sections
1402 and 1403, with respect to which the Company has effected defeasance and/or
covenant defeasance as provided in Article Twelve; and
(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 Company;
provided, however, that in determining whether the Holders of the requisite
principal amount of the Outstanding Securities have given any request, demand,
authorization, direction, notice, consent or waiver hereunder or are present at
a meeting of Holders for quorum purposes, and for the purpose of making the
calculations required by TIA Section 313, (i) the principal amount of an
Original Issue Discount Security that may be counted in making such
determination or calculation and that shall be deemed to be Outstanding for such
purpose shall be equal to the amount of principal thereof that would be (or
shall have been declared to be) due and payable, at the time of such
determination, upon a declaration of acceleration of the maturity thereof
pursuant to Section 502, (ii) the principal amount of any Security denominated
in a Foreign Currency that may be counted in making such determination or
calculation and that shall be deemed Outstanding for such purpose shall be equal
to the Dollar equivalent, determined pursuant to Section 301 as of the date such
Security is originally issued by the Company, of the principal amount (or, in
the case of an Original Issue Discount Security, the Dollar equivalent as of
such date of original issuance of the amount determined as provided in cause (i)
above) of such Security, (iii) the principal amount of any Indexed Security that
may be counted in making such determination or calculation and that shall be
deemed outstanding for such purpose shall be equal to the principal face amount
of such Indexed Security at original issuance, unless otherwise provided with
respect to such Security pursuant to Section 301, and (iv) Securities owned by
the Company or any other obligor upon the Securities or any Affiliate of
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the Company or of such other obligor shall be disregarded and deemed not to be
Outstanding, except that, in determining whether the Trustee shall be protected
in making such calculation or in relying upon any such request, demand,
authorization, direction, notice, consent or waiver, only Securities which the
Trustee knows to be so owned shall be so disregarded. Securities so owned which
have been pledged in good faith may be regarded as Outstanding if the pledgee
establishes to the satisfaction of the Trustee the pledgee's right so to act
with respect to such Securities and that the pledgee is not the Company or any
other obligor upon the Securities or any Affiliate of the Company or of such
other obligor.
"Paying Agent" means any Person authorized by the Company to
pay the principal of (and Premium or Make-Whole Amount, if any) or interest on
any Securities or coupons on behalf of the Company.
"Person" means any individual, corporation, Company, joint
venture, association, joint-stock company, trust, unincorporated organization or
government or any agency or political subdivision thereof.
"Place of Payment", when used with respect to the Securities of
or within any series, means the place or places where the principal of (and
Premium 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", when used with respect to any Security to be
redeemed, in whole or in part, means the date fixed for such redemption by or
pursuant to this Indenture.
"Redemption Price", when used with respect to any Security to
be redeemed, means the price at which it is to be redeemed pursuant to this
Indenture.
"Registered Security" shall mean any Security which is
registered in the Security Register.
"Regular Record Date" for the interest payable on any Interest
Payment Date on the Registered Securities of or within any series means the date
specified for that purpose as contemplated by Section 301, whether or not a
Business Day.
"Reinvestment Rate" means .25% (one-fourth of one percent) plus
the yield under the heading "Week Ending" published in the most recent
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 premium shall be used.
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"Repayment Date" means, when used with respect to any Security
to be repaid at the option of the Holder, the date fixed for such repayment by
or pursuant to this Indenture.
"Repayment Price" means, when used with respect to any Security
to be repaid at the option of the Holder, the price at which it is to be repaid
by or pursuant to this Indenture.
"Responsible Officer", when used with respect to the Trustee,
means the chairman or vice-chairman of the board of directors, the chairman or
vice-chairman of the executive committee of the board of directors, the
president, any vice president (whether or not designated by a number or a word
or words added before or after the title "vice president"), the secretary, any
assistant secretary, the treasurer, any assistant treasurer, the cashier, any
assistant cashier, any trust officer or assistant trust officer, the controller
or any other officer of the Trustee customarily performing functions similar to
those performed by any of the above designated officers and also means, with
respect to a particular corporate trust matter, any other officer to whom such
matter is referred because of such officer's knowledge and familiarity with the
particular subject.
"Securities Act" means the Securities Act of 1933 and any
successor statute thereto, in each case as amended from time to time and the
rules and regulations of the Commission thereunder.
"Security" has the meaning stated in the first recital of this
Indenture and, more particularly, means any Security or Securities authenticated
and delivered under this Indenture; provided, however, that, if at any time
there is more than one Person acting as Trustee under this Indenture,
"Securities" with respect to the Indenture as to which such Person is Trustee
shall have the meaning stated in the first recital of this Indenture and shall
more particularly mean Securities authenticated and delivered under this
Indenture, exclusive, however, of Securities of any series as to which such
Person is not Trustee.
"Security Register" and "Security Registrar" have the
respective meanings specified in Section 305.
"Senior Debt" means the principal of and interest on, or
substantially similar payments to be made by the Company in respect of, the
following, whether outstanding at the date of execution of this Indenture or
thereafter incurred, created or assumed: (a) indebtedness of the Company for
money borrowed or represented by purchase-money obligations, (b) indebtedness of
the Company evidenced by notes, debentures, or bonds, or other securities issued
under the provisions of an indenture, fiscal agency agreement or other
instrument, (c) obligations of the Company as lessee under leases of property
either made as part of any sale and lease-back transaction to which the Company
is a party or otherwise, (d) indebtedness of partnerships and joint ventures
which is included in the Company's consolidated financial statements, (e)
indebtedness, obligations and liabilities of others in respect of which the
Company is liable contingently or otherwise to pay or advance money or property
or as guarantor, endorser or otherwise or which the Company has agreed to
purchase or otherwise acquire, and (f) any binding commitment of the Company to
fund any 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 Company to substantially the same
extent as or to a greater extent than the Securities are subordinated and (3)
the Securities. As used in the preceding sentence, the term "purchase-money
obligations" shall mean indebtedness or obligations evidenced by a note,
debenture, bond or other instrument (whether or not secured by any lien or other
security interest but excluding indebtedness or obligations for which recourse
is limited to the property purchased) issued or assumed as all or a part of the
consideration
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for the acquisition of property, whether by purchase, merger, consolidation or
otherwise, but shall not include any trade accounts payable. A distribution may
consist of cash, securities or other property.
"Significant Subsidiary" means any Subsidiary which is a
"significant subsidiary" (as defined in Article I, Rule 1-02 of Regulation S-X,
promulgated under the Securities Act) of the Company.
"Special Record Date" for the payment of any Defaulted Interest
on the Registered Securities of or within any series means a date fixed by the
Trustee pursuant to Section 307.
"Stated Maturity," when used with respect to any Security or
any installment of principal thereof or interest thereon, means the date
specified in such Security or a coupon representing such installment of interest
as the fixed date on which the principal of such Security or such installment of
principal or interest is due and payable.
"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 Company.
"Subsidiary" means a corporation or a partnership a majority of
the outstanding voting stock or partnership interests, as the case may be, of
which is owned, directly or indirectly, by the Company or by one or more other
Subsidiaries of the Company. For the purposes of this definition, "voting stock"
means stock having voting power for the election of directors, whether at all
times or only so long as no senior class of stock has such voting power by
reason of any contingency.
"Total Assets" as of any date means the sum of (i) the
Company's and its Subsidiaries' Undepreciated Real Estate Assets and (ii) all
other assets of the Company and its Subsidiaries on a consolidated basis
determined in accordance with GAAP (but excluding intangibles and account
receivables).
"Trust Indenture Act" or "TIA" means the Trust Indenture Act of
1939, as amended and as in force at the date as of which this Indenture was
executed, except as provided in Section 905.
"Trustee" means the Person named as the "Trustee" in the first
paragraph of this Indenture until a successor Trustee shall have become such
pursuant to the applicable provisions of this Indenture, and thereafter
"Trustee" shall mean or include each Person who is then a Trustee hereunder;
provided, however, that if at any time there is more than one such Person,
"Trustee" as used with respect to the Securities of any series shall mean only
the Trustee with respect to Securities of that series.
"Undepreciated Real Estate Assets" means as of any date the
amount of real estate assets of the Company 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
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corporation, Company or other entity created or organized in or under the laws
of the United States or an estate or trust the income of which is subject to
United States federal income taxation regardless of its source.
"Yield to Maturity" means the yield to maturity, computed at
the time of issuance of a Security (or, if applicable, at the most recent
redetermination of interest on such Security) and as set forth in such Security
in accordance with generally accepted United States bond yield computation
principles.
SECTION 102. Compliance Certificates and Opinions. Upon any
application or request by the Company to the Trustee to take any action under
any provision of this Indenture, the Company shall furnish to the Trustee an
Officers' Certificate stating that all conditions precedent, if any, provided
for in this Indenture relating to the proposed action have been complied with
and an Opinion of Counsel stating that in the opinion of such counsel all such
conditions precedent, if any, have been complied with, except that in the case
of any such application or request as to which the furnishing of such documents
is specifically required by any provision of this Indenture relating to such
particular application or request, no additional certificate or opinion need be
furnished.
Every certificate or opinion with respect to compliance with a
condition or covenant provided for in this Indenture (including certificates
delivered pursuant to Section 1011) shall include:
(1) a statement that each individual signing such certificate
or opinion has read such condition or covenant and the definitions herein
relating thereto;
(2) a brief statement as to the nature and scope of the
examination or investigation upon which the statements or opinions contained in
such certificate or opinion are based;
(3) a statement that, in the opinion of each such individual,
he has made such examination or investigation as is necessary to enable him to
express an informed opinion as to whether or not such condition or covenant has
been complied with; and
(4) a statement as to whether, in the opinion of each such
individual, such condition or covenant has been complied with.
SECTION 103. Form of Documents Delivered to Trustee. In any
case where several matters are required to be certified by, or covered by an
opinion of, any specified Person, it is not necessary that all such matters be
certified by, or covered by the opinion of, only one such Person, or that they
be so certified or covered by only one document, but one such Person may certify
or give an opinion as to some matters and one or more other such Persons as to
other matters, and any such Person may certify or give an opinion as to such
matters in one or several documents.
Any certificate or opinion of an officer of the Company may be
based, insofar as it relates to legal matters, upon an Opinion of Counsel, or a
certificate or representations by counsel, unless such officer knows, or in the
exercise of reasonable care should know, that the opinion, certificate or
representations with respect to the matters upon which his certificate or
opinion is based are erroneous. Any such Opinion of Counsel or certificate or
representations may be based, insofar as it relates to factual matters, upon a
certificate or opinion of, or representations by, an officer or officers of the
Company stating that the information as to such factual matters is in the
possession of the Company, unless such counsel knows that the certificate or
opinion or representations as to such matters are erroneous.
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Where any Person is required to make, give or execute two or
more applications, requests, consents, certificates, statements, opinions or
other instruments under this Indenture, they may, but need not, be consolidated
and form one instrument.
SECTION 104. Acts of Holders. (a) Any request, demand,
authorization, direction, notice, consent, waiver or other action provided by
this Indenture to be given or taken by Holders of the Outstanding Securities of
all series or one or more series, as the case may be, may be embodied in and
evidenced by one or more instruments of substantially similar tenor signed by
such Holders in person or by agents duly appointed in writing. If Securities of
a series are issuable as Bearer Securities, any request, demand, authorization,
direction, notice, consent, waiver or other action provided by this Indenture to
be given or taken by Holders of Securities of such series may, alternatively, be
embodied in and evidenced by the record of Holders of Securities of such series
voting in favor thereof, either in person or by proxies duly appointed in
writing, at any meeting of Holders of Securities of such series duly called and
held in accordance with the provisions of Article Fourteen, or a combination of
such instruments and any such record. Except as herein otherwise expressly
provided, such action shall become effective when such instrument or instruments
or record or both are delivered to the Trustee and, where it is hereby expressly
required, to the Company. Such instrument or instruments and any such record
(and the action embodied therein and evidenced thereby) are herein sometimes
referred to as the "Act" of the Holders signing such instrument or instruments
or so voting at any such meeting. Proof of execution of any such instrument or
of a writing appointing any such agent, or of the holding by any Person of a
Security, shall be sufficient for any purpose of this Indenture and conclusive
in favor of the Trustee and the Company and any agent of the Trustee or the
Company, if made in the manner provided in this Section. 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 Company may assume that such ownership of
any Bearer Security continues until (1) another certificate or affidavit bearing
a later date issued in respect of the same Bearer Security is produced, or (2)
such Bearer Security is produced to the Trustee by some other Person, or (3)
such Bearer Security is surrendered in exchange for a Registered Security, or
(4) such Bearer Security is no longer Outstanding. The ownership of Bearer
Securities may also be proved in any other manner which the Trustee deems
sufficient.
(e) If the Company shall solicit from the Holders of Registered
Securities any request, demand, authorization, direction, notice, consent,
waiver or other Act, the Company may, at
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its option, in or pursuant to a Board Resolution, fix in advance a record date
for the determination of Holders entitled to give such request, demand,
authorization, direction, notice, consent, waiver or other Act, but the Company
shall have no obligation to do so. Notwithstanding TIA Section 316(c), such
record date shall be the record date specified in or pursuant to such Board
Resolution, which shall be a date not earlier than the date 30 days prior to the
first solicitation of Holders generally in connection therewith and not later
than the date such solicitation is completed. If such a record date is fixed,
such request, demand, authorization, direction, notice, consent, waiver or other
Act may be given before or after such record date, but only the Holders of
record at the close of business on such record date shall be deemed to be
Holders for the purposes of determining whether Holders of the requisite
proportion of Outstanding Securities have authorized or agreed or consented to
such request, demand, authorization, direction, notice, consent, waiver or other
Act, and for that purpose the Outstanding Securities shall be computed as of
such record date; provided that no such authorization, agreement or consent by
the Holders on such record date shall be deemed effective unless it shall become
effective pursuant to the provisions of this Indenture not later than eleven
months after the record date.
(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 Company in
reliance thereon, whether or not notation of such action is made upon such
Security.
SECTION 105. Notices, etc., to Trustee and Company. Any
request, demand, authorization, direction, notice, consent, waiver or Act of
Holders or other document provided or permitted by this Indenture to be made
upon, given or furnished to, or filed with,
(1) the Trustee by any Holder or by the Company shall be
sufficient for every purpose hereunder if made, given, furnished or filed in
writing to or with the Trustee at its Corporate Trust Office, or
(2) the Company by the Trustee or by any Holder shall be
sufficient for every purpose hereunder (unless otherwise herein expressly
provided) if in writing and mailed, first class postage prepaid, to the Company
addressed to it at the address of its principal office specified in the first
paragraph of this Indenture or at any other address previously furnished in
writing to the Trustee by the Company.
SECTION 106. Notice to Holders; Waiver. Where this Indenture
provides for notice of any event to Holders of Registered Securities by the
Company or the Trustee, such notice shall be sufficiently given (unless
otherwise herein expressly provided) if in writing and mailed, first-class
postage prepaid, to each such Holder affected by such event, at his address as
it appears in the Security Register, not later than the latest date, and not
earlier than the earliest date, prescribed for the giving of such notice. In any
case where notice to Holders of Registered Securities is given by mail, neither
the failure to mail such notice, nor any defect in any notice so mailed, to any
particular Holder shall affect the sufficiency of such notice with respect to
other Holders of Registered 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.
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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 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.
SECTION 108. Successors and Assigns. All covenants and
agreements in this Indenture by the Company shall be binding on their 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,
in the Securities or coupons, express or implied, shall give to any Person,
other than the Parties hereto, any Security Registrar, any Paying Agent, any
Authenticating Agent and their successors hereunder and the Holders any benefit
or any legal or equitable right, remedy or claim under this Indenture.
SECTION 111. 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 trustee, as such, of the Company
or of any successor, either directly or through the Company or any successor,
under any rule of law, statute or constitutional provision or by the enforcement
of any assessment or by any legal or equitable proceeding or otherwise, all such
liabilty 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.
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SECTION 112. Governing Law. This Indenture and the Securities
and coupons shall be governed by and construed in accordance with the law of the
State of [ ]. 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, of each series and
related coupons shall be in substantially the forms as shall be established in
one or more indentures supplemental hereto or approved from time to time by or
pursuant to a Board Resolution in accordance with this Indenture, shall have
such appropriate insertions, omissions, substitutions and other variations as
are required or permitted by this Indenture or any indenture supplemental
hereto, and may have such letters, numbers or other marks of identification or
designation and such legends or endorsements placed thereon as the Company may
deem appropriate and as are not inconsistent with the provisions of this
Indenture, or as may be required to comply with any law or with any rule or
regulation made pursuant thereto or with any rule or regulation of any stock
exchange on which the Securities may be listed, or to conform to usage.
Unless otherwise specified as contemplated by Section 301,
Bearer Securities shall have interest coupons attached.
The definitive Securities and coupons shall be printed,
lithographed or engraved or produced by any combination of these methods on a
steel engraved border or steel engraved borders or may be produced in any other
manner, all as determined by the officers executing such Securities or coupons,
as evidenced by their execution of such Securities or coupons.
SECTION 202. Form of Trustee's Certificate of Authentication.
Subject to Section 611, the Trustee's certificate of authentication shall be in
substantially the following form:
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This is one of the Securities of the series designated therein
referred to in the within-mentioned Indenture.
[BANK], as Trustee
By:
-----------------------------------
Authorized Signatory
SECTION 203. Securities Issuable in Global Form. If Securities
of or within a series are issuable in global form, as specified as contemplated
by Section 301, then, notwithstanding clause (8) of Section 301 and the
provisions of Section 302, any such Security shall represent such of the
Outstanding Securities of such series as shall be specified therein and may
provide that it shall represent the aggregate amount of Outstanding Securities
of such series from time to time endorsed thereon and that the aggregate amount
of Outstanding Securities of such series represented thereby may from time to
time be increased or decreased to reflect exchanges. Any endorsement of a
Security in global form to reflect the amount, or any increase or decrease in
the amount, of Outstanding Securities represented thereby shall be made by the
Trustee in such manner and upon instructions given by such Person or Persons as
shall be specified therein or in the Company Order to be delivered to the
Trustee pursuant to Section 303 or 304. Subject to the provisions of Section 303
and, if applicable, Section 304, the Trustee shall deliver and redeliver any
Security in permanent global form in the manner and upon instructions given by
the Person or Persons specified therein or in the applicable Company Order. If a
Company Order pursuant to Section 303 or 304 has been, or simultaneously is,
delivered, any instructions by the Company with respect to endorsement or
delivery or redelivery of a Security in global form shall be in writing but need
not comply with Section 102 and need not be accompanied by an Opinion of
Counsel.
The provisions of the last sentence of Section 303 shall apply
to any Security represented by a Security in global form if such Security was
never issued and sold by the Company and the Company delivers to the Trustee the
Security in global form together with written instructions (which need not
comply with Section 102 and need not be accompanied by an Opinion of Counsel)
with regard to the reduction in the principal amount of Securities represented
thereby, together with the written statement contemplated by the last sentence
of Section 303.
Notwithstanding the provisions of Section 307, unless otherwise
specified as contemplated by Section 301, payment of principal of and any
premium and interest on any Security in permanent global form shall be made to
the Person or Persons specified therein.
Notwithstanding the provisions of Section 308 and except as
provided in the preceding paragraph, the Company, the Trustee and any agent of
the Company and the Trustee shall treat as the Holder of such principal amount
of Outstanding Securities represented by a permanent global Security (i) in the
case of a permanent global Security in registered form, the Holder of such
permanent global Security in registered form, or (ii) in the case of a permanent
global Security in bearer form, Euroclear or CEDEL.
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.
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The Securities may be issued in one or more series. There shall
be established in one or more Board Resolutions or pursuant to authority granted
by one or more Board Resolutions and, subject to Section 303, set forth, or
determined in the manner provided, in an Officers' Certificate, or established
in one or more indentures supplemental hereto, prior to the issuance of
Securities of any series, any or all of the following, as applicable (each of
which (except for the matters set forth in clauses (1), (2) and (15) below), if
so provided, may be determined from time to time by the Company with respect to
unissued Securities of the series when issued from time to time):
(1) the title of the Securities of the series (which shall
distinguish the Securities of such series from all other series of Securities);
(2) any limit upon the aggregate principal amount of the
Securities of the series that may be authenticated and delivered under this
Indenture (except for Securities authenticated and delivered upon registration
of transfer of, or in exchange for, or in lieu of, other Securities of the
series pursuant to Section 304, 305, 306, 906, 1107 or 1305);
(3) the date or dates, or the method by which such date or
dates will be determined, on which the principal of the Securities of the series
shall be payable;
(4) the rate or rates at which the Securities of the series
shall bear interest, if any, or the method by which such rate or rates shall be
determined, the date or dates from which such interest shall accrue or the
method by which such date or dates shall be determined, the Interest Payment
Dates on which such interest will be payable and the Regular Record Date, if
any, for the interest payable on any Registered Security on any Interest Payment
Date, or the method by which such date shall be determined, and the basis upon
which interest shall be calculated if other than that of a 360-day year of
twelve 30-day months;
(5) the place or places, 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 the series shall be
payable, any Registered Securities of the series may be surrendered for
registration of transfer, exchange or conversion and notices or demands to or
upon the Company in respect of the Securities of the series and this Indenture
may be served;
(6) the period or periods within which, the price or prices
(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 the series may be
redeemed, in whole or in part, at the option of the Company, if the Company is
to have the option;
(7) the obligation, if any, of the Company to redeem, repay or
purchase Securities of the series pursuant to any provision or at the option of
a Holder thereof, and the period or periods within which or the date of dates on
which, the price or prices at which, the currency or currencies, currency unit
or units or composite currency or currencies in which, and other terms and
conditions upon which Securities of the series shall be redeemed, repaid or
purchased (including without limitation whether, and the extent to which, the
premium shall be payable in connection therewith), in whole or in part, pursuant
to such obligation.
(8) if other than denominations of $1,000 and any integral
multiple thereof, the denominations in which any Registered Securities of the
series shall be issuable and, if other than the denomination of $5,000, the
denomination or denominations in which any Bearer Securities of the series shall
be issuable;
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(9) if other than the Trustee, the identity of each Security
Registrar and/or Paying Agent;
(10) if other than the principal amount thereof, the portion of
the principal amount of Securities of the series that shall be payable upon
declaration of acceleration of the Maturity thereof pursuant to Section 502 or,
if applicable, the portion of the principal amount of Securities of the series
that is convertible in accordance with the provisions of this Indenture, or the
method by which such portion shall be determined;
(11) if other than Dollars, the Foreign Currency or Currencies
in which payment of the principal of (and premium or Make-Whole Amount, if any)
or interest or Additional Amounts, if any, on the Securities of the series shall
be payable or in which the Securities of the series shall be denominated;
(12) whether the amount of payments of principal of (and
premium or Make-Whole Amount, if any) or interest, if any, on the Securities of
the series may be determined with reference to an index, formula or other method
(which index, formula or method may be based, without limitation, on one or more
currencies, currency units, composite currencies, commodities, equity indices or
other indices), and the manner in which such amounts shall be determined;
(13) whether the principal of (and premium or Make-Whole
Amount, if any) or interest or Additional Amounts, if any, on the Securities of
the series are to be payable, at the election of the Company, or a Holder
thereof, in a currency or currencies, currency unit or units or composite
currency or currencies other than that in which such Securities are denominated
or stated to be payable, the period or periods within which, and the terms and
conditions upon which, such election may be made, and the time and manner of,
and identity of the exchange rate agent with responsibility for, determining the
exchange rate between the currency or currencies, currency unit or units or
composite currency or currencies in which such Securities are denominated or
stated to be payable and the currency or currencies, currency unit or units or
composite currency or currencies in which such Securities are to be so payable;
(14) provisions, if any, granting special rights to the Holders
of Securities of the series upon the occurrence of such events as may be
specified;
(15) any deletions from, modifications of or additions to the
Events of Default or covenants of the Company with respect to Securities of the
series, whether or not such Events of Default or covenants are consistent with
the Events of Default or covenants set forth herein;
(16) whether Securities of the series are to be issuable as
Registered Securities, Bearer Securities (with or without coupons) or both, any
restrictions applicable to the offer, sale or delivery of Bearer Securities and
the terms upon which Bearer Securities of the series may be exchanged for
Registered Securities of the series and vice versa (if permitted by applicable
laws and regulations), whether any Securities of the series are to be issuable
initially in temporary global form and whether any Securities of the series are
to be issuable in permanent global form with or without coupons and, if so,
whether beneficial owners of interests in any such permanent global Security may
exchange such interests for Securities of such series and of like tenor of any
authorized form and denomination and the circumstances under which any such
exchanges may occur, if other than in the manner provided in Section 305, and,
if Registered Securities of the series are to be issuable as a global Security,
the identity of the depositary for such series;
(17) the date as of which any Bearer Securities of the series
and any temporary global Security representing Outstanding Securities of the
series shall be dated if other than the date of original issuance of the first
Security of the series to be issued;
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(18) the Person to whom any interest on any Registered Security
of the series shall be payable, if other than the Person in whose name that
Security (or one or more Predecessor Securities) is registered at the close of
business on the Regular Record Date for such interest, the manner in which, or
the Person to whom, any interest on any Bearer Security of the series shall be
payable, if otherwise than upon presentation and surrender of the coupons
appertaining thereto as they severally mature, and the extent to which, or the
manner in which, any interest payable on a temporary global Security on an
Interest Payment Date will be paid if other than in the manner provided in
Section 304;
(19) the applicability, if any, of Sections 1402 and/or 1403 to
the Securities of the series and any provisions in modification of, in addition
to or in lieu of any of the provisions of Article Fourteen;
(20) if the Securities of such series are to be issuable in
definitive form (whether upon original issue or upon exchange of a temporary
Security of such series) only upon receipt of certain certificates or other
documents or satisfaction of other conditions, then the form and/or terms of
such certificates, documents or conditions;
(21) if the Securities of the series are to be issued upon
the exercise of warrants, the time, manner and place for such Securities to be
authenticated and delivered;
(22) whether and under what circumstances the Company will pay
Additional Amounts as contemplated by Section 1012 on the Securities of the
series to any Holder who is not a United States person (including any
modification to the definition of such term) in respect of any tax, assessment
or governmental charge and, if so, whether the Company will have the option to
redeem such Securities rather than pay such Additional Amounts (and the terms of
any such option);
(23) any other terms of the series (which terms shall not be
inconsistent with the provisions of this Indenture).
All Securities of any one series and the coupons appertaining
to any Bearer Securities of such series shall be substantially identical except,
in the case of Registered Securities, as to denomination and except as may
otherwise be provided in or pursuant to such Board Resolution (subject to
Section 303) and set forth in such Officers' Certificate or in any such
indenture supplemental hereto. All Securities of any one series need not be
issued at the same time and, unless otherwise provided, a series may be
reopened, without the consent of the Holders, for issuances of additional
Securities of such series.
If any of the terms of the Securities of any series are
established by action taken pursuant to one or more Board Resolutions, a copy of
an appropriate record of such action(s) shall be certified by the Secretary or
an Assistant Secretary of the Company on behalf of the Company and delivered to
the Trustee at or prior to the delivery of the Officers' Certificate setting
forth the terms of the Securities of such series.
SECTION 302. Denominations. The Securities of each series shall
be issuable in such denominations as shall be specified as contemplated by
Section 301. With respect to Securities of any series denominated in Dollars, in
the absence of any such provisions with respect to the Securities of any series,
the Registered Securities of such series, other than Registered Securities
issued in global form (which may be of any denomination), shall be issuable in
denominations of $1,000 and any integral multiple thereof and the Bearer
Securities of such series, other than Bearer Securities issued in global form
(which may be of any denomination), shall be issuable in a denomination of
$5,000.
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SECTION 303. Execution, Authentication, Delivery and Dating.
The Securities and any coupons appertaining thereto shall be executed by the
Company's Chairman of the Board and President or one of its Senior Vice
Presidents, and its Chief Financial Officer. The signature of any of these
officers on the Securities and coupons may be manual or facsimile signatures of
the present or any future such authorized officer and may be imprinted or
otherwise reproduced on the Securities.
Securities or coupons bearing the manual or facsimile
signatures of individuals who were at any time the proper officers of the
Company shall bind the Company, notwithstanding that such individuals or any of
them have ceased to hold such offices prior to the authentication and delivery
of such Securities did not hold such offices at the date of such Securities or
coupons.
At any time and from time to time after the execution and
delivery of this Indenture, the Company may deliver Securities of any series,
together with any coupon appertaining thereto, executed by the Company to the
Trustee for authentication, together with a Company Order for the authentication
and delivery of such Securities, and the Trustee in accordance with the Company
Order shall authenticate and deliver such Securities; provided, however, that,
in connection with its original issuance, no Bearer Security shall be mailed or
otherwise delivered to any location in the United States; and provided further
that, unless otherwise specified with respect to any series of Securities
pursuant to Section 301, a Bearer Security may be delivered in connection with
its original issuance only if the Person entitled to receive such Bearer
Security shall have furnished a certificate to Euroclear or CEDEL, as the case
may be, in the form set forth in Exhibit A-1 to this Indenture or such other
certificate as may be specified with respect to any series of Securities
pursuant to Section 301, dated no earlier than 15 days prior to the earlier of
the date on which such Bearer Security is delivered and the date on which any
temporary Security first becomes exchangeable for such Bearer Security in
accordance with the terms of such temporary Security and this Indenture. If any
Security shall be represented by a permanent global Bearer Security, then, for
purposes of this Section and Section 304, the notation of a beneficial owner's
interest therein upon original issuance of such Security or upon exchange of a
portion of a temporary global Security shall be deemed to be delivery in
connection with its original issuance of such beneficial owner's interest in
such permanent global Security. Except as permitted by Section 306, the Trustee
shall not authenticate and deliver any Bearer Security unless all appurtenant
coupons for interest then matured have been detached and canceled.
If all the Securities of any series are not to be issued at one
time and if the Board Resolution or supplemental indenture establishing such
series shall so permit, such Company Order may set forth procedures acceptable
to the Trustee for the issuance of such Securities and determining the terms of
particular Securities of such series, such as interest rate or formula, maturity
date, date of issuance and date from which interest shall accrue. In
authenticating such Securities, and accepting the additional responsibilities
under this Indenture in relation to such Securities, the Trustee shall be
entitled to receive, and (subject to TIA Section 315(a) through 315(d)) shall be
fully protected in relying upon,
(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 established in conformity with the provisions of this
Indenture;
(b) the terms of such Securities and any coupons have
been established in conformity with the provisions of this Indenture; and
(c) such Securities, together with any coupons
appertaining thereto, when completed by appropriate insertions and executed and
delivered by the Company to the Trustee for authentication in accordance with
this Indenture, authenticated and delivered by the
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Trustee in accordance with this Indenture and issued by the Company in the
manner and subject to any conditions specified in such Opinion of Counsel, will
constitute legal, valid and binding obligations of the Company, enforceable in
accordance with their terms, subject to applicable bankruptcy, insolvency,
reorganization and other similar laws of general applicability relating to or
affecting the enforcement of creditors' rights generally and to general
equitable principles; and
(ii) an Officers' Certificate stating that all conditions
precedent provided for in this Indenture relating to the issuance of the
Securities have been complied with and that, to the best of the knowledge of the
signers of such certificate, that no Event of Default with respect to any of the
Securities shall have occurred and be continuing.
If such form or terms have been so established, the Trustee
shall not be required to authenticate such Securities if the issue of such
Securities pursuant to this Indenture will affect the Trustee's own rights,
duties, obligations or immunities under the Securities and this Indenture or
otherwise in a manner which is not reasonably acceptable to the Trustee.
Notwithstanding the provisions of Section 301 and of the
preceding paragraph, if all the Securities of any series are not to be issued at
one time, it shall not be necessary to deliver an Officers' Certificate
otherwise required pursuant to Section 301 or a Company Order, or an Opinion of
Counsel or an Officers' Certificate otherwise required pursuant to the preceding
paragraph at the time of issuance of each Security of such series, but such
order, opinion and certificates, with appropriate modifications to cover such
future issuances, shall be delivered at or before the time of issuance of the
first Security of such series.
Each Registered Security shall be dated the date of its
authentication and each Bearer Security shall be dated as of the date specified
as contemplated by Section 301.
No Security or coupon shall be entitled to any benefit under
this Indenture or be valid or obligatory for any purpose unless there appears on
such Security or Security to which such coupon appertains a certificate of
authentication substantially in the form provided for herein duly executed by
the Trustee by manual signature of an authorized signatory, and such certificate
upon any Security shall be conclusive evidence, and the only evidence, that such
Security has been duly authenticated and delivered hereunder and is entitled to
the benefits of this Indenture. Notwithstanding the foregoing, if any Security
shall have been authenticated and delivered hereunder but never issued and sold
by the Company, and the Company shall deliver such Security to the Trustee for
cancellation as provided in Section 309 together with a written statement (which
need not comply with Section 102 and need not be accompanied by an Opinion of
Counsel) stating that such Security has never been issued and sold by the
Company, for all purposes of this Indenture such Security shall be deemed never
to have been authenticated and delivered hereunder and shall never be entitled
to the benefits of this Indenture.
SECTION 304. Temporary Securities. (a) Pending the preparation
of definitive Securities of any series, the Company may execute, and upon
Company Order, the Trustee shall authenticate and deliver, temporary Securities
which are printed, lithographed, typewritten, mimeographed or otherwise
produced, in any authorized denomination, substantially of the tenor of the
definitive Securities in lieu of which they are issued, in registered form, or,
if authorized, in bearer form with one or more coupons or without coupons, and
with such appropriate insertions, omissions, substitutions and other variations
as the officers executing such Securities may determine, as conclusively
evidenced by their execution of such Securities. In the case of Securities of
any series, such temporary Securities may be in global form.
Except in the case of temporary Securities in global form
(which shall be exchanged in accordance with Section 304(b) or as otherwise
provided in or pursuant to a Board Resolution), if temporary Securities of any
series are issued, the Company will cause definitive Securities of that
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series to be prepared without unreasonable delay. After the preparation of
definitive securities of such series, the temporary Securities of such series
shall be exchangeable for definitive Securities of such series upon surrender of
the temporary Securities of such series at the office or agency of the Company
in a Place of Payment for that series, without charge to the Holder. Upon
surrender for cancellation of any one or more temporary Securities of any series
(accompanied by any non-matured coupons appertaining thereto), the Company shall
execute and the Trustee shall authenticate and deliver in exchange therefor a
like principal amount of definitive Securities of the same series of authorized
denominations; provided, however, that no definitive Bearer Security shall be
delivered in exchange for a temporary Registered Security; and provided further
that a definitive Bearer Security shall be delivered in exchange for a temporary
Bearer Security only in compliance with the conditions set forth in Section 303.
Until so exchanged, the temporary Securities of any series shall in all respects
be entitled to the same benefits under this Indenture as definitive Securities
of such series.
(b) Unless otherwise provided in or pursuant to a Board
Resolution, this Section 304(b) shall govern the exchange of temporary
Securities issued in global form other than through the facilities of The
Depository Trust Company. If any such temporary Security is issued in global
form, then such temporary global Security shall, unless otherwise provided
therein, be delivered to the London office of a depositary or common depositary
(the "Common Depositary"), for the benefit of Euroclear and CEDEL, for credit to
the respective accounts of the beneficial owners of such Securities (or to such
other accounts as they may direct).
Without unnecessary delay but in any event not later than the
date specified in, or determined pursuant to the terms of, any such temporary
global Security (the "Exchange Date"), the Company shall deliver to the Trustee
definitive Securities, in aggregate principal amount equal to the principal
amount of such temporary global Security, executed by the Company. On or after
the Exchange Date, such temporary global Security shall be surrendered by the
Common Depositary to the Trustee, as the Company's agent for such purpose, to be
exchanged, in whole or from time to time in part, for definitive Securities
without charge, and the Trustee shall authenticate and deliver, in exchange for
each portion of such temporary global Security, an equal aggregate principal
amount of definitive Securities of the same series of authorized denominations
and of like tenor as the portion of such temporary global Security to be
exchanged. The definitive Securities to be delivered in exchange for any such
temporary global Security shall be in bearer form, registered form, permanent
global bearer form or permanent global registered form, or any combination
thereof, as specified as contemplated by Section 301, and, if any combination
thereof is so specified, as requested by the beneficial owner thereof; provided,
however, that, unless otherwise specified in such temporary global Security,
upon such presentation by the Common Depositary, such temporary global Security
is accompanied by a certificate dated the Exchange Date or a subsequent date and
signed by Euroclear as to the portion of such temporary global Security held for
its account then to be exchanged and a certificate dated the Exchange Date or a
subsequent date and signed by CEDEL as to the portion of such temporary global
Security held for its account then to be exchanged, each in the form set forth
in Exhibit A-2 to this Indenture or in such other form as may be established
pursuant to Section 301; and provided further that definitive Bearer Securities
shall be delivered in exchange for a portion of a temporary global Security only
in compliance with the requirements of Section 303.
Unless otherwise specified in such temporary global Security,
the interest of a beneficial owner of Securities of a series in a temporary
global Security shall be exchanged for definitive Securities of the same series
and of like tenor following the Exchange Date when the account holder instructs
Euroclear or CEDEL, as the case may be, to request such exchange on his behalf
and delivers to Euroclear or CEDEL, as the case may be, a certificate in the
form set forth in Exhibit A-1 to this Indenture (or in such other form as may be
established pursuant to Section 301), dated no earlier than 15 days prior to the
Exchange Date, copies of which certificate shall be available from the offices
of Euroclear and CEDEL, the Trustee, any Authenticating Agent appointed
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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 he respective accounts of Persons who are the beneficial owners of such
temporary global Security on such Interest Payment Date and who have each
delivered to Euroclear or CEDEL, as the case may be, a certificate dated no
earlier than 15 days prior to the Interest Payment Date occurring prior to such
Exchange Date in the form set forth as Exhibit A-1 to this Indenture (or in such
other forms as may be established pursuant to Section 301). Notwithstanding
anything to the contrary herein contained, the certifications made pursuant to
this paragraph shall satisfy the certification requirements of the preceding two
paragraphs of this Section 304(b) and of the third paragraph of Section 303 of
this Indenture and the interests of the Persons who are the beneficial owners of
the temporary global Security with respect to which such certification was made
will be exchanged for definitive Securities of the same series and of like tenor
on the Exchange Date or the date of certification if such date occurs after the
Exchange Date, without further act or deed by such beneficial owners. Except as
otherwise provided in this paragraph, no payments of principal or interest owing
with respect to a beneficial interest in a temporary global Security will be
made unless and until such interest in such temporary global Security shall have
been exchanged for an interest in a definitive Security. Any interest so
received by Euroclear and CEDEL and not paid as herein provided shall be
returned to the Trustee prior to the expiration of two years after such Interest
Payment Date in order to be repaid to the Company.
SECTION 305. Registration, Registration of Transfer and
Exchange. The Company shall cause to be kept at the Corporate Trust Office of
the Trustee or in any office or agency of the Company in a Place of Payment a
register for each series of Securities (the registers maintained in such office
or in any such office or agency of the Company in a Place of Payment being
herein sometimes referred to collectively as the "Security Register") in which,
subject to such reasonable regulations as it may prescribe, the Company shall
provide for the registration of Registered Securities and of transfers of
Registered Securities. The Security Register shall be in written form or any
other form capable of being converted into written form within a reasonable
time. The Trustee, at its Corporate Trust Office, is hereby 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 Company in a Place of Payment for that series, the
Company shall execute, and the Trustee shall authenticate and deliver, in the
name of the designated transferee or transferees, one or more new Registered
Securities of the same series, of any authorized denominations and of a like
aggregate principal amount, bearing a number not contemporaneously outstanding,
and containing identical terms and provisions.
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Subject to the provisions of this Section 305, at the option of
the Holder, Registered Securities of any series may be exchanged for other
Registered Securities of the same series, of any authorized denomination or
denominations and of a like aggregate principal amount, containing identical
terms and provisions, upon surrender of the Registered Securities to be
exchanged at any such office or agency. Whenever any such Registered Securities
are so surrendered for exchange, the Company shall execute, and the Trustee
shall authenticate and deliver, the Registered Securities which the Holder
making the exchange is entitled to receive. Unless otherwise specified with
respect to any series of Securities as contemplated by Section 301, Bearer
Securities may not be issued in exchange for Registered Securities.
If (but only if) permitted by the applicable Board Resolution
and (subject to Section 303) set forth in the applicable Officers' Certificate,
or in any indenture supplemental hereto, delivered as contemplated by Section
301, at the option of the Holder, Bearer Securities of any series may be
exchanged for Registered Securities of the same series of any authorized
denominations and of a like aggregate principal amount and tenor, upon surrender
of the Bearer Securities to be exchanged at any such office or agency, with all
unmatured coupons and all matured coupons in default thereto appertaining. If
the Holder of a Bearer Security is unable to produce any such unmatured coupon
or coupons or matured coupon or coupons in default, any such permitted exchange
may be effected if the Bearer Securities are accompanied by payment in funds
acceptable to the Company in an amount equal to the face amount of such missing
coupon or coupons, or the surrender of such missing coupon or coupons may be
waived by the Company and the Trustee if there is furnished to them such
security or indemnity as they may require to save each of them and any Paying
Agent harmless. If thereafter the Holder of such Security shall surrender to any
Paying Agent any such missing coupon in respect of which such a payment shall
have been made, such Holder shall be entitled to receive the amount of such
payment; provided, however, that, except as otherwise provided in Section 1002,
interest represented by coupons shall be payable only upon presentation and
surrender of those coupons at an office or agency located outside the United
States. Notwithstanding the foregoing, in case a Bearer Security of any series
is surrendered at any such office or agency in a permitted exchange for a
Registered Security of the same series and like tenor after the close of
business at such office or agency on (i) any Regular Record Date and before the
opening of business at such office or agency on the relevant Interest Payment
Date, or (ii) any Special Record Date and before the opening of business at such
office or agency on the related proposed date for payment of Defaulted Interest,
such Bearer Security shall be surrendered without the coupon relating to such
Interest Payment Date or proposed date for payment, as the case may be, and
interest or Defaulted Interest, as the case may be, will not be payable on such
Interest Payment Date or proposed date for payment, as the case may be, in
respect of the Registered Security issued in exchange for such Bearer Security,
but will be payable only to the Holder of such coupon when due in accordance
with the provisions of this Indenture. Whenever any Securities are so
surrendered for exchange, the Company shall execute, and the Trustee shall
authenticate and deliver, the Securities which the Holder making the exchange is
entitled to receive.
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 Company or to a nominee of such
successor to DTC. If at any time DTC notifies the Company that it is unwilling
or unable to continue as depositary for the applicable global Security or
Securities or if at any time DTC ceases to be a clearing agency registered under
the Exchange Act if so required by applicable law or regulation, the Company
shall appoint a successor depositary with respect to such global Security or
Securities. If (x) a successor depositary for such global Security or Securities
is not appointed by the Company within 90 days after the Company receives such
notice or becomes aware of such unwillingness, inability or ineligibility, (y)
an Event of
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Default has occurred and is continuing and the beneficial owners representing a
majority in principal amount of the applicable series of Securities represented
by such global Security or Securities advise DTC to cease acting as depositary
for such global Security or Securities or (z) the Company, in its sole
discretion, determines at any time that all Outstanding Securities (but not less
than all) of any series issued or issuable in the form of one or more global
Securities shall no longer be represented by such global Security or Securities,
then the Company shall execute, and the Trustee shall authenticate and deliver
definitive Securities of like series, rank, tenor and terms in definitive form
in an aggregate principal amount equal to the principal amount of such global
Security or Securities. If any beneficial owner of an interest in a permanent
global Security is otherwise entitled to exchange such interest for Securities
of such series and of like tenor and principal amount of another authorized form
and denomination, as specified as contemplated by Section 301 and provided that
any applicable notice provided in the permanent global Security shall have been
given, then without unnecessary delay but in any event not later than the
earliest date on which such interest may be so exchanged, the Company shall
execute, and the Trustee shall authenticate and deliver definitive Securities in
aggregate principal amount equal to the principal amount of such beneficial
owner's interest in such permanent global Security. On or after the earliest
date on which such interests may be so exchanged, such permanent global Security
shall be surrendered for exchange by DTC or such other depositary as shall be
specified in the Company Order with respect thereto to the Trustee, as the
Company's agent for such purpose; provided, however, that no such exchanges may
occur during a period beginning at the opening of business 15 days before any
selection of Securities to be redeemed and ending on the relevant Redemption
Date if the Security for which exchange is requested may be among those selected
for redemption; and provided further that no Bearer Security delivered in
exchange for a portion of a permanent global Security shall be mailed or
otherwise delivered to any location in the United States. If a Registered
Security is issued in exchange for any portion of a permanent global Security
after the close of business at the office or agency where such exchange occurs
on (i) any Regular Record Date and before the opening of business at such office
or agency on the relevant Interest Payment Date, or (ii) any Special Record Date
and the opening of business at such office or agency on the related proposed
date for payment of Defaulted Interest, interest or Defaulted Interest, as the
case may be, will not be payable on such Interest Payment Date or proposed date
for payment, as the case may be, in respect of such Registered Security, but
will be payable on such Interest Payment Date or proposed date for payment, as
the case may be, only to the Person to whom interest in respect of such portion
of such permanent global Security is payable in accordance with the provisions
of this Indenture.
All Securities issued upon any registration of transfer or
exchange of Securities shall be the valid obligations of the Company, evidencing
the same debt, and entitled to the same benefits under this Indenture, as the
Securities surrendered upon such registration of transfer or exchange.
Every Registered Security presented or surrendered for
registration of transfer or for exchange or redemption shall (if so required by
the Company or the Security Registrar) be duly endorsed, or be accompanied by a
written instrument of transfer in form satisfactory to the Company and the
Security Registrar, duly executed by the Holder thereof or his attorney duly
authorized in writing.
No service charge shall be made for any registration of
transfer or exchange of Securities, but the Company may require payment of a sum
sufficient to cover any tax or other governmental charge that may be imposed in
connection with any registration of transfer or exchange of Securities, other
than exchanges pursuant to Section 304, 906, 1107 or 1305 not involving any
transfer.
The Company, or the Trustee, as applicable, shall not be
required (i) to issue, register the transfer of or exchange any Security if such
Security may be among those selected for redemption during a period beginning at
the opening of business 15 days before selection of the Securities to be
redeemed under Section 1103 and ending at the close of business on (A) if such
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Securities are issuable only as Registered Securities, the day of the mailing of
the relevant notice of redemption and (B) if such Securities are issuable as
Bearer Securities, the day of the first publication of the relevant notice of
redemption or, if such Securities are also issuable as Registered Securities and
there is no publication, the mailing of the relevant notice of redemption, or
(ii) to register the transfer of or exchange any Registered Security so selected
for redemption in whole or in part, except, in the case of any Registered
Security to be redeemed in part, the portion thereof not to be redeemed, or
(iii) to exchange any Bearer Security so selected for redemption except that
such a Bearer Security may be exchanged for a Registered Security of that series
and like tenor, provided that such Registered Security shall be simultaneously
surrendered for redemption, or (iv) to issue, register the transfer of or
exchange any Security which has been surrendered for repayment at the option of
the Holder, except the portion, if any, of such Security not to be so repaid.
SECTION 306. Mutilated, Destroyed, Lost and Stolen Securities.
If any mutilated Security or a Security with a mutilated coupon appertaining to
it is surrendered to the Trustee or the Company, together with, in proper cases,
such security or indemnity as may be required by the Company or the Trustee to
save each of them or any agent of either of them harmless, the Company shall
execute and the Trustee shall authenticate and deliver in exchange therefor a
new Security of the same series and principal amount, containing identical terms
and provisions and bearing a number not contemporaneously outstanding, with
coupons corresponding to the coupons, if any, appertaining to the surrendered
Security.
If there shall be delivered to the Company and to the Trustee
(i) evidence to their satisfaction of the destruction, loss or theft of any
Security or coupon, and (ii) such security or indemnity as may be required by
them to save each of them and any agent of either of them harmless, then, in the
absence of notice to the Company or the Trustee that such Security or coupon has
been acquired by a bona fide purchaser, the Company shall execute and upon its
request the Trustee shall authenticate and deliver, in lieu of any such
destroyed, lost or stolen Security or in exchange for the Security to which a
destroyed, lost or stolen coupon appertains (with all appurtenant coupons not
destroyed, lost or stolen), a new Security of the same series and principal
amount, containing identical terms and provisions and bearing a number not
contemporaneously outstanding, with coupons corresponding to the coupons, if
any, appertaining to such destroyed, lost or stolen Security or to the Security
to which such destroyed, lost or stolen coupon appertains.
Notwithstanding the provisions of the previous two paragraphs,
in case any such mutilated, destroyed, lost or stolen Security or coupon has
become or is about to become due and payable, the Company in its discretion may,
instead of issuing a new Security, with coupons corresponding to the coupons, if
any, appertaining to such destroyed, lost or stolen Security or to the Security
to which such destroyed, lost or stolen coupon appertains, pay such Security or
coupon; provided, however, that payment of principal of (and premium 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
Company may require the payment of a sum sufficient to cover any tax or other
governmental charge that may be imposed in relation thereto and any other
expenses (including the fees and expenses of the Trustee) connected therewith.
Every new Security of any series with its coupons, if any,
issued pursuant to this Section in lieu of any destroyed, lost or stolen
Security, or in exchange for a Security to which a destroyed, lost or stolen
coupon appertains, shall constitute an original additional contractual
obligation of the Company, whether or not the destroyed, lost or stolen Security
and its coupons, if any, or the destroyed, lost or stolen coupon shall be at any
time enforceable by anyone, and shall be
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entitled to all the benefits of this Indenture equally and proportionately with
any and all other Securities of that series and their coupons, if any, duly
issued hereunder.
The provisions of this Section are exclusive and shall preclude
(to the extent lawful) all other rights and remedies with respect to the
replacement or payment of mutilated, destroyed, lost or stolen Securities or
coupons.
SECTION 307. Payment of Interest; Interest Rights Preserved.
Except as otherwise specified with respect to a series of Securities in
accordance with the provisions of Section 301, interest on any Registered
Security that is payable, and is punctually paid or duly provided for, on any
Interest Payment Date shall be paid to the Person in whose name that Security
(or one or more Predecessor Securities) is registered at the close of business
on the Regular Record Date for such interest at the office or agency of the
Company maintained for such purpose pursuant to Section 1002; provided, however,
that each installment of interest on any Registered Security may at the
Company's option be paid by (i) mailing a check for such interest, payable to or
upon the written order of the Person entitled thereto pursuant to Section 308,
to the address of such Person as it appears on the Security Register or (ii)
transfer to an account maintained by the payee located inside the United States.
Unless otherwise provided as contemplated by Section 301 with
respect to the Securities of any series, payment of interest may be made, in the
case of a Bearer Security, by transfer to an account maintained by the payee
with a bank located outside the United States.
Unless otherwise provided as contemplated by Section 301, every
permanent global Security will provide that interest, if any, payable on any
Interest Payment Date will be paid to DTC, Euroclear and/or CEDEL, as the case
may be, with respect to that portion of such permanent global Security held for
its account by Cede & Co. or the Common Depositary, as the case may be, for the
purpose of permitting such party to credit the interest received by it in
respect of such permanent global Security to the accounts of the beneficial
owners thereof.
In case a Bearer Security of any series is surrendered in
exchange for a Registered Security of such series after the close of business
(at an office or agency in a Place of Payment for such series) on any Regular
Record Date and before the opening of business (at such office or agency) on the
next succeeding Interest Payment Date, such Bearer Security shall be surrendered
without the coupon relating to such Interest Payment Date and interest will not
be payable on such Interest Payment Date in respect of the Registered Security
issued in exchange for such Bearer Security, but will be payable only to the
Holder of such coupon when due in accordance with the provisions of this
Indenture.
Except as otherwise specified with respect to a series of
Securities in accordance with the provisions of Section 301, any interest on any
Registered Security of any series that is payable, but is not punctually paid or
duly provided for, on any Interest Payment Date (herein called "Defaulted
Interest") shall forthwith cease to be payable to the registered Holder thereof
on the relevant Regular Record Date by virtue of having been such Holder, and
such Defaulted Interest may be paid by the Company at its election in each case,
as provided in clause (1) or (2) below:
(1) The Company may elect to make payment of any Defaulted
Interest to the Persons in whose names the Registered Securities of such series
(or their respective Predecessor Securities) are registered at the close of
business on a special Record Date for the payment of such Defaulted Interest,
which shall be fixed in the following manner. The Company shall notify the
Trustee in writing of the amount of Defaulted Interest proposed to be paid on
each Registered Security of such series and the date of the proposed payment
(which shall not be less than 20 days after such notice is received by the
Trustee), and at the same time the Company shall deposit with the Trustee an
amount of money in the currency or currencies, currency unit or units or
composite
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currency or currencies in which the Securities of such series are payable
(except as otherwise specified pursuant to Section 301 for the Securities of
such series) equal to the aggregate amount proposed to be paid in respect of
such Defaulted Interest or shall make arrangements satisfactory to the Trustee
for such deposit on or prior to the date of the proposed payment, such money
when deposited to be held in trust for the benefit of the Persons entitled to
such Defaulted Interest as in this clause provided. Thereupon the Trustee shall
fix a Special Record Date for the payment of such Defaulted Interest which shall
be not more than 15 days and not less than 10 days prior to the date of the
proposed payment and not less than 10 days after the receipt by the Trustee of
the notice of the proposed payment. The Trustee shall promptly notify the
Company of such Special Record Date and, in the name and at the expense of the
Company, shall cause notice of the proposed payment of such Defaulted Interest
and the Special Record Date therefor to be mailed, first-class postage prepaid,
to each Holder of Registered Securities of such series at his address as it
appears in the Security Register not less than 10 days prior to such Special
Record Date. The Trustee may, in its discretion, in the name and at the expense
of the Company, cause a similar notice to be published at least once in an
Authorized Newspaper in each place of payment, but such 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 Company may make payment of any Defaulted Interest on
the Registered Securities of any series in any other lawful manner not
inconsistent with the requirements of any securities exchange on which such
Securities may be listed, and upon such notice as may be required by such
exchange, if, after notice given by the Company to the Trustee of the proposed
payment pursuant to this clause, such manner of payment shall be deemed
practicable by the Trustee.
Subject to the foregoing provisions of this Section and Section
305, each Security delivered under this Indenture upon registration of transfer
of or in exchange for or in lieu of any other Security shall carry the rights to
interest accrued and unpaid, and to accrue, which were carried by such other
Security.
SECTION 308. Persons Deemed Owners. Prior to due presentment of
a Registered Security for registration of transfer, the Company, the Trustee and
any agent of the Company or the Trustee may treat the Person in whose name such
Registered Security is registered as the owner of such Security for the purpose
of receiving payment of principal of (and premium 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 none of the Company, the Trustee or any agent of the Company or the
Trustee shall be affected by notice to the contrary.
Title to any Bearer Security and any coupons appertaining
thereto shall pass by delivery. The Company, the Trustee and any agent of the
Company or the Trustee may treat the Holder of any Bearer Security and the
Holder of any coupon as the absolute owner of such Security or coupon for the
purpose of receiving payment thereof or on account thereof and for all other
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purposes whatsoever, whether or not such Security or coupon be overdue, and none
of the Company, the Trustee or any agent of the Company or the Trustee shall be
affected by notice to the contrary.
None of the Company, the Trustee, any Paying Agent or the
Security Registrar will have any responsibility or liability for any aspect of
the records relating to or payments made on account of beneficial ownership
interests of a Security in global form or for maintaining, supervising or
reviewing any records relating to such beneficial ownership interests.
Notwithstanding the foregoing, with respect to any global
Security, nothing herein shall prevent the Company, the Trustee, or any agent of
the Company, or the Trustee, from giving effect to any written certification,
proxy or other authorization furnished by any depositary, as a Holder, with
respect to such global Security or impair, as between such depositary and owners
of beneficial interests in such global Security, the operation of customary
practices governing the exercise of the rights of such depositary (or its
nominee) as Holder of such global Security.
SECTION 309. Cancellation. All Securities and coupons
surrendered for payment, redemption, repayment at the option of the Holder,
registration of transfer or exchange or for credit against any sinking fund
payment shall, if surrendered to any Person other than the Trustee, be delivered
to the Trustee, and any such Securities and coupons and Securities and coupons
surrendered directly to the Trustee for any such purpose shall be promptly
canceled by it. The Company may at any time deliver to the Trustee for
cancellation any Securities previously authenticated and delivered hereunder
which the Company may have acquired in any manner whatsoever, and may deliver to
the Trustee (or to any other Person for delivery to the Trustee) for
cancellation any Securities previously authenticated hereunder which the Company
has not issued and sold, and all Securities so delivered shall be promptly
canceled by the Trustee. If the Company shall so acquire any of the Securities,
however, such acquisition shall not operate as a redemption or satisfaction of
the indebtedness represented by such Securities unless and until the same are
surrendered to the Trustee for cancellation. No Securities shall be
authenticated in lieu of or in exchange for any Securities canceled as provided
in this Section, except as expressly permitted by this Indenture. Canceled
Securities and coupons held by the Trustee shall be destroyed by the Trustee and
the Trustee shall deliver a certificate of such destruction to the Company,
unless by the Company Order, the Company directs their return to it.
SECTION 310. Computation of Interest. Except as otherwise
specified as contemplated by Section 301 with respect to Securities of any
series, interest on the Securities of each series shall be computed on the basis
of a 360-day year consisting of twelve 30-day months.
ARTICLE FOUR
SATISFACTION AND DISCHARGE
SECTION 401. Satisfaction and Discharge of Indenture. This
Indenture shall upon Company Request cease to be of further effect with respect
to any series of Securities specified in such Company Request (except as to any
surviving rights of registration of transfer or exchange of Securities of such
series herein expressly provided for and any right to receive Additional
Amounts, as provided in Section 1012), and the Trustee, upon receipt of a
Company Order, and at the expense of the Company, shall execute proper
instruments acknowledging satisfaction and discharge of this Indenture as to
such series when,
(1) either
(A) all Securities of such series theretofore
authenticated and delivered and all coupons, if any, appertaining thereto (other
than (i) coupons appertaining to Bearer
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Securities surrendered for exchange for Registered Securities and maturing after
such exchange, whose surrender is not required or has been waived as provided in
Section 305, (ii) Securities and coupons of such series which have been
destroyed, lost or stolen and which have been replaced or paid as provided in
Section 306, (iii) coupons appertaining to Securities called for redemption and
maturing after the relevant Redemption Date, whose surrender has been waived as
provided in Section 1106, and (iv) Securities and coupons of such series for
whose payment money has theretofore been deposited in trust or segregated and
held in trust by the Company and thereafter repaid to the Company or discharged
from such trust, as provided in Section 1003) have been delivered to the Trustee
for cancellation; or
(B) all Securities of such series and, in the case of
(i) or (ii) below, any coupons appertaining thereto not theretofore delivered to
the Trustee for cancellation
(i) have become due and payable, or
(ii) will become due and payable at their
Stated Maturity within one year, or
(iii) if redeemable at the option of the
Company, are to be called for redemption within one year under arrangements
satisfactory to the Trustee for the giving of notice of redemption by the
Trustee in the name, and at the expense of the Company,
and the Company, in the case of (i), (ii) or (iii) above, has irrevocably
deposited or caused to be deposited with the Trustee as trust funds in trust for
the purpose an amount in the currency or currencies, currency unit or units or
composite currency or currencies in which the Securities of such series are
payable, sufficient to pay and discharge the entire indebtedness on such
Securities and such coupons not theretofore delivered to the Trustee for
cancellation, for principal (and premium 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 to the
Stated Maturity or Redemption Date, as the case may be;
(2) the Company has paid or caused to be paid all other sums
payable hereunder by the Company; and
(3) the Company has delivered to the Trustee an Officers'
Certificate and an Opinion of Counsel, each stating that all conditions
precedent herein provided for relating to the satisfaction and discharge of this
Indenture as to such series have been complied with.
Notwithstanding the satisfaction and discharge of this
Indenture, the obligations of the Company to the Trustee and any predecessor
Trustee under Section 606, the obligations of the Company to any Authenticating
Agent under Section 611 and, if money shall have been deposited with and held by
the Trustee pursuant to subclause (B) of clause (1) of this Section, the
obligations of the Trustee under Section 402 and the last paragraph of Section
1003 shall survive.
SECTION 402. Application of Trust Funds. Subject to the
provisions of the last paragraph of Section 1003, all money deposited with the
Trustee pursuant to Section 401 shall be held in trust and applied by it, in
accordance with the provisions of the Securities, the coupons and this
Indenture, to the payment, either directly or through any Paying Agent
(including the Company acting as its own Paying Agent) as the Trustee may
determine, to the Persons entitled thereto, of the principal (and premium or
Make-Whole Amount, if any), and any interest and Additional Amounts for whose
payment such money has deposited with or received by the Trustee, but such money
need not be segregated from other funds except to the extent required by law.
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ARTICLE FIVE
REMEDIES
SECTION 501. Events of Default. "Event of Default," wherever
used herein with respect to any particular series of Securities, means any one
of the following events (whatever the reason for such Event of Default and
whether or not it shall be voluntary or involuntary or be effected by operation
of law or pursuant to any judgment, decree or order of any court or any order,
rule or regulation of any administrative or governmental body):
(1) default in the payment of any interest upon or any
Additional Amounts payable in respect of any Security of that series or of any
coupon appertaining thereto, when such interest, Additional Amounts or coupon
becomes due and payable, and continuance of such default for a period of 30
days; or
(2) default in the payment of the principal of (or premium 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 performance, or breach, of any covenant or
warranty of the Company in this Indenture with respect to any Security of that
series (other than a covenant or warranty a default in whose performance or
whose breach is elsewhere in this Section specifically dealt with), and
continuance of such default or breach for a period of 60 days after there has
been given, by registered or certified mail to the Company, by the Trustee or to
the Company, and the Trustee by the Holders of at least 25% in principal amount
of the Outstanding Securities of that series a written notice specifying such
default or breach and requiring it to be remedied and stating that such notice
is a "Notice of Default" hereunder; or
(4) a default under any bond, debenture, note or other evidence
of indebtedness of the Company, or under any mortgage, indenture or other
instrument of the Company (including a default with respect to Securities of any
series other than that series) under which there may be issued or by which there
may be secured any indebtedness of 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 on a full recourse basis)
whether such indebtedness now exists or shall hereafter be created, which
default shall constitute a failure to pay an aggregate principal amount
exceeding $10,000,000 of such indebtedness when due and payable after the
expiration of any applicable grace period with respect thereto and shall have
resulted in such indebtedness in an aggregate principal amount exceeding
$10,000,000 becoming or 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 Company by the Trustee or to the Company 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
Company 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
(5) the Company or any Significant Subsidiary pursuant to or
within the meaning of any Bankruptcy Law:
(A) commences a voluntary case,
(B) consents to the entry of an order for relief
against it in an involuntary case,
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(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
(6) a court of competent jurisdiction enters an order or decree
under any Bankruptcy Law that:
(A) is for relief against the Company or any
Significant Subsidiary in an involuntary case,
(B) appoints a Custodian of the Company or any
Significant Subsidiary or for all or
substantially all of either of its property,
or
(C) orders the liquidation of the Company or any
Significant Subsidiary,
and the order or decree remains unstayed and in effect for 90 days; or
(7) 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) and premium
(if any) of all the Securities of that series to be due and payable immediately,
by a notice in writing to the Company, (and to the Trustee if given by the
Holders), and upon any such declaration such principal and premium (if any) 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
Company and the Trustee, may rescind and annul such declaration and its
consequences if:
(1) the Company has paid or deposited with the Trustee a sum
sufficient to pay in the currency, currency unit or composite currency in which
the Securities of such series are payable (except as otherwise specified
pursuant to Section 301 for the Securities of such series):
(A) all overdue installments of interest on and any
Additional Amounts payable in respect of all Outstanding Securities of that
series and any related coupons,
(B) the principal of (and premium 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
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(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 Company covenants that if:
(1) default is made in the payment of any installment of
interest or Additional Amounts, if any, on any Security of any series and any
related coupon when such interest or Additional Amount becomes due and payable
and such default continues for a period of 30 days, or
(2) default is made in the payment of the principal of (or
premium or Make-Whole Amount, if any, on) any Security of any series at its
Maturity, then the Company will, upon demand of the Trustee, pay to the Trustee,
for the benefit of the Holders of such Securities of such series and coupons,
the whole amount then due and payable on such Securities and coupons for
principal (and premium 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 Company fails to pay such amounts forthwith upon such
demand, the Trustee, in its own name and as trustee of an express trust, may
institute a judicial proceeding for the collection of the sums so due and
unpaid, and may prosecute such proceeding to judgment or final decree, and may
enforce the same against the Company, or any other obligor upon such Securities
of such series and collect the moneys adjudged or decreed to be payable in the
manner provided by law out of the property of the Company or any other obligor
upon such Securities of such series, wherever situated.
If an Event of Default with respect to Securities of any series
occurs and is continuing, the Trustee may in its discretion proceed to protect
and enforce its rights and the rights of the Holders of Securities of such
series and any related coupons by such appropriate judicial proceedings as the
Trustee shall deem most effectual to protect and enforce any such rights,
whether for the specific enforcement of any covenant or agreement in this
Indenture or in aid of the 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 Company or any other obligor upon the Securities or
the property of the Company or of such other obligor or their creditors, the
Trustee (irrespective of whether the principal of the Securities of any series
shall then be due and payable as therein expressed or by declaration or
otherwise and irrespective of whether the Trustee shall have made any demand on
the Company for the payment of overdue principal, premium or Make-Whole
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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 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
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THIRD: To the payment of the remainder, if any, to the Company.
SECTION 507. Limitation on Suits. No Holder of any Security of
any series or any related coupon shall have any right to institute any
proceeding, judicial or otherwise, with respect to this Indenture, or for the
appointment of a receiver or trustee, or for any other remedy hereunder, unless:
(1) such Holder has previously given written notice to the
Trustee of a continuing Event of Default with respect to the Securities of that
series;
(2) the Holders of not less than 25% in principal amount of the
Outstanding Securities of that series shall have made written request to the
Trustee to institute proceedings in respect of such Event of Default in its own
name as Trustee hereunder;
(3) such Holder or Holders have offered to the Trustee
indemnity reasonably satisfactory to the Trustee against the costs, expenses and
liabilities to be incurred in compliance with such request;
(4) the Trustee for 60 days after its receipt of such notice,
request and offer of indemnity has failed to institute any such proceeding; and
(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 Company, the
Trustee and the Holders of Securities and coupons shall, subject to any
determination in such proceeding, be restored severally and respectively to
their former positions hereunder and thereafter all rights and remedies of the
Trustee and the Holders shall continue as though no such proceeding had been
instituted.
SECTION 510. Rights and Remedies Cumulative. Except as
otherwise provided with respect to the replacement or payment of mutilated,
destroyed, lost or stolen Securities or coupons in the last paragraph of Section
306, no right or remedy herein conferred upon or reserved to the Trustee or to
the Holders of Securities or coupons is intended to be exclusive of any other
right or remedy, and every right and remedy shall, to the extent permitted by
law, be cumulative and in addition to every other right and remedy given
hereunder or now or hereafter existing at law or in
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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 from time to time, and as often as may be
deemed expedient, by the Trustee or by the Holders of Securities or coupons, as
the case may be.
SECTION 512. Control by Holders of Securities. The Holders of
not less than a majority in principal amount of the Outstanding Securities of
any series shall have the right to direct the time, method and place of
conducting any proceeding for any remedy available to the Trustee or exercising
any trust or power conferred on the Trustee with respect to the Securities of
such series, provided that
(1) such direction shall not be in conflict with any rule of
law or with this Indenture,
(2) the Trustee may take any other action deemed proper by the
Trustee which is not inconsistent with such direction, and
(3) the Trustee need not take any action which might involve it
in personal liability or be unduly prejudicial to the Holders of Securities of
such series not joining therein.
SECTION 513. Waiver of Past Defaults. The Holders of not less
than a majority in principal amount of the Outstanding Securities of any series
may on behalf of the Holders of all the Securities of such series and any
related coupons waive any past default hereunder with respect to such series and
its consequences, except a default
(1) in the payment of the principal of (or premium, if any) or
interest on or Additional Amounts payable in respect of any Security of such
series or any related coupons, or
(2) in respect of a covenant or provision hereof which under
Article Nine cannot be modified or amended without the consent of the Holder of
each Outstanding Security of such series affected.
Upon any such waiver, such default shall cease to exist, and
any Event of Default arising therefrom shall be deemed to have been cured, for
every purpose of this Indenture; but no such waiver shall extend to any
subsequent or other default or Event of Default or impair any right consequent
thereon.
SECTION 514. Waiver of Usury, Stay or Extension Laws. The
Company covenants (to the extent that it may lawfully do so) that it will not at
any time insist upon, or plead, or in any manner whatsoever claim or take the
benefit or advantage of, any usury, stay or extension law wherever enacted, now
or at any time hereafter in force, which may affect the covenants or the
performance of this Indenture; and the Company (to the extent that it may
lawfully do so) hereby expressly waives all benefit or advantage of any such
law, and covenants that it will not hinder, delay or 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,
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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 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(3) 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 may rely and shall be protected in acting or
refraining from acting upon any resolution, certificate, statement, instrument,
opinion, report, notice, request, direction, consent, order, bond, debenture,
note, coupon or other paper or document believed by it to be genuine and to have
been signed or presented by the proper party or parties;
(2) any request or direction of the Company mentioned herein
shall be sufficiently evidenced by a Company Request or Company Order (other
than delivery of any Security, together with any coupons appertaining thereto,
to the Trustee for authentication and delivery pursuant to Section 303 which
shall be sufficiently evidenced as provided therein) and any resolution of the
Board of Directors may be sufficiently evidenced by a Board Resolution;
(3) whenever in the administration of this Indenture the
Trustee shall deem it desirable that a matter be proved or established prior to
taking, suffering or omitting any action hereunder, the Trustee (unless other
evidence be herein specifically prescribed) may, in the absence of bad faith on
its part, rely upon an Officers' Certificate;
(4) the Trustee may consult with counsel and the advice of such
counsel or any Opinion of Counsel shall be full and complete authorization and
protection in respect of any action taken, suffered or omitted by it hereunder
in good faith and in reliance thereon;
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(5) the Trustee shall be under no obligation to exercise any of
the rights or powers vested in it by this Indenture at the request or direction
of any of the Holders of Securities of any series or any related coupons
pursuant to this Indenture, unless such Holders shall have offered to the
Trustee security or indemnity reasonably satisfactory to the Trustee against the
costs, expenses and liabilities which might be incurred by it in compliance with
such request or direction;
(6) the Trustee shall not be bound to make any investigation
into the facts or matters stated in any resolution, certificate, statement,
instrument, opinion, report, notice, request, direction, consent, order, bond,
debenture, note, coupon or other paper or document, but the Trustee, in its
discretion, may make such further inquiry or investigation into such facts or
matters as it may see fit, and, if the Trustee shall determine to make such
further inquiry or investigation, it shall be entitled to examine the books,
records and premises of the Company personally or by agent or attorney;
(7) the Trustee may execute any of the trusts or powers
hereunder or perform any duties hereunder either directly or by or through
agents or attorneys and the Trustee shall not be responsible for any misconduct
or negligence on the part of any agent or attorney appointed with due care by it
hereunder; and
(8) the Trustee shall not be liable for any action taken,
suffered or omitted by it in good faith and reasonably believed by it to be
authorized or within the discretion 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.
Except during the continuance of an Event of Default, the
Trustee undertakes to perform only such duties as are specifically set forth in
this Indenture, and no implied covenants or obligations shall be read into this
Indenture against the Trustee.
SECTION 603. Not Responsible for Recitals or Issuance of
Securities. The recitals contained herein and in the Securities, except the
Trustee's certificate of authentication, and in any coupons shall be taken as
the statements of the Company and neither the Trustee nor any Authenticating
Agent assumes any responsibility for their correctness. The Trustee makes no
representations as to the validity or sufficiency of this Indenture or of the
Securities or coupons, except that the Trustee represents that it is duly
authorized to execute and deliver this Indenture, authenticate the Securities
and perform its obligations hereunder. Neither the Trustee nor any
Authenticating Agent shall be accountable for the use or application by the
Company of Securities or the proceeds thereof.
SECTION 604. May Hold Securities. The Trustee, any Paying
Agent, Security Registrar, Authenticating Agent or any other agent of the
Company, in its individual or any other capacity, may become the owner or
pledgee of Securities and coupons and, subject to TIA Sections 310(b) and 311,
may otherwise deal with the Company with the same rights it would have if it
were not the Trustee, Paying Agent, Security Registrar, Authenticating Agent or
such other agent.
SECTION 605. Money Held in Trust. Money held by the Trustee in
trust hereunder need not be segregated from other funds except to the extent
required by law. The Trustee shall be under no liability for interest on any
money received by it hereunder except as otherwise agreed with the Company.
SECTION 606. Compensation and Reimbursement. The Company
agrees:
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(1) to pay to the Trustee from time to time reasonable
compensation for all services rendered by it hereunder (which compensation shall
not be limited by any provision of law in regard to the compensation of a
trustee of an express trust);
(2) except as otherwise expressly provided herein, to reimburse
each of the Trustee and any predecessor Trustee upon its request for all
reasonable expenses, disbursements and advances incurred or made by the Trustee
in accordance with any provision of this Indenture (including the reasonable
compensation and the expenses and disbursements of its agents and counsel),
except any such expense, disbursement or advance as may be attributable to its
negligence or bad faith; and
(3) to indemnify each of the Trustee and any predecessor
Trustee for, and to hold it harmless against, any loss, liability or expense
incurred without negligence or bad faith on its own part, arising out of or in
connection with the acceptance or administration of the trust or trusts
hereunder, including the costs and expenses of defending itself against any
claim or liability in connection with the exercise or performance of any of its
powers or duties hereunder.
When the Trustee incurs expenses or renders services in
connection with an Event of Default specified in Section 501(5) or Section
501(6), the expenses (including the reasonable charges and expenses of its
counsel) and the compensation for the services are intended to constitute
expenses of administration under any applicable Federal or state bankruptcy,
insolvency or other similar law.
As security for the performance of the obligations of the
Company under this Section, the Trustee shall have a lien prior to the
Securities upon all property and funds held or collected by the Trustee as such,
except funds held in trust for the payment of principal of (or premium, if any)
or interest on particular Securities or any coupons.
The provisions of this Section shall survive the termination of
this Indenture.
SECTION 607. Corporate Trustee Required; Eligibility;
Conflicting Interests. There shall at all times be a Trustee hereunder which
shall be eligible to act as Trustee under TIA Section 310(a)(1) and shall have a
combined capital and surplus of at least $50,000,000. If such corporation
publishes reports of condition at least annually, pursuant to law or the
requirements of Federal, State, Territorial or District of Columbia supervising
or examining authority, then for the purposes of this Section, the combined
capital and surplus of such corporation shall be deemed to be its combined
capital and surplus as set forth in its most recent report of condition so
published. If at any time the Trustee shall cease to be eligible in accordance
with the provisions of this Section, it shall resign immediately in the manner
and with the effect hereinafter specified in this Article.
SECTION 608. Resignation and Removal; Appointment of Successor.
(a) No resignation or removal of the Trustee and no appointment of a successor
Trustee pursuant to this Article shall become effective until the acceptance of
appointment by the successor Trustee in accordance with the applicable
requirements of Section 609.
(b) The Trustee may resign at any time with respect to the
Securities of one or more series by giving written notice thereof to the
Company. If an instrument of acceptance by a successor Trustee shall not have
been delivered to the Trustee within 30 days after the giving of such notice of
resignation, the resigning Trustee may petition any court of competent
jurisdiction for the appointment of a successor Trustee.
(c) The Trustee may be removed at any time with respect to the
Securities of any series by Act of the Holders of a majority in principal amount
of the Outstanding Securities of such series delivered to the Trustee and the
Company.
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(d) If at any time:
(1) the Trustee shall fail to comply with the
provisions of TIA Section 310(b) after written request therefor by the Company
or by any Holder of a Security who has been a bona fide Holder of a Security for
at least six months, or
(2) the Trustee shall cease to be eligible under
Section 607 and shall fail to resign after written request therefor by the
Company or by any Holder of a Security who has been a bona fide Holder of a
Security for at least six months, or
(3) the Trustee shall become incapable of acting or
shall be adjudged a bankrupt or insolvent or a receiver of the Trustee or of its
property shall be appointed or any public officer shall take charge or control
of the Trustee or of its property or affairs for the purpose of rehabilitation,
conservation or liquidation, then, in any such case, (i) the Company by or
pursuant to a Board Resolution may remove the Trustee and appoint a successor
Trustee with respect to all Securities, or (ii) subject to TIA Section 315(e),
any Holder of a Security who has been a bona fide Holder of a Security for at
least six months may, on behalf of himself and all others similarly situated,
petition any court of competent jurisdiction for the removal of the Trustee with
respect to all Securities and the appointment of a successor Trustee or
Trustees.
(e) If the Trustee shall resign, be removed or become incapable
of acting, or if a vacancy shall occur in the office of Trustee for any cause
with respect to the Securities of one or more series, the Company, by or
pursuant to a Board Resolution, shall promptly appoint a successor Trustee or
Trustees with respect to the Securities of that or those series (it being
understood that any such successor Trustee may be appointed with respect to the
Securities of one or more or all of such series and that at any time there shall
be only one Trustee with respect to the Securities of any particular series).
If, within one year after such resignation, removal or incapability, or the
occurrence of such vacancy, a successor Trustee with respect to the Securities
of any series shall be appointed by Act of the Holders of a majority in
principal amount of the Outstanding Securities of such series delivered to the
Company and the retiring Trustee, the successor Trustee so appointed shall,
forthwith upon its acceptance or such appointment, become the successor Trustee
with respect to the Securities of such series and to that extent supersede the
successor Trustee appointed by the Company. If no successor Trustee with respect
to the Securities of any series shall have been so appointed by the Company or
the Holders of Securities and accepted appointment in the manner hereinafter
provided, any Holder of a Security who has been a bona fide Holder of a Security
of such series for at least six months may, on behalf of himself and all others
similarly situated, petition any court of competent jurisdiction for the
appointment of a successor Trustee with respect to Securities of such series.
(f) The Company shall give notice of each resignation and each
removal of the Trustee with respect to the Securities of any series and each
appointment of a successor Trustee with respect to the Securities of any series
in the manner provided for notices to the Holders of Securities in Section 106.
Each notice shall include the name of the successor Trustee with respect to the
Securities of such series and the address of its Corporate Trust Office.
SECTION 609. Acceptance of Appointment by Successor. (a) In
case of the appointment hereunder of a successor Trustee with respect to all
Securities, every such successor Trustee shall execute, acknowledge and deliver
to the Company and the retiring Trustee an instrument accepting such
appointment, and thereupon the resignation or removal of the retiring Trustee
shall become effective and such successor Trustee, without any further act, deed
or conveyance, shall become vested with all the rights, powers, trusts and
duties of the retiring Trustee; but, on request of the Company or the successor
Trustee, such retiring Trustee shall, upon payment of its charges, execute and
deliver an instrument transferring to such successor Trustee all the rights,
powers and trusts of the retiring Trustee, and shall duly assign, transfer and
deliver to such
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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 Company,
the retiring Trustee and each successor Trustee with respect to the Securities
of one or more series shall execute and deliver an indenture supplemental
hereto, pursuant to Article Nine hereof, wherein each successor Trustee shall
accept such appointment and which (1) shall contain such provisions as shall be
necessary or desirable to transfer and confirm to, and to vest in, each
successor Trustee all the rights, powers, trusts and duties of the retiring
Trustee with respect to the Securities of that or those series to which the
appointment of such successor Trustee relates, (2) if the retiring Trustee is
not retiring with respect to all Securities, shall contain such provisions as
shall be deemed necessary or desirable to confirm that all the rights, powers,
trusts and duties of the retiring Trustee with respect to the Securities of that
or those series as to which the retiring Trustee is not retiring shall continue
to be vested in the retiring Trustee, and (3) shall add to or change any of the
provisions of this Indenture as shall be necessary to provide for or facilitate
the administration of the trusts hereunder by more than one Trustee, it being
understood that nothing herein or in such supplemental indenture shall
constitute such Trustees co-trustees of the same trust and that each such
Trustee shall be trustee of a trust or trusts hereunder separate and apart from
any trust or trusts hereunder administered by any other such Trustee; and upon
the execution and delivery of such supplemental indenture the resignation or
removal of the retiring Trustee shall become effective to the extent provided
therein and each such successor Trustee, without any further act, deed or
conveyance, shall become vested with all the rights, powers, trusts and duties
of the retiring Trustee with respect to the Securities of that or those series
to which the appointment of such successor Trustee relates; but, on request of
the Company, or any successor Trustee, such retiring Trustee shall 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 Company
shall execute any and all instruments for more fully and certainly vesting in
and confirming to such successor Trustee all such rights, powers and trusts
referred to in paragraph (a) or (b) of this Section, as the case may be.
(d) No successor Trustee shall accept its appointment unless at
the time of such acceptance such successor Trustee shall be qualified and
eligible under this Article.
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 of 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
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respect to one or more series of Securities which shall be authorized to act on
behalf of the Trustee to authenticate Securities of such series issued upon
exchange, registration of transfer or partial redemption or repayment thereof,
and Securities so authenticated shall be entitled to the benefits of this
Indenture and shall be valid and obligatory for all purposes as if authenticated
by the Trustee hereunder. Any such appointment shall be evidenced by an
instrument in writing signed by a Responsible Officer of the Trustee, a copy of
which instrument shall be promptly furnished to the Company. Wherever reference
is made in this Indenture to the authentication and delivery of Securities by
the Trustee or the Trustee's certificate of authentication, such reference shall
be deemed to include authentication and delivery on behalf of the Trustee by an
Authenticating Agent and a certificate of authentication executed on behalf of
the Trustee by an Authenticating Agent. Each Authenticating Agent shall be
acceptable to the Company and shall at all times be a bank or trust company or
corporation organized and doing business and in good standing under the laws of
the United States of America or of any State or the District of Columbia,
authorized under such laws to act as Authenticating Agent, having a combined
capital and surplus of not less than $50,000,000 and subject to supervision or
examination by Federal or State authorities. If such Authenticating Agent
publishes reports of condition at least annually, pursuant to law or the
requirements of the aforesaid supervising or examining authority, then for the
purposes of this Section, the combined capital and surplus of such
Authenticating Agent shall be deemed to be its combined capital and surplus as
set forth in its most recent report of condition so published. In case at any
time an Authenticating Agent shall cease to be eligible in accordance with the
provisions of this Section, such Authenticating Agent shall resign immediately
in the manner and with the effect specified in this Section.
Any corporation into which an Authenticating Agent may be
merged or converted or with which it may be consolidated, or any corporation
resulting from any merger, conversion or consolidation to which such
Authenticating Agent shall be a party, or any corporation succeeding to the
corporate agency or corporate trust business of an Authenticating Agent, shall
continue to be an Authenticating Agent, provided such corporation shall be
otherwise eligible under this Section, without the execution or filing of any
paper or further act on the part of the Trustee or the Authenticating Agent.
An Authenticating Agent for any series of Securities may at any
time resign by giving written notice of resignation to the Trustee for such
series and to the Company. The Trustee for any series of Securities may at any
time terminate the agency of an Authenticating Agent by giving written notice of
termination to such Authenticating Agent and the Company. Upon receiving such a
notice of resignation or upon such a termination, or in case at any time such
Authenticating Agent shall cease to be eligible in accordance with the
provisions of this Section, the Trustee for such series may appoint a successor
Authenticating Agent which shall be acceptable to the Company and shall give
notice of such appointment to all Holders of Securities of the series with
respect to which such Authenticating Agent will serve in the manner set forth in
Section 106. Any successor Authenticating Agent upon acceptance of its
appointment hereunder shall become vested with all the rights, powers and duties
of its predecessor hereunder, with like effect as if originally named as an
Authenticating Agent herein. No successor Authenticating Agent shall be
appointed unless eligible under the provisions of this Section.
The Company agrees to pay to each Authenticating Agent from
time to time reasonable compensation including reimbursement of its reasonable
expenses for its services under this Section.
If an appointment with respect to one or more series is made
pursuant to this Section, the Securities of such series may have endorsed
thereon, in addition to or in lieu of the Trustee's certificate of
authentication, an alternate certificate of authentication substantially in the
following form:
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This is one of the Securities of the series designated therein
referred to in the within-mentioned Indenture.
[BANK], as Trustee
By:
-------------------------------
as Authenticating Agent
By:
-------------------------------
Authorized Signatory
ARTICLE SEVEN
HOLDERS' LISTS AND REPORTS BY TRUSTEE AND COMPANY
SECTION 701. Disclosure of Names and Addresses of Holders.
Every Holder of Securities or coupons, by receiving and holding the same, agrees
with the Company and the Trustee that neither the Company nor the Trustee nor
any Authenticating Agent nor any Paying Agent nor any Security Registrar shall
be held accountable by reason of the disclosure of any information as to the
names and addresses of the Holders of Securities in accordance with TIA Section
312, regardless of the source from which such information was derived, and that
the Trustee shall not be held accountable by reason of mailing any material
pursuant to a request made under TIA Section 312(b).
SECTION 702. Reports by Trustee. Within 60 days after October 1
of each year commencing with the first October 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 October 1 if required by TIA Section 313(a).
SECTION 703. Reports by Company. The Company will:
(1) file with the Trustee, within 15 days after the Company is
required to file the same with the Commission, copies of the annual reports and
of the information, documents and other reports (or copies of such portions of
any of the foregoing as the Commission may from time to time by rules and
regulations prescribe) which the Company may be required to file with the
Commission pursuant to Section 13 or Section 15(d) of the Exchange Act; or the
Company is not required to file information, documents or reports pursuant to
either of such Sections, then it will file with the Trustee and the Commission,
in accordance with rules and regulations prescribed from time to time by the
Commission, such of the supplementary and periodic information, documents and
reports which may be required pursuant to Section 13 of the Exchange Act in
respect of a security listed and registered on a national securities exchange as
may be prescribed from time to time in such rules and regulations;
(2) file with the Trustee and the Commission, in accordance
with rules and regulations prescribed from time to time by the Commission, such
additional information, documents and reports with respect to compliance by the
Company with the conditions and covenants of this Indenture as may be required
from time to time by such rules and regulations; and
(3) transmit by mail to the Holders of Securities, within 30
days after the filing thereof with the Trustee, in the manner and to the extent
provided in TIA Section 313(c), such summaries of any information, documents and
reports required to be filed by the Company pursuant to paragraphs (1) and (2)
of this Section as may be required by rules and regulations prescribed from time
to time by the Commission.
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SECTION 704. The Company to Furnish Trustee Names and Addresses
of Holders. The Company will furnish or cause to be furnished to the Trustee:
(a) semi-annually, not later than 15 days after the Regular
Record Date for interest for each series of Securities, a list, in such form as
the Trustee may reasonably require, of the names and addresses of the Holders of
Registered Securities of such series as of such Regular Record Date, or if there
is no Regular Record Date for interest for such series of Securities,
semi-annually, upon such dates as are set forth in the Board Resolution or
indenture supplemental hereto authorizing such series, and
(b) at such other times as the Trustee may request in Writing,
within 30 days after the receipt by the Company of any such request, a list of
similar form and content as of a date not more than 15 days prior to the time
such list is furnished, provided, however, that, so long as the Trustee is the
Security Registrar, no such list shall be required to be furnished.
ARTICLE EIGHT
CONSOLIDATION, MERGER, SALE, LEASE OR CONVEYANCE
SECTION 801. Consolidations and Mergers of Company and Sales,
Leases and Conveyances Permitted Subject to Certain Conditions. The Company may
consolidate with, or sell, lease or convey all or substantially all of its
assets to, or merge with or into any other entity, provided that in any such
case, (1) either the Company shall be the continuing entity, or the successor
entity shall be an entity organized and existing under the laws of the United
States or a State thereof and such successor entity shall expressly assume the
due and punctual payment of the principal of (and premium or Make-Whole Amount,
if any) and any interest (including all Additional Amounts, if any, payable
pursuant to Section 1012) on all of the Securities, according to their tenor,
and the due and punctual performance and observance of all of the covenants and
conditions of this Indenture to be performed by the Company by supplemental
indenture, complying with Article Nine hereof, satisfactory to the Trustee,
executed and delivered to the Trustee by such entity and (ii) 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 or 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 Entity. 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 Company, 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 Company, any
or all of the Securities issuable hereunder which theretofore shall not have
been signed by the Company and delivered to the Trustee; and, upon the order of
such successor entity, instead of the Company, and subject to all the terms,
conditions and limitations in this Indenture prescribed, the Trustee shall
authenticate and shall deliver any Securities which previously shall have been
signed and delivered by the officers of the Company to the Trustee for
authentication, and any Securities which such successor entity thereafter shall
cause to be signed and delivered to the Trustee for that purpose. All the
Securities so issued shall in all respects have the same legal rank and benefit
under this Indenture as the Securities theretofore or thereafter issued in
accordance with the terms of this Indenture as though all of such Securities had
been issued at the date of the execution hereof.
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In case of any such consolidation, merger, sale, lease or
conveyance, such changes in phraseology and form (but not in substance) may be
made in the Securities thereafter to be issued as may be appropriate.
SECTION 803. Officers' Certificate and Opinion of Counsel. Any
consolidation, merger, sale, lease or conveyance permitted under Section 801 is
also subject to the condition that the Trustee receive an Officers' Certificate
and an Opinion of Counsel to the effect that any such consolidation, merger,
sale, lease or conveyance, and the assumption by any successor entity, complies
with the provisions of this Article and that all conditions precedent herein
provided for relating to such transaction have been complied with.
ARTICLE NINE
SUPPLEMENTAL INDENTURES
SECTION 901. Supplemental Indentures Without Consent of
Holders. Without the consent of any Holders of Securities or coupons, the
Company, when authorized by or pursuant to a Board Resolution, and the Trustee,
at any time and from time to time, may enter into one or more indentures
supplemental hereto, in form satisfactory to the Trustee, for any of the
following purposes:
(1) to evidence the succession of another Person to the Company
and the assumption by any such successor of the covenants of the Company herein
and in the Securities contained; or
(2) to add to the covenants of the Company for the benefit of
the Holders of all or any series of Securities (and if such covenants are to be
for the benefit of less than all series of Securities, stating that such
covenants are expressly being included solely for the benefit of such series) or
to surrender any right or power herein conferred upon the Company; or
(3) to add any additional Events of Default for the benefit of
the Holders of all or any series of Securities (and if such Events of Default
are to be for the benefit of less than all series of Securities, stating that
such Events of Default are expressly being included solely for the benefit of
such series); provided, however, that in respect of any such additional Events
of Default such supplemental indenture may provide for a particular period of
grace after default (which period may be shorter or longer than that allowed in
the case of other defaults) 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 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 or 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
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(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, provided such provisions shall not adversely affect the
interests of the Holders of Securities of any series or any related coupons in
any material respect; or
(10) to supplement any of the provisions of this Indenture to
such extent as shall be necessary to permit or facilitate the defeasance and
discharge of any series of Securities pursuant to Sections 401, 1302 and 1303;
provided 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 Company and the Trustee, the Company, when
authorized by or pursuant to a Board Resolution, and the Trustee may enter into
an indenture or indentures supplemental hereto for the purpose of adding any
provisions to or changing in any manner or eliminating any of the provisions of
this Indenture or of modifying in any manner the rights of the Holders of
Securities and any related coupons under this Indenture; provided, however, that
no such supplemental indenture shall, without the consent of the Holder of each
Outstanding Security affected thereby:
(1) change the Stated Maturity of the principal of (or premium
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 payable upon the redemption thereof, or change any obligation of the
Company to pay Additional Amounts pursuant to Section 1012 (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 that would be due and payable upon a declaration of acceleration of the
Maturity thereof pursuant to Section 502 or the amount thereof provable in
bankruptcy pursuant to Section 504, or adversely affect any right of repayment
at the option of the Holder of any Security, or change any Place of Payment
where, or the currency or currencies, currency unit or units or composite
currency or currencies in which, any Security or any premium or Make-Whole
Amount 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 1404 for quorum or voting, or
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(3) modify any of the provisions of this Section, Section 513
or Section 1013, 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
solely for the benefit of one or more particular series of Securities, or which
modifies the rights of the Holders of Securities of such series with respect to
such covenant or other provision, shall be deemed not to affect the rights under
this Indenture of the Holders of Securities of any other series.
SECTION 903. Execution of Supplemental Indentures. In
executing, or accepting the additional trusts created by, any supplemental
indenture permitted by this Article or the modification thereby of the trusts
created by this Indenture, the Trustee shall be entitled to receive, and shall
be fully protected in relying upon, an Opinion of Counsel stating that the
execution of such supplemental indenture is authorized or permitted by this
Indenture. The Trustee may, but shall not be obligated to, enter into any such
supplemental indenture which affects the Trustee's own rights, duties or
immunities under this Indenture or otherwise.
SECTION 904. Effect of Supplemental Indentures. Upon the
execution of any supplemental indenture under this Article, this Indenture shall
be modified in accordance therewith, and such supplemental indenture shall form
a part of this Indenture for all purposes; and every Holder of Securities
theretofore or thereafter authenticated and delivered hereunder and of any
coupon appertaining thereto shall be bound thereby.
SECTION 905. Conformity with Trust Indenture Act. Every
supplemental indenture executed pursuant to this Article shall conform to the
requirements of the Trust Indenture Act as then in effect.
SECTION 906. Reference in Securities to Supplemental
Indentures. Securities of any series authenticated and delivered after the
execution of any supplemental indenture pursuant to this Article may, and shall,
if required by the Trustee, bear a notation in form approved by the Trustee as
to any matter provided for in such supplemental indenture. If the Company shall
so determine, new Securities of any series so modified as to conform, in the
opinion of the Trustee and the Company, to any such supplemental indenture may
be prepared and executed by the Company and authenticated and delivered by the
Trustee in exchange for Outstanding Securities of such series.
SECTION 907. Notice of Supplemental Indentures. Promptly after
the execution by the Company and the Trustee of any supplemental indenture
pursuant to the provisions of Section 902, the Company shall give notice thereof
to the Holders of each Outstanding Security affected, in the manner provided for
in Section 106, setting forth in general terms the substance of such
supplemental indenture.
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ARTICLE TEN
COVENANTS
SECTION 1001. Payment of Principal, Premium or Make-Whole
Amount, if any, Interest and Additional Amounts. The Company covenants and
agrees for the benefit of the Holders of each series of Securities that it will
duly and punctually pay the principal of (and premium 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 1012 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 Company, all payments of principal may be paid by check to the registered
Holder of the Registered Security or other person entitled thereto against
surrender of such Security.
SECTION 1002. Maintenance of Office or Agency. If Securities of
a series are issuable only as Registered Securities, the Company shall maintain
in each Place of Payment for any series of Securities an office or agency where
Securities of that series may be presented or surrendered for payment or
conversion, where Securities of that series may be surrendered for registration
of transfer or exchange and where notices and demands to or upon the Company in
respect of the Securities of that series and this Indenture may be served. If
Securities of a series are issuable as Bearer Securities, the Company will
maintain: (A) in the Borough of Manhattan, 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 registration of transfer, where Securities of that
series may be surrendered for exchange, where notices and demands to or upon the
Company in respect of the Securities of that series and this Indenture may be
served and where Bearer Securities of that series and related coupons may be
presented or surrendered for payment or conversion in the circumstances
described in the following paragraph (and not otherwise); (B) subject to any
laws or regulations applicable thereto, in a Place of Payment for that series
which is located outside the United States, an office or agency where Securities
of that series and related coupons may be presented and surrendered for payment
(including payment of any Additional Amounts payable on Securities of that
series pursuant to Section 1012) or conversion; provided, however, that if the
Securities of that series are listed on the Luxembourg Stock Exchange or any
other stock exchange located outside the United States and such stock exchange
shall so require, the Company will maintain a Paying Agent for the Securities of
that series in Luxembourg or any other required city located outside the United
States, as the case may be, so long as the Securities of that series are listed
on such exchange; and (C) subject to any laws or regulations applicable thereto,
in a Place of Payment for that series located outside the United States an
office or agency where any Registered Securities of that series may be
surrendered for registration of transfer, where Securities of that series may be
surrendered for exchange and where notices and demands to or upon the Company in
respect of the Securities of that series and this Indenture may be served. The
Company will give prompt written notice to the Trustee of the location, and any
change in the location, of each such office or agency. If at any time the
Company shall fail to maintain any such required office or agency or shall fail
to furnish the Trustee with the address thereof, such presentations, surrenders,
notices and demands may be made or served at the Corporate Trust Office of the
Trustee, except that Bearer Securities of that series and the related coupons
may be presented and surrendered for payment (including payment of any
Additional Amounts payable on Bearer Securities of that series pursuant to
Section 1012) or conversion at the offices specified in the Security, in London,
England, and the Company hereby appoint the same as its agent to receive such
respective presentations, surrenders, notices and
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demands, and the Company hereby appoint the Trustee its agent to receive all
such presentations, surrenders, notices and demands.
Unless otherwise specified with respect to any Securities
pursuant to Section 301, no payment of principal, premium or interest on or
Additional Amounts in respect of Bearer Securities shall be made at any office
or agency of the Company in the United States or by check mailed to any address
in the United States or by transfer to an account maintained with a bank located
in the United States; provided, however, that, if the Securities of a series are
payable in Dollars, payment of principal of and any premium and interest on any
Bearer Security (including any Additional Amounts payable on Securities of such
series pursuant to Section 1012) shall be made at the office of the Company's
Paying Agent in the Borough of Manhattan, The City of New York, if (but only if)
payment in Dollars of the full amount of such principal, premium, or Make-Whole
Amount, interest or Additional Amounts, as the case may be, at all offices or
agencies outside the United States maintained for the purpose by the Company in
accordance with this Indenture, is illegal or effectively precluded by exchange
controls or other similar restrictions.
The Company may from time to time designate one or more other
offices or agencies where the Securities of one or more series may be presented
or surrendered for any or all of such purposes, and may from time to time
rescind such designations; provided, however, that no such designation or
rescission shall in any manner relieve the Company of its obligation to maintain
an office or agency in accordance with the requirements set forth above for
Securities of any series for such purposes. The Company will give prompt written
notice to the Trustee of any such designation or rescission and of any change in
the location of any such other office or agency. Unless otherwise specified with
respect to any Securities pursuant to Section 301 with respect to a series of
Securities, the Company hereby designates as a Place of Payment for each series
of Securities the office or agency of the Company in the Borough of Manhattan,
The City of New York, and initially appoints the Trustee at its Corporate Trust
Office as Paying Agent in such city and as its agent to receive all such
presentations, surrenders, notices and demands.
Unless otherwise specified with respect to any Securities
pursuant to Section 301, if and so long as the Securities of any series (i) are
denominated in a Foreign Currency or (ii) may be payable in a Foreign Currency,
or so long as it is required under any other provision of the Indenture, then
the Company will maintain with respect to each such series of Securities, or as
so required, at least one exchange rate agent.
SECTION 1003. Money for Securities Payments to Be Held in
Trust. If the Company shall at any time act as its own Paying Agent with respect
to any series of any Securities and any related coupons, it will, on or before
each due date of the principal of (and premium 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 Company shall have one or more Paying Agents for
any series of Securities and any related coupons, it will, on or before each due
date of the principal of (and premium 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,
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premium or interest or Additional Amounts and (unless such Paying Agent is the
Trustee) the Company will promptly notify the Trustee of its action or failure
so to act.
The Company will cause each Paying Agent other than the Trustee
to execute and deliver to the Trustee an instrument in which such Paying Agent
shall agree with the Trustee, subject to the provisions of this Section, 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 Company (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 Company may at any time, for the purpose of obtaining the
satisfaction and discharge of this Indenture or for any other purpose, pay, or
by Company Order direct any Paying Agent to pay, to the Trustee all sums held in
trust by the Company or such Paying Agent, such sums to be held by the Trustee
upon the same trusts as those upon which such sums were held by the Company or
such Paying Agent; and, upon such payment by any Paying Agent to the Trustee,
such Paying Agent shall be released from all further liability with respect to
such sums.
Except as otherwise provided in the Securities of any series,
any money deposited with the Trustee or any Paying Agent, or then held by the
Company, in trust for the payment of the principal of (and premium 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 premium or Make-Whole Amount, if any), interest or Additional
Amounts has become due and payable shall be paid to the Company upon Company
Request or (if then held by the Company) shall be discharged from such trust;
and the Holder of such Security shall thereafter, as an unsecured general
creditor, look only to the Company for payment of such principal of (and premium
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 Company as trustee thereof, shall thereupon cease; provided, however,
that the Trustee or such Paying Agent, before being required to make any such
repayment, may at the expense of the Company cause to be published once, in an
Authorized Newspaper, notice that such money remains unclaimed and that, after a
date specified therein, which shall not be less than 30 days from the date of
such publication, any unclaimed balance of such money then remaining will be
repaid to the Company.
SECTION 1004. [Omitted].
SECTION 1005. [Omitted].
SECTION 1006. Existence. Subject to Article Eight, the Company
will do or cause to be done all things necessary to preserve and keep in full
force and effect its existence, rights and franchises; provided, however, that
the Company shall not be required to preserve any right or franchise if the
Board of Directors shall determine that the preservation thereof is no longer
desirable in the conduct of the business of the Company and that the loss
thereof is not disadvantageous in any material respect to the Holders.
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SECTION 1007. 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 nothing in this Section shall
prevent the Company or any Subsidiary from selling or otherwise disposing for
value its properties in the ordinary course of its business.
SECTION 1008. Insurance. The Company will, and will cause each
of its Subsidiaries to, keep all of its insurable properties insured against
loss or damage at least equal to their then full insurable value with
financially sound and reputable insurers.
SECTION 1009. Payment of Taxes and Other Claims. The Company
will pay or discharge or cause to be paid or discharged, before the same shall
become delinquent, (1) all taxes, assessments and governmental charges levied or
imposed upon it or any Subsidiary or upon the income, profits or property of the
Company or any Subsidiary, and (2) all lawful claims for labor, materials and
supplies which, if unpaid, might by law become a lien upon the property of the
Company or any Subsidiary; provided, however, that the Company shall not be
required to pay or discharge or cause to be paid or discharged any such tax,
assessment, charge or claim whose amount, applicability or validity is being
contested in good faith by appropriate proceedings.
SECTION 1010. Provision of Financial Information. Whether or
not the Company is subject to Section 13 or 15(d) of the Exchange Act, the
Company will, to the extent permitted under the Exchange Act, file with the
Commission the annual reports, quarterly reports and other documents which the
Company would have been required to file with the Commission pursuant to such
Section 13 or 15(d) (the "Financial Statements") if the Company were so subject,
such documents to be filed with the Commission on or prior to the respective
dates (the "Required Filing Dates") by which the Company would have been
required so to file such documents if the Company were so subject.
The Company will also in any event (x) within 15 days of each
Required Filing Date (i) transmit by mail to all Holders, as their names and
addresses appear in the Security Register, without cost to such Holders copies
of the annual reports and quarterly reports which the Company would have been
required to file with the Commission pursuant to Section 13 or 15(d) of the
Exchange Act if the Company were subject to such Sections, and (ii) file with
the Trustee copies of the annual reports, quarterly reports and other documents
which the Company would have been required to file with the Commission pursuant
to Section 13 or 15(d) of the Exchange Act if the Company were subject to such
Sections and (y) if filing such documents by the Company with the Commission is
not permitted under the Exchange Act, promptly upon written request and payment
of the reasonable cost of duplication and delivery, supply copies of such
documents to any prospective Holder.
SECTION 1011. Statement as to Compliance. The Company will
deliver to the Trustee, within 120 days after the end of each fiscal year, a
brief certificate from the principal executive officer, principal financial
officer or principal accounting officer as to his or her knowledge of the
Company's compliance with all conditions and covenants under this Indenture and,
in the event of any noncompliance, specifying such noncompliance and the nature
and status thereof. For purposes of this Section 1011, such compliance shall be
determined without regard to any period of grace or requirement of notice under
this Indenture.
SECTION 1012. Additional Amounts. If any Securities of a series
provide for the payment of Additional Amounts, the Company will pay to the
Holder of any Security of such series or any coupon appertaining thereto
Additional Amounts as may be specified as contemplated by Section
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301. Whenever in this Indenture there is mentioned, in any context except in the
case of Section 502(1), the payment of the principal of or any premium or
interest on, or in respect of, any Security of any series or payment of any
related coupon or the net proceeds received on the sale or exchange of any
Security of any series, such mention shall be deemed to include mention of the
payment of Additional Amounts provided by the terms of such series established
pursuant to Section 301 to the extent that, in such context, Additional Amounts
are, were or would be payable in respect thereof pursuant to such terms and
express mention of the payment of Additional Amounts (if applicable) in any
provisions hereof shall not be construed as excluding Additional Amounts in
those provisions hereof where such express mention is not made.
Except as otherwise specified as contemplated by Section 301,
if the Securities of a series provide for the payment of Additional Amounts, at
least 10 days prior to the first Interest Payment Date with respect to that
series of Securities (or if the Securities of that series will not bear interest
prior to Maturity, the first day on which a payment of principal and any premium
is made), and at least 10 days prior to each date of payment of principal and
any premium or interest if there has been any change with respect to the matters
set forth in the below-mentioned Officers' Certificate, the Company will furnish
the Trustee and the Company's principal Paying Agent or Paying Agents, if other
than the Trustee, with an Officers' Certificate instructing the Trustee and such
Paying Agent or Paying Agents whether such payment of principal of and any
premium or interest on the Securities of that series shall be made to Holders of
Securities of that series or any related coupons who are not United States
persons without withholding for or on account of any tax, assessment or other
governmental charge described in the Securities of the series. If any such
withholding shall be required, then such Officers' Certificate shall specify by
country the amount, if any, required to be withheld on such payments to such
Holders of Securities of that series or related coupons and the Company will pay
to the Trustee or such Paying Agent the Additional Amounts required by the terms
of such Securities. If the Trustee or any Paying Agent, as the case may be,
shall not so receive the above-mentioned certificate, then the Trustee or such
Paying Agent shall be entitled (i) to assume that no such withholding or
deduction is required with respect to any payment of principal or interest with
respect to any Securities of a series or related coupons until it shall have
received a certificate advising otherwise and (ii) to make all payments of
principal and interest with respect to the Securities of a series or related
coupons without withholding or deductions until otherwise advised. The Company
covenants to indemnify the Trustee and any Paying Agent for, and to hold them
harmless against, any loss, liability or expense reasonably incurred without
negligence or bad faith on their part arising out of or in connection with
actions taken or omitted by any them or in reliance on any Officers' Certificate
furnished pursuant to this Section or in reliance on the Company's not
furnishing such an Officers' Certificate.
SECTION 1013. Waiver of Certain Covenants. The Company may omit
in any particular instance to comply with any term, provision or condition set
forth in Sections 1004 to 1010, inclusive, if before or after the time for such
compliance the Holders of at least a majority in principal amount of all
outstanding Securities of such series, by Act of such Holders, either waive such
compliance in such instance or generally waive compliance with such covenant or
condition, but no such waiver shall extend to or affect such covenant or
condition except to the extent so expressly waived, and, until such waiver shall
become effective, the obligations of the Company and the duties of the Trustee
in respect of any such term, provision or condition shall remain in full force
and effect.
ARTICLE ELEVEN
REDEMPTION OF SECURITIES
SECTION 1101. Applicability of Article. Securities of any
series which are redeemable before their Stated Maturity shall be redeemable in
accordance with their terms and
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(except as otherwise specified as contemplated by Section 301 for Securities of
any series) in accordance with this Article.
SECTION 1102. Election to Redeem; Notice to Trustee. The
election of the Company to redeem any Securities shall be evidenced by or
pursuant to a Board Resolution. In case of any redemption at the election of the
Company of less than all of the Securities of any series, the Company shall, at
least 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 Company shall furnish the
Trustee with an Officers' Certificate evidencing compliance with such
restriction.
SECTION 1103. Selection by Trustee of Securities to Be
Redeemed. If less than all the Securities of any series issued on the same day
with the same terms are to be redeemed, the particular Securities to be redeemed
shall be selected not more than 60 days prior to the Redemption Date by the
Trustee, from the Outstanding Securities of such series issued on such date with
the same terms not previously called for redemption, by such method as the
Trustee shall deem fair and appropriate and which may provide for the selection
for redemption of portions (equal to the minimum authorized denomination for
Securities of that series or any integral multiple thereof) of the principal
amount of Securities of such series of a denomination larger than the minimum
authorized denomination for Securities of that series.
The Trustee shall promptly notify the Company and the Security
Registrar (if other than itself) in writing of the Securities selected for
redemption and, in the case of any Securities selected for partial redemption,
the principal amount thereof to be redeemed.
For all purposes of this Indenture, unless the context
otherwise requires, all provisions relating to the redemption of Securities
shall relate, in the case of any Security redeemed or to be redeemed only in
part, to the portion of the principal amount of such Security which has been or
is to be redeemed.
SECTION 1104. Notice of Redemption. Notice of redemption shall
be given 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,
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(4) in case any Security is to be redeemed in part only, the
notice which relates to such Security shall state that on and after the
Redemption Date, upon surrender of such Security, the holder will receive,
without a charge, a new Security or Securities 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, unless otherwise specified in such notice, Bearer
Securities of any series, if any, surrendered for redemption must be accompanied
by all coupons maturing subsequent to the date fixed for redemption or the
amount of any such missing coupon or coupons will be deducted from the
Redemption Price, unless security or indemnity satisfactory to the Company and
the Trustee for such series and any Paying Agent is furnished,
(8) if Bearer Securities of any series are to be redeemed and
any Registered Securities of such series are not to be redeemed, and if such
Bearer Securities may be exchanged for Registered Securities not subject to
redemption on this Redemption Date pursuant to Section 305 or otherwise, the
last date, as determined by the Company, on which such exchanges may be made,
(9) the CUSIP number of such Security, if any, and
(10) if applicable, that a Holder of Securities who desires to
convert Securities for redemption must satisfy the requirements for conversion
contained in such Securities, the then existing conversion price or rate, and
the date and time when the option to convert shall expire.
Notice of redemption of Securities to be redeemed shall be
given by the Company or, at the Company's request, by the Trustee in the name
and at the expense of the Company.
SECTION 1105. Deposit of Redemption Price. At least one
Business Day prior to any Redemption Date, the Company shall deposit with the
Trustee or with a Paying Agent (or, if the Company is acting as its own Paying
Agent, 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 Company shall default
in the payment of the Redemption Price and accrued interest) such Securities
shall, if the same were interest-bearing, cease to bear interest and the coupons
for such interest appertaining to any Bearer Securities so to be redeemed,
except to the extent provided below, shall be void. Upon surrender of any such
Security for redemption in accordance with said
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notice, together with all coupons, if any, appertaining thereto maturing after
the Redemption Date, such Security shall be paid by the Company at the
Redemption Price, together with accrued interest, if any, to the Redemption
Date; provided, however, that installments of interest on Bearer Securities
whose Stated Maturity is on or prior to the Redemption Date shall be payable
only at an office or agency located outside the United States (except as
otherwise provided in Section 1002) and, unless otherwise specified as
contemplated by Section 301, only upon presentation and surrender of coupons for
such interest; and provided further that, 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 Company and the Trustee if there be
furnished to them such security or indemnity as they may require to save each of
them and any Paying Agent harmless. If thereafter the Holder of such Security
shall surrender to the Trustee or any Paying Agent any such missing coupon in
respect of which a deduction shall have been made from the Redemption Price,
such Holder shall be entitled to receive the amount so deducted; provided,
however, that interest represented by coupons shall be payable only at an office
or agency located outside the United States (except as otherwise provided in
Section 1002) and, unless otherwise specified as contemplated by Section 301,
only upon presentation and surrender of those coupons.
If any Security called for redemption shall not be so paid upon
surrender thereof for redemption, the principal (and premium 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 Registered
Security which is to be redeemed only in part (pursuant to the provisions of
this Article) shall be surrendered at a Place of Payment therefor (with, if the
Company or the Trustee so requires, due endorsement by, or a written instrument
of transfer in form satisfactory to the Company and the Trustee duly executed
by, the Holder thereof or his attorney duly authorized in writing) and the
Company shall execute and the Trustee shall authenticate and deliver to the
Holder of such Security without service charge a new Security or Securities of
the same series, of any authorized denomination as requested by such Holder in
aggregate principal amount equal to and in exchange for the unredeemed portion
of the principal of the Security so surrendered.
ARTICLE TWELVE
[INTENTIONALLY OMITTED]
ARTICLE THIRTEEN
REPAYMENT AT THE OPTION OF HOLDERS
SECTION 1301. Applicability of Article. Repayment of Securities
of any series before their Stated Maturity at the option of Holders thereof
shall be made in accordance with the terms of such Securities, if any, and
(except as otherwise specified by the terms of such series established pursuant
to Section 301) in accordance with this Article.
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SECTION 1302. Repayment of Securities. Securities of any series
subject to repayment in whole or in part at the option of the Holders thereof
will, unless otherwise provided in the terms of such Securities, be repaid at a
price equal to the principal amount thereof, together with interest, if any,
thereon accrued to the Repayment Date specified in or pursuant to the terms of
such Securities. The Company covenants that at least one Business Day prior to
the Repayment Date it will deposit with the Trustee or with a Paying Agent (or,
if the Company is acting as its own Paying Agent, segregate and hold in trust as
provided in Section 1003) an amount of money in the currency or currencies,
currency unit or units or composite currency or currencies in which the
Securities of such series are payable (except as otherwise specified pursuant to
Section 301 for the Securities of such series) sufficient to pay the principal
(or, if so provided by the terms of the Securities of any series, a percentage
of the principal) of, and (except if the Repayment Date shall be an Interest
Payment Date) accrued interest on, all the Securities or portions thereof, as
the case may be, to be repaid on such date.
SECTION 1303. Exercise of Option. Securities of any series
subject to repayment at the option of the Holders thereof will contain an
"Option to Elect Repayment" form on the reverse of such Securities. In order for
any Security to be repaid at the option of the Holder, the Trustee must receive
at the Place of Payment there for specified in the terms of such Security (or at
such other place or places of which the Company shall from time to time notify
the Holders of such Securities) not earlier than 60 days nor later than 30 days
prior to the Repayment Date (1) the Security so providing for such repayment
together with the "Option to Elect Repayment" form on the reverse thereof duly
completed by the Holder (or by the Holder's attorney duly authorized in writing)
or (2) a telegram, telex, facsimile transmission or 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 the series of which such Security to be
repaid is a part. Except as otherwise may be provided by the terms of any
Security providing for repayment at the option of the Holder thereof, exercise
of the repayment option by the Holder shall be irrevocable unless waived by the
Company.
SECTION 1304. When Securities Presented for Repayment Become
Due and Payable. If Securities of any series provide 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 portion thereof, as the case may be, to be repaid shall become due and
payable and shall be paid by the Company on the Repayment Date therein
specified, and on and after such Repayment Date (unless the Company shall
default in the payment of such Securities on such Repayment Date) such
Securities shall, if the same were interest-bearing, cease to bear interest and
the coupons for such interest appertaining to any Bearer Securities so to be
repaid, except to the extent provided below, shall be void. Upon surrender of
any such Security for repayment in accordance with such provisions, together
with coupons, if any, appertaining thereto maturing after
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the Repayment Date, the principal amount of such Security so to be repaid paid
by the Company, together with accrued interest, if any, Repayment Date;
provided, however, that coupons whose Stated Maturity is on or prior to the
Repayment Date shall be payable 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 with interest thereon, unless
the Company shall default in the payment thereof) to the Holders of such
Securities, or one or more Predecessor Securities, registered as such at the
close of business relevant Record Dates according to their terms and the
provisions of Section 307.
If any Bearer Security surrendered for repayment shall not be
accompanied by all appurtenant coupons maturing after the Repayment Date, such
Security may be paid after deducting from the amount payable therefor as
provided in Section 1302 an amount equal to the face amount of all such missing
coupons, or the surrender of such missing coupon or coupons may be waived by the
Company and the Trustee if there be furnished to it such security or indemnity
as they may require to save it 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 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 Company shall
execute and the Trustee shall authenticate and deliver to the Holder of such
Security, without service charge and at the expense of the Company, a new
Registered Security or Securities of the same series, of any authorized
denomination specified by the Holder, in an aggregate principal amount equal to
and in exchange for the portion of the principal of such Security so surrendered
which is not to be repaid.
ARTICLE FOURTEEN
DEFEASANCE AND COVENANT DEFEASANCE
SECTION 1401. Applicability of Article; Company's Option to
Effect Defeasance or Covenant Defeasance. If, pursuant to Section 301, provision
is made for either or both of (a) defeasance of the Securities of or within a
series under Section 1402 or (b) covenant defeasance of the Securities of or
within a series under Section 1403, then the provisions of such Section or
Sections, as the case may be, together with the other provisions of this Article
(with such modifications thereto as may be specified pursuant to Section 301
with respect to any Securities), shall be applicable to such Securities and any
coupons appertaining thereto, and the Company may at its option by Board
Resolution, at any time, with respect to such Securities and any coupons
appertaining thereto, elect to have Section 1402 (if applicable) or Section 1403
(if applicable) be applied to such Outstanding Securities and any coupons
appertaining thereto upon compliance with the conditions set forth below in this
Article.
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SECTION 1402. Defeasance and Discharge. Upon the Company's
exercise of the above option applicable to this Section with respect to any
Securities of or within a series, the Company shall be deemed to have been
discharged from its obligations with respect to such Outstanding Securities and
any coupons appertaining thereto on the date the conditions set forth in Section
1404 are satisfied (hereinafter, "defeasance"). For this purpose, such
defeasance means that the Company shall be deemed to have paid and discharged
the entire indebtedness represented by such Outstanding Securities and any
coupons appertaining thereto, which shall thereafter be deemed to be
"Outstanding" only for the purposes of Section 1405 and the other Sections of
this Indenture referred to in clauses (A) and (B) below, and to have satisfied
all of its other obligations under such Securities and any coupons appertaining
thereto and this Indenture insofar as such Securities and any coupons
appertaining thereto are concerned (and the Trustee, at the expense of the
Company, shall execute proper instruments acknowledging the same), except for
the following which shall survive until otherwise terminated or discharged
hereunder: (A) the rights of Holders of such Outstanding Securities and any
coupons appertaining thereto to receive, solely from the trust fund described in
Section 1404 and as more fully set forth in such Section, payments in respect of
the 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 Company's obligations with respect to such Securities under
Sections 305, 306, 1002 and 1003 and with respect to the payment of Additional
Amounts, if any, on such Securities as contemplated by Section 1012, (C) the
rights, powers, trusts, duties and immunities of the Trustee hereunder and (D)
this Article. Subject to compliance with this Article Fourteen, the Company may
exercise its option under this Section notwithstanding the prior exercise of its
option under Section 1403 with respect to such Securities and any coupons
appertaining thereto.
SECTION 1403. Covenant Defeasance. Upon the Company's exercise
of the above option applicable to this Section with respect to any Securities of
or within a series, the Company shall be released from its obligations under
Sections 1004 to 1010, inclusive and, if specified pursuant to Section 301, its
obligations under any other covenant, with respect to such Outstanding
Securities and 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 1010, inclusive, or such other covenant, but
shall continue to be deemed "Outstanding" for all other purposes hereunder. For
this purpose, such covenant defeasance means that, with respect to such
Outstanding Securities and any coupons appertaining thereto, the Company may
omit to comply with and shall have no liability in respect of any term,
condition or limitation set forth in any such Section or such other covenant,
whether directly or indirectly, by reason of any reference elsewhere herein to
any such Section or such other covenant or by reason of reference in any 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(3) or 501(7) otherwise, as the case may be, but,
except as specified above, 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 Company shall irrevocably have deposited or caused to
be deposited with the Trustee (or another trustee satisfying the requirements of
Section 607 who shall agree to comply with the provisions of this Article
Fourteen applicable to it) as trust funds in trust for the purpose of making the
following payments, specifically pledged as security for, a 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
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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 the 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,
any case, in an amount, sufficient, without consideration of any reinvestment of
such principal and interest, in the opinion of a nationally recognized firm of
independent public accountants expressed in a written certification thereof
delivered the Trustee, to pay and discharge, and which shall be applied by the
Trustee (or other qualifying trustee) to pay and discharge, 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 or analogous
payments applicable to such Outstanding Securities and any coupons appertaining
thereto on the day on which such payments are due and payable in accordance with
the terms of this Indenture and of such Securities and any coupons appertaining
thereto.
(b) Such defeasance or covenant defeasance shall not result in
a breach or violation of, or constitute a default under, this Indenture or any
other material agreement or instrument to which the Company is a party or by
which it is bound.
(c) No Event of Default or event which with notice or lapse of
time or both would become an Event of Default with respect to such Securities
and any coupons appertaining thereto shall have occurred and be continuing on
the date of such deposit or, insofar as Sections 501(6) and 501(7) are
concerned, at any time during the period ending on the 91st day after the date
of such deposit (it being understood that this condition shall not be deemed
satisfied until the expiration of such period).
(d) In the case of an election under Section 1402, the Company
shall have delivered to the Trustee an Opinion of Counsel stating that (i) the
Company has received from, or there has been published by, the Internal Revenue
Service a ruling, or (ii) since the date of execution of this Indenture, there
has been a change in the applicable Federal income tax law, in either case to
the effect that, and based thereon such opinion shall confirm that, the Holders
of such Outstanding Securities and any coupons appertaining thereto will not
recognize income, gain or loss for Federal income tax purposes as a result of
such defeasance and will be subject to Federal income tax on the same amounts,
in the same manner and at the same times as would have been the case if such
defeasance had not occurred.
(e) In the case of an election under Section 1403, the Company
shall have delivered to the Trustee an Opinion of Counsel to the effect that the
Holders of such Outstanding Securities and any coupons appertaining thereto will
not recognize income, gain or loss for Federal income tax purposes as a result
of such covenant defeasance and will be subject to Federal income tax on the
same amounts, in the same manner and at the same times as would have been the
case if such covenant defeasance had not occurred.
(f) The Company shall have delivered to the Trustee an
Officers' Certificate and an Opinion of Counsel, each stating that all
conditions precedent to the defeasance under Section 1402 or the covenant
defeasance under Section 1403 (as the case may be) have been complied with and
an Opinion of Counsel to the effect that either (i) as a result of a deposit
pursuant to subsection (a) above and the related exercise of the Company's
option under Section 1402 or Section 1403 (as the case may be), registration is
not required under the Investment Company Act of 1940, as amended, by the
Company with respect to the trust funds representing such deposit or by the
Trustee for such trust funds or (ii) all necessary registrations under said Act
have been effected.
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(g) Notwithstanding any other provisions of this Section, such
defeasance or covenant defeasance shall be effected in compliance with any
additional or substitute terms, conditions or limitations which may be imposed
on the Company in connection therewith pursuant to Section 301.
SECTION 1405. Deposited Money and Government Obligations to Be
Held in Trust; Other Miscellaneous Provisions. Subject to the provisions of the
last paragraph of Section 1003, all money and Government Obligations (or other
property as may be provided pursuant to Section 301) (including the proceeds
thereof) deposited with the Trustee (or other qualifying trustee, collectively
for purposes of this Section 1405, the "Trustee") pursuant to Section 1404 in
respect of any Outstanding Securities of any series and any coupons appertaining
thereto shall be held in trust and applied by the Trustee, in accordance with
the provisions of such Securities and any coupons appertaining thereto and this
Indenture, to the payment, either directly or through any Paying Agent 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 Company shall pay and indemnify the Trustee against any
tax, fee or other charge imposed on or assessed against the Government
Obligations deposited pursuant to Section 1404 or the principal and interest
received in respect thereof other than any such tax, fee or other charge which
by law is for the account of the Holders of such Outstanding Securities and any
coupons appertaining thereto.
Anything in this Article to the contrary notwithstanding,
subject to Section 606, the Trustee shall deliver or pay to the Company from
time to time upon the Company Request any money or Government Obligations (or
other property and any proceeds therefrom) held by it as provided in Section
1404 which, in the opinion of a nationally recognized firm of independent public
accountants 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.
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ARTICLE FIFTEEN
MEETINGS OF HOLDERS OF SECURITIES
SECTION 1501. Purposes for Which Meetings May Be Called. A
meeting of Holders of Securities of any series may be called at any time and
from time to time pursuant to this Article to make, give or take any request,
demand, authorization, direction, notice, consent, waiver or other action
provided by this Indenture to be made, given or taken by Holders of Securities
of such series.
SECTION 1502. Call, Notice and Place of Meetings. (a) The
Trustee may at any time call a meeting of Holders of Securities of any series
for any purpose specified in Section 1501, to be held at such time and at such
place in the Borough of Manhattan, The City of New York, or in London as the
Trustee shall determine. Notice of every meeting of Holders of Securities of any
series, setting forth the time and the place of such meeting and in general
terms the action proposed to be taken at such meeting, shall be given, in the
manner provided in Section 106, not less than 21 nor more than 180 days prior to
the date fixed for the meeting.
(b) In case at any time the Company pursuant to a Board
Resolution, or the Holders of at least 10% in principal amount of the
Outstanding Securities of any series shall have requested the Trustee to call a
meeting of the Holders of Securities of such series for any purpose specified in
Section 1501, by written request setting forth in reasonable detail the action
proposed to be taken at the meeting, and the Trustee shall not have made the
first publication of the notice of such meeting within 21 days after receipt of
such request or shall not thereafter proceed to cause the meeting to be held as
provided herein, then the Company or the Holders of Securities of such series in
the amount above specified, as the case may be, may determine the time and the
place in 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 Company and its counsel.
SECTION 1504. Quorum; Action. The Persons entitled to vote a
majority in principal amount of the Outstanding Securities of a series shall
constitute a quorum for a meeting of Holders of Securities of such series;
provided, however, that if any action is to be taken at such meeting with
respect to a consent or waiver which this Indenture expressly provides may be
given by the Holders of not less than a specified percentage in principal amount
of the Outstanding Securities of a series, the Persons entitled to vote such
specified percentage in principal amount of the Outstanding 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
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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 specific percentage, which is
less than a majority, in principal amount 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 act 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 proved in the manner specified in Section 104
and the appointment of any proxy shall be proved in the manner specified in
Section 104 or by having the signature of the Person executing the proxy
witnessed or guaranteed by any trust company, bank or banker authorized by
Section 104 to certify to the holding of Bearer Securities. Such regulations may
provide that written instruments appointing proxies, regular on their face, may
be presumed valid and genuine without the proof specified in Section 104 or
other proof.
(b) The Trustee shall, by an instrument in writing appoint a
temporary chairman of the meeting, unless the meeting shall have been called by
the Company or by Holders of Securities provided in Section 1502(b), in which
case the Company or the Holders of Securities of the series calling the meeting,
as the case may be, shall in like manner appoint a temporary chairman. A
permanent chairman and a permanent secretary of the meeting shall be elected by
vote of the Persons entitled to vote a majority in principal amount of the
Outstanding Securities of such series represented at the meeting.
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(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 meeting and one such copy shall be delivered to the
Company and another to the Trustee to be preserved by the Trustee, the latter to
have attached thereto the ballots voted at the meeting. Any record so signed and
verified shall be conclusive evidence of the matters therein stated.
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. 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 SIXTEEN
SUBORDINATION
SECTION 1601. Agreement to Subordinate. The Company agrees,
and each Holder by accepting a Security agrees, that the indebtedness evidenced
by the Securities is subordinated in right of payment, to the extent and in the
manner provided in this Article, to the prior payment in full of all Senior Debt
and that the subordination is for the benefit of the holders of Senior Debt.
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<PAGE>
SECTION 1602. Liquidation; Dissolution; Bankruptcy. Upon any
distribution to creditors of the Company in a liquidation or dissolution of the
Company or in a bankruptcy, reorganization, insolvency, receivership or similar
proceeding relating to the Company or its property:
(1) Holders of Senior Debt shall be entitled to
receive payment in full in cash of the principal of (and
premium or Make-Whole Amount, if any) and interest (including
interest accruing after the commencement of any such
proceeding) to the date of payment on the Senior Debt before
Holders shall be entitled to receive any payment of principal
of or interest on Securities;
(2) Until the Senior Debt is paid in full in cash, any
distribution to which Holders would be entitled but for this
Article shall be made to holders of Senior Debt as their
interests may appear, except that Holders may receive
securities that are subordinated to Senior Debt to at least the
same extent as the Securities; and
(3) the Trustee is entitled to rely upon an order or
decree of a court of competent jurisdiction or a certificate of
a bankruptcy trustee or other similar official for the purpose
of ascertaining the persons entitled to participate in such
distribution, the holders of Senior Debt and other Company
debt, the amount thereof or payable thereon and all other
pertinent facts relating to the Trustee's obligations under
this Article Sixteen.
SECTION 1603. Default on Senior Debt. The Company may not pay
principal of or interest on the Securities and may not acquire any Securities
for cash or property other than capital stock of the Company if:
(1) a default on Senior Debt occurs and is continuing
that permits Holders of such Senior Debt to accelerate its
maturity, and
(2) the default is the subject of judicial proceedings
or the Company receives a notice of the default from a person
who may give it pursuant to Section 1611. If the Company
receives any such notice, a similar notice received within nine
months thereafter relating to the same default on the same
issue of Senior Debt shall not be effective for purposes of
this Section.
The Company may resume payments on the Securities and may
acquire them when:
(a) the default is cured or waived, or
(b) 120 days pass after the notice is given if the default is
not the subject of judicial proceedings.
if this Article otherwise permits the payment or acquisition at that time.
SECTION 1604. Acceleration of Securities. If payment of the
Securities is accelerated because of an Event of Default, the Company shall
promptly notify Holders of Senior Debt of the acceleration. The Company may pay
the Securities when 120 days pass after the acceleration occurs if this Article
permits the payment at that time.
SECTION 1605. When Distribution Must Be Paid Over. If a
distribution is made to Holders that because of this Article should not have
been made to them, the Holders who receive the distribution shall hold it in
trust for Holders of Senior Debt and pay it over to them as their interests may
appear.
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<PAGE>
SECTION 1606. Notice by Company. The Company shall promptly
notify the Trustee and any Paying Agent of any facts known to them that would
cause a payment of principal of or interest on Securities to violate this
Article.
SECTION 1607. Subrogation. After all Senior Debt is paid in
full and until the Securities are paid in full, Holders shall be subrogated to
the rights of Holders of Senior Debt to receive distributions applicable to
Senior Debt to the extent that distributions otherwise payable to the Holders
have been applied to the payment of Senior Debt. A distribution made under this
Article to Holders of Senior Debt which otherwise would have been made to
Holders is not, as between the Company and Holders, a payment by the Company on
Senior Debt.
SECTION 1608. Relative Rights. This Article defines the
relative rights of Holders and Holders of Senior Debt. Nothing in this Indenture
shall:
(1) impair, as between the Company and Holders, the
obligation of the Company, which iis absolute and
unconditional, to pay principal of and interest on the
Securities in accordance with their terms;
(2) affect the relative rights of Holders and
creditors of the Company other than Holders of Senior Debt; or
(3) prevent the Trustee or any Holder from exercising
its available remedies upon an Event of Default, subject to the
rights of Holders of Senior Debt to receive distributions
otherwise payable to Holders.
If the Company fails because of this Article to pay principal
of or interest on a Security on the due date, the failure is still a default.
SECTION 1609. Subordination May Not Be Impaired By Company. No
right of any Holder of Senior Debt to enforce the subordination of the
indebtedness evidenced by the Securities shall be impaired by any act or failure
to act by the Company or by its failure to comply with this Indenture.
SECTION 1610. Distribution or Notice to Representative.
Whenever a distribution is to be made or a notice given to Holders of Senior
Debt, the distribution may be made and the notice given to their Representative.
SECTION 1611. Rights of Trustee and Paying Agent. The Trustee
or any Paying Agent may continue to make payments on the Securities until it
receives written notice of facts that would cause a payment of principal of or
interest on the Securities to violate the Article. Only the Company, a
Representative or a Holder of an issue of Senior Debt that has no Representative
may give the written notice.
The Trustee has no fiduciary duty to the Holders of Senior Debt
other than as created under this Indenture. The Trustee in its individual or any
other capacity may hold Senior Debt with the same rights it would have if it
were not Trustee.
The Company's obligation to pay, and the Company's payment of,
the Trustee's fees pursuant to Section 606 are excluded from the operation of
this Article Sixteen.
************
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<PAGE>
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.
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<PAGE>
IN WITNESS WHEREOF, the parties hereto have caused this
Indenture to be duly executed, and their respective corporate seals to be
hereunto affixed and attested, all as of the day and year first above written.
CARRAMERICA REALTY CORPORATION
By:
------------------------------------
Title:
[BANK], as Trustee
By:
------------------------------------
Title: Vice President
ATTEST
By:
--------------------------------
Title: Assistant Vice President
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<PAGE>
STATE OF NEW YORK )
) ss:
COUNTY OF NEW YORK )
On the __th day of __________, 199__, before me personally came
to me known, _____________ who, being by me duly sworn, did depose and say that
he/she resides in _________________________________, that he/she is the
___________________ of CarrAmerica Realty Corporation, one of the parties
described in and which executed the foregoing instrument; and that he/she signed
his/her name thereto by authority of said corporation.
[Notarial Seal]
-----------------------------
Notary Public
COMMISSION EXPIRES
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<PAGE>
STATE OF NEW YORK )
) ss:
COUNTY OF NEW YORK )
On the _________ day of _________, 199__, before me personally
came to me known, _____________________, who, being by me duly sworn, did depose
and say that she/he resides at ___________________________, that she/he is a
__________________ of [Bank], one of the parties described in and which executed
the foregoing instrument; and that he/she signed his/her name thereto by
authority of said corporation.
[Notarial Seal]
-----------------------------
Notary Public
COMMISSION EXPIRES:
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<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 Companys, domestic corporations or any estate or trust the income of
which is subject to United States federal income taxation regardless of its
source ("United States person(s)"), (ii) are owned by United States person(s)
that are (a) foreign branches of United States financial institutions (financial
institutions, as defined in United States Treasury Regulations Section
2.165-12(c)(1)(v) are herein referred to as "financial institutions") purchasing
for their own account or for resale, or (b) United States person(s) who acquired
the Securities through foreign branches of United States financial institutions
and who hold the Securities through such United States financial institutions on
the date hereof (and in either case (a) or (b), each such United States
financial institution hereby agrees, on its own behalf or through its agent,
that you may advise Colonial Prospective Trust or its agent that such financial
institution will comply with the requirements of Section 165(j)(3)(A), (B) or
(C) of the United States Internal Revenue Code of 1986, as amended, and the
regulations thereunder), or (iii) are owned by United States or foreign
financial institution(s) for purposes of resale during the restricted period (as
defined in United States Treasury Regulations Section 1.163-5(c)(2)(i)(D)(7)),
and, in addition, if the owner is a United States or foreign financial
institution described in clause (iii) above (whether or not also described in
clause (i) or (ii)), this is to further certify that such financial institution
has not acquired the Securities for purposes of resale directly or indirectly to
a United States person or to a person within the United States or its
possessions.
As used herein, "United States" means the United States of
America (including the States and the District of Columbia); and "possessions"
include Puerto Rico, the U.S. Virgin Islands, Guam, American Samoa, Wake Island
and the Northern Mariana Islands.
We undertake to advise you promptly by tested telex on or prior
to the date on which you intend to submit your certification relating to the
above-captioned Securities held by you for our account in accordance with your
Operating Procedures if any applicable statement herein is not correct on such
date, and in the absent of any such notification it may be assumed that this
certification applies as of such date.
This certificate excepts and does not relate to [U.S. $]
____________________ of such interest in the above-captioned Securities in
respect of which we are not able to certify and as to which we 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.
<PAGE>
Dated: _________________, 19__
[To be dated no earlier than the 15th day
prior to (i) the Exchange Date or (ii) the
relevant Interest Payment Date occurring
prior to the Exchange Date, as applicable]
[Name of Person Making Certification]
-------------------------------------
(Authorized Signatory)
Name:
Title:
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<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 Companys, domestic corporations or any
estate or trust the income of which is subject to United States Federal income
taxation regardless of its source ("United States person(s)"), (ii) is owned by
United States person(s) that are (a) foreign branches of United States financial
institutions (financial institutions, as defined in U.S. Treasury Regulations
Section 1.165-12(c)(1)(v) are herein referred to as "financial institutions")
purchasing for their own account or for resale, or (b) United 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 Colonial Prospective Trust or its agent that such financial
institution will comply with the requirements of Section 165(j) (3) (A), (B) or
(C) of the Internal Revenue Code of 1986, as amended, and the regulations
thereunder), or (iii) is owned by United States or foreign financial
institution(s) for purposes of resale during the restricted period (as defined
in United States Treasury Regulations Section 1.163-5(c)(2)(i)(D)(7)), and, to
the further effect, that financial institutions described in clause (iii) above
(whether or not also described in clause (i) or (ii)) have certified that they
have not acquired the Securities for purposes of resale directly or indirectly
to a United States person or to a person within the United States or its
possessions.
As used herein, "United States" means the United States of
America (including the States and the District of Columbia); and its
"possessions" include Puerto Rico, the U.S. Virgin Islands, Guam, American
Samoa, Wake Island and the Northern Mariana Islands.
We further certify that (i) we are not making available
herewith for exchange (or, if relevant, collection of any interest) any portion
of the temporary global Security representing the above captioned Securities
excepted in the above-referenced certificates of Member Organizations and (ii)
as of the date hereof we have not received any notification from any of our
Member Organizations to the effect that the statements made by such Member
Organizations with 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__
<PAGE>
[To be dated no earlier than the Exchange Date or the relevant Interest Payment
Date occurring prior to the Exchange Date, as applicable]
[Morgan Guaranty Trust Company of
New York, Brussels Office,] as
Operator of the Euroclear System [Cedel S.A.]
By:
------------------------------------------
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<PAGE>
EXHIBIT 23.1
INDEPENDENT AUDITORS' CONSENT
The Board of Directors
CarrAmerica Realty Corporation:
We consent to the use of our reports incorporated herein by reference and to the
reference to our firm under the heading "Experts" in the prospectus.
/s/ KPMG PEAT MARWICK LLP
Washington, D.C.
June 26, 1996
<PAGE>
