<PAGE> 1
AS FILED WITH THE SECURITIES AND EXCHANGE COMMISSION ON AUGUST 8, 1997
REGISTRATION NO. 333-29013
================================================================================
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
------------------------
AMENDMENT NO. 2
TO
FORM S-3
REGISTRATION STATEMENT
AND
POST-EFFECTIVE AMENDMENT TO
REGISTRATION STATEMENT NO. 33-62395
UNDER
THE SECURITIES ACT OF 1933
------------------------
VORNADO REALTY TRUST
and
VORNADO REALTY L.P.
(EXACT NAME OF REGISTRANTS AS SPECIFIED IN THEIR CHARTERS)
<TABLE>
<S> <C>
MARYLAND 22-1657560
DELAWARE 13-3925979
(STATE OR OTHER JURISDICTION OF INCORPORATION OR
ORGANIZATION) (IRS EMPLOYER IDENTIFICATION NUMBER)
PARK 80 WEST, PLAZA II, JOSEPH MACNOW
SADDLE BROOK, NEW JERSEY 07663 PARK 80 WEST, PLAZA II,
(201) 587-1000 SADDLE BROOK, NEW JERSEY 07663
(ADDRESS, INCLUDING ZIP CODE, AND TELEPHONE (201) 587-1000
NUMBER, INCLUDING AREA CODE, OF REGISTRANTS' (NAME, ADDRESS, INCLUDING ZIP CODE, AND TELEPHONE
PRINCIPAL EXECUTIVE OFFICES) NUMBER, INCLUDING AREA CODE, OF AGENT FOR SERVICE)
</TABLE>
------------------------
COPIES TO:
PATRICIA A. CERUZZI, ESQ.
JANET T. GELDZAHLER, ESQ.
SULLIVAN & CROMWELL
125 BROAD STREET
NEW YORK, NEW YORK 10004
APPROXIMATE DATE OF COMMENCEMENT OF PROPOSED SALE TO THE PUBLIC: From time
to time after the effective date of this Registration Statement 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, 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, 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. [ ]
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<PAGE> 2
------------------------
CALCULATION OF REGISTRATION FEE
<TABLE>
<CAPTION>
======================================================================================================================
PROPOSED MAXIMUM PROPOSED MAXIMUM
TITLE OF EACH CLASS OF AMOUNT TO BE AGGREGATE PRICE AGGREGATE OFFERING AMOUNT OF
SECURITIES TO BE REGISTERED REGISTERED(1) PER UNIT(2) PRICE(1)(2) REGISTRATION FEE
<S> <C> <C> <C> <C>
- ----------------------------------------------------------------------------------------------------------------------
FOR VORNADO REALTY TRUST:
- ----------------------------------------------------------------------------------------------------------------------
Common Shares (par value $.04
per share)(3)................. N/A
- ----------------------------------------------------------------------------------------------------------------------
Preferred Shares (no par value
per share)(4)................. N/A
- ----------------------------------------------------------------------------------------------------------------------
Depositary Shares representing
Preferred Shares(5)........... N/A
- ----------------------------------------------------------------------------------------------------------------------
Vornado Realty Trust Total...... $614,000,000
- ----------------------------------------------------------------------------------------------------------------------
FOR VORNADO REALTY L.P.:
- ----------------------------------------------------------------------------------------------------------------------
Debt Securities(6).............. $1,000,000,000 N/A
- ----------------------------------------------------------------------------------------------------------------------
TOTAL.................... $1,614,000,000(7) (8) $1,614,000,000(7)(9) $489,090.91(10)
======================================================================================================================
</TABLE>
(1) In U.S. Dollars or the equivalent thereof denominated in one or more
foreign currencies or units or two or more foreign currencies or composite
currencies (such as European Currency Units).
(2) Estimated for the sole purpose of computing the registration fee.
(3) There are being registered hereunder a number of Common Shares of
Beneficial Interest of Vornado Realty Trust (with an aggregate maximum
offering price of $614,000,000 (together with the securities referred to
below and in footnotes (4) and (5) to this table), in addition to the
$136,000,000 aggregate principal amount of unsold Common Shares of
Beneficial Interest, Preferred Shares of Beneficial Interest and Depositary
Shares of Vornado Realty Trust previously registered) as may be sold, from
time to time, by Vornado Realty Trust. There are also being registered
hereunder a number of Common Shares of Beneficial Interest of Vornado
Realty Trust (with an aggregate maximum offering price of $614,000,000
(together with the securities referred to above and in footnotes (4) and
(5) to this table), in addition to the $136,000,000 aggregate principal
amount of unsold Common Shares of Beneficial Interest, Preferred Shares of
Beneficial Interest and Depositary Shares of Vornado Realty Trust
previously registered) as shall be issuable upon conversion of Preferred
Shares of Beneficial Interest of Vornado Realty Trust registered hereby or
upon exchange of exchangeable Debt Securities of Vornado Realty L.P.
registered hereby.
(4) There are being registered hereunder a number of Preferred Shares of
Beneficial Interest of Vornado Realty Trust (with an aggregate maximum
offering price of $614,000,000 (together with the securities referred to in
footnotes (3) and (5) to this table), in addition to the $136,000,000
aggregate principal amount of unsold Common Shares of Beneficial Interest,
Preferred Shares of Beneficial Interest and Depositary Shares of Vornado
Realty Trust previously registered) as may be sold, from time to time, by
Vornado Realty Trust.
(5) There are being registered hereunder a number of Depositary Shares (with an
aggregate maximum offering price of $614,000,000 (together with the
securities referred to in footnotes (3) and (4) to this table), in addition
to the $136,000,000 aggregate principal amount of unsold Common Shares of
Beneficial Interest, Preferred Shares of Beneficial Interest and Depositary
Shares of Vornado Realty Trust previously registered) to be evidenced by
Depositary Receipts issued pursuant to a Deposit Agreement. In the event
Vornado Realty Trust elects to offer to the public fractional interests in
Preferred Shares of Beneficial Interest registered hereunder, Depositary
Receipts will be distributed to those persons purchasing such fractional
interests and Preferred Shares of Beneficial Interest will be issued to the
Depositary under the Deposit Agreement. No separate consideration will be
received for the Depositary Shares.
(6) There are being registered hereunder an aggregate principal amount of
$1,000,000,000 of Debt Securities of Vornado Realty L.P.
(7) Such amount represents the principal amount of any Debt Securities issued
at their principal amount, the issue price rather than the principal amount
of any Debt Securities issued at an original issue discount, the
liquidation preference of any Preferred Shares and the amount computed
pursuant to Rule 457(c) for any Common Shares.
(8) Omitted pursuant to General Instruction II.D. of Form S-3 under the
Securities Act of 1933, as amended (the "Securities Act").
(9) No separate consideration will be received for Common Shares of Beneficial
Interest of Vornado Realty Trust as may from time to time be issued upon
conversion of Preferred Shares of Beneficial Interest of Vornado Realty
Trust or upon exchange of exchangeable Debt Securities of Vornado Realty
L.P.
(10) Calculated pursuant to Rule 457(o) of the rules and regulations under the
Securities Act, in respect of the $1,614,000,000 of previously unregistered
securities registered hereby. This filing fee was paid on June 12, 1997. An
additional filing fee of $46,896.55 was previously paid for $136,000,000
aggregate principal amount of unsold Common Shares of Beneficial Interest,
Preferred Shares of Beneficial Interest and Depositary Shares of Vornado
Realty Trust registered under Registration Statement No. 33-62395.
------------------------
PURSUANT TO RULE 429 UNDER THE SECURITIES ACT OF 1933, THIS REGISTRATION
STATEMENT INCLUDES A PROSPECTUS WHICH MAY RELATE TO SECURITIES REGISTERED BY THE
COMPANY ON FORM S-3 (REGISTRATION STATEMENT NO. 33-62395). THIS REGISTRATION
STATEMENT, WHICH IS A NEW REGISTRATION STATEMENT, ALSO CONSTITUTES A
POST-EFFECTIVE AMENDMENT TO REGISTRATION STATEMENT NO. 33-62395. SUCH
POST-EFFECTIVE AMENDMENT SHALL HEREAFTER BECOME EFFECTIVE CONCURRENTLY WITH THE
EFFECTIVENESS OF THIS REGISTRATION STATEMENT IN ACCORDANCE WITH SECTION 8(c) OF
THE SECURITIES ACT OF 1933.
THE REGISTRANTS HEREBY AMEND THIS REGISTRATION STATEMENT AND POST-EFFECTIVE
AMENDMENT ON SUCH DATE OR DATES AS MAY BE NECESSARY TO DELAY ITS EFFECTIVE DATE
UNTIL THE REGISTRANTS SHALL FILE A FURTHER AMENDMENT WHICH SPECIFICALLY STATES
THAT THIS REGISTRATION STATEMENT AND POST-EFFECTIVE AMENDMENT SHALL THEREAFTER
BECOME EFFECTIVE IN ACCORDANCE WITH SECTION 8(a) OF THE SECURITIES ACT OF 1933
OR UNTIL THIS REGISTRATION STATEMENT AND POST-EFFECTIVE AMENDMENT SHALL BECOME
EFFECTIVE ON SUCH DATE AS THE COMMISSION, ACTING PURSUANT TO SAID SECTION 8(a),
MAY DETERMINE.
================================================================================
<PAGE> 3
INFORMATION CONTAINED HEREIN IS SUBJECT TO COMPLETION OR AMENDMENT. A
REGISTRATION STATEMENT RELATING TO THESE SECURITIES HAS BEEN FILED WITH THE
SECURITIES AND EXCHANGE COMMISSION. THESE SECURITIES MAY NOT BE SOLD NOR
MAY OFFERS TO BUY BE ACCEPTED PRIOR TO THE TIME THE REGISTRATION STATEMENT
BECOMES EFFECTIVE. THIS PROSPECTUS SHALL NOT CONSTITUTE AN OFFER TO SELL OR
THE SOLICITATION OF AN OFFER TO BUY NOR SHALL THERE BE ANY SALE OF THESE
SECURITIES IN ANY STATE IN WHICH SUCH OFFER, SOLICITATION OR SALE WOULD BE
UNLAWFUL PRIOR TO REGISTRATION OR QUALIFICATION UNDER THE SECURITIES LAWS
OF ANY SUCH STATE.
SUBJECT TO COMPLETION
PRELIMINARY PROSPECTUS DATED AUGUST 8, 1997
PROSPECTUS
$750,000,000
VORNADO REALTY TRUST
PREFERRED SHARES, DEPOSITARY SHARES AND
COMMON SHARES
$1,000,000,000
VORNADO REALTY L.P.
DEBT SECURITIES
------------------------
Vornado Realty Trust ("Vornado") may offer from time to time, together or
separately, in one or more series (i) preferred shares of beneficial interest of
Vornado, no par value ("Preferred Shares"), (ii) depositary shares representing
entitlement to all rights and preferences of a fraction of a Preferred Share of
a specified series and represented by depositary receipts ("Depositary Shares")
and (iii) common shares of beneficial interest of Vornado, par value $0.04 per
share ("Common Shares"), having an aggregate initial offering price not to
exceed U.S. $750,000,000. Vornado Realty L.P. (the "Operating Partnership") may
offer from time to time, together or separately, in one or more series debt
securities ("Debt Securities"), which may be either (i) senior debt securities
(the "Senior Debt Securities") or (ii) subordinated debt securities (the
"Subordinated Debt Securities"), having an aggregate initial offering price not
to exceed U.S. $1,000,000,000. The Preferred Shares, Depositary Shares, Common
Shares and Debt Securities offered hereby (collectively, the "Securities") may
be offered separately or together, in separate series, in amounts, at prices and
on terms to be set forth in a supplement to this Prospectus (a "Prospectus
Supplement").
The accompanying Prospectus Supplement will set forth with regard to the
particular Securities in respect of which this Prospectus is being delivered (i)
in the case of Debt Securities, the title, aggregate principal amount,
denominations (which may be in United States dollars, or in any other currency,
currencies or currency unit, including the European Currency Unit), maturity,
rate, if any (which may be fixed or variable), or method of calculation thereof,
time of payment of any interest, any terms for redemption at the option of the
Operating Partnership or the holder, any terms for sinking fund payments, rank,
any exchange rights, any listing on a securities exchange, and the initial
public offering price and any other terms in connection with the offering and
sale of such Debt Securities, (ii) in the case of Preferred Shares, the specific
title, the aggregate amount and the stated value, any dividend (including the
method of calculating the payment of dividend), liquidation, redemption,
conversion, voting or other rights and the initial offering price and (iii) in
the case of Common Shares, the number of Common Shares, the initial offering
price and the terms of the offering thereof. The Prospectus Supplement will also
contain, as applicable, a discussion of the material United States Federal
income tax considerations relating to the Securities in respect of which this
Prospectus is being delivered to the extent not contained herein.
Vornado's Common Shares are listed on the New York Stock Exchange ("NYSE")
under the symbol "VNO". Vornado's $3.25 Series A Convertible Preferred Shares of
Beneficial Interest, liquidation preference $50.00 per share (the "Series A
Preferred Shares"), are listed on the NYSE under the symbol "VNO Pr A". The
Prospectus Supplement will also contain information, where applicable, as to any
listing on a securities exchange of the Securities covered by such Prospectus
Supplement.
------------------------
SEE "RISK FACTORS" BEGINNING ON PAGE 4 FOR CERTAIN FACTORS RELEVANT 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.
------------------------
Vornado and the Operating Partnership may sell Securities to or through
underwriters, and also may sell Securities directly to other purchasers or
through agents. The accompanying Prospectus Supplement will set forth the names
of any underwriters or agents involved in the sale of the Securities in respect
of which this Prospectus is being delivered, the amounts of Securities, if any,
to be purchased by underwriters and the compensation, if any, of such
underwriters or agents. See "Plan of Distribution" herein.
The date of this Prospectus is , 1997.
<PAGE> 4
NO PERSON HAS BEEN AUTHORIZED TO GIVE ANY INFORMATION OR TO MAKE ANY
REPRESENTATIONS OTHER THAN THOSE CONTAINED OR INCORPORATED BY REFERENCE IN THIS
PROSPECTUS IN CONNECTION WITH THE OFFER CONTAINED IN THIS PROSPECTUS AND, IF
GIVEN OR MADE, SUCH INFORMATION OR REPRESENTATIONS MUST NOT BE RELIED UPON AS
HAVING BEEN AUTHORIZED BY THE COMPANY, THE OPERATING PARTNERSHIP OR ANY
UNDERWRITERS, AGENTS OR DEALERS. THIS PROSPECTUS DOES NOT CONSTITUTE AN OFFER TO
SELL OR SOLICITATION OF AN OFFER TO BUY SECURITIES IN ANY JURISDICTION TO ANY
PERSON TO WHOM IT IS UNLAWFUL TO MAKE SUCH OFFER OR SOLICITATION. NEITHER THE
DELIVERY OF THIS PROSPECTUS NOR ANY SALE MADE HEREUNDER SHALL, UNDER ANY
CIRCUMSTANCES, CREATE AN IMPLICATION THAT THERE HAS BEEN NO CHANGE IN THE
AFFAIRS OF THE COMPANY AND ITS SUBSIDIARIES OR THE OPERATING PARTNERSHIP SINCE
THE DATE HEREOF OR THE INFORMATION CONTAINED HEREIN IS CORRECT AT ANY TIME
SUBSEQUENT TO THE DATE HEREOF.
All references to "Vornado" in this prospectus shall be deemed to refer to
Vornado Realty Trust; all references to the "Operating Partnership" in this
prospectus shall be deemed to refer to Vornado Realty L.P.; and all references
to the "Company" in this prospectus shall be deemed to include Vornado and its
consolidated subsidiaries, including the Operating Partnership.
AVAILABLE INFORMATION
Vornado is and the Operating Partnership will be subject to the
informational requirements of the Securities Exchange Act of 1934, as amended
(the "Exchange Act"), and in accordance therewith Vornado files and the
Operating Partnership will file reports, proxy statements and other information
with the Securities and Exchange Commission (the "Commission"). Such reports,
proxy statements and other information filed by Vornado and the Operating
Partnership with the Commission can be inspected and copied at the Commission at
Room 1024, Judiciary Plaza, 450 Fifth Street, N.W., Washington, D.C. 20549, and
at the following regional offices of the Commission: 7 World Trade Center, 13th
Floor, New York, New York 10048 and Citicorp Center, 500 West Madison Street,
Suite 1400, Chicago, Illinois 60661-2511. Copies of such information can be
obtained from the Public Reference Section of the Commission, 450 Fifth Street,
N.W., Washington, D.C. 20549, at prescribed rates. The Commission maintains a
web site on the World Wide Web that contains reports, proxy and information
statements and other information on registrants, such as Vornado and the
Operating Partnership, that must file such material with the Commission
electronically. The Commission's address on the world wide web is
"http://www.sec.gov". Vornado's Common Shares and Series A Preferred Shares are
listed on the NYSE and similar information can be inspected and copied at the
NYSE, 20 Broad Street, 17th Floor, New York, New York 10005.
This Prospectus constitutes a part of a registration statement on Form S-3
(the "Registration Statement") filed by Vornado and the Operating Partnership
with the Commission under the Securities Act of 1933, as amended (the
"Securities Act"). As permitted by the rules and regulations of the Commission,
this Prospectus omits certain of the information contained in the Registration
Statement and reference is hereby made to the Registration Statement and related
exhibits for further information with respect to Vornado, the Operating
Partnership and the Securities offered hereby. Statements contained herein
concerning the provisions of any documents filed as an exhibit to the
Registration Statement or otherwise filed with the Commission are not
necessarily complete, and in each instance reference is made to the copy of such
document so filed. Each such statement is qualified in its entirety by such
reference.
2
<PAGE> 5
INCORPORATION OF CERTAIN DOCUMENTS BY REFERENCE
The following documents filed by the Company and the Operating Partnership
with the Commission pursuant to the Exchange Act are hereby incorporated by
reference into this Prospectus:
(1) Vornado's Annual Report on Form 10-K (File No. 001-11954) for the
fiscal year ended December 31, 1996, as amended by the Form 10-K/A
Amendment No. 1 and Form 10-K/A Amendment No. 2 for the fiscal year
ended December 31, 1996 filed with the Commission on July 18, 1997 and
August 7, 1997, respectively;
(2) Vornado's Quarterly Report on Form 10-Q (File No. 001-11954) for the
period ended March 31, 1997;
(3) Vornado's Current Report on Form 8-K (File No. 001-11954), dated March
12, 1997, as amended by Form 8-K/A, dated March 12, 1997 and filed with
the Commission on April 1, 1997, and Vornado's Current Reports on Form
8-K (File No. 001-11954), dated April 3, 1997, April 15, 1997, May 7,
1997 and June 27, 1997;
(4) the description of Vornado's Series A Preferred Shares contained in
Vornado's Registration Statement on Form 8-A (File No. 001-11954),
filed with the Commission on April 3, 1997;
(5) the Operating Partnership's Registration Statement on Form 10 (File No.
000-22685), filed with the Commission on June 12, 1997, as amended by
the Form 10/A Amendment No. 1 and Form 10/A Amendment No. 2 filed with
the Commission on July 18, 1997 and August 7, 1997, respectively; and
(6) the Operating Partnership's Current Report on Form 8-K (File No.
000-22685), dated June 27, 1997.
All other documents and reports filed with the Commission by Vornado or the
Operating Partnership pursuant to Section 13(a), 13(c), 14 or 15(d) of the
Exchange Act from the date of this Prospectus and prior to the termination of
the offering of the Securities shall be deemed to be incorporated by reference
herein and shall be deemed to be a part hereof from the date of the filing of
such reports and documents (provided, however, that the information referred to
in item 402(a)(8) of Regulation S-K of the Commission shall not be deemed
specifically incorporated by reference herein).
Any statement contained in a document incorporated or deemed to be
incorporated by reference herein shall be deemed to be modified or superseded
for purposes of this Prospectus to the extent that a statement contained herein
or in any subsequently filed document which also is or is deemed to be
incorporated by reference herein modifies or supersedes such statement. Any such
statement so modified or superseded shall not be deemed, except as so modified
or superseded, to constitute a part of this Prospectus.
Vornado and the Operating Partnership will provide without charge to each
person to whom a copy of this Prospectus is delivered, on written or oral
request of such person, a copy of any or all documents which are incorporated
herein by reference (not including the exhibits to such documents, unless such
exhibits are specifically incorporated by reference in the document which this
Prospectus incorporates). Requests should be directed to the Secretary of
Vornado, Park 80 West, Plaza II, Saddle Brook, New Jersey 07663, telephone
number (201) 587-1000.
3
<PAGE> 6
RISK FACTORS
Prospective investors should carefully consider, among other factors, the
matters described below.
REAL ESTATE INVESTMENT CONSIDERATIONS
General
Real property investments are subject to varying degrees of risk. Real
estate values are affected by changes in the general economic climate, local
conditions such as an oversupply of or a reduction in demand for real estate in
the area, the attractiveness of the Company's properties to tenants, the
quality, philosophy and performance of management, competition from comparable
properties, inability to collect rent from tenants, the effects of any
bankruptcies of major tenants, changes in market rental rates, the need to
periodically repair, renovate and rent space and to pay the costs thereof
(including, without limitation, substantial tenant improvement and leasing costs
of re-leasing office space), and increases in operating costs due to inflation
and other factors (including increased real estate taxes), which increases may
not necessarily be passed through fully to tenants. Real estate values are also
affected by such factors as government regulations and changes in zoning or tax
laws, interest rate levels, the availability of financing and potential
liability under environmental and other laws. Changes in any of the foregoing
factors could result in a decline in rents obtained and/or occupancy levels at
the Company's properties. A decline in rental revenues could result in a lower
level of funds available for distribution to Vornado's shareholders.
Dependence on Tenants
The Company's results of operations will depend on its ability to continue
to lease space in its real estate properties on economically favorable terms. In
addition, as substantially all of the Company's income is derived from rentals
of real property, the Company's income and funds available for distribution to
Vornado's shareholders would be adversely affected if a significant number of
the Company's lessees were unable to meet their obligations to the Company. In
the event of default by a lessee, the Company may experience delays in enforcing
its rights as lessor and may incur substantial costs in protecting its
investment. Currently only one of the Company's tenants, Bradlees, Inc.
("Bradlees"), represents more than 3% of the Company's pro forma revenues.
Bradlees accounted for approximately 10.5% of pro forma property rentals for the
year ended December 31, 1996.
Bankruptcy of Tenants
There have been a number of recent bankruptcies in the retail industry,
including certain tenants of the Company. The bankruptcy or insolvency of a
major tenant may have a material adverse effect on the shopping centers affected
and the income produced by such properties. The Company's leases generally do
not contain restrictions designed to ensure the creditworthiness of the tenant.
As a result, the bankruptcy or insolvency of a major tenant could result in a
lower level of funds from operations available for distribution to Vornado's
shareholders.
In June 1995, Bradlees filed for protection under Chapter 11 of the U.S.
Bankruptcy Code. The Company currently leases 17 locations to Bradlees. Of these
locations, 14 are fully guaranteed by Stop & Shop Companies, Inc. ("Stop &
Shop"), a wholly-owned subsidiary of Royal Ahold NV, a leading international
food retailer, and one is guaranteed as to 70% of the rent. During 1996,
Bradlees rejected three leases and assigned one lease to Kohl's Department
Stores, Inc. These four leases are fully guaranteed by Stop & Shop. In January
1997, Bradlees received bankruptcy court approval to close one of the two stores
in which leases are not guaranteed by Stop & Shop. Montgomery Ward & Co., Inc.
(a previous lessee) remains liable on eight of the leases guaranteed by Stop &
Shop, including the rent it was obligated to pay -- approximately 70% of current
rent. The failure of Stop & Shop to perform its obligations with respect to
these leases could result in a decline in the level of the Company's rental
revenues and, as a result, in a lower level of funds from operations being
available for distribution to Vornado's shareholders.
4
<PAGE> 7
Acquisition and Development Risks
The Company may acquire or develop properties or acquire other real estate
companies when it believes that an acquisition or development is consistent with
its business strategies. In addition, the Company anticipates that, in certain
circumstances, it may use Operating Partnership units ("Units") as consideration
for acquisitions from tax-sensitive sellers and, in connection with such
acquisitions, it may agree to certain restrictions on the Company's ability to
sell, or reduce the mortgage indebtedness on, such acquired assets, including
agreeing not to sell properties for significant periods of time. These
transactions also may increase the Operating Partnership's indebtedness as a
percentage of the Company's asset value or market capitalization, which may
impair the ability of the Company to take actions that would otherwise be in the
best interests of Vornado and its shareholders. A significant increase in the
level of the Company's indebtedness could affect the Operating Partnership's
ability to make required principal and interest payments with respect to
indebtedness, including the Debt Securities. See also "-- Leverage."
Illiquidity of Assets; Restrictions on Dispositions of Mortgaged Properties
Equity real estate investments are relatively illiquid and therefore tend
to limit the ability of the Company to vary its portfolio promptly in response
to changes in economic or other conditions. In addition, certain significant
expenditures associated with each equity investment (such as mortgage payments,
real estate taxes and maintenance costs) are generally not reduced when
circumstances cause a reduction in income from the investment. Should such
events occur, the Company's income and funds available for distribution to
Vornado's shareholders would be adversely affected. A portion of the Company's
properties are mortgaged to secure payment of indebtedness, and if the Company
were unable to meet its mortgage payments, a loss could be sustained as a result
of foreclosure on the properties by the mortgagee. In addition, if it becomes
necessary or desirable for the Company to dispose of one or more of the
mortgaged properties, the Company might not be able to obtain release of the
lien on such mortgaged property. The foreclosure of a mortgage on a property or
inability to sell a property could affect the level of funds available for
distribution to Vornado shareholders. See "Management's Discussion and Analysis
of Financial Condition and Results of Operations -- Liquidity and Capital
Resources" and the Notes to the Consolidated Financial Statements contained in
the Company's Annual Report on Form 10-K for the Fiscal Year Ended December 31,
1996, incorporated in this Prospectus by reference for information regarding the
terms of the mortgages encumbering the Company's properties.
SUBSTANTIAL INFLUENCE OF CONTROLLING SHAREHOLDER; POSSIBLE CONFLICTS OF
INTEREST; RELATED PARTY TRANSACTIONS
Interstate Properties, a New Jersey general partnership ("Interstate"),
owns 21.9% of the outstanding Common Shares of the Company (assuming conversion
of all Operating Partnership Units) and Units of the Operating Partnership.
Steven Roth, Chairman of the Board and Chief Executive Officer of the Company,
is the managing general partner of Interstate. Mr. Roth, David Mandelbaum and
Russell B. Wight, Jr. are the three partners of Interstate. Messrs. Roth,
Mandelbaum and Wight and Interstate own, in the aggregate, 26.2% of the
outstanding Common Shares of the Company and Units of the Operating Partnership.
As of December 31, 1996, the Company owned 29.3% of the outstanding common
stock of Alexander's Inc. ("Alexander's"), a New York corporation. Alexander's
is a real estate investment trust engaged in leasing, managing, developing and
redeveloping properties, focusing primarily on the locations where its
department stores (which ceased operations in 1992) formerly operated.
Alexander's has nine properties which are located in the New York City region.
Interstate owns an additional 27.1% of the outstanding common stock of
Alexander's as of such date. Mr. Roth, the Company's Chief Executive Officer,
and Mr. Fascitelli, the Company's President, are directors of Alexander's.
Messrs. Mandelbaum, West and Wight, members of the Company's Board of Trustees,
are also members of the Board of Directors of Alexander's.
Because of the foregoing, Mr. Roth and Interstate may have substantial
influence on the Company and Alexander's on the outcome of any matters submitted
to the Company's or Alexander's stockholders for approval. In addition, certain
decisions concerning the operations or financial structure of the Company may
present conflicts of interest among Messrs. Roth, Mandelbaum and Wight and
Interstate and the Company's other shareholders. In addition, Mr. Roth and
Interstate engage in a wide variety of activities in the real estate
5
<PAGE> 8
business which may result in conflicts of interest with respect to certain
matters affecting the Company or Alexander's, such as determination of which of
such entities or persons, if any, may take advantage of potential business
opportunities, decisions concerning the business focus of such entities
(including decisions concerning the types of properties and geographic locations
in which such entities make investments) demands on the time of Mr. Roth and
certain of the executive officers of the Company and changes of existing
arrangements between Mr. Roth, the Company and Interstate, potential competition
between business activities conducted, or sought to be conducted, by the
Company, Interstate and Alexander's (including competition for properties and
tenants), possible corporate transactions (such as acquisitions) and other
strategic decisions affecting the future of such parties.
Bernard Mendik, the Company's co-chairman, owns direct and indirect
managing general partner interests in two properties (Two Park Avenue and 330
Madison Avenue) in which the Company owns a partial interest, direct and
indirect interests in numerous additional office properties and other real
estate assets, and interests in certain property services businesses, including
in businesses which provide cleaning and related services, security services and
facilities management services, which interests may give rise to certain
conflicts of interest concerning the fulfillment of Mr. Mendik's responsibility
as a trustee of the Company.
The Mendik Group (the "Mendik Group", as used herein, Bernard H. Mendik,
David R. Greenbaum and certain entities controlled by them) owns an entity which
provides cleaning and related services and security services to office
properties. The Company has entered into contracts with the Mendik Group to
provide such services to the certain office properties in which the Company owns
a 100% interest. Although the terms and conditions of the contracts pursuant to
which these services will be provided were not negotiated at arms' length, the
Company believes based upon comparable fees charged to other real estate
companies, that the terms and conditions of such contracts are fair to the
Company, although there can be no assurance to this effect.
Alexander's Management and Development Agreement
Pursuant to a Management and Development Agreement (the "Management
Agreement") between the Company and Alexander's, the Company has agreed to
manage Alexander's business affairs and manage and develop Alexander's
properties for an annual fee. The Management Agreement was assigned by the
Company to Vornado Management Corp. ("VMC"), a New Jersey corporation. The
Company owns 100% of the outstanding shares of preferred stock of VMC (which
entitles the Company to 95% of the economic benefits of VMC through
distributions), and Messrs. Roth and West own 100% of the outstanding shares of
common stock of VMC. The Company also acts as a leasing agent for Alexander's
properties on a fee basis under a leasing agreement. In addition, the Company
lent Alexander's $45 million, the subordinated tranche of a $75 million secured
financing, the balance of which was funded by a bank. None of Mr. Roth,
Interstate or Vornado is obligated to present to Alexander's any particular
investment opportunity which comes to his or its attention, even if such
opportunity is of a character which might be suitable for investment by
Alexander's.
Leasing Services Provided to Other Properties
The Mendik Management Company Inc. (the "Management Corporation") (which is
controlled by Messrs. Mendik, Greenbaum and Fascitelli and not by the Company)
provides management and leasing services to properties in which the Company owns
less than a 100% interest as well as to other office properties (including
several properties in which the Mendik Group has an interest). Certain conflicts
of interest may result from the Management Corporation providing leasing
services both to properties in which the Company has an interest and other
properties in which the Mendik Group has an interest.
CORPORATE STRUCTURE
Vornado is a real estate investment trust formed under Title 8 of the
Corporations and Associations Article of the Annotated Code of Maryland ("Title
8"). Substantially all of Vornado's assets consist of its partnership interests
in the Operating Partnership, of which Vornado is the general partner.
Substantially all of the Operating Partnership's properties and assets are held
through subsidiaries. Any right of Vornado's
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shareholders to participate in any distribution of the assets of any of the
Company's indirect subsidiaries upon the liquidation, reorganization or
insolvency of such subsidiary (and any consequent right of the Company's
securityholders to participate in those assets) will be subject to the claims of
the creditors (including trade creditors) and preferred stockholders, if any, of
the Operating Partnership and such subsidiary, except to the extent the Company
has a claim against such subsidiary as a creditor of such subsidiary. In
addition, in the event that claims of the Company as a creditor of a subsidiary
are recognized, such claims would be subordinate to any security interest in the
assets of such subsidiary and any indebtedness of such subsidiary senior to that
held by the Company. See also "-- Potential Anti-takeover Effects of Charter
Documents and Applicable Law" and "-- Leverage".
LEVERAGE
As of July 31, 1997, the Company had aggregate indebtedness outstanding of
approximately $713 million, of which $463 million is secured by Company
properties. The Operating Partnership's ability to make required principal and
interest payments with respect to indebtedness, including any Debt Securities,
depends on the earnings of its subsidiaries and on its ability to receive funds
from such subsidiaries through dividends or other payments since the Debt
Securities are obligations of the Operating Partnership only and its
subsidiaries are not obligated or required to pay any amounts due pursuant to
the Debt Securities or to make funds available therefor in the form of dividends
or advances to the Operating Partnership. Of the approximately $713 million of
outstanding indebtedness, Vornado Finance L.P., a Delaware limited partnership
and subsidiary of the Operating Partnership ("Vornado Finance"), has outstanding
an aggregate of $227,000,000 of 6.36% Collateralized Notes Due December 1, 2000
(the "Collateralized Notes"), secured by a mortgage note, mortgage and various
other instruments, documents and agreements executed in connection therewith by
other subsidiaries of the Operating Partnership owning, in the aggregate, the
interests in 44 of the Company's properties.
The indenture relating to the Collateralized Notes of Vornado Finance
provides that all cash flows from the 44 Company properties which are collateral
for the Collateralized Notes will be deposited in a segregated trust account. So
long as no event of default under the indenture has occurred and is continuing,
Vornado Finance may withdraw funds from such trust account to the extent that
the amounts in such account exceed a certain minimum reserve level. Such minimum
reserve level equals the sum of (i) the amount of current or past due operating
expenses of Vornado Finance and its subsidiaries, (ii) indebtedness of Vornado
Finance and its subsidiaries due prior to such withdrawal and (iii) accrued and
unpaid interest on the Collateralized Notes; provided that (a) if the debt
service coverage ratio (as defined in the indenture relating to the
Collateralized Notes) is less than 2.0 and greater than or equal to 1.8, the
amount in (iii) above is increased by an amount equal to six months interest on
the Collateralized Notes and (b) if the debt service coverage ratio is less than
1.8, the amount in (iii) above is increased by an amount equal to eighteen
months interest on the Collateralized Notes. As a result of these limitations on
cash flows relating to such properties, which cash flows represented
approximately 83% of cash flows from properties of the Operating Partnership and
its consolidated subsidiaries in 1996, the Operating Partnership's ability to
pay interest and principal on its Debt Securities may be adversely affected.
The Indentures do not contain provisions that limit the Operating
Partnership's ability to incur indebtedness. Vornado has historically maintained
a relatively low level of debt to market capitalization of between 15% and 35%.
As of July 31, 1997, the level of debt to market capitalization was 31%. In the
future, in connection with its strategy for growth, this percentage may
increase. This policy may be reviewed and modified from time to time by the
Company without the vote of shareholders.
GEOGRAPHIC CONCENTRATION
For the year ended December 31, 1996, 78% of the Company's revenues were
derived from properties located in New York City and New Jersey. In addition,
the Company may concentrate a significant portion of its future acquisitions in
New York City and New Jersey. Like other real estate markets, the real estate
market in New York City and New Jersey experienced economic downturns in the
past, including most recently in the late 1980s and 1990s. Future declines in
the economy or the real estate markets in New York
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<PAGE> 10
City and New Jersey could adversely affect the Company's financial performance.
The Operating Partnership's financial performance and its ability to make
distributions to its partners, including Vornado, are dependent on conditions in
the economy and the real estate markets in New York City and New Jersey, which
may be affected by a number of factors, including the economic climate in New
York City and New Jersey (which may be adversely affected by business layoffs or
downsizing, industry slowdowns, relocations of businesses, changing
demographics, increased telecommuting, infrastructure quality in New York City
and New Jersey and other factors) and conditions in the real estate markets in
New York City and New Jersey (such as oversupply of or reduced demand for real
estate). There can be no assurance as to the continued strength of the economy,
or the continued strength of the real estate markets, in New York City and New
Jersey.
ENVIRONMENTAL MATTERS
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 a property,
and may be held liable to a governmental entity or to third parties for property
damage or personal injuries and for investigation and clean-up costs incurred by
the parties in connection with the contamination. Such laws often impose
liability without regard to whether the owner or operator knew of, or was
responsible for, the release of such hazardous substances. 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. Other Federal, state and local laws, ordinances and regulations
require abatement or removal of certain asbestos-containing materials in the
event of demolition or certain renovations or remodeling and also govern
emissions of and exposure to asbestos fibers in the air. The operation and
subsequent removal of certain underground storage tanks are also regulated by
Federal and state laws. In connection with the ownership, operation and
management of its properties, the Company could be held liable for the costs of
remedial action with respect to such regulated substances or tanks or related
claims.
Each of the Company's properties has been subjected to varying degrees of
environmental assessment, which generally did not include soil sampling or
subsurface investigations, at various times. The environmental assessments did
not reveal any environmental condition or liability that the Company believes
will have a material adverse effect on the Company's business, assets or results
of operations. However, there can be no assurance that the identification of new
areas of contamination, change in the extent or known scope of contamination,
the discovery of additional sites or changes in cleanup requirements would not
result in significant costs to the Company.
COMPETITION
The leasing of real estate is highly competitive. The principal means of
competition are rent charged, location, services provided and the nature and
condition of the facility to be leased. The Company directly competes with all
lessors and developers of similar space in the areas in which its properties are
located. Demand for retail space has been impacted by the recent bankruptcy of a
number of retail companies and a general trend toward consolidation in the
retail industry which could adversely affect the ability of the Company to
attract and retain tenants.
The Company's shopping center properties are generally located on major
regional highways in mature, densely populated areas. These shopping center
properties compete with, among others, free standing stores, neighborhood
centers and stores leased on the periphery of regional malls. Further, the
general economic climate (such as household disposable income) and the
conditions of shopping center markets (such as oversupply of or reduced demand
for retail space) in the places where the shopping center properties are located
could adversely affect the Company's financial condition.
The Company's office building properties are concentrated in highly
developed areas of midtown Manhattan. Manhattan is the largest office market in
the United States. The number of competitive office properties in Manhattan
could have a material adverse effect on the Company's ability to lease office
space at its properties, and on the effective rents the Company is able to
charge. These competing properties may be
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newer or better located. In addition, the Company may compete with other
property owners (including other REITs that currently invest in markets other
than Manhattan) that are willing to acquire properties in transactions which are
more highly leveraged than the Company is willing to undertake.
DEPENDENCE ON KEY PERSONNEL
The Company is dependent on the efforts of Steven Roth, the Chairman and
Chief Executive Officer of Vornado, and Michael D. Fascitelli, the President of
Vornado. While the Company believes that it could find replacements for these
key personnel, the loss of their services could have an adverse effect on the
operations of the Company.
CONSEQUENCES OF THE FAILURE TO QUALIFY OR REMAIN QUALIFIED AS A REIT
Although Vornado's management believes that Vornado will remain organized
and will continue to operate so as to qualify as a real estate investment trust
("REIT") for Federal income tax purposes, no assurance can be given that it will
remain so qualified. Qualification as a REIT for Federal income tax purposes
involves the application of highly technical and complex provisions of the
Internal Revenue Code of 1986, as amended (the "Code"), for which there are only
limited judicial or administrative interpretations, and the determination of
various factual matters and circumstances not entirely within the control of
Vornado may impact its ability to qualify as a REIT. In addition, no assurance
can be given that legislation, new regulations, administrative interpretations
or court decisions will not significantly change the tax laws with respect to
the requirements for qualification as a REIT or the Federal income tax
consequences of such qualification. Vornado, however, is not aware of any
proposal to amend the tax laws that would significantly and adversely affect its
ability to operate in such a manner as to qualify as a REIT.
If, with respect to any taxable year, Vornado fails to qualify as a REIT,
it would not be allowed a deduction for distributions to shareholders in
computing its taxable income and would be subject to Federal income tax
(including any applicable alterative minimum tax) on its taxable income at
regular corporate rates. As a result, the amount available for distribution to
shareholders would be reduced for the year or years involved, and distributions
would no longer be required to be made. In addition, unless entitled to relief
under certain statutory provisions, Vornado would also be disqualified from
treatment as a REIT for the four taxable years following the year during which
qualification was lost. Notwithstanding that Vornado currently intends to
operate in a manner designed to allow it to qualify as a REIT, future economic,
market, legal, tax or other considerations may cause it to determine that it is
in the best interest of Vornado and its shareholders to revoke the REIT
election.
POTENTIAL ANTI-TAKEOVER EFFECTS OF CHARTER DOCUMENTS AND APPLICABLE LAW
Generally, for Vornado to maintain its qualification as a REIT under the
Code, not more than 50% in value of the outstanding shares of beneficial
interest of Vornado may be owned, directly or indirectly, by five or fewer
individuals (as defined in the Code to include certain entities) at any time
during the last half of Vornado's taxable year (other than the first taxable
year for which the election to be treated as a REIT has been made). To ensure
that Vornado will not fail to qualify as a REIT under this and other tests under
the Code, the Declaration of Trust, subject to certain exceptions, provides that
no person may own more than 6.7% of the outstanding Common Shares or 9.9% of the
outstanding Preferred Shares. These restrictions on transferability and
ownership may delay, defer or prevent a transaction or a change in control of
Vornado that might involve a premium price or otherwise be in the best interest
of the shareholders. See "Description of Shares of Beneficial
Interest -- Description of Preferred Shares -- Restrictions on Ownership" and
"Description of Shares of Beneficial Interest -- Description of Common
Shares -- Restrictions on Ownership".
Vornado's Board of Trustees is divided into three classes of trustees.
Trustees of each class are chosen for three-year staggered terms. Staggered
terms of trustees may reduce the possibility of a tender offer or an attempt to
change control of Vornado, even though a tender offer or change in control might
be in the best interest of the shareholders. Vornado's Declaration of Trust
authorizes the Board of Trustees to cause Vornado to issue additional authorized
but unissued shares of Common Shares or Preferred Shares and to classify or
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reclassify any unissued Preferred Shares and to set the preferences, rights and
other terms of such classified or unclassified shares. Although the Board of
Trustees has no such intention at the present time, it could establish a series
of Preferred Shares that could, depending on the terms of such series, delay,
defer or prevent a transaction or a change in control of Vornado that might
involve a premium price or otherwise be in the best interest of the
shareholders.
Under the Maryland General Corporation Law, as amended ("MGCL"), as
applicable to real estate investment trusts, certain "business combinations"
(including certain issuances of equity securities) between a Maryland real
estate investment trust and any person who beneficially owns ten percent or more
of the voting power of the trust's shares (an "Interested Shareholder") or an
affiliate thereof are prohibited for five years after the most recent date on
which the Interested Shareholder becomes an Interested Shareholder. Thereafter,
any such business combination must be approved by two super-majority shareholder
votes unless, among other conditions, the trust's common shareholders receive a
minimum price (as defined in the MGCL) for their shares and the consideration is
received in cash or in the same form as previously paid by the Interested
Shareholder for its common shares. As permitted by Maryland law, the Board of
Trustees has adopted a resolution exempting any business combination between any
trustee or officer of Vornado (or their affiliates) and Vornado. As a result,
the trustees and officers of Vornado and their affiliates may be able to enter
business combinations with Vornado which may not be in the best interest of
shareholders and, with respect to business combinations with other persons, the
business combination provisions of the MGCL may have the effect of delaying,
deferring or preventing a transaction or a change in the control of Vornado that
might involve a premium price or otherwise be in the best interest of the
shareholders.
VORNADO AND THE OPERATING PARTNERSHIP
Vornado is a fully-integrated real estate investment trust organized under
the laws of the state of Maryland. In April 1997, Vornado transferred
substantially all of its assets to the Operating Partnership, a Delaware limited
partnership. As a result, Vornado now conducts its business through, and
substantially all of its interests in properties are held by, the Operating
Partnership, in which it is the sole general partner and in which it owns an
approximately 90% limited partnership interest as of June 11, 1997. The
Operating Partnership currently owns: (i) 58 shopping center properties in seven
states and Puerto Rico containing 10.5 million square feet, including 1.2
million square feet built by tenants on land leased from the Company; (ii) all
or portions of nine office building properties in the New York City metropolitan
area (primarily Manhattan) containing 4.2 million square feet; (iii) eight
warehouse/industrial properties in New Jersey containing 2.0 million square
feet; and (iv) approximately 29.3% of the outstanding common stock of
Alexander's, Inc., which has nine properties in the New York City metropolitan
area.
As of July 31, 1997, the Company's total consolidated outstanding debt was
approximately $713 million, of which $463 million is secured by Company
properties, and its total consolidated debt plus its proportionate share of
total unconsolidated debt were approximately $825 million, of which $575 million
is secured by Company properties.
The executive offices of Vornado and the Operating Partnership are located
at Park 80 West, Plaza II, Saddle Brook, N.J. 07663; telephone (201) 587-1000.
USE OF PROCEEDS
Vornado is required by the terms of the partnership agreement of the
Operating Partnership to invest the net proceeds of any sale of Common Shares,
Preferred Shares or Depositary Shares in the Operating Partnership in exchange
for additional Units or preferred Units, as the case may be. As will be more
fully described in the applicable Prospectus Supplement, Vornado and the
Operating Partnership intend to use the net proceeds from the sale of Securities
for general corporate purposes or such other uses as may be set forth in a
Prospectus Supplement.
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CONSOLIDATED RATIOS OF EARNINGS TO FIXED CHARGES
AND COMBINED FIXED CHARGES AND PREFERRED SHARE DIVIDEND REQUIREMENTS
For purposes of calculating the following ratios, (i) earnings represent
income from continuing operations before income taxes, plus fixed charges, and
(ii) fixed charges represent interest expense on all indebtedness (including
amortization of deferred debt issuance costs) and the portion of operating lease
rental expense that is representative of the interest factor (deemed to be
one-third of operating lease rentals). There were no preferred shares
outstanding during any of the periods indicated below and therefore the ratio of
earnings to fixed charges would have been the same as the ratio of earnings to
combined fixed charges and preferred share dividend requirements for each period
indicated. The historical ratios of earnings to combined fixed charges and
preferred share dividend requirements set forth below are the same for both
Vornado and the Operating Partnership.
<TABLE>
<CAPTION>
SIX
MONTHS
ENDED YEAR ENDED DECEMBER 31,
JUNE 30, ----------------------------------------
1997 1996 1995 1994 1993 1992
--------- ---- ---- ---- ---- ----
<S> <C> <C> <C> <C> <C> <C>
Ratio of Earnings to Combined Fixed Charges
and Preferred Share Dividend
Requirements............................... 1.83 4.56 4.06 3.54 1.80 1.07
</TABLE>
DESCRIPTION OF DEBT SECURITIES
The Debt Securities may be issued from time to time in one or more series.
The particular terms of each series of Debt Securities offered by any Prospectus
Supplement or Prospectus Supplements will be described therein. The Senior Debt
Securities are to be issued under an Indenture (the "Senior Indenture") between
the Operating Partnership and The Bank of New York, as trustee (the "Senior
Trustee"), a copy of the form of which Senior Indenture is filed as an exhibit
to the Registration Statement. The Subordinated Debt Securities are to be issued
under a separate Indenture (the "Subordinated Indenture") between the Operating
Partnership and The Bank of New York, as trustee (the "Subordinated Trustee"), a
copy of the form of which Subordinated Indenture is filed as an exhibit to the
Registration Statement. The Senior Indenture and the Subordinated Indenture are
sometimes referred to collectively as the "Indentures" and the Senior Trustee
and Subordinated Trustee are sometimes referred to collectively as the
"Trustees."
The following summaries of the material provisions of the Senior Debt
Securities, the Subordinated Debt Securities, the Senior Indenture and the
Subordinated Indenture are brief summaries thereof, do not purport to be
complete and are subject to, and are qualified in their entirety by reference to
all the provisions of the Indenture applicable to a particular series of Debt
Securities. Wherever particular Sections, Articles or defined terms of the
Indentures are referred to herein or in a Prospectus Supplement, such Sections,
Articles or defined terms are incorporated herein or therein by reference.
GENERAL
Unless otherwise specified in the applicable Prospectus Supplement, the
Debt Securities will be general unsecured obligations of the Operating
Partnership. The Indentures do not limit the aggregate amount of Debt Securities
which may be issued thereunder, and Debt Securities may be issued thereunder
from time to time in separate series up to the aggregate amount from time to
time authorized by the Operating Partnership for each series. Unless otherwise
specified in the Prospectus Supplement, the Senior Debt Securities when issued
will be unsubordinated obligations of the Operating Partnership and will rank
equally and ratably with all other unsecured and unsubordinated indebtedness of
the Operating Partnership. The Subordinated Debt Securities when issued will be
subordinated in right of payment to the prior payment in full of all Senior Debt
(as defined in the Subordinated Indenture) of the Operating Partnership as
described below under "-- Subordination of Subordinated Debt Securities" and in
the Prospectus Supplement applicable to an offering of Subordinated Debt
Securities.
The applicable Prospectus Supplement or Prospectus Supplements will
describe the following terms of the series of Debt Securities in respect of
which this Prospectus is being delivered: (1) the title of such Debt
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Securities; (2) any limit on the aggregate principal amount of such Debt
Securities; (3) the person to whom any interest on any Debt Security of the
series shall be payable if other than the person in whose name the Debt Security
is registered on the regular record date; (4) the date or dates on which such
Debt Securities will mature; (5) the rate or rates of interest, if any, or the
method of calculation thereof, which such Debt Securities will bear, the date or
dates from which any such interest will accrue, the interest payment dates on
which any such interest on such Debt Securities will be payable and the regular
record date for any interest payable on any interest payment date; (6) the place
or places where the principal of, premium, if any, and interest on such Debt
Securities will be payable; (7) the period or periods within which, the events
upon the occurrence of which, and the price or prices at which, such Debt
Securities may, pursuant to any optional or mandatory provisions, be redeemed or
purchased, in whole or in part, by the Operating Partnership and any terms and
conditions relevant thereto; (8) the obligations of the Operating Partnership,
if any, to redeem or repurchase such Debt Securities at the option of the
Holders; (9) the denominations in which any such Debt Securities will be
issuable, if other than denominations of $1,000 and any integral multiple
thereof; (10) any index or formula used to determine the amount of payments of
principal of and any premium and interest on such Debt Securities; (11) the
currency, currencies or currency unit or units of payment of principal of and
any premium and interest on such Debt Securities if other than U.S. dollars;
(12) if the principal of, or premium, if any, or interest, if any, on such Debt
Securities is to be payable, at the election of the Operating Partnership or a
holder thereof, in one or more currencies or currency units other than that or
those in which such Debt Securities are stated to be payable, the currency,
currencies or currency units in which payment of the principal of and any
premium and interest on Debt Securities of such series as to which such election
is made shall be payable, and the periods within which and the terms and
conditions upon which such election is to be made; (13) if other than the
principal amount thereof, the portion of the principal amount of such Debt
Securities of the series which will be payable upon acceleration of the maturity
thereof; (14) if the principal amount of any Debt Securities which will be
payable at the maturity thereof will not be determinable as of any date prior to
such maturity, the amount which will be deemed to be the outstanding principal
amount of such Debt Securities; (15) the applicability of any provisions
described under "-- Defeasance"; (16) whether any of such Debt Securities are to
be issuable in permanent global form ("Global Security") and, if so, the terms
and conditions, if any, upon which interests in such Debt Securities in global
form may be exchanged, in whole or in part, for the individual Debt Securities
represented thereby; (17) the applicability of any provisions described under
"-- Events of Default" and any additional Event of Default applicable thereto;
(18) any covenants applicable to such Debt Securities; (19) the terms and
conditions, if any, pursuant to which the Debt Securities are exchangeable into
Common Shares of the Company; and (20) any other terms of such Debt Securities
not inconsistent with the provisions of the Indentures. (Section 301)
Debt Securities may be issued at a discount from their principal amount.
United States Federal income tax considerations and other special considerations
applicable to any such original issue discount Securities will be described in
the applicable Prospectus Supplement.
If the purchase price of any of the Debt Securities is denominated in a
foreign currency or currencies or a foreign currency unit or units or if the
principal of and any premium and interest on any series of Debt Securities is
payable in a foreign currency or currencies or a foreign currency unit or units,
the restrictions, elections, general Federal income tax considerations, specific
terms and other information with respect to such issue of Debt Securities will
be set forth in the applicable Prospectus Supplement.
The Indentures do not contain any provisions that limit the Operating
Partnership's ability to incur indebtedness. Except as may be indicated in the
applicable Prospectus Supplement with respect to a particular series of Debt
Securities, Holders of Debt Securities will not have the benefit of any specific
covenants or provisions in the applicable Indenture or Debt Securities that
would protect them in the event the Operating Partnership engages in or becomes
the subject of a highly leveraged transaction and the limitations on mergers,
consolidations and transfers of substantially all of the Operating Partnership's
properties and assets as an entirety to any person as described below under
"-- Consolidation, Merger and Sale of Assets." Such covenants may not be waived
or modified by the Operating Partnership, although Holders of Debt Securities
could waive or modify such covenants as more fully described below under
"-- Modification and Waiver."
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<PAGE> 15
The applicable Prospectus Supplement with respect to any particular series
of Debt Securities that provide for the optional redemption or prepayment of
such Debt Securities upon the occurrence of certain events (i.e., a change of
control) will describe the following: (1) the effects that such provisions may
have in deterring certain mergers, tender offers or other takeover attempts, as
well as that there may be possible adverse effects on the market price of the
Operating Partnership's securities or ability to obtain financing; (2) that the
Operating Partnership will comply with the requirements of applicable securities
laws, including Rules 14e-1 and 13e-4 under the Exchange Act, in connection with
such provisions and any related offers by the Operating Partnership; (3) whether
the occurrence of the specified events may give rise to cross-defaults on other
indebtedness such that payment on the offered Debt Securities may be effectively
subordinated; (4) limitations on the Operating Partnership's financial or legal
ability to repurchase the offered Debt Securities upon the triggering of an
event risk provision requiring such a repurchase or offer to repurchase; (5) the
impact, if any, under the governing instrument of the failure to repurchase,
including whether such failure to make any required repurchases in the event of
a change of control will create an event of default with respect to the offered
Debt Securities or will become an event of default only after the continuation
of such failure for a specified period of time after written notice is given to
the Operating Partnership by the Trustee or to the Operating Partnership and the
Trustee by the holders of a specified percentage in aggregate principal amount
of the debt outstanding; (6) that there can be no assurance that sufficient
funds will be available at the time of the triggering of an event risk provision
to make any required repurchases; (7) if such offered Debt Securities are to be
subordinated to other obligations of the Operating Partnership or its
subsidiaries that would be accelerated upon the triggering of a change in
control or similar event, the material effect thereof on such acceleration
provision and such offered Debt Securities; and (8) to the extent that there is
a definition of "change of control" in a supplemental indenture relating to such
offered Debt Securities that includes the concept of "all or substantially all,"
the established meaning of such phrase under New York law.
EXCHANGE OF DEBT SECURITIES
If so indicated in the applicable Prospectus Supplement with respect to a
particular series of Debt Securities, such series will be exchangeable into
Common Shares of Vornado on the terms and conditions set forth therein. Such
terms may include provisions pursuant to which the number of Common Shares of
Vornado to be received by the holders of Debt Securities would be calculated
according to the market price of Common Shares of Vornado as of a time stated in
the Prospectus Supplement. The applicable Prospectus Supplement will indicate
certain restrictions on ownership which may apply in the event of an exchange.
See "Description of Preferred Shares -- Restrictions on Ownership" and
"Description of Common Shares -- Restrictions on Ownership."
FORM, REGISTRATION, TRANSFER AND PAYMENT
Unless otherwise indicated in the applicable Prospectus Supplement, the
Debt Securities will be issued only in fully registered form in denominations of
$1,000 or integral multiples thereof. (Section 302) Unless otherwise indicated
in the applicable Prospectus Supplement, payment of principal, premium, if any,
and interest on the Debt Securities will be payable, and the exchange and
transfer of Debt Securities will be registerable, at the office or agency of the
Operating Partnership maintained for such purposes and at any other office or
agency maintained for such purpose. (Sections 301, 305 and 1002) No service
charge will be made for any registration of transfer or exchange of the Debt
Securities, but the Operating Partnership may require payment of a sum
sufficient to cover any tax or other governmental charge imposed in connection
therewith. (Section 305)
All monies paid by the Operating Partnership to a Paying Agent for the
payment of principal of and any premium or interest on any Debt Security which
remain unclaimed for two years after such principal, premium or interest has
become due and payable may be repaid to the Operating Partnership and thereafter
the Holder of such Debt Security may look only to the Operating Partnership for
payment thereof. (Section 1003)
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BOOK-ENTRY DEBT SECURITIES
The Debt Securities of a series may be issued in whole or in part in the
form of one or more Global Securities that will be deposited with, or on behalf
of, a depositary (the "Global Depositary") or its nominee identified in the
applicable Prospectus Supplement. In such a case, one or more Global Securities
will be issued in a denomination or aggregate denomination equal to the portion
of the aggregate principal amount of Outstanding Debt Securities of the series
to be represented by such Global Security or Securities. Unless and until it is
exchanged in whole or in part for Debt Securities in registered form, a Global
Security may not be registered for transfer except as a whole by the Global
Depositary for such Global Security to a nominee of such Global Depositary or by
a nominee of such Global Depositary to such Global Depositary or another nominee
of such Global Depositary or by such Global Depositary or any nominee to a
successor Global Depositary or a nominee of such successor Global Depositary and
except in the circumstances described in the applicable Prospectus Supplement.
(Sections 204 and 305)
The specific terms of the depositary arrangement with respect to any
portion of a series of Debt Securities to be represented by a Global Security
will be described in the applicable Prospectus Supplement. The Operating
Partnership expects that the following provisions will apply to depositary
arrangements although no assurance can be given that such will be the case.
Unless otherwise specified in the applicable Prospectus Supplement, Debt
Securities which are to be represented by a Global Security to be deposited with
or on behalf of a Global Depositary will be represented by a Global Security
registered in the name of such Global Depositary or its nominee. Upon the
issuance of such Global Security, and the deposit of such Global Security with
or on behalf of the Global Depositary for such Global Security, the Global
Depositary will credit, on its book-entry registration and transfer system, the
respective principal amounts of the Debt Securities represented by such Global
Security to the accounts of institutions that have accounts with such Global
Depositary or its nominee ("participants"). The accounts to be credited will be
designated by the underwriters or agents of such Debt Securities or by the
Operating Partnership, if such Debt Securities are offered and sold directly by
the Operating Partnership. Ownership of beneficial interest in such Global
Security will be limited to participants or Persons that may hold interests
through participants. Ownership of beneficial interests by participants in such
Global Security will be shown on, and the transfer of that ownership interest
will be effected only through, records maintained by the Global Depositary or
its nominee for such Global Security. Ownership of beneficial interests in such
Global Security by Persons that hold through participants will be shown on, and
the transfer of such ownership interests within such participant will be
effected only through, records maintained by such participant. The laws of some
jurisdictions require that certain purchasers of securities take physical
delivery of such securities in certificated form. The foregoing limitations and
such laws may impair the ability to transfer beneficial interests in such Global
Securities.
So long as the Global Depositary for a Global Security, or its nominee, is
the registered owner of such Global Security, such Global Depositary or such
nominee, as the case may be, will be considered the sole owner or holder of the
Securities represented by such Global Security for all purposes under the
applicable Indenture. Except as set forth below, unless otherwise specified in
the applicable Prospectus Supplement, owners of beneficial interests in such
Global Security will not be entitled to have Debt Securities of the series
represented by such Global Security registered in their names, will not receive
or be entitled to receive physical delivery of Debt Securities of such series in
certificated form and will not be considered the holders thereof for any
purposes under the applicable Indenture. (Sections 204 and 305) Accordingly,
each Person owning a beneficial interest in such Global Security must rely on
the procedures of the Global Depositary and, if such Person is not a
participant, on the procedures of the participant through which such Person owns
its interest, to exercise any rights of a holder under the applicable Indenture.
The Operating Partnership understands that under existing industry practices, if
the Operating Partnership requests any action of holders or an owner of a
beneficial interest in such Global Security desires to give any notice or take
any action a holder is entitled to give or take under the applicable Indenture,
the Global Depositary would authorize the participants to give such notice or
take such action, and participants would authorize beneficial owners owning
through such participants to give such notice or take such action or would
otherwise act upon the instructions of beneficial owners owning through them.
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If the Global Depositary for Debt Securities of a series is at any time
unwilling, unable or ineligible to continue as Global Depositary and a successor
Global Depositary is not appointed by the Operating Partnership within 90 days
or an Event of Default under the applicable Indenture has occurred and is
continuing, the Operating Partnership will issue Debt Securities of such series
in definitive form in exchange for the Global Security or Securities
representing the Debt Securities of such series. In addition, the Operating
Partnership may at any time and in its sole discretion, subject to any
limitations described in the applicable Prospectus Supplement, determine not to
have any Debt Securities of a series represented by one or more Global
Securities and, in such event, will issue Debt Securities of such series in
definitive form in exchange for the Global Security or Securities representing
such Debt Securities. Further, if the Operating Partnership so specifies with
respect to the Debt Securities of a series, an owner of a beneficial interest in
a Global Security representing Debt Securities of such series may, on terms
acceptable to the Operating Partnership and the Global Depositary for such
Global Security, receive Debt Securities of such series in definitive form in
exchange for such beneficial interests, subject to any limitations described in
the applicable Prospectus Supplement relating to such Debt Securities. In any
such instance, an owner of a beneficial interest in a Global Security will be
entitled to physical delivery in definitive form of Debt Securities of the
series represented by such Global Security equal in principal amount to such
beneficial interest and to have such Debt Securities registered in its name (if
the Debt Securities of such series are issuable as registered securities).
Principal of and any premium and interest on a Global Security will be
payable in the manner described in the applicable Prospectus Supplement.
CERTAIN COVENANTS OF THE OPERATING PARTNERSHIP
If so indicated in the applicable Prospectus Supplement with respect to a
particular series of Debt Securities, the Operating Partnership will be subject
to the covenants described therein. In addition, the Operating Partnership will
be subject to the following covenants.
Existence
Except as permitted under "--Consolidation, Merger and Sale of Assets," the
Operating Partnership 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
and franchises; provided, however, that the Operating Partnership 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. (Section 1005)
Maintenance of Properties
The Operating Partnership will be required to cause all 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 to cause to be made all necessary repairs,
renewals, replacements, betterments and improvements thereof, all as in the
judgment of the Operating Partnership may be necessary so that the business
carried on in connection therewith may be properly and advantageously conducted
at all times; provided, however, that the Operating Partnership shall not be
prevented from discontinuing the operation or maintenance of any of its
properties if such discontinuance is, in the judgment of the Operating
Partnership, desirable in the conduct of its business or the business of any
subsidiary and not disadvantageous in any material respect to the Holders.
(Section 1006)
Payment of Taxes and Other Claims
The Operating Partnership 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 the Operating
Partnership or any subsidiary or upon the income, profits or property of the
Operating Partnership or any subsidiary, and (ii) all lawful claims for labor,
materials and supplies which, if unpaid,
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might by law become a lien upon the property of the Operating Partnership or any
subsidiary; provided, however, that the Operating Partnership 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 1007)
Insurance
The Operating Partnership will be required to, and to cause each of its
subsidiaries to, keep all of its insurable properties insured against loss or
damage with insurers of recognized responsibility in commercially reasonable
amounts and types. (Section 1008)
Provision of Financial Information
Whether or not the Operating Partnership is subject to Section 13 or
Section 15(d) of the Exchange Act and for so long as any Debt Securities are
outstanding, the Operating Partnership will, to the extent permitted under the
Exchange Act, file with the Commission the annual reports, quarterly reports and
other documents which the Operating Partnership would have been required to file
with the Commission pursuant to Section 13 or Section 15(d) (the "Financial
Statements") if the Operating Partnership 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 Operating Partnership would have been required so to
file such documents if the Operating Partnership were so subject.
The Operating Partnership will also in any event (x) within 15 days of each
Required Filing Date (i) transmit by mail to all Holders of Debt Securities
whose names appear in the security register for such Debt Securities, as their
names and addresses appear in the security register for such Debt Securities,
without cost to such Holders, copies of the annual reports and quarterly reports
which the Operating Partnership would have been required to file with the
Commission pursuant to Section 13 or Section 15(d) of the Exchange Act if the
Operating Partnership were subject to such Sections and (ii) file with any
Trustee copies of the annual reports, quarterly reports and other documents
which the Operating Partnership would have been required to file with the
Commission pursuant to Section 13 or Section 15(d) of the Exchange Act if the
Operating Partnership were subject to such Sections and (y) if filing such
documents by the Operating Partnership 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 1009)
EVENTS OF DEFAULT
The following are Events of Default under the Indentures with respect to
Debt Securities of any series: (a) failure to pay principal of or premium, if
any, on any Debt Security of that series when due; (b) failure to pay any
interest on any Debt Security of that series when due, continued for 30 days;
(c) failure in the deposit of any sinking fund payment in respect of any Debt
Security of that series; (d) failure to perform any other covenant of the
Operating Partnership in the Indentures (other than a covenant included in the
applicable Indenture solely for the benefit of a series of Debt Securities other
than that series), continued for 60 days after written notice to the Operating
Partnership as provided in the applicable Indenture; (e) the acceleration of, or
failure to pay at maturity (including any applicable grace period), any
indebtedness for money borrowed by the Operating Partnership with at least
$50,000,000 in principal amount outstanding, which acceleration or failure to
pay is not rescinded or annulled or such indebtedness paid, in each case within
10 days after the date on which written notice thereof shall have first been
given to the Operating Partnership as provided in the applicable Indenture; (f)
certain events of bankruptcy, insolvency or reorganization; and (g) any other
Event of Default provided with respect to Debt Securities of that series.
(Section 501)
If an Event of Default with respect to Outstanding Debt Securities of any
series shall occur and be continuing, either the applicable Trustee or the
Holders of not less than 25% in principal amount of the Outstanding Debt
Securities of that series by notice as provided in the Indentures may declare
the principal amount (or, if the Debt Securities of that series are Original
Issue Discount Securities, such portion of the
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principal amount as may be specified in the terms of that series) of all Debt
Securities of that series to be due and payable immediately. However, at any
time after a declaration of acceleration with respect to Debt Securities of any
series has been made, but before a judgment or decree based on such acceleration
has been obtained, the Holders of a majority in principal amount of the
Outstanding Debt Securities of that series may, under certain circumstances,
rescind and annul such acceleration. (Section 502) For information as to waiver
or defaults, see "-- Modification and Waiver" below.
The Indentures provide that, subject to the duty of the Trustees thereunder
during an Event of Default to act with the required standard of care, such
Trustees will be under no obligation to exercise any of its rights or powers
under the Indentures at the request or direction of any of the Holders, unless
such Holders shall have offered to such Trustees reasonable security or
indemnity. (Sections 601 and 603) Subject to certain provisions, including those
requiring security or indemnification of the Trustees, the Holders of a majority
in principal amount of the Outstanding Debt Securities of any series will have
the right to direct the time, method and place of conducting any proceeding for
any remedy available to the Trustees, or exercising any trust or power conferred
on such Trustees, with respect to the Debt Securities of that series. (Section
512)
No Holder of a Debt Security of any series will have any right to institute
any proceeding with respect to the Indentures or for any remedy thereunder,
unless (i) such Holder shall have previously given to the applicable Trustee
written notice of a continuing Event of Default (as defined) with respect to
Debt Securities of that series; (ii) the Holders of not less than 25% in
aggregate principal amount of the Outstanding Debt Securities of the same series
shall have made written request, and offered reasonable indemnity, to the
applicable Trustee to institute proceedings in respect of such Event of Default
in its own name as trustee under the Indenture; (iii) the Trustee shall have
failed to institute such proceedings within 60 days; and (iv) the Trustee shall
not have received from the Holders of a majority in aggregate principal amount
of the outstanding Debt Securities of the same series a direction inconsistent
with such request (Section 507); provided, however, that such limitations do not
apply to a suit instituted by a Holder of a Debt Security for enforcement of
payment of the principal of and any premium and interest on such Debt Security
on or after the respective due dates expressed in such Debt Security. (Section
508)
The Operating Partnership will be required to furnish to the Trustees
annually a statement as to the performance by the Operating Partnership of its
obligations under the Indentures and as to any default in such performance.
(Section 1004)
MODIFICATION AND WAIVER
Without the consent of any Holder of Outstanding Debt Securities, the
Operating Partnership and the applicable Trustee may amend or supplement the
applicable Indenture or the Debt Securities to cure any ambiguity, defect or
inconsistency, or to make any change that does not materially adversely affect
the rights of any Holder of Debt Securities. (Section 901) Other modifications
and amendments of the Indentures may be made by the Operating Partnership and
the applicable Trustee only with the consent of the Holders of not less than a
majority in aggregate principal amount of the Outstanding Debt Securities of
each series affected thereby; provided, however, that no such modification or
amendment may, without the consent of the Holder of each Outstanding Debt
Security affected thereby: (a) change the Stated Maturity of the principal of,
or any installment of principal of, or interest on, any Debt Security; (b)
reduce the principal amount of, the rate of interest on, or the premium, if any,
payable upon the redemption of, any Debt Security; (c) reduce the amount of
principal of an Original Issue Discount Security payable upon acceleration of
the Maturity thereof; (d) change the place or currency of payment of principal
of, or premium, if any, or interest on any Debt Security; (e) impair the right
to institute suit for the enforcement of any payment on or with respect to any
Debt Security on or after the Stated Maturity or Redemption Date thereof; (f)
modify the subordination provisions applicable to any series of Debt Securities
in a manner adverse to the holders thereof; or (g) reduce the percentage in
principal amount of Outstanding Debt Securities of any series, the consent of
the Holders of which is required for modification or amendment of the Indentures
or for waiver of compliance with certain provisions of the applicable Indenture
or for waiver of certain defaults. (Section 902)
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Unless otherwise indicated in the applicable Prospectus Supplement, the
Holders of at least a majority in aggregate principal amount of the Outstanding
Debt Securities of any series may on behalf of the Holders of all Debt
Securities of that series waive, insofar as that series is concerned, compliance
by the Operating Partnership with certain covenants of the Indentures. (Section
1008) Unless otherwise indicated in the applicable Prospectus Supplement, the
Holders of not less than a majority in principal amount of the Outstanding Debt
Securities of any series may, on behalf of the Holders of all Debt Securities of
that series, waive any past default under the applicable Indenture with respect
to that series, except a default in the payment of the principal of, or premium,
if any, or interest on, any Debt Security of that series or in respect of a
provision which under such applicable Indenture cannot be modified or amended
without the consent of the Holder of each Outstanding Debt Security of that
series affected. (Section 513)
CONSOLIDATION, MERGER AND SALE OF ASSETS
Unless otherwise indicated in the applicable Prospectus Supplement, the
Operating Partnership, without the consent of any Holders of outstanding Debt
Securities, may consolidate with or merge into, or transfer or lease its assets
substantially as an entirety to, any Person, and any other Person may
consolidate with or merge into, or transfer or lease its assets substantially as
an entirety to, the Operating Partnership, provided that (a) the Person (if
other than the Operating Partnership) formed by such consolidation or into which
the Operating Partnership is merged or which acquires or leases the assets of
the Operating Partnership substantially as an entirety assumes the Operating
Partnership's obligations on the Debt Securities and under the Indenture
relating thereto and (b) after giving effect to such transaction no Event of
Default, and no event which, after notice or lapse of time or both, would become
an Event of Default, shall have happened and be continuing. (Article Eight) A
Prospectus Supplement may set forth any additional provisions regarding a
consolidation with, merger into, or transfer or lease of its assets
substantially as an entirety to, any Person (or of such Person with, into or to
the Operating Partnership).
DEFEASANCE
If so indicated in the applicable Prospectus Supplement with respect to the
Debt Securities of a series, the Operating Partnership, at its option (i) will
be discharged from any and all obligations in respect of the Debt Securities of
such series (except for certain obligations to register the transfer or exchange
of Debt Securities of such series, to replace destroyed, stolen, lost or
mutilated Debt Securities of such series, and to maintain an office or agency in
respect of the Debt Securities and hold monies for payment in trust) or (ii)
will be released from its obligations to comply with any covenants that may be
specified in the applicable Prospectus Supplement with respect to the Debt
Securities of such series, and the occurrence of an event described in clause
(d) under "-- Events of Default" above with respect to any defeased covenants
shall no longer be an Event of Default, if in either case the Operating
Partnership irrevocably deposits with the applicable Trustee, in trust, money or
U.S. Government Obligations that through the payment of interest thereon and
principal thereof in accordance with their terms will provide money in an amount
sufficient to pay all of the principal of and premium, if any, and any interest
on the Debt Securities of such series on the dates such payments are due (which
may include one or more redemption dates designated by the Operating
Partnership) in accordance with the terms of such Debt Securities. Such a trust
may only be established if, among other things, (a) no Event of Default or event
which with the giving of notice or lapse of time, or both, would become an Event
of Default under the applicable Indenture shall have occurred and be continuing
on the date of such deposit, (b) no Event of Default described under clause (e)
under "-- Events of Default" above or event which with the giving of notice or
lapse of time, or both, would become an Event of Default described under such
clause (e) shall have occurred and be continuing at any time during the period
ending on the 91st day following such date of deposit and (c) the Operating
Partnership shall have delivered an Opinion of Counsel to the effect that the
Holders of the Debt Securities will not recognize gain or loss for United States
Federal income tax purposes as a result of such deposit or defeasance and will
be subject to United States Federal income tax in the same manner as if such
deposit and defeasance had not occurred, which Opinion of Counsel, in the case
of a deposit and defeasance of such Indenture with respect to the Debt
Securities of any series as described under clause (i) above, shall be based on
either (A) a ruling to such effect that the Operating Partnership has received
from, or that has been published by, the Internal Revenue
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Service or (B) a change in the applicable Federal income tax law, occurring
after the date of the applicable Indenture, to such effect. In the event the
Operating Partnership omits to comply with its remaining obligations under such
Indenture after a defeasance of such Indenture with respect to the Debt
Securities of any series as described under clause (ii) above and the Debt
Securities of such series are declared due and payable because of the occurrence
of any undefeased Event of Default, the amount of money and U.S. Government
Obligations on deposit with the applicable Trustee may be insufficient to pay
amounts due on the Debt Securities of such series at the time of the
acceleration resulting from such Event of Default. However, the Operating
Partnership will remain liable in respect to such payments. (Article Thirteen)
SUBORDINATION OF SUBORDINATED DEBT SECURITIES
Unless otherwise indicated in the Prospectus Supplement, the following
provisions will apply to the Subordinated Debt Securities.
The Subordinated Debt Securities will, to the extent set forth in the
Subordinated Indenture, be subordinate in right of payment to the prior payment
in full of all Senior Debt, including the Senior Debt Securities. Upon any
payment or distribution of assets to creditors upon any liquidation,
dissolution, winding up, reorganization, assignment for the benefit of
creditors, marshalling of assets or any bankruptcy, insolvency, debt
restructuring or similar proceedings in connection with any insolvency or
bankruptcy proceeding of the Operating Partnership, the holders of Senior Debt
will first be entitled to receive payment in full of principal of (and premium,
if any) and interest, if any, on such Senior Debt before the holders of the
Subordinated Debt Securities will be entitled to receive or retain any payment
in respect of the principal of (and premium, if any) or interest, if any, on the
Subordinated Debt Securities. (Article Fifteen of the Subordinated Indenture)
By reason of such subordination, in the event of liquidation or insolvency,
creditors of the Operating Partnership who are not holders of Senior Debt or
Subordinated Debt Securities may recover less, ratably, than holders of Senior
Debt and may recover more, ratably, than the holders of the Subordinated Debt
Securities.
In the event of the acceleration of the maturity of any Subordinated Debt
Securities, the holders of all Senior Debt outstanding at the time of such
acceleration will first be entitled to receive payment in full of all amounts
due thereon before the Holders of the Subordinated Debt Securities will be
entitled to receive any payment upon the principal of (or premium, if any) or
interest, if any, on the Subordinated Debt Securities.
No payments on account of principal (or premium, if any) or interest, if
any, in respect of the Subordinated Debt Securities may be made if there shall
have occurred and be continuing a default in any payment with respect to Senior
Debt, or an event of default with respect to any Senior Debt resulting in the
acceleration of the maturity thereof, or if any judicial proceeding shall be
pending with respect to any such default.
Unless otherwise indicated in the applicable Prospectus Supplement, "Senior
Debt" means the principal of (and premium, if any) and interest (including
interest accruing on or after the filing of any petition in bankruptcy or for
reorganization relating to the Operating Partnership to the extent such claim
for post-petition interest is allowed in such proceeding) on all indebtedness of
the Operating Partnership (including indebtedness of others guaranteed by the
Operating Partnership), other than the Subordinated Debt Securities whether
outstanding on the date of the Subordinated Indenture or thereafter created,
incurred or assumed, which is: (i) for money borrowed, (ii) evidenced by a note
or similar instrument given in connection with the acquisition of any
businesses, properties or assets of any kind or (iii) obligations of the
Operating Partnership as lessee under leases required to be capitalized on the
balance sheet of the lessee under generally accepted accounting principles or
leases of property or assets made as part of any sale and lease-back transaction
to which the Operating Partnership is a party, including amendments, renewals,
extensions, modifications and refundings of any such indebtedness or obligation,
unless in any case in the instrument creating or evidencing any such
indebtedness or obligation or pursuant to which the same is outstanding it is
provided that such indebtedness or obligation is not superior in right of
payment to the Subordinated Debt Securities.
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The Subordinated Indenture does not limit or prohibit the incurrence of
additional Senior Debt, which may include indebtedness that is senior to the
Subordinated Debt Securities, but subordinate to other obligations of the
Operating Partnership. The Senior Debt Securities, when issued, will constitute
Senior Debt.
The Prospectus Supplement will set forth the aggregate amount of
outstanding indebtedness as of the most recent practicable date that by the
terms of such indebtedness and the terms of the offered Subordinated Debt
Securities would rank senior to or pari passu with such Subordinated Debt
Securities and any limitation on the issuance of additional senior or pari passu
indebtedness. The Prospectus Supplement may further describe the provisions, if
any, applicable to the subordination of the Subordinated Debt Securities of a
particular series.
GOVERNING LAW
The Indentures and the Debt Securities will be governed by, and construed
in accordance with, the laws of the State of New York. (Section 112)
REGARDING THE TRUSTEES
The Operating Partnership and certain of its subsidiaries in the ordinary
course of business maintain general banking relations with The Bank of New York.
Pursuant to the provisions of the Trust Indenture Act of 1939, upon a default
under either the Senior Indenture or the Subordinated Indenture, The Bank of New
York may be deemed to have a conflicting interest by virtue of its acting as
both the Senior Trustee and the Subordinated Trustee requiring it to resign and
be replaced by a successor trustee in one of such positions.
DESCRIPTION OF SHARES OF BENEFICIAL INTEREST
The following descriptions of the material terms of the shares of
beneficial interest of Vornado do not purport to be complete and are subject to,
and qualified in their entirety by reference to, the more complete descriptions
thereof set forth in the following documents: (i) Vornado's Amended and Restated
Declaration of Trust, including the articles supplementary for the Series A
Preferred Shares (the "Declaration of Trust"), and (ii) its Bylaws, which
documents are exhibits to this Registration Statement.
For Vornado to qualify as a REIT under the Code, not more than 50% of the
value of its outstanding shares of beneficial interest 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 and the shares must be
beneficially owned by 100 or more persons during at least 335 days of a taxable
year of 12 months (or during a proportionate part of a shorter taxable year).
Accordingly, the Declaration of Trust contains provisions that restrict the
ownership and transfer of shares of beneficial interest.
The Declaration of Trust authorizes the issuance of up to 180,000,000
shares, consisting of 70,000,000 Common Shares, 20,000,000 preferred shares of
beneficial interest, no par value per share ("Preferred Shares"), and 90,000,000
excess shares of beneficial interest, $.04 par value per share ("Excess
Shares"). See "-- Description of Preferred Shares -- Restrictions on Ownership"
and "-- Description of Common Shares -- Restrictions on Ownership" for a
discussion of the possible issuance of Excess Shares.
DESCRIPTION OF PREFERRED SHARES
The following is a description of the material terms and provisions of the
Preferred Shares. The particular terms of any series of Preferred Shares will be
described in the applicable Prospectus Supplement, which will supplement the
information set forth below.
The summary of the material terms of Vornado's Preferred Shares contained
in this Prospectus does not purport to be complete and is subject to, and
qualified in its entirety by, the provisions of the Declaration of Trust and the
articles supplementary relating to each series of the Preferred Shares (the
"Articles Supplementary"), which will be filed as an exhibit to or incorporated
by reference in the Registration
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Statement of which this Prospectus is a part at or prior to the time of issuance
of such series of the Preferred Shares.
As of the date hereof, the Declaration of Trust authorizes the issuance of
20,000,000 Preferred Shares. As of July 31, 1997, 5,750,000 Series A Preferred
Shares were outstanding. The Series A Preferred Shares are listed on the NYSE
under the symbol "VNO Pr A". A description of Vornado's Series A Preferred
Shares is set forth in Vornado's Registration Statement on Form 8-A, filed with
the Commission on April 3, 1997, and incorporated herein by reference. The
Preferred Shares authorized by the Declaration of Trust may be issued from time
to time in one or more series in such amounts and with such designations,
preferences, conversion or other rights, voting powers, restrictions,
limitations as to dividends, qualifications and terms and conditions of
redemption as may be fixed by the Board of Trustees. Under certain
circumstances, the issuance of Preferred Shares could have the effect of
delaying, deferring or preventing a change of control of Vornado and may
adversely affect the voting and other rights of the holders of Common Shares.
The Declaration of Trust authorizes the Board of Trustees to classify or
reclassify any unissued Preferred Shares by setting or changing the
designations, preferences, conversion or other rights, voting powers,
restrictions, limitations as to distributions, qualifications and terms and
conditions of redemption of such Preferred Shares.
The Preferred Shares shall have the dividend, liquidation, redemption and
voting rights described below as such description may be supplemented in a
Prospectus Supplement relating to a particular series of the Preferred Shares.
The applicable Prospectus Supplement will describe the following terms of the
series of Preferred Shares in respect of which this Prospectus is being
delivered: (1) the title of such Preferred Shares and the number of shares
offered; (2) the amount of liquidation preference per share; (3) the initial
public offering price at which such Preferred Shares will be issued; (4) the
dividend rate (or method of calculation), the dates on which dividends shall be
payable and the dates from which dividends shall commence to cumulate, if any;
(5) any redemption or sinking fund provisions; (6) any conversion or exchange
rights; (7) any additional voting, dividend, liquidation, redemption, sinking
fund and other rights, preferences, limitations and restrictions; (8) any
listing of such Preferred Shares on any securities exchange; (9) the relative
ranking and preferences of such Preferred Shares as to dividend rights and
rights upon liquidation, dissolution or winding up of the affairs of Vornado;
(10) any limitations on issuance of any series of Preferred Shares ranking
senior to or on a parity with such series of Preferred Shares as to dividend
rights and rights upon liquidation, dissolution or winding up of the affairs of
Vornado; and (11) any limitations on direct, beneficial or constructive
ownership and restrictions on transfer, in each case as may be appropriate to
preserve the status of Vornado as a REIT. The applicable Prospectus Supplement
will also include a discussion of Federal income tax considerations applicable
to such Preferred Shares.
General
The Preferred Shares offered hereby will be issued in one or more series.
The Preferred Shares, upon issuance against full payment of the purchase price
therefor, will be fully paid and nonassessable. The liquidation preference is
not indicative of the price at which the Preferred Shares will actually trade on
or after the date of issuance.
Rank
The Preferred Shares shall, with respect to dividend rights and rights upon
liquidation, dissolution and winding up of Vornado, rank prior to the Common
Shares and Excess Shares (other than certain Excess Shares resulting from the
conversion of Preferred Shares) and to all other classes and series of equity
securities of Vornado now or hereafter authorized, issued or outstanding (the
Common Shares and such other classes and series of equity securities
collectively may be referred to herein as the "Junior Stock"), other than any
classes or series of equity securities of Vornado which by their terms
specifically provide for a ranking on a parity with (the "Parity Stock") or
senior to (the "Senior Stock") the Preferred Shares as to dividend rights and
rights upon liquidation, dissolution or winding up of Vornado. The Preferred
Shares shall be junior to all outstanding debt of Vornado. The Preferred Shares
shall be subject to creation of Senior Stock, Parity Stock and Junior Stock to
the extent not expressly prohibited by the Declaration of Trust.
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Dividends
Holders of Preferred Shares shall be entitled to receive, when, as and if
authorized by the Board of Trustees out of assets of Vornado legally available
for payment, dividends, or distributions in cash, property or other assets of
Vornado or in Securities of Vornado or from any other source as the Board of
Trustees in its discretion shall determine and at such dates and at such rates
per share per annum as described in the applicable Prospectus Supplement. Such
rate may be fixed or variable or both. Each authorized dividend shall be payable
to holders of record as they appear at the close of business on the books of
Vornado on such record dates, not more than 90 calendar days preceding the
payment dates therefor, as are determined by the Board of Trustees (each of such
dates, a "Record Date").
Such dividends may be cumulative or noncumulative, as described in the
applicable Prospectus Supplement. If dividends on a series of Preferred Shares
are noncumulative and if the Board of Trustees fails to authorize a dividend in
respect of a dividend period with respect to such series, then holders of such
Preferred Shares will have no right to receive a dividend in respect of such
dividend period, and Vornado will have no obligation to pay the dividend for
such period, whether or not dividends are authorized payable on any future
dividend payment dates. If dividends of a series of Preferred Shares are
cumulative, the dividends on such shares will accrue from and after the date set
forth in the applicable Prospectus Supplement.
No full dividends shall be authorized or paid or set apart for payment on
Preferred Shares of any series ranking, as to dividends, on a parity with or
junior to the series of Preferred Shares offered by the applicable Prospectus
Supplement for any period unless full dividends for the immediately preceding
dividend period on such Preferred Shares (including any accumulation in respect
of unpaid dividends for prior dividend periods, if dividends on such Preferred
Shares are cumulative) have been or contemporaneously are authorized and paid or
authorized and a sum sufficient for the payment thereof is set apart for such
payment. When dividends are not so paid in full (or a sum sufficient for such
full payment is not so set apart) upon such Preferred Shares and any other
Preferred Shares of Vornado ranking on a parity as to dividends with the
Preferred Shares, dividends upon such Preferred Shares and dividends on such
other Preferred Shares ranking on a parity with the Preferred Shares shall be
authorized pro rata so that the amount of dividends authorized per share on such
Preferred Shares and such other Preferred Shares ranking on a parity with the
Preferred Shares shall in all cases bear to each other the same ratio that
accrued dividends for the then-current dividend period per share on such
Preferred Shares (including any accumulation in respect of unpaid dividends for
prior dividend periods, if dividends on such Preferred Shares are cumulative)
and accrued dividends, including required or permitted accumulations, if any, on
shares of such other Preferred Shares, bear to each other. No interest, or sum
of money in lieu of interest, shall be payable in respect of any dividend
payment(s) on Preferred Shares which may be in arrears. Unless full dividends on
the series of Preferred Shares offered by the applicable Prospectus Supplement
have been authorized and paid or set apart for payment for the immediately
preceding dividend period (including any accumulation in respect of unpaid
dividends for prior dividend periods, if dividends on such Preferred Shares are
cumulative), (a) no cash dividend or distribution (other than in shares of
Junior Stock) may be authorized, set aside or paid on the Junior Stock, (b)
Vornado may not, directly or indirectly, repurchase, redeem or otherwise acquire
any shares of its Junior Stock (or pay any monies into a sinking fund for the
redemption of any shares) except by conversion into or exchange for Junior
Stock, and (c) Vornado may not, directly or indirectly, repurchase, redeem or
otherwise acquire any Preferred Shares or Parity Stock (or pay any monies into a
sinking fund for the redemption of any shares of any such stock) otherwise than
pursuant to pro rata offers to purchase or a concurrent redemption of all, or a
pro rata portion, of the outstanding Preferred Shares and shares of Parity Stock
(except by conversion into or exchange for Junior Stock).
Any dividend payment made on a series of Preferred Shares shall first be
credited against the earliest accrued but unpaid dividend due with respect to
shares of such series.
Redemption
The terms, if any, on which Preferred Shares of any series may be redeemed
will be set forth in the applicable Prospectus Supplement.
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Liquidation
In the event of a voluntary or involuntary liquidation, dissolution or
winding up of the affairs of Vornado, the holders of a series of Preferred
Shares will be entitled, subject to the rights of creditors, but before any
distribution or payment to the holders of Common Shares, Excess Shares (other
than certain Excess Shares resulting from the conversion of Preferred Shares) or
any Junior Stock on liquidation, dissolution or winding up of Vornado, to
receive a liquidating distribution in the amount of the liquidation preference
per share as set forth in the applicable Prospectus Supplement plus accrued and
unpaid dividends for the then-current dividend period (including any
accumulation in respect of unpaid dividends for prior dividend periods, if
dividends on such series of Preferred Shares are cumulative). If the amounts
available for distribution with respect to the Preferred Shares and all other
outstanding Parity Stock are not sufficient to satisfy the full liquidation
rights of all the outstanding Preferred Shares and Parity Stock, then the
holders of each series of such stock will share ratably in any such distribution
of assets in proportion to the full respective preferential amount (which in the
case of Preferred Shares may include accumulated dividends) to which they are
entitled. After payment of the full amount of the liquidation distribution, the
holders of Preferred Shares will not be entitled to any further participation in
any distribution of assets by Vornado.
Title 8 does not contain any sections on the power of a Maryland real
estate investment trust, such as the Company, to make distributions, including
dividends, to its shareholders. It is possible that a Maryland court may look to
the Maryland General Corporation Law ("MGCL") for guidance on matters, such as
the making of distributions to shareholders, not covered by Title 8. The MGCL
requires that, after giving effect to a distribution, (1) the corporation must
be able to pay its debts as they become due in the usual course of business and
(2) the corporation's assets must at least equal the sum of its liabilities and
the preferential rights on dissolution of stockholders whose rights on
dissolution are superior to those stockholders receiving the distribution.
However, the MGCL also provides that the charter of the corporation may provide
that senior dissolution preferences shall not be included with liabilities for
purposes of determining amounts available for distribution. The applicable
articles supplementary may include such a provision.
Voting
The Preferred Shares of a series will not be entitled to vote, except as
described below or in the applicable Prospectus Supplement. Without the
affirmative vote of a majority of the Preferred Shares then outstanding (voting
separately as a class together with any Parity Stock), Vornado may not (i)
increase or decrease the aggregate number of authorized shares of such class or
any security ranking prior to the Preferred Shares, (ii) increase or decrease
the par value of the shares of holders of such class or (iii) alter or change
the voting or other powers, preferences or special rights of such class so as to
affect them adversely. An amendment which increases the number of authorized
shares of or authorizes the creation or issuance of other classes or series of
Junior Stock or Parity Stock, or substitutes the surviving entity in a merger,
consolidation, reorganization or other business combination for Vornado, shall
not be considered to be such an adverse change.
No Other Rights
The shares of a series of Preferred Shares will not have any preferences,
conversion or other rights, voting powers, restrictions, limitations as to
dividends and other distributions, qualifications, and terms and conditions of
redemption except as set forth above or in the applicable Prospectus Supplement,
the Declaration of Trust and in the applicable Articles Supplementary or as
otherwise required by law.
Transfer Agent and Registrar
The transfer agent for each series of Preferred Shares will be described in
the related Prospectus Supplement.
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Restrictions on Ownership
As discussed below, for Vornado to qualify as a REIT under the Code, not
more than 50% in value of its outstanding shares of beneficial interest may be
owned, directly or constructively, by five or fewer individuals (as defined in
the Code to include certain entities) during the last half of a taxable year,
and the shares of beneficial interest must be beneficially owned by 100 or more
persons during at least 335 days of a taxable year of 12 months (or during a
proportionate part of a shorter taxable year). Therefore, the Declaration of
Trust contains, and the Articles Supplementary for each series of Preferred
Shares may contain, provisions restricting the ownership and transfer of the
Preferred Shares.
The Declaration of Trust contains a limitation that restricts shareholders
from owning, under the applicable attribution rules of the Code, more than 9.9%
of the outstanding Preferred Shares of any series (the "Preferred Shares
Beneficial Ownership Limit"). The attribution rules which apply for purposes of
the Common Shares Beneficial Ownership Limit (as defined below) also apply for
purposes of the Preferred Shares Beneficial Ownership Limit. See "-- Description
of Common Shares -- Restrictions on Ownership". Shareholders should be aware
that events other than a purchase or other transfer of Preferred Shares may
result in ownership, under the applicable attribution rules of the Code, of
Preferred Shares in excess of the Preferred Shares Beneficial Ownership Limit.
Shareholders are urged to consult their own tax advisors concerning the
application of the attribution rules of the Code in their particular
circumstances.
Holders of Preferred Shares are also subject to the Constructive Ownership
Limit (as defined below in "-- Description of Common Shares -- Restrictions on
Ownership"), which restricts them from owning, under the applicable attribution
rules of the Code, more than 9.9% of the outstanding Preferred Shares of any
series. The attribution rules which apply for purposes of the Constructive
Ownership Limit differ from those that apply for purposes of the Preferred
Shares Beneficial Ownership Limit. See "-- Description of Common
Shares -- Restrictions on Ownership". Shareholders should be aware that events
other than a purchase or other transfer of Preferred Shares may result in
ownership, under the applicable attribution rules of the Code, of Preferred
Shares in excess of the Constructive Ownership Limit. Shareholders are urged to
consult their own tax advisors concerning the application of the attribution
rules of the Code in their particular circumstances.
The Declaration of Trust provides that a transfer of Preferred Shares that
would otherwise result in ownership, under the applicable attribution rules of
the Code, of Preferred Shares in excess of the Preferred Shares Beneficial
Ownership Limit or the Constructive Ownership Limit, or which would cause the
shares of beneficial interest of Vornado to be beneficially owned by fewer than
100 persons, will be null and void and the Declaration of Trust provides that
the purported transferee will acquire no rights or economic interest in such
Preferred Shares. In addition, Preferred Shares that would otherwise be owned,
under the applicable attribution rules of the Code, in excess of the Preferred
Shares Beneficial Ownership Limit or the Constructive Ownership Limit will be
automatically exchanged for Excess Shares that will be transferred, by operation
of law, to Vornado as trustee of a trust for the exclusive benefit of a
beneficiary designated by the purported transferee or purported holder. While so
held in trust, Excess Shares are not entitled to vote and are not entitled to
participate in any dividends or distributions made by Vornado. Any dividends or
distributions received by the purported transferee or other purported holder of
such Excess Shares prior to the discovery by Vornado of the automatic exchange
for Excess Shares shall be repaid to Vornado upon demand.
If the purported transferee or purported holder elects to designate a
beneficiary of an interest in the trust with respect to such Excess Shares, only
a person whose ownership of the shares will not violate the Preferred Shares
Beneficial Ownership Limit or the Constructive Ownership Limit may be
designated, at which time the Excess Shares will be automatically exchanged for
Preferred Shares of the same class as the Preferred Shares which were originally
exchanged for such Excess Shares. The Declaration of Trust contains provisions
designed to ensure that the purported transferee or other purported holder of
the Excess Shares may not receive in return for such a transfer an amount that
reflects any appreciation in the Preferred Shares for which such Excess Shares
were exchanged during the period that such Excess Shares were outstanding but
will bear the burden of any decline in value during such period. Any amount
received by a purported transferee or other purported holder for designating a
beneficiary in excess of the amount permitted to be received must be turned
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over to Vornado. The Declaration of Trust provides that Vornado may purchase any
Excess Shares that have been automatically exchanged for Preferred Shares as a
result of a purported transfer or other event. The price at which Vornado may
purchase such Excess Shares shall be equal to the lesser of (i) in the case of
Excess Shares resulting from a purported transfer for value, the price per share
in the purported transfer that resulted in the automatic exchange for Excess
Shares or, in the case of Excess Shares resulting from some other event, the
market price of the Preferred Shares exchanged on the date of the automatic
exchange for Excess Shares and (ii) the market price of the Preferred Shares
exchanged for such Excess Shares on the date that the Company accepts the deemed
offer to sell such Excess Shares. Vornado's purchase right with respect to
Excess Shares shall exist for 90 days, beginning on the date that the automatic
exchange for Excess Shares occurred or, if Vornado did not receive a notice
concerning the purported transfer that resulted in the automatic exchange for
Excess Shares, the date that the Board of Trustees determines in good faith that
an exchange for Excess Shares has occurred.
The Board of Trustees may exempt certain persons from the Preferred Shares
Beneficial Ownership Limit or the Constructive Ownership Limit if evidence
satisfactory to the trustees is presented showing that such exemption will not
jeopardize Vornado's status as a REIT under the Code. As a condition of such
exemption, the Board of Trustees may require a ruling from the Internal Revenue
Service and/or an opinion of counsel satisfactory to it and/or representations
and undertakings from the applicant with respect to preserving the REIT status
of Vornado.
The foregoing restrictions on transferability and ownership will not apply
if the Board of Trustees determines that it is no longer in the best interests
of Vornado to attempt to qualify, or to continue to qualify, as a REIT.
All certificates evidencing Preferred Shares will bear a legend referring
to the restrictions described above.
All persons who own, directly or by virtue of the applicable attribution
rules of the Code, more than 2% of the outstanding Preferred Shares of any
series must give a written notice to Vornado containing the information
specified in the Declaration of Trust by January 31 of each year. In addition,
each shareholder shall upon demand be required to disclose to Vornado such
information as Vornado may request, in good faith, in order to determine
Vornado's status as a REIT or to comply with Treasury Regulations promulgated
under the REIT provisions of the Code.
DEPOSITARY SHARES
Vornado may, at its option, elect to offer receipts for fractional
interests ("Depositary Shares") in Preferred Shares, rather than full Preferred
Shares. In such event, receipts ("Depositary Receipts") for Depositary Shares,
each of which will represent a fraction (to be set forth in the Prospectus
Supplement relating to a particular series of Preferred Shares) of a share of a
particular series of Preferred Shares, will be issued as described below.
The description set forth below of the material provisions of the Deposit
Agreement and of the Depositary Shares and Depositary Receipts (each as defined
below) does not purport to be complete and is subject to and qualified in its
entirety by reference to the forms of Deposit Agreement and Depositary Receipts
relating to each series of the Preferred Shares which have been or will be filed
with the Commission at or prior to the time of the offering of such series of
the Preferred Shares. The particular terms of Depositary Shares representing
fractional interests in any particular series of Preferred Shares will be
described in the applicable Prospectus Supplement, which will supplement the
information set forth herein.
General
The shares of any series of Preferred Shares represented by Depositary
Shares will be deposited under a Deposit Agreement (the "Deposit Agreement")
between Vornado and the depositary (the "Depositary"). Subject to the terms of
the Deposit Agreement, each owner of a Depositary Share will be entitled, in
proportion to the applicable fraction of a Preferred Share represented by such
Depositary Share, to all the
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preferences, conversion or other rights, voting powers, restrictions,
limitations as to dividends and other distributions, qualifications and terms
and conditions of redemption of the Preferred Shares represented thereby.
Dividends and Other Distributions
The Depositary will distribute all cash dividends or other cash
distributions received in respect of the Preferred Shares to the record holders
of Depositary Shares relating to such Preferred Shares in proportion to the
numbers of such Depositary Shares owned by such holders.
In the event of a distribution other than in cash, the Depositary will
distribute property received by it to the record holders of Depositary Shares in
an equitable manner, unless the Depositary determines that it is not feasible to
make such distribution, in which case the Depositary may sell such property and
distribute the net proceeds from such sale to such holders.
Withdrawal of Preferred Shares
Upon surrender of Depositary Receipts at the corporate trust office of the
Depositary (unless the related Depositary Shares have previously been called for
redemption or converted into Excess Shares or otherwise), the holders thereof
will be entitled to delivery at such office, to or upon such holder's order, of
the number of whole or fractional shares of the class or series of Preferred
Shares and any money or other property represented by the Depositary Shares
evidenced by such Depositary Receipts. Holders of Depositary Receipts will be
entitled to receive whole or fractional shares of the related class or series of
Preferred Shares on the basis of the proportion of Preferred Shares represented
by each Depositary Share as specified in the applicable Prospectus Supplement,
but holders of such Preferred Shares will not thereafter be entitled to receive
Depositary Shares thereof. If the Depositary Receipts delivered by the holder
evidence a number of Depositary Shares in excess of the number of Depositary
Shares representing the number of shares of Preferred Shares to be withdrawn,
the Depositary will deliver to such holder at the same time a new Depositary
Receipt evidencing such excess number of Depositary Shares.
Redemption of Depositary Shares
If a series of Preferred Shares represented by Depositary Shares is subject
to redemption, the Depositary Shares will be redeemed from the proceeds received
by the Depositary resulting from the redemption, in whole or in part, of such
series of Preferred Shares held by the Depositary. The redemption price per
Depositary Share will be equal to the applicable fraction of the redemption
price per share payable with respect to such series of the Preferred Shares.
Whenever Vornado redeems Preferred Shares held by the Depositary, the Depositary
will redeem as of the same redemption date the number of Depositary Shares
representing Preferred Shares so redeemed. If fewer than all the Depositary
Shares are to be redeemed, the Depositary Shares to be redeemed will be selected
by lot, pro rata or by any other equitable method as may be determined by the
Depositary.
Voting the Preferred Shares
Upon receipt of notice of any meeting at which the holders of the Preferred
Shares are entitled to vote, the Depositary will mail the information contained
in such notices of meeting to the record holders of the Depositary Shares
relating to such Preferred Shares. Each record holder of such Depositary Shares
on the record date (which will be the same date as the record date for the
Preferred Shares) will be entitled to instruct the Depositary as to the exercise
of the voting rights pertaining to the amount of the Preferred Shares
represented by such holder's Depositary Shares. The Depositary will endeavor,
insofar as practicable, to vote the amount of the Preferred Shares represented
by such Depositary Shares in accordance with such instructions, and Vornado will
agree to take all reasonable action which may be deemed necessary by the
Depositary in order to enable the Depositary to do so. The Depositary will
abstain from voting the Preferred Shares to the extent it does not receive
specific instructions from the holder of Depositary Shares representing such
Preferred Shares.
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Amendment and Termination of the Deposit Agreement
The form of Depositary Receipt evidencing the Depositary Shares and any
provision of the Deposit Agreement may at any time be amended by agreement
between Vornado and the Depositary. However, any amendment which materially and
adversely alters the rights of the holders of Depositary Shares will not be
effective unless such amendment has been approved by the holders of at least a
majority of the Depositary Shares then outstanding. The Deposit Agreement will
only terminate if (i) all outstanding Depositary Shares have been redeemed or
(ii) there has been a final distribution in respect of the Preferred Shares in
connection with any liquidation, dissolution or winding up of Vornado and such
distribution has been distributed to the holders of the related Depositary
Shares.
Charges of Depositary
Vornado will pay all transfer and other taxes and governmental charges
arising solely from the existence of the depositary arrangements. Vornado will
pay charges of the Depositary in connection with the initial deposit of the
Preferred Shares and issuance of Depositary Receipts, all withdrawals of
Preferred Shares by owners of Depositary Shares and any redemption of the
Preferred Shares. Holders of Depositary Receipts will pay other transfer and
other taxes and governmental charges and such other charges as are expressly
provided in the Deposit Agreement to be for their accounts.
Resignation and Removal of Depositary
The Depositary may resign at any time by delivering to Vornado notice of
its election to do so, and Vornado may at any time remove the Depositary, any
such resignation or removal to take effect upon the appointment of a successor
Depositary and its acceptance of such appointment. Such successor Depositary
must be appointed within 60 days after delivery of the notice of resignation or
removal and must be a bank or trust company having its principal office in the
United States and having a combined capital and surplus of at least $50,000,000.
Restrictions on Ownership
In order to safeguard Vornado against an inadvertent loss of REIT status,
the Deposit Agreement or the Declaration of Trust will contain provisions
restricting the ownership and transfer of Depositary Shares. Such restrictions
will be described in the applicable Prospectus Supplement.
Miscellaneous
The Depositary will forward all reports and communications from Vornado
which are delivered to the Depositary and which Vornado is required or otherwise
determines to furnish to the holders of the Preferred Shares.
Neither the Depositary nor Vornado will be liable if it is prevented or
delayed by law or any circumstance beyond its control in performing its
obligations under the Deposit Agreement. The obligations of Vornado and the
Depositary under the Deposit Agreement will be limited to performance in good
faith of their duties thereunder and they will not be obligated to prosecute or
defend any legal proceeding in respect of any Depositary Shares or Preferred
Shares unless satisfactory indemnity is furnished. They may rely upon written
advice of counsel or accountants, or information provided by persons presenting
Preferred Shares for deposit, holders of Depositary Shares or other persons
believed to be competent and on documents believed to be genuine.
DESCRIPTION OF COMMON SHARES
As of July 31, 1997, 26,553,161 Common Shares were issued and outstanding
and no Excess Shares were issued and outstanding. The Common Shares of Vornado
are listed on the NYSE under the symbol "VNO".
The holders of Common Shares are entitled to receive dividends when, if and
as authorized by the Board of Trustees of Vornado out of assets legally
available therefor, provided that if any Preferred Shares are at the
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time outstanding, the payment of dividends on Common Shares or other
distributions (including purchases of Common Shares) may be subject to the
declaration and payment of full cumulative dividends, and the absence of
arrearages in any mandatory sinking fund, on outstanding Preferred Shares.
The holders of Common Shares are entitled to one vote for each share on all
matters voted on by stockholders, including elections of trustees. There is no
cumulative voting in the election of trustees, which means that the holders of a
majority of the outstanding Common Shares can elect all of the trustees then
standing for election. The holders of Common Shares do not have any conversion,
redemption or preemptive rights to subscribe to any securities of the Company.
In the event of the dissolution, liquidation or winding up of Vornado, holders
of Common Shares are entitled to share ratably in any assets remaining after the
satisfaction in full of the prior rights of creditors, including holders of the
Company's indebtedness, and the aggregate liquidation preference of any
Preferred Shares then outstanding.
The Common Shares have equal dividend, distribution, liquidation and other
rights, and shall have no preference, appraisal or exchange rights. All
outstanding shares of Common Shares are, and any Common Shares offered by a
Prospectus Supplement, upon issuance, will be, fully paid and non-assessable.
The transfer agent for the Common Shares is First Fidelity Bank, N.A., New
Jersey.
Restrictions on Ownership
The Declaration of Trust contains a number of provisions which restrict the
ownership and transfer of shares and which are designed to safeguard Vornado
against an inadvertent loss of its REIT status. In order to prevent any Vornado
shareholder from owning shares in an amount which would cause more than 50% in
value of the outstanding shares of Vornado to be owned by five or fewer
individuals, the Declaration of Trust contains a limitation that restricts, with
certain exceptions, shareholders from owning, under the applicable attribution
rules of the Code, more than a specified percentage of the outstanding Common
Shares (the "Common Shares Beneficial Ownership Limit"). The Common Shares
Beneficial Ownership Limit was initially set at 2.0% of the outstanding Common
Shares. The Board of Trustees subsequently adopted a resolution raising the
Common Shares Beneficial Ownership Limit from 2.0% to 6.7% of the outstanding
Common Shares. The shareholders who owned, under the applicable attribution
rules of the Code, more than 6.7% of the Common Shares immediately after the
merger of Vornado, Inc. into Vornado in May 1993 (the "Merger") may continue to
do so and may acquire additional Common Shares through stock option and similar
plans or from other shareholders who owned, under the applicable attribution
rules of the Code, more than 6.7% of the Common Shares immediately after the
Merger, subject to the restriction that Common Shares cannot be transferred if,
as a result, more than 50% in value of the outstanding shares of Vornado would
be owned by five or fewer individuals. While such shareholders are not generally
permitted to acquire additional Common Shares from any other source, such
shareholders may acquire additional Common Shares from any source in the event
that additional Common Shares are issued by Vornado, up to the percentage held
by them immediately prior to such issuance.
Shareholders should be aware that events other than a purchase or other
transfer of Common Shares can result in ownership, under the applicable
attribution rules of the Code, of Common Shares in excess of the Common Shares
Beneficial Ownership Limit. For instance, if two shareholders, each of whom
owns, under the applicable attribution rules of the Code, 3.5% of the
outstanding Common Shares, were to marry, then after their marriage both
shareholders would own, under the applicable attribution rules of the Code, 7.0%
of the outstanding Common Shares, which is in excess of the Common Shares
Beneficial Ownership Limit. Similarly, if a shareholder who owns, under the
applicable attribution rules of the Code, 4.9% of the outstanding Common Shares
were to purchase a 50% interest in a corporation which owns 4.8% of the
outstanding Common Shares, then the shareholder would own, under the applicable
attribution rules of the Code, 7.3% of the outstanding Common Shares.
Shareholders are urged to consult their own tax advisors concerning the
application of the attribution rules of the Code in their particular
circumstances.
Under the Code, rental income received by a REIT from persons in which the
REIT is treated, under the applicable attribution rules of the Code, as owning a
10% or greater interest does not constitute qualifying income for purposes of
the income requirements that REITs must satisfy. For these purposes, a REIT is
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treated as owning any stock owned, under the applicable attribution rules of the
Code, by a person that owns 10% or more of the value of the outstanding shares
of the REIT. Therefore, in order to ensure that rental income of the Company
will not be treated as nonqualifying income under the rule described above, and
thus to ensure that there will not be an inadvertent loss of REIT status as a
result of the ownership of shares of a tenant, or a person that holds an
interest in a tenant, the Declaration of Trust also contains an ownership limit
that restricts, with certain exceptions, shareholders from owning, under the
applicable attribution rules of the Code (which are different from those
applicable with respect to the Common Shares Beneficial Ownership Limit), more
than 9.9% of the outstanding shares of any class (the "Constructive Ownership
Limit"). The shareholders who owned, under the applicable attribution rules of
the Code, shares in excess of the Constructive Ownership Limit immediately after
the Merger generally are not subject to the Constructive Ownership Limit.
Subject to an exception for tenants and subtenants from whom the REIT receives,
directly or indirectly, rental income that is not in excess of a specified
threshold, the Declaration of Trust also contains restrictions that are designed
to ensure that the shareholders who owned, under the applicable attribution
rules of the Code, shares in excess of the Constructive Ownership Limit
immediately after the Merger will not, in the aggregate, own an interest in a
tenant or subtenant of the REIT of sufficient magnitude to cause rental income
received, directly or indirectly, by the REIT from such tenant or subtenant to
be treated as nonqualifying income for purposes of the income requirements that
REITs must satisfy.
Shareholders should be aware that events other than a purchase or other
transfer of shares can result in ownership, under the applicable attribution
rules of the Code, of shares in excess of the Constructive Ownership Limit. As
the attribution rules that apply with respect to the Constructive Ownership
Limit differ from those that apply with respect to the Common Shares Beneficial
Ownership Limit, the events other than a purchase or other transfer of shares
which can result in share ownership in excess of the Constructive Ownership
Limit can differ from those which can result in share ownership in excess of the
Common Shares Beneficial Ownership Limit. Shareholders are urged to consult
their own tax advisors concerning the application of the attribution rules of
the Code in their particular circumstances.
The Declaration of Trust provides that a transfer of Common Shares that
would otherwise result in ownership, under the applicable attribution rules of
the Code, of Common Shares in excess of the Common Shares Beneficial Ownership
Limit or the Constructive Ownership Limit, or which would cause the shares of
beneficial interest of the Company to be beneficially owned by fewer than 100
persons, will be null and void and the purported transferee will acquire no
rights or economic interest in such Common Shares. In addition, the Declaration
of Trust provides that Common Shares that would otherwise be owned, under the
applicable attribution rules of the Code, in excess of the Common Shares
Beneficial Ownership Limit or the Constructive Ownership Limit will be
automatically exchanged for Excess Shares that will be transferred, by operation
of law, to Vornado as trustee of a trust for the exclusive benefit of a
beneficiary designated by the purported transferee or purported holder. While so
held in trust, Excess Shares are not entitled to vote and are not entitled to
participate in any dividends or distributions made by Vornado. Any dividends or
distributions received by the purported transferee or other purported holder of
such Excess Shares prior to the discovery by Vornado of the automatic exchange
for Excess Shares shall be repaid to Vornado upon demand.
If the purported transferee or purported holder elects to designate a
beneficiary of an interest in the trust with respect to such Excess Shares, only
a person whose ownership of the shares will not violate the Common Shares
Beneficial Ownership Limit or the Constructive Ownership Limit may be
designated, at which time the Excess Shares will be automatically exchanged for
Common Shares. The Declaration of Trust contains provisions designed to ensure
that the purported transferee or other purported holder of the Excess Shares may
not receive in return for such a transfer an amount that reflects any
appreciation in the Common Shares for which such Excess Shares were exchanged
during the period that such Excess Shares were outstanding but will bear the
burden of any decline in value during such period. Any amount received by a
purported transferee or other purported holder for designating a beneficiary in
excess of the amount permitted to be received must be turned over to Vornado.
The Declaration of Trust provides that Vornado may purchase any Excess Shares
that have been automatically exchanged for Common Shares as a result of a
purported transfer or other event. The price at which Vornado may purchase such
Excess Shares shall be equal to the lesser of (i) in the case of Excess Shares
resulting from a purported transfer for value, the price per share in the
purported transfer that
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resulted in the automatic exchange for Excess Shares or, in the case of Excess
Shares resulting from some other event, the market price of the Common Shares
exchanged on the date of the automatic exchange for Excess Shares and (ii) the
market price of the Common Shares exchanged for such Excess Shares on the date
that Vornado accepts the deemed offer to sell such Excess Shares. Vornado's
purchase right with respect to Excess Shares shall exist for 90 days, beginning
on the date that the automatic exchange for Excess Shares occurred or, if
Vornado did not receive a notice concerning the purported transfer that resulted
in the automatic exchange for Excess Shares, the date that the Board of Trustees
determines in good faith that an exchange for Excess Shares has occurred.
The Board of Trustees of Vornado may exempt certain persons from the Common
Shares Beneficial Ownership Limit or the Constructive Ownership Limit, including
the limitations applicable to holders who owned in excess of 6.7% of the Common
Shares immediately after the Merger, if evidence satisfactory to the Board of
Trustees is presented showing that such exemption will not jeopardize Vornado's
status as a REIT under the Code. As a condition of such exemption, the Board of
Trustees may require a ruling from the Internal Revenue Service and/or an
opinion of counsel satisfactory to it and/or representations and undertakings
from the applicant with respect to preserving the REIT status of Vornado.
The foregoing restrictions on transferability and ownership will not apply
if the Board of Trustees determines that it is no longer in the best interests
of Vornado to attempt to qualify, or to continue to qualify, as a REIT.
All persons who own, directly or by virtue of the applicable attribution
rules of the Code, more than 2.0% of the outstanding Common Shares must give a
written notice to Vornado containing the information specified in the
Declaration of Trust by January 31 of each year. In addition, each shareholder
shall upon demand be required to disclose to the Company such information as
Vornado may request, in good faith, in order to determine Vornado's status as a
REIT or to comply with Treasury Regulations promulgated under the REIT
provisions of the Code.
The ownership restrictions described above may have the effect of
precluding acquisition of control of Vornado unless the Board of Trustees
determines that maintenance of REIT status is no longer in the best interests of
Vornado.
FEDERAL INCOME TAX CONSIDERATIONS
The following summary of the taxation of Vornado and the material Federal
income tax consequences to holders of the Securities is for general information
only, and is not tax advice. The tax treatment of a holder of Securities will
vary depending upon the holder's particular situation, and this discussion
addresses only holders that hold Securities as capital assets and does not
purport to deal with all aspects of taxation that may be relevant to particular
holders in light of their personal investment or tax circumstances, or to
certain types of holders (including dealers in securities or currencies, banks,
tax-exempt organizations, life insurance companies, persons that hold Securities
that are a hedge or that are hedged against currency risks or that are part of a
straddle or conversion transaction) subject to special treatment under the
Federal income tax laws. This summary is based on the Code, its legislative
history, existing and proposed regulations thereunder, published rulings and
court decisions, all as currently in effect and all subject to change at any
time, perhaps with retroactive effect.
INVESTORS ARE URGED TO CONSULT WITH THEIR OWN TAX ADVISORS REGARDING THE TAX
CONSEQUENCES TO THEM OF THE ACQUISITION, OWNERSHIP AND SALE OF SECURITIES,
INCLUDING THE FEDERAL, STATE, LOCAL AND FOREIGN TAX CONSEQUENCES OF SUCH
ACQUISITION, OWNERSHIP AND SALE IN THEIR PARTICULAR CIRCUMSTANCES AND POTENTIAL
CHANGES IN APPLICABLE LAWS.
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TAXATION OF THE COMPANY AS A REIT
General
In the opinion of Sullivan & Cromwell, commencing with its taxable year
ended December 31, 1993, Vornado has been organized and operated in conformity
with the requirements for qualification and taxation as a REIT under the Code,
and Vornado's proposed method of operation will enable it to continue to meet
the requirements for qualification and taxation as a REIT under the Code.
Investors should be aware, however, that opinions of counsel are not binding
upon the Internal Revenue Service or any court. In providing its opinion,
Sullivan & Cromwell is relying upon (i) representations received from Vornado
and (ii) an opinion of Shearman & Sterling as to the qualification of
Alexander's as a REIT. In providing its opinion to the effect that, commencing
with Alexander's taxable year ending December 31, 1995, Alexander's has been
organized and operated in conformity with the requirements for qualification and
taxation as a REIT under the Code, and Alexander's proposed method of operation
will enable it to continue to meet the requirements for qualification and
taxation as a REIT under the Code, Shearman & Sterling is in turn relying upon
representations received from Alexander's. The qualification and taxation of
Vornado and Alexander's as REITs depends upon their ability to meet, through
actual annual operating results, distribution levels, stock ownership
requirements and the various qualification tests imposed under the Code.
Accordingly, while Vornado intends to continue to qualify to be taxed as a REIT,
no assurance can be given that the actual results of Vornado's or Alexander's
operations for any particular year will satisfy such requirements. Neither
Sullivan & Cromwell nor Shearman & Sterling will monitor the compliance of the
Company or Alexander's with the requirements for REIT qualification on an
ongoing basis.
The sections of the Code applicable to REITs are highly technical and
complex. The material aspects thereof are summarized below.
As a REIT, Vornado generally will not be subject to Federal corporate
income taxes on its net income that is currently distributed to shareholders.
This treatment substantially eliminates the "double taxation" (at the corporate
and shareholder levels) that generally results from investment in a regular
corporation. However, Vornado will be subject to federal income tax as follows.
First, Vornado will be taxed at regular corporate rates on any undistributed
real estate investment trust taxable income, including undistributed net capital
gains. Second, under certain circumstances, Vornado may be subject to the
"alternative minimum tax" on its items of tax preference. Third, if Vornado has
(i) net income from the sale or other disposition of "foreclosure property"
which is held primarily for sale to customers in the ordinary course of business
or (ii) other non-qualifying income from foreclosure property, it will be
subject to tax at the highest corporate rate on such income. Fourth, if Vornado
has net income from "prohibited transactions" (which are, in general, certain
sales or other dispositions of property, other than foreclosure property, held
primarily for sale to customers in the ordinary course of business), such income
will be subject to a 100% tax. Fifth, if Vornado should fail to satisfy the 75%
gross income test or the 95% gross income test (as discussed below), but has
nonetheless maintained its qualification as a REIT because certain other
requirements have been met, it will be subject to a 100% tax on an amount equal
to (a) the gross income attributable to the greater of the amount by which
Vornado fails the 75% or 95% test, multiplied by (b) a fraction intended to
reflect Vornado's profitability. Sixth, if Vornado should fail to distribute
during each calendar year at least the sum of (i) 85% of its real estate
investment trust ordinary income for such year, (ii) 95% of its real estate
investment trust capital gain net income for such year, and (iii) any
undistributed taxable income from prior periods, Vornado would be subject to a
4% excise tax on the excess of such required distribution over the amounts
actually distributed. Seventh, if during the 10-year period (the "Recognition
Period") beginning on the first day of the first taxable year for which Vornado
qualified as a REIT, Vornado recognizes gain on the disposition of any asset
held by Vornado as of the beginning of the Recognition Period, then, to the
extent of the excess of (a) fair market value of such asset as of the beginning
of the Recognition Period over (b) Vornado's adjusted basis in such asset as of
the beginning of the Recognition Period (the "Built-in Gain"), such gain will be
subject to tax at the highest regular corporate rate pursuant to Treasury
regulations that have not been promulgated; provided, however, that Vornado
shall not be subject to tax on recognized Built-in Gain with respect to assets
held as of the first day of the Recognition Period to the extent that the
aggregate amount of such recognized Built-in Gain exceeds the net aggregate
amount of Vornado's unrealized Built-in Gain as of the first day of the
Recognition
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Period. Eighth, if Vornado acquires any asset from a C corporation (i.e.,
generally a corporation subject to full corporate-level tax) in certain
transactions in which the basis of the asset in the hands of Vornado is
determined by reference to the basis of the asset (or any other property) in the
hands of the C corporation, and Vornado recognizes gain on the disposition of
such asset during the Recognition Period beginning on the date on which such
asset was acquired by Vornado, then, pursuant to the Treasury regulations that
have not yet been issued and to the extent of the Built-in Gain, such gain will
be subject to tax at the highest regular corporate rate.
Requirements for Qualification
The Code defines a REIT as a corporation, trust or association (1) which is
managed by one or more trustees or directors, (2) the beneficial ownership of
which is evidenced by transferable shares, or by transferable certificates of
beneficial interest, (3) which would otherwise be taxable as a domestic
corporation, but for Sections 856 through 859 of the Code, (4) which 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) during the last half of each taxable year, not more than 50% in
value of the outstanding stock of which is owned, directly or constructively, by
five or fewer individuals (as defined in the Code to include certain entities)
and (7) which meets certain other tests, described below, regarding the nature
of its income and assets. The Code provides that conditions (1) to (4) 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.
Vornado has satisfied conditions (1) through (5) and believes that it has
also satisfied condition (6). In addition, Vornado's Declaration of Trust
provides for restrictions regarding the ownership and transfer of Vornado's
shares of beneficial interest, which restrictions are intended to assist Vornado
in continuing to satisfy the share ownership requirements described in (5) and
(6) above. The ownership and transfer restrictions pertaining to the Preferred
Shares and the Common Shares are described above under the headings "Description
of Shares of Beneficial Interest -- Description of Preferred
Shares -- Restrictions on Ownership" and "Description of Shares of Beneficial
Interest -- Description of Common Shares -- Restrictions on Ownership."
Vornado owns a number of wholly-owned subsidiaries. Code Section 856(i)
provides that a corporation which is a "qualified REIT subsidiary" shall not be
treated as a separate corporation, and all assets, liabilities, and items of
income, deduction, and credit of a "qualified REIT subsidiary" shall be treated
as assets, liabilities and such items (as the case may be) of the REIT. Thus, in
applying the requirements described herein, Vornado's "qualified REIT
subsidiaries" will be ignored, and all assets, liabilities and items of income,
deduction, and credit of such subsidiaries will be treated as assets,
liabilities and such items (as the case may be) of Vornado. Vornado believes
that all of its wholly-owned subsidiaries are "qualified REIT subsidiaries."
In the case of a REIT that is a partner in a partnership, Treasury
regulations provide that the REIT will be deemed to own its proportionate share
of the assets of the partnership and will be deemed to be entitled to the income
of the partnership attributable to such share. In addition, the character of the
assets and gross income of the partnership will retain the same character in the
hands of the REIT for purposes of Section 856 of the Code, including satisfying
the gross income tests and the asset tests. Thus, Vornado's proportionate share
of the assets, liabilities and items of income of any partnership in which
Vornado is a partner, including the Operating Partnership, will be treated as
assets, liabilities and items of income of Vornado for purposes of applying the
requirements described herein. Thus, actions taken by partnerships in which
Vornado owns an interest either directly or through one or more tiers of
partnerships or qualified REIT subsidiaries, can affect Vornado's ability to
satisfy the REIT income and assets tests and the determination of whether
Vornado has net income from "prohibited transactions".
Income Tests. In order to maintain qualification as a REIT, Vornado
annually must satisfy three gross income requirements. First, at least 75% of
Vornado'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"-- which term generally includes
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expenses of Vornado that are paid or reimbursed by tenants) or from certain
types of temporary investments. Second, at least 95% of Vornado's gross income
(excluding gross income from prohibited transactions) for each taxable year must
be derived from such real property investments, dividends, interest and gain
from the sale or disposition of stock or securities (or from any combination of
the foregoing). Third, for taxable years beginning on or before August 5, 1997,
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 Vornado's gross
income (including gross income from prohibited transactions) for such taxable
year.
Rents received by Vornado will qualify as "rents from real property" in
satisfying the gross income requirements for a REIT described above only if
several conditions are met. First, the amount of rent must not be based in whole
or in part on the income or profits of any person. However, an amount received
or accrued generally will not be excluded from the terms "rents from real
property" solely by reason of being based on a fixed percentage or percentages
of receipts or sales. Second, the Code provides that rents received from a
tenant will not qualify as "rents from real property" in satisfying the gross
income tests if the REIT, directly or under the applicable attribution rules,
owns a 10% or greater interest in such tenant (a "Related Party Tenant"). Third,
if rent attributable to personal property leased in connection with a lease of
real property is greater than 15% of the total rent received under the lease,
then the portion of rent attributable to such personal property will not qualify
as "rents from real property". Finally, for rents received to qualify as "rents
from real property," the REIT generally must not operate or manage the property
or furnish or render services to the tenants of such property, other than
through an independent contractor from whom the REIT derives no revenue;
provided, however, that Vornado may directly perform certain services that are
"usually or customarily rendered" in connection with the rental of space for
occupancy only or are not considered "rendered to the occupant" of the property.
Vornado does not derive significant rents from Related Party Tenants, and
Vornado does not and will not derive rental income attributable to personal
property (other than personal property leased in connection with the lease of
real property, the amount of which is less than 15% of the total rent received
under the lease). Vornado directly performs services for certain of its tenants.
Vornado does not believe that the provision of such services will cause its
gross income attributable to such tenants to fail to be treated as "rents from
real property." For taxable years of Vornado beginning after August 5, 1997, if
Vornado provides services to a tenant that are other than those usually or
customarily provided in connection with the rental of space for occupancy only,
amounts received or accrued by Vornado for any such services will not be treated
as "rents from real property" for purposes of the REIT gross income tests but
will not cause other amounts received with respect to the property to fail to be
treated as "rents from real property" unless the amounts received in respect of
such services, together with amounts received for certain management services,
exceeds 1% of all amounts received or accrued by Vornado during the taxable year
with respect to such property. Under the literal wording of Section 856 of the
Code, if the 1% threshold is exceeded, then all amounts received or accrued by
Vornado with respect to the property will not qualify as "rents from real
property", even if the impermissible services are provided to some, but not all,
of the tenants of the property.
The term "interest" generally does not include any amount received or
accrued (directly or indirectly) if the determination of such amount depends in
whole or in part on the income or profits of any person. However, an amount
received or accrued generally will not be excluded from the term "interest"
solely by reason of being based on a fixed percentage or percentages of receipts
or sales.
If Vornado fails to satisfy one or both of the 75% or 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. These relief
provisions will generally be available if Vornado's failure to meet such tests
was due to reasonable cause and not due to willful neglect, Vornado attaches a
schedule of the sources of its income to its Federal income tax return, and any
incorrect information on the schedule was not due to fraud with intent to evade
tax. It is not possible, however, to state whether in all circumstances Vornado
would be entitled to the benefit of these relief provisions. As discussed above
under "-- General," even if these relief provisions apply, a tax would be
imposed with respect to the excess income.
Asset Tests. Vornado, at the close of each quarter of its taxable year,
must also satisfy three tests relating to the nature of its assets. First, at
least 75% of the value of Vornado's total assets must be represented
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by real estate assets (including (i) real estate assets held by Vornado's
qualified REIT subsidiaries and Vornado's allocable share of real estate assets
held by partnerships in which Vornado owns an interest, (ii) for a period of one
year from the date of Vornado's receipt of proceeds of an offering of its shares
of beneficial interest or long-term (at least five years) debt, stock or debt
instruments purchased with such proceeds and (iii) stock issued by another
REIT), cash, cash items and government securities. Second, not more than 25% of
Vornado's total assets may be represented by securities other than those in the
75% asset class. Third, of the investments included in the 25% asset class, the
value of any one issuer's securities (other than securities issued by another
REIT) owned by Vornado may not exceed 5% of the value of Vornado's total assets
and Vornado may not own more than 10% of any one issuer's outstanding voting
securities.
Since March 2, 1995, Vornado has owned more than 10% of the voting
securities of Alexander's. Since April of 1997, Vornado's ownership of
Alexander's has been through the Operating Partnership rather than direct.
Vornado's ownership interest in Alexander's will not cause Vornado to fail to
satisfy the asset tests for REIT status so long as Alexander's qualified as a
REIT for each of taxable years beginning with its taxable year ending December
31, 1995 and continues to so qualify. In the opinion of Shearman & Sterling,
commencing with Alexander's taxable year ended December 31, 1995, Alexander's
has been organized and operated in conformity with the requirements for
qualification and taxation as a REIT under the Code, and its proposed method of
operation will enable it to continue to meet the requirements for qualification
and taxation as a REIT under the Code. In providing its opinion, Shearman &
Sterling is relying upon representations received from Alexander's.
Since April of 1997 Vornado has also owned, through the Operating
Partnership, more than 10% of the voting securities of Two Penn Plaza REIT, Inc.
("Two Penn REIT"). Vornado's indirect ownership interest in Two Penn REIT will
not cause Vornado to fail to satisfy the asset tests for REIT status so long as
Two Penn REIT qualifies as a REIT for its first taxable year and each taxable
year thereafter. Vornado believes that Two Penn REIT will also qualify.
In order to ensure compliance with the 95% gross income test described
above, Vornado transferred certain contract rights and obligations to VMC, a New
Jersey corporation, in return for all of VMC's nonvoting preferred stock (the
"Nonvoting Stock"). Since April of 1997, the Nonvoting Stock has been held by
the Operating Partnership. The Nonvoting Stock entitles the holder thereof to
95% of the dividends paid by VMC. Vornado does not believe that its indirect
ownership of the Nonvoting Stock will adversely affect its ability to satisfy
the asset tests described above.
Since April of 1997 and June of 1997, respectively, Vornado has also owned,
through the Operating Partnership, nonvoting shares in the Management
Corporation and Vornado RR, Inc. Vornado does not believe that the
characteristics or value of such shares will cause Vornado to fail to satisfy
the REIT asset tests described above.
Annual Distribution Requirements. Vornado, in order to qualify as a REIT,
is required to distribute dividends (other than capital gain dividends) to its
shareholders in an amount at least equal to (A) the sum of (i) 95% of Vornado's
"real estate investment trust taxable income" (computed without regard to the
dividends paid deduction and Vornado's net capital gain) and (ii) 95% of the net
income (after tax), if any, from foreclosure property minus (B) the sum of
certain items of non-cash income. In addition, if Vornado disposes of any asset
during its Recognition Period, Vornado will be required, pursuant to Treasury
regulations which have not yet been promulgated, to distribute at least 95% of
the Built-in Gain (after tax), if any, recognized on the disposition of such
asset. Such distributions must be paid in the taxable year to which they relate,
or in the following taxable year if declared before Vornado timely files its tax
return for such year and if paid on or before the first regular dividend payment
after such declaration. To the extent that Vornado does not distribute all of
its net capital gain or distributes at least 95%, but less than 100%, of its
"real estate investment trust taxable income," as adjusted, it will be subject
to tax thereon at regular ordinary and capital gain corporate tax rates.
Furthermore, if Vornado should fail to distribute during each calendar year at
least the sum of (i) 85% of its ordinary income for such year, (ii) 95% of its
capital gain net income for such year, and (iii) any undistributed taxable
income from prior periods, Vornado would be subject to a 4% excise tax on
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the excess of such required distribution over the amounts actually distributed.
Vornado intends to satisfy the annual distribution requirements.
It is possible that Vornado, from time to time, may not have sufficient
cash or other liquid assets to meet the 95% distribution requirement due to
timing differences between (i) the actual receipt of income and actual payment
of deductible expenses and (ii) the inclusion of such income and deduction of
such expenses in arriving at taxable income of Vornado. In the event that such
timing differences occur, in order to meet the 95% distribution requirement,
Vornado may find it necessary to arrange for short-term, or possibly long-term,
borrowings or to pay dividends in the form of taxable stock dividends.
Under certain circumstances, Vornado may be able to rectify a failure to
meet the distribution requirement for a year by paying "deficiency dividends" to
shareholders in a later year, which may be included in Vornado's deduction for
dividends paid for the earlier year. Thus, Vornado may be able to avoid being
taxed on amounts distributed as deficiency dividends; however, Vornado will be
required to pay interest based upon the amount of any deduction taken for
deficiency dividends.
Failure to Qualify
If Vornado fails to qualify for taxation as a REIT in any taxable year, and
the relief provisions do not apply, Vornado will be subject to tax (including
any applicable alternative minimum tax) on its taxable income at regular
corporate rates. Distributions to shareholders in any year in which Vornado
fails to qualify will not be deductible by Vornado nor will they be required to
be made. In such event, to the extent of current and accumulated earnings and
profits, all distributions to shareholders will be taxable as ordinary income
and, subject to certain limitations of the Code, corporate distributees may be
eligible for the dividends received deduction. Unless entitled to relief under
specific statutory provisions, Vornado will also 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
Vornado would be entitled to such statutory relief.
TAXATION OF HOLDERS OF DEBT SECURITIES
As used herein, the term "U.S. Holder" means a holder of a Debt Security
who (for United States Federal income tax purposes) is (i) a citizen or resident
of the United States, (ii) a domestic corporation or (iii) otherwise subject to
United States Federal income taxation on a net income basis in respect of the
Debt Security and "U.S. Alien Holder" means a holder of a Debt Security who (for
United States Federal income tax purposes) is (i) a nonresident alien individual
or (ii) a foreign corporation, partnership or estate or trust, in either case
not subject to United States Federal income tax on a net income basis in respect
of income or gain from the Debt Security.
U.S. Holders
Payments of Interest. Interest on a Debt Security will be taxable to a
U.S. Holder as ordinary income at the time it is received or accrued, depending
on the U.S. Holder's method of accounting for tax purposes.
Purchase, Sale and Retirement of the Debt Securities. A U.S. Holder's tax
basis in a Debt Security will generally be its U.S. dollar cost.
A U.S. Holder will generally recognize gain or loss on the sale or
retirement of a Debt Security equal to the difference between the amount
realized on the sale or retirement and the U.S. Holder's tax basis in the Debt
Security. Except to the extent attributable to accrued but unpaid interest, gain
or loss recognized on the sale or retirement of a Debt Security will be capital
gain or loss, will be long-term capital gain or loss if the Debt Security was
held for more than one year and may be eligible for a reduced rate of tax if the
Debt Security was held for more than 18 months and in certain other
circumstances.
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U.S. Alien Holders
This discussion assumes that the Debt Security is not subject to the rules
of Section 871(h)(4)(A) of the Code (relating to interest payments that are
determined by reference to the income, profits, changes in the value of property
or other attributes of the debtor or a related party).
Under present United States Federal income and estate tax law, and subject
to the discussion of backup withholding below:
(i) payments of principal, premium (if any) and interest by the Operating
Partnership or any of its paying agents to any holder of a Debt Security that is
a U.S. Alien Holder will not be subject to United States Federal withholding tax
if, in the case of interest (a) the beneficial owner of the Debt Security does
not actually or constructively own 10% or more of the capital or profits
interest in the Operating Partnership, (b) the beneficial owner of the Debt
Security is not a controlled foreign corporation that is related to the
Operating Partnership through stock ownership, and (c) either (A) the beneficial
owner of the Debt Security certifies to the Operating Partnership or its agent,
under penalties of perjury, that it is not a U.S. person and provides its name
and address or (B) a securities clearing organization, bank or other financial
institution that holds customers' securities in the ordinary course of its trade
or business (a "financial institution") and holds the Debt Security certifies to
the Operating Partnership or its agent under penalties of perjury that such
statement has been received from the beneficial owner by it or by a financial
institution between it and the beneficial owner and furnishes the payor with a
copy thereof;
(ii) a U.S. Alien Holder of a Debt Security will not be subject to United
States Federal withholding tax on any gain realized on the sale or exchange of a
Debt Security; and
(iii) a Debt Security held by an individual who at death is not a citizen
or resident of the United States will not be includible in the individual's
gross estate for purposes of the United States Federal estate tax as a result of
the individual's death if (a) the individual did not actually or constructively
own 10% or more of the capital or profits interest in the Operating Partnerships
and (b) the income on the Debt Security would not have been effectively
connected with a United States trade or business of the individual at the time
of the individual's death.
Proposed Internal Revenue Service regulations (the "Proposed Regulations")
would provide alternative methods for satisfying the certification requirement
described in clause (i)(c) above. The Proposed Regulations also would require,
in the case of Debt Securities held by a foreign partnership, that (x) the
certification described in clause (i)(c) above be provided by the partners
rather than the partnership and (y) the partnership provide certain information,
including a United States taxpayer identification number. A look-through rule
would apply in the case of tiered partnerships. The Proposed Regulations are
proposed to be effective for payments made after December 31, 1997. There can be
no assurance that the Proposed Regulations will be adopted or as to the
provisions they will include if and when adopted in temporary or final form.
Information Reporting and Backup Withholding
U.S. Holders. In general, information reporting requirements will apply to
payments of principal, any premium and interest on a Debt Security and the
proceeds of the sale of a Debt Security before maturity within the United States
to non-corporate U.S. Holders, and "backup withholding" at a rate of 31% will
apply to such payments if the U.S. Holder fails to provide an accurate taxpayer
identification number or is notified by the Internal Revenue Service that it has
failed to report all interest and dividends required to be shown on its federal
income tax returns.
U.S. Alien Holders. Information reporting and backup withholding will not
apply to payments of principal, premium (if any) and interest made by the
Operating Partnership or a paying agent to a U.S. Alien Holder on a Debt
Security if the certification described in clause (i)(c) under "U.S. Alien
Holders" above is received, provided that the payor does not have actual
knowledge that the holder is a U.S. person. The Operating Partnership or a
paying agent, however, may report (on Internal Revenue Form 1042-S) payments of
interest on the Debt Securities.
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Payments of the proceeds from the sale by a U.S. Alien Holder of a Debt
Security made to or through a foreign office of a broker will not be subject to
information reporting or backup withholding, except that if the broker is a U.S.
person, a controlled foreign corporation for United States Federal income tax
purposes or a foreign person 50% or more of whose gross income is effectively
connected with a United States trade or business for a specified three-year
period, information reporting may apply to such payments. Payments of the
proceeds from the sale of a Debt Security to or through the United States office
of a broker is subject to information reporting and backup withholding unless
the holder or beneficial owner certifies as to its non-United States status or
otherwise establishes an exemption from information reporting and backup
withholding.
The applicable Prospectus Supplement will contain a discussion of any
special United States Federal income tax rules with respect to Debt Securities
that are issued at a discount or premium or as a unit with other Securities,
have a maturity of one year or less, provide for conversion rights, contingent
payments, early redemption or payments that are denominated in or determined by
reference to a currency other than the U.S. dollar or otherwise subject to
special United States Federal income tax rules.
TAXATION OF HOLDERS OF COMMON SHARES OR PREFERRED SHARES
U.S. Shareholders
As used herein, the term "U.S. Shareholder" means a holder of Common Shares
or Preferred Shares ("Shares") who (for United States Federal income tax
purposes) is (i) a citizen or resident of the United States, (ii) a corporation,
partnership or other entity created or organized in or under the laws of the
United States or of any political subdivision thereof, or (iii) an estate or
trust the income of which is subject to United States Federal income taxation
regardless of its source.
As long as Vornado qualifies as a REIT, distributions made by Vornado out
of its current or accumulated earnings and profits (and not designated as
capital gain dividends) will constitute dividends taxable to its taxable U.S.
Shareholders as ordinary income. Such distributions will not be eligible for the
dividends-received deduction in the case of U.S. Shareholders that are
corporations. Distributions made by Vornado that are properly designated by
Vornado as capital gain dividends will be taxable to U.S. Shareholders as gain
from the sale of a capital asset held for more than one year (to the extent that
they do not exceed Vornado's actual net capital gain for the taxable year)
without regard to the period for which a U.S. Shareholder has held his shares.
U.S. Shareholders that are corporations may, however, be required to treat up to
20% of certain capital gain dividends as ordinary income.
To the extent that Vornado makes distributions (not designated as capital
gain dividends) in excess of its current and accumulated earnings and profits,
such distributions will be treated first as a tax-free return of capital to each
U.S. Shareholder, reducing the adjusted basis which such U.S. Shareholder has in
his Shares for tax purposes by the amount of such distribution (but not below
zero), with distributions in excess of a U.S. Shareholder's adjusted basis in
his shares taxable as capital gains (provided that the Shares have been held as
a capital asset). For purposes of determining the portion of distributions on
separate classes of Shares that will be treated as dividends for Federal income
tax purposes, current and accumulated earnings and profits will be allocated to
distributions resulting from priority rights of Preferred Shares before being
allocated to other distributions. Dividends authorized by Vornado in October,
November, or December of any year and payable to a shareholder of record on a
specified date in any such month shall be treated as both paid by Vornado and
received by the shareholder on December 31 of such year, provided that the
dividend is actually paid by Vornado on or before January 31 of the following
calendar year. Shareholders may not include in their own income tax returns any
net operating losses or capital losses of Vornado.
For taxable years of the Company beginning after August 5, 1997, U.S.
Shareholders holding Shares at the close of Vornado's taxable year will be
required to include, in computing their long-term capital gains for the taxable
year in which the last day of Vornado's taxable year falls, such amount as
Vornado may designate in a written notice mailed to its shareholders. Vornado
may not designate amounts in excess of Vornado's undistributed net capital gain
for the taxable year. Each U.S. Shareholder required to include such a
designated amount in determining such shareholder's long-term capital gains will
be deemed to have paid, in
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<PAGE> 40
the taxable year of the inclusion, the tax paid by Vornado in respect of such
undistributed net capital gains. U.S. Shareholders subject to these rules will
be allowed a credit or a refund, as the case may be, for the tax deemed to have
paid by such shareholders. U.S. Shareholders will increase their basis in their
Shares by the difference between the amount of such includible gains and the tax
deemed paid by the shareholder in respect of such gains.
Distributions made by Vornado and gain arising from the sale or exchange by
a U.S. Shareholder of Shares will not be treated as passive activity income,
and, as a result, U.S. Shareholders generally will not be able to apply any
"passive losses" against such income or gain.
Upon any sale or other disposition of Shares, a U.S. Shareholder will
recognize gain or loss for Federal income tax purposes in an amount equal to the
difference between (i) the amount of cash and the fair market value of any
property received on such sale or other disposition, and (ii) the holder's
adjusted basis in the Shares for tax purposes. Such gain or loss will be capital
gain or loss if the Shares have been held by the U.S. Shareholder as a capital
asset, will be long-term gain or loss if such Shares have been held for more
than one year any may be eligible for reduced rate of tax if the Shares have
been held for more than 18 months or in certain other circumstances. In general,
any loss recognized by a U.S. Shareholder upon the sale or other disposition of
shares of Vornado that have been held 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 received by such U.S. Shareholder from Vornado which
were required to be treated as long-term capital gains.
Backup Withholding. Vornado will report to its U.S. Shareholders and the
Internal Revenue Service (the "IRS") the amount of dividends paid during each
calendar year, and the amount of tax withheld, if any. Under the backup
withholding rules, a shareholder may be subject to backup withholding at the
rate of 31% with respect to 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 number,
certifies as to no loss of exemption from backup withholding, and otherwise
complies with applicable requirements of the backup withholding rules. A U.S.
Shareholder that does not provide Vornado with his correct taxpayer
identification number may also be subject to penalties imposed by the IRS. Any
amount paid as backup withholding will be creditable against the shareholder's
income tax liability. In addition, Vornado may be required to withhold a portion
of capital gain distributions to any shareholders who fail to certify their
non-foreign status to Vornado.
Taxation of Tax-Exempt Shareholders. The IRS has ruled that amounts
distributed as dividends by a REIT generally do not constitute unrelated
business taxable income ("UBTI") when received by a tax-exempt entity. Based on
that ruling, provided that a tax-exempt shareholder (except certain tax-exempt
shareholders described below) has not held its Shares as "debt financed
property" within the meaning of the Code and such Shares are not otherwise used
in a trade or business, the dividend income from Shares will not be UBTI to a
tax-exempt shareholder. Similarly, income from the sale of Shares will not
constitute UBTI unless such tax-exempt shareholder has held such Shares as "debt
financed property" within the meaning of the Code or has used the Shares in a
trade or business.
For tax-exempt shareholders that are social clubs, voluntary employee
benefit associations, supplemental unemployment benefit trusts, and qualified
group legal services plans exempt from Federal income taxation under Sections
501(c)(7), (c)(9), (c)(17), and (c)(20) of the Code, respectively, income from
an investment in Vornado's Shares will constitute UBTI unless the organization
is able to properly deduct amounts set aside or placed in reserve for certain
purposes so as to offset the income generated by its Shares. Such prospective
investors should consult their own tax advisors concerning these "set aside" and
reserve requirements.
Notwithstanding the foregoing, however, a portion of the dividends paid by
a "pension-held REIT" will be treated as UBTI to any trust which (i) is
described in Section 401(a) of the Code, (ii) is tax exempt under Section 501(a)
of the Code, and (iii) holds more than 10% (by value) of the equity interests in
the REIT. Tax-exempt pension, profit-sharing and stock bonus funds that are
described in Section 401(a) of the Code are referred to below as "qualified
trusts".
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<PAGE> 41
A REIT is a "pension-held REIT" if (i) it would not have qualified as a
REIT but for the fact that Section 856(h)(3) of the Code provides that stock
owned by qualified trusts shall be treated, for purposes of the "not closely
held" requirement, as owned by the beneficiaries of the trust (rather than by
the trust itself) and (ii) either (A) at least one qualified trust holds more
than 25% (by value) of the interests in the REIT or (B) one or more qualified
trusts, each of which owns more than 10% (by value) of the interests in the
REIT, hold in the aggregate more than 50% (by value) of the interests in the
REIT. The percentage of any REIT dividend treated as UBTI is equal to the ratio
of (i) the gross income (less direct expenses related thereto) of the REIT from
unrelated trades or businesses (determined as though the REIT were a qualified
trust) to (ii) the total gross income (less direct expenses related thereto) of
the REIT. A de minimis exception applies where this percentage is less than 5%
for any year. Vornado does not expect to be classified as a "pension-held REIT".
Tax-entities will be subject to the rules described above, under the
heading "-- U.S. Shareholders" concerning the inclusion of Vornado's designated
undistributed net capital gains in the income of its shareholders. Thus, such
entities will be allowed a credit or refund of the tax deemed paid by such
entities in respect of such includible gains.
Non-U.S. Shareholders
The rules governing U.S. Federal income taxation of nonresident alien
individuals, foreign corporations, foreign partnerships and other foreign
shareholders (collectively, "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 Shares, including any reporting requirements.
Ordinary Dividends. Distributions, other than distributions that are
treated as attributable to gain from sales or exchanges by Vornado of U.S. real
property interests (discussed below) and other than distributions designated by
Vornado as capital gain dividends, will be treated as ordinary income to the
extent that they are made out of current or accumulated earnings and profits of
Vornado. Such distributions to Non-U.S. Shareholders will ordinarily be subject
to a withholding tax equal to 30% of the gross amount of the distribution,
unless an applicable tax treaty reduces that tax. However, if income from the
investment in the Shares is treated as effectively connected with the Non-U.S.
Shareholder's conduct of a U.S. trade or business, the Non-U.S. Shareholder
generally will be subject to tax at graduated rates in the same manner as U.S.
shareholders are taxed with respect to such dividends (and may also be subject
to the 30% branch profits tax if the shareholder is a foreign corporation).
Vornado expects to withhold U.S. tax at the rate of 30% on the gross amount of
any dividends, other than dividends treated as attributable to gain from sales
or exchanges of U.S. real property interests and capital gain dividends, paid to
a Non-U.S. Shareholder, unless (i) a lower treaty rate applies and the required
form evidencing eligibility for that reduced rate is filed with Vornado or the
appropriate withholding agent or (ii) the Non-U.S. Shareholder files an IRS Form
4224 (or a successor form) with Vornado or the appropriate withholding agent
claiming that the distributions are "effectively connected" income.
Distributions to a Non-U.S. Shareholder that are designated by Vornado at
the time of distribution as capital gain dividends which are not attributable to
or treated as attributable to the disposition by Vornado of a U.S. real property
interest generally will not be subject to U.S. Federal income taxation, except
as described below.
Return of Capital. Distributions in excess of current and accumulated
earnings and profits of Vornado, which are not treated as attributable to the
gain from disposition by Vornado of a U.S. real property interest, will not be
taxable to a Non-U.S. Shareholder to the extent that they do not exceed the
adjusted basis of the Non-U.S. Shareholder's Shares, but rather will reduce the
adjusted basis of such Shares. To the extent that such distributions exceed the
adjusted basis of a Non-U.S. Shareholder's Shares, they will give rise to tax
liability if the Non-U.S. Shareholder otherwise would be subject to tax on any
gain from the sale or disposition of its Shares, as described below. If it
cannot be determined at the time a distribution is made whether such
distribution will be in excess of current and accumulated earnings and profits,
the distribution will be subject to withholding at the rate applicable to
dividends. However, the Non-U.S. Shareholder may seek a refund of
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<PAGE> 42
such amounts from the IRS if it is subsequently determined that such
distribution was, in fact, in excess of current and accumulated earnings and
profits of Vornado.
Capital Gain Dividends. For any year in which Vornado qualifies as a REIT,
distributions that are attributable to gain from sales or exchanges by Vornado
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, as
amended ("FIRPTA"). Under FIRPTA, these distributions are taxed to a Non-U.S.
Shareholder as if such gain were effectively connected with a U.S. business.
Thus, Non-U.S. Shareholders will be taxed on such distributions at the normal
capital gain rates applicable to U.S. Shareholders (subject to any applicable
alternative minimum tax and special alternative minimum tax in the case of
nonresident alien individuals). Vornado is required by applicable Treasury
Regulations under FIRPTA to withhold 35% of any distribution that could be
designated by Vornado as a capital gain dividend. However, if Vornado designates
as a capital gain dividend a distribution made prior to the day Vornado actually
effects such designation, then (although such distribution may be taxable to a
Non-U.S. Shareholder) such distribution is not subject to withholding under
FIRPTA; rather, Vornado must effect the 35% FIRPTA withholding from
distributions made on and after the date of such designation, until the
distributions so withheld equal the amount of the prior distribution designated
as a capital gain dividend. The amount withheld is creditable against the
Non-U.S. Shareholder's U.S. tax liability.
Sales of Shares. Gain recognized by a Non-U.S. Shareholder upon a sale or
exchange of Common Shares generally will not be taxed under FIRPTA if Vornado is
a "domestically controlled REIT," defined generally as a REIT in respect of
which at all times during a specified testing period less than 50% in value of
the stock is and was held directly or indirectly by foreign persons. It is
currently anticipated that Vornado will continue to be a "domestically
controlled REIT," and, therefore, that the sale of Shares will not be subject to
taxation under FIRPTA. However, gain not subject to FIRPTA will be taxable to a
Non-U.S. Shareholder if (i) investment in the Shares is treated as "effectively
connected" with the Non-U.S. Shareholder's U.S. trade or business, in which case
the Non-U.S. Shareholder will be subject to the same treatment as U.S.
Shareholders with respect to such gain, or (ii) the Non-U.S. Shareholder is a
nonresident alien individual who was present in the United States for 183 days
or more during the taxable year and has a "tax home" in the United States, or
maintains an office or a fixed place of business in the United States to which
the gain is attributable, in which case the nonresident alien individual will be
subject to a 30% tax on the individual's capital gains. A similar rule will
apply to capital gain dividends not subject to FIRPTA.
If Vornado were not a domestically-controlled REIT, a Non-U.S.
Shareholder's sale of Shares would be subject to tax under FIRPTA only if the
selling Non-U.S. Shareholder owned more than 5% of the class of Shares sold at
any time during a specified period (generally the shorter of the period that the
Non-U.S. Shareholder owned the Shares sold or the five-year period ending on the
date of disposition). If the gain on the sale of Shares were to be subject to
tax under FIRPTA, the Non-U.S. Shareholder would be subject to the same
treatment as U.S. Shareholders with respect to such gain (subject to any
applicable alternative minimum tax and a special alternative minimum tax in the
case of nonresident alien individuals) and the purchaser of such Shares would be
required to withhold 10% of the gross purchase price.
Treaty Benefits. Pursuant to current Treasury Regulations, dividends paid
to an address in a country outside the United States are generally presumed to
be paid to a resident of such country for purposes of determining the
applicability of withholding discussed above and the applicability of a tax
treaty rate. Shareholders that are partnerships or entities that are similarly
fiscally transparent for Federal income tax purposes, and persons holding Shares
through such entities, may be subject to restrictions on their ability to claim
benefits under U.S. tax treaties and should consult a tax advisor.
Under the Proposed Regulations, however, a Non-U.S. Shareholder who wishes
to claim the benefit of an applicable treaty rate would be required to satisfy
applicable certification requirements. In addition, under the Proposed
Regulations, in the case of Shares held by a foreign partnership, (x) the
certification requirement would generally be applied to the partners in the
partnership and (y) the partnership would be required to provide certain
information, including a United States taxpayer identification number. The
Proposed Regulations provide look-through rules in the case of tiered
partnerships. It is not certain whether, or in what form, the Proposed
Regulations will be adopted.
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OTHER TAX CONSEQUENCES
Vornado and its shareholders 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 Vornado and
its shareholders may not conform to the Federal income tax consequences
discussed above. Consequently, prospective shareholders are urged to consult
their own tax advisors regarding the effect of state and local tax laws on an
investment in Vornado.
PLAN OF DISTRIBUTION
Vornado and the Operating Partnership may sell the Securities to one or
more underwriters for public offering and sale by them or may sell the
Securities to investors directly or through agents. Vornado's Common Shares
being registered hereby may be issued in connection with the exchange of the
Debt Securities of the Operating Partnership. Any such underwriter or agent
involved in the offer and sale of the Securities will be named in the related
Prospectus Supplement. Such underwriters may include Goldman, Sachs & Co., or a
group of underwriters represented by firms including Goldman, Sachs & Co.
Goldman, Sachs & Co. may also act as agents. Vornado and the Operating
Partnership have reserved the right to sell the Securities directly to investors
on their own behalf in those jurisdictions where it is authorized to do so.
Underwriters may offer and sell the Securities at a fixed price or prices
that may be changed or at negotiated prices. Vornado and the Operating
Partnership also may, from time to time, authorize dealers, acting as Vornado's
or the Operating Partnership's agents, to offer and sell the Securities upon
such terms and conditions as set forth in the related Prospectus Supplement. In
connection with the sale of the Securities, underwriters may receive
compensation from Vornado or the Operating Partnership 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 the 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 (which may be changed from time to time) from
the purchasers for whom they may act as agents.
Any underwriting compensation paid by Vornado or the Operating Partnership
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 related Prospectus Supplement.
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 entered into with Vornado
or the Operating Partnership, to indemnification against and contribution
towards certain civil liabilities, including any liabilities under the
Securities Act.
Any Securities issued hereunder (other than Common Shares and Series A
Preferred Shares) will be new issues of securities with no established trading
market. Any underwriters or agents to or through whom such Securities are sold
by Vornado or the Operating Partnership for public offering and sale may make a
market in such Securities, but such underwriters or agents will not be obligated
to do so and may discontinue any market making at any time without notice. No
assurance can be given as to the liquidity of the trading market for any such
Securities.
Certain of the underwriters, dealers or agents and their associates may
engage in transactions with, and perform services for, Vornado, the Operating
Partnership and certain of their affiliates in the ordinary course of business.
EXPERTS
The consolidated financial statements and the related consolidated
financial statement schedules incorporated in this Prospectus by reference from
Vornado's Annual Report on Form 10-K for the year ended December 31, 1996, as
amended, and the Balance Sheet of Vornado Realty L.P. as at April 14, 1997
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incorporated by reference in this prospectus from Vornado Realty L.P.'s
Registration Statement on Form 10 filed with the Commission on June 12, 1997, as
amended, have been audited by Deloitte & Touche LLP, independent auditors, as
stated in their reports which are incorporated herein by reference, and have
been so incorporated in reliance upon the report of such firm given upon their
authority as experts in accounting and auditing.
The financial statements of 866 U.N. Plaza Associates LLC; the combined
financial statements of M Eleven Associates, M393 Associates and Eleven Penn
Plaza Company; the financial statements of Two Penn Plaza Associates L.P.; the
financial statements of 1740 Broadway Associates, L.P.; and the financial
statements of B&B Park Avenue L.P., all incorporated herein by reference from
Vornado's Current Report on Form 8-K, dated March 12, 1997, as amended by
Vornado's Current Report on Form 8-K/A, dated March 12, 1997, and the combined
financial statements of the Mendik Predecessors incorporated by reference herein
from the Vornado Realty L.P. Registration Statement on Form 10 filed with the
Commission on June 12, 1997, as amended, have been audited by Friedman Alpren &
Green LLP, independent auditors, as stated in their reports which are
incorporated herein by reference, and have been so incorporated in reliance upon
the report of such firm given upon their authority as experts in accounting and
auditing.
The financial statements of Two Park Company, a New York general
partnership, incorporated herein by reference from Vornado's Current Report on
Form 8-K, dated March 12, 1997, as amended by Vornado's Current Report on Form
8-K/A, dated March 12, 1997, have been audited by KPMG Peat Marwick LLP,
independent auditors, as stated in their report which is incorporated herein by
reference, and have been so incorporated in reliance upon the report of such
firm given upon their authority as experts in accounting and auditing.
VALIDITY OF THE SECURITIES
The validity of any Debt Securities issued hereunder will be passed upon
for the Operating Partnership by Sullivan & Cromwell, New York, New York,
counsel to Vornado and the Operating Partnership, and the validity of any
Preferred Shares, Depositary Shares or Common Shares issued hereunder will be
passed upon for Vornado by Ballard Spahr Andrews & Ingersoll, Baltimore,
Maryland, counsel to Vornado. The validity of any Securities issued hereunder
will be passed upon for any underwriters by the counsel named in the applicable
Prospectus Supplement.
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PART II
INFORMATION NOT REQUIRED IN PROSPECTUS
ITEM 14. OTHER EXPENSES OF ISSUANCE AND DISTRIBUTION.
The estimated expenses in connection with the issuance and distribution of
the securities being registered, other than Underwriting Compensation, are as
follows:
<TABLE>
<S> <C>
SEC registration fee.......................................... $ 489,090.91
Printing and engraving expenses............................... $ 500,000.00
Legal fees and disbursements.................................. $1,000,000.00
Accounting fees and disbursements............................. $ 300,000.00
Transfer Agent's, Depositary's and Trustee's fees and
disbursements............................................... $ 100,000.00
Blue Sky fees and expenses.................................... $ 100,000.00
Miscellaneous (including listing and rating agency fees)...... $1,000,000.00
-----------
Total............................................... $3,489,090.91
===========
</TABLE>
ITEM 15. INDEMNIFICATION OF TRUSTEES AND OFFICERS.
Under Maryland law, a real estate investment trust formed in Maryland is
permitted to eliminate, by provision in its declaration of trust, the liability
of its trustees and officers to the trust and its shareholders for money damages
except for liability resulting from (i) actual receipt of an improper benefit or
profit in money, property or services or (ii) active and deliberate dishonesty
established by a final judgment as being material to the cause of action.
Vornado's Declaration of Trust includes such a provision eliminating such
liability to the maximum extent permitted by Maryland law.
Vornado's Bylaws require it to indemnify (a) any present or former trustee
or officer who has been successful, on the merits or otherwise, in the defense
of a proceeding to which he was made a party by reason of such status, against
reasonable expenses incurred by him in connection with the proceeding, (b) any
trustee or officer who, at the request of Vornado, serves or has served another
trust, corporation or other entity as a director, officer, partner, or trustee
and (c) any present or former trustee or officer against any claim or liability
to which he may become subject by reason of such status unless it is established
that (i) his act or omission was material to the matter giving rise to the
proceeding and was committed in bad faith or was the result of active and
deliberate dishonesty, (ii) he actually received an improper personal benefit in
money, property or services or (iii) in the case of a criminal proceeding, he
had reasonable cause to believe that his act or omission was unlawful. However,
Maryland law prohibits Vornado from indemnifying a trustee or officer for an
adverse judgment in a suit by or in the right of the corporation or for a
judgment of liability on the basis that personal benefit was improperly
received, unless in either case a court orders indemnification and then only for
expenses. In addition, Vornado's Bylaws permit it to pay or reimburse, in
advance of final disposition of a proceeding, reasonable expenses incurred by a
present or former trustee or officer made a party to a proceeding by reason of
such status upon Vornado's receipt of (i) a written affirmation by the trustee
or officer of his good faith belief that he has met the applicable standard of
conduct necessary for indemnification by Vornado and (ii) a written undertaking
by or on his behalf to repay the amount paid or reimbursed by Vornado if it
shall ultimately be determined that the applicable standard of conduct was not
met. Vornado's Bylaws also (i) permit Vornado to provide indemnification and
payment or reimbursement of expenses to a present or former trustee or officer
who served a predecessor of Vornado in such capacity and to any employee or
agent of Vornado or a predecessor of Vornado, (ii) provide that any
indemnification or payment or reimbursement of the expenses permitted by the
Bylaws shall be furnished in accordance with the procedures provided for
indemnification or payment or reimbursement of expenses, as the case may be,
under Section 2-418 of the Maryland General Corporation Law (the "MGCL") for
directors of Maryland corporations and (iii) permit Vornado to provide such
other and further indemnification or payment or reimbursement of
II-1
<PAGE> 46
expenses as may be permitted by the MGCL, as in effect from time to time, for
directors of Maryland corporations. Insofar as indemnification for liabilities
arising under the Securities Act may be permitted to trustees and officers of
Vornado pursuant to the foregoing provisions or otherwise, Vornado has been
advised that, although the validity and scope of the governing statute has not
been tested in court, in the opinion of the Commission, such indemnification is
against public policy as expressed in the Securities Act and is, therefore,
unenforceable. In addition, indemnification may be limited by state securities
laws.
The First Amended and Restated Agreement of Limited Partnership, dated as
of April 15, 1997 (the "Partnership Agreement"), of the Operating Partnership
provides, generally, for the indemnification of an "indemnitee" against losses,
claims, damages, liabilities, expenses (including, without limitation,
attorneys' fees and other legal fees and expenses), judgments, fines,
settlements and other amounts that relate to the operations of the Operating
Partnership unless it is established that (i) the act or omission of the
Indemnitee was material and either was committed in bad faith or pursuant to
active and deliberate dishonesty, (ii) the Indemnitee actually received an
improper personal benefit in money, property or services or (iii) in the case of
any criminal proceeding, the Indemnitee had reasonable cause to believe that the
act or omission was unlawful. For this purpose, the term "Indemnitee" includes
(i) any person made a party to a proceeding by reason of its status as (A) the
general partner of the Operating Partnership, (B) a limited partner of the
Operating Partnership or (C) an officer of the Operating Partnership or a
trustee, officer or shareholder of Vornado and (ii) such other persons
(including affiliates of Vornado or the Operating Partnership) as Vornado may
designate from time to time in its discretion. Any such indemnification will be
made only out of assets of the Operating Partnership, and in no event may an
Indemnitee subject the limited partners of the Operating Partnership to personal
liability by reason of the indemnification provisions in the Partnership
Agreement. Insofar as indemnification for liabilities arising under the
Securities Act of 1933 may be permitted pursuant to the foregoing provisions or
otherwise, the Operating Partnership has been advised that, in the opinion of
the Securities and Exchange Commission, such indemnification is against public
policy and, therefore, unenforceable. The Operating Partnership has purchased
liability insurance for the purpose of providing a source of funds to pay the
indemnification described above.
ITEM 16. EXHIBITS.
<TABLE>
<CAPTION>
EXHIBIT
NO. EXHIBIT
- ------ -------------------------------------------------------------------------------------
<S> <C>
1.1* Form of Underwriting Agreement (for Common Shares)
1.2* Form of Underwriting Agreement (for Preferred Shares)
1.3* Form of Underwriting Agreement (for Debt Securities)
3.1 Amended and Restated Declaration of Trust of Vornado, amended April 3, 1997
(incorporated by reference to Exhibit 3.1 of Vornado's Registration Statement on Form
S-8 (File No. 333-29011), filed on June 12, 1997)
3.2 By-laws of Vornado, as amended on April 28, 1997 (incorporated by reference to
Exhibit 3(b) of Vornado's Quarterly Report on Form 10-Q for the period ended March
31, 1997 (File No. 001-11954), filed on May 14, 1997)
3.3 First Amended and Restated Agreement of Limited Partnership of the Operating
Partnership, dated as of April 15, 1997 (incorporated by reference to Exhibit 3.1 of
the Operating Partnership's Registration Statement on Form 10 (File No. 000-22685),
filed on June 12, 1997)
4.1 Specimen certificate representing Vornado's Common Shares of Beneficial Interest, par
value $0.04 per share (incorporated by reference to Exhibit 4.1 of Amendment No. 1 to
Vornado's Registration Statement on Form S-3 (File No. 33-62395), filed on October
26, 1995)
4.2 Specimen certificate representing Vornado's $3.25 Series A Preferred Shares of
Beneficial Interest, liquidation preference $50.00 per share (incorporated by
reference to Exhibit 4.2 of Vornado's Current Report on Form 8-K, dated April 3, 1997
(File No. 001-11954), filed on April 8, 1997)
</TABLE>
II-2
<PAGE> 47
<TABLE>
<CAPTION>
EXHIBIT
NO. EXHIBIT
- ------ -------------------------------------------------------------------------------------
<S> <C>
4.3 Articles Supplementary Classifying Vornado's $3.25 Series A Preferred Shares of
Beneficial Interest, liquidation preference $50.00 per share (incorporated by
reference to Exhibit 4.1 of Vornado's Current Report on Form 8-K, dated April 3, 1997
(File No. 001-11954), filed on April 8, 1997)
4.4 Form of Indenture for Senior Debt Securities
4.5 Form of Senior Debt Security (included in Exhibit 4.4)
4.6 Form of Indenture for Subordinated Debt Securities
4.7 Form of Subordinated Debt Security (included in Exhibit 4.6)
4.8 Form of Deposit Agreement (incorporated by reference to Exhibit 4.6 of Amendment No.
1 to Vornado's Registration Statement on Form S-3 (File No. 33-52441), filed on May
12, 1994)
4.9 Form of Depositary Receipt (included in Exhibit 4.8)
5.1** Opinion of Ballard Spahr Andrews & Ingersoll
5.2** Opinion of Sullivan & Cromwell
8.1 Tax Opinion of Sullivan & Cromwell
8.2 Tax opinion of Shearman & Sterling
12 Statement Regarding Computation of Consolidated Ratios of Earnings to Fixed Charges
and Combined Fixed Charges and Preferred Share Dividend Requirements
23.1 Consent of Deloitte & Touche LLP
23.2 Consents of Friedman Alpren & Green LLP
23.3 Consent of KPMG Peat Marwick LLP
23.4** Consent of Ballard Spahr Andrews & Ingersoll (included in its opinion filed as
Exhibit 5.1)
23.5** Consent of Sullivan & Cromwell (included in its opinion filed as Exhibit 5.2)
24.1** Powers of Attorney (included on signature page to Vornado's and the Operating
Partnership's Registration Statement on Form S-3 (File No. 333-29013) filed on June
12, 1997)
25.1** Statement of Eligibility of Senior Trustee on Form T-1
25.2** Statement of Eligibility of Subordinated Trustee on Form T-1
</TABLE>
- ---------------
* To be filed on a Current Report on Form 8-K.
** Previously filed.
ITEM 17. UNDERTAKINGS.
(a) The undersigned registrants hereby undertake:
(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 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.
II-3
<PAGE> 48
(iii) To include any material information with respect to the plan
of distribution not previously disclosed in the registration statement
or any material change to such information in the registration
statement;
provided, however, that paragraphs (1)(i) and (1)(ii) do not apply if the
information required to be included in a post-effective amendment by those
paragraphs is contained in periodic reports filed by the registrant
pursuant to Section 13 or Section 15(d) of the Securities Exchange Act of
1934 that are incorporated by reference in the registration statement.
(2) That, for the purpose of determining any liability under the
Securities Act of 1933, each such post-effective amendment shall be deemed
to be a new registration statement relating to the securities offered
therein, and the offering of such securities at that time shall be deemed
to be the initial bona fide offering thereof.
(3) To remove from registration by means of a post-effective amendment
any of the securities being registered which remain unsold at the
termination of the offering.
(b) The undersigned registrants hereby undertake that, for purposes of
determining any liability under the Securities Act of 1933, each filing of the
registrant's annual report pursuant to Section 13(a) or Section 15(d) of the
Securities Exchange Act of 1934 (and, where applicable, each filing of an
employee benefit plan's annual report pursuant to Section 15(d) of the
Securities Exchange Act of 1934) that is incorporated by reference in the
registration statement shall be deemed to be a new registration statement
relating to the securities offered therein, and the offering of such securities
at that time shall be deemed to be the initial bona fide offering thereof.
(c) Insofar as indemnification for liabilities arising under the Securities
Act of 1933 may be permitted to directors, officers and controlling persons of
the registrant pursuant to the foregoing provisions, or otherwise (other than
insurance), the registrants have 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 insurance
payments and 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
registrants will, unless in the opinion of its counsel the matter has been
settled by controlling precedent, submit to a court of appropriate jurisdiction
the question of whether such indemnification by it is against public policy as
expressed in the Act and will be governed by the final adjudication of such
issue.
OTHER
The Operating Partnership hereby states that it reasonably believes that
the Debt Securities being registered hereunder will be "investment grade
securities" (as defined in General Instruction I.B.2. of Form S-3) by the time
of sale of such securities.
II-4
<PAGE> 49
SIGNATURES
Pursuant to the requirements of the Securities Act of 1933, the registrants
certify that they have reasonable grounds to believe that they meet all of the
requirements for filing on Form S-3 and have duly caused this Amendment No 2. to
their Registration Statement on Form S-3 to be signed on their behalf by the
undersigned, thereunto duly authorized, in the City of Saddle Brook and State of
New Jersey, on August 8, 1997.
VORNADO REALTY TRUST,
a Maryland real estate investment
trust
By: /s/ STEVEN ROTH
------------------------------------
Steven Roth
Chairman of the Board of Trustees
(Principal Executive Officer)
VORNADO REALTY L.P.,
a Delaware limited partnership
By: Vornado Realty Trust
Its: General Partner
By: /s/ STEVEN ROTH
------------------------------------
Steven Roth
Chairman of the Board of Trustees
(Principal Executive Officer)
II-5
<PAGE> 50
Pursuant to the requirements of the Securities Act of 1933, this Amendment
No. 2 to the Registration Statement has been signed below by the following
persons in the capacities and on the date indicated. Each person listed below
has signed this Amendment No. 2 to the Registration Statement (i) in their
capacity as an officer or trustee of Vornado Realty Trust ("Vornado"), on behalf
of Vornado and (ii) as an officer or trustee of Vornado, in its capacity as
general partner of Vornado Realty L.P.
<TABLE>
<CAPTION>
SIGNATURE TITLE DATE
- ------------------------------------------ -------------------------------- ---------------
<C> <S> <C>
/s/ STEVEN ROTH Chairman of the Board of August 8, 1997
- ------------------------------------------ Trustees (Principal Executive
Steven Roth Officer)
* President and Trustee August 8, 1997
- ------------------------------------------
Michael D. Fascitelli
* Co-Chairman of the Board of August 8, 1997
- ------------------------------------------ Trustees and Chief Executive
Bernard H. Mendik Officer of the Mendik Division
/s/ JOSEPH MACNOW Vice President -- Chief August 8, 1997
- ------------------------------------------ Financial Officer and
Joseph Macnow Controller (Principal
Financial and Accounting
Officer)
* Trustee August 8, 1997
- ------------------------------------------
David Mandelbaum
* Trustee August 8, 1997
- ------------------------------------------
Stanley Simon
* Trustee August 8, 1997
- ------------------------------------------
Richard R. West
* Trustee August 8, 1997
- ------------------------------------------
Ronald G. Targan
* Trustee August 8, 1997
- ------------------------------------------
Russell B. Wight, Jr.
*By: /s/ JOSEPH MACNOW
- ------------------------------------------
Joseph Macnow
Attorney-in-Fact
</TABLE>
II-6
<PAGE> 51
EXHIBIT INDEX
<TABLE>
<CAPTION>
EXHIBIT
NO. EXHIBIT
- ------- -------------------------------------------------------------------------------------
<S> <C>
1.1* Form of Underwriting Agreement (for Common Shares)
1.2* Form of Underwriting Agreement (for Preferred Shares)
1.3* Form of Underwriting Agreement (for Debt Securities)
3.1 Amended and Restated Declaration of Trust of Vornado, amended April 3, 1997
(incorporated by reference to Exhibit 3.1 of Vornado's Registration Statement on Form
S-8 (File No. 333-29011), filed on June 12, 1997)
3.2 By-laws of Vornado, as amended on April 28, 1997 (incorporated by reference to
Exhibit 3(b) of Vornado's Quarterly Report on Form 10-Q for the period ended March
31, 1997 (File No. 001-11954), filed on May 14, 1997)
3.3 First Amended and Restated Agreement of Limited Partnership of the Operating
Partnership, dated as of April 15, 1997 (incorporated by reference to Exhibit 3.1 of
the Operating Partnership's Registration Statement on Form 10 (File No. 000-22685),
filed on June 12, 1997)
4.1 Specimen certificate representing Vornado's Common Shares of Beneficial Interest, par
value $0.04 per share (incorporated by reference to Exhibit 4.1 of Amendment No. 1 to
Vornado's Registration Statement on Form S-3 (File No. 33-62395), filed on October
26, 1995)
4.2 Specimen certificate representing Vornado's $3.25 Series A Preferred Shares of
Beneficial Interest, liquidation preference $50.00 per share (incorporated by
reference to Exhibit 4.2 of Vornado's Current Report on Form 8-K, dated April 3, 1997
(File No. 001-11954), filed on April 8, 1997)
4.3 Articles Supplementary Classifying Vornado's $3.25 Series A Preferred Shares of
Beneficial Interest, liquidation preference $50.00 per share (incorporated by
reference to Exhibit 4.1 of the Company's Current Report on Form 8-K, dated April 3,
1997 (File No. 001-11954), filed on April 8, 1997)
4.4 Form of Indenture for Senior Debt Securities
4.5 Form of Senior Debt Security (included in Exhibit 4.4)
4.6 Form of Indenture for Subordinated Debt Securities
4.7 Form of Subordinated Debt Security (included in Exhibit 4.6)
4.8 Form of Deposit Agreement (incorporated by reference to Exhibit 4.6 of Amendment No.
1 to the Company's Registration Statement on Form S-3 (File No. 33-52441), filed on
May 12, 1994)
4.9 Form of Depositary Receipt (included in Exhibit 4.8)
5.1** Opinion of Ballard Spahr Andrews & Ingersoll
5.2** Opinion of Sullivan & Cromwell
8.1 Tax Opinion of Sullivan & Cromwell
8.2 Tax opinion of Shearman & Sterling
12 Statement Regarding Computation of Consolidated Ratios of Earnings to Fixed Charges
and Combined Fixed Charges and Preferred Share Dividend Requirements
23.1 Consent of Deloitte & Touche LLP
23.2 Consents of Friedman Alpren & Green LLP
23.3 Consent of KPMG Peat Marwick LLP
23.4** Consent of Ballard Spahr Andrews & Ingersoll (included in its opinion filed as
Exhibit 5.1)
23.5** Consent of Sullivan & Cromwell (included in its opinion filed as Exhibit 5.2)
24.1** Powers of Attorney (included on signature page to Vornado's and the Operating
Partnership's Registration Statement on Form S-3 (File No. 333-29013) filed on June
12, 1997)
25.1** Statement of Eligibility of Senior Trustee on Form T-1
25.2** Statement of Eligibility of Subordinated Trustee on Form T-1
</TABLE>
- ---------------
* To be filed on a Current Report on Form 8-K.
** Previously filed.
<PAGE> 1
Exhibit 4.4
VORNADO REALTY L.P.
TO
THE BANK OF NEW YORK
Trustee
--------------
INDENTURE
Dated as of , 1997
--------------
SENIOR DEBT SECURITIES
<PAGE> 2
..............................................................
CERTAIN SECTIONS OF THIS INDENTURE RELATING TO SECTIONS 310 THROUGH 318,
INCLUSIVE, OF THE TRUST INDENTURE ACT OF 1939:
TRUST INDENTURE
ACT SECTION INDENTURE SECTION
Section 310(a)(1) ...................................... 609
(a)(2) ...................................... 609
(a)(3) ...................................... Not Applicable
(a)(4) ...................................... Not Applicable
(b) ...................................... 608
610
Section 311(a) ...................................... 613
(b) ...................................... 613
Section 312(a) ...................................... 701
702
(b) ...................................... 702
(c) ...................................... 702
Section 313(a) ...................................... 703
(b) ...................................... 703
(c) ...................................... 703
(d) ...................................... 703
Section 314(a) ...................................... 704
(a)(4) ...................................... 101
1004
(b) ...................................... Not Applicable
(c)(1) ...................................... 102
(c)(2) ...................................... 102
(c)(3) ...................................... Not Applicable
(d) ...................................... Not Applicable
(e) ...................................... 102
Section 315(a) ...................................... 601
(b) ...................................... 602
(c) ...................................... 601
(d) ...................................... 601
(e) ...................................... 514
Section 316(a) ...................................... 101
(a)(1)(A)...................................... 502
512
(a)(1)(B)...................................... 513
(a)(2) ...................................... Not Applicable
(b) ...................................... 508
(c) ...................................... 104
Section 317(a)(1) ...................................... 503
(a)(2) ...................................... 504
(b) ...................................... 1003
Section 318(a) ...................................... 107
- -------------------
NOTE: This reconciliation and tie shall not, for any purpose, be deemed to be a
part of the Indenture.
<PAGE> 3
TABLE OF CONTENTS
----------
PAGE
----
PARTIES........................................................ 1
RECITALS OF THE OPERATING PARTNERSHIP.......................... 1
ARTICLE ONE
DEFINITIONS AND OTHER PROVISIONS OF GENERAL APPLICATION
SECTION 101. Definitions:
Act............................................... 2
Affiliate; control................................ 2
Authenticating Agent.............................. 2
Board of Trustees................................. 2
Board Resolution.................................. 2
Business Day...................................... 2
Commission........................................ 2
Common Shares..................................... 2
Corporate Trust Office............................ 3
corporation....................................... 3
Covenant Defeasance............................... 3
Defaulted Interest................................ 3
Defeasance........................................ 3
Depositary........................................ 3
Event of Default.................................. 3
Exchange Act...................................... 3
Expiration Date................................... 3
Global Security................................... 3
Holder............................................ 3
Indenture......................................... 3
interest.......................................... 4
Interest Payment Date............................. 4
Investment Company Act............................ 4
Maturity.......................................... 4
Notice of Default................................. 4
Operating Partnership............................. 4
Operating Partnership Request; Operating
Partnership Order................................. 4
Officers' Certificate............................. 4
Opinion of Counsel................................ 4
Original Issue Discount Security.................. 4
- --------------
NOTE: This table of contents shall not, for any purpose, be deemed to be a
part of the Indenture.
<PAGE> 4
PAGE
----
Outstanding....................................... 4
Paying Agent...................................... 5
Person............................................ 5
Place of Payment.................................. 5
Predecessor Security.............................. 6
Redemption Date................................... 6
Redemption Price.................................. 6
Regular Record Date............................... 6
Responsible Officer............................... 6
Securities........................................ 6
Securities Act.................................... 6
Security Register and Security Registrar.......... 6
Special Record Date............................... 6
Stated Maturity................................... 6
Subsidiary........................................ 7
Trust Indenture Act............................... 7
Trustee........................................... 7
U.S. Government Obligations....................... 7
Vice President.................................... 7
SECTION 102. Compliance Certificates and Opinions.............. 7
SECTION 103. Form of Documents Delivered to Trustee............ 8
SECTION 104. Acts of Holders; Record Dates..................... 8
SECTION 105. Notices, Etc., to Trustee and Operating
Partnership....................................... 10
SECTION 106. Notice to Holders; Waiver......................... 11
SECTION 107. Conflict with Trust Indenture Act................. 11
SECTION 108. Effect of Headings and Table of Contents.......... 12
SECTION 109. Successors and Assigns............................ 12
SECTION 110. Separability Clause............................... 12
SECTION 111. Benefits of Indenture............................. 12
SECTION 112. Governing Law..................................... 12
SECTION 113. Legal Holidays.................................... 12
ARTICLE TWO
SECURITY FORMS
SECTION 201. Forms Generally................................... 13
SECTION 202. Form of Face of Security.......................... 13
SECTION 203. Form of Reverse of Security....................... 15
SECTION 204. Form of Legend for Global Securities.............. 18
-ii-
<PAGE> 5
PAGE
----
SECTION 205. Form of Trustee's Certificate of Authentication... 19
ARTICLE THREE
THE SECURITIES
SECTION 301. Amount Unlimited; Issuable in Series.............. 19
SECTION 302. Denominations..................................... 22
SECTION 303. Execution, Authentication, Delivery and Dating.... 22
SECTION 304. Temporary Securities.............................. 23
SECTION 305. Registration, Registration of Transfer and
Exchange.......................................... 24
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...................................... 28
SECTION 310. Computation of Interest........................... 28
SECTION 311. CUSIP Numbers..................................... 28
ARTICLE FOUR
SATISFACTION AND DISCHARGE
SECTION 401. Satisfaction and Discharge of Indenture........... 29
SECTION 402. Application of Trust Money........................ 30
ARTICLE FIVE
REMEDIES
SECTION 501. Events of Default................................. 30
SECTION 502. Acceleration of Maturity; Rescission and Annulment 32
SECTION 503. Collection of Indebtedness and Suits for
Enforcement by Trustee........................ 33
SECTION 504. Trustee May File Proofs of Claim.................. 34
SECTION 505. Trustee May Enforce Claims Without Possession
of Securities................................. 34
SECTION 506. Application of Money Collected.................... 35
SECTION 507. Limitation on Suits............................... 35
-iii-
<PAGE> 6
PAGE
----
SECTION 508. Unconditional Right of Holders to Receive
Principal, Premium and Interest............... 36
SECTION 509. Restoration of Rights and Remedies................ 36
SECTION 510. Rights and Remedies Cumulative.................... 36
SECTION 511. Delay or Omission Not Waiver...................... 36
SECTION 512. Control by Holders................................ 37
SECTION 513. Waiver of Past Defaults........................... 37
SECTION 514. Undertaking for Costs............................. 37
SECTION 515. Waiver of Usury, Stay or Extension Laws........... 38
ARTICLE SIX
THE TRUSTEE
SECTION 601. Certain Duties and Responsibilities............... 38
SECTION 602. Notice of Defaults................................ 38
SECTION 603. Certain Rights of Trustee......................... 39
SECTION 604. Not Responsible for Recitals or Issuance of
Securities................................... 40
SECTION 605. May Hold Securities............................... 40
SECTION 606. Money Held in Trust............................... 40
SECTION 607. Compensation and Reimbursement.................... 40
SECTION 608. Disqualification; Conflicting Interests........... 41
SECTION 609. Corporate Trustee Required; Eligibility........... 41
SECTION 610. Resignation and Removal; Appointment of Successor. 41
SECTION 611. Acceptance of Appointment by Successor............ 43
SECTION 612. Merger, Conversion, Consolidation or Succession
to Business................................... 44
SECTION 613. Preferential Collection of Claims Against
Operating Partnership......................... 44
SECTION 614. Appointment of Authenticating Agent............... 45
ARTICLE SEVEN
HOLDERS' LISTS AND REPORTS BY TRUSTEE AND OPERATING PARTNERSHIP
SECTION 701. Operating Partnership to Furnish Trustee Names and
Addresses of Holders.......................... 46
SECTION 702. Preservation of Information; Communications
to Holders.................................... 47
SECTION 703. Reports by Trustee................................ 47
-iv-
<PAGE> 7
PAGE
----
SECTION 704. Reports by Operating Partnership.................. 47
SECTION 705. Notice of Default................................. 48
ARTICLE EIGHT
CONSOLIDATION, MERGER, CONVEYANCE, TRANSFER OR LEASE
SECTION 801. Operating Partnership May Consolidate, Etc., Only
on Certain Terms.............................. 48
SECTION 802. Successor Substituted............................. 49
ARTICLE NINE
SUPPLEMENTAL INDENTURES
SECTION 901. Supplemental Indentures Without Consent of Holders 49
SECTION 902. Supplemental Indentures With Consent of Holders... 50
SECTION 903. Execution of Supplemental Indentures.............. 52
SECTION 904. Effect of Supplemental Indentures................. 52
SECTION 905. Conformity with Trust Indenture Act............... 52
SECTION 906. Reference in Securities to Supplemental Indentures 52
ARTICLE TEN
COVENANTS
SECTION 1001.Payment of Principal, Premium and Interest........ 53
SECTION 1002.Maintenance of Office or Agency................... 53
SECTION 1003.Money for Securities Payments to Be Held in Trust. 53
SECTION 1004.Statement by Officers as to Default............... 54
SECTION 1005.Existence......................................... 55
SECTION 1006.Maintenance of Properties......................... 55
SECTION 1007.Payment of Taxes and Other Claims................. 55
SECTION 1008.Insurance......................................... 56
SECTION 1009.Provision of Financial Information................ 56
SECTION 1010.Waiver of Certain Covenants....................... 56
SECTION 1011.Calculation of Original Issue Discount............ 56
-v-
<PAGE> 8
PAGE
----
ARTICLE ELEVEN
REDEMPTION OF SECURITIES
SECTION 1101.Applicability of Article.......................... 56
SECTION 1102.Election to Redeem; Notice to Trustee............. 56
SECTION 1103.Selection by Trustee of Securities to Be Redeemed. 57
SECTION 1104.Notice of Redemption.............................. 57
SECTION 1105.Deposit of Redemption Price....................... 58
SECTION 1106.Securities Payable on Redemption Date............. 58
SECTION 1107.Securities Redeemed in Part....................... 59
ARTICLE TWELVE
SINKING FUNDS
SECTION 1201.Applicability of Article.......................... 59
SECTION 1202.Satisfaction of Sinking Fund Payments with
Securities................................... 59
SECTION 1203.Redemption of Securities for Sinking Fund......... 60
ARTICLE THIRTEEN
DEFEASANCE AND COVENANT DEFEASANCE
SECTION 1301.Operating Partnership's Option to Effect
Defeasance or Covenant Defeasance............. 60
SECTION 1302.Defeasance and Discharge.......................... 61
SECTION 1303.Covenant Defeasance............................... 61
SECTION 1304.Conditions to Defeasance or Covenant Defeasance... 62
SECTION 1305.Deposited Money and U.S. Government Obligations
to Be Held in Trust; Miscellaneous Provisions. 63
SECTION 1306.Reinstatement..................................... 65
-vi-
<PAGE> 9
PAGE
----
TESTIMONIUM.................................................... 65
SIGNATURES AND SEALS........................................... 65
ACKNOWLEDGEMENTS............................................... 66
-vii-
<PAGE> 10
INDENTURE, dated as of _____________, 199_, between Vornado Realty L.P., a
Delaware limited partnership duly organized and existing under the laws of the
State of Delaware (herein called the "Operating Partnership") and managed by
Vornado Realty Trust as its general partner, having its principal office at Park
80 West, Plaza II, Saddle Brook, New Jersey 07663, and The Bank of New York, a
New York banking corporation, as Trustee (herein called the "Trustee").
RECITALS OF THE OPERATING PARTNERSHIP
The Operating Partnership has duly authorized the execution and delivery of
this Indenture to provide for the issuance from time to time of its unsecured
debentures, notes or other evidences of indebtedness (herein called the
"Securities") to be issued in one or more series as in this Indenture provided.
All things necessary to make this Indenture a valid agreement of the
Operating Partnership, 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 agreed, for the equal and proportionate
benefit of all Holders of the Securities or of series thereof, 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 Trust Indenture
Act, either directly or by reference therein, have the meanings assigned to
them therein;
(3) all accounting terms not otherwise defined herein have the meanings
assigned to them in accordance with generally accepted accounting principles,
and, except as otherwise herein expressly provided, the term "generally
accepted accounting principles" with respect to any computation required or
permitted hereunder shall mean
<PAGE> 11
such accounting principles as are generally accepted in the United States of
America at the date of such computation;
(4) unless the context otherwise requires, any reference to an "Article"
or a "Section" refers to an Article or a Section, as the case may be, of this
Indenture; and
(5) the words "herein", "hereof" and "hereunder" and other words of
similar import refer to this Indenture as a whole and not to any particular
Article, Section or other subdivision.
"Act", when used with respect to any Holder, has the meaning specified in
Section 104.
"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 Person authorized by the Trustee pursuant
to Section 614 to act on behalf of the Trustee to authenticate Securities of one
or more series.
"Board of Trustees" means either the board of trustees of Vornado Realty
Trust or any duly authorized committee of that board.
"Board Resolution" means a copy of a resolution certified by the Secretary
or an Assistant Secretary of Vornado Realty Trust to have been duly adopted by
the Board of Trustees 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, means each
Monday, Tuesday, Wednesday, Thursday and Friday which is not a day on which
banking institutions in that Place of Payment are authorized or obligated by law
or executive order to close.
"Commission" means the Securities and Exchange Commission, from time to time
constituted, created under the Exchange Act, or, if at any time after the
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 at such time.
"Corporate Trust Office" means the principal office of the Trustee in The
City of New York at which at any particular time its corporate trust business
shall be administered, which office at the date hereof is located at 101 Barclay
Street, Floor 21 West, New York, New York 10286, Attention: Corporate Trust
Trustee Administration.
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"corporation" means a corporation, association, company, joint-stock company
or business trust.
"Covenant Defeasance" has the meaning specified in Section 1303.
"Defaulted Interest" has the meaning specified in Section 307.
"Defeasance" has the meaning specified in Section 1302.
"Depositary" means, with respect to Securities of any series issuable in
whole or in part in the form of one or more Global Securities, a clearing agency
registered under the Exchange Act that is designated to act as Depositary for
such Securities as contemplated by Section 301.
"Event of Default" has the meaning specified in Section 501.
"Exchange Act" means the Securities Exchange Act of 1934 and any statute
successor thereto, in each case as amended from time to time.
"Expiration Date" has the meaning specified in Section 104.
"Global Security" means a Security that evidences all or part of the
Securities of any series and bears the legend set forth in Section 204 (or such
legend as may be specified as contemplated by Section 301 for such Securities).
"Holder" means a Person in whose name a Security is registered in the
Security Register.
"Indenture" means this instrument as originally executed and 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, including, for
all purposes of this instrument and any such supplemental indenture, the
provisions of the Trust Indenture Act that are deemed to be a part of and govern
this instrument and any such supplemental indenture, respectively. The term
"Indenture" shall also include the terms of particular series of Securities
established as contemplated by Section 301.
"interest", when used with respect to an Original Issue Discount Security
which by its terms bears interest only after Maturity, means interest payable
after Maturity.
"Interest Payment Date", when used with respect to any Security, means the
Stated Maturity of an instalment of interest on such Security.
"Investment Company Act" means the Investment Company Act of 1940 and any
statute successor thereto, in each case as amended from time to time.
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"Maturity", when used with respect to any Security, means the date on which
the principal of such Security or an instalment of principal becomes due and
payable as therein or herein provided, whether at the Stated Maturity or by
declaration of acceleration, call for redemption or otherwise.
"Notice of Default" means a written notice of the kind specified in Section
501(4) or 501(5).
"Officers' Certificate" means a certificate signed by the Chairman of the
Board, a Vice Chairman of the Board, the President or a Vice President, and by
the Treasurer, an Assistant Treasurer, the Secretary or an Assistant Secretary,
of Vornado Realty Trust, and delivered to the Trustee. One of the officers
signing an Officers' Certificate given pursuant to Section 1004 shall be the
principal executive, financial or accounting officer of Vornado Realty Trust.
"Operating Partnership" means the Person named as the "Operating
Partnership" in the first paragraph of this instrument until a successor Person
shall have become such pursuant to the applicable provisions of this Indenture,
and thereafter "Operating Partnership" shall mean such successor Person.
"Operating Partnership Request" or "Operating Partnership Order" means a
written request or order signed in the name of the Operating Partnership by the
Chairman of the Board, the Vice Chairman of the Board, the President or a Vice
President, and by the Treasurer, an Assistant Treasurer, the Secretary or an
Assistant Secretary of Vornado Realty Trust, and delivered to the Trustee.
"Opinion of Counsel" means a written opinion of counsel, who may be counsel
for the Operating Partnership, and who shall be acceptable to the Trustee.
"Original Issue Discount Security" means any Security which provides for an
amount less than the principal amount thereof to be due and payable upon a
declaration of acceleration of the Maturity thereof pursuant to Section 502.
"Outstanding", when used with respect to Securities, means, as of the date
of determination, all Securities theretofore authenticated and delivered under
this Indenture, except:
(1) Securities theretofore cancelled by the Trustee or delivered to the
Trustee for cancellation;
(2) Securities for whose payment or redemption money in the necessary
amount has been theretofore deposited with the Trustee or any Paying Agent
(other than the Operating Partnership) in trust or set aside and segregated in
trust by the Operating Partnership (if the Operating Partnership shall act as
its own Paying Agent) for the Holders of such Securities; provided that, if
such Securities are to be redeemed, notice
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of such redemption has been duly given pursuant to this Indenture or provision
therefor satisfactory to the Trustee has been made;
(3) Securities as to which Defeasance has been effected pursuant to
Section 1302; and
(4) 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 Operating Partnership;
provided, however, that in determining whether the Holders of the requisite
principal amount of the Outstanding Securities have given, made or taken any
request, demand, authorization, direction, notice, consent, waiver or other
action hereunder as of any date, (A) the principal amount of an Original Issue
Discount Security which shall be deemed to be Outstanding shall be the amount of
the principal thereof which would be due and payable as of such date upon
acceleration of the Maturity thereof to such date pursuant to Section 502, (B)
if, as of such date, the principal amount payable at the Stated Maturity of a
Security is not determinable, the principal amount of such Security which shall
be deemed to be Outstanding shall be the amount as specified or determined as
contemplated by Section 301, (C) the principal amount of a Security denominated
in one or more foreign currencies or currency units which shall be deemed to be
Outstanding shall be the U.S. dollar equivalent, determined as of such date in
the manner provided as contemplated by Section 301, of the principal amount of
such Security (or, in the case of a Security described in Clause (A) or (B)
above, of the amount determined as provided in such Clause), and (D) Securities
owned by the Operating Partnership or any other obligor upon the Securities or
any Affiliate of the Operating Partnership 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 relying upon any such request, demand,
authorization, direction, notice, consent, waiver or other action, 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 Operating Partnership or any other obligor upon the Securities or any
Affiliate of the Operating Partnership or of such other obligor.
"Paying Agent" means any Person authorized by the Operating Partnership to
pay the principal of or any premium or interest on any Securities on behalf of
the Operating Partnership.
"Person" means any individual, corporation, partnership, joint venture,
trust, unincorporated organization or government or any agency or political
subdivision thereof.
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"Place of Payment", when used with respect to the Securities of any series,
means the place or places where the principal of and any premium and interest on
the Securities of that series are payable as specified as contemplated by
Section 301.
"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 shall be deemed to evidence the
same debt as the mutilated, destroyed, lost or stolen Security.
"Redemption Date", when used with respect to any Security to be redeemed,
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.
"Regular Record Date" for the interest payable on any Interest Payment Date
on the Securities of any series means the date specified for that purpose as
contemplated by Section 301.
"Responsible Officer", when used with respect to the Trustee, means the
chairman or any vice-chairman of the board of directors, the chairman or any
vice-chairman of the executive committee of the board of directors, the chairman
of the trust committee, the president, any 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 assistant 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 his knowledge of
and familiarity with the particular subject.
"Securities" has the meaning stated in the first recital of this Indenture
and more particularly means any Securities authenticated and delivered under
this Indenture.
"Securities Act" means the Securities Act of 1933 and any statute successor
thereto, in each case as amended from time to time.
"Security Register" and "Security Registrar" have the respective meanings
specified in Section 305.
"Special Record Date" for the payment of any Defaulted Interest means a date
fixed by the Trustee pursuant to Section 307.
"Stated Maturity", when used with respect to any Security or any instalment
of principal thereof or interest thereon, means the date specified in such
Security as the fixed
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date on which the principal of such Security or such instalment of principal or
interest is due and payable.
"Subsidiary" means a corporation more than 50% of the outstanding voting
stock of which is owned, directly or indirectly, by the Operating Partnership or
by one or more other Subsidiaries, or by the Operating Partnership and one or
more other Subsidiaries. For the purposes of this definition, "voting stock"
means stock which ordinarily has voting power for the election of directors or
trustees, whether at all times or only so long as no senior class of stock has
such voting power by reason of any contingency.
"Trust Indenture Act" means the Trust Indenture Act of 1939 as in force at
the date as of which this instrument was executed; provided, however, that in
the event the Trust Indenture Act of 1939 is amended after such date, "Trust
Indenture Act" means, to the extent required by any such amendment, the Trust
Indenture Act of 1939 as so amended.
"Trustee" means the Person named as the "Trustee" in the first paragraph of
this instrument 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, and if at any time there is
more than one such Person, "Trustee" as used with respect to the Securities of
any series shall mean the Trustee with respect to Securities of that series.
"U.S. Government Obligation" has the meaning specified in Section 1304.
"Vice President", when used with respect to the Operating Partnership or the
Trustee, means any vice president, whether or not designated by a number or a
word or words added before or after the title "vice president".
SECTION 102. Compliance Certificates and Opinions.
Upon any application or request by the Operating Partnership to the Trustee
to take any action under any provision of this Indenture, the Operating
Partnership shall furnish to the Trustee such certificates and opinions as may
be required under the Trust Indenture Act. Each such certificate or opinion
shall be given in the form of an Officers' Certificate, if to be given by an
officer of Vornado Realty Trust on behalf of the Operating Partnership, or an
Opinion of Counsel, if to be given by counsel, and shall comply with the
requirements of the Trust Indenture Act and any other requirements set forth in
this Indenture.
Every certificate or opinion with respect to compliance with a condition or
covenant provided for in this Indenture (except for certificates provided for in
Section 1004) shall include,
(1) a statement that each individual signing such certificate or opinion
has read such covenant or condition and the definitions herein relating
thereto;
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(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 covenant or condition 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 with respect 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 may be based, insofar as it relates
to legal matters, upon a certificate or opinion of, or representations by,
counsel, unless such officer knows, or in the exercise of reasonable care should
know, that the certificate or opinion or representations with respect to the
matters upon which his certificate or opinion is based are erroneous. Any such
certificate or opinion of counsel may be based, insofar as it relates to factual
matters, upon a certificate or opinion of, or representations by, an officer or
officers stating that the information with respect to such factual matters is in
the possession of the Operating Partnership, unless such counsel knows, or in
the exercise of reasonable care should know, that the certificate or opinion or
representations with respect 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; Record Dates.
Any request, demand, authorization, direction, notice, consent, waiver or
other action provided or permitted by this Indenture to be given, made or taken
by Holders may be embodied in and evidenced by one or more instruments of
substantially similar tenor signed by such 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 and, where it is hereby expressly required, to the Operating
Partnership. Such instrument or instruments (and the action
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<PAGE> 18
embodied therein and evidenced thereby) are herein sometimes referred to as the
"Act" of the Holders signing such instrument or instruments. Proof of execution
of any such instrument or of a writing appointing any such agent shall be
sufficient for any purpose of this Indenture and (subject to Section 601)
conclusive in favor of the Trustee and the Operating Partnership, if made in the
manner provided in this Section.
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 manner which the Trustee deems sufficient.
The ownership of Securities shall be proved by the Security Register.
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 or the Operating
Partnership in reliance thereon, whether or not notation of such action is made
upon such Security.
The Operating Partnership may, in the circumstances permitted by the Trust
Indenture Act, set any day as a record date for the purpose of determining the
Holders of Outstanding Securities of any series entitled to give, make or take
any request, demand, authorization, direction, notice, consent, waiver or other
action provided or permitted by this Indenture to be given, made or taken by
Holders of Securities of such series, provided that the Operating Partnership
may not set a record date for, and the provisions of this paragraph shall not
apply with respect to, the giving or making of any notice, declaration, request
or direction referred to in the next paragraph. If any record date is set
pursuant to this paragraph, the Holders of Outstanding Securities of the
relevant series on such record date, and no other Holders, shall be entitled to
take the relevant action, whether or not such Holders remain Holders after such
record date; provided that no such action shall be effective hereunder unless
taken on or prior to the applicable Expiration Date by Holders of the requisite
principal amount of Outstanding Securities of such series on such record date.
Nothing in this paragraph shall be construed to prevent the Operating
Partnership from setting a new record date for any action for which a record
date has previously been set pursuant to this paragraph (whereupon the record
date previously set shall automatically and with no action by any Person be
cancelled and of no effect), and nothing in this paragraph shall be construed to
render ineffective any action taken by Holders of the requisite principal amount
of Outstanding Securities of the relevant series on the date such action is
taken. Promptly after any record date is set pursuant to this paragraph, the
Operating Partnership, at its own expense, shall cause notice of such record
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date, the proposed action by Holders and the applicable Expiration Date to be
given to the Trustee in writing and to each Holder of Securities of the relevant
series in the manner set forth in Section 106.
The Trustee may set any day as a record date for the purpose of determining
the Holders of Outstanding Securities of any series entitled to join in the
giving or making of (i) any Notice of Default, (ii) any declaration of
acceleration referred to in Section 502, (iii) any request to institute
proceedings referred to in Section 507(2) or (iv) any direction referred to in
Section 512, in each case with respect to Securities of such series. If any
record date is set pursuant to this paragraph, the Holders of Outstanding
Securities of such series on such record date, and no other Holders, shall be
entitled to join in such notice, declaration, request or direction, whether or
not such Holders remain Holders after such record date; provided that no such
action shall be effective hereunder unless taken on or prior to the applicable
Expiration Date by Holders of the requisite principal amount of Outstanding
Securities of such series on such record date. Nothing in this paragraph shall
be construed to prevent the Trustee from setting a new record date for any
action for which a record date has previously been set pursuant to this
paragraph (whereupon the record date previously set shall automatically and with
no action by any Person be cancelled and of no effect), and nothing in this
paragraph shall be construed to render ineffective any action taken by Holders
of the requisite principal amount of Outstanding Securities of the relevant
series on the date such action is taken. Promptly after any record date is set
pursuant to this paragraph, the Trustee, at the Operating Partnership's expense,
shall cause notice of such record date, the proposed action by Holders and the
applicable Expiration Date to be given to the Operating Partnership in writing
and to each Holder of Securities of the relevant series in the manner set forth
in Section 106.
With respect to any record date set pursuant to this Section, the party
hereto which sets such record dates may designate any day as the "Expiration
Date" and from time to time may change the Expiration Date to any earlier or
later day; provided that no such change shall be effective unless notice of the
proposed new Expiration Date is given to the other party hereto in writing, and
to each Holder of Securities of the relevant series in the manner set forth in
Section 106, on or prior to the existing Expiration Date. If an Expiration Date
is not designated with respect to any record date set pursuant to this Section,
the party hereto which set such record date shall be deemed to have initially
designated the 180th day after such record date as the Expiration Date with
respect thereto, subject to its right to change the Expiration Date as provided
in this paragraph. Notwithstanding the foregoing, no Expiration Date shall be
later than the 180th day after the applicable record date.
Without limiting the foregoing, a Holder entitled hereunder to take any
action hereunder with regard to any particular Security may do so with regard to
all or any part of the principal amount of such Security or by one or more duly
appointed agents each of which may do so pursuant to such appointment with
regard to all or any part of such principal amount.
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SECTION 105. Notices, Etc., to Trustee and Operating Partnership.
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 Operating Partnership shall be
sufficient for every purpose hereunder if made, given, furnished or filed in
writing to or with the Trustee at its Corporate Trust Office, Attention:
Corporate Trust Trustee Administration, or
(2) the Operating Partnership 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
Operating Partnership addressed to it at the address of its principal office
specified in the first paragraph of this instrument, Attention: .............,
or at any other address previously furnished in writing to the Trustee by the
Operating Partnership.
SECTION 106. Notice to Holders; Waiver.
Where this Indenture provides for notice to Holders of any event, such
notice shall be sufficiently given (unless otherwise herein expressly provided)
if in writing and mailed, first-class postage prepaid, to each Holder affected
by such event, at his address as it appears in the Security Register, not later
than the latest date (if any), and not earlier than the earliest date (if any),
prescribed for the giving of such notice. In any case where notice to Holders 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. 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.
In case by reason of the suspension of regular mail service or by reason of
any other cause it shall be impracticable to give such notice by mail, then such
notification as shall be made with the approval of the Trustee shall constitute
a sufficient notification for every purpose hereunder.
SECTION 107. Conflict with Trust Indenture Act.
If any provision hereof limits, qualifies or conflicts with a provision of
the Trust Indenture Act that is required under such Act to be a part of and
govern this Indenture, the latter provision shall control. If any provision of
this Indenture modifies or excludes any provision of the Trust Indenture Act
that may be so modified or excluded, the latter
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provision shall be deemed to apply to this Indenture as so modified or to be
excluded, as the case may be.
SECTION 108. 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 109. Successors and Assigns.
All covenants and agreements in this Indenture by the Operating Partnership
shall bind its successors and assigns, whether so expressed or not.
SECTION 110. Separability Clause.
In case any provision in this Indenture or in the Securities 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 111. Benefits of Indenture.
Nothing in this Indenture or in the Securities, express or implied, shall
give to any Person, other than the parties hereto and their successors hereunder
and the Holders, any benefit or any legal or equitable right, remedy or claim
under this Indenture.
SECTION 112. Governing Law.
This Indenture and the Securities shall be governed by and construed in
accordance with the law of the State of New York, without regard to principles
of conflicts of law.
SECTION 113. Legal Holidays.
In any case where any Interest Payment Date, Redemption Date or Stated
Maturity of any Security shall not be a Business Day at any Place of Payment,
then (notwithstanding any other provision of this Indenture or of the Securities
(other than a provision of any Security which specifically states that such
provision shall apply in lieu of this Section)) payment of interest 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 or
Redemption Date, or at the Stated Maturity, provided that no interest shall
accrue
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with respect to such payment for the period from and after such Interest Payment
Date, Redemption Date or Stated Maturity, as the case may be.
ARTICLE TWO
SECURITY FORMS
SECTION 201. Forms Generally.
The Securities of each series shall be in substantially the form set forth
in this Article, or in such other form as shall be established by or pursuant to
a Board Resolution or in one or more indentures supplemental hereto, in each
case with such appropriate insertions, omissions, substitutions and other
variations as are required or permitted by this Indenture, and may have such
letters, numbers or other marks of identification and such legends or
endorsements placed thereon as may be required to comply with the rules of any
securities exchange or Depositary therefor or as may, consistently herewith, be
determined by the officers executing such Securities, as evidenced by their
execution thereof. If the form of Securities of any series is established by
action taken pursuant to a Board Resolution, a copy of an appropriate record of
such action shall be certified by the Secretary or an Assistant Secretary of
Vornado Realty Trust and delivered to the Trustee at or prior to the delivery of
the Operating Partnership Order contemplated by Section 303 for the
authentication and delivery of such Securities.
The definitive Securities shall be printed, lithographed or engraved on
steel engraved borders or may be produced in any other manner, all as determined
by the officers executing such Securities, as evidenced by their execution of
such Securities.
SECTION 202. Form of Face of Security.
[Insert any legend required by the Internal Revenue Code and the regulations
thereunder.]
VORNADO REALTY L.P.
..........................................................................
No. ......... $ ........
CUSIP No. ________
VORNADO REALTY L.P., a Delaware limited partnership duly organized and
existing under the laws of the State of Delaware (herein called the "Operating
Partnership", which term includes any successor Person under the Indenture
hereinafter referred to), for value received, hereby promises to pay to
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..............................................., or registered assigns, the
principal sum of ...................................... Dollars on
........................................................, and to pay interest
thereon from the most recent Interest Payment Date to which interest has been
paid or duly provided for, semi-annually on ............ and ............ in
each year, commencing as of the date, at the rate of [__%] per annum, until the
principal hereof is paid or made available for payment, provided that any
principal and premium, and any such instalment of interest, which is overdue
shall bear interest at the rate of [____%] per annum (to the extent that the
payment of such interest shall be legally enforceable), from the dates such
amounts are due until they are paid or made available for payment, and such
interest shall be payable on demand. The interest so payable, and punctually
paid or duly provided for, on any Interest Payment Date will, as provided in
such Indenture, be paid to the Person in whose name this Security (or one or
more Predecessor Securities) is registered at the close of business on the
Regular Record Date for such interest, which shall be the ....... or .......
(whether or not a Business Day), as the case may be, next preceding such
Interest Payment Date. Any such interest not so punctually paid or duly provided
for will forthwith cease to be payable to the Holder on such Regular Record Date
and may either be paid to the Person in whose name this Security (or one or more
Predecessor Securities) is registered at the close of business on a Special
Record Date for the payment of such Defaulted Interest to be fixed by the
Trustee, notice whereof shall be given to Holders of Securities of this series
not less than 10 days prior to such Special Record Date, or be paid at any time
in any other lawful manner not inconsistent with the requirements of any
securities exchange on which the Securities of this series may be listed, and
upon such notice as may be required by such exchange, all as more fully provided
in said Indenture.
[If the Security is not to bear interest prior to Maturity, insert -- The
principal of this Security shall not bear interest except in the case of a
default in payment of principal upon acceleration, upon redemption or at Stated
Maturity and in such case the overdue principal and any overdue premium shall
bear interest at the rate of _____% per annum (to the extent that the payment of
such interest shall be legally enforceable), from the dates such amounts are due
until they are paid or made available for payment. Interest on any overdue
principal or premium shall be payable on demand. Any such interest on any
overdue principal or premium which is not so paid on demand shall bear interest
at the rate of _____% per annum (to the extent that the payment of such interest
shall be legally enforceable), from the dates such amounts are due until they
are paid or made available for payment. Interest on any overdue interest shall
be payable on demand.]
Payment of the principal of (and premium, if any) and [if applicable, insert
- -- any such] interest on this Security will be made at the office or agency of
the Operating Partnership maintained for that purpose in [ ], in such coin or
currency of the United States of America as at the time of payment is legal
tender for payment of public and private debts; provided, however, that at the
option of the Operating Partnership payment of interest may be made by check
mailed to the address of the Person entitled thereto as such address shall
appear in the Security Register.
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<PAGE> 24
Reference is hereby made to the further provisions of this Security set
forth on the reverse hereof, which further provisions shall for all purposes
have the same effect as if set forth at this place.
Unless the certificate of authentication hereon has been executed by the
Trustee referred to on the reverse hereof by manual signature, this Security
shall not be entitled to any benefit under the Indenture or be valid or
obligatory for any purpose.
IN WITNESS WHEREOF, the Operating Partnership has caused this instrument to
be duly executed under its corporate seal.
VORNADO REALTY L.P.
By...................................................
Attest:
.........................................
SECTION 203. Form of Reverse of Security.
This Security is one of a duly authorized issue of securities of the
Operating Partnership (herein called the "Securities"), issued and to be issued
in one or more series under an Indenture, dated as of .......... (herein called
the "Indenture", which term shall have the meaning assigned to it in such
instrument), between the Operating Partnership and The Bank of New York, as
Trustee (herein called the "Trustee", which term includes any successor trustee
under the Indenture), and reference is hereby made to the Indenture and all
indentures supplemental thereto for a statement of the respective rights,
limitations of rights, duties and immunities thereunder of the Operating
Partnership, the Trustee and the Holders of the Securities and of the terms upon
which the Securities are, and are to be, authenticated and delivered. This
Security is one of the series designated on the face hereof [if applicable,
insert -- limited or aggregate principal amount to $________].
[If applicable, insert -- The Securities of this series are subject to
redemption upon not less than 30 days' nor more than 60 days' notice by mail,
[if applicable, insert -- (1) on ........... in any year commencing with the
year ...... and ending with the year ...... through operation of the sinking
fund for this series at a Redemption Price equal to 100% of the principal
amount, and (2)] at any time [if applicable, insert -- on or after .........,
19..], as a whole or in part, at the election of the Operating Partnership, at
the following
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<PAGE> 25
Redemption Prices (expressed as percentages of the principal amount): If
redeemed during the 12-month period beginning ............. of the years
indicated,
Redemption Redemption
Year Price Year Price
- ---- ---------- ---- ----------
and thereafter at a Redemption Price equal to .....% of the principal amount,
together in the case of any such redemption [(whether through operation of the
sinking fund or otherwise)] with accrued interest to the Redemption Date, but
interest installments whose Stated Maturity is on or prior to such Redemption
Date will be payable to the Holders of such Securities, or one or more
Predecessor Securities, of record at the close of business on the relevant
Record Dates referred to on the face hereof, all as provided in the Indenture.
[If applicable, insert -- The sinking fund for this series provides for the
redemption on ............ in each year beginning with the year ....... and
ending with the year ...... of [if applicable, insert -- not less than
$.......... ("mandatory sinking fund") and not more than] $......... aggregate
principal amount of Securities of this series. Securities of this series
acquired or redeemed by the Operating Partnership otherwise than through [if
applicable, insert -- mandatory] sinking fund payments may be credited against
subsequent [if applicable, insert -- mandatory] sinking fund payments otherwise
required to be made [if applicable, insert -- , in the inverse order in which
they become due].]
[If the Security is subject to redemption of any kind, insert -- In the
event of redemption of this Security in part only, a new Security or Securities
of this series and of like tenor for the unredeemed portion hereof will be
issued in the name of the Holder hereof upon the cancellation hereof.]
[If applicable, insert -- The Indenture contains provisions for defeasance
at any time of the entire indebtedness of this Security and Events of Default
with respect to this Security, in each case upon compliance with certain
conditions set forth in the Indenture.]
[If the Security is not an Original Issue Discount Security, insert -- If an
Event of Default with respect to Securities of this series shall occur and be
continuing, the principal of the Securities of this series may be declared due
and payable in the manner and with the effect provided in the Indenture.]
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<PAGE> 26
[If the Security is an Original Issue Discount Security, insert -- If an
Event of Default with respect to Securities of this series shall occur and be
continuing, an amount of principal of the Securities of this series may be
declared due and payable in the manner and with the effect provided in the
Indenture. Such amount shall be equal to -- insert formula for determining the
amount. Upon payment (i) of the amount of principal so declared due and payable
and (ii) of interest on any overdue principal, premium and inter est (in each
case to the extent that the payment of such interest shall be legally
enforceable), all of the Operating Partnership's obligations in respect of the
payment of the principal of and premium and interest, if any, on the Securities
of this series shall terminate.]
The Indenture permits, with certain exceptions as therein provided, the
amendment thereof and the modification of the rights and obligations of the
Operating Partnership and the rights of the Holders of the Securities of each
series to be affected under the Indenture at any time by the Operating
Partnership and the Trustee with the consent of the Holders of a majority in
principal amount of the Securities at the time Outstanding of each series to be
affected. The Indenture also contains provisions permitting the Holders of
specified percentages in principal amount of the Securities of each series at
the time Outstanding, on behalf of the Holders of all Securities of such series,
to waive compliance by the Operating Partnership with certain provisions of the
Indenture and certain past defaults under the Indenture and their consequences.
Any such consent or waiver by the Holder of this Security shall be conclusive
and binding upon such Holder and upon all future Holders of this Security and of
any Security issued upon the registration of transfer hereof or in exchange
herefor or in lieu hereof, whether or not notation of such consent or waiver is
made upon this Security.
As provided in and subject to the provisions of the Indenture, the Holder of
this Security shall not have the right to institute any proceeding with respect
to the Indenture or for the appointment of a receiver or trustee or for any
other remedy thereunder, unless such Holder shall have previously given the
Trustee written notice of a continuing Event of Default with respect to the
Securities of this series, the Holders of not less than 25% in principal amount
of the Securities of this series at the time Outstanding shall have made written
request to the Trustee to institute proceedings in respect of such Event of
Default as Trustee and offered the Trustee reasonable indemnity, and the Trustee
shall not have received from the Holders of a majority in principal amount of
Securities of this series at the time Outstanding a direction inconsistent with
such request, and shall have failed to institute any such proceeding, for 60
days after receipt of such notice, request and offer of indemnity. The foregoing
shall not apply to any suit instituted by the Holder of this Security for the
enforcement of any payment of principal hereof or any premium or interest hereon
on or after the respective due dates expressed herein.
No reference herein to the Indenture and no provision of this Security or of
the Indenture shall alter or impair the obligation of the Operating Partnership,
which is absolute and unconditional, to pay the principal of and any premium and
interest on this Security at the times, place and rate, and in the coin or
currency, herein prescribed.
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<PAGE> 27
As provided in the Indenture and subject to certain limitations therein set
forth, the transfer of this Security is registrable in the Security Register,
upon surrender of this Security for registration of transfer at the office or
agency of the Operating Partnership in any place where the principal of and any
premium and interest on this Security are payable, duly endorsed by, or
accompanied by a written instrument of transfer in form satisfactory to the
Operating Partnership and the Security Registrar duly executed by, the Holder
hereof or his attorney duly authorized in writing, and thereupon one or more new
Securities of this series and of like tenor, of authorized denominations and for
the same aggregate principal amount, will be issued to the designated transferee
or transferees.
The Securities of this series are issuable only in registered form without
coupons in denominations of $....... and any integral multiple thereof. As
provided in the Indenture and subject to certain limitations therein set forth,
Securities of this series are exchangeable for a like aggregate principal amount
of Securities of this series and of like tenor of a different authorized
denomination, as requested by the Holder surrendering the same.
No service charge shall be made for any such registration of transfer or
exchange, but the Operating Partnership may require payment of a sum sufficient
to cover any tax or other governmental charge payable in connection therewith.
Prior to due presentment of this Security for registration of transfer, the
Operating Partnership, the Trustee and any agent of the Operating Partnership or
the Trustee may treat the Person in whose name this Security is registered as
the owner hereof for all purposes, whether or not this Security be overdue, and
neither the Operating Partnership, the Trustee nor any such agent shall be
affected by notice to the contrary.
[If applicable, insert -- Interest on the principal balance of this Security
shall be calculated on the basis of a [365- or 366-day year, as appropriate, for
the actual number of days elapsed] [360-day year of twelve 30-day months]]
THIS SECURITY SHALL BE GOVERNED BY AND CONSTRUED IN ACCORDANCE WITH THE LAWS
OF THE STATE OF NEW YORK, WITHOUT REGARD TO PRINCIPLES OF CONFLICTS LAWS.
All terms used in this Security which are defined in the Indenture shall
have the meanings assigned to them in the Indenture.
SECTION 204. Form of Legend for Global Securities.
Unless otherwise specified as contemplated by Section 301 for the Securities
evidenced thereby, every Global Security authenticated and delivered hereunder
shall bear a legend in substantially the following form:
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<PAGE> 28
THIS SECURITY IS A GLOBAL SECURITY WITHIN THE MEANING OF THE INDENTURE
HEREINAFTER REFERRED TO AND IS REGISTERED IN THE NAME OF A DEPOSITARY OR A
NOMINEE THEREOF. THIS SECURITY MAY NOT BE EXCHANGED IN WHOLE OR IN PART FOR A
SECURITY REGISTERED, AND NO TRANSFER OF THIS SECURITY IN WHOLE OR IN PART MAY BE
REGISTERED, IN THE NAME OF ANY PERSON OTHER THAN SUCH DEPOSITARY OR A NOMINEE
THEREOF, EXCEPT IN THE LIMITED CIRCUMSTANCES DESCRIBED IN THE INDENTURE.
SECTION 205. Form of Trustee's Certificate of Authentication.
The Trustee's certificates 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.
Dated: THE BANK OF NEW YORK,
As Trustee
By.........................................
Authorized Signatory
ARTICLE THREE
THE SECURITIES
SECTION 301. Amount Unlimited; Issuable in Series.
The aggregate principal amount of Securities which may be authenticated and
delivered under this Indenture is unlimited.
The Securities may be issued in one or more series. There shall be
established in or pursuant to a Board Resolution 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,
(1) the title of the Securities of the series (which shall distinguish the
Securities of the series from Securities of any other series);
(2) any limit upon the aggregate principal amount of the Securities of the
series which may be authenticated and delivered under this Indenture (except
for Securities
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<PAGE> 29
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 or 1107 and except for any Securities which, pursuant to Section
303, are deemed never to have been authenticated and delivered hereunder);
(3) the Person to whom any interest on a 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;
(4) the date or dates on which the principal of any Securities of the series
is payable;
(5) the rate or rates at which any Securities of the series shall bear
interest, if any, the date or dates from which any such interest shall accrue,
the Interest Payment Dates on which any such interest shall be payable and the
Regular Record Date for any such interest payable on any Interest Payment
Date;
(6) the place or places where the principal of and any premium and interest
on any Securities of the series shall be payable;
(7) the period or periods within which, the price or prices at which and the
terms and conditions upon which any Securities of the series may be redeemed,
in whole or in part, at the option of the Operating Partnership and, if other
than by a Board Resolution, the manner in which any election by the Operating
Partnership to redeem the Securities shall be evidenced;
(8) the obligation, if any, of the Operating Partnership to redeem or
purchase any Securities of the series pursuant to any sinking fund or
analogous provisions or at the option of the Holder thereof and the period or
periods within which, the price or prices at which and the terms and
conditions upon which any Securities of the series shall be redeemed or
purchased, in whole or in part, pursuant to such obligation;
(9) if other than denominations of $1,000 and any integral multiple thereof,
the denominations in which any Securities of the series shall be issuable;
(10)if the amount of principal of or any premium or interest on any
Securities of the series may be determined with reference to an index or
pursuant to a formula, the manner in which such amounts shall be determined;
(11)if other than the currency of the United States of America, the
currency, currencies or currency units in which the principal of or any
premium or interest on any Securities of the series shall be payable and the
manner of determining the equivalent thereof in the currency of the United
States of America for any purpose, including for purposes of the definition of
"Outstanding" in Section 101;
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<PAGE> 30
(12)if the principal of or any premium or interest on any Securities of the
series is to be payable, at the election of the Operating Partnership or the
Holder thereof, in one or more currencies or currency units other than that or
those in which such Securities are stated to be payable, the currency,
currencies or currency units in which the principal of or any premium or
interest on such Securities as to which such election is made shall be
payable, the periods within which and the terms and conditions upon which such
election is to be made and the amount so payable (or the manner in which such
amount shall be determined);
(13)if other than the entire principal amount thereof, the portion of the
principal amount of any Securities of the series which shall be payable upon
declaration of acceleration of the Maturity thereof pursuant to Section 502;
(14)if the principal amount payable at the Stated Maturity of any Securities
of the series will not be determinable as of any one or more dates prior to
the Stated Maturity, the amount which shall be deemed to be the principal
amount of such Securities as of any such date for any purpose thereunder or
hereunder, including the principal amount thereof which shall be due and
payable upon any Maturity other than the Stated Maturity or which shall be
deemed to be Outstanding as of any date prior to the Stated Maturity (or, in
any such case, the manner in which such amount deemed to be the principal
amount shall be determined);
(15)if applicable, that the Securities of the series, shall be subject to
either or both of Defeasance or Covenant Defeasance as provided in Article
Thirteen;
(16)if applicable, that any Securities of the series shall be issuable in
whole or in part in the form of one or more Global Securities and, in such
case, the respective Depositaries for such Global Securities, the form of any
legend or legends which shall be borne by any such Global Security in addition
to or in lieu of that set forth in Section 204 and any circumstances in
addition to or in lieu of those set forth in Clause (2) of the last paragraph
of Section 305 in which any such Global Security may be exchanged in whole or
in part for Securities registered, and any transfer of such Global Security in
whole or in part may be registered, in the name or names of Persons other than
the Depositary for such Global Security or a nominee thereof;
(17)any addition to or change in the Events of Default which applies to any
Securities of the series and any change in the right of the Trustee or the
requisite Holders of such Securities to declare the principal amount thereof
due and payable pursuant to Section 502;
(18)any addition to or change in the covenants set forth in Article Ten
which applies to Securities of the series;
(19)any other terms of the series (which terms shall not be inconsistent
with the provisions of this Indenture, except as permitted by Section 901(5)).
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<PAGE> 31
All Securities of any one series shall be substantially identical except as
to denomination and except as may otherwise be provided in or pursuant to the
Board Resolution referred to above and (subject to Section 303) set forth, or
determined in the manner provided, in the Officers' Certificate referred to
above or in any such indenture supplemental hereto.
If any of the terms of the series are established by action taken pursuant
to a Board Resolution, a copy of an appropriate record of such action shall be
certified by the Secretary or an Assistant Secretary of Vornado Realty Trust and
delivered to the Trustee at or prior to the delivery of the Officers'
Certificate setting forth the terms of the series.
SECTION 302. Denominations.
The Securities of each series shall be issuable only in registered form
without coupons and only in such denominations as shall be specified as
contemplated by Section 301. In the absence of any such specified denomination
with respect to the Securities of any series, the Securities of such series
shall be issuable in denominations of $1,000 and any integral multiple thereof.
SECTION 303. Execution, Authentication, Delivery and Dating.
The Securities shall be executed on behalf of the Operating Partnership by
the Chairman of the Board, the Vice Chairman of the Board, the President or one
of the Vice Presidents, under the corporate seal reproduced thereon attested by
the Secretary or one of the Assistant Secretaries of Vornado Realty Trust. The
signature of any of these officers on the Securities may be manual or facsimile.
Securities bearing the manual or facsimile signatures of individuals who
were at any time the proper officers of Vornado Realty Trust shall bind the
Operating Partnership, notwithstanding that such individuals or any of them have
ceased to hold such offices prior to the authentication and delivery of such
Securities or did not hold such offices at the date of such Securities.
At any time and from time to time after the execution and delivery of this
Indenture, the Operating Partnership may deliver Securities of any series
executed by the Operating Partnership to the Trustee for authentication,
together with a Operating Partnership Order for the authentication and delivery
of such Securities, and the Trustee in accordance with the Operating Partnership
Order shall authenticate and deliver such Securities. If the form or terms of
the Securities of the series have been established by or pursuant to one or more
Board Resolutions as permitted by Sections 201 and 301, 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 Section 601) shall be fully protected in relying upon, an Opinion of
Counsel stating,
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<PAGE> 32
(1) if the form of such Securities has been established by or pursuant to
Board Resolution as permitted by Section 201, that such form has been
established in conformity with the provisions of this Indenture;
(2) if the terms of such Securities have been established by or pursuant to
Board Resolution as permitted by Section 301, that such terms have been
established in conformity with the provisions of this Indenture; and
(3) that such Securities, when authenticated and delivered by the Trustee
and issued by the Operating Partnership in the manner and subject to any
conditions specified in such Opinion of Counsel, will constitute valid and
legally binding obligations of the Operating Partnership enforceable in
accordance with their terms, subject to bankruptcy, insolvency, fraudulent
transfer, reorganization, moratorium and similar laws of general applicability
relating to or affecting creditors' rights and to general equity principles.
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 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 Securities of a series are not to be originally issued at one
time, it shall not be necessary to deliver the Officers' Certificate otherwise
required pursuant to Section 301 or the Operating Partnership Order and Opinion
of Counsel otherwise required pursuant to such preceding paragraph at or prior
to the authentication of each Security of such series if such documents are
delivered at or prior to the authentication upon original issuance of the first
Security of such series to be issued.
Each Security shall be dated the date of its authentication.
No Security shall be entitled to any benefit under this Indenture or be
valid or obligatory for any purpose unless there appears on such Security a
certificate of authentication substantially in the form provided for herein
executed by the Trustee by manual signature, and such certificate upon any
Security shall be conclusive evidence, and the only evidence, that such Security
has been duly authenticated and delivered hereunder. Notwithstanding the
foregoing, if any Security shall have been authenticated and delivered hereunder
but never issued and sold by the Operating Partnership, and the Operating
Partnership shall deliver such Security to the Trustee for cancellation as
provided in Section 309, 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.
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<PAGE> 33
SECTION 304. Temporary Securities.
Pending the preparation of definitive Securities of any series, the
Operating Partnership may execute, and upon Operating Partnership 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 and with such appropriate insertions, omissions,
substitutions and other variations as the officers executing such Securities
may determine, as evidenced by their execution of such Securities.
If temporary Securities of any series are issued, the Operating Partnership
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 Operating Partnership 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, the
Operating Partnership shall execute and the Trustee shall authenticate and
deliver in exchange therefor one or more definitive Securities of the same
series, of any authorized denominations and of like tenor and aggregate
principal amount. 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 and tenor.
SECTION 305. Registration, Registration of Transfer and Exchange.
The Operating Partnership shall cause to be kept at the Corporate Trust
Office of the Trustee a register (the register maintained in such office and in
any other office or agency of the Operating Partnership in a Place of Payment
being herein sometimes collectively referred to as the "Security Register") in
which, subject to such reasonable regulations as it may prescribe, the Operating
Partnership shall provide for the registration of Securities and of transfers of
Securities. The Trustee is hereby appointed "Security Registrar" for the purpose
of registering Securities and transfers of Securities as herein provided.
Upon surrender for registration of transfer of any Security of a series at
the office or agency of the Operating Partnership in a Place of Payment for that
series, the Operating Partnership shall execute, and the Trustee shall
authenticate and deliver, in the name of the designated transferee or
transferees, one or more new Securities of the same series, of any authorized
denominations and of like tenor and aggregate principal amount.
At the option of the Holder, Securities of any series may be exchanged for
other Securities of the same series, of any authorized denominations and of like
tenor and aggregate principal amount, upon surrender of the Securities to be
exchanged at such office or agency. Whenever any Securities are so surrendered
for exchange, the Operating
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<PAGE> 34
Partnership shall execute, and the Trustee shall authenticate and deliver, the
Securities which the Holder making the exchange is entitled to receive.
All Securities issued upon any registration of transfer or exchange of
Securities shall be the valid obligations of the Operating Partnership,
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 Security presented or surrendered for registration of transfer or for
exchange shall (if so required by the Operating Partnership or the Trustee) be
duly endorsed, or be accompanied by a written instrument of transfer in form
satisfactory to the Operating Partnership 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 Operating Partnership 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 or 1107 not involving any transfer.
If the Securities of any series (or of any series and specified tenor) are
to be redeemed in part, the Operating Partnership shall not be required (A) to
issue, register the transfer of or exchange any Securities of that series (or of
that series and specified tenor, as the case may be) during a period beginning
at the opening of business 15 days before the day of the mailing of a notice of
redemption of any such Securities selected for redemption under Section 1103 and
ending at the close of business on the day of such mailing, or (B) to register
the transfer of or exchange any Security so selected for redemption in whole or
in part, except the unredeemed portion of any Security being redeemed in part.
The provisions of Clauses (1), (2), (3) and (4) below shall apply only to
Global Securities:
(1) Each Global Security authenticated under this Indenture shall be
registered in the name of the Depositary designated for such Global Security
or a nominee thereof and delivered to such Depositary or a nominee thereof or
custodian therefor, and each such Global Security shall constitute a single
Security for all purposes of this Indenture.
(2) Notwithstanding any other provision in this Indenture, no Global
Security may be exchanged in whole or in part for Securities registered, and
no transfer of a Global Security in whole or in part may be registered, in the
name of any Person other than the Depositary for such Global Security or a
nominee thereof unless (A) such Depositary (i) has notified the Operating
Partnership that it is unwilling or unable to continue as Depositary for such
Global Security or (ii) has ceased to be a clearing agency registered under
the Exchange Act, and in either case a successor Depositary is not appointed
within 90 days by the Operating Partnership, (B) there shall have
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<PAGE> 35
occurred and be continuing an Event of Default with respect to such Global
Security or (C) there shall exist such circumstances, if any, in addition to
or in lieu of the foregoing as have been specified for this purpose as
contemplated by Section 301.
(3) Subject to Clause (2) above, any exchange of a Global Security for other
Securities may be made in whole or in part, and all Securities issued in
exchange for a Global Security or any portion thereof shall be registered in
such names as the Depositary for such Global Security shall direct.
(4) Every Security authenticated and delivered upon registration of transfer
of, or in exchange for or in lieu of, a Global Security or any portion
thereof, whether pursuant to this Section, Section 304, 306, 906 or 1107 or
otherwise, shall be authenticated and delivered in the form of, and shall be,
a Global Security, unless such Security is registered in the name of a Person
other than the Depositary for such Global Security or a nominee thereof.
SECTION 306. Mutilated, Destroyed, Lost and Stolen Securities.
If any mutilated Security is surrendered to the Trustee, the Operating
Partnership shall execute and the Trustee shall authenticate and deliver in
exchange therefor a new Security of the same series and of like tenor and
principal amount and bearing a number not contemporaneously outstanding.
If there shall be delivered to the Operating Partnership and the Trustee (i)
evidence to their satisfaction of the destruction, loss or theft of any Security
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 Operating Partnership or the Trustee that such Security has been acquired by
a bona fide purchaser, the Operating Partnership shall execute and the Trustee
shall authenticate and deliver, in lieu of any such destroyed, lost or stolen
Security, a new Security of the same series and of like tenor and principal
amount and bearing a number not contemporaneously outstanding.
In case any such mutilated, destroyed, lost or stolen Security has become or
is about to become due and payable, the Operating Partnership in its discretion
may, instead of issuing a new Security, pay such Security.
Upon the issuance of any new Security under this Section, the Operating
Partnership 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 issued pursuant to this Section in lieu of
any destroyed, lost or stolen Security shall constitute an original additional
contractual obligation of the Operating Partnership, whether or not the
destroyed, lost or stolen Security shall be at any time enforceable by anyone,
and shall be entitled to all the benefits of this
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Indenture equally and proportionately with any and all other Securities of that
series 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.
SECTION 307. Payment of Interest; Interest Rights Preserved.
Except as otherwise provided as contemplated by Section 301 with respect to
any series of Securities, interest on any Security which 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.
Any interest on any Security of any series which 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 Holder
on the relevant Regular Record Date by virtue of having been such Holder, and
such Defaulted Interest may be paid by the Operating Partnership, at its
election in each case, as provided in Clause (1) or (2) below:
(1) The Operating Partnership may elect to make payment of any Defaulted
Interest to the Persons in whose names the Securities of such series (or
their respective Predecessor Securities) are registered at the close of
business on a Special Record Date for the payment of such Defaulted
Interest, which shall be fixed in the following manner. The Operating
Partnership shall notify the Trustee in writing of the amount of Defaulted
Interest proposed to be paid on each Security of such series and the date of
the proposed payment, and at the same time the Operating Partnership shall
deposit with the Trustee an amount of money 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 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 Operating
Partnership of such Special Record Date and, in the name and at the expense
of the Operating Partnership, shall cause notice of the proposed payment of
such Defaulted Interest and the Special Record Date therefor to be given to
each Holder of Securities of such series in the manner set forth in Section
106, not less than 10 days prior to such Special Record Date. Notice of the
proposed payment of such Defaulted Interest and the Special Record Date
therefor having been so mailed, such Defaulted Interest shall be paid to the
Persons in whose names the Securities
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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).
(2) The Operating Partnership may make payment of any Defaulted Interest
on the Securities of any series in any other lawful manner not inconsistent
with the requirements of any securities exchange on which such Securities
may be listed, and upon such notice as may be required by such exchange, if,
after notice given by the Operating Partnership 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, 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 Security for registration of transfer, the
Operating Partnership, the Trustee and any agent of the Operating Partnership or
the Trustee may treat the Person in whose name such Security is registered as
the owner of such Security for the purpose of receiving payment of principal of
and any premium and (subject to Section 307) any interest on such Security and
for all other purposes whatsoever, whether or not such Security be overdue, and
neither the Operating Partnership, the Trustee nor any agent of the Operating
Partnership or the Trustee shall be affected by notice to the contrary.
SECTION 309. Cancellation.
All Securities surrendered for payment, redemption, 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 shall be
promptly cancelled by it. The Operating Partnership may at any time deliver to
the Trustee for cancellation any Securities previously authenticated and
delivered hereunder which the Operating Partnership 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 Operating Partnership has not issued and sold,
and all Securities so delivered shall be promptly cancelled by the Trustee. No
Securities shall be authenticated in lieu of or in exchange for any Securities
cancelled as provided in this Section, except as expressly permitted by this
Indenture. All cancelled Securities held by the Trustee shall be disposed of in
a manner customary to the Trustee as directed by a Operating Partnership Order.
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SECTION 310. Computation of Interest.
Except as otherwise specified as contemplated by Section 301 for Securities
of any series, interest on the Securities of each series shall be computed on
the basis of a 360-day year of twelve 30-day months.
SECTION 311. CUSIP Numbers.
The Operating Partnership in issuing the Securities may use "CUSIP" numbers
(if then generally in use), and, if so, the Trustee shall us "CUSIP" numbers in
notices of redemption as a convenience to Holders; provided that any such notice
may state that no representation is made as to the correctness of such numbers
either as printed on the Securities or as contained in any notice of a
redemption and that reliance may be placed only on the other identification
numbers printed on the Securities, and any such redemption shall not be affected
by any defect in or omission of such numbers.
ARTICLE FOUR
SATISFACTION AND DISCHARGE
SECTION 401. Satisfaction and Discharge of Indenture.
This Indenture shall upon Operating Partnership Request cease to be of
further effect (except as to any surviving rights of registration of transfer or
exchange of Securities herein expressly provided for), and the Trustee, at the
expense of the Operating Partnership, shall execute proper instruments
acknowledging satisfaction and discharge of this Indenture, when
(1) either
(A) all Securities theretofore authenticated and delivered (other than (i)
Securities which have been destroyed, lost or stolen and which have been
replaced or paid as provided in Section 306 and (ii) Securities for whose
payment money has theretofore been deposited in trust or segregated and held
in trust by the Operating Partnership and thereafter repaid to the Operating
Partnership or discharged from such trust, as provided in Section 1003) have
been delivered to the Trustee for cancellation; or
(B) all such Securities not theretofore delivered to the Trustee for
cancellation
(i) have become due and payable, or
(ii)will become due and payable at their Stated Maturity within one
year, or
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(iii) 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
Operating Partnership,
and the Operating Partnership, in the case of (i), (ii) or (iii) above,
has deposited or caused to be deposited with the Trustee as trust funds in
trust for the purpose money in an amount sufficient to pay and discharge
the entire indebtedness on such Securities not theretofore delivered to
the Trustee for cancellation, for principal and any premium and interest
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 Operating Partnership has paid or caused to be paid all other sums
payable hereunder by the Operating Partnership; and
(3) the Operating Partnership 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 have been complied with.
Notwithstanding the satisfaction and discharge of this Indenture, the
obligations of the Operating Partnership to the Trustee under Section 607, the
obligations of the Trustee to any Authenticating Agent under Section 614 and, if
money shall have been deposited with 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 Money.
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 and this
Indenture, to the payment, either directly or through any Paying Agent
(including the Operating Partnership acting as its own Paying Agent) as the
Trustee may determine, to the Persons entitled thereto, of the principal and any
premium and interest for whose payment such money has been deposited with the
Trustee.
ARTICLE FIVE
REMEDIES
SECTION 501. Events of Default.
"Event of Default", wherever used herein with respect to Securities of any
series, means any one of the following events (whatever the reason for such
Event of Default and
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whether 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 any Security of that
series when it 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 any premium, if any, on
any Security of that series; or
(3) default in the deposit of any sinking fund payment, when and as due by
the terms of a Security of that series; or
(4) default in the performance, or breach, of any covenant or warranty of
the Operating Partnership in this Indenture (other than a covenant or
warranty a default in whose performance or whose breach is elsewhere in this
Section specifically dealt with or which has expressly been included in this
Indenture solely for the benefit of series of Securities other than that
series), 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 Operating
Partnership by the Trustee or to the Operating Partnership 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 or breach and
requiring it to be remedied and stating that such notice is a "Notice of
Default" hereunder; or
(5) a default under any bond, debenture, note or other evidence of
indebtedness for money borrowed by the Operating Partnership (including a
default with respect to Securities of any series other than that series)
having an aggregate principal amount outstanding of at least $50,000,000, or
under any mortgage, indenture or instrument (including this Indenture) under
which there may be issued or by which there may be secured or evidenced any
indebtedness for money borrowed by the Operating Partnership having an
aggregate principal amount outstanding of at least $50,000,000, whether such
indebtedness now exists or shall hereafter be created, which default (A)
shall constitute a failure to pay any portion of the principal of such
indebtedness when due and payable after the expiration of any applicable
grace period with respect thereto or (B) shall have resulted in such
indebtedness becoming or being declared due and payable prior to the date on
which it would otherwise have become due and payable, without, in the case of
Clause (A), such indebtedness having been discharged or without, in the case
of Clause (B), such indebtedness having been discharged or such acceleration
having been rescinded or annulled, in each such case within a period of 10
days after there shall have been given, by registered or certified mail, to
the Operating Partnership by the Trustee or to the Operating Partnership 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 Operating Partnership to cause such indebtedness to
be discharged or cause such acceleration to be rescinded or annulled, as the
case may be, and stating that such notice is a "Notice of Default" hereunder;
provided, however, that, subject to the provisions of Sections 601 and 602,
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the Trustee shall not be deemed to have knowledge of such default unless
either (A) a Responsible Officer of the Trustee shall have knowledge of such
default or (B) the Trustee shall have received written notice thereof from
the Operating Partnership, from any Holder, from the holder of any such
indebtedness or from the trustee under any such mortgage, indenture or other
instrument; or
(6) the entry by a court having jurisdiction in the premises of (A) a
decree or order for relief in respect of the Operating Partnership in an
involuntary case or proceeding under any applicable Federal or State
bankruptcy, insolvency, reorganization or other similar law or (B) a decree
or order adjudging the Operating Partnership a bankrupt or insolvent, or
approving as properly filed a petition seeking reorganization, arrangement,
adjustment or composition of or in respect of the Operating Partnership under
any applicable Federal or State law, or appointing a custodian, receiver,
liquidator, assignee, trustee, sequestrator or other similar official of the
Operating Partnership or of any substantial part of its property, or ordering
the winding up or liquidation of its affairs, and the continuance of any such
decree or order for relief or any such other decree or order unstayed and in
effect for a period of 60 consecutive days; or
(7) the commencement by the Operating Partnership of a voluntary case or
proceeding under any applicable Federal or State bankruptcy, insolvency,
reorganization or other similar law or of any other case or proceeding to be
adjudicated a bankrupt or insolvent, or the consent by it to the entry of a
decree or order for relief in respect of the Operating Partnership in an
involuntary case or proceeding under any applicable Federal or State
bankruptcy, insolvency, reorganization or other similar law or to the
commencement of any bankruptcy or insolvency case or proceeding against it,
or the filing by it of a petition or answer or consent seeking reorganization
or relief under any applicable Federal or State law, or the consent by it to
the filing of such petition or to the appointment of or taking possession by
a custodian, receiver, liquidator, assignee, trustee, sequestrator or other
similar official of the Operating Partnership or of any substantial part of
its property, or the making by it of an assignment for the benefit of
creditors, or the admission by it in writing of its inability to pay its
debts generally as they become due, or the taking of corporate action by the
Operating Partnership in furtherance of any such action; or
(8) any other Event of Default provided with respect to Securities of that
series.
SECTION 502. Acceleration of Maturity; Rescission and Annulment.
If an Event of Default (other than an Event of Default specified in
Section 501(6) or 501(7)) with respect to Securities of any series at the time
Outstanding occurs and is continuing, then in every such case the Trustee, upon
receipt of a request from the Holders of not less than 25% in principal amount
of the Outstanding Securities of that series, shall, or the Holders of not less
than 25% in principal amount of the Outstanding Securities of that series may,
declare the principal amount of all the Securities of that
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series (or, if any Securities of that series are Original Issue Discount
Securities, such portion of the principal amount of such Securities as may be
specified by the terms thereof) to be due and payable immediately, by a notice
in writing to the Operating Partnership (and to the Trustee if given by
Holders), and upon any such declaration such principal amount (or specified
amount) shall become immediately due and payable. If an Event of Default
specified in Section 501(6) or 501 (7) with respect to Securities of any series
at the time Outstanding occurs, the principal amount of all the Securities of
that series (or, if any Securities of that series are Original Issue Discount
Securities, such portion of the principal amount of such Securities as may be
specified by the terms thereof) shall automatically, and without any declaration
or other action on the part of the Trustee or any Holder, 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 Operating
Partnership and the Trustee, may rescind and annul such declaration and its
consequences if
(1) the Operating Partnership has paid or deposited with the Trustee a sum
sufficient to pay
(A) all overdue interest on all Securities of that series,
(B) the principal of (and premium, if any, on) any Securities of that
series which have become due otherwise than by such declaration of
acceleration and any interest thereon at the rate or rates prescribed
therefor in such Securities,
(C) to the extent that payment of such interest is lawful, interest
upon overdue interest at the rate or rates prescribed therefor 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 non-payment of the principal of 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.
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SECTION 503. Collection of Indebtedness and Suits for Enforcement by Trustee.
The Operating Partnership covenants that if
(1) default is made in the payment of any interest on any Security when
such interest becomes due and payable and such default continues for a period
of 30 days, or
(2) default is made in the payment of the principal of (or premium, if
any, on) any Security at the Maturity thereof,
the Operating Partnership will, upon demand of the Trustee, pay to it, for the
benefit of the Holders of such Securities, the whole amount then due and payable
on such Securities for principal and any premium and interest and, to the extent
that payment of such interest shall be legally enforceable, interest on any
overdue principal and premium and on any overdue interest, at the rate or rates
prescribed therefor 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 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 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 any judicial proceeding relative to the Operating Partnership
(or any other obligor upon the Securities), its property or its creditors, the
Trustee shall be entitled and empowered, by intervention in such proceeding or
otherwise, to take any and all actions authorized under the Trust Indenture Act
in order to have claims of the Holders and the Trustee allowed in any such
proceeding. In particular, the Trustee shall be authorized 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 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 it for
the reasonable compensation, expenses, disbursements and advances of the
Trustee, its agents and counsel, and any other amounts due the Trustee under
Section 607.
No provision of this Indenture shall be deemed to authorize the Trustee to
authorize or consent to or accept or adopt on behalf of any Holder any plan of
reorganization,
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arrangement, adjustment or composition affecting the Securities or the rights of
any Holder thereof or to authorize the Trustee to vote in respect of the claim
of any Holder in any such proceeding; provided, however, that the Trustee may,
on behalf of the Holders, vote for the election of a trustee in bankruptcy or
similar official and be a member of a creditors' or other similar committee.
SECTION 505. Trustee May Enforce Claims Without Possession of Securities.
All rights of action and claims under this Indenture or the Securities may be
prosecuted and enforced by the Trustee without the possession of any of the
Securities 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 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 any premium
or interest, upon presentation of the Securities 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 under Section 607;
and
SECOND: To the payment of the amounts then due and unpaid for principal of
and any premium and interest on the Securities 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 amounts due and payable on such
Securities for principal and any premium and interest, respectively.
SECTION 507. Limitation on Suits.
No Holder of any Security of any series 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;
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(2) the Holders of not less than 25% in principal amount of the
Outstanding Securi ties of that series shall have made written request to the
Trustee to institute proceedings in respect of such Event of Default in its
own name as Trustee hereunder;
(3) such Holder or Holders have offered to the Trustee reasonable
indemnity against the costs, expenses and liabilities to be incurred in
compliance with such request;
(4) the Trustee for 60 days after its receipt of such notice, request and
offer of indemnity has failed to institute any such proceeding; and
(5) no direction inconsistent with such written request has been given to
the Trustee during such 60-day period by the Holders of a majority in
principal amount of the Outstanding Securities of that series;
it being understood and intended that no one or more of such Holders shall have
any right in any manner whatever by virtue of, or by availing of, any provision
of this Indenture to affect, disturb or prejudice the rights of any other of
such Holders, or to obtain or to seek to obtain priority or preference over any
other of such Holders or to enforce any right under this Indenture, except in
the manner herein provided and for the equal and ratable benefit of all of such
Holders.
SECTION 508. Unconditional Right of Holders to Receive Principal,
Premium and Interest.
Notwithstanding any other provision in this Indenture, the Holder of any
Security shall have the right, which is absolute and unconditional, to receive
payment of the principal of and any premium and (subject to Section 307)
interest on such Security on the respective Stated Maturities expressed in such
Security (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 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, subject to any determination in
such proceeding, the Operating Partnership, the Trustee and the Holders shall 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.
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SECTION 510. Rights and Remedies Cumulative.
Except as otherwise provided with respect to the replacement or payment of
mutilated, destroyed, lost or stolen Securities in the last paragraph of Section
306, no right or remedy herein conferred upon or reserved to the Trustee or to
the Holders 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 Securities 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, as the case may
be.
SECTION 512. Control by Holders.
The Holders of 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, and
(2) the Trustee may take any other action deemed proper by the Trustee
which is not inconsistent with such direction.
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 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 any premium or interest on any
Security of such series, or
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(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 impair any right consequent thereon.
SECTION 514. Undertaking for Costs.
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, suffered or omitted by
it as Trustee, a court may require any party litigant in such suit to file an
undertaking to pay the costs of such suit, and may assess costs against any such
party litigant, in the manner and to the extent provided in the Trust Indenture
Act. The provisions of this Section shall not apply to any suit instituted by
the Trustee, to any suit instituted by the Operating Partnership, to any suit
instituted by any Holder, or group of Holders of an aggregate more than 10
percent in principal amount of the Securities then outstanding, or to any suit
instituted by any Holder for the enforcement of the payment of the principal of
or interest on any Security, on or after the respective due dates expressed in
such Security.
SECTION 515. Waiver of Usury, Stay or Extension Laws.
The Operating Partnership 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 Operating
Partnership (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.
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ARTICLE SIX
THE TRUSTEE
SECTION 601. Certain Duties and Responsibilities.
The duties and responsibilities of the Trustee shall be as provided by the
Trust Indenture Act. Notwithstanding the foregoing, no provision of this
Indenture shall require the Trustee 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. Whether or not therein
expressly so provided, every provision of this Indenture relating to the conduct
or affecting the liability of or affording protection to the Trustee shall be
subject to the provisions of this Section.
SECTION 602. Notice of Defaults.
If a default occurs hereunder with respect to Securities of any series,
the Trustee shall give the Holders of Securities of such series notice of such
default as and to the extent provided by the Trust Indenture Act; provided,
however, that in the case of any default of the character specified in Section
501(4) with respect to Securities of such series, no such notice to Holders
shall be given until at least 30 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 Securities of such series.
SECTION 603. Certain Rights of Trustee.
Subject to the provisions of Section 601:
(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,
other evidence of indebtedness 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 Operating Partnership mentioned herein
shall be sufficiently evidenced by a Operating Partnership Request or
Operating Partnership Order, and any resolution of the Board of Trustees
shall be sufficiently evidenced by a Board Resolution;
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(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 of its selection and the advice
of such counsel (to be confirmed in writing) 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 pursuant to this Indenture, unless such Holders shall have
offered to the Trustee reasonable security or indemnity against the costs,
expenses and liabilities which might be incurred by it in compliance with
such request or direction;
(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, other evidence of indebtedness 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 Operating
Partnership, 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 to be taken 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.
SECTION 604. Not Responsible for Recitals or Issuance of Securities.
The recitals contained herein and in the Securities, except the Trustee's
certificates of authentication, shall be taken as the statements of the
Operating Partnership, 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. Neither the Trustee nor any Authenticating Agent shall be
accountable for the use or application by the Operating Partnership of
Securities or the proceeds thereof.
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SECTION 605. May Hold Securities.
The Trustee, any Authenticating Agent, any Paying Agent, any Security
Registrar or any other agent of the Operating Partnership, in its individual or
any other capacity, may become the owner or pledgee of Securities and, subject
to Sections 608 and 613, may otherwise deal with the Operating Partnership with
the same rights it would have if it were not Trustee, Authenticating Agent,
Paying Agent, Security Registrar or such other agent.
SECTION 606. 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 in writing with the Operating Partnership.
SECTION 607. Compensation and Reimbursement.
The Operating Partnership agrees
(1) to pay to the Trustee from time to time such reasonable compensation
as the Operating Partnership and the Trustee shall from time to time agree in
writing 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 the
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 reason able 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 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 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.
The Trustee shall have a lien prior to the Securities as to all property
and funds held by it hereunder for any amount owing it or any predecessor
Trustee pursuant to this Section 607 except with respect to funds held in trust
for the benefit of the Holders of particular Securities. When the Trustee incurs
expenses or renders services in connection with an Event of Default specified in
Section 501(6) or Section 501(7), the expenses (including the reasonable charges
and expenses of its counsel) and the compensation for
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the services are intended to constitute expenses of administration under any
applicable Federal or state bankruptcy, insolvency or other similar law.
The provisions of this Section shall survive the termination of this
Indenture.
SECTION 608. Disqualification; Conflicting Interests.
If the Trustee has or shall acquire a conflicting interest within the
meaning of the Trust Indenture Act, the Trustee shall either eliminate such
interest or resign, to the extent and in the manner provided by, and subject to
the provisions of, the Trust Indenture Act and this Indenture. To the extent
permitted by such Act, the Trustee shall not be deemed to have a conflicting
interest by virtue of being a trustee under this Indenture with respect to
Securities of more than one series.
SECTION 609. Corporate Trustee Required; Eligibility.
There shall at all times be one (and only one) Trustee hereunder with
respect to the Securities of each series, which may be Trustee hereunder for
Securities of one or more other series. Each Trustee shall be a Person that is
eligible pursuant to the Trust Indenture Act to act as such and has a combined
capital and surplus of at least $50,000,000. If any such Person publishes
reports of condition at least annually, pursuant to law or to the requirements
of its supervising or examining authority, then for the purposes of this Section
and to the extent permitted by the Trust Indenture Act, the combined capital and
surplus of such Person 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 with respect to the Securities of any series 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 610. Resignation and Removal; Appointment of Successor.
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 611.
The Trustee may resign at any time with respect to the Securities of one
or more series by giving written notice thereof to the Operating Partnership.
The Trustee may be removed at any time with respect to the Securities of
any series by Act of the Holders of a majority in principal amount of the
Outstanding Securities of such series, delivered to the Trustee and to the
Operating Partnership.
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If at any time:
(1) the Trustee shall fail to comply with Section 608 after written
request therefor by the Operating Partnership or by any Holder 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 609 and shall
fail to resign after written request therefor by the Operating Partnership or
by any such Holder, 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, (A) the Operating Partnership by a Board Resolution may
remove the Trustee with respect to all Securities, or (B) subject to Section
514, any Holder 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.
If the instrument of acceptance by a successor Trustee required by Section
611 shall not have been delivered to the Trustee within 30 days after the giving
of such notice of resignation or removal, the Trustee resigning or being removed
may petition any court of competent jurisdiction for the appointment of a
successor Trustee with respect to the Securities of such series.
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 Operating Partnership, by 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) and shall comply with the
applicable requirements of Section 611. 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 Operating Partnership and
the retiring Trustee, the successor Trustee so appointed shall, forthwith upon
its acceptance of such appointment in accordance with the applicable
requirements of Section 611, become the successor Trustee with respect to the
Securities of such series and to that extent supersede the successor Trustee
appointed by the Operating Partnership. If no successor Trustee with respect to
the Securities of any series shall have been so appointed by the Operating
Partnership or the Holders and accepted appointment in the manner required by
Section 611, the retiring Trustee or any Holder who has been a bona fide Holder
of a Security of such series for at least six months may, on behalf of himself
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and all others similarly situated, petition any court of competent jurisdiction
for the appointment of a successor Trustee with respect to the Securities of
such series.
The Operating Partnership 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
to all Holders of Securities of such series in the manner provided 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 611. Acceptance of Appointment by Successor.
In case of the appointment hereunder of a successor Trustee with respect
to all Securities, every such successor Trustee so appointed shall execute,
acknowledge and deliver to the Operating Partnership and to the retiring Trustee
an instrument accepting such appointment, and thereupon the resignation or
removal of the retiring Trustee shall become effective and such successor
Trustee, without any further act, deed or conveyance, shall become vested with
all the rights, powers, trusts and duties of the retiring Trustee; but, on the
request of the Operating Partnership 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.
In case of the appointment hereunder of a successor Trustee with respect
to the Securities of one or more (but not all) series, the Operating
Partnership, 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 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,
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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 Operating Partnership or any successor Trustee,
such retiring Trustee shall duly assign, transfer and deliver to such successor
Trustee all property and money held by such retiring Trustee hereunder with
respect to the Securities of that or those series to which the appointment of
such successor Trustee relates.
Upon request of any such successor Trustee, the Operating Partnership
shall execute any and all instruments for more fully and certainly vesting in
and confirming to such suc cessor Trustee all such rights, powers and trusts
referred to in the first or second preceding paragraph, as the case may be.
No successor Trustee shall accept its appointment unless at the time of
such acceptance such successor Trustee shall be qualified and eligible under
this Article.
SECTION 612. 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 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 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 so authenticated with the same effect
as if such successor Trustee had itself authenticated such Securities.
SECTION 613. Preferential Collection of Claims Against Operating Partnership.
If and when the Trustee shall be or become a creditor of the Operating
Partnership (or any other obligor upon the Securities), the Trustee shall be
subject to the provisions of the Trust Indenture Act regarding the collection of
claims against the Operating Partnership (or any such other obligor).
SECTION 614. Appointment of Authenticating Agent.
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 original issue
and upon exchange, registration of transfer, or partial redemption thereof or
pursuant to Section 306, and Securities so authenticated shall be entitled to
the benefits of this Indenture and shall be
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valid and obligatory for all purposes as if authenticated by the Trustee
hereunder. 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 Operating Partnership and
shall at all times be a corporation organized and doing business under the laws
of the United States of America, any State thereof 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 authority. If such Authenticating Agent
publishes reports of condition at least annually, pursuant to law or to the
requirements of said 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. If 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 any further
act on the part of the Trustee or the Authenticating Agent.
An Authenticating Agent may resign at any time by giving written notice
thereof to the Trustee and to the Operating Partnership. The Trustee may at any
time terminate the agency of an Authenticating Agent by giving written notice
thereof to such Authenticating Agent and to the Operating Partnership. 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 may appoint a successor
Authenticating Agent which shall be acceptable to the Operating Partnership and
shall give notice of such appointment in the manner provided in Section 106 to
all Holders of Securities of the series with respect to which such
Authenticating Agent will serve. 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. No successor Authenticating Agent
shall be appointed unless eligible under the provisions of this Section.
The Trustee agrees to pay to each Authenticating Agent from time to time
reasonable compensation for its services under this Section, and the Trustee
shall be entitled to be reimbursed for such payments, subject to the provisions
of Section 607.
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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 the Trustee's certificate of authentication, an alternative
certificate of authentication in the following form:
This is one of the Securities of the series designated therein referred to
in the within-mentioned Indenture.
THE BANK OF NEW YORK,
As Trustee
By......................................,
As Authenticating Agent
By.......................................
Authorized Officer
ARTICLE SEVEN
HOLDERS' LISTS AND REPORTS BY TRUSTEE AND OPERATING PARTNERSHIP
SECTION 701. Operating Partnership to Furnish Trustee Names and Addresses of
Holders.
The Operating Partnership will furnish or cause to be furnished to the
Trustee
(1) semi-annually, not later than March 15 and September 15 in each year,
a list, in such form as the Trustee may reasonably require, of the names and
addresses of the Holders of Securities of each series as of the preceding
March 1 or September 1, as the case may be, and
(2) at such other times as the Trustee may request in writing, within 30
days after the receipt by the Operating Partnership 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;
excluding from any such list names and addresses received by the Trustee in its
capacity as Security Registrar.
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SECTION 702. Preservation of Information; Communications to Holders.
The Trustee shall preserve, in as current a form as is reasonably
practicable, the names and addresses of Holders contained in the most recent
list furnished to the Trustee as provided in Section 701 and the names and
addresses of Holders received by the Trustee in its capacity as Security
Registrar. The Trustee may destroy any list furnished to it as provided in
Section 701 upon receipt of a new list so furnished.
The rights of Holders to communicate with other Holders with respect to
their rights under this Indenture or under the Securities, and the corresponding
rights and privileges of the Trustee, shall be as provided by the Trust
Indenture Act.
Every Holder of Securities, by receiving and holding the same, agrees with
the Operating Partnership and the Trustee that neither the Operating Partnership
nor the Trustee nor any agent of either of them shall be held accountable by
reason of any disclosure of information as to names and addresses of Holders
made pursuant to the Trust Indenture Act.
SECTION 703. Reports by Trustee.
The Trustee shall transmit to Holders such reports concerning the Trustee
and its actions under this Indenture as may be required pursuant to the Trust
Indenture Act at the times and in the manner provided pursuant thereto. Reports
so required to be transmitted at stated intervals of not more than 12 months
shall be transmitted within 60 days after the first date of issuance of
Securities and on each anniversary of such date.
A copy of each such report shall, at the time of such transmission to
Holders, be filed by the Trustee with each stock exchange upon which any
Securities are listed, with the Commission and with the Operating Partnership.
The Operating Partnership will promptly notify the Trustee when any Securities
are listed on any stock exchange.
SECTION 704. Reports by Operating Partnership.
The Operating Partnership shall file with the Trustee and the Commission,
and transmit to Holders, such information, documents and other reports, and such
summaries thereof, as may be required pursuant to the Trust Indenture Act at the
times and in the manner provided pursuant to such Act; provided that any such
information, documents or reports required to be filed with the Commission
pursuant to Section 13 or 15(d) of the Exchange Act shall be filed with the
Trustee within 15 days after the same is so required to be filed with the
Commission.
Delivery of such reports, information and documents to the Trustee is for
informational purposes only and the Trustee's receipt of such shall not
constitute
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constructive notice of any information contained therein or determinable form
information contained therein, including the Operating Partnership's compliance
with any of its covenants hereunder (as to which the Trustee is entitled to rely
exclusively on Officers' Certificates).
SECTION 705. Notice of Default.
The Operating Partnership shall file with the Trustee written notice of
the occurrence of any Event of Default within five Business Days of its becoming
aware of any such Event of Default.
ARTICLE EIGHT
CONSOLIDATION, MERGER, CONVEYANCE, TRANSFER OR LEASE
SECTION 801. Operating Partnership May Consolidate, Etc., Only on Certain Terms.
The Operating Partnership shall not consolidate with or merge into any
other Person or convey, transfer or lease its properties and assets
substantially as an entirety to any Person, and the Operating Partnership shall
not permit any Person to consolidate with or merge into the Operating
Partnership or convey, transfer or lease its properties and assets substantially
as an entirety to the Operating Partnership, unless:
(1) in case the Operating Partnership shall consolidate with or merge into
another Person or convey, transfer or lease its properties and assets
substantially as an entirety to any Person, the Person formed by such
consolidation or into which the Operating Partnership is merged or the Person
which acquires by conveyance or transfer, or which leases, the properties and
assets of the Operating Partnership substantially as an entirety shall be a
corporation, partnership or trust, shall be organized and validly existing
under the laws of the United States of America, any State thereof or the
District of Columbia and shall expressly assume, by an indenture supplemental
hereto, executed and delivered to the Trustee, in form satisfactory to the
Trustee, the due and punctual payment of the principal of and any premium and
interest on all the Securities and the performance or observance of every
covenant of this Indenture on the part of the Operating Partnership to be
performed or observed;
(2) immediately after giving effect to such transaction and treating any
indebtedness which becomes an obligation of the Operating Partnership or any
Subsidiary as a result of such transaction as having been incurred by the
Operating Partnership or such Subsidiary at the time of such transaction, no
Event of Default, and no event which, after notice or lapse of time or both,
would become an Event of Default, shall have happened and be continuing;
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(3) if, as a result of any such consolidation or merger or such
conveyance, transfer or lease, properties or assets of the Operating
Partnership would become subject to a mortgage, pledge, lien, security
interest or other encumbrance which would not be permitted by this
Indenture, the Operating Partnership or such successor Person, as the case
may be, shall take such steps as shall be necessary effectively to secure the
Securities equally and ratably with (or prior to) all indebtedness secured
thereby; and
(4) the Operating Partnership has delivered to the Trustee an Officers'
Certificate and an Opinion of Counsel, each stating that such consolidation,
merger, conveyance, transfer or lease and, if a supplemental indenture is
required in connection with such transaction, such supplemental indenture
comply with this Article and that all conditions precedent herein provided
for relating to such transaction have been complied with.
SECTION 802. Successor Substituted.
Upon any consolidation of the Operating Partnership with, or merger of the
Operating Partnership into, any other Person or any conveyance, transfer or
lease of the properties and assets of the Operating Partnership substantially as
an entirety in accordance with Section 801, the successor Person formed by such
consolidation or into which the Operating Partnership is merged or to which such
conveyance, transfer or lease is made shall succeed to, and be substituted for,
and may exercise every right and power of, the Operating Partnership under this
Indenture with the same effect as if such successor Person had been named as the
Operating Partnership herein, and thereafter, except in the case of a lease, the
predecessor Person shall be relieved of all obligations and covenants under this
Indenture and the Securities.
ARTICLE NINE
SUPPLEMENTAL INDENTURES
SECTION 901. Supplemental Indentures Without Consent of Holders.
Without the consent of any Holders, the Operating Partnership, when
authorized by 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 Operating
Partnership and the assumption by any such successor of the covenants of the
Operating Partnership herein and in the Securities; or
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(2) to add to the covenants of the Operating Partnership 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
Operating Partnership; 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 additional Events of Default
are to be for the benefit of less than all series of Securities, stating that
such additional Events of Default are expressly being included solely for the
benefit of such series); or
(4) to add to or change any of the provisions of this Indenture to such
extent as shall be necessary to permit or facilitate the issuance of
Securities in bearer form, registrable or not registrable as to principal,
and with or without interest coupons, or to permit or facilitate the issuance
of Securities in uncertificated form; or
(5) to add to, change or eliminate any of the provisions of this Indenture
in respect of one or more series of Securities, provided that any such
addition, change or elimination (A) shall neither (i) apply to any Security
of any series created prior to the execution of such supplemental indenture
and entitled to the benefit of such provision nor (ii) modify the rights of
the Holder of any such Security with respect to such provi sion or (B) shall
become effective only when there is no such Security Outstanding; or
(6) to secure the Securities; or
(7) to establish the form or terms of Securities of any series 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, pursuant to the requirements of Section
611; 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, provided that such action pursuant to this Clause (9) shall
not adversely affect the interests of the Holders of Securities of any series
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 the Outstanding Securities of each series affected by such
supplemental indenture, by Act of said Holders delivered to the Operating
Partnership and the Trustee, the Operating
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Partnership, when authorized by 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 of such series 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 any instalment of
principal of or interest on, any Security, or reduce the principal amount
thereof or the rate of interest thereon or any premium payable upon the
redemption thereof, or reduce the amount of the principal of an Original
Issue Discount Security or any other Security which would be due and payable
upon a declaration of acceleration of the Maturity thereof pursuant to
Section 502, or change any Place of Payment where, or the coin or currency in
which, any Security or any premium or 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, on or after
the Redemption Date), 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 (of compliance with certain provisions of this Indenture or
certain defaults hereunder and their consequences) provided for in this
Indenture, or
(3) modify any of the provisions of this Section, Section 513 or Section
1008, except to increase any such percentage 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; provided,
however, that this clause shall not be deemed to require the consent of any
Holder with respect to changes in the references to "the Trustee" and
concomitant changes in this Section and Section 1008, or the deletion of this
proviso, in accordance with the requirements of Sections 611 and 901(8).
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.
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.
The Operating Partnership may, but shall not be obligated to, fix a record
date for the purpose of determining the Persons entitled to consent to any
indenture supplemental hereto. If a record date is fixed, the Holders on such
record date, or their duly designated
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proxies, and only such Persons, shall be entitled to consent to such
supplemental indenture, whether or not such Holders remain Holders after such
record date; provided, that unless such consent shall have become effective by
virtue of the requisite percentage having been obtained prior to the date which
is 90 days after such record date, any such consent previously given shall
automatically and without further action by any Holder be cancelled and of no
further effect.
SECTION 903. Execution of Supplemental Indentures.
In executing, or accepting the additional trusts created by, any
supplemental indenture permitted by this Article or the modifications thereby of
the trusts created by this Indenture, the Trustee shall be entitled to receive,
and (subject to Section 601) 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
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.
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 Operating
Partnership shall so determine, new Securities of any series so modified as to
conform, in the opinion of the Trustee and the Operating Partnership, to any
such supplemental indenture may be prepared and executed by the Operating
Partnership and authenticated and delivered by the Trustee in exchange for
Outstanding Securities of such series.
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ARTICLE TEN
COVENANTS
SECTION 1001. Payment of Principal, Premium and Interest.
The Operating Partnership covenants and agrees for the benefit of each
series of Securities that it will duly and punctually pay the principal of and
any premium and interest on the Securities of that series in accordance with the
terms of the Securities and this Indenture.
SECTION 1002. Maintenance of Office or Agency.
The Operating Partnership will maintain in each Place of Payment for any
series of Securities an office or agency where Securities of that series may be
presented or surrendered for payment, where Securities of that series may be
surrendered for registration of transfer or exchange and where notices and
demands to or upon the Operating Partnership in respect of the Securities of
that series and this Indenture may be served. The Operating Partnership will
give prompt written notice to the Trustee of the location, and any change in the
location, of such office or agency. If at any time the Operating Partnership
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, and the Operating Partnership hereby appoints the Trustee as its agent
to receive all such presentations, surrenders, notices and demands.
The Operating Partnership may also 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 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 Operating Partnership of its
obligation to maintain an office or agency in each Place of Payment for
Securities of any series for such purposes. The Operating Partnership 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.
SECTION 1003. Money for Securities Payments to Be Held in Trust.
If the Operating Partnership shall at any time act as its own Paying Agent
with respect to any series of Securities, it will, on or before each due date of
the principal of or any premium or interest on any of the Securities of that
series, segregate and hold in trust for the benefit of the Persons entitled
thereto a sum sufficient to pay the principal and any premium and interest so
becoming due until such sums shall be paid to such Persons
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or otherwise disposed of as herein provided and will promptly notify the Trustee
of its action or failure so to act.
Whenever the Operating Partnership shall have one or more Paying Agents
for any series of Securities, it will, prior to each due date of the principal
of or any premium or interest on any Securities of that series, deposit with a
Paying Agent a sum sufficient to pay such amount, such sum to be held as
provided by the Trust Indenture Act, and (unless such Paying Agent is the
Trustee) the Operating Partnership will promptly notify the Trustee of its
action or failure so to act.
The Operating Partnership will cause each Paying Agent for any series of
Securities 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) comply with the
provisions of the Trust Indenture Act applicable to it as a Paying Agent and (2)
during the continuance of any default by the Operating Partnership (or any other
obligor upon the Securities of that series) in the making of any payment in
respect of the Securities of that series, upon the written request of the
Trustee, forthwith pay to the Trustee all sums held in trust by such Paying
Agent for payment in respect of the Securities of that series.
The Operating Partnership may at any time, for the purpose of obtaining
the satisfaction and discharge of this Indenture or for any other purpose, pay,
or by Operating Partnership Order direct any Paying Agent to pay, to the Trustee
all sums held in trust by the Operating Partnership 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 Operating Partnership 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 money.
Any money deposited with the Trustee or any Paying Agent, or then held by
the Operating Partnership, in trust for the payment of the principal of or any
premium or interest on any Security of any series and remaining unclaimed for
two years after such principal, premium or interest has become due and payable
shall be paid to the Operating Partnership on Operating Partnership Request, or
(if then held by the Operating Partnership) shall be discharged from such trust;
and the Holder of such Security shall thereafter, as an unsecured general
creditor, look only to the Operating Partnership for payment thereof, and all
liability of the Trustee or such Paying Agent with respect to such trust money,
and all liability of the Operating Partnership 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
Operating Partnership cause to be published once, in a newspaper published in
the English language, customarily published on each Business Day and of general
circulation in New York, New York, 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 Operating Partnership.
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SECTION 1004. Statement by Officers as to Default.
The Operating Partnership will deliver to the Trustee, within 120 days
after the end of each fiscal year of the Operating Partnership ending after the
date hereof, an Officers' Certificate, stating whether or not to the best
knowledge of the signers thereof the Operating Partnership is in default in the
performance and observance of any of the terms, provisions and conditions of
this Indenture (without regard to any period of grace or requirement of notice
provided hereunder) and, if the Operating Partnership shall be in default,
specifying all such defaults and the nature and status thereof of which they may
have knowledge.
SECTION 1005. Existence.
Subject to Article Eight, the Operating Partnership will do or cause to be
done all things necessary to preserve and keep in full force and effect its
existence, rights (charter and statutory) and franchises; provided, however,
that the Operating Partnership shall not be required to preserve any such right
or franchise if the Board of Trustees shall determine that the preservation
thereof is no longer desirable in the conduct of the business of the Operating
Partnership and that the loss thereof is not disadvantageous in any material
respect to the Holders.
SECTION 1006. Maintenance of Properties.
The Operating Partnership will cause all 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 Operating Partnership 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 Operating
Partnership from discontinuing the operation or maintenance of any of such
properties if such discontinuance is, in the judgment of the Operating
Partnership, desirable in the conduct of its business or the business of any
Subsidiary and not disadvantageous in any material respect to the Holders.
SECTION 1007. Payment of Taxes and Other Claims.
The Operating Partnership 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 the Operating Partnership or any
Subsidiary or upon the income, profits or property of the Operating Partnership
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 Operating
Partnership or any Subsidiary; provided, however,
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that the Operating Partnership shall not be required to pay or discharge or
cause to be paid or discharged any such tax, assessment, charge or claim whose
amount, applicability or validity is being contested in good faith by
appropriate proceedings.
SECTION 1008. Insurance.
The Operating Partnership will cause each of its properties and each of
the properties of its Subsidiaries which are of an insurable nature to be
insured against loss of damage with insurers of recognized responsibility, in
commercially reasonable amounts and types.
SECTION 1009. Provision of Financial Information.
Whether or not the Operating Partnership is subject to Section 13 or
Section 15(d) of the Exchange Act, the Operating Partnership will, to the
extent permitted under the Exchange Act, file with the Commission the annual
reports, quarterly reports and other documents that the Operating Partnership
would have been required to file with the Commission pursuant to Section 13 or
Section 15(d) of the Exchange Act (the "Financial Statements") if the Operating
Partnership 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
Operating Partnership would have been required so to file such documents if the
Operating Partnership were so subject.
The Operating Partnership 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 that the Operating
Partnership would have been required to file with the Commission pursuant to
Section 13 or Section 15(d) of the Exchange Act if the Operating Partnership
were subject to such Sections, and (ii) file with the Trustee copies of the
annual reports, quarterly reports and other documents that the Operating
Partnership would have been required to file with the Commission pursuant to
Section 13 or Section 15(d) of the Exchange Act if the Operating Partnership
were subject to such Sections and (y) if filing such documents by the Operating
Partnership 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. Waiver of Certain Covenants.
Except as otherwise specified as contemplated by Section 301 for Securities
of such series, the Operating Partnership may, with respect to the Securities of
any series, omit in any particular instance to comply with any term, provision
or condition set forth in any covenant provided pursuant to Section 301(18),
901(2) or 901(7) for the benefit of the Holders of such series or in any of
Sections 1005 through 1009, inclusive, if before the time for such compliance
the Holders of at least a majority in principal amount of the Outstanding
Securities of such series shall, by Act of such Holders, either waive such
compliance in such instance or generally waive compliance with such term,
provision or condition, but no such waiver shall extend to or affect such term,
provision or condition except to the extent so expressly waived, and, until such
waiver shall become effective, the obligations of the Operating Partnership and
the duties of the Trustee in respect of any such term, provision or condition
shall remain in full force and effect.
SECTION 1011. Calculation of Original Issue Discount.
The Operating Partnership shall file with the Trustee promptly at the end
of each calendar year a written notice specifying the amount of original issue
discount (including daily rates and accrual periods) accrued on Outstanding
Securities as of the end of such year.
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 such Securities) in accordance with
this Article.
SECTION 1102. Election to Redeem; Notice to Trustee.
The election of the Operating Partnership to redeem any Securities shall
be evidenced by a Board Resolution or in another manner specified as
contemplated by Section 301 for such Securities. In case of any redemption at
the election of the Operating Partnership of less than all the Securities of any
series (including any such redemption affecting only a
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single Security), the Operating Partnership shall, at least 60 days prior to the
Redemption Date fixed by the Operating Partnership (unless a shorter notice
shall be satisfactory to the Trustee), notify the Trustee of such Redemption
Date, of the principal amount of Securities of such series to be redeemed and,
if applicable, of the tenor of the Securities 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 Operating Partnership 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 are to be redeemed (unless
all the Securities of such series and of a specified tenor are to be redeemed or
unless such redemption affects only a single Security), 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
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 a
portion of the principal amount of any Security of such series, provided that
the unredeemed portion of the principal amount of any Security shall be in an
authorized denomination (which shall not be less than the minimum authorized
denomination) for such Security. If less than all the Securities of such series
and of a specified tenor are to be redeemed (unless such redemption affects only
a single Security), 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 and specified tenor not previously called
for redemption in accordance with the preceding sentence.
The Trustee shall promptly notify the Operating Partnership in writing of
the Securities selected for redemption as aforesaid and, in case of any
Securities selected for partial redemption as aforesaid, the principal amount
thereof to be redeemed.
The provisions of the two preceding paragraphs shall not apply with
respect to any redemption affecting only a single Security, whether such
Security is to be redeemed in whole or in part. In the case of any such
redemption in part, the unredeemed portion of the principal amount of the
Security shall be in an authorized denomination (which shall not be less than
the minimum authorized denomination) for such Security.
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 Securities redeemed or to be redeemed only in part, to the portion
of the principal amount of such Securities which has been or is to be redeemed.
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SECTION 1104. Notice of Redemption.
Notice of redemption shall be given by first-class mail, postage prepaid,
mailed not less than 30 nor more than 60 days prior to the Redemption Date, to
each Holder of Securities to be redeemed, at his address appearing in the
Security Register.
All notices of redemption shall state, including CUSIP number, if any:
(1) the Redemption Date,
(2) the Redemption Price,
(3) if less than all the Outstanding Securities of any series consisting
of more than a single Security are to be redeemed, the identification (and,
in the case of partial redemption of any such Securities, the principal
amounts) of the particular Securities to be redeemed and, if less than all
the Outstanding Securities of any series consisting of a single Security are
to be redeemed, the principal amount of the particular Security to be
redeemed,
(4) that on the Redemption Date the Redemption Price will become due and
payable upon each such Security to be redeemed and, if applicable, that
interest thereon will cease to accrue on and after said date,
(5) the place or places where each such Security is to be surrendered for
payment of the Redemption Price, and
(6) that the redemption is for a sinking fund, if such is the case.
Notice of redemption of Securities to be redeemed at the election of the
Operating Partnership shall be given by the Operating Partnership or, at the
Operating Partnership's request, by the Trustee in the name and at the expense
of the Operating Partnership and shall be irrevocable.
SECTION 1105. Deposit of Redemption Price.
Prior to any Redemption Date, the Operating Partnership shall deposit with
the Trustee or with a Paying Agent (or, if the Operating Partnership is acting
as its own Paying Agent, segregate and hold in trust as provided in Section
1003) an amount of money sufficient to pay the Redemption Price of, and (except
if the Redemption Date shall be an Interest Payment Date) accrued interest on,
all the Securities which are to be redeemed on that date.
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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, and from and after such date (unless the
Operating Partnership shall default in the payment of the Redemption Price and
accrued interest) such Securities shall cease to bear interest. Upon surrender
of any such Security for redemption in accordance with said notice, such
Security shall be paid by the Operating Partnership at the Redemption Price,
together with accrued interest to the Redemption Date; provided, however, that,
unless otherwise specified as contemplated by Section 301, installments of
interest whose Stated Maturity is on or prior to the Redemption Date will 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 Security called for redemption shall not be so paid upon surrender
thereof for redemption, the principal and any premium shall, until paid, bear
interest from the Redemption Date at the rate prescribed therefor in the
Security.
SECTION 1107. Securities Redeemed in Part.
Any Security which is to be redeemed only in part shall be surrendered at
a Place of Payment therefor (with, if the Operating Partnership or the Trustee
so requires, due endorsement by, or a written instrument of transfer in form
satisfactory to the Operating Partnership and the Trustee duly executed by, the
Holder thereof or his attorney duly authorized in writing), and the Operating
Partnership 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 and of like tenor, of any authorized denomination as requested
by such Holder, in aggregate principal amount equal to and in exchange for the
unredeemed portion of the principal of the Security so surrendered.
ARTICLE TWELVE
SINKING FUNDS
SECTION 1201. Applicability of Article.
The provisions of this Article shall be applicable to any sinking fund for
the retirement of Securities of any series except as otherwise specified as
contemplated by Section 301 for such Securities.
The minimum amount of any sinking fund payment provided for by the terms
of any Securities is herein referred to as a "mandatory sinking fund payment",
and any payment
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in excess of such minimum amount provided for by the terms of such Securities is
herein referred to as an "optional sinking fund payment". If provided for by the
terms of any Securities, the cash amount of any sinking fund payment may be
subject to reduction as provided in Section 1202. Each sinking fund payment
shall be applied to the redemption of Securities as provided for by the terms of
such Securities.
SECTION 1202. Satisfaction of Sinking Fund Payments with Securities.
The Operating Partnership (1) may deliver Outstanding Securities of a
series (other than any previously called for redemption) and (2) may apply as a
credit Securities of a series which have been redeemed either at the election of
the Operating Partnership pursuant to the terms of such Securities or through
the application of permitted optional sinking fund payments pursuant to the
terms of such Securities, in each case in satisfaction of all or any part of any
sinking fund payment with respect to any Securities of such series required to
be made pursuant to the terms of such Securities as and to the extent provided
for by the terms of such Securities; provided that the Securities to be so
credited have not been previously so credited. The Securities to be so credited
shall be received and credited for such purpose by the Trustee at the Redemption
Price, as specified in the Securities so to be redeemed, for redemption through
operation of the sinking fund and the amount of such sinking fund payment shall
be reduced accordingly.
SECTION 1203. Redemption of Securities for Sinking Fund.
Not less than 60 days prior to each sinking fund payment date for any
Securities, the Operating Partnership will deliver to the Trustee an Officers'
Certificate specifying the amount of the next ensuing sinking fund payment for
such Securities pursuant to the terms of such Securities, the portion thereof,
if any, which is to be satisfied by payment of cash and the portion thereof, if
any, which is to be satisfied by delivering and crediting Securities pursuant to
Section 1202 and will also deliver to the Trustee any Securities to be so
delivered. Not less than 30 nor more than 45 days prior to each such sinking
fund payment date, the Trustee shall select the Securities to be redeemed upon
such sinking fund payment date in the manner specified in Section 1103 and cause
notice of the redemption thereof to be given in the name of and at the expense
of the Operating Partnership in the manner provided in Section 1104. Such notice
having been duly given, the redemption of such Securities shall be made upon the
terms and in the manner stated in Sections 1106 and 1107.
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ARTICLE THIRTEEN
DEFEASANCE AND COVENANT DEFEASANCE
SECTION 1301. Operating Partnership's Option to Effect Defeasance or Covenant
Defeasance.
If applicable to a particular series of Securities, the Operating
Partnership may elect, at its option at any time, to have Section 1302 or
Section 1303 applied to any such series of Securities or any Securities of such
series, as the case may be, designated pursuant to Section 301 as being
defeasible pursuant to such Section 1302 or 1303, in accordance with any
applicable requirements provided pursuant to Section 301 and upon compliance
with the conditions set forth below in this Article. Any such election shall be
evidenced by a Board Resolution or in another manner specified as contemplated
by Section 301 for such Securities.
SECTION 1302. Defeasance and Discharge.
Upon the Operating Partnership's exercise of its option (if any) to have
this Section applied to any applicable series of Securities or any Securities of
such series, as the case may be, the Operating Partnership shall be deemed to
have been discharged from its obligations with respect to such Securities as
provided in this Section on and after the date the conditions set forth in
Section 1304 are satisfied (hereinafter called "Defeasance"). For this purpose,
such Defeasance means that the Operating Partnership shall be deemed to have
paid and discharged the entire indebtedness represented by such Securities and
to have satisfied all its other obligations under such Securities and this
Indenture insofar as such Securities are concerned (and the Trustee, at the
expense of the Operating Partnership, shall execute proper instruments
acknowledging the same), subject to the following which shall survive until
otherwise terminated or discharged hereunder: (1) the rights of Holders of such
Securities to receive, solely from the trust fund described in Section 1304 and
as more fully set forth in such Section, payments in respect of the principal of
and any premium and interest on such Securities when payments are due, (2) the
Operating Partnership's obligations with respect to such Securities under
Sections 304, 305, 306, 1002 and 1003, (3) the rights, powers, trusts, duties
and immunities of the Trustee hereunder and (4) this Article. Subject to
compliance with this Article, the Operating Partnership may exercise its option
(if any) to have this Section applied to any applicable Securities
notwithstanding the prior exercise of its option (if any) to have Section 1303
applied to such Securities.
SECTION 1303. Covenant Defeasance.
Upon the Operating Partnership's exercise of its option (if any) to have
this Section applied to any applicable series of Securities or any Securities of
such series, as the case
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may be, (1) the Operating Partnership shall be released from its obligations
under Section 801(3), Sections 1005 through 1007, inclusive, and any covenants
provided pursuant to Section 301(18), 901(2) or 901(7) for the benefit of the
Holders of such Securities and (2) the occurrence of any event specified in
Sections 501(4) (with respect to any of Section 801(3), Sections 1005 through
1007, inclusive, and any such covenants provided pursuant to Section 301(18),
901(2) or 901(7)), 501(5) and 501(8) shall be deemed not to be or result in an
Event of Default, in each case with respect to such Securities as provided in
this Section on and after the date the conditions set forth in Section 1304 are
satisfied (hereinafter called "Covenant Defeasance"). For this purpose, such
Covenant Defeasance means that, with respect to such Securities, the Operating
Partnership may omit to comply with and shall have no liability in respect of
any term, condition or limitation set forth in any such specified Section (to
the extent so specified in the case of Section 501(4)), whether directly or
indirectly by reason of any reference elsewhere herein to any such Section or by
reason of any reference in any such Section to any other provision herein or in
any other document, but the remainder of this Indenture and such Securities
shall be unaffected thereby.
SECTION 1304. Conditions to Defeasance or Covenant Defeasance.
The following shall be the conditions to the application of Section 1302
or Section 1303 to any applicable series of Securities or any Securities of such
series, as the case may be:
(1) The Operating Partnership shall irrevocably have deposited or caused
to be deposited with the Trustee (or another trustee which satisfies the
requirements contemplated by Section 609 and agrees to comply with the
provisions of this Article applicable to it) as trust funds in trust for the
purpose of making the following payments, specifically pledged as security
for, and dedicated solely to, the benefits of the Holders of such Securities,
(A) money in an amount, or (B) U.S. Government Obligations which through the
scheduled payment of principal and interest in respect thereof in accordance
with their terms will provide, not later than one day before the due date of
any payment, money in an amount, or (C) a combination thereof, in each case
sufficient, in the opinion of a nationally recognized firm of independent
public accountants expressed in a written certification thereof delivered to
the Trustee, to pay and discharge, and which shall be applied by the Trustee
(or any such other qualifying trustee) to pay and discharge, the principal of
and any premium and interest on such Securities on the respective Stated
Maturities, in accordance with the terms of this Indenture and such
Securities. As used herein, "U.S. Government Obligation" means (x) any
security which is (i) a direct obligation of the United States of America for
the payment of which the full faith and credit of the United States of
America is pledged or (ii) an obligation of a Person controlled or supervised
by and acting as an agency or instrumentality of the United States of America
the payment of which is unconditionally guaranteed as a full faith and credit
obligation by the United States of America, which, in either case (i) or
(ii), is not callable or redeemable at the option of the issuer thereof, and
(y) any depositary receipt issued by a bank (as defined in Section 3(a)(2) of
the
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Securities Act) as custodian with respect to any U.S. Government Obligation
which is specified in Clause (x) above and held by such bank for the account
of the holder of such depositary receipt, or with respect to any specific
payment of principal of or interest on any U.S. Government Obligation which
is so specified and held, 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 depositary receipt from any amount received by the
custodian in respect of the U.S. Government Obligation or the specific
payment of principal or interest evidenced by such depositary receipt.
(2) In the event of an election to have Section 1302 apply to any
applicable series of Securities or any Securities of such series, as the case
may be, the Operating Partnership shall have delivered to the Trustee an
Opinion of Counsel stating that (A) the Operating Partnership has received
from, or there has been published by, the Internal Revenue Service a ruling
or (B) since the date of this instrument, there has been a change in the
applicable Federal income tax law, in either case (A) or (B) to the effect
that, and based thereon such opinion shall confirm that, the Holders of such
Securities will not recognize gain or loss for Federal income tax purposes as
a result of the deposit, Defeasance and discharge to be effected with respect
to such Securities and will be subject to Federal income tax on the same
amount, in the same manner and at the same times as would be the case if such
deposit, Defeasance and discharge were not to occur.
(3) In the event of an election to have Section 1303 apply to any
applicable series of Securities or any Securities of such series, as the case
may be, the Operating Partnership shall have delivered to the Trustee an
Opinion of Counsel to the effect that the Holders of such Securities will not
recognize gain or loss for Federal income tax purposes as a result of the
deposit and Covenant Defeasance to be effected with respect to such
Securities and will be subject to Federal income tax on the same amount, in
the same manner and at the same times as would be the case if such deposit
and Covenant Defeasance were not to occur.
(4) The Operating Partnership shall have delivered to the Trustee an
Officer's Certificate to the effect that neither such Securities nor any
other Securities of the same series, if then listed on any securities
exchange, will be delisted as a result of such deposit.
(5) No event which is, or after notice or lapse of time or both would
become, an Event of Default with respect to such Securities or any other
Securities shall have occurred and be continuing at the time of such deposit
or, with regard to any such event specified in Sections 501(6) and (7), at
any time on or prior to the 90th day after the date of such deposit (it being
understood that this condition shall not be deemed satisfied until after such
90th day).
(6) Such Defeasance or Covenant Defeasance shall not cause the Trustee to
have a conflicting interest within the meaning of the Trust Indenture Act
(assuming all Securities are in default within the meaning of such Act).
-64-
<PAGE> 74
(7) Such Defeasance or Covenant Defeasance shall not result in a breach or
violation of, or constitute a default under, any other agreement or
instrument to which the Operating Partnership is a party or by which it is
bound.
(8) Such Defeasance or Covenant Defeasance shall not result in the trust
arising from such deposit constituting an investment company within the
meaning of the Investment Company Act unless such trust shall be registered
under such Act or exempt from registration thereunder.
(9) The Operating Partnership shall have delivered to the Trustee an
Officer's Certificate and an Opinion of Counsel, each stating that all
conditions precedent with respect to such Defeasance or Covenant Defeasance
have been complied with.
SECTION 1305. Deposited Money and U.S. Government Obligations to Be
Held in Trust; Miscellaneous Provisions.
Subject to the provisions of the last paragraph of Section 1003, all money
and U.S. Government Obligations (including the proceeds thereof) deposited with
the Trustee or other qualifying trustee (solely for purposes of this Section and
Section 1306, the Trustee and any such other trustee are referred to
collectively as the "Trustee") pursuant to Section 1304 in respect of any
Securities shall be held in trust and applied by the Trustee, in accordance with
the provisions of such Securities and this Indenture, to the payment, either
directly or through any such Paying Agent (including the Operating Partnership
acting as its own Paying Agent) as the Trustee may determine, to the Holders of
such Securities, of all sums due and to become due thereon in respect of
principal and any premium and interest, but money so held in trust need not be
segregated from other funds except to the extent required by law.
The Operating Partnership shall pay and indemnify the Trustee against any
tax, fee or other charge imposed on or assessed against the U.S. Government
Obligations deposited pursuant to Section 1304 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 Outstanding Securities.
Anything in this Article to the contrary notwithstanding, the Trustee
shall deliver or pay to the Operating Partnership from time to time upon
Operating Partnership Request any money or U.S. Government Obligations held by
it as provided in Section 1304 with respect to any Securities 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 the Defeasance or Covenant Defeasance, as the case may be, with respect
to such Securities.
-65-
<PAGE> 75
SECTION 1306. Reinstatement.
If the Trustee or the Paying Agent is unable to apply any money in
accordance with this Article with respect to any Securities by reason of any
order or judgment of any court or governmental authority enjoining, restraining
or otherwise prohibiting such application, then the obligations under this
Indenture and such Securities from which the Operating Partnership has been
discharged or released pursuant to Section 1302 or 1303 shall be revived and
reinstated as though no deposit had occurred pursuant to this Article with
respect to such Securities, until such time as the Trustee or Paying Agent is
permitted to apply all money held in trust pursuant to Section 1305 with respect
to such Securities in accordance with this Article; provided, however, that if
the Operating Partnership makes any payment of principal of or any premium or
interest on any such Security following such reinstatement of its obligations,
the Operating Partnership shall be subrogated to the rights (if any) of the
Holders of such Securities to receive such payment from the money so held in
trust.
-66-
<PAGE> 76
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.
VORNADO REALTY L.P.
By...........................................
Attest:
..............................
THE BANK OF NEW YORK
Trustee:
By...........................................
Attest:
..............................
-67-
<PAGE> 77
STATE OF NEW YORK )
) ss.:
COUNTY OF NEW YORK )
On the .... day of ..........., ...., before me personally came
..........................., to me known, who, being by me duly sworn, did
depose and say that he is .................... of ..........................,
one of the corporations described in and which executed the foregoing
instrument; that he knows the seal of said corporation; that the seal affixed
to said instrument is such corporate seal; that it was so affixed by authority
of the Board of Trustees of said corporation; and that he signed his name
thereto by like authority.
..............................
STATE OF NEW YORK )
) ss.:
COUNTY OF NEW YORK )
On the .... day of ..........., ...., before me personally came
..........................., to me known, who, being by me duly sworn, did
depose and say that he is .................... of ..........................,
one of the corporations described in and which executed the foregoing
instrument; that he knows the seal of said corporation; that the seal affixed
to said instrument is such corporate seal; that it was so affixed by authority
of the Board of Trustees of said corporation; and that he signed his name
thereto by like authority.
..............................
-68-
<PAGE> 1
Exhibit 4.6
- --------------------------------------------------------------------------------
VORNADO REALTY L.P.
TO
THE BANK OF NEW YORK
Trustee
------------------
INDENTURE
Dated as of , 1997
------------------
SUBORDINATED DEBT SECURITIES
- --------------------------------------------------------------------------------
<PAGE> 2
................................................................................
CERTAIN SECTIONS OF THIS INDENTURE RELATING TO SECTIONS 310
THROUGH 318, INCLUSIVE, OF THE TRUST INDENTURE ACT OF 1939:
<TABLE>
<CAPTION>
TRUST INDENTURE
ACT SECTION INDENTURE SECTION
<S> <C>
Section 310(a)(1) .................................................. 609
(a)(2) .................................................. 609
(a)(3) .................................................. Not Applicable
(a)(4) .................................................. Not Applicable
(b) .................................................. 608
.................................................. 610
Section 311(a) .................................................. 613
(b) .................................................. 613
Section 312(a) .................................................. 701
.................................................. 702
(b) .................................................. 702
(c) .................................................. 702
Section 313(a) .................................................. 703
(b) .................................................. 703
(c) .................................................. 703
(d) .................................................. 703
Section 314(a) .................................................. 704
(a)(4) .................................................. 101
.................................................. 1004
(b) .................................................. Not Applicable
(c)(1) .................................................. 102
(c)(2) .................................................. 102
(c)(3) .................................................. Not Applicable
(d) .................................................. Not Applicable
(e) .................................................. 102
Section 315(a) .................................................. 601
(b) .................................................. 602
(c) .................................................. 601
(d) .................................................. 601
(e) .................................................. 514
Section 316(a) .................................................. 101
(a)(1)(A) .................................................. 502
.................................................. 512
(a)(1)(B) .................................................. 513
(a)(2) .................................................. Not Applicable
(b) .................................................. 508
(c) .................................................. 104
Section 317(a)(1) .................................................. 503
(a)(2) .................................................. 504
(b) .................................................. 1003
Section 318(a) .................................................. 107
</TABLE>
- ------------------
NOTE: This reconciliation and tie shall not, for any purpose, be deemed to be a
part of the Indenture.
<PAGE> 3
TABLE OF CONTENTS
-------------
<TABLE>
<CAPTION>
PAGE
<S> <C>
PARTIES.........................................................................................1
RECITALS OF THE OPERATING PARTNERSHIP...........................................................1
</TABLE>
ARTICLE ONE
DEFINITIONS AND OTHER PROVISIONS
OF GENERAL APPLICATION
<TABLE>
<CAPTION>
<S> <C>
SECTION 101. Definitions:
Act.........................................................................2
Affiliate...................................................................2
Authenticating Agent........................................................2
Board of Trustees...........................................................2
Board Resolution............................................................2
Business Day................................................................2
Commission..................................................................2
Common Shares...............................................................2
Corporate Trust Office......................................................3
corporation.................................................................3
Covenant Defeasance.........................................................3
Defaulted Interest..........................................................3
Defeasance..................................................................3
Depositary..................................................................3
Event of Default............................................................3
Exchange Act................................................................3
Expiration Date.............................................................3
Global Security.............................................................3
Holder......................................................................3
Indenture...................................................................3
interest....................................................................3
Interest Payment Date.......................................................3
Investment Company Act......................................................4
Maturity....................................................................4
Notice of Default...........................................................4
</TABLE>
- ------------------
NOTE: This table of contents shall not, for any purpose, be deemed to be a part
of the Indenture.
<PAGE> 4
<TABLE>
<S> <C>
Officers' Certificate.......................................................4
Operating Partnership.......................................................4
Operating Partnership Request...............................................4
Operating Partnership Order.................................................4
Opinion of Counsel..........................................................4
Original Issue Discount Security............................................4
Outstanding.................................................................4
Paying Agent................................................................5
Person......................................................................5
Place of Payment............................................................5
Predecessor Security........................................................5
Redemption Date.............................................................6
Redemption Price............................................................6
Regular Record Date.........................................................6
Responsible Officer.........................................................6
Securities..................................................................6
Securities Act..............................................................6
Security Register and Security Registrar....................................6
Senior Debt.................................................................6
Special Record Date.........................................................7
Stated Maturity.............................................................7
Subsidiary..................................................................7
Trust Indenture Act.........................................................7
Trustee.....................................................................7
U.S. Government Obligation..................................................7
Vice President..............................................................7
Section 102. Compliance Certificates and Opinions........................................7
Section 103. Form of Documents Delivered to Trustee......................................8
Section 104. Acts of Holders; Record Dates...............................................8
Section 105. Notices, Etc., to Trustee and Operating Partnership........................10
Section 106. Notice to Holders; Waiver..................................................11
Section 107. Conflict with Trust Indenture Act..........................................11
Section 108. Effect of Headings and Table of Contents...................................11
Section 109. Successors and Assigns.....................................................11
Section 110. Separability Clause........................................................12
Section 111. Benefits of Indenture......................................................12
Section 112. Governing Law..............................................................12
Section 113. Legal Holidays.............................................................12
</TABLE>
ARTICLE TWO
SECURITY FORMS
<TABLE>
<S> <C>
Section 201. Forms Generally............................................................12
</TABLE>
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<PAGE> 5
<TABLE>
<S> <C>
Section 202. Form of Face of Security...................................................13
Section 203. Form of Reverse of Security................................................15
Section 204. Form of Legend for Global Securities.......................................20
Section 205. Form of Trustee's Certificate of Authentication............................21
</TABLE>
ARTICLE THREE
THE SECURITIES
<TABLE>
<S> <C>
Section 301. Amount Unlimited; Issuable in Series.......................................21
Section 302. Denominations..............................................................24
Section 303. Execution, Authentication, Delivery and Dating.............................24
Section 304. Temporary Securities.......................................................25
Section 305. Registration, Registration of Transfer and Exchange........................26
Section 306. Mutilated, Destroyed, Lost and Stolen Securities...........................28
Section 307. Payment of Interest; Interest Rights Preserved.............................28
Section 308. Persons Deemed Owners......................................................30
Section 309. Cancellation...............................................................30
Section 310. Computation of Interest....................................................30
Section 311. CUSIP Numbers..............................................................30
</TABLE>
ARTICLE FOUR
SATISFACTION AND DISCHARGE
<TABLE>
<S> <C>
Section 401. Satisfaction and Discharge of Indenture....................................31
Section 402. Application of Trust Money.................................................32
</TABLE>
ARTICLE FIVE
REMEDIES
<TABLE>
<S> <C>
Section 501. Events of Default..........................................................32
Section 502. Acceleration of Maturity; Rescission and Annulment.........................34
Section 503. Collection of Indebtedness and Suits for Enforcement by Trustee............35
Section 504. Trustee May File Proofs of Claim...........................................36
Section 505. Trustee May Enforce Claims Without Possession of Securities................36
Section 506. Application of Money Collected.............................................36
Section 507. Limitation on Suits........................................................37
Section 508. Unconditional Right of Holders to Receive Principal,
Premium and Interest.....................................................37
</TABLE>
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<PAGE> 6
<TABLE>
<S> <C>
Section 509. Restoration of Rights and Remedies.........................................38
Section 510. Rights and Remedies Cumulative.............................................38
Section 511. Delay or Omission Not Waiver...............................................38
Section 512. Control by Holders.........................................................38
Section 513. Waiver of Past Defaults....................................................39
Section 514. Undertaking for Costs......................................................39
Section 515. Waiver of Usury, Stay or Extension Laws....................................39
</TABLE>
ARTICLE SIX
THE TRUSTEE
<TABLE>
<S> <C>
Section 601. Certain Duties and Responsibilities........................................40
Section 602. Notice of Defaults.........................................................40
Section 603. Certain Rights of Trustee..................................................40
Section 604. Not Responsible for Recitals or Issuance of Securities.....................41
Section 605. May Hold Securities........................................................42
Section 606. Money Held in Trust........................................................42
Section 607. Compensation and Reimbursement.............................................42
Section 608. Disqualification; Conflicting Interests....................................43
Section 609. Corporate Trustee Required; Eligibility....................................43
Section 610. Resignation and Removal; Appointment of Successor..........................43
Section 611. Acceptance of Appointment by Successor.....................................45
Section 612. Merger, Conversion, Consolidation or Succession to Business................46
Section 613. Preferential Collection of Claims Against Operating Partnership...........46
Section 614. Appointment of Authenticating Agent........................................46
</TABLE>
ARTICLE SEVEN
HOLDERS' LISTS AND REPORTS BY TRUSTEE AND OPERATING PARTNERSHIP
<TABLE>
<S> <C>
Section 701. Operating Partnership to Furnish Trustee Names and Addresses
of Holders...............................................................48
Section 702. Preservation of Information; Communications to Holders.....................48
Section 703. Reports by Trustee.........................................................49
Section 704. Reports by Operating Partnership...........................................49
Section 705. Notice of Default..........................................................49
</TABLE>
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<PAGE> 7
ARTICLE EIGHT
CONSOLIDATION, MERGER, CONVEYANCE, TRANSFER OR LEASE
<TABLE>
<S> <C>
Section 801. Operating Partnership May Consolidate, Etc., Only on Certain Terms.........50
Section 802. Successor Substituted......................................................51
</TABLE>
ARTICLE NINE
SUPPLEMENTAL INDENTURES
<TABLE>
<S> <C>
Section 901. Supplemental Indentures Without Consent of Holders.........................51
Section 902. Supplemental Indentures With Consent of Holders............................52
Section 903. Execution of Supplemental Indentures.......................................53
Section 904. Effect of Supplemental Indentures..........................................54
Section 905. Conformity with Trust Indenture Act........................................54
Section 906. Reference in Securities to Supplemental Indentures.........................54
</TABLE>
ARTICLE TEN
COVENANTS
<TABLE>
<S> <C>
Section 1001. Payment of Principal, Premium and Interest....................................54
Section 1002. Maintenance of Office or Agency...............................................55
Section 1003. Money for Securities Payments to Be Held in Trust.............................55
Section 1004. Statement by Officers as to Default...........................................56
Section 1005. Existence.....................................................................56
Section 1006. Maintenance of Properties.....................................................57
Section 1007. Payment of Taxes and Other Claims.............................................57
Section 1008. Insurance.....................................................................60
Section 1009. Provision of Financial Information............................................60
Section 1010. Waiver of Certain Covenants...................................................57
Section 1011. Calculation of Original Issue Discount........................................57
</TABLE>
ARTICLE ELEVEN
REDEMPTION OF SECURITIES
<TABLE>
<S> <C>
Section 1101. Applicability of Article......................................................58
Section 1102. Election to Redeem; Notice to Trustee.........................................58
Section 1103. Selection by Trustee of Securities to Be Redeemed.............................58
Section 1104. Notice of Redemption..........................................................59
Section 1105. Deposit of Redemption Price...................................................60
</TABLE>
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<PAGE> 8
<TABLE>
<S> <C>
Section 1106. Securities Payable on Redemption Date.........................................60
Section 1107. Securities Redeemed in Part...................................................61
</TABLE>
ARTICLE TWELVE
SINKING FUNDS
<TABLE>
<S> <C>
Section 1201. Applicability of Article......................................................61
Section 1202. Satisfaction of Sinking Fund Payments with Securities.........................61
Section 1203. Redemption of Securities for Sinking Fund.....................................62
</TABLE>
ARTICLE THIRTEEN
DEFEASANCE AND COVENANT DEFEASANCE
<TABLE>
<S> <C>
Section 1301. Operating Partnership's Option to Effect Defeasance or Covenant
Defeasance...............................................................62
Section 1302. Defeasance and Discharge......................................................62
Section 1303. Covenant Defeasance...........................................................63
Section 1304. Conditions to Defeasance or Covenant Defeasance...............................63
Section 1305. Deposited Money and U.S. Government Obligations to
Be Held in Trust; Miscellaneous Provisions...............................65
Section 1306. Reinstatement.................................................................66
</TABLE>
ARTICLE FOURTEEN
SUBORDINATION OF SECURITIES
<TABLE>
<S> <C>
Section 1401. Securities Subordinate to Senior Debt.........................................75
Section 1402. Payment Over of Proceeds Upon Dissolution, Etc................................75
Section 1403. Prior Payment to Senior Debt Upon Acceleration of Securities..................77
Section 1404. No Payment When Senior Debt in Default........................................77
Section 1405. Payment Permitted in Certain Situations.......................................78
Section 1406. Subrogation to Rights of Holders of Senior Debt...............................78
Section 1407. Provisions Solely to Define Relative Rights...................................79
Section 1408. Trustee to Effectuate Subordination...........................................79
Section 1409. No Waiver of Subordination Provisions.........................................79
Section 1410. Notice to Trustee.............................................................80
Section 1411. Reliance on Judicial Order or Certificate of Liquidating Agent................80
Section 1412. Trustee Not Fiduciary for Holders of Senior Debt..............................81
Section 1413. Rights of Trustee as Holder of Senior Debt; Preservation
</TABLE>
-vi-
<PAGE> 9
<TABLE>
<S> <C>
of Trustee's Rights......................................................81
Section 1414. Article Applicable to Paying Agents...........................................81
</TABLE>
<TABLE>
<S> <C>
TESTIMONIUM....................................................................................82
SIGNATURES AND SEALS...........................................................................82
AKNOWLEDGEMENTS................................................................................83
</TABLE>
-vii-
<PAGE> 10
INDENTURE, dated as of _______________, 199_, between Vornado Realty
L.P, a Delaware limited partnership duly organized and existing under the laws
of the State of Delaware (herein called the "Operating Partnership") and managed
by Vornado Realty Trust, its general partner, having its principal office at
Park 80 West, Plaza II, Saddle Brook, New Jersey 07663, and The Bank of New
York, a New York banking corporation, as Trustee (herein called the "Trustee").
RECITALS OF THE OPERATING PARTNERSHIP
The Operating Partnership has duly authorized the execution and
delivery of this Indenture to provide for the issuance from time to time of its
unsecured debentures, notes or other evidences of indebtedness (herein called
the "Securities"), to be issued in one or more series as in this Indenture
provided.
All things necessary to make this Indenture a valid agreement of the
Operating Partnership, 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 agreed, for the equal and
proportionate benefit of all Holders of the Securities or of series thereof, 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 Trust
Indenture Act, either directly or by reference therein, have the
meanings assigned to them therein;
(3) all accounting terms not otherwise defined herein have the
meanings assigned to them in accordance with generally accepted
accounting principles, and, except as otherwise herein expressly
provided, the term "generally accepted
-1-
<PAGE> 11
accounting principles" with respect to any computation required or
permitted hereunder shall mean such accounting principles as are
generally accepted in the United States of America at the date of such
computation;
(4) unless the context otherwise requires, any reference to an
"Article" or a "Section" refers to an Article or a Section, as the case
may be, of this Indenture; and
(5) the words "herein", "hereof" and "hereunder" and other
words of similar import refer to this Indenture as a whole and not to
any particular Article, Section or other subdivision.
"Act", when used with respect to any Holder, has the meaning specified
in Section 104.
"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 Person authorized by the Trustee
pursuant to Section 614 to act on behalf of the Trustee to authenticate
Securities of one or more series.
"Board of Trustees" means either the board of trustees of Vornado
Realty Trust, the general partner of the Operating Partnership, or any duly
authorized committee of that board.
"Board Resolution" means a copy of a resolution certified by the
Secretary or an Assistant Secretary of Vornado Realty Trust to have been duly
adopted by the Board of Trustees 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, means
each Monday, Tuesday, Wednesday, Thursday and Friday which is not a day on which
banking institutions in that Place of Payment are authorized or obligated by law
or executive order to close.
"Commission" means the Securities and Exchange Commission, from time to
time constituted, created under the Exchange Act, or, if at any time after the
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 at such time.
-2-
<PAGE> 12
"Common Shares" means the common shares of beneficial interest of Vornado
Realty Trust.
"Corporate Trust Office" means the principal office of the Trustee in The
City of New York at which at any particular time its corporate trust business
shall be administered, which office at the date hereof is located at 101 Barclay
Street, Floor 21 West, New York, New York 10286, Attention: Corporate Trust
Trustee Administration.
"corporation" means a corporation, association, company, joint-stock
company or business trust.
"Covenant Defeasance" has the meaning specified in Section 1303.
"Defaulted Interest" has the meaning specified in Section 307.
"Defeasance" has the meaning specified in Section 1302.
"Depositary" means, with respect to Securities of any series issuable in
whole or in part in the form of one or more Global Securities, a clearing agency
registered under the Exchange Act that is designated to act as Depositary for
such Securities as contemplated by Section 301.
"Event of Default" has the meaning specified in Section 501.
"Exchange Act" means the Securities Exchange Act of 1934 and any statute
successor thereto, in each case as amended from time to time.
"Expiration Date" has the meaning specified in Section 104.
"Global Security" means a Security that evidences all or part of the
Securities of any series and bears the legend set forth in Section 204 (or such
legend as may be specified as contemplated by Section 301 for such Securities).
"Holder" means a Person in whose name a Security is registered in the
Security Register.
"Indenture" means this instrument as originally executed and 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,
including, for all purposes of this instrument and any such supplemental
indenture, the provisions of the Trust Indenture Act that are deemed to be a
part of and govern this instrument and any such supplemental indenture,
respectively. The term "Indenture" shall also include the terms of particular
series of Securities established as contemplated by Section 301.
-3-
<PAGE> 13
"interest", when used with respect to an Original Issue Discount Security
which by its terms bears interest only after Maturity, means interest payable
after Maturity.
"Interest Payment Date", when used with respect to any Security, means the
Stated Maturity of an instalment of interest on such Security.
"Investment Company Act" means the Investment Company Act of 1940 and any
statute successor thereto, in each case as amended from time to time.
"Maturity", when used with respect to any Security, means the date on
which the principal of such Security or an instalment of principal becomes due
and payable as therein or herein provided, whether at the Stated Maturity or by
declaration of acceleration, call for redemption or otherwise.
"Notice of Default" means a written notice of the kind specified in
Section 501(4) or 501(5).
"Officers' Certificate" means a certificate signed by the Chairman of the
Board, a Vice Chairman of the Board, the President or a Vice President, and by
the Treasurer, an Assistant Treasurer, the Secretary or an Assistant Secretary,
of Vornado Realty Trust, and delivered to the Trustee. One of the officers
signing an Officers' Certificate given pursuant to Section 1004 shall be the
principal executive, financial or accounting officer of Vornado Realty Trust.
"Operating Partnership" means the Person named as the "Operating
Partnership" in the first paragraph of this instrument until a successor Person
shall have become such pursuant to the applicable provisions of this Indenture,
and thereafter "Operating Partnership" shall mean such successor Person.
"Operating Partnership Request" or "Operating Partnership Order" means a
written request or order signed in the name of the Operating Partnership by the
Chairman of the Board, the Vice Chairman of the Board, the President or a Vice
President, and by the Treasurer, an Assistant Treasurer, the Secretary or an
Assistant Secretary of Vornado Realty Trust, and delivered to the Trustee.
"Opinion of Counsel" means a written opinion of counsel, who may be
counsel for the Operating Partnership, and who shall be acceptable to the
Trustee.
"Original Issue Discount Security" means any Security which provides for
an amount less than the principal amount thereof to be due and payable upon a
declaration of acceleration of the Maturity thereof pursuant to Section 502.
-4-
<PAGE> 14
"Outstanding", when used with respect to Securities, means, as of the date
of determination, all Securities theretofore authenticated and delivered under
this Indenture, except:
(1) Securities theretofore canceled by the Trustee or delivered to
the Trustee for cancellation;
(2) Securities for whose payment or redemption money in the
necessary amount has been theretofore deposited with the Trustee or any
Paying Agent (other than the Operating Partnership) in trust or set aside
and segregated in trust by the Operating Partnership (if the Operating
Partnership shall act as its own Paying Agent) for the Holders of such
Securities; provided that, if such Securities are to be deemed, notice of
such redemption has been duly given pursuant to this Indenture or
provision therefor satisfactory to the Trustee has been made;
(3) Securities as to which Defeasance has been effected pursuant to
Section 1302; and
(4) 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 Operating
Partnership;
provided, however, that in determining whether the Holders of the requisite
principal amount of the Outstanding Securities have given, made or taken any
request, demand, authorization, direction, notice, consent, waiver or other
action hereunder as of any date, (A) the principal amount of an Original Issue
Discount Security which shall be deemed to be Outstanding shall be the amount of
the principal thereof which would be due and payable as of such date upon
acceleration of the Maturity thereof to such date pursuant to Section 502, (B)
if, as of such date, the principal amount payable at the Stated Maturity of a
Security is not determinable, the principal amount of such Security which shall
be deemed to be Outstanding shall be the amount as specified or determined as
contemplated by Section 301, (C) the principal amount of a Security denominated
in one or more foreign currencies or currency units which shall be deemed to be
Outstanding shall be the U.S. dollar equivalent, determined as of such date in
the manner provided as contemplated by Section 301, of the principal amount of
such Security (or, in the case of a Security described in Clause (A) or (B)
above, of the amount determined as provided in such Clause), and (D) Securities
owned by the Operating Partnership or any other obligor upon the Securities or
any Affiliate of the Operating Partnership 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 relying upon any such request, demand,
authorization, direction, notice, consent, waiver or other action, only
Securities which the Trustee knows
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<PAGE> 15
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 Operating Partnership or any
other obligor upon the Securities or any Affiliate of the Operating Partnership
or of such other obligor.
"Paying Agent" means any Person authorized by the Operating Partnership to
pay the principal of or any premium or interest on any Securities on behalf of
the Operating Partnership.
"Person" means any individual, corporation, partnership, joint venture,
trust, unincorporated organization or government or any agency or political
subdivision thereof.
"Place of Payment", when used with respect to the Securities of any
series, means the place or places where the principal of and any premium and
interest on the Securities of that series are payable as specified as
contemplated by Section 301.
"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 shall be deemed to evidence the
same debt as the mutilated, destroyed, lost or stolen Security.
"Redemption Date", when used with respect to any Security to be redeemed,
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.
"Regular Record Date" for the interest payable on any Interest Payment
Date on the Securities of any series means the date specified for that purpose
as contemplated by Section 301.
"Responsible Officer", when used with respect to the Trustee, means the
chairman or any vice-chairman of the board of directors, the chairman or any
vice-chairman of the executive committee of the board of directors, the chairman
of the trust committee, the president, any 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 assistant 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 his knowledge of
and familiarity with the particular subject.
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<PAGE> 16
"Securities" has the meaning stated in the first recital of this Indenture
and more particularly means any Securities authenticated and delivered under
this Indenture.
"Securities Act" means the Securities Act of 1933 and any statute
successor thereto, in each case as amended from time to time.
"Security Register" and "Security Registrar" have the respective meanings
specified in Section 305.
"Senior Debt" means the principal of (and premium, if any) and interest
(including interest accruing on or after the filing of any petition in
bankruptcy or for reorganization relating to the Operating Partnership to the
extent that such claim for past-petition interest is allowed in such proceeding)
on all indebtedness of the Operating Partnership (including indebtedness of
others guaranteed by the Operating Partnership), other than the Securities,
whether outstanding on the date of this Indenture or thereafter created,
incurred or assumed, which is (i) for money borrowed, (ii) evidenced by a note
or similar instrument given in connection with the acquisition of any
businesses, properties or assets of any kind or (iii) obligations of the
Operating Partnership as lessee under leases required to be capitalized on the
balance sheet of the lessee under generally accepted accounting principles or
leases of property or assets made as part of any sale and lease-back transaction
to which the Operating Partnership is a party, including amendments, renewals,
extensions, modifications and refundings of any such indebtedness or obligation,
unless in any case in the instrument creating or evidencing any such
indebtedness or obligation or pursuant to which the same is outstanding it is
provided that such indebtedness or obligation is not superior in right of
payment to the Securities.
"Special Record Date" for the payment of any Defaulted Interest means a
date fixed by the Trustee pursuant to Section 307.
"Stated Maturity", when used with respect to any Security or any
instalment of principal thereof or interest thereon, means the date specified in
such Security as the fixed date on which the principal of such Security or such
instalment of principal or interest is due and payable.
"Subsidiary" means a corporation more than 50% of the outstanding voting
stock of which is owned, directly or indirectly, by the Operating Partnership or
by one or more other Subsidiaries, or by the Operating Partnership and one or
more other Subsidiaries. For the purposes of this definition, "voting stock"
means stock which ordinarily has voting power for the election of directors,
whether at all times or only so long as no senior class of stock has such voting
power by reason of any contingency.
"Trust Indenture Act" means the Trust Indenture Act of 1939 as in force at
the date as of which this instrument was executed; provided, however, that in
the event the Trust
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<PAGE> 17
Indenture Act of 1939 is amended after such date, "Trust Indenture Act" means,
to the extent required by any such amendment, the Trust Indenture Act of 1939 as
so amended.
"Trustee" means the Person named as the "Trustee" in the first paragraph
of this instrument 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, and if at any time there
is more than one such Person, "Trustee" as used with respect to the Securities
of any series shall mean the Trustee with respect to Securities of that series.
"U.S. Government Obligation" has the meaning specified in Section 1304.
"Vice President", when used with respect to the Operating Partnership or
the Trustee, means any vice president, whether or not designated by a number or
a word or words added before or after the title "vice president".
Section 102. Compliance Certificates and Opinions.
Upon any application or request by the Operating Partnership to the
Trustee to take any action under any provision of this Indenture, the Operating
Partnership shall furnish to the Trustee such certificates and opinions as may
be required under the Trust Indenture Act. Each such certificate or opinion
shall be given in the form of an Officers' Certificate, if to be given by an
officer of Vornado Realty Trust, or an Opinion of Counsel, if to be given by
counsel, and shall comply with the requirements of the Trust Indenture Act and
any other requirements set forth in this Indenture.
Every certificate or opinion with respect to compliance with a condition
or covenant provided for in this Indenture (except for certificates provided for
in Section 1004) shall include,
(1) a statement that each individual signing such certificate or
opinion has read such covenant or condition 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 covenant or condition 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.
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<PAGE> 18
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 with respect 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 Vornado Realty Trust may be
based, insofar as it relates to legal matters, upon a certificate or opinion of,
or representations by, counsel, unless such officer knows, or in the exercise of
reasonable care should know, that the certificate or opinion or representations
with respect to the matters upon which his certificate or opinion is based are
erroneous. Any such certificate or opinion of counsel may be based, insofar as
it relates to factual matters, upon a certificate or opinion of, or
representations by, an officer or officers of Vornado Realty Trust stating that
the information with respect to such factual matters is in the possession of the
Operating Partnership, unless such counsel knows, or in the exercise of
reasonable care should know, that the certificate or opinion or representations
with respect 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; Record Dates.
Any request, demand, authorization, direction, notice, consent, waiver or
other action provided or permitted by this Indenture to be given, made or taken
by Holders may be embodied in and evidenced by one or more instruments of
substantially similar tenor signed by such 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 and, where it is hereby expressly required, to the Operating
Partnership. Such instrument or instruments (and the action embodied therein and
evidenced thereby) are herein sometimes referred to as the "Act" of the Holders
signing such instrument or instruments. Proof of execution of any such
instrument or of a writing appointing any such agent shall be sufficient for any
purpose of this Indenture and (subject to Section 601) conclusive in favor of
the Trustee and the Operating Partnership, if made in the manner provided in
this Section.
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,
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<PAGE> 19
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 manner which the Trustee
deems sufficient.
The ownership of Securities shall be proved by the Security Register.
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 or the Operating
Partnership in reliance thereon, whether or not notation of such action is made
upon such Security.
The Operating Partnership may, in the circumstances permitted by the Trust
Indenture Act, set any day as a record date for the purpose of determining the
Holders of Outstanding Securities of any series entitled to give, make or take
any request, demand, authorization, direction, notice, consent, waiver or other
action provided or permitted by this Indenture to be given, made or taken by
Holders of Securities of such series, provided that the Operating Partnership
may not set a record date for, and the provisions of this paragraph shall not
apply with respect to, the giving or making of any notice, declaration, request
or direction referred to in the next paragraph. If any record date is set
pursuant to this paragraph, the Holders of Outstanding Securities of the
relevant series on such record date, and no other Holders, shall be entitled to
take the relevant action, whether or not such Holders remain Holders after such
record date; provided that no such action shall be effective hereunder unless
taken on or prior to the applicable Expiration Date by Holders of the requisite
principal amount of Outstanding Securities of such series on such record date.
Nothing in this paragraph shall be construed to prevent the Operating
Partnership from setting a new record date for any action for which a record
date has previously been set pursuant to this paragraph (whereupon the record
date previously set shall automatically and with no action by any Person be
canceled and of no effect), and nothing in this paragraph shall be construed to
render ineffective any action taken by Holders of the requisite principal amount
of Outstanding Securities of the relevant series on the date such action is
taken. Promptly after any record date is set pursuant to this paragraph, the
Operating Partnership, at its own expense, shall cause notice of such record
date, the proposed action by Holders and the applicable Expiration Date to be
given to the Trustee in writing and to each Holder of Securities of the relevant
series in the manner set forth in Section 106.
The Trustee may set any day as a record date for the purpose of
determining the Holders of Outstanding Securities of any series entitled to join
in the giving or making of (i) any Notice of Default, (ii) any declaration of
acceleration referred to in Section 502,
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<PAGE> 20
(iii) any request to institute proceedings referred to in Section 507(2) or (iv)
any direction referred to in Section 512, in each case with respect to
Securities of such series. If any record date is set pursuant to this paragraph,
the Holders of Outstanding Securities of such series on such record date, and no
other Holders, shall be entitled to join in such notice, declaration, request or
direction, whether or not such Holders remain Holders after such record date;
provided that no such action shall be effective hereunder unless taken on or
prior to the applicable Expiration Date by Holders of the requisite principal
amount of Outstanding Securities of such series on such record date. Nothing in
this paragraph shall be construed to prevent the Trustee from setting a new
record date for any action for which a record date has previously been set
pursuant to this paragraph (whereupon the record date previously set shall
automatically and with no action by any Person be canceled and of no effect),
and nothing in this paragraph shall be construed to render ineffective any
action taken by Holders of the requisite principal amount of Outstanding
Securities of the relevant series on the date such action is taken. Promptly
after any record date is set pursuant to this paragraph, the Trustee, at the
Operating Partnership's expense, shall cause notice of such record date, the
proposed action by Holders and the applicable Expiration Date to be given to the
Operating Partnership in writing and to each Holder of Securities of the
relevant series in the manner set forth in Section 106.
With respect to any record date set pursuant to this Section, the party
hereto which sets such record dates may designate any day as the "Expiration
Date" and from time to time may change the Expiration Date to any earlier or
later day; provided that no such change shall be effective unless notice of the
proposed new Expiration Date is given to the other party hereto in writing, and
to each Holder of Securities of the relevant series in the manner set forth in
Section 106, on or prior to the existing Expiration Date. If an Expiration Date
is not designated with respect to any record date set pursuant to this Section,
the party hereto which set such record date shall be deemed to have initially
designated the 180th day after such record date as the Expiration Date with
respect thereto, subject to its right to change the Expiration Date as provided
in this paragraph. Notwithstanding the foregoing, no Expiration Date shall be
later than the 180th day after the applicable record date.
Without limiting the foregoing, a Holder entitled hereunder to take any
action hereunder with regard to any particular Security may do so with regard to
all or any part of the principal amount of such Security or by one or more duly
appointed agents, each of which may do so pursuant to such appointment with
regard to all or any part of such principal amount.
Section 105. Notices, Etc., to Trustee and Operating Partnership.
Any request, demand, authorization, direction, notice, consent, waiver or
Act of Holders or other document provided or permitted by this Indenture to be
made upon, given or furnished to, or filed with,
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<PAGE> 21
(1) the Trustee by any Holder or by the Operating Partnership shall
be sufficient for every purpose hereunder if made, given, furnished or
filed in writing to or with the Trustee at its Corporate Trust Office,
Attention: Corporate Trust Trustee Administration, or
(2) the Operating Partnership 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 Operating Partnership addressed to it at the address of its
principal office specified in the first paragraph of this instrument,
Attention: ............., or at any other address previously furnished in
writing to the Trustee by the Operating Partnership.
Section 106. Notice to Holders; Waiver.
Where this Indenture provides for notice to Holders of any event, such
notice shall be sufficiently given (unless otherwise herein expressly provided)
if in writing and mailed, first-class postage prepaid, to each Holder affected
by such event, at his address as it appears in the Security Register, not later
than the latest date (if any), and not earlier than the earliest date (if any),
prescribed for the giving of such notice. In any case where notice to Holders 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. 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.
In case by reason of the suspension of regular mail service or by reason
of any other cause it shall be impracticable to give such notice by mail, then
such notification as shall be made with the approval of the Trustee shall
constitute a sufficient notification for every purpose hereunder.
Section 107. Conflict with Trust Indenture Act.
If any provision hereof limits, qualifies or conflicts with a provision of
the Trust Indenture Act that is required under such Act to be a part of and
govern this Indenture, the latter provision shall control. If any provision of
this Indenture modifies or excludes any provision of the Trust Indenture Act
that may be so modified or excluded, the latter provision shall be deemed to
apply to this Indenture as so modified or to be excluded, as the case may be.
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<PAGE> 22
Section 108. 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 109. Successors and Assigns.
All covenants and agreements in this Indenture by the Operating
Partnership shall bind its successors and assigns, whether so expressed or not.
Section 110. Separability Clause.
In case any provision in this Indenture or in the Securities 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 111. Benefits of Indenture.
Nothing in this Indenture or in the Securities, express or implied, shall
give to any Person, other than the parties hereto and their successors
hereunder, the holders of Senior Debt and the Holders, any benefit or any legal
or equitable right, remedy or claim under this Indenture.
Section 112. Governing Law.
This Indenture and the Securities shall be governed by and construed in
accordance with the law of the State of New York, without regard to principles
of conflicts of law.
Section 113. Legal Holidays.
In any case where any Interest Payment Date, Redemption Date or Stated
Maturity of any Security shall not be a Business Day at any Place of Payment,
then (notwithstanding any other provision of this Indenture or of the Securities
(other than a provision of any Security which specifically states that such
provision shall apply in lieu of this Section)) payment of interest 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 or
Redemption Date, or at the Stated Maturity, provided that no interest shall
accrue with
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<PAGE> 23
respect to such payment for the period from and after such Interest Payment
Date, Redemption Date or Stated Maturity, as the case may be.
ARTICLE TWO
SECURITY FORMS
Section 201. Forms Generally.
The Securities of each series shall be in substantially the form set forth
in this Article, or in such other form as shall be established by or pursuant to
a Board Resolution or in one or more indentures supplemental hereto, in each
case with such appropriate insertions, omissions, substitutions and other
variations as are required or permitted by this Indenture, and may have such
letters, numbers or other marks of identification and such legends or
endorsements placed thereon as may be required to comply with the rules of any
securities exchange or Depositary therefor or as may, consistently herewith, be
determined by the officers executing such Securities, as evidenced by their
execution thereof. If the form of Securities of any series is established by
action taken pursuant to a Board Resolution, a copy of an appropriate record of
such action shall be certified by the Secretary or an Assistant Secretary of
Vornado Realty Trust and delivered to the Trustee at or prior to the delivery of
the Operating Partnership Order contemplated by Section 303 for the
authentication and delivery of such Securities.
The definitive Securities shall be printed, lithographed or engraved on
steel engraved borders or may be produced in any other manner, all as determined
by the officers executing such Securities, as evidenced by their execution of
such Securities.
Section 202. Form of Face of Security.
[Insert any legend required by the Internal Revenue Code and the
regulations thereunder.]
VORNADO REALTY L.P.
..........................................................................
No. ........... $ ...........
CUSIP No. .........
VORNADO REALTY L.P., a Delaware limited partnership duly organized and
existing under the laws of the State of Delaware (herein called the "Operating
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<PAGE> 24
Partnership", which term includes any successor Person under the Indenture
hereinafter referred to), for value received, hereby promises to pay to
....................................................., or registered assigns,
the principal sum of ................................. Dollars on
........................................................., and to pay interest
thereon from the most recent Interest Payment Date to which interest has been
paid or duly provided for, semiannually on ................. and
................ in each year, commencing as of the date, at the rate of [__%]
per annum, until the principal hereof is paid or made available for payment,
provided that any principal and premium, and any such instalment of interest,
which is overdue shall bear interest at the rate of [__%] per annum (to the
extent that the payment of such interest shall be legally enforceable), from the
dates such amounts are due until they are paid or made available for payment,
and such interest shall be payable on demand. The interest so payable, and
punctually paid or duly provided for, on any Interest Payment Date will, as
provided in such Indenture, be paid to the Person in whose name this Security
(or one or more Predecessor Securities) is registered at the close of business
on the Regular Record Date for such interest, which shall be the .............
................................. or .........................................
..... (whether or not a Business Day), as the case may be, next preceding such
Interest Payment Date. Any such interest not so punctually paid or duly provided
for will forthwith cease to be payable to the Holder on such Regular Record Date
and may either be paid to the Person in whose name this Security (or one or more
Predecessor Securities) is registered at the close of business on a Special
Record Date for the payment of such Defaulted Interest to be fixed by the
Trustee, notice whereof shall be given to Holders of Securities of this series
not less than 10 days prior to such Special Record Date, or be paid at any time
in any other lawful manner not inconsistent with the requirements of any
securities exchange on which the Securities of this series may be listed, and
upon such notice as may be required by such exchange, all as more fully provided
in said Indenture.
[If the Security is not to bear interest prior to Maturity, insert -- The
principal of this Security shall not bear interest except in the case of a
default in payment of principal upon acceleration, upon redemption or at Stated
Maturity and in such case the overdue principal and any overdue premium shall
bear interest at the rate of __% per annum (to the extent that the payment of
such interest shall be legally enforceable), from the dates such amounts are due
until they are paid or made available for payment. Interest on any overdue
principal or premium shall be payable on demand. Any such interest on any
overdue principal or premium which is not so paid on demand shall bear interest
at the rate of _____% per annum (to the extent that the payment of such interest
shall be legally enforceable), from the dates such amounts are due until they
are paid or made available for payment. Interest on any overdue interest shall
be payable on demand.]
Payment of the principal of (and premium, if any) and [if applicable,
insert -- any such] interest on this Security will be made at the office or
agency of the Operating Partnership maintained for that purpose in [ ], in
such coin or currency of the United States of America as at the time of
payment is legal tender for payment of public and private debts; provided,
however, that at the option of the Operating Partnership
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<PAGE> 25
payment of interest may be made by check mailed to the address of the Person
entitled thereto as such address shall appear in the Security Register.
Reference is hereby made to the further provisions of this Security set
forth on the reverse hereof, which further provisions shall for all purposes
have the same effect as if set forth at this place.
Unless the certificate of authentication hereon has been executed by the
Trustee referred to on the reverse hereof by manual signature, this Security
shall not be entitled to any benefit under the Indenture or be valid or
obligatory for any purpose.
IN WITNESS WHEREOF, the Operating Partnership has caused this instrument
to be duly executed under its corporate seal.
VORNADO REALTY L.P.
By.................................................................
Attest:
.................................................
Section 203. Form of Reverse of Security.
This Security is one of a duly authorized issue of securities of the
Operating Partnership (herein called the "Securities"), issued and to be issued
in one or more series under an Indenture, dated as of .......... (herein called
the "Indenture", which term shall have the meaning assigned to it in such
instrument), between the Operating Partnership and The Bank of New York, as
Trustee (herein called the "Trustee", which term includes any successor trustee
under the Indenture), and reference is hereby made to the Indenture and all
indentures supplemental thereto for a statement of the respective rights,
limitations of rights, duties and immunities thereunder of the Operating
Partnership, the Trustee and the Holders of the Securities and of the terms upon
which the Securities are, and are to be, authenticated and delivered. This
Security is one of the series designated on the face hereof [if applicable,
insert -- limited or aggregate principal amount to $.........].
[If applicable, insert -- The Securities of this series are subject to
redemption upon not less than 30 days' nor more than 60 days' notice by mail,
[if applicable, insert -- (1) on ................ in any year commencing with
the year ........ and ending with the year ........ through operation of the
sinking fund for this series at a Redemption Price equal to 100% of the
principal amount, and (2)] at any time [if applicable, insert -- on or after
.........., 199..], as a whole or in part, at the election of the Operating
Partnership, at the
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<PAGE> 26
following Redemption Prices (expressed as percentages of the principal amount):
If redeemed during the 12-month period beginning ............................ of
the years indicated,
REDEMPTION REDEMPTION
YEAR PRICE YEAR PRICE
- ---- ----- ---- -----
and thereafter at a Redemption Price equal to ....... % of the principal amount,
together in the case of any such redemption [(whether through operation of the
sinking fund or otherwise)) with accrued interest to the Redemption Date, but
interest installments whose Stated Maturity is on or prior to such Redemption
Date will be payable to the Holders of such Securities, or one or more
Predecessor Securities, of record at the close of business on the relevant
Record Dates referred to on the face hereof, all as provided in the Indenture.
[If applicable, insert -- The sinking fund for this series provides for
the redemption on .................... in each year beginning with the year
........ and ending with the year ........ of [if applicable, insert -- not less
than $............... ("mandatory sinking fund") and not more than]
$................. aggregate principal amount of Securities of this series.
Securities of this series acquired or redeemed by the Operating Partnership
otherwise than through [if applicable, insert -- mandatory] sinking fund
payments may be credited against subsequent [if applicable, insert -- mandatory]
sinking fund payments otherwise required to be made [if applicable, insert -- ,
in the inverse order in which they become due].]
[If the Security is subject to redemption of any kind, insert -- In the
event of redemption of this Security in part only, a new Security or Securities
of this series and of like tenor for the unredeemed portion hereof will be
issued in the name of the Holder hereof upon the cancellation hereof.]
The Operating Partnership covenants and agrees, and each Holder of a
Security, by his acceptance thereof, likewise covenants and agrees, that to the
extent and in the manner set forth in Article Fourteen of the Indenture, the
indebtedness represented by the Securities and the payment of principal (and
premium, if any) and interest on each and all of the Securities are hereby
expressly made subordinate and subject in right of payment to the prior payment
in full of all Senior Debt.
[If applicable, insert -- The Indenture contains provisions for defeasance
at any time of the entire indebtedness of this Security and Events of Default
with respect to this Security, in each case upon compliance with certain
conditions set forth in the Indenture.]
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<PAGE> 27
[If the Security is not an Original Issue Discount Security, insert -- If
an Event of Default with respect to Securities of this series shall occur and be
continuing, the principal of the Securities of this series may be declared due
and payable in the manner and with the effect provided in the Indenture.]
[If the Security is an Original Issue Discount Security, insert -- If an
Event of Default with respect to Securities of this series shall occur and be
continuing, an amount of principal of the Securities of this series may be
declared due and payable in the manner and with the effect provided in the
Indenture. Such amount shall be equal to --insert formula for determining the
amount. Upon payment (i) of the amount of principal so declared due and payable
and (ii) of interest on any overdue principal, premium and interest (in each
case to the extent that the payment of such interest shall be legally
enforceable), all of the Operating Partnership's obligations in respect of the
payment of the principal of and premium and interest, if any, on the Securities
of this series shall terminate.]
The Indenture permits, with certain exceptions as therein provided, the
amendment thereof and the modification of the rights and obligations of the
Operating Partnership and the rights of the Holders of the Securities of each
series to be affected under the Indenture at any time by the Operating
Partnership and the Trustee with the consent of the Holders of a majority in
principal amount of the Securities at the time Outstanding of each series to be
affected. The Indenture also contains provisions permitting the Holders of
specified percentages in principal amount of the Securities of each series at
the time Outstanding, on behalf of the Holders of all Securities of such series,
to waive compliance by the Operating Partnership with certain provisions of the
Indenture and certain past defaults under the Indenture and their consequences.
Any such consent or waiver by the Holder of this Security shall be conclusive
and binding upon such Holder and upon all future Holders of this Security and of
any Security issued upon the registration of transfer hereof or in exchange
herefor or in lieu hereof, whether or not notation of such consent or waiver is
made upon this Security.
As provided in and subject to the provisions of the Indenture, the Holder
of this Security shall not have the right to institute any proceeding with
respect to the Indenture or for the appointment of a receiver or trustee or for
any other remedy thereunder, unless such Holder shall have previously given the
Trustee written notice of a continuing Event of Default with respect to the
Securities of this series, the Holders of not less than 25% in principal amount
of the Securities of this series at the time Outstanding shall have made written
request to the Trustee to institute proceedings in respect of such Event of
Default as Trustee and offered the Trustee reasonable indemnity, and the Trustee
shall not have received from the Holders of a majority in principal amount of
Securities of this series at the time Outstanding a direction inconsistent with
such request, and shall have failed to institute any such proceeding, for 60
days after receipt of such notice, request and offer of indemnity. The foregoing
shall not apply to any suit instituted by the Holder of this
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<PAGE> 28
Security for the enforcement of any payment of principal hereof or any premium
or interest hereon on or after the respective due dates expressed herein.
Subject to the rights of holders of Senior Debt, as set forth in the
Indenture, no other reference herein to the Indenture and no provision of this
Security or of the Indenture shall alter or impair the obligation of the
Operating Partnership, which is absolute and unconditional, to pay the principal
of and any premium and interest on this Security at the times, place and rate,
and in the coin or currency, herein prescribed.
As provided in the Indenture and subject to certain limitations therein
set forth, the transfer of this Security is registrable in the Security
Register, upon surrender of this Security for registration of transfer at the
office or agency of the Operating Partnership in any place where the principal
of and any premium and interest on this Security are payable, duly endorsed by,
or accompanied by a written instrument of transfer in form satisfactory to the
Operating Partnership and the Security Registrar duly executed by, the Holder
hereof or his attorney duly authorized in writing, and thereupon one or more new
Securities of this series and of like tenor, of authorized denominations and for
the same aggregate principal amount, will be issued to the designated transferee
or transferees.
The Securities of this series are issuable only in registered form without
coupons in denominations of $......... and any integral multiple thereof. As
provided in the Indenture and subject to certain limitations therein set forth,
Securities of this series are exchangeable for a like aggregate principal amount
of Securities of this series and of like tenor of a different authorized
denomination, as requested by the Holder surrendering the same.
No service charge shall be made for any such registration of transfer or
exchange, but the Operating Partnership may require payment of a sum sufficient
to cover any tax or other governmental charge payable in connection therewith.
Prior to due presentment of this Security for registration of transfer,
the Operating Partnership, the Trustee and any agent of the Operating
Partnership or the Trustee may treat the Person in whose name this Security is
registered as the owner hereof for all purposes, whether or not this Security be
overdue, and neither the Operating Partnership, the Trustee nor any such agent
shall be affected by notice to the contrary.
[If applicable, insert -- Interest on the principal balance of this
Security shall be calculated on the basis of a [365- or 366-day year, as
appropriate, for the actual number of days elapsed] [360-day year of twelve
30-day months].]
THIS SECURITY SHALL BE GOVERNED BY AND CONSTRUED IN ACCORDANCE WITH THE
LAWS OF THE STATE OF NEW YORK, WITHOUT REGARD TO PRINCIPLES OF CONFLICTS OF
LAWS.
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All terms used in this Security which are defined in the Indenture shall
have the meanings assigned to them in the Indenture.
Section 204. Form of Legend for Global Securities.
Unless otherwise specified as contemplated by Section 301 for the
Securities evidenced thereby, every Global Security authenticated and delivered
hereunder shall bear a legend in substantially the following form:
THIS SECURITY IS A GLOBAL SECURITY WITHIN THE MEANING OF THE INDENTURE
HEREINAFTER REFERRED TO AND IS REGISTERED IN THE NAME OF A DEPOSITARY OR A
NOMINEE THEREOF. THIS SECURITY MAY NOT BE EXCHANGED IN WHOLE OR IN PART
FOR A SECURITY REGISTERED, AND NO TRANSFER OF THIS SECURITY IN WHOLE OR IN
PART MAY BE REGISTERED, IN THE NAME OF ANY PERSON OTHER THAN SUCH
DEPOSITARY OR A NOMINEE THEREOF, EXCEPT IN THE LIMITED CIRCUMSTANCES
DESCRIBED IN THE INDENTURE.
Section 205. Form of Trustee's Certificate of Authentication.
The Trustee's certificates 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.
Dated: THE BANK OF NEW YORK,
As Trustee
By....................................................
Authorized Signatory
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ARTICLE THREE
THE SECURITIES
Section 301. Amount Unlimited; Issuable in Series.
The aggregate principal amount of Securities which may be authenticated
and delivered under this Indenture is unlimited.
The Securities may be issued in one or more series. There shall be
established in or pursuant to a Board Resolution 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,
(1) the title of the Securities of the series (which shall
distinguish the Securities of the series from Securities of any other
series);
(2) any limit upon the aggregate principal amount of the Securities
of the series which 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 or 1107
and except for any Securities which, pursuant to Section 303, are deemed
never to have been authenticated and delivered hereunder);
(3) the Person to whom any interest on a 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;
(4) the date or dates on which the principal of any Securities of
the series is payable;
(5) the rate or rates at which any Securities of the series shall
bear interest, if any, the date or dates from which any such interest
shall accrue, the Interest Payment Dates on which any such interest shall
be payable and the Regular Record Date for any such interest payable on
any Interest Payment Date;
(6) the place or places where the principal of and any premium and
interest on any Securities of the series shall be payable;
(7) the period or periods within which, the price or prices at
which and the terms and conditions upon which any Securities of the series
may be redeemed, in whole or in part, at the option of the Operating
Partnership and, if other than by a
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Board Resolution, the manner in which any election by the Operating
Partnership to redeem the Securities shall be evidenced;
(8) the obligation, if any, of the Operating Partnership to redeem
or purchase any Securities of the series pursuant to any sinking fund or
analogous provisions or at the option of the Holder thereof and the period
or periods within which, the price or prices at which and the terms and
conditions upon which any Securities of the series shall be redeemed or
purchased, in whole or in part, pursuant to such obligation;
(9) if other than denominations of $1,000 and any integral multiple
thereof, the denominations in which any Securities of the series shall be
issuable;
(10) if the amount of principal of or any premium or interest on
any Securities of the series may be determined with reference to an index
or pursuant to a formula, the manner in which such amounts shall be
determined;
(11) if other than the currency of the United States of America,
the currency, currencies or currency units in which the principal of or
any premium or interest on any Securities of the series shall be payable
and the manner of determining the equivalent thereof in the currency of
the United States of America for any purpose, including for purposes of
the definition of "Outstanding" in Section 101;
(12) if the principal of or any premium or interest on any
Securities of the series is to be payable, at the election of the
Operating Partnership or the Holder thereof, in one or more currencies or
currency units other than that or those in which such Securities are
stated to be payable, the currency, currencies or currency units in which
the principal of or any premium or interest on such Securities as to which
such election is made shall be payable, the periods within which and the
terms and conditions upon which such election is to be made and the amount
so payable (or the manner in which such amount shall be determined);
(13) if other than the entire principal amount thereof, the portion
of the principal amount of any Securities of the series which shall be
payable upon declaration of acceleration of the Maturity thereof pursuant
to Section 502;
(14) if the principal amount payable at the Stated Maturity of any
Securities of the series will not be determinable as of any one or more
dates prior to the Stated Maturity, the amount which shall be deemed to be
the principal amount of such Securities as of any such date for any
purpose thereunder or hereunder, including the principal amount thereof
which shall be due and payable upon any Maturity other than the Stated
Maturity or which shall be deemed to be Outstanding as of any date prior
to the Stated Maturity (or, in any such case, the manner in which such
amount deemed to be the principal amount shall be determined);
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(15) if applicable, that the Securities of the series shall be
subject to either or both of Defeasance or Covenant Defeasance as provided
in Article Thirteen; provided that no series of Securities that is
exchangeable for Common Shares or other securities pursuant to Section
301(19) shall be subject to Defeasance pursuant to Section 1302;
(16) if applicable, that any Securities of the series shall be
issuable in whole or in part in the form of one or more Global Securities
and, in such case, the respective Depositaries for such Global Securities,
the form of any legend or legends which shall be borne by any such Global
Security in addition to or in lieu of that set forth in Section 204 and
any circumstances in addition to or in lieu of those set forth in Clause
(2) of the last paragraph of Section 305 in which any such Global Security
may be exchanged in whole or in part for Securities registered, and any
transfer of such Global Security in whole or in part may be registered, in
the name or names of Persons other than the Depositary for such Global
Security or a nominee thereof;
(17) any addition to or change in the Events of Default which
applies to any Securities of the series and any change in the right of the
Trustee or the requisite Holders of such Securities to declare the
principal amount thereof due and payable pursuant to Section 502;
(18) any addition to or change in the covenants set forth in
Article Ten which applies to Securities of the series;
(19) the terms and conditions, if any, pursuant to which the
Securities are exchangeable for Common Shares or other securities; and
(20) any other terms of the series (which terms shall not be
inconsistent with the provisions of this Indenture, except as permitted by
Section 901(5)).
All Securities of any one series shall be substantially identical except
as to denomination and except as may otherwise be provided in or pursuant to the
Board Resolution referred to above and (subject to Section 303) set forth, or
determined in the manner provided, in the Officers' Certificate referred to
above or in any such indenture supplemental hereto.
If any of the terms of the series are established by action taken pursuant
to a Board Resolution, a copy of an appropriate record of such action shall be
certified by the Secretary or an Assistant Secretary of Vornado Realty Trust and
delivered to the Trustee at or prior to the delivery of the Officers'
Certificate setting forth the terms of the series.
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Section 302. Denominations.
The Securities of each series shall be issuable only in registered form
without coupons and only in such denominations as shall be specified as
contemplated by Section 301. In the absence of any such specified denomination
with respect to the Securities of any series, the Securities of such series
shall be issuable in denominations of $1,000 and any integral multiple thereof.
Section 303. Execution, Authentication, Delivery and Dating.
The Securities shall be executed on behalf of the Operating Partnership by
the Chairman of the Board, the Vice Chairman of the Board, the President or one
of the Vice Presidents of Vornado Realty Trust, under the Operating
Partnership's corporate seal reproduced thereon attested by the Secretary or one
of the Assistant Secretaries of Vornado Realty Trust. The signature of any of
these officers on the Securities may be manual or facsimile.
Securities bearing the manual or facsimile signatures of individuals who
were at any time the proper officers of Vornado Realty Trust shall bind the
Operating Partnership, notwithstanding that such individuals or any of them have
ceased to hold such offices prior to the authentication and delivery of such
Securities or did not hold such offices at the date of such Securities.
At any time and from time to time after the execution and delivery of this
Indenture, the Operating Partnership may deliver Securities of any series
executed by the Operating Partnership to the Trustee for authentication,
together with an Operating Partnership Order for the authentication and delivery
of such Securities, and the Trustee in accordance with the Operating Partnership
Order shall authenticate and deliver such Securities. If the form or terms of
the Securities of the series have been established by or pursuant to one or more
Board Resolutions as permitted by Sections 201 and 301, 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 Section 601) shall be fully protected in relying upon, an Opinion of
Counsel stating,
(1) if the form of such Securities has been established by or
pursuant to Board Resolution as permitted by Section 201, that such form
has been established in conformity with the provisions of this Indenture;
(2) if the terms of such Securities have been established by or
pursuant to Board Resolution as permitted by Section 301, that such terms
have been established in conformity with the provisions of this Indenture;
and
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(3) that such Securities, when authenticated and delivered by the
Trustee and issued by the Operating Partnership in the manner and subject
to any conditions specified in such Opinion of Counsel, will constitute
valid and legally binding obligations of the Operating Partnership
enforceable in accordance with their terms, subject to bankruptcy,
insolvency, fraudulent transfer, reorganization, moratorium and similar
laws of general applicability relating to or affecting creditors' rights
and to general equity principles.
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 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 Securities of a series are not to be originally issued at one
time, it shall not be necessary to deliver the Officers' Certificate otherwise
required pursuant to Section 301 or the Operating Partnership Order and Opinion
of Counsel otherwise required pursuant to such preceding paragraph at or prior
to the authentication of each Security of such series if such documents are
delivered at or prior to the authentication upon original issuance of the first
Security of such series to be issued.
Each Security shall be dated the date of its authentication.
No Security shall be entitled to any benefit under this Indenture or be
valid or obligatory for any purpose unless there appears on such Security a
certificate of authentication substantially in the form provided for herein
executed by the Trustee by manual signature, and such certificate upon any
Security shall be conclusive evidence, and the only evidence, that such Security
has been duly authenticated and delivered hereunder. Notwithstanding the
foregoing, if any Security shall have been authenticated and delivered hereunder
but never issued and sold by the Operating Partnership, and the Operating
Partnership shall deliver such Security to the Trustee for cancellation as
provided in Section 309, 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.
Pending the preparation of definitive Securities of any series, the
Operating Partnership may execute, and upon Operating Partnership 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 and with such appropriate
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insertions, omissions, substitutions and other variations as the officers
executing such Securities may determine, as evidenced by their execution of such
Securities.
If temporary Securities of any series are issued, the Operating
Partnership 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 Operating Partnership 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, the
Operating Partnership shall execute and the Trustee shall authenticate and
deliver in exchange therefor one or more definitive Securities of the same
series, of any authorized denominations and of like tenor and aggregate
principal amount. 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 and tenor.
Section 305. Registration, Registration of Transfer and Exchange.
The Operating Partnership shall cause to be kept at the Corporate Trust
Office of the Trustee a register (the register maintained in such office and in
any other office or agency of the Operating Partnership in a Place of Payment
being herein sometimes collectively referred to as the "Security Register") in
which, subject to such reasonable regulations as it may prescribe, the Operating
Partnership shall provide for the registration of Securities and of transfers of
Securities. The Trustee is hereby appointed "Security Registrar" for the purpose
of registering Securities and transfers of Securities as herein provided.
Upon surrender for registration of transfer of any Security of a series at
the office or agency of the Operating Partnership in a Place of Payment for that
series, the Operating Partnership shall execute, and the Trustee shall
authenticate and deliver, in the name of the designated transferee or
transferees, one or more new Securities of the same series, of any authorized
denominations and of like tenor and aggregate principal amount.
At the option of the Holder, Securities of any series may be exchanged for
other Securities of the same series, of any authorized denominations and of like
tenor and aggregate principal amount, upon surrender of the Securities to be
exchanged at such office or agency. Whenever any Securities are so surrendered
for exchange, the Operating Partnership shall execute, and the Trustee shall
authenticate and deliver, the Securities which the Holder making the exchange is
entitled to receive.
All Securities issued upon any registration of transfer or exchange of
Securities shall be the valid obligations of the Operating Partnership,
evidencing the same debt, and entitled to the same benefits under this
Indenture, as the Securities surrendered upon such registration of transfer or
exchange.
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Every Security presented or surrendered for registration of transfer or
for exchange shall (if so required by the Operating Partnership or the Trustee)
be duly endorsed, or be accompanied by a written instrument of transfer in form
satisfactory to the Operating Partnership 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 Operating Partnership 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 or 1107 not involving any transfer.
If the Securities of any series (or of any series and specified tenor) are
to be redeemed in part, the Operating Partnership shall not be required (A) to
issue, register the transfer of or exchange any Securities of that series (or of
that series and specified tenor, as the case may be) during a period beginning
at the opening of business 15 days before the day of the mailing of a notice of
redemption of any such Securities selected for redemption under Section 1103 and
ending at the close of business on the day of such mailing, or (B) to register
the transfer of or exchange any Security so selected for redemption in whole or
in part, except the unredeemed portion of any Security being redeemed in part.
The provisions of Clauses (1), (2), (3) and (4) below shall apply only to
Global Securities:
(1) Each Global Security authenticated under this Indenture shall
be registered in the name of the Depositary designated for such Global
Security or a nominee thereof and delivered to such Depositary or a
nominee thereof or custodian therefor, and each such Global Security shall
constitute a single Security for all purposes of this Indenture.
(2) Notwithstanding any other provision in this Indenture, no
Global Security may be exchanged in whole or in part for Securities
registered, and no transfer of a Global Security in whole or in part may
be registered, in the name of any Person other than the Depositary for
such Global Security or a nominee thereof unless (A) such Depositary (i)
has notified the Operating Partnership that it is unwilling or unable to
continue as Depositary for such Global Security or (ii) has ceased to be a
clearing agency registered under the Exchange Act, and in either case a
successor Depositary is not appointed within 90 days by the Operating
Partnership, (B) there shall have occurred and be continuing an Event of
Default with respect to such Global Security or (C) there shall exist such
circumstances, if any, in addition to or in lieu of the foregoing as have
been specified for this purpose as contemplated by Section 301.
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(3) Subject to Clause (2) above, any exchange of a Global Security
for other Securities may be made in whole or in part, and all Securities
issued in exchange for a Global Security or any portion thereof shall be
registered in such names as the Depositary for such Global Security shall
direct.
(4) Every Security authenticated and delivered upon registration of
transfer of, or in exchange for or in lieu of, a Global Security or any
portion thereof, whether pursuant to this Section, Section 304, 306, 906
or 1107 or otherwise, shall be authenticated and delivered in the form of,
and shall be, a Global Security, unless such Security is registered in the
name of a Person other than the Depositary for such Global Security or a
nominee thereof.
Section 306. Mutilated, Destroyed, Lost and Stolen Securities.
If any mutilated Security is surrendered to the Trustee, the Operating
Partnership shall execute and the Trustee shall authenticate and deliver in
exchange therefor a new Security of the same series and of like tenor and
principal amount and bearing a number not contemporaneously outstanding.
If there shall be delivered to the Operating Partnership and the Trustee
(i) evidence to their satisfaction of the destruction, loss or theft of any
Security 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 Operating Partnership or the Trustee that such Security has been
acquired by a bona fide purchaser, the Operating Partnership shall execute and
the Trustee shall authenticate and deliver, in lieu of any such destroyed, lost
or stolen Security, a new Security of the same series and of like tenor and
principal amount and bearing a number not contemporaneously outstanding.
In case any such mutilated, destroyed, lost or stolen Security has become
or is about to become due and payable, the Operating Partnership in its
discretion may, instead of issuing a new Security, pay such Security.
Upon the issuance of any new Security under this Section, the Operating
Partnership 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 issued pursuant to this Section in lieu
of any destroyed, lost or stolen Security shall constitute an original
additional contractual obligation of the Operating Partnership, whether or not
the destroyed, lost or stolen Security 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 duly issued
hereunder.
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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.
Section 307. Payment of Interest; Interest Rights Preserved.
Except as otherwise provided as contemplated by Section 301 with respect
to any series of Securities, interest on any Security which 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.
Any interest on any Security of any series which 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 Holder
on the relevant Regular Record Date by virtue of having been such Holder, and
such Defaulted Interest may be paid by the Operating Partnership, at its
election in each case, as provided in Clause (1) or (2) below:
(1) The Operating Partnership may elect to make payment of any
Defaulted Interest to the Persons in whose names the Securities of such
series (or their respective Predecessor Securities) are registered at the
close of business on a Special Record Date for the payment of such
Defaulted Interest, which shall be fixed in the following manner. The
Operating Partnership shall notify the Trustee in writing of the amount of
Defaulted Interest proposed to be paid on each Security of such series and
the date of the proposed payment, and at the same time the Operating
Partnership shall deposit with the Trustee an amount of money 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
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 Operating Partnership of such Special Record Date and, in the
name and at the expense of the Operating Partnership, shall cause notice
of the proposed payment of such Defaulted Interest and the Special Record
Date therefor to be given to each Holder of Securities of such series in
the manner set forth in Section 106, not less than 10 days prior to such
Special Record Date. Notice of the proposed payment of such Defaulted
Interest and the Special Record Date therefor having been so mailed, such
Defaulted Interest shall be paid to the Persons in whose names the
Securities of such series (or their respective Predecessor Securities) are
registered at the close of business on such
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Special Record Date and shall no longer be payable pursuant to the
following Clause (2).
(2) The Operating Partnership may make payment of any Defaulted
Interest on the Securities of any series in any other lawful manner not
inconsistent with the requirements of any securities exchange on which
such Securities may be listed, and upon such notice as may be required by
such exchange, if, after notice given by the Operating Partnership 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, 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 Security for registration of transfer, the
Operating Partnership, the Trustee and any agent of the Operating Partnership or
the Trustee may treat the Person in whose name such Security is registered as
the owner of such Security for the purpose of receiving payment of principal of
and any premium and (subject to Section 307) any interest on such Security and
for all other purposes whatsoever, whether or not such Security be overdue, and
neither the Operating Partnership, the Trustee nor any agent of the Operating
Partnership or the Trustee shall be affected by notice to the contrary.
Section 309. Cancellation.
All Securities surrendered for payment, redemption, 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 shall be promptly canceled by it. The Operating Partnership may at any time
deliver to the Trustee for cancellation any Securities previously authenticated
and delivered hereunder which the Operating Partnership 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 Operating Partnership has not issued and sold,
and all Securities so delivered shall be promptly canceled by the Trustee. 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. All canceled Securities held by the Trustee shall be disposed of in a
manner customary to the Trustee as directed by a Operating Partnership Order.
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Section 310. Computation of Interest.
Except as otherwise specified as contemplated by Section 301 for
Securities of any series, interest on the Securities of each series shall be
computed on the basis of a 360-day year of twelve 30-day months.
Section 311. CUSIP Numbers.
The Operating Partnership in issuing the Securities may use "CUSIP"
numbers (if then generally in use), and, if so, the Trustee shall use "CUSIP"
numbers in notices of redemption as a convenience to Holders; provided that any
such notice may state that no representation is made as to the correctness of
such numbers either as printed on the Securities or as contained in any notice
of a redemption and that reliance may be placed only on the other identification
numbers printed on the Securities, and any such redemption shall not be affected
by any defect in or omission of such numbers.
ARTICLE FOUR
SATISFACTION AND DISCHARGE
Section 401. Satisfaction and Discharge of Indenture.
This Indenture shall upon the Operating Partnership's Request cease to be
of further effect (except as to any surviving rights of registration of transfer
or exchange of Securities herein expressly provided for), and the Trustee, at
the expense of the Operating Partnership, shall execute proper instruments
acknowledging satisfaction and discharge of this Indenture, when
(1) either
(A) all Securities theretofore authenticated and delivered
(other than (i) Securities which have been destroyed, lost or
stolen and which have been replaced or paid as provided in Section
306 and (ii) Securities for whose payment money has theretofore
been deposited in trust or segregated and held in trust by the
Operating Partnership and thereafter repaid to the Operating
Partnership or discharged from such trust, as provided in Section
1003) have been delivered to the Trustee for cancellation; or
(B) all such Securities not theretofore delivered to the
Trustee for cancellation
(i) have become due and payable, or
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(ii) will become due and payable at their Stated Maturity
within one year, or
(iii) 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 Operating Partnership,
and the Operating Partnership, in the case of (i), (ii) or (iii)
above, has deposited or caused to be deposited with the Trustee as
trust funds in trust for the purpose money in an amount sufficient
to pay and discharge the entire indebtedness on such Securities not
theretofore delivered to the Trustee for cancellation, for
principal and any premium and interest 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 Operating Partnership has paid or caused to be paid all
other sums payable hereunder by the Operating Partnership; and
(3) the Operating Partnership 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 have been complied with.
Notwithstanding the satisfaction and discharge of this Indenture, the
obligations of the Operating Partnership to the Trustee under Section 607, the
obligations of the Trustee to any Authenticating Agent under Section 614 and, if
money shall have been deposited with 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 Money.
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 and this
Indenture, to the payment, either directly or through any Paying Agent
(including the Operating Partnership acting as its own Paying Agent) as the
Trustee may determine, to the Persons entitled thereto, of the principal and any
premium and interest for whose payment such money has been deposited with the
Trustee. Money deposited pursuant to this section not in violation of this
Indenture shall not be subject to claims of the holders of Senior Debt under
Article Fourteen.
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ARTICLE FIVE
REMEDIES
Section 501. Events of Default.
"Event of Default", wherever used herein with respect to Securities of any
series, means any one of the following events (whatever the reason for such
Event of Default and whether it shall be occasioned by the provisions of Article
Fourteen or 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 any Security of that
series when it 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 any premium, if any,
on any Security of that series; or
(3) default in the deposit of any sinking fund payment, when and as
due by the terms of a Security of that series; or
(4) default in the performance, or breach, of any covenant or warranty
of the Operating Partnership in this Indenture (other than a covenant or
warranty a default in whose performance or whose breach is elsewhere in
this Section specifically dealt with or which has expressly been included
in this Indenture solely for the benefit of series of Securities other than
that series), 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
Operating Partnership by the Trustee or to the Operating Partnership 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 or breach and requiring it to be remedied and stating that such
notice is a "Notice of Default" hereunder; or
(5) a default under any bond, debenture, note or other evidence of
indebtedness for money borrowed by the Operating Partnership (including a
default with respect to Securities of any series other than that series)
having an aggregate principal amount outstanding of at least $50,000,000,
or under any mortgage, indenture or instrument (including this Indenture)
under which there may be issued or by which there may be secured or
evidenced any indebtedness for money borrowed by the Operating Partnership
having an aggregate principal amount outstanding of at least $50,000,000,
whether such indebtedness now exists or shall hereafter be created, which
default (A) shall constitute a failure to pay any portion of the principal
of such indebtedness when due and payable after the expiration of any
applicable grace
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period with respect thereto or (B) shall have resulted in such indebtedness
becoming or being declared due and payable prior to the date on which it
would otherwise have become due and payable, without, in the case of Clause
(A), such indebtedness having been discharged or without, in the case of
Clause (B), such indebtedness having been discharged or such acceleration
having been rescinded or annulled, in each such case within a period of 10
days after there shall have been given, by registered or certified mail, to
the Operating Partnership by the Trustee or to the Operating Partnership
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 Operating Partnership to cause such indebtedness
to be discharged or cause such acceleration to be rescinded or annulled, as
the case may be, and stating that such notice is a "Notice of Default"
hereunder; provided, however, that, subject to the provisions of Sections
601 and 602, the Trustee shall not be deemed to have knowledge of such
default unless either (A) a Responsible Officer of the Trustee shall have
knowledge of such default or (B) the Trustee shall have received written
notice thereof from the Operating Partnership, from any Holder, from the
holder of any such indebtedness or from the trustee under any such
mortgage, indenture or other instrument; or
(6) the entry by a court having jurisdiction in the premises of (A) a
decree or order for relief in respect of the Operating Partnership in an
involuntary case or proceeding under any applicable Federal or State
bankruptcy, insolvency, reorganization or other similar law or (B) a decree
or order adjudging the Operating Partnership a bankrupt or insolvent, or
approving as properly filed a petition seeking reorganization, arrangement,
adjustment or composition of or in respect of the Operating Partnership
under any applicable Federal or State law, or appointing a custodian,
receiver, liquidator, assignee, trustee, sequestrator or other similar
official of the Operating Partnership or of any substantial part of its
property, or ordering the winding up or liquidation of its affairs, and the
continuance of any such decree or order for relief or any such other decree
or order unstayed and in effect for a period of 60 consecutive days; or
(7) the commencement by the Operating Partnership of a voluntary case
or proceeding under any applicable Federal or State bankruptcy, insolvency,
reorganization or other similar law or of any other case or proceeding to
be adjudicated a bankrupt or insolvent, or the consent by it to the entry
of a decree or order for relief in respect of the Operating Partnership in
an involuntary case or proceeding under any applicable Federal or State
bankruptcy, insolvency, reorganization or other similar law or to the
commencement of any bankruptcy or insolvency case or proceeding against it,
or the filing by it of a petition or answer or consent seeking
reorganization or relief under any applicable Federal or State law, or the
consent by it to the filing of such petition or to the appointment of or
taking possession by a custodian, receiver, liquidator, assignee, trustee,
sequestrator or other similar official of the Operating Partnership or of
any substantial part of its property,
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or the making by it of an assignment for the benefit of creditors, or the
admission by it in writing of its inability to pay its debts generally as
they become due, or the taking of corporate action by the Operating
Partnership in furtherance of any such action; or
(8) any other Event of Default provided with respect to Securities of
that series.
Section 502. Acceleration of Maturity; Rescission and Annulment.
If an Event of Default (other than an Event of Default specified in Section
501(6) or 501(7)) with respect to Securities of any series at the time
Outstanding occurs and is continuing, then in every such case the Trustee, upon
receipt of a request from the Holders of not less than 25% in principal amount
of the Outstanding Securities of that series, shall, or the Holders of not less
than 25% in principal amount of the Outstanding Securities of that series may,
declare the principal amount of all the Securities of that series (or, if any
Securities of that series are Original Issue Discount Securities, such portion
of the principal amount of such Securities as may be specified by the terms
thereof) to be due and payable immediately, by a notice in writing to the
Operating Partnership (and to the Trustee if given by Holders), and upon any
such declaration such principal amount (or specified amount) shall become
immediately due and payable. If an Event of Default specified in Section 501(6)
or 501(7) with respect to Securities of any series at the time Outstanding
occurs, the principal amount of all the Securities of that series (or, if any
Securities of that series are Original Issue Discount Securities, such portion
of the principal amount of such Securities as may be specified by the terms
thereof) shall automatically, and without any declaration or other action on the
part of the Trustee or any Holder, 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 Operating
Partnership and the Trustee, may rescind and annul such declaration and its
consequences if
(1) the Operating Partnership has paid or deposited with the Trustee a
sum sufficient to pay
(A) all overdue interest on all Securities of that series,
(B) the principal of (and premium, if any, on) any Securities of
that series which have become due otherwise than by such declaration of
acceleration and any interest thereon at the rate or rates prescribed
therefor in such Securities,
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(C) to the extent that payment of such interest is lawful,
interest upon overdue interest at the rate or rates prescribed
therefor 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 non-payment of the principal of 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 Operating Partnership covenants that if
(1) default is made in the payment of any interest on any Security
when such interest becomes due and payable and such default continues for a
period of 30 days, or
(2) default is made in the payment of the principal of (or premium, if
any, on) any Security at the Maturity thereof,
the Operating Partnership will, upon demand of the Trustee, pay to it, for the
benefit of the Holders of such Securities, the whole amount then due and payable
on such Securities for principal and any premium and interest and, to the extent
that payment of such interest shall be legally enforceable, interest on any
overdue principal and premium and on any overdue interest, at the rate or rates
prescribed therefor 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 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 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
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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 any judicial proceeding relative to the Operating Partnership
(or any other obligor upon the Securities), its property or its creditors, the
Trustee shall be entitled and empowered, by intervention in such proceeding or
otherwise, to take any and all actions authorized under the Trust Indenture Act
in order to have claims of the Holders and the Trustee allowed in any such
proceeding. In particular, the Trustee shall be authorized 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 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 it for
the reasonable compensation, expenses, disbursements and advances of the
Trustee, its agents and counsel, and any other amounts due the Trustee under
Section 607.
No provision of this Indenture shall be deemed to authorize the Trustee to
authorize or consent to or accept or adopt on behalf of any Holder any plan of
reorganization, arrangement, adjustment or composition affecting the Securities
or the rights of any Holder thereof or to authorize the Trustee to vote in
respect of the claim of any Holder in any such proceeding; provided, however,
that the Trustee may, on behalf of the Holders, vote for the election of a
trustee in bankruptcy or similar official and be a member of a creditors' or
other similar committee.
Section 505. Trustee May Enforce Claims Without Possession of Securities.
All rights of action and claims under this Indenture or the Securities may
be prosecuted and enforced by the Trustee without the possession of any of the
Securities 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 in respect of which such judgment has been
recovered.
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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 any premium
or interest, upon presentation of the Securities 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 under Section
607; and
SECOND: To the payment of the amounts then due and unpaid for
principal of and any premium and interest on the Securities 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 amounts due
and payable on such Securities for principal and any premium and interest,
respectively.
Section 507. Limitation on Suits.
No Holder of any Security of any series shall have any right to institute
any proceeding, judicial or otherwise, with respect to this Indenture, or for
the appointment of a receiver or trustee, or for any other remedy hereunder,
unless
(1) such Holder has previously given written notice to the Trustee of
a continuing Event of Default with respect to the Securities of that
series;
(2) the Holders of not less than 25% in principal amount of the
Outstanding Securities of that series shall have made written request to
the Trustee to institute proceedings in respect of such Event of Default in
its own name as Trustee hereunder;
(3) such Holder or Holders have offered to the Trustee reasonable
indemnity against the costs, expenses and liabilities to be incurred in
compliance with such request;
(4) the Trustee for 60 days after its receipt of such notice, request
and offer of indemnity has failed to institute any such proceeding; and
(5) no direction inconsistent with such written request has been given
to the Trustee during such 60-day period by the Holders of a majority in
principal amount of the Outstanding Securities of that series;
it being understood and intended that no one or more of such Holders shall have
any right in any manner whatever by virtue of, or by availing of, any provision
of this Indenture to
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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 of such Holders.
Section 508. Unconditional Right of Holders to Receive Principal,
Premium and Interest.
Notwithstanding any other provision in this Indenture, but subject to
Article Fourteen of this Indenture, the Holder of any Security shall have the
right, which is absolute and unconditional, to receive payment of the principal
of and any premium and (subject to Section 307) interest on such Security on the
respective Stated Maturities expressed in such Security (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 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, subject to any determination in
such proceeding, the Operating Partnership, the Trustee and the Holders shall 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 in the last paragraph of Section
306, no right or remedy herein conferred upon or reserved to the Trustee or to
the Holders is intended to be exclusive of any other right or remedy, and every
right and remedy shall, to the extent permitted by law, be cumulative and in
addition to every other right and remedy given hereunder or now or hereafter
existing at law or in equity or otherwise. The assertion or employment of any
right or remedy hereunder, or otherwise, shall not prevent the concurrent
assertion or employment of any other appropriate right or remedy.
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Section 511. Delay or Omission Not Waiver.
No delay or omission of the Trustee or of any Holder of any Securities 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, as the case may
be.
Section 512. Control by Holders.
The Holders of 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, and
(2) the Trustee may take any other action deemed proper by the Trustee
which is not inconsistent with such direction.
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 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 any premium or interest on
any Security of such series, 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 impair any right consequent thereon.
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Section 514. Undertaking for Costs.
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, suffered or
omitted by it as Trustee, a court may require any party litigant in such suit to
file an undertaking to pay the costs of such suit, and may assess costs against
any such party litigant, in the manner and to the extent provided in the Trust
Indenture Act. The provisions of this Section shall not apply to any suit
instituted by the Trustee, to any suit instituted by the Operating Partnership,
to any suit instituted by any Holder, or group of Holders of an aggregate of
more than 10 percent in principal amount of the Securities then outstanding, or
to any suit instituted by any Holder for the enforcement of the payment of the
principal of or interest on any Security, on or after the respective due dates
expressed in such Security.
Section 515. Waiver of Usury, Stay or Extension Laws.
The Operating Partnership 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 Operating
Partnership (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.
ARTICLE SIX
THE TRUSTEE
Section 601. Certain Duties and Responsibilities.
The duties and responsibilities of the Trustee shall be as provided by the
Trust Indenture Act. Notwithstanding the foregoing, no provision of this
Indenture shall require the Trustee 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. Whether or not therein
expressly so provided, every provision of this Indenture relating to the conduct
or affecting the liability of or affording protection to the Trustee shall be
subject to the provisions of this Section.
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Section 602. Notice of Defaults.
If a default occurs hereunder with respect to Securities of any series, the
Trustee shall give the Holders of Securities of such series notice of such
default as and to the extent provided by the Trust Indenture Act; provided,
however, that in the case of any default of the character specified in Section
501(4) with respect to Securities of such series, no such notice to Holders
shall be given until at least 30 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 Securities of such series.
Section 603. Certain Rights of Trustee.
Subject to the provisions of Section 601:
(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, other evidence of indebtedness 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 Operating Partnership mentioned
herein shall be sufficiently evidenced by an Operating Partnership Request
or Operating Partnership Order, and any resolution of the Board of Trustees
shall 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 of its selection and the
advice of such counsel (to be confirmed in writing) 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 pursuant to this Indenture, unless such Holders shall
have offered to the Trustee reasonable security or indemnity against the
costs, expenses and liabilities which might be incurred by it in compliance
with such request or direction;
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(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, other evidence of indebtedness 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
Operating Partnership, 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 to be taken 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.
Section 604. Not Responsible for Recitals or Issuance of Securities.
The recitals contained herein and in the Securities, except the Trustee's
certificates of authentication, shall be taken as the statements of the
Operating Partnership, 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. Neither the Trustee nor any Authenticating Agent shall be
accountable for the use or application by the Operating Partnership of
Securities or the proceeds thereof.
Section 605. May Hold Securities.
The Trustee, any Authenticating Agent, any Paying Agent, any Security
Registrar or any other agent of the Operating Partnership, in its individual or
any other capacity, may become the owner or pledgee of Securities and, subject
to Sections 608 and 613, may otherwise deal with the Operating Partnership with
the same rights it would have if it were not Trustee, Authenticating Agent,
Paying Agent, Security Registrar or such other agent.
Section 606. 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
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any money received by it hereunder except as otherwise agreed in writing with
the Operating Partnership.
Section 607. Compensation and Reimbursement.
The Operating Partnership agrees
(1) to pay to the Trustee from time to time such reasonable
compensation as the Operating Partnership and the Trustee shall from time
to time agree in writing 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 the
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 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 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.
The Trustee shall have a lien prior to the Securities as to all property
and funds held by it hereunder for any amount owing it or any predecessor
Trustee pursuant to this Section 607, except with respect to funds held in trust
for the benefit of the Holders of particular Securities.
When the Trustee incurs expenses or renders services in connection with an
Event of Default specified in Section 501(6) or Section 501(7), the expenses
(including the reasonable charges and 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.
The provisions of this Section shall survive the termination of this
Indenture.
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Section 608. Disqualification; Conflicting Interests.
If the Trustee has or shall acquire a conflicting interest within the
meaning of the Trust Indenture Act, the Trustee shall either eliminate such
interest or resign, to the extent and in the manner provided by, and subject to
the provisions of, the Trust Indenture Act and this Indenture. To the extent
permitted by such Act, the Trustee shall not be deemed to have a conflicting
interest by virtue of being a trustee under this Indenture with respect to
Securities of more than one series.
Section 609. Corporate Trustee Required; Eligibility.
There shall at all times be one (and only one) Trustee hereunder with
respect to the Securities of each series, which may be Trustee hereunder for
Securities of one or more other series. Each Trustee shall be a Person that is
eligible pursuant to the Trust Indenture Act to act as such and has a combined
capital and surplus of at least $50,000,000. If any such Person publishes
reports of condition at least annually, pursuant to law or to the requirements
of its supervising or examining authority, then for the purposes of this Section
and to the extent permitted by the Trust Indenture Act, the combined capital and
surplus of such Person 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 with respect to the Securities of any series 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 610. Resignation and Removal; Appointment of Successor.
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 611.
The Trustee may resign at any time with respect to the Securities of one or
more series by giving written notice thereof to the Operating Partnership.
The Trustee may be removed at any time with respect to the Securities of
any series by Act of the Holders of a majority in principal amount of the
Outstanding Securities of such series, delivered to the Trustee and to the
Operating Partnership.
If at any time:
(1) the Trustee shall fail to comply with Section 608 after written
request therefor by the Operating Partnership or by any Holder who has been
a bona fide Holder of a Security for at least six months, or
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(2) the Trustee shall cease to be eligible under Section 609 and shall
fail to resign after written request therefor by the Operating Partnership
or by any such Holder, 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, conversation or liquidation,
then, in any such case, (A) the Operating Partnership by a Board Resolution may
remove the Trustee with respect to all Securities, or (B) subject to Section
514, any Holder 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.
If the instrument of acceptance by a successor Trustee required by Section
611 shall not have been delivered to the Trustee within 30 days after the giving
of such notice of resignation or removal, the Trustee resigning or being removed
may petition any court of competent jurisdiction for the appointment of a
successor Trustee with respect to the Securities of such series.
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 Operating Partnership, by 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) and shall comply with the
applicable requirements of Section 611. 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 Operating Partnership and
the retiring Trustee, the successor Trustee so appointed shall, forthwith upon
its acceptance of such appointment in accordance with the applicable
requirements of Section 611, become the successor Trustee with respect to the
Securities of such series and to that extent supersede the successor Trustee
appointed by the Operating Partnership. If no successor Trustee with respect to
the Securities of any series shall have been so appointed by the Operating
Partnership or the Holders and accepted appointment in the manner required by
Section 611, the retiring Trustee or any Holder 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 the Securities of
such series.
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The Operating Partnership 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
to all Holders of Securities of such series in the manner provided 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 611. Acceptance of Appointment by Successor.
In case of the appointment hereunder of a successor Trustee with respect to
all Securities, every such successor Trustee so appointed shall execute,
acknowledge and deliver to the Operating Partnership and to the retiring Trustee
an instrument accepting such appointment, and thereupon the resignation or
removal of the retiring Trustee shall become effective and such successor
Trustee, without any further act, deed or conveyance, shall become vested with
all the rights, powers, trusts and duties of the retiring Trustee; but, on the
request of the Operating Partnership 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.
In case of the appointment hereunder of a successor Trustee with respect to
the Securities of one or more (but not all) series, the Operating Partnership,
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
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 Operating
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Partnership or any successor Trustee, such retiring Trustee shall duly assign,
transfer and deliver to such successor Trustee all property and money held by
such retiring Trustee hereunder with respect to the Securities of that or those
series to which the appointment of such successor Trustee relates.
Upon request of any such successor Trustee, the Operating Partnership 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 the first or second preceding paragraph, as the case may be.
No successor Trustee shall accept its appointment unless at the time of
such acceptance such successor Trustee shall be qualified and eligible under
this Article.
Section 612. 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 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 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 so authenticated with the same effect
as if such successor Trustee had itself authenticated such Securities.
Section 613. Preferential Collection of Claims Against Operating Partnership.
If and when the Trustee shall be or become a creditor of the Operating
Partnership (or any other obligor upon the Securities), the Trustee shall be
subject to the provisions of the Trust Indenture Act regarding the collection of
claims against the Operating Partnership (or any such other obligor).
Section 614. Appointment of Authenticating Agent.
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 original issue
and upon exchange, registration of transfer, or partial redemption thereof or
pursuant to Section 306, and Securities so authenticated shall be entitled to
the benefits of this Indenture and shall be
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valid and obligatory for all purposes as if authenticated by the Trustee
hereunder. 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 Operating Partnership and
shall at all times be a corporation organized and doing business under the laws
of the United States of America, any State thereof 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 authority. If such Authenticating Agent
publishes reports of condition at least annually, pursuant to law or to the
requirements of said 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. If 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 any further
act on the part of the Trustee or the Authenticating Agent.
An Authenticating Agent may resign at any time by giving written notice
thereof to the Trustee and to the Operating Partnership. The Trustee may at any
time terminate the agency of an Authenticating Agent by giving written notice
thereof to such Authenticating Agent and to the Operating Partnership. 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 may appoint a successor
Authenticating Agent which shall be acceptable to the Operating Partnership and
shall give notice of such appointment in the manner provided in Section 106 to
all Holders of Securities of the series with respect to which such
Authenticating Agent will serve. 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. No successor Authenticating Agent
shall be appointed unless eligible under the provisions of this Section.
The Trustee agrees to pay to each Authenticating Agent from time to time
reasonable compensation for its services under this Section, and the Trustee
shall be entitled to be reimbursed for such payments, subject to the provisions
of Section 607.
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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 the Trustee's certificate of authentication, an alternative
certificate of authentication in the following form:
This is one of the Securities of the series designated therein referred to
in the within-mentioned Indenture.
THE BANK OF NEW YORK,
As Trustee
By.................................................,
As Authenticating Agent
By..................................................
Authorized Officer
ARTICLE SEVEN
HOLDERS' LISTS AND REPORTS BY TRUSTEE AND OPERATING PARTNERSHIP
Section 701. Operating Partnership to Furnish Trustee Names and Addresses of
Holders.
The Operating Partnership will furnish or cause to be furnished to the
Trustee
(1) semi-annually, not later than March 15 and September 15 in each
year, a list, in such form as the Trustee may reasonably require, of the
names and addresses of the Holders of Securities of each series as of the
preceding March 1 or September 1, as the case may be, and
(2) at such other times as the Trustee may request in writing, within
30 days after the receipt by the Operating Partnership 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; excluding from any such list names and
addresses received by the Trustee in its capacity as Security Registrar.
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Section 702. Preservation of Information; Communications to Holders.
The Trustee shall preserve, in as current a form as is reasonably
practicable, the names and addresses of Holders contained in the most recent
list furnished to the Trustee as provided in Section 701 and the names and
addresses of Holders received by the Trustee in its capacity as Security
Registrar. The Trustee may destroy any list furnished to it as provided in
Section 701 upon receipt of a new list so furnished.
The rights of Holders to communicate with other Holders with respect to
their rights under this Indenture or under the Securities, and the corresponding
rights and privileges of the Trustee, shall be as provided by the Trust
Indenture Act.
Every Holder of Securities, by receiving and holding the same, agrees with
the Operating Partnership and the Trustee that neither the Operating Partnership
nor the Trustee nor any agent of either of them shall be held accountable by
reason of any disclosure of information as to names and addresses of Holders
made pursuant to the Trust Indenture Act.
Section 703. Reports by Trustee.
The Trustee shall transmit to Holders such reports concerning the Trustee
and its actions under this Indenture as may be required pursuant to the Trust
Indenture Act at the times and in the manner provided pursuant thereto. Reports
so required to be transmitted at stated intervals of not more than 12 months
shall be transmitted within 60 days after the first date of issuance of
Securities and on each anniversary of such date.
A copy of each such report shall, at the time of such transmission to
Holders, be filed by the Trustee with each stock exchange upon which any
Securities are listed, with the Commission and with the Operating Partnership.
The Operating Partnership will promptly notify the Trustee when any Securities
are listed on any stock exchange.
Section 704. Reports by Operating Partnership.
The Operating Partnership shall file with the Trustee and the Commission,
and transmit to Holders, such information, documents and other reports, and such
summaries thereof, as may be required pursuant to the Trust Indenture Act at the
times and in the manner provided pursuant to such Act; provided that any such
information, documents or reports required to be filed with the Commission
pursuant to Section 13 or 15(d) of the Exchange Act shall be filed with the
Trustee within 15 days after the same is so required to be filed with the
Commission.
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Delivery of such reports, information and documents to the Trustee is for
informational purposes only and the Trustee's receipt of such shall not
constitute constructive notice of any information contained therein or
determinable from information contained therein, including the Operating
Partnership's compliance with any of its covenants hereunder (as to which the
Trustee is entitled to rely exclusively on Officers' Certificates).
Section 705. Notice of Default.
The Operating Partnership shall file with the Trustee written notice of the
occurrence of any Event of Default within five Business Days of its becoming
aware of any such Event of Default.
ARTICLE EIGHT
CONSOLIDATION, MERGER, CONVEYANCE, TRANSFER OR LEASE
Section 801. Operating Partnership May Consolidate, Etc., Only on Certain Terms.
The Operating Partnership shall not consolidate with or merge into any
other Person or convey, transfer or lease its properties and assets
substantially as an entirety to any Person, and the Operating Partnership shall
not permit any Person to consolidate with or merge into the Operating
Partnership or convey, transfer or lease its properties and assets substantially
as an entirety to the Operating Partnership, unless:
(1) in case the Operating Partnership shall consolidate with or merge
into another Person or convey, transfer or lease its properties and assets
substantially as an entirety to any Person, the Person formed by such
consolidation or into which the Operating Partnership is merged or the
Person which acquires by conveyance or transfer, or which leases, the
properties and assets of the Operating Partnership substantially as an
entirety shall be a corporation, partnership or trust, shall be organized
and validly existing under the laws of the United States of America, any
State thereof or the District of Columbia and shall expressly assume, by an
indenture supplemental hereto, executed and delivered to the Trustee, in
form satisfactory to the Trustee, the due and punctual payment of the
principal of and any premium and interest on all the Securities and the
performance or observance of every covenant of this Indenture on the part
of the Operating Partnership to be performed or observed;
(2) immediately after giving effect to such transaction and treating
any indebtedness which becomes an obligation of the Operating Partnership
or any
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Subsidiary as a result of such transaction as having been incurred by the
Operating Partnership or such Subsidiary at the time of such transaction,
no Event of Default, and no event which, after notice or lapse of time or
both, would become an Event of Default, shall have happened and be
continuing;
(3) if, as a result of any such consolidation or merger or such
conveyance, transfer or lease, properties or assets of the Operating
Partnership would become subject to a mortgage, pledge, lien, security
interest or other encumbrance which would not be permitted by this
Indenture, the Operating Partnership or such successor Person, as the case
may be, shall take such steps as shall be necessary effectively to secure
the Securities equally and ratably with (or prior to) all indebtedness
secured thereby; and
(4) the Operating Partnership has delivered to the Trustee an
Officers' Certificate and an Opinion of Counsel, each stating that such
consolidation, merger, conveyance, transfer or lease and, if a supplemental
indenture is required in connection with such transaction, such
supplemental indenture comply with this Article and that all conditions
precedent herein provided for relating to such transaction have been
complied with.
Section 802. Successor Substituted.
Upon any consolidation of the Operating Partnership with, or merger of the
Operating Partnership into, any other Person or any conveyance, transfer or
lease of the properties and assets of the Operating Partnership substantially as
an entirety in accordance with Section 801, the successor Person formed by such
consolidation or into which the Operating Partnership is merged or to which such
conveyance, transfer or lease is made shall succeed to, and be substituted for,
and may exercise every right and power of, the Operating Partnership under this
Indenture with the same effect as if such successor Person had been named as the
Operating Partnership herein, and thereafter, except in the case of a lease, the
predecessor Person shall be relieved of all obligations and covenants under this
Indenture and the Securities.
ARTICLE NINE
SUPPLEMENTAL INDENTURES
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Section 901. Supplemental Indentures Without Consent of Holders.
Without the consent of any Holders, the Operating Partnership, when
authorized by 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 Operating
Partnership and the assumption by any such successor of the covenants of
the Operating Partnership herein and in the Securities; or
(2) to add to the covenants of the Operating Partnership 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 Operating Partnership; 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 additional Events
of Default are to be for the benefit of less than all series of Securities,
stating that such additional Events of Default are expressly being included
solely for the benefit of such series); or
(4) to add to or change any of the provisions of this Indenture to
such extent as shall be necessary to permit or facilitate the issuance of
Securities in bearer form, registrable or not registrable as to principal,
and with or without interest coupons, or to permit or facilitate the
issuance of Securities in uncertificated form; or
(5) to add to, change or eliminate any of the provisions of this
Indenture in respect of one or more series of Securities, provided that any
such addition, change or elimination (A) shall neither (i) apply to any
Security of any series created prior to the execution of such supplemental
indenture and entitled to the benefit of such provision nor (ii) modify the
rights of the Holder of any such Security with respect to such provision or
(B) shall become effective only when there is no such Security Outstanding;
or
(6) to secure the Securities; or
(7) to establish the form or terms of Securities of any series 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
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facilitate the administration of the trusts hereunder by more than one
Trustee, pursuant to the requirements of Section 611; 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, provided that such action pursuant
to this Clause (10) shall not adversely affect the interests of the Holders
of Securities of any series 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 the Outstanding Securities of each series affected by such
supplemental indenture, by Act of said Holders delivered to the Operating
Partnership and the Trustee, the Operating Partnership, when authorized by 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 of such series
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 any instalment
of principal of or interest on, any Security, or reduce the principal
amount thereof or the rate of interest thereon or any premium payable upon
the redemption thereof, or reduce the amount of the principal of an
Original Issue Discount Security or any other Security which would be due
and payable upon a declaration of acceleration of the Maturity thereof
pursuant to Section 502, or change any Place of Payment where, or the coin
or currency in which, any Security or any premium or 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, on or after the Redemption Date), 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 (of compliance with certain provisions of this Indenture or
certain defaults hereunder and their consequences) provided for in this
Indenture, or
(3) modify any of the provisions of this Section, Section 513 or
Section 1008, except to increase any such percentage 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; provided, however, that this clause shall not be deemed to require
the consent of any Holder with respect to changes in the
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references to "the Trustee" and concomitant changes in this Section and
Section 1008, or the deletion of this proviso, in accordance with the
requirements of Section 611 and 901(8).
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.
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.
The Operating Partnership may, but shall not be obligated to, fix a record
date for the purpose of determining the Persons entitled to consent to any
indenture supplemental hereto. If a record date is fixed, the Holders on such
record date, or their duly designated proxies, and only such Persons, shall be
entitled to consent to such supplemental indenture, whether or not such Holders
remain Holders after such record date; provided, that unless such consent shall
have become effective by virtue of the requisite percentage having been obtained
prior to the date which is 90 days after such record date, any such consent
previously given shall automatically and without further action by any Holder be
canceled and of no further effect.
Section 903. Execution of Supplemental Indentures.
In executing, or accepting the additional trusts created by, any
supplemental indenture permitted by this Article or the modifications thereby of
the trusts created by this Indenture, the Trustee shall be entitled to receive,
and (subject to Section 601) 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
shall be bound thereby.
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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.
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 Operating Partnership shall
so determine, new Securities of any series so modified as to conform, in the
opinion of the Trustee and the Operating Partnership, to any such supplemental
indenture may be prepared and executed by the Operating Partnership and
authenticated and delivered by the Trustee in exchange for Outstanding
Securities of such series.
ARTICLE TEN
COVENANTS
Section 1001. Payment of Principal, Premium and Interest.
The Operating Partnership covenants and agrees for the benefit of each
series of Securities that it will duly and punctually pay the principal of and
any premium and interest on the Securities of that series in accordance with the
terms of the Securities and this Indenture.
Section 1002. Maintenance of Office or Agency.
The Operating Partnership will maintain in each Place of Payment for any
series of Securities an office or agency where Securities of that series may be
presented or surrendered for payment, where Securities of that series may be
surrendered for registration of transfer or exchange and where notices and
demands to or upon the Operating Partnership in respect of the Securities of
that series and this Indenture may be served. The Operating Partnership will
give prompt written notice to the Trustee of the location, and any change in the
location, of such office or agency. If at any time the Operating Partnership
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, and the
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Operating Partnership hereby appoints the Trustee as its agent to receive all
such presentations, surrenders, notices and demands.
The Operating Partnership may also 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 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 Operating Partnership of its
obligation to maintain an office or agency in each Place of Payment for
Securities of any series for such purposes. The Operating Partnership 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.
Section 1003. Money for Securities Payments to be Held in Trust.
If the Operating Partnership shall at any time act as its own Paying Agent
with respect to any series of Securities, it will, on or before each due date of
the principal of or any premium or interest on any of the Securities of that
series, segregate and hold in trust for the benefit of the Persons entitled
thereto a sum sufficient to pay the principal and any premium and interest 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 Operating Partnership shall have one or more Paying Agents for
any series of Securities, it will, prior to each due date of the principal of or
any premium or interest on any Securities of that series, deposit with a Paying
Agent a sum sufficient to pay such amount, such sum to be held as provided by
the Trust Indenture Act, and (unless such Paying Agent is the Trustee) the
Operating Partnership will promptly notify the Trustee of its action or failure
so to act.
The Operating Partnership will cause each Paying Agent for any series of
Securities 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) comply with the
provisions of the Trust Indenture Act applicable to it as a Paying Agent and (2)
during the continuance of any default by the Operating Partnership (or any other
obligor upon the Securities of that series) in the making of any payment in
respect of the Securities of that series, upon the written request of the
Trustee, forthwith pay to the Trustee all sums held in trust by such Paying
Agent for payment in respect of the Securities of that series.
The Operating Partnership may at any time, for the purpose of obtaining the
satisfaction and discharge of this Indenture or for any other purpose, pay, or
by Operating Partnership Order direct any Paying Agent to pay, to the Trustee
all sums held in trust by the Operating Partnership or such Paying Agent, such
sums to be held by the Trustee upon
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the same trusts as those upon which such sums were held by the Operating
Partnership 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 money.
Any money deposited with the Trustee or any Paying Agent, or then held by
the Operating Partnership, in trust for the payment of the principal of or any
premium or interest on any Security of any series and remaining unclaimed for
two years after such principal, premium or interest has become due and payable
shall be paid to the Operating Partnership on Operating Partnership Request, or
(if then held by the Operating Partnership) shall be discharged from such trust;
and the Holder of such Security shall thereafter, as an unsecured general
creditor, look only to the Operating Partnership for payment thereof, and all
liability of the Trustee or such Paying Agent with respect to such trust money,
and all liability of the Operating Partnership 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
Operating Partnership cause to be published once, in a newspaper published in
the English language, customarily published on each Business Day and of general
circulation in New York, New York, 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 Operating Partnership.
Section 1004. Statement by Officers as to Default.
The Operating Partnership will deliver to the Trustee, within 120 days
after the end of each fiscal year of the Operating Partnership ending after the
date hereof, an Officers' Certificate, stating whether or not to the best
knowledge of the signers thereof the Operating Partnership is in default in the
performance and observance of any of the terms, provisions and conditions of
this Indenture (without regard to any period of grace or requirement of notice
provided hereunder) and, if the Operating Partnership shall be in default,
specifying all such defaults and the nature and status thereof of which they may
have knowledge.
Section 1005. Existence.
Subject to Article Eight, the Operating Partnership will do or cause to be
done all things necessary to preserve and keep in full force and effect its
existence, rights (charter and statutory) and franchises; provided, however,
that the Operating Partnership shall not be required to preserve any such right
or franchise if the Board of Trustees shall determine that the preservation
thereof is no longer desirable in the conduct of the business of the Operating
Partnership and that the loss thereof is not disadvantageous in any material
respect to the Holders.
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Section 1006. Maintenance of Properties.
The Operating Partnership will cause all 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 Operating Partnership 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 Operating
Partnership from discontinuing the operation or maintenance of any of such
properties if such discontinuance is, in the judgment of the Operating
Partnership, desirable in the conduct of its business or the business of any
Subsidiary and not disadvantageous in any material respect to the Holders.
Section 1007. Payment of Taxes and Other Claims.
The Operating Partnership 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 the Operating Partnership or any
Subsidiary or upon the income, profits or property of the Operating Partnership
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 Operating
Partnership or any Subsidiary; provided, however, that the Operating Partnership
shall not be required to pay or discharge or cause to be paid or discharged any
such tax, assessment, charge or claim whose amount, applicability or validity is
being contested in good faith by appropriate proceedings.
Section 1008. Insurance.
The Operating Partnership will cause each of its properties and each of
the properties of its Subsidiaries which are of an insurable nature to be
insured against loss of damage with insurers of recognized responsibility, in
commercially reasonable amounts and types.
Section 1009. Provision of Financial Information.
Whether or not the Operating Partnership is subject to Section 13 or
Section 15(d) of the Exchange Act, the Operating Partnership will, to the
extent permitted under the Exchange Act, file with the Commission the annual
reports, quarterly reports and other documents that the Operating Partnership
would have been required to file with the Commission pursuant to Section 13 or
Section 15(d) of the Exchange Act (the "Financial Statements") if the Operating
Partnership 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
Operating Partnership would have been required so to file such documents if the
Operating Partnership were so subject.
The Operating Partnership 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 that the Operating
Partnership would have been required to file with the Commission pursuant to
Section 13 or Section 15(d) of the Exchange Act if the Operating Partnership
were subject to such Sections, and (ii) file with the Trustee copies of the
annual reports, quarterly reports and other documents that the Operating
Partnership would have been required to file with the Commission pursuant to
Section 13 or Section 15(d) of the Exchange Act if the Operating Partnership
were subject to such Sections and (y) if filing such documents by the Operating
Partnership 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. Waiver of Certain Covenants.
Except as otherwise specified as contemplated by Section 301 for Securities
of such series, the Operating Partnership may, with respect to the Securities of
any series, omit in any particular instance to comply with any term, provision
or condition set forth in any covenant provided pursuant to Section 301(18),
901(2) or 901(7) for the benefit of the Holders of such series or in any of
Sections 1005 through 1009, inclusive, if before the time for such compliance
the Holders of at least a majority in principal amount of the Outstanding
Securities of such series shall, by Act of such Holders, either waive such
compliance in such instance or generally waive compliance with such term,
provision or condition, but no such waiver shall extend to or affect such term,
provision or condition except to the extent so expressly waived, and, until such
waiver shall become effective, the obligations of the Operating Partnership 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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Section 1011. Calculation of Original Issue Discount.
The Operating Partnership shall file with the Trustee promptly at the end
of each calendar year a written notice specifying the amount of original issue
discount (including daily rates and accrual periods) accrued on Outstanding
Securities as of the end of such year.
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 such Securities) in accordance with
this Article.
Section 1102. Election to Redeem; Notice to Trustee.
The election of the Operating Partnership to redeem any Securities shall be
evidenced by a Board Resolution or in another manner specified as contemplated
by Section 301 for such Securities. In case of any redemption at the election of
the Operating Partnership of less than all the Securities of any series
(including any such redemption affecting only a single Security), the Operating
Partnership shall, at least 60 days prior to the Redemption Date fixed by the
Operating Partnership (unless a shorter notice shall be satisfactory to the
Trustee), notify the Trustee of such Redemption Date, of the principal amount of
Securities of such series to be redeemed and, if applicable, of the tenor of the
Securities 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 Operating Partnership 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 are to be redeemed (unless
all the Securities of such series and of a specified tenor are to be redeemed or
unless such redemption affects only a single Security), 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
not previously called for redemption, by such method as the Trustee shall
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deem fair and appropriate and which may provide for the selection for redemption
of a portion of the principal amount of any Security of such series, provided
that the unredeemed portion of the principal amount of any Security shall be in
an authorized denomination (which shall not be less than the minimum authorized
denomination) for such Security. If less than all the Securities of such series
and of a specified tenor are to be redeemed (unless such redemption affects only
a single Security), 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 and specified tenor not previously called
for redemption in accordance with the preceding sentence.
The Trustee shall promptly notify the Operating Partnership in writing of
the Securities selected for redemption as aforesaid and, in case of any
Securities selected for partial redemption as aforesaid, the principal amount
thereof to be redeemed.
The provisions of the two preceding paragraphs shall not apply with respect
to any redemption affecting only a single Security, whether such Security is to
be redeemed in whole or in part. In the case of any such redemption in part, the
unredeemed portion of the principal amount of the Security shall be in an
authorized denomination (which shall not be less than the minimum authorized
denomination) for such Security.
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 Securities redeemed or to be redeemed only in part, to the portion
of the principal amount of such Securities which has been or is to be redeemed.
Section 1104. Notice of Redemption.
Notice of redemption shall be given by first-class mail, postage prepaid,
mailed not less than 30 nor more than 60 days prior to the Redemption Date, to
each Holder of Securities to be redeemed, at his address appearing in the
Security Register.
All notices of redemption shall state, including CUSIP number, if any:
(1) the Redemption Date,
(2) the Redemption Price,
(3) if less than all the Outstanding Securities of any series
consisting of more than a single Security are to be redeemed, the
identification (and, in the case of partial redemption of any such
Securities, the principal amounts) of the particular Securities to be
redeemed and, if less than all the Outstanding Securities of any series
consisting of a single Security are to be redeemed, the principal amount of
the particular Security to be redeemed,
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(4) that on the Redemption Date the Redemption Price will become due
and payabe upon each such Security to be redeemed and, if applicable, that
interest thereon will cease to accrue on and after said date,
(5) the place or places where each such Security is to be surrendered
for payment of the Redemption Price, and
(6) that the redemption is for a sinking fund, if such is the case.
Notice of redemption of Securities to be redeemed at the election of the
Operating Partnership shall be given by the Operating Partnership or, at the
Operating Partnership's request, by the Trustee in the name and at the expense
of the Operating Partnership and shall be irrevocable.
Section 1105. Deposit of Redemption Price.
Prior to any Redemption Date, the Operating Partnership shall deposit with
the Trustee or with a Paying Agent (or, if the Operating Partnership is acting
as its own Paying Agent, segregate and hold in trust as provided in Section
1003) an amount of money sufficient to pay the Redemption Price of, and (except
if the Redemption Date shall be an Interest Payment Date) accrued interest on,
all the Securities 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, and from and after such date (unless the
Operating Partnership shall default in the payment of the Redemption Price and
accrued interest) such Securities shall cease to bear interest. Upon surrender
of any such Security for redemption in accordance with said notice, such
Security shall be paid by the Operating Partnership at the Redemption Price,
together with accrued interest to the Redemption Date; provided, however, that,
unless otherwise specified as contemplated by Section 301, installments of
interest whose Stated Maturity is on or prior to the Redemption Date will 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 Security called for redemption shall not be so paid upon surrender
thereof for redemption, the principal and any premium shall, until paid, bear
interest from the Redemption Date at the rate prescribed therefor in the
Security.
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Section 1107. Securities Redeemed in Part.
Any Security which is to be redeemed only in part shall be surrendered at a
Place of Payment therefor (with, if the Operating Partnership or the Trustee so
requires, due endorsement by, or a written instrument of transfer in form
satisfactory to the Operating Partnership and the Trustee duly executed by, the
Holder thereof or his attorney duly authorized in writing), and the Operating
Partnership 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 and of like tenor, of any authorized denomination as requested
by such Holder, in aggregate principal amount equal to and in exchange for the
unredeemed portion of the principal of the Security so surrendered.
ARTICLE TWELVE
SINKING FUNDS
Section 1201. Applicability of Article.
The provisions of this Article shall be applicable to any sinking fund for
the retirement of Securities of any series except as otherwise specified as
contemplated by Section 301 for such Securities.
The minimum amount of any sinking fund payment provided for by the terms of
any Securities is herein referred to as a "mandatory sinking fund payment", and
any payment in excess of such minimum amount provided for by the terms of such
Securities is herein referred to as an "optional sinking fund payment". If
provided for by the terms of any Securities, the cash amount of any sinking fund
payment may be subject to reduction as provided in Section 1202. Each sinking
fund payment shall be applied to the redemption of Securities as provided for by
the terms of such Securities.
Section 1202. Satisfaction of Sinking Fund Payments with Securities.
The Operating Partnership (1) may deliver Outstanding Securities of a
series (other than any previously called for redemption) and (2) may apply as a
credit Securities of a series which have been redeemed either at the election of
the Operating Partnership pursuant to the terms of such Securities or through
the application of permitted optional sinking fund payments pursuant to the
terms of such Securities, in each case in satisfaction of all or any part of any
sinking fund payment with respect to any Securities of such series required to
be made pursuant to the terms of such Securities as and to the extent provided
for by the terms of such Securities; provided that the Securities to be so
credited have not
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been previously so credited. The Securities to be so credited shall be received
and credited for such purpose by the Trustee at the Redemption Price, as
specified in the Securities so to be redeemed, for redemption through operation
of the sinking fund and the amount of such sinking fund payment shall be reduced
accordingly.
Section 1203. Redemption of Securities for Sinking Fund.
Not less than 60 days prior to each sinking fund payment date for any
Securities, the Operating Partnership will deliver to the Trustee an Officers'
Certificate specifying the amount of the next ensuing sinking fund payment for
such Securities pursuant to the terms of such Securities, the portion thereof,
if any, which is to be satisfied by payment of cash and the portion thereof, if
any, which is to be satisfied by delivering and crediting Securities pursuant to
Section 1202 and will also deliver to the Trustee any Securities to be so
delivered. Not less than 30 nor more than 45 days prior to each such sinking
fund payment date, the Trustee shall select the Securities to be redeemed upon
such sinking fund payment date in the manner specified in Section 1103 and cause
notice of the redemption thereof to be given in the name of and at the expense
of the Operating Partnership in the manner provided in Section 1104. Such notice
having been duly given, the redemption of such Securities shall be made upon the
terms and in the manner stated in Sections 1106 and 1107.
ARTICLE THIRTEEN
DEFEASANCE AND COVENANT DEFEASANCE
Section 1301. Operating Partnership's Option to Effect Defeasance or Covenant
Defeasance.
If applicable to a particular series of Securities, the Operating
Partnership may elect, at its option at any time, to have Section 1302 or
Section 1303 applied to any such series of Securities or any Securities of such
series, as the case may be, designated pursuant to Section 301 as being
defeasible pursuant to such Section 1302 or 1303, in accordance with any
applicable requirements provided pursuant to Section 301 and upon compliance
with the conditions set forth below in this Article. Any such election shall be
evidenced by a Board Resolution or in another manner specified as contemplated
by Section 301 for such Securities.
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Section 1302. Defeasance and Discharge.
Upon the Operating Partnership's exercise of its option (if any) to have
this Section applied to any applicable series of Securities or any Securities of
such series, as the case may be, the Operating Partnership shall be deemed to
have been discharged from its obligations with respect to such Securities as
provided in this Section on and after the date the conditions set forth in
Section 1304 are satisfied (hereinafter called "Defeasance"). For this purpose,
such Defeasance means that the Operating Partnership shall be deemed to have
paid and discharged the entire indebtedness represented by such Securities and
to have satisfied all its other obligations under such Securities and this
Indenture insofar as such Securities are concerned (and the Trustee, at the
expense of the Operating Partnership, shall execute proper instruments
acknowledging the same), subject to the following which shall survive until
otherwise terminated or discharged hereunder: (1) the rights of Holders of such
Securities to receive, solely from the trust fund described in Section 1304 and
as more fully set forth in such Section, payments in respect of the principal of
and any premium and interest on such Securities when payments are due, (2) the
Operating Partnership's obligations with respect to such Securities under
Sections 304, 305, 306, 1002 and 1003, (3) the rights, powers, trusts, duties
and immunities of the Trustee hereunder and (4) this Article. Subject to
compliance with this Article, the Operating Partnership may exercise its option
(if any) to have this Section applied to any applicable Securities
notwithstanding the prior exercise of its option (if any) to have Section 1303
applied to such Securities.
Section 1303. Covenant Defeasance.
Upon the Operating Partnership's exercise of its option (if any) to have
this Section applied to any applicable series of Securities or any Securities of
such series, as the case may be, (1) the Operating Partnership shall be released
from its obligations under Section 801(3), Sections 1005 through 1007,
inclusive, and any covenants provided pursuant to Section 301(18), 901(2) or
901(7) for the benefit of the Holders of such Securities and (2) the occurrence
of any event specified in Sections 501(4) (with respect to any of Section
801(3), Sections 1005 through 1007, inclusive, and any such covenants provided
pursuant to Section 301(18), 901(2) or 901(7)), 501(5) and 501(8) shall be
deemed not to be or result in an Event of Default, in each case with respect to
such Securities as provided in this Section on and after the date the conditions
set forth in Section 1304 are satisfied (hereinafter called "Covenant
Defeasance"). For this purpose, such Covenant Defeasance means that, with
respect to such Securities, the Operating Partnership may omit to comply with
and shall have no liability in respect of any term, condition or limitation set
forth in any such specified Section (to the extent so specified in the case of
Section 501(4)), whether directly or indirectly by reason of any reference
elsewhere herein to any such Section or by reason of any reference in any such
Section to any other provision herein or in any other document, but the
remainder of this Indenture and such Securities shall be unaffected thereby.
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Section 1304. Conditions to Defeasance or Covenant Defeasance.
The following shall be the conditions to the application of Section 1302 or
Section 1303 to any applicable series of Securities or any Securities of such
series, as the case may be:
(1) The Operating Partnership shall irrevocably have deposited or
caused to be deposited with the Trustee (or another trustee which satisfies
the requirements contemplated by Section 609 and agrees to comply with the
provisions of this Article applicable to it) as trust funds in trust for
the purpose of making the following payments, specifically pledged as
security for, and dedicated solely to, the benefits of the Holders of such
Securities, (A) money in an amount, or (B) U.S. Government Obligations
which through the scheduled payment of principal and interest in respect
thereof in accordance with their terms will provide, not later than one day
before the due date of any payment, money in an amount, or (C) a
combination thereof, in each case sufficient, in the opinion of a
nationally recognized firm of independent public accountants expressed in a
written certification thereof delivered to the Trustee, to pay and
discharge, and which shall be applied by the Trustee (or any such other
qualifying trustee) to pay and discharge, the principal of and any premium
and interest on such Securities on the respective Stated Maturities, in
accordance with the terms of this Indenture and such Securities. As used
herein, "U.S. Government Obligation" means (x) any security which is (i) a
direct obligation of the United States of America for the payment of which
the full faith and credit of the United States of America is pledged or
(ii) an obligation of a Person controlled or supervised by and acting as an
agency or instrumentality of the United States of America the payment of
which is unconditionally guaranteed as a full faith and credit obligation
by the United States of America, which, in either case (i) or (ii), is not
callable or redeemable at the option of the issuer thereof, and (y) any
depositary receipt issued by a bank (as defined in Section 3(a)(2) of the
Securities Act) as custodian with respect to any U.S. Government Obligation
which is specified in Clause (x) above and held by such bank for the
account of the holder of such depositary receipt, or with respect to any
specific payment of principal of or interest on any U.S. Government
Obligation which is so specified and held, 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 depositary receipt from any
amount received by the custodian in respect of the U.S. Government
Obligation or the specific payment of principal or interest evidenced by
such depositary receipt.
(2) In the event of an election to have Section 1302 apply to any
applicable series of Securities or any Securities of such series, as the
case may be, the Operating Partnership shall have delivered to the Trustee
an Opinion of
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Counsel stating that (A) the Operating Partnership has received from, or
there has been published by, the Internal Revenue Service a ruling or (B)
since the date of this instrument, there has been a change in the
applicable Federal income tax law, in either case (A) or (B) to the effect
that, and based thereon such opinion shall confirm that, the Holders of
such Securities will not recognize gain or loss for Federal income tax
purposes as a result of the deposit, Defeasance and discharge to be
effected with respect to such Securities and will be subject to Federal
income tax on the same amount, in the same manner and at the same times as
would be the case if such deposit, Defeasance and discharge were not to
occur.
(3) In the event of an election to have Section 1303 apply to any
applicable series of Securities or any Securities of such series, as the
case may be, the Operating Partnership shall have delivered to the Trustee
an Opinion of Counsel to the effect that the Holders of such Securities
will not recognize gain or loss for Federal income tax purposes as a result
of the deposit and Covenant Defeasance to be effected with respect to such
Securities and will be subject to Federal income tax on the same amount, in
the same manner and at the same times as would be the case if such deposit
and Covenant Defeasance were not to occur.
(4) The Operating Partnership shall have delivered to the Trustee an
Officer's Certificate to the effect that neither such Securities nor any
other Securities of the same series, if then listed on any securities
exchange, will be delisted as a result of such deposit.
(5) No event which is, or after notice or lapse of time or both would
become, an Event of Default with respect to such Securities or any other
Securities shall have occurred and be continuing at the time of such
deposit or, with regard to any such event specified in Sections 501(6) and
(7), at any time on or prior to the 90th day after the date of such deposit
(it being understood that this condition shall not be deemed satisfied
until after such 90th day).
(6) Such Defeasance or Covenant Defeasance shall not cause the Trustee
to have a conflicting interest within the meaning of the Trust Indenture
Act (assuming all Securities are in default within the meaning of such
Act).
(7) Such Defeasance or Covenant Defeasance shall not result in a
breach or violation of, or constitute a default under, any other agreement
or instrument to which the Operating Partnership is a party or by which it
is bound.
(8) Such Defeasance or Covenant Defeasance shall not result in the
trust arising from such deposit constituting an investment company within
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the meaning of the Investment Company Act unless such trust shall be
registered under such Act or exempt from registration thereunder.
(9) The Operating Partnership shall have delivered to the Trustee an
Officer's Certificate and an Opinion of Counsel, each stating that all
conditions precedent with respect to such Defeasance or Covenant Defeasance
have been complied with.
Section 1305. Deposited Money and U.S. Government Obligations to Be Held in
Trust; Miscellaneous Provisions.
Subject to the provisions of the last paragraph of Section 1003, all money
and U.S. Government Obligations (including the proceeds thereof) deposited with
the Trustee or other qualifying trustee (solely for purposes of this Section and
Section 1306, the Trustee and any such other trustee are referred to
collectively as the "Trustee') pursuant to Section 1304 in respect of any
Securities shall be held in trust and applied by the Trustee, in accordance with
the provisions of such Securities and this Indenture, to the payment, either
directly or through any such Paying Agent (including the Operating Partnership
acting as its own Paying Agent) as the Trustee may determine, to the Holders of
such Securities, of all sums due and to become due thereon in respect of
principal and any premium and interest, but money so held in trust need not be
segregated from other funds except to the extent required by law.
The Operating Partnership shall pay and indemnify the Trustee against any
tax, fee or other charge imposed on or assessed against the U.S. Government
Obligations deposited pursuant to Section 1304 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 Outstanding Securities.
Anything in this Article to the contrary notwithstanding, the Trustee shall
deliver or pay to the Operating Partnership from time to time upon Operating
Partnership Request any money or U.S. Government Obligations held by it as
provided in Section 1304 with respect to any Securities 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 the
Defeasance or Covenant Defeasance, as the case may be, with respect to such
Securities.
Section 1306. Reinstatement.
If the Trustee or the Paying Agent is unable to apply any money in
accordance with this Article with respect to any Securities by reason of any
order or judgment of any court
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or governmental authority enjoining, restraining or otherwise prohibiting such
application, then the obligations under this Indenture and such Securities from
which the Operating Partnership has been discharged or released pursuant to
Section 1302 or 1303 shall be revived and reinstated as though no deposit had
occurred pursuant to this Article with respect to such Securities, until such
time as the Trustee or Paying Agent is permitted to apply all money held in
trust pursuant to Section 1305 with respect to such Securities in accordance
with this Article; provided, however, that if the Operating Partnership makes
any payment of principal of or any premium or interest on any such Security
following such reinstatement of its obligations, the Operating Partnership shall
be subrogated to the rights (if any) of the Holders of such Securities to
receive such payment from the money so held in trust.
ARTICLE FOURTEEN
SUBORDINATION OF SECURITIES
Section 1401. Securities Subordinate to Senior Debt.
The Operating Partnership covenants and agrees, and each Holder of a
Security, by his acceptance thereof, likewise covenants and agrees, that, to the
extent and in the manner hereinafter set forth in this Article, the indebtedness
represented by the Securities and the payment of the principal of (and premium,
if any) and interest on each and all of the Securities are hereby expressly made
subordinate and subject in right of payment to the prior payment in full of all
Senior Debt.
Section 1402. Payment Over of Proceeds Upon Dissolution, Etc.
In the event of (a) any insolvency or bankruptcy case or proceeding, or any
receivership, liquidation, reorganization or other similar case or proceeding in
connection therewith, relative to the Operating Partnership or to its creditors,
as such, or to its assets, or (b) any liquidation, dissolution or other winding
up of the Operating Partnership, whether voluntary or involuntary and whether or
not involving insolvency or bankruptcy, or (c) any assignment for the benefit of
creditors or any other marshalling of assets and liabilities of the Operating
Partnership, then and in any such event the holders of Senior Debt shall be
entitled to receive payment in full of all amounts due or to become due on or in
respect of all Senior Debt, or provision shall be made for such payment in cash,
before the Holders of the Securities are entitled to receive any payment on
account of principal of (or premium, if any) or interest on the Securities, and
to that end the holders of Senior Debt shall be entitled to receive, for
application to the payment thereof, any payment or distribution of any kind or
character, whether in cash, property or securities, including any such payment
or distribution which may be payable or deliverable by reason of the
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payment of any other indebtedness of the Operating Partnership being
subordinated to the payment of the Securities, which may be payable or
deliverable in respect of the Securities in any such case, proceeding,
dissolution, liquidation or other winding up event.
In the event that, notwithstanding the foregoing provisions of this
Section, the Trustee or the Holder of any Security shall have received any
payment or distribution of assets of the Operating Partnership of any kind or
character, whether in cash, property or securities, including any such payment
or distribution which may be payable or deliverable by reason of the payment of
any other indebtedness of the Operating Partnership being subordinated to the
payment of the Securities, before all Senior Debt is paid in full or payment
thereof provided for, and if such fact shall, at or prior to the time of such
payment or distribution, have been made known to the Trustee or, as the case may
be, such Holder, then and in such event such payment or distribution shall be
paid over or delivered forthwith to the trustee in bankruptcy, receiver,
liquidating trustee, custodian, assignee, agent or other Person making payment
or distribution of assets of the Operating Partnership for application to the
payment of all Senior Debt remaining unpaid, to the extent necessary to pay all
Senior Debt in full, after giving effect to any concurrent payment or
distribution to or for the holders of Senior Debt. Any taxes that have been
withheld or deducted from any payment or distribution in respect of the
Securities, or any taxes that ought to have been withheld or deducted from any
such payment or distribution that have been remitted to the relevant taxing
authority, shall not be considered to an amount that the Trustee or the Holder
of any Security receives for purposes of this Section.
For purposes of this Article only, the words "cash, property or securities"
shall not be deemed to include shares of stock of the Operating Partnership as
reorganized or readjusted, or securities of the Operating Partnership or any
other corporation provided for by a plan of reorganization or readjustment which
are subordinated in right of payment to all Senior Debt which may at the time be
outstanding to substantially the same extent as, or to a greater extent than,
the Securities are so subordinated as provided in this Article. The
consolidation of the Operating Partnership with, or the merger of the Operating
Partnership into, another Person or the liquidation or dissolution of the
Operating Partnership following the conveyance or transfer of its properties and
assets substantially as an entirety to another Person upon the terms and
conditions set forth in Article Eight shall not be deemed a dissolution, winding
up, liquidation, reorganization, assignment for the benefit of creditors or
marshalling of assets and liabilities of the Operating Partnership for the
purposes of this Section if the Person formed by such consolidation or into
which the Operating Partnership is merged or the Person which acquires by
conveyance or transfer such properties and assets substantially as an entirety,
as the case may be, shall, as a part of such consolidation, merger, conveyance
or transfer, comply with the conditions set forth in Article Eight.
-71-
<PAGE> 81
Section 1403. Prior Payment to Senior Debt Upon Acceleration of Securities.
In the event that any Securities are declared due and payable before their
Stated Maturity, then and in such event the holders of Senior Debt shall be
entitled to receive payment in full of all amounts due or to become due on or in
respect of all Senior Debt or provision shall be made for such payment in cash,
before the Holders of the Securities are entitled to receive any payment
(including any payment which may be payable by reason of the payment of any
other indebtedness of the Operating Partnership being subordinated to the
payment of the Securities) by the Operating Partnership on account of the
principal of (or premium, if any) or interest on the Securities or on account of
the purchase or other acquisition of Securities; provided, however, that nothing
in this Section shall prevent the satisfaction of any sinking fund payment in
accordance with Article Twelve by delivering and crediting pursuant to Section
1202 Securities which have been acquired (upon redemption or otherwise) prior to
such declaration of acceleration.
In the event that, notwithstanding the foregoing, the Operating Partnership
shall make any payment to the Trustee or the Holder of any Security prohibited
by the foregoing provisions of this Section, and if such fact shall, at or prior
to the time of such payment, have been made known to the Trustee or, as the case
may be, such Holder, then and in such event such payment shall be paid over and
delivered forthwith to the Operating Partnership.
The provisions of this Section shall not apply to any payment with respect
to which Section 1402 would be applicable.
Section 1404. No Payment When Senior Debt in Default.
(a) In the event and during the continuation of any default in the payment
of principal of (or premium, if any) or interest on any Senior Debt beyond any
applicable grace period with respect thereto, or in the event that any event of
default with respect to any Senior Debt shall have occurred and be continuing
permitting the holders of such Senior Debt (or a trustee on behalf of the
holders thereof) to declare such Senior Debt due and payable prior to the date
on which it would otherwise have become due and payable, unless and until such
event of default shall have been cured or waived or shall have ceased to exist
and such acceleration shall have been rescinded or annulled, or (b) in the event
any judicial proceeding shall be pending with respect to any such default in
payment or event of default, then no payment (including any payment which may be
payable by reason of the payment of any other indebtedness of the Operating
Partnership being subordinated to the payment of the Securities) shall be made
by the Operating Partnership on account of principal of (or premium, if any) or
interest on the Securities or on account of the purchase or other acquisition of
Securities; provided, however, that nothing in this Section shall prevent the
satisfaction of any sinking fund payment in accordance with Article Twelve by
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<PAGE> 82
delivering and crediting pursuant to Section 1202 Securities which have been
acquired (upon redemption or otherwise) prior to such default in Payment or
event of default.
In the event that, notwithstanding the foregoing, the Operating Partnership
shall make any payment to the Trustee or the Holder of any Security prohibited
by the foregoing provisions of this Section, and if such fact shall, at or prior
to the time of such payment, have been made known to the Trustee or, as the case
may be, such Holder, then and in such event such payment shall be paid over and
delivered forthwith to the Operating Partnership.
The provisions of this Section shall not apply to any payment with respect
to which Section 1402 would be applicable.
Section 1405. Payment Permitted in Certain Situations.
Nothing contained in this Article or elsewhere in this Indenture or in any
of the Securities shall prevent (a) the Operating Partnership, at any time
except during the pendency of any case, proceeding, dissolution, liquidation or
other winding up, assignment for the benefit of creditors or other marshalling
of assets and liabilities of the Operating Partnership referred to in Section
1402 or under the conditions described in Section 1403 or 1404, from making
payments at any time of principal of (and premium, if any) or interest on the
Securities, or (b) the application by the Trustee of any money deposited with it
hereunder to the payment of or on account of the principal of (and premium, if
any) or interest on the Securities or the retention of such payment by the
holders, if, at the time of such application by the Trustee, it did not have
knowledge that such payment would have been prohibited by the provisions of this
Article.
Section 1406. Subrogation to Rights of Holders of Senior Debt.
Subject to the payment in full of all Senior Debt or the provision for such
payment in cash or cash equivalents or otherwise in a manner satisfactory to the
holders of Senior Debt, the Holders of the Securities shall be subrogated to the
extent of the payments or distributions made to the holders of such Senior Debt
pursuant to the provisions of this Article (equally and ratably with the holders
of indebtedness of the Operating Partnership which by its express terms is
subordinated to indebtedness of the Operating Partnership to substantially the
same extent as the Securities are subordinated to the Senior Debt and is
entitled to like rights of subrogation) to the rights of the holders of such
Senior Debt to receive payments and distributions of cash, property and
securities applicable to the Senior Debt until the principal of (and premium, if
any) and interest on the Securities shall be paid in full. For purposes of such
subrogation, no payments or distributions to the holders of the Senior Debt of
any cash, property or securities to which the Holders of the Securities or the
Trustee would be entitled except for the provisions of this Article, and no
-73-
<PAGE> 83
payments over pursuant to the provisions of this Article to the holders of
Senior Debt by Holders of the Securities or the Trustee, shall, as among the
Operating Partnership, its creditors other than holders of Senior Debt and the
Holders of the Securities, be deemed to be a payment or distribution by the
Operating Partnership to or on account of the Senior Debt.
Section 1407. Provisions Solely to Define Relative Rights.
The provisions of this Article are and are intended solely for the purpose
of defining the relative rights of the Holders of the Securities on the one hand
and the holders of Senior Debt on the other hand. Nothing contained in this
Article or elsewhere in this Indenture or in the Securities is intended to or
shall (a) impair, as among the Operating Partnership, its creditors other than
holders of Senior Debt and the Holders of the Securities, the obligation of the
Operating Partnership, which is absolute and unconditional (and which, subject
to the rights under this Article of the holders of Senior Debt, is intended to
rank equally with all other general obligations of the Operating Partnership),
to pay to the Holders of the Securities the principal of (and premium, if any)
and interest on the Securities as and when the same shall become due and payable
in accordance with their terms; or (b) affect the relative rights against the
Operating Partnership of the Holders of the Securities and creditors of the
Operating Partnership other than the holders of Senior Debt; or (c) prevent the
Trustee or the Holder of any Security from exercising all remedies otherwise
permitted by applicable law upon default under this Indenture, subject to the
rights, if any, under this Article of the holders of Senior Debt to receive
cash, property and securities otherwise payable or deliverable to the Trustee or
such Holder.
Section 1408. Trustee to Effectuate Subordination.
Each Holder of a Security by his acceptance thereof authorizes and directs
the Trustee on his behalf to take such action as may be necessary or appropriate
to effectuate the subordination provided in this Article and appoints the
Trustee his attorney-in-fact for any and all such purposes.
Section 1409. No Waiver of Subordination Provisions.
No right of any present or future holder of any Senior Debt to enforce
subordination as herein provided shall at any time in any way be prejudiced or
impaired by any act or failure to act on the part of the Operating Partnership
or by any act or failure to act, in good faith, by any such holder, or by any
non-compliance by the Operating Partnership with the terms, provisions and
covenants of this Indenture, regardless of any knowledge thereof any such holder
may have or be otherwise charged with.
-74-
<PAGE> 84
Without in any way limiting the generality of the foregoing paragraph, the
holders of Senior Debt may, at any time and from time to time, without the
consent of or notice to the Trustee or the Holders of the Securities, without
incurring responsibility to the Holders of the Securities and without impairing
or releasing the subordination provided in this Article or the obligations
hereunder of the Holders of the Securities to the holders of Senior Debt do any
one or more of the following: (i) change the manner, place or terms of payment
or extend the time of payment of, or renew or alter, Senior Debt or otherwise
amend or supplement in any manner Senior Debt or any instrument evidencing the
same or any agreement under which Senior Debt is outstanding; (ii) sell,
exchange, release or otherwise deal with any property pledged, mortgaged or
otherwise securing Senior Debt; (iii) release any Person liable in any manner
for the collection of Senior Debt; and (iv) exercise or refrain from exercising
any rights against the Operating Partnership and any other Person.
Section 1410. Notice to Trustee.
The Operating Partnership shall give prompt written notice to the Trustee
of any fact known to the Operating Partnership which would prohibit the making
of any payment to or by the Trustee in respect of the Securities.
Notwithstanding the provisions of this Article or any other provision of this
Indenture, the Trustee shall not be charged with knowledge of the existence of
any facts which would prohibit the making of any payment to or by the Trustee in
respect of the Securities, unless and until the Trustee shall have received
written notice thereof from the Operating Partnership or a holder of Senior Debt
or from any trustee therefor; and, prior to the receipt of any such written
notice, the Trustee, subject to the provisions of Section 601, shall be entitled
in all respects to assume that no such facts exist.
Subject to the provisions of Section 601, the Trustee shall be entitled to
rely on the delivery to it of a written notice by a Person representing himself
to be a holder of Senior Debt (or a trustee therefor) to establish that such
notice has been given by a holder of Senior Debt (or a trustee therefor). In the
event that the Trustee determines in good faith that further evidence is
required with respect to the right of any Person as a holder of Senior Debt to
participate in any payment or distribution pursuant to this Article, the Trustee
may request such Person to furnish evidence to the reasonable satisfaction of
the Trustee as to the amount of Senior Debt held by such Person, the extent to
which such Person is entitled to participate in such payment or distribution and
any other facts pertinent to the rights of such Person under this Article, and
if such evidence is not furnished, the Trustee may defer any payment to such
Person pending judicial determination as to the right of such Person to receive
such payment.
-75-
<PAGE> 85
Section 1411. Reliance on Judicial Order or Certificate of Liquidating Agent.
Upon any payment or distribution of assets of the Operating Partnership
referred to in this Article, the Trustee, subject to the provisions of Section
601, and the Holders of the Securities shall be entitled to rely upon any order
or decree entered by any court of competent jurisdiction in which such
insolvency, bankruptcy, receivership, liquidation, reorganization, dissolution,
winding up or similar case or proceeding is pending, or a certificate of the
trustee in bankruptcy, receiver, liquidating trustee, custodian, assignee for
the benefit of creditors, agent or other Person making such payment or
distribution, delivered to the Trustee or to the Holders of Securities, for the
purpose of ascertaining the Persons entitled to participate in such payment or
distribution, the holders of Senior Debt and other indebtedness of the Operating
Partnership, the amount thereof or payable thereon, the amount or amounts paid
or distributed thereon and all other facts pertinent thereto or to this Article.
Section 1412. Trustee Not Fiduciary for Holders of Senior Debt.
The Trustee shall not be deemed to owe any fiduciary duty to the holders of
Senior Debt and shall not be liable to any such holders or creditors if it shall
in good faith pay over or distribute to Holders of Securities or to the
Operating Partnership or to any other Person cash, property or securities to
which any holders of Senior Debt shall be entitled by virtue of this Article or
otherwise.
Section 1413. Rights of Trustee as Holder of Senior Debt; Preservation of
Trustee's Rights.
The Trustee in its individual capacity shall be entitled to all the rights
set forth in this Article with respect to any Senior Debt which may at any time
be held by it, to the same extent as any other holder of Senior Debt and nothing
in this Indenture shall deprive the Trustee of any of its rights as such holder.
Nothing in this Article shall apply to claims of, or payments to, the
Trustee under or pursuant to Section 607.
Section 1414. Article Applicable to Paying Agents.
In case at any time any Paying Agent other than the Trustee shall have been
appointed by the Operating Partnership and be then acting hereunder, the term
"Trustee"as used in this Article shall in such case (unless the context
otherwise requires) be construed as extending to and including such Paying Agent
within its meaning as fully for all intents and purposes as if such Paying Agent
were named in this Article in addition to or in place
-76-
<PAGE> 86
of the Trustee; provided, however, that Section 1413 shall not apply to the
Operating Partnership or any Affiliate of the Operating Partnership if it or
such Affiliate acts as Paying Agent.
-77-
<PAGE> 87
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.
VORNADO REALTY L.P.
BY..............................
Attest:
..............................
THE BANK OF NEW YORK
Trustee:
BY..............................
Attest:
..............................
-78-
<PAGE> 88
STATE OF NEW YORK )
) ss.:
COUNTY OF NEW YORK )
On the .... day of .............., ......, before me personally came
....................................., to me known, who, being by me duly sworn,
did depose and say that he is .................... of
...................................., one of the corporations described in and
which executed the foregoing instrument; that he knows the seal of said
corporation; that the seal affixed to said instrument is such corporate seal;
that it was so affixed by authority of the Board of Trustees of said
corporation; and that he signed his name thereto by like authority.
..............................
STATE OF NEW YORK )
) ss.:
COUNTY OF NEW YORK )
On the .... day of ............, ......., before me personally came
................................, to me known, who, being by me duly sworn,
did depose and say that he is .................... of
.........................................., one of the corporations
described in and which executed the foregoing instrument; that he knows the
seal of said corporation; that the seal affixed to said instrument is such
corporate seal; that it was so affixed by authority of the Board of
Trustees of said corporation; and that he signed his name thereto by like
authority.
..............................
<PAGE> 1
[LETTERHEAD OF SULLIVAN & CROMWELL]
August 7, 1997
Vornado Realty Trust,
Park 80 West, Plaza II,
Saddle Brook, New Jersey 07663.
Vornado Realty L.P.,
Park 80 West, Plaza II,
Saddle Brook, N.J. 07663.
Dear Sirs:
We have acted as your counsel in connection with the registration under the
Securities Act of 1933, as amended (the "Securities Act"), of (i) a maximum
aggregate amount of $750,000,000 in common shares of beneficial interest, par
value $.04 per share, of Vornado Realty Trust ("Vornado"), preferred shares of
beneficial interest of Vornado without par value ("Preferred Shares") and
depositary shares representing Preferred Shares and (ii) a maximum aggregate
amount of $1,000,000,000 of debt securities of Vornado Realty L.P. (the
"Operating Partnership") and warrants to purchase such debt securities.
In rendering this opinion, we have reviewed such documents as we have
considered necessary or appropriate. In addition, in rendering this opinion, we
have relied upon (i) the statements and representations contained in (x) the
certificates provided to us by Vornado dated August 7, 1997 (the "Vornado
Certificates"), and (y) the certificate provided to us from Alexander's, Inc.
("Alexander's") dated August 7, 1997 (together with the Vornado Certificates,
the "Certificates"), and (ii) the opinion of Shearman & Sterling, dated August
7, 1997, concerning the qualification of Alexander's as a REIT, a copy of which
is attached as Exhibit A (the "Shearman & Sterling Opinion"). We understand
that, in providing the Vornado Certificates, Vornado and the Operating
Partnership are relying upon certificates, dated August 7, 1997, provided to it
by David R. Greenbaum.
In rendering this opinion we have also assumed, with your approval, that
(I) the statements and representations made in the Certificates are true and
correct, (II) the Certificates have been executed by appropriate and authorized
officers of Vornado and Alexander's, and (III) the assumptions and conditions
underlying the Shearman & Sterling Opinion are true and correct.
Based on the foregoing and reliance thereon and subject thereto and on an
analysis of the Code, Treasury Regulations thereunder, judicial authority and
current administrative rulings and such other laws and facts as we have deemed
relevant and necessary, we hereby confirm (i) our opinion that, commencing with
its taxable year ending December 31, 1993, Vornado has been organized in
conformity with the requirements for qualification as a REIT under the Code, and
its proposed method of operation will enable it to satisfy the requirements for
qualification and taxation as a REIT and (ii) our opinion set forth under the
caption "Federal Income Tax Considerations" in the Preliminary Prospectus of
Vornado and the Operating Partnership included in the Registration Statement
(No. 33-62395) on Form S-3 under the Securities Act filed by Vornado and the
Operating Partnership with the Securities and Exchange Commission of the United
States (the "Prospectus").
<PAGE> 2
Vornado's qualification as a REIT will depend upon the continuing
satisfaction by Vornado and its subsidiaries and, given Vornado's current
ownership interest in Alexander's and Two Penn Plaza REIT, Inc., by Alexander's
and Two Penn Plaza REIT, Inc. and their subsidiaries (collectively with Vornado,
the "Company") of requirements of the Code relating to qualification for REIT
status; which requirements include those that are dependent upon actual
operating results, distribution levels, diversity of stock ownership, asset
composition, source of income and recordkeeping. We do not undertake to monitor
whether the Company actually has satisfied or will satisfy the various
qualification tests, and we express no opinion concerning whether the Company
actually has satisfied or will satisfy these various qualifications tests.
We hereby consent to the filing with the Securities and Exchange Commission
of this letter as an exhibit to the Registration Statement of which the
Prospectus is a part and the reference to us in the Prospectus under the caption
"Federal Income Tax Considerations". In giving such consent, we do not thereby
admit that we are within the category of persons whose consent is required under
Section 7 of the Securities Act.
Very truly yours,
/s/ Sullivan & Cromwell
<PAGE> 1
[LETTERHEAD OF SHEARMAN & STERLING]
August 7, 1997
Vornado Realty Trust
Park 80 West, Plaza II
Saddle Brook, NJ 07663
Sullivan & Cromwell
125 Broad Street
New York, NY 10004
ALEXANDER'S REIT ELECTION
Dear Sirs:
You have requested our opinion in connection with the election by
Alexander's, Inc. ("Alexander's") to be treated for Federal income tax purposes
as a real estate investment trust (a "REIT"), within the meaning of section
856(a) of the Internal Revenue Code of 1986, as amended (the "Code"). We
understand that Alexander's has elected to be treated as a REIT initially for
its taxable year ended December 31, 1995, and intends to continue to be so
treated for subsequent taxable years.
In rendering this opinion, we have relied upon statements and information
contained in Alexander's letter to us, dated the date hereof and delivered in
connection with this opinion, and in the Exhibits to such letter (such letter
and Exhibits hereinafter referred to as the "Representation Letter"). We have
assumed that the statements made in the Representation Letter are true and
correct and that the Representation Letter has been executed by appropriate and
authorized officers of Alexander's.
In rendering this opinion, with your permission we have also made the
following assumptions:
(a) Alexander's has made a valid election to be taxed as a REIT for
its taxable year ended December 31, 1995, which election has not been, and
will not be, revoked or terminated.
(b) Since January 1, 1995, the outstanding shares of Alexander's have
been held by at least 100 or more persons, and such shares will continue to
be held by 100 or more persons.
(c) Not more than 50 percent in value of the outstanding shares of
Alexander's have been or will be owned directly or indirectly, actually or
constructively (within the meaning of section 542(a)(2) of the Code, as
modified by section 856(h) of the Code), by five or fewer individuals (or
entities treated as individuals for purposes of section 856(h) of the
Code), during the second half of every taxable year following the taxable
year ended December 31, 1995.
(d) Alexander's will not receive or accrue (and since January 1, 1995,
has not received or accrued) any amount from (i) any corporation in which
it owns (or since July 1, 1994, has owned) 10 percent or more of the total
combined voting power of all shares of stock entitled to vote or 10 percent
or more of the total number of shares of all classes of stock of such
corporation, or (ii) any unincorporated entity in which it owns (or since
July 1, 1994, has owned) an interest of 10 percent or more in the assets or
net profits of such person. For purposes of this assumption, ownership is
determined in accordance with section 856(d)(5) of the Code.
<PAGE> 2
(e) Alexander's has requested and maintained, and will continue to
request and maintain, records concerning ownership of its outstanding
shares in accordance with section 857(f)(1) of the Code and Treasury
Regulations promulgated thereunder and predecessor requirements.
(f) Alexander's has made and will make distributions to its
stockholders sufficient to meet the 95 percent distribution requirements of
section 857(a)(1) of the Code for the taxable year for which the REIT
election was made and every subsequent taxable year.
(g) For its taxable year ended December 31, 1995, Alexander's had a
deficit in earnings and profits (as defined in the Code) in excess of its
accumulated earnings and profits (if any) as of the close of its taxable
year ended December 31, 1994.
Based on the foregoing and in reliance thereon and subject thereto and on
an analysis of the Code, Treasury Regulations thereunder, judicial authority and
current administrative rulings and such other laws and facts as we have deemed
relevant and necessary, we are of the opinion that commencing with its taxable
year ended December 31, 1995, Alexander's has been organized and operated in
conformity with the requirements for qualification and taxation as a REIT under
the Code, and its proposed method of operation will enable it to continue to
meet the requirements for qualification and taxation as a REIT under the Code.
Qualification of Alexander's as a REIT will depend upon the satisfaction by
Alexander's and its subsidiaries (the "Company"), through actual operating
results, distribution levels, diversity of stock ownership and otherwise, of the
applicable asset composition, source of income, shareholder diversification,
distribution, recordkeeping and other requirements of the Code necessary for a
corporation to qualify as a REIT. No assurance can be given that the actual
results of the Company's operations for any one taxable year will satisfy all
such requirements. We do not undertake to monitor whether the Company actually
has satisfied or actually will satisfy the various qualification tests, and we
express no opinion whether the Company actually has satisfied or actually will
satisfy these various qualification tests.
This opinion is based on current Federal income tax law, and we do not
undertake to advise you as to future changes in Federal income tax law that may
affect this opinion unless we are specifically engaged to do so. This opinion
relates solely to Federal income tax law, and we do not undertake to render any
opinion as to the taxation of the Company under any state or local corporate
franchise or income tax law. Furthermore, this opinion is rendered solely for
your benefit and is not to be relied upon by any other person without our prior
written consent.
We hereby consent to (i) the use of our name and the making of statements
with respect to us as set forth under the heading "Federal Income Tax
Considerations" in the Prospectus of Vornado Realty Trust contained in
Registration Statement No. 33-62395, (ii) the incorporation by reference of this
opinion into Registration Statement No. 33-62395, and (iii) the inclusion of
this opinion as an exhibit in Registration Statement No. 33-62395. In giving
such consent, we do not thereby admit that we are within the category of persons
whose consent is required under Section 7 of the Securities Act of 1933, as
amended.
Very truly yours,
/s/ Shearman & Sterling
2
<PAGE> 1
EXHIBIT 12
VORNADO REALTY TRUST
CONSOLIDATED RATIOS OF EARNINGS TO FIXED CHARGES AND
COMBINED FIXED CHARGES AND PREFERRED SHARE DIVIDEND REQUIREMENTS
(amounts in thousands except ratios)
<TABLE>
<CAPTION>
SIX
MONTHS
ENDED
JUNE
30, DECEMBER 31, DECEMBER 31, DECEMBER 31, DECEMBER 31, DECEMBER 31,
1997 1996 1995 1994 1993 1992
------- ------------ ------------ ------------ ------------ ------------
<S> <C> <C> <C> <C> <C> <C>
Income from continuing
operations before income
taxes.................... $18,623 $ 61,364 $ 53,008 $ 41,240 $ 25,386 $ 2,263
Fixed charges.............. 22,526 17,214 17,333 14,647 31,610 34,392
------- ------- ------- ------- ------- -------
Income from continuing
operations before income
taxes and fixed
charges.................. $41,149 $ 78,578 $ 70,341 $ 55,887 $ 56,996 $ 36,655
======= ======= ======= ======= ======= =======
Fixed charges:
Interest and debt
expense................ $17,350 $ 16,726 $ 16,426 $ 14,209 $ 31,155 $ 33,910
Preferred stock
dividends.............. 4,855 -- -- -- -- --
1/3 of rent
expense -- interest
factor................. 321 488 465 438 455 482
------- ------- ------- ------- ------- -------
22,526 17,214 16,891 14,647 31,610 34,392
Capitalized interest..... -- -- 442 1,582 282 --
------- ------- ------- ------- ------- -------
22,526 $ 17,214 $ 17,333 $ 16,229 $ 31,892 $ 34,392
======= ======= ======= ======= ======= =======
Ratio of earnings to fixed
charges.................. 1.83 4.56 4.06 3.44 1.79 1.07
</TABLE>
Note: For purposes of this calculation, earnings before fixed charges consist of
earnings before income taxes plus fixed charges. Fixed charges consist of
interest expense on all indebtedness (including amortization of deferred
debt issuance costs) and the portion of operating lease rental expense
that is representative of the interest factor (deemed to be one third of
operating lease rentals).
<TABLE>
<S> <C> <C> <C> <C> <C> <C> <C>
Rent Expense..... $ 963 $ 1,465 $ 1,395 $ 1,313 $ 1,366 $ 1,446
</TABLE>
<PAGE> 1
EXHIBIT 23.1
INDEPENDENT AUDITORS' CONSENT
We consent to the incorporation by reference in this Amendment No. 2 (File
No. 333-29013) to the Registration Statement of Vornado Realty Trust and Vornado
Realty L.P. and the Post-Effective Amendment to the Registration Statement No.
33-62395 of Vornado Realty Trust, both on Form S-3, of our report dated March
12, 1997 on the consolidated financial statements of Vornado Realty Trust,
appearing in the Annual Report on Form 10-K of Vornado Realty Trust for the year
ended December 31, 1996 and incorporated by reference in the Registration
Statement on Form 10 (File No. 000-22685) of Vornado Realty L.P. and of our
report dated August 7, 1997 on the balance sheet of Vornado Realty L.P. as at
April 14, 1997, appearing in the Registration Statement on Form 10 (File No.
000-22685) of Vornado Realty L.P. and to the reference to us under the heading
"Experts" in the Prospectus which is part of this Registration Statement.
DELOITTE & TOUCHE LLP
Parsippany, New Jersey
August 7, 1997
<PAGE> 1
EXHIBIT 23.2
CONSENT OF INDEPENDENT AUDITORS
To the Members of
866 U.N. Plaza Associates LLC
We consent to the incorporation by reference in this Amendment No. 2 to the
Registration Statement on Form S-3 (File No. 333-29013) of Vornado Realty Trust
and Vornado Realty L.P. of our report dated January 15, 1997, except for Note 2,
as to which the date is March 12, 1997, on the balance sheet of 866 U.N. Plaza
Associates LLC (formerly 866 U.N. Plaza Associates), as of December 31, 1996 and
1995, and the related statements of operations, changes in partners' capital and
cash flows for each of the years in the three-year period ended December 31,
1996, which report appears in the Form 8-K of Vornado Realty Trust, dated March
12, 1997, as amended by the Form 8-K/A, dated March 12, 1997, and incorporated
by reference in the Registration Statement on Form 10 (File No. 000-22685) of
Vornado Realty L.P. and to the reference to our firm under the heading "Experts"
in the Prospectus which is part of this Registration Statement.
Friedman Alpren & Green LLP
New York, New York
August 7, 1997
<PAGE> 2
EXHIBIT 23.2
CONSENT OF INDEPENDENT AUDITORS
To the Partners of
Two Penn Plaza Associates L.P.
We consent to the incorporation by reference in this Amendment No. 2 to the
Registration Statement on Form S-3 (File No. 333-29013) of Vornado Realty Trust
and Vornado Realty L.P. of our report dated January 15, 1997, except for Note 2,
as to which the date is March 12, 1997, on the balance sheet of Two Penn Plaza
Associates L.P., as of December 31, 1996 and 1995, and the related statements of
operations, changes in partners' capital and cash flows for each of the years in
the three-year period ended December 31, 1996, which report appears in the Form
8-K of Vornado Realty Trust, dated March 12, 1997, as amended by the Form 8-K/A
of Vornado Realty Trust, dated March 12, 1997, and incorporated by reference in
the Registration Statement on Form 10 (File No. 000-22685) of Vornado Realty
L.P. and to the reference to our firm under the heading "Experts" in the
Prospectus which is part of this Registration Statement.
Friedman Alpren & Green LLP
New York, New York
August 7, 1997
<PAGE> 3
EXHIBIT 23.2
CONSENT OF INDEPENDENT AUDITORS
To the Partners of
B&B Park Avenue L.P.
We consent to the incorporation by reference in this Amendment No. 2 to the
Registration Statement on Form S-3 (File No. 333-29013) of Vornado Realty Trust
and Vornado Realty L.P. of our report dated January 15, 1997, except for Note 2,
as to which the date is March 12, 1997, on the balance sheet of B&B Park Avenue
L.P., as of December 31, 1996 and 1995, and the related statements of
operations, changes in partners' capital and cash flows for each of the years in
the three-year period ended December 31, 1996, which report appears in the Form
8-K of Vornado Realty Trust, dated March 12, 1997, as amended by the Form 8-K/A
of Vornado Realty Trust, dated March 12, 1997, and incorporated by reference in
the Registration Statement on Form 10 (File No. 000-22685) of Vornado Realty
L.P. and to the reference to our firm under the heading "Experts" in the
Prospectus which is part of this Registration Statement.
Friedman Alpren & Green LLP
New York, New York
August 7, 1997
<PAGE> 4
EXHIBIT 23.2
CONSENT OF INDEPENDENT AUDITORS
To the Partners of
M Eleven Associates, M 393 Associates and Eleven Penn Plaza Company
We consent to the incorporation by reference in this Amendment No. 2 to the
Registration Statement on Form S-3 (File No. 333-29013) of Vornado Realty Trust
and Vornado Realty L.P. of our report dated January 14, 1997, except for Note 2,
as to which the date is March 12, 1997, on the balance sheet of M Eleven
Associates, M 393 Associates and Eleven Penn Plaza Company, as of December 31,
1996 and 1995, and the related statements of operations, changes in partners'
capital and cash flows for each of the years in the three-year period ended
December 31, 1996, which report appears in the Form 8-K of Vornado Realty Trust,
dated March 12, 1997, as amended by the Form 8-K/A of Vornado Realty Trust,
dated March 12, 1997, and incorporated by reference in the Registration
Statement on Form 10 (File No. 000-22685) of Vornado Realty L.P. and to the
reference to our firm under the heading "Experts" in the Prospectus which is
part of this Registration Statement.
Friedman Alpren & Green LLP
New York, New York
August 7, 1997
<PAGE> 5
EXHIBIT 23.2
CONSENT OF INDEPENDENT AUDITORS
To the Partners, Members and Stockholders of the Mendik Predecessors
We consent to the incorporation by reference in this Amendment No. 2 to the
Registration Statement on Form S-3 (File No. 333-29013) of Vornado Realty Trust
and Vornado Realty L.P. of our report dated January 16, 1997, except for Note 2,
as to which the date is March 12, 1997, on the combined balance sheet of the
Mendik Predecessors, as of December 31, 1996, and the related statements of
income, owners' equity and cash flows for the year ended December 31, 1996,
which report appears in the Registration Statement on Form 10 (File No.
000-22685) of Vornado Realty L.P. and to the reference to our firm under the
heading "Experts" in the Prospectus which is part of this Registration
Statement.
Friedman Alpren & Green LLP
New York, New York
August 7, 1997
<PAGE> 6
EXHIBIT 23.2
CONSENT OF INDEPENDENT AUDITORS
To the Partners of
1740 Broadway Associates, L.P.
We consent to the incorporation by reference in this Amendment No. 2 to the
Registration Statement on Form S-3 (File No. 333-29013) of Vornado Realty Trust
and Vornado Realty L.P. of our report dated January 16, 1997, except for Note 2,
as to which the date is March 12, 1997, on the balance sheet of 1740 Broadway
Associates, L.P., as of December 31, 1996 and 1995, and the related statements
of operations, changes in partners' capital and cash flows for each of the years
in the three-year period ended December 31, 1996, which report appears in the
Form 8-K of Vornado Realty Trust, dated March 12, 1997, as amended by the Form
8-K/A of Vornado Realty Trust, dated March 12, 1997, and incorporated by
reference in the Registration Statement on Form 10 (File No. 000-22685) of
Vornado Realty L.P. and to the reference to our firm under the heading "Experts"
in the Prospectus which is part of this Registration Statement.
Friedman Alpern & Green LLP
New York, New York
August 7, 1997
<PAGE> 1
EXHIBIT 23.3
CONSENT OF INDEPENDENT AUDITORS
The Partners
Two Park Company:
We consent to incorporation by reference in this Amendment No. 2 (File No.
333-29013) to the Registration Statement of Vornado Realty Trust and Vornado
Realty L.P. and the Post-Effective Amendment to the Registration Statement No.
33-62395 of Vornado Realty Trust, both on Form S-3, of our report dated March
14, 1997, with respect to the balance sheets of Two Park Company, a New York
general partnership, as of December 31, 1996 and 1995, and the related
statements of operations, changes in partners' capital and cash flows for each
of the years in the three-year period ended December 31, 1996, which report
appears in the Form 8-K of Vornado Realty Trust dated March 12, 1997 as amended
by Form 8-K/A dated March 12, 1997, and incorporated by reference in the
Registration Statement on Form 10 (File No. 000-22685) of Vornado Realty L.P.
and to the reference to our firm under the heading "Experts" in the prospectus.
KPMG Peat Marwick LLP
Boston, Massachusetts
August 7, 1997
