<PAGE>
AS FILED WITH THE SECURITIES AND EXCHANGE COMMISSION ON APRIL 18, 1995
REGISTRATION NO. 33-
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SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
--------------------------
FORM S-3
REGISTRATION STATEMENT UNDER THE SECURITIES ACT OF 1933
--------------------------
SHURGARD STORAGE CENTERS, INC.
(Exact name of registrant as specified in its charter)
<TABLE>
<S> <C>
DELAWARE 91-1080141
(State or other jurisdiction of (I.R.S. Employer
incorporation or organization) Identification Number)
</TABLE>
1201 THIRD AVENUE, SUITE 2200
SEATTLE, WASHINGTON 98101
(206) 624-8100
(Address, including zip code, and telephone number, including
area code, of registrant's principal executive offices)
CHARLES K. BARBO
1201 THIRD AVENUE, SUITE 2200
SEATTLE, WASHINGTON 98101
(206) 624-8100
(Name, address, including zip code, and telephone number, including area code,
of agent for service of process)
--------------------------
COPIES TO:
<TABLE>
<S> <C>
MICHAEL E. STANSBURY WILLIAM J. CERNIUS
L. MICHELLE WILSON DANIEL L. PELEKOUDAS
PERKINS COIE LATHAM & WATKINS
1201 THIRD AVENUE, 40TH FLOOR 650 TOWN CENTER DRIVE, 20TH FLOOR
SEATTLE, WASHINGTON 98101-3099 COSTA MESA, CALIFORNIA 92626-1925
(206) 583-8888 (714) 540-1235
</TABLE>
--------------------------
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/
--------------------------
CALCULATION OF REGISTRATION FEE
<TABLE>
<CAPTION>
PROPOSED MAXIMUM PROPOSED MAXIMUM
TITLE OF EACH CLASS OF AMOUNT TO BE OFFERING PRICE PER AGGREGATE OFFERING
SECURITIES TO BE REGISTERED (1) REGISTERED (2) UNIT PRICE (2)(3)
<S> <C> <C> <C>
Debt Securities..........................................
Preferred Stock, par value $.001 per share(4)............
Class A Common Stock, par value $.001 per share (5)......
Total.................................................. $200,000,000 (6) $200,000,000
<CAPTION>
TITLE OF EACH CLASS OF AMOUNT OF
SECURITIES TO BE REGISTERED (1) REGISTRATION FEE
<S> <C>
Debt Securities..........................................
Preferred Stock, par value $.001 per share(4)............
Class A Common Stock, par value $.001 per share (5)......
Total.................................................. $68,966(7)
<FN>
(1) This Registration Statement also covers contracts that may be issued by the
Registrant under which the counterparty may be required to purchase Debt
Securities, Preferred Stock or Class A Common Stock. Such contracts would
be issued with the Debt Securities, Preferred Stock or Class A Common Stock
covered hereby. In addition, Securities registered hereunder may be sold
separately, together or as units with other Securities registered
hereunder.
(2) In U.S. Dollars or the equivalent thereof denominated in one or more
foreign currencies or units of two or more foreign currencies or composite
currencies (such as European Currency Units).
(3) Estimated solely for purposes of calculating the registration fee. No
separate consideration will be received for Class A Common Stock or
Preferred Stock that is issued upon conversion of Debt Securities or
Preferred Stock registered hereunder, as the case may be. The aggregate
maximum public offering price of all Securities issued pursuant to this
Registration Statement will not exceed $200,000,000.
(4) Such indeterminate number of shares of Preferred Stock as may from time to
time be issued at indeterminate prices or issuable upon conversion of Debt
Securities.
(5) Such indeterminate number of shares of Class A Common Stock (including the
associated Preferred Share Purchase Rights) as may from time to time be
issued at indeterminate prices or issuable upon conversion of Debt
Securities or Preferred Stock registered hereunder, as the case may be.
(6) Omitted pursuant to General Instruction II.D of Form S-3 under the
Securities Act of 1933, as amended.
(7) Calculated pursuant to Rule 457(o) of the rules and regulations under the
Securities Act of 1933, as amended.
</TABLE>
--------------------------
THE REGISTRANT HEREBY AMENDS THIS REGISTRATION STATEMENT ON SUCH DATE OR
DATES AS MAY BE NECESSARY TO DELAY ITS EFFECTIVE DATE UNTIL THE REGISTRANT SHALL
FILE A FURTHER AMENDMENT THAT SPECIFICALLY STATES THAT THIS REGISTRATION
STATEMENT SHALL THEREAFTER BECOME EFFECTIVE IN ACCORDANCE WITH SECTION 8(A) OF
THE SECURITIES ACT OF 1933, AS AMENDED, OR UNTIL THIS REGISTRATION STATEMENT
SHALL BECOME EFFECTIVE ON SUCH DATE AS THE COMMISSION, ACTING PURSUANT TO SAID
SECTION 8(A), MAY DETERMINE.
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<PAGE>
INFORMATION CONTAINED HEREIN IS SUBJECT TO COMPLETION OR AMENDMENT. A
REGISTRATION STATEMENT RELATING TO THESE SECURITIES HAS BEEN FILED WITH THE
SECURITIES AND EXCHANGE COMMISSION. THESE SECURITIES MAY NOT BE SOLD NOR MAY
OFFERS TO BUY BE ACCEPTED PRIOR TO THE TIME THE REGISTRATION STATEMENT BECOMES
EFFECTIVE. THIS PROSPECTUS SHALL NOT CONSTITUTE AN OFFER TO SELL OR THE
SOLICITATION OF AN OFFER TO BUY NOR SHALL THERE BE ANY SALE OF THESE SECURITIES
IN ANY STATE IN WHICH SUCH OFFER, SOLICITATION OR SALE WOULD BE UNLAWFUL PRIOR
TO REGISTRATION OR QUALIFICATION UNDER THE SECURITIES LAWS OF ANY SUCH STATE.
<PAGE>
SUBJECT TO COMPLETION DATED APRIL 18, 1995
PROSPECTUS
SHURGARD STORAGE CENTERS, INC.
$200,000,000
DEBT SECURITIES, PREFERRED STOCK AND COMMON STOCK
Shurgard Storage Centers, Inc. (the "Company") may from time to time offer
in one or more series (i) its debt securities (the "Debt Securities"), (ii)
shares of its preferred stock, par value $.001 per share (the "Preferred
Stock"), or (iii) shares of its Class A Common Stock, par value $.001 per share
(the "Class A Common Stock"), with an aggregate public offering price of up to
$200,000,000 on terms to be determined at the time of offering. The Debt
Securities, the Preferred Stock and the Class A Common Stock (collectively, the
"Securities") may be offered, separately or together, in separate series, in
amounts, at prices and on terms to be set forth in one or more supplements to
this Prospectus (each, a "Prospectus Supplement").
The specific terms of the Securities in respect of which this Prospectus is
being delivered will be set forth in the applicable Prospectus Supplement and
will include, where applicable: (i) in the case of Debt Securities, the specific
title, aggregate principal amount, currency, form (which may be registered or
bearer, or certificated or global), authorized denominations, maturity, rate (or
manner of calculation thereof) and time of payment of interest, terms for
redemption at the Company's option or repayment at the holder's option, terms
for sinking fund payments, terms for conversion into Preferred Stock or Class A
Common Stock, covenants and any initial public offering price; (ii) in the case
of Preferred Stock, the specific designation and stated value, any dividend,
liquidation, redemption, conversion, voting and other rights, and any initial
public offering price; and (iii) in the case of Class A Common Stock, any
initial public offering price. In addition, such specific terms may include
limitations on actual or constructive ownership and restrictions on transfer of
the Securities, in each case as may be appropriate to preserve the status of the
Company as a real estate investment trust ("REIT") for federal income tax
purposes. See "Restrictions on Transfers of Capital Stock; Excess Stock."
The applicable Prospectus Supplement will also contain information, where
applicable, about certain United States federal income tax considerations
relating to, and any listing on a securities exchange of, the Securities covered
by such Prospectus Supplement.
The Securities may be offered directly, through agents designated from time
to time by the Company, or to or through underwriters or dealers. If any agents
or underwriters are involved in the sale of any of the Securities, their names,
and any applicable purchase price, fee, commission or discount arrangement
between or among them, will be set forth, or will be calculable from the
information set forth, in the applicable Prospectus Supplement. See "Plan of
Distribution." No Securities may be sold without delivery of the applicable
Prospectus Supplement describing the method and terms of the offering of such
series of Securities.
------------------------
THESE SECURITIES HAVE NOT BEEN APPROVED OR DISAPPROVED BY THE SECURITIES AND
EXCHANGE COMMISSION OR ANY STATE SECURITIES COMMISSION NOR HAS THE SECURITIES
AND EXCHANGE COMMISSION OR ANY STATE SECURITIES COMMISSION PASSED UPON THE
ACCURACY OR ADEQUACY OF THIS PROSPECTUS. ANY REPRESENTATION
TO THE CONTRARY IS A CRIMINAL OFFENSE.
------------------------
THE ATTORNEY GENERAL OF THE STATE OF NEW YORK HAS NOT PASSED ON OR ENDORSED
THE MERITS OF THIS OFFERING. ANY REPRESENTATION TO THE CONTRARY IS UNLAWFUL.
------------------------
The date of this Prospectus is April , 1995.
<PAGE>
AVAILABLE INFORMATION
The Company is subject to the informational requirements of the Securities
Exchange Act of 1934, as amended (the "Exchange Act"), and in accordance
therewith files reports, proxy statements and other information with the
Securities and Exchange Commission (the "Commission"). The registration
statement on Form S-3 (of which this Prospectus is a part) (the "Registration
Statement"), the exhibits and schedules forming a part thereof and the reports,
proxy statements and other information filed by the Company with the Commission
in accordance with the Exchange Act can be inspected and copied at the
Commission's Public Reference Section, 450 Fifth Street, N.W., Washington, D.C.
20549, and at the following regional offices of the Commission: Seven World
Trade Center, 13th Floor, New York, New York 10048 and Citicorp Center, 500 West
Madison Street, Suite 1400, Chicago, Illinois 60661. Copies of such material can
be obtained from the Public Reference Section of the Commission, 450 Fifth
Street, N.W., Washington, D.C. 20549, at prescribed rates. In addition, the
Class A Common Stock is quoted on the Nasdaq National Market ("Nasdaq") and
similar information concerning the Company can be inspected and copied at the
offices of Nasdaq, 1735 K Street, N.W., Washington, D.C. 20006.
The Company has filed with the Commission the Registration Statement under
the Securities Act of 1933, as amended (the "Securities Act"), with respect to
the Securities. This Prospectus does not contain all the information set forth
in the Registration Statement, certain portions of which have been omitted as
permitted by the Commission's rules and regulations. Statements contained in
this Prospectus as to the contents of any contract or other document are not
necessarily complete, and in each instance reference is made to the copy of such
contract or other document filed as an exhibit to the Registration Statement,
each such statement being qualified in all respects by such reference and the
exhibits and schedules thereto. For further information regarding the Company
and the Securities, reference is hereby made to the Registration Statement and
such exhibits and schedules, which may be obtained from the Commission at its
principal office in Washington, D.C. upon payment of the fees prescribed by the
Commission.
INCORPORATION OF CERTAIN DOCUMENTS BY REFERENCE
The documents listed below have been filed by the Company under the Exchange
Act with the Commission and are incorporated herein by reference:
a. Annual Report on Form 10-K for the fiscal year ended December 31, 1994;
b. Description of the Class A Common Stock contained in the Company's
Registration Statement on Form 8-A dated February 24, 1994; and
c. Description of the Preferred Share Purchase Rights contained in the
Company's Registration Statement on Form 8-A dated March 17, 1994.
All documents filed by the Company pursuant to Sections 13(a), 13(c), 14 and
15(d) of the Exchange Act subsequent to the date of this Prospectus and prior to
the termination of the offering of the Securities shall be deemed to be
incorporated by reference in this Prospectus and to be part hereof from the date
of filing such documents.
Any statement contained herein or in a document incorporated or deemed to be
incorporated by reference herein shall be deemed to be modified or superseded
for purposes of this Prospectus to the extent that a statement contained herein
(or in the applicable Prospectus Supplement) or in any other subsequently filed
document that 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.
Copies of all documents that are incorporated herein by reference (not
including the exhibits to such documents, unless such exhibits are specifically
incorporated by reference into the information that this Prospectus
incorporates) will be provided without charge to each person, including any
beneficial owner, to whom this Prospectus is delivered, upon written or oral
request. Requests should be directed to the Secretary of the Company, 1201 Third
Avenue, Suite 2200, Seattle, Washington, 98101 (telephone number: (206) 624-8100
ext. 511).
2
<PAGE>
THE COMPANY
Shurgard Storage Centers, Inc. (the "Company") is a fully integrated,
self-managed real estate investment trust ("REIT") that acquires, owns and
manages self-storage properties. The Company's self-storage properties offer
low-cost, easily accessible storage space for personal and business uses. The
Company is one of the largest operators of self-storage properties in the United
States. The Company owns, as of March 31, 1995, directly and through joint
ventures, 161 operating self-storage properties, containing approximately 10.7
million net rentable square feet, which are located in 22 major metropolitan
areas in 19 states. As a result of the merger (the "Merger") with Shurgard
Incorporated (the "Management Company") described below, the Company also
manages 87 self-storage facilities for affiliated and unaffiliated owners of
self-storage facilities. In addition, the Company owns two business parks. As of
December 31, 1994, the Company's owned self-storage properties had a weighted
average annual square foot occupancy of 89% and a weighted average annual rent
per square foot of $8.25.
The Company began operations as a REIT through the consolidation on March 1,
1994 of 17 publicly held real estate limited partnerships (the "Consolidation")
that were sponsored by the Management Company. On March 24, 1995, the Management
Company merged with and into the Company pursuant to an Agreement and Plan of
Merger dated December 19, 1994, and the Company became self-administered and
self-managed. Through the Merger, the Company internalized the expertise and
experience of the Management Company's personnel that cover all aspects of the
self-storage industry.
The Company is a Delaware corporation incorporated on July 23, 1993. The
Company's executive offices are located at 1201 Third Avenue, Suite 2200,
Seattle, Washington 98101, and the telephone number is (206) 624-8100.
USE OF PROCEEDS
Unless otherwise described in the applicable Prospectus Supplement, the
Company intends to use the net proceeds from the sale of the Securities for
general corporate purposes, which will include the development and acquisition
of additional properties and other acquisition transactions, the expansion and
improvement of certain properties in the Company's portfolio, and the repayment
of indebtedness.
RATIOS OF EARNINGS TO FIXED CHARGES
The following table sets forth ratios of earnings to fixed charges for the
periods shown. The ratio shown for the year ended December 31, 1994 is for the
Company. Ratios shown for the years ended December 31, 1993, 1992, 1991 and 1990
are derived from combined historical financial information of the 17 publicly
held real estate limited partnerships that were included in the Consolidation
("Predecessor").
<TABLE>
<CAPTION>
YEAR ENDED DECEMBER 31,
- -------------------------------------------------------
PREDECESSOR COMPANY
- ------------------------------------------ -----------
1990 1991 1992 1993 1994
- --------- --------- --------- --------- -----------
<S> <C> <C> <C> <C>
7.69x 8.93x 10.23x 8.80x 2.95x
</TABLE>
The ratios of earnings to fixed charges were computed by dividing earnings
by fixed charges. For this purpose, earnings consist of net income before
extraordinary items plus fixed charges. Fixed charges consist of interest
expense (including interest costs capitalized) and the amortization of debt
issuance costs. To date, the Company has not issued any Preferred Stock;
therefore, the ratios of earnings to combined fixed charges and preferred share
dividends are the same as the ratios presented above.
3
<PAGE>
DESCRIPTION OF DEBT SECURITIES
GENERAL
The Debt Securities will be direct obligations of the Company, which may be
secured or unsecured, and which may be senior or subordinated indebtedness of
the Company. The Debt Securities may be issued under one or more indentures,
each dated as of a date before the issuance of the Debt Securities to which it
relates and in the form that has been filed as an exhibit to the Registration
Statement of which this Prospectus is a part, subject to such amendments or
supplements as may be adopted from time to time. Each such indenture
(collectively, the "Indenture") will be entered into between the Company and a
trustee (the "Trustee"), which may be the same Trustee. The Indenture will be
subject to, and governed by, the Trust Indenture Act of 1939, as amended. The
statements made hereunder relating to the Indenture and the Debt Securities are
summaries of the anticipated provisions thereof, do not purport to be complete
and are subject to, and are qualified in their entirety by reference to, all
provisions of the Indenture and such Debt Securities. Capitalized terms used but
not defined herein shall have the respective meanings set forth in the
Indenture.
TERMS
The particular terms of the Debt Securities offered by a Prospectus
Supplement will be described in the particular Prospectus Supplement, along with
any applicable modifications of or additions to the general terms of the Debt
Securities as described herein and in the applicable Indenture and any
applicable federal income tax considerations. Accordingly, for a description of
the terms of any series of Debt Securities, reference must be made to both the
Prospectus Supplement relating thereto and the description of the Debt
Securities set forth in this Prospectus.
Except as set forth in any Prospectus Supplement, the Debt Securities may be
issued without limits as to aggregate principal amount, in one or more series,
in each case as established from time to time by the Company's Board of
Directors or as set forth in the applicable Indenture or one or more indentures
supplemental to the Indenture. All Debt Securities of one series need not be
issued at the same time and, unless otherwise provided, a series may be
reopened, without the consent of the holders of the Debt Securities of such
series, for issuances of additional Debt Securities of such series.
Each Indenture will provide that the Company may, but need not, designate
more than one Trustee thereunder, each with respect to one or more series of
Debt Securities. Any Trustee under an Indenture may resign or be removed with
respect to one or more series of Debt Securities, and a successor Trustee may be
appointed to act with respect to such series. If two or more persons are acting
as Trustee with respect to different series of Debt Securities, each such
Trustee shall be a Trustee of a trust under the applicable Indenture separate
and apart from the trust administered by any other Trustee and, except as
otherwise indicated herein, any action described herein to be taken by a Trustee
may be taken by each such Trustee with respect to, and only with respect to, the
one or more series of Debt Securities for which it is Trustee under the
applicable Indenture.
The following summaries set forth certain general terms and provisions of
the Indenture and the Debt Securities. The Prospectus Supplement relating to the
series of Debt Securities being offered will contain further terms of such Debt
Securities, including the following specific terms:
(1) the title of such Debt Securities;
(2) the aggregate principal amount of such Debt Securities and any limit on such
aggregate principal amount;
(3) the price (expressed as a percentage of the principal amount thereof) at
which such Debt Securities will be issued and, if other than the principal
amount thereof, the portion of the principal amount thereof payable upon
declaration of acceleration of the maturity thereof, or (if applicable) the
portion of the principal amount of such Debt Securities that is convertible
into Class A Common Stock or Preferred Stock, or the method by which any
such portion shall be determined;
4
<PAGE>
(4) if convertible, the terms on which such Debt Securities are convertible,
including the initial conversion price or rate and conversion period and, in
connection with the preservation of the Company's status as a REIT, any
applicable limitations on the ownership or transferability of the Class A
Common Stock or the Preferred Stock into which such Debt Securities are
convertible;
(5) the date or dates, or the method for determining such date or dates, on
which the principal of such Debt Securities will be payable;
(6) the rate or rates (which may be fixed or variable), or the method by which
such rate or rates shall be determined, at which such Debt Securities will
bear interest, if any;
(7) the date or dates, or the method for determining such date or dates, from
which any interest will accrue, the dates upon which any such interest will
be payable, the record dates for payment of such interest, or the method by
which any such dates shall be determined, the persons to whom such interest
shall be payable, and the basis upon which interest shall be calculated if
other than that of a 360-day year of twelve 30-day months;
(8) the place or places where the principal of (and premium, if any) and
interest, if any, on such Debt Securities will be payable, where such Debt
Securities may be surrendered for conversion or registration of transfer or
exchange and where notices or demands to or upon the Company in respect of
such Debt Securities and the Indenture may be served;
(9) the period or periods, if any, within which, the price or prices at which
and the terms and conditions upon which such Debt Securities may be
redeemed, as a whole or in part, at the Company's option;
(10) the obligation, if any, of the Company to redeem, repay or purchase such
Debt Securities pursuant to any sinking fund or analogous provision or at
the option of a holder thereof, and the period or periods within which, the
price or prices at which and the terms and conditions upon which such Debt
Securities will be redeemed, repaid or purchased, as a whole or in part,
pursuant to such obligation;
(11) if other than U.S. dollars, the currency or currencies in which such Debt
Securities are denominated and payable, which may be a foreign currency or
units of two or more foreign currencies or a composite currency or
currencies, and the terms and conditions relating thereto;
(12) whether the amount of payments of principal of (and premium, if any) or
interest, if any, on such Debt Securities may be determined with reference
to an index, formula or other method (which index, formula or method may,
but need not, be based on a currency, currencies, currency unit or units or
composite currency or currencies) and the manner in which such amounts shall
be determined;
(13) whether such Debt Securities will be issued in certificated and/or
book-entry form, and, if so, the identity of the depositary for such Debt
Securities;
(14) whether such Debt Securities will be in registered or bearer form and, if
in registered form, the denominations thereof if other than $1,000 and any
integral multiple thereof and, if in bearer form, the denominations thereof
and terms and conditions relating thereto;
(15) the applicability, if any, of the defeasance and covenant defeasance
provisions described herein or set forth in the applicable Indenture, or any
modification thereof;
(16) any deletions from, modifications of or additions to the events of default
or covenants of the Company, to the extent different from those described
herein or in the applicable Indenture with respect to such Debt Securities,
and any change in the right of any Trustee or any of the holders to declare
the principal amount of any such Debt Securities due and payable;
5
<PAGE>
(17) whether and under what circumstances the Company will pay any Additional
Amounts on such Debt Securities in respect of any tax, assessment or
governmental charge and, if so, whether the Company will have the option to
redeem such Debt Securities in lieu of making such payment;
(18) the subordination provisions, if any, relating to such Debt Securities;
(19) the provisions, if any, relating to any security provided for such Debt
Securities; and
(20) any other terms of such Debt Securities not inconsistent with the
provisions of the applicable Indenture.
If so provided in the applicable Prospectus Supplement, the Debt Securities
may be issued at a discount below their principal amount and provide for less
than the entire principal amount thereof to be payable upon declaration of
acceleration of the maturity thereof ("Original Issue Discount Securities"). In
such cases, any special U.S. federal income tax, accounting and other
considerations applicable to Original Issue Discount Securities will be
described in the applicable Prospectus Supplement.
Except as may be set forth in any Prospectus Supplement, the Debt Securities
will not contain any provisions that would limit the Company's ability to incur
indebtedness or that would afford holders of Debt Securities protection in the
event of a highly leveraged or similar transaction involving the Company or in
the event of a change of control. Restrictions on ownership and transfers of the
Common Stock (defined below) and Preferred Stock are, however, designed to
preserve the Company's status as a REIT and, therefore, may act to prevent or
hinder a change of control. See "Restrictions on Transfers of Capital Stock;
Excess Stock." In addition, the Company's Restated By-Laws (the "By-Laws")
provide that, subject to certain exceptions, the Company may not incur debt if
after giving effect to such borrowing, its indebtedness for borrowed funds would
exceed 50% of its total assets (as defined in the By-laws) or 300% of its
adjusted net worth (as defined in the By-laws). Reference is made to the
applicable Prospectus Supplement for information with respect to any deletions
from, modifications of or additions to the events of default or covenants of the
Company that are described below, including any addition of a covenant or other
provision providing event risk or similar protection.
DENOMINATIONS, INTEREST, REGISTRATION AND TRANSFER
Unless otherwise described in the applicable Prospectus Supplement, the Debt
Securities of any series will be issuable in denominations of $1,000 and
integral multiples thereof.
Unless otherwise described in the applicable Prospectus Supplement, the
principal of (and applicable premium, if any) and interest on any series of Debt
Securities will be payable at the applicable Trustee's corporate trust office,
the address of which will be set forth in the applicable Prospectus Supplement;
PROVIDED, HOWEVER, that, at the Company's option, payment of interest may be
made by check mailed to the address of the person entitled thereto as it appears
in the applicable register for such Debt Securities or by wire transfer of funds
to such person at an account maintained within the United States.
Subject to certain limitations imposed on Debt Securities issued in
book-entry form, the Debt Securities of any series will be exchangeable for any
authorized denomination of other Debt Securities of the same series and of a
like aggregate principal amount and tenor upon surrender of such Debt Securities
at the applicable Trustee's corporate trust office or at the office of any
transfer agent designated by the Company for such purpose. In addition, subject
to certain limitations imposed on Debt Securities issued in book-entry form, the
Debt Securities of any series may be surrendered for conversion or registration
of transfer thereof at the applicable Trustee's corporate trust office or at the
office of any transfer agent designated by the Company for such purpose. Every
Debt Security surrendered for conversion, registration of transfer or exchange
shall be duly endorsed or accompanied by a written instrument of transfer and
the person requesting such transfer must provide evidence of title and identity
satisfactory to the applicable Trustee or transfer agent. No service charge will
be made for any registration of transfer or exchange of any Debt Securities, but
the
6
<PAGE>
Company may require payment of a sum sufficient to cover any tax or other
governmental charge payable in connection therewith. If the applicable
Prospectus Supplement refers to any transfer agent (in addition to the
applicable Trustee) initially designated by the Company with respect to any
series of Debt Securities, the Company may at any time rescind the designation
of any such transfer agent or approve a change in the location through which any
such transfer agent acts, except that the Company will be required to maintain a
transfer agent in each place of payment for such series. The Company may at any
time designate additional transfer agents with respect to any series of Debt
Securities.
Neither the Company nor any Trustee shall be required to (a) issue, register
the transfer of or exchange Debt Securities of any series during a period
beginning at the opening of business 15 days before the day of mailing of notice
of redemption of any Debt Securities of that series that may be selected for
redemption and ending at the close of business on the day of mailing the
relevant notice of redemption; (b) register the transfer of or exchange any Debt
Security, or portion thereof, so selected for redemption, in whole or in part,
except the unredeemed portion of any Debt Security being redeemed in part; or
(c) issue, register the transfer of or exchange any Debt Security that has been
surrendered for repayment at the holder's option, except the portion, if any, of
such Debt Security not to be so repaid.
MERGER, CONSOLIDATION OR SALE OF ASSETS
The Indenture will provide that the Company may, with or without the consent
of the holders of any outstanding Debt Securities, consolidate with, or sell,
lease or convey all or substantially all of its assets to, or merge with or
into, any other entity, provided that (a) either the Company shall be the
continuing entity, or the successor entity (if other than the Company) formed by
or resulting from any such consolidation or merger or which shall have received
the transfer of such assets shall expressly assume the Company's obligation to
pay the principal of (and premium, if any) and interest on all the Debt
Securities and the due and punctual performance and observance of all the
covenants and conditions contained in the Indenture; (b) immediately after
giving effect to such transaction and treating any indebtedness that becomes an
obligation of the Company or any subsidiary as a result thereof as having been
incurred by the Company or such subsidiary at the time of such transaction, no
event of default under the Indenture, and no event that, after notice or the
lapse of time, or both, would become such an event of default, shall have
occurred and be continuing; and (c) an officers' certificate and legal opinion
covering such conditions shall be delivered to each Trustee.
CERTAIN COVENANTS
EXISTENCE. Except as permitted under "-- Merger, Consolidation or Sale of
Assets," the Indenture will require the Company to do or cause to be done all
things necessary to preserve and keep in full force and effect its corporate
existence, rights (by certificate of incorporation, by-laws and statute) and
franchises; PROVIDED, HOWEVER, that the Company shall not be required to
preserve any right or franchise if its Board of Directors determines that the
preservation thereof is no longer desirable in the conduct of its business.
MAINTENANCE OF PROPERTIES. The Indenture will require the Company to cause
all of its material properties used or useful in the conduct of its business or
the business of any subsidiary to be maintained and kept in good condition,
repair and working order and supplied with all necessary equipment and to cause
to be made all necessary repairs, renewals, replacements, betterments and
improvements thereof, all as in the Company's judgment may be necessary so that
the business carried on or in connection therewith may be properly and
advantageously conducted at all times; PROVIDED, HOWEVER, that the Company and
its subsidiaries shall not be prevented from selling or otherwise disposing of
their properties for value in the ordinary course of business.
INSURANCE. The Indenture will require the Company to, and to cause each of
its subsidiaries to, keep in force upon all of its properties and operations
policies of insurance carried with responsible companies in such amounts and
covering all such risks as shall be customary in the industry in accordance with
prevailing market conditions and availability.
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PAYMENT OF TAXES AND OTHER CLAIMS. The Indenture will require the Company
to pay or discharge or cause to be paid or discharged, before the same shall
become delinquent, (a) all taxes, assessments and governmental charges levied or
imposed on it or any subsidiary or on the income, profits or property of the
Company or any subsidiary and (b) all lawful claims for labor, materials and
supplies that, if unpaid, might by law become a lien upon the property of the
Company or any subsidiary; PROVIDED, HOWEVER, that the Company shall not be
required to pay or discharge or cause to be paid or discharged any such tax,
assessment, charge or claim the amount, applicability or validity of which is
being contested in good faith.
PROVISION OF FINANCIAL INFORMATION. Whether or not the Company is subject
to Section 13 or 15(d) of the Exchange Act, the Indenture will require the
Company, within 15 days after each of the respective dates by which the Company
would have been required to file annual reports, quarterly reports and other
documents with the Commission if the Company were so subject, (a) to transmit by
mail to all holders of Debt Securities, as their names and addresses appear in
the applicable register for such Debt Securities, without cost to such holders,
copies of the annual reports, quarterly reports and other documents that the
Company would have been required to file with the Commission pursuant to Section
13 or 15(d) of the Exchange Act if the Company were subject to such Sections,
(b) to file with the Trustee copies of the annual reports, quarterly reports and
other documents that the Company would have been required to file with the
Commission pursuant to Section 13 or 15(d) of the Exchange Act if the Company
were subject to such Sections, and (c) to supply, promptly upon written request
and payment of the reasonable cost of duplication and delivery, copies of such
documents to any prospective holder of Debt Securities.
ADDITIONAL COVENANTS. Any additional covenants of the Company with respect
to any of the series of Debt Securities will be set forth in the Prospectus
Supplement relating thereto.
EVENTS OF DEFAULT, NOTICE AND WAIVER
Unless otherwise provided in the applicable Indenture, each Indenture will
provide that the following events are "events of default" with respect to any
series of Debt Securities issued thereunder: (a) default for 30 days in the
payment of any installment of interest on any Debt Security of such series; (b)
default in the payment of the principal of (or premium, if any, on) any Debt
Security of such series at its maturity; (c) default in making any sinking fund
payment as required for any Debt Security of such series; (d) default in the
performance of any other covenant of the Company contained in the Indenture
(other than a covenant added to the Indenture solely for the benefit of a series
of Debt Securities issued thereunder other than such series), continued for 60
days after written notice as provided in the applicable Indenture; (e) a default
under any bond, debenture, note or other evidence of indebtedness for money
borrowed by the Company or any of its subsidiaries (including obligations under
leases required to be capitalized on the balance sheet of the lessee under
generally accepted accounting principles, but not including any indebtedness or
obligations for which recourse is limited to property purchased) in an aggregate
principal amount in excess of $10,000,000 or under any mortgage, indenture or
instrument under which there may be issued or by which there may be secured or
evidenced any indebtedness for money borrowed by the Company or any of its
subsidiaries (including such leases, but not including such indebtedness or
obligations for which recourse is limited to property purchased) in an aggregate
principal amount in excess of $10,000,000, whether such indebtedness now exists
or shall hereafter be created, which default shall have resulted in such
indebtedness becoming or being declared due and payable prior to the date on
which it would otherwise have become due and payable or such obligations being
accelerated, without such acceleration having been rescinded or annulled; (f)
certain events of bankruptcy, insolvency or reorganization, or court appointment
of a receiver, liquidator or trustee of the Company or any Significant
Subsidiary of the Company; and (g) any other Event of Default provided with
respect to a particular series of Debt Securities. The term "Significant
Subsidiary" has the meaning ascribed to such term in Regulation S-X promulgated
under the Securities Act.
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If an event of default under any Indenture with respect to Debt Securities
of any series at the time outstanding occurs and is continuing, then in every
such case the applicable Trustee or the holders of not less than 25% in
principal amount of the outstanding Debt Securities of that series may declare
the principal amount (or, if the Debt Securities of that series are Original
Issue Discount Securities or indexed securities, such portion of the principal
amount as may be specified in the terms thereof) of all the Debt Securities of
that series to be due and payable immediately by written notice thereof to the
Company (and to the applicable Trustee if given by the holders). However, at any
time after such a declaration of acceleration with respect to Debt Securities of
such series (or of all Debt Securities then outstanding under the Indenture, as
the case may be) has been made, but before a judgment or decree for payment of
the money due has been obtained by the applicable Trustee, the holders of not
less than a majority of the principal amount of the outstanding Debt Securities
of such series (or of all Debt Securities then outstanding under the Indenture,
as the case may be) may rescind and annul such declaration and its consequences
if (a) the Company shall have deposited with the applicable Trustee all required
payments of the principal of (and premium, if any) and interest on the Debt
Securities of such series (or of all Debt Securities then outstanding under the
Indenture, as the case may be), plus certain fees, expenses, disbursements and
advances of the applicable Trustee and (b) all events of default, other than the
nonpayment of accelerated principal (or specified portion thereof), with respect
to Debt Securities of such series (or of all Debt Securities then outstanding
under the Indenture, as the case may be) have been cured or waived as provided
in the Indenture. The Indenture will also provide that the holders of not less
than a majority in principal amount of the outstanding Debt Securities of any
series (or of all Debt Securities then outstanding under the Indenture, as the
case may be) may waive any past default with respect to such series and its
consequences, except a default (y) in the payment of the principal of (or
premium, if any) or interest on any Debt Security of such series or (z) in
respect of a covenant or provision contained in the Indenture that cannot be
modified or amended without the consent of the holder of each outstanding Debt
Security affected thereby.
The Indenture will require each Trustee to give notice to the holders of
Debt Securities within 90 days of a default under the Indenture unless such
default shall have been cured or waived; PROVIDED, HOWEVER, that such Trustee
may withhold notice to the holders of any series of Debt Securities of any
default with respect to such series (except a default in the payment of the
principal of (or premium, if any) or interest on any Debt Security of such
series or in the payment of any sinking fund installment in respect of any Debt
Security of such series) if specified responsible officers of the Trustee
consider such withholding to be in such holders' interest.
The Indenture will provide that no holders of Debt Securities of any series
may institute any proceedings, judicial or otherwise, with respect to the
Indenture or for any remedy thereunder, except in the case of failure of the
Trustee, for 60 days, to act after it has received a written request to
institute proceedings in respect of an event of default from the holders of not
less than 25% in principal amount of the outstanding Debt Securities of such
series, as well as an offer of indemnity reasonably satisfactory to it. This
provision will not prevent, however, any holder of Debt Securities from
instituting suit for the enforcement of payment of the principal of (and
premium, if any) and interest on such Debt Securities at the respective due
dates thereof.
The Indenture will provide that, subject to provisions in such Indenture
relating to its duties in case of default, the Trustee is under no obligation to
exercise any of its rights or powers under the Indenture at the request or
direction of any holders of any series of Debt Securities then outstanding under
the Indenture, unless such holders shall have offered to the Trustee reasonable
security or indemnity. The holders of not less than a majority in principal
amount of the outstanding Debt Securities of any series (or of all Debt
Securities then outstanding under the Indenture, as the case may be) shall have
the right to direct the time, method and place of conducting any proceeding for
any remedy available to the Trustee, or of exercising any trust or power
conferred upon the Trustee. The Trustee may, however, refuse to follow any
direction that is in conflict with any law or the Indenture that may involve the
Trustee in personal liability or that may be unduly prejudicial to the holders
of Debt Securities of such series not joining therein.
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Within 120 days after the close of each fiscal year, the Company will be
required to deliver to the Trustee a certificate, signed by one of several
specified officers, stating whether or not such officer has knowledge of any
default under the Indenture and, if so, specifying each such default and the
nature and status thereof.
MODIFICATION OF THE INDENTURE
Modifications and amendments of any Indenture will be permitted only with
the consent of the holders of not less than a majority in principal amount of
all outstanding Debt Securities issued under such Indenture affected by such
modification or amendment; PROVIDED, HOWEVER, that no such modification or
amendment may, without the consent of the holder of each Debt Security affected
thereby, (a) change the stated maturity of the principal of, or any installment
of interest (or premium, if any) on, any such Debt Security; (b) reduce the
principal amount of, or the rate or amount of interest on, or any premium
payable on redemption of, any such Debt Security, or reduce the amount of
principal of an Original Issue Discount Security that would be due and payable
upon declaration of acceleration of the maturity thereof or would be provable in
bankruptcy, or adversely affect any right of repayment of the holder of any such
Debt Security; (c) change the place of payment, or the coin or currency, for
payment of principal of (and premium, if any), or interest on any such Debt
Security; (d) impair the right to institute suit for the enforcement of any
payment on or with respect to any such Debt Security; (e) reduce the
above-stated percentage of outstanding Debt Securities of any series necessary
to modify or amend the Indenture, to waive compliance with certain provisions
thereof or certain defaults and consequences thereunder or to reduce the quorum
or voting requirements set forth in the Indenture; or (f) modify any of the
foregoing provisions or any of the provisions relating to the waiver of certain
past defaults or certain covenants, except to increase the required percentage
to effect such action or to provide that certain other provisions may not be
modified or waived without the consent of the holder of such Debt Security.
The holders of a majority in aggregate principal amount of outstanding Debt
Securities of each series may, on behalf of all holders of Debt Securities of
that series waive, insofar as that series is concerned, compliance by the
Company with certain restrictive covenants in the applicable Indenture.
Modifications and amendments of the Indenture will be permitted to be made
by the Company and the Trustee without the consent of any holder of Debt
Securities for any of the following purposes: (a) to evidence the succession of
another person to the Company as obligor under the Indenture; (b) to add to the
covenants of the Company for the benefit of the holders of all or any series of
Debt Securities or to surrender any right or power conferred upon the Company in
the Indenture; (c) to add events of default for the benefit of the holders of
all or any series of Debt Securities; (d) to add or change any provisions of the
Indenture to facilitate the issuance of, or to liberalize certain terms of, Debt
Securities in bearer form, or to permit or facilitate the issuance of Debt
Securities in uncertificated form, PROVIDED that such action shall not adversely
affect the interests of the holders of the Debt Securities of any series in any
material respect; (e) to change or eliminate any provisions of the Indenture,
PROVIDED that any such change or elimination shall become effective only when
there are no Debt Securities outstanding of any series created prior thereto
that are entitled to the benefit of such provision; (f) to secure the Debt
Securities; (g) to establish the form or terms of Debt Securities of any series,
including the provisions and procedures, if applicable, for the conversion of
such Debt Securities into Class A Common Stock or Preferred Stock; (h) to
provide for the acceptance of appointment by a successor Trustee or facilitate
the administration of the trusts under the Indenture by more than one Trustee;
(i) to cure any ambiguity, defect or inconsistency in the Indenture; PROVIDED,
HOWEVER, that such action shall not adversely affect the interests of holders of
Debt Securities of any series in any material respect; or (j) to supplement any
of the provisions of the Indenture to the extent necessary to permit or
facilitate defeasance and discharge of any series of such Debt Securities,
PROVIDED, HOWEVER, that such action shall not adversely affect the interests of
the holders of the Debt Securities of any series in any material respect.
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The Indenture will provide that in determining whether the holders of the
requisite principal amount of outstanding Debt Securities of a series have given
any request, demand, authorization, direction, notice, consent or waiver
thereunder or whether a quorum is present at a meeting of holders of Debt
Securities, (a) the principal amount of an Original Issue Discount Security that
shall be deemed to be outstanding shall be the amount of the principal thereof
that would be due and payable as of the date of such determination upon
declaration of acceleration of the maturity thereof, (b) the principal amount of
any Debt Security denominated in a foreign currency that shall be deemed
outstanding shall be the U.S. dollar equivalent, determined on the issue date
for such Debt Security, of the principal amount (or, in the case of an Original
Issue Discount Security, the U.S. dollar equivalent on the issue date of such
Debt Security of the amount determined as provided in (a) above), (c) the
principal amount of an indexed security that shall be deemed outstanding shall
be the principal face amount of such indexed security at original issuance,
unless otherwise provided with respect to such indexed security in the
applicable Indenture, and (d) Debt Securities owned by the Company or any other
obligor upon the Debt Securities or any affiliate of the Company or of such
other obligor shall be disregarded.
The Indenture will contain provisions for convening meetings of the holders
of Debt Securities of a series. A meeting may be permitted to be called at any
time by the Trustee, and also, upon request, by the Company or the holders of at
least 10% in principal amount of the outstanding Debt Securities of such series,
in any such case upon notice given as provided in the Indenture. Except for any
consent that must be given by the holder of each Debt Security affected by
certain modifications and amendments of the Indenture, any resolution presented
at a meeting or adjourned meeting duly reconvened at which a quorum is present
may be adopted by the affirmative vote of the holders of a majority in principal
amount of the outstanding Debt Securities of that series; PROVIDED, HOWEVER,
that, except as referred to above, any resolution with respect to any request,
demand, authorization, direction, notice, consent, waiver or other action that
may be made, given or taken by the holders of a specified percentage, which is
less than a majority, in principal amount of the outstanding Debt Securities of
a series may be adopted at a meeting or adjourned meeting duly reconvened at
which a quorum is present by the affirmative vote of the holders of such
specified percentage in principal amount of the outstanding Debt Securities of
that series. Any resolution passed or decision taken at any meeting of holders
of Debt Securities of any series duly held in accordance with the Indenture will
be binding on all holders of Debt Securities of that series. The quorum at any
meeting called to adopt a resolution, and at any reconvened meeting, will be
persons holding or representing a majority in principal amount of the
outstanding Debt Securities of a series; PROVIDED, HOWEVER, that if any action
is to be taken at such meeting with respect to a consent or waiver that may be
given by the holders of not less than a specified percentage in principal amount
of the outstanding Debt Securities of a series, the persons holding or
representing such specified percentage in principal amount of the outstanding
Debt Securities of such series will constitute a quorum.
Notwithstanding the foregoing provisions, the Indenture will provide that if
any action is to be taken at a meeting of holders of Debt Securities of any
series with respect to any request, demand, authorization, direction, notice,
consent, waiver or other action that the Indenture expressly provides may be
made, given or taken by the holders of a specified percentage in principal
amount of all outstanding Debt Securities affected thereby, or of the holders of
such series and one or more additional series: (a) there shall be no minimum
quorum requirement for such meeting and (b) the principal amount of the
outstanding Debt Securities of such series that vote in favor of such request,
demand, authorization, direction, notice, consent, waiver or other action shall
be taken into account in determining whether such request, demand,
authorization, direction, notice, consent, waiver or other action has been made,
given or taken under the Indenture.
DISCHARGE, DEFEASANCE AND COVENANT DEFEASANCE
Unless otherwise indicated in the applicable Prospectus Supplement, the
Company will be permitted, at its option, to discharge certain obligations to
holders of any series of Debt Securities that have not already been delivered to
the applicable Trustee for cancellation and that either have become
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due and payable or will become due and payable within one year (or scheduled for
redemption within one year) by irrevocably depositing with the applicable
Trustee, in trust, funds in such currency or currencies, currency unit or units
or composite currency or currencies in which such Debt Securities are payable in
an amount sufficient to pay the entire indebtedness on such Debt Securities in
respect of principal (and premium, if any) and interest to the date of such
deposit (if such Debt Securities have become due and payable) or to the stated
maturity or redemption date, as the case may be.
The Indenture will provide that, unless otherwise indicated in the
applicable Prospectus Supplement, the Company may elect either to (a) defease
and be discharged from any and all obligations with respect to any series of
Debt Securities (except for the obligation to pay additional amounts, if any,
upon the occurrence of certain events of tax, assessment or governmental charge
with respect to payments on such Debt Securities and the obligations to register
the transfer or exchange of such Debt Securities, to replace temporary or
mutilated, destroyed, lost or stolen Debt Securities, to maintain an office or
agency in respect of such Debt Securities and to hold money for payment in
trust) ("defeasance") or (b) be released from its obligations with respect to
such Debt Securities under the applicable Indenture (being the restrictions
described under "-- Certain Covenants") or, if provided in the applicable
Prospectus Supplement, its obligations with respect to any other covenant, and
any omission to comply with such obligations, shall not constitute a default or
an event of default with respect to such Debt Securities ("covenant
defeasance"), in either case upon the irrevocable deposit by the Company with
the applicable Trustee, in trust, of an amount, in such currency or currencies,
currency unit or units or composite currency or currencies in which such Debt
Securities are payable at stated maturity, or Government Obligations (as defined
below), or both, applicable to such Debt Securities that through the scheduled
payment of principal and interest in accordance with their terms will provide
money in an amount sufficient to pay the principal of (and premium, if any) and
interest on such Debt Securities, and any mandatory sinking fund or analogous
payments thereon, on the scheduled due dates therefor.
Such a trust may only be established if, among other things, the Company has
delivered to the applicable Trustee an opinion of counsel (as specified in the
applicable Indenture) to the effect that the holders of such Debt Securities
will not recognize income, gain or loss for U.S. federal income tax purposes as
a result of such defeasance or covenant defeasance and will be subject to U.S.
federal income tax on the same amounts, in the same manner and at the same times
as would have been the case if such defeasance or covenant defeasance had not
occurred, and such opinion of counsel, in the case of defeasance, must refer to
and be based on a ruling of the Internal Revenue Service (the "IRS") or a change
in applicable U.S. federal income tax law occurring after the date of the
Indenture. In the event of such defeasance, the holders of such Debt Securities
would thereafter be able to look only to such trust fund for payment of
principal (and premium, if any) and interest.
"Government Obligations" means securities that are (a) direct obligations of
the United States of America or the government which issued the foreign currency
in which the Debt Securities of a particular series are payable, for the payment
of which its full faith and credit is pledged, or (b) obligations of a person
controlled or supervised by and acting as an agency or instrumentality of the
United States of America or such government which issued the foreign currency in
which the Debt Securities of such series are payable, the payment of which is
unconditionally guaranteed as a full faith and credit obligation by the United
States of America or such other government, which, in either case, are not
callable or redeemable at the option of the issuer thereof, and shall also
include a depository receipt issued by a bank or trust company as custodian with
respect to any such Government Obligation or a specific payment of interest on
or principal of any such Government Obligation held by such custodian for the
account of the holder of a depository receipt; PROVIDED, HOWEVER, that (except
as required by law) such custodian is not authorized to make any deduction from
the amount payable to the holder of such depository receipt from any amount
received by the custodian in respect of the Government Obligation or the
specific payment of interest on or principal of the Government Obligation
evidenced by such depository receipt.
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Unless otherwise provided in the applicable Prospectus Supplement, if after
the Company has deposited funds and/or Government Obligations to effect
defeasance or covenant defeasance with respect to Debt Securities of any series,
(a) the holder of a Debt Security of such series is entitled to, and does, elect
pursuant to the applicable Indenture or the terms of such Debt Security to
receive payment in a currency, currency unit or composite currency other than
that in which such deposit has been made in respect of such Debt Security or (b)
a Conversion Event (as defined below) occurs in respect of the currency,
currency unit or composite currency in which such deposit has been made, the
indebtedness represented by such Debt Security will be deemed to have been, and
will be, fully discharged and satisfied through the payment of the principal of
(and premium, if any) and interest on such Debt Security as they become due out
of the proceeds yielded by converting the amount so deposited in respect of such
Debt Security into the currency, currency unit or composite currency in which
such Debt Security becomes payable as a result of such election or such
cessation of usage based on the applicable market exchange rate. "Conversion
Event" means the cessation of use of (i) a currency, currency unit or composite
currency both by the government of the country which issued such currency and
for the settlement of transactions by a central bank or other public institution
of or within the international banking community, (ii) the ECU both within the
European Monetary System and for the settlement of transactions by public
institutions of or within the European Communities, or (iii) any currency unit
or composite currency other than the ECU for the purposes for which it was
established. Unless otherwise provided in the applicable Prospectus Supplement,
all payments of principal of (and premium, if any) and interest on any Debt
Security that is payable in a foreign currency that ceases to be used by its
government of issuance shall be made in U.S. dollars.
In the event the Company effects covenant defeasance with respect to any
Debt Securities and such Debt Securities are declared due and payable because of
the occurrence of any event of default other than the event of default described
in clause (d) under "-- Events of Default, Notice and Waiver" with respect to
the specified sections of the applicable Indenture (which sections would no
longer be applicable to such Debt Securities) or clause (g) thereunder with
respect to any other covenant as to which there has been covenant defeasance,
the amount in such currency, currency unit or composite currency in which such
Debt Securities are payable, and Government Obligations on deposit with the
applicable Trustee, will be sufficient to pay amounts due on such Debt
Securities at the time of their stated maturity, but may not be sufficient to
pay amounts due on such Debt Securities at the time of the acceleration
resulting from such event of default. The Company would, however, remain liable
to make payment of such amounts due at the time of acceleration.
The applicable Prospectus Supplement may further describe the provisions, if
any, permitting such defeasance or covenant defeasance, including any
modifications to the provisions described above, with respect to the Debt
Securities of or within a particular series.
CONVERSION RIGHTS
The terms and conditions, if any, upon which the Debt Securities are
convertible into Class A Common Stock or Preferred Stock will be set forth in
the applicable Prospectus Supplement relating thereto. Such terms will include
whether such Debt Securities are convertible into Class A Common Stock or
Preferred Stock, the conversion price (or manner of calculation thereof), the
conversion period, provisions as to whether conversion will be at the option of
the holders or the Company, the events requiring an adjustment of the conversion
price and provisions affecting conversion in the event of the redemption of such
Debt Securities and any restrictions on conversion, including restrictions
directed at maintaining the Company's REIT status.
PAYMENT
Unless otherwise specified in the applicable Prospectus Supplement, the
principal of (and applicable premium, if any) and interest on any series of Debt
Securities will be payable at the Trustee's corporate trust office, the address
of which will be stated in the applicable Prospectus Supplement; PROVIDED,
HOWEVER, that, at the Company's option, payment of interest may be made by check
mailed to
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the address of the person entitled thereto as it appears in the applicable
register for such Debt Securities or by wire transfer of funds to such person at
an account maintained within the United States.
All amounts paid by the Company to a paying agent or a Trustee for the
payment of the principal of or any premium or interest on any Debt Security that
remain unclaimed at the end of two years after such principal, premium or
interest has become due and payable will be repaid to the Company, and the
holder of such Debt Security thereafter may look only to the Company for payment
thereof.
GLOBAL SECURITIES
The Debt Securities of a series may be issued in whole or in part in the
form of one or more global securities (the "Global Securities") that will be
deposited with, or on behalf of, a depositary identified in the applicable
Prospectus Supplement relating to such series. Global Securities may be issued
in either registered or bearer form and in either temporary or permanent form.
The specific terms of the depositary arrangement with respect to a series of
Debt Securities will be described in the applicable Prospectus Supplement
relating to such series.
DESCRIPTION OF COMMON STOCK
The Company has authority to issue 120,000,000 shares of Class A Common
Stock, par value $.001 per share and 500,000 shares of Class B Common Stock, par
value $.001 per share (collectively, the "Common Stock"). At April 14, 1995, the
Company had outstanding 18,095,988 shares of Class A Common Stock and 154,604
shares of Class B Common Stock.
GENERAL
The following description of the Class A Common Stock sets forth certain
general terms and provisions of the Class A Common Stock to which any Prospectus
Supplement may relate, including a Prospectus Supplement providing that Class A
Common Stock will be issuable upon conversion of Debt Securities or Preferred
Stock. The statements below describing the Class A Common Stock are in all
respects subject to and qualified in their entirety by reference to the
applicable provisions of the Company's Amended and Restated Certificate of
Incorporation (the "Certificate of Incorporation") and By-Laws.
TERMS
Subject to the preferential rights of any other shares or series of stock,
holders of Class A Common Stock will be entitled to receive dividends when, as
and if declared by the Company's Board of Directors out of funds legally
available therefor. Payment and declaration of dividends on the Class A Common
Stock and purchases of shares thereof by the Company will be subject to certain
restrictions if the Company fails to pay dividends on the Preferred Stock. See
"Description of Preferred Stock." Upon any liquidation, dissolution or winding
up of the Company, holders of Class A Common Stock (together with holders of
Class B Common Stock) will be entitled to share equally and ratably in any
assets available for distribution to them, after payment or provision for
payment of the debts and other liabilities of the Company and the preferential
amounts owing with respect to any outstanding Preferred Stock. The Class A
Common Stock will possess ordinary voting rights for the election of directors
and in respect of other corporate matters, each share entitling the holder
thereof to one vote. Holders of Class A Common Stock will not have cumulative
voting rights in the election of directors, which means that holders of more
than 50% of all the shares of the Company's Common Stock voting for the election
of directors can elect all the directors if they choose to do so and the holders
of the remaining shares cannot elect any directors. Holders of shares of Class A
Common Stock will not have preemptive rights, which means they have no right to
acquire any additional shares of Class A Common Stock that may be issued by the
Company at a subsequent date. All shares of Class A Common Stock now outstanding
are, and additional shares of Class A Common Stock offered will be when issued,
fully paid and nonassessable, and no shares of Class A Common Stock are or will
be subject to preemptive or similar rights.
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The Class B Common Stock has rights substantially similar to those of the
Class A Common Stock. Each holder of Class B Common Stock was entitled to a loan
from the Company in an amount necessary to satisfy the holder's general partner
capital obligation to certain partnerships that were acquired by the Company in
the Consolidation. Each loan is secured by a pledge of the Class B Common Stock
held by the borrowing stockholder. Upon repayment of a portion of the loan, that
portion of the Class B Common Stock equal to the percentage of the loan
principal repaid is released from the pledge and is convertible, on a
share-for-share basis, into shares of Class A Common Stock. Class B Common Stock
is not publicly traded but is transferable upon its release from the pledge.
RESTRICTIONS ON OWNERSHIP
For the Company to qualify as a REIT under the Internal Revenue Code of
1986, as amended (the "Code"), not more than 50% in value of its outstanding
capital stock may be owned, actually or constructively, by five or fewer
individuals (defined in the Code to include certain entities) during the last
half of a taxable year. To assist the Company in meeting this requirement, the
Company may take certain actions to limit the beneficial ownership, actually or
constructively, by a single person or entity of the Company's outstanding equity
securities. See "Restrictions on Transfers of Capital Stock; Excess Stock."
TRANSFER AGENT
The registrar and transfer agent for the Common Stock is Gemisys
Corporation.
STOCKHOLDER RIGHTS PLAN
Pursuant to the Rights Agreement dated as of March 17, 1994, between the
Company and Gemisys Corporation, as Rights Agent (the "Rights Agreement"),
holders of shares of the Common Stock have certain rights to purchase shares of
the Company's Series A Junior Participating Preferred Stock (the "Junior
Preferred Shares") exercisable only in certain circumstances (the "Rights"). The
Rights, which are represented by certificates for the Common Stock, trade
together with the Common Stock until a Distribution Date (as defined below).
Each Right, when it becomes exercisable as described below, will entitle the
registered holder to purchase one one-hundredth of a Junior Preferred Share at
$65 per one one-hundredth of a Junior Preferred Share (subject to adjustment,
the "Purchase Price").
Until the earlier to occur of (a) 10 days following a public announcement
that a person or group of affiliated or associated persons (an "Acquiring
Person") has acquired beneficial ownership of 10% or more of the outstanding
Common Stock and (b) 10 business days (or such later date as may be determined
by action of the Company's Board of Directors prior to such time as any person
or group of affiliated persons becomes an Acquiring Person) following the
commencement of, or announcement of an intention to make, a tender offer or
exchange offer, the consummation of which would result in the beneficial
ownership by a person or group of 10% or more of such outstanding Common Stock
(the earlier of such dates, the "Distribution Date"), the Rights will be
evidenced, with respect to any of the Common Stock certificates outstanding as
of March 25, 1994 (the "Rights Record Date"), by such Common Stock certificate,
with a copy of a Summary of Rights to Purchase Preferred Shares (the "Summary of
Rights") attached thereto.
The Rights Agreement provides that, until the Distribution Date (or earlier
redemption or expiration of the Rights), the Rights will be transferred with and
only with the Common Stock. Until the Distribution Date (or earlier redemption
or expiration of the Rights), new Common Stock certificates issued after the
Rights Record Date upon transfer or new issuance of Common Stock will contain a
notation incorporating the Rights Agreement by reference. Until the Distribution
Date (or earlier redemption or expiration of the Rights), the surrender for
transfer of any certificates for Common Stock outstanding as of the Rights
Record Date, even without such notation or a copy of the Summary of Rights being
attached thereto, will also constitute the transfer of the Rights associated
with the Common Stock represented by such certificate. As soon as practicable
following the Distribution Date,
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separate certificates evidencing the Rights ("Right Certificates") will be
mailed to holders of record of the Common Stock as of the close of business on
the Distribution Date, and such separate Right Certificates alone will evidence
the Rights.
The Rights are not exercisable until the Distribution Date. The Rights will
expire on March 17, 2004, unless such date is extended or unless the Rights are
earlier redeemed or exchanged by the Company, in each case as described below.
The Purchase Price payable and the number of Junior Preferred Shares or
other securities or property issuable upon exercise of the Rights are subject to
adjustment from time to time to prevent dilution (a) in the event of a stock
dividend on, or a subdivision, combination or reclassification of, the Junior
Preferred Shares, (b) upon the grant to holders of the Junior Preferred Shares
of certain rights or warrants to subscribe for or purchase Junior Preferred
Shares at a price, or securities convertible into Junior Preferred Shares with a
conversion price, less than the then-current market price of the Junior
Preferred Shares, or (c) upon the distribution to holders of the Junior
Preferred Shares of evidences of indebtedness or assets (excluding regular
periodic cash dividends paid out of earnings or retained earnings or dividends
payable in Junior Preferred Shares) or of subscription rights or warrants (other
than those referred to above).
The number of outstanding Rights and the number of one one-hundredths of a
Junior Preferred Share issuable upon exercise of each Right is also subject to
adjustment in the event of a stock split of the Common Stock or a dividend on
the Common Stock payable in Common Stock or subdivisions, consolidations or
combinations of the Common Stock occurring, in any such case, prior to the
Distribution Date.
Junior Preferred Shares purchasable upon exercise of the Rights will be
redeemable only in accordance with the redemption provisions discussed under
"Restrictions on Transfers of Capital Stock; Excess Stock." Each holder of
Junior Preferred Shares will be entitled to a minimum preferential quarterly
dividend payment of the greater of $1 per share and a per share dividend of 100
times the aggregate dividends declared per share of Common Stock. In the event
of liquidation, the holders of Junior Preferred Shares will be entitled to a
minimum preferential liquidation payment of $100 per share or, if greater, to an
aggregate per share payment of 100 times the aggregate payment made per share of
Common Stock. Each Junior Preferred Share will have 100 votes, voting together
with the Common Stock. Finally, in the event of any merger, consolidation or
other transaction in which shares of Common Stock are exchanged, each Junior
Preferred Share will be entitled to receive 100 times the amount received per
share of Common Stock. These rights are protected by customary antidilution
provisions.
Because of the nature of the Junior Preferred Shares' dividend, liquidation
and voting rights, the value of the one one-hundredth interest in a Junior
Preferred Share purchasable upon exercise of each Right should approximate the
value of one share of Common Stock.
If any person or group of affiliated or associated persons becomes an
Acquiring Person, proper provision will be made so that each holder of a Right,
other than Rights beneficially owned by the Acquiring Person (which will
thereafter be void), will thereafter have the right to receive upon exercise
that number of shares of Common Stock having a market value, as of the date of
exercise, of two times the exercise price of the Right. If the Company is
acquired in a merger or other business combination transaction, or 50% or more
of its consolidated assets or earning power are sold, proper provision will be
made so that each holder of a Right will thereafter have the right to receive,
upon the exercise thereof at the then-current exercise price of the Right, that
number of shares of common stock of the acquiring company that at the time of
such transaction will have a market value of two times the exercise price of the
Right.
At any time after any person or group becomes an Acquiring Person and prior
to the acquisition by such person or group of 50% or more of the outstanding
Common Stock, the Company's Board of Directors may exchange the Rights (other
than Rights owned by such person or group that have
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become void), in whole or in part, at an exchange ratio of one share of Common
Stock, or one one-hundredth of a Junior Preferred Share (or of a share of a
class or series of the Company's Preferred Stock having equivalent rights,
preferences and privileges), per Right (subject to adjustment).
With certain exceptions, no adjustment in the Purchase Price will be
required until cumulative adjustments require an adjustment of at least 1% in
such Purchase Price. No fractional Junior Preferred Shares will be issued (other
than fractions that are integral multiples of one one-hundredth of a Junior
Preferred Share, which may, at the Company's election, be evidenced by
depositary receipts) and, in lieu thereof, an adjustment in cash will be made
based on the market price of the Junior Preferred Shares on the last trading day
prior to the date of exercise.
At any time prior to any person or group becoming an Acquiring Person, the
Company's Board of Directors may redeem the Rights in whole, but not in part, at
the price of $.0001 per Right, with adjustments for stock splits, stock
dividends or other similar transactions (the "Redemption Price"). The redemption
of the Rights may be made effective at such time, on such basis and with such
conditions as the Company's Board of Directors in its sole discretion may
establish. Immediately upon any redemption of the Rights, the right to exercise
the Rights will terminate and the only right of the holders of Rights will be to
receive the Redemption Price.
The terms of the Rights may be amended by the Company's Board of Directors
without the consent of the holders of the Rights, including an amendment to
lower certain 10% thresholds described above to not less than the greater of (a)
the sum of .001% and the largest percentage of the outstanding Common Stock then
known to the Company to be beneficially owned by any person or group of
affiliated persons and (b) 9.8%, except that, from and after such time as any
person or group of affiliated or associated persons becomes an Acquiring Person,
no such amendment may adversely affect the interests of the holders of the
Rights.
Until a Right is exercised, the holder thereof, as such, will have no rights
as a stockholder of the Company, including, without limitation, the right to
vote or to receive dividends.
The Rights have certain antitakeover effects. The Rights will cause
substantial dilution to a person or group that attempts to acquire the Company
without conditioning the offer on substantially all the Rights being acquired.
The Rights will not interfere with any merger or other business combination
approved by the Company's Board of Directors since the Company's Board of
Directors may, at its option, at any time prior to any person or group becoming
an Acquiring Person, redeem all, but not less than all, the then-outstanding
Rights at the Redemption Price.
DESCRIPTION OF PREFERRED STOCK
The Company is authorized to issue 40,000,000 shares of Preferred Stock, par
value $.001 per share, of which no shares were outstanding as of April 14, 1995.
The Company has designated 2,800,000 shares of the Preferred Stock as the Junior
Preferred Shares issuable in connection with the Rights Agreement discussed
under "Description of Common Stock -- Stockholder Rights Plan."
GENERAL
The following description of the Preferred Stock sets forth certain general
terms and provisions of the Preferred Stock to which any Prospectus Supplement
may relate. The statements below describing the Preferred Stock are in all
respects subject to and qualified in their entirety by reference to the
applicable provisions of the Certificate of Incorporation (including the
applicable Certificate of Designations) and By-Laws.
Shares of Preferred Stock may be issued from time to time in one or more
series as authorized by the Company's Board of Directors. Subject to limitations
prescribed by the Delaware General Corporation Law and the Certificate of
Incorporation, the Company's Board of Directors is authorized to fix the number
of shares constituting each series of Preferred Stock and the designations and
powers, preferences and relative, participating, optional or other special
rights and qualifications, limitations
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or restrictions thereof, including such provisions as may be desired concerning
voting, redemption, dividends, dissolution or the distribution of assets,
conversion or exchange, and such other subjects or matters as may be fixed by
resolution by the Board of Directors or a duly authorized committee thereof. The
Preferred Stock will, when issued, be fully paid and nonassessable and will have
no preemptive rights.
Reference is made to the Prospectus Supplement relating to the Preferred
Stock offered thereby for specific terms, including:
(1) the title and stated value of such Preferred Stock;
(2) the number of shares of such Preferred Stock offered, the liquidation
preference per share and the offering price of such Preferred Stock;
(3) the dividend rate(s), period(s) and/or payment date(s) or method(s) of
calculation thereof applicable to such Preferred Stock;
(4) whether such Preferred Stock is cumulative or not and, if cumulative, the
date from which dividends on such Preferred Stock shall accumulate;
(5) the procedures for any auction and remarketing, if any, for such Preferred
Stock;
(6) the provision for a sinking fund, if any, for such Preferred Stock;
(7) any voting rights of such Preferred Stock;
(8) the provision for redemption, if applicable, of such Preferred Stock;
(9) any listing of such Preferred Stock on any securities exchange;
(10) the terms and conditions, if applicable, upon which such Preferred Stock
will be convertible into Common Stock of the Company, including the
conversion price (or manner of calculation thereof);
(11) a discussion of federal income tax considerations applicable to such
Preferred Stock;
(12) any limitations on actual, beneficial or constructive ownership and
restrictions on transfer, in each case as may be appropriate to preserve the
Company's REIT status;
(13) the relative ranking and preferences of such Preferred Stock as to dividend
rights and rights upon liquidation, dissolution or winding up of the affairs
of the Company;
(14) any limitations on issuance of any series of Preferred Stock ranking senior
to or on a parity with such series of Preferred Stock as to dividend rights
and rights upon liquidation, dissolution or winding up of the affairs of the
Company; and
(15) any other specific terms, preferences, rights, limitations or restrictions
of such Preferred Stock.
RANK
Unless otherwise specified in the applicable Prospectus Supplement, the
Preferred Stock will, with respect to dividend rights and rights upon
liquidation, dissolution or winding up of the affairs of the Company, rank (a)
senior to all classes or series of Common Stock and Excess Stock of the Company,
to the Junior Preferred Shares and to all equity securities ranking junior to
such Preferred Stock with respect to dividend rights or rights upon liquidation,
dissolution or winding up of the Company; (b) on a parity with all equity
securities issued by the Company the terms of which specifically provide that
such equity securities rank on a parity with the Preferred Stock with respect to
dividend rights or rights upon liquidation, dissolution or winding up of the
affairs of the Company; and (c) junior to all equity securities issued by the
Company the terms of which specifically provide that such equity securities rank
senior to the Preferred Stock with respect to dividend rights or rights upon
liquidation, dissolution or winding up of the affairs of the Company. As used in
the Certificate of Incorporation for these purposes, the term "equity
securities" does not include convertible debt securities.
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DIVIDENDS
Holders of shares of the Preferred Stock of each series shall be entitled to
receive, when, as and if declared by the Company's Board of Directors, out of
the Company's assets legally available for payment, cash dividends at such rates
and on such dates as will be set forth in the applicable Prospectus Supplement.
Each such dividend shall be payable to holders of record as they appear on the
Company's stock transfer books on such record dates as shall be fixed by the
Company's Board of Directors.
Dividends on any series of Preferred Stock may be cumulative or
noncumulative, as provided in the applicable Prospectus Supplement. Dividends,
if cumulative, will be cumulative from and after the date set forth in the
applicable Prospectus Supplement. If the Company's Board of Directors fails to
declare a dividend payable on a dividend payment date on any series of Preferred
Stock for which dividends are noncumulative, then the holders of such series of
Preferred Stock will have no right to receive a dividend in respect of the
dividend period ending on such dividend payment date, and the Company will have
no obligation to pay the dividend accrued for such period, whether or not
dividends on such series are declared payable on any future dividend payment
date.
If any shares of Preferred Stock of any series are outstanding, no full
dividends shall be declared or paid or set apart for payment on the Preferred
Stock of any other series ranking, as to dividends, on a parity with or junior
to the Preferred Stock of such series for any period unless (a) if such series
of Preferred Stock has a cumulative dividend, full cumulative dividends have
been or contemporaneously are declared and paid or declared and a sum sufficient
for the payment thereof is set apart for such payment on the Preferred Stock of
such series for all past dividend periods and the then current dividend period
or (b) if such series of Preferred Stock does not have a cumulative dividend,
full dividends for the then current dividend period have been or
contemporaneously are declared and paid or declared and a sum sufficient for the
payment thereof is set apart for such payment on the Preferred Stock of such
series. When dividends are not paid in full (or a sum sufficient for such full
payment is not so set apart) upon the shares of Preferred Stock of any series
and the shares of any other series of Preferred Stock ranking on a parity as to
dividends with the Preferred Stock of such series, all dividends declared on
shares of Preferred Stock of such series and any other series of Preferred Stock
ranking on a parity as to dividends of such Preferred Stock shall be declared
pro rata so that the amount of dividends declared per share on the Preferred
Stock of such series and such other series of Preferred Stock shall in all cases
bear to each other the same ratio that accrued dividends per share on the shares
of Preferred Stock of such series (which shall not include any accumulation in
respect of unpaid dividends for prior dividend periods if such Preferred Stock
does not have a cumulative dividend) and such other series of Preferred Stock
bear to each other. No interest, or sum of money in lieu of interest, shall be
payable in respect of any dividend payment or payments on Preferred Stock of
such series that may be in arrears.
Except as provided in the immediately preceding paragraph, unless (a) if
such series of Preferred Stock has a cumulative dividend, full cumulative
dividends on the Preferred Stock of such series have been or contemporaneously
are declared and paid or declared and a sum sufficient for the payment thereof
is set apart for payment for all past dividend periods and the then current
dividend period and (b) if such series of Preferred Stock does not have a
cumulative dividend, full dividends on the Preferred Stock of such series have
been or contemporaneously are declared and paid or declared and a sum sufficient
for the payment thereof is set apart for payment for the then current dividend
period, no dividends (other than in Common Stock or other capital stock of the
Company ranking junior to the Preferred Stock of such series as to dividends and
upon liquidation) shall be declared or paid or set aside for payment nor shall
any other distribution be declared or made on the Common Stock or any other
capital stock of the Company ranking junior to or on a parity with the Preferred
Stock of such series as to dividends or upon liquidation, nor shall any Common
Stock or any other capital stock of the Company ranking junior to or on a parity
with the Preferred Stock of such series as to dividends or upon liquidation be
redeemed, purchased or otherwise acquired for any consideration (or any amounts
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be paid to or made available for a sinking fund for the redemption of any shares
of any such stock) by the Company (except by conversion into or exchange for
other capital stock of the Company ranking junior to the Preferred Stock of such
series as to dividends and upon liquidation).
Any dividend payment made on shares of a series of Preferred Stock shall
first be credited against the earliest accrued but unpaid dividend due with
respect to shares of such series that remains payable.
REDEMPTION
If so provided in the applicable Prospectus Supplement, the shares of
Preferred Stock will be subject to mandatory redemption or redemption at the
Company's option, as a whole or in part, in each case on the terms, at the times
and at the redemption prices set forth in such Prospectus Supplement.
The Prospectus Supplement relating to a series of Preferred Stock that is
subject to mandatory redemption will specify the number of shares of such
Preferred Stock that shall be redeemed by the Company in each year commencing
after a date to be specified, at a redemption price per share to be specified,
together with an amount equal to all accumulated and unpaid dividends thereon
(which shall not, if such Preferred Stock does not have a cumulative dividend,
include any accumulation in respect of unpaid dividends for prior dividend
periods) to the date of redemption. The redemption price may be payable in cash
or other property, as specified in the applicable Prospectus Supplement. If the
redemption price for Preferred Stock of any series is payable only from the net
proceeds of the issuance of capital stock of the Company, the terms of such
Preferred Stock may provide that, if no such capital stock shall have been
issued or to the extent the net proceeds from any issuance are insufficient to
pay in full the aggregate redemption price then due, such Preferred Stock shall
automatically and mandatorily be converted into shares of the applicable capital
stock of the Company pursuant to conversion provisions specified in the
applicable Prospectus Supplement.
Notwithstanding the foregoing, unless (a) if such series of Preferred Stock
has a cumulative dividend, full cumulative dividends on all shares of such
series of Preferred Stock have been or contemporaneously are declared and paid
or declared and a sum sufficient for the payment thereof is set apart for
payment for all past dividend periods and the then current dividend period and
(b) if such series of Preferred Stock does not have a cumulative dividend, full
dividends on the Preferred Stock of such series have been or contemporaneously
are declared and paid or declared and a sum sufficient for the payment thereof
is set apart for payment for the then current dividend period, no shares of such
series of Preferred Stock shall be redeemed unless all outstanding shares of
Preferred Stock of such series are simultaneously redeemed; PROVIDED, HOWEVER,
that the foregoing shall not prevent the purchase or acquisition of shares of
Preferred Stock of such series to preserve the Company's REIT status or pursuant
to a purchase or exchange offer made on the same terms to holders of all
outstanding shares of Preferred Stock of such series. In addition, unless (i) if
such series of Preferred Stock has a cumulative dividend, full cumulative
dividends on all outstanding shares of such series of Preferred Stock have been
or contemporaneously are declared and paid or declared and a sum sufficient for
the payment thereof is set apart for payment for all past dividend periods and
the then current dividend period and (ii) if such series of Preferred Stock does
not have a cumulative dividend, full dividends on the Preferred Stock of such
series have been or contemporaneously are declared and paid or declared and a
sum sufficient for the payment thereof is set apart for payment for the then
current dividend period, the Company shall not purchase or otherwise acquire
directly or indirectly any shares of Preferred Stock of such series (except by
conversion into or exchange for capital stock of the Company ranking junior to
the Preferred Stock of such series as to dividends and upon liquidation);
PROVIDED, HOWEVER, that the foregoing shall not prevent the purchase or
acquisition of shares of Preferred Stock of such series to preserve the
Company's REIT status or pursuant to a purchase or exchange offer made on the
same terms to holders of all outstanding shares of Preferred Stock of such
series.
If fewer than all the outstanding shares of Preferred Stock of any series
are to be redeemed, the number of shares to be redeemed will be determined by
the Company and such shares may be
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redeemed pro rata from the holders of record of such shares in proportion to the
number of such shares held by such holders (with adjustments to avoid redemption
of fractional shares) or any other equitable method determined by the Company
that will not result in the issuance of any Excess Stock.
Notice of redemption will be mailed at least 30, but not more than 60, days
before the redemption date to each holder of record of a share of Preferred
Stock of any series to be redeemed at the address shown on the Company's stock
transfer books. Each notice shall state: (a) the redemption date; (b) the number
of shares and series of the Preferred Stock to be redeemed; (c) the redemption
price; (d) the place or places where certificates for such Preferred Stock are
to be surrendered for payment of the redemption price; (e) that dividends on the
shares to be redeemed will cease to accumulate on such redemption date; and (f)
the date on which the holder's conversion rights, if any, as to such shares
shall terminate. If fewer than all the shares of Preferred Stock of any series
are to be redeemed, the notice mailed to each such holder thereof shall also
specify the number of shares of Preferred Stock to be redeemed from each such
holder and, upon redemption, a new certificate shall be issued representing the
unredeemed shares without cost to the holder thereof. If notice of redemption of
any shares of Preferred Stock has been given and if the funds necessary for such
redemption have been set aside by the Company in trust for the benefit of the
holders of any shares of Preferred Stock so called for redemption, then from and
after the redemption date dividends will cease to accrue on such shares of
Preferred Stock, such shares of Preferred Stock shall no longer be deemed
outstanding and all rights of the holders of such shares will terminate, except
the right to receive the redemption price. In order to facilitate the redemption
of shares of Preferred Stock of any series, the Board of Directors may fix a
record date for the determination of shares of such series of Preferred Stock to
be redeemed.
Subject to applicable law and the limitation on purchases when dividends on
a series of Preferred Stock are in arrears, the Company may, at any time and
from time to time, purchase any shares of such series of Preferred Stock in the
open market, by tender or by private agreement.
LIQUIDATION PREFERENCE
Upon any voluntary or involuntary liquidation, dissolution or winding up of
the affairs of the Company, then, before any distribution or payment shall be
made to the holders of any Common Stock or any other class or series of capital
stock of the Company ranking junior to any series of the Preferred Stock in the
distribution of assets upon any liquidation, dissolution or winding up of the
affairs of the Company, the holders of such series of Preferred Stock shall be
entitled to receive out of assets of the Company legally available for
distribution to stockholders liquidating distributions in the amount of the
liquidation preference per share (set forth in the applicable Prospectus
Supplement), plus an amount equal to all dividends accrued and unpaid thereon
(which shall not include any accumulation in respect of unpaid dividends for
prior dividend periods if such Preferred Stock does not have a cumulative
dividend). After payment of the full amount of the liquidating distributions to
which they are entitled, the holders of Preferred Stock will have no right or
claim to any of the remaining assets of the Company. If, upon any such voluntary
or involuntary liquidation, dissolution or winding up, the legally available
assets of the Company are insufficient to pay the amount of the liquidating
distributions on all outstanding shares of any series of Preferred Stock and the
corresponding amounts payable on all shares of other classes or series of
capital stock of the Company ranking on a parity with such series of Preferred
Stock in the distribution of assets upon liquidation, dissolution or winding up,
then the holders of such series of Preferred Stock and all other such classes or
series of capital stock shall share ratably in any such distribution of assets
in proportion to the full liquidating distributions to which they would
otherwise be respectively entitled.
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If liquidating distributions shall have been made in full to all holders of
any series of Preferred Stock, the remaining assets of the Company shall be
distributed among the holders of any other classes or series of capital stock
ranking junior to such series of Preferred Stock upon liquidation, dissolution
or winding up, according to their respective rights and preferences and in each
case according to their respective number of shares. For such purposes, the
consolidation or merger of the Company with or into any other entity, or the
sale, lease, transfer or conveyance of all or substantially all of the Company's
property or business, shall not be deemed to constitute a liquidation,
dissolution or winding up of the affairs of the Company.
VOTING RIGHTS
Holders of the Preferred Stock will not have any voting rights, except as
set forth below or as otherwise from time to time required by law or as
indicated in the applicable Prospectus Supplement.
Unless provided otherwise for any series of Preferred Stock, so long as any
shares of Preferred Stock of a series remain outstanding, the Company shall not,
without the affirmative vote or consent of the holders of at least a majority of
the shares of such series of Preferred Stock outstanding at the time, given in
person or by proxy, either in writing or at a meeting (such series voting
separately as a class), (a) authorize or create, or increase the authorized or
issued amount of, any class or series of capital stock ranking prior to such
series of Preferred Stock with respect to payment of dividends or the
distribution of assets upon liquidation, dissolution or winding up or reclassify
any authorized capital stock of the Company into any such shares, or create,
authorize or issue any obligation or security convertible into or evidencing the
right to purchase any such shares; or (b) amend, alter or repeal the provisions
of the Certificate of Incorporation or the Certificate of Designations for such
series of Preferred Stock, whether by merger, consolidation or otherwise, so as
to materially and adversely affect any right, preference, privilege or voting
power of such series of Preferred Stock or the holders thereof; PROVIDED,
HOWEVER, that any increase in the amount of the authorized Preferred Stock or
the creation or issuance of any other series of Preferred Stock, or any increase
in the amount of authorized shares of such series or any other series of
Preferred Stock, in each case ranking on a parity with or junior to the
Preferred Stock of such series with respect to payment of dividends or the
distribution of assets upon liquidation, dissolution or winding up, shall not be
deemed to materially and adversely affect such rights, preferences, privileges
or voting powers.
The foregoing voting provisions will not apply if, at or prior to the time
when the act with respect to which such vote would otherwise be required shall
be effected, all outstanding shares of such series of Preferred Stock shall have
been redeemed or called for redemption upon proper notice and sufficient funds
shall have been deposited in trust to effect such redemption.
Under Delaware law, notwithstanding anything to the contrary set forth
above, holders of each series of Preferred Stock will be entitled to vote as a
class upon a proposed amendment to the Certificate of Incorporation, whether or
not entitled to vote thereon by the Certificate of Incorporation, if the
amendment would increase or decrease the aggregate number of authorized shares
of such series, increase or decrease the par value of the shares of such series,
or alter or change the powers, preferences or special rights of the shares of
such series so as to affect them adversely.
CONVERSION RIGHTS
The terms and conditions, if any, upon which shares of any series of
Preferred Stock are convertible into Class A Common Stock will be set forth in
the applicable Prospectus Supplement relating thereto. Such terms will include
the number of shares of Class A Common Stock into which the Preferred Stock is
convertible, the conversion price (or manner of calculation thereof), the
conversion period, provisions as to whether conversion will be at the option of
the holders of the Preferred Stock or the Company, the events requiring an
adjustment of the conversion price and provisions affecting conversion in the
event of the redemption of such Preferred Stock.
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RESTRICTIONS ON OWNERSHIP
For the Company to qualify as a REIT under the Code, not more than 50% in
value of its outstanding capital stock may be owned, actually or constructively,
by five or fewer individuals (defined in the Code to include certain entities)
during the last half of a taxable year. To assist the Company in meeting this
requirement, the Company may take certain actions to limit the beneficial
ownership, actually or constructively, by a single person or entity of the
Company's outstanding equity securities. See "Restrictions on Transfers of
Capital Stock; Excess Stock."
TRANSFER AGENT
The transfer agent and registrar for any series of Preferred Stock will be
set forth in the applicable Prospectus Supplement.
RESTRICTIONS ON TRANSFERS OF CAPITAL STOCK; EXCESS STOCK
For the Company to qualify as a REIT under the Code, among other things, not
more than 50% in value of its outstanding capital stock may be owned, actually
or constructively, by five or fewer individuals (defined in the Code to include
certain entities) during the last half of a taxable year, and such capital stock
must be beneficially owned by 100 or more persons during at least 355 days of a
taxable year of 12 months or during a proportionate part of a shorter taxable
year. To ensure that the Company remains qualified as a REIT, the Certificate of
Incorporation, subject to certain exceptions, provides that the Company may
prevent the transfer and/or call for redemption of shares of the Company
(whether Common Stock or Preferred Stock) if more than 50% of the outstanding
shares would be owned, actually or constructively, by five or fewer persons
(defined to include individuals, corporations, partnerships, joint ventures and
similar entities) or if one person would own, actually or constructively, more
than 9.8% of the total outstanding shares (or such higher percentage as may be
determined by the Company's Board of Directors (the "Ownership Limit")). In
addition, the Company may prevent such transfers and/or call for redemption of
such shares if the Company's Board of Directors determines in good faith that
the shares have or may become concentrated to the extent that may prevent the
Company from qualifying as a REIT. See "Certain Federal Income Tax
Considerations -- Overview of REIT Qualification Rules -- Share Ownership." Any
class or series of Preferred Stock may be subject to these restrictions if so
stated in the resolutions providing for the issuance of such Preferred Stock.
Any corporate investor wishing to acquire or own more than 9.8% of the total
outstanding shares may petition the Company's Board of Directors in writing for
approval. The Company's Board will grant such request unless it determines in
good faith that the acquisition or ownership of such shares would jeopardize the
Company's qualification as a REIT under existing federal tax laws and
regulations. Any corporate investor intending to acquire shares in excess of the
Ownership Limit must give written notice to the Company of the proposed
acquisition no later than the date on which the transaction occurs and must
furnish such opinions of counsel, affidavits, undertakings, agreements and
information as may be required by the Company's Board of Directors to evaluate
or to protect against any adverse effect of the transfer. Notwithstanding the
foregoing, the Company's Board of Directors is not required to grant a request
to adjust the Ownership Limit if the Company's Board of Directors believes,
based on advice of legal counsel, that the granting of such request would cause
the Company's Board of Directors to breach its fiduciary duties to the
stockholders of the Company.
If, despite the restrictions noted above, any person acquires shares of the
Company's Common Stock in excess of the Ownership Limit (applying certain
constructive ownership provisions), the shares most recently acquired by such
person in excess of the Ownership Limit will be automatically exchanged for an
equal number of shares of Excess Stock. The Company is authorized to issue
160,000,000 shares of Excess Stock, par value $.001 per share. Pursuant to the
Company's Certificate of Incorporation, shares of Excess Stock have the
following characteristics: (a) owners of Excess Stock are not entitled to
exercise voting rights with respect to the Excess Stock; (b) Excess Stock shall
not be deemed outstanding for purposes of determining a quorum at any annual or
special meeting of stockholders; and (c) Excess Stock will not be entitled to
any dividends or other distributions. Any
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person who becomes an owner of Excess Stock is obligated to immediately give the
Company written notice of such fact and certain information required by the
Certificate of Incorporation. Excess Stock is also deemed to have been offered
for sale to the Company or its designee for a period of 120 days from the later
of (i) the date of the transfer that created the Excess Stock if the Company has
actual notice that such transfer created the Excess Stock and (ii) the date on
which the Company's Board of Directors determines in good faith that the
transfer creating the Excess Stock has occurred. The Company has the right
during such time period to accept the deemed offer or, in the Board of
Directors' discretion, the Company may acquire and sell, or cause the owner to
sell, the Excess Stock. The price for the Excess Stock will be the lesser of (y)
the closing price of the shares exchanged into Excess Stock on the national
stock exchange on which the shares are listed as of the date the Company or its
designee acquires the Excess Stock or, if no such price is available, as
determined in good faith by the Company's Board of Directors and (z) the price
per share paid by the owner of the shares that were exchanged into Excess Stock
or, if no purchase price was paid, the fair market value of such shares on the
date of acquisition as determined in good faith by the Company's Board of
Directors. Upon such transfer or sale, the Excess Stock will automatically
convert to Class A Common Stock with all voting and dividend rights effective as
of the date of such conversion; PROVIDED, HOWEVER, that the owner will not be
entitled to receive dividends payable with respect to Class A Common Stock for
the period during which the shares were Excess Stock.
All certificates of Class A Common Stock and Class B Common Stock, any other
series of the Company's Common Stock, and any class or series of Preferred Stock
will bear a legend referring to the restrictions described above. All persons
who own a specified percentage (or more) of the outstanding capital stock of the
Company must file an affidavit with the Company containing information regarding
their ownership of stock as set forth in the Treasury Regulations. Under current
Treasury Regulations, the percentage is set between .5% and 5%, depending on the
number of record holders of capital stock. In addition, each stockholder shall
upon demand be required to disclose to the Company in writing such information
with respect to the direct, indirect and constructive ownership of shares of
capital stock of the Company as the Board of Directors deems necessary to comply
with the provisions of the Code applicable to a REIT, to comply with the
requirements of any taxing authority or governmental agency or to determine any
such compliance.
This ownership limitation may have the effect of precluding acquisition of
control of the Company by a third party unless the Board of Directors determines
that maintenance of REIT status is no longer in the best interests of the
Company.
CERTAIN FEDERAL INCOME TAX CONSIDERATIONS
GENERAL
The following summary of certain federal income tax considerations to the
Company is based on current law, is for general information only, and is not tax
advice. The tax treatment of a holder of any of the Securities will vary
depending on the terms of the specific Securities acquired by such holder, as
well as his or her particular situation. This discussion does not attempt to
address any aspects of federal income taxation relating to holders of
Securities. Certain federal income tax considerations relevant to a holder of
Securities will be provided in the Prospectus Supplement relating thereto.
EACH INVESTOR IS ADVISED TO CONSULT THE APPLICABLE PROSPECTUS SUPPLEMENT, AS
WELL AS HIS OR HER OWN TAX ADVISOR, REGARDING THE TAX CONSEQUENCES TO HIM OR HER
OF THE ACQUISITION, OWNERSHIP AND SALE OF THE OFFERED SECURITIES, INCLUDING THE
FEDERAL, STATE, LOCAL, FOREIGN AND OTHER TAX CONSEQUENCES OF SUCH ACQUISITION,
OWNERSHIP AND SALE AND OF POTENTIAL CHANGES IN APPLICABLE LAWS.
QUALIFICATION OF THE COMPANY AS A REIT; OPINION OF COUNSEL
The Company intends to elect to be taxed as a REIT under Sections 856
through 860 of the Code, commencing with its fiscal year ended December 31,
1994. The election to be taxed as a REIT will
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continue until it is revoked or otherwise terminated. The most important
consequence to the Company of being treated as a REIT for federal income tax
purposes is that it will not be subject to federal corporate income taxes on net
income that is currently distributed to its stockholders. This treatment
substantially eliminates the "double taxation" (at the corporate and stockholder
levels) that typically results when a corporation earns income and distributes
that income to stockholders in the form of a dividend. Accordingly, if the
Company at any time fails to qualify as a REIT, the Company will be taxed on its
distributed income, thereby reducing the amount of cash available for
distribution to its stockholders.
In the opinion of Perkins Coie, counsel to the Company, commencing with the
taxable year ended December 31, 1994, the Company has been organized in
conformity with the requirements for qualification as a REIT 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. This opinion is based on
various assumptions and is conditioned upon the representations of the Company
as to factual matters. Moreover, continued qualification and taxation as a REIT
will depend on the Company's ability to satisfy on a continuing basis certain
distribution levels, diversity of stock ownership and various qualification
tests imposed by the Code as summarized below. While the Company intends to
operate so that it will continue to qualify as a REIT, given the highly complex
nature of the rules governing REITs, the ongoing importance of factual
determinations, and the possibility of future changes in the circumstances of
the Company, no assurance can be given by counsel or the Company that the
Company will so qualify for any particular year. Perkins Coie will not review
compliance with these tests on a continuing basis, and has not undertaken to
update its opinion subsequent to the date hereof.
TAXATION OF THE COMPANY AS A REIT
If the Company qualifies for taxation as a REIT, it generally will not be
subject to federal income tax on net income that is currently distributed to its
stockholders. The Company may, however, be subject to certain federal taxes
based on the amount of its distributions or its inability to meet certain REIT
qualification requirements. These taxes are the following:
TAX ON UNDISTRIBUTED INCOME. First, if the Company does not distribute all
of its net taxable income, including any net capital gain, the Company would be
taxed at regular corporate rates on the undistributed income or gains.
TAX ON PROHIBITED TRANSACTIONS. Second, if the Company has net income from
certain prohibited transactions, including sales or dispositions of property
held primarily for sale to customers in the ordinary course of business, such
net income would be subject to a 100% confiscatory tax.
TAX ON FAILURE TO MEET GROSS INCOME REQUIREMENTS. Third, if the Company
should fail to meet either the 75% or 95% gross income test as described below
but still qualify for REIT status because, among other requirements, it was able
to show that such failure was due to reasonable cause, it will be subject to a
100% tax on an amount equal to (a) the gross income attributable to the greater
of the amount, if any, by which the Company failed either the 75% or the 95%
gross income test, multiplied by (b) a fraction intended to reflect the
Company's profitability.
TAX ON FAILURE TO MEET DISTRIBUTION REQUIREMENTS. Fourth, if the Company
should fail to distribute during each calendar year at least the sum of (a) 85%
of its REIT ordinary income for such year, (b) 95% of its REIT capital gain net
income for such year, and (c) any undistributed taxable income from prior
periods, the Company would be subject to a 4% excise tax on the excess of such
required distribution over the amounts actually distributed.
TAX ON BUILT-IN GAIN. Fifth, if during the 10-year period (the "Recognition
Period") beginning on the date that the Management Company merged with and into
the Company, the Company recognizes gain on the disposition of any asset
acquired by the Company from the Management Company, then to the extent of the
excess of (a) the fair market value of such asset as of the beginning
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of such Recognition Period over (b) the Company's adjusted basis in such asset
as of the beginning of such Recognition Period, such gain will be subject to tax
at the highest regular corporate rate pursuant to IRS regulations that have not
yet been promulgated.
ALTERNATIVE MINIMUM TAX. Sixth, the Company may be subject to alternative
minimum tax on certain items of tax preference.
TAX ON FORECLOSURE PROPERTY. Seventh, if the Company has (a) net income
from the sale or other disposition of foreclosure property that is held
primarily for sale to customers in the ordinary course of business or (b) other
nonqualifying income from foreclosure property, it will be subject to tax at the
highest corporate rate on such income.
OVERVIEW OF REIT QUALIFICATION RULES
The following summarizes the basic requirements for REIT status:
(a) The Company must be a corporation, trust or association that is managed
by one or more trustees or directors.
(b) The Company's stock or beneficial interests must be transferable and
held by more than 100 stockholders, and no more than 50% of the value of the
Company's stock may be held, actually or constructively, by five or fewer
individuals.
(c) Generally, 75% (by value) of the Company's investments must be in real
estate, mortgages secured by real estate, cash or government securities.
(d) The Company must meet three gross income tests:
(i) First, at least 75% of the gross income must be derived from
specific real estate sources;
(ii) Second, at least 95% of the gross income must be from the real
estate sources includable in the 75% test, or from dividends,
interest or gains from the sale or disposition of stock and
securities; and
(iii) Third, less than 30% of the gross income may be derived from the
sale of real estate assets held for less than four years, from the
sale of certain "dealer" properties or from the sale of stock or
securities having a short-term holding period.
(e) The Company must distribute to its stockholders in each taxable year an
amount at least equal to 95% of the Company's "REIT taxable income" (which is
generally equivalent to taxable ordinary income and is defined below).
The discussion set forth below explains these REIT qualification
requirements in greater detail. It also addresses how these highly technical
rules may be expected to impact the Company in its operations, noting areas of
uncertainty that perhaps could lead to adverse consequences to the Company and
its stockholders.
SHARE OWNERSHIP. The Company's shares of stock are fully transferable, with
the exception of certain shares that are subject to contractual transfer
restrictions. Furthermore, the Company has more than 100 stockholders and its
Certificate of Incorporation provides, to decrease the possibility that the
Company will ever be closely held, that no individual, corporation or
partnership is permitted to actually or constructively acquire more than 9.8% of
the number of outstanding shares of Class A Common Stock. The Ownership Limit
may be adjusted, however, by the Company's Board of Directors in certain
circumstances. Shares acquired in excess of the Ownership Limit may be redeemed
by the Company. In addition, the Certificate of Incorporation provides that
shares acquired in excess of the Ownership Limit will automatically convert into
nondividend-paying and nonvoting shares of Excess Stock. Contractual or
securities law restrictions on transferability should be disregarded for
purposes of determining the transferability of REIT shares. The ownership and
transfer restrictions pertaining generally to a particular issue of Preferred
Stock will be described in the Prospectus Supplement relating to such issue.
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NATURE OF ASSETS. On the last day of each calendar quarter, at least 75% of
the value of the Company's total assets must consist of (a) real estate assets
(including interests in real property and mortgages on loans secured by real
property), (b) cash and cash items (including receivables), and (c) government
securities (collectively, the "real estate assets"). In addition, no more than
25% of the value of the Company's assets may consist of securities (other than
government securities). Finally, except for certain "qualified REIT
subsidiaries," as described below, the securities of any issuer, other than the
United States government, may not represent more than 5% of the value of the
Company's total assets or 10% of the outstanding voting securities of any one
issuer.
While, as noted above, a REIT cannot own more than 10% of the outstanding
voting securities of any single issuer, an exception to this rule permits REITs
to own "qualified REIT subsidiaries." A "qualified REIT subsidiary" is any
corporation in which 100% of its stock is owned by the REIT at all times during
which the corporation was in existence. The Company currently has three wholly
owned corporate subsidiaries that were formed and owned at all times during
their existence by the Company. These corporations should be treated as
"qualified REIT subsidiaries" and should not adversely affect the Company's
qualification as a REIT.
The Company owns interests in partnerships that directly or indirectly own
and operate self-storage facilities. The Company, for purposes of satisfying its
REIT asset and income tests, will be treated as if it owns a proportionate share
of each of the assets of these partnerships attributable to such interests. For
these purposes, the Company's interest in each of the partnerships will be
determined in accordance with its capital interest in such partnership. The
character of the various assets in the hands of the partnership and the items of
gross income of the partnership will remain the same in the Company's hands for
these purposes. Accordingly, to the extent the partnership receives qualified
real estate rentals and holds real property, a proportionate share of such
qualified income and assets, based on the Company's capital interest in the
partnerships, will be treated as qualified rental income and real estate assets
of the Company for purposes of determining its REIT characterization. It is
expected that substantially all the properties of the partnerships will
constitute real estate assets and generate qualified rental income for these
REIT qualification purposes.
In several partnerships, the Company is entitled to a percentage of profits
in excess of its percentage of total capital contributed to the partnership.
Regulatory authority does not specifically address this situation and, based on
existing authority, the treatment of these profit interests when applying these
gross income and asset rules is uncertain. For example, based on the existing
rules, if the amount of net income allocated to a REIT based on a profit
interest in a partnership is in excess of its capital interest in the
partnership's underlying gross income, the amount of such excess should be
entirely disregarded for these REIT qualification purposes. Furthermore, these
rules do not specifically address the manner in which a REIT is to determine its
capital interest. There is no reference to the capital account or special
allocation rules of Section 704(b) of the Code and the Treasury Regulations
promulgated thereunder and these rules do not address acquisitions of
partnership interests for valuable consideration. Based on the fact that the
Company acquired these interests for valuable consideration in connection with
the Merger and at a time when the partnership assets may have some appreciated
capital value, the Company may be treated as having a capital percentage in the
partnerships at the time of the Merger. In the event the IRS determines that the
percentage of capital contributed is the proper indicator of a capital interest,
however, a portion of the income recognized by the Company and the real estate
treated as owned by the Company attributable to its interest in these
partnerships may be disregarded when applying these gross income and asset
requirements.
This treatment for partnerships is conditioned on the treatment of these
entities as partnerships for federal income tax purposes (as opposed to
associations taxable as corporations). If any of the partnerships is treated as
an association, it would be taxable as a corporation. In such situation, if the
Company's ownership in any of the partnerships exceeded 10% of the partnership's
voting interests or the value of such interest exceeded 5% of the value of the
Company's assets, the Company would cease to qualify as a REIT. Furthermore, in
such a situation, distributions from any of the partnerships to the Company
would be treated as dividends, which are not taken into account in satisfying
the 75%
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gross income test described below and which could therefore make it more
difficult for the Company to qualify as a REIT for the taxable year in which
such distribution was received. In addition, in such a situation, the interest
in any of the partnerships held by the Company would not qualify as "real estate
assets," which could make it more difficult for the Company to meet the 75%
asset test described above. Finally, in such a situation, the Company would not
be able to deduct its share of any losses generated by the partnerships in
computing its taxable income. The Company believes that each of the partnerships
will be taxed for tax purposes as a partnership (and not as an association
taxable as a corporation). However, there can be no assurance that the IRS may
not successfully challenge the tax status of any of the partnerships.
INCOME TESTS. To maintain its qualification as a REIT, the Company must
meet three gross income requirements that must be satisfied annually. First, at
least 75% of the REIT's gross income (excluding gross income from prohibited
transactions) for each taxable year must be derived directly or indirectly from
investments relating to real property or mortgages on real property (including
"rents from real property" and, in certain circumstances, interest) or from
certain types of temporary investments. Second, at least 95% of the REIT's gross
income (excluding gross income from prohibited transactions) for each taxable
year must be derived from such real property investments, and from dividends,
interest and gain from the sale or disposition of stock or securities, or from
any combination of the foregoing. Third, short-term gain from the sale or other
disposition of stock or securities, gain from prohibited transactions and gain
from the sale or other disposition of real property held for less than four
years (apart from involuntary conversions and sales of foreclosure property)
must represent less than 30% of the REIT's gross income (including gross income
from prohibited transactions) for each taxable year.
Rents received by the Company on the lease of self-storage facilities 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 term "rents from real property" solely by reason of being
based on a fixed percentage or percentages of receipts of sales. Second, the
Code provides that rents received from a tenant will not qualify as "rents from
real property" in satisfying the gross income test if the Company, or an owner
of 10% or more of the Company, actually or constructively owns 10% or more of
such tenant (a "Related-Party Tenant"). Third, if rent attributable to personal
property leased in connection with the 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." The Company does not anticipate charging rent for any portion of any
property that is based in whole or in part on the income or profits of any
person and the Company does not anticipate receiving rents in excess of a de
minimis amount from Related-Party Tenants. Furthermore, the Company does not
lease personal property in connection with its rental of self-storage
facilities.
Finally, for rents to qualify as "rents from real property," the Company
must not operate or manage the property or furnish or render services to tenants
unless the Company furnishes or renders such services through an independent
contractor from whom the Company derives no revenue. The Company need not
utilize an independent contractor to the extent that services provided by the
Company are usually and customarily rendered in connection with the rental of
space for occupancy only and are not otherwise considered "rendered to the
occupant." The Company has obtained a private letter ruling from the IRS ruling
that the management services provided by the Company for its own properties will
not cause the rents received by the Company to be treated as other than "rents
from real property." The ruling is based on a description of those management
services to be performed by the Company in connection with its own properties,
including maintenance, repair, lease administration and accounting and security.
The ruling also considers certain ancillary services to be directly
performed by the Company such as truck rentals and inventory sales. The ruling
provides that such services do not otherwise adversely affect the
characterization of the rental income received by the Company. Nonetheless,
income from
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truck rentals and certain other ancillary services does not qualify under these
gross income tests ("Nonqualifying Income"). In addition, the fees,
consideration and certain reimbursements that the Company receives for
performing management and administrative services with respect to properties
that are not owned entirely by the Company will also be treated as Nonqualifying
Income.
As of the date of this Prospectus, the Company anticipates that it will
generate Nonqualifying Income of between approximately 4.1% and 4.3% in 1995 and
between approximately 4.5% and 4.7% in 1996 based on its historical and budgeted
revenues and assuming no substantial change in its current operations.
The Company intends to monitor the percentage of Nonqualifying Income and
reduce the percentage of Nonqualifying Income if necessary. Because the income
tests are based on a percentage of total gross income, increases in qualifying
rents will reduce the percentage of Nonqualifying Income. For example, the
Company may acquire real estate assets that would generate additional qualifying
income, thereby lowering the percentage of total Nonqualifying Income. Increases
in other Nonqualifying Income may similarly affect these calculations. Reference
is made to the applicable Prospectus Supplement for a current discussion, if
any, relating to the amount of Nonqualifying Income expected to be generated by
the Company.
If the Company fails to satisfy one or both of the 75% and 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 generally will be available if the Company's failure to meet such
test was due to reasonable cause and not willful neglect and the Company
attaches a schedule of its income sources to its tax return that does not
fraudulently or intentionally exclude any income sources. As discussed above,
even if these relief provisions apply, a tax would be imposed with respect to
such excess income.
ANNUAL DISTRIBUTION REQUIREMENTS. Each year, the Company must have a
deduction for dividends paid (determined under Section 561 of the Code) to its
stockholders in an amount equal to (a) 95% of the sum of (i) its "REIT taxable
income" as defined below, (ii) any net income from foreclosure property less the
tax on such income, minus (b) any "excess noncash income," as defined below.
"REIT taxable income" is the taxable income of a REIT computed without a
deduction for dividends paid and excluding any net capital gain. REIT taxable
income is further adjusted by certain items, including, without limitation, an
exclusion for net income from foreclosure property, a deduction for the excise
tax on the greater of the amount by which the REIT fails the 75% or the 95%
income test, and an exclusion for an amount equal to any net income derived from
prohibited transactions. "Excess noncash income" means the excess of certain
amounts that the REIT is required to recognize as income in advance of receiving
cash, such as original issue discount on purchase money debt, over 5% of the
REIT taxable income before deduction for dividends paid and excluding any net
capital gain. Such distributions must be made in the taxable year to which they
relate, or in the following taxable year if declared before the REIT timely
files its tax return for such year and is paid on or before the first regular
dividend payment after such declaration.
It is possible that the Company, from time to time, may not have sufficient
cash or other liquid assets to meet the 95% distribution requirement due to
timing differences between (a) the actual receipt of income and the actual
payment of deductible expenses and (b) the inclusion of such income and
deduction of such expenses in arriving at taxable income of the Company.
Furthermore, substantial principal payments on Company indebtedness, which has
the effect of lowering the amount of distributable cash without an offsetting
deduction to Company taxable income, may adversely affect the Company's ability
to meet this distribution requirement. In the event that such timing differences
or reduction to distributable cash occurs, in order to meet the 95% distribution
requirement, the Company may find it necessary to arrange for short-term, or
possible long-term, borrowings or to pay dividends in the form of taxable stock
dividends.
Under certain circumstances, the Company may be able to rectify a failure to
meet the distribution requirement for a year by paying "deficiency dividends" to
stockholders in a later year that may
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be included in the Company's deduction for dividends paid for the earlier year.
Thus, the Company may be able to avoid being taxed on amounts distributed as
deficiency dividends; however, the Company will be required to pay to the IRS
interest based on the amount of any deduction taken for deficiency dividends.
DISTRIBUTION OF ACQUIRED EARNINGS. In addition to the above annual
distribution requirements, a REIT is not allowed to have accumulated earnings
and profits attributable to non-REIT years. A REIT has until the close of its
first taxable year in which it has non-REIT earnings and profits to distribute
any such accumulated earnings and profits. As a result of the Merger in March
1995, the Company is treated as having acquired the Management Company's
accumulated earnings and profits and must, therefore, distribute these earnings
and profits prior to the close of 1995. Failure to do so would result in loss of
the Company's REIT status. See "-- Failure of the Company to Qualify as a REIT."
The amount of the Management Company's accumulated earnings and profits
acquired by the Company (the "Acquired Earnings") will be determined, in part,
through an earnings and profits study based on the Management Company's
corporate tax returns as filed for the years beginning on the Management
Company's date of incorporation through the date of the Merger. Furthermore, as
a result of the Management Company's spin off of InterMation, Inc.
("InterMation") prior to the Merger, a portion of the Management Company's
consolidated earnings and profits have been allocated to InterMation based on
the relative fair market values of the two separate corporations at the time of
the spin-off. The valuation of these two corporations will be based on the share
consideration paid by the Company for the Management Company in the Merger
(exclusive of contingent consideration) and an independent valuation of
InterMation.
As of the date of this Prospectus the Company estimates that the amount of
the Acquired Earnings is between $4,500,000 and $5,500,000, depending on the
relative values of InterMation assumed for allocating such accumulated earnings
and profits in connection with the spin-off. This estimate is based on, among
other things, (i) a reduction in the accumulated earnings and profits of the
Management Company resulting from the exercise of stock options and the payment
of cash bonuses to pay taxes associated with such exercise during 1995, (ii) a
reduction in the accumulated earnings and profits of the Management Company
resulting from payment of stock and cash bonuses during 1994 and 1995, and (iii)
a reduction in the accumulated earnings and profits of the Management Company
resulting from an InterMation net operating loss for the 1995 period ending on
the date of the spin-off. The amount of these reductions has not been
independently reviewed as of the date of this Prospectus. Because the above
range is based on estimates and other assumptions, the actual amount of Acquired
Earnings may differ from the above range.
Based on its quarterly dividend history during 1994, the Company will be
required to increase its distributions during 1995 to distribute the Acquired
Earnings. The Company may accomplish these additional distributions by
increasing its quarterly distribution, making special distributions during 1995
or making a special year-end distribution. A year-end distribution must be
declared within the last three months of 1995, payable to stockholders of record
on a specified date in any such month and paid prior to January 31, 1996. This
distribution, to the extent it constitutes a dividend, would be treated for all
purposes as a 1995 dividend to the Company's stockholders even though received
by the stockholders after year-end. The Company intends to make distributions
that are sufficient to fully distribute the Acquired Earnings prior to the end
of 1995. As a result of these increased distributions, the Company's
stockholders will recognize additional dividend income in 1995.
The calculation of the amount of Acquired Earnings is subject to challenge
by the IRS. The IRS may examine the Management Company's prior tax returns and
propose adjustments to increase its taxable income. Because the earnings and
profits study used to calculate the amount of Acquired Earnings is based on
these returns, such adjustments may increase the amount of Acquired Earnings,
particularly since the IRS may consider all taxable years as open for review for
purposes of determining earnings and profits. Moreover, there can be no
assurance that the IRS will respect the valuations used for purposes of
allocating the consolidated earnings and profits between the Management
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Company and InterMation in connection with the spin-off. If the IRS determines
that the Management Company has a proportionately greater value than InterMation
at the time of the InterMation spin-off, the amount of Acquired Earnings would
proportionately increase.
If the IRS determines that the Company has not distributed the Acquired
Earnings prior to the end of 1995, the Company would fail to qualify as a REIT
for 1995. See "-- Failure of the Company to Qualify as a REIT." However, the
Company may make an additional distribution within 90 days of such a
determination by the IRS and would be required to pay the IRS an interest charge
based on 50% of the amount not previously distributed. If such additional
distribution is made, the Company's failure to distribute the Acquired Earnings
would not prevent it from qualifying as a REIT for years subsequent to 1995.
Reference is made to the applicable Prospectus Supplement for a current
discussion, if any, of the amount of Acquired Earnings and the expected timing
and amount of Company distributions.
FAILURE OF THE COMPANY TO QUALIFY AS A REIT
If the Company fails to qualify for taxation as a REIT in any taxable year,
and the relief provisions do not apply, the Company would be subject to tax
(including any applicable alternative minimum tax) on its taxable income at
regular corporate rates, thereby reducing the amount of cash available for
distribution to its stockholders. Distributions to stockholders in any year in
which the Company fails to qualify would not be deductible by the Company nor
would they be required to be made. In such an event, to the extent of current
and accumulated earnings and profits, all distributions to stockholders would be
taxable as ordinary income and, subject to certain limitations in the Code,
corporate distributees may be eligible for the dividends-received deduction.
Unless entitled to relief under specific statutory relief provisions, the
Company would also be disqualified from taxation as a REIT for the four taxable
years following the year during which such qualification was lost. It is not
possible to state whether in all circumstances the Company would be entitled to
such statutory relief.
MANAGEMENT COMPANY MERGER
The Company has obtained an opinion from Perkins Coie that, among other
things, the Merger will be treated as a reorganization under Section 368(a) of
the Code and that no gain or loss will be recognized by the Company or the
Management Company in the Merger. No ruling from the IRS will be applied for
with respect to the federal income tax consequences of the Merger. Thus there
can be no assurance that the IRS will agree with the conclusions set forth in
such opinion. If the Merger does not qualify as a reorganization under Section
368(a) of the Code, the Management Company would recognize gain or loss in an
amount equal to the difference between the fair market value of the Class A
Common Stock issued in the Merger and the adjusted tax basis of the Management
Company assets acquired in the Merger. Although the Company would not directly
recognize gain or loss as a result of the failure of the Merger to qualify as a
reorganization under Section 368(a) of the Code, the Company will be primarily
liable as the successor to the Management Company for the resulting tax
liability imposed on the Management Company. Furthermore, the failure of the
Merger to qualify as a reorganization may cause the InterMation spin-off to fail
to qualify as a tax-free corporate division under Section 355(a)(1) of the Code.
STATE AND LOCAL TAXES
The Company or its stockholders, or both, may be subject to state or local
taxes in other jurisdictions such as those in which the Company may be deemed to
be engaged in activities or in which stockholders reside or own property or
other interests. Such tax treatment of the Company and its stockholders in
states having taxing jurisdiction over them may differ from the federal income
tax treatment described in the summary. Each stockholder should consult his or
her tax advisor as to the status of the Securities under the respective state
laws applicable to them.
31
<PAGE>
PLAN OF DISTRIBUTION
The Company 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. Any such underwriter or agent involved in the offer and sale of
the Securities will be named in the applicable Prospectus Supplement.
Underwriters may offer and sell the Securities at a fixed price or prices,
which may be changed, at prices relating to the prevailing market prices at the
time of sale or at negotiated prices. The Company also may offer and sell the
Securities in exchange for one or more of its then outstanding issues of debt
securities. The Company also may, from time to time, authorize underwriters
acting as the Company's agents to offer and sell the Securities upon the terms
and conditions as are set forth in the applicable Prospectus Supplement. In
connection with the sale of Securities, underwriters may be deemed to have
received compensation from the Company in the form of underwriting discounts or
commissions and may also receive commissions from purchasers of Securities for
whom they may act as agent. Underwriters may sell Securities to or through
dealers, and such dealers may receive compensation in the form of discounts,
concessions or commissions from the underwriters and/or commissions from the
purchasers for whom they may act as agent. Any underwriting compensation paid by
the Company to underwriters or agents in connection with the offering of
Securities, and any discounts, concessions or commissions allowed by
underwriters to participating dealers, will be set forth in the applicable
Prospectus Supplement. Underwriters, dealers and agents participating in the
distribution of the Securities may be deemed to be underwriters, and any
discounts and commissions received by them and any profit realized by them on
resale of the Securities may be deemed to be underwriting discounts and
commissions, under the Securities Act. Any such underwriter or agent will be
identified, and such compensation received from the Company will be described,
in the applicable Prospectus Supplement.
Underwriters, dealers and agents may be entitled, under agreements entered
into with the Company, to indemnification against and contribution toward
certain civil liabilities, including liabilities under the Securities Act.
Certain of the underwriters, dealers and agents and their affiliates may be
customers of, engage in transactions with and perform services for the Company
and its subsidiaries in the ordinary course of business.
If so indicated in the applicable Prospectus Supplement, the Company will
authorize underwriters or other persons acting as the Company's agents to
solicit offers by certain institutions to purchase Securities from the Company
at the public offering price set forth in such Prospectus Supplement pursuant to
Delayed Delivery Contracts ("Contracts") providing for payment and delivery on
the date or dates stated in such Prospectus Supplement. Each Contract will be
for an amount not less than, and the aggregate principal amount of Securities
sold pursuant to Contracts will be not less nor more than, the respective
amounts stated in the applicable Prospectus Supplement. Institutions with whom
Contracts, when authorized, may be made include commercial and savings banks,
insurance companies, pension funds, investment companies, educational and
charitable institutions, and other institutions, but will in all cases be
subject to the Company's approval. Contracts will not be subject to any
conditions except (a) the purchase by an institution of the Securities covered
by its Contracts shall not at the time of delivery be prohibited under the laws
of any jurisdiction in the United States to which such institution is subject
and (b) if the Securities are being sold to underwriters, the Company shall have
sold to such underwriters the total principal amount of the Securities less the
principal amount thereof covered by Contracts. The underwriters and other agents
will not have any responsibility in respect of the validity or performance of
such Contracts.
Unless otherwise specified in the related Prospectus Supplement, each series
of Securities will be a new issue with no established trading market, other than
the Class A Common Stock. The Class A Common Stock is currently quoted on
Nasdaq. Unless otherwise specified in the related Prospectus Supplement, any
shares of Class A Common Stock sold pursuant to a Prospectus Supplement will be
quoted on Nasdaq, subject to official notice of issuance. The Company may elect
to list any series of
32
<PAGE>
Debt Securities or Preferred Stock on an exchange or Nasdaq, but is not
obligated to do so. It is possible that one or more underwriters may make a
market in a series of Securities, but will not be obligated to do so and may
discontinue any market making at any time without notice. Therefore, there can
be no assurance as to the liquidity of, or the trading market for, the
Securities.
In order to comply with the securities laws of certain states, if
applicable, the Securities offered hereby will be sold in such jurisdictions
only through registered or licensed brokers or dealers. In addition, in certain
states Securities may not be sold unless they have been registered or qualified
for sale in the applicable state or an exemption from the registration or
qualification requirement is available and is complied with.
Under applicable rules and regulations under the Exchange Act, any person
engaged in the distribution of the Securities offered hereby may not
simultaneously engage in market making activities with respect to the Securities
for a period of two business days prior to the commencement of such
distribution.
EXPERTS
The financial statements incorporated in this Prospectus by reference from
the Company's Annual Report on Form 10-K have been audited by Deloitte & Touche
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.
LEGAL MATTERS
The validity of the Securities will be passed upon for the Company by
Perkins Coie, Seattle, Washington.
33
<PAGE>
PART II
INFORMATION NOT REQUIRED IN PROSPECTUS
ITEM 14. OTHER EXPENSES OF ISSUANCE AND DISTRIBUTION
The estimated expenses, other than underwriting discounts and commissions,
in connection with the offerings of the Securities are as follows:
<TABLE>
<S> <C>
Securities Act Registration Fee......... $ 68,966
Blue Sky Fees and Expenses.............. 15,000
Printing and Engraving Expenses......... 150,000
Legal Fees and Expenses................. 175,000
Accounting Fees and Expenses............ 100,000
Miscellaneous........................... 50,000
--------
Total................................. $558,966
========
</TABLE>
ITEM 15. INDEMNIFICATION OF DIRECTORS AND OFFICERS
Article 13 of the Certificate of Incorporation provides that directors
of the Registrant shall not be liable to the Registrant or its stockholders
for monetary damages for their conduct as directors to the full extent
permitted by the Delaware General Corporation Law ("Delaware Law") as it
existed at the time the Certificate of Incorporation was adopted, and as it
may thereafter be amended. Any amendment to or repeal of Article 13 shall
apply only to acts or omissions of directors occurring after such amendment
or repeal.
The By-Laws provide that the Registrant shall indemnify and hold
harmless its directors and officers to the fullest extent permitted under
Delaware Law or by any other applicable law against all litigation expenses,
judgments, fines and settlement amounts incurred in connection with their
service or status as directors and officers. Such indemnification also
extends to liabilities arising from actions taken by directors or officers
when serving at the request of the Registrant as a director, officer,
employee or agent of another corporation or of a partnership, joint venture,
trust or other enterprise.
Section 145 of Delaware Law, as currently in effect, sets forth the
indemnification rights of directors and officers of Delaware corporations.
Under such provision, a director or officer of a corporation (i) shall be
indemnified by the corporation for all expenses of litigation or other legal
proceedings when he or she is successful on the merits or otherwise, (ii) may
be indemnified by the corporation for the expenses, judgments, fines and
amounts paid in settlement of such litigation (other than a derivative suit),
even if he or she is not successful on the merits, if he or she acted in good
faith and in a manner he or she reasonably believed to be in or not opposed
to the best interests of the corporation (and, in the case of a criminal
proceeding, had no reason to believe his or her conduct was unlawful), and
(iii) may be indemnified by the corporation for the expenses of a derivative
suit (a suit by a stockholder alleging a breach by a director or an officer
of a duty owed to the corporation), even if he or she is not successful on
the merits, if he or she acted in good faith and in a manner he or she
reasonably believed to be in or not opposed to the best interests of the
corporation, provided that no such indemnification may be made in accordance
with this clause (iii) if the director or officer is adjudged liable to the
corporation, unless a court determines that, despite such adjudication but in
view of all the circumstances, he or she is fairly and reasonably entitled to
indemnification of such expenses. The indemnification described in clauses
(ii) and (iii) above shall be made only upon a determination by (A) a
majority of a quorum of disinterested directors, (B) independent legal
counsel in a written opinion, or (C) the stockholders, that indemnification
is proper because the applicable standard of conduct has been met.
The effect of the indemnification provisions contained in the By-Laws is
to require the Registrant to indemnify its directors and officers under
circumstances where such indemnification would otherwise be discretionary and
to extend to the Registrant's directors and officers the benefits of Delaware
Law dealing with director and officer indemnification, as well as any future
changes that might occur under Delaware Law in this area.
II-1
<PAGE>
The By-Laws state that the indemnification rights granted thereunder are
not exclusive of any other indemnification rights to which the director or
officer may otherwise be entitled. As permitted by Section 145(g) of Delaware
Law, the By-Laws also authorize the Registrant to purchase directors and
officers insurance for the benefit of its directors and officers,
irrespective of whether the Registrant has the power to indemnify such
persons under Delaware Law. The Registrant currently maintains such insurance
as allowed by these provisions.
ITEM 16. EXHIBITS
1(a) Form of Underwriting Agreement for Debt Securities(1)
1(b) Form of Underwriting Agreement for Equity Securities(1)
2 Agreement and Plan of Merger dated as of December 19, 1994 (incorporated
by reference to Exhibit 2.1 to the Registration Statement on Form S-4 of
Shurgard Storage Centers, Inc. (Registration No. 33-57047))
4(a) Amended and Restated Certificate of Incorporation (incorporated by
reference to Exhibit 3.1 to the Registration Statement on Form S-4 of
Shurgard Storage Centers, Inc. (Registration No. 33-57047))
4(b) Restated By-Laws (incorporated by reference to Exhibit 3.2 to the
Registration Statement on Form S-4 of Shurgard Storage Centers, Inc.
(Registration No. 33-57047))
4(c) Rights Agreement between Shurgard Storage Centers, Inc. and Gemisys
Corporation dated as of March 17, 1994 (incorporated by reference to
Exhibit 2-1 to the Registration Statement on Form 8-A (File No. 0-23466)
of Shurgard Storage Centers, Inc. filed with the Securities and Exchange
Commission on March 17, 1994)
4(d) Form of Indenture
4(e) Form of Debt Security (included in Exhibit 4(d))
4(f) Form of Certificate of Designations for the Preferred Stock(1)
4(g) Form of Preferred Stock Certificate(1)
5 Opinion of Perkins Coie(1)
8 Opinion of Perkins Coie Regarding Tax Matters
12 Statement of Computation of Ratios of Earnings to Fixed Charges
23(a) Consent of Deloitte & Touche LLP (contained on page II-5)
23(b) Consents of Perkins Coie (included in Exhibit 5 and Exhibit 8)
24 Power of Attorney (contained on the signature page hereto)
25 Statement of Eligibility of Trustee on Form T-1(1)
_________________
(1) To be filed by amendment or incorporated by reference in connection with
the offering of Securities.
ITEM 17. UNDERTAKINGS
(a) The undersigned Registrant hereby undertakes:
(1) To file, during any period in which offers or sales are being
made, a post-effective amendment to this Registration Statement:
(i) To include any prospectus required by Section 10(a)(3) of
the Securities Act of 1933, as amended (the "Securities Act");
II-2
<PAGE>
(ii) To reflect in the prospectus any facts or events arising
after the effective date of this Registration Statement (or the most
recent post-effective amendment thereof) that, individually or in the
aggregate, represent a fundamental change in the information set forth
in this Registration Statement; and
(iii) To include any material information with respect to the plan
of distribution not previously disclosed in this Registration
Statement or any material change to such information in this
Registration Statement;
PROVIDED, HOWEVER, that subparagraphs (a)(1)(i) and (a)(1)(ii) do not apply
if the information required to be included in a post-effective amendment by
those paragraphs is contained in the periodic reports filed with or furnished
to the Commission by the Registrant pursuant to Section 13 or Section 15(d)
of the Securities Exchange Act of 1934, as amended (the "Exchange Act"), that
are incorporated by reference in this Registration Statement;
(2) That, for the purpose of determining any liability under the
Securities Act, each such post-effective amendment shall be deemed to be a
new registration statement relating to the securities offered herein, and the
offering of such securities at that time shall be deemed to be the initial
bona fide offering thereof; and
(3) To remove from registration by means of a post-effective
amendment any of the securities being registered that remain unsold at the
termination of the offering.
(b) The undersigned Registrant hereby further undertakes that, for the
purposes of determining any liability under the Securities Act, each filing
of the Registrant's annual report pursuant to Section 13(a) or Section 15(d)
of the Exchange Act that is incorporated by reference in this Registration
Statement shall be deemed to be a new registration statement relating to the
securities offered herein, 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 may be permitted to directors, officers and controlling
persons of the Registrant pursuant to the provisions under Item 15 above, or
otherwise, the Registrant has been advised that in the opinion of the
Commission such indemnification is against public policy as expressed in the
Securities Act and is, therefore, unenforceable. In the event that a claim
for indemnification against such liabilities (other than the payment by the
Registrant of expenses incurred or paid by a director, officer or controlling
person of the Registrant in the successful defense of any action, suit or
proceeding) is asserted by such director, officer or controlling person in
connection with the securities being registered, the Registrant will, unless
in the opinion of its counsel the matter has been settled by controlling
precedent, submit to a court of appropriate jurisdiction the question whether
such indemnification by it is against public policy as expressed in the
Securities Act and will be governed by the final adjudication of such issue.
(d) The undersigned Registrant hereby undertakes to file an application
for the purpose of determining the eligibility of the trustee to act under
subsection (a) of Section 310 of the Trust Indenture Act in accordance with
the rules and regulations prescribed by the Commission under Section
305(b)(2) of the Trust Indenture Act.
II-3
<PAGE>
SIGNATURES
Pursuant to the requirements of the Securities Act of 1933, as amended
the Registrant certifies that it has reasonable grounds to believe that it
meets all the requirements for filing on Form S-3 and has duly caused this
Registration Statement to be signed on its behalf by the undersigned,
thereunto duly authorized, in the City of Seattle, State of Washington, on
this 18th day of April, 1995.
SHURGARD STORAGE CENTERS, INC.
By CHARLES K. BARBO
-----------------------------------
Charles K. Barbo
Chairman of the Board, President
and Chief Executive Officer
POWER OF ATTORNEY
Each person whose individual signature appears below hereby authorizes
and appoints Charles K. Barbo, Harrell L. Beck, and each of them, with full
power of substitution and full power to act without the other, as his true
and lawful attorney-in-fact and agent to act in his name, place and stead and
to execute in the name and on behalf of each person, individually and in each
capacity stated below, and to file, any and all amendments to this
Registration Statement, including any and all post-effective amendments, with
the Securities and Exchange Commission or any regulatory authority.
Pursuant to the requirements of the Securities Act of 1933, as amended,
this Registration Statement has been signed by the following persons in the
capacities indicated below on this 18th day of April, 1995.
SIGNATURE TITLE
--------- -----
CHARLES K. BARBO Chairman of the Board, Chief Executive
- ----------------------------------- Officer and President
Charles K. Barbo
HARRELL L. BECK Senior Vice President, Chief Financial
- ----------------------------------- Officer, Treasurer and Director
Harrell L. Beck (Principal Financial and Accounting
Officer)
DONALD W. LUSK Director
- -----------------------------------
Donald W. Lusk
W.J. (JIM) SMITH Director
- -----------------------------------
W.J. (Jim) Smith
II-4
<PAGE>
INDEPENDENT AUDITOR'S CONSENT
We consent to the incorporation by reference in this Registration
Statement of Shurgard Storage Centers, Inc. on Form S-3 of our report dated
February 9, 1995 (March 24, 1995 as to Notes E and N), appearing in the
Annual Report on Form 10-K of Shurgard Storage Centers, Inc. for the year
ended December 31, 1994 and to the reference to us under the heading
"Experts" in the Prospectus, which is part of this Registration Statement.
DELOITTE & TOUCHE LLP
Seattle, Washington
April 17, 1995
II-5
<PAGE>
EXHIBIT INDEX
1(a) Form of Underwriting Agreement for Debt Securities(1)
1(b) Form of Underwriting Agreement for Equity Securities(1)
2 Agreement and Plan of Merger dated as of December 19, 1994 (incorporated
by reference to Exhibit 2.1 to the Registration Statement on Form S-4 of
Shurgard Storage Centers, Inc. (Registration No. 33-57047))
4(a) Amended and Restated Certificate of Incorporation (incorporated by
reference to Exhibit 3.1 to the Registration Statement on Form S-4 of
Shurgard Storage Centers, Inc. (Registration No. 33-57047))
4(b) Restated By-Laws (incorporated by reference to Exhibit 3.2 to the
Registration Statement on Form S-4 of Shurgard Storage Centers, Inc.
(Registration No. 33-57047))
4(c) Rights Agreement between Shurgard Storage Centers, Inc. and Gemisys
Corporation dated as of March 17, 1994 (incorporated by reference to
Exhibit 2-1 to the Registration Statement on Form 8-A (File No. 0-23466)
of Shurgard Storage Centers, Inc. filed with the Securities and Exchange
Commission on March 17, 1994)
4(d) Form of Indenture
4(e) Form of Debt Security (included in Exhibit 4(d))
4(f) Form of Certificate of Designations for the Preferred Stock(1)
4(g) Form of Preferred Stock Certificate(1)
5 Opinion of Perkins Coie(1)
8 Opinion of Perkins Coie Regarding Tax Matters
12 Statement of Computation of Ratios of Earnings to Fixed Charges
23(a) Consent of Deloitte & Touche LLP (contained on page II-5)
23(b) Consents of Perkins Coie (included in Exhibit 5 and Exhibit 8)
24 Power of Attorney (contained on the signature page hereto)
25 Statement of Eligibility of Trustee on Form T-1(1)
_________________
(1) To be filed by amendment or incorporated by reference in connection with
the offering of Securities.
<PAGE>
SHURGARD STORAGE CENTERS, INC.
TO
[NAME OF TRUSTEE],
TRUSTEE
------------------------------
INDENTURE
DATED AS OF ____________, ____
--------------------------------
DEBT SECURITIES
<PAGE>
TABLE OF CONTENTS
ARTICLE ONE DEFINITIONS AND OTHER PROVISIONS OF GENERAL
APPLICATION . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .1
SECTION 101. Definitions . . . . . . . . . . . . . . . . . . . . . . .1
SECTION 102. Compliance Certificates and Opinions. . . . . . . . . . .9
SECTION 103. Form of Documents Delivered to Trustee. . . . . . . . . 10
SECTION 104. Acts of Holders . . . . . . . . . . . . . . . . . . . . 10
SECTION 105. Notices, etc., to Trustee and Company . . . . . . . . . 12
SECTION 106. Notice to Holders; Waiver . . . . . . . . . . . . . . . 12
SECTION 107. Counterparts; Effect of Headings and Table of Contents. 13
SECTION 108. Successors and Assigns. . . . . . . . . . . . . . . . . 13
SECTION 109. Severability Clause . . . . . . . . . . . . . . . . . . 14
SECTION 110. Benefits of Indenture . . . . . . . . . . . . . . . . . 14
SECTION 111. Governing Law . . . . . . . . . . . . . . . . . . . . . 14
SECTION 112. Legal Holidays. . . . . . . . . . . . . . . . . . . . . 14
SECTION 113. Immunity of Stockholders, Directors, Officers and
Agents of the Company. . . . . . . . . . . . . . . . . . . . . . 14
SECTION 114. Conflict With Trust Indenture Act . . . . . . . . . . . 15
ARTICLE TWO SECURITIES FORMS . . . . . . . . . . . . . . . . . . . . . . 15
SECTION 201. Forms of Securities . . . . . . . . . . . . . . . . . . 15
SECTION 202. Form of Trustee's Certificate of Authentication . . . . 15
SECTION 203. Securities Issuable in Global Form. . . . . . . . . . . 16
ARTICLE THREE THE SECURITIES. . . . . . . . . . . . . . . . . . . . . . . 17
SECTION 301. Amount Unlimited; Issuable in Series. . . . . . . . . . 17
SECTION 302. Denominations . . . . . . . . . . . . . . . . . . . . . 20
SECTION 303. Execution, Authentication, Delivery and Dating. . . . . 21
SECTION 304. Temporary Securities. . . . . . . . . . . . . . . . . . 23
SECTION 305. Registration, Registration of Transfer and Exchange . . 25
SECTION 306. Mutilated, Destroyed, Lost and Stolen Securities. . . . 28
SECTION 307. Payment of Interest; Interest Rights Preserved. . . . . 29
SECTION 308. Persons Deemed Owners . . . . . . . . . . . . . . . . . 31
SECTION 309. Cancellation. . . . . . . . . . . . . . . . . . . . . . 32
SECTION 310. Computation of Interest . . . . . . . . . . . . . . . . 32
ARTICLE FOUR SATISFACTION AND DISCHARGE . . . . . . . . . . . . . . . . . 33
SECTION 401. Satisfaction and Discharge of Indenture . . . . . . . . 33
SECTION 402. Application of Trust Funds. . . . . . . . . . . . . . . 34
ARTICLE FIVE REMEDIES . . . . . . . . . . . . . . . . . . . . . . . . . . 34
SECTION 501. Events of Default . . . . . . . . . . . . . . . . . . . 34
SECTION 502. Acceleration of Maturity; Rescission and Annulment. . . 36
SECTION 503. Collection of Indebtedness and Suits for
Enforcement by Trustee . . . . . . . . . . . . . . . . . . . . . 37
SECTION 504. Trustee May File Proofs of Claim. . . . . . . . . . . . 38
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<PAGE>
SECTION 505. Trustee May Enforce Claims Without Possession of
Securities or Coupons. . . . . . . . . . . . . . . . . . . . . . 38
SECTION 506. Application of Money Collected. . . . . . . . . . . . . 39
SECTION 507. Limitation on Suits . . . . . . . . . . . . . . . . . . 39
SECTION 508. Unconditional Rights of Holders to Receive Principal,
Premium, if Any, Interest and Additional Amounts . . . . . . . . 40
SECTION 509. Restoration of Rights and Remedies. . . . . . . . . . . 40
SECTION 510. Rights and Remedies Cumulative. . . . . . . . . . . . . 40
SECTION 511. Delay or Omission Not Waiver. . . . . . . . . . . . . . 40
SECTION 512. Control by Holders of Securities. . . . . . . . . . . . 41
SECTION 513. Waiver of Past Defaults . . . . . . . . . . . . . . . . 41
SECTION 514. Waiver of Usury, Stay or Extension Laws . . . . . . . . 41
SECTION 515. Undertaking for Costs . . . . . . . . . . . . . . . . . 42
ARTICLE SIX THE TRUSTEE . . . . . . . . . . . . . . . . . . . . . . . . . 42
SECTION 601. Notice of Defaults. . . . . . . . . . . . . . . . . . . 42
SECTION 602. Certain Rights of Trustee . . . . . . . . . . . . . . . 42
SECTION 603. Not Responsible for Recitals or Issuance of Securities. 44
SECTION 604. May Hold Securities . . . . . . . . . . . . . . . . . . 44
SECTION 605. Money Held in Trust . . . . . . . . . . . . . . . . . . 44
SECTION 606. Compensation and Reimbursement. . . . . . . . . . . . . 44
SECTION 607. Corporate Trustee Required; Eligibility; Conflicting
Interests. . . . . . . . . . . . . . . . . . . . . . . . . . . . 45
SECTION 608. Resignation and Removal; Appointment of Successor . . . 46
SECTION 609. Acceptance of Appointment by Successor. . . . . . . . . 47
SECTION 610. Merger, Conversion, Consolidation or Succession
to Business. . . . . . . . . . . . . . . . . . . . . . . . . . . 48
SECTION 611. Appointment of Authenticating Agent . . . . . . . . . . 48
ARTICLE SEVEN HOLDERS' LISTS AND REPORTS BY TRUSTEE AND COMPANY . . . . . 50
SECTION 701. Disclosure of Names and Addresses of Holders. . . . . . 50
SECTION 702. Reports by Trustee. . . . . . . . . . . . . . . . . . . 50
SECTION 703. Reports by Company. . . . . . . . . . . . . . . . . . . 50
SECTION 704. Company to Furnish Trustee Names and Addresses
of Holders . . . . . . . . . . . . . . . . . . . . . . . . . . . 51
ARTICLE EIGHT CONSOLIDATION, MERGER, SALE, LEASE OR CONVEYANCE. . . . . . 51
SECTION 801. Consolidations and Mergers of Company and Sales,
Leases and Conveyances Permitted Subject to Certain Conditions . 51
SECTION 802. Rights and Duties of Successor Corporation. . . . . . . 52
SECTION 803. Officers' Certificate and Opinion of Counsel. . . . . . 52
ARTICLE NINE SUPPLEMENTAL INDENTURES. . . . . . . . . . . . . . . . . . . 53
SECTION 901. Supplemental Indentures Without Consent of Holders. . . 53
SECTION 902. Supplemental Indentures With Consent of Holders . . . . 54
SECTION 903. Execution of Supplemental Indentures. . . . . . . . . . 55
SECTION 904. Effect of Supplemental Indentures . . . . . . . . . . . 55
-ii-
<PAGE>
SECTION 905. Conformity With Trust Indenture Act . . . . . . . . . . 55
SECTION 906. Reference in Securities to Supplemental Indentures. . . 56
ARTICLE TEN COVENANTS . . . . . . . . . . . . . . . . . . . . . . . . . . 56
SECTION 1001. Payment of Principal, Premium, if Any, Interest and
Additional Amounts . . . . . . . . . . . . . . . . . . . . . . . 56
SECTION 1002. Maintenance of Office or Agency. . . . . . . . . . . . 56
SECTION 1003. Money for Securities Payments to Be Held in Trust. . . 58
SECTION 1004. Existence. . . . . . . . . . . . . . . . . . . . . . . 59
SECTION 1005. Maintenance of Properties. . . . . . . . . . . . . . . 59
SECTION 1006. Insurance. . . . . . . . . . . . . . . . . . . . . . . 60
SECTION 1007. Payment of Taxes and Other Claims. . . . . . . . . . . 60
SECTION 1008. Provision of Financial Information . . . . . . . . . . 60
SECTION 1009. Statement as to Compliance . . . . . . . . . . . . . . 60
SECTION 1010. Additional Amounts . . . . . . . . . . . . . . . . . . 61
SECTION 1011. Waiver of Certain Covenants. . . . . . . . . . . . . . 62
ARTICLE ELEVEN REDEMPTION OF SECURITIES . . . . . . . . . . . . . . . . . 62
SECTION 1101. Applicability of Article . . . . . . . . . . . . . . . 62
SECTION 1102. Election to Redeem; Notice to Trustee. . . . . . . . . 62
SECTION 1103. Selection by Trustee of Securities to Be Redeemed. . . 62
SECTION 1104. Notice of Redemption . . . . . . . . . . . . . . . . . 63
SECTION 1105. Deposit of Redemption Price. . . . . . . . . . . . . . 64
SECTION 1106. Securities Payable on Redemption Date. . . . . . . . . 64
SECTION 1107. Securities Redeemed in Part. . . . . . . . . . . . . . 65
ARTICLE TWELVE SINKING FUNDS. . . . . . . . . . . . . . . . . . . . . . . 66
SECTION 1201. Applicability of Article . . . . . . . . . . . . . . . 66
SECTION 1202. Satisfaction of Sinking Fund Payments With Securities. 66
SECTION 1203. Redemption of Securities for Sinking Fund. . . . . . . 66
ARTICLE THIRTEEN REPAYMENT AT THE OPTION OF HOLDERS . . . . . . . . . . . 67
SECTION 1301. Applicability of Article . . . . . . . . . . . . . . . 67
SECTION 1302. Repayment of Securities. . . . . . . . . . . . . . . . 67
SECTION 1303. Exercise of Option . . . . . . . . . . . . . . . . . . 67
SECTION 1304. When Securities Presented for Repayment Become Due
and Payable. . . . . . . . . . . . . . . . . . . . . . . . . . . 68
SECTION 1305. Securities Repaid in Part. . . . . . . . . . . . . . . 69
ARTICLE FOURTEEN DEFEASANCE AND COVENANT DEFEASANCE . . . . . . . . . . . 69
SECTION 1401. Applicability of Article; Company's Option to Effect
Defeasance or Covenant Defeasance. . . . . . . . . . . . . . . . 69
SECTION 1402. Defeasance and Discharge . . . . . . . . . . . . . . . 70
SECTION 1403. Covenant Defeasance. . . . . . . . . . . . . . . . . . 70
SECTION 1404. Conditions to Defeasance or Covenant Defeasance. . . . 71
SECTION 1405. Deposited Money and Government Obligations to Be Held
in Trust; Other Miscellaneous Provisions . . . . . . . . . . . . 72
ARTICLE FIFTEEN MEETINGS OF HOLDERS OF SECURITIES . . . . . . . . . . . . 73
SECTION 1501. Purposes for Which Meetings May Be Called. . . . . . . 73
SECTION 1502. Call, Notice and Place of Meetings . . . . . . . . . . 73
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<PAGE>
SECTION 1503. Persons Entitled to Vote at Meetings . . . . . . . . . 74
SECTION 1504. Quorum; Action . . . . . . . . . . . . . . . . . . . . 74
SECTION 1505. Determination of Voting Rights, Conduct and
Adjournment of Meetings. . . . . . . . . . . . . . . . . . . . . 75
SECTION 1506. Counting Votes and Recording Action of Meetings. . . . 76
SIGNATURES AND SEALS . . . . . . . . . . . . . . . . . . . . . . . . . . . 77
Exhibit A Form of Debt Security A-1
Exhibit B-1 Form of Certification B-1
Exhibit B-2 Form of Certification B-2
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<PAGE>
SHURGARD STORAGE CENTERS, INC.
Reconciliation and tie between Trust Indenture Act of 1939 and Indenture dated
as of __________, 199_.
Trust Indenture
Act Section Indenture Section
- -------------------------- -------------------------------
Section 310(a)(1). . . . . . . . . . . . . . 607
(a)(2). . . . . . . . . . . . . . 607
(b) . . . . . . . . . . . . . . . 607, 608
Section 312(c) . . . . . . . . . . . . . . . 701
Section 313(a) . . . . . . . . . . . . . . . 702
(c) . . . . . . . . . . . . . . . 702
Section 314(a) . . . . . . . . . . . . . . . 703
(a)(4). . . . . . . . . . . . . . 1009
(c)(1). . . . . . . . . . . . . . 102
(c)(2). . . . . . . . . . . . . . 102
(e) . . . . . . . . . . . . . . . 102
Section 315(b) . . . . . . . . . . . . . . . 601
Section 316(a) (last sentence) . . . . . . . 101 ("Outstanding")
(a)(1)(A) . . . . . . . . . . . . 502, 512
(a)(1)(B) . . . . . . . . . . . . 513
(b) . . . . . . . . . . . . . . . 508
Section 317(a)(1). . . . . . . . . . . . . . 503
(a)(2). . . . . . . . . . . . . . 504
Section 318(a) . . . . . . . . . . . . . . . 111
(c) . . . . . . . . . . . . . . . 111
- ----------------------
NOTE: This reconciliation and tie shall not, for any purpose, be deemed to be
a part of the Indenture.
Attention should also be directed to Section 318(c) of the 1939 Act, which
provides that the provisions of Sections 310 to and including 317 of the 1939
Act are a part of and govern every qualified indenture, whether or not
physically contained therein.
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<PAGE>
THIS INDENTURE, dated as of ____________________, between SHURGARD STORAGE
CENTERS, INC., a Delaware corporation (the "Company"), having its principal
office at 1201 Third Avenue, Suite 2200, Seattle, Washington 98101, and ________
____________________, a corporation organized under the laws the State of
__________, as Trustee hereunder (the "Trustee"), having its Corporate Trust
Office at______________________________.
RECITALS OF THE COMPANY
The Company deems it necessary to issue from time to time for its lawful
purposes debt Securities (hereinafter called the "Securities") evidencing its
indebtedness, and has duly authorized the execution and delivery of this
Indenture to provide for the issuance from time to time of the Securities, to be
issued in one or more series as provided in this Indenture.
This Indenture is subject to the provisions of the Trust Indenture Act of
1939, as amended, that are deemed to be incorporated into this Indenture and
shall, to the extent applicable, be governed by such provisions.
All things necessary to make this Indenture a valid agreement of the
Company, in accordance with its terms, have been done.
NOW, THEREFORE, THIS INDENTURE WITNESSETH:
For and in consideration of the premises and the purchase of the Securities
by the Holders thereof, it is mutually covenanted and agreed, for the equal and
proportionate benefit of all Holders of the Securities, as follows:
ARTICLE 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 One have the meanings assigned
to them in this Article One, and include the plural as well as the singular;
(2) all other terms used herein which are defined in the TIA, either
directly or by reference therein, have the meanings assigned to them therein,
and the terms "cash transaction" and "self-liquidating paper," as used in TIA
Section 311, shall have the meanings assigned to them in the rules of the
Commission adopted under the TIA;
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(3) all accounting terms not otherwise defined herein have the
meanings assigned to them in accordance with GAAP; and
(4) the words "herein," "hereof" and "hereunder" and other words of
similar import refer to this Indenture as a whole and not to any particular
Article, Section or other subdivision.
"ACT," when used with respect to any Holder, has the meaning specified in
Section 104.
"ADDITIONAL AMOUNTS" means any additional amounts which are required by a
Security or by or pursuant to a Board Resolution, under circumstances specified
therein, to be paid by the Company in respect of certain taxes imposed on
certain Holders and which are owing to such Holders.
"AFFILIATE" of any specified Person means any other Person directly or
indirectly controlling or controlled by or under direct or indirect common
control with such specified Person. For the purposes of this definition,
"control" when used with respect to any specified Person means the power to
direct the management and policies of such Person, directly or indirectly,
whether through the ownership of voting Securities, by contract or otherwise;
and the terms "controlling" and "controlled" have meanings correlative to the
foregoing.
"AUTHENTICATING AGENT" means any authenticating agent appointed by the
Trustee pursuant to Section 611 to act on behalf of the Trustee to authenticate
Securities.
"AUTHORIZED NEWSPAPER" means a newspaper, printed in the English language
or in an official language of the country of publication, customarily published
on each Business Day, whether or not published on Saturdays, Sundays or
holidays, and of general circulation in each place in connection with which the
term is used or in the financial community of each such place. Whenever
successive publications are required to be made in Authorized Newspapers, the
successive publications may be made in the same or in different Authorized
Newspapers in the same city meeting the foregoing requirements and in each case
on any Business Day.
"BANKRUPTCY LAW" has the meaning specified in Section 501.
"BEARER SECURITY" means any Security established pursuant to Section 201
which is payable to bearer.
"BOARD OF DIRECTORS" means the board of directors of the Company, or any
committee of that board duly authorized to act hereunder.
"BOARD RESOLUTION" means a copy of a resolution certified by the Secretary
or an Assistant Secretary of the Company to have been duly adopted by the Board
of Directors and to be in full force and effect on the date of such
certification, and delivered to the Trustee.
"BUSINESS DAY," when used with respect to any Place of Payment or any other
particular location referred to in this Indenture or in the Securities, means,
unless otherwise specified with respect to any Securities pursuant to
Section 301, any day, other than a Saturday or Sunday, that
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<PAGE>
is not a day on which banking institutions in that Place of Payment or
particular location are authorized or required by law, regulation or executive
order to close.
"CEDEL" means Centrale de Livraison de Valeurs Mobilieres, S.A., or its
successor.
"COMMISSION" means the Securities and Exchange Commission, as from time to
time constituted, created under the Securities Exchange Act of 1934, as amended,
or, if at any time after execution of this instrument such Commission is not
existing and performing the duties now assigned to it under the Trust Indenture
Act, then the body performing such duties on such date.
"COMMON STOCK" means, with respect to any Person, all shares of capital
stock issued by such Person other than Preferred Stock.
"COMPANY" means the Person named as the "Company" in the first paragraph of
this Indenture until a successor corporation shall have become such pursuant to
the applicable provisions of this Indenture, and thereafter "Company" shall mean
such successor corporation.
"COMPANY REQUEST" and "COMPANY ORDER" mean, respectively, a written request
or order signed in the name of the Company by its Chairman of the Board, the
President, any Senior Vice President or Vice President and by its Treasurer, an
Assistant Treasurer, the Secretary or an Assistant Secretary, and delivered to
the Trustee.
"CONVERSION EVENT" means the cessation of use of (1) a Foreign Currency
both by the government of the country which issued such currency and for the
settlement of transactions by a central bank or other public institutions of or
within the international banking community, (2) the ECU both within the European
Monetary System and for the settlement of transactions by public institutions of
or within the European Communities, or (3) any currency unit (or composite
currency) other than the ECU for the purposes for which it was established.
"CORPORATE TRUST OFFICE" means the office of the Trustee at which, at any
particular time, its corporate trust business shall be principally administered,
which office at the date hereof is located at ______________________________.
"CORPORATION" includes corporations, associations, companies and business
trusts.
"COUPON" means any interest coupon appertaining to a Bearer Security.
"CUSTODIAN" has the meaning specified in Section 501.
"DEFAULTED INTEREST" has the meaning specified in Section 307.
"DOLLAR" or "$" means a dollar or other equivalent unit in such coin or
currency of the United States of America as at the time shall be legal tender
for the payment of public and private debts.
"ECU" means the European Currency Unit as defined and revised from time to
time by the Council of the European Communities.
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<PAGE>
"EUROCLEAR" means Morgan Guaranty Trust Company of New York, Brussels
office, or its successor as operator of the Euroclear System.
"EUROPEAN COMMUNITIES" means the European Economic Community, the European
Coal and Steel Community and the European Atomic Energy Community.
"EUROPEAN MONETARY SYSTEM" means the European Monetary System established
by the Resolution of December 5, 1978 of the Council of the European
Communities.
"EVENT OF DEFAULT" has the meaning specified in Article Five.
"FOREIGN CURRENCY" means any currency, currency unit or composite currency,
including, without limitation, the ECU, issued by the government of one or more
countries other than the United States of America or by any recognized
confederation or association of such governments.
"GAAP" means generally accepted accounting principles, as in effect from
time to time, as used in the United States applied on a consistent basis.
"GLOBAL SECURITY" means a security evidencing all or a part of a series of
Securities issued to and registered in the name of the depositary for such
series, or its nominee, in accordance with Section 305, and bearing the legend
prescribed in Section 203.
"GOVERNMENT OBLIGATIONS" means Securities which are (1) direct obligations
of the United States or the government which issued the Foreign Currency in
which the Securities of a particular series are payable, for the payment of
which its full faith and credit is pledged or (2) obligations of a Person
controlled or supervised by and acting as an agency or instrumentality of the
United States or such government which issued the Foreign Currency in which the
Securities of such series are payable, the payment of which is unconditionally
guaranteed as a full faith and credit obligation by the United States or such
other government, which, in either case, are not callable or redeemable at the
option of the issuer thereof, and shall also include a depository receipt issued
by a bank or trust company as custodian with respect to any such Government
Obligation or a specific payment of interest on or principal of any such
Government Obligation held by such custodian for the account of the holder of a
depository receipt; PROVIDED, HOWEVER, that (except as required by law) such
custodian is not authorized to make any deduction from the amount payable to the
holder of such depository receipt from any amount received by the custodian in
respect of the Government Obligation or the specific payment of interest on or
principal of the Government Obligation evidenced by such depository receipt.
"HOLDER" means, in the case of a Registered Security, the Person in whose
name a Security is registered in the Security Register and, in the case of a
Bearer Security, the bearer thereof and, when used with respect to any coupon,
shall mean the bearer thereof.
"INDENTURE" means this instrument as originally executed or as it may be
supplemented or amended from time to time by one or more indentures supplemental
hereto entered into pursuant to the applicable provisions hereof, and shall
include the terms of particular series of Securities established as contemplated
by Section 301; PROVIDED, HOWEVER, that, if at any time more than one Person is
acting as Trustee under this instrument, "Indenture" shall mean, with respect to
any one
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<PAGE>
or more series of Securities for which such Person is Trustee, this instrument
as originally executed or as it may be supplemented or amended from time to time
by one or more indentures supplemental hereto entered into pursuant to the
applicable provisions hereof and shall include the terms of the, or those,
particular series of Securities for which such Person is Trustee established as
contemplated by Section 301, exclusive, however, of any provisions or terms
which relate solely to other series of Securities for which such Person is
Trustee, regardless of when such terms or provisions were adopted, and exclusive
of any provisions or terms adopted by means of one or more indentures
supplemental hereto executed and delivered after such Person had become such
Trustee but to which such Person, as such Trustee, was not a party.
"INDEXED SECURITY" means a Security the terms of which provide that the
principal amount thereof payable at Stated Maturity may be more or less than the
principal face amount thereof at original issuance.
"INTEREST," when used with respect to an Original Issue Discount Security
which by its terms bears interest only after Maturity, means interest payable
after Maturity, and, when used with respect to a Security which provides for the
payment of Additional Amounts pursuant to Section 1010, includes such Additional
Amounts.
"INTEREST PAYMENT DATE," when used with respect to any Security, means the
Stated Maturity of an installment of interest on such Security.
"MATURITY," when used with respect to any Security, means the date on which
the principal of such Security or an installment of principal becomes due and
payable as therein or herein provided, whether at the Stated Maturity or by
declaration of acceleration, notice of redemption, notice of option to elect
repayment or otherwise.
"OFFICERS' CERTIFICATE" means a certificate signed by the Chairman of the
Board of Directors, the President, any Senior Vice President or Vice President
and by the Treasurer, an Assistant Treasurer, the Secretary or an Assistant
Secretary of the Company, and delivered to the Trustee.
"OPINION OF COUNSEL" means a written opinion of counsel, who may be counsel
for the Company or who may be an employee of or other counsel for the Company
and who shall be satisfactory to the Trustee.
"ORIGINAL ISSUE DISCOUNT SECURITY" means any Security which provides for an
amount less than the principal amount thereof to be due and payable upon a
declaration of acceleration of the Maturity thereof pursuant to Section 502.
"OUTSTANDING," when used with respect to Securities, means, as of the date
of determination, all Securities therefore authenticated and delivered under
this Indenture, EXCEPT:
(1) Securities theretofore cancelled by the Trustee or delivered to
the Trustee for cancellation;
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<PAGE>
(2) Securities, or portions thereof, for whose payment or redemption
(including repayment at the option of the Holder) money in the necessary amount
has been theretofore been deposited with the Trustee or any Paying Agent (other
than the Company) in trust or set aside and segregated in trust by the Company
(if the Company shall act as its own Paying Agent) for the Holders of such
Securities and any coupons appertaining thereto; PROVIDED, HOWEVER, that, if
such Securities are to be redeemed, notice of such redemption has been duly
given pursuant to this Indenture or provision therefor satisfactory to the
Trustee has been made;
(3) Securities, except to the extent provided in Sections 1402 and
1403, with respect to which the Company has effected defeasance and/or covenant
defeasance as provided in Article Fourteen;
(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 Company; and
(5) Securities converted into Common Stock or Preferred Stock
pursuant to or in accordance with this Indenture if the terms of such Securities
provide for convertibility pursuant to Section 301;
PROVIDED, HOWEVER, that in determining whether the Holders of the requisite
principal amount of the Outstanding Securities have given any request, demand,
authorization, direction, notice, consent or waiver hereunder or are present at
a meeting of Holders for quorum purposes, and for the purpose of making the
calculation required by TIA Section 313, (i) the principal amount of an Original
Issue Discount Security that may be counted in making such determination or
calculation and that shall be deemed to be Outstanding for such purpose shall be
equal to the amount of principal thereof that would be (or shall have been
declared to be) due and payable, at the time of such determination, upon a
declaration of acceleration of the maturity thereof pursuant to Section 502,
(ii) the principal amount of any Security denominated in a Foreign Currency that
may be counted in making such determination or calculation and that shall be
deemed Outstanding for such purpose shall be equal to the Dollar equivalent,
determined pursuant to Section 301 as of the date such Security is originally
issued by the Company, of the principal amount (or, in the case of an Original
Issue Discount Security, the Dollar equivalent as or such date of original
issuance of the amount determined as provided in clause (i) above) of such
Security, (iii) the principal amount of any Indexed Security that may be counted
in making such determination or calculation and that shall be deemed outstanding
for such purpose shall be equal to the principal face amount of such Indexed
Security at original issuance, unless otherwise provided with respect to such
Security pursuant to Section 301, and (iv) Securities owned by the Company or of
any other obligor upon the Securities or any Affiliate of the Company or of such
other obligor shall be disregarded and deemed not to be Outstanding, except
that, in determining whether the Trustee shall be protected in making such
calculation or in relying upon any such request, demand, authorization,
direction, notice, consent or waiver, only Securities which the Trustee knows to
be so owned shall be so disregarded. Securities owned as provided in
clause (iv) above which have been pledged in good faith may be regarded as
Outstanding if the pledgee establishes to the
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<PAGE>
satisfaction of the Trustee the pledgee's right so to act with respect to such
Securities and that the pledgee is not the Company or any other obligor upon the
Securities or any Affiliate of the Company or of such other obligor.
"PAYING AGENT" means any Person authorized by the Company to pay the
principal of (and premium, if any) or interest on any Securities or coupons on
behalf of the Company.
"PERSON" means any individual, corporation, partnership, joint venture,
association, joint-stock company, trust, unincorporated organization or
government or any agency or political subdivision thereof.
"PLACE OF PAYMENT," when used with respect to the Securities of or within
any series, means the place or places where the principal of (and premium, if
any) and interest on such Securities are payable as specified as contemplated by
Sections 301 and 1001.
"PREDECESSOR SECURITY" of any particular Security means every previous
Security evidencing all or a portion of the same debt as that evidenced by such
particular Security; and, for the purposes of this definition, any Security
authenticated and delivered under Section 306 in exchange for or in lieu of a
mutilated, destroyed, lost or stolen Security or a Security to which a
mutilated, destroyed, lost or stolen coupon appertains shall be deemed to
evidence the same debt as the mutilated, destroyed, lost or stolen Security or
the Security to which the mutilated, destroyed, lost or stolen coupon
appertains.
"PREFERRED STOCK" means, with respect to any Person, all capital stock
issued by such Person that are entitled to a preference or priority over any
other capital stock issued by such Person with respect to any distribution of
such Person's assets, whether by dividend or upon any voluntary or involuntary
liquidation, dissolution or winding up.
"REDEMPTION DATE," when used with respect to any Security to be redeemed,
in whole or in part, means the date fixed for such redemption by or pursuant to
this Indenture.
"REDEMPTION PRICE," when used with respect to any Security to be redeemed,
means the price at which it is to be redeemed pursuant to this Indenture.
"REGISTERED SECURITY" shall mean any Security which is registered in the
Security Register.
"REGULAR RECORD DATE" for the interest payable on any Interest Payment Date
on the Registered Securities of or within any series means the date specified
for that purpose as contemplated by Section 301, whether or not a Business Day.
"REPAYMENT DATE" means, when used with respect to any Security to be repaid
at the option of the Holder, the date fixed for such repayment by or pursuant to
this Indenture.
"RESPONSIBLE OFFICER," when used with respect to the Trustee, means the
chairman or vice-chairman of the board of directors, the chairman or vice-
chairman of the executive committee of the board of directors, the president,
any vice president (whether or not designated by a number or a word or words
added before or after the title "vice president"), the secretary, any assistant
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secretary, the treasurer, any assistant treasurer, the cashier, any assistant
cashier, any trust officer or assistant trust officer, the controller or any
other officer of the Trustee customarily performing functions similar to those
performed by any of the above-designated officers and also means, with respect
to a particular corporate trust matter, any other officer to whom such matter is
referred because of such officer's knowledge and familiarity with the particular
subject.
"SECURITY" has the meaning stated in the first recital of this Indenture
and, more particularly, means any Security or Securities authenticated and
delivered under this Indenture; PROVIDED, HOWEVER, that, if at any time there is
more than one Person acting as Trustee under this Indenture, "Securities" with
respect to the Indenture as to which such Person is Trustee shall have the
meaning stated in the first recital of this Indenture and shall more
particularly mean Securities authenticated and delivered under this Indenture,
exclusive, however, of Securities of any series as to which such Person is not
Trustee.
"SECURITY REGISTER" and "SECURITY REGISTRAR" have the respective meanings
specified in Section 305.
"SIGNIFICANT SUBSIDIARY" means any Subsidiary which is a "significant
subsidiary" (as defined in Article I, Rule 1-02 of Regulation S-X promulgated
under the Securities Act of 1933, as amended) of the Company.
"SPECIAL RECORD DATE" for the payment of any Defaulted Interest on the
Registered Securities of or within any series means a date fixed by the Company
pursuant to Section 307.
"STATED MATURITY," when used with respect to any Security or any
installment of principal thereof or interest thereon, means the date specified
in such Security or a coupon representing such installment of interest as the
fixed date on which the principal of such Security or such installment of
principal or interest is due and payable.
"SUBSIDIARY" means a corporation a majority of the outstanding voting stock
of which is owned, directly or indirectly, by the Company or by one or more
other Subsidiaries of the Company. For the purposes of this definition, "voting
stock" means stock having voting power for the election of directors, whether at
all times or only so long as no senior class of stock has such voting power by
reason of any contingency.
"TRUST INDENTURE ACT" or "TIA" means the Trust Indenture Act of 1939, as
amended and as in force at the date as of which this Indenture was executed,
except as provided in Section 905.
"TRUSTEE" means the Person named as the "Trustee" in the first paragraph of
this Indenture until a successor Trustee shall have become such pursuant to the
applicable provisions of this Indenture, and thereafter "Trustee" shall mean or
include each Person who is then a Trustee hereunder; PROVIDED, HOWEVER, that if
at any time there is more than one such Person, "Trustee" as used with respect
to the Securities of any series shall mean only the Trustee with respect to
Securities of that series.
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<PAGE>
"UNITED STATES" means, unless otherwise specified with respect to any
Securities pursuant to Section 301, the United States of America (including the
states and the District of Columbia), its territories, its possessions and other
areas subject to its jurisdiction.
"UNITED STATES PERSON" means, unless otherwise specified with respect to
any Securities pursuant to Section 301, an individual who is a citizen or
resident of the United States, a corporation, partnership or other entity
created or organized in or under the laws of the United States or an estate or
trust the income of which is subject to United States federal income taxation
regardless of its source.
"YIELD TO MATURITY" means the yield to maturity, computed at the time of
issuance of a Security (or, if applicable, at the most recent redetermination of
interest on such Security) and as set forth in such Security in accordance with
generally accepted United States bond yield computation principles.
SECTION 102. COMPLIANCE CERTIFICATES AND OPINIONS
Upon any application or request by the Company to the Trustee to take any
action under any provision of this Indenture, the Company shall furnish to the
Trustee an Officers' Certificate stating that all conditions precedent, if any,
provided for in this Indenture relating to the proposed action have been
complied with and an Opinion of Counsel stating that in the opinion of such
counsel all such conditions precedent, if any, have been complied with, except
that in the case of any such application or request as to which the furnishing
of such documents is specifically required by any provision of this Indenture
relating to such particular application or request, no additional certificate or
opinion need be furnished.
Every certificate or opinion with respect to compliance with a condition or
covenant provided for in this Indenture (including certificates delivered
pursuant to Section 1009) shall include:
(1) a statement that each individual signing such certificate or
opinion has read such condition or covenant and the definitions herein relating
thereto;
(2) a brief statement as to the nature and scope of the examination
or investigation upon which the statements or opinions contained in such
certificate or opinion are based;
(3) a statement that, in the opinion of each such individual, he has
made such examination or investigation as is necessary to enable him to express
an informed opinion as to whether or not such condition or covenant has been
complied with; and
(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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SECTION 103. FORM OF DOCUMENTS DELIVERED TO TRUSTEE
In any case where several matters are required to be certified by, or
covered by an opinion of, any specified Person, it is not necessary that all
such matters be certified by, or covered by the opinion of, only one such
Person, or that they be so certified or covered by only one document, but one
such Person may certify or give an opinion as to some matters and one or more
other such Persons as to other matters, and any such Person may certify or give
an opinion as to such matters in one or several documents.
Any certificate or opinion of an officer of the Company may be based,
insofar as it relates to legal matters, upon an Opinion of Counsel, or a
certificate or representations by counsel, unless such officer knows, or in the
exercise or reasonable care should know, that the opinion, certificate or
representations with respect to the matters upon which his certificate or
opinion is based are erroneous. Any such Opinion of Counsel or certificate or
representations may be based, insofar as it relates to factual matters, upon a
certificate or opinion of, or representations by, an officer or officers of the
Company stating that the information as to such factual matters is in the
possession of the Company, unless such counsel knows that the certificate,
opinion or representations as to such matters are erroneous.
Where any Person is required to make, give or execute two or more
applications, requests, consents, certificates, statements, opinions or other
instruments under this Indenture, they may, but need not, be consolidated and
form one instrument.
SECTION 104. ACTS OF HOLDERS
Any request, demand, authorization, direction, notice, consent, waiver or
other action provided by this Indenture to be given or taken by Holders of the
Outstanding Securities of all series or one or more series, as the case may be,
may be embodied in and evidenced by one or more instruments of substantially
similar tenor signed by such Holders in person or by agents duly appointed in
writing. If Securities of a series are issuable as Bearer Securities, any
request, demand, authorization, direction, notice, consent, waiver or other
action provided by this Indenture to be given or taken by Holders of Securities
of such series may, alternatively, be embodied in and evidenced by the record of
Holders of Securities of such series voting in favor thereof, either in person
or by proxies duly appointed in writing, at any meeting of Holders of Securities
of such series duly called and held in accordance with the provisions of Article
Fifteen, or a combination of such instruments and any such record. Except as
herein otherwise expressly provided, such action shall become effective when
such instrument or instruments or record or both are delivered to the Trustee
and, where it is hereby expressly required, to the Company. Such instrument or
instruments and any such record (and the action embodied therein and evidenced
thereby) are herein sometimes referred to as the "Act" of the Holders signing
such instrument or instruments or so voting at any such meeting. Proof of
execution of any such instrument or of a writing appointing any such agent, or
of the holding by any Person of a Security, shall be sufficient for any purpose
of this Indenture and conclusive in favor of the Trustee and the Company and any
agent of the Trustee or the Company, if made in the manner provided in this
Section 104. The record of any meeting of Holders of Securities shall be proved
in the manner provided in Section 1506.
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The fact and date of the execution by any Person of any such instrument or
writing may be proved by the affidavit of a witness of such execution or by a
certificate of a notary public or other officer authorized by law to take
acknowledgments of deeds, certifying that the individual signing such instrument
or writing acknowledged to him the execution thereof. Where such execution is
by a signer acting in a capacity other than his individual capacity, such
certificate or affidavit shall also constitute sufficient proof of his
authority. The fact and date of the execution of any such instrument or
writing, or the authority of the Person executing the same, may also be proved
in any other reasonable manner which the Trustee deems sufficient.
The ownership of Registered Securities shall be proved by the Security
Register. As to any matter relating to beneficial ownership interests in any
Global Security, the appropriate depositary's records shall be dispositive for
purposes of this Indenture.
The ownership of Bearer Securities may be proved by the production of such
Bearer Securities or by a certificate executed, as depositary, by any trust
company, bank, banker or other depositary, wherever situated, if such
certificate shall be deemed by the Trustee to be satisfactory, showing that at
the date therein mentioned such Person had on deposit with such depositary, or
exhibited to it, the Bearer Securities therein described; or such facts may be
proved by the certificate or affidavit of the Person holding such Bearer
Securities, if such certificate or affidavit is deemed by the Trustee to be
satisfactory. The Trustee and the Company may assume that such ownership of any
Bearer Security continues until (1) another certificate or affidavit bearing a
later date issued in respect of the same Bearer Security is produced or (2) such
Bearer Security is produced to the Trustee by some other Person or (3) such
Bearer Security is surrendered in exchange for a Registered Security or (4) such
Bearer Security is no longer Outstanding. The ownership of Bearer Securities
may also be proved in any other manner which the Trustee deems sufficient.
If the Company shall solicit from the Holders of Registered Securities any
request, demand, authorization, direction, notice, consent, waiver or other Act,
the Company may, at its option, in or pursuant to a Board Resolution, fix in
advance a record date for the determination of Holders entitled to give such
request, demand, authorization, direction, notice, consent, waiver or other Act,
but the Company shall have no obligation to do so. Notwithstanding TIA
Section 316(c), such record date shall be the record date specified in or
pursuant to such Board Resolution, which shall be a date not earlier than the
date 30 days prior to the first solicitation of Holders generally in connection
therewith and not later than the date such solicitation is completed. If such a
record date is fixed, such request, demand, authorization, direction, notice,
consent, waiver or other Act may be given before or after such record date, but
only the Holders of record at the close of business on such record date shall be
deemed to be Holders for the purposes of determining whether Holders of the
requisite proportion of Outstanding Securities have authorized or agreed or
consented to such request, demand, authorization, direction, notice, consent,
waiver or other Act, and for that purpose the Outstanding Securities shall be
computed as of such record date; PROVIDED, HOWEVER, that no such authorization,
agreement or consent by the Holders on such record date shall be deemed
effective unless it shall become effective pursuant to the provisions of this
Indenture not later then eleven months after the record date.
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Any request, demand, authorization, direction, notice, consent, waiver or
other Act of the Holder of any Security shall bind every future Holder of the
same Security and the Holder of every Security issued upon the registration of
transfer thereof or in exchange therefor or in lieu thereof in respect of
anything done, omitted or suffered to be done by the Trustee, any Security
Registrar, any Paying Agent, any Authenticating Agent or the Company in reliance
thereon, whether or not notation of such action is made upon such Security.
SECTION 105. NOTICES, ETC., TO TRUSTEE AND COMPANY
Any request, demand, authorization, direction, notice, consent, waiver or
Act of Holders or other document provided or permitted by this Indenture to be
made upon, given or furnished to, or filed with,
(1) the Trustee by any Holder or by the Company shall be sufficient
for every purpose hereunder if made, given, furnished or filed in writing to or
with the Trustee at ________________________________________; or
(2) the Company by the Trustee or by any Holder shall be sufficient
for every purpose hereunder (unless otherwise herein expressly provided) if in
writing and mailed, first-class postage prepaid, to the Company addressed to it
at the address of its principal office specified in the first paragraph of this
Indenture or at any other address previously furnished in writing to the Trustee
by the Company, Attention: Chief Financial Officer (with a copy to the
Company's general counsel); or
(3) either the Trustee or the Company, by the other party shall be
sufficient for every purpose hereunder if given by facsimile transmission,
receipt confirmed by telephone followed by an original copy delivered by
guaranteed overnight courier; if to the Trustee at facsimile number (___)
________; and if to the Company at facsimile number (206) 623-0968.
SECTION 106. NOTICE TO HOLDERS; WAIVER
Where this Indenture provides for notice of any event to Holders of
Registered Securities by the Company or the Trustee, such notice shall be
sufficiently given (unless otherwise herein expressly provided) if in writing
and mailed, first-class postage prepaid, to each such Holder affected by such
event, at his address as it appears in the Security Register, not later than the
latest date, and not earlier than the earliest date, if any, prescribed for the
giving of such notice. In any case where notice to Holders of Registered
Securities is given by mail, neither the failure to mail such notice, nor any
defect in any notice so mailed, to any particular Holder shall affect the
sufficiency of such notice with respect to other Holders of Registered
Securities or the sufficiency of any notice to Holders of Bearer Securities
given as provided herein. Any notice mailed to a Holder in the manner herein
prescribed shall be conclusively deemed to have been received by such Holder,
whether or not such Holder actually receives such notice.
If by reason of the suspension of or irregularities in regular mail service
or by reason of any other cause it shall be impracticable to give such notice by
mail, then such notification to
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Holders of Registered Securities as shall be made with the approval of the
Trustee shall constitute a sufficient notification to such Holders for every
purpose hereunder.
Except as otherwise expressly provided herein or otherwise specified with
respect to any Securities pursuant to Section 301, where this Indenture provides
for notice to Holders of Bearer Securities of any event, such notice shall be
sufficiently given if published in an Authorized Newspaper in the City of New
York and the City of Seattle and in such other city or cities as may be
specified in such Securities on a Business Day, such publication to be not later
than the latest date, and not earlier than the earliest date, if any, prescribed
for the giving of such notice. Any such notice shall be deemed to have been
given on the date of such publication or, if published more than once, on the
date of the first such publication.
If by reason of the suspension of publication of any Authorized Newspaper
or Authorized Newspapers or by reason of any other cause it shall be
impracticable to publish any notice to Holders of Bearer Securities as provided
above, then such notification to Holders of Bearer Securities as shall be given
with the approval of the Trustee shall constitute sufficient notice to such
Holders for every purpose hereunder. Neither the failure to give notice by
publication to any particular Holder of Bearer Securities as provided above, nor
any defect in any notice so published, shall affect the sufficiency of such
notice with respect to other Holders of Bearer Securities or the sufficiency of
any notice to Holders of Registered Securities given as provided herein.
Any request, demand, authorization, direction, notice, consent or waiver
required or permitted under this Indenture shall be in the English language,
except that any published notice may be in an official language of the country
of publication.
Where this Indenture provides for notice in any manner, such notice may be
waived in writing by the Person entitled to receive such notice, either before
or after the event, and such waiver shall be the equivalent of such notice.
Waivers of notice by Holders shall be filed with the Trustee, but such filing
shall not be a condition precedent to the validity of any action taken in
reliance upon such waiver.
SECTION 107. COUNTERPARTS; EFFECT OF HEADINGS AND TABLE OF CONTENTS
This Indenture may be executed in any number of counterparts, each of which
when executed shall be deemed to be an original, but all such counterparts shall
together constitute but one and the same Indenture. The Article and
Section headings herein and the Table of Contents are for convenience only and
shall not affect the construction hereof.
SECTION 108. SUCCESSORS AND ASSIGNS
All covenants and agreements in this Indenture by the Company shall bind
its successors and assigns, whether so expressed or not.
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SECTION 109. SEVERABILITY CLAUSE
In case any provision in this Indenture or in any Security or coupon shall
be invalid, illegal or unenforceable, the validity, legality and enforceability
of the remaining provisions shall not in any way be affected or impaired
thereby.
SECTION 110. BENEFITS OF INDENTURE
Nothing in this Indenture or in the Securities or coupons, express or
implied, shall give to any Person, other than the parties hereto, any Security
Registrar, any Paying Agent, any Authenticating Agent and their successors
hereunder and the Holders any benefit or any legal or equitable right, remedy or
claim under this Indenture.
SECTION 111. GOVERNING LAW
This Indenture and the Securities and coupons shall be governed by and
construed in accordance with the law of the State of Washington. This Indenture
is subject to the provisions of the TIA that are required to be part of this
Indenture and shall, to the extent applicable, be governed by such provisions.
SECTION 112. LEGAL HOLIDAYS
In any case where any Interest Payment Date, Redemption Date, Repayment
Date, sinking fund payment date, Stated Maturity or Maturity of any Security or
the last date on which a Holder has the right to convert or exchange a Security
shall not be a Business Day at any Place of Payment, then (notwithstanding any
other provision of this Indenture or any Security or coupon other than a
provision in the Securities of any series which specifically states that such
provision shall apply in lieu hereof), payment of interest or any Additional
Amounts or principal (and premium, if any) or conversion or exchange of such
security need not be made at such Place of Payment on such date, but (except as
otherwise provided in the supplemental indenture with respect to such Security)
may be made on the next succeeding Business Day at such Place of Payment with
the same force and effect as if made on the Interest Payment Date, Redemption
Date, Repayment Date or sinking fund payment date, or at the Stated Maturity or
Maturity, or on such last day of conversion or exchange, provided that no
interest shall accrue on the amount so payable for the period from and after
such Interest Payment Date, Redemption Date, Repayment Date, sinking fund
payment date, Stated Maturity or Maturity, as the case may be.
SECTION 113. IMMUNITY OF STOCKHOLDERS, DIRECTORS, OFFICERS AND AGENTS OF THE
COMPANY
No recourse under or upon any obligation, covenant or agreement contained
in this Indenture, or in any Security, or because of any indebtedness evidenced
thereby, shall be had against any past, present or future stockholder, employee,
officer or director, as such, of the Company or of any successor, either
directly or through the Company or any successor, under any rule of law, statute
or constitutional provision or by the enforcement of any assessment or by any
legal or equitable proceeding or otherwise, all such liability being expressly
waived and released
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by the acceptance of the Securities by the Holders and as part of the
consideration for the issue of the Securities.
SECTION 114. CONFLICT WITH TRUST INDENTURE ACT
If any provision hereof limits, qualifies or conflicts with another
provision hereof which is required or deemed to be included in this Indenture by
any of the provisions of the Trust Indenture Act, such required provision shall
control. If any provision of this Indenture modifies or excludes any provision
of the Trust Indenture Act that may be so modified or excluded, the latter
provision shall be deemed to apply to this Indenture as so modified or to be
excluded, as the case may be.
ARTICLE TWO
SECURITIES FORMS
SECTION 201. FORMS OF SECURITIES
The Registered Securities, if any, of each series and the Bearer
Securities, if any, of each series and related coupons shall be substantially in
the form of Exhibit A hereto or in such other form as shall be established in
one or more indentures supplemental hereto or approved from time to time by or
pursuant to a Board Resolution in accordance with Section 301, shall have such
appropriate insertions, omissions, substitutions and other variations as are
required or permitted by this Indenture or any indenture supplemental hereto,
and may have such letters, numbers or other marks of identification or
designation and such legends or endorsements placed thereon as the Company may
deem appropriate and as are not inconsistent with the provisions of this
Indenture, or as may be required to comply with any law or with any rule or
regulation made pursuant thereto or with any rule or regulation of any stock
exchange on which the Securities may be listed, or to conform to usage.
Unless otherwise specified as contemplated by Section 301, Bearer
Securities shall have interest coupons attached.
Subject to Section 304, the definitive Securities and coupons shall be
printed, lithographed or engraved, or produced by any combination of these
methods, on a steel engraved border or steel engraved borders or mechanically
reproduced on safety paper or may be produced in any other manner, all as
determined by the officers of the Company executing such Securities or coupons,
as evidenced by their execution of such Securities or coupons.
SECTION 202. FORM OF TRUSTEE'S CERTIFICATE OF AUTHENTICATION
Subject to Section 611, the Trustee's certificate of authentication shall
be in substantially the following form:
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This is one of the Securities of the series designated therein referred to
in the within-mentioned Indenture.
[NAME OF TRUSTEE]
as Trustee
By:
--------------------------------
Authorized Signatory
SECTION 203. SECURITIES ISSUABLE IN GLOBAL FORM
If Securities of or within a series are issuable in the form of one or more
Global Securities, then, notwithstanding clause (8) of Section 301 and the
provisions of Section 302, any such Global Security or Securities may provide
that it or they shall represent the aggregate amount of all Outstanding
Securities of such series (or such lesser amount as is permitted by the terms
thereof) from time to time endorsed thereon and may also provide that the
aggregate amount of Outstanding Securities of such series represented thereby
may from time to time be increased or decreased to reflect exchanges. Any
endorsement of any Global Security to reflect the amount, or any increase or
decrease in the amount, or changes in the rights of Holders thereof, of
Outstanding Securities represented thereby shall be made by the Trustee in such
manner or by such Person or Persons as shall be specified therein or in the
Company Order to be delivered to the Trustee pursuant to Section 303 or 304.
Subject to the provisions of Section 303 and, if applicable, Section 304, the
Trustee shall deliver and redeliver any Global Security in permanent global form
in the manner and upon instructions given by the Person or Persons specified
therein or in the applicable Company Order. If a Company Order pursuant to
Section 303 or 304 has been, or simultaneously is, delivered, any instructions
by the Company with respect to endorsement or delivery or redelivery of a Global
Security shall be in writing but need not comply with Section 102 and need not
be accompanied by an Opinion of Counsel.
The provisions of the last sentence of Section 303 shall apply to any
Security represented by a Global Security if such Security was never issued and
sold by the Company and the Company delivers to the Trustee the Global Security
together with written instructions (which need not comply with Section 102 and
need not be accompanied by an Opinion of Counsel) with regard to the reduction
in the principal amount of Securities represented thereby, together with the
written statement contemplated by the last sentence of Section 303.
Notwithstanding the provisions of Section 307, unless otherwise specified
as contemplated by Section 301, payment of principal of and any premium and
interest on any Global Security shall be made to the Person or Persons specified
therein.
Notwithstanding the provisions of Section 308 and except as provided in the
preceding paragraph, the Company, the Trustee and any agent of the Company and
the Trustee shall treat as the Holder of such principal amount of Outstanding
Securities represented by a permanent Global Security (1) in the case of a
permanent Global Security in registered form, the Holder of such permanent
Global Security in registered form or (2) in the case of a permanent Global
Security in bearer form, Euroclear or CEDEL.
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Any Global Security authenticated and delivered hereunder shall bear a
legend in substantially the following form:
This Security is a Global Security within the meaning set forth in the
Indenture hereinafter referred to and is registered in the name of a
Depositary or a nominee of a Depositary. This Security is
exchangeable for Securities registered in the name of a person other
than the Depositary or its nominee only in the limited circumstances
described in the Indenture, and may not be transferred except as a
whole by the Depositary to a nominee of the Depositary or by a nominee
of the Depositary to the Depositary or another nominee of the
Depositary or by the Depositary or its nominee to a successor
Depositary or its nominee.
ARTICLE THREE
THE SECURITIES
SECTION 301. AMOUNT UNLIMITED; ISSUABLE IN SERIES
The aggregate principal amount of Securities which may be authenticated and
delivered under this Indenture is unlimited.
The Securities may be issued in one or more series. There shall be
established in one or more Board Resolutions or pursuant to authority granted by
one or more Board Resolutions and, subject to Section 303, set forth 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 such series from all other series of Securities);
(2) any limit upon the aggregate principal amount of the Securities
of the series that may be authenticated and delivered under this Indenture
(except for Securities authenticated and delivered upon registration of transfer
of, or in exchange for, or in lieu of, other Securities of the series pursuant
to Section 304, 305, 306, 906, 1107 or 1305);
(3) the date or dates, or the method by which such date or dates will
be determined, on which the principal of the Securities of the series shall be
payable;
(4) the rate or rates at which the Securities of the series shall
bear interest, if any, or the method by which such rate or rates shall be
determined, the date or dates from which such interest shall accrue or the
method by which such date or dates shall be determined, the Interest Payment
Dates on which such interest will be payable and the Regular Record Date, if
any, for the interest payable on any Registered Security on any Interest Payment
Date, or the method by which such date shall be determined, and the basis upon
which interest shall be calculated if other than that of a 360-day year of
twelve 30-day months;
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(5) the place or places where the principal of (and premium, if any),
interest, if any, on, and Additional Amounts, if any, payable in respect of,
Securities of the series shall be payable, any Registered Securities of the
series may be surrendered for registration of transfer, exchange or conversion
and notices or demands to or upon the Company in respect of the Securities of
the series and this Indenture may be served;
(6) the period or periods within which, the price or prices at which,
the currency or currencies, currency unit or units or composite currency or
currencies in which, and other terms and conditions upon which Securities of the
series may be redeemed, in whole or in part, at the option of the Company, if
the Company is to have the option;
(7) the obligation, if any, of the Company to redeem, repay or
purchase Securities of the series pursuant to any sinking fund or analogous
provision or at the option of a Holder thereof, and the period or periods within
which or the date or dates on which, the price or prices at which, the currency
or currencies, currency unit or units or composite currency or currencies in
which, and other terms and conditions upon which Securities of the series shall
be redeemed, repaid or purchased, in whole or in part, pursuant to such
obligation;
(8) if other than denominations of $1,000 and any integral multiple
thereof, the denominations in which any Securities of the series shall be
issuable;
(9) if other than the Trustee, the identity of each Security
Registrar and/or Paying Agent;
(10) if other than the principal amount thereof, the portion of the
principal amount of Securities of the series that shall be payable upon
declaration of acceleration of the Maturity thereof pursuant to Section 502 or,
if applicable, the portion of the principal amount of Securities of the series
that is convertible in accordance with the provisions of this Indenture, or the
method by which such portion shall be determined;
(11) if other than Dollars, the Foreign Currency or Currencies in
which payment of the principal of (and premium, if any) and interest or
Additional Amounts, if any, on the Securities of the series shall be payable or
in which the Securities of the series shall be denominated and the manner of
determining the equivalent thereof in Dollars for purposes of the definition of
"Outstanding" in Section 101;
(12) whether the amount of payments of principal of (and premium, if
any) or interest, if any, on the Securities of the series may be determined with
reference to an index, formula or other method (which index, formula or method
may be based, without limitation, on one or more currencies, currency units,
composite currencies, commodities, equity indices or other indices), and the
manner in which such amounts shall be determined;
(13) whether the principal of (and premium, if any) or interest or
Additional Amounts, if any, on the Securities of the series are to be payable,
at the election of the Company or a Holder thereof, in a currency or currencies,
currency unit or units or composite currency or currencies other than that in
which such Securities are denominated or stated to be payable, the
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period or periods within which, and the terms and conditions upon which, such
election may be made, and the time and manner of, and identity of the exchange
rate agent with responsibility for, determining the exchange rate between the
currency or currencies, currency unit or units or composite currency or
currencies in which such Securities are denominated or stated to be payable and
the currency or currencies, currency unit or units or composite currency or
currencies in which such Securities are to be so payable;
(14) provisions, if any, granting special rights to the Holders of
Securities of the series upon the occurrence of such events as may be specified;
(15) any deletions from, modifications of or additions to the Events
of Default or covenants of the Company with respect to Securities of the series,
whether or not such Events of Default or covenants are consistent with the
Events of Default or covenants set forth herein;
(16) whether Securities of the series are to be issuable as Registered
Securities, Bearer Securities (with or without coupons) or both, any
restrictions applicable to the offer, sale or delivery of Bearer Securities and
the terms upon which Bearer Securities of the series may be exchanged for
Registered Securities of the series and vice versa (if permitted by applicable
laws and regulations), whether any Securities of the series are to be issuable
initially in temporary global form and whether any Securities of the series are
to be issuable in permanent global form with or without coupons and, if so,
whether beneficial owners of interests in any such permanent Global Security may
exchange such interests for Securities of such series and of like tenor of any
authorized form and denomination and the circumstances under which any such
exchanges may occur, if other than in the manner provided in Section 305, and,
if Registered Securities of the series are to be issuable as a Global Security,
the identity of the depositary for such series;
(17) the date as of which any Bearer Securities of the series and any
temporary Global Security representing Outstanding Securities of the series
shall be dated if other than the date of original issuance of the first Security
of the series to be issued;
(18) the Person to whom any interest on any Registered Security of the
series shall be payable, if other than the Person in whose name that Security
(or one or more Predecessor Securities) is registered at the close of business
on the Regular Record Date for such interest, the manner in which, or the Person
to whom, any interest on any Bearer Security of the series shall be payable, if
otherwise than upon presentation and surrender of the coupons appertaining
thereto as they severally mature, and the extent to which, or the manner in
which, any interest payable on a temporary Global Security on an Interest
Payment Date will be paid if other than in the manner provided in Section 304;
(19) the applicability, if any, of Sections 1402 and/or 1403 to the
Securities of the series and any provisions in modification of, in addition to
or in lieu of any of the provisions of Article Fourteen;
(20) if the Securities of such series are to be issuable in definitive
form (whether upon original issue or upon exchange of a temporary Security of
such series) only upon receipt of
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certain certificates or other documents or satisfaction of other conditions,
then the form and/or terms of such certificates, documents or conditions;
(21) if the Securities of the series are to be issued upon the
exercise of warrants, the time, manner and place for such Securities to be
authenticated and delivered;
(22) whether and under what circumstances the Company will pay
Additional Amounts as contemplated by Section 1010 on the Securities of the
series to any Holder who is not a United States Person (including any
modification to the definition of such term) in respect of any tax, assessment
or governmental charge and, if so, whether the Company will have the option to
redeem such Securities rather than pay such Additional Amounts (and the terms of
any such option);
(23) the obligation, if any, of the Company to permit the conversion
of the Securities of such series into the Company's Common Stock or Preferred
Stock, as the case may be, and the terms and conditions upon which such
conversion shall be effected (including, without limitation, the initial
conversion price or rate, the conversion period, any adjustment of the
applicable conversion price and any requirements relative to the reservation of
such shares for purposes of conversion) and applicable limitations on the
ownership or transferability of the Common Stock or Preferred Stock into which
such Securities are convertible; and
(24) any other terms of the series (which terms shall not be
inconsistent with the provisions of this Indenture).
All Securities of any one series and the coupons appertaining to any Bearer
Securities of such series shall be substantially identical except, in the case
of Registered Securities, as to denomination and except as may otherwise be
provided in or pursuant to such Board Resolution (subject to Section 303) and
set forth in such Officers' Certificate or in any such indenture supplemental
hereto. All Securities of any one series need not be issued at the same time
and, unless otherwise provided, a series may be reopened, without the consent of
the Holders, for issuances of additional Securities of such series.
If any of the terms of the Securities of any series are established by
action taken pursuant to one or more Board Resolutions, a copy of an appropriate
record of such action(s) shall be certified by the Secretary or an Assistant
Secretary of the Company and delivered to the Trustee at or before the delivery
of the Officers' Certificate setting forth the terms of the Securities of such
series.
SECTION 302. Denominations
The Securities of each series shall be issuable in such denominations as
shall be specified as contemplated by Section 301. With respect to Securities
of any series denominated in Dollars, in the absence of any such provisions with
respect to the Securities or any series, the Securities of such series, other
than Securities issued in global form (which may be of any denomination), shall
be issuable in denominations of $1,000 and any integral multiple thereof.
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SECTION 303. EXECUTION, AUTHENTICATION, DELIVERY AND DATING
The Securities and any coupons appertaining thereto shall be executed on
behalf of the Company by its Chairman of the Board, its President or one of its
Senior Vice Presidents, under its corporate seal reproduced thereon, and
attested by its Secretary or one of its Assistant Secretaries. The signature of
any of these officers on the Securities and coupons may be manual or facsimile
signatures of the present or any future such authorized officer and may be
imprinted or otherwise reproduced on the Securities.
Securities or coupons bearing the manual or facsimile signatures of
individuals who were at any time the proper officers of the Company shall bind
the Company, notwithstanding that such individuals or any of them have ceased to
hold such offices before the authentication and delivery of such Securities or
did not hold such offices at the date of such Securities or coupons.
At any time and from time to time after the execution and delivery of this
Indenture, the Company may deliver Securities of any series, together with any
coupon appertaining thereto, executed by the Company to the Trustee for
authentication, together with a Company Order for the authentication and
delivery of such Securities, and the Trustee in accordance with the Company
Order shall authenticate and deliver such Securities; PROVIDED, HOWEVER, that,
in connection with its original issuance, no Bearer Security shall be mailed or
otherwise delivered to any location in the United States; and PROVIDED FURTHER
that, unless otherwise specified with respect to any series of Securities
pursuant to Section 301, a Bearer Security may be delivered in connection with
its original issuance only if the Person entitled to receive such Bearer
Security shall have furnished a certificate to Euroclear or CEDEL, as the case
may be, in the form set forth in Exhibit B-1 to this Indenture or such other
certificate as may be specified with respect to any series of Securities
pursuant to Section 301, dated no earlier than 15 days before the earlier of the
date on which such Bearer Security is delivered and the date on which any
temporary Security first becomes exchangeable for such Bearer Security in
accordance with the terms of such temporary Security and this Indenture. If any
Security shall be represented by a permanent global Bearer Security, then, for
purposes of this Section 303 and Section 304, the notation of a beneficial
owner's interest therein upon original issuance of such Security or upon
exchange of a portion of a temporary Global Security shall be deemed to be
delivery in connection with its original issuance of such beneficial owner's
interest in such permanent Global Security. Except as permitted by Section 306,
the Trustee shall not authenticate and deliver any Bearer Security unless all
appurtenant coupons for interest then matured have been detached and cancelled.
If all the Securities of any series are not to be issued at one time and if
the Board Resolution or supplemental indenture establishing such series shall so
permit, such Company Order may set forth procedures acceptable to the Trustee
for the issuance of such Securities and determining the terms of particular
Securities of such series, such as interest rate or formula, maturity date, date
of issuance and date from which interest shall accrue. In authenticating such
Securities, and accepting the additional responsibilities under this Indenture
in relation to such Securities, the Trustee shall be entitled to receive, and
(subject to TIA Section 315(a) through 315(d)) shall be fully protected in
relying upon,
(1) an Opinion of Counsel stating that:
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(A) the form or forms of such Securities and any coupons have
been established in conformity with the provisions of this Indenture;
(B) the terms of such Securities and any coupons have been
established in conformity with the provisions of this Indenture; and
(C) such Securities, together with any coupons appertaining
thereto, when completed by appropriate insertions and executed and
delivered by the Company to the Trustee for authentication in
accordance with this Indenture, authenticated and delivered by the
Trustee in accordance with this Indenture and issued by the Company in
the manner and subject to any conditions specified in such Opinion of
Counsel, will constitute legal, valid and binding obligations of the
Company, enforceable in accordance with their terms, subject to
applicable bankruptcy, insolvency, fraudulent transfer, reorganization
and other similar laws of general applicability relating to or
affecting the enforcement of creditors' rights generally and to
general equitable principles; and
(2) an Officers' Certificate stating that all conditions precedent
provided for in this Indenture relating to the issuance of the Securities have
been complied with and that, to the best of the knowledge of the signers of such
certificate, no Event of Default with respect to any of the Securities shall
have occurred and be continuing.
If such form or terms have been so established, the Trustee shall not be
required to authenticate such Securities if the issue of such Securities
pursuant to this Indenture will affect the Trustee's own rights, duties,
obligations or immunities under the Securities and this Indenture or otherwise
in a manner which is not reasonably acceptable to the Trustee.
Notwithstanding the provisions of Section 301 and of the preceding
paragraph, if all the Securities of any series are not to be issued at one time,
it shall not be necessary to deliver an Officers' Certificate otherwise required
pursuant to Section 301 or a Company Order, or an Opinion of Counsel or an
Officers' Certificate otherwise required pursuant to the preceding paragraph at
the time of issuance of each Security of such series, but such order, opinion
and certificates, with appropriate modifications to cover such future issuances,
shall be delivered at or before the time of issuance of the first Security of
such series.
Each Registered Security shall be dated the date of its authentication and
each Bearer Security shall be dated as of the date specified as contemplated by
Section 301.
No Security or coupon shall be entitled to any benefit under this Indenture
or be valid or obligatory for any purpose unless there appears on such Security
or Security to which such coupon appertains a certificate of authentication
substantially in the form provided for herein duly executed by the Trustee by
manual signature of an authorized signatory, and such certificate upon any
Security shall be conclusive evidence, and the only evidence, that such security
has been duly authenticated and delivered hereunder and is entitled to the
benefits of this Indenture. Notwithstanding the foregoing, if any Security
(including a Global Security) shall have been authenticated and delivered
hereunder but never issued and sold by the Company, and the
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Company shall deliver such Security to the Trustee for cancellation as provided
in Section 309 together with a written statement (which need not comply with
Section 102 and need not be accompanied by an Opinion of Counsel) stating that
such Security has never been issued and sold by the Company, for all purposes of
this Indenture such Security shall be deemed never to have been authenticated
and delivered hereunder and shall never be entitled to the benefits of this
Indenture.
SECTION 304. TEMPORARY SECURITIES
Pending the preparation of definitive Securities of any series, the Company
may execute, and upon Company Order the Trustee shall authenticate and deliver,
temporary Securities which are printed, lithographed, typewritten, mimeographed
or otherwise produced, in any authorized denomination, substantially of the
tenor of the definitive Securities in lieu of which they are issued, in
registered form, or, if authorized, in bearer form with one or more coupons or
without coupons, and with such appropriate insertions, omissions, substitutions
and other variations as the officers executing such Securities may determine, as
conclusively evidenced by their execution of such Securities. In the case of
Securities of any series, such temporary Securities may be in global form.
Except in the case of temporary Securities (which shall be exchanged as
otherwise provided herein or as otherwise provided in or pursuant to a Board
Resolution), if temporary Securities of any series are issued, the Company will
cause definitive Securities of that series to be prepared without unreasonable
delay. After the preparation of definitive Securities of such series, the
temporary Securities of such series shall be exchangeable for definitive
Securities of such series upon surrender of the temporary Securities of such
series at the office or agency of the Company in a Place of Payment for that
series, without charge to the Holder. Upon surrender for cancellation of any
one or more temporary Securities of any series (accompanied by any nonmatured
coupons appertaining thereto), the Company shall execute and the Trustee shall
authenticate and deliver in exchange therefor a like principal amount of
definitive Securities of the same series of authorized denominations; PROVIDED,
HOWEVER, that no definitive Bearer Security shall be delivered in exchange for a
temporary Registered Security; and PROVIDED FURTHER that a definitive Bearer
Security shall be delivered in exchange for a temporary Bearer Security only in
compliance with the conditions set forth in Section 303. Until so exchanged,
the temporary Securities of any series shall in all respects be entitled to the
same benefits under this Indenture as definitive Securities of such series.
Unless otherwise provided in or pursuant to a Board Resolution, the
following provisions of this Section 304 shall govern the exchange of temporary
Securities other than through the facilities of The Depository Trust Company
("DTC"). If any such temporary Security is issued in global form, then such
temporary Global Security shall, unless otherwise provided therein, be delivered
to the London office of a depositary or common depositary (the "Common
Depositary"), for the benefit of Euroclear and CEDEL, for credit to the
respective accounts of the beneficial owners of such Securities (or to such
other accounts as they may direct).
Without unnecessary delay but in any event not later than the date
specified in, or determined pursuant to the terms of, any such temporary Global
Security (the "Exchange Date"),
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the Company shall deliver to the Trustee definitive Securities, in aggregate
principal amount equal to the principal amount of such temporary Global
Security, executed by the Company. On or after the Exchange Date, such
temporary Global Security shall be surrendered by the Common Depositary to the
Trustee, as the Company's agent for such purpose, to be exchanged, in whole or
from time to time in part, for definitive Securities without charge, and the
Trustee shall authenticate and deliver, in exchange for each portion of such
temporary Global Security, an equal aggregate principal amount of definitive
Securities of the same series of authorized denominations and of like tenor as
the portion of such temporary Global Security to be exchanged. The definitive
Securities to be delivered in exchange for any such temporary Global Security
shall be in bearer form, registered form, permanent global bearer form or
permanent global registered form, or any combination thereof, as specified as
contemplated by Section 301, and, if any combination thereof is so specified, as
requested by the beneficial owner thereof; PROVIDED, HOWEVER, that, unless
otherwise specified in such temporary Global Security, upon such presentation by
the Common Depositary, such temporary Global Security is accompanied by a
certificate dated the Exchange Date or a subsequent date and signed by Euroclear
as to the portion of such temporary global security held for its account then to
be exchanged and a certificate dated the Exchange Date or a subsequent date and
signed by CEDEL as to the portion of such temporary Global Security held for its
account then to be exchanged, each in the form set forth in Exhibit B-2 to this
Indenture or in such other form as may be established pursuant to Section 301;
and PROVIDED FURTHER that definitive Bearer Securities shall be delivered in
exchange for a portion of a temporary Global Security only in compliance with
the requirements of Section 303.
Unless otherwise specified in such temporary Global Security, the interest
of a beneficial owner of Securities of a series in a temporary Global Security
shall be exchanged for definitive Securities of the same series and of like
tenor following the Exchange Date when the account holder instructs Euroclear or
CEDEL, as the case may be, to request such exchange on his behalf and delivers
to Euroclear or CEDEL, as the case may be, a certificate in the form set forth
in Exhibit B-1 to this Indenture (or in such other form as may be established
pursuant to Section 301), dated no earlier than 15 days prior to the Exchange
Date, copies of which certificate shall be available from the offices of
Euroclear and CEDEL, the Trustee, any Authenticating Agent appointed for such
series of Securities and each Paying Agent. Unless otherwise specified in such
temporary Global Security, any such exchange shall be made free of charge to the
beneficial owners of such temporary Global Security, except that a Person
receiving definitive Securities must bear the cost of insurance, postage,
transportation and the like unless such Person takes delivery of such definitive
Securities in person at the offices of Euroclear or CEDEL. Definitive
Securities in bearer form to be delivered in exchange for any portion of a
temporary Global Security shall be delivered only outside the United States.
Until exchanged in full as hereinabove provided, the temporary Securities
of any series shall in all respects be entitled to the same benefits under this
Indenture as definitive Securities of the same series and of like tenor
authenticated and delivered hereunder, except that, unless otherwise specified
as contemplated by Section 301, interest payable on a temporary Global Security
on an Interest Payment Date for Securities of such series occurring prior to the
applicable Exchange Date shall be payable to Euroclear and CEDEL on such
Interest Payment Date upon delivery by Euroclear and CEDEL to the Trustee of a
certificate or certificates in the form set forth in Exhibit B-2 to this
Indenture (or in such other forms as may be established
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pursuant to Section 301), for credit without further interest on or after such
Interest Payment Date to the respective accounts of Persons who are the
beneficial owners of such temporary Global Security on such Interest Payment
Date and who have each delivered to Euroclear or CEDEL, as the case may be, a
certificate dated no earlier than 15 days prior to the Interest Payment Date
occurring prior to such Exchange Date in the form set forth in Exhibit B-1 to
this Indenture (or in such other forms as may be established pursuant to
Section 301). Notwithstanding anything to the contrary herein contained, the
certifications made pursuant to this paragraph shall satisfy the certification
requirements of the preceding two paragraphs and of the third paragraph or
Section 303 and the interests of the Persons who are the beneficial owners of
the temporary Global Security with respect to which such certification was made
will be exchanged for definitive Securities of the same series and of like tenor
on the Exchange Date or the date of certification if such date occurs after the
Exchange Date, without further act or deed by such beneficial owners. Except as
otherwise provided in this paragraph, no payments of principal or interest owing
with respect to a beneficial interest in a temporary Global Security will be
made unless and until such interest in such temporary Global Security shall have
been exchanged for an interest in a definitive Security. Any interest so
received by Euroclear and CEDEL and not paid as herein provided shall be
returned to the Trustee prior to the expiration of two years after such Interest
Payment Date in order to be repaid to the Company.
SECTION 305. REGISTRATION, REGISTRATION OF TRANSFER AND EXCHANGE
The Company shall cause to be kept at the Corporate Trust Office of the
Trustee or in any office or agency of the Company in a Place of Payment a
register for each series of Securities (the registers maintained in such office
or in any such office or agency of the Company in a Place of Payment being
herein sometimes referred to collectively as the "Security Register") in which,
subject to such reasonable regulations as it may prescribe, the Company shall
provide for the registration of Securities and of transfers of Securities. The
Security Register shall be in written form or any other form capable of being
converted into written form within a reasonable time. The Trustee, at its
Corporate Trust Office, is hereby initially appointed "Security Registrar" for
the purpose of registering Securities and transfers of Securities on such
Security Register as herein provided. If the Trustee shall cease to be Security
Registrar, it shall have the right to examine the Security Register at all
reasonable times.
Subject to the provisions of this Section 305, upon surrender for
registration of transfer of any Registered Security of any series at any office
or agency of the Company in a Place of Payment for that series, the Company
shall execute, and the Trustee shall authenticate and deliver, in the name of
the designated transferee or transferees, one or more new Securities of the same
series, of any authorized denominations and of a like aggregate principal
amount, bearing a number not contemporaneously outstanding, and containing
identical term and provisions.
Subject to the provisions of this Section 305, at the option of the Holder,
Securities of any series may be exchanged for other Securities of the same
series, of any authorized denomination or denominations and of a like aggregate
principal amount, containing identical terms and provisions, upon surrender of
the Securities to be exchanged at any such office or agency. Whenever any such
Securities are so surrendered for exchange, the Company shall execute, and the
Trustee shall authenticate and deliver, the Securities which the Holder making
the exchange is
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entitled to receive. Unless otherwise specified with respect to any series of
Securities as contemplated by Section 301, Bearer Securities may not be issued
in exchange for Securities.
If (but only if) permitted by the applicable Board Resolution and (subject
to Section 303) set forth in the applicable Officers' Certificate, or in any
indenture supplemental hereto, delivered as contemplated by Section 301, at the
option of the Holder, Bearer Securities of any series may be exchanged for
Securities of the same series of any authorized denominations and of a like
aggregate principal amount and tenor, upon surrender of the Bearer Securities to
be exchanged at any such office or agency, with all unmatured coupons and all
matured coupons in default thereto appertaining. If the Holder of a Bearer
Security is unable to produce any such unmatured coupon or coupons or matured
coupon or coupons in default, any such permitted exchange may be effected if the
Bearer Securities are accompanied by payment in funds acceptable to the Company
in an amount equal to the face amount of such missing coupon or coupons, or the
surrender of such missing coupon or coupons may be waived by the Company and the
Trustee if there is furnished to them such security or indemnity as they may
require to save each of them and any Paying Agent harmless. If thereafter the
Holder of such Security shall surrender to any Paying Agent any such missing
coupon in respect of which such a payment shall have been made, such Holder
shall be entitled to receive the amount of such payment; PROVIDED, HOWEVER,
that, except as otherwise provided in Section 1002, interest represented by
coupons shall be payable only upon presentation and surrender of those coupons
at an office or agency located outside the United States. Notwithstanding the
foregoing, in case a Bearer Security of any series is surrendered at any such
office or agency in a permitted exchange for a Registered Security of the same
series and like tenor after the close of business at such office or agency on
(1) any Regular Record Date and before the opening of business at such office or
agency on the relevant Interest Payment Date, or (2) any Special Record Date and
before the opening of business at such office or agency on the related proposed
date for payment of Defaulted Interest, such Bearer Security shall be
surrendered without the coupon relating to such Interest Payment Date or
proposed date for payment, as the case may be, and interest or Defaulted
Interest, as the case may be, will not be payable on such Interest Payment Date
or proposed date for payment, as the case may be, in respect of the Registered
Security issued in exchange for such Bearer Security, but will be payable only
to the Holder of such coupon when due in accordance with the provisions of this
Indenture. Whenever any Securities are so surrendered for exchange, the Company
shall execute, and the Trustee shall authenticate and deliver, the Securities
which the Holder making the exchange is entitled to receive.
Notwithstanding the foregoing, except as otherwise specified as
contemplated by Section 301, any permanent Global Security shall be exchangeable
only as provided in this paragraph. If the depositary for any permanent Global
Security is DTC, then, unless the terms of such Global Security expressly permit
such Global Security to be exchanged in whole or in part for definitive
Securities, a Global Security may be transferred, in whole but not in part, only
to a nominee of DTC, or by a nominee of DTC to DTC, or to a successor to DTC for
such Global Security selected or approved by the Company or to a nominee of such
successor to DTC. If at any time DTC notifies the Company that it is unwilling
or unable to continue as depositary for the applicable Global Security or
Securities or if at any time DTC ceases to be a clearing agency registered under
the Securities Exchange Act of 1934, as amended, if so required by applicable
law or regulation, the Company shall appoint a successor depositary with respect
to such Global
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Security or Securities. If (1) a successor depositary for such Global Security
or Securities is not appointed by the Company within 90 days after the Company
receives such notice or becomes aware of such unwillingness, inability or
ineligibility, (2) an Event of Default has occurred and is continuing and the
beneficial owners representing a majority in principal amount of the applicable
series of Securities represented by such Global Security or Securities advise
DTC to cease acting as depositary for such Global Security or Securities, or
(3) the Company, in its sole discretion, determines at any time that all
Outstanding Securities (but not less than all) of any series issued or issuable
in the form of one or more Global Securities shall no longer be represented by
such Global Security or Securities, then the Company shall execute, and the
Trustee shall authenticate and deliver, definitive Securities of like series,
rank, tenor and terms in definitive form in an aggregate principal amount equal
to the principal amount of such Global Security or Securities. If any
beneficial owner of an interest in a permanent Global Security is otherwise
entitled to exchange such interest for Securities of such series and of like
tenor and principal amount of another authorized form and denomination, as
specified as contemplated by Section 301 and provided that any applicable notice
provided in the permanent Global Security shall have been given, then without
unnecessary delay but in any event not later than the earliest date on which
such interest may be so exchanged, the Company shall execute, and the Trustee
shall authenticate and deliver, definitive Securities in aggregate principal
amount equal to the principal amount of such beneficial owner's interest in such
permanent Global Security. On or after the earliest date on which such
interests may be so exchanged, such permanent Global Security shall be
surrendered for exchange by DTC or such other depositary as shall be specified
in the Company Order with respect thereto to the Trustee, as the Company's agent
for such purpose; PROVIDED, HOWEVER, that no such exchanges may occur during a
period beginning at the opening of business 15 days before any selection of
Securities to be redeemed and ending on the relevant Redemption Date if the
Security for which exchange is requested may be among those selected for
redemption; and PROVIDED FURTHER that no Bearer Security delivered in exchange
for a portion of a permanent Global Security shall be mailed or otherwise
delivered to any location in the United States. If a Registered Security is
issued in exchange for any portion of a permanent Global Security after the
close of business at the office or agency where such exchange occurs on (i) any
Regular Record Date and before the opening of business at such office or agency
on the relevant Interest Payment Date or (ii) any Special Record Date and the
opening of business at such office or agency on the related proposed date for
payment of Defaulted Interest, interest or Defaulted Interest, as the case may
be, will not be payable on such Interest Payment Date or proposed date for
payment, as the case may be, in respect of such Registered Security, but will be
payable on such Interest Payment Date or proposed date for payment, as the case
may be, only to the Person to whom interest in respect of such portion of such
permanent Global Security is payable in accordance with the provisions of this
Indenture.
All Securities issued upon any registration of transfer or exchange of
Securities shall be the valid obligations of the Company, evidencing the same
debt, and entitled to the same benefits under this Indenture, as the Securities
surrendered upon such registration of transfer or exchange.
Every Registered Security presented or surrendered for registration of
transfer or for exchange or redemption shall (if so required by the Company or
the Security Registrar) be duly endorsed, or be accompanied by a written
instrument of transfer (including evidence of title and identity) in form
satisfactory to the
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Company and the Security Registrar, duly executed by the Holder thereof or his
attorney duly authorized in writing.
No service charge shall be made for any registration of transfer or
exchange of Securities, but the Company may require payment of a sum sufficient
to cover any tax or other governmental charge that may be imposed in connection
with any registration of transfer or exchange of Securities, other than
exchanges pursuant to Section 304, 906, 1107 or 1305 not involving any transfer.
The Company or the Trustee, as applicable, shall not be required to
(1) issue, register the transfer of or exchange any Security if such Security
may be among those selected for redemption during a period beginning at the
opening of business 15 days before selection of the Securities to be redeemed
under Section 1103 and ending at the close of business on (A) if such Securities
are issuable only as Securities, the day of the mailing of the relevant notice
of redemption and (B) if such Securities are issuable as Bearer Securities, the
day of the first publication of the relevant notice of redemption or, if such
Securities are also issuable as Securities and there is no publication, the
mailing of the relevant notice of redemption, or (2) register the transfer of or
exchange any Registered Security so selected for redemption in whole or in part,
except, in the case of any Registered Security to be redeemed in part, the
portion thereof not to be redeemed, or (3) exchange any Bearer Security so
selected for redemption, except that such Bearer Security may be exchanged for a
Registered Security of that series and like tenor; PROVIDED, HOWEVER, that such
Registered Security shall be simultaneously surrendered for redemption, or
(4) issue, register the transfer of or exchange any Security which has been
surrendered for repayment at the option of the Holder, except the portion, if
any, of such Security not to be so repaid.
SECTION 306. MUTILATED, DESTROYED, LOST AND STOLEN SECURITIES
If any mutilated Security or a Security with a mutilated coupon
appertaining to it is surrendered to the Trustee or the Company, together with,
in proper cases, such security or indemnity as may be required by the Company or
the Trustee to save each of them or any agent of either of them harmless, the
Company shall execute and the Trustee shall authenticate and deliver in exchange
therefor a new Security of the same series and principal amount, containing
identical terms and provisions and bearing a number not contemporaneously
outstanding, with coupons corresponding to the coupons, if any, appertaining to
the surrendered Security.
If there shall be delivered to the Company and to the Trustee (1) evidence
to their satisfaction of the destruction, loss or theft of any Security or
coupon and (2) such security or indemnity as may be required by them to save
each of them and any agent of either of them harmless, then, in the absence of
notice to the Company or the Trustee that such Security or coupon has been
acquired by a bona fide purchaser, the Company shall execute and upon its
request the Trustee shall authenticate and deliver, in lieu of any such
destroyed, lost or stolen Security or in exchange for the Security to which a
destroyed, lost or stolen coupon appertains (with all appurtenant coupons not
destroyed, lost or stolen), a new security of the same series and principal
amount, containing identical terms and provisions and bearing a number not
contemporaneously outstanding, with coupons corresponding to the coupons, if
any, appertaining
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to such destroyed, lost or stolen Security or to the Security to which such
destroyed, lost or stolen coupon appertains.
Notwithstanding the provisions of the previous two paragraphs, in case any
such mutilated, destroyed, lost or stolen Security or coupon has become or is
about to become due and payable, the Company in its discretion may, instead of
issuing a new Security, with coupons corresponding to the coupons, if any,
appertaining to such destroyed, lost or stolen Security or to the Security to
which such destroyed, lost or stolen coupon appertains, pay such Security or
coupon; PROVIDED, HOWEVER, that payment of principal of (and premium, if any),
any interest on and any Additional Amounts with respect to Bearer Securities
shall, except as otherwise provided in Section 1002, be payable only at an
office or agency located outside the United States and, unless otherwise
specified as contemplated by Section 301, any interest on Bearer Securities
shall be payable only upon presentation and surrender of the coupons
appertaining thereto.
Upon the issuance of any new Security under this Section 306, the Company
may require the payment of a sum sufficient to cover any tax or other
governmental charge that may be imposed in relation thereto and any other
expenses (including the fees and expenses of the Trustee) connected therewith.
Every new Security of any series with its coupons, if any, issued pursuant
to this Section 306 in lieu of any destroyed, lost or stolen Security, or in
exchange for a Security to which a destroyed, lost or stolen coupon appertains,
shall constitute an original additional contractual obligation of the Company,
whether or not the destroyed, lost or stolen Security and its coupons, if any,
or the destroyed, lost or stolen coupon shall be at any time enforceable by
anyone, and shall be entitled to all the benefits of this Indenture equally and
proportionately with any and all other Securities of that series and their
coupons, if any, duly issued hereunder.
The provisions of this Section 306 are exclusive and shall preclude (to the
extent lawful) all other rights and remedies with respect to the replacement or
payment of mutilated, destroyed, lost or stolen Securities or coupons.
SECTION 307. PAYMENT OF INTEREST; INTEREST RIGHTS PRESERVED
Except as otherwise specified with respect to a series of Securities in
accordance with the provisions of Section 301, interest on any Registered
Security that is payable, and is punctually paid or duly provided for, on any
Interest Payment Date shall be paid to the Person in whose name that Security
(or one or more Predecessor Securities) is registered at the close of business
on the Regular Record Date for such interest at the office or agency of the
Company maintained for such purpose pursuant to Section 1002; PROVIDED, HOWEVER,
that each installment of interest on any Registered Security may at the
Company's option be paid by (1) mailing a check for such interest, payable to or
upon the written order of the Person entitled thereto pursuant to Section 308,
to the address of such Person as it appears on the Security Register or
(2) transfer to an account maintained by the payee located inside the United
States.
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Unless otherwise provided as contemplated by Section 301 with respect to
the Securities of any series, payment of interest may be made, in the case of a
Bearer Security, by transfer to an account maintained by the payee with a bank
located outside the United States.
Unless otherwise provided as contemplated by Section 301, every permanent
Global Security will provide that interest, if any, payable on any Interest
Payment Date will be paid to DTC, Euroclear and/or CEDEL, as the case may be,
with respect to that portion of such permanent Global Security held for its
account by Cede & Co. or the Common Depositary, as the case may be, for the
purpose of permitting such party to credit the interest received by it in
respect of such permanent Global Security to the accounts of the beneficial
owners thereof.
In case a Bearer Security of any series is surrendered in exchange for a
Registered Security of such series after the close of business (at an office or
agency in a Place of Payment for such series) on any Regular Record Date and
before the opening of business (at such office or agency) on the next succeeding
Interest Payment Date, such Bearer Security shall be surrendered without the
coupon relating to such Interest Payment Date and interest will not be payable
on such Interest Payment Date in respect of the Registered Security issued in
exchange for such Bearer Security, but will be payable only to the Holder of
such coupon when due in accordance with the provisions of this Indenture.
Except as otherwise specified with respect to a series of Securities in
accordance with the provisions of Section 301, any interest on any Registered
Security of any series that is payable, but is not punctually paid or duly
provided for, on any Interest Payment Date (herein called "Defaulted Interest")
shall forthwith cease to be payable to the registered Holder thereof on the
relevant Regular Record Date by virtue of having been such Holder, and such
Defaulted Interest may be paid by the Company, at its election, in each case as
provided in clause (1) or (2) below:
(1) The Company may elect to make payment of any Defaulted Interest
to the Persons in whose names the Securities of such series (or their respective
Predecessor Securities) are registered at the close of business on a Special
Record Date for the payment of such Defaulted Interest, which shall be fixed in
the following manner. The Company shall notify the Trustee in writing of the
amount of Defaulted Interest proposed to be paid on each Registered Security of
such series and the date of the proposed payment (which shall not be less than
20 days after such notice is received by the Trustee), and at the same time the
Company shall deposit with the Trustee an amount of money in the currency or
currencies, currency unit or units or composite currency or currencies in which
the Securities of such series are payable (except as otherwise specified
pursuant to Section 301 for the Securities of such series) equal to the
aggregate amount proposed to be paid in respect of such Defaulted Interest or
shall make arrangements satisfactory to the Trustee for such deposit on or prior
to the date of the proposed payment, such money when deposited to be held in
trust for the benefit of the Persons entitled to such Defaulted Interest as in
this clause provided. Thereupon the Trustee shall fix a Special Record Date for
the payment of such Defaulted Interest which shall be not more than 15 days and
not less than 10 days prior to the date of the proposed payment and not less
than 10 days after the receipt by the Trustee of the notice of the proposed
payment. The Trustee shall promptly notify the Company of such Special Record
Date and, in the name and at the expense of the Company, shall cause notice of
the proposed payment of such Defaulted Interest and the Special Record Date
therefor to be mailed,
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first-class postage prepaid, to each Holder of Securities of such series at his
address as it appears in the Security Register not less than 10 days prior to
such Special Record Date. The Trustee may, in its discretion, in the name and
at the expense of the Company, cause a similar notice to be published at least
once in an Authorized Newspaper in each Place of Payment, but such publications
shall not be a condition precedent to the establishment of such Special Record
Date. Notice of the proposed payment of such Defaulted Interest and the Special
Record Date therefor having been mailed as aforesaid, such Defaulted Interest
shall be paid to the Persons in whose names the Securities of such series (or
their respective Predecessor Securities) are registered at the close of business
on such Special Record Date and shall no longer be payable pursuant to the
following clause (2). In case a Bearer Security of any series is surrendered at
the office or agency in a Place of Payment for such series in exchange for a
Registered Security of such series after the close of business at such office or
agency on any Special Record Date and before the opening of business at such
office or agency on the related proposed date for payment of Defaulted Interest,
such Bearer Security shall be surrendered without the coupon relating to such
proposed date of payment and Defaulted Interest will not be payable on such
proposed date of payment in respect of the Registered Security issued in
exchange for such Bearer Security, but will be payable only to the Holder of
such coupon when due in accordance with the provisions of this Indenture.
(2) The Company may make payment of any Defaulted Interest on the
Securities of any series in any other lawful manner not inconsistent with the
requirements of any Securities exchange on which such Securities may be listed,
and upon such notice as may be required by such exchange, if, after notice given
by the Company to the Trustee or 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 307 and Section 305,
each Security delivered under this Indenture upon registration of transfer of or
in exchange for or in lieu of any other Security shall carry the rights to
interest accrued and unpaid, and to accrue, which were carried by such other
Security.
SECTION 308. PERSONS DEEMED OWNERS
Prior to due presentment of a Registered Security for registration of
transfer, the Company, the Trustee and any agent of the Company or the Trustee
may treat the Person in whose name such Registered Security is registered as the
owner of such Security for the purpose of receiving payment of principal of (and
premium, if any), and (subject to Sections 305 and 307) interest on, such
Registered Security and for all other purposes whatsoever, whether or not such
Registered Security be overdue, and neither the Company, the Trustee nor any
agent of the Company or the Trustee shall be affected by notice to the contrary.
All such payments so made to any such Person, or upon such Person's order, shall
be valid, and, to the extent of the sum or sums so paid, effectual to satisfy
and discharge the liability for money payable upon any such Security.
Title to any Bearer Security and any coupons appertaining thereto shall
pass by delivery. The Company, the Trustee and any agent of the Company or the
Trustee may treat the Holder of any Bearer Security and the Holder of any coupon
as the absolute owner of such Security or coupon for the purpose of receiving
payment thereof or on account thereof and for all other
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purposes whatsoever, whether or not such Security or coupon be overdue, and
neither the Company, the Trustee nor any agent of the Company or the Trustee
shall be affected by notice to the contrary.
No Holder of any beneficial interest in any Global Security held on its
behalf by a depositary shall have any rights under this Indenture with respect
to such Global Security and such depositary shall be treated by the Company, the
Trustee, and any agent of the Company or the Trustee as the owner of such Global
Security for all purposes whatsoever. None of the Company, the Trustee, any
Paying Agent or the Security Registrar will have any responsibility or liability
for any aspect of the records relating to or payments made on account of
beneficial ownership interests of a Global Security or for maintaining,
supervising or reviewing any records relating to such beneficial ownership
interests.
Notwithstanding the foregoing, with respect to any Global Security, nothing
herein shall prevent the Company, the Trustee, or any agent of the Company or
the Trustee, from giving effect to any written certification, proxy or other
authorization furnished by any depositary, as a Holder, with respect to such
Global Security or impair, as between such depositary and owners of beneficial
interests in such Global Security, the operation of customary practices
governing the exercise of the rights of such depositary (or its nominee) as
Holder of such Global Security.
SECTION 309. CANCELLATION
All Securities and coupons surrendered for payment, redemption, repayment
at the option of the Holder, registration of transfer or exchange or conversion
or for credit against any sinking fund payment shall, if surrendered to any
Person other than the Trustee, be delivered to the Trustee, and any such
Securities and coupons and Securities and coupons surrendered directly to the
Trustee for any such purpose shall be promptly cancelled by it. The Company may
at any time deliver to the Trustee for cancellation any Securities previously
authenticated and delivered hereunder which the Company may have acquired in any
manner whatsoever, and may deliver to the Trustee (or to any other Person for
delivery to the Trustee) for cancellation any Securities previously
authenticated hereunder which the Company has not issued and sold, and all
Securities so delivered shall be promptly cancelled by the Trustee. If the
Company shall so acquire any of the Securities, however, such acquisition shall
not operate as a redemption or satisfaction of the indebtedness represented by
such Securities unless and until the same are surrendered to the Trustee for
cancellation. No Securities shall be authenticated in lieu of or in exchange
for any Securities cancelled as provided in this Section 309, except as
expressly permitted by this Indenture. Cancelled Securities and coupons held by
the Trustee shall be destroyed by the Trustee and the Trustee shall deliver a
certificate of such destruction to the Company, unless the Trustee is otherwise
directed by a Company Order.
SECTION 310. COMPUTATION OF INTEREST
Except as otherwise specified as contemplated by Section 301 with respect
to Securities of any series, interest on the Securities of each series shall be
computed on the basis of a 360-day year consisting of twelve 30-day months.
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ARTICLE FOUR
SATISFACTION AND DISCHARGE
SECTION 401. SATISFACTION AND DISCHARGE OF INDENTURE
This Indenture shall upon Company Request cease to be of further effect
with respect to any series of Securities specified in such Company Request
(except as to any surviving rights of registration of transfer or exchange of
Securities of such series herein expressly provided for and any right to receive
Additional Amounts, as provided in Section 1010), and the Trustee, upon receipt
of a Company Order, and at the expense of the Company, shall execute instruments
in form and substance satisfactory to the Trustee and the Company acknowledging
satisfaction and discharge of this Indenture as to such series when
(1) either
(A) all Securities of such series theretofore authenticated and
delivered and all coupons, if any, appertaining thereto (other than
(i) coupons appertaining to Bearer Securities surrendered for exchange
for Securities and maturing after such exchange, whose surrender is
not required or has been waived as provided in Section 305,
(ii) Securities and coupons of such series which have been destroyed,
lost or stolen and which have been replaced or paid as provided in
Section 306, (iii) coupons appertaining to Securities called for
redemption and maturing after the relevant Redemption Date, whose
surrender has been waived as provided in Section 1106, and
(iv) Securities and coupons of such series for whose payment money has
theretofore been deposited in trust or segregated and held in trust by
the Company and thereafter repaid to the Company or discharged from
such trust, as provided in Section 1003) have been delivered to the
Trustee for cancellation or
(B) all Securities of such series and, in the case of (i) or
(ii) below, any coupons appertaining thereto not theretofore delivered
to the Trustee for cancellation
(i) have become due and payable or
(ii) will become due and payable at their Stated Maturity within
one year or
(iii) if redeemable at the option of the Company, are to be
called for redemption within one year under arrangements
satisfactory to the Trustee for the giving of notice of redemption
by the Trustee in the name, and at the expense, of the Company,
and the Company, in the case of (i), (ii) or (iii) above, has
irrevocably deposited or caused to be deposited with the Trustee as
trust funds in trust for such purpose an amount in the currency or
currencies, currency unit or units or composite currency or currencies
in which the Securities of such series are payable, sufficient to pay
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and discharge the entire indebtedness on such Securities and such
coupons not theretofore delivered to the Trustee for cancellation, for
principal (and premium, if any) and interest, and any Additional
Amounts with respect thereto, to the date of such deposit (in the case
of Securities which have become due and payable) or to the Stated
Maturity or Redemption Date, as the case may be;
(2) the Company has paid or caused to be paid all other sums payable
hereunder by the Company; and
(3) the Company has delivered to the Trustee an Officers' Certificate
and an Opinion of Counsel, each stating that all conditions precedent herein
provided for relating to the satisfaction and discharge of this Indenture as to
such series have been complied with.
Notwithstanding the satisfaction and discharge of this Indenture, the
obligations of the Company to the Trustee and any predecessor Trustee under
Section 606, the obligations of the Company to any Authenticating Agent under
Section 611 and, if money shall have been deposited with and held by the Trustee
pursuant to subclause (B) of clause (1) of this Section 401, the obligations of
the Trustee under Section 402 and the last paragraph or Section 1003 shall
survive.
SECTION 402. APPLICATION OF TRUST FUNDS
Subject to the provisions of the last paragraph of Section 1003, all money
deposited with the Trustee pursuant to Section 401 shall be held in trust and
applied by it, in accordance with the provisions of the Securities, the coupons
and this Indenture, to the payment, either directly or through any Paying Agent
(including the Company acting as its own Paying Agent) as the Trustee may
determine, to the Persons entitled thereto of the principal (and premium, if
any) and any interest and Additional Amounts for whose payment such money has
been deposited with or received by the Trustee, but such money need not be
segregated from other funds except to the extent required by law.
ARTICLE FIVE
REMEDIES
SECTION 501. EVENTS OF DEFAULT
"Event of Default," wherever used herein with respect to any particular
series of Securities, means any one of the following events (whatever the reason
for such Event of Default and whether or not it shall be voluntary or
involuntary or be effected by operation of law or pursuant to any judgment,
decree or order of any court or any order, rule or regulation of any
administrative or governmental body):
(1) default in the payment of any interest upon or any Additional
Amounts payable in respect of any Security of that series or of any coupon
appertaining thereto, when such interest, Additional Amounts or coupon becomes
due and payable, and continuance of such default for a period of 30 days; or
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(2) default in the payment of the principal of (or premium, if any,
on) any Security of that series when it becomes due and payable at its Maturity;
or
(3) default in the deposit of any sinking fund payment, when and as
due by the terms of any Security of that series; or
(4) default in the performance, or breach, of any covenant or
warranty of the Company in this Indenture with respect to any Security of that
series (other than a covenant or warranty a default in whose performance or
whose breach is elsewhere in this Section 501 specifically dealt with), and
continuance of such default or breach for a period of 60 days after there has
been given, by registered or certified mail, to the Company by the Trustee or to
the Company and the Trustee by the Holders of at least 25% in principal amount
of the Outstanding Securities of that series a written notice specifying such
default or breach and requiring it to be remedied and stating that such notice
is a "Notice of Default" hereunder; or
(5) default under any bond, debenture, note or other evidence of
indebtedness for money borrowed by the Company or any of its Subsidiaries
(including obligations under leases required to be capitalized on the balance
sheet of the lessee under generally accepted accounting principles, but not
including any indebtedness or obligations for which recourse is limited to
property purchased) in an aggregate principal amount in excess of $10,000,000 or
under any mortgage, indenture or instrument under which there may be issued or
by which there may be secured or evidenced any indebtedness for money borrowed
by the Company or any of its Subsidiaries (including such leases, but not
including such indebtedness or obligations for which recourse is limited to
property purchased) in an aggregate principal amount in excess of $10,000,000,
whether such indebtedness now exists or shall hereafter be created, which
default shall have resulted in such indebtedness becoming or being declared
during and payable prior to the date on which it would otherwise have become due
and payable or such obligations being accelerated, without such acceleration
having been rescinded or annulled; or
(6) the Company or any Significant Subsidiary pursuant to or within
the meaning of any Bankruptcy Law:
(A) commences a voluntary case;
(B) consents to the entry of an order for relief against it in
an involuntary case;
(C) consents to the appointment of a Custodian of it or for all
or substantially all of its property; or
(D) makes a general assignment for the benefit of its creditors;
or
(7) a court of competent jurisdiction enters an order or decree under
any Bankruptcy Law that:
(A) is for relief against the Company or any Significant
Subsidiary in an involuntary case;
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(B) appoints a Custodian of the Company or any Significant
Subsidiary or for all or substantially all of either of their
property; or
(C) orders the liquidation of the Company or any Significant
Subsidiary, and the order or decree remains unstayed and in effect for
90 days; or
(8) any other Event of Default provided with respect to Securities of
that series.
As used in this Section 501, the term "Bankruptcy Law" means Title 11, U.S. Code
or any similar federal or state law for the relief of debtors and the term
"Custodian" means any receiver, Trustee, assignee, liquidator or other similar
official under any Bankruptcy Law.
SECTION 502. ACCELERATION OF MATURITY; RESCISSION AND ANNULMENT
If an Event of Default with respect to Securities of any series at the time
Outstanding occurs and is continuing, then and in every such case the Trustee or
the Holders of not less than 25% in principal amount of the Outstanding
Securities of that series may declare the principal amount (or, if Securities of
that series are Original Issue Discount Securities or Indexed Securities, such
portion of the principal as may be specified in the terms thereof) of all the
Securities of that series to be due and payable immediately, by a notice in
writing to the Company (and to the Trustee if given by the Holders), and upon
any such declaration such principal or specified portion thereof shall become
immediately due and payable.
At any time after such a declaration of acceleration with respect to
Securities of any series has been made and before a judgment or decree for
payment of the money due has been obtained by the Trustee as hereinafter in this
Article Five provided, the Holders of a majority in principal amount of the
Outstanding Securities of that series, by written notice to the Company and the
Trustee, may rescind and annul such declaration of acceleration and its
consequences if:
(1) the Company has paid or deposited with the Trustee a sum
sufficient to pay in the currency, currency unit or composite currency in which
the Securities of such series are payable (except as otherwise specified
pursuant to Section 301 for the Securities of such series):
(A) all overdue installments of interest on and any Additional
Amounts payable in respect of all Outstanding Securities of that
series and any related coupons;
(B) the principal of (and premium, if any, on) any Outstanding
Securities of that series which have become due otherwise than by such
declaration of acceleration and interest thereon at the rate or rates
borne by or provided for in such Securities;
(C) to the extent that payment of such interest is lawful,
interest upon overdue installments of interest and any Additional
Amounts at the rate or rates borne by or provided for in such
Securities; and
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(D) all sums paid or advanced by the Trustee hereunder and the
reasonable compensation, expenses, disbursements and advances of the
Trustee, its agents and counsel; and
(2) all Events of Default with respect to Securities of that series,
other than the nonpayment of the principal of (or premium, if any) or interest
on Securities of that series which have become due solely by such declaration of
acceleration, have been cured or waived as provided in Section 513.
No such rescission shall affect any subsequent default or impair any right
consequent thereon.
SECTION 503. COLLECTION OF INDEBTEDNESS AND SUITS FOR ENFORCEMENT BY TRUSTEE
The Company covenants that if:
(1) default is made in the payment of any installment of interest or
Additional Amounts, if any, on any Security of any series and any related coupon
when such interest or Additional Amount becomes due and payable and such default
continues for a period of 30 days or
(2) default is made in the payment of the principal of (or premium,
if any, on) any Security of any series at its Maturity,
then the Company will, upon demand of the Trustee, pay to the Trustee, for the
benefit of the Holders of such Securities of such series and coupons, the whole
amount then due and payable on such Securities and coupons for principal (and
premium, if any) and interest and Additional Amounts, with interest upon any
overdue principal (and premium, if any) and, to the extent that payment of such
interest shall be legally enforceable, upon any overdue installments of interest
or Additional Amounts, if any, at the rate or rates borne by or provided for in
such Securities, and, in addition thereto, such further amount as shall be
sufficient to cover the costs and expenses of collection, including the
reasonable compensation, expenses, disbursements and advances of the Trustee and
its agents and counsel.
If the Company fails to pay such amounts forthwith upon such demand, the
Trustee, in its own name and as Trustee of an express trust, may institute a
judicial proceeding for the collection of the sums so due and unpaid, may
prosecute such proceeding to judgment or final decree, and may enforce the same
against the Company or any other obligor upon such Securities of such series and
collect the moneys adjudged or decreed to be payable in the manner provided by
law out of the property of the Company or any other obligor upon such Securities
of such series, wherever situated.
If an Event of Default with respect to Securities of any series occurs and
is continuing, the Trustee may in its discretion proceed to protect and enforce
its rights and the rights of the Holders of Securities of such series and any
related coupons by 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.
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SECTION 504. TRUSTEE MAY FILE PROOFS OF CLAIM
In case of the pendency of any receivership, insolvency, liquidation,
bankruptcy, reorganization, arrangement, adjustment, composition or other
judicial proceeding relative to the Company or any other obligor upon the
Securities or the property of the Company or of such other obligor or their
creditors, the Trustee (irrespective of whether the principal of the Securities
of any series shall then be due and payable as therein expressed or by
declaration or otherwise and irrespective of whether the Trustee shall have made
any demand on the Company for the payment of overdue principal, premium, if any,
or interest) shall be entitled and empowered, by intervention in such proceeding
or otherwise:
(1) to file and prove a claim for the whole amount, or such lesser
amount as may be provided for in the Securities of such series, of principal
(and premium, if any) and interest and Additional Amounts, if any, owing and
unpaid in respect of the Securities and to file such other papers or documents
as may be necessary or advisable in order to have the claims of the Trustee
(including any claim for the reasonable compensation, expenses, disbursements
and advances of the Trustee and its agents and counsel) and of the Holders
allowed in such judicial proceeding and
(2) to collect and receive any money or other property payable or
deliverable on any such claims and to distribute the same;
and any custodian, receiver, assignee, trustee, liquidator, sequestrator (or
other similar official) in any such judicial proceeding is hereby authorized by
each Holder of Securities of such series and coupons to make such payments to
the Trustee, and if the Trustee shall consent to the making of such payments
directly to the Holders, to pay to the Trustee any amount due to it for the
reasonable compensation, expenses, disbursements and advances of the Trustee and
any predecessor Trustee, their agents and counsel, and any other amounts due the
Trustee or any predecessor Trustee under Section 606.
Nothing herein contained shall be deemed to authorize the Trustee to
authorize or consent to or accept or adopt on behalf of any Holder of a Security
or coupon any plan of reorganization, arrangement, adjustment or composition
affecting the Securities or coupons or the rights of any Holder thereof, or to
authorize the Trustee to vote in respect of the claim of any Holder of a
Security or coupon in any such proceeding.
In any proceedings brought by the Trustee (and also any proceedings
involving the interpretation of any provision of this Indenture to which the
Trustee shall be a party), the Trustee shall be held to represent all the
Holders of the Securities, and it shall not be necessary to make any Holders of
the Securities parties to any such proceedings.
SECTION 505. TRUSTEE MAY ENFORCE CLAIMS WITHOUT POSSESSION OF SECURITIES OR
COUPONS
All rights of action and claims under this Indenture or any of the
Securities or coupons may be prosecuted and enforced by the Trustee without the
possession of any of the Securities or
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coupons or the production thereof in any proceeding relating thereto, and any
such proceeding instituted by the Trustee shall be brought in its own name as
trustee of an express trust, and any recovery of judgment shall, after provision
for the payment of the reasonable compensation, expenses, disbursements and
advances of the Trustee and its agents and counsel, be for the ratable benefit
of the Holders of the Securities and coupons in respect of which such judgment
has been recovered.
SECTION 506. APPLICATION OF MONEY COLLECTED
Any money collected by the Trustee pursuant to this Article Five shall be
applied in the following order, at the date or dates fixed by the Trustee and,
in case of the distribution of such money on account of principal (or premium,
if any) or interest and any Additional Amounts, upon presentation of the
Securities or coupons, or both, as the case may be, and the notation thereon of
the payment if only partially paid and upon surrender thereof if fully paid:
FIRST: To the payment of all amounts due the Trustee and any
predecessor Trustee under Section 606;
SECOND: To the payment of the amounts then due and unpaid upon the
Securities and coupons for the principal (and premium, if any) and interest
and any Additional Amounts payable, in respect of which or for the benefit
of which such money has been collected, ratably, without preference or
priority of any kind, according to the aggregate amounts due and payable on
such Securities and coupons for principal (and premium, if any), interest
and Additional Amounts, respectively; and
THIRD: To the payment of the remainder, if any, to the Company.
SECTION 507. LIMITATION ON SUITS
No Holder of any Security of any series or any related coupon shall have
any right to institute any proceeding, judicial or otherwise, with respect to
this Indenture, or for the appointment of a receiver or trustee, or for any
other remedy hereunder, unless:
(1) such Holder has previously given written notice to the Trustee of
a continuing Event of Default with respect to the Securities of that series;
(2) the Holders of not less than 25% in principal amount of the
Outstanding Securities of that series shall have made written request to the
Trustee to institute proceedings in respect of such Event of Default in its own
name as Trustee hereunder;
(3) such Holder or Holders have offered to the Trustee indemnity
reasonably satisfactory to the Trustee against the costs, expenses and
liabilities to be incurred in compliance with such request;
(4) the Trustee for 60 days after its receipt of such notice, request
and offer of indemnity has failed to institute any such proceeding; and
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(5) no direction inconsistent with such written request has been
given to the Trustee during such 60-day period by the Holders of a majority in
principal amount of the Outstanding Securities of that series;
it being understood and intended that no one or more of such Holders shall have
any right in any manner whatever by virtue of, or by availing of, any provision
of this Indenture to affect, disturb or prejudice the rights of any other of
such Holders, or to obtain or to seek to obtain priority or preference over any
other of such Holders or to enforce any right under this Indenture, except in
the manner herein provided and for the equal and ratable benefit of all such
Holders.
SECTION 508. UNCONDITIONAL RIGHTS OF HOLDERS TO RECEIVE PRINCIPAL, PREMIUM, IF
ANY, INTEREST AND ADDITIONAL AMOUNTS
Notwithstanding any other provision in this Indenture, the Holder of any
Security or coupon shall have the right, which is absolute and unconditional, to
receive payment of the principal of (and premium, if any) and (subject to
Sections 305 and 307) interest on, and any Additional Amounts in respect of,
such Security or payment of such coupon on the respective due dates expressed in
such Security or coupon (or, in the case of redemption, on the Redemption Date)
and to institute suit for the enforcement of any such payment, and such rights
shall not be impaired without the consent of such Holder.
SECTION 509. RESTORATION OF RIGHTS AND REMEDIES
If the Trustee or any Holder of a Security or coupon has instituted any
proceeding to enforce any right or remedy under this Indenture and such
proceeding has been discontinued or abandoned for any reason, or has been
determined adversely to the Trustee or to such Holder, then and in every such
case, the Company, the Trustee and the Holders of Securities and coupons shall,
subject to any determination in such proceeding, be restored severally and
respectively to their former positions hereunder and thereafter all rights and
remedies of the Trustee and the Holders shall continue as though no such
proceeding had been instituted.
SECTION 510. RIGHTS AND REMEDIES CUMULATIVE
Except as otherwise provided with respect to the replacement or payment of
mutilated, destroyed, lost or stolen Securities or coupons in the last paragraph
of Section 306, no right or remedy herein conferred upon or reserved to the
Trustee or to the Holders of Securities or coupons is intended to be exclusive
of any other right or remedy, and every right and remedy shall, to the extent
permitted by law, be cumulative and in addition to every other right and remedy
given hereunder or now or hereafter existing at law or in equity or otherwise.
The assertion or employment of any right or remedy hereunder, or otherwise,
shall not prevent the concurrent assertion or employment of any other
appropriate right or remedy.
SECTION 511. DELAY OR OMISSION NOT WAIVER
No delay or omission of the Trustee or of any Holder of any Security or
coupon to exercise any right or remedy accruing upon any Event of Default shall
impair any such right or remedy or constitute a waiver of any such Event of
Default or an acquiescence therein. Every
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right and remedy given by this Article Five or by law to the Trustee or to the
Holders may be exercised from time to time, and as often as may be deemed
expedient, by the Trustee or by the Holders of Securities or coupons, as the
case may be.
SECTION 512. CONTROL BY HOLDERS OF SECURITIES
The Holders of not less than a majority in principal amount of the
Outstanding Securities of any series shall have the right to direct the time,
method and place of conducting any proceeding for any remedy available to the
Trustee or exercising any trust or power conferred on the Trustee with respect
to the Securities of such series, provided that
(1) such direction shall not be in conflict with any rule of law or
with this Indenture;
(2) the Trustee may take any other action deemed proper by the
Trustee which is not inconsistent with such direction; and
(3) the Trustee need not take any action which might involve it in
personal liability or be unduly prejudicial to the Holders of Securities of such
series not joining therein.
Nothing in this Indenture shall impair the right of the Trustee in its
discretion to take any action deemed proper by the Trustee and which is not
inconsistent with such direction by Holders.
SECTION 513. WAIVER OF PAST DEFAULTS
The Holders of not less than a majority in principal amount of the
Outstanding Securities of any series may on behalf of the Holders of all the
Securities of such series and any related coupons waive any past default
hereunder with respect to such series and its consequences, except a default
(1) in the payment of the principal of (or premium, if any) or
interest on or Additional Amounts payable in respect of any Security of such
series or any related coupons or
(2) in respect of a covenant or provision hereof which under Article
Nine cannot be modified or amended without the consent of the Holder of each
Outstanding Security of such series affected.
Upon any such waiver, such default shall cease to exist, and any Event of
Default arising therefrom shall be deemed to have been cured, for every purpose
of this Indenture; but no such waiver shall extend to any subsequent or other
default or Event of Default or impair any right consequent thereon.
SECTION 514. WAIVER OF USURY, STAY OR EXTENSION LAWS
The Company covenants (to the extent that it may lawfully do so) that it
will not at any time insist upon, or plead, or in any manner whatsoever claim or
take the benefit or advantage of, any usury, stay or extension law wherever
enacted, now or at any time hereafter in force, which
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may affect the covenants or the performance of this Indenture; and the Company
(to the extent that it may lawfully do so) hereby expressly waives all benefit
or advantage of any such law, and covenants that it will not hinder, delay or
impede the execution of any power herein granted to the Trustee, but will suffer
and permit the execution of every such power as though no such law had been
enacted.
SECTION 515. UNDERTAKING FOR COSTS
All parties to this Indenture agree, and each Holder of any Security by his
acceptance thereof shall be deemed to have agreed, that any court may in its
discretion require, in any suit for the enforcement of any right or remedy under
this Indenture, or in any suit against the Trustee for any action taken or
omitted by it as Trustee, the filing by any party litigant in such suit of any
undertaking to pay the costs of such suit, and that such court may in its
discretion assess reasonable costs, including reasonable attorneys' fees,
against any party litigant in such suit having due regard to the merits and good
faith of the claims or defenses made by such party litigant; but the provisions
of this Section 515 shall not apply to any suit instituted by the Trustee, to
any suit instituted by any Holder, or group of Holders, holding in the aggregate
more than 10% in principal amount of the Outstanding Securities of any series,
or to any suit instituted by any Holder for the enforcement of the payment of
the principal of (or premium, if any) or interest on any Security on or after
the respective Stated Maturities expressed in such Security (or, in the case of
redemption, on or after the Redemption Date).
ARTICLE SIX
THE TRUSTEE
SECTION 601. NOTICE OF DEFAULTS
Within 90 days after the occurrence of any default hereunder with respect
to the Securities of any series, the Trustee shall transmit in the manner and to
the extent provided in TIA Section 313(c), notice of such default hereunder
known to the Trustee, unless such default shall have been cured or waived;
PROVIDED, HOWEVER, that, except in the case of a default in the payment of the
principal of (or premium, if any) or interest on or any Additional Amounts with
respect to any Security of such series, or in the payment of any sinking fund
installment with respect to the Securities of such series, the Trustee shall be
protected in withholding such notice if and so long as Responsible Officers of
the Trustee in good faith determine that the withholding of such notice is in
the interest of the Holders of the Securities and coupons of such series; and
PROVIDED FURTHER that in the case of any default or breach of the character
specified in Section 501(4) with respect to the Securities and coupons of such
series, no such notice to Holders shall be given until at least 60 days after
the occurrence thereof. For the purpose of this Section 601, the term "default"
means any event which is, or after notice or lapse of time or both would become,
an Event of Default with respect to the Securities of such series.
SECTION 602. CERTAIN RIGHTS OF TRUSTEE
Subject to the provisions of TIA Section 315(a) through 315(d):
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(1) the Trustee may rely and shall be protected in acting or
refraining from acting upon any resolution, certificate, statement, instrument,
opinion, report, notice, request, direction, consent, order, bond, debenture,
note, coupon or other paper or document believed by it to be genuine and to have
been signed or presented by the proper party or parties;
(2) any request or direction of the Company mentioned herein shall be
sufficiently evidenced by a Company Request or Company Order (other than
delivery of any Security, together with any coupons appertaining thereto, to the
Trustee for authentication and delivery pursuant to Section 303 which shall be
sufficiently evidenced as provided therein) and any resolution of the Board of
Directors may be sufficiently evidenced by a Board Resolution;
(3) whenever in the administration of this Indenture the Trustee
shall deem it desirable that a matter be proved or established prior to taking,
suffering or omitting any action hereunder, the Trustee (unless other evidence
be herein specifically prescribed) may, in the absence of bad faith on its part,
rely upon an Officers' Certificate;
(4) the Trustee may consult with counsel and the written advice of
such counsel or any Opinion of Counsel shall be full and complete authorization
and protection in respect of any action taken, suffered or omitted by it
hereunder in good faith and in reliance thereon;
(5) the Trustee shall be under no obligation to exercise any of the
rights or power vested in it by this Indenture at the request or direction of
any of the Holders of Securities of any series or any related coupons pursuant
to this Indenture, unless such Holders shall have offered to the Trustee
security or indemnity reasonably satisfactory to the Trustee against the costs,
expenses and liabilities which might be incurred by it in compliance with such
request or direction;
(6) the Trustee shall not be bound to make any investigation into the
facts or matters stated in any resolution, certificate, statement, instrument,
opinion, report, notice, request, direction, consent, order, bond, debenture,
note, coupon or other paper or document, unless requested in writing so to do by
the Holders of not less than a majority in aggregate principal amount of the
Outstanding Securities of any series; PROVIDED that, if the payment within a
reasonable time to the Trustee of the costs, expenses or liabilities likely to
be incurred by it in the making of such investigation is, in the opinion of the
Trustee, not reasonably assured to the Trustee by the security afforded to it by
the terms of this Indenture, the Trustee may require reasonable indemnity
against such expenses or liabilities as a condition to proceeding; the
reasonable expenses of every such examination shall be paid by the Holders or,
if paid by the Trustee, shall be repaid by the Holders upon demand. The
Trustee, in its discretion, may make such further inquiry or investigation into
such facts or matters as it may see fit, and, if the Trustee shall determine to
make such further inquiry or investigation, it shall be entitled to examine the
books, records and premises of the Company, relevant to the facts or matters
that are the subject of its inquiry, personally or by agent or attorney;
(7) the Trustee may execute any of the trusts or powers hereunder or
perform any duties hereunder either directly or by or through agents or
attorneys and the Trustee shall not
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be responsible for any misconduct or negligence on the part of any agent or
attorney appointed with due care by it hereunder; and
(8) the Trustee shall not be liable for any action taken, suffered or
omitted by it in good faith and reasonably believed by it to be authorized or
within the discretion, rights or power conferred upon it by this Indenture.
The Trustee shall not be required to expend or risk its own funds or
otherwise incur any financial liability in the performance of any of its duties
hereunder, or in the exercise of any of its rights or powers, if it shall have
reasonable grounds for believing that repayment of such funds or adequate
indemnity against such risk or liability is not reasonably assured to it.
Except during the continuance of an Event of Default, the Trustee
undertakes to perform only such duties as are specifically set forth in this
Indenture, and no implied covenants or obligations shall be read into this
Indenture against the Trustee.
SECTION 603. NOT RESPONSIBLE FOR RECITALS OR ISSUANCE OF SECURITIES
The recitals contained herein and in the Securities, except the Trustee's
certificate of authentication, and in any coupons shall be taken as the
statements of the Company, and neither the Trustee nor any Authenticating Agent
assumes any responsibility for their correctness. The Trustee makes no
representations as to the validity or sufficiency of this Indenture or of the
Securities or coupons, except that the Trustee represents that it is duly
authorized to execute and deliver this Indenture, authenticate the Securities
and perform its obligations hereunder. Neither the Trustee nor any
Authenticating Agent shall be accountable for the use or application by the
Company of Securities or the proceeds thereof.
SECTION 604. MAY HOLD SECURITIES
The Trustee, any Paying Agent, Security Registrar, Authenticating Agent or
any other agent of the Company, in its individual or any other capacity, may
become the owner or pledgee of Securities and coupons and subject to TIA
Sections 310(b) and 311, and may otherwise deal with the Company with the same
rights it would have if it were not Trustee, Paying Agent, Security Registrar,
Authenticating Agent or such other agent.
SECTION 605. MONEY HELD IN TRUST
Money held by the Trustee in trust hereunder need not be segregated from
other funds except to the extent required by law. The Trustee shall be under no
liability for interest on any money received by it hereunder except as otherwise
agreed with the Company.
SECTION 606. COMPENSATION AND REIMBURSEMENT
The Company agrees:
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(1) to pay to the Trustee from time to time reasonable compensation
for all services rendered by it hereunder (which compensation shall not be
limited by any provision of law in regard to the compensation of a trustee of an
express trust);
(2) except as otherwise expressly provided herein, to reimburse each
of the Trustee and any predecessor Trustee upon its request for all reasonable
expenses, disbursements and advances incurred or made by the Trustee in
accordance with any provision of this Indenture (including the reasonable
compensation and the reasonable expenses and disbursements of its agents and
counsel), except any such expense, disbursement or advance as may be
attributable to its negligence or bad faith; and
(3) to indemnify each of the Trustee and any predecessor Trustee for,
and to hold it harmless against, any loss, liability or expense incurred without
negligence or bad faith on its own part, arising out of or in connection with
the acceptance or administration of the trust or trusts hereunder, including the
costs and expenses of defending itself against any claim or liability in
connection with the exercise or performance of any of its powers or duties
hereunder.
When the Trustee incurs expenses or renders services in connection with an
Event of Default specified in Section 501(5) or Section 501(6), the expenses
(including the reasonable charges and expenses of its counsel) and the
compensation for the services are intended to constitute expenses of
administration under any applicable federal or state bankruptcy, insolvency or
other similar law.
As security for the performance of the obligations of the Company under
this Section 606, the Trustee shall have a lien prior to the Securities upon all
property and money held or collected by the Trustee as such, except money held
in trust for the payment of principal of (or premium, if any) or interest on
particular Securities or any coupons.
The provisions of this Section 606 shall survive the termination of this
Indenture.
SECTION 607. CORPORATE TRUSTEE REQUIRED; ELIGIBILITY; CONFLICTING INTERESTS
There shall at all times be a Trustee hereunder which shall be eligible to
act as Trustee under TIA Section 310(a)(1) and shall have a combined capital and
surplus of at least $50,000,000. If such corporation publishes reports of
condition at least annually, pursuant to law or the requirements of federal,
state, territorial or District of Columbia supervising or examining authority,
then for the purposes of this Section 607, the combined capital and surplus of
such corporation shall be deemed to be its combined capital and surplus as set
forth in its most recent report of condition so published. If at any time the
Trustee shall cease to be eligible in accordance with the provisions of this
Section 607, it shall resign immediately in the manner and with the effect
hereinafter specified in this Article Six. Neither the Company nor any Person
directly or indirectly controlling or controlled by, or under common control
with, the Company shall serve as Trustee.
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SECTION 608. RESIGNATION AND REMOVAL; APPOINTMENT OF SUCCESSOR
No resignation or removal of the Trustee and no appointment of a successor
Trustee pursuant to this Article Six shall become effective until the acceptance
of appointment by the successor Trustee in accordance with the applicable
requirements of Section 609.
The Trustee may resign at any time with respect to the Securities of one or
more series by giving written notice thereof to the Company. If an instrument
of acceptance by a successor Trustee shall not have been delivered to the
Trustee within 30 days after the giving of such notice or resignation, the
resigning Trustee may petition any court of competent jurisdiction for the
appointment of a successor Trustee.
The Trustee may be removed at any time with respect to the Securities of
any series by Act of the Holders of a majority in principal amount of the
Outstanding Securities of such series delivered to the Trustee and to the
Company.
If at any time:
(1) the Trustee shall fail to comply with the provisions of TIA
Section 310(b) after written request therefor by the Company or by any Holder of
a Security who has been a bona fide Holder of a Security for at least six
months; or
(2) the Trustee shall cease to be eligible under Section 607 and
shall fail to resign after written request therefor by the Company or by any
Holder of a Security who has been a bona fide Holder of a Security for at least
six months; or
(3) the Trustee shall become incapable of acting or shall be adjudged
a bankrupt or insolvent or a receiver of the Trustee or of its property shall be
appointed or any public officer shall take charge or control of the Trustee or
of its property or affairs for the purpose of rehabilitation, conservation or
liquidation,
then, in any such case, (i) the Company by or pursuant to a Board Resolution may
remove the Trustee and appoint a successor Trustee with respect to all
Securities or (ii) subject to TIA Section 315(e), any Holder of a Security who
has been a bona fide Holder of a Security for at least six months may, on behalf
of himself and all others similarly situated, petition any court of competent
jurisdiction for the removal of the Trustee with respect to all Securities and
the appointment of a successor Trustee or Trustees.
If the Trustee shall resign, be removed or become incapable of acting, or
if a vacancy shall occur in the office of Trustee for any cause with respect to
the Securities of one or more series, the Company, by or pursuant to a Board
Resolution, shall promptly appoint a successor Trustee or Trustees with respect
to the Securities of that or those series (it being understood that any such
successor Trustee may be appointed with respect to the Securities of one or more
or all of such series and that at any time there shall be only one Trustee with
respect to the Securities of any particular series). If, within one year after
such resignation, removal or incapability, or the occurrence of such vacancy, a
successor Trustee with respect to the Securities of any series shall be
appointed by Act of the Holders of a majority in principal amount of the
Outstanding Securities
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of such series delivered to the Company and the retiring Trustee, the successor
Trustee so appointed shall, forthwith upon its acceptance of such appointment,
become the successor Trustee with respect to the Securities of such series and
to that extent supersede the successor Trustee appointed by the Company. If no
successor Trustee with respect to the Securities of any series shall have been
so appointed by the Company or the Holders of Securities and accepted
appointment in the manner hereinafter provided, any Holder of a Security who has
been a bona fide Holder of a Security of such series for at least six months
may, on behalf of himself and all others similarly situated, petition any court
of competent jurisdiction for the appointment of a successor Trustee with
respect to Securities of such series.
The Company shall give notice of each resignation and each removal of the
Trustee with respect to the Securities of any series and each appointment of a
successor Trustee with respect to the Securities of any series in the manner
provided for notices to the Holders of Securities in Section 106. Each notice
shall include the name of the successor Trustee with respect to the Securities
of such series and the address of its Corporate Trust Office.
SECTION 609. ACCEPTANCE OF APPOINTMENT BY SUCCESSOR
In case of the appointment hereunder of a successor Trustee with respect to
all Securities, every such successor Trustee shall execute, acknowledge and
deliver to the Company and to the retiring Trustee an instrument accepting such
appointment, and thereupon the resignation or removal of the retiring Trustee
shall become effective and such successor Trustee, without any further act, deed
or conveyance, shall become vested with all the rights, powers, trusts and
duties of the retiring Trustee; but, on request of the Company or the successor
Trustee, such retiring Trustee shall, upon payment of its charges, execute and
deliver an instrument transferring to such successor Trustee all the rights,
powers and trusts of the retiring Trustee, and shall duly assign, transfer and
deliver to such successor Trustee all property and money held by such retiring
Trustee hereunder, subject nevertheless to its claim, if any, provided for in
Section 606.
In case of the appointment hereunder of a successor Trustee with respect to
the Securities of one or more (but not all) series, the Company, the retiring
Trustee and each successor Trustee with respect to the Securities of one or more
series shall execute and deliver an indenture supplemental hereto, pursuant to
Article Nine, wherein each successor Trustee shall accept such 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
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such supplemental indenture the resignation or removal of the retiring Trustee
shall become effective to the extent provided therein and each such successor
Trustee, without any further act, deed or conveyance, shall become vested with
all the rights, powers, trusts and duties of the retiring Trustee with respect
to the Securities of that or those series to which the appointment of such
successor Trustee relates; but, on request of the Company or any successor
Trustee, such retiring Trustee shall duly assign, transfer and deliver to such
successor Trustee all property and money held by such retiring Trustee hereunder
with respect to the Securities of that or those series to which the appointment
of such successor Trustee relates.
Upon request of any such successor Trustee, the Company shall execute any
and all instruments for more fully and certainly vesting in and confirming to
such successor Trustee all such rights, powers and trusts referred to in this
Section 609, as the case may be.
No successor Trustee shall accept its appointment unless at the time of
such acceptance such successor Trustee shall be qualified and eligible under
this Article Six.
SECTION 610. MERGER, CONVERSION, CONSOLIDATION OR SUCCESSION TO BUSINESS
Any corporation into which the Trustee may be merged or converted or with
which it may be consolidated, or any corporation resulting from any merger,
conversion or consolidation to which the Trustee shall be a party, or any
corporation succeeding to all or substantially all of the corporate trust
business of the Trustee, shall be the successor of the Trustee hereunder;
PROVIDED such corporation shall be otherwise qualified and eligible under this
Article Six, without the execution or filing of any paper or any further act on
the part of the parties hereto. In case any Securities or coupons shall have
been authenticated, but not delivered, by the Trustee then in office, any
successor by merger, conversion or consolidation to such authenticating Trustee
may adopt such authentication and deliver the Securities or coupons so
authenticated with the same effect as if such successor Trustee had itself
authenticated such Securities or coupons. In case any Securities or coupons
shall not have been authenticated by such predecessor Trustee, any such
successor Trustee may authenticate and deliver such Securities or coupons, in
either its own name or that of its predecessor Trustee, with the full force and
effect which this Indenture provides for the certificate of authentication of
the Trustee.
SECTION 611. APPOINTMENT OF AUTHENTICATING AGENT
At any time when any of the Securities remain Outstanding, the Trustee may
appoint an Authenticating Agent or Agents with respect to one or more series of
Securities which shall be authorized to act on behalf of the Trustee to
authenticate Securities of such series issued upon exchange, registration of
transfer or partial redemption or repayment thereof, and Securities so
authenticated shall be entitled to the benefits of this Indenture and shall be
valid and obligatory for all purposes as if authenticated by the Trustee
hereunder. Any such appointment shall be evidenced by an instrument in writing
signed by a Responsible Officer of the Trustee, a copy of which instrument shall
be promptly furnished to the Company. Wherever reference is made in this
Indenture to the authentication and delivery of Securities by the Trustee or the
Trustee's certificate of authentication, such reference shall be deemed to
include authentication and delivery on behalf of the Trustee by an
Authenticating Agent and a certificate of authentication executed
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on behalf of the Trustee by an Authenticating Agent. Each Authenticating Agent
shall be acceptable to the Company and shall at all times be a bank or trust
company or corporation organized and doing business and in good standing under
the laws of the United States or of any state or the District of Columbia
authorized under such laws to act as Authenticating Agent, having a combined
capital and surplus of not less than $50,000,000 and subject to supervision or
examination by federal or state authorities. If such Authenticating Agent
publishes reports of condition at least annually, pursuant to law or the
requirements of the aforesaid supervising or examining authority, then for the
purposes of this Section 611, the combined capital and surplus of such
Authenticating Agent shall be deemed to be its combined capital and surplus as
set forth in its most recent report of condition so published. In case at any
time an Authenticating Agent shall cease to be eligible in accordance with the
provisions of this Section 611, such Authenticating Agent shall resign
immediately in the manner and with the effect specified in this Section 611.
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 611, without the execution or filing of any paper or further
act on the part of the Trustee or the Authenticating Agent.
An Authenticating Agent for any series of Securities may at any time resign
by giving written notice of resignation to the Trustee for such series and to
the Company. The Trustee for any series of Securities may at any time terminate
the agency of an Authenticating Agent by giving written notice of termination to
such Authenticating Agent and to the Company. Upon receiving such a notice of
resignation or upon such a termination, or in case at any time such
Authenticating Agent shall cease to be eligible in accordance with the
provisions of this Section 611, the Trustee for such series may appoint a
successor Authenticating Agent which shall be acceptable to the Company and
shall give notice of such appointment to all Holders of Securities of the series
with respect to which such Authenticating Agent will serve in the manner set
forth in Section 106. Any successor Authenticating Agent upon acceptance of its
appointment hereunder shall become vested with all the rights, powers and duties
of its predecessor hereunder, with like effect as if originally named as an
Authenticating Agent herein. No successor Authenticating Agent shall be
appointed unless eligible under the provisions of this Section 611.
The Company agrees to pay to each Authenticating Agent from time to time
reasonable compensation, including reimbursement of its reasonable expenses for
its services under this Section 611.
If an appointment with respect to one or more series is made pursuant to
this Section 611, the Securities of such series may have endorsed thereon, in
addition to or in lieu of the Trustee's certificate of authentication, an
alternate certificate of authentication substantially in the following form:
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This is one of the Securities of the series designated therein referred to
in the within-mentioned Indenture.
[NAME OF THE TRUSTEE], as Trustee
By:
------------------------------------
as Authenticating Agent
By:
------------------------------------
Authorized Signatory
ARTICLE SEVEN
HOLDERS' LISTS AND REPORTS BY TRUSTEE AND COMPANY
SECTION 701. DISCLOSURE OF NAMES AND ADDRESSES OF HOLDERS
Every Holder of Securities or coupons, by receiving and holding the same,
agrees with the Company and the Trustee that neither the Company nor the Trustee
nor any Authenticating Agent nor any Paying Agent nor any Security Registrar
shall be held accountable by reason of the disclosure of any information as to
the names and addresses of the Holders of Securities in accordance with TIA
Section 312, regardless of the source from which such information was derived,
and that the Trustee shall not be held accountable by reason of mailing any
material pursuant to a request made under TIA Section 312(b).
SECTION 702. REPORTS BY TRUSTEE
Within 60 days after [DATE] of each year commencing with the first [DATE]
after the first issuance of Securities pursuant to this Indenture, the Trustee
shall transmit by mail to all Holders of Securities as provided in TIA
Section 313(c) a brief report dated as of such [DATE] if required by TIA
Section 313(a).
SECTION 703. REPORTS BY COMPANY
The Company will:
(1) file with the Trustee, within 15 days after the Company is
required to file the same with the Commission, copies of the annual reports and
of the information, documents and other reports (or copies of such portions of
any of the foregoing as the Commission may from time to time by rules and
regulations prescribe) which the Company may be required to file with the
Commission pursuant to Section 13 or Section 15(d) of the Securities Exchange
Act of 1934, as amended; or, if the Company is not required to file information,
documents or reports pursuant to either of such Sections, then it will file with
the Trustee and the Commission, in accordance
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with rules and regulations prescribed from time to time by the Commission, such
of the supplementary and periodic information, documents and reports which may
be required pursuant to Section 13 of the Securities Exchange Act of 1934, as
amended, in respect of a security listed and registered on a national securities
exchange as may be prescribed from time to time in such rules and regulations;
(2) file with the Trustee and the Commission, in accordance with
rules and regulations prescribed from time to time by the Commission, such
additional information, documents and reports with respect to compliance by the
Company with the conditions and covenants of this Indenture as may be required
from time to time by such rules and regulations; and
(3) transmit by mail to the Holders of Securities, within 30 days
after the filing thereof with the Trustee, in the manner and to the extent
provided in TIA Section 313(c), such summaries of any information, documents and
reports required to be filed by the Company pursuant to clauses (1) and (2) of
this Section 703 as may be required by rules and regulations prescribed from
time to time by the Commission.
SECTION 704. COMPANY TO FURNISH TRUSTEE NAMES AND ADDRESSES OF HOLDERS
The Company will furnish or cause to be furnished to the Trustee:
(1) semiannually, not later than 15 days after the Regular Record
Date for interest for each series of Securities, a list, in such form as the
Trustee may reasonably require, of the names and addresses of the Holders of
Securities of such series as of such Regular Record Date or, if there is no
Regular Record Date for interest for such series of Securities, semiannually,
upon such dates as are set forth in the Board Resolution or indenture
supplemental hereto authorizing such series, and
(2) at such other times as the Trustee may request in writing, within
30 days after the receipt by the Company of any such request, a list of similar
form and content as of a date not more than 15 days prior to the time such list
is furnished,
PROVIDED, HOWEVER, that, so long as the Trustee is the Security Registrar, no
such list shall be required to be furnished.
ARTICLE EIGHT
CONSOLIDATION, MERGER, SALE, LEASE OR CONVEYANCE
SECTION 801. CONSOLIDATIONS AND MERGERS OF COMPANY AND SALES, LEASES AND
CONVEYANCES PERMITTED SUBJECT TO CERTAIN CONDITIONS
The Company may consolidate with, or sell, lease or convey all or
substantially all of its assets to, or merge with or into any other entity,
provided that in any such case (1) either the Company shall be the continuing
entity, or the successor entity shall be an entity organized and existing under
the laws of the United States or a state thereof and such
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successor entity shall expressly assume the due and punctual payment of the
principal of (and premium, if any) and any interest (including all Additional
Amounts, if any, payable pursuant to Section 1010) on all of the Securities,
according to their tenor, and the due and punctual performance and observance
of all of the covenants and conditions of this Indenture to be performed by the
Company by supplemental indenture, complying with Article Nine, satisfactory
to the Trustee, executed and delivered to the Trustee by such entity and
(2) immediately after giving effect to such transaction and treating any
indebtedness which becomes an obligation of the Company or any Subsidiary as a
result thereof as having been incurred by the Company or such Subsidiary at the
time of such transaction, no Event of Default, and no event which, after notice
or the lapse of time, or both, would become an Event of Default, shall have
occurred and be continuing.
SECTION 802. RIGHTS AND DUTIES OF SUCCESSOR CORPORATION
In case of any such consolidation, merger, sale, lease or conveyance and
upon any such assumption by the successor corporation, such successor
corporation shall succeed to and be substituted for the Company, with the same
effect as if it had been named herein as the party of the first part, and the
predecessor corporation, except in the event of a lease, shall be relieved of
any further obligation under this Indenture and the Securities. Such successor
corporation thereupon may cause to be signed, and may issue either in its own
name or in the name of the Company, any or all of the Securities issuable
hereunder which theretofore shall not have been signed by the Company and
delivered to the Trustee; and, upon the order of such successor corporation,
instead of the Company, and subject to all the terms, conditions and limitations
in this Indenture prescribed, the Trustee shall authenticate and shall deliver
any Securities which previously shall have been signed and delivered by the
officers of the Company to the Trustee for authentication, and any Securities
which such successor corporation thereafter shall cause to be signed and
delivered to the Trustee for that purpose. All the Securities so issued shall
in all respects have the same legal rank and benefit under this Indenture as the
Securities theretofore or thereafter issued in accordance with the terms of this
Indenture as though all of such Securities had been issued at the date of the
execution hereof.
In case of any such consolidation, merger, sale, lease or conveyance, such
changes in phraseology and form (but not in substance) may be made in the
Securities thereafter to be issued as may be appropriate.
SECTION 803. OFFICERS' CERTIFICATE AND OPINION OF COUNSEL
Any consolidation, merger, sale, lease or conveyance permitted under
Section 801 is also subject to the condition that the Trustee receive an
Officers' Certificate and an Opinion of Counsel to the effect that any such
consolidation, merger, sale, lease or conveyance, and the assumption by any
successor corporation, complies with the provisions of this Article Eight and
that all conditions precedent herein provided for relating to such transaction
have been complied with.
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ARTICLE NINE
SUPPLEMENTAL INDENTURES
SECTION 901. SUPPLEMENTAL INDENTURES WITHOUT CONSENT OF HOLDERS
Without the consent of any Holders of Securities or coupons, the Company,
when authorized by or pursuant to a Board Resolution, and the Trustee, at any
time and from time to time, may enter into one or more indentures supplemental
hereto, in form satisfactory to the Trustee, for any of the following purposes:
(1) to evidence the succession of another Person to the Company and
the assumption by any such successor of the covenants of the Company herein and
in the Securities contained; or
(2) to add to the covenants of the Company for the benefit of the
Holders of all or any series of Securities (and if such covenants are to be for
the benefit of less than all series of Securities, stating that such covenants
are expressly being included solely for the benefit of such series) or to
surrender any right or power herein conferred upon the Company; or
(3) to add any additional Events of Default for the benefit of the
Holders of all or any series of Securities (and if such Events of Default are to
be for the benefit of less than all series of Securities, stating that such
Events of Default are expressly being included solely for the benefit of such
series); PROVIDED, HOWEVER, that in respect of any such additional Events of
Default such supplemental indenture may provide for a particular period of grace
after default (which period may be shorter or longer than that allowed in the
case of other defaults), may provide for an immediate enforcement upon such
default, may limit the remedies available to the Trustee upon such default or
may limit the right of the Holders of a majority in aggregate principal amount
of that or those series of Securities to which such additional Events of Default
apply to waive such default; or
(4) to add to or change any of the provisions of this Indenture to
provide that Bearer Securities may be registrable as to principal, to change or
eliminate any restrictions on the payment of principal of or any premium or
interest on Bearer Securities, to permit Bearer Securities to be issued in
exchange for Securities, to permit Bearer Securities to be issued in exchange
for Bearer Securities of other authorized denominations or to permit or
facilitate the issuance of Securities in uncertificated form; PROVIDED, HOWEVER,
that any such action shall not adversely affect the interests of the Holders of
Securities of any series or any related coupons in any material respect; or
(5) to change or eliminate any of the provisions of this Indenture,
PROVIDED that any such change or elimination shall become effective only when
there is no Security Outstanding of any series created prior to the execution of
such supplemental indenture which is entitled to the benefit of such provision;
or
(6) to secure the Securities; or
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(7) to establish the form or terms of Securities of any series and
any related coupons as permitted by Sections 201 and 301, including the
provisions and procedures relating to Securities convertible into Common Stock
or Preferred Stock, as the case may be; or
(8) to evidence and provide for the acceptance of appointment
hereunder by a successor Trustee with respect to the Securities of one or more
series and to add to or change any of the provisions of this Indenture as shall
be necessary to provide for or facilitate the administration of the trusts
hereunder by more than one Trustee; or
(9) to cure any ambiguity, to correct or supplement any provision
herein which may be defective or inconsistent with any other provision herein,
or to make any other provisions with respect to matters or questions arising
under this Indenture which shall not be inconsistent with the provisions of this
Indenture; PROVIDED, HOWEVER, that such provisions shall not adversely affect
the interests of the Holders of Securities of any series or any related coupons
in any material respect; or
(10) to supplement any of the provisions of this Indenture to such
extent as shall be necessary to permit or facilitate the defeasance and
discharge of any series of Securities pursuant to Sections 401, 1402 and 1403;
PROVIDED, HOWEVER, that any such action shall not adversely affect the interests
of the Holders of Securities of such series and any related coupons or any other
series of Securities in any material respect.
SECTION 902. SUPPLEMENTAL INDENTURES WITH CONSENT OF HOLDERS
With the consent of the Holders of not less than a majority in principal
amount of all Outstanding Securities affected by such supplemental indenture, by
Act of said Holders delivered to the Company and the Trustee, the Company, when
authorized by or pursuant to a Board Resolution, and the Trustee may enter into
an indenture or indentures supplemental hereto for the purpose of adding any
provisions to or changing in any manner or eliminating any of the provisions of
this Indenture or of modifying in any manner the rights of the Holders of
Securities and any related coupons under this Indenture; PROVIDED, HOWEVER, that
no such supplemental indenture shall, without the consent of the Holder of each
Outstanding Security affected thereby:
(1) change the Stated Maturity of the principal of (or premium, if
any, on) or any installment of principal of or interest on, any Security; or
reduce the principal amount thereof or the rate or amount of interest thereon or
any Additional Amounts payable in respect thereof, or any premium payable upon
the redemption thereof, or change any obligation of the Company to pay
Additional Amounts pursuant to Section 1010 (except as contemplated by Section
801(1) and permitted by Section 901(1)), or reduce the amount of the principal
of an Original Issue Discount Security that would be due and payable upon a
declaration of acceleration of the Maturity thereof pursuant to Section 502 or
the amount thereof provable in bankruptcy pursuant to Section 504, or adversely
affect any right of repayment at the option of the Holder of any Security, or
change any Place of Payment where, or the currency or currencies, currency unit
or units or composite currency or currencies in which, any Security or any
premium or the interest thereon is payable, or impair the right to institute
suit for the enforcement of any such payment on or after the Stated
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Maturity thereof (or, in the case of redemption or repayment at the option of
the Holder, on or after the Redemption Date or the Repayment Date, as the case
may be), or
(2) reduce the percentage in principal amount of the Outstanding
Securities of any series, the consent of whose Holders is required for any such
supplemental indenture, or the consent of whose Holders is required for any
waiver with respect to such series (or compliance with certain provisions of
this Indenture or certain defaults hereunder and their consequences) provided
for in this Indenture, or reduce the requirements of Section 1504 for quorum or
voting, or
(3) modify any of the provisions of this Section 902, Section 513 or
1011, except to increase the required percentage to effect such action or to
provide that certain other provisions of this Indenture cannot be modified or
waived without the consent of the Holder of each Outstanding Security affected
thereby.
It shall not be necessary for any Act of Holders under this Section 902 to
approve the particular form of any proposed supplemental indenture, but it shall
be sufficient if such Act shall approve the substance thereof.
A supplemental indenture which changes or eliminates any covenant or other
provision of this Indenture which has expressly been included solely for the
benefit of one or more particular series of Securities, or which modifies the
rights of the Holders of Securities of such series with respect to such covenant
or other provision, shall be deemed not to affect the rights under this
Indenture of the Holders of Securities of any other series.
SECTION 903. EXECUTION OF SUPPLEMENTAL INDENTURES
In executing, or accepting the additional trusts created by, any
supplemental indenture permitted by this Article Nine or the modification
thereby of the trusts created by this Indenture, the Trustee shall be entitled
to receive, and shall be fully protected in relying upon, an Opinion of Counsel
stating that the execution of such supplemental indenture is authorized or
permitted by this Indenture. The Trustee may, but shall not be obligated to,
enter into any such supplemental indenture which affects the Trustee's own
rights, duties or immunities under this Indenture or otherwise.
SECTION 904. EFFECT OF SUPPLEMENTAL INDENTURES
Upon the execution of any supplemental indenture under this Article Nine,
this Indenture shall be modified in accordance therewith, and such supplemental
indenture shall form a part of this Indenture for all purposes; and every Holder
of Securities that are theretofore or thereafter authenticated and delivered
hereunder and of any coupon appertaining thereto shall be bound thereby.
SECTION 905. CONFORMITY WITH TRUST INDENTURE ACT
Every supplemental indenture executed pursuant to this Article Nine shall
conform to the requirements of the Trust Indenture Act as then in effect.
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SECTION 906. REFERENCE IN SECURITIES TO SUPPLEMENTAL INDENTURES
Securities of any series authenticated and delivered after the execution of
any supplemental indenture pursuant to this Article Nine may, and shall, if
required by the Trustee, bear a notation in form approved by the Trustee as to
any matter provided for in such supplemental indenture. If the Company shall so
determine, new Securities of any series so modified as to conform, in the
opinion of the Trustee and the Company, to any such supplemental indenture may
be prepared and executed by the Company and authenticated and delivered by the
Trustee in exchange for Outstanding Securities of such series.
ARTICLE TEN
COVENANTS
SECTION 1001. PAYMENT OF PRINCIPAL, PREMIUM, IF ANY, INTEREST AND ADDITIONAL
AMOUNTS
The Company covenants and agrees for the benefit of the Holders of each
series of Securities that it will duly and punctually pay the principal of (and
premium, if any) and interest on and any Additional Amounts payable in respect
of the Securities of that series in accordance with the terms of such series of
Securities, any coupons appertaining thereto and this Indenture. Unless
otherwise specified as contemplated by Section 301 with respect to any series of
Securities, any interest due on and any Additional Amounts payable in respect of
Bearer Securities on or before Maturity, other than Additional Amounts, if any,
payable as provided in Section 1010 in respect of principal of (or premium, if
any, on) such a Security, shall be payable only upon presentation and surrender
of the several coupons for such interest installments as are evidenced thereby
as they severally mature. Unless otherwise specified with respect to Securities
of any series pursuant to Section 301, at the option of the Company, all
payments of principal may be paid by check to the registered Holder of the
Registered Security or other person entitled thereto against surrender of such
Security.
SECTION 1002. MAINTENANCE OF OFFICE OR AGENCY
If Securities of a series are issuable only as Registered Securities, the
Company shall maintain in each Place of Payment for any series of Securities an
office or agency where Securities of that series may be presented or surrendered
for payment or conversion, where Securities of that series may be surrendered
for registration of transfer or exchange and where notices and demands to or
upon the Company in respect of the Securities of that series and this Indenture
may be served. If Securities of a series are issuable as Bearer Securities, the
Company will maintain: (1) in the Borough of Manhattan, the City of New York,
an office or agency where any Securities of that series may be presented or
surrendered for payment or conversion, where any Securities of that series may
be surrendered for registration of transfer, where Securities of that series may
be surrendered for exchange, where notices and demands to or upon the Company in
respect of the Securities of that series and this Indenture may be served and
where Bearer Securities of that series and related coupons may be presented or
surrendered for payment or conversion in the circumstances described in the
following paragraph (and not otherwise); (2) subject to any laws or
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regulations applicable thereto, in a Place of Payment for that series which is
located outside the United States, an office or agency where Securities of that
series and related coupons may be presented and surrendered for payment
(including payment of any Additional Amounts payable on Securities of that
series pursuant to Section 1010) or conversion; PROVIDED, HOWEVER, that if the
Securities of that series are listed on any stock exchange located outside the
United States and such stock exchange shall so require, the Company will
maintain a Paying Agent for the Securities of that series in any required city
located outside the United States, as the case may be, so long as the Securities
of that series are listed on such exchange; and (3) subject to any laws or
regulations applicable thereto, in a Place of Payment for that series located
outside the United States an office or agency where any Securities of that
series may be surrendered for registration of transfer, where Securities of that
series may be surrendered for exchange and where notices and demands to or upon
the Company in respect of the Securities of that series and this Indenture may
be served. The Company will give prompt written notice to the Trustee of the
location, and any change in the location, of each such office or agency. If at
any time the Company shall fail to maintain any such required office or agency
or shall fail to furnish the Trustee with the address thereof, such
presentations, surrenders, notices and demands may be made or served at the
Corporate Trust Office of the Trustee, except that Bearer Securities of that
series and the related coupons may be presented and surrendered for payment
(including payment of any Additional Amounts payable on Bearer Securities of
that series pursuant to Section 1010) or conversion at the offices specified in
the Security, in London, England, and the Company hereby appoints the same as
its agent to receive such respective presentations, surrenders, notices and
demands, and the Company hereby appoints the Trustee its agent to receive all
such presentations, surrenders, notices and demands.
Unless otherwise specified with respect to any Securities pursuant to
Section 301, no payment of principal, premium or interest on or Additional
Amounts in respect of Bearer Securities shall be made at any office or agency of
the Company in the United States or by check mailed to any address in the United
States or by transfer to an account maintained with a bank located in the United
States; PROVIDED, HOWEVER, that, if the Securities of a series are payable in
Dollars, payment of principal of and any premium and interest on any Bearer
Security (including any Additional Amounts payable on Securities of such series
pursuant to Section 1010) shall be made at the office of the Company's Paying
Agent in the Borough of Manhattan, the City of New York, if (but only if)
payment in Dollars of the full amount of such principal, premium, interest or
Additional Amounts, as the case may be, at all offices or agencies outside the
United States maintained for the purpose by the Company in accordance with this
Indenture is illegal or effectively precluded by exchange controls or other
similar restrictions.
The Company may from time to time designate one or more other offices or
agencies where the Securities of one or more series may be presented or
surrendered for any or all of such purposes, and may from time to time rescind
such designations; PROVIDED, HOWEVER, that no such designation or rescission
shall in any manner relieve the Company of its obligation to maintain an office
or agency in accordance with the requirements set forth above for Securities of
any series for such purposes. The Company will give prompt written notice to
the Trustee of any such designation or rescission and of any change in the
location of any such other office or agency. Unless otherwise specified with
respect to any Securities pursuant to Section 301 with respect to a series of
Securities, the Company hereby designates as a Place of Payment for each series
of
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Securities the office or agency of the Company in the Borough of Manhattan, the
City of New York, and initially appoints the Trustee at its Corporate Trust
Office as Paying Agent in such city and as its agent to receive all such
presentations, surrenders, notices and demands.
Unless otherwise specified with respect to any Securities pursuant to
Section 301, if and so long as the Securities of any series (1) are denominated
in a Foreign Currency or (2) may be payable in a Foreign Currency, or so long as
it is required under any other provision of this Indenture, then the Company
will maintain with respect to each such series of Securities, or as so required,
at least one exchange rate agent.
SECTION 1003. MONEY FOR SECURITIES PAYMENTS TO BE HELD IN TRUST
If the Company shall at any time act as its own Paying Agent with respect
to any series of any Securities and any related coupons, it will, on or before
each due date of the principal of (and premium, if any), or interest on or
Additional Amounts in respect of, any of the Securities of that series,
segregate and hold in trust for the benefit of the Persons entitled thereto a
sum in the currency or currencies, currency unit or units or composite currency
or currencies in which the Securities of such series are payable (except as
otherwise specified pursuant to Section 301 for the Securities of such series)
sufficient to pay the principal (and premium, if any) or interest or Additional
Amounts so becoming due until such sums shall be paid to such Persons or
otherwise disposed of as herein provided, and will promptly notify the Trustee
of its action or failure so to act.
Whenever the Company shall have one or more Paying Agents for any series of
Securities and any related coupons, it will, on or before each due date of the
principal of (and premium, if any), or interest on or Additional Amounts in
respect of, any Securities of that series, deposit with a Paying Agent a sum (in
the currency or currencies, currency unit or units or composite currency or
currencies described in the preceding paragraph) sufficient to pay the principal
(and premium, if any) or interest or Additional Amounts so becoming due, such
sum to be held in trust for the benefit of the Persons entitled to such
principal, premium or interest or Additional Amounts and (unless such Paying
Agent is the Trustee) the Company will promptly notify the Trustee of its action
or failure so to act.
The Company will cause each Paying Agent other than the Trustee to execute
and deliver to the Trustee an instrument in which such Paying Agent shall agree
with the Trustee, subject to the provisions of this Section 1003, that such
Paying Agent will
(1) hold all sums held by it for the payment of principal of (and
premium, if any) or interest or Additional Amounts on Securities in trust for
the benefit of the Persons entitled thereto until such sums shall be paid to
such Persons or otherwise disposed of as herein provided;
(2) give the Trustee notice of any default by the Company (or any
other obligor upon the Securities) in the making of any such payment of
principal (and premium, if any) or interest on the Securities of that series;
and
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(3) at any time during the continuance of any such default upon the
written request of the Trustee, forthwith pay to the Trustee all sums so held in
trust by such Paying Agent.
The Company may at any time, for the purpose of obtaining the satisfaction
and discharge of this Indenture or for any other purpose, pay, or by Company
Order direct any Paying Agent to pay, to the Trustee all sums held in trust by
the Company or such Paying Agent, such sums to be held by the Trustee upon the
same terms as those upon which such sums were held by the Company or such Paying
Agent; and, upon such payment by any Paying Agent to the Trustee, such Paying
Agent shall be released from all further liability with respect to such sums.
Except as otherwise provided in the Securities of any series, any money
deposited with the Trustee or any Paying Agent, or then held by the Company, in
trust for the payment of the principal of (and premium, if any) or interest on,
or any Additional Amounts in respect of, any Security of any series and
remaining unclaimed for two years after such principal (and premium, if any),
interest or Additional Amounts has become due and payable shall be paid to the
Company upon Company Request or (if then held by the Company) shall be
discharged from such trust; and the Holder of such Security shall thereafter, as
an unsecured general creditor, look only to the Company for payment of such
principal of (and premium, if any) or interest on, or any Additional Amounts in
respect of, any Security, without interest thereon, and all liability of the
Trustee or such Paying Agent with respect to such trust money, and all liability
of the Company as Trustee thereof, shall thereupon cease; PROVIDED, HOWEVER,
that the Trustee or such Paying Agent, before being required to make any such
repayment, may at the expense of the Company cause to be published once, in an
Authorized Newspaper, notice that such money remains unclaimed and that, after a
date specified therein, which shall not be less than 30 days from the date of
such publication, any unclaimed balance of such money then remaining will be
repaid to the Company.
SECTION 1004. EXISTENCE
Subject to Article Eight, the Company will do or cause to be done all
things necessary to preserve and keep in full force and effect its corporate
existence, all material rights (by certificate of incorporation, by-laws and
statute) and material franchises; PROVIDED, HOWEVER, that the Company shall not
be required to preserve any right or franchise if the Board of Directors shall
determine that the preservation thereof is no longer desirable in the conduct of
the business of the Company.
SECTION 1005. MAINTENANCE OF PROPERTIES
The Company will cause all of its material properties used or useful in the
conduct of its business or the business of any Subsidiary to be maintained and
kept in good condition, repair and working order and supplied with all necessary
equipment and will cause to be made all necessary repairs, renewals,
replacements, betterments and improvements thereof, all as in the judgment of
the Company may be necessary so that the business carried on in connection
therewith may be properly and advantageously conducted at all times; PROVIDED,
HOWEVER, that the Company and its Subsidiaries shall not be prevented from
selling or otherwise disposing for value of their properties in the ordinary
course of their business.
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SECTION 1006. INSURANCE
The Company will, and will cause each of its Subsidiaries to, keep in force
upon all of its properties and operations policies of insurance carried with
responsible companies in such amounts and covering all such risks as shall be
customary in the industry in accordance with prevailing market conditions and
availability.
SECTION 1007. PAYMENT OF TAXES AND OTHER CLAIMS
The Company will pay or discharge or cause to be paid or discharged, before
the same shall become delinquent, (1) all taxes, assessments and governmental
charges levied or imposed upon it or any Subsidiary or upon the income, profits
or property of the Company or any Subsidiary and (2) all lawful claims for
labor, materials and supplies which, if unpaid, might by law become a lien upon
the property of the Company or any Subsidiary; PROVIDED, HOWEVER, that the
Company shall not be required to pay or discharge or cause to be paid or
discharged any such tax, assessment, charge or claim whose amount, applicability
or validity is being contested in good faith by appropriate proceedings.
SECTION 1008. PROVISION OF FINANCIAL INFORMATION
Whether or not the Company is subject to Section 13 or 15(d) of the
Securities Exchange Act of 1934, as amended, the Company will, within 15 days
after each of the respective dates by which the Company would have been required
to file annual reports, quarterly reports and other documents with the
Commission if the Company were so subject, (1) transmit by mail to all Holders,
as their names and addresses appear in the Security Register, without cost to
such Holders copies of the annual reports, quarterly reports and other documents
which the Company would have been required to file with the Commission pursuant
to Section 13 or 15(d) of the Securities Exchange Act of 1934, as amended, if
the Company were subject to such Sections, and (2) file with the Trustee copies
of the annual reports, quarterly reports and other documents which the Company
would have been required to file with the Commission pursuant to Section 13 or
15(d) of the Securities Exchange Act of 1934, as amended, if the Company were
subject to such Sections, and (3) promptly upon written request and payment of
the reasonable cost of duplication and delivery, supply copies of such documents
to any prospective Holder.
SECTION 1009. STATEMENT AS TO COMPLIANCE
The Company will deliver to the Trustee, within 120 days after the end of
each fiscal year, a brief certificate from the principal executive officer,
principal financial officer or principal accounting officer as to his or her
knowledge of the Company's compliance with all conditions and covenants under
this Indenture and, in the event of any noncompliance, specifying such
noncompliance and the nature and status thereof. For purposes of this
Section 1009, such compliance shall be determined without regard to any period
of grace or requirement of notice under this Indenture.
SECTION 1010. ADDITIONAL AMOUNTS
If any Securities of a series provide for the payment of Additional
Amounts, the Company
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will pay to the Holder of any Security of such series or any coupon appertaining
thereto Additional Amounts as may be specified as contemplated by Section 301.
Whenever in this Indenture there is mentioned, in any context except in the case
of Section 502(1), the payment of the principal of or any premium or interest
on, or in respect of, any Security of any series or payment of any related
coupon or the net proceeds received on the sale or exchange of any Security of
any series, such mention shall be deemed to include mention of the payment of
Additional Amounts provided by the terms of such series established pursuant to
Section 301 to the extent that, in such context, Additional Amounts are, were or
would be payable in respect thereof pursuant to such terms and express mention
of the payment of Additional Amounts (if applicable) in any provisions hereof
shall not be construed as excluding Additional Amounts in those provisions
hereof where such express mention is not made.
Except as otherwise specified as contemplated by Section 301, if the
Securities of a series provide for the payment of Additional Amounts, at least
10 days prior to the first Interest Payment Date with respect to that series of
Securities (or if the Securities of that series will not bear interest prior to
Maturity, the first day on which a payment of principal and any premium is
made), and at least 10 days prior to each date of payment of principal and any
premium or interest if there has been any change with respect to the matters set
forth in the below-mentioned Officers' Certificate, the Company will furnish the
Trustee and the Company's principal Paying Agent or Paying Agents, if other than
the Trustee, with an Officers' Certificate instructing the Trustee and such
Paying Agent or Paying Agents whether such payment of principal of and any
premium or interest on the Securities of that series shall be made to Holders of
Securities of that series or any related coupons who are not United States
Persons without withholding for or on account of any tax, assessment or other
governmental charge described in the Securities of the series. If any such
withholding shall be required, then such Officers' Certificate shall specify by
country the amount, if any, required to be withheld on such payments to such
Holders of Securities of that series or related coupons and the Company will pay
to the Trustee or such Paying Agent the Additional Amounts required by the terms
of such Securities. If the Trustee or any Paying Agent, as the case may be,
shall not so receive the above-mentioned Officers' Certificate, then the Trustee
or such Paying Agent shall be entitled (1) to assume that no such withholding or
deduction is required with respect to any payment of principal or interest with
respect to any Securities of a series or related coupons until it shall have
received a certificate advising otherwise and (2) to make all payments of
principal and interest with respect to the Securities of a series or related
coupons without withholding or deductions until otherwise advised. The Company
covenants to indemnify the Trustee and any Paying Agent for, and to hold them
harmless against, any loss, liability or expense reasonably incurred without
negligence or bad faith on their part arising out of or in connection with
actions taken or omitted by any of them or in reliance on any Officers'
Certificate furnished pursuant to this Section 1010 or in reliance on the
Company's not furnishing such an Officers' Certificate.
SECTION 1011. WAIVER OF CERTAIN COVENANTS
The Company may omit in any particular instance to comply with any term,
provision or condition set forth in Sections 1004 to 1008, inclusive, if before
or after the time for such compliance the Holders of at least a majority in
principal amount of all outstanding Securities of such series, by act of such
Holders, either waive such compliance in such instance or generally
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waive compliance with such covenant or condition, but no such waiver shall
extend to or affect such covenant or condition except to the extent so expressly
waived, and, until such waiver shall become effective, the obligations of the
Company and the duties of the Trustee in respect of any such term, provision or
condition shall remain in full force and effect.
ARTICLE ELEVEN
REDEMPTION OF SECURITIES
SECTION 1101. APPLICABILITY OF ARTICLE
Securities of any series which are redeemable before their Stated Maturity
shall be redeemable in accordance with their terms and (except as otherwise
specified as contemplated by Section 301 for Securities of any series) in
accordance with this Article Eleven.
SECTION 1102. ELECTION TO REDEEM; NOTICE TO TRUSTEE
The election of the Company to redeem any Securities shall be evidenced by
or pursuant to a Board Resolution. In case of any redemption at the election of
the Company of less than all of the Securities of any series, the Company shall,
at least 45 days prior to the giving of the notice of redemption in Section 1104
(unless a shorter notice shall be satisfactory to the Trustee), notify the
Trustee of such Redemption Date and of the principal amount of Securities of
such series to be redeemed. In the case of any redemption of Securities prior
to the expiration of any restriction on such redemption provided in the terms of
such Securities or elsewhere in this Indenture, the Company shall furnish the
Trustee with an Officers' Certificate evidencing compliance with such
restriction.
SECTION 1103. SELECTION BY TRUSTEE OF SECURITIES TO BE REDEEMED
If less than all the Securities of any series issued on the same day with
the same terms are to be redeemed, the particular Securities to be redeemed
shall be selected not more than 60 days prior to the Redemption Date by the
Trustee, from the Outstanding Securities of such series issued on such date with
the same terms not previously called for redemption, by such method as the
Trustee shall deem fair and appropriate and which may provide for the selection
for redemption of portions (equal to the minimum authorized denomination for
Securities of that series or any integral multiple thereof) of the principal
amount of Securities of such series of a denomination larger than the minimum
authorized denomination for Securities of that series.
The Trustee shall promptly notify the Company and the Security Registrar
(if other than itself) in writing of the Securities selected for redemption and,
in the case of any Securities selected for partial redemption, the principal
amount thereof to be redeemed.
For all purposes of this Indenture, unless the context otherwise requires,
all provisions relating to the redemption of Securities shall relate, in the
case of any Security redeemed or to be redeemed only in part, to the portion of
the principal amount of such Security which has been or is to be redeemed.
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SECTION 1104. NOTICE OF REDEMPTION
Notice of redemption shall be given in the manner provided in Section 106,
not less than 30 days nor more than 60 days prior to the Redemption Date, unless
a shorter period is specified by the terms of such series established pursuant
to Section 301, to each Holder of Securities to be redeemed, but failure to give
such notice in the manner herein provided to the Holder of any Security
designated for redemption as a whole or in part, or any defect in the notice to
any such Holder, shall not affect the validity of the proceedings for the
redemption of any other such Security or portion thereof.
Any notice that is mailed to the Holders of Securities in the manner herein
provided shall be conclusively presumed to have been duly given, whether or not
the Holder receives the notice.
All notices of redemption shall state:
(1) the Redemption Date;
(2) the Redemption Price, accrued interest to the Redemption Date
payable as provided in Section 1106, if any, and Additional Amounts, if any;
(3) if less than all Outstanding Securities of any series are to be
redeemed, the identification (and, in the case of partial redemption, the
principal amount) of the particular Security or Securities to be redeemed;
(4) in case any Security is to be redeemed in part only, the notice
which relates to such Security shall state that on and after the Redemption
Date, upon surrender of such Security, the holder will receive, without a
charge, a new Security or Securities or authorized denominations for the
principal amount thereof remaining unredeemed;
(5) that on the Redemption Date the Redemption Price and accrued
interest to the Redemption Date payable as provided in Section 1106, if any,
will become due and payable upon each such Security, or the portion thereof, to
be redeemed and, if applicable, that interest thereon shall cease to accrue on
and after said date;
(6) the Place or Places of Payment where such Securities, together in
the case of Bearer Securities with all coupons appertaining thereto, if any,
maturing after the Redemption Date, are to be surrendered for payment of the
Redemption Price and accrued interest, if any, or for conversion;
(7) that the redemption is for a sinking fund, if such is the case;
(8) that, unless otherwise specified in such notice, Bearer
Securities of any series, if any, surrendered for redemption must be accompanied
by all coupons maturing subsequent to the date fixed for redemption or the
amount of any such missing coupon or coupons will be deducted from the
Redemption Price, unless security or indemnity satisfactory to the Company, the
Trustee for such series and any Paying Agent is furnished;
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(9) if Bearer Securities of any series are to be redeemed and any
Securities of such series are not to be redeemed, and if such Bearer Securities
may be exchanged for Securities not subject to redemption on this Redemption
Date pursuant to Section 305 or otherwise, the last date, as determined by the
Company, on which such exchanges may be made;
(10) the CUSIP number of such Security, if any; and
(11) if applicable, that a Holder of Securities who desires to convert
Securities for redemption must satisfy the requirements for conversion contained
in such Securities, the then-existing conversion price or rate, the place or
places where such Securities may be surrendered for conversion, and the date and
time when the option to convert shall expire.
Notice of redemption of Securities to be redeemed at the election of the
Company shall be given by the Company or, at the Company's request, by the
Trustee in the name and at the expense of the Company.
SECTION 1105. DEPOSIT OF REDEMPTION PRICE
On or before any Redemption Date, the Company shall deposit with the
Trustee or with a Paying Agent (or, if the Company is acting as its own Paying
Agent, which it may not do in the case of a sinking fund payment under Article
Twelve, segregate and hold in trust as provided in Section 1003) an amount of
money in the currency or currencies, currency unit or units or composite
currency or currencies in which the Securities of such series are payable
(except as otherwise specified pursuant to Section 301 for the Securities of
such series) sufficient to pay on the Redemption Date the Redemption Price of,
and (except if the Redemption Date shall be an Interest Payment Date) accrued
interest on, all the Securities or portions thereof which are to be redeemed on
that date.
If any Securities called for redemption is converted, any money deposited
with the Trustee or with any Paying Agent or so segregated and held in trust for
the redemption of such Security shall be paid to the Company upon Company
Request or, if then held by the Company, shall be discharged from such trust.
SECTION 1106. SECURITIES PAYABLE ON REDEMPTION DATE
Notice of redemption having been given as aforesaid, the Securities so to
be redeemed shall, on the Redemption Date, become due and payable at the
Redemption Price therein specified in the currency or currencies, currency unit
or units or composite currency or currencies in which the Securities of such
series are payable (except as otherwise specified pursuant to Section 301 for
the Securities of such series) (together with accrued interest, if any, to the
Redemption Date), and from and after such date (unless the Company shall default
in the payment of the Redemption Price and accrued interest) such Securities
shall, if the same were interest-bearing, cease to bear interest and the coupons
for such interest appertaining to any Bearer Securities so to be redeemed,
except to the extent provided below, shall be void. Upon surrender of any such
Security for redemption in accordance with said notice, together with all
coupons, if any, appertaining thereto maturing after the Redemption Date, such
Security shall be paid by the
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Company at the Redemption Price, together with accrued interest, if any, to the
Redemption Date; PROVIDED, HOWEVER, that installments of interest on Bearer
Securities whose Stated Maturity is on or prior to the Redemption Date shall be
payable only at an office or agency located outside the United States (except as
otherwise provided in Section 1002) and, unless otherwise specified as
contemplated by Section 301, only upon presentation and surrender of coupons for
such interest; and PROVIDED FURTHER that, except as otherwise provided with
respect to Securities convertible into Common Stock or Preferred Stock,
installments of interest on Securities whose Stated Maturity is on or prior to
the Redemption Date shall be payable to the Holders of such Securities, or one
or more Predecessor Securities, registered as such at the close of business on
the relevant record dates according to their terms and the provisions of Section
307.
If any Bearer Security surrendered for redemption shall not be accompanied
by all appurtenant coupons maturing after the Redemption Date, such Security may
be paid after deducting from the Redemption Price an amount equal to the face
amount of all such missing coupons, or the surrender of such missing coupon or
coupons may be waived by the Company and the Trustee if there be furnished to
them such security or indemnity as they may require to save each of them and any
Paying Agent harmless. If thereafter the Holder of such Security shall
surrender to the Trustee or any Paying Agent any such missing coupon in respect
of which a deduction shall have been made from the Redemption Price, such Holder
shall be entitled to receive the amount so deducted; PROVIDED, HOWEVER, that
interest represented by coupons shall be payable only at an office or agency
located outside the United States (except as otherwise provided in Section 1002)
and, unless otherwise specified as contemplated by Section 301, only upon
presentation and surrender of those coupons.
If any Security called for redemption shall not be so paid upon surrender
thereof for redemption, the principal (and premium, if any) shall, until paid,
bear interest from the Redemption Date at the rate borne by the Security.
SECTION 1107. SECURITIES REDEEMED IN PART
Any Registered Security which is to be redeemed only in part (pursuant to
the provisions of this Article Eleven or of Article Twelve) shall be surrendered
at a Place of Payment therefor (with, if the Company or the Trustee so requires,
due endorsement by, or a written instrument of transfer in form satisfactory to
the Company and the Trustee duly executed by, the Holder thereof or his or her
attorney duly authorized in writing) and the Company shall execute and the
Trustee shall authenticate and deliver to the Holder of such Security without
service charge a new Security or Securities of the same series of any authorized
denomination as requested by such Holder in aggregate principal amount equal to
and in exchange for the unredeemed portion of the principal of the Security so
surrendered. If a Global Security is so surrendered, the Company shall execute
and the Trustee shall authenticate and deliver to the depositary, without
service charge, a new Global Security in a denomination equal to and in exchange
for the unredeemed portion of the principal of the Global Security so
surrendered.
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ARTICLE TWELVE
SINKING FUNDS
SECTION 1201. APPLICABILITY OF ARTICLE
The provisions of this Article Twelve shall be applicable to any sinking
fund for the retirement of Securities of a series except as otherwise specified
as contemplated by Section 301 for Securities of such series.
The minimum amount of any sinking fund payment provided for by the terms of
Securities of any series is herein referred to as a "mandatory sinking fund
payment," and any payment in excess of such minimum amount provided for by the
terms of such Securities of any series is herein referred to as an "optional
sinking fund payment." If provided for by the terms of any Securities of any
series, the cash amount of any mandatory sinking fund payment may be subject to
reduction as provided in Section 1202. Each sinking fund payment shall be
applied to the redemption of Securities of any series as provided for by the
terms of Securities of such series.
SECTION 1202. SATISFACTION OF SINKING FUND PAYMENTS WITH SECURITIES
The Company may, in satisfaction of all or any part of any mandatory
sinking fund payment with respect to the Securities of a series, (1) deliver
Outstanding Securities of such series (other than any previously called for
redemption) together, in the case of any Bearer Securities of such series, with
all unmatured coupons appertaining thereto and (2) apply as a credit Securities
of such series which have been redeemed either at the election of the Company
pursuant to the terms of such Securities or through the application of permitted
optional sinking fund payments pursuant to the terms of such Securities, as
provided for by the terms of such Securities, or which have otherwise been
acquired by the Company; PROVIDED, HOWEVER, that such Securities so delivered or
applied as a credit have not been previously so credited. Such Securities shall
be received and credited for such purpose by the Trustee at the applicable
Redemption Price specified in such Securities for redemption through operation
of the sinking fund and the amount of such mandatory sinking fund payment shall
be reduced accordingly.
SECTION 1203. REDEMPTION OF SECURITIES FOR SINKING FUND
Not less than 60 days prior to each sinking fund payment date for
Securities of any series, the Company will deliver to the Trustee an Officers'
Certificate specifying the amount of the next ensuing mandatory sinking fund
payment for that series pursuant to the terms of that series, the portion
thereof, if any, which is to be satisfied by payment of cash in the currency or
currencies, currency unit or units or composite currency or currencies in which
the Securities of such series are payable (except as otherwise specified
pursuant to Section 301 for the Securities of such series) and the portion
thereof, if any, which is to be satisfied by delivering and crediting Securities
of that series pursuant to Section 1202, and the optional amount, if any, to be
added in cash to the next ensuing mandatory sinking fund payment, and will also
deliver to the Trustee any Securities to be so delivered and credited. If such
Officers' Certificate shall specify an optional amount to be added in cash to
the next ensuing mandatory sinking fund payment, the Company
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shall thereupon be obligated to pay the amount therein specified. Not less than
30 days before each such sinking fund payment date the Trustee shall select the
Securities to be redeemed upon such sinking fund payment date in the manner
specified in Section 1103 and cause notice of the redemption thereof to be given
in the name of and at the expense of the Company in the manner provided in
Section 1104. Such notice having been duly given, the redemption of such
Securities shall be made upon the terms and in the manner stated in Sections
1106 and 1107.
ARTICLE THIRTEEN
REPAYMENT AT THE OPTION OF HOLDERS
SECTION 1301. APPLICABILITY OF ARTICLE
Repayment of Securities of any series before their Stated Maturity at the
option of Holders thereof shall be made in accordance with the terms of such
Securities, if any, and (except as otherwise specified by the terms of such
series established pursuant to Section 301) in accordance with this Article
Thirteen.
SECTION 1302. REPAYMENT OF SECURITIES
Securities of any series subject to repayment in whole or in part at the
option of the Holders thereof will, unless otherwise provided in the terms of
such Securities, be repaid at a price equal to the principal amount thereof,
together with interest, if any, thereon accrued to the Repayment Date specified
in or pursuant to the terms of such Securities. The Company covenants that on
or prior to the Repayment Date it will deposit with the Trustee or with a Paying
Agent (or, if the Company is acting as its own Paying Agent, segregate and hold
in trust as provided in Section 1003) an amount of money in the currency or
currencies, currency unit or units or composite currency or currencies in which
the Securities of such series are payable (except as otherwise specified
pursuant to Section 301 for the Securities of such series) sufficient to pay the
principal (or, if so provided by the terms of the Securities of any series, a
percentage of the principal) of, and (except if the Repayment Date shall be an
Interest Payment Date) accrued interest on, all the Securities or portions
thereof, as the case may be, to be repaid on such date.
SECTION 1303. EXERCISE OF OPTION
Securities of any series subject to repayment at the option of the Holders
thereof will contain an "Option to Elect Repayment" form on the reverse of such
Securities. In order for any Security to be repaid at the option of the Holder,
the Trustee must receive at the Place of Payment therefor specified in the terms
of such Security (or at such other place or places of which the Company shall
from time to time notify the Holders of such Securities) not earlier than 60
days nor later than 30 days prior to the Repayment Date (1) the Security so
providing for such repayment together with the "Option to Elect Repayment" form
on the reverse thereof duly completed by the Holder (or by the Holder's attorney
duly authorized in writing) or (2) a telegram, telex, facsimile transmission or
letter from a member of a national securities exchange, or the National
Association of Securities Dealers, Inc., or a commercial bank or trust company
in the United States setting forth the name of the Holder of the Security, the
principal amount of the
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Security, the principal amount of the Security to be repaid, the CUSIP number,
if any, or a description of the tenor and terms of the Security, a statement
that the option to elect repayment is being exercised thereby and a guarantee
that the Security to be repaid, together with the duly completed form entitled
"Option to Elect Repayment" on the reverse of the Security, will be received by
the Trustee not later than the fifth Business Day after the date of such
telegram, telex, facsimile transmission or letter; PROVIDED, HOWEVER, that such
telegram, telex, facsimile transmission or letter shall only be effective if
such Security and form duly completed are received by the Trustee by such fifth
Business Day. If less than the entire principal amount of such Security is to
be repaid in accordance with the terms of such Security, the principal amount of
such Security to be repaid, in increments of the minimum denomination for
Securities of such series, and the denomination or denominations of the Security
or Securities to be issued to the Holder for the portion of the principal amount
of such Security surrendered that is not to be repaid, must be specified. The
principal amount of any Security providing for repayment at the option of the
Holder thereof may not be repaid in part if, following such repayment, the
unpaid principal amount of such Security would be less than the minimum
authorized denomination of Securities of the series of which such Security to be
repaid is a part. Except as otherwise may be provided by the terms of any
Security providing for repayment at the option of the Holder thereof, exercise
or the repayment option by the Holder shall be irrevocable unless waived by the
Company.
SECTION 1304. WHEN SECURITIES PRESENTED FOR REPAYMENT BECOME DUE AND PAYABLE
If Securities of any series providing for repayment at the option of the
Holders thereof shall have been surrendered as provided in this Article Thirteen
and as provided by or pursuant to the terms of such Securities, such Securities
or the portions thereof, as the case may be, to be repaid shall become due and
payable and shall be paid by the Company on the Repayment Date therein
specified, and on and after such Repayment Date (unless the Company shall
default in the payment of such Securities on such Repayment Date) such
Securities shall, if the same were interest-bearing, cease to bear interest and
the coupons for such interest appertaining to any Bearer Securities so to be
repaid, except to the extent provided below, shall be void. Upon surrender of
any such Security for repayment in accordance with such provisions, together
with all coupons, if any, appertaining thereto maturing after the Repayment
Date, the principal amount of such Security so to be repaid shall be paid by the
Company, together with accrued interest, if any, to the Repayment Date;
PROVIDED, HOWEVER, that coupons whose Stated Maturity is on or prior to the
Repayment Date shall be payable only at an office or agency located outside the
United States (except as otherwise provided in Section 1002) and, unless
otherwise specified pursuant to Section 301, only upon presentation and
surrender of such coupons; and PROVIDED FURTHER that, in the case of Securities,
installments of interest, if any, whose Stated Maturity is on or prior to the
Repayment Date shall be payable (but without interest thereon, unless the
Company shall default in the payment thereof) to the Holders of such Securities,
or one or more Predecessor Securities, registered as such at the close of
business on the relevant record dates according to their terms and the
provisions of Section 307.
If any Bearer Security surrendered for repayment shall not be accompanied
by all appurtenant coupons maturing after the Repayment Date, such Security may
be paid after
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deducting from the amount payable therefor as provided in Section 1302 an amount
equal to the face amount of all such missing coupons, or the surrender of such
missing coupon or coupons may be waived by the Company and the Trustee if there
be furnished to them such security or indemnity as they may require to save each
of them and any Paying Agent harmless. If thereafter the Holder of such
Security shall surrender to the Trustee or any Paying Agent any such missing
coupon in respect of which a deduction shall have been made as provided in the
preceding sentence, such Holder shall be entitled to receive the amount so
deducted; PROVIDED, HOWEVER, that interest represented by coupons shall be
payable only at an office or agency located outside the United States (except as
otherwise provided in Section 1002) and, unless otherwise specified as
contemplated by Section 301, only upon presentation and surrender of those
coupons.
If the principal amount of any Security surrendered for repayment shall not
be so repaid upon surrender thereof, such principal amount (together with
interest, if any, thereon accrued to such Repayment Date) shall, until paid,
bear interest from the Repayment Date at the rate of interest or Yield to
Maturity (in the case of Original Issue Discount Securities) set forth in such
Security.
SECTION 1305. SECURITIES REPAID IN PART
Upon surrender of any Registered Security which is to be repaid in part
only, the Company shall execute and the Trustee shall authenticate and deliver
to the Holder of such Security, without service charge and at the expense of the
Company, a new Registered Security or Securities of the same series, of any
authorized denomination specified by the Holder, in an aggregate principal
amount equal to and in exchange for the portion of the principal of such
Security so surrendered which is not to be repaid.
ARTICLE FOURTEEN
DEFEASANCE AND COVENANT DEFEASANCE
SECTION 1401. APPLICABILITY OF ARTICLE; COMPANY'S OPTION TO EFFECT DEFEASANCE
OR COVENANT DEFEASANCE
If, pursuant to Section 301, provision is made for either or both of
(1) defeasance of the Securities of or within a series under Section 1402 or
(2) covenant defeasance of the Securities of or within a series under
Section 1403, then the provisions of such Section or Sections, as the case may
be, together with the other provisions of this Article Fourteen (with such
modifications thereto as may be specified pursuant to Section 301 with respect
to any Securities), shall be applicable to such Securities and any coupons
appertaining thereto, and the Company may at its option by Board Resolution, at
any time, with respect to such Securities and any coupons appertaining thereto,
elect to have Section 1402 (if applicable) or Section 1403 (if applicable) be
applied to such Outstanding Securities and any coupons appertaining thereto upon
compliance with the conditions set forth below in this Article Fourteen.
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SECTION 1402. DEFEASANCE AND DISCHARGE
Upon the Company's exercise of the above option applicable to this
Section 1402 with respect to any Securities of or within a series, the Company
shall be deemed to have been discharged from its obligations with respect to
such Outstanding Securities and any coupons appertaining thereto on the date the
conditions set forth in Section 1404 are satisfied (hereinafter, "defeasance").
For this purpose, such defeasance means that the Company shall be deemed to have
paid and discharged the entire indebtedness represented by such Outstanding
Securities and any coupons appertaining thereto, which shall thereafter be
deemed to be "Outstanding" only for the purposes of Section 1405 and the other
Sections of this Indenture referred to in clauses (1) and (2) below, and to have
satisfied all of its other obligations under such Securities and any coupons
appertaining thereto and this Indenture insofar as such Securities and any
coupons appertaining thereto are concerned (and the Trustee, at the expense of
the Company, shall execute proper instruments acknowledging the same), except
for the following which shall survive until otherwise terminated or discharged
hereunder: (1) the rights of Holders of such Outstanding Securities and any
coupons appertaining thereto to receive, solely from the trust fund described in
Section 1404 and as more fully set forth in such Section, payments in respect of
the principal of (and premium, if any) and interest, if any, on such Securities
and any coupons appertaining thereto when such payments are due, (2) the
Company's obligations with respect to such Securities under Sections 305, 306,
1002 and 1003 and with respect to the payment of Additional Amounts, if any, on
such Securities as contemplated by Section 1010, (3) the rights, powers, trusts,
duties and immunities of the Trustee hereunder, and (4) this Article Fourteen.
Subject to compliance with this Article Fourteen, the Company may exercise its
option under this Section 1402 notwithstanding the prior exercise of its option
under Section 1403 with respect to such Securities and any coupons appertaining
thereto.
SECTION 1403. COVENANT DEFEASANCE
Upon the Company's exercise of the above option applicable to this Section
with respect to any Securities of or within a series, the Company shall be
released from its obligations under Sections 1004 to 1008, inclusive, and, if
specified pursuant to Section 301, its obligations under any other covenant,
with respect to such Outstanding Securities and any coupons appertaining thereto
on and after the date the conditions set forth in Section 1404 are satisfied
(hereinafter, "covenant defeasance"), and such Securities and any coupons
appertaining thereto shall thereafter be deemed to be not "Outstanding" for the
purposes of any direction, waiver, consent or declaration or Act of Holders (and
the consequences of any thereof) in connection with Sections 1004 to 1008,
inclusive, or such other covenant, but shall continue to be deemed "Outstanding"
for all other purposes hereunder. For this purpose, such covenant defeasance
means that, with respect to such Outstanding Securities and any coupons
appertaining thereto, the Company may omit to comply with and shall have no
liability in respect of any term, condition or limitation set forth in any such
Section or such other covenant, whether directly or indirectly, by reason of any
reference elsewhere herein to any such Section or such other covenant or by
reason of reference in any such Section or such other covenant to any other
provision herein or in any other document, and such omission to comply shall not
constitute a default or an Event of Default under Section 501(4) or 501(8) or
otherwise, as the case may be, but, except as specified above,
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the remainder of this Indenture and such Securities and any coupons appertaining
thereto shall be unaffected thereby.
SECTION 1404. CONDITIONS TO DEFEASANCE OR COVENANT DEFEASANCE
The following shall be the conditions to application of Section 1402 or
Section 1403 to any Outstanding Securities of or within a series and any coupons
appertaining thereto:
(1) The Company shall irrevocably have deposited or caused to be
deposited with the Trustee (or another Trustee satisfying the requirements of
Section 607 who shall agree to comply with the provisions of this Article
Fourteen applicable to it) as trust funds in trust for the purpose of making the
following payments, specifically pledged as security for, and dedicated solely
to, the benefit of the Holders of such Securities and any coupons appertaining
thereto, (A) an amount in such currency, currencies or currency unit in which
such Securities and any coupons appertaining thereto are then specified as
payable at Stated Maturity, or (B) Government Obligations applicable to such
Securities and coupons appertaining thereto (determined on the basis of the
currency, currencies or currency unit in which such Securities and coupons
appertaining thereto are then specified as payable at Stated Maturity) which
through the scheduled payment of principal and interest in respect thereof in
accordance with their terms will provide, not later than one day before the due
date of any payment of principal of (and premium, if any) and interest, if any,
on such Securities and any coupons appertaining thereto, or (C) a combination
thereof, in any case, in an amount sufficient, without consideration of any
reinvestment of such principal and interest, in the opinion of a nationally
recognized firm of independent public accountants expressed in a written
certification thereof delivered to the Trustee, to pay and discharge, and which
shall be applied by the Trustee (or other qualifying Trustee) to pay and
discharge, (i) the principal of (and premium, if any) and interest, if any, on
such Outstanding Securities and any coupons appertaining thereto on the Stated
Maturity of such principal or installment of principal or interest and (ii) any
mandatory sinking fund payments or analogous payments applicable to such
Outstanding Securities and any coupons appertaining thereto on the day on which
such payments are due and payable in accordance with the terms of this Indenture
and of such Securities and any coupons appertaining thereto.
(2) Such defeasance or covenant defeasance shall not result in a
breach or violation of, or constitute a default under, this Indenture or any
other material agreement or instrument to which the Company is a party or by
which it is bound.
(3) No Event of Default or event which with notice or lapse of time
or both would become an Event of Default with respect to such Securities and any
coupons appertaining thereto shall have occurred and be continuing on the date
of such deposit or, insofar as Sections 501(6) and 501(7) are concerned, at any
time during the period ending on the 91st day after the date of such deposit (it
being understood that this condition shall not be deemed satisfied until the
expiration of such period).
(4) In the case of an election under Section 1402, the Company shall
have delivered to the Trustee an Opinion of Counsel stating that (A) the Company
has received from, or there has been published by, the Internal Revenue Service
a ruling or (B) since the date of
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execution of this Indenture, there has been a change in the applicable federal
income tax law, in either case to the effect that, and based thereon such
opinion shall confirm that, the Holders of such Outstanding Securities and any
coupons appertaining thereto will not recognize income, gain or loss for federal
income tax purposes as a result of such defeasance and will be subject to
federal income tax on the same amounts, in the same manner and at the same times
as would have been the case if such defeasance had not occurred.
(5) In the case of an election under Section 1403, the Company shall
have delivered to the Trustee an Opinion of Counsel to the effect that the
Holders of such Outstanding Securities and any coupons appertaining thereto will
not recognize income, gain or loss for federal income tax purposes as a result
of such covenant defeasance and will be subject to federal income tax on the
same amounts, in the same manner and at the same times as would have been the
case if such covenant defeasance had not occurred.
(6) The Company shall have delivered to the Trustee an Officers'
Certificate and an Opinion of Counsel, each stating that all conditions
precedent to the defeasance under Section 1402 or the covenant defeasance under
Section 1403 (as the case may be) have been complied with and an Opinion of
Counsel to the effect that either (A) as a result of a deposit pursuant to
clause (1) above and the related exercise of the Company's option under
Section 1402 or 1403 (as the case may be), registration is not required under
the Investment Company Act of 1940, as amended, by the Company, with respect to
the trust funds representing such deposit or by the Trustee for such trust funds
or (B) all necessary registrations under said act have been effected.
(7) Notwithstanding any other provisions of this Section 1404, such
defeasance or covenant defeasance shall be effected in compliance with any
additional or substitute terms, conditions or limitations which may be imposed
on the Company in connection therewith pursuant to Section 301.
SECTION 1405. DEPOSITED MONEY AND GOVERNMENT OBLIGATIONS TO BE HELD IN TRUST;
OTHER MISCELLANEOUS PROVISIONS
Subject to the provisions of the last paragraph of Section 1003, all money
and Government Obligations (or other property as may be provided pursuant to
Section 301) (including the proceeds thereof) deposited with the Trustee (or
other qualifying Trustee, collectively for purposes of this Section 1405, the
"Trustee") pursuant to Section 1404 in respect of any Outstanding Securities of
any series and any coupons appertaining thereto shall be held in trust and
applied by the Trustee, in accordance with the provisions of such Securities and
any coupons appertaining thereto and this Indenture, to the payment, either
directly or through any Paying Agent (including the Company acting as its own
Paying Agent) as the Trustee may determine, to the Holders of such Securities
and any coupons appertaining thereto of all sums due and to become due thereon
in respect of principal (and premium, if any) and interest and Additional
Amounts, if any, but such money need not be segregated from other funds except
to the extent required by law.
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Unless otherwise specified with respect to any Security pursuant to
Section 301, if, after a deposit referred to in Section 1404(1) has been made,
(1) the Holder of a Security in respect of which such deposit was made is
entitled to, and does, elect pursuant to Section 301 or the terms of such
Security to receive payment in a currency or currency unit other than that in
which the deposit pursuant to Section 1404(1) has been made in respect of such
Security or (2) a Conversion Event occurs in respect of the currency or currency
unit in which the deposit pursuant to Section 1404(1) has been made, the
indebtedness represented by such Security and any coupons appertaining thereto
shall be deemed to have been, and will be, fully discharged and satisfied
through the payment of the principal of (and premium, if any), and interest, if
any, on such Security as the same becomes due out of the proceeds yielded by
converting (from time to time as specified below in the case of any such
election) the amount or other property deposited in respect of such Security
into the currency or currency unit in which such Security becomes payable as a
result of such election or Conversion Event based on the applicable market
exchange rate for such currency or currency unit in effect on the second
Business Day prior to each payment date, except, with respect to a Conversion
Event, for such currency or currency unit in effect (as nearly as feasible) at
the time of the Conversion Event.
The Company shall pay and indemnify the Trustee against any tax, fee or
other charge imposed on or assessed against the Government Obligations deposited
pursuant to Section 1404 or the principal and interest received in respect
thereof other than any such tax, fee or other charge which by law is for the
account of the Holders of such Outstanding Securities and any coupons
appertaining thereto.
Anything in this Article Fourteen to the contrary notwithstanding, subject
to Section 606, the Trustee shall deliver or pay to the Company from time to
time upon Company Request any money or Government Obligations (or other property
and any proceeds therefrom) held by it as provided in Section 1404 which, in the
opinion of a nationally recognized firm of independent public accountants
expressed in a written certification thereof delivered to the Trustee, are in
excess of the amount thereof which would then be required to be deposited to
effect a defeasance or covenant defeasance, as applicable, in accordance with
this Article Fourteen.
ARTICLE FIFTEEN
MEETINGS OF HOLDERS OF SECURITIES
SECTION 1501. PURPOSES FOR WHICH MEETINGS MAY BE CALLED
A meeting of Holders of Securities of any series may be called at any time
and from time to time pursuant to this Article Fifteen to make, give or take any
request, demand, authorization, direction, notice, consent, waiver or other
action provided by this Indenture to be made, given or taken by Holders of
Securities of such series.
SECTION 1502. CALL, NOTICE AND PLACE OF MEETINGS
(1) The Trustee may at any time call a meeting of Holders of
Securities of any series for any purpose specified in Section 1501, to be held
at such time and at such place as the
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Trustee shall determine. Notice of every meeting of Holders of Securities of
any series, setting forth the time and the place of such meeting and in general
terms the action proposed to be taken at such meeting, shall be given, in the
manner provided in Section 106, not less than 20 nor more than 180 days prior to
the date fixed for the meeting.
(2) In case at any time the Company, pursuant to a Board Resolution,
or the Holders of at least [10]% in principal amount of the Outstanding
Securities of any series shall have requested the Trustee to call a meeting of
the Holders of Securities of such series for any purpose specified in
Section 1501, by written request setting forth in reasonable detail the action
proposed to be taken at the meeting, and the Trustee shall not have made the
first publication of the notice of such meeting within 20 days after receipt of
such request or shall not thereafter proceed to cause the meeting to be held as
provided herein, then the Company or the Holders of Securities of such series in
the amount above specified, as the case may be, may determine the time and the
place for such meeting and may call such meeting for such purposes by giving
notice thereof as provided in clause (1) of this Section 1502.
SECTION 1503. PERSONS ENTITLED TO VOTE AT MEETINGS
To be entitled to vote at any meeting of Holders of Securities of any
series, a Person shall be (1) a Holder of one or more Outstanding Securities of
such series or (2) a Person appointed by an instrument in writing as proxy for a
Holder or Holders of one or more Outstanding Securities of such series by such
Holder or Holders. The only Persons who shall be entitled to be present or to
speak at any meeting of Holders of Securities of any series shall be the Persons
entitled to vote at such meeting and their counsel, any representatives of the
Trustee and its counsel and any representatives of the Company and its counsel.
SECTION 1504. QUORUM; ACTION
The Persons entitled to vote a majority in principal amount of the
Outstanding Securities of a series shall constitute a quorum for a meeting of
Holders of Securities of such series; PROVIDED, HOWEVER, that if any action is
to be taken at such meeting with respect to a consent or waiver which this
Indenture expressly provides may be given by the Holders of not less than a
specified percentage in principal amount of the Outstanding Securities of a
series, the Persons entitled to vote such specified percentage in principal
amount of the Outstanding Securities of such series shall constitute a quorum.
In the absence of a quorum within 30 minutes after the time appointed for any
such meeting, the meeting shall, if convened at the request of Holders of
Securities of such series, be dissolved. In any other case the meeting may be
adjourned for a period of not less than 10 days as determined by the chairman of
the meeting prior to the adjournment of such meeting. In the absence of a
quorum at the reconvening of any such adjourned meeting, such adjourned meeting
may be further adjourned for a period of not less than 10 days; at the
reconvening of any meeting adjourned or further adjourned for lack of a quorum,
the persons entitled to vote [25]% in aggregate principal amount of the then
Outstanding Securities shall constitute a quorum for the taking of any action
set forth in the notice of the original meeting. Notice of the reconvening of
any adjourned meeting shall be given as provided in Section 1502(2), except that
such notice need be given only once not less than five days prior to the date on
which the meeting is scheduled to be reconvened.
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<PAGE>
Except as limited by the proviso to Section 902, any resolution presented
to a meeting or adjourned meeting duly reconvened at which a quorum is present
as aforesaid may be adopted by the affirmative vote of the Holders of a majority
in principal amount of the Outstanding Securities of that series; PROVIDED,
HOWEVER, that, except as limited by the proviso to Section 902, any resolution
with respect to any request, demand, authorization, direction, notice, consent,
waiver or other action which this Indenture expressly provides may be made,
given or taken by the Holders of a specified percentage, which is less than a
majority, in principal amount of the Outstanding Securities of a series may be
adopted at a meeting or an adjourned meeting duly reconvened and at which a
quorum is present as aforesaid by the affirmative vote of the Holders of such
specified percentage in principal amount of the Outstanding Securities of that
series.
Any resolution passed or decision taken at any meeting of Holders of
Securities of any series duly held in accordance with this Section 1504 shall be
binding on all the Holders of Securities of such series and the related coupons,
whether or not present or represented at the meeting.
Notwithstanding the foregoing provisions of this Section 1504, if any
action is to be taken at a meeting of Holders of Securities of any series with
respect to any request, demand, authorization, direction, notice, consent,
waiver or other action that this Indenture expressly provides may be made, given
or taken by the Holders of a specified percentage in principal amount of all
Outstanding Securities affected thereby, or of the Holders of such series and
one or more additional series:
(1) there shall be no minimum quorum requirement for such meeting and
(2) the principal amount of the Outstanding Securities of such series
that vote in favor of such request, demand, authorization, direction, notice,
consent, waiver or other action shall be taken into account in determining
whether such request, demand, authorization, direction, notice, consent, waiver
or other action has been made, given or taken under this Indenture.
SECTION 1505. DETERMINATION OF VOTING RIGHTS, CONDUCT AND ADJOURNMENT OF
MEETINGS
(1) Notwithstanding any provisions of this Indenture, the Trustee may
make such reasonable regulations as it may deem advisable for any meeting of
Holders of Securities of a series in regard to proof of the holding of
Securities of such series and of the appointment of proxies and in regard to the
appointment and duties of inspector of elections, the submission and examination
of proxies, certificates and other evidence of the right to vote, and such other
matters concerning the conduct of the meeting as it shall deem appropriate.
Except as otherwise permitted or required by any such regulations, the holding
of Securities shall be proved in the manner specified in Section 104 and the
appointment of any proxy shall be proved in the manner specified in Section 104
or by having the signature of the Person executing the proxy witnessed or
guaranteed by any trust company, bank or banker authorized by Section 104 to
certify to the holding of Bearer Securities. Such regulations may provide that
written instruments appointing proxies, regular on their face, may be presumed
valid and genuine without the proof specified in Section 104 or other proof.
-75-
<PAGE>
(2) The Trustee shall, by an instrument in writing appoint a
temporary chairman of the meeting, unless the meeting shall have been called by
the Company or by Holders of Securities as provided in Section 1502(2), in which
case the Company or the Holders of Securities of the series calling the meeting,
as the case may be, shall in like manner appoint a temporary chairman. A
permanent chairman and a permanent secretary of the meeting shall be elected by
vote of the Persons entitled to vote a majority in principal amount of the
Outstanding Securities of such series represented at the meeting.
(3) At any meeting each Holder of a Security of such series or proxy
shall be entitled to one vote for each $1,000 principal amount of the
Outstanding Securities of such series held or represented by him; PROVIDED,
HOWEVER, that no vote shall be cast or counted at any meeting in respect of any
Security challenged as not Outstanding and ruled by the chairman of the meeting
to be not Outstanding. The chairman of the meeting shall have no right to vote,
except as a Holder of a Security of such series or proxy.
(4) Any meeting of Holders of Securities of any series duly called
pursuant to Section 1502 at which a quorum is present may be adjourned from time
to time by Persons entitled to vote a majority in principal amount of the
Outstanding Securities of such series represented at the meeting, and the
meeting may be held as so adjourned without further notice.
SECTION 1506. COUNTING VOTES AND RECORDING ACTION OF MEETINGS
The vote upon any resolution submitted to any meeting of Holders of
Securities of any series shall be by written ballots on which shall be
subscribed the signatures of the Holders of Securities of such series or of
their representatives by proxy and the principal amounts and serial numbers of
the Outstanding Securities of such series held or represented by them. The
permanent chairman of the meeting shall appoint two inspectors of votes who
shall count all votes cast at the meeting for or against any resolution and who
shall make and file with the secretary of the meeting their verified written
reports in duplicate of all votes cast at the meeting. A record, at least in
duplicate, of the proceedings of each meeting of Holders of Securities of any
series shall be prepared by the secretary of the meeting and there shall be
attached to said record the original reports of the inspectors of votes on any
vote by ballot taken thereat and affidavits by one or more persons having
knowledge of the fact, setting forth a copy of the notice of the meeting and
showing that said notice was given as provided in Section 1502 and, if
applicable, Section 1504. Each copy shall be signed and verified by the
affidavits of the permanent chairman and secretary of the meeting and one such
copy shall be delivered to the Company and another to the Trustee to be
preserved by the Trustee, the latter to have attached thereto the ballots voted
at the meeting. Any record so signed and verified shall be conclusive evidence
of the matters therein stated.
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<PAGE>
SIGNATURES AND SEALS
IN WITNESS WHEREOF, the parties hereto have caused this Indenture to be
duly executed all as of the day and year first above written.
SHURGARD STORAGE CENTERS, INC.
By:
---------------------------------------
Title:
[SEAL]
Attest:
- ----------------------------------
Title:
[Name of Trustee], as Trustee
By:
---------------------------------------
Title:
[SEAL]
Attest:
- ---------------------------------
Title:
-77-
<PAGE>
STATE OF WASHINGTON )
) ss.
COUNTY OF ______________ )
On this _____ day of _________________, 19__, before me, the undersigned, a
Notary Public in and for the State of Washington, duly commissioned and sworn,
personally appeared ______________________________________________ and
______________________________________________, to me known to be the persons
who signed as ______________________________________________ and
______________________________________________, respectively, of SHURGARD
STORAGE CENTERS, INC., the corporation that executed the within and foregoing
instrument, and acknowledged said instrument to be the free and voluntary act
and deed of said corporation for the uses and purposes therein mentioned, and on
oath stated that they were duly elected, qualified and acting as said officers
of the corporation, that they were authorized to execute said instrument and
that the seal affixed, if any, is the corporate seal of said corporation.
IN WITNESS WHEREOF I have hereunto set my hand and official seal the day
and year first above written.
----------------------------------------
(Signature of Notary)
----------------------------------------
(Print or stamp name of Notary)
NOTARY PUBLIC in and for the State
of Washington, residing at_____________.
My Appointment Expires: _______________.
STATE OF ______________ )
) ss.
COUNTY OF _____________ )
On this _____ day of _________________, 19__, before me, the undersigned, a
Notary Public in and for the State of ___________, duly commissioned and sworn,
personally appeared ________________________ and ___________________________, to
me known to be the persons who signed as __________________________________ and
__________________________, respectively, of
________________________________________, the corporation that executed the
within and foregoing instrument, and acknowledged said instrument to be the free
and voluntary act and deed of said corporation for the uses and purposes therein
mentioned, and on oath stated that they were duly elected, qualified and acting
as said officers of the corporation, that they were authorized to execute said
instrument and that the seal affixed, if any, is the corporate seal of said
corporation.
-78-
<PAGE>
IN WITNESS WHEREOF I have hereunto set my hand and official seal the day
and year first above written.
-----------------------------------
(Signature of Notary)
-----------------------------------
(Print or stamp name of Notary)
NOTARY PUBLIC in and for the State
of __________, residing at _______.
My Appointment Expires: __________.
-79-
<PAGE>
EXHIBIT A
FORM OF REDEEMABLE OR NONREDEEMABLE SECURITY
[FACE OF SECURITY]
[If the Holder of this Security (as indicated below it) is The Depository Trust
Company ("DTC") or a nominee of DTC, this Security is a Global Security and the
following two legends apply:
UNLESS THIS SECURITY IS PRESENTED BY AN AUTHORIZED REPRESENTATIVE OF THE
DEPOSITORY TRUST COMPANY ("DTC"), 55 WATER STREET, NEW YORK, NEW YORK TO THE
ISSUER OR ITS AGENT FOR REGISTRATION OF TRANSFER, EXCHANGE OR PAYMENT, AND SUCH
SECURITY ISSUED IS REGISTERED IN THE NAME OF CEDE & CO., OR SUCH OTHER NAME AS
REQUESTED BY AN AUTHORIZED REPRESENTATIVE OF DTC, ANY TRANSFER, PLEDGE OR OTHER
USE HEREOF FOR VALUE OR OTHERWISE BY OR TO ANY PERSON IS WRONGFUL, SINCE THE
REGISTERED OWNER HEREOF, CEDE & CO., HAS AN INTEREST HEREIN.
UNLESS AND UNTIL THIS SECURITY IS EXCHANGED IN WHOLE OR IN PART FOR SECURITIES
IN CERTIFICATED FORM, THIS SECURITY MAY NOT BE TRANSFERRED EXCEPT AS A WHOLE BY
DTC TO A NOMINEE THEREOF OR BY AS NOMINEE THEREOF TO DTC OR ANOTHER NOMINEE OF
DTC OR BY DTC OR ANY SUCH NOMINEE TO A SUCCESSOR OF DTC OR A NOMINEE OF SUCH
SUCCESSOR.]
[IF THIS SECURITY IS AN ORIGINAL ISSUE DISCOUNT SECURITY, INSERT -- FOR PURPOSES
OF SECTIONS 1273 AND 1275 OF THE UNITED STATES INTERNAL REVENUE CODE, THE AMOUNT
OF ORIGINAL ISSUE DISCOUNT ON THIS SECURITY IS ___% OF ITS PRINCIPAL AMOUNT, THE
ISSUE DATE IS ______________, 19__ [AND] THE YIELD TO MATURITY IS ____%. [THE
METHOD USED TO DETERMINE THE AMOUNT OF ORIGINAL ISSUE DISCOUNT APPLICABLE TO THE
SHORT ACCRUAL PERIOD OF _________, 19__ TO ____________, 19__, IS ____% OF THE
PRINCIPAL AMOUNT OF THIS SECURITY.]
SHURGARD STORAGE CENTERS, INC.
[Designation of Series]
No. _____ $______
SHURGARD STORAGE CENTERS, INC., a Delaware corporation (herein referred to as
the "Company," which term includes any successor corporations under the
Indenture referred to on the reverse hereof), for value received, hereby
promises to pay to _______________________ ____________________ or registered
assigns the principal sum of _______ Dollars on ____________________ (the
"Stated Maturity Date") [OR INSERT DATE FIXED FOR EARLIER REDEMPTION (the
"Redemption Date)" and, together with the Stated Maturity Date with respect to
principal repayable on such date, the "Maturity Date")].
[IF THE SECURITY IS TO BEAR INTEREST PRIOR TO MATURITY, INSERT--and to pay
interest thereon from _____________________ or from the most recent interest
payment date to which interest has
A-1
<PAGE>
been paid or duly provided for, semi-annually on ___________ and _______________
in each year (each, an "Interest Payment Date"), commencing ________________, at
the rate of ___% per annum, until the principal hereof is paid or duly provided
for. The interest so payable, and punctually paid or duly provided for, on any
Interest Payment Date will, as provided in such Indenture, be paid to the Holder
in whose name this Security (or one or more Predecessor Securities) is
registered at the close of business on the Regular Record Date for such
interest, which shall be the ____________ or ______________ (whether or not a
Business Day, as defined below), as the case may be, next preceding such
Interest Payment Date [at the office or agency of the Company maintained for
such purpose; PROVIDED, HOWEVER, that such interest may be paid, at the
Company's option, by mailing a check to such Holder at his registered address or
by transfer of funds to an account maintained by such Holder within the United
States]. Any such interest not so punctually paid or duly provided for shall
forthwith cease to be payable to the Holder on such Regular Record Date, and may
be paid to the Holder in whose name this Security (or one or more Predecessor
Securities) is registered at the close of business on a Special Record Date for
the payment of such Defaulted Interest to be fixed by the Trustee, notice
whereof shall be given to Holders of Securities of this series not less than 10
days prior to such Special Record Date, or may be paid at any time in any other
lawful manner not inconsistent with the requirements of any securities exchange
on which the Securities of this series may be listed, and upon such notice as
may be required by such exchange, all as more fully provided in the Indenture.
Interest will be computed on the basis of a 360-day year of twelve 30-day
months.]
[IF THE SECURITY IS NOT TO BEAR INTEREST PRIOR TO MATURITY, INSERT--The
principal of this Security shall not bear interest except in the case of a
default in payment of principal upon acceleration, upon redemption or at the
[Stated] Maturity Date and in such case the overdue principal of this Security
shall bear interest at the rate of ___% per annum (to the extent that the
payment of such interest shall be legally enforceable), which shall accrue from
the date of such default in payment to the date payment of such principal has
been made or duly provided for. Interest on any overdue principal shall be
payable on demand. Any such interest on any overdue principal that is not so
paid on demand shall bear interest at the rate of ___% per annum (to the extent
that the payment of such interest shall be legally enforceable), which shall
accrue from the date of such demand for payment to the date payment of such
interest has been made or duly provided for, and such interest shall also be
payable on demand.]
The principal of this Security payable on the [Stated] Maturity Date [or the
principal of, premium, if any, and, if the Redemption Date is not an Interest
Payment Date, interest on this Security payable on the Redemption Date] will be
paid against presentation of this Security at the office or agency of the
Company maintained for that purpose in ___________________, in such coin or
currency of the United States as at the time of payment is legal tender for the
payment of public and private debts.
Interest payable on this Security on any Interest Payment Date and on the
[Stated] Maturity Date [or Redemption Date, as the case may be,] will include
interest accrued from and including the next preceding Interest Payment Date in
respect of which interest has been paid or duly provided for (or from and
including ___________, if no interest has been paid on this Security) to but
excluding such Interest Payment Date or the [Stated] Maturity Date [or
Redemption Date, as the case may be]. If any Interest Payment Date or the
[Stated] Maturity Date [or Redemption Date]
A-2
<PAGE>
falls on a day that is not a Business Day, principal, premium, if any, and/or
interest payable with respect to such Interest Payment Date or [Stated] Maturity
Date [or Redemption Date, as the case may be,] will be paid on the next
succeeding Business Day with the same force and effect as if it were paid on the
date such payment was due, and no interest shall accrue on the amount so payable
for the period from and after such Interest Payment Date or [Stated] Maturity
Date [or Redemption Date, as the case may be]. "Business Day" means any day,
other than a Saturday or Sunday, on which banks in New York are not required or
authorized by law or executive order to close.
[IF THIS SECURITY IS A GLOBAL SECURITY, INSERT--All payments of principal,
premium, if any, and interest in respect of this Security will be made by the
Company in immediately available funds.]
Reference is hereby made to the further provisions of this Security set forth on
the reverse hereof, which further provisions shall for all purposes have the
same effect as if set forth at this place.
Unless the Certificate of Authentication hereon has been executed by the Trustee
by manual signature of one of its authorized signatories, this Security shall
not be entitled to any benefit under the Indenture, or be valid or obligatory
for any purpose.
IN WITNESS WHEREOF, the Company has caused this instrument to be duly executed
under its [facsimile] corporate seal.
Dated: SHURGARD STORAGE CENTERS, INC.
-------------
By:
-------------------------------------
Attest:
- -------------------
Secretary
A-3
<PAGE>
[Reverse of Security]
SHURGARD STORAGE CENTERS, INC.
This Security is one of a duly authorized issue of securities of the Company,
issued and to be issued in one or more series under an Indenture, dated as of
___________, 199__ (herein called the "Indenture") between the Company and
_______________________, as Trustee (herein called the "Trustee," which term
includes any successor trustee under the Indenture with respect to the series of
which this Security is a part), to which Indenture and all indentures
supplemental thereto reference is hereby made for a statement of the respective
rights, limitations of rights, duties and immunities thereunder of the Company,
the Trustee and the Holders of the Securities, and of the terms upon which the
Securities are, and are to be, authenticated and delivered. This Security is
one of the duly authorized series of Securities designated on the face hereof
(collectively, the "Securities"), [IF APPLICABLE, INSERT--and the aggregate
principal amount of the securities to be issued under such series is limited to
$_________ (except for Securities authenticated and delivered upon transfer of,
or in exchange for, or in lieu of other Securities).] All terms used in this
Security which are defined in the Indenture shall have the meanings assigned to
them in the Indenture.
If an Event of Default shall occur and be continuing, the principal of the
Securities of this series may be declared due and payable in the manner and with
the effect provided in the Indenture.
[IF APPLICABLE, INSERT--The Securities may not be redeemed prior to the [Stated]
Maturity Date.]
[IF APPLICABLE, INSERT--The Securities are subject to redemption [(1) [IF
APPLICABLE, INSERT--on _____________ in any year commencing with the year ____
and ending with the year ____ through operation of the sinking fund for this
series at a Redemption Price equal to 100% of the principal amount and (2) ] [IF
APPLICABLE, INSERT--at any time [on or after _____________], as a whole or in
part, at the election of the Company, at the following Redemption Prices
(expressed as percentages of the principal amount):
If redeemed on or before ______________, ___% and if redeemed during the 12-
month period beginning ___________ of the years indicated, at the Redemption
Prices indicated below.
YEAR REDEMPTION PRICE YEAR REDEMPTION PRICE
and thereafter at a Redemption Price equal to ___% of the principal amount,
together, in the case of any such redemption [IF APPLICABLE, INSERT--(whether
through operation of the sinking fund or otherwise)], with accrued interest to
the Redemption Date; PROVIDED, HOWEVER, that installments of interest on this
Security whose Stated Maturity is on or prior to such Redemption Date will be
payable to the Holder of this Security, or one or more Predecessor Securities,
of record at the close of business on the relevant Record Dates referred to on
the face hereof, all as provided in the Indenture.]
A-4
<PAGE>
[IF APPLICABLE, INSERT--The Securities are subject to redemption (1) on
_________ in any year commencing with the year ____ and ending with the year
____ through operation of the sinking fund for this series at the Redemption
Prices for redemption through operation of the sinking fund (expressed as
percentages of the principal amount) set forth in the table below and (2) at any
time [on or after _____], as a whole or in part, at the election of the Company,
at the Redemption Prices for redemption otherwise than through operation of the
sinking fund (expressed as percentages of the principal amount) set forth in the
table below: If redeemed during the 12-month period beginning ____________ of
the years indicated,
Redemption Price for Redemption Price for
Redemption Through Redemption Otherwise
Operation of the Than Through Operation
Year Sinking Fund of the Sinking Fund
---- ------------ -------------------
and thereafter at a Redemption Price equal to ____% of the principal amount,
together, in the case of any such redemption (whether through operation of the
sinking fund or otherwise), with accrued interest to the Redemption Date;
PROVIDED, HOWEVER, that installments of interest on this Security whose Stated
Maturity is on or prior to such Redemption Date will be payable to the Holder of
this Security, or one or more Predecessor Securities, of record at the close of
business on the relevant record dates referred to on the face hereof, all as
provided in the Indenture.]
[IF APPLICABLE, INSERT--Notwithstanding the foregoing, the Company may not,
prior to __________, redeem any Securities as contemplated by [clause (2) of]
the preceding paragraph as a part of, or in anticipation of, any refunding
operation by the application, directly or indirectly, of money borrowed having
an interest cost to the Company (calculated in accordance with generally
accepted financial practice) of less than ___% per annum.]
[IF APPLICABLE, INSERT--The sinking fund for the Securities provides for
the redemption on _________ in each year, beginning with the year ____ and
ending with the year ____, of [not less than] $_____] [("mandatory sinking
fund") and not more than $_____] aggregate principal amount of the Securities.
[The Securities acquired or redeemed by the Company otherwise than through
[mandatory] sinking fund payments may be credited against subsequent [mandatory]
sinking fund payments otherwise required to be made in the [DESCRIBE ORDER]
order in which they become due.]]
Notice of redemption will be given by mail to Holders of Securities, not
less than 30 nor more than 60 days prior to the Redemption Date, all as provided
in the Indenture.
In the event of redemption of the Security in part only, a new Security or
Securities for the unredeemed portion hereof shall be issued in the name of the
Holder hereof upon the cancellation hereof.
[IF APPLICABLE, INSERT CONVERSION PROVISIONS SET FORTH IN ANY BOARD
RESOLUTION OR INDENTURE SUPPLEMENTAL TO THE INDENTURE.]
A-5
<PAGE>
The Indenture permits, with certain exceptions as therein provided, the
amendment thereof and the modification of the rights and obligations of the
Company and the rights of the Holders of the Securities under the Indenture at
any time by the Company and the Trustee with the consent of the Holders of not
less than a majority of the aggregate principal amount of all Securities issued
under the Indenture at the time Outstanding and affected thereby. The Indenture
also contains provisions permitting the Holders of not less than a majority of
the aggregate principal amount of the Outstanding Securities, on behalf of the
Holders of all such Securities, to waive compliance by the Company with certain
provisions of the Indenture. Furthermore, provisions in the Indenture permit
the Holders of not less than a majority of the aggregate principal amount, in
certain instances, of the Outstanding Securities of any series to waive, on
behalf of all of the Holders of Securities of such series, certain past defaults
under the Indenture and their consequences. Any such consent or waiver by the
Holder of this Security shall be conclusive and binding upon such Holder and
upon all future Holders of this Security and other Securities issued upon the
registration of transfer hereof or in exchange herefor or in lieu hereof,
whether or not notation of such consent or waiver is made upon this Security.
No reference herein to the Indenture and no provision of this Security or
of the Indenture shall alter or impair the obligation of the Company, which is
absolute and unconditional, to pay the principal of (and premium, if any) and
interest on this Security at the tines, places and rate, and in the coin or
currency, herein prescribed.
As provided in the Indenture and subject to certain limitations therein
[and herein] set forth, the transfer of this Security is registrable in the
Security Register of the Company upon surrender of this security for
registration of transfer at the office or agency of the Company in any place
where the principal of (and premium, if any) and interest on this Security are
payable, duly endorsed by, or accompanied by a written instrument of transfer in
form satisfactory to the Company and the Security Registrar duly executed by,
the Holder hereof or by his attorney duly authorized in writing, and thereupon
one or more new Securities, of authorized denominations and for the same
aggregate principal amount, will be issued to the designated transferee or
transferees.
As provided in the Indenture and subject to certain limitations therein
[and herein] set forth, this Security is exchangeable for a like aggregate
principal amount of Securities of different authorized denominations but
otherwise having the same terms and conditions, as requested by the Holder
hereof surrendering the same.
The Securities of this series are issuable only in registered form [without
coupons] in denominations of $___________ and any integral multiple thereof.
No service charge shall be made for any such registration of transfer or
exchange, but the Company may require payment of a sum sufficient to cover any
tax or other governmental charge payable in connection therewith.
Prior to due presentment of this Security for registration of transfer, the
Company, the Trustee and any agent of the Company or the Trustee may treat the
Person in whose name this Security is registered as the owner hereof for all
purposes, whether or not this Security be
A-6
<PAGE>
overdue, and neither the Company, the Trustee nor any such agent shall be
affected by notice to the contrary.
No recourse shall be had for the payment of the principal of or premium, if
any, or the interest on this Security, or for any claim based hereon, or
otherwise in respect hereof, or based on or in respect of the Indenture or any
indenture supplemental thereto, against any past, present or future stockholder,
employee, officer or director, as such, of the Company or of any successor,
either directly or through the Company or any successor, whether by virtue of
any constitution, statute or rule of law or by the enforcement of any assessment
or penalty or otherwise, all such liability being, by the acceptance hereof and
as part of the consideration for the issue hereof, expressly waived and
released.
The Indenture and the Securities shall be governed by and construed in
accordance with the laws of the State of Washington applicable to agreements
made and to be performed entirely in such State.
TRUSTEE'S CERTIFICATE OF AUTHENTICATION
This is one of the Securities of the series designated therein referred to
in the within-mentioned Indenture.
[NAME OF TRUSTEE]
as Trustee
By:
--------------------------------
Authorized Signatory
A-7
<PAGE>
EXHIBIT B
FORMS OF CERTIFICATION
EXHIBIT B-1
FORM OF CERTIFICATE TO BE GIVEN BY PERSON ENTITLED
TO RECEIVE BEARER SECURITY OR TO OBTAIN INTEREST
PAYABLE PRIOR TO THE EXCHANGE DATE
CERTIFICATE
[Insert title or sufficient description of Securities to be delivered]
This is to certify that, as of the date hereof, and except as set forth
below, the above-captioned Securities held by you for our account are owned by
(i) person(s) that are not citizens or residents of the United States, domestic
partnerships, domestic corporations or any estate or trust the income of which
is subject to United States federal income taxation regardless of its source
("United States Person(s)"), (ii) United States Person(s) that are (a) foreign
branches of United States financial institutions (financial institutions, as
defined in United States Treasury Regulations Section 1.165-12(c)(1)(v), are
herein referred to as "financial institutions") purchasing for their own account
or for resale or (b) United States Person(s) who acquired the Securities through
foreign branches of United States financial institutions and who hold the
Securities through such United States financial institutions on the date hereof
(and in either case (a) or (b), each such United States financial institution
hereby agrees, on its own behalf or through its agent, that you may advise
Shurgard Storage Centers, Inc. or its agent that such financial institution will
comply with the requirements of Section 165(j)(3)(A), (B) or (C) of the United
States Internal Revenue Code of 1986, as amended, and the regulations
thereunder), or (iii) are owned by United States or foreign financial
institution(s) for purposes of resale during the restricted period (as defined
in United States Treasury Regulations Section 1.163-5(c)(2)(i)(D)(7)), and, in
addition, if the owner is a United States or foreign financial institution
described in clause (iii) above (whether or not also described in clause (i) or
(ii)), this is to further certify that such financial institution has not
acquired the Securities for purposes of resale directly or indirectly to a
United States Person or to a person within the United States or its possessions.
As used herein, "United States" means the United States of America
(including the states and the District of Columbia); and its "possessions"
include Puerto Rico, the U.S. Virgin Islands, Guam, American Samoa, Wake Island
and the Northern Mariana Islands.
We undertake to advise you promptly by tested telex on or prior to the date
on which you intend to submit your certification relating to the above-captioned
Securities held by you for our account in accordance with your Operating
Procedures if any applicable statement herein is not correct on such date, and
in the absence of any such notification it may be assumed that this
certification applies as of such date.
B-1
<PAGE>
This certificate excepts and does not relate to [US$ ____________] of such
interest in the above-captioned Securities in respect of which we are not able
to certify and as to which we understand an exchange for an interest in a
permanent Global Security or an exchange for and delivery of definitive
Securities (or, if relevant, collection of any interest) cannot be made until we
do so certify.
We understand that this certificate may be required in connection with
certain tax legislation in the United States. If administrative or legal
proceedings are commenced or threatened in connection with which this
certificate is or would be relevant, we irrevocably authorize you to produce
this certificate or a copy thereof to any interested party in such proceedings.
Dated: ________________, _____
[To be dated no earlier than the 15th day prior to
(i) the Exchange Date or (ii) the relevant Interest
Payment Date occurring prior to the Exchange
Date, as applicable]
[Name of Person Making
Certification]
-----------------------------------
(Authorized Signator)
Name:
Title:
B-2
<PAGE>
EXHIBIT B-2
FORM OF CERTIFICATE TO BE GIVEN BY EUROCLEAR
AND CEDEL S.A. IN CONNECTION WITH THE EXCHANGE OF
A PORTION OF A TEMPORARY GLOBAL SECURITY OR TO
OBTAIN INTEREST PAYABLE PRIOR TO THE EXCHANGE DATE
CERTIFICATE
[Insert title or sufficient description of Securities to be delivered]
This is to certify that, based solely on written certifications that we
have received in writing, by tested telex or by electronic transmission from
each of the persons appearing in our records as persons entitled to a portion of
the principal amount set forth below (our "Member Organizations") substantially
in the form attached hereto, as of the date hereof, [US$]
_________________________ principal amount of the above-captioned Securities is
owned by (i) person(s) that are not citizens or residents of the United States,
domestic partnerships, domestic corporations or any estate or trust the income
of which is subject to United States federal income taxation regardless of its
source ("United States Person(s)"), (ii) United States Person(s) that are
(a) foreign branches of United States financial institutions (financial
institutions, as defined in United States Treasury Regulations Section 1.165-
12(c)(1)(v), are herein referred to as "financial institutions") purchasing for
their own account or for resale or (b) United States Person(s) who acquired the
Securities through foreign branches of United States financial institutions and
who hold the Securities through such United States financial institutions on the
date hereof (and in either case (a) or (b), each such financial institution has
agreed, on its own behalf or through its agent, that we may advise Shurgard
Storage Centers, Inc. or its agent that such financial institution will comply
with the requirements of Section 165(j)(3)(A), (B) or (C) of the Internal
Revenue Code of 1986, as amended, and the regulations thereunder), or
(iii) United States or foreign financial institution(s) for purposes of resale
during the restricted period (as defined in United States Treasury Regulations
Section 1.163-5(c)(2)(i)(D)(7)), and, to the further effect, that financial
institutions described in clause (iii) (whether or not also described in clause
(i) or (ii)) have certified that they have not acquired the Securities for
purposes of resale directly or indirectly to a United States Person or to a
person within the United States or its possessions.
As used herein, "United States" means the United States of America
(including the states and the District of Columbia); and its "possessions"
include Puerto Rico, the U.S. Virgin Islands, Guam, American Samoa, Wake Island
and the Northern Mariana Islands.
We further certify that (i) we are not making available herewith for
exchange (or, if relevant, collection of any interest) any portion of the
temporary Global Security representing the above-captioned Securities excepted
in the above-referenced certificates of Member Organizations and (ii) as of the
date hereof we have not received any notification from any of our Member
Organizations to the effect that the statements made by such Member
Organizations with respect to any portion of the part submitted herewith for
exchange (or, if relevant, collection of any interest) are no longer true and
cannot be relied upon as of the date hereof.
B-2-1
<PAGE>
We understand that this certification is required in connection with
certain tax legislation in the United States. If administrative or legal
proceedings are commenced or threatened in connection with which this
certificate is or would be relevant, we irrevocably authorize you to produce
this certificate or a copy thereof to any interested party in such proceedings.
Dated: _____________ ____
[To be dated no earlier than the Exchange Date
or the relevant Interest Payment Date occurring
prior to the Exchange Date, as applicable]
[Morgan Guaranty Trust Company of
New York, Brussels Office,] as
Operator of the Euroclear System
[CEDEL S.A.]
By:
-------------------------------
B-2-2
<PAGE>
PERKINS COIE
A LAW PARTNERSHIP INCLUDING PROFESSIONAL CORPORATIONS
1201 THIRD AVENUE, 40TH FLOOR - SEATTLE, WASHINGTON 98101-3099
TELEPHONE: (206) 583-8888 - FACSIMILE: (206) 583-8500
April 18, 1995
Shurgard Storage Centers, Inc.
1201 Third Avenue, Suite 2200
Seattle, Washington 98101
Re: $200,000,000 Aggregate Offering Price of Securities (the
"Securities") of Shurgard Storage Centers, Inc. (the "Company")
Ladies and Gentlemen:
In connection with the registration statement on Form S-3 (the
"Registration Statement") being filed by you on April 18, 1995 with the
Securities and Exchange Commission, in connection with the registration of
the Securities under the Securities Act of 1933, as amended, you have
requested our opinion concerning certain of the federal income tax
consequences to the Company of its election to be taxed as a real estate
investment trust. This opinion is based on various facts and assumption, and
is conditioned upon certain representations made by the Company as to factual
matters. In addition, this opinion is based upon the factual representations
of the Company concerning its business and properties as set forth in the
Registration Statement.
As tax counsel, we have made such legal and factual examinations and
inquiries, including an examination of originals or copies certified or
otherwise identified to our satisfaction of such documents, corporate records
and other instruments as we have deemed necessary or appropriate for purposes
of this opinion.
This opinion is based on (i) existing law as contained in the Internal
Revenue Code of 1986 (the "Code"), regulations issued thereunder by the U.S.
Treasury Department, administrative pronouncements of the Internal Revenue
Service and court decisions as of the date hereof, (ii) our understanding of
the relevant facts related to the Company, its past, current, and
contemplated operation, as reflected in the Registration Statement and as
represented to us in the certificate of the Company attached hereto, and
(iii) our assumption that the Company will continue to meet, through actual
annual operating results, distribution levels and diversity of stock
ownership, the various qualification tests imposed under the Code. Any of the
statutes, regulations, administrative pronouncements, or judicial decisions
upon which this opinion is based could be changed at any time, perhaps with
retroactive effect. Furthermore, some of the issues under existing law that
could significantly affect our opinion have not yet been authoritatively
addressed by the IRS or the courts.
<PAGE>
April 18, 1995
Page 2
Based on such facts, assumption and representations, it is our opinion
that:
1. Commencing with the Company's taxable year beginning January 1,
1994, the Company has been organized in conformity with the requirements for
qualification as a "real estate investment trust" and its proposed method of
operation, as described in the representations of the Company referred to
above, will enable it to meet the requirements for qualification and taxation
as a "real estate investment trust" under the Code.
2. The statements in the Registration Statement set forth under the
caption "Certain Federal Income Tax Considerations," to the extent such
information constitutes matters of law, summaries of legal matters, or legal
conclusions, have been reviewed by us and are accurate in all material
respects.
No opinion is expressed as to any matter not discussed herein.
We are opining herein as to the effect on the subject transaction only
of the federal income tax laws of the United States and we express no opinion
with respect to the applicability thereto, or the effect thereon, of other
federal laws, the laws of any other jurisdiction or as to any matters of
municipal law or the laws of any other local agencies within any state. Our
opinion is not binding on the IRS. Hence there can be no assurance that the
IRS will not assert that the Company does not qualify as a REIT for federal
income tax purposes, particularly since the determination whether the Company
qualifies as a REIT depends upon numerous factual issues as to which we are
relying upon representations of the Company. In this regard, our opinion is
based on our understanding of the facts as represented to us in the attached
certificate of the Company and on the assumption that the Company is operated
in the manner described in the Registration Statement and in the attached
certificate. Perkins Coie will undertake no obligation to update this opinion
or to ascertain after the date hereof whether circumstances occurring after
such date may affect the conclusions set forth herein. Accordingly, no
assurance can be given that the actual results of the Company's operation for
any one taxable year will satisfy these requirements.
This opinion is furnished only to you, and is solely for use in connection
with the Registration Statement. We hereby consent to the filing of this
opinion as an exhibit to the Registration Statement and to the use of our name
under the caption "Legal Matters" in the Registration Statement.
Very truly yours,
Perkins Coie
<PAGE>
CERTIFICATE OF SHURGARD STORAGE CENTERS, INC.
The undersigned, Harrell Beck, hereby certifies that he is the Vice
President and Chief Financial Officer of Shurgard Storage Centers, Inc., a real
estate investment trust organized as a Delaware corporation (the "Company"), and
that he has received from Perkins Coie a proposed form of opinion letter
addressed to the Company, which opinion is to be delivered to the Company in
connection with the registration of securities, more fully described in the
Registration Statement on Form S-3 to be filed with the Securities and Exchange
Commission on or about April 18, 1995. The undersigned has read said proposed
opinion letter. This Certificate, which is rendered on behalf of the Company,
is intended as a statement of facts upon which Perkins Coie may rely in
rendering the opinion. The undersigned acknowledges that, with the exception of
the preparation of this Certificate, Perkins Coie has not undertaken any
independent inquiry into or verification of the matters addressed herein. All
terms used in this Certificate shall have the meanings set forth (or
incorporated by reference) in the proposed opinion letter, unless otherwise
defined herein.
The undersigned, for and on behalf of the Company, hereby certifies to
Perkins Coie as follows:
1. The Company is organized as a Delaware corporation.
2. The Company will elect to be taxed as a real estate investment trust
("REIT") within the meaning of Section 856(a) of the Internal Revenue Code of
1986, as amended (the "Code") beginning with its taxable year ended December 31,
1994.
3. The Company is not a bank (within the meaning of Section 581 of the
Code), financial institution described in Section 591 of the Code, small
business investment company operating under the Small Business Act of 1958,
business development corporation (within the meaning of Section 582(c)(2)(B) of
the Code) or insurance company subject to Subpart L of the Code.
4. The Company is managed by a board of directors.
5. The beneficial ownership of the Company is evidenced by shares of
common stock, which shares, subject to federal and state securities laws and
applicable transfer restrictions set forth in the Company's Certificate of
Incorporation, are freely transferable.
6. The Company will, for each year after its first taxable year, have
more than 100 stockholders during at least 335/365ths of such taxable year.
7. No more than 50% of the value of the Company's capital stock is or has
been held at any time during the last half of any taxable year since 1994
actually or constructively (taking into account the constructive ownership rules
of Section 856(h) of the Code) by or for five or fewer individuals.
8. At the end of each quarter of each taxable year since 1994, (i) at
least 75% of the value of the Company's total assets consisted of "real estate
assets," cash and cash items (i.e., receivables arising in the ordinary course
of the Company's operations), certificates of deposit, obligations secured by
mortgages on real property, shares in REITs, or government securities; and
(ii) the Company's total assets did not consist of securities (other than
obligations secured by mortgages on real property, shares in REITs, or
government securities) of any one issuer that represented either more than 5% of
the value of the Company's total assets or more than 10% of the outstanding
voting securities of such issuer (within the meaning of Section 856(c)(5)(B) of
the Code and Treasury Regulation Section 1.856-3(e) thereunder), except for the
"Qualified REIT Subsidiaries" as provided in paragraph 14. For purposes of
this representation, "real estate assets" means real property (including fee
ownership, co-ownership, leaseholds, and options to acquire such interests),
mortgages
<PAGE>
on real property, and shares in another REIT, and the Company is considered to
own a proportionate share of any assets owned by a partnership in which the
Company is a partner.
9. At least 75% of the Company's gross income for each taxable year since
1994 has been derived from: (i) "rents from real property" (as defined in
Section 856(d) of the Code); (ii) interest on obligations secured by mortgages
on real property or interests in real property (excluding amounts described in
Section 856(f) of the Code); (iii) gain from the sale or other disposition of
real property not held as inventory or primarily for sale to customers in the
ordinary course of business; (iv) dividends or other distributions on, and gain
from the sale or other disposition of, transferable shares in other REITs;
(v) abatements and refunds of taxes on real property; (vi) income from
foreclosure property (as defined in Section 856(e) of the Code); (vii) amounts
received or accrued as consideration for entering into agreements to make loans
secured by mortgages on real property or on interests in real property or to
purchase or lease real property (including interests in real property and
interests in mortgages on real property); (viii) gain from the sale or
disposition of a real estate asset that is not a prohibited transaction solely
by reason of Section 857(b)(6) of the Code; and (ix) any income that is
attributable to a stock or debt instrument, the temporary investment of new
capital, and is received or accrued during the one-year period beginning on the
date the Company received the capital.
10. At least 95% of the Company's gross income for each taxable year since
1994 has been derived from the sources described in paragraph 9 plus dividends,
interest on obligations other than mortgages, and gain from the sale or other
disposition of stock and securities not held as inventory or primarily for sale
to customers in the ordinary course of business.
11. No amounts payable to the Company in connection with the rental of any
property depends in whole or in part on income or profits derived from any
tenant (or sub-tenant) of such property (except that such amounts may be based
on a fixed percentage or percentages of receipts or sales).
12. Less than 15% of the rent received by the Company with respect to
each property is attributable to personal property and all personal property
contained in the properties is leased under or in connection with a lease of
real property.
13. Less than 30% of the Company's gross income for each taxable year
since 1994 has been derived from the sale or disposition of stock or securities
held for less than one year, property held as inventory or primarily for sale in
the ordinary course of business, and real property held for less than four
years, other than property compulsorily or involuntarily converted (within the
meaning of Section 1033 of the Code) and foreclosure property (within the
meaning of Section 856(3) of the Code).
14. The Company does not own securities in any other corporate issuer that
either (i) represents in excess of 10% of the outstanding voting securities of
such issuer or (ii) has an aggregate value in excess of 5% of the value of the
total assets of the Company (as determined in accordance with Treasury
Regulation Section 1.856-2(d)(2)), except that the Company has three "Qualified
REIT Subsidiaries" (as defined in Section 856(i) of the Code).
15. The Company has complied with the record-keeping requirements set
forth in Treasury Regulation Sections 1.857-8 and -9 (relating to the records to
be maintained concerning stock ownership and information required to be
requested from stockholders) for each of its taxable years.
16. During 1994, the Company distributed less than 95% of its REIT taxable
income for such year. In order to continue to satisfy the 95% REIT taxable
income distribution requirement for 1994, the Company made distributions in 1995
that, pursuant to Section 858 of the Code, qualified as attributable to
the 1994 REIT taxable income sufficient to satisfy the requirement that the
Company distribute 95% of its REIT taxable income for 1994.
-2-
<PAGE>
17. During 1995, the Company will make distributions in an amount
necessary to eliminate the accumulated earnings and profits of Shurgard
Incorporated acquired by the Company in the merger of Shurgard Incorporated with
and into the Company.
18. The Company is not aware of any facts, circumstances, or events which
are contrary to or inconsistent with any of the foregoing statements or any of
the statements and opinions contained in the proposed opinion letter. To the
knowledge of the undersigned, the Company has never been advised by an
accounting firm or a law firm that there exists a material issue as to the
Company's qualification or continued qualification as a REIT.
19. With respect to the representations in paragraphs 6 through 18, the
Company expects that, and it will take all measures within its control to ensure
that, those representations continue to be true for 1994 and succeeding taxable
years.
20. The facts contained within letter ruling request as delivered by
Shurgard Incorporated to the Internal Revenue Service on behalf of the Company
with respect to services performed by the Company on a system wide basis for
Company tenants are true, correct and complete in all material respects.
IN WITNESS WHEREOF, the undersigned has executed this Certificate as of the
18th day of April, 1995.
SHURGARD STORAGE CENTERS, INC.
By HARRELL BECK
-----------------------------------
Harrell Beck
Vice President and
Chief Financial Officer
-3-
<PAGE>
EXHIBIT 12
SHURGARD STORAGE CENTERS, INC.
STATEMENT OF COMPUTATION OF RATIOS OF EARNINGS TO FIXED CHARGES
(AMOUNTS IN THOUSANDS)
<TABLE>
<CAPTION>
Predecessor Company
------------------------------------------------- ------------------
Year ended December 31, Year ended
December 31,
1990 1991 1992 1993 1994
------------ ------------ ------------ ---------- ------------------
<S> <C> <C> <C> <C> <C>
Net Income Before
Extraordinary Item 16,289 20,411 22,055 18,284 19,001
Fixed Charges:
Interest 2,425 2,545 2,347 2,288 9,105
Amortization of Loan Costs 11 29 42 55 629
---- ---- ---- ---- ----
2,436 2,574 2,389 2,343 9,734
Net Income Before
Extraordinary Item and Fixed
Charges 18,725 22,985 24,444 20,627 28,735
Divided by Fixed Charges 2,436 2,574 2,389 2,343 9,734
------ ------ ------ ------ ------
Ratio of Earnings to Fixed
Charges 7.69 8.93 10.23 8.80 2.95
---- ---- ----- ---- ----
</TABLE>
