<PAGE> 1
Registration Statement No. 333-
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
FORM S-3 REGISTRATION STATEMENT UNDER
THE SECURITIES ACT OF 1933
LEXINGTON CORPORATE PROPERTIES TRUST
(Exact Name of Registrant as Specified in Its Charter)
MARYLAND 13-3737318
(State or Other Jurisdiction of (I.R.S. Employer Identification
Incorporation or Organization) Number)
355 LEXINGTON AVENUE
NEW YORK, NEW YORK 10017
(212) 692-7260
(Address, Including Zip Code, and Telephone Number,
Including Area Code, of Registrant's Principal Executive Offices)
T. WILSON EGLIN COPIES TO:
PRESIDENT AND CHIEF BARRY A. BROOKS, ESQ.
OPERATING OFFICER PAUL, HASTINGS, JANOFSKY & WALKER LLP
355 LEXINGTON AVENUE 399 PARK AVENUE
NEW YORK, NEW YORK 10017 NEW YORK, NEW YORK 10022
(212) 692-7260 (212) 318-6000
(Name, Address, Including Zip Code, and Telephone Number,
Including Area Code, of Agent For Service)
Approximate date of commencement of proposed sale to the public: From
time to time after the effective date of this Registration Statement.
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If the only securities being registered on this Form are being offered
pursuant to dividend or interest reinvestment plans, please check the following
box. |_|
If any of the securities being registered on this Form are to be offered
on a delayed or continuous basis pursuant to Rule 415 under the Securities Act
of 1933, other than securities offered only in connection with dividend or
interest reinvestment plans, check the following box. |X|
If this Form is filed to register additional securities for an offering
pursuant to Rule 462(b) under the Securities Act, please check the following box
and list the Securities Act registration statement number of the earlier
effective registration statement for the same offering. |_|
If this form is a post-effective amendment filed pursuant to Rule 462(c)
under the Securities Act, check the following box and list the Securities Act
registration statement number of the earlier registration statement for the same
offering. |_|
If delivery of the prospectus is expected to be made pursuant to Rule 434,
please check the following box. |_|
<PAGE> 3
CALCULATION OF REGISTRATION FEE
<TABLE>
<CAPTION>
Proposed Proposed
Maximum Maximum
Title of Each Class Amount to Offering Aggregate Amount of
of Securities to Be Be Price Per Offering Registration
Registered Registered Unit Price Fee
- ---------------------- ------------- ------------- ------------ --------------
<S> <C> <C> <C> <C>
Debt Securities ...... (1)(3) (2) (1)(2)(3) N/A
Preferred Shares
(par value $.0001
per share) ........... (1)(4) (2) (1)(2)(4) N/A
Common Shares (par
value $.0001 per
share) ............... (1)(5) (2) (1)(2)(5) N/A
Total ............. $250,000,000 (2) $250,000,000 $73,750 (6)
</TABLE>
- ----------
(1) In no event will the aggregate initial offering price of all securities
issued, from time to time, pursuant to this Registration Statement exceed
$250,000,000.
(2) The proposed maximum initial offering price per unit will be determined,
from time to time, by the Registrant in connection with the issuance by
the Registrant of the securities registered hereunder.
(3) There are being registered hereunder an indeterminate principal amount of
Debt Securities.
(4) There are being registered hereunder an indeterminate number of Preferred
Shares as may be sold, from time to time, by the Registrant.
(5) Subject to Rule 415(a)(4) of the Securities Act of 1933, as amended, there
are being registered hereunder an indeterminate number of shares of Common
Shares as may be sold, from time to time, by the Registrant. There are
also being registered hereunder an indeterminate number of shares of
Common Shares as shall be issuable upon conversion of the Preferred Shares
or Debt Securities registered hereby.
(6) Calculated pursuant to Rule 457(o) under the Securities Act of 1993, as
amended.
--------------------
THE REGISTRANT HEREBY AMENDS THIS REGISTRATION STATEMENT ON SUCH
DATE OR DATES AS MAY BE NECESSARY TO DELAY ITS EFFECTIVE DATE UNTIL THE
REGISTRANT SHALL FILE A FURTHER AMENDMENT WHICH SPECIFICALLY STATES THAT THIS
REGISTRATION STATEMENT SHALL THEREAFTER BECOME EFFECTIVE IN ACCORDANCE WITH
SECTION 8(A) OF THE SECURITIES ACT OF 1933 OR UNTIL THIS REGISTRATION STATEMENT
SHALL BECOME EFFECTIVE ON SUCH DATE AS THE COMMISSION, ACTING PURSUANT TO SAID
SECTION 8(A), MAY DETERMINE.
<PAGE> 4
PART I. INFORMATION REQUIRED IN PROSPECTUS
<PAGE> 5
PROSPECTUS
$250,000,000
Lexington Corporate Properties Trust
Debt Securities
Preferred Shares
Common Shares
--------------------
Lexington Corporate Properties Trust (the "Company"), may offer from
time to time in one or more series (i) its debt securities ("Debt Securities"),
which may be senior or subordinated debt securities, (ii) its preferred shares,
of beneficial interest, $.0001 par value per share ("Preferred Shares"), and
(iii) its common shares of beneficial interest, $.0001 par value per share
("Common Shares"), with an aggregate public offering price of up to $250,000,000
(or its equivalent based on the exchange rate at the time of sale) in amounts,
at prices and on terms to be determined at the time of offering. The Debt
Securities, Preferred Shares and Common Shares (collectively, the "Securities")
may be offered, separately or together, in separate classes or 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 for 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, ranking, currency, form (which may be
registered or bearer, or certificated or global), authorized denominations,
maturity, rate (or manner of calculation thereof) and time of payment of
interest, terms for redemption at the option of the Company or repayment at the
option of the holder thereof, terms for sinking fund payments, terms for
conversion into Common Shares or Preferred Shares, covenants and any initial
public offering price; (ii) in the case of Preferred Shares, the specific
designation and stated value per share, any dividend, liquidation, redemption,
conversion, voting and other rights, and any initial public offering price; and
(iii) in the case of Common Shares, any initial public offering price. In
addition, such specific terms may include limitations on direct or beneficial
ownership and restrictions on transfer of the Securities, in each case as may be
consistent with the Company's Declaration of Trust (the "Declaration of Trust")
or otherwise appropriate to preserve the status of the Company as a real estate
investment trust for federal income tax purposes. See "Restrictions on Transfers
of Capital Shares and Anti-Takeover Provisions."
The applicable Prospectus Supplement will also contain information,
where appropriate, about certain United States federal income tax considerations
relating to, and any listings on a securities exchange of, the Securities
covered by such Prospectus Supplement.
The Securities may be offered by the Company 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 a Prospectus Supplement describing the method and terms of the
offering of such Securities.
Prospective investors should consider carefully matters discussed
under the caption "Risk Factors" appearing on pages 5 through 8 which are
relevant to an investment in the Securities.
--------------------
THESE SECURITIES HAVE NOT BEEN APPROVED OR DISAPPROVED BY THE SECURITIES
AND EXCHANGE COMMISSION OR ANY STATE SECURITIES COMMISSION NOR
HAS THE SECURITIES AND EXCHANGE COMMISSION OR ANY STATE
SECURITIES COMMISSION PASSED UPON THE ACCURACY OR
ADEQUACY OF THIS PROSPECTUS. ANY REPRESENTA-
TION TO THE CONTRARY IS A CRIMINAL OFFENSE.
--------------------
The date of this Prospectus is April 3, 1998.
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AVAILABLE INFORMATION
The Company is subject to the informational reporting requirements
of the Securities Exchange Act of 1934, as amended (the "Exchange Act"), and in
accordance therewith, is required to file reports, proxy statements and other
information with the Securities and Exchange Commission (the "Commission"). Such
reports, proxy statements and other information can be inspected and copied at
the public reference facilities maintained by the Commission at Room 1024, 450
Fifth Street, N.W., Washington, D.C. 20549, and at the Commission's Regional
offices located at 7 World Trade Center, 13th Floor, New York, New York 10048
and Citicorp Center, 500 West Madison Street, Suite 1400, Chicago, Illinois
60661-2511. Copies of such material also 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, such material may be electronically
accessed at the Commission's site on the World Wide Web located at
http://www.sec.gov.
The Company's Common Shares are listed on the New York Stock
Exchange (the "NYSE") and reports, proxy and information statements, and other
information concerning the Company can be inspected at the offices of the NYSE
at 20 Broad Street, New York, New York 10005.
The Company has filed with the Commission a Registration Statement
on Form S-3, of which this Prospectus forms a part (together with any amendments
thereto, the "Registration Statement"), under the Securities Act of 1933, as
amended (the "Securities Act"). As permitted by the rules and regulations of the
Commission, this Prospectus omits certain information, exhibits and undertakings
contained in the Registration Statement. Such additional information, exhibits
and undertakings may be inspected and obtained from the Commission's principal
office in Washington, D.C. upon payment of the fees prescribed by the
Commission. The summaries or descriptions of documents in this Prospectus are
not necessarily complete. Reference is made to the copies of such documents
attached hereto or otherwise filed as a part of the Registration Statement for a
full and complete statement of their provisions, and such summaries and
descriptions are, in each case, qualified in their entirety by such reference.
INCORPORATION OF CERTAIN DOCUMENTS BY REFERENCE
In December 1997, the Company was reorganized as a Maryland real
estate investment trust. See "The Company." References herein to the Company
include references to the Company's predecessor corporations. The following
documents or information have been filed by the Company with the Commission and
are incorporated herein by reference:
1. The Company's Annual Report on Form 10-K (Commission File No.
1-12386) for the year ended December 31, 1997, filed on March
31, 1998.
2. The Company's Current Report on Form 8-K (Commission File No.
1-12386), filed on January 16, 1998.
3. The Company's 1997 Proxy Statement on Schedule 14-A, filed on
May 6, 1997 (Commission File No. 1-12386).
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4. The description of the Company's capital shares contained in
the Company's Registration Statement on Form 8-B under the
Exchange Act, filed on August 10, 1994 (Commission File No.
1-12386).
All documents subsequently filed by the Company with the Commission
pursuant to Section 13(a), 13(c), 14 or 15(d) of the Exchange Act after the date
of this Prospectus and prior to the termination of the offering of all
Securities covered by this Prospectus will be deemed incorporated by reference
into this Prospectus and to be a part hereof from the date of filing of such
documents. Any statement contained in a document 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 modifies or
supersedes such statement. Any statement so modified or superseded shall not be
deemed, except as so modified or superseded, to constitute a part of this
Prospectus.
The Company hereby undertakes to provide without charge to each
person to whom a copy of this Prospectus has been delivered, upon the written or
oral request of such person to the Company at 355 Lexington Avenue, New York,
New York 10017. Attention: T. Wilson Eglin, President and Chief Operating
Officer, any or all of the documents referred to above (other than exhibits to
such documents) which have been incorporated by reference in this Prospectus.
THE COMPANY
Lexington Corporate Properties Trust is a self-managed and
self-administered real estate investment trust ("REIT") that acquires, owns and
manages a geographically diversified portfolio of high quality office,
industrial and retail properties. Substantially all of the Company's leases are
"Net Leases," under which the tenant is responsible for all costs of real estate
taxes, insurance, ordinary maintenance and structural repairs. Management
believes that owning acquiring and managing net lease properties results in
lower operating expenses for the Company than the Company otherwise would incur
through investments in properties which were not net leased.
Management has diversified the Company's portfolio by geographical
location, tenant industry segment, lease term expiration and property type with
the intention of providing steady internal growth with low volatility.
Management believes that such diversification should help insulate the Company
from regional recession, industry specific downturns and price fluctuations by
property type.
The Company's management team has demonstrated its ability to create
value and increase cash flow for the Company through active management of its
portfolio of Properties subject to Net Leases, including acquisitions,
expansions of existing Properties, attracting strong tenants, refinancings and
selective dispositions. Management has an active presence in and knowledge of
the real estate market in the United States, particularly with respect to the
market for single tenant properties subject to Net Leases. Management subjects
each prospective property acquisition candidate to a rigorous underwriting
process which analyzes the property's (i) design, construction quality,
efficiency and functionality; (ii) location with respect to the immediate
submarket, city and region; (iii) tenant financial strength, credit rating,
growth prospects and competitive position within its respective industry; (iv)
lease integrity with respect to term, rental rate increases, corporate
guarantees and property maintenance provisions; (v) economics with respect to
the current and future cash flow growth prospects and expected investment yield
sensitivity calculations; and (vi) fit within the existing Company portfolio of
Properties.
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The Company commenced operations in 1993 as a REIT, with several
operating partnership subsidiaries. This operating partnership structure enables
the Company to acquire property by issuing to a seller, as a form of
consideration, interests ("OP Units") in the Company's subsidiary operating
partnerships. The OP Units are exchangeable, after certain dates, for Common
Shares of the Company. Management believes that this structure facilitates the
Company's ability to raise capital and to acquire portfolio and individual
properties by enabling the Company to structure transactions which may defer tax
gains for a contributor of property while preserving the Company's cash
available for other purposes, including the payment of distributions.
The Company was originally incorporated under the laws of the State
of Delaware, and was reincorporated in the State of Maryland in June 1994. In
December 1997, the Company reorganized as a Maryland real estate investment
trust ("Maryland REIT"). The reorganization was effected by merging the Company
with and into a newly formed Maryland REIT. References herein to the Company
include references to the Company's Delaware and Maryland predecessor
corporations and the predecessor companies referenced above, unless the context
otherwise requires.
The principal executive offices of the Company are located at 355
Lexington Avenue, New York, New York 10017, and its telephone number is (212)
692-7260.
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RISK FACTORS
Risks Involved in Single Tenant Leases. The Company focuses its
acquisition activities in Net Leased real properties or interests therein.
Because the Company's Net Leased real properties are leased to single tenants,
the financial failure of or other default by a tenant resulting in the
termination of a lease is likely to cause a significant reduction in the
operating cash flow of the lessor and might decrease the value of the property
leased to such tenant.
Dependence on Major Tenants. Revenues from several of the Company's
Properties constitute a significant percentage of the Company's consolidated
rental revenues. The default, financial distress or bankruptcy of any of the
tenants of such Properties could cause interruptions in the receipt of lease
revenues from such tenants and/or result in vacancies in the respective
Properties, which would reduce the revenues of the Company until the affected
property is relet, and could decrease the ultimate sale value of each such
Property. Upon the expiration of the leases that are currently in place with
respect to these Properties, the Company may not be able to re-lease the vacant
property at a comparable lease rate or without incurring additional expenditures
in connection with such re-leasing.
Leverage. The Company has incurred, and may continue to incur,
indebtedness (secured and unsecured) in furtherance of its activities. Neither
the Declaration of Trust nor any policy statement formally adopted by the Board
limits either the total amount of indebtedness or the specified percentage of
indebtedness (based upon the total market capitalization of the Company) which
may be incurred. Accordingly, the Company could become more highly leveraged,
resulting in increased risk of default on obligations of the Company and in an
increase in debt service requirements which could adversely affect the financial
condition and results of operations of the Company and the Company's ability to
pay distributions. The Credit Facility (as defined below) limits the amount of
indebtedness the Company may incur to 60% of the Company's total market
capitalization.
Possible Inability to Refinance Balloon Payments on Mortgage Debt. A
significant number of the Company's Properties are subject to mortgages with
balloon payments. Balloon payments, relating to three Properties, of
approximately $10.0 million and $5.6 million are due in 1998 and 1999,
respectively. The Company's secured revolving credit facility with Fleet
National Bank (the "Credit Facility") matures in 1999. Also, on May 19, 1995,
the Company, through its wholly owned subsidiary, LXP Funding Corp., completed a
$70 million secured debt offering, secured by fifteen of the Company's
Properties, by issuing commercial mortgage pass-through certificates, which
mature in 2005. See Note 5 of the Company's Consolidated Financial Statements
included in the Company's 1997 Annual Report on Form 10-K. The ability of the
Company to make such balloon payments will depend upon its ability either to
refinance the mortgage related thereto or to sell the related property. The
ability of the Company to accomplish such goals will be affected by various
factors existing at the relevant time, such as the state of the national and
regional economies, local real estate conditions, available mortgage rates, the
Company's equity in the mortgaged properties, the financial condition of the
Company, the operating history of the mortgaged properties, and tax laws.
Uncertainties Relating to Lease Renewals and Re-letting of Space.
The Company will be subject to the risks that, upon expiration of leases for
space located in the Company's Properties, the premises may not be re-let or the
terms of re-letting (including the cost of concessions to tenants) may be less
favorable than current lease terms. If the Company were unable to re-let
promptly all or a substantial portion of its commercial units or if the rental
rates upon such re-letting were significantly
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lower than expected rates, the Company's net income and ability to make expected
distributions to shareholders would be adversely affected. There can be no
assurance that the Company will be able to retain tenants in any of the
Company's Properties upon the expiration of their leases.
Defaults on Cross-Collateralized Properties. Although the Company
does not generally cross-collateralize any of its properties, management may
determine to do so from time to time. As of the date of this Prospectus, two of
the Company's Properties in Florida were cross-collateralized and fifteen of the
Company's Properties were the subject of a segregated pool of assets with
respect to which commercial mortgage pass-through certificates (as discussed
above) were issued. To the extent that any of the Company's Properties are
cross-collateralized, any default by the Company under the mortgage relating to
one such Property will result in a default under the financing arrangements
relating to any other Property which also provides security for such mortgage.
Possible Liability Relating to Environmental Matters. Under various
federal, state and local environmental laws, statutes, ordinances, rules and
regulations, an owner of real property may be liable for the costs of removal or
remediation of certain hazardous or toxic substances at, on, in or under such
property, as well as certain other potential costs relating to hazardous or
toxic substances (including government fines and penalties and damages for
injuries to persons and adjacent property). Such laws often impose liability
without regard to whether the owner knew of, or was responsible for, the
presence or disposal of such substances. Such liability may be imposed on the
owner in connection with the activities of an operator of, or tenant at, the
property. The cost of any required remediation, removal, fines or personal or
property damages and the owner's liability therefor could exceed the value of
the property and/or the aggregate assets of the owner. In addition, the presence
of such substances, or the failure to properly dispose of or remove such
substances, may adversely affect the owner's ability to sell or rent such
property or to borrow using such property as collateral, which, in turn, would
reduce the Company's revenues and ability to make distributions. A property can
also be adversely affected either through physical contamination or by virtue of
an adverse effect upon value attributable to the migration of hazardous or toxic
substances, or other contaminants that have or may have emanated from other
properties. Although the Company's tenants are primarily responsible for any
environmental damages and claims related to the leased premises, in the event of
the bankruptcy or inability of the tenant of such premises to satisfy any
obligations with respect thereto, the Company may be required to satisfy such
obligations. In addition, under certain environmental laws, the Company, as the
owner of such properties, may be held directly liable for any such damages or
claims irrespective of the provisions of any lease.
From time to time, in connection with the conduct of the Company's
business, and prior to the acquisition of any property from a third party or as
required by the Company's financing sources, the Company authorizes the
preparation of Phase I environmental reports and, when necessary, Phase Il
environmental reports, with respect to its Properties. Based upon such
environmental reports and management s ongoing review of its Properties, as of
the date of this Prospectus, management was not aware of any environmental
condition with respect to any of the Company's Properties which management
believed would be reasonably likely to have a material adverse effect on the
Company. There can be no assurance, however, that (i) the discovery of
environmental conditions, the existence or severity of which were previously
unknown, (ii) changes in law, (iii) the conduct of tenants, or (iv) activities
relating to properties in the vicinity of the Company's Properties will not
expose the Company to material liability in the future. Changes in laws
increasing the potential liability for environmental conditions existing on
properties or increasing the restrictions on discharges or other conditions may
result in significant unanticipated expenditures or may otherwise adversely
affect the
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operations of the Company's tenants, which could adversely affect the Company's
financial condition or results of operations.
Risks Relating to Acquisitions. A significant element of the
Company's business strategy is the enhancement of its portfolio through
acquisitions of additional properties. The consummation of any future
acquisition will be subject to satisfactory completion of the Company's
extensive valuation analysis and due diligence review and to the negotiation of
definitive documentation. There can be no assurance that the Company will be
able to identify and acquire additional properties or that it will be able to
finance acquisitions in the future. In addition, there can be no assurance that
any such acquisition, if consummated, will be profitable for the Company. If the
Company is unable to consummate the acquisition of additional properties in the
future, there can be no assurance that the Company will be able to increase the
cash available for distribution to shareholders.
Concentration of Ownership by Certain Investors. In three separate
closings in 1997, the Company sold 2,000,000 Class A Senior Cumulative
Convertible Preferred Shares of Beneficial Interest in the Company (the
"Convertible Preferred Shares") to Five Arrows Realty, L.L.C. ("Five Arrows").
The Convertible Preferred Shares are convertible to Common Shares on a
one-to-one basis at $12.50 per share. In March 1997, the Company sold to an
institutional investor in a private placement 8% Exchangeable Redeemable Secured
Notes (the "Exchangeable Notes") in the aggregate principal amount of $25
million. The Exchangeable Notes are exchangeable at $13 per share for the
Company's Common Shares beginning in the year 2000, subject to adjustment.
Significant concentrations of ownership by certain investors may allow such
investors to exert a greater influence over the management and affairs of the
Company.
Uninsured Loss. The Company carries comprehensive liability, fire,
extended coverage and carries rent loss insurance on most of its Properties,
with policy specifications and insured limits customarily carried for similar
properties. However, with respect to certain of the Properties where the leases
do not provide for abatement of rent under any circumstances, the Company
generally does not maintain rent loss insurance. In addition, there are certain
types of losses (such as due to wars or acts of God) that generally are not
insured because they are either uninsurable or not economically insurable.
Should an uninsured loss or a loss in excess of insured limits occur, the
Company could lose capital invested in a Property, as well as the anticipated
future revenues from a Property, while remaining obligated for any mortgage
indebtedness or other financial obligations related to the Property. Any such
loss would adversely affect the financial condition of the Company. Management
believes that the Company's Properties are adequately insured in accordance with
industry standards.
Adverse Effects of Changes in Market Interest Rates. The trading
prices of equity securities issued by REITs have historically been affected by
changes in broader market interest rates, with increases in interest rates
resulting in decreases in trading prices, and decreases in interest rates
resulting in increases in such trading prices. An increase in market interest
rates could therefore adversely affect the trading prices of any equity
Securities issued by the Company.
Competition. The real estate industry is highly competitive. The
Company's principal competitors include national REITs, many of which are
substantially larger and have substantially greater financial resources than the
Company.
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Failure to Qualify as a REIT. Management believes that the Company
has met the requirements for qualification as a REIT for federal income tax
purposes beginning with its taxable year ended December 31, 1993 and intends to
continue to meet such requirements in the future. However, qualification as a
REIT involves the application of highly technical and complex provisions of the
Internal Revenue Code of 1986, as amended (the "Code"), for which there are only
limited judicial or administrative interpretations. No assurance can be given
that the Company has qualified or will remain qualified as a REIT. The Code
provisions and income tax regulations applicable to REITs are more complex than
those applicable to corporations. The determination of various factual matters
and circumstances not entirely within the Company's control may affect its
ability to qualify as a REIT. In addition, no assurance can be given that
legislation, regulations, administrative interpretations or court decisions will
not significantly change the requirements for qualification as a REIT or the
federal income tax consequences of such qualification. If the Company does not
qualify as a REIT, the Company would not be allowed a deduction for
distributions to shareholders in computing its income subject to tax at the
regular corporate rates. The Company also could be disqualified from treatment
as a REIT for the four taxable years following the year during which
qualification was lost. Cash available for distribution to the Company's
shareholders would be significantly reduced for each year in which the Company
does not qualify as a REIT. Although the Company currently intends to continue
to qualify as a REIT, it is possible that future economic, market, legal, tax or
other considerations may cause the Company, without the consent of the
shareholders, to revoke the REIT election or to otherwise take action that would
result in disqualification.
USE OF PROCEEDS
Unless otherwise described in the applicable Prospectus Supplement,
the Company intends to use the net proceeds from the sale of Securities for
general corporate purposes, which may include the acquisition of additional
properties, the repayment of outstanding indebtedness or the improvement of
certain properties already in the Company's portfolio.
RATIO OF EARNINGS TO FIXED CHARGES
The Company's ratio of earnings to fixed charges for each of the
years ended 1997, 1996, 1995, 1994 and 1993 was 1.49, 1.41, 1.78, 1.48, and
1.40, respectively. The ratios of earnings to fixed charges were computed by
dividing earnings by charges. For this purpose, earnings consist of pre-tax
income from continued operations plus fixed charges (excluding capitalized
interest). Fixed charges consist of interest expense and the amortization of
debt issuance costs.
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DESCRIPTION OF DEBT SECURITIES
General
The Debt Securities will be direct obligations of the Company, which
may be secured or unsecured and may be either senior Debt Securities ("Senior
Securities") or subordinated Debt Securities ("Subordinated Securities"). The
Debt Securities will be issued under one or more indentures in the form filed as
an exhibit to the Registration Statement of which this Prospectus is a part (the
"Form of Indenture"). As provided in the Form of Indenture, the specific terms
of any Debt Security issued pursuant to an indenture will be set forth in one or
more Supplemental Indentures, each dated as of a date of or prior to the
issuance of the Debt Securities to which it relates (the "Supplemental
Indentures" and each a "Supplemental Indenture"). Senior Securities and
Subordinated Securities may be issued pursuant to separate indentures
(respectively, a "Senior Indenture" and a "Subordinated Indenture"), in each
case between the Company and a trustee (an "Indenture Trustee"), which may be
the same Indenture Trustee, subject to such amendments or supplements as may be
adopted from time to time. The Senior Indenture and the Subordinated Indenture,
as amended or supplemented from time to time, are sometimes hereinafter referred
to collectively as the "Indentures." The Indentures will be subject to and
governed by the Trust Indenture Act of 1939, as amended. The statements made
under this heading relating to the Debt Securities and the Indentures are
summaries of the provisions thereof, do not purport to be complete and are
qualified in their entirety by reference to the Indentures and such Debt
Securities.
Capitalized terms used herein and not defined shall have the
meanings assigned to them in the applicable Indenture.
Terms
The indebtedness represented by the Senior Securities will rank
equally with all other unsecured and unsubordinated indebtedness of the Company.
The indebtedness represented by Subordinated Securities will be subordinated in
right of payment to the prior payment in full of the Senior Debt of the Company
as described under "--Subordination." The particular terms of the Debt
Securities offered by a Prospectus Supplement will be described in the
applicable Prospectus Supplement, along with any applicable federal income tax
considerations unique to such Debt Securities. 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 or
as set forth in the applicable Indenture or in one or more Supplemental
Indentures. 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 issuance of
additional Debt Securities of such series.
The Form of Indenture provides that the Company may, but need not,
designate more than one Indenture Trustee thereunder, each with respect to one
or more series of Debt Securities. Any Indenture Trustee under an Indenture may
resign or be removed with respect to one or more series of Debt Securities and a
successor Indenture Trustee may be appointed to act with respect to such series.
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If two or more persons are acting as Indenture Trustee with respect to different
series of Debt Securities, each such Indenture Trustee shall be an Indenture
Trustee of a trust under the applicable Indenture separate and apart from the
trust administered by any other Indenture Trustee, and, except as otherwise
indicated herein, any action described herein to be taken by each Indenture
Trustee may be taken by each such Indenture Trustee with respect to, and only
with respect to, the one or more series of Debt Securities for which it is
Indenture Trustee under the applicable Indenture.
The following Summaries set forth certain general terms and
provisions of the Indentures 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 and whether such Debt
Securities are secured or unsecured or Senior Securities or Subordinated
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 the maturity thereof, or (if applicable) the
portion of the principal amount of such Debt Securities that is
convertible into Common Shares or Preferred Shares, or the method by which
any such portion shall be determined;
(4) If convertible, the terms on which such Debt Securities are
convertible, including the initial conversion price or rate and the
conversion period and any applicable limitations on the ownership or
transferability of the Common Shares or Preferred Shares receivable on
conversion;
(5) The date or dates, or the method for determining such date or
dates, on which the principal of such Debt Securities will be payable;
(6) The rate or rates (which may be fixed or variable), or the
method by which such rate or rates shall be determined, at which such Debt
Securities will bear interest, if any;
(7) The date or dates, or the method for determining such date or
dates, from which any such interest will accrue, the dates on which any
such interest will be payable, the record dates for such interest payment
dates, or the method by which such dates shall be determined, the persons
to whom such interest shall be payable, and the basis upon which interest
shall be calculated if other than that of a 360-day year of twelve 30-day
months;
(8) The place or places where the principal of (and premium, if any)
and interest, if any, on such Debt Securities will be payable, where such
Debt Securities may be surrendered for conversion or registration of
transfer or exchange and where notices or demands to or upon the Company
with respect to such Debt Securities and the applicable Indenture may be
served;
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(9) The period or periods, if any, within which, the price or prices
at which and the other terms and conditions upon which such Debt
Securities may, pursuant to any optional or mandatory redemption
provisions, be redeemed, as a whole or in part, at the option of the
Company;
(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 other terms and
conditions upon which such Debt Securities will be redeemed, repaid or
purchased, as a whole or in part, pursuant to such obligation;
(11) If other than U.S. dollars, the currency or currencies in which
such Debt Securities are denominated and payable, which may be a foreign
currency or units of two or more foreign currencies or a composite
currency or currencies, and the terms and conditions relating thereto;
(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 or
book-entry form and, if so, the identity of the depository for such Debt
Securities;
(14) Whether such Debt Securities will be in registered or bearer
form or both 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) 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;
(17) 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 set forth 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 of such Debt Securities
due and payable;
(18) The provisions, if any, relating to the security provided for
such Debt Securities; and
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<PAGE> 16
(19) 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, neither the
Debt Securities nor the Indenture will contain any provisions that would limit
the ability of the Company to incur indebtedness or that would afford holders of
Debt Securities protection in the event of a highly leveraged or similar
transaction involving the Company or in the event of a change of control,
regardless of whether such indebtedness, transaction or change of control is
initiated or supported by the Company, any affiliate of the Company or any other
party. However, certain restrictions on ownership and transfers of the Common
Shares and Preferred Shares are 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 Shares and Anti-Takeover Provisions."
Reference is made to the applicable Prospectus Supplement for information with
respect to any deletions from, modifications of, or additions to, the events of
default or covenants of the Company that are described below, including any
addition of a covenant or other provision providing event risk or similar
protection.
Denomination, Interest, Registration and Transfer
Unless otherwise described in the applicable Prospectus Supplement,
the Debt Securities of any series will be issuable in denominations of $1,000
and integral multiples thereof.
Unless otherwise specified in the applicable Prospectus Supplement,
the principal of (and applicable premium, if any) and interest on any series of
Debt Securities will be payable at the corporate trust office of the applicable
Indenture Trustee, the address of which will be stated in the applicable
Prospectus Supplement; provided, however, that, at the option of the Company,
payment of interest may be made by check mailed to the address of the person
entitled thereto as it appears in the applicable register for such Debt
Securities or by wire transfer of funds to such person at an account maintained
within the United States.
Subject to certain limitations imposed upon 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 corporate trust office of the applicable Indenture Trustee or at the
office of any transfer agent designated by the Company for such purpose. In
addition, subject to certain limitations imposed upon Debt Securities issued in
book-entry form, the Debt Securities of any series may be surrendered for
conversion or registration of transfer or exchange thereof at the corporate
trust office of the applicable Indenture Trustee 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 must be duly
endorsed or accompanied by a written instrument of transfer, and the person
requesting such action must provide evidence of title and identity satisfactory
to the applicable Indenture Trustee or transfer agent. No service charge will be
made for any registration of transfer or exchange of any
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<PAGE> 17
Debt Securities, but the Company may require payment of a sum sufficient to
cover any tax or other governmental charge payable in connection therewith. If
the applicable Prospectus Supplement refers to any transfer agent (in addition
to the applicable Indenture 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 Indenture Trustee shall be required (i)
to 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 a notice of redemption of any Debt Securities that may be selected
for redemption and ending at the close of business on the day of such mailing;
(ii) to 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 (iii) to issue, register
the transfer of or exchange any Debt Security that has been surrendered for
repayment at the option of the holder, except the portion, if any, of such Debt
Security not to be so repaid.
Merger, Consolidation or Sale of Assets
The Indentures will provide that the Company may, 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, is organized under the laws of any domestic
jurisdiction and assumes the Company's obligations to pay principal of (and
premium, if any) and interest on all of the Debt Securities and the due and
punctual performance and observance of all of the covenants and conditions
contained in each Indenture; (b) immediately after giving effect to such
transaction and treating any indebtedness that becomes an obligation of the
Company or any subsidiary as a result thereof as having been incurred by the
Company or such subsidiary at the time of such transaction, no event of default
under the Indentures, and no event which, after notice or the lapse of time, or
both, would become such an event of default, shall have occurred and be
continuing; and (c) an officers' certificate and legal opinion covering such
conditions shall be delivered to each Indenture Trustee.
Certain Covenants
Existence. Except as permitted under "--Merger, Consolidation or
Sale of Assets," the Indentures 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 declaration of trust, by-laws and statute) and
franchises; provided, however, that the Company will not be required to preserve
any right or franchise if its Board of Trustees determines that the preservation
thereof is no longer desirable in the conduct of its business by appropriate
proceedings.
Maintenance of Properties. The Indentures 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 will cause to be made all necessary repairs, renewals, replacements,
betterments and
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<PAGE> 18
improvements thereof, all as in the judgment of the Company may be necessary so
that the business carried on in connection therewith may be properly and
advantageously conducted at all times; provided, however, that the Company and
its subsidiaries shall not be prevented from selling or otherwise disposing of
their properties for value in the ordinary course of business.
Insurance. The Indentures will require the Company to cause each of
its and its subsidiaries' insurable properties to be insured against loss or
damage with insurers of recognized responsibility and, if described in the
applicable Prospectus Supplement, having a specified rating from a recognized
insurance rating service, in such amounts and covering all such risks as shall
be customary in the industry in accordance with prevailing market conditions and
availability.
Payment of Taxes and Other Claims. The Indentures will require the
Company to pay or discharge or cause to be paid or discharged, before the same
shall become delinquent, (i) all taxes, assessments and governmental charges
levied or imposed upon it or any subsidiary or upon the income, profits or
property of the Company or any subsidiary and (ii) all lawful claims for labor,
materials and supplies which, if unpaid, might by law become a lien upon the
property of the Company or any subsidiary; provided, however, that the Company
shall not be required to pay or discharge or cause to be paid or discharged any
such tax, assessment, charge or claim whose amount, applicability or validity is
being contested in good faith.
Provision of Financial Information. Whether or not the Company is
subject to Section 13 or 15(d) of the Exchange Act, the Indentures will require
the Company, within 15 days of 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, (i) 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,
(ii) to file with the applicable Indenture 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 (iii) to supply, promptly upon
written request and payment of the reasonable cost of duplication and delivery,
copies of such documents to any prospective holder.
Additional Covenants. Any additional covenants of the Company with
respect to any 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 Prospectus Supplement,
each Indenture will provide that the following events are "Events of Default"
with respect to any series of Debt Securities issued thereunder (i) default for
30 days in the payment of any installment of interest on any Debt Security of
such series; (ii) default in the payment of principal of (or premium, if any,
on) any Debt Security of such series at its maturity; (iii) default in making
any sinking fund payment as required for any Debt Security of such series; (iv)
default in the performance or breach of any other covenant or warranty of the
Company contained in the Indenture (other than a covenant added to the Indenture
solely for the benefit of a series of Debt Securities issued thereunder other
than such series), continued for 60 days after written notice as provided in the
applicable Indenture; (v) a default under
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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 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 exists on the date of
such Indenture or shall thereafter be created, with such obligations being
accelerated and not rescinded or annulled; (vi) certain events of bankruptcy,
insolvency or reorganization, or court appointment of a receiver, liquidator or
trustee of the Company or any Significant Subsidiary of the Company; and (vii)
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.
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 Indenture Trustee or the holders of not less
than 25% in principal amount of the Debt Securities of that series will have the
right to declare the principal amount (or, if the Debt Securities of that series
are Original Issue Discount Securities or indexed securities, such portion of
the principal amount as may be specified in the terms thereof) of all the Debt
Securities of that series to be due and payable immediately by written notice
thereof to the Company (and to the applicable Indenture Trustee if given by the
holders). However, at any time after such a declaration of acceleration with
respect to Debt Securities of such series (or of all Debt Securities then
outstanding under any Indenture, as the case may be) has been made, but before a
judgment or decree for payment of the money due has been obtained by the
applicable Indenture Trustee, the holders of not less than a majority in
principal amount of outstanding Debt Securities of such series (or of all Debt
Securities then outstanding under the applicable Indenture, as the case may be)
may rescind and annul such declaration and its consequences if (i) the Company
shall have deposited with the applicable Indenture 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 than outstanding under the applicable
Indenture, as the case may be), plus certain fees, expenses, disbursements and
advances of the applicable Indenture Trustee and (ii) all events of default,
other than the non-payment of accelerated principal (or specified portion
thereof), with respect to Debt Securities of such series (or of all Debt
Securities then outstanding under the applicable Indenture, as the case may be)
have been cured or waived as provided in such Indenture. The Indentures 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 applicable Indenture, as the case may be) may waive any
past default with respect to such series and its consequences, except a default
(x) in the payment of the principal of (or premium, if any) or interest on any
Debt Security of such series or (y) in respect of a covenant or provision
contained in the applicable Indenture that cannot be modified or amended without
the consent of the holder of each outstanding Debt Security affected thereby.
The Indentures will require each Indenture Trustee to give notice to
the holders of Debt Securities within 90 days of a default under the applicable
Indenture unless such default shall have been cured or waived; provided,
however, that such Indenture 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
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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 to any Debt Security of such series) if specified responsible officers
of such Indenture Trustee consider such withholding to be in the interest of
such holders.
The Indentures will provide that no holder of Debt Securities of any
series may institute any proceeding, judicial or otherwise, with respect to such
Indenture or for any remedy thereunder, except in the case of failure of the
applicable Indenture 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 Indentures will provide that, subject to provisions in each
Indenture relating to its duties in case of default, an Indenture Trustee will
be under no obligation to exercise any of its rights or powers under an
Indenture at the request or direction of any holders of any series of Debt
Securities then outstanding under such Indenture, unless such holders shall have
offered to the Indenture Trustee thereunder 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
an Indenture, as the case may be) shall have the right to direct the time,
method and place of conducting any proceeding for any remedy available to the
applicable Indenture Trustee, or of exercising any trust or power conferred upon
such Indenture Trustee. However, an Indenture Trustee may refuse to follow any
direction which is in conflict with any law or the applicable Indenture, which
may involve such Indenture Trustee in personal liability or which may be unduly
prejudicial to the holders of Debt Securities of such series not joining
therein.
Within 120 days after the close of each fiscal year, the Company
will be required to deliver to each Indenture Trustee a certificate, signed by
one of several specified officers of the Company, stating whether or not such
officer has knowledge of any default under the applicable Indenture and, if so,
specifying each such default and the nature and status thereof.
Modification of the Indentures
Modifications and amendments of an Indenture will be permitted to be
made only with the consent of the holders of not less than a majority in
principal amount of all outstanding Debt Securities issued under such Indenture
affected by such modification or amendment; provided, however, that no such
modification or amendment may, without the consent of the holder of each such
Debt Security affected thereby, (i) change the stated maturity of the principal
of, or any installment of interest (or premium, if any) on, any such Debt
Security; (ii) 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; (iii) change the place of payment, or the coin or
currency, for payment of principal of, premium, if any, or interest on any such
Debt Security; (iv) impair the right to institute suit for the enforcement of
any payment on or with respect to any such Debt Security; (v) reduce the
above-stated percentage of outstanding Debt Securities of any series necessary
to modify or amend the applicable Indenture, to waive compliance
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<PAGE> 21
with certain provisions thereof or certain defaults and consequences thereunder
or to reduce the quorum or voting requirements set forth in the applicable
Indenture; or (vi) 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 the
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 of the applicable
Indenture.
Modifications and amendments of an Indenture will be permitted to be
made by the Company and the respective Indenture Trustee thereunder without the
consent of any holder of Debt Securities for any of the following purposes: (i)
to evidence the succession of another person to the Company as obligor under
such Indenture; (ii) to add to the covenants of the Company for the benefit of
the holders of all or any series of Debt Securities or to surrender any right or
power conferred upon the Company in such Indenture; (iii) to add events of
default for the benefit of the holders of all or any series of Debt Securities;
(iv) to add or change any provisions of an Indenture to facilitate the issuance
of, or to liberalize certain terms of, Debt Securities in bearer form, or to
permit or facilitate the issuance of Debt Securities in uncertificated form;
provided that such action shall not adversely affect the interest of the holders
of the Debt Securities of any series in any material respect; (v) to change or
eliminate any provisions of an Indenture; provided that any such change or
elimination shall be effective only when there are no Debt Securities
outstanding of any series created prior thereto which are entitled to the
benefit of such provision; (vi) to secure the Debt Securities; (vii) to
establish the form or terms of Debt Securities of any series, including the
provisions and procedures, if applicable, for the conversion of such Debt
Securities into Common Shares or Preferred Shares; (viii) to provide for the
acceptance of appointment by a successor Indenture Trustee or facilitate the
administration of the trusts under an Indenture by more than one Indenture
Trustee; (ix) to cure any ambiguity, defect or inconsistency in an Indenture;
provided that such action shall not adversely affect the interests of holders of
Debt Securities of any series issued under such Indenture; or (x) to supplement
any of the provisions of an Indenture to the extent necessary to permit or
facilitate defeasance and discharge of any series of such Debt Securities;
provided that such action shall not adversely affect the interests of the
holders of the outstanding Debt Securities of any series.
The Indentures will provide that, in determining whether the holders
of the requisite principal amount of outstanding Debt Securities of a series
have given any request, demand, authorization, direction, notice, consent or
waiver thereunder or whether a quorum is present at a meeting of holders of Debt
Securities, (i) the principal amount of an Original Issue Discount Security that
shall be deemed to be outstanding shall be the amount of the principal thereof
that would be due and payable as of the date of such determination upon
declaration of acceleration of the maturity thereof (ii) the principal amount of
any Debt Security denominated in a foreign currency that shall be deemed
outstanding shall 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 Securities of the amount determined as provided in (i) above), (iii) the
principal amount of an indexed security that shall be deemed outstanding shall
be the principal face amount of such indexed security at original issuance,
unless otherwise provided with respect to such indexed security pursuant to such
Indenture, and (iv) Debt Securities owned by the
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<PAGE> 22
Company or any other obligor upon the Debt Securities or an affiliate of the
Company or of such other obligor shall be disregarded.
The Indentures will contain provisions for convening meetings of the
holders of Debt Securities of a series issued thereunder. A meeting may be
called at any time by the applicable Indenture Trustee, and also, upon request
by the Company or the holder of at least 25% in principal amount of the
outstanding Debt Securities of such series, in any such case upon notice given
as provided in such Indenture. Except for any consent that must be given by the
holder of each Debt Security affected by certain modifications and amendments of
an Indenture, any resolution presented at a meeting or adjourned meeting duly
reconvened at which a quorum is present may be adopted by the affirmative vote
of the holders of a majority in principal amount of the outstanding Debt
Securities of that series; provided, however, that, except as referred to above,
any resolution with respect to any request, demand, authorization, direction,
notice, consent, waiver or other action that may be made, given or taken by the
holders of a specified percentage, which is less than a majority, in principal
amount of the outstanding Debt Securities of a series may be adopted at a
meeting or adjourned meeting duly reconvened at which a quorum is present by the
affirmative vote of the holders of such specified percentage in principal amount
of the outstanding Debt Securities of that series. Any resolution passed or
decision taken at any meeting of holders of Debt Securities of any series duly
held in accordance with an Indenture will be binding on all holders of Debt
Securities of that series. The quorum at any meeting called to adopt a
resolution, and at any reconvened meeting, will be persons holding or
representing a majority in principal amount of the outstanding Debt Securities
of a series; provided, however, that if any action is to be taken at such
meeting with respect to a consent or waiver which may be given by the holders of
not less than a specified percentage in principal amount of the outstanding Debt
Securities of a series, the persons holding or representing such specified
percentage in principal amount of the outstanding Debt Securities of such series
will constitute a quorum.
Notwithstanding the foregoing provisions, the Indentures will
provide that if any action is to be taken at a meeting of holders of Debt
Securities of any series with respect to any request, demand, authorization,
direction, notice, consent, waiver and other action that such Indenture
expressly provides may be made, given or taken by the holders of a specified
percentage in principal amount of all outstanding Debt Securities affected
thereby, or of the holders of such series and one or more additional series; (i)
there shall be no minimum quorum requirement for such meeting, and (ii) the
principal amount of the outstanding Debt Securities of such series that vote in
favor of such request, demand, authorization, direction, notice, consent, waiver
or other action shall be taken into account in determining whether such request,
demand, authorization, direction, notice, consent, waiver or other action has
been made, given or taken under such Indenture.
Subordination
Unless otherwise provided in the applicable Prospectus Supplement,
Subordinated Securities will be subject to the following subordination
provisions.
Upon any distribution to creditors of the Company in a liquidation,
dissolution or reorganization, the payment of the principal of and interest on
any Subordinated Securities will be subordinated to the extent provided in the
applicable Indenture in right of payment to the prior payment in full of all
Senior Debt (as defined below), but the obligation of the Company to make
payments of the principal of and interest on such Subordinated Securities will
not otherwise be affected. No payment of principal or interest will be permitted
to be made on Subordinated Securities
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at any time if a default on Senior Debt exists that permits the holders of such
Senior Debt to accelerate its maturity and the default is the subject of
judicial proceedings or the Company receives notice of the default. After all
Senior Debt is paid in full and until the Subordinated Securities are paid in
full, holders will be subrogated to the rights of holders of Senior Debt to the
extent that distributions otherwise payable to holders have been applied to the
payment of Senior Debt. The Subordinated Indenture will not restrict the amount
of Senior Indebtedness or other indebtedness of the Company and its
subsidiaries. As a result of these subordination provisions in the event of a
distribution of assets upon insolvency, holders of Subordinated Indebtedness may
recover less, ratably, than senior creditors of the Company.
Senior Debt will be defined in the applicable Indenture as the
principal of and interest on, or substantially similar payments to be made by
the Company in respect of, the following, whether outstanding at the date of
execution of the applicable Indenture or thereafter incurred, created or
assumed: (i) indebtedness of the Company for money borrowed or represented by
purchase-money obligations, (ii) indebtedness of the Company evidenced by notes,
debentures, or bonds, or other securities issued under the provisions of an
indenture, fiscal agency agreement or other agreement, (iii) obligations of the
Company as lessee under leases of property either made as part of any sale and
leaseback transaction to which the Company is a part or otherwise, (iv)
indebtedness of partnerships and joint ventures which is included in the
consolidated financial statements of the Company, (v) indebtedness obligations
and liabilities of others in respect of which the Company is liable contingently
or otherwise to pay or advance money or property or as guarantor, endorser or
otherwise or which the Company has agreed to purchase or otherwise acquire, and
(vi) any binding commitment of the real estate investment, in each case other
than (a) any such indebtedness, obligation or liability referred to in clauses
(i) through (vi) above as to which, in the instrument creating or evidencing the
same pursuant to which the same is outstanding, it is provided that such
indebtedness, obligation or liability is not superior in right of payment to the
Subordinated Securities or ranks pari passu with the Subordinated Securities,
(b) any such indebtedness obligation or liability which is subordinated to
indebtedness of the Company to substantially the same extent as or to a greater
extent than the Subordinated Securities are subordinated, and (c) the
Subordinated Securities. There will not be any restriction in any Indenture
relating to Subordinated Securities upon the creation of additional Senior Debt.
If this Prospectus is being delivered in connection with a series of
Subordinated Securities, the accompanying Prospectus Supplement or the
information incorporated herein by reference will set forth the approximate
amount of Senior Debt outstanding as of the end of the Company's most recent
fiscal quarter.
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 issued under any Indenture that have
not already been delivered to the applicable Indenture Trustee for cancellation
and that either have become due and payable or will become due and payable
within one year (or scheduled for redemption within one year) by irrevocably
depositing with the applicable Indenture 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 with respect to principal
(and premium, if any) and interest
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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 Indentures will provide that, unless otherwise indicated in the
applicable Prospectus Supplement, the Company may elect either (i) to defease
and be discharged from any and all obligations (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,
to hold moneys for payment in trust and, with respect to Subordinated Debt
Securities which are convertible or exchangeable, the right to convert or
exchange) with respect to such Debt Securities ("defeasance") or (ii) to 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 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 Indenture Trustee, in trust, of an
amount in such currency or currencies, currency unit or units or composite
currency or currencies in which such Debt Securities are payable at stated
maturity, or Government Obligations (as defined below), or both, applicable to
such Debt Securities, which through the scheduled payment of principal and
interest in accordance with their terms will provide money in an amount
sufficient to pay the principal of (and premium, if any) and interest on such
Debt Securities, and any mandatory sinking fund or analogous payments thereon,
on the scheduled due dates therefor.
Such a trust will only be permitted to be established if, among
other things, the Company has delivered to the applicable Indenture 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, will be required to refer to and be based upon a
ruling received from or published by the Internal Revenue Service or a change in
applicable United States 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 (i) direct
obligations of the United States of America or the government which issued the
foreign currency in which the Debt Securities of a particular series are
payable, for the payment of which its full faith and credit is pledged, or (ii)
obligations of a person controlled or supervised by and acting as an agency or
instrumentality of the United States of America or such government which issued
the foreign currency in which the Debt Securities of such series are payable,
the payment of which is unconditionally guaranteed as a full faith and credit
obligation by the United States of America or such other government, which, in
either case, are not callable or redeemable at the option of the issuer thereof,
and shall also include a depository receipt issued by a bank or trust company as
custodian with respect to any such Government Obligation or a specific payment
of interest on or principal of any such Government Obligation held by such
custodian for the account of the holder of a depository receipt; provided that
(except as required by law) such custodian is not authorized to make any
deduction from the amount payable to
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the holder of such depository receipt from any amount received by the custodian
in respect of the Government Obligation or the specific payment of interest on
or principal of the Government Obligation evidenced by such depository receipt.
Unless otherwise provided in the applicable Prospectus Supplement,
if after the Company has deposited funds and/or Government Obligations to effect
defeasance or covenant defeasance with respect to Debt Securities of any series,
(i) 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
(ii) 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 (a) a currency, currency unit or composite
currency both by the government of the country which issued such currency and
for the settlement of transactions by a central bank or other public
institutions of or within the international banking community, (b) the ECU both
within the European Monetary System and for the settlement of transactions by
public institutions of or within the European Communities, or (c) 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.
If the Company effects covenant defeasance with respect to any Debt
Securities and such Debt Securities are declared due and payable because of the
occurrence of any event of default other than the event of default described in
clause (iv) under "--Events of Default, Notice and Waiver" with respect to
specified sections of an Indenture (which sections would no longer be applicable
to such Debt Securities) or described in clause (vii) under "--Events of
Default, Notice and Waiver" with respect to any other covenant as to which there
has been covenant defeasance, the amount in such currency, currency unit or
composite currency in which such Debt Securities are payable, and Government
Obligations on deposit with the applicable Indenture 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. However, the Company
would remain liable to make payment of such amounts due at the time of
acceleration.
The applicable Prospectus Supplement may further describe the
provisions, if any, permitting such defeasance or covenant defeasance, including
any modifications to the provisions described above, with respect to the Debt
Securities of or within a particular series.
Conversion Rights
The terms and conditions, if any, upon which the Debt Securities are
convertible into Common Shares or Preferred Shares will be set forth in the
applicable Prospectus Supplement relating thereto. Such terms will include
whether such Debt Securities are convertible into Common Shares or
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Preferred Shares, the conversion price (or manner of calculation thereof), the
conversion period, provisions as to whether conversion will be at the option of
the holders or 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 corporate trust office of the Indenture
Trustee, the address of which will be stated in the applicable Prospectus
Supplement; provided that, at the option of the Company, payment of interest may
be made by check mailed to the address of the person entitled thereto as it
appears in the applicable register for such Debt Securities or by wire transfer
of funds to such person at an account maintained within the United States.
All moneys paid by the Company to a paying agent or an Indenture
Trustee for the payment of the principal of or any premium or interest on any
Debt Security which remain unclaimed at the end of one year 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.
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DESCRIPTION OF PREFERRED SHARES
The description of the Company's preferred shares, par value $.0001
per share ("Preferred Shares"), set forth below does not purport to be complete
and is qualified in its entirety by reference to the Company's Declaration of
Trust and Bylaws (the "Bylaws").
General
Under the Declaration of Trust, the Company has authority to issue
10,000,000 Preferred Shares from time to time, in one or more series, as
authorized by the Board of Trustees of the Company. Prior to issuance of shares
of each series, the Board of Trustees is required by the Maryland law of
Corporations and Associations and the Declaration of Trust to fix for each
series, subject to the provisions of the Declaration of Trust regarding excess
shares of beneficial interest, $.0001 par value per share ("Excess Shares"), the
terms, preferences, conversion or other rights, voting powers, restrictions,
limitations as to dividends or other distributions, qualifications and terms or
conditions of redemption, as are permitted by Maryland law. The Preferred Shares
will, when issued against payment therefor, be fully paid and nonassessable and
will not be subject to preemptive rights. The Board of Trustees could authorize
the issuance of Preferred Shares with terms and conditions that could have the
effect of discouraging a takeover or other transaction that holders of Common
Shares might believe to be in their best interests or in which holders of some,
or a majority, of the Common Shares might receive a premium for their shares
over the then market price of such Common Shares.
Terms
The following description of the Preferred Shares sets forth certain
general terms and provisions of the Preferred Shares to which any Prospectus
Supplement may relate. The statements below describing the Preferred Shares are
in all respects subject to and qualified in their entirety by reference to the
applicable provisions of the Declaration of Trust and Bylaws and any applicable
amendment to the Declaration of Trust designating terms of a series of Preferred
Shares (a "Designating Amendment").
Reference is made to the Prospectus Supplement relating to the
Preferred Shares offered thereby for specific terms, including:
(1) The title and stated value of such Preferred Shares;
(2) The number of such Preferred Shares offered, the liquidation
preference per share and the offering price of such Preferred Shares;
(3) The dividend rate(s), period(s) and/or payment date(s) or
method(s) of calculation thereof applicable to such Preferred Shares;
(4) The date from which dividends on such Preferred Shares shall
accumulate, if applicable;
(5) The provision for a sinking fund, if any, for such Preferred
Shares;
(6) The provision for redemption, if applicable, of such Preferred
Shares;
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(7) Any listing of such Preferred Shares on any securities exchange;
(8) The terms and conditions, if applicable, upon which such
Preferred Shares will be convertible into Common Shares, including the
conversion price (or manner of calculation thereof);
(9) Any other specific terms, preferences, rights, limitations or
restrictions of such Preferred Shares;
(10) A discussion of federal income tax considerations applicable to
such Preferred Shares;
(11) The relative ranking and preference of such Preferred Shares as
to dividend rights and rights upon liquidation, dissolution or winding-up
of the affairs of the Company;
(12) Any limitations on issuance of an series of Preferred Shares
ranking senior to or on a parity with such series of Preferred Shares as
to dividend rights and rights upon liquidation, dissolution or winding-up
of the affairs of the Company; and
(13) Any limitations on direct or beneficial ownership and
restrictions on transfer, in each case as may be appropriate to preserve
the status of the Company as a REIT.
Rank
Unless otherwise specified in the Prospectus Supplement, the
Preferred Shares will, with respect to dividend rights and rights upon
liquidation, dissolution or winding-up of the Company, rank (i) senior to all
classes or series of Common Shares of the Company, and to all equity securities
ranking junior to such Preferred Shares with respect to dividend rights or
rights upon liquidation, dissolution or winding-up of the Company, (ii) on a
parity with all equity securities issued by the Company the terms of which
specifically provide that such equity securities rank on a parity with the
Preferred Shares with respect to dividend rights or rights upon liquidation,
dissolution or winding-up of the Company; and (iii) junior to all equity
securities issued by the Company the terms of which specifically provide that
such equity securities rank senior to the Preferred Shares with respect to
dividend rights or rights upon liquidation, dissolution or winding-up of the
Company. The term "equity securities" does not include convertible debt
securities.
Dividends
Holders of the Preferred Shares of each series will be entitled to
receive, when, as and if declared by the Board of Trustees of the Company, out
of assets of the Company legally available for payment, cash dividends at such
rates and on such dates as will be set forth in the applicable Prospectus
Supplement. Each such dividend shall be payable to holders of record as they
appear on the share transfer books of the Company on such record dates as shall
be fixed by the Board of Trustees of the Company.
Dividends on any series of the Preferred Shares may be cumulative or
non-cumulative, as provided in the applicable Prospectus Supplement. Dividends,
if cumulative, will be cumulative from and after the date set forth in the
applicable Prospectus Supplement. If the Board of Trustees of
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the Company fails to declare a dividend payable on a dividend payment date on
any series of the Preferred Shares for which dividends are noncumulative, then
the holders of such series of the Preferred Shares will have no right to receive
a dividend in respect of the dividend period ending on such dividend payment
date, and 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 Preferred Shares of any series are outstanding, no dividends will
be declared or paid or set apart for payment on any capital shares of the
Company of any other series ranking, as to dividends, on a parity with or junior
to the Preferred Shares of such series for any period unless (i) if such series
of Preferred Shares has a cumulative dividend, full cumulative dividends have
been or contemporaneously are declared and paid or declared and a sum sufficient
for the payment thereof is set apart for such payment on the Preferred Shares of
such series for all past dividend periods and the then current dividend period
or (ii) if such series of Preferred Shares does not have a cumulative dividend,
full dividends for the then current dividend period have been or
contemporaneously are declared and paid or declared and a sum sufficient for the
payment thereof is set apart for such payment on the Preferred Shares of such
series. When dividends are not paid in full (or a sum sufficient for such full
payment is not so set apart) upon Preferred Shares of any series and the shares
of any other series of Preferred Shares ranking on a parity as to dividends with
the Preferred Shares of such series, all dividends declared upon Preferred
Shares of such series and any other series of Preferred Shares ranking on a
parity as to dividends with such Preferred Shares shall be declared pro rata so
that the amount of dividends declared per share of Preferred Shares of such
series and such other series of Preferred Shares shall in all cases bear to each
other the same ratio that accrued dividends per share on the Preferred Shares of
such series (which shall not include any accumulation in respect of unpaid
dividends for prior dividend periods if such Preferred Shares does not have a
cumulative dividend) and such other series of Preferred Shares bear to each
other. No interest, or sum or money in lieu of interest, shall be payable in
respect or any dividend payment or payments on Preferred Shares of such series
which may be in arrears.
Except as provided in the immediately preceding paragraph, unless
(i) if such series of Preferred Shares has a cumulative dividend, full
cumulative dividends on the Preferred Shares of such series have been or
contemporaneously are declared and paid or declared and a sum sufficient for the
payment thereof is set apart for payment for all past dividend periods and the
then current dividend period, and (ii) if such series of Preferred Shares does
not have a cumulative dividend, full dividends on the Preferred Shares of such
series have been or contemporaneously are declared and paid or declared and a
sum sufficient for the payment thereof is set apart for payment for the then
current dividend period, no dividends (other than in Common Shares or other
capital shares in the Company ranking junior to the Preferred Shares of such
series as to dividends and upon liquidation) shall be declared or paid or set
aside for payment nor shall any other distribution be declared or made upon the
Common Shares, or any other capital shares of the Company ranking junior to or
on a parity with the Preferred Shares of such series as to dividends or upon
liquidation, nor shall any Common Shares, or any other capital shares of the
Company ranking junior to or on a parity with the Preferred Shares of such
series as to dividends or upon liquidation be redeemed, purchased or otherwise
acquired for any consideration (or any moneys be paid to or made available for a
sinking fund for the redemption of any such shares) by the Company (except by
conversion into or exchange for other capital shares of the Company ranking
junior to the Preferred Shares of such series as to dividends and upon
liquidation).
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Any dividend payment made on shares of a series of Preferred Shares
shall first be credited against the earliest accrued but unpaid dividend due
with respect to shares of such series which remains payable.
Redemption
If so provided in the applicable Prospectus Supplement, the Preferred
Shares will be subject to mandatory redemption or redemption at the option of
the Company, as a whole or in part, in each case upon the terms, at the times
and at the redemption prices set forth in such Prospectus Supplement.
The Prospectus Supplement relating to a series of Preferred Shares that is
subject to mandatory redemption will specify the number of such Preferred Shares
that shall be redeemed by the Company in each year commencing after a date to be
specified, at a redemption price per share to be specified, together with an
amount equal to all accrued and unpaid dividends thereon (which shall not, if
such Preferred Shares 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 Shares of any series is payable only from the net
proceeds of the issuance of capital shares of the Company, the terms of such
Preferred Shares may provide that, if no such capital shares shall have been
issued or to the extent the net proceeds from any issuance are insufficient to
pay in full the aggregate redemption price then due, such Preferred Shares shall
automatically and mandatorily be converted into the applicable capital shares of
the Company pursuant to conversion provisions specified in the applicable
Prospectus Supplement.
Notwithstanding the foregoing, unless (i) if a series of Preferred Shares
has a cumulative dividend, full cumulative dividends on all shares of all such
series of Preferred Shares shall have been or contemporaneously are declared and
paid or declared and a sum sufficient for the payment thereof set apart for
payment for all past dividend periods and the then current dividend period, and
(ii) if a series of Preferred Shares does not have a cumulative dividend, full
dividends on all Preferred Shares of such series have been or contemporaneously
are declared and paid or declared and a sum sufficient for the payment thereof
set apart for payment for the then current dividend period, no shares of such
series of Preferred Shares shall be redeemed unless all outstanding Preferred
Shares of such series are simultaneously redeemed; provided, however, that the
foregoing shall not prevent the purchase or acquisition of Preferred Shares of
such series to preserve the REIT status of the Company or pursuant to a purchase
or exchange offer made on the same terms to holders of all outstanding Preferred
Shares of such series. In addition, unless (a) if such series of Preferred
Shares has a cumulative dividend, full cumulative dividends on all outstanding
shares of such series of Preferred Shares have been or contemporaneously are
declared and paid or declared and a sum sufficient for the payment thereof set
apart for payment for all past dividend periods and the then current dividend
period, and (b) if such series of Preferred Shares does not have a cumulative
dividend, full dividends on the Preferred Shares of such series have been or
contemporaneously are declared and paid or declared and a sum sufficient for the
payment thereof set apart for payment for the then current dividend period, the
Company shall not purchase or otherwise acquire directly or indirectly any
Preferred Shares of such series (except by conversion into or exchange for
capital shares of the Company ranking junior to the Preferred Shares of such
series as to dividends and upon liquidation); provided, however, that the
foregoing shall not prevent the purchase or acquisition of Preferred Shares
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of such series to preserve the REIT status of the Company or pursuant to a
purchase or exchange offer made on the same terms to holders of all outstanding
Preferred Shares of such series.
If fewer than all of the outstanding Preferred Shares of any series
are to be redeemed, the number of shares to be redeemed will be determined by
the Company and such shares may be redeemed pro rata from the holders of record
of such shares in proportion to the number of such shares held or for which
redemption is requested by such holder (with adjustments to avoid redemption of
fractional shares) or by an other equitable manner determined by the Company.
Notice of redemption will be mailed at least 15 days but not more
than 60 days before the redemption date to each holder of record of Preferred
Shares of any series to be redeemed at the address shown on the share transfer
books of the Company. Each notice shall state: (i) the redemption date; (ii) the
number of shares and series of the Preferred Shares to be redeemed; (iii) the
redemption price; (iv) the place or places where certificates for such Preferred
Shares are to be surrendered for payment of the redemption price; (v) that
dividends on the shares to be redeemed will cease to accrue on such redemption
date; and (vi) the date upon which the holder's conversion rights, if any, as to
such shares shall terminate. If fewer than all the Preferred Shares of any
series are to be redeemed, the notice mailed to each such holder thereof shall
also specify the number of Preferred Shares to be redeemed from each such
holder. If notice of redemption of any Preferred Shares has been given and if
the funds necessary for such redemption have been set aside by the Company in
trust for the benefit of the holders of any Preferred Shares so called for
redemption, then from and after the redemption date dividends will cease to
accrue on such Preferred Shares, and all rights of the holders of such shares
will terminate, except the right to receive the redemption price.
Liquidation Preference
Upon any voluntary or involuntary liquidation, dissolution or
winding-up of the affairs of the Company, then, before any distribution or
payment shall be made to the holders of any Common Shares or any other class or
series of capital shares of the Company ranking junior to the Preferred Shares
in the distribution of assets upon any liquidation, dissolution or winding-up of
the Company, the holders of each series of Preferred Shares shall be entitled to
receive out of assets of the Company legally available for distribution to
shareholders liquidating distributions in the amount of the liquidation
preference per share, if any, 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 noncumulative dividends for
prior dividend periods). After payment of the full amount of the liquidating
distributions to which they are entitled, the holders of Preferred Shares will
have no right or claim to any of the remaining assets of the Company. In the
event that, upon any such voluntary or involuntary liquidation, dissolution or
winding-up, the available assets of the Company are insufficient to pay the
amount of the liquidating distributions on all outstanding Preferred Shares and
the corresponding amounts payable on all shares of other classes or series of
capital shares of the Company ranking on a parity with the Preferred Shares in
the distribution of assets, then the holders of the Preferred Shares and all
other such classes or series of capital shares shall share ratably in any such
distribution of assets in proportion to the full liquidating distributions to
which they would otherwise be respectively entitled.
If liquidating distributions shall have been made in full to all
holders of Preferred Shares, the remaining assets of the Company shall be
distributed among the holders of any other classes or series of capital shares
ranking junior to the Preferred Shares upon liquidation, dissolution or
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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 corporation, trust
or entity, or the sale, lease or conveyance of all or substantially all of the
property or business of the Company, shall not be deemed to constitute a
liquidation, dissolution or winding-up of the Company.
Voting Rights
Holders of the Preferred Shares will not have any voting rights,
except as set forth below or as otherwise from time to time required by law or
as indicated in the applicable Prospectus Supplement.
Unless provided otherwise for any series of Preferred Shares, so
long as any Preferred Shares of a series remain outstanding, the Company will
not, without the affirmative vote or consent of the holders of a percentage to
be specified in the applicable Prospectus Supplement of the shares of such
series of Preferred Shares outstanding at the time, given in person or by proxy,
either in writing or at a meeting (such series voting separately as a class),
(i) authorize or create, or increase the authorized or issued amount of any
class or series of capital shares ranking prior to such series of Preferred
Shares with respect to payment of dividends or the distribution of assets upon
liquidation, dissolution or winding-up or reclassify any authorized capital
shares of the Company into such shares, or create, authorize or issue any
obligation or security convertible into or evidencing the right to purchase any
such shares; or (ii) amend, alter or repeal the provisions of the Declaration of
Trust or the Designating Amendment for such series of Preferred Shares, whether
by merger, consolidation or otherwise (an "Event"), so as to materially and
adversely affect any right, preference, privilege or voting power of such series
of Preferred Shares or the holders thereof; provided, however, with respect to
the occurrence of any of the Events set forth in (ii) above, so long as the
Preferred Shares remain outstanding with the terms thereof materially unchanged,
taking into account that upon the occurrence of an Event the Company may not be
the surviving entity, the occurrence of any such Event shall not be deemed to
materially and adversely affect such rights, preferences, privileges or voting
power of holders of Preferred Shares, and provided further that (x) any increase
in the amount of the authorized Preferred Shares or the creation or issuance of
any other series of Preferred Shares, or (y) any increase in the amount of
authorized shares of such series or any other series of Preferred Shares, in
each case ranking on a parity with or junior to the Preferred Shares of such
series with respect to payment of dividends or the distribution of assets upon
liquidation, dissolution or winding-up, shall not be deemed to materially and
adversely affect such rights, preferences, privileges or voting powers.
The foregoing voting provisions will not apply if, at or prior to
the time when the act with respect to which such vote would otherwise be
required shall be effected, all outstanding shares of such series of Preferred
Shares shall have been redeemed or called for redemption and sufficient funds
shall have been deposited in trust to effect such redemption.
Conversion Rights
The terms and conditions, if any, upon which any series of Preferred
Shares is convertible into Common Shares will be set forth in the applicable
Prospectus Supplement relating thereto. Such terms will include the number of
Common Shares into which the Preferred Shares are convertible, the conversion
price (or manner of calculation thereof), the conversion period, provisions as
to whether conversion will be at the option of the holders of the Preferred
Shares or the Company,
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the events requiring an adjustment of the conversion price and provisions
affecting conversion in the event of the redemption of such series of Preferred
Shares.
Restrictions on Ownership
For the Company to qualify as a REIT under the Code, not more than
50% in value of its outstanding capital shares may be owned, directly or
indirectly, by five or fewer individuals (as defined in the Code to include
certain entities) during the last half of a taxable year. To assist the Company
in meeting this requirement the Company may take certain actions to limit the
beneficial ownership, directly or indirectly, by a single person of the
Company's outstanding equity securities, including any Preferred Shares of the
Company. Therefore, the Designating Amendment for each series of Preferred
Shares may contain provisions restricting the ownership and transfer of the
Preferred Shares. The applicable Prospectus Supplement will specify any
additional ownership limitation relating to a series of Preferred Shares. See
"Restrictions on Transfers of Capital Shares and Anti-Takeover Provisions."
Transfer Agent
The transfer agent and registrar for the Preferred Shares will be
set forth in the applicable Prospectus Supplement.
Terms of Class A Senior Cumulative Convertible Preferred Shares
In December 1996, the Company entered into an agreement with Five
Arrow Realty Securities L.L.C. ("Five Arrows") providing for the sale of up to
2,000,000 of the Company's Class A Senior Cumulative Convertible Preferred
Shares ("Convertible Preferred Shares"). Under the terms of the agreement, the
Company sold all 2,000,000 Convertible Preferred Shares to Five Arrows at three
closings during 1997 for an aggregate price of $25 million. The Convertible
Preferred Shares, which are convertible into Common Shares on a one-for-one
basis at $ 12.50 per share, subject to adjustment, are entitled to quarterly
distributions equal to the greater of $.295 per share or the product of 1.05 and
the per share quarterly distribution on Common Shares. The Convertible Preferred
Shares may be redeemed by the Company after five years at a 6% premium over the
liquidation preference of $12.50 per share (plus accrued and unpaid dividends),
with such premium declining to zero on or after December 31, 2011. In certain
instances, including a change of control of the Company (as defined in the
agreement with Five Arrows), a holder of Convertible Preferred Shares may
require the Company to redeem its shares at a price equal to $13.75 per share
plus any accrued dividends. Each Convertible Preferred Share is entitled to one
vote per share and holders thereof are entitled to vote on all matters submitted
to a vote of holders of outstanding Common Shares. In connection with such sale,
the Company has entered into certain related agreements with Five Arrows,
providing, among other things for certain demand and piggyback registration
rights with respect to such shares and the right to designate a member or
members of the Board of Trustees of the Company. Five Arrows designee, John D.
McGurk, is currently serving as a member of the Board of Trustees of the
Company.
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DESCRIPTION OF COMMON SHARES
The description of the Company's Common Shares of beneficial
interest, par value $.0001 per share ("Common Shares"), set forth below does not
purport to be complete and is qualified in its entirety by reference to the
Company's Declaration of Trust and Bylaws.
General
Under the Declaration of Trust, the Company has authority to issue
40,000,000 Common Shares, par value $.0001 per share. Under Maryland law,
shareholders generally are not responsible for a corporation's debts or
obligations.
Terms
Subject to the preferential rights of any other shares or series of
equity securities and to the provisions of the Declaration of Trust regarding
Excess Shares, holders of Common Shares are entitled to receive dividends on
Common Shares if, as and when authorized and declared by the Board of Trustees
of the Company out of assets legally available therefor and to share ratably in
the assets of the Company legally available for distribution to its shareholders
in the event of its liquidation, dissolution or winding-up after payment of, or
adequate provision for, all known debts and liabilities of the Company and the
amount to which holders of any class of shares classified or reclassified or
having a preference on distributions in liquidation, dissolution or winding-up
of the Company have a right.
Subject to the provisions of the Declaration of Trust regarding
Excess Shares, each outstanding Common Share entitles the holder to one vote on
all matters submitted to a vote of shareholders, including the election of
Trustees and, except as otherwise required by law or except as provided with
respect to any other class or series of shares, the holders of Common Shares
will possess the exclusive voting power. There is no cumulative voting in the
election of Trustees, which means that the holders of a majority of the
outstanding Common Shares can elect all of the Trustees then standing for
election, and the holders of the remaining Common Shares will not be able to
elect any Trustees.
Holders of Common Shares have no conversion, sinking fund or
redemption rights, or preemptive rights to subscribe for any securities of the
Company.
The Company furnishes its shareholders with annual reports
containing audited consolidated financial statements and an opinion thereon
expressed by an independent public accounting firm and quarterly reports for the
first three quarters of each fiscal year containing unaudited financial
information.
Subject to the provisions of the Declaration of Trust regarding
Excess Shares, all Common Shares will have equal dividend, distribution,
liquidation and other rights and will have no preference, appraisal or exchange
rights.
Pursuant to the Maryland Law of Corporations and Associations, a
real estate investment trust generally cannot amend its declaration of trust or
merge unless approved by the affirmative vote of shareholders holding at least
two-thirds of the shares entitled to vote on the matter
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unless a lesser percentage (but not less than a majority of all of the votes to
be cast on the matter) is set forth in the declaration of trust. However, the
Company's Declaration of Trust provides that such actions, with the exception of
certain amendments to the Declaration of Trust for which a higher vote
requirement has been set, shall be valid and effective if authorized by holders
of a majority of the total number of shares of all classes outstanding and
entitled to vote thereon.
Restrictions on Ownership
For the Company to qualify as a REIT under the Code, not more than
50% in value of its outstanding capital shares may be owned, directly or
indirectly, by five or fewer individuals (as defined in the Code to include
certain entities) during the last half of a taxable year. To assist the Company
in meeting this requirement, the Company may take certain actions to limit the
beneficial ownership, directly or indirectly, by a single person of the
Company's outstanding equity securities. See "Restrictions on Transfers of
Capital Shares and Anti-Takeover Provisions."
Transfer Agent
The transfer agent and registrar for the Common Shares is
ChemicalMellon Shareholder Services LLC.
RESTRICTIONS ON TRANSFERS OF CAPITAL SHARES
AND ANTI-TAKEOVER PROVISIONS
Restrictions Relating to REIT Status
For the Company to qualify as a REIT under the Code, among other
things, not more than 50% in value of its outstanding capital shares may be
owned, directly or indirectly, by five or fewer individuals (defined in the Code
to include certain entities) during the last half of a taxable year, and such
capital shares must be beneficially owned by 100 or more persons during at least
335 days of a taxable year of 12 months or during a proportionate part of a
shorter taxable year (in each case, other than the first such year). To assist
the Company in continuing to remain a qualified REIT, the Declaration of Trust,
subject to certain exceptions, provides that no holder may own, or be deemed to
own by virtue of the attribution provisions of the Code, more than 9.8% (the
"Ownership Limit") of the Company's equity shares, defined as Common Shares or
Preferred Shares. The Board of Trustees may waive the Ownership Limit if
evidence satisfactory to the Board of Trustees and the Company's tax counsel is
presented that the changes in ownership will not then or in the future
jeopardize the Company's status as a REIT. Any transfer of equity shares or any
security convertible into equity shares that would create a direct or indirect
ownership of equity shares in excess of the Ownership Limit or that would result
in the disqualification of the Company as a REIT, including any transfer that
results in the equity shares being owned by fewer than 100 persons or results in
the Company being "closely held" within the meaning of Section 856(h) of the
Code, shall be null and void, and the intended transferee will acquire no rights
to the equity shares. The foregoing restrictions on transferability and
ownership will not apply if the Board of Trustees determines that it is no
longer in the best interests of the Company to attempt to qualify, or to
continue to qualify, as a REIT.
Equity shares owned, or deemed to be owned, or transferred to a
shareholder in excess of the Ownership Limit, will automatically be exchanged
for Excess Shares that will be transferred, by operation of law, to the Company
as trustee of a trust for the exclusive benefit of the transferees to
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whom such capital shares may be ultimately transferred without violating the
Ownership Limit. While the Excess Shares are held in trust, they will not be
entitled to vote, they will not be considered for purposes of any shareholder
vote or the determination of a quorum for such vote and, except upon
liquidation, they will not be entitled to participate in dividends or other
distributions. Any dividend or distribution paid to a proposed transferee of
Excess Shares prior to the discovery by the Company that equity shares have been
transferred in violation of the provisions of the Declaration of Trust shall be
repaid to the Company upon demand. The Excess Shares are not treasury shares,
but rather constitute a separate class of issued and outstanding shares of the
Company. The original transferee-shareholder may, at any time the Excess Shares
are held by the Company in trust, transfer the interest in the trust
representing the Excess Shares to any individual whose ownership of the equity
shares exchanged into such Excess Shares would be permitted under the
Declaration of Trust, at a price not in excess of the price paid by the original
transferee-shareholder for the equity shares that were exchanged into Excess
Shares, or, if the transferee-shareholder did not give value for such shares, a
price not in excess of the market price (as determined in the manner set forth
in the Declaration of Trust) on the date of the purported transfer. Immediately
upon the transfer to the permitted transferee, the Excess Shares will
automatically be exchanged for equity shares of the class from which they were
converted. If the foregoing transfer restrictions are determined to be void or
invalid by virtue of any legal decision, statute, rule or regulation, then the
intended transferee of any Excess Shares may be deemed, at the option of the
Company, to have acted as an agent on behalf of the Company in acquiring the
Excess Shares and to hold the Excess Shares on behalf of the Company.
In addition to the foregoing transfer restrictions, the Company will
have the right, for a period of 90 days during the time any Excess Shares are
held by the Company in trust, to purchase all or any portion of the Excess
Shares from the original transferee-shareholder for the lesser of the price paid
for the equity shares by the original transferee-shareholder or the market price
(as determined in the manner set forth in the Declaration of Trust) of the
equity shares on the date the Company exercises its option to purchase. The
90-day period begins on the date on which the Company receives written notice of
the transfer or other event resulting in the exchange of equity shares for
Excess Shares.
Each shareholder shall upon demand be required to disclose to the
Company in writing any information with respect to the direct, indirect and
constructive ownership of beneficial interests as the Board of Trustees deems
necessary to comply with the provisions of the Code applicable to REITs, 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 unless the Board of Trustees determines
that maintenance of REIT status is no longer in the best interests of the
Company.
Authorized Capital
The Company has an aggregate of 40,000,000 authorized Common Shares,
40,000,000 Excess Shares, 2,000,000 of which have been designated Excess Class A
Preferred Shares, par value $.0001 per share and 10,000,000 undesignated
Preferred Shares available for issuance in its Declaration of Trust, 2,000,000
of which have been designated Class A Senior Cumulative Convertible Preferred
Shares, $.0001 par value per share. Such shares (other than reserved shares) may
be issued from time to time by the Company in the discretion of the Board of
Trustees to raise additional capital, acquire
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assets, including additional real properties, redeem or retire debt or for any
other business purpose. In addition, the undesignated Preferred Shares may be
issued in one or more additional classes with such designations, preferences and
relative, participating, optional or other special rights including, without
limitation, preferential dividend or voting rights, and rights upon liquidation,
as shall be fixed by the Board of Trustees. Also, the Board of Trustees is
authorized to classify and reclassify any unissued capital shares by setting or
changing, in any one or more respects, the preferences, conversion or other
rights, voting powers, restrictions, limitations as to dividends, qualifications
or terms or conditions of redemption of such shares. Such authority includes,
without limitation, subject to the provisions of the Declaration of Trust,
authority to classify or reclassify any such unissued shares into a class or
classes of preferred shares, preference shares, special shares or other shares,
and to divide and reclassify shares of any class into one or more series of such
class. In certain circumstances, the issuance of Preferred Shares, or the
exercise by the Board of Trustees of such rights to classify or reclassify
shares, could have the effect of deterring individuals or entities from making
tender offers for the Common Shares or seeking to change incumbent management.
Maryland Corporations and Associations Law
The Law of Corporations and Associations of the State of Maryland
includes certain other provisions which may also discourage a change in control
of management of the Company. Maryland law provides that a Maryland real estate
investment trust may not engage in any "business combination" with any
"interested stockholder." An "interested stockholder" is defined, in essence, as
any person owning beneficially, directly or indirectly, 10% or more of the
outstanding voting shares of a Maryland real estate investment trust. Unless an
exemption applies, the Company may not engage in any business combination with
an interested stockholder for a period of five years after the interested
stockholder became an interested stockholder, and thereafter may not engage in a
business combination unless it is recommended by the Board of Trustees and
approved by the affirmative vote of at least (i) 80% of the votes entitled to be
cast by the holders of all outstanding voting shares of the Company, and (ii)
66y% of the votes entitled to be cast by all holders of outstanding shares of
voting shares other than voting shares held by the interested stockholder. The
voting requirements do not apply at any time to business combinations with an
interested stockholder or its affiliates if approved by the Board of Trustees
prior to the time the interested stockholder first became an interested
stockholder. Additionally, if the business combination involves the receipt of
consideration by the shareholders in exchange for the Company's shares, the
voting requirements do not apply if certain "fair price" conditions are met.
FEDERAL INCOME TAX CONSIDERATIONS
General
The following discussion summarizes the material federal income tax
considerations to a prospective holder of Common Shares. The following
discussion is for general information purposes only, is not exhaustive of all
possible tax considerations and is not intended to be and should not be
construed as tax advice. For example, this summary does not give a detailed
discussion of any state, local or foreign tax considerations. In addition, this
discussion is intended to address only those federal income tax considerations
that are generally applicable for all security holders in the Company. It does
not discuss all of the aspects of federal income taxation that may be relevant
to a prospective security holder in light of his or her particular circumstances
or to certain types of security holders
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who are subject to special treatment under the federal income tax laws
including, without limitation, insurance companies, tax-exempt entities,
financial institutions or broker-dealers, foreign corporations and persons who
are not citizens or residents of the United States. If the Company offers one or
more series of Preferred Shares or Debt Securities, then there may be tax
consequences for the holders of such Securities not discussed herein. For a
discussion of any such additional consequences, see the applicable Prospectus
Supplement.
The information in this section is based on the Code (including the
provisions of the Taxpayer Relief Act of 1997 (the "1997 Act"), several of which
are described herein), current, temporary and proposed Treasury Regulations, the
legislative history of the Code, current administrative interpretations and
practices of the IRS (including its practices and policies as endorsed in
private letter rulings, which are not binding on the IRS except with respect to
the taxpayer that receives such a ruling), and court decisions, all as of the
date hereof. No assurance can be given that future legislation, Treasury
Regulations, administrative interpretations and court decisions will not
significantly change current law or adversely affect existing interpretations of
current law. Any such change could apply retroactively to transactions preceding
the date of the change. The Company has not received any rulings from the IRS
concerning the tax treatment of the Company. Thus no assurance can be provided
that the statements set forth herein (which do not bind the IRS or the courts)
will not be challenged by the IRS or will be sustained by a court if so
challenged.
EACH PROSPECTIVE PURCHASER OF THE SECURITIES IS ADVISED TO CONSULT
WITH HIS OR HER OWN TAX ADVISOR REGARDING THE SPECIFIC TAX CONSEQUENCES TO HIM
OR HER OF THE PURCHASE, OWNERSHIP AND SALE OF SECURITIES OF AN ENTITY ELECTING
TO BE TAXED AS A REIT, INCLUDING THE FEDERAL, STATE, LOCAL AND FOREIGN AND OTHER
TAX CONSEQUENCES OF SUCH PURCHASE, OWNERSHIP, SALE AND ELECTION AND OF POTENTIAL
CHANGES IN APPLICABLE TAX LAWS.
Taxation of the Company
General. The Company elected to be taxed as a REIT under Sections
856 through 860 of the Code effective for its taxable year ended December 31,
1993. The Company believes that it was organized, and has operated, in such a
manner so as to qualify for taxation as a REIT under the Code and intends to
conduct its operations so as to continue to qualify for taxation as a REIT. No
assurance, however, can be given that the Company has operated in a manner so as
to qualify or will be able to operate in such a manner so as to remain qualified
as a REIT. Qualification and taxation as a REIT depends upon the Company's
ability to meet on a continuing basis, through actual annual operating results,
the required distribution levels, diversity of share ownership and the various
qualification tests imposed under the Code discussed below, the results of which
will not be reviewed by Counsel. Given the highly complex nature of the rules
governing REITs, the ongoing importance of factual determinations, and the
possibility of future changes in circumstances of the Company, no assurance can
be given that the actual results of the Company's operations for any one taxable
year have satisfied or will continue to satisfy such requirements.
The following is a general summary of the Code provisions that
govern the federal income tax treatment of a REIT and its shareholders. These
provisions of the Code are highly technical and complex. This summary is
qualified in its entirety by the applicable Code provisions,
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Treasury Regulations and administrative and judicial interpretations thereof,
all of which are subject to change prospectively or retroactively.
If the Company qualifies for taxation as a REIT, it generally will
not be subject to federal corporate income taxes on its net income that is
currently distributed to shareholders. This treatment substantially eliminates
the "double taxation" (at the corporate and shareholder levels) that generally
results from investment in a corporation. However, the Company will be subject
to federal income tax as follows: first, the Company will be taxed at regular
corporate rates on any undistributed REIT taxable income, including
undistributed net capital gains. Second, under certain circumstances, the
Company may be subject to the "alternative minimum tax" on its items of tax
preference. Third, if the Company has (i) net income from the sale or other
disposition of "foreclosure property" (which is, in general, property acquired
on foreclosure or otherwise on default on a loan secured by such real property
or a lease of such property) which is held primarily for sale to customers in
the ordinary course of business or (ii) other nonqualifying income from
foreclosure property, it will be subject to tax at the highest corporate rate on
such income. Fourth, if the Company has net income from prohibited transactions
(which are, in general, certain sales or other dispositions of property held
primarily for sale to customers in the ordinary course of business other than
foreclosure property), such income will be subject to a 100% tax. Fifth, if the
Company should fail to satisfy the 75% gross income test or the 95% gross income
test (as discussed below), but nonetheless has maintained its qualification as a
REIT because certain other requirements have been met, it will be subject to a
100% tax on an amount equal to (a) the gross income attributable to the greater
of the amount by which the Company fails the 75% or 95% test multiplied by (b) a
fraction intended to reflect the Company's profitability. Sixth, if the Company
should fail to distribute during each calendar year at least the sum of (i) 85%
of its REIT ordinary income for such year, (ii) 95% of its REIT capital gain net
income for such year, and (iii) 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. Seventh, if the
Company acquires any asset from a C corporation (i.e., a corporation generally
subject to full corporate level tax) in a transaction in which the basis of the
asset in the Company's hands is determined by reference to the basis of the
asset (or any other property) in the hands of the C corporation, and the Company
recognizes gain on the disposition of such asset during the 10-year period
beginning on the date on which such asset was acquired by the Company, then, to
the extent of such property's "built-in gain" (the excess of the fair market
value of such property at the time of the acquisition by the Company over the
adjusted basis of such property at such time), such gain will be subject to tax
at the highest regular corporate rate applicable (as provided in Internal
Revenue Service regulations that have not yet been promulgated).
Requirements for Qualification. A REIT is a corporation, trust or
association (i) which is managed by one or more trustees or directors, (ii) the
beneficial ownership of which is evidenced by transferable shares, or by
transferable certificates of beneficial interest, (iii) which would be taxable
as a domestic corporation, but for Sections 856 through 859 of the Code, (iv)
which is neither a financial institution nor an insurance company subject to
certain provisions of the Code, (v) the beneficial ownership of which is held by
100 or more persons, (vi) during the last half of each taxable year not more
than 50% in value of the outstanding stock of which is owned, directly or
indirectly, by five or fewer individuals (as defined in the Code to include
certain entities), and (vii) which meets certain other tests, described below,
regarding the nature of its income and assets. The Code provides that conditions
(i) through (iv), inclusive, must be met during the entire taxable year and that
condition (v) must be met during at least 335 days of a taxable year of 12
months, or during a proportionate part of a taxable year of less than 12 months.
The Company expects to meet the ownership test immediately
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after the transaction contemplated herein. The Company may redeem, at its
option, a sufficient number of shares or restrict the transfer thereof to bring
or maintain the ownership of the shares in conformity with the requirements of
the Code. In addition, the Company's Declaration of Trust includes restrictions
regarding the transfer of its stock that are intended to assist the Company in
continuing to satisfy requirements (v) and (vi). Moreover, for the Company's
taxable years commencing on or after January 1, 1998, if the Company complies
with regulatory rules pursuant to which it is required to send annual letters to
holders of its capital stock requesting information regarding the actual
ownership of its capital stock, and the Company does not know, or exercising
reasonable diligence would not have known, whether it failed to meet requirement
(vi) above, the Company will be treated as having met the requirement. See
"Description of Common Shares," "Description of Preferred Shares" and
"Restrictions on Transfers of Capital Shares and Anti-Takeover Provisions."
In the case of a REIT which is a partner in a partnership, Treasury
Regulations provide that the REIT will be deemed to own its proportionate share
of each of the assets of the partnership and will be deemed to be entitled to
the income of the partnership attributable to such share. In addition, the
character of the assets and items of gross income of the partnership will retain
the same character in the hands of the REIT for purposes of Section 856 of the
Code, including satisfying the gross income tests and assets (as discussed
below). Thus, the Company's proportionate share of the assets, liabilities, and
items of gross income of the partnerships in which the Company owns an interest
are treated as assets, liabilities and items of the Company for purposes of
applying the requirements described herein.
Income Tests. In order to maintain qualification as a REIT, the
Company annually must satisfy certain gross income requirements. First, at least
75% of the Company'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 qualified temporary investments. Second, at least 95% of the
Company's gross income (excluding gross income from prohibited transactions) for
each taxable year must be derived from such real property investments,
dividends, interest and gain from the sale or disposition of stock or
securities. For its tax years ending on or before December 31, 1997, the Company
was subject to a third gross income test which required that short-term gain
from the sale or other disposition of stock or securities, gain from prohibited
transactions and gain on the sale or other disposition of real property held for
less than four years (apart from involuntary conversions and sales of
foreclosure property) must have represented less than 30% of the Company's gross
income (including gross income from prohibited transactions) for each taxable
year.
Rents received by the Company will qualify as "rents from real
property" in satisfying the gross income requirements for a REIT described above
only if several conditions 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 or sales. Second, the Code provides that rents received
from a tenant will not qualify as "rents from real property" in satisfying the
gross income tests if the REIT, or an owner of 10% or more of the REIT, 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 a
lease of real property, is greater than 15% of the total rent received under the
lease, then the portion of rent attributable to such personal property
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will not qualify as "rents from real property." Finally, for rents received to
qualify as "rents from real property," the Company generally must not operate or
manage the property (subject to a de minimis exception applicable to the
Company's tax years commencing on and after January 1, 1998 as described below)
or furnish or render services to the tenants of such property, other than
through an independent contractor from whom the REIT derives no revenue. The
REIT may, however, directly perform certain services that are "usually or
customarily rendered" in connection with the rental of space for occupancy only
and are not otherwise considered "rendered to the occupant" of the property
("Permissible Services").
For the Company's taxable years commencing on or after January 1,
1998, rents received generally will qualify as rents from real property
notwithstanding the fact that the Company provides services that are not
Permissible Services so long as the amount received for such services meets a de
minimis standard. The amount received for "impermissible services" with respect
to a property (or, if services are available only to certain tenants, possibly
with respect to such tenants) cannot exceed one percent of all amounts received,
directly or indirectly, by the Company with respect to such property (or, if
services are available only to certain tenants, possibly with respect to such
tenants). The amount that the Company will be deemed to have received for
performing "impermissible services" will be the greater of the actual amounts so
received or 150% of the direct cost to the Company of providing those services.
If the Company fails to satisfy one or both of the 75% or 95% gross
income tests for any taxable year, it may nevertheless qualify as a REIT for
such year if such failure was due to reasonable cause and not willful neglect,
it disclosed the nature and amounts of its items of gross income in a schedule
attached to its return, and any incorrect information on the schedule was not
due to fraud with intent to evade tax. A 100% penalty tax would be imposed on
the amount by which the Company failed the 75% or 95% test (whichever amount is
greater), less an amount which generally reflects expenses attributable to
earning the nonqualified income. No analogous relief is available for failure to
satisfy the 30% income test.
Subject to certain safe harbor exceptions, any gain realized by the
Company on the sale of any property held as inventory or other property held
primarily for sale to customers in the ordinary course of business will be
treated as income from a prohibited transaction that is subject to a 100%
penalty tax. Such prohibited transaction income may also have an adverse effect
upon the Company's ability to satisfy the income tests for qualification as a
REIT. Under existing law, whether property is held as inventory or primarily for
sale to customers in the ordinary course of a trade or business is a question of
fact that depends on all the facts and circumstances with respect to the
particular transaction.
Asset Tests. The Company must also satisfy three tests relating to
the nature of its assets every quarter. First, at least 75% of the value of the
Company's total assets must be represented by real estate assets (including (i)
its allocable share of real estate assets held by partnerships in which the
Company owns an interest or held by "qualified REIT subsidiaries" (as defined in
the Code) of the Company and (ii) stock or debt instruments held for not more
than one year purchased with the proceeds of an offering of equity securities or
a long-term (at least five years) debt offering of the Company, cash, cash items
and government securities). Second, not more than 25% of the Company's total
assets may be represented by securities other than those in the 75% asset class.
Third, of the investments included in the 25% asset class, the value of any one
issuer's securities owned by the Company may not exceed 5% of the value of the
Company's total assets and the Company may not
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own more than 10% of any one issuer's outstanding voting securities. The Company
expects that substantially all of its assets will consist of (i) real
properties, (ii) stock or debt investments that earn qualified temporary
investment income, (iii) other qualified real estate assets, and (iv) cash, cash
items and government securities. The Company may also invest in securities of
other entities, provided that such investments will not prevent the Company from
satisfying the asset and income tests for REIT qualification set forth above.
If the Company inadvertently fails one or more of the asset tests at
the end of a calendar quarter, such a failure would not cause it to lose its
REIT status, provided that (i) it satisfied all of the asset tests at the close
of a preceding calendar quarter, and (ii) the discrepancy between the values of
the Company's assets and the standards imposed by the asset test either did not
exist immediately after the acquisition of any particular acquisition or was not
wholly partly caused by such an acquisition. If the condition described in
clause (ii) of the preceding sentence were not satisfied, the Company could
still avoid disqualification by eliminating any discrepancy within 30 days after
the close of the calendar quarter in which it arose.
Annual Distribution Requirement. With respect to each taxable year,
the Company must distribute to its shareholders dividends (other than capital
gain dividends) in an amount at least equal to the sum of (a) 95% of its "REIT
Taxable income" (determined without regard to the deduction for dividends paid
and by excluding any net capital gain), and (b) 95% of any after-tax net income
from foreclosure property, minus the sum of certain items of "excess noncash
income." REIT Taxable Income is generally computed in the same manner as taxable
income of ordinary corporations, with several adjustments, such as a deduction
allowed for dividends paid, but not for dividends received. "Excess noncash
income" is the amount, if any, by which the sum of certain items of noncash
income exceeds 5% of REIT Taxable Income for the taxable year (determined
without regard to the deduction for dividends paid and by excluding any net
capital gain). With respect to the Company's taxable years commencing prior to
January 1, 1998, these items of noncash income for which relief from the
distribution requirement is provided are (i) the excess of amounts includible in
gross income due to the operation of Section 467 of the Code (relating to
deferred rental agreements) over the amounts that would have been includible
without regard to such provision, (ii) income from certain like-kind exchanges
not eligible for tax-free treatment, and (iii) the amounts includible on gross
income with respect to the amount that original issue discount on purchase money
debt obligations (but not other kinds of original issue discount or market
discount) exceed the amount of money and fair market value of other property
received during the taxable year under such instruments. With respect to the
Company's tax years commencing on and after January 1, 1998, "excess noncash
income" described in clause (iii) above applies equally to REITs that use the
accrual method of accounting for United States federal income tax purposes.
The Company will be subject to tax on amounts not distributed at
regular United States federal corporate income tax rates. With respect to its
taxable years beginning on and after January 1, 1998, the Company may elect to
retain rather than distribute, net long-term capital gain, and be subject to
regular United States federal income tax thereon. For the consequences of such
an election to the REIT's shareholders, see "Taxation of Taxable Shareholders."
In addition, a nondeductible 4% excise tax is imposed on the excess of (i) 85%
of the Company's ordinary income for the year plus 95% of capital gain net
income for the year and the undistributed portion of the required distribution
for the prior year over (ii) the actual distribution to shareholders during the
year (if any). Net operating losses generated by the Company may be carried
forward but not carried back and used by the Company for 15 years (or 20 years
in the case of net operating losses generated in the
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Company's tax years commencing on or after January 1, 1998) to reduce REIT
Taxable Income and the amount that the Company will be required to distribute in
order to remain qualified as a REIT. Net capital losses of the Company may be
carried forward for five years (but not carried back) and used to reduce capital
gains.
In general, a distribution must be made during the taxable year to
which it relates to satisfy the distribution test and to be deducted in
computing REIT Taxable Income. However, the Company may elect to treat a
dividend declared and paid after the end of the year (a "subsequent declared
dividend") as paid during such year for purposes of complying with the
distribution test and computing REIT Taxable Income, if the dividend is (i)
declared before the regular or extended due date of the Company's tax return for
such year and (ii) paid not later than the date of the first regular dividend
payment made after the declaration (but in no case later than 12 months after
the end of the year). For purposes of computing the 4% excise tax, a subsequent
declared dividend is considered paid when actually distributed. Furthermore, any
dividend that is declared by the Company in October, November of December of a
calendar year, and payable to shareholders of record as of a specified date in
such month of such year will be deemed to have been paid by the Company (and
received by shareholders) on December 31 of such calendar year, but only if such
dividend is actually paid by the Company in January of the following calendar
year. For purposes of complying with the distribution test for a taxable year as
a result of an adjustment in certain of its items of income, gain or deduction
by the IRS, the Company may be permitted to remedy such failure by paying a
"deficiency dividend" in a later year together with interest and a penalty. Such
deficiency dividend may be included in the Company's deduction of dividends paid
for the earlier year for purposes of satisfying the distribution test. For
purposes of the 4% excise tax, the deficiency dividend is taken into account
when paid, and any income giving rise to the deficiency adjustment is treated as
arising when the deficiency dividend is paid.
The Company believes that it has distributed and intends to continue
to distribute to its shareholders an amount at least equal to 95% of the sum of
(i) its REIT Taxable Income (determined without regard to the deduction for
dividends paid and by excluding any net capital gains) and (ii) any after-tax
net income from foreclosure properties less any "excess noncash income," as
those amounts are determined in good faith by the Company or its independent
accountants. However, it is possible that timing differences between the accrual
of income and its actual collection, and the need to make deductible
expenditures (such as capital improvements or principal payments on debt) may
cause the Company to recognize taxable income in excess of its net cash
receipts, thus increasing the difficulty of compliance with the distribution
requirement. In order to meet the 95% requirement, the Company might find it
necessary to arrange for short-term, or possibly long-term, borrowings.
Failure to Qualify. If the Company fails to qualify as a REIT for
any taxable year, and if certain relief provisions of the Code do not apply, it
would be subject to federal income tax (including applicable alternative minimum
tax) on its taxable income at regular corporate rates. Distributions to
shareholders in any year in which the Company fails to qualify will not be
deductible by the Company nor will they be required to be made. As a result, the
Company's failure to qualify as a REIT would reduce the cash available for
distribution by the Company to its shareholders. In addition, if the Company
fails to qualify as a REIT, all distributions to shareholders will be taxable as
ordinary income, to the extent of the Company's current and accumulated earnings
and profits. Subject to certain limitations of the Code, corporate distributees
may be eligible for the dividends-received deduction.
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If the Company's failure to qualify as a REIT is not due to
reasonable cause but results from willful neglect, the Company would not be
permitted to elect REIT status for the four taxable years after the taxable year
for which such disqualification is effective. In the event the Company were to
fail to qualify as a REIT in one year and subsequently requalify in a later
year, the Company might be required to recognize taxable income based on the net
appreciation in value of its assets as a condition to requalification. In the
alternative, the Company may be taxed on the net appreciation in value of its
assets if it sells properties within ten years of the date the Company
requalifies as a REIT under federal income tax laws.
Taxation of Taxable Shareholders
As used herein, the term "U.S. shareholder" means a holder of Common
or Preferred Shares who (for United States federal income tax purposes) (i) is a
citizen or resident of the United States, (ii) is a corporation, partnership, or
other entity treated as a corporation or partnership for federal income tax
purposes created or organized in or under the laws of the United States or of
any political subdivision thereof, (iii) is an estate the income of which is
subject to United States federal income taxation regardless of its source or
(iv) a trust whose administration is subject to the primary supervision of a
United States court and which has one or more United States persons who have the
authority to control all substantial decisions of the trust.
As long as the Company qualifies as a REIT, distributions made to
the Company's U.S. shareholders out of current or accumulated earnings and
profits (and not designated as capital gain dividends) will be taken into
account by them as ordinary income and corporate shareholders will not be
eligible for the dividends-received deductions as to such amounts. For purposes
of computing the Company's earnings and profits, depreciation for depreciable
real estate will be computed on a straight-line basis over a 40-year period. For
purposes of determining whether distributions on the Common Shares are out of
current or accumulated earnings and profits, the earnings and profits of the
Company will be allocated first to the Preferred Shares and second to the Common
Shares. There can be no assurance that the Company will have sufficient earnings
and profits to cover distributions on any Preferred Shares.
Distributions that are properly designated as capital gain dividends
will be taxed as gains from the sale or exchange of a capital asset held for
more than one year (to the extent they do not exceed the Company's actual net
capital gain for the taxable year) without regard to the period for which the
shareholder has held its shares. However, corporate shareholders may be required
to treat up to 20% of certain capital gain dividends as ordinary income pursuant
to Section 291 of the Code. As described below, the Taxpayer Relief Act of 1997
(the "1997 Act") changed significantly the taxation of capital gains by
taxpayers who are individuals, estates, or a trust. With respect to amounts
designated as capital gain distributions, the IRS has released Notice 97-64
describing temporary regulations that will be issued to permit REITs to further
designate such capital gain dividends as (i) a 20% rate gain distribution, (ii)
an unrecaptured Section 1250 gain distribution (taxed at a rate of 25%), or
(iii) a 28% rate gain distribution. Capital gain distributions that are not
specifically designated will be characterized as a 28% rate gain distribution.
Notice 97-64 provides that a REIT must determine the maximum amounts that it may
designate as 20% and 25% rate capital gain dividends by performing the
computation required by the Code as if the REIT were an individual whose
ordinary income were subject to a marginal tax rate of at least 28%. The Notice
further provides that designations made by the REIT will be effective only to
the extent that they comply with Revenue
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Ruling 89-81, which requires that distributions made to different classes of
shares not be composed disproportionately of dividends of a particular type.
Distributions in excess of current and accumulated earnings and
profits will constitute a non-taxable return of capital to a shareholder to the
extent that such distributions do not exceed the adjusted basis of the
shareholder's shares, and will result in a corresponding reduction in the
shareholder's basis in the shares. Any reduction in a shareholder's tax basis
for its shares will increase the amount of taxable gain or decrease the
deductible loss that will be realized upon the eventual disposition of the
shares. The Company will notify shareholders at the end of each year as to the
portions of the distributions which constitute ordinary income, capital gain or
a return of capital. Any portion of such distributions that exceed the adjusted
basis of a U.S. shareholder's shares will be taxed as capital gain from the
disposition of shares, provided that the shares are held as capital assets in
the hands of the U.S. shareholder.
Aside from the different income tax rates applicable to ordinary
income and capital gain dividends, regular and capital gain dividends from the
Company will be treated as dividend income for most other federal income tax
purposes. In particular, such dividends will be treated as "portfolio" income
for purposes of the passive activity loss limitation (including all individuals)
and generally will not be able to offset any "passive losses" against such
dividends. Dividends will be treated as investment income for purposes of the
investment interest limitation contained in Section 63(d) of the Code, which
limits the deductibility of interest expense incurred by noncorporate taxpayers
with respect to indebtedness attributable to certain investment assets.
In general, dividends paid by the Company will be taxable to
shareholders in the year in which they are received, except in the case of
dividends declared at the end of the year, but paid in the following January, as
discussed above.
In general, a domestic shareholder will realize capital gain or loss
on the disposition of shares equal to the difference between (i) the amount of
cash and the fair market value of any property received on such disposition and
(ii) the shareholder's adjusted basis of such shares. With respect to
dispositions occurring after July 28, 1997, in the case of a domestic
shareholder who is an individual or an estate or trust, such gain or loss will
be long-term capital gain or loss if such shares have been held for more than
one year but not more than 18 months and long-term capital gain or loss subject
to a 20% tax rate if such shares have been held for more than 18 months. In the
case of a taxable U.S. shareholder that is a corporation, such gain or loss will
be long-term capital gain or loss if such shares have been held for more than
one year. Loss upon the sale or exchange of shares by a shareholder who has held
such shares for six months or less (after applying certain holding period rules)
will be treated as long-term capital loss to the extent of distribution from the
Company required to be treated by such shareholder as long-term capital gain.
Pursuant to the 1997 Act, for the Company's taxable years commencing
on or after January 1, 1998, the Company may elect to require the holders of
shares to include the Company's undistributed net long-term capital gains in
their income. If the Company makes such an election, the holders of shares will
(i) include in their income as long-term capital gains their proportionate share
of such undistributed capital gains and (ii) be deemed to have paid their
proportionate share of the tax paid by the Company on such undistributed capital
gains and thereby receive a credit or refund for such amount. A holder of shares
will increase the basis in its shares by the difference between the amount of
capital gain included in its income and the amount of tax it is deemed to have
paid. The
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earnings and profits of the Company will be adjusted appropriately. As described
below in "-- Recent Legislation," with respect to such long-term capital gain of
a taxable domestic shareholder that is an individual or an estate or a trust,
the IRS has authority to issue regulations that could apply the special tax rate
applicable to sales of depreciable real property by an individual or an estate
or trust to the portion of the long-term capital gains of an individual or an
estate or trust attributable to deductions for depreciation taken with respect
to depreciable real property.
Backup Withholding
The Company will report to its domestic shareholders and the IRS the
amount of dividends paid during each calendar year, and the amount of tax
withheld, if any, with respect thereto. Under the backup withholding rules, a
shareholder may be subject to backup withholding at the rate of 31% with respect
to dividends paid unless such holder (a) is a corporation or comes within
certain other exempt categories and, when required, demonstrates this fact, or
(b) provides a taxpayer identification number and certifies as to no loss of
exemption from backup withholding. Amounts withheld as backup withholding will
be creditable against the shareholder's income tax liability. In addition, the
Company may be required to withhold a portion of capital gain distributions made
to any shareholders who fail to certify their non-foreign status to the Company.
See "--Taxation of Non-U.S. Shareholders" below. Additional issues may arise
pertaining to information reporting and backup withholding with respect to
Non-U.S. Shareholders (persons other than (i) citizens or residents of the
United States, (ii) corporations, partnerships or other entities created or
organized under the laws of the United States or any political subdivision
thereof, and (iii) estates or trusts the income of which is subject to United
States federal income taxation regardless of its source) and Non-U.S.
Shareholders should consult their tax advisors with respect to any such
information and backup withholding requirements.
The Treasury Department has recently finalized regulations regarding
the withholding and information reporting rules discussed above. In general,
these regulations do not alter the substantive withholding and information
reporting requirements but unify current certification procedures and forms and
clarify and modify reliance standards. These regulations generally are effective
for payments made after December 31, 1998, subject to certain transition rules.
Valid withholding certificates that are held on December 31, 1998, will remain
valid until the earlier of December 31, 1999 or the date of expiration of the
certificate under rules currently in effect (unless otherwise invalidated due to
changes in the circumstances of the person whose name is on such certificate).
Taxation of Non-U.S. Shareholders
The following discussion is only a summary of the rules governing
United States federal income taxation of nonresident alien individuals, foreign
corporations, foreign partnerships or other foreign estates or trusts
(collectively, "Non-U.S. Shareholders"). Prospective Non-U.S. Shareholders
should consult with their own tax advisors to determine the impact of federal,
state and local income tax laws with regard to an investment in shares,
including any reporting requirements.
Distributions that are not attributable to gain from sales or
exchanges by the Company of United States real property interests and not
designated by the Company as capital gains dividends will be treated as
dividends of ordinary income to the extent that they are made out of current or
accumulated earnings and profits of the Company. Such distributions ordinarily
will be subject to a
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withholding tax equal to 30% of the gross amount of the distribution unless an
applicable tax treaty reduces or eliminates that tax. Certain tax treaties limit
the extent to which dividends paid by a REIT can qualify for a reduction of the
withholding tax on dividends. Distributions in excess of current and accumulated
earnings and profits of the Company will not be taxable to a Non-U.S.
Shareholder to the extent that they do not exceed the adjusted basis of the
Shareholder's shares, but rather will reduce the adjusted basis of such shares.
To the extent that such distributions exceed the adjusted basis of a Non-U.S.
Shareholder's shares, they will give rise to tax liability if the Non-U.S.
Shareholder would otherwise be subject to tax on any gain from the sale or
disposition of his shares in the Company, as described below.
For withholding tax purposes, the Company currently is required to
treat all distributions as if made out of its current or accumulated earnings
and profits and thus intends to withhold at the rate of 30% (or a reduced treaty
rate if applicable) on the amount of any distribution (other than distributions
designated as capital gain dividends) made to a Non-U.S. Shareholder. Under the
final regulations (discussed above), generally effective for distributions on or
after January 1, 1999, the Company would be required to withhold at the 30% rate
on distributions it reasonably estimates to be in excess of the Company's
current and accumulated earnings and profits. If it cannot be determined at the
time a distribution is made whether such distribution will be in excess of
current and accumulated earnings and profits, the distribution will be subject
to withholding at the rate applicable to ordinary dividends. As a result of a
legislative change made by the Small Business Job Protection Act of 1996, it
appears that the Company will be required to withhold 10% of any distribution in
excess of the Company's current and accumulated earnings and profits.
Consequently, although the Company intends to withhold at a rate of 30% on the
entire amount of any distribution (or a lower applicable treaty rate), to the
extent that the Company does not do so, any portion of a distribution not
subject to withholding at a rate of 30% (or lower applicable treaty rate) will
be subject to withholding at a rate of 10%. However, the Non-U.S. Shareholder
may seek from the IRS a refund of such amounts from the IRS if it is
subsequently determined that such distribution was, in fact, in excess of
current or accumulated earnings and profits of the Company, and the amount
withheld exceeded the Non-U.S. Shareholder's United States tax liability, if
any.
For any year in which the Company qualifies as a REIT, distributions
that are attributable to gain from sales or exchanges by the Company of United
States real property interests will be taxed to a Non-U.S. Shareholder under the
provisions of the Foreign Investment in Real Property Tax Act of 1980
("FIRPTA"). Under FIRPTA, a Non-U.S. Shareholder is taxed as if such gain were
effectively connected with a United States business. Non-U.S. Shareholders would
thus be taxed at the normal capital gain rates applicable to U.S. shareholders
(subject to applicable alternative minimum tax and a special alternative minimum
tax in the case of non-resident alien individuals). Also, distributions subject
to FIRPTA may be subject to a 30% branch profits tax in the hands of a corporate
Non-U.S. Shareholder not entitled to treaty relief. The Company is required by
applicable regulations to withhold 35% of any distribution that could be
designated by the Company as a capital gains dividend regardless of the amount
actually designated as a capital gain dividend. This amount is creditable
against the Non-U.S. Shareholder's FIRPTA tax liability.
Although the law is not entirely clear on the matter, it appears
that amounts designated by the Company pursuant to the 1997 Act as undistributed
capital gains in respect of shares would be treated with respect to Non-U.S.
Shareholders in the manner outlined in the preceding paragraph for actual
distributions by the Company of capital gain dividends. See "Taxation of
Shareholders -- Taxation of Taxable Shareholders." Under that approach, Non-U.S.
Shareholders would be able to
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offset as a credit against their United States federal income tax liability
resulting therefrom their proportionate share of the tax paid by the Company on
such undistributed capital gains (and to receive from the IRS a refund to the
extent their proportionate share of such tax paid by the Company were to exceed
their actual United States federal income tax liability).
Gain recognized by a Non-U.S. Shareholder upon a sale of shares
generally will not be taxed under FIRPTA if the Company is a "domestically
controlled REIT," defined generally as a REIT in which at all times during
specified testing period less than 50% in value of the share was held directly
or indirectly by foreign persons. It is anticipated that the Company will be a
"domestically controlled REIT." Therefore, the sale of shares will not be
subject to taxation under FIRPTA. However, gain not subject to FIRPTA will be
taxable to a Non-U.S. Shareholder if (i) investment in the shares is effectively
connected with the Non-U.S. Shareholder's United States trade or business, in
which case the Non-U.S. Shareholder will be subject to the same treatment as
U.S. Shareholders with respect to such gain, or (ii) the Non-U.S. Shareholder is
a nonresident alien individual who was present in the United States for 183 days
or more during the taxable year and such gain is attributable to an office or
fixed place of business in the United States or such nonresident alien
individual has a "tax home" in the United States and such gain is not
attributable to an office or fixed place of business located outside the United
States or, if such gain is attributable to an office or fixed place of business
located outside the United States, it is not subject to foreign income tax equal
to at least 10% of such gain. If the gain on the sale of shares were to be
subject to taxation under FIRPTA, the Non-U.S. Shareholder will be subject to
the same treatment as U.S. Shareholders with respect to such gain (subject to
applicable alternative minimum tax, special alternative minimum tax in the case
of nonresident alien individuals and possible application of the 30% branch
profits tax in the case of foreign corporations) and the purchaser would be
required to withhold and remit to the Internal Revenue Service 10% of the
purchase price.
Taxation of Tax-Exempt Shareholders
Tax-exempt entities, including qualified employee pension and profit
sharing trusts and individual retirement accounts ("Exempt Organizations"),
generally are exempt from federal income taxation. However, they are subject to
taxation on their unrelated business taxable income ("UBTI"). While investments
in real estate may generate UBTI, the Service has issued a published ruling to
the effect that dividend distributions by a REIT to an exempt employee pension
trust do not constitute UBTI, provided that the shares of the REIT are not
otherwise used in an unrelated trade or business of the exempt employee pension
trust. Based on that ruling and on the intention of the Company to invest its
assets in a manner that will avoid the recognition of UBTI by the Company,
amounts distributed by the Company to Exempt Organizations generally should not
constitute UBTI. However, if an Exempt Organization finances its acquisition of
shares in the Company with debt, a portion of its income from the Company, if
any, will constitute UBTI pursuant to the "debt-financed property" rules.
Furthermore, social clubs, voluntary employee benefit associations, supplemental
unemployment benefit trusts, and qualified group legal services plans that are
exempt from taxation under paragraphs (7), (9), ( 17), and (20), respectively,
of Code Section 501(c) are subject to different UBTI rules, which generally will
require them to characterize distributions from the Company as UBTI.
In addition, a pension trust that owns more than 10% of the Company
is required to treat a percentage of the dividends from the Company as UBTI (the
"UBTI Percentage") in certain circumstances. The UBTI Percentage is the gross
income derived from an unrelated trade or business (determined as if the Company
were a pension trust) divided by the gross income of the Company for
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the year in which the dividends are paid. The UBTI rule applies only if (i) the
UBTI Percentage is at least 5%, (ii) the Company qualifies as a REIT by reason
of the modification of the 5/50 Rule that allows the beneficiaries of the
pension trust to be treated as holding shares of the Company in proportion to
their actuarial interests in the pension trust, and (iii) either (A) one pension
trust owns more than 25% of the value of the Company's shares or (B) a group of
pension trusts individually holding more than 10% of the value of the Company's
capital shares collectively own more than 50% of the value of the Company's
capital shares.
While an investment in the Company by an Exempt Organization
generally is not expected to result in UBTI except in the circumstances
described in the preceding paragraph, any gross UBTI that does arise from such
an investment will be combined with all other gross UBTI of the Exempt
Organization for a taxable year and reduced by all deductions attributable to
the UBTI plus $1,000. Any amount then remaining will constitute UBTI on which
the Exempt Organization will be subject to tax. If the gross income taken into
account in computing UBTI exceeds $1,000, the Exempt Organization is obligated
to file a tax return for such year on IRS Form 990-T. None of the Company, the
Board of Trustees, or any of their Affiliates expects to undertake the
preparation or filing of IRS Form 990-T for any Exempt Organization in
connection with an investment by such Exempt Organization in the Common Shares.
Generally, IRS Form 990-T must be filed with the Service by April 15 of the year
following the year in which it relates.
Recent Legislation
As described above, the 1997 Act contains certain changes to the
REIT qualification requirements and to the taxation of REITs. The 1997 Act also
contains certain changes to the taxation of capital gains of individuals, trusts
and estates.
Capital Gain Rates. Subject to certain exceptions, for individuals,
trusts and estates, the maximum rate of tax on the net capital gain from a sale
or exchange occurring after July 28, 1997 of a capital asset held for more than
18 months has been reduced from 28% to 20%. The maximum rate has been reduced to
18% for capital assets acquired after December 31, 2000 and held for more than
five years. The maximum rate for capital assets held for more than one year but
not more than 18 months remains at 28%. The maximum rate for net capital gains
attributable to the sale of depreciable real property held for more than 18
months is 25% to the extent of the prior deductions for "unrecaptured Section
1250 gain" (i.e., depreciation deductions not otherwise recaptured as ordinary
income under the existing depreciation recapture rules). Capital gain from the
sale of depreciable real property held for more than 18 months allocated by the
Company to a non-corporate shareholder will be subject to the 25% rate to the
extent that the capital gain on the real property sold by the Company does not
exceed prior depreciation deductions with respect to such property. The 1997 Act
provides the IRS with authority to issue regulations that could, among other
things, apply these rates on a look-through basis in the case of "pass-through"
entities such as the Company. The taxation of capital gains of corporations was
not changed by the 1997 Act.
REIT Provisions. In addition to the provisions discussed above, the
1997 Act contains a number of technical provisions that either (i) reduce the
risk that the Company will inadvertently cease to qualify as a REIT, or (ii)
provide additional flexibility with which the Company can meet the REIT
qualification requirements. These provisions are effective for the Company's
taxable years commencing on or after January 1, 1998.
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Taxation of Reinvested Dividends
Those holders of Common Shares who elect to participate in the
Dividend Reinvestment Plan will be deemed to have received the gross amount of
dividends distributed on their behalf by the Plan Agent as agent for the
participants in such plan. Such deemed dividends will be treated as actual
dividends to such shareholders by the Company and will retain their character
and have the tax effects as described above. Participants that are subject to
federal income tax will thus be taxed as if they received such dividends despite
the fact that their distributions have been reinvested and, as a result, they
will not receive any cash with which to pay the resulting tax liability.
Other Tax Considerations
Entity Classification. A significant number of the Company's
investments are held through partner-ships. If any such partnerships were
treated as an association, the entity would be taxable as a corporation and
therefore would be subject to an entity level tax on its income. In such a
situation, the character of the Company's assets and items of gross income would
change and might preclude the Company from qualifying as a REIT.
Prior to January 1, 1997, an organization formed as a partnership or
a limited liability company was treated as a partnership for federal income tax
purposes rather than as a corporation only if it had no more than two of the
four corporate characteristics that the Treasury Regulations in effect at that
time used to distinguish a partnership from a corporation for tax purposes.
These four characteristics were (i) continuity of life, (ii) centralization of
management, (iii) limited liability, and (iv) free transferability of interests.
Under final Treasury Regulations which became effective January 1, 1997, the
four factor test has been eliminated and an entity formed as a partnership or as
a limited liability company will be taxed as a partnership for federal income
tax purposes, unless it specifically elects otherwise. The Regulations provide
that the IRS will not challenge the classification of an existing partnership or
limited liability company for tax periods prior to January 1, 1997 so long as
(1) the entity had a reasonable basis for its claimed classification, (2) the
entity and all its members recognized the federal income tax consequences of any
changes in the entity's classification within the 60 months prior to January 1,
1997, and (3) neither the entity nor any member of the entity had been notified
in writing on or before May 8, 1996, that the classification of the entity was
under examination by the IRS.
The Company believes that each partnership in which it holds an
interest (either directly or indirectly) is properly treated as a partnership
for tax purposes (and not as an association taxable as a corporation).
Tax Allocations with Respect to the Properties. When property is
contributed to a partnership in exchange for an interest in the partnership, the
partnership generally takes a carryover basis in that property for tax purposes
equal to the adjusted basis of the contributing partner in the property, rather
than a basis equal to the fair market value of the property at the time of
contribution (this difference is referred to as "Book-Tax Difference"). Special
rules under 704(c) of the Code and the regulations thereunder tend to eliminate
the Book-Tax Difference on an annual basis or with respect to a specific taxable
transaction such as a sale. Thus, the carryover basis of the contributed
properties in the hands of the partnership could cause the Company (i) to be
allocated lower amounts of depreciation and other deductions for tax purposes
than would be allocated to the Company if all properties were to have a tax
basis equal to their fair market value at the time the properties were
46
<PAGE> 51
contributed to the partnership, and (ii) possibly to be allocated taxable gain
in the event of a sale of such contributed properties in excess of the economic
or book income allocated to the Company as a result of such sale.
PLAN OF DISTRIBUTION
The Company may sell Securities through underwriters or dealers,
directly to one or more purchasers, through agents or through a combination of
any such methods of sale.
The distribution of the Securities may be effected from time to time
in one or more transactions at a fixed price or prices, which may be changed, at
market prices prevailing at the time of sale, at prices related to such
prevailing market prices, or at negotiated prices.
In connection with the sale of Securities, underwriters or agents
may receive compensation from the Company or from purchasers of Securities, for
whom they may act as agents, in the form of discounts, concessions or
commissions. Underwriters may sell Securities to or through dealers, and such
dealers may receive compensation in the form of discounts, concessions or
commissions from the underwriters and/or commissions from the purchasers for
whom they may act as agents. Underwriters, dealers, and agents that participate
in the distribution of Securities may be deemed to be underwriters under the
Securities Act, and any discounts or commissions they receive from the Company
and any profit on the resale of Securities they realize may be deemed to be
underwriting discounts and commissions under the Securities Act. Any such
underwriter or agent will be identified, and any such compensation received from
the Company will be described, in the applicable Prospectus Supplement.
Unless otherwise specified in the related Prospectus Supplement,
each series of Securities will be a new issue with no established trading
market, other than the Common Shares which are listed on the NYSE. Any Common
Shares sold pursuant to a Prospectus Supplement will be listed on the NYSE,
subject to official notice of issuance. The Company may elect to list any series
of Debt Securities or Preferred Shares on an exchange, but is not obligated to
do so. It is possible that one or more underwriters may make a market in a
series of Securities, but will not be obligated to do so and may discontinue any
market making at any time without notice. Therefore, no assurance can be given
as to the liquidity of, or the trading market for, the Securities.
Under agreements into which the Company may enter, underwriters,
dealers and agents who participate in the distribution of Securities may be
entitled to indemnification by the Company against certain liabilities,
including liabilities under the Securities Act.
Underwriters, dealers and agents may engage in transactions with, or
perform services for, or be tenants of, the Company in the ordinary course of
business.
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.
47
<PAGE> 52
EXPERTS
The consolidated financial statements of the Company incorporated
into this Prospectus by reference to the Annual Report on Form 10-K for the year
ended December 31, 1997, have been so incorporated in reliance on the report of
KPMG Peat Marwick LLP, independent certified public accountants (incorporated by
reference) and upon the authority of said firm as experts in accounting and
auditing.
LEGAL MATTERS
Certain legal matters, including the validity of the Securities and
certain tax matters, will be passed upon for the Company by Paul, Hastings,
Janofsky & Walker LLP, 399 Park Avenue, New York, New York 10022. Seth M.
Zachary, a partner of Paul, Hastings, Janofsky & Walker LLP, is presently
serving as a member of the Board of Trustees of the Company and will continue to
serve as a member of the Board of Trustees until the Company's 1998 Annual
Meeting of Shareholders. In connection with certain matters related to the laws
of the State of Maryland, Paul, Hastings, Janofsky & Walker LLP will rely on the
opinion of Piper & Marbury L.L.P., 36 South Charles Street, Baltimore, Maryland
21201.
48
<PAGE> 53
================================================================================
No dealer, salesperson or other individual has been authorized to
give any information or to make any representations not contained in this
Prospectus in connection with the Offering covered by this Prospectus. If given
or made, such information or representations must not be relied upon as having
been authorized by the Company or the Underwriters. This Prospectus does not
constitute an offer to sell, or a solicitation of any offer to buy any
securities in any jurisdiction where, or to any person to whom, it is unlawful
to make such offer or solicitation. Neither the delivery of this Prospectus nor
any sale made hereunder shall, under any circumstances, create any implication
that there has been no change in the affairs of the Company since the date
hereof or that the information contained herein is correct as of any time
subsequent to the date hereof.
TABLE OF CONTENTS
Page
Prospectus
Available Information .................................................. 2
Incorporation of Certain Documents by Reference ........................ 2
The Company ............................................................ 3
Risk Factors ........................................................... 5
Use of Proceeds ........................................................ 8
Ratio of Earnings to Fixed Charges ..................................... 8
Description of Debt Securities ......................................... 9
Description of Preferred Shares ........................................ 23
Description of Common Shares ........................................... 30
Restrictions on Transfers of Capital Shares and
Anti-Takeover Provisions ............................................ 31
Federal Income Tax Considerations ...................................... 32
Plan of Distribution ................................................... 47
Experts ................................................................ 48
Legal Matters .......................................................... 48
================================================================================
================================================================================
LEXINGTON CORPORATE
PROPERTIES TRUST
Debt Securities
Preferred Shares
Common Shares
--------------
PROSPECTUS
--------------
April 3, 1998
================================================================================
<PAGE> 54
PART II. INFORMATION NOT REQUIRED IN PROSPECTUS
ITEM 14. OTHER EXPENSES OF ISSUANCE AND DISTRIBUTION.
The expenses in connection with the distribution of the securities
being registered are set forth in the following table (all amounts except the
registration fee are estimated):
<TABLE>
<S> <C>
Registration Fee ........................ $73,750
Printing Expenses ....................... $100,000
Legal fees and expenses ................. $200,000
Accounting fees and expenses ............ $60,000
Miscellaneous ........................... $66,250
--------
TOTAL ................................... $500,000
========
</TABLE>
All expenses in connection with the issuance and distribution of the
securities being offered will be borne by the Registrant (other than selling
commissions).
ITEM 15. INDEMNIFICATION OF TRUSTEES AND OFFICERS.
The Declaration of Trust of the Registrant provides that any trustee
or officer of the Registrant shall be indemnified by the Registrant to the full
extent that trustees and officers are permitted to be indemnified by the laws of
the State of Maryland.
Section 8-301 of the Maryland Law of Corporations and Associations
permits a real estate investment trust to indemnify trustees of the trust to the
same extent as is permitted for directors of Maryland corporations pursuant to
Section 2-418 of the Maryland General Corporation Law ("MGCL"). Section 2-418 of
the MGCL generally permits a corporation to indemnify any director made a party
to any proceeding by reason of service in that capacity unless it is established
that (i) the act or omission of the director was material to the matter giving
rise to the proceeding and (a) was committed in bad faith or (b) was the result
of active and deliberate dishonesty; or (ii) the director actually received an
improper personal benefit in money, property or services, or (iii) in the case
of any criminal proceeding, the director had reasonable cause to believe that
the act or omission was unlawful. Reasonable expenses incurred by a director who
is a party to a proceeding may be paid or reimbursed by the corporation in
advance of the final disposition of the proceeding subject to the satisfaction
of certain procedural criteria. Indemnification and advancement of expenses
authorized by statute are not deemed exclusive of any other rights, by
indemnification or otherwise, to which a director may be entitled under the
charter, bylaws, a resolution of stockholders or directors, an agreement or
otherwise, both as to action in an official capacity and as to
<PAGE> 55
action in another capacity while holding such office. A real estate investment
trust may indemnify officers, employees and agents of the trust to the same
extent as is permitted for officers, employees and agents of Maryland
corporations under Section 2-418 of the MGCL. Section 2-418 permits a
corporation to indemnify an officer, employee or agent to the same extent that
it may indemnify directors.
The foregoing reference is necessarily subject to the complete text
of the Declaration of Trust referred to above and is qualified in its entirety
by reference thereto.
The Registrant has also entered into Indemnification Agreements with
certain officers and trustees for the purpose of indemnifying such persons from
certain claims and action in their capacities as such.
ITEM 16. EXHIBITS.
There are filed with the Registration Statement the following
exhibits:
EXHIBIT NO. DESCRIPTION
3.1 Declaration of Trust (filed as Exhibit 3.1 to the
Company's Report on Form 10-K filed March 31, 1998 (the
"Form 10-K")).*
3.2 Bylaws (filed as Exhibit 3.2 to the Form 10-K).*
4.1 Form of Indenture.
5.1 Opinion of Paul, Hastings, Janofsky & Walker LLP as to
the validity of the Securities being registered.
5.2 Opinion of Piper & Marbury L.L.P. as to the validity of
the Securities being registered.
23.1 Consent of KPMG Peat Marwick LLP.
23.2 Consent of Paul, Hastings, Janofsky & Walker LLP
(included in Exhibit 5.1).
23.3 Consent of Piper & Marbury L.L.P. (included in Exhibit
5.2).
<PAGE> 56
EXHIBIT NO. DESCRIPTION
24.1 Power of Attorney (included in Part II of this
Registration Statement).
*Incorporated by reference.
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;
(ii) To reflect in the prospectus any acts or events
arising after the effective date of the registration statement
(or the most recent post-effective amendment thereof) which,
individually or in the aggregate, represent a fundamental
change in the information set forth in the registration
statement. Notwithstanding the foregoing, any increase or
decrease in volume of securities offered (if the total dollar
value of securities offered would not exceed that which was
registered) and any deviation from the low or high end of the
estimated offering range may be reflected in the form of
prospectus filed with the Commission pursuant to Rule 424(b)
if, in the aggregate, the changes in volume and price
represent no more than a 20% change in the maximum aggregate
offering price set forth in the "Calculation of Registration
Fee" table in the effective registration statement; and
(iii) To include any material information with respect
to the plan of distribution not previously disclosed in the
registration statement or any material change to such
information in the registration statement;
provided, however, that paragraphs (a)(1)(i) and (a)(1)(ii)
herein do not apply if the Registration Statement is on Form
S-3 or Form S-8, and if the information required to be
included in a post-effective amendment by those paragraphs is
contained in
<PAGE> 57
periodic reports filed with or furnished to the Commission by
the Registrant pursuant to Section 13 or Section 15(d) of the
Securities Exchange Act of 1934 that are incorporated by
reference in this registration statement;
(2) That, for the purpose of determining any liability
under the Securities Act, each such post-effective amendment
shall be deemed to be a new registration statement relating to
the securities offered therein, and the offering of such
securities at that time shall be deemed to be the initial bona
fide offering thereof;
(3) To remove from registration by means of a
post-effective amendment any of the securities being
registered which remain unsold at the termination of the
offering.
(b) The undersigned Registrant hereby undertakes that, for purposes
of determining any liability under the Securities Act of 1933, each filing of
the Registrant's annual report pursuant to Section 13(a) or 15(d) of the
Securities Exchange Act of 1934 (and, where applicable, each filing of an
employee benefit plan's annual report pursuant to Section 15(d) of the
Securities Exchange Act of 1934) that is incorporated by reference in the
Registration Statement shall be deemed to be a new registration statement
relating to the securities offered therein, and the offering of such securities
at that time shall be deemed to be the initial bona fide offering thereof.
(c) Insofar as indemnification for liabilities arising under the
Securities Act of 1933 may be permitted to trustees, officers and controlling
persons of the Registrant pursuant to the foregoing provisions, or otherwise,
the Registrant has been advised that in the opinion of the Securities and
Exchange Commission such indemnification is against public policy as expressed
in the Act and is, therefore, unenforceable. In the event that a claim for
indemnification against such liabilities (other than the payment by the
Registrant of expenses incurred or paid by a trustee, officer or controlling
person of the Registrant in the successful defense of any action, suit or
proceeding) is asserted by such trustee, officer or controlling person in
connection with the securities being registered, the Registrant will, unless in
the opinion of its counsel the matter has been settled by controlling precedent,
submit to a court of appropriate jurisdiction the question whether such
indemnification by it is against public policy as expressed in the Act and will
be governed by the final adjudication of such issue.
(d) The undersigned Registrant hereby undertakes to file an
application for the purpose of determining 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 such act.
<PAGE> 58
SIGNATURES
Pursuant to the requirements of the Securities Act of 1933, the
Registrant has duly caused this Registration Statement to be signed on its
behalf by the undersigned, thereunto duly authorized, in the City of New York,
State of New York, on April 3, 1998.
LEXINGTON CORPORATE PROPERTIES TRUST
By: /s/ T. Wilson Eglin
-------------------------------------
T. Wilson Eglin
President and Chief Operating Officer
KNOW ALL MEN BY THESE PRESENTS, that each person whose signature
appears below constitutes and appoints T. Wilson Eglin and E. Robert Roskind,
jointly and severally, his attorneys-in-fact, each with power of substitution
for him in any and all capacities, to sign any amendments to this Registration
Statement, to file the same, with the exhibits thereto, and other documents in
connection therewith, with the Securities and Exchange Commission, hereby
ratifying and confirming all that each of said attorneys-in-fact, or his
substitute or substitutes, may do or cause to be done by virtue hereof. Pursuant
to the requirements of the Securities Act of 1933, this Registration Statement
has been signed by the following persons in the capacities and on the dates
indicated.
Signature Capacity Date
- --------- -------- ----
Chairman of the Board,
Co-Chief Executive
/s/ E. Robert Roskind Officer and Trustee April 3, 1998
- ----------------------- (Principal Executive Officer)
E. Robert Roskind
/s/ Richard J. Rouse Vice Chairman, Co-Chief April 3, 1998
- ----------------------- Executive Officer and
Richard J. Rouse Trustee
<PAGE> 59
/s/ T. Wilson Eglin President, Chief Operating April 3, 1998
- ----------------------- Officer and Trustee
T. Wilson Eglin
/s/ Antonia G. Trigiani Chief Financial Officer April 3, 1998
- ----------------------- and Treasurer
Antonia G. Trigiani
/s/ Paul R. Wood Vice President, Chief April 3, 1998
- ----------------------- Accounting Officer
Paul R. Wood and Secretary
/s/ Carl D. Glickman Trustee April 3, 1998
- -----------------------
Carl D. Glickman
/s/ John D. McGurk Trustee April 3, 1998
- -----------------------
John D. McGurk
/s/ Seth M. Zachary Trustee April 3, 1998
- -----------------------
Seth M. Zachary
/s/ Kevin W. Lynch Trustee April 3, 1998
- -----------------------
Kevin W. Lynch
<PAGE> 60
EXHIBIT INDEX
-------------
EXHIBIT NO. DESCRIPTION
3.1 Declaration of Trust.*
3.2 Bylaws*
4.1 Form of Indenture.
5.1 Opinion of Paul, Hastings, Janofsky & Walker LLP as to
the validity of the Securities being registered.
5.2 Opinion of Piper & Marbury L.L.P. as to the validity of
the Securities being registered.
23.1 Consent of KPMG Peat Marwick LLP.
23.2 Consent of Paul, Hastings, Janofsky & Walker LLP
(included in Exhibit 5.1).
23.3 Consent of Piper & Marbury L.L.P. (included in Exhibit
5.2).
24.1 Power of Attorney (included in Part II of this
Registration Statement).
*Incorporated by reference.
<PAGE> 1
EXHIBIT 4.1
- -------------------------------------------------------------------------------
LEXINGTON CORPORATE PROPERTIES TRUST
TO
[Name of Indenture Trustee]
Indenture Trustee
-------------------------------------------------
Indenture
Dated as of ____________ ___, _______
----------------------
Debt Securities
- -------------------------------------------------------------------------------
<PAGE> 2
TABLE OF CONTENTS
<TABLE>
<CAPTION>
Page
----
<S> <C>
RECITALS OF THE COMPANY..................................................................................1
ARTICLE I DEFINITIONS AND OTHER PROVISIONS OF
GENERAL APPLICATION....................................................................1
SECTION 1.01 Definitions...................................................................1
SECTION 1.02 Compliance Certificates and Opinions.........................................11
SECTION 1.03 Form of Documents Delivered to Indenture Trustee.............................12
SECTION 1.04 Acts of Holders..............................................................12
SECTION 1.05 Notices, etc., to Indenture Trustee and Company..............................14
SECTION 1.06 Notice to Holders; Waivers...................................................15
SECTION 1.07 Counterparts: Effect of Headings and Table of Contents.......................16
SECTION 1.08 Successors and Assigns.......................................................16
SECTION 1.09 Severability Clause..........................................................16
SECTION 1.10 Benefits of Indenture........................................................16
SECTION 1.11 Governing Law................................................................17
SECTION 1.12 Legal Holidays...............................................................17
SECTION 1.13 Immunity of Shareholders, Trustees, Officers and Agents of
the Company..................................................................17
SECTION 1.14 Conflict with Trust Indenture Act............................................17
ARTICLE II SECURITIES FORMS......................................................................18
SECTION 2.01 Forms of Securities..........................................................18
SECTION 2.02 Form of Indenture Trustee's Certificate of Authentication....................18
SECTION 2.03 Securities Issuable in Global Form...........................................19
ARTICLE III THE SECURITIES........................................................................20
SECTION 3.01 Amount Unlimited; Issuable in Series.........................................20
SECTION 3.02 Denominations................................................................24
SECTION 3.03 Execution, Authentication, Delivery and Dating...............................25
SECTION 3.04 Temporary Securities.........................................................27
SECTION 3.05 Registration, Registration of Transfer and Exchange..........................30
SECTION 3.06 Mutilated, Destroyed, Lost and Stolen Securities.............................34
SECTION 3.07 Payment of Interest: Interest Rights Preserved...............................35
SECTION 3.08 Persons Deemed Owners........................................................37
SECTION 3.09 Cancellation.................................................................39
SECTION 3.10 Computation of Interest......................................................39
</TABLE>
-i-
<PAGE> 3
<TABLE>
<CAPTION>
<S> <C>
ARTICLE IV SATISFACTION AND DISCHARGE............................................................39
SECTION 4.01 Satisfaction and Discharge of Indenture......................................39
SECTION 4.02 Application of Trust Funds...................................................41
ARTICLE V REMEDIES..............................................................................41
SECTION 5.01 Events of Default............................................................41
SECTION 5.02 Acceleration of Maturity: Rescission and Annulment...........................43
SECTION 5.03 Collection of Indebtedness and Suits for Enforcement by
Indenture Trustee............................................................44
SECTION 5.04 Indenture Trustee May File Proofs of Claim...................................45
SECTION 5.05 Indenture Trustee May Enforce Claims Without Possession of
Securities or Coupons........................................................46
SECTION 5.06 Application of Money Collected...............................................46
SECTION 5.07 Limitation on Suits..........................................................47
SECTION 5.08 Unconditional Right of Holders to Receive Principal,
Premium, if any, Interest and Additional Amounts.............................48
SECTION 5.09 Restoration of Rights and Remedies...........................................48
SECTION 5.10 Rights and Remedies Cumulative...............................................48
SECTION 5.11 Delay or Omission Not Waiver.................................................49
SECTION 5.12 Control by Holders of Securities.............................................49
SECTION 5.13 Waiver of Past Defaults......................................................49
SECTION 5.14 Waiver of Usury, Stay or Extension Laws......................................50
SECTION 5.15 Undertaking for Costs........................................................50
ARTICLE VI THE INDENTURE TRUSTEE.................................................................50
SECTION 6.01 Notice of Defaults...........................................................50
SECTION 6.02 Certain Rights of Indenture Trustee..........................................51
SECTION 6.03 Not Responsible for Recitals or Issuance of Securities.......................53
SECTION 6.04 May Hold Securities..........................................................53
SECTION 6.05 Money Held in Trust..........................................................53
SECTION 6.06 Compensation and Reimbursement...............................................53
SECTION 6.07 Corporate Indenture Trustee Required; Eligibility; Conflicting
Interests....................................................................54
SECTION 6.08 Resignation and Removal; Appointment of Successor............................54
SECTION 6.09 Acceptance of Appointment by Successor.......................................56
SECTION 6.10 Merger, Conversion, Consolidation or Succession to
Business.....................................................................57
SECTION 6.11 Appointment of Authenticating Agent..........................................58
ARTICLE VII HOLDERS' LISTS AND REPORTS BY INDENTURE
TRUSTEE AND COMPANY...................................................................60
SECTION 7.01 Disclosure of Names and Addresses of Holders.................................60
</TABLE>
-ii-
<PAGE> 4
<TABLE>
<CAPTION>
<S> <C>
SECTION 7.02 Reports by Indenture Trustee.................................................60
SECTION 7.03 Reports by Company...........................................................60
SECTION 7.04 Company to Furnish Indenture Trustee Names and Addresses
of Holders...................................................................61
ARTICLE VIII CONSOLIDATION, MERGER, SALE,
LEASE OR CONVEYANCE...................................................................62
SECTION 8.01 Consolidations and Mergers of Company and Sales, Leases
and Conveyances Permitted Subject to Certain Conditions......................62
SECTION 8.02 Rights and Duties of Successor Corporation...................................62
SECTION 8.03 Officers' Certificate and Opinion of Counsel.................................63
ARTICLE IX SUPPLEMENTAL INDENTURES...............................................................63
SECTION 9.01 Supplemental Indentures Without Consent of Holders...........................63
SECTION 9.02 Supplemental Indentures with Consent of Holders..............................65
SECTION 9.03 Execution of Supplemental Indentures.........................................66
SECTION 9.04 Effect of Supplemental Indentures............................................66
SECTION 9.05 Conformity with Trust Indenture Act..........................................66
SECTION 9.06 Reference in Securities to Supplemental Indentures...........................66
ARTICLE X COVENANTS.............................................................................67
SECTION 10.01 Payment of Principal, Premium, if any; Interest and
Additional Amounts...........................................................67
SECTION 10.02 Maintenance of Office or Agency..............................................67
SECTION 10.03 Money for Securities Payments to Be Held in Trust............................69
SECTION 10.04 Existence....................................................................71
SECTION 10.05 Maintenance of Properties....................................................71
SECTION 10.06 Insurance....................................................................71
SECTION 10.07 Payment of Taxes and Other Claims............................................71
SECTION 10.08 Provision of Financial Information...........................................71
SECTION 10.09 Statement as to Compliance...................................................72
SECTION 10.10 Additional Amounts...........................................................72
SECTION 10.11 Waiver of Certain Covenants..................................................73
ARTICLE XI REDEMPTION OF SECURITIES..............................................................73
SECTION 11.01 Applicability of Article.....................................................73
SECTION 11.02 Election to Redeem; Notice to Indenture Trustee..............................74
SECTION 11.03 Selection by Indenture Trustee of Securities to
Be Redeemed..............................................................74
SECTION 11.04 Notice of Redemption.........................................................74
SECTION 11.05 Deposit of Redemption Price..................................................76
SECTION 11.06 Securities Payable on Redemption Date........................................76
</TABLE>
-iii-
<PAGE> 5
<TABLE>
<CAPTION>
<S> <C>
SECTION 11.07 Securities Redeemed in Part..................................................78
ARTICLE XII SINKING FUNDS.........................................................................78
SECTION 12.01 Applicability of Article.....................................................78
SECTION 12.02 Satisfaction of Sinking Fund Payments with Securities........................78
SECTION 12.03 Redemption of Securities for Sinking Fund....................................79
ARTICLE XIII REPAYMENT AT THE OPTION OF HOLDERS....................................................79
SECTION 13.01 Applicability of Article.....................................................79
SECTION 13.02 Repayment of Securities......................................................79
SECTION 13.03 Exercise of Option...........................................................80
SECTION 13.04 When Securities Presented for Repayment Become Due and
Payable......................................................................81
SECTION 13.05 Securities Repaid in Part....................................................82
ARTICLE XIV DEFEASANCE AND COVENANT DEFEASANCE....................................................82
SECTION 14.01 Applicability of Article; Company's Option to Effect
Defeasance or Covenant Defeasance............................................82
SECTION 14.02 Defeasance and Discharge.....................................................82
SECTION 14.03 Covenant Defeasance..........................................................83
SECTION 14.04 Conditions to Defeasance or Covenant Defeasance..............................83
SECTION 14.05 Deposited Money and Government Obligations to Be Held in
Trust; Other Miscellaneous Provisions........................................85
ARTICLE XV MEETINGS OF HOLDERS OF SECURITIES.....................................................87
SECTION 15.01 Purposes for Which Meetings May Be Called....................................87
SECTION 15.02 Call, Notice and Place of Meetings...........................................87
SECTION 15.03 Persons Entitled to Vote at Meetings.........................................87
SECTION 15.04 Quorum; Action...............................................................87
SECTION 15.05 Determination of Voting Rights; Conduct and Adjournment of
Meetings.....................................................................89
SECTION 15.06 Counting Votes and Recording Action of Meetings..............................90
SIGNATURES..............................................................................................91
EXHIBIT A
FORM OF REDEEMABLE OR NON-REDEEMABLE SECURITY............................................................1
EXHIBIT B
FORMS OF CERTIFICATION...................................................................................1
</TABLE>
-iv-
<PAGE> 6
LEXINGTON CORPORATE PROPERTIES TRUST
Reconciliation and tie between Trust Indenture Act of 1939
and Indenture, dated as of _______________, 199_.
<TABLE>
<CAPTION>
Trust Indenture
Act Section Indenture Section
----------- -----------------
<S> <C>
Section 310(a)(1).................................................. 6.07
(a)(2).................................................. 6.07
(b).................................................. 6.07,6.08
Section 312(c).................................................. 7.01
Section 313(a).................................................. 7.02
(c).................................................. 7.02
Section 314(a).................................................. 7.03
(a)(4).................................................. 1.0.09
(c)(1).................................................. 1.02
(c)(2).................................................. 1.02
(e).................................................. 1.02
Section 315(b).................................................. 6.01
Section 316(a) (last sentence)............................................ 1.01 ("Outstanding")
(a)(1)(A).................................................. 5.02, 5.12
(a)(1)(B).................................................. 5.13
(b).................................................. 5.08
Section 317(a)(1).................................................. 5.03
(a)(2).................................................. 5.04
Section 318(a).................................................. 1.11
(c).................................................. 1.11
</TABLE>
- ----------------------
NOTE: This reconciliation and tie shall not, for any purpose, be deemed to be
a part of the Indenture.
Attention should also be directed to Section 318(c) of the
Trust Indenture Act, which provides that the provisions of Sections 310 to and
including 317 of the Trust Indenture Act are a part of and govern every
qualified indenture, whether or not physically contained therein.
<PAGE> 7
INDENTURE, dated as of _____________, __, between LEXINGTON CORPORATE
PROPERTIES TRUST, a real estate investment trust organized under the laws of the
State of Maryland (hereinafter called the "Company"), having its principal
office at 355 Lexington Avenue, New York, NY 10017, and [NAME OF INDENTURE
TRUSTEE], a corporation organized under the laws of ______________ as Indenture
Trustee hereunder (hereinafter called the "Indenture 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 I. - DEFINITIONS AND OTHER PROVISIONS OF
GENERAL APPLICATION
SECTION 1.01 Definitions: For all purposes of this Indenture, except
as otherwise expressly provided or unless the context otherwise requires:
(1) the terms defined in this Article have the meanings assigned
to them in this Article, and include the plural as well as the
singular;
(2) all other terms used herein which are defined in the TIA (as
defined), either directly or by reference therein, have the meanings
assigned to them therein, and the terms "cash transaction" and
"self-liquidating paper," as used
<PAGE> 8
in TIA Section 311, shall have the meanings assigned to them in the
rules of the Commission adopted under the TIA;
(3) all accounting terms not otherwise defined herein have the
meanings assigned to them in accordance with GAAP; and
(4) the words "herein," "hereof" and "hereunder" and other words
of similar import refer to this Indenture as a whole and not to any
particular Article, Section or other subdivision.
"Act," when used with respect to any Holder, has the meaning
specified in Section 1.04.
"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 Person authorized by the Indenture
Trustee pursuant to Section 6.11 hereof to act on behalf of the Indenture
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 5.01.
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"Bearer Security" means any Security established pursuant to Section
2.01 which is payable to bearer.
"Board of Trustees" means the board of trustees 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 Trustees and to be in full force and effect on the date of such
certification, and delivered to the Indenture 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 3.01, any day, other than a Saturday or Sunday, that 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, 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 Shares" means, with respect to any Person, all shares of
capital stock or beneficial interest, as applicable, issued by such Person other
than Preferred Stock or Preferred Shares, as applicable, or Excess Stock or
Excess Shares, as applicable.
"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 or a Vice President, and by its Treasurer, an Assistant Treasurer,
the Secretary or an Assistant Secretary, of the Company, and delivered to the
Indenture Trustee.
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"Conversion Event" means the cessation of use of (i) a Foreign
Currency both by the government of the country which issued such currency and
for the settlement of transactions by a central bank or other public
institutions of or within the international banking community, (ii) the ECU both
within the European Monetary System and for the settlement of transactions by
public institutions of or within the European Communities or (iii) any currency
unit (or composite currency) other than the ECU for the purposes for which it
was established.
"Corporate Trust Office" means the office of the Indenture Trustee at
which, by 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,
business trusts and real estate investment trusts.
"coupon" means any interest coupon appertaining to a Bearer Security.
"Custodian" has the meaning specified in Section 5.01.
"Defaulted Interest" has the meaning specified in Section 3.07.
"Dollar" or "$" means a dollar or other equivalent unit in such coin
or currency of the United States of America as at the time shall be legal tender
for the payment of public and private debts.
"ECU" means the European Currency Unit as defined and revised from
time to time by the Council of the European Communities.
"Euroclear" means Morgan Guaranty Trust Company of New York, Brussels
office, or its successor as operator of the Euroclear System.
"European Communities" means the European Economic Community, the
European Coal and Steel Community and the European Atomic Energy Community.
"European Monetary System" means the European Monetary System
established by the Resolution of December 5, 1978 of the Council of the European
Communities.
"Event of Default" has the meaning specified in Section 5.01.
"Foreign Currency" means any currency, currency unit or composite
currency, including, without limitation, the ECU issued by the government of one
or more
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<PAGE> 11
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 3.05, and bearing the
legend prescribed in Section 2.03.
"Government Obligations" means securities which are (i) direct
obligations of the United States of America or the government which issued the
Foreign Currency in which the Securities of a particular series are payable, for
the payment of which its full faith and credit is pledged or (ii) obligations of
a Person controlled or supervised by and acting as an agency or instrumentality
of the United States of America or such government which issued the Foreign
Currency in which the Securities of such series are payable, the payment of
which is unconditionally guaranteed as a full faith and credit obligation by the
United States of America or such other government, which, in either case, are
not callable or redeemable at the option of the issuer thereof, and shall also
include a depository receipt issued by a bank or trust company as custodian with
respect to any such Government Obligation or a specific payment of interest on
or principal of any such Government Obligation held by such custodian for the
account of the holder of a depository receipt, provided that (except as required
by law) such custodian is not authorized to make any deduction from the amount
payable to the holder of such depository receipt from any amount received by the
custodian in respect of the Government Obligation or the specific payment of
interest on or principal of the Government Obligation evidenced by such
depository receipt.
"Holder" means, in the case of a Registered Security, the Person in
whose name a Security is registered in the Security Register and, in the case of
a Bearer Security, the bearer thereof and, when used with respect to any coupon,
shall mean the bearer thereof.
"Indenture" means this instrument as originally executed or as it may
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 3.01; provided, however, that, if at any time more than
one Person is acting as Indenture Trustee under this instrument, "Indenture"
shall mean, with respect to any one or more series of Securities for which such
Person is Indenture Trustee, this instrument as originally executed or as it may
be supplemented or amended from time to time by one
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<PAGE> 12
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 Indenture Trustee established as
contemplated by Section 3.01, exclusive, however, of any provisions or terms
which relate solely to other series of Securities for which such Person is
Indenture Trustee, regardless of when such terms or provisions were adopted, and
exclusive of any provision or terms adopted by means of one or more indentures
supplemental hereto executed and delivered after such Person had become such
Indenture Trustee but to which such Person, as such Indenture Trustee, was not a
party.
"Indexed Security" means a Security the terms of which provide that
the principal amount thereof payable at Stated Maturity may be more or less than
the principal face amount thereof at original issuance.
"Interest," when used with respect to an Original Issue Discount
Security which by its terms bears interest only after Maturity, shall mean
interest payable after Maturity, and, when used with respect to a Security which
provides for the payment of Additional Amounts pursuant to Section 10.10,
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 Trustees, the President or a Vice President and by the Treasurer,
an Assistant Treasurer, the Secretary or an Assistant Secretary of the Company,
and delivered to the Indenture Trustee.
"Opinion of Counsel" means a written opinion of counsel, who may be
counsel for the Company or who may be an employee of or other counsel for the
Company and who shall be reasonably satisfactory to the Indenture 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 5.02.
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<PAGE> 13
"Outstanding," when used with respect to Securities, means, as of the
date of determination, all Securities theretofore authenticated and delivered
under this Indenture, except:
(i) Securities theretofore cancelled by the Indenture Trustee or
delivered to the Indenture Trustee for cancellation;
(ii) 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 deposited with the
Indenture 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 Indenture Trustee has been
made;
(iii) Securities, except to the extent provided in Sections
14.02 and 14.03, with respect to which the Company has effected
defeasance and/or covenant defeasance as provided in Article XIV;
(iv) Securities which have been paid pursuant to Section 3.06 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 Indenture Trustee proof satisfactory to it that such
Securities are held by a bona fide purchaser in whose hands such
Securities are valid obligations of the Company; and
(v) Securities converted into Common Shares or Preferred Shares
pursuant to or in accordance with this Indenture if the terms of such
Securities provide for convertibility pursuant to Section 3.01;
provided, however, that in determining whether the Holders of the requisite
principal amount of the Outstanding Securities have given any request, demand,
authorization, direction, notice, consent or waiver hereunder or are present at
a meeting of Holders for quorum purposes, and for the purpose of making the
calculations required by TIA Section 3.03, (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 5.02, (ii) the principal amount of any Security denominated
in a Foreign
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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 3.01 as of the date such Security is
originally issued by the Company, of the principal amount (or, in the case of an
Original Issue Discount Security, the Dollar equivalent as of such date of
original issuance of the amount determined as provided in clause (i) above) of
such Security, (iii) the principal amount of any Indexed Security that may be
counted in making such determination or calculation and that shall be deemed
outstanding for such purpose shall be equal to the principal face amount of such
Indexed Security at original issuance, unless otherwise provided with respect to
such Security pursuant to Section 3.01, and (iv) Securities owned by the Company
or any other obligor upon the Securities or any Affiliate of the Company or of
such other obligor shall be disregarded and deemed not to be Outstanding, except
that, in determining whether the Indenture 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 Indenture
Trustee knows to be 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 reasonable satisfaction of the
Indenture 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. In case of a dispute
as to such right, the advice of counsel shall be full protection in respect of
any decision made by the Indenture Trustee in accordance with such advice.
"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, limited liability
company, partnership, joint venture, association, joint-stock company, trust,
unincorporated organization or government or any agency or political subdivision
thereof or any other entity.
"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 3.01 and 10.02.
"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 3.06 in exchange for or in
lieu of a mutilated, destroyed,
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<PAGE> 15
lost or stolen Security or a Security to which a mutilated, destroyed, lost or
stolen coupon appertains shall be deemed to evidence the same debt as the
mutilated, destroyed, lost or stolen Security or the Security to which the
mutilated, destroyed, lost or stolen coupon appertains.
"Preferred Shares" means, with respect to any Person, all shares of
beneficial interest or capital stock, as applicable, issued by such Person that
is entitled to a preference or priority over any other shares of beneficial
interest or capital stock, as applicable, 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 3.01, whether or not a
Business Day.
"Repayment Date" means, when used with respect to any Security to be
repaid at the option of the Holder, the date fixed for such repayment by or
pursuant to this Indenture.
"Repayment Price" means, when used with respect to any Security to be
repaid at the option of the Holder, the price at which it is to be repaid by or
pursuant to this Indenture.
"Responsible Officer," when used with respect to the Indenture
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"), assistant
cashier, any trust officer or assistant trust officer, the controller or any
other officer of the Indenture 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
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<PAGE> 16
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 Indenture Trustee under this Indenture,
"Securities" with respect to the Indenture as to which such Person is Indenture
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 Indenture Trustee.
"Security Register" and "Security Registrar" have the respective
meanings specified in Section 3.05.
"Significant Subsidiary" means any Subsidiary which is a "significant
subsidiary" (as defined in Article I, Rule 1-02 of Regulation S-X, promulgated
under the Securities Act of 1933) of the Company.
"Special Record Date" for the payment of any Defaulted Interest on
the Registered Securities of or within any Series means a date fixed by the
Company pursuant to Section 3.07.
"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
equity securities 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, "equity securities" means stock or shares having voting power for
the election of directors or trustees, as applicable, whether at all times or
only so long as no senior class of stock or shares 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 9.05.
"Indenture Trustee" means the Person named as the "Indenture Trustee"
in the first paragraph of this Indenture until a successor Indenture Trustee
shall have become such pursuant to the applicable provisions of this Indenture,
and thereafter "Indenture
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Trustee" shall mean or include each Person who is then an Indenture Trustee
hereunder; provided, however, that if at any time there is more than one such
Person, "Indenture Trustee" as used with respect to the Securities of any series
shall mean only the Indenture Trustee with respect to Securities of that series.
"United States" means, unless otherwise specified with respect to any
Securities pursuant to Section 3.01, 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 3.01, 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 1.02 Compliance Certificates and Opinions. Upon any
application or request by the Company to the Indenture Trustee to take any
action under any provision of this Indenture, the Company shall furnish to the
Indenture 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 10.09) 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;
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<PAGE> 18
(3) a statement that, in the opinion of each such individual, he
has made such examination or investigation as is necessary to enable
him to express an informed opinion as to whether or not such
condition or covenant has been complied with; and
(4) a statement as to whether, in the opinion of each such
individual, such condition or covenant has been complied with.
SECTION 1.03 Form of Documents Delivered to Indenture Trustee. In any
case where several matters are required to be certified by, or covered by an
opinion of, any specified Person, it is not necessary that all such matters be
certified by, or covered by the opinion of, only one such Person, or that they
be so certified or covered by only one document, but one such Person may certify
or give an opinion with respect to some matters and one or more other such
Persons as to other matters, and any such person may certify or give an opinion
as to such matters in one or several documents.
Any certificate or opinion of an officer of the Company may be based,
insofar as it relates to legal matters, upon an Opinion of Counsel, or a
certificate or representations by counsel, unless such officer knows, or in the
exercise of reasonable care should know, that the opinion, certificate or
representations with respect to the matters upon which his certificate or
opinion is based are erroneous. Any such Opinion of Counsel or certificate or
representations may be based, insofar as it relates to factual matters, upon a
certificate or opinion of, or representations by, an officer or officers of the
Company stating that the information as to such factual matters is in the
possession of the Company, unless such counsel knows, or in the exercise of
reasonable care should know, that the certificate or opinion or representations
with respect to such matters are erroneous.
Where any Person is required to make, give or execute two or more
applications, requests, consents, certificates, statements, opinions or other
instruments under this Indenture, they may, but need not, be consolidated and
form one instrument.
SECTION 1.04 Acts of Holders. (a) Any request, demand, authorization,
direction, notice, consent, waiver or other action provided by this Indenture to
be given or taken by Holders of the Outstanding Securities of all series or one
or more series, as the case may be, may be embodied in and evidenced by one or
more instruments of substantially similar tenor signed by such Holders in person
or by agents duly appointed in writing. If Securities of a series are issuable
as Bearer Securities, any request, demand, authorization, direction, notice,
consent, waiver or other action provided by this Indenture to be given or taken
by Holders of Securities of such series may, alternatively, be embodied in and
evidenced by the record of Holders of Securities of such series voting in favor
thereof, either in person or by proxies duly appointed in
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<PAGE> 19
writing, at any meeting of Holders of Securities of such series duly called and
held in accordance with the provisions of Article XV, 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 Indenture 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 Indenture Trustee and the Company and any agent of the Indenture
Trustee or the Company, if made in the manner provided in this Section 1.04. The
record of any meeting of Holders of Securities shall be proved in the manner
provided in Section 15.06.
(b) The fact and date of the execution by any Person of any such
instrument or writing may be proved by the affidavit of a witness of such
execution or by a certificate of a notary public or other officer authorized by
law to take acknowledgements of deeds, certifying that the individual signing
such instrument or writing acknowledged to him the execution thereof. Where such
execution is by a signer acting in a capacity other than his individual
capacity, such certificate or affidavit shall also constitute sufficient proof
of his authority. The fact and date of the execution of any such instrument or
writing, or the authority of the Person executing the same, may also be proved
in any other reasonable manner which the Indenture Trustee deems sufficient.
(c) 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 depository's records shall be
dispositive for purposes of this Indenture.
(d) The ownership of Bearer Securities may be proved by the
production of such Bearer Securities or by a certificate executed, as
depository, by any trust company, bank, banker or other depository, wherever
situated, if such certificate shall be deemed by the Indenture Trustee to be
satisfactory, showing that at the date therein mentioned such Person had on
deposit with such depository, 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 Indenture Trustee to be satisfactory. The Indenture 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
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<PAGE> 20
Security is produced, or (2) such Bearer Security is produced to the Indenture
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 Indenture Trustee deems sufficient.
(e) If the Company shall solicit from the Holders of Registered
Securities any request, demand, authorization, direction, notice, consent or
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 15 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 or waiver or other Act may be given
before or after such record date, but only the Holders of record at the close of
business on such record date shall be deemed to be Holders for the purposes of
determining whether Holders of the requisite proportion of outstanding
Securities have authorized or agreed or consented to such request, demand,
authorization, direction, notice, consent, waiver or other Act, and for that
purpose the Outstanding Securities shall be computed as of such record date;
provided that no such authorization, agreement or consent by the Holders on such
record date shall be deemed effective unless it shall become effective pursuant
to the provisions of this Indenture not later than eleven months after the
record date.
(f) Any request, demand, authorization, direction, notice, consent,
waiver or other Act of the Holder of any Security shall bind every future Holder
of the same Security and the Holder of every Security issued upon the
registration of transfer thereof or in exchange therefor or in lieu thereof in
respect of anything done, omitted or suffered to be done by the Indenture
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 1.05 Notices, etc., to Indenture 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 Indenture 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 Indenture Trustee at
_________________; or
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(2) the Company by the Indenture 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
Indenture Trustee by the Company, Attention: President (with a copy
to the Company's counsel), or
(3) either the Indenture 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
Indenture Trustee at facsimile number (___) _____________; and if to
the Company at facsimile number (212) 986-6972.
SECTION 1.06 Notice to Holders; Waivers. When this Indenture provides
for notice of any event to Holders of Registered Securities by the Company or
the Indenture 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, if any, and
not earlier than the earliest date, if any, prescribed for the giving of such
notice. In any case where notice to Holders of Registered Securities is given by
mail, neither the failure to mail such notice, nor any defect in any notice so
mailed, to any particular Holder shall affect the sufficiency of such notice
with respect to other Holders of Registered Securities or the sufficiency of any
notice to Holders of Bearer Securities given as provided herein. Any notice
mailed to a Holder in the manner herein prescribed shall be conclusively deemed
to have been received by such Holder, whether or not such Holder actually
receives such notice.
If by reason of the suspension of or irregularities in regular mail
service or by reason of any other cause it shall be impracticable to give such
notice by mail, then such notification to Holders of Registered Securities as
shall be made with the approval of the Indenture 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 3.01, where this Indenture
provides for notice to Holders of Bearer Securities of any event, such notice
shall be sufficiently given if published in an Authorized Newspaper in The City
of New York and in such other city or cities as may be specified in such
Securities on a Business Day, such publication to be not later than the latest
date, if any, and not earlier than the earliest date, if any, prescribed for the
giving of such notice. Any such notice shall be deemed
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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 Indenture 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 Indenture Trustee,
but such filing shall not be a condition precedent to the validity of any action
taken in reliance upon such waiver.
SECTION 1.07 Counterparts: Effect of Headings and Table of Contents.
This Indenture may be executed in any number of counterparts, each of which so
executed shall be deemed to be an original, but all such counterparts shall
together constitute but one and the same Indenture. The Article and Section
headings herein and the Table of Contents are for convenience only and shall not
affect the construction thereof.
SECTION 1.08 Successors and Assigns. All covenants and agreements in
this Indenture by the Company shall bind its successors and assigns, whether so
expressed or not.
SECTION 1.09 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 1.10 Benefits of Indenture. Nothing in this Indenture or in
the Securities or coupons, express or implied, shall give to any Person, other
than the
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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 1.11 Governing Law. This Indenture and the Securities and
coupons shall be governed by and construed in accordance with the internal law
of the State of New York without regard to the principles of the conflict of
laws thereof. 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 1.12 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 for
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 1.13 Immunity of Shareholders, Trustees, 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 shareholder,
employee, officer or trustee, as such, of the Company or of any successor,
either directly or through the Company or any successor, under any rule of law,
statute or constitutional provision or by the enforcement of any assessment or
by any legal or equitable proceeding or otherwise, all such liability being
expressly waived and released by the acceptance of the Securities by the Holders
and as part of the consideration for the issue of the Securities.
SECTION 1.14 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
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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 II. - SECURITIES FORMS
SECTION 2.01 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 3.01, 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 3.01, Bearer
Securities shall have interest coupons attached.
The definitive Securities and coupons shall be printed, lithographed
or engraved or produced by any combination of these methods on a steel engraved
border or steel engraved borders or mechanically reproduced on safety paper or
may be produced in any other manner, all as determined by the officers executing
such Securities or coupons, as evidenced by their execution of such Securities
or coupons.
SECTION 2.02 Form of Indenture Trustee's Certificate of
Authentication. Subject to Section 6.11, the Indenture Trustee's certificate of
authentication shall be in substantially the following form:
This is one of the Securities of the series designated therein
referred to in the within-mentioned Indenture.
[NAME OF INDENTURE TRUSTEE]
as Indenture Trustee
By______________________________
Authorized Signatory
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SECTION 2.03 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 3.01 and the provisions of Section 3.02,
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
Series 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 Indenture 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
Indenture Trustee pursuant to Section 3.03 or 3.04. Subject to the provisions of
Section 3.03 and, if applicable, Section 3.04, the Indenture 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 3.03 or 3.04
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 1.02 and need not be accompanied by
an Opinion of Counsel.
The provisions of the last sentence of Section 3.03 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 Indenture Trustee the
Global Security together with written instructions (which need not comply with
Section 1.02 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
3.03.
Notwithstanding the provisions of Section 3.07, unless otherwise
specified as contemplated by Section 3.01, payment of principal of and premium,
if any, and interest on any Global Security in permanent global form shall be
made to the registered Holder thereof.
Notwithstanding the provisions of Section 3.08 and except as provided
in the next preceding paragraph, the Company, the Indenture Trustee and any
agent of the Company and the Indenture Trustee shall treat as the Holder of such
principal amount of Outstanding Securities represented by a permanent Global
Security (i) in the case of a permanent Global Security in registered form, the
Holder of such permanent Global Security in registered form, or (ii) in the case
of a permanent Global Security in bearer form, Euroclear or CEDEL.
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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 Depository or a nominee of a Depository. This Security is
exchangeable for Securities registered in the name of a person other
than the Depository or its nominee only in the limited circumstances
described in the Indenture, and may not be transferred except as a
whole by the Depository to a nominee of the Depository or by a
nominee of the Depository to the Depository or another nominee of the
Depository or by the Depository or its nominee to a successor
Depository or its nominee."
ARTICLE III. - THE SECURITIES
SECTION 3.01 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 3.03, 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 Series authenticated and delivered
upon registration of transfer of, or in exchange for, or in lieu of,
other Securities of the series pursuant to Sections 3.04, 3.05, 3.06,
9.06, 11.07 or 13.05);
(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,
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the date or dates from which such interest shall accrue or the method
by which such date or dates shall be determined, the Interest Payment
Dates on which such interest will be payable and the Regular Record
Date, if any, for the interest payable on any Registered Security on
any Interest Payment Date, or the method by which such date shall be
determined, and the basis upon which interest shall be calculated if
other than that of a 360-day year of twelve 30-day months;
(5) the place or places where the principal of (and premium, if
any), interest, if any, on, and Additional Amounts, if any, payable
in respect of Securities of the series shall be payable, any
Registered Securities of the series may be surrendered for
registration of transfer, exchange or conversion and notices or
demands to or upon the Company in respect of the Securities of the
series and this Indenture may be served;
(6) the period or periods within which, the price or prices at
which, the currency or currencies, currency unit or units or
composite currency or currencies in which, and other terms and
conditions upon which Securities of the series may be redeemed, in
whole or in part, at the option of the Company, if the Company is to
have the option;
(7) the obligation, if any, of the Company to redeem, repay or
purchase Securities of the series pursuant to any sinking fund or
analogous provision or at the option of a Holder thereof, and the
period or periods within which or the date or dates on which, the
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 Indenture 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 5.02 or, if applicable, the portion of the
principal amount of Securities of the series that is convertible
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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
1.01;
(12) whether the amounts of payments of principal of (and
premium, if any) or interest, if any, on the Securities of the series
may be determined with reference to an index, formula or other method
(which index, formula or method may be based, without limitation, on
one or more currencies, currency units, composite currencies,
commodities, equity indices or other indices), and the manner in
which such amounts shall be determined;
(13) whether the principal of (and premium, if any) or interest
or Additional Amounts, if any, on the Securities of the series are to
be payable, at the election of the Company or a Holder thereof, in a
currency or currencies, currency unit or units, or composite currency
or currencies other than that in which such Securities are
denominated or stated to be payable, the period or periods within
which, and the terms and conditions upon which, such election may be
made, and 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
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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 3.05, and, if Registered Securities of the series
are to be issuable as a Global Security, the identity of the
depository 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 3.04;
(19) the applicability, if any, of Sections 14.02 and/or 14.03 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 XIV;
(20) if the Securities of such series are to be issuable in
definitive form (whether upon original issue or upon exchange of a
temporary Security of such series) only upon receipt of certain
certificates or other documents or satisfaction of other conditions,
then the form and/or terms of such certificates, documents or
conditions;
(21) if the Securities of the series are to be issued upon the
exercise of warrants, the time, manner and place for such Securities
to be authenticated and delivered;
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(22) whether and under what circumstances the Company will pay
Additional Amount as contemplated by Section 10.10 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
Shares or Preferred Shares, 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
(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 3.03) 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 issuance 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 Indenture Trustee at or
prior to the delivery of the Officers' Certificate setting forth the terms of
the Securities of such series.
SECTION 3.02 Denominations. The Securities of each series shall be
issuable in such denominations as shall be specified as contemplated by Section
3.01. With respect to Securities of any series denominated in Dollars, in the
absence of any such provisions with respect to the Securities of any series, the
Securities of such series, other than Global Securities (which may be of any
denomination), shall be issuable in denominations of $1,000 and any integral
multiple thereof.
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SECTION 3.03 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 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 prior to the authentication and delivery of such Securities or
did not hold such offices at the date of such Securities or coupons.
At any time and from time to time after the execution and delivery of
this Indenture, the Company may deliver Securities of any series, together with
any coupon appertaining thereto, executed by the Company to the Indenture
Trustee for authentication, together with a Company Order for the authentication
and delivery of such Securities, and the Indenture 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 3.01, 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 3.01, dated no earlier than 15 days prior to the
earlier of the date on which such Bearer Security is delivered and the date on
which any temporary Security first becomes exchangeable for such Bearer Security
in accordance with the terms of such temporary Security and this Indenture. If
any Security shall be represented by a permanent global Bearer Security, then,
for purposes of this Section and Section 3.04, 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 3.06,
the Indenture Trustee shall not authenticate and deliver any Bearer Security
unless all appurtenant coupons for interest then matured have been detached and
canceled.
If all the Securities of any series are not to be issued at one time
and if the Board Resolution or supplemental indenture establishing such series
shall so permit, such Company Order may set forth procedures acceptable to the
Indenture Trustee for
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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 Indenture Trustee shall be entitled to
receive, and (subject to TIA Section 315(a) through 315(d)) shall be fully
protected in relying upon,
(i) an Opinion of Counsel stating that
(a) the form or forms of such Securities and any coupons
have been established in conformity with the provisions of this
Indenture;
(b) the terms of such Securities and any coupons have been
established in conformity with the provisions of this Indenture;
and
(c) such Securities, together with any coupons
appertaining thereto, when completed by appropriate insertions
and executed and delivered by the Company to the Indenture
Trustee for authentication in accordance with this Indenture,
authenticated and delivered by the Indenture 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 legally binding
obligations of the Company, enforceable in accordance with their
terms, subject to applicable bankruptcy, insolvency, fraudulent
transfer, reorganization and other laws of general applicability
relating to or affecting the enforcement of creditors' rights
generally and to general equitable principles; and
(ii) an Officers' Certificate stating that all conditions
precedent provided for in this Indenture relating to the issuance of
the Securities have been complied with and that, to the best of the
knowledge of the signers of such certificate, that no Event of
Default with respect to any of the Securities shall have occurred and
be continuing.
If such form or terms have been so established, the Indenture Trustee shall not
be required to authenticate such Securities if the issue of such Securities
pursuant to this Indenture will affect the Indenture 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 Indenture
Trustee.
Notwithstanding the provisions of Section 3.01 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
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3.01 or a Company Order, or an Opinion of Counsel or an Officers' Certificate
otherwise required pursuant to the next 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 3.01.
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 Indenture 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 benefit 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 Company
shall deliver such Security to the Indenture Trustee for cancellation as
provided in Section 3.09 together with a written statement (which need not
comply with Section 1.02 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 3.04 Temporary Securities. Pending the preparation of
definitive Securities of any series, the Company may execute, and upon Company
Order the Indenture 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 coupon or without coupon, and
with such appropriate insertions, omissions, substitutions and other variations
as the officers executing such Series 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 Global Securities (which shall be
exchanged as otherwise provided herein or as otherwise provided in or pursuant
to a Board Resolution), if temporary Securities or 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
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the temporary Securities of such series at the office or agency of the company
in a Place of Payment for that series, without charge to the Holder. Upon
surrender for cancellation of any one or more temporary Securities of any series
(accompanied by any non-matured coupons appertaining thereto), the Company shall
execute and the Indenture 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 3.03. 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 3.04 shall govern the exchange of temporary
Securities other than through the facilities of The Depository Trust Company. If
any such temporary Security is issued in global form, then such temporary Global
Security shall, unless otherwise provided therein, be delivered to the London
office of a depository or common depository (the "Common Depository"), for the
benefit of Euroclear and CEDEL, for credit to the respective accounts of the
beneficial owners of such Securities (or to such other accounts as they may
direct).
Without unnecessary delay but in any event not later than the date
specified in, or determined pursuant to the terms of, any such temporary Global
Security (the "Exchange Date"), the Company shall deliver to the Indenture
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 Depository to the Indenture 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 Indenture 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 3.01, 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 Depository, 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
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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 3.01; 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 3.03.
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 3.01), 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 Indenture 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 3.01, 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 Indenture 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
pursuant to Section 3.01), for credit without further interest on or after such
Interest Payment Date to the respective accounts of Persons who are the
beneficial owners of such temporary Global Security on such Interest Payment
Date and who have each delivered to Euroclear or CEDEL, as the case may be, a
certificate dated no earlier than 15 days prior to the Interest Payment Date
occurring prior to such Exchange Date in the form set forth as Exhibit B-1 to
this Indenture (or in such other forms as may be established pursuant to Section
3.01). Notwithstanding anything to the contrary herein contained, the
certifications made pursuant to this paragraph shall
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satisfy the certification requirements of the preceding two paragraphs of this
Section 3.04 and of the third paragraph of Section 3.03 of this Indenture and
the interests of the Persons who are the beneficial owners of the temporary
Global Security with respect to which such certification was made will be
exchanged for definitive Securities of the same series and of like tenor on the
Exchange Date or the date of certification if such date occurs after the
Exchange Date, without further act or deed by such beneficial owners. Except as
otherwise provided in this paragraph, no payments of principal or interest owing
with respect to a beneficial interest in a temporary Global Security will be
made unless and until such interest in such temporary Global Security shall have
been exchanged for an interest in a definitive Security. Any interest so
received by Euroclear and CEDEL and not paid as herein provided shall be
returned to the Indenture Trustee prior to the expiration of two years after
such Interest Payment Date in order to be repaid to the Company.
SECTION 3.05 Registration, Registration of Transfer and Exchange. The
Company shall cause to be kept at the Corporate Trust Office of the Indenture
Trustee or in any office or agency of the Company in a Place of Payment a
register for each series of Securities (the registers maintained in such office
or in any such office or agency of the Company in a Place of Payment being
herein sometimes referred to collectively as the "Security Register") in which,
subject to such reasonable regulations as it may prescribe, the Company shall
provide for the registration of Registered Securities and of transfers of
Registered Securities. The Security Register shall be in written form or any
other form capable of being converted into written form within a reasonable
time. The Indenture Trustee, at its Corporate Trust Office, is hereby initially
appointed "Security Registrar" for the purpose of registering Registered
Securities and transfers of Registered Securities on such Security Register as
herein provided. In the event that the Indenture 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 3.05, 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 Indenture Trustee shall authenticate and deliver, in the
name of the designated transferee or transferees, one or more new Registered
Securities of the same series, of any authorized denominations and of a like
aggregate principal amount, bearing a number not contemporaneously outstanding,
and containing identical terms and positions.
Subject to the provisions of this Section 3.05, at the option of the
Holder, Registered Securities of any series may be exchanged for other
Registered Securities of the same series, of any authorized denomination or
denominations and of a like aggregate principal amount, containing identical
terms and provisions, upon surrender
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of the Registered Securities to be exchanged at any such office or agency.
Whenever any such Registered Securities are so surrendered for exchange, the
Company shall execute, and the Indenture Trustee shall authenticate and deliver,
the Registered Securities which the Holder making the exchange is entitled to
receive. Unless otherwise specified with respect to any series of Securities as
contemplated by Section 3.01, Bearer Securities may not be issued in exchange
for Registered Securities.
If (but only if) permitted by the applicable Board Resolution and
(subject to Section 3.03) set forth in the applicable Officers' Certificate, or
in any indenture supplemental hereto, delivered as contemplated by Section 3.01,
at the option of the Holder, Bearer Securities of any series may be exchanged
for Registered Securities of the same series of any authorized denominations and
of a like aggregate principal amount and tenor, upon surrender of the Bearer
Securities to be exchanged at any such office or agency, with all unmatured
coupons and all matured coupons in default thereto appertaining. If the Holder
of a Bearer Security is unable to produce any such unmatured coupon or coupons
or matured coupon or coupons in default, any such permitted exchange may be
effected if the Bearer Securities are accompanied by payment in funds acceptable
to the Company in an amount equal to the face amount of such missing coupon or
coupons, or the surrender of such missing coupon or coupons may be waived by the
Company and the Indenture 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 10.02,
interest represented by coupons shall be payable only upon presentation and
surrender of those coupons at an office or agency located outside the United
States. Notwithstanding the foregoing, in case a Bearer Security of any series
is surrendered at any such office or agency in a permitted exchange for a
Registered Security of the same series and like tenor after the close of
business at such office or agency on (i) any Regular Record Date and before the
opening of business at such office or agency on the relevant Interest Payment
Date, or (ii) any Special Record Date and before the opening of business at such
office or agency on the related proposed date for payment of Defaulted Interest,
such Bearer Security shall be surrendered without the coupon relating to such
Interest Payment Date or proposed date for payment, as the case may be, and
interest or Defaulted Interest, as the case may be, will not be payable on such
Interest Payment Date or proposed date for payment, as the case may be, in
respect of the Registered Security issued in exchange for such Bearer Security,
but will be payable only to the Holder of such coupon when due in accordance
with the provisions of this Indenture. Whenever any Securities are so
surrendered for exchange, the Company shall execute, and the Indenture Trustee
shall authenticate and deliver, the Securities which the Holder making the
exchange is entitled to receive.
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Notwithstanding the foregoing, except as otherwise specified as
contemplated by Section 3.01, any permanent Global Security shall be
exchangeable only as provided in this paragraph. If the depository for any
permanent Global Security is The Depository Trust Company ("DTC"), then, unless
the terms of such Global Security expressly permit such Global Security to be
exchanged in whole or in part for definitive Securities, a Global Security may
be transferred, in whole but not in part, only to a nominee of DTC, or by a
nominee of DTC to DTC, or to a successor to DTC for such Global Security
selected or approved by the Company or to a nominee of such successor to DTC. If
at any time DTC notifies the Company that it is unwilling or unable to continue
as depository 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 if so required by applicable law or regulation, the Company shall
appoint a successor depository with respect to such Global Security or
Securities. If (x) a successor depository for such Global Security or Securities
is not appointed by the Company within 90 days after the Company received such
notice or becomes aware of such unwillingness, inability or ineligibility, (y)
an Event of Default has occurred and is continuing and the beneficial owners
representing a majority in principal amount of the applicable series of
Securities represented by such Global Security or Securities advise DTC to cease
acting as depository for such Global Security or Securities or (z) the Company,
in its sole discretion, determines at any time that all Outstanding Securities
(but not less than all) of any series issued or issuable in the form of one or
more Global Securities shall no longer be represented by such Global Security or
Securities, then the Company shall execute, and the Indenture 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 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
depository as shall be specified in the Company Order with respect thereto to
the Indenture 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
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Registered Security, but will be payable on such Interest Payment Date or
proposed date for payment, as the case may be, only to the Person to whom
interest in respect of such portion of such permanent Global Security is payable
in accordance with the provisions of this Indenture.
All Securities issued upon any registration of transfer or exchange
of Securities shall be the valid obligations of the Company, evidencing the same
debt, and entitled to the same benefits under this Indenture, as the Securities
surrendered upon such registration of transfer or exchange.
Every Registered Security presented or surrendered for registration
of transfer or for exchange or redemption shall (if so required by the Company
or the Security Registrar) be duly endorsed, or be accompanied by a written
instrument of transfer in form satisfactory to the Company and the Security
Registrar, duly executed by the Holder thereof or his attorney duly authorized
in writing.
No service charge shall be made for any registration of transfer or
exchange of Securities, but the Company may require payment of a sum sufficient
to cover any tax or other governmental charge that may be imposed in connection
with any registration of transfer or exchange of Securities, other than
exchanges pursuant to Section 3.04, 9.06, 11.07 or 13.05 not involving any
transfer.
The Company or the Indenture Trustee, as applicable, shall not be
required (i) to issue, register the transfer of or exchange any Security if such
Security may be among those selected for redemption during a period beginning at
the opening of business 15 days before selection of the Securities to be
redeemed under Section 11.03 and ending at the close of business on (A) if such
Securities are issuable only as Registered Securities, the day of the mailing of
the relevant notice of redemption and (B) if such Securities are issuable as
Bearer Securities, the day of the first publication of the relevant notice of
redemption or, if such Securities are also issuable as Registered Securities and
there is no publication, the mailing of the relevant notice of redemption, or
(ii) to register the transfer of or exchange any Registered Security so selected
for redemption in whole or in part, except, in the case of any Registered
Security to be redeemed in part, the portion thereof not to be redeemed, or
(iii) to exchange any Bearer Security so selected for redemption except that
such a Bearer Security may be exchanged for a Registered Security of that series
and like tenor, provided that such Registered Security shall be simultaneously
surrendered for redemption, or (iv) to issue, register the transfer of or
exchange any Security which has been surrendered for repayment at the option of
the Holder, except the portion, if any, of such Security not to be so repaid.
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SECTION 3.06 Mutilated, Destroyed, Lost and Stolen Securities. If any
mutilated Security or a Security with a mutilated coupon appertaining to it is
surrendered to the Indenture Trustee or the Company, together with, in proper
cases, such security or indemnity as may be required by the Company or the
Indenture Trustee to save each of them or any agent of either of them harmless,
the Company shall execute and the Indenture 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 the Indenture Trustee
(i) evidence to their satisfaction of the destruction, loss or theft of any
Security or coupon, and (ii) such security or indemnity as may be required by
them to save each of them and any agent of either of them harmless, then, in the
absence of notice to the Company or the Indenture Trustee that such Security or
coupon has been acquired by a bona fide purchaser, the Company shall execute and
upon its request the Indenture Trustee shall authenticate and deliver, in lieu
of any such destroyed, lost or stolen Security or in exchange for the Security
to which a destroyed, lost or stolen coupon appertains (with all appurtenant
coupons not destroyed, lost or stolen), a new Security of the same series and
principal amount, containing identical terms and provisions and bearing a number
not contemporaneously outstanding, with coupons corresponding to the coupons, if
any, appertaining to such destroyed, lost or stolen Security or to the Security
to which such destroyed, lost or stolen coupon appertains.
Notwithstanding the provisions of the previous two paragraphs, in
case any such mutilated, destroyed, lost or stolen Security or coupon has become
or is about to become due and payable, the Company in its discretion may,
instead of issuing a new Security, with coupons corresponding to the coupons, if
any, appertaining to such destroyed, lost or stolen Security or to the Security
to which such destroyed, lost or stolen coupon appertains, pay such Security or
coupon; provided, however, that payment of principal of (and premium, if any),
any interest on and any Additional Amounts with respect to, Bearer Securities
shall, except as otherwise provided in Section 10.02, be payable only at an
office or agency located outside the United States and, unless otherwise
specified as contemplated by Section 3.01, any interest on Bearer Securities
shall be payable only upon presentation and surrender of the coupons
appertaining thereto.
Upon the issuance of any new Security under this Section, the Company
may require the payment of a sum sufficient to cover any tax or other
governmental charge that may be imposed in relation thereto and any other
expenses (including the fees and expenses of the Indenture Trustee) connected
therewith.
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Every new Security of any series with its coupons, if any, issued
pursuant to this Section in lieu of any destroyed, lost or stolen Security, or
in exchange for a Security to which a destroyed, lost or stolen coupon
appertains, shall constitute an original additional contractual obligation of
the Company, whether or not the destroyed, lost or stolen Security and its
coupons, if any, or the destroyed, lost or stolen coupon shall be at any time
enforceable by anyone, and shall be entitled to all the benefits of this
Indenture equally and proportionately with any and all other Securities of that
series and their coupons, if any, duly issued hereunder.
The provisions of this Section are exclusive and shall preclude (to
the extent lawful) all other rights and remedies with respect to the replacement
or payment of mutilated, destroyed, lost or stolen Securities or coupons.
SECTION 3.07 Payment of Interest: Interest Rights Preserved. Except
as otherwise specified with respect to a series of Securities in accordance with
the provisions of Section 3.01, 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 10.02; provided, however, that each
installment of interest on any Registered Security may at the Company's option
be paid by (i) mailing a check for such interest, payable to or upon the written
order of the Person entitled thereto pursuant to Section 3.08, to the address of
such Person as it appears on the Security Register or (ii) transfer to an
account maintained by the payee located inside the United States.
Unless otherwise provided as contemplated by Section 3.01 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 3.01, every
permanent global Security will provide that interest, if any, payable on any
Interest Payment Date will be paid by 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 Depository, 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
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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 3.01, any interest on any
Registered Security of any series that is payable, but is not punctually paid or
duly provided for, on any Interest Payment Date (herein called "Defaulted
Interest") shall forthwith cease to be payable to the registered Holder thereof
on the relevant Regular Record Date by virtue of having been such Holder, and
such Defaulted Interest may be paid by the Company, at its election in each
case, as provided in clause (1) or (2) below:
(1) The Company may elect to make payment of any Defaulted
Interest to the Persons in whose names the Registered Securities of such
series (or their respective Predecessor Securities) are registered at the
close of business on a Special Record Date for the payment of such
Defaulted Interest, which shall be fixed in the following manner. The
Company shall notify the Indenture 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 Indenture Trustee), and at
the same time the Company shall deposit with the Indenture 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 3.01 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 Indenture 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 Indenture 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
Indenture Trustee of the notice of the proposed payment. The Indenture
Trustee shall promptly notify the Company of such Special Record Date and,
in the name and at the expense of the Company, shall cause notice of the
proposed payment of such Defaulted Interest and the Special Record Date
therefor to be mailed, first-class postage prepaid, to each Holder of
Registered Securities of such series at his address as it appears in the
Security Register not less than 10 days prior to such Special Record Date.
The Indenture Trustee may, in its discretion, in the name and at the
expense of the Company,
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cause a similar notice to be published at least once in an Authorized
Newspaper in each Place of Payment, but such publications shall not be a
condition precedent to the establishment of such Special Record Date.
Notice of the proposed payment of such Defaulted Interest and the Special
Record Date therefor having been mailed as aforesaid, such Defaulted
Interest shall be paid to the Persons in whose names the Registered
Securities of such series (or their respective Predecessor Securities) are
registered at the close of business on such Special Record Date and shall
no longer be payable pursuant to the following clause (2). In case a
Bearer Security of any series is surrendered at the office or agency in a
Place of Payment for such series in exchange for a Registered Security of
such series after the close of business at such office or agency on any
Special Record Date and before the opening of business at such office or
agency on the related proposed date for payment of Defaulted Interest,
such Bearer Security shall be surrendered without the coupon relating to
such proposed date of payment and Defaulted Interest will not be payable
on such proposed date of payment in respect of the Registered Security
issued in exchange for such Bearer Security, but will be payable only to
the Holder of such coupon when due in accordance with the provisions of
this Indenture.
(2) The Company may make payment of any Defaulted Interest on
the Registered Securities of any series in any other lawful manner not
inconsistent with the requirements of any securities exchange on which
such Securities may be listed, and upon such notice as may be required by
such exchange, if, after notice given by the Company to the Indenture
Trustee of the proposed payment pursuant to this clause, such manner of
payment shall be deemed practicable by the Indenture Trustee.
Subject to the foregoing provisions of this Section and Section 3.05,
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 3.08 Persons Deemed Owners. Prior to due presentment of a
Registered Security for registration of transfer, the Company, the Indenture
Trustee and any agent of the Company or the Indenture 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 3.05 and 3.07) interest on, such Registered
Security and for all other purposes whatsoever, whether or not such Registered
Security be overdue, and neither the Company, the Indenture Trustee nor any
agent of the Company or the Indenture 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,
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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 Indenture Trustee and any agent of the
Company or the Indenture Trustee may treat the Holder of any Bearer Security and
the Holder of any coupon as the absolute owner of such Security or coupon for
the purpose of receiving payment thereof or on account thereof and for all other
purposes whatsoever, whether or not such Security or coupon be overdue, and
neither the Company, the Indenture Trustee nor any agent of the Company or the
Indenture Trustee shall be affected by notice to the contrary.
Title to any Bearer Security and any coupons appertaining thereto
shall pass by delivery. The Company, the Indenture Trustee and any agent of the
Company or the Indenture Trustee may treat the Holder of any Bearer Security and
the Holder of any coupon as the absolute owner of such Security or coupon for
the purpose of receiving payment thereof or on account thereof and for all other
purposes whatsoever, whether or not such Security or coupon be overdue, and
neither the Company, the Indenture Trustee, nor any agent of the Company or the
Indenture 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 depository shall have any rights under this Indenture with
respect to such Global Security and such depository shall be treated by the
Company, the Indenture Trustee, and any agent of the Company or the Indenture
Trustee as the owner of such Global Security for all purposes whatsoever. None
of the Company, the Indenture 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 Indenture Trustee, or any agent of
the Company or the Indenture Trustee, from giving effect to any written
certification, proxy or other authorization furnished by any depository, as a
Holder, with respect to such Global Security or impair, as between such
depository and owners of beneficial interests in such Global Security, the
operation of customary practices governing the exercise of the rights of such
depository (or its nominee) as Holder of such Global Security.
SECTION 3.09 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
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surrendered to any Person other than the Indenture Trustee, be delivered to the
Indenture Trustee, and any such Securities and coupons surrendered directly to
the Indenture Trustee for any such purpose shall be promptly cancelled by it.
The Company may at any time deliver to the Indenture 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
Indenture Trustee (or to any other Person for delivery to the Indenture 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 Indenture 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 Indenture Trustee for cancellation. No
Securities shall be authenticated in lieu of or in exchange for any Securities
cancelled as provided in this Section, except as expressly permitted by this
Indenture. Cancelled Securities and coupons held by the Indenture Trustee shall
be destroyed by the Indenture Trustee and the Indenture Trustee shall deliver a
certificate of such destruction to the Company, unless the Indenture Trustee is
otherwise directed by a Company Order.
SECTION 3.10 Computation of Interest. Except as otherwise specified
as contemplated by Section 3.01 with respect to Securities of any series,
interest on the Securities of each series shall be computed on the basis of a
360-day year consisting of twelve 30-day months.
ARTICLE IV. - SATISFACTION AND DISCHARGE
SECTION 4.01 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 10.10), and the Indenture Trustee, upon receipt
of a Company Order, and at the expense of the Company, shall execute instruments
in form and substance reasonably satisfactory to the Indenture Trustee and the
Company acknowledging satisfaction and discharge of this Indenture as to such
series when
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(1) either
(A) all Securities of such series theretofore authenticated and
delivered and all coupons, if any, appertaining thereto (other than
(i) coupons appertaining to Bearer Securities surrendered for
exchange for Registered Securities and maturing after such exchange,
whose surrender is not required or has been waived as provided in
Section 3.05, (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 3.06, (iii) coupons appertaining to Securities
called for redemption and maturing after the relevant Redemption
Date, whose surrender has been waived as provided in Section 11.06,
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 10.03) have been
delivered to the Indenture 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 Indenture 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 Indenture Trustee for the giving of notice
of redemption by the Indenture 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 Indenture Trustee as trust
funds in trust for the purpose an amount in the currency or currencies,
currency unit or units or composite currency or currencies in which the
Securities of such series are payable, sufficient to pay and discharge the
entire indebtedness on such Securities and such coupons not theretofore
delivered to the Indenture 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;
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(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 Indenture 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 Indenture Trustee and any predecessor
Indenture Trustee under Section 6.06, the obligations of the Company to any
Authenticating Agent under Section 6.11 and, if money shall have been deposited
with and held by the Indenture Trustee pursuant to subclause (B) of clause (1)
of this Section, the obligations of the Indenture Trustee under Section 4.02 and
the last paragraph of Section 10.03 shall survive.
SECTION 4.02 Application of Trust Funds. Subject to the provisions of the
last paragraph of Section 10.03, all money deposited with the Indenture Trustee
pursuant to Section 4.01 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 Indenture 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 Indenture Trustee, but such money need not be segregated
from other funds except to the extent required by law.
ARTICLE V. - REMEDIES
SECTION 5.01 Events of Default. "Event of Default," wherever used
herein with respect to any particular series of Securities, means any one of the
following events (whatever the reason for such Event of Default and whether or
not it shall be voluntary or involuntary or be effected by operation of law or
pursuant to any judgment, decree or order of any court or any order, rule or
regulation of any administrative or governmental body):
(1) default in the payment of any interest upon or any
Additional Amounts payable in respect of any Security of that series or of
any coupon appertaining thereto, when such interest, Additional Amounts or
coupon becomes due and payable, and continuance of such default for a
period of 30 days; or
(2) default in the payment of the principal of (or premium, if
any, on) any Security of that series when it becomes due and payable at
its Maturity; or
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(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 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 Indenture Trustee or to the Company and the Indenture
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 by
the Company, whether such indebtedness now exists or shall hereafter be
created with such obligations being accelerated and not 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
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(7) a court of competent jurisdiction enters an order or decree
under any Bankruptcy Law that:
(A) is for relief against the Company or any Significant
Subsidiary in an involuntary case,
(B) appoints a Custodian of the Company or any Significant
Subsidiary or for all or substantially all of either of its property,
or
(C) orders the liquidation of the Company or any
Significant Subsidiary, and the order or decree remains unstayed and
in effect for 90 days; or
(8) any other Event of Default provided with respect to
Securities of that series.
As used in this Section 5.01, 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 5.02 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 Indenture
Trustee or the Holders of not less than 25% in principal amount of all the
Securities of that series will have the right to declare the principal amount
(or, if the 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) to be due and payable immediately, by a notice in writing to the
Company (and to the Indenture 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 Indenture Trustee as
hereinafter in this Article provided, the Holders of a majority in principal
amount of the Outstanding Securities of that series, by written notice to the
Company and the Indenture Trustee, may rescind and annul such declaration of
acceleration and its consequences if:
(1) the Company has paid or deposited with the Indenture Trustee
a sum sufficient to pay in the currency, currency unit or composite
currency in which the
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Securities of such series are payable (except as otherwise specified
pursuant to Section 3.01 for the Securities of such series):
(A) all overdue installments of interest on and any
Additional Amounts payable in respect of all Outstanding Securities
of that series and any related coupons,
(B) the principal of (and premium, if any, on) any
Outstanding Securities of that series which have become due otherwise
than by such declaration of acceleration and interest thereon at the
rate or rates borne by or provided for in such Securities,
(C) to the extent that payment of such interest is lawful,
interest upon overdue installments of interest and any Additional
Amounts at the rate or rates borne by or provided for in such
Securities, and
(D) all sums paid or advanced by the Indenture Trustee
hereunder and the reasonable compensation, expenses, disbursements
and advances of the Indenture 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 5.13.
No such rescission shall affect any subsequent default or impair any right
consequent thereon.
SECTION 5.03 Collection of Indebtedness and Suits for Enforcement by
Indenture 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 Indenture Trustee, pay to the
Indenture 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
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(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
Indenture Trustee, its agents and counsel.
If the Company fails to pay such amounts forthwith upon such demand,
the Indenture Trustee, in its own name and as trustee of an express trust, may
institute a judicial proceeding for the collection of the sums so due and
unpaid, and may prosecute such proceeding to judgment or final decree, and may
enforce the same against the Company or any other obligor upon such Securities
of such series and collect the moneys adjudged or decreed to be payable in the
manner provided by law out of the property of the Company or any other obligor
upon such Securities of such series, wherever situated.
If an Event of Default with respect to Securities of any series
occurs and is continuing, the Indenture 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 Indenture Trustee shall deem most effectual to protect and enforce any such
rights, whether for the specific enforcement of any covenant or agreement in
this Indenture or in aid of the exercise of any power granted herein, or to
enforce any other proper remedy.
SECTION 5.04 Indenture 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
Indenture 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 Indenture Trustee shall have made
any demand on the Company for the payment of overdue principal, premium, if any,
or interest) shall be entitled and empowered, by intervention in such proceeding
or otherwise:
(i) to file and prove a claim for the whole amount,
or such lesser amount as may be provided for in the Securities of
such series, of principal (and premium, if any) and interest and
Additional Amounts, if any, owing and unpaid in respect of the
Securities and to file such other papers or documents as may be
necessary or advisable in order to have the claims of the Indenture
Trustee (including any claim for the reasonable compensation,
expenses,
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disbursements and advances of the Indenture Trustee, its agents and
counsel) and of the Holders allowed in such judicial proceeding, and
(ii) to collect and receive any moneys or other
property payable or deliverable on any such claims and to distribute
the same;
and any custodian, receiver, assignee, trustee, liquidator, sequestrator (or
other similar official) in any such judicial proceeding is hereby authorized by
each Holder of Securities of such series and coupons to make such payments to
the Indenture Trustee, and in the event that the Indenture Trustee shall consent
to the making of such payments directly to the Holders, to pay to the Indenture
Trustee any amount due to it for the reasonable compensation, expenses,
disbursements and advances of the Indenture Trustee and any predecessor
Indenture Trustee, their agents and counsel, and any other amounts due the
Indenture Trustee or any predecessor Indenture Trustee under Section 6.06.
Nothing herein contained shall be deemed to authorize the Indenture
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 Indenture 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 Indenture Trustee (and also any
proceedings involving the interpretation of any provision of this Indenture to
which the Indenture Trustee shall be a party) the Indenture 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 5.05 Indenture 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
Indenture Trustee without the possession of any of the Securities or coupons or
the production thereof in any proceeding relating thereto, and any such
proceeding instituted by the Indenture 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 Indenture Trustee, its agents and counsel, be
for the ratable benefit of the Holders of the Securities and coupons in respect
of which such judgment has been recovered.
SECTION 5.06 Application of Money Collected. Any money collected by
the Indenture Trustee pursuant to this Article shall be applied in the following
order, at the
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date or dates fixed by the Indenture 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 Indenture Trustee
and any predecessor Indenture Trustee under Section 6.06;
SECOND: To the payment of the amounts then due and unpaid upon
the Securities and coupons for principal (and premium, if any) and
interest and any Additional Amounts payable, in respect of which or
for the benefit of which such money has been collected, ratably,
without preference or priority of any kind, according to the
aggregate amounts due and payable on such Securities and coupons for
principal (and premium, if any), interest and Additional Amounts,
respectively; and
THIRD: To the payment of the remainder, if any, to the Company.
SECTION 5.07 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
Indenture 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 Indenture Trustee to institute proceedings in respect of such Event of
Default in its own name as Indenture Trustee hereunder;
(3) such Holder or Holders have offered to the Indenture Trustee
indemnity reasonably satisfactory to the Indenture Trustee against the
costs, expenses and liabilities to be incurred in compliance with such
request;
(4) the Indenture 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 Indenture 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 itself 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 5.08 Unconditional Right of Holders to Receive Principal,
Premium, if any, Interest and Additional Amounts. Notwithstanding any other
provision in this Indenture, the Holder of any Security or coupon shall have the
right which is absolute and unconditional to receive payment of the principal of
(and premium, if any) and (subject to Sections 3.05 and 3.07) 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 5.09 Restoration of Rights and Remedies. If the Indenture
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 Indenture Trustee or to such Holder, then and in every such case, the
Company, the Indenture 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 Indenture Trustee and the Holders shall continue as though no
such proceeding had been instituted.
SECTION 5.10 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 3.06, no
right or remedy herein conferred upon or reserved to the Indenture Trustee or to
the Holders of Securities or coupons is intended to be exclusive of any other
right or remedy, and every right and remedy shall, to the extent permitted by
law, be cumulative and in addition to every other right and remedy given
hereunder or now or hereafter existing at law or in equity or otherwise. The
assertion or employment of any right or remedy hereunder, or otherwise, shall
not prevent the concurrent assertion or employment of any other appropriate
right or remedy.
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SECTION 5.11 Delay or Omission Not Waiver. No delay or omission of
the Indenture Trustee or of any Holder of any Security or coupon to exercise any
right or remedy accruing upon any Event of Default shall impair any such right
or remedy or constitute a waiver of any such Event of Default or an acquiescence
therein. Every right and remedy given by this Article or by law to the Indenture
Trustee or to the Holders may be exercised from time to time, and as often as
may be deemed expedient, by the Indenture Trustee or by the Holders of
Securities or coupons, as the case may be.
SECTION 5.12 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 Indenture Trustee or exercising
any trust or power conferred on the Indenture 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 Indenture Trustee may take any other action deemed
proper by the Indenture Trustee which is not inconsistent with such
direction, and
(3) the Indenture 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 Indenture
Trustee in its discretion to take any action deemed proper by the Indenture
Trustee and which is not inconsistent with such direction by Holders.
SECTION 5.13 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 IX cannot be modified or amended without the consent of the Holder
of each Outstanding Security of such series affected.
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Upon any such waiver, such default shall cease to exist, and any
Event of Default arising therefrom shall be deemed to have been cured, for every
purpose of this Indenture; but no such waiver shall extend to any subsequent or
other default or Event of Default or impair any right consequent thereon.
SECTION 5.14 Waiver of Usury, Stay or Extension Laws. The Company
covenants (to the extent that it may lawfully do so) that it will not at any
time insist upon, or plead, or in any manner whatsoever claim or take the
benefit or advantage of, any usury, stay or extension law wherever enacted, now
or at any time hereafter in force, which may affect the covenants or the
performance of this Indenture; and the Company (to the extent that it may
lawfully do so) hereby expressly waives all benefit or advantage of any such
law, and covenants that it will not hinder, delay or impede the execution of any
power herein granted to the Indenture Trustee, but will suffer and permit the
execution of every such power as though no such law had been enacted.
SECTION 5.15 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 Indenture Trustee for any action taken or omitted by it as Indenture
Trustee, the filing by any party litigant in such suit of an undertaking to pay
the costs of such suit, and that such court may in its discretion assess
reasonable costs, including reasonable attorneys' fees, against any party
litigant in such suit having due regard to the merits and good faith of the
claims or defenses made by such party litigant; but the provisions of this
Section shall not apply to any suit instituted by the Indenture 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 VI. - THE INDENTURE TRUSTEE
SECTION 6.01 Notice of Defaults. Within 90 days after the occurrence
of any default hereunder with respect to the Securities of any series, the
Indenture Trustee shall transmit in the manner and to the extent provided in TIA
Section 313(c), notice of such default hereunder known to the Indenture 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 Indenture Trustee shall
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be protected in withholding such notice if and so long as Responsible Officers
of the Indenture Trustee in good faith determine that the withholding of such
notice is in the interests of the Holders of the Securities and coupons of such
series; and provided further that in the case of any default or breach of the
character specified in Section 5.01(4) with respect to the Securities and
coupons of such series, no such notice to Holders shall be given until at least
60 days after the occurrence thereof. For the purpose of this Section, the term
"default" means any event which is, or after notice or lapse of time or both
would become, an Event of Default with respect to the Securities of such series.
SECTION 6.02 Certain Rights of Indenture Trustee. Subject to the
provisions of TIA Section 315(a) through 315(d):
(1) the Indenture 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 Indenture Trustee for authentication and
delivery pursuant to Section 3.03 which shall be sufficiently evidenced as
provided therein) and any resolution of the Board of Trustees may be
sufficiently evidenced by a Board Resolution;
(3) whenever in the administration of this Indenture the
Indenture Trustee shall deem it desirable that a matter be proved or
established prior to taking, suffering or omitting any action hereunder,
the Indenture 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 Indenture 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 Indenture Trustee shall be under no obligation to
exercise any of the rights or powers vested in it by this Indenture at the
request or direction of any of the Holders of Securities of any series or
any related coupons pursuant to this Indenture, unless such Holders shall
have offered to the Indenture Trustee security or indemnity reasonably
satisfactory to the Indenture Trustee against the costs,
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expenses and liabilities which might be incurred by it in compliance with
such request or direction;
(6) the Indenture 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 Indenture 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 Indenture Trustee, not reasonably
assured to the Indenture Trustee by the security afforded to it by the
terms of this Indenture, the Indenture 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 Indenture Trustee, shall be repaid
by the Holders upon demand. The Indenture Trustee, in its discretion, may
make such further inquiry or investigation into such facts or matters as
it may see fit, and, if the Indenture 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 Indenture 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 Indenture Trustee shall not be
responsible for any misconduct or negligence on the part of any agent or
attorney appointed with due care by it hereunder; and
(8) the Indenture Trustee shall not be liable for any action
taken, suffered or omitted by it in good faith and reasonably believed by
it to be authorized or within the discretion or rights or powers conferred
upon it by this Indenture.
The Indenture 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 Indenture
Trustee undertakes to perform only such duties as are specifically set forth in
this Indenture,
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and no implied covenants or obligations shall be read into this Indenture
against the Indenture Trustee.
SECTION 6.03 Not Responsible for Recitals or Issuance of Securities.
The recitals contained herein and in the Securities, except the Indenture
Trustee's certificate of authentication, and in any coupons shall be taken as
the statements of the Company, and neither the Indenture Trustee nor any
Authenticating Agent assumes any responsibility for their correctness. The
Indenture Trustee makes no representations as to the validity or sufficiency of
this Indenture or of the Securities or coupons, except that the Indenture
Trustee represents that it is duly authorized to execute and deliver this
Indenture, authenticate the Securities and perform its obligations hereunder.
Neither the Indenture Trustee nor any Authenticating Agent shall be accountable
for the use or application by the Company of Securities or the proceeds thereof.
SECTION 6.04 May Hold Securities. The Indenture Trustee, any Paying
Agent, Security Registrar, Authenticating Agent or any other agent of the
Company, in its individual or any other capacity, may become the owner or
pledgee of Securities and coupons and, subject to TIA Sections 310(b) and 311,
may otherwise deal with the Company with the same rights it would have if it
were not Indenture Trustee, Paying Agent, Security Registrar, Authenticating
Agent or such other agent.
SECTION 6.05 Money Held in Trust. Money held by the Indenture Trustee
in trust hereunder need not be segregated from other funds except to the extent
required by law. The Indenture Trustee shall be under no liability for interest
on any money received by it hereunder except as otherwise agreed with the
Company.
SECTION 6.06 Compensation and Reimbursement. The Company agrees:
(1) to pay to the Indenture 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 an
Indenture Trustee of an express trust);
(2) except as otherwise expressly provided herein, to reimburse
each of the Indenture Trustee and any predecessor Indenture Trustee upon its
request for all reasonable expenses, disbursements and advances incurred or made
by the Indenture 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
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(3) to indemnify each of the Indenture Trustee and any
predecessor Indenture Trustee for, and to hold it harmless against, any loss,
liability or expense incurred without negligence or bad faith on its part,
arising out of or in connection with the acceptance or administration of the
trust or trusts hereunder, including the costs and expenses of defending itself
against any claim or liability in connection with the exercise or performance of
any of its powers or duties hereunder.
When the Indenture Trustee incurs expenses or renders services in
connection with an Event of Default specified in Section 5.01(5) or Section
5.01(6), the expenses (including the reasonable charges and expenses of its
counsel) and the compensation for the services are intended to constitute
expenses of administration under any applicable Federal or state bankruptcy,
insolvency or other similar law.
As security for the performance of the obligations of the Company
under this Section, the Indenture Trustee shall have a lien prior to the
Securities upon all property and funds held or collected by the Indenture
Trustee as such, except funds held in trust for the payment of principal of (or
premium, if any) or interest on particular Securities or any coupons.
The provisions of this Section shall survive the termination of this
Indenture.
SECTION 6.07 Corporate Indenture Trustee Required; Eligibility;
Conflicting Interests. There shall at all times be an Indenture Trustee
hereunder which shall be eligible to act as Indenture Trustee under TIA Section
310(a)(1) and shall have a combined capital and surplus of at least $50,000,000.
If such corporation publishes reports of condition at least annually, pursuant
to law or the requirements of Federal, state, territorial or District of
Columbia supervising or examining authority, then for the purposes of this
Section, the combined capital and surplus of such corporation shall be deemed to
be its combined capital and surplus as set forth in its most recent report of
condition so published. If at any time the Indenture Trustee shall cease to be
eligible in accordance with the provisions of this Section, it shall resign
immediately in the manner and with the effect hereinafter specified in this
Article. Neither the Company nor any Person directly or indirectly controlling,
controlled by, or under common control with the Company shall serve as Indenture
Trustee.
SECTION 6.08 Resignation and Removal; Appointment of Successor.
(a) No resignation or removal of the Indenture Trustee and no
appointment of a successor Indenture Trustee pursuant to this Article shall
become effective until the acceptance of appointment by the successor Indenture
Trustee in accordance with the applicable requirements of Section 6.09.
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(b) The Indenture 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 Indenture Trustee shall
not have been delivered to the Indenture Trustee within 30 days after the giving
of such notice of resignation, the resigning Indenture Trustee may petition any
court of competent jurisdiction for the appointment of a successor Indenture
Trustee.
(c) The Indenture 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 Indenture
Trustee and to the Company.
(d) If at any time:
(1) the Indenture 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 Indenture Trustee shall cease to be eligible under
Section 6.07 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 Indenture Trustee shall become incapable of acting or
shall be adjudged bankrupt or insolvent or a receiver of the Indenture
Trustee or of its property shall be appointed or any public officer shall
take charge or control of the Indenture 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 Indenture Trustee and appoint a successor Indenture 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 Indenture Trustee with respect
to all Securities and the appointment of a successor Indenture Trustee or
Indenture Trustees.
(e) If the Indenture Trustee shall resign, be removed or become
incapable of acting, or if a vacancy shall occur in the office of Indenture
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 Indenture Trustee or Indenture Trustees with respect to the Securities
of that or those series (it being understood that any such
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successor Indenture 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
Indenture 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 Indenture Trustee with respect to the
Securities of any series shall be appointed by Act of the Holders of a majority
in principal amount of the Outstanding Securities of such series delivered to
the Company and the retiring Indenture Trustee, the successor Indenture Trustee
so appointed shall, forthwith upon its acceptance of such appointment, become
the successor Indenture Trustee with respect to the Securities of such series
and to that extent supersede the successor Indenture Trustee appointed by the
Company. If no successor Indenture 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
Indenture Trustee with respect to Securities of such series.
(f) The Company shall give notice of each resignation and each
removal of the Indenture Trustee with respect to the Securities of any series in
the manner provided for notices to the Holders of Securities in Section 1.06.
Each notice shall include the name of the successor Indenture Trustee with
respect to the Securities of such series and the address of its Corporate Trust
Office.
SECTION 6.09 Acceptance of Appointment by Successor. (a) In case of
the appointment hereunder of a successor Indenture Trustee with respect to all
Securities, every such successor Indenture Trustee so appointed shall execute,
acknowledge and deliver to the Company and to the retiring Indenture Trustee an
instrument accepting such appointment, and thereupon the resignation or removal
of the retiring Indenture Trustee shall become effective and such successor
Indenture Trustee, without any further act, deed or conveyance, shall become
vested with all the rights, powers, trusts and duties of the retiring Indenture
Trustee; but, on request of the Company or the successor Indenture Trustee, such
retiring Indenture Trustee shall, upon payment of its charges, execute and
deliver an instrument transferring to such successor Indenture Trustee all the
rights, powers and trusts of the retiring Indenture Trustee, and shall duly
assign, transfer and deliver to such successor Indenture Trustee all property
and money held by such retiring Indenture Trustee hereunder, subject
nevertheless to its claim, if any, provided for in Section 6.06.
(b) In case of the appointment hereunder of a successor Indenture
Trustee with respect to the Securities of one or more (but not all) series, the
Company, the retiring Indenture Trustee and each successor Indenture Trustee
with respect to the Securities of
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one or more series shall execute and deliver an indenture supplemental hereto,
pursuant to Article IX hereof, wherein each successor Indenture 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 Indenture Trustee all the rights, powers, trusts and duties of the
retiring Indenture Trustee with respect to the Securities of that or those
series to which the appointment of such successor Indenture Trustee relates, (2)
if the retiring Indenture 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 Indenture Trustee with respect to the Securities of that or those
series as to which the retiring Indenture Trustee is not retiring shall continue
to be vested in the retiring Indenture 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 Indenture
Trustee, it being understood that nothing herein or in such supplemental
indenture shall constitute such Indenture Trustees co-trustees of the same trust
and that each such Indenture Trustee shall be trustee of a trust or trusts
hereunder separate and apart form any trust or trusts hereunder administered by
any other such Indenture Trustee; and upon the execution and delivery of such
supplemental indenture the resignation or removal of the retiring Indenture
Trustee shall become effective to the extent provided therein and each such
successor Indenture Trustee, without any further act, deed or conveyance, shall
become vested with all the rights, powers, trusts and duties of the retiring
Indenture Trustee with respect to the Securities of that or those series to
which the appointment of such successor Indenture Trustee relates; but, on
request of the Company or any successor Indenture Trustee, such retiring
Indenture Trustee shall duly assign, transfer and deliver to such successor
Indenture Trustee all property and money held by such retiring Indenture Trustee
hereunder with respect to the Securities of that or those series to which the
appointment of such successor Indenture Trustee relates.
(c) Upon request of any such successor Indenture Trustee, the Company
shall execute any and all instruments for more fully and certainly vesting in
and confirming to such successor Indenture Trustee all such rights, powers and
trusts referred to in paragraph (a) or (b) of this Section 6.09, as the case may
be.
(d) No successor Indenture Trustee shall accept its appointment
unless at the time of such acceptance such successor Indenture Trustee shall be
qualified and eligible under this Article.
SECTION 6.10 Merger, Conversion, Consolidation or Succession to
Business. Any corporation into which the Indenture 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 Indenture Trustee
shall be a party, or
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any corporation succeeding to all or substantially all of the corporate trust
business of the Indenture Trustee, shall be the successor of the Indenture
Trustee hereunder, provided such corporation shall be otherwise qualified and
eligible under this Article, without the execution or filing of any paper or any
further act on the part of any of the parties hereto. In case any Securities or
coupons shall have been authenticated, but not delivered, by the Indenture
Trustee then in office, any successor by merger, conversion or consolidation to
such authenticating Indenture Trustee may adopt such authentication and deliver
the Securities or coupons so authenticated with the same effect as if such
successor Indenture Trustee had itself authenticated such Securities or coupons.
In case any Securities or coupons shall not have been authenticated by such
predecessor Indenture Trustee, any such successor Indenture Trustee may
authenticate and deliver such Securities or coupons, in either its own name or
that of its predecessor Indenture Trustee, with the full force and effect which
this Indenture provides for the certificate of authentication of the Indenture
Trustee.
SECTION 6.11 Appointment of Authenticating Agent. At any time when
any of the Securities remain Outstanding, the Indenture 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 Indenture 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 Indenture
Trustee hereunder. Any such appointment shall be evidenced by an instrument in
writing signed by a Responsible Officer of the Indenture 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 Indenture Trustee or the Indenture Trustee's certificate of authentication,
such reference shall be deemed to include authentication and delivery on behalf
of the Indenture Trustee by an Authenticating Agent and a certificate of
authentication executed on behalf of the Indenture Trustee by an Authenticating
Agent. Each Authenticating Agent shall be acceptable to the Company and shall at
all times be a bank or trust company or corporation organized and doing business
and in good standing under the laws of the United States of America or of any
state or the District of Columbia, authorized under such laws to act as
Authenticating Agent, having a combined capital and surplus of not less than
$50,000,000 and subject to supervision or examination by Federal or state
authorities. If such Authenticating Agent publishes reports of condition at
least annually, pursuant to laws or the requirements of the aforesaid
supervising or examining authority, then for the purposes of this Section, the
combined capital and surplus of such Authenticating Agent shall be deemed to be
its combined capital and surplus as set forth in its most recent report of
condition so published. In case at any time an Authenticating Agent shall cease
to be eligible in accordance with the
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provisions of this Section, such Authenticating Agent shall resign immediately
in the manner and with the effect specified in this Section.
Any corporation into which an Authenticating Agent may be merged or
converted or with which it may be consolidated, or any corporation resulting
from any merger, conversion or consolidation to which such Authenticating Agent
shall be a party, or any corporation succeeding to the corporate agency or
corporate trust business of an Authenticating Agent, shall continue to be an
Authenticating Agent, provided such corporation shall be otherwise eligible
under this Section, without the execution or filing of any paper or further act
on the part of the Indenture 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 Indenture Trustee for such
series and to the Company. The Indenture 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
any case at any time such Authenticating Agent shall cease to be eligible in
accordance with the provisions of this Section, the Indenture 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 1.06. Any successor Authenticating
Agent upon acceptance of its appointment hereunder shall become vested with all
the rights, powers and duties of its predecessor hereunder, with like effect as
if originally named as an Authenticating Agent herein. No successor
Authenticating Agent shall be appointed unless eligible under the provisions of
this Section.
The Company agrees to pay to each Authenticating Agent from time to
time reasonable compensation including reimbursement of its reasonable expenses
for its services under this Section.
If an appointment with respect to one or more series is made pursuant
to this Section, the Securities of such series may have endorsed thereon, in
addition to or in lieu of the Indenture 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 INDENTURE TRUSTEE]
as Indenture Trustee
By: _____________________________
as Authenticating Agent
By: _____________________________
Authorized Signatory
ARTICLE VII. - HOLDERS' LISTS AND
REPORTS BY INDENTURE TRUSTEE AND COMPANY
SECTION 7.01 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 Indenture Trustee that neither the Company nor the Indenture
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 Indenture Trustee shall not be held
accountable by reason of mailing any material pursuant to a request made under
TIA Section 312(b).
SECTION 7.02 Reports by Indenture Trustee. Within 60 days after May
15 of each year commencing with the first [ DATE ] after the first issuance of
Securities pursuant to this Indenture, the Indenture Trustee shall transmit by
mail to all Holders of Securities as provided in TIA Section 313(c) a brief
report dated as of [ DATE ] if required by TIA Section 313(a).
SECTION 7.03 Reports by Company. The Company will:
(1) file with the Indenture 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; or,
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if the Company is not required to file information, documents or reports
pursuant to either of such Sections, then it will file with the Indenture
Trustee and the Commission, in accordance with rules and regulations
prescribed from time to time by the Commission, such of the supplementary
and periodic information, documents and reports which may be required
pursuant to Section 13 of the Securities Exchange Act of 1934 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 Indenture 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 Indenture Trustee, in the manner
and to the extent provided in TIA Section 313(c), such summaries of any
information, documents and reports required to be filed by the Company
pursuant to paragraphs (1) and (2) of this Section as may be required by
rules and regulations prescribed from time to time by the Commission.
SECTION 7.04 Company to Furnish Indenture Trustee Names and Addresses
of Holders. The Company will furnish or cause to be furnished to the Indenture
Trustee:
(a) 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
Indenture Trustee may reasonably require, of the names and addresses of the
Holders of Registered Securities of such series as of such Regular Record Date,
or if there is no Regular Record Date for interest for such series of
Securities, semiannually, upon such dates as are set forth in the Board
Resolution or indenture supplemental hereto authorizing such series, and
(b) at such other times as the Indenture 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 Indenture Trustee is the Security
Registrar, no such list shall be required to be furnished.
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ARTICLE VIII. - CONSOLIDATION, MERGER, SALE,
LEASE OR CONVEYANCE
SECTION 8.01 Consolidations and Mergers of Company and Sales, Leases
and Conveyances Permitted Subject to Certain Conditions. The Company may
consolidate with, or sell, lease or convey all or substantially all of its
assets to, or merge with or into any other corporation, provided that in any
such case, (1) either the Company shall be the continuing corporation, or the
successor corporation shall be a corporation organized and existing under the
laws of the United States or a State thereof and such successor corporation
shall expressly assume the due and punctual payment of the principal of (and
premium, if any) and any interest (including all Additional Amounts, if any,
payable pursuant to Section 10.10) 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 IX hereof, satisfactory to the
Indenture Trustee, executed and delivered to the Indenture Trustee by such
corporation 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 8.02 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
Indenture 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 Indenture Trustee shall authenticate and shall deliver
any Securities which previously shall have been signed and delivered by the
officers of the Company to the Indenture Trustee for authentication, and any
Securities which such successor corporation thereafter shall cause to be signed
and delivered to the Indenture Trustee for that purpose. All the Securities so
issued shall in all respects have the same legal rank and benefit under this
Indenture as the Securities theretofore or thereafter issued in accordance with
the terms of this Indenture as though all of such Securities had been issued at
the date of the execution hereof.
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In case of any such consolidation, merger, sale, lease or conveyance,
such changes in phraseology and form (but not in substance) may be made in the
Securities thereafter to be issued as may be appropriate.
SECTION 8.03 Officers' Certificate and Opinion of Counsel. Any
consolidation, merger, sale, lease or conveyance permitted under Section 8.01 is
also subject to the condition that the Indenture Trustee receive an Officers'
Certificate and an Opinion of Counsel to the effect that any such consolidation,
merger, sale, lease or conveyance, and the assumption by any successor
corporation, complies with the provisions of this Article and that all
conditions precedent herein provided for relating to such transaction have been
complied with.
ARTICLE IX. - SUPPLEMENTAL INDENTURES
SECTION 9.01 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 Indenture Trustee, at
any time and from time to time, may enter into one or more indentures
supplemental hereto, in form satisfactory to the Indenture Trustee, for any of
the following purposes:
(1) to evidence the succession of another Person to the Company
and the assumption by any such successor of the covenants of the Company
herein and in the Securities contained; or
(2) to add to the covenants of the Company for the benefit of
the Holders of all or any series of Securities (and if such covenants are
to be for the benefit of less than all series of Securities, stating that
such covenants are expressly being included solely for the benefit of such
series) or to surrender any right or power herein conferred upon the
Company; or
(3) to add any additional Events of Default for the benefit of
the Holders of all or any series of Securities (and if such Events of
Default are to be for the benefit of less than all series of Securities,
stating that such Events of Default are expressly being included solely
for the benefit of such series); provided, however, that in respect of any
such additional Events of Default such supplemental indenture may provide
for a particular period of grace after default (which period may be
shorter or longer than that allowed in the case of other defaults) or may
provide for an immediate enforcement upon such default or may limit the
remedies available to the Indenture 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
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Securities to which such additional Events of Default apply to waive such
default; or
(4) to add to or change any of the provisions of this Indenture
to provide that Bearer Securities may be registrable as to principal, to
change or eliminate any restrictions on the payment of principal of or any
premium or interest on Bearer Securities, to permit Bearer Securities to
be issued in exchange for Registered Securities, to permit Bearer
Securities to be issued in exchange for Bearer Securities of other
authorized denominations or to permit or facilitate the issuance of
Securities in uncertificated form, provided that any such action shall not
adversely affect the interests of the Holders of Securities of any series
or any related coupons in any material respect; or
(5) to change or eliminate any of the provisions of this
Indenture, provided that any such change or elimination shall become
effective only when there is no Security Outstanding of any series created
prior to the execution of such supplemental indenture which is entitled to
the benefit of such provision; or
(6) to secure the Securities; or
(7) to establish the form or terms of Securities of any series
and any related coupons as permitted by Sections 2.01 and 3.01, including
the provisions and procedures relating to Securities convertible into
Common Shares or Preferred Shares, as the case may be; or
(8) to evidence and provide for the acceptance of appointment
hereunder by a successor Indenture 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 Indenture Trustee;
or
(9) to cure any ambiguity, to correct or supplement any
provision herein which may be defective or inconsistent with any other
provision herein, or to make any other provisions with respect to matters
or questions arising under this Indenture which shall not be inconsistent
with the provisions of this Indenture, provided such provisions shall not
adversely affect the interests of the Holders of Securities of any series
or any related coupons in any material respect; or
(10) to supplement any of the provisions of this Indenture to
such extent as shall be necessary to permit or facilitate the defeasance
and discharge of any series of Securities pursuant to Sections 4.01, 14.02
and 14.03; provided that any such action shall not adversely affect the
interests of the Holders of Securities of such
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series and any related coupons or any other series of Securities in any
material respect.
SECTION 9.02 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 Indenture Trustee, the Company,
when authorized by or pursuant to a Board Resolution, and the Indenture 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 10.10 (except
as contemplated by Section 8.01(1) and permitted by Section 9.01(1)), or
reduce the amount of 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 5.02 or the amount thereof provable
in bankruptcy pursuant to Section 5.04, or adversely affect any right of
repayment at the option of the Holder of any Security, or change any Place
of Payment where, or the currency or currencies, currency unit or units or
composite currency or currencies in which, any Security or any premium or
the interest thereon is payable, or impair the right to institute suit for
the enforcement of any such payment on or after the Stated Maturity
thereof (or, in the case of redemption or repayment at the option of the
Holder, on or after the Redemption Date or the Repayment Date, as the case
may be), or
(2) reduce the percentage in principal amount of the Outstanding
Securities of any series, the consent of whose Holders is required for any
such supplemental indenture, or the consent of whose Holders is required
for any waiver with respect to such series (or compliance with certain
provisions of this Indenture or certain defaults hereunder and their
consequences) provided for in this Indenture, or reduce the requirements
of Section 15.04 for quorum or voting, or
(3) modify any of the provisions of this Section, Section 5.13
or Section 10.11, except to increase the required percentage to effect
such action or to provide
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that certain other provisions of this Indenture cannot be modified or
waived without the consent of the Holder of each Outstanding Security
affected thereby.
It shall not be necessary for any Act of Holders under this Section
to approve the particular form of any proposed supplemental indenture, but it
shall be sufficient if such Act shall approve the substance thereof.
A supplemental indenture which changes or eliminates any covenant or
other provision of this Indenture which has expressly been included solely for
the benefit of one or more particular series of Securities, or which modifies
the rights of the Holders of Securities of such series with respect to such
covenant or other provision, shall be deemed not to affect the rights under this
Indenture of the Holders of Securities of any other series.
SECTION 9.03 Execution of Supplemental Indentures. In executing, or
accepting the additional trusts created by, any supplemental indenture permitted
by this Article or the modification thereby of the trusts created by this
Indenture, the Indenture 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 Indenture Trustee may, but shall not be obligated to, enter into
any such supplemental indenture which affects the Indenture Trustee's own
rights, duties or immunities under this Indenture or otherwise.
SECTION 9.04 Effect of Supplemental Indentures. Upon the execution of
any supplemental indenture under this Article, this Indenture shall be modified
in accordance therewith, and such supplemental indenture shall form a part of
this Indenture for all purposes; and every Holder of Securities theretofore or
thereafter authenticated and delivered hereunder and of any coupon appertaining
thereto shall be bound thereby.
SECTION 9.05 Conformity with Trust Indenture Act. Every supplemental
indenture executed pursuant to this Article shall conform to the requirements of
the Trust Indenture Act as then in effect.
SECTION 9.06 Reference in Securities to Supplemental Indentures.
Securities of any series authenticated and delivered after the execution of any
supplemental indenture pursuant to this Article may, and shall, if required by
the Indenture Trustee, bear a notation in form approved by the Indenture 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 Indenture Trustee and the Company, to any such supplemental
indenture may be
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prepared and executed by the Company and authenticated and delivered by the
Indenture Trustee in exchange for Outstanding Securities of such series.
ARTICLE X. - COVENANTS
SECTION 10.01 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 3.01 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 10.10 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 3.01, 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 10.02 Maintenance of Office or Agency. If Securities of a
series are issuable only as Registered Securities, the Company shall maintain in
each Place of Payment for any series of Securities an office or agency where
Securities of that series may be presented or surrendered for payment or
conversion, where Securities of that series may be surrendered for registration
of transfer or exchange and where notices and demands to or upon the Company in
respect of the Securities of that series and this Indenture may be served. If
Securities of a series are issuable as Bearer Securities, the Company will
maintain: (A) in the Borough of Manhattan, The City of New York, an office or
agency where any Registered Securities of that series may be presented or
surrendered for payment or conversion, where any Registered Securities of that
series may be surrendered for registration of transfer, where Securities of that
series may be surrendered for exchange, where notices and demands to or upon the
Company in respect of the Securities of that series and this Indenture may be
served and where Bearer Securities of that series and related coupons may be
presented or surrendered for payment or conversion in the circumstances
described in the following paragraph (and not otherwise); (B) subject to any
laws or regulations applicable thereto, in a Place of Payment for that series
which is located outside the United States, an office or agency where Securities
of that series and related coupons may be presented and surrendered for payment
(including payment of any Additional Amounts payable on Securities of
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that series pursuant to Section 10.10) 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 (C) subject to any laws or
regulations applicable thereto, in a Place of Payment for that series located
outside the United States an office or agency where any Registered Securities of
that series may be surrendered for registration of transfer, where Securities of
that series may be surrendered for exchange and where notices and demands to or
upon the Company in respect of the Securities of that series and this Indenture
may be served. The Company will give prompt written notice to the Indenture
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 Indenture Trustee with the address
thereof, such presentations, surrenders, notices and demands may be made or
served at the Corporate Trust Office of the Indenture 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 10.10) 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 Indenture
Trustee its agent to receive all such presentations, surrenders, notices and
demands.
Unless otherwise specified with respect to any Securities pursuant to
Section 3.01, 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 10.10) 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, if any,
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;
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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 Indenture
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 3.01 with respect to a series of Securities,
the Company hereby designates as a Place of Payment for each series of
Securities the office or agency of the Company in the Borough of Manhattan, The
City of New York, and initially appoints the Indenture 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 3.01, if and so long as the Securities of any series (i) are denominated
in a Foreign Currency or (ii) may be payable in a Foreign Currency, or so long
as it is required under any other provision of the Indenture, then the Company
will maintain with respect to each such series of Securities, or as so required,
at least one exchange rate agent.
SECTION 10.03 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 3.01 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 Indenture 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 Indenture Trustee) the Company will promptly
notify the Indenture Trustee of its action or failure so to act.
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The Company will cause each Paying Agent for any series of Securities
other than the Indenture Trustee to execute and deliver to the Indenture Trustee
an instrument in which such Paying Agent shall agree with the Indenture Trustee,
subject to the provisions of this Section, that such Paying Agent will
(1) hold all sums held by it for payment of principal of (and
premium, if any) or interest on Securities in trust for the benefit
of the Persons entitled thereto until such sums shall be paid to such
Persons or otherwise disposed of as herein provided;
(2) give the Indenture 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
(3) at any time during the continuance of any such default upon
the written request of the Indenture Trustee, forthwith pay to the
Indenture 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 Indenture Trustee all
sums held in trust by the Company or such Paying Agent, such sums to be held by
the Indenture Trustee upon the same trusts as those upon which such sums were
held by the Company or such Paying Agent; and, upon such payment by any Paying
Agent to the Indenture 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 Indenture 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 one year 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
Indenture 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 Indenture 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
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from the date of such publication, any unclaimed balance of such money then
remaining will be repaid to the Company.
SECTION 10.04 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 articles of
incorporation, by-laws and statute) and material franchises, provided, however,
that the Company shall not be required to preserve any such right or franchise
if the Board of Trustees shall determine that the preservation thereof is no
longer desirable in the conduct of the business of the Company.
SECTION 10.05 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 of their properties
for value in the ordinary course of business.
SECTION 10.06 Insurance. The Company will cause each of its and its
Subsidiaries' insurable properties to be insured against loss or damage in an
amount at least equal to their then full insurable value with insurers of
recognized responsibility.
SECTION 10.07 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 10.08 Provision of Financial Information. Whether or not the
Company is subject to Section 13 or 15(d) of the Securities Exchange Act of
1934, the Company will prepare the annual reports, quarterly reports and other
documents within 15 days of each of the respective dates by which the Company
would have been required to file such annual reports, quarterly reports and
other documents with the Commission pursuant to such Section 13 or 15(d) and
will (i) transmit by mail to all
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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 if the
Company were subject to such Sections, and (ii) file with the Indenture 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 if the Company were subject
to such Sections and (iii) promptly upon written request and payment of the
reasonable cost of duplication and delivery, supply copies of such documents to
any prospective Holder.
SECTION 10.09 Statement as to Compliance. The Company will deliver to
the Indenture 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 10.09, such compliance shall be
determined without regard to any period of grace or requirement of notice under
this Indenture.
SECTION 10.10 Additional Amounts. If any Securities of a series
provide for the payment of Additional Amounts, the Company will pay to the
Holder of any Security of such series or any coupon appertaining thereto
Additional Amounts as may be specified as contemplated by Section 3.01. Whenever
in this Indenture there is mentioned, in any context except in the case of
Section 5.02(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
3.01 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 3.01, 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
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Company will furnish the Indenture Trustee and the Company's principal Paying
Agent or Paying Agents, if other than the Indenture Trustee, with an Officers'
Certificate instructing the Indenture Trustee and such Paying Agent or Paying
Agents whether such payment of principal of 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 Indenture Trustee or such Paying
Agent the Additional Amounts required by the terms of such Securities. In the
event that the Indenture Trustee or any Paying Agent, as the case may be, shall
not so receive the above-mentioned certificate, then the Indenture Trustee or
such Paying Agent shall be entitled (i) to assume that no such withholding or
deduction is required with respect to any payment of principal or interest with
respect to any Securities of a series or related coupons until it shall have
received a certificate advising otherwise and (ii) to make all payments of
principal and interest with respect to the Securities of a series or related
coupons without withholding or deductions until otherwise advised. The Company
covenants to indemnify the Indenture Trustee and any Paying Agent for, and to
hold them harmless against, any loss, liability or expense reasonably incurred
without negligence or bad faith on their part arising out of or in connection
with actions taken or omitted by any of them or in reliance on any Officers'
Certificate furnished pursuant to this Section or in reliance on the Company's
not furnishing such an Officers' Certificate.
SECTION 10.11 Waiver of Certain Covenants. The Company may omit in
any particular instance to comply with any term, provision or condition set
forth in Sections 10.04 to 10.08, inclusive, if before or after the time for
such compliance the Holders of at least a majority in principal amount of all
outstanding Securities of such series, by Act of such Holders, either waive such
compliance in such instance or generally waive compliance with such covenant or
condition, but no such waiver shall extend to or affect such covenant or
condition except to the extent so expressly waived, and, until such waiver shall
become effective, the obligations of the Company and the duties of the Indenture
Trustee in respect of any such term, provision or condition shall remain in full
force and effect.
ARTICLE XI. - REDEMPTION OF SECURITIES
SECTION 11.01 Applicability of Article. Securities of any series
which are redeemable before their Stated Maturity shall be redeemable in
accordance with their
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terms and (except as otherwise specified as contemplated by Section 3.01 for
Securities of any series) in accordance with this Article.
SECTION 11.02 Election to Redeem; Notice to Indenture 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 11.04
(unless a shorter notice shall be satisfactory to the Indenture Trustee), notify
the Indenture 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 Indenture Trustee with an Officers' Certificate
evidencing compliance with such restriction.
SECTION 11.03 Selection by Indenture 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
Indenture 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 Indenture 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 Indenture 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 the Securities shall
relate, in the case of any Security redeemed or to be redeemed only in part, to
the portion of the principal amount of such Security which has been or is to be
redeemed.
SECTION 11.04 Notice of Redemption. Notice of redemption shall be
given in the manner provided in Section 1.06, not less than 15 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 3.01, to each Holder
of Securities to be redeemed, but failure to give such notice in the manner
herein provided to the Holder
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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 Security or portion thereof.
Any notice that is mailed to the Holders of Registered Securities in
the manner herein provided shall be conclusively presumed to have been duly
given, whether or not the Holder receives the notice.
All notices of redemption shall state:
(1) the Redemption Date,
(2) the Redemption Price, accrued interest to the Redemption
Date payable as provided in Section 11.06, if any, and Additional
Amounts, if any,
(3) if less than all Outstanding Securities of any series are to
be redeemed, the identification (and, in the case of partial
redemption, the principal amount) of the particular Security or
Securities to be redeemed,
(4) in case any Security is to be redeemed in part only, the
notice which relates to such Security shall state that on and after
the Redemption Date, upon surrender of such Security, the holder will
receive, without a charge, a new Security or Securities of authorized
denominations for the principal amount thereof remaining unredeemed,
(5) that on the Redemption Date, the Redemption Price and
accrued interest to the Redemption Date payable as provided in
Section 11.06, 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 pertaining
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
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Price, unless security or indemnity satisfactory to the Company, the
Indenture Trustee for such series and any Paying Agent is furnished,
(9) if Bearer Securities of any series are to be redeemed and
any Registered Securities of such series are not to be redeemed, and
if such Bearer Securities may be exchanged for Registered Securities
not subject to redemption on this Redemption Date pursuant to Section
3.05 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
Indenture Trustee in the name and at the expense of the Company.
SECTION 11.05 Deposit of Redemption Price. On or prior to any
Redemption Date, the Company shall deposit with the Indenture 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 10.03) an amount of money in the currency
or currencies, currency unit or units or composite currency of currencies in
which the Securities of such series are payable (except as otherwise specified
pursuant to Section 3.01 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 are converted, any money
deposited with the Indenture 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 11.06 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 of
composite currency or
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currencies in which the Securities of such series are payable (except as
otherwise specified pursuant to Section 3.01 for the Securities of such series)
(together with accrued interest, if any, to the Redemption Date), and from and
after such date (unless the Company shall default in the payment of the
Redemption Price and accrued interest) such Securities shall, if the same were
interest-bearing, cease to bear interest and the coupons for such interest
appertaining to any Bearer Securities so to be redeemed, except to the extent
provided below, shall be void. Upon surrender of any such Security for
redemption in accordance with said notice, together with all coupons, if any,
appertaining thereto maturing after the Redemption Date, such Security shall be
paid by the Company at the Redemption Price, together with accrued interest, if
any, to the Redemption Date; provided, however, that installments of interest on
Bearer Securities whose Stated Maturity is on or prior to the Redemption Date
shall be payable only at an office or agency located outside the United States
(except as otherwise provided in Section 10.02) and, unless otherwise specified
as contemplated by Section 3.01, only upon presentation and surrender of coupons
for such interest; and provided further that, except as otherwise provided with
respect to Securities convertible into Common Shares or Preferred Shares,
installments of interest on Registered Securities whose Stated Maturity is on or
prior to the Redemption Date shall be payable to the Holders of such Securities,
or one or more Predecessor Securities, registered as such at the close of
business on the relevant Record Dates according to their terms and the
provisions of Section 3.07.
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 Indenture 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 Indenture 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 10.02) and, unless otherwise specified as
contemplated by Section 3.01, 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 11.07 Securities Redeemed in Part. Any Registered Security
which is to be redeemed only in part (pursuant to the provisions of this Article
or of
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Article XII) shall be surrendered at a Place of Payment therefor (with, if the
Company or the Indenture Trustee so requires, due endorsement by, or a written
instrument of transfer in form satisfactory to the Company and the Indenture
Trustee duly executed by, the Holder thereof or his attorney duly authorized in
writing) and the Company shall execute and the Indenture 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 Indenture
Trustee shall authenticate and deliver to the depository, 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.
ARTICLE XII. - SINKING FUNDS
SECTION 12.01 Applicability of Article. The provisions of this
Article shall be applicable to any sinking fund for the retirement of Securities
of a series except as otherwise specified as contemplated by Section 3.01 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 12.02. 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 12.02 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 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 Indenture Trustee at the applicable Redemption Price
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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 12.03 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 Indenture 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 3.01 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 12.02, 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 Indenture Trustee any Securities to be so delivered and credited.
If such Officers' Certificate shall specify an optional amount to be added in
cash to the next ensuing mandatory sinking fund payment, the Company shall
thereupon be obligated to pay the amount therein specified. Not less than 30
days before each such sinking fund payment date the Indenture Trustee shall
select the Securities to be redeemed upon such sinking fund payment date in the
manner specified in Section 11.03 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 11.04. Such notice having been duly given, the redemption of such
Securities shall be made upon the terms and in the manner stated in Sections
11.06 and 11.07.
ARTICLE XIII. - REPAYMENT AT THE OPTION OF HOLDERS
SECTION 13.01 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
3.01) in accordance with this Article.
SECTION 13.02 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 Indenture 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 10.03) an amount of money in the currency or
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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 3.01 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 13.03 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 Indenture 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 a letter from a member of a
national securities exchange, or the National Association of Securities Dealers,
Inc. ("NASD"), or a commercial bank or trust company in the United States
setting forth the name of the Holder of the Security, the principal amount of
the Security, the principal amount of the Security to be repaid, the CUSIP
number, if any, or a description of the tenor and terms of the Security, a
statement that the option to elect repayment is being exercised thereby and a
guarantee that the Security to be repaid, together with the duly completed form
entitled "Option to Elect Repayment" on the reverse of the Security, will be
received by the Indenture 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
Indenture Trustee by such fifth Business Day. If less than the entire principal
amount of such Security is to be repaid in accordance with the terms of such
Security, the principal amount of such Security to be repaid, in increments of
the minimum denomination for Securities of such series, and the denomination or
denominations of the Security or Securities to be issued to the Holder for the
portion of the principal amount of such Security surrendered that is not to be
repaid, must be specified. The principal amount of any Security providing for
repayment at the option of the Holder thereof may not be repaid in part if,
following such repayment, the unpaid principal amount of such Security would be
less than the minimum authorized denomination of Securities of the series of
which such Security to be repaid is a part. Except as otherwise may be provided
by the terms of any Security providing for repayment at the option of the Holder
thereof, exercise of the repayment option by the Holder shall be irrevocable
unless waived by the Company.
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SECTION 13.04 When Securities Presented for Repayment Become Due and
Payable. If Securities of any series providing for repayment at the option of
the Holders thereof shall have been surrendered as provided in this Article and
as provided by or pursuant to the terms of such Securities, such Securities or
the portions thereof, as the case may be, to be repaid shall become due and
payable and shall be paid by the 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
Redemption Date shall be payable only at an office or agency located outside the
United States (except as otherwise provided in Section 10.02) and, unless
otherwise specified pursuant to Section 3.01, only upon presentation and
surrender of such coupons; and provided further that, in the case of Registered
Securities, installments of interest, if any, whose Stated Maturity is on or
prior to the Repayment Date shall be payable (but without interest thereon,
unless the Company shall default in the payment thereof) to the Holders of such
Securities, or one or more Predecessor Securities, registered as such at the
close of business on the relevant Record Dates according to their terms and the
provisions of Section 3.07.
If any Bearer Security surrendered for repayment shall not be
accompanied for all appurtenant coupons maturing after the Repayment Date, such
Security may be paid after deducting from the amount payable therefor as
provided in Section 13.02 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 Indenture 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
Indenture 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 10.02) and, unless otherwise specified as contemplated by Section 3.01,
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
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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 13.05 Securities Repaid in Part. Upon surrender of any
Registered Security which is to be repaid in part only, the Company shall
execute and the Indenture 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 XIV. - DEFEASANCE AND COVENANT DEFEASANCE
SECTION 14.01 Applicability of Article; Company's Option to Effect
Defeasance or Covenant Defeasance. If, pursuant to Section 3.01, provision is
made for either or both of (a) defeasance of the Securities of or within a
series under Section 14.02 or (b) covenant defeasance of the Securities of or
within a series under Section 14.03, then the provisions of such Section or
Sections, as the case may be, together with the other provisions of this Article
(with such modifications thereto as may be specified pursuant to Section 3.01
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 14.02 (if applicable) or Section
14.03 (if applicable) be applied to such Outstanding Securities and any coupons
appertaining thereto upon compliance with the conditions set forth below in this
Article.
SECTION 14.02 Defeasance and Discharge. Upon the Company's exercise
of the above option applicable to this Section with respect to any Securities of
or within a series, the Company shall be deemed to have been discharged from its
obligations with respect to such Outstanding Securities and any coupons
appertaining thereto on the date the conditions set forth in Section 14.04 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 14.05 and the other Sections of this Indenture
referred to in clauses (A) and (B) below, and to have satisfied all of its other
obligations under such Securities and any coupons appertaining thereto and this
Indenture insofar as such Securities and any coupons appertaining thereto are
concerned (and the Indenture Trustee, at the expense of the Company, shall
execute proper instruments acknowledging the same), except for the following
which shall survive until otherwise terminated or discharged hereunder: (A) the
rights of Holders of such
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Outstanding Securities and any coupons appertaining thereto to receive, solely
from the trust fund described in Section 14.04 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, (B) the Company's obligations with respect to such
Securities under Sections 3.05, 3.06, 10.02 and 10.03 and with respect to the
payment of Additional Amounts, if any, on such Securities as contemplated by
Section 10.10, (C) the rights, powers, trusts, duties and immunities of the
Indenture Trustee hereunder and (D) this Article. Subject to compliance with
this Article XIV, the Company may exercise its option under this Section
notwithstanding the prior exercise of its option under Section 14.03 with
respect to such Securities and any coupons appertaining thereto.
SECTION 14.03 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 10.04 to 10.08, inclusive, and, if specified pursuant to Section 3.01,
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 14.04 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 10.04 to 10.08, 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 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 5.01(4) or 5.01(8) or otherwise, as the case may be, but, except
as specified above, the remainder of this Indenture and such Securities and any
coupons appertaining thereto shall be unaffected thereby.
SECTION 14.04 Conditions to Defeasance or Covenant Defeasance. The
following shall be the conditions to application of Section 14.02 or Section
14.03 to any Outstanding Securities of or within a series and any coupons
appertaining thereto:
(a) The Company shall irrevocably have deposited or caused to be
deposited with the Indenture Trustee (or another trustee satisfying the
requirements of Section 6.07 who shall agree to comply with the provisions of
this Article XIV applicable to it)
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as trust funds in trust for the purpose of making the following payments,
specifically pledged as security for, and dedicated solely to, the benefit of
the Holders of such Securities and any coupons appertaining thereto, (1) an
amount in such currency, currencies or currency unit in which such Securities
and any coupons appertaining thereto are then specified as payable at Stated
Maturity, or (2) Government Obligations applicable to such securities and
coupons appertaining thereto (determined on the basis of the currency,
currencies or currency unit in which such Securities and coupons appertaining
thereto are then specified as payable at Stated Maturity) which through the
scheduled payment of principal and interest in respect thereof in accordance
with their terms will provide, not later than the due date of any payment of
principal of (and premium, if any) and interest, if any, on such Securities and
any coupons appertaining thereto, money in an amount, or (3) a combination
thereof, in any case, in an amount, sufficient, without consideration of any
reinvestment of 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 Indenture Trustee, to pay and discharge,
and which shall be applied by the Indenture Trustee (or other qualifying
trustee) to pay and discharge, (i) the principal of (and premium, if any) and
interest, if any, on such Outstanding Securities and any coupons appertaining
thereto on the Stated Maturity of such principal or installment of principal or
interest and (ii) any mandatory sinking fund payments or analogous payments
applicable to such Outstanding Securities and any coupons appertaining thereto
on the day on which such payments are due and payable in accordance with the
terms of this Indenture and of such Securities and any coupons appertaining
thereto.
(b) Such defeasance or covenant defeasance shall not result in a
breach or violation of, or constitute a default under, this Indenture or any
other material agreement or instrument to which the Company is a party or by
which it is bound.
(c) No Event of Default or event which with notice or lapse of time
or both would become an Event of Default with respect to such Securities and any
coupons appertaining thereto shall have occurred and be continuing on the date
of such deposit or, insofar as Sections 5.01(6) and 5.01(7) are concerned, at
any time during the period ending on the 91st day after the date of such deposit
(it being understood that this condition shall not be deemed satisfied until the
expiration of such period).
(d) In the case of an election under Section 14.02, the Company shall
have delivered to the Indenture Trustee an Opinion of Counsel stating that (i)
the Company has received from, or there has been published by, the Internal
Revenue Service a ruling, or (ii) since the date of execution of this Indenture,
there has been a change in the applicable Federal income tax law, in either case
to the effect that, and based thereon such opinion shall confirm that, the
Holders of such Outstanding Securities and any coupons appertaining thereto will
not recognize income, gain or loss for Federal
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income tax purposes as a result of such defeasance and will be subject to
Federal income tax on the same amounts, in the same manner and at the same times
as would have been the case if such defeasance had not occurred.
(e) In the case of an election under Section 14.03, the Company shall
have delivered to the Indenture Trustee an Opinion of Counsel to the effect that
the Holders of such Outstanding Securities and any coupons appertaining thereto
will not recognize income, gain or loss for Federal income tax purposes as a
result of such covenant defeasance and will be subject to Federal income tax on
the same amounts, in the same manner and at the same times as would have been
the case if such covenant defeasance had not occurred.
(f) The Company shall have delivered to the Indenture Trustee an
Officers' Certificate and an Opinion of Counsel, each stating that all
conditions precedent to the defeasance under Section 14.02 or the covenant
defeasance under Section 14.03 (as the case may be) have been complied with and
an Opinion of Counsel to the effect that either (i) as a result of a deposit
pursuant to subsection (a) above and the related exercise of the Company's
opinion under Section 14.02 or Section 14.03 (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
Indenture Trustee for such trust funds or (ii) all necessary registrations under
said Act have been effected.
(g) Notwithstanding any other provisions of this Section, such
defeasance or covenant defeasance shall be effected in compliance with any
additional or substitute terms, conditions or limitations with may be imposed on
the Company in connection therewith pursuant to Section 3.01.
SECTION 14.05 Deposited Money and Government Obligations to Be Held
in Trust; Other Miscellaneous Provisions. Subject to the provisions of the last
paragraph of Section 10.03, all money and Government Obligations (or other
property as may be provided pursuant to Section 3.01) (including the proceeds
thereof) deposited with the Indenture Trustee (or other qualifying trustee,
collectively for purposes of this Section 14.05, the "Indenture Trustee")
pursuant to Section 14.04 in respect of any Outstanding Securities of any series
and any coupons appertaining thereto shall be held in trust and applied by the
Indenture 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 Indenture 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
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Amounts, if any, but such money need not be segregated from other funds except
to the extent required by law.
Unless otherwise specified with respect to any Security pursuant to
Section 3.01, if, after a deposit referred to in Section 14.04(a) has been made,
(a) the Holder of a Security in respect of which such deposit was made is
entitled to, and does, elect pursuant to Section 3.01 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 14.04(a) has been made in respect of such
Security, or (b) a Conversion Event occurs in respect of the currency or
currency unit in which the deposit pursuant to Section 14.04(a) has been made,
the indebtedness represented by such Security and any coupons appertaining
thereto shall be deemed to have been, and will be, fully discharged and
satisfied through the payment of the principal of (and premium, if any), and
interest, if any, on such Security as the same becomes due out of the process
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 become
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 Indenture Trustee against any
tax, fee or other charge imposed on or assessed against the Government
Obligations deposited pursuant to Section 14.04 or the principal and interest
received in respect thereof other than any such tax, fee or other charge which
by law is for the account of the Holders of such Outstanding Securities and any
coupons appertaining thereto.
Anything in this Article to the contrary notwithstanding, subject to
Section 6.06, the Indenture 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 14.04
which, in the opinion of a nationally recognized firm of independent public
accountants expressed in a written certification thereof delivered to the
Indenture Trustee, are in excess of the amount thereof which would then be
required to be deposited to effect a defeasance or covenant defeasance, as
applicable, in accordance with this Article.
ARTICLE XV. - MEETINGS OF HOLDERS OF SECURITIES
SECTION 15.01 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
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pursuant to this Article to make, give or take any request, demand,
authorization, direction, notice, consent, waiver or other action provided by
this Indenture to be made, given or taken by Holders of Securities of such
series.
SECTION 15.02 Call, Notice and Place of Meetings. (a) The Indenture
Trustee may at any time call a meeting of Holders of Securities of any series
for any purpose specified in Section 15.01, to be held at such time and at such
place as the Indenture 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 1.06, not less than
20 nor more than 180 days prior to the date fixed for the meeting.
(b) In case at any time the Company, pursuant to a Board Resolution
or the Holders of at least 25% in principal amount of the Outstanding Securities
of any series shall have requested the Indenture Trustee to call a meeting of
the Holders of Securities of such series for any purpose specified in Section
15.01, by written request setting forth in reasonable detail the action proposed
to be taken at the meeting, and the Indenture 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 subsection (a) of this Section.
SECTION 15.03 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 Indenture Trustee and
its counsel and any representatives of the Company and its counsel.
SECTION 15.04 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
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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 15.02(a), except that such notice need be given only once not less than
five days prior to the date on which the meeting is scheduled to be reconvened.
Except as limited by the proviso to Section 9.02, any resolution
presented to a meeting or adjourned meeting duly reconvened at which a quorum is
present as aforesaid may be adopted by the affirmative vote of the persons
entitled to vote a majority in aggregate principal amount of the Outstanding
Securities represented at such meeting; provided, however, that, except as
limited by the proviso to Section 9.02, any resolution with respect to any
request, demand, authorization, direction, notice, consent, waiver or other
action which this Indenture expressly provides may be made, given or taken by
the Holders of a specified percentage, which is less than a majority, in
principal amount of the Outstanding Securities of a series may be adopted at a
meeting or an adjourned meeting duly reconvened and at which a quorum is present
as aforesaid by the affirmative vote of the Holders of such specified percentage
in principal amount of the Outstanding Securities of that series.
Any resolution passed or decision taken at any meeting of Holders of
Securities of any series duly held in accordance with this Section shall be
binding on all the Holders of Securities of such series and the related coupons,
whether or not present or represented at the meeting.
Notwithstanding the foregoing provisions of this Section 15.04, if
any action is to be taken at a meeting of Holders of Securities of any series
with respect to any request, demand, authorization, direction, notice, consent,
waiver or other action that this Indenture expressly provides may be made, given
or taken by the Holders of a specified percentage in principal amount of all
Outstanding Securities affected thereby, or of the Holders of such series and
one or more additional series:
(i) there shall be no minimum quorum requirement for such
meeting; and
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(ii) the principal amount of the Outstanding Securities of such
series that vote in favor of such request, demand, authorization,
direction, notice, consent, waiver or other action shall be taken into
account in determining whether such request, demand, authorization,
direction, notice, consent, waiver or other action has been made, given or
taken under this Indenture.
SECTION 15.05 Determination of Voting Rights; Conduct and Adjournment of
Meetings. (a) Notwithstanding any provisions of this Indenture, the Indenture
Trustee may make such reasonable regulations as it may deem advisable for any
meeting of Holders of Securities of a series in regard to proof of the holding
of Securities of such series and of the appointment of proxies and in regard to
the appointment and duties of inspectors of votes, the submission and
examination of proxies, certificates and other evidence of the right to vote,
and such other matters concerning the conduct of the meeting as it shall deem
appropriate. Except as otherwise permitted or required by any such regulations,
the holding of Securities shall be proved in the manner specified in Section
1.04 and the appointment of any proxy shall be proved in the manner specified in
Section 1.04 or by having the signature of the Person executing the proxy
witnessed or guaranteed by any trust company, bank or banker authorized by
Section 1.04 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 1.04 or
other proof.
(b) The Indenture 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 15.02(b), in
which case the Company or the Holders of Securities of the series calling the
meeting, as the case may be, shall in like manner appoint a temporary chairman.
A permanent chairman and a permanent secretary of the meeting shall be elected
by vote of the Persons entitled to vote a majority in principal amount of the
Outstanding Securities of such series represented at the meeting.
(c) At any meeting each Holder of a Security of such series or proxy
shall be entitled to one vote for each $1,000 principal amount of the
Outstanding Securities of such series held or represented by him; provided,
however, that no vote shall be cast or counted at any meeting in respect of any
Security challenged as not Outstanding and ruled by the chairman of the meeting
to be not Outstanding. The chairman of the meeting shall have no right to vote,
except as a Holder of a Security of such series or proxy.
(d) Any meeting of Holders of Securities of any series duly called
pursuant to Section 15.02 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
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such series represented at the meeting, and the meeting may be held as so
adjourned without further notice.
SECTION 15.06 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 15.02 and, if applicable, Section 15.04.
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 Indenture Trustee to be preserved by the
Indenture 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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SIGNATURES
IN WITNESS WHEREOF, the parties hereto have caused this Indenture to
be duly executed all as of the day and year first above written.
LEXINGTON CORPORATE PROPERTIES TRUST
By:________________________________
Title:
Attest:________________________
Title:
[NAME OF INDENTURE TRUSTEE]
as Indenture Trustee
By:________________________________
Title:
Attest:________________________
Title:
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<PAGE> 98
EXHIBIT A
FORM OF REDEEMABLE OR NON-REDEEMABLE SECURITY
[Face of Security]
[If the Holder of this Security (as indicated below) 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 a 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 SECTION 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.]
LEXINGTON CORPORATE PROPERTIES TRUST
[Designation of Series]
No.____ $____
LEXINGTON CORPORATE PROPERTIES TRUST, a Maryland real estate investment trust
(therein referred to as the "Company," which term includes any
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successor corporation 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 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 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 its 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 Indenture 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
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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 of America 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] falls on a day that is not a
Business Day, as defined below, 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 ____________ 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
Indenture 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.
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Dated:____________ LEXINGTON CORPORATE PROPERTIES
TRUST
By:________________________________
Attest:
________________________________
Secretary
A-4
<PAGE> 102
[Reverse of Security]
LEXINGTON CORPORATE PROPERTIES TRUST
This Security is one of a duly authorized issue of securities of the Company
(herein called the "Securities"), 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 Indenture Trustee
(herein called the "Indenture 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 Indenture 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, as defined in the Indenture, 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 are subject to redemption [(i) (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
a percentage 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
---- ---------------- ---- ----------------
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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.]
[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 Redemption Price for Redemption
Through Operation Otherwise Than Through
Year of the Sinking Fund Operation 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 -- 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.]]
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<PAGE> 104
Notice of redemption will be given by mail to Holders of Securities,
not less than 15 nor more than 60 days prior to the Redemption Date, all as
provided in the Indenture.
In the event of redemption of this 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.]
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 Indenture 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 times, 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
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<PAGE> 105
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 Indenture Trustee and any agent of the Company or the
Indenture Trustee may treat the Person in whose name this Security is registered
as the owner hereof for all purposes, whether or not this Security be overdue,
and neither the Company, the Indenture 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 shareholder, 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 party 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 internal laws of the State of New York applicable to
agreements made and to be performed entirely in such State.
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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 your account (i) are
owned by person(s) that are not citizens or residents of the United States,
domestic partnerships, domestic corporations or any estate or trust the income
of which is subject to United States Federal income taxation regardless of its
source ("United States person(s)"), (ii) are owned by United States person(s)
that are (a) foreign branches of United States financial institutions (financial
institutions, as defined in the United States Treasury Regulations Section
2.165-12(c)(1)(v) are herein referred to as "financial institutions") purchasing
for their own account or for resale, or (b) United States person(s) who acquired
the Securities through foreign branches of United States financial institutions
and who hold the Securities through such United States financial institutions on
the date hereof (and in either case (a) or (b), each such United States
financial institution hereby agrees, on its own behalf or through its agent,
that you may advise Lexington Corporate Properties Trust or its agent that such
financial institution will comply with the requirements of Section 165(j)(3)(A),
(B) or (C) of the United States Internal Revenue Code of 1986, as amended, and
the regulations thereunder), or (iii) are owned by United States or foreign
financial institution(s) for purposes of resale during the restricted period (as
defined in United States Treasury Regulations Section 1.163- 5(c)(2)(i)(D)(7)),
and, in addition, if the owner is a United States or foreign financial
institution described in clause (iii) above (whether or not also described in
clause (i) or (ii), this is to further certify that such financial institution
has not acquired the Securities for purposes of resale directly or indirectly to
a United States person or to a person within the United States or its
possessions.
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<PAGE> 107
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 or electronic
transmission 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 applied as of such date.
This certificate excepts and does not relate to [U.S.$] of such
interest in the above-captioned Securities in respect of which we are not able
to certify and as to which we understand an exchange for an interest in a
permanent Global Security or an exchange for and delivery of definitive
Securities (or, if relevant, collection of any interest) cannot be made until we
do so certify.
We understand that this certificate may be required in connection
with certain tax legislation in the United States. If administrative or legal
proceedings are commenced or threatened in connection with which this
certificate is or would be relevant, we irrevocably authorize you to produce
this certificate or a copy thereof to any interested party in such proceedings.
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 Signature)
Name:
Title:
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<PAGE> 108
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, [U.S.$] principal amount of
the above-captioned Securities (i) is owned by person(s) that are not citizens
or residents of the United States, domestic partnerships, domestic corporations
or any estate or trust the income of which is subject to United States Federal
income taxation regardless of its source ("United States person(s)"), (ii) is
owned by United States person(s) that are (a) foreign branches of United States
financial institutions (financial institutions, as defined in U.S. Treasury
Regulations Section 1.165-12(c)(1)(v) are herein referred to as "financial
institutions") purchasing for their own account or for resale, or (b) United
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 Lexington Corporate Properties Trust or its agent that
such financial institution will comply with the requirements of Section
165(j)(3)(A), (B) or (C) of the Internal Revenue Code of 1986, as amended, and
the regulations thereunder), or (iii) is owned by United States or foreign
financial institution(s) for purposes of resale during the restricted period (as
defined in United States Treasury Regulations Section 1.163-5(c)(2)(i)(D)(7)),
and, to the further effect, that financial institutions described in clause
(iii) above (whether or not also described in clause (i) or (ii)) have certified
that they have not acquired the Securities for purposes of resale directly or
indirectly to a United States person or to a person within the United States or
its possessions.
As used herein, "United States" means the United States of America
(including the States and the District of Columbia); and its "Possessions"
include Puerto Rico, the U.S. Virgin Islands, Guam, American Samoa, Wake Island
and the Northern Mariana Islands.
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<PAGE> 109
We further certify that (i) we are not making available herewith for
exchange (or, if relevant, collection of any interest) any portion of the
temporary Global Security representing the above-captioned Securities excepted
in the above-referenced certificates of Member Organizations and (ii) as of the
date hereof we have not received any notification from any of our Member
Organizations to the effect that the statements made by such Member
Organizations with respect to any portion of the part submitted herewith for
exchange (or, if relevant, collection of any interest) are no longer true and
cannot be relied upon as of the date hereof.
We understand that this certification is required in connection with
certain tax legislation in the United States. If administrative or legal
proceedings are commenced or threatened in connection with which this
certificate is or would be relevant, we irrevocably authorize you to produce
this certificate or a copy thereof to any interested party in such proceedings.
Dated: ___________
[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-4
<PAGE> 1
EXHIBIT 5.1
[PAUL, HASTINGS, JANOFSKY & WALKER LLP LETTERHEAD]
April 3, 1998
23062.71109
Lexington Corporate Properties Trust
355 Lexington Avenue
New York, NY 10017
Re: Legality of Securities to be Registered
under Registration Statement on Form S-3
File No. 333-
Ladies and Gentlemen:
This opinion is delivered in our capacity as counsel to Lexington
Corporate Properties Trust (the "Company") in connection with the Company's
registration statement on Form S-3 (File No. 333- ) (the "Registration
Statement") filed with the Securities and Exchange Commission under the
Securities Act of 1933, as amended, relating to the offering, from time to time,
by the Company, of an indeterminate amount of Debt Securities, Preferred Shares
and Common Shares with an aggregate public offering price of up to $250,000,000
(such securities being referred to collectively herein as the "Securities" and
individually as a "Security"). The Registration Statement provides that the
Securities may be offered separately or together, in separate series, in
amounts, at prices and on terms to be set forth in one or more prospectus
supplements (each a "Prospectus Supplement") to the Prospectus contained in the
Registration Statement. Capitalized terms used and not otherwise defined herein
shall have the meaning assigned to such terms in the Registration Statement.
In connection with this opinion, we have examined copies or
originals of:
(i) the Declaration of Trust of the Company and the Bylaws of the
Company;
(ii) signed copies of the Registration Statement and all exhibits
thereto, all as filed with the Securities and Exchange Commission on April 3,
1998;
<PAGE> 2
Lexington Corporate Properties Trust
April 3, 1998
Page 2
(iii) minutes of the meetings of the Board of Trustees of the
Company; and
(iv) such other documents as we have deemed material to the opinion
set forth below. The documents described in paragraphs (i) through (iv) are
hereby referred to as the "Company Documents."
In addition, we have reviewed certificates of public officials and
of the Company, statutes, records and other instruments and documents as we have
deemed necessary to form a basis for the opinion hereinafter expressed.
In our examination of the Company Documents, we have assumed,
without independent investigation, (i) the genuineness of all signatures, and
the authority of all persons or entities signing all documents examined by us
and (ii) the authenticity of all documents submitted to us as originals and the
conformity to authentic original documents of all copies submitted to us as
certified, conformed or photostatic copies. With regard to certain factual
matters, we have relied, without independent investigation or verification, upon
statements and representations of representatives of the Company. To the extent
that the opinion set forth below relates to matters under the laws of the State
of Maryland, we have assumed the correctness of, have not made any independent
investigation of the matters covered by, and relied solely on an opinion of
Piper & Marbury L.L.P. dated April 3, 1998, addressed to the Company and to us.
Therefore, to such extent, our opinion is qualified or limited by, or
conditioned upon the matters referenced in such opinion of Piper & Marbury
L.L.P.
We assume that prior to the issuance of any Preferred Shares or
Common Shares or convertible Debt Securities, there will exist, under the
Declaration of Trust of the Company, the requisite number of authorized but
unissued Preferred Shares or Common Shares, as the case may be, and that all
actions necessary to the designation of any such Preferred Shares, including the
filing of an amendment to the Declaration of Trust, will have been taken. We
further assume that any Debt Securities will be issued pursuant to an indenture
(an "Indenture").
We further assume that the issuance, sale amount and terms of the
Securities to be offered from time to time, and the form of any Indenture
relating to any Debt Securities to be offered from time to time, will be
authorized and determined by proper action of the Board of Trustees of the
Company in accordance with the parameters described in the Registration
Statement (each, a "Board Action") and in accordance with the Company's
Declaration of Trust and applicable law.
In addition, we assume that, at or prior to the time of the delivery
of any Security, (i) the Registration Statement has been declared effective and
no stop order has been issued in respect thereof, (ii) a prospectus supplement
or an amendment to the Registration Statement, as
<PAGE> 3
Lexington Corporate Properties Trust
April 3, 1998
Page 3
appropriate, has been filed by the Company with the Commission in a form
reviewed by us, which sets forth the particular terms of the Securities proposed
to be issued, (iii) any Underwriting Agreement entered into by the Company with
respect to the Securities is in a form reviewed by us, (iv) there has not
occurred, since the date of this opinion, any change in law affecting the
validity of the Securities or the ability or capacity of the Company to issue
any Security, and (v) the Company has not effected any material change to its
Declaration of Trust or Bylaws. We have also assumed that none of the terms of
any Security to be established subsequent to the date hereof nor the issuance
and delivery of any Security nor the compliance by the Company with the terms of
any Security will violate any applicable law, rule or regulation or will result
in a violation of any provision of any instrument or agreement then binding upon
the Company or any restriction imposed by any court or governmental body having
jurisdiction over the Company.
Based upon and subject to the foregoing, we are of the opinion that,
as of the date hereof:
1. When the Debt Securities have been (a) duly established by the
applicable Indenture, (b) duly authenticated by the Indenture Trustee and duly
authorized and established by the applicable Board Action, and (c) duly executed
and delivered on behalf of the Company against payment therefor in accordance
with the terms and provisions of such Board Action, the applicable Indenture as
contemplated by the Registration Statement, the Prospectus or the applicable
Prospectus Supplement, and, if applicable, an Underwriting Agreement, the Debt
Securities will be legally issued and will constitute binding obligations of the
Company.
2. When a series of the Preferred Shares has been duly authorized
and established in accordance with the applicable Board Action, the terms of the
Company's Declaration of Trust and applicable law, and upon issuance and
delivery of certificates for shares of such series of Preferred Shares against
payment therefor in the manner contemplated by such Board Action, the
Registration Statement, the Prospectus or the applicable Prospectus Supplement,
the Preferred Shares represented by such certificates will be validly issued,
fully paid and non-assessable.
3. Assuming due Board Action and upon issuance and delivery of
certificates for Common Shares against payment therefor (a) in the manner
contemplated by such Board Action, the Registration Statement, the Prospectus or
the applicable Prospectus Supplement, or (b) pursuant to the conversion of
Company convertible Debt Securities or convertible Preferred Shares, the Common
Shares represented by such certificates will be duly authorized, validly issued,
fully paid and non-assessable.
We hereby consent to being named as counsel to the Company in the
Registration Statement, to the references therein to our firm under the caption
"Legal Matters" and to the
<PAGE> 4
Lexington Corporate Properties Trust
April 3, 1998
Page 4
inclusion of this opinion as an exhibit to the Registration Statement. In giving
this consent, we do not thereby admit that we are within the category of persons
whose consent is required under Section 7 of the Securities Act of 1933, as
amended, or the rules and regulations of the Commission thereunder.
Very truly yours,
/s/ PAUL, HASTINGS, JANOFSKY & WALKER LLP
<PAGE> 1
Exhibit 5.2
PIPER & MARBURY
L.L.P.
CHARLES CENTER SOUTH WASHINGTON
36 SOUTH CHARLES STREET NEW YORK
BALTIMORE, MARYLAND 21201-3018 PHILADELPHIA
410-539-2530 EASTON
FAX: 410-539-0489
April 3, 1998
LEXINGTON CORPORATE PROPERTIES TRUST
355 Lexington Avenue
New York, New York 10017
Registration Statement on Form S-3
----------------------------------
Gentlemen:
We have acted as special Maryland counsel to Lexington Corporate
Properties Trust, a Maryland real estate investment trust (the "Trust"), in
connection with the registration under the Securities Act of 1933, as amended
(the "Act"), pursuant to a Registration Statement (the "Registration Statement")
on Form S-3 of the Trust to be filed with the Securities and Exchange Commission
(the "Commission"), for offering by the Trust from time to time of up to
$250,000,000 aggregate initial offering price of its (i) debt securities (the
"Debt Securities"), (ii) Preferred Shares, par value $.0001 per share (the
"Preferred Shares"), and (iii) Common Shares, par value $.0001 per share (the
"Common Shares"). The Debt Securities, the Preferred Shares, and the Common
Shares are collectively referred to as the "Securities." The Registration
Statement provides that 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 the Prospectus (each a "Prospectus Supplement"). This
opinion is being provided at your request in connection with the filing of the
Registration Statement.
In our capacity as special Maryland counsel, we have reviewed the
following:
(a) The Registration Statement.
(b) The Trust's Declaration of Trust, Bylaws, and Articles
Supplementary.
(c) A short-form good standing certificate for the Trust, dated March
9, 1998, issued by the Maryland State Department of Assessments
and Taxation.
<PAGE> 2
Piper & Marbury
L.L.P.
LEXINGTON CORPORATE PROPERTIES TRUST
April 3, 1998
Page 2
(d) An Officer's Certificate (the "Certificate") of the Trust, dated
the date hereof, as to certain factual matters.
(e) Such other documents as we have considered necessary to the
rendering of the opinions expressed below.
In our examination of the aforesaid documents, we have assumed, without
independent investigation, the genuineness of all signatures, the legal capacity
of all individuals who have executed any of the aforesaid documents, the
authenticity of all documents submitted to us as originals, and the conformity
with originals of all documents submitted to us as copies (and the authenticity
of the originals of such copies), and that all public records reviewed are
accurate and complete. In making our examination of documents executed by
parties other than the Trust, we have assumed that such parties had the power,
corporate or other, to enter into and perform all obligations thereunder, and we
have also assumed the due authorization by all requisite action, corporate or
other, and the valid execution and delivery by such parties of such documents
and the validity, binding effect, and enforceability thereof with respect to
such parties. As to any facts material to this opinion which we did not
independently establish or verify, we have relied solely upon the Certificate.
We further assume that:
(a) The issuance, sale, amount, and terms of the Securities to be
offered from time to time by the Trust will be authorized and
determined by proper action of the Board of Trustees of the Trust
(each, a "Board Action") in accordance with the Trust's Declaration
of Trust, Bylaws and Articles Supplementary and applicable Maryland
law, in each case so as not to result in a default under or breach
of any agreement or instrument binding upon the Trust and so as to
comply with any requirement or restriction imposed by any court or
governmental or regulatory body having jurisdiction over the Trust.
(b) Any Debt Securities will be issued under a valid and legally
binding indenture (an "Indenture") that conforms to the description
thereof set forth in the Prospectus Supplement and will comply with
the Declaration of Trust and Bylaws of the Trust and applicable
Maryland law.
(c) Appropriate debentures, notes, or other evidences of indebtedness
evidencing the Debt Securities will be executed and authenticated
in accordance with the Indenture, will be delivered upon the
issuance and sale of the Debt Securities, and will comply with the
<PAGE> 3
Piper & Marbury
L.L.P.
LEXINGTON CORPORATE PROPERTIES TRUST
April 3, 1998
Page 3
Indenture of the Trust and applicable Maryland law.
(d) Prior to the issuance of any of the Common Shares or the Preferred
Shares, there will exist, under the Declaration of Trust of the
Trust, the requisite number of authorized but unissued Common
Shares or Preferred Shares (and securities of any class into which
any Preferred Shares may be convertible), as the case may be, and
that all actions necessary to the creation and designation of any
such Preferred Shares (and securities of any class into which any
Preferred Shares may be convertible), whether by amendment of the
Declaration of Trust, or by classification or reclassification of
existing capital stock and the filing of Articles Supplementary,
will have been taken.
(e) Appropriate certificates representing Common Shares or the
Preferred Shares will be executed and delivered upon issuance and
sale of any Common Shares or Preferred Shares, as the case may be,
and will comply with the Trust's Declaration of Trust and Bylaws
and applicable Maryland law.
(f) The underwriting agreements for offerings of the Securities (each,
an "Underwriting Agreement," and collectively, the "Underwriting
Agreements") will be valid and legally binding contracts that
conform to the description thereof set forth in the applicable
Prospectus Supplement.
(g) To the extent that the obligations of the Trust under any Debt
Securities or related Indenture may be dependent upon such matters,
the financial institution to be identified in such Indenture as
Trustee (the "Trustee") will be duly organized, validly existing,
and in good standing under the laws of its jurisdiction of
organization; the Trustee will be duly qualified to engage in the
activities contemplated by such Indenture; such Indenture will have
been duly authorized, executed, and delivered by the Trustee and
will constitute the legally valid and binding obligation of the
Trustee enforceable against the Trustee in accordance with its
terms; the Trustee will be in compliance, generally, with respect
to acting as Trustee under such Indenture, with all applicable laws
and regulations; and the Trustee will have the requisite
organizational and legal power and authority to perform its
obligations under such Indenture.
<PAGE> 4
Piper & Marbury
L.L.P.
LEXINGTON CORPORATE PROPERTIES TRUST
April 3, 1998
Page 4
Based upon and subject to the foregoing, we are of the opinion and
advise you that, as of the date hereof:
1. When a series of the Debt Securities has been duly authorized and
established in accordance with the applicable Board Action, the
terms of the Indenture, the Declaration of Trust and Bylaws of the
Trust, and applicable law, and, upon execution, issuance, and
delivery of debentures, notes, or other evidences of indebtedness
for such series of the Debt Securities against payment therefor in
accordance with the terms and provisions of such Board Action, the
Indenture, the Registration Statement (as declared effective under
the Act), or the applicable Prospectus Supplement and, if
applicable, an Underwriting Agreement, the Debt Securities will
constitute valid and legally binding obligations of the Trust.
2. Upon due authorization by Board Action of an issuance of Common
Shares, and upon issuance and delivery of certificates for such
Common Shares against payment therefor in accordance with the terms
and provisions of such Board Action, the Registration Statement (as
declared effective under the Act), or the applicable Prospectus
Supplement and, if applicable, an Underwriting Agreement, or the
conversion of one or more series of Preferred Shares convertible
into Common Shares, the Common Shares represented by such
certificates will be duly authorized, validly issued, fully paid,
and nonassessable.
3. When a series of the Preferred Shares (and securities of any class
into which any Preferred Shares may be convertible) has been duly
authorized and established in accordance with the applicable Board
Action, the terms of the Trust's Declaration of Trust and Bylaws,
and applicable law, and, upon issuance and delivery of certificates
for shares of such series of the Preferred Shares against payment
therefor in accordance with the terms and provisions of such Board
Action, the Registration Statement (as declared effective under the
Act), or the applicable Prospectus Supplement and, if applicable,
an Underwriting Agreement, or the conversion of one or more series
of Preferred Shares convertible into another series of Preferred
Shares, the shares of the Preferred Shares represented by such
certificates will be duly authorized, validly issued, fully paid,
and nonassessable.
The opinion stated herein relating to the validity and binding nature
of obligations of the Trust is subject to (i) the effect of any applicable
bankruptcy, insolvency (including, without limitation, all laws relating to
<PAGE> 5
Piper & Marbury
L.L.P.
LEXINGTON CORPORATE PROPERTIES TRUST
April 3, 1998
Page 5
fraudulent transfers), reorganization, moratorium, or similar laws affecting
creditors' rights generally and (ii) the effect of general principles of equity
(regardless of whether considered in a proceeding in equity or at law).
The opinion expressed above is limited to the laws of the State of
Maryland, exclusive of the securities or "blue sky" laws of the State of
Maryland. The foregoing opinion is rendered as of the date hereof. We assume no
obligation to update such opinion to reflect any facts or circumstances which
may hereafter come to our attention or changes in the law which may hereafter
occur. To the extent that any documents referred to herein are governed by the
law of a jurisdiction other than Maryland, we have assumed that the laws of such
jurisdiction are the same as the laws of Maryland.
We hereby consent to the filing of this opinion with the Commission as
Exhibit 5.2 to the Registration Statement and to the reference to our firm under
the heading "Legal Matters" in the Registration Statement. We further consent to
the reliance on this opinion by Paul, Hastings, Janofsky & Walker L.L.P. in
rendering their opinion to the Trust in connection with the filing of the
Registration Statement. The opinion expressed above is limited to the matters
set forth herein, and no other opinion should be inferred beyond the matters
expressly stated.
Very truly yours,
/s/ Piper & Marbury L.L.P.
<PAGE> 1
Exhibit 23.1
CONSENT OF INDEPENDENT AUDITORS
The Shareholders
Lexington Corporate Properties Trust
We consent to the use of our report incorporated herein by reference and to the
reference to our firm under the heading "Experts" in the registration statement.
/s/ KPMG Peat Marwick LLP
KPMG Peat Marwick LLP
New York, New York
April 1, 1998
