AS FILED WITH THE SECURITIES AND EXCHANGE COMMISSION ON SEPTEMBER 9, 1998
REGISTRATION NO. 333-60285
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SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
------------------------
AMENDMENT NO. 1
TO
FORM S-3
REGISTRATION STATEMENT
UNDER THE SECURITIES ACT OF 1933
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MID-AMERICA APARTMENT COMMUNITIES, INC.
(EXACT NAME OF REGISTRANT AS SPECIFIED IN ITS CHARTER)
TENNESSEE 62-1543819
(STATE OR OTHER JURISDICTION OF (I.R.S. EMPLOYER
INCORPORATION OR ORGANIZATION) IDENTIFICATION NO.)
6584 POPLAR AVENUE, SUITE 340
MEMPHIS, TENNESSEE 38138
(901) 682-6600
(ADDRESS, INCLUDING ZIP CODE, AND TELEPHONE NUMBER, INCLUDING
AREA CODE, OF REGISTRANT'S PRINCIPAL EXECUTIVE OFFICE)
GEORGE E. CATES
6584 POPLAR AVENUE, SUITE 340
MEMPHIS, TENNESSEE 38138
(901) 682-6600
(NAME, ADDRESS, INCLUDING ZIP CODE AND TELEPHONE NUMBER, INCLUDING
AREA CODE, OF AGENT FOR SERVICE)
COPIES TO:
JOHN A. GOOD, ESQ.
BAKER, DONELSON, BEARMAN & CALDWELL
165 MADISON AVENUE, 20TH FLOOR
MEMPHIS, TENNESSEE 38103
TELEPHONE (901) 577-2148
APPROXIMATE DATE OF COMMENCEMENT OF PROPOSED SALE TO THE PUBLIC: From time
to time after the effective date of this Registration Statement.
If the only securities being registered on this form are being offered
pursuant to dividend or interest reinvestment plans, please check the following
box. [ ]
If any of the securities being registered on this form are to be offered on
a delayed or continuous basis pursuant to Rule 415 under the Securities Act of
1933, other than securities offered only in connection with dividend or interest
reinvestment plans, check the following box. [X]
If this Form is filed to register additional securities for an offering
pursuant to Rule 462(b) under the Securities Act, please check the following box
and list the Securities Act registration statement number of the earlier
effective registration statement for the same offering. [ ]
If this Form is a post-effective amendment filed pursuant to Rule 462(c)
under the Securities Act, check the following box and list the Securities Act
registration statement number of the earlier effective registration statement
for the same offering. [ ]
If delivery of the prospectus is expected to be made pursuant to Rule 434,
please check the following box. [ ]
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.
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THE INFORMATION IN THIS PROSPECTUS IS NOT COMPLETE AND MAY BE CHANGED. WE MAY
NOT SELL THESE SECURITIES UNTIL THE REGISTRATION STATEMENT FILED WITH THE
SECURITIES AND EXCHANGE COMMISSION IS EFFECTIVE. THIS PROSPECTUS IS NOT AN OFFER
TO SELL THESE SECURITIES AND IT IS NOT SOLICITING ANY OFFER TO BUY THESE
SECURITIES IN ANY STATE WHERE THE OFFER AND SALE IS NOT PERMITTED.
SUBJECT TO COMPLETION, DATED SEPTEMBER 9, 1998
MID-AMERICA APARTMENT COMMUNITIES, INC.
BY THIS PROSPECTUS, WE MAY OFFER --
DEBT SECURITIES
PREFERRED STOCK
COMMON STOCK
DEPOSITARY SHARES
We will provide specific terms of these
securities in supplements to this
prospectus. You should read this
prospectus and any supplement carefully
before you invest. This prospectus may
not be used to consummate sales of
these securities unless accompanied by
a prospectus supplement.
THE NEW YORK STOCK EXCHANGE LISTS OUR --
Common Stock (symbol: MAA)
9.5% Series A Cumulative Preferred Stock (symbol: MAA PrA)
8 7/8% Series B Cumulative Preferred Stock (symbol: MAA PrB); and
9 3/8% Series C Cumulative Redeemable Preferred Stock (symbol: MAA PrC).
To ensure that we qualify as a REIT, no person may own more than 9.9% of the
total value of our outstanding capital stock, unless our Board of Directors
waives this limitation.
SEE "RISK FACTORS" BEGINNING ON PAGE 5 FOR INFORMATION THAT SHOULD BE
CONSIDERED BY PROSPECTIVE INVESTORS.
THESE SECURITIES HAVE NOT BEEN APPROVED BY THE SEC OR ANY STATE SECURITIES
COMMISSION. NONE OF THESE ORGANIZATIONS HAS DETERMINED THAT THIS PROSPECTUS IS
ACCURATE OR COMPLETE. ANY REPRESENTATION TO THE CONTRARY IS A CRIMINAL OFFENSE.
THIS PROSPECTUS IS DATED SEPTEMBER , 1998.
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SUMMARY
This summary highlights selected information from this document and may not
contain all of the information that is important to you. To understand the terms
of our securities, you should carefully read this document and the prospectus
supplement that gives the specific terms of the securities we are offering. You
should also read the documents we have referred you to in WHERE YOU CAN FIND
MORE INFORMATION on page 3 for information on our company and our financial
statements.
MID-AMERICA APARTMENT COMMUNITIES, INC.
We are a Memphis, Tennessee-based REIT. As of June 30, 1998, we owned and
operated 120 apartment communities containing 31,791 apartment units in 13
states. We also manage but do not own 43 properties containing 5,387 apartment
units.
In November 1997, we acquired Flournoy Development Company, a privately
held company and as a result:
o acquired 30 apartment communities containing 8,641 apartment units,
including 950 units under development; and
o increased our ability to build our own apartment communities rather than
acquiring existing apartment communities or relying on third party
developers.
We own, manage, develop and build apartment communities appealing to middle and
upper income residents primarily in mid-size cities in the southeastern United
States and Texas. Approximately 71% of our apartment units are located in
Tennessee, Georgia, Florida and Texas markets. Our strategic focus is to provide
our residents high quality apartment units in attractive community settings,
characterized by extensive landscaping and attention to aesthetic detail. We
utilize our experience and expertise in maintenance, landscaping and management
to raise occupancy levels and per unit average rentals.
We operate in an umbrella partnership REIT structure. In this structure,
properties are owned and operated by one or more operating partnerships in which
the REIT is general partner and owns a substantial interest. The remaining
partnership interests are owned by investors who have the right to redeem their
partnership interests for common shares in the REIT or, at the REIT's option,
for cash. Our primary operating partnership is Mid-America Apartments, L.P. Most
of our operations are conducted through Mid-America Apartments, L.P. Common
units of limited partnership interest in Mid-America Apartments, L.P. are
redeemable for our common stock on a one-for-one basis or, at our option, for
cash.
As of June 30, 1998, our executive officers and directors owned
approximately 18% of our combined outstanding common stock and common units of
limited partnership interest in Mid-America Apartments, L.P. We use stock-based
and other incentive compensation plans to motivate employees to meet long-term
management goals that are consistent with creating value for our shareholders.
Our principal executive offices are located at 6584 Poplar Avenue, Suite
340, Memphis, Tennessee 38138 and our telephone number is (901) 682-6600.
THE SECURITIES WE MAY OFFER
We may offer up to $231,518,187 of any of the following securities either
separately or in units: DEBT, PREFERRED STOCK, COMMON STOCK, AND DEPOSITARY
SHARES. The Prospectus Supplement will describe the specific amounts, prices and
terms of these securities.
DEBT SECURITIES
We may offer our unsecured general obligations in the form of either senior
or subordinated debt. Senior debt includes our notes, debt, and guarantees,
which are for money borrowed and are not subordinated. Subordinated debt,
designated at the time it is issued, is entitled to interest and principal
payments after the senior debt payments.
The senior and subordinated debt will be issued under an indenture between
the company and a trustee, a U.S banking institution. We have summarized the
general features of the debt from the indenture. We encourage you to read the
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indenture which is an exhibit to our registration statement No. 333-60285, our
recent annual reports on Form 10-K and our recent quarterly reports on Form
10-Q. Direction on how you can get copies are provided in WHERE YOU CAN FIND
MORE INFORMATION below.
GENERAL INDENTURE PROVISIONS THAT APPLY TO SENIOR AND SUBORDINATED DEBT
o The indenture does not limit the amount of debt that we may issue nor does
it provide holders any protection should there be a highly leveraged
transaction involving our company.
o If we redeem debt which is convertible into our capital stock, your right
to convert that debt into our capital stock will expire on the redemption
date.
o The indenture allows us to merge or consolidate with another company, or
sell all or substantially all of our assets to another company. If these
events occur, the other company will be required to assume our
responsibilities on the debt, and we will be released from all liabilities
and obligations.
o The indenture provides that holders of a majority of the total principal
amount of the debt outstanding in any series may vote to change our
obligations or your rights concerning the debt. But to change the payment
of principal or interest, every holder in that series must consent.
o We may discharge the indenture at any time by depositing sufficient funds
with the Trustee to pay the obligations when due. All amounts due to you on
the debt would be paid by the Trustee from the deposited funds.
o If we fail to meet our obligations on the debt, the Indenture gives you the
following remedy:
EVENT OF DEFAULT
o Principal not paid when due
o Sinking fund payment not made when due
o Failure to pay interest for 30 days
o Covenants not performed for 60 days
o Acceleration of at least $10,000,000 in principal amount of other debt not
rescinded
o Any other event of default in the indenture
REMEDY
Trustee or holders of 25% of the principal amount outstanding in a series
may declare principal immediately payable. However, the holders of 25% of the
principal amount may rescind this action.
PREFERRED STOCK
We may issue preferred stock in one or more series and will determine the
dividend, voting, and conversion rights and other provisions at the time of
sale. We may also issue fractional shares of preferred stock that will be
represented by depositary shares and receipts.
COMMON STOCK
Common Stock holders are entitled to receive dividends declared by the
Board of Directors (subject to rights of Preferred Stock holders). Each holder
of Common Stock is entitled to one vote per share. The holders of Common Stock
have no preemptive rights or cumulative voting rights.
WHERE YOU CAN FIND
MORE INFORMATION
We file annual, quarterly and special reports, proxy statements and other
information with the SEC. Our SEC filings are available to the public over the
Internet at the SEC's web site at http://www.sec.gov. You may also read and copy
documents at the SEC's public reference rooms in Washington, D.C., New York, New
York and Chicago, Illinois. Please call the SEC at 1-800-SEC-0330 for further
information on the public reference rooms.
The SEC allows us to "incorporate by reference" the information we file
with them, which means that we can disclose important information to you by
referring you to those documents. The information incorporated by reference is
an important part of this prospectus, and information that we file later with
the SEC will automatically update and supersede this information. We incorporate
by reference the
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documents listed below. We also incorporate all future filings made with the SEC
under Sections 13(a), 13(c), 14, or 15(d) of the Securities Exchange Act of 1934
until we have sold all of the securities.
o Annual Report on Form 10-K for the year ended December 31, 1997, as amended
by Forms 10-K/A filed with the SEC on April 2, 1998 and April 27, 1998;
o Quarterly Report on Form 10-Q for the quarter ended June 30, 1998;
o Current Reports on Form 8-K filed with the SEC on February 19, 1998, March
13, 1998, April 30, 1998, May 26, 1998, June 12, 1998 (2 filed), June 16,
1998, June 24, 1998, June 29, 1998, July 1, 1998, and July 28, 1998;
o Amended Current Reports on Form 8-K/A filed with the SEC on February 5,
1998, May 26, 1998, July 30, 1998 and August 12, 1998;
o Proxy Statement for the Company's 1998 Annual Meeting of Shareholders filed
with the SEC on April 30, 1998;
o the description of the Company's common stock contained in Form 8-A filed
with the SEC on December 14, 1993;
o the description of the Company's 9.5% Series A Cumulative Preferred Stock
contained in Form 8-A/A filed with the SEC on October 11, 1996;
o the description of the Company's 8 7/8% Series B Cumulative Preferred Stock
contained in Form 8-A/A filed with the SEC on November 19, 1997; and
o the description of the Company's 9 3/8% Series C Cumulative Redeemable
Preferred Stock contained in Form 8-A/A filed with the SEC on June 26,
1998.
You may request a copy of these filings at no cost, by writing or
telephoning us at the following address: Corporate Secretary, Mid-America
Apartment Communities, Inc., 6584 Poplar Avenue, Suite 340, Memphis, Tennessee
38138, (901) 682-6600.
You should rely only on the information incorporated by reference or
provided in this prospectus or any prospectus supplement. We have not authorized
anyone else to provide you with different information. We are making offers of
these securities only in states where the offer is permitted. You should not
assume that the information in this prospectus or any prospectus supplement is
accurate as of any date other than the date on the front of those documents.
ABOUT THIS PROSPECTUS
This prospectus is part of a registration statement that we filed with the
SEC utilizing a "shelf" registration process. Over the next two years, we may
sell any combination of the securities described in this prospectus in one or
more offerings up to a total dollar amount of $231,518,781. This prospectus
provides you with a general description of the securities we may offer. Each
time we sell securities, we will provide a prospectus supplement that will
describe the securities being offered and the terms of that offering. The
prospectus supplement may also add to, update or change information contained in
this prospectus. You should read both this prospectus and any prospectus
supplement.
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RISK FACTORS
BEFORE YOU INVEST IN OUR SECURITIES, YOU SHOULD BE AWARE THAT YOUR
INVESTMENT IS SUBJECT TO VARIOUS RISKS, INCLUDING THOSE DESCRIBED BELOW. YOU
SHOULD CONSIDER CAREFULLY THESE RISKS TOGETHER WITH ALL OF THE OTHER INFORMATION
INCLUDED IN THIS PROSPECTUS BEFORE YOU DECIDE TO PURCHASE ANY OF OUR SECURITIES.
SOME OF THE INFORMATION IN THIS PROSPECTUS OR ANY PROSPECTUS SUPPLEMENT MAY
CONTAIN FORWARD-LOOKING STATEMENTS. SUCH STATEMENTS CAN BE IDENTIFIED BY THE USE
OF FORWARD-LOOKING WORDS SUCH AS "MAY," "WILL," "EXPECT," "ANTICIPATE,"
"ESTIMATE," "CONTINUE" OR OTHER SIMILAR WORDS. THESE STATEMENTS DISCUSS FUTURE
EXPECTATIONS OR CONTAIN PROJECTIONS. WHEN CONSIDERING SUCH FORWARD- LOOKING
STATEMENTS, YOU SHOULD KEEP IN MIND THE FOLLOWING RISK FACTORS. THE RISK FACTORS
COULD CAUSE OUR ACTUAL RESULTS TO DIFFER MATERIALLY FROM THOSE CONTAINED IN ANY
FORWARD-LOOKING STATEMENT.
OUR DEVELOPMENT ACTIVITIES MAY BE MORE COSTLY THAN ANTICIPATED.
We have increased our financial and management commitment to the
development and construction of new apartment communities in addition to
purchasing existing apartment communities. In connection with development and
construction of an apartment community, we run the risk that:
o construction costs will exceed our budget;
o the newly completed apartment community will not generate the profits
we anticipate; and
o we can not obtain all necessary zoning, land-use, building, occupancy,
and other required governmental permits and authorizations.
Any of these events could adversely affect the return on our investment in
developed apartment communities and could require us to use cash reserves or
cash flows from other apartment communities to cover shortfalls, which could
prevent us from making expected distributions.
OUR ABILITY TO MAKE DISTRIBUTIONS MAY BE ADVERSELY AFFECTED BY FACTORS BEYOND
OUR CONTROL.
Our ability to make distributions to you depends on our ability to generate
funds from operations in excess of scheduled principal payments on debt and
capital expenditure requirements. Funds from operations and the value of our
properties may be less because of factors which are beyond our control. Such
events or conditions could include:
o competition from other apartment communities;
o overbuilding of new apartment units in our markets, which might
adversely affect apartment occupancy or rental rates;
o increases in operating costs (including real estate taxes) due to
inflation and other factors, which may not be offset by increased
rents;
o our inability to rent properties on favorable economic terms;
o changes in governmental regulations and the related costs of
compliance;
o changes in tax laws and housing laws including the enactment of rent
control laws or other laws regulating multifamily housing;
o changes in interest rate levels and the availability of financing,
which could lead renters to purchase homes (if interest rates drop and
home loans are available more readily) or increase our acquisition and
operating costs (if interest rates increase and financing is less
readily available); and
o the relative illiquidity of real estate investments.
o any decline in our funds from operations or property values because of
these factors which are beyond our control could adversely affect our
ability to make distributions to you.
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HIGH DEBT LEVEL MAY AFFECT OVERALL OPERATING RESULTS.
We currently have a substantial amount of debt. Payments of principal and
interest on borrowings may leave us with insufficient cash resources to operate
the apartment communities or pay distributions required to be paid in order for
us to maintain our qualification as a REIT. We intend to keep our total debt
below 60% of the undepreciated book value of our assets, although our charter
and bylaws do not limit our debt levels. Circumstances may cause us to exceed
that target from time to time. As of June 30, 1998, our ratio of debt to
undepreciated book value was approximately 50%. Our Board of Directors can
modify this policy at any time which could allow us to become more highly
leveraged and decrease our ability to make distributions to our shareholders.
Currently, our operating cash flow is insufficient to finance our development
activities. Therefore, we will have to borrow more money to pay for our
development activities.
VARIABLE INTEREST RATES MAY PREVENT US FROM MAKING DISTRIBUTIONS.
At June 30, 1998, $78 million of our debt bore interest at a variable rate.
In addition, we may incur additional debt in the future that also bears interest
at variable rates. Variable-rate debt creates higher debt service requirements
if market interest rates increase, which would adversely affect our cash flow
and the amounts available to pay distributions to shareholders.
NONCOMPLIANCE WITH GOVERNMENT REGULATIONS MAY AFFECT OPERATING RESULTS.
ENVIRONMENTAL MATTERS
Phase I environmental site assessments have been obtained on all of our
apartment communities. The purpose of Phase I environmental site assessments is
to identify potential sources of contamination for which we may be responsible
and to assess the status of environmental regulatory compliance. The phase I
environmental site assessments did not reveal any environmental condition,
liability or compliance concern that we believe would have a material adverse
effect on our business, assets or results of operations, nor are we aware of any
such condition, liability or concern by any other means. However, it is possible
that the environmental site assessments relating to any one of the properties
did not reveal all environmental conditions, liabilities or compliance concerns.
It is also possible that there are material environmental conditions,
liabilities or compliance concerns that arose at a property after the related
review was completed. If environmental contamination exists or existed at an
apartment community, we may be liable for the costs of removal or remediation of
the contamination and may be liable for personal injury or similar claims by
private plaintiffs. Moreover, the existence of an environmental contamination at
an apartment community could adversely affect the occupancy of the apartment
community and our ability to sell or borrow against that apartment community.
AMERICANS WITH DISABILITIES ACT COMPLIANCE
Under the Americans with Disabilities Act of 1990 (the "ADA"), all public
accommodations and commercial facilities must meet certain Federal requirements
related to access and use by disabled persons. Compliance with the ADA
requirements could require removal of access barriers, and non-compliance could
result in the U.S. government imposing fines or private litigants winning
damages. The ADA does not consider apartment communities to be public
accommodations or commercial facilities, except to the extent portions of such
facilities, such as a leasing office, are open to the public. We believe that
our properties are substantially in compliance with these requirements.
FAIR HOUSING AMENDMENTS ACT COMPLIANCE
The Fair Housing Amendments Act of 1988 (the "FHA") requires apartment
communities first occupied after March 13, 1990 to be accessible to the
handicapped. Non-compliance with the FHA could result in the U.S. government
imposing fines or private litigants winning damages. We believe that our
properties are substantially in compliance with these requirements.
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CONSEQUENCES OF THE FAILURE TO QUALIFY AS A REIT
We believe that we operate in a manner that enables us to meet the
requirements for qualification as a REIT for Federal income tax purposes. We
have not requested, and do not plan to request, a ruling from the Internal
Revenue Service that we qualify as a REIT. We have, however, received an opinion
from the law firm of Baker, Donelson, Bearman & Caldwell that we met the
requirements for qualification as a REIT for the taxable years ended December
31, 1994 through 1997, and that we are in a position to continue such
qualification. You should be aware that opinions of counsel are not binding on
the IRS or any court. Furthermore, the conclusions stated in the opinion are
conditioned on, and our continued qualification as a REIT will depend on, our
meeting various requirements.
If we fail to qualify as a REIT, we would not be allowed a deduction for
distributions to shareholders in computing our taxable income and would be
required to pay substantial federal and state income taxes. We also could be
subject to the Federal alternative minimum tax. Therefore, if we lose our REIT
status, the funds available for distribution to you would be reduced
substantially for each of the years involved. Unless we were entitled to relief
under specific statutory provisions, we could not elect to be taxed as a REIT
for four taxable years following the year during which we were disqualified.
POSSIBLE ADVERSE CONSEQUENCES OF LIMITS ON OWNERSHIP OF SHARES
Our charter limits ownership of our capital stock by any single shareholder
to 9.9% of the value of all outstanding shares of our capital stock, both common
and preferred. The charter also prohibits anyone from buying shares if the
purchase would result in our losing our REIT status. This could happen if a
share transaction results in fewer than 100 persons owning all of our shares or
in five or fewer persons, applying certain broad attribution rules of the
Internal Revenue Code, owning 50% or more of our shares. If you acquire shares
in excess of the ownership limit or in violation of the ownership requirements
of the Internal Revenue Code for REITs, we:
o will consider the transfer to be null and void;
o will not reflect the transaction on our books;
o may institute legal action to enjoin the transaction;
o will not pay dividends or other distributions with respect to those
shares;
o will not recognize any voting rights for those shares;
o will consider the shares held in trust for the benefit of the Company;
and
o will either direct you to sell the shares and turn over any profit to
us, or we will redeem the shares. If we redeem the shares, you will be
paid a price equal to the lesser of:
(a) the price paid by the person to whom you sell the shares; or
(b) the average of the last reported sales prices on the New York Stock
Exchange on the ten trading days immediately preceding the date
fixed for redemption by our Board of Directors.
If you acquire shares in violation of the limits on ownership described
above:
o you may lose your power to dispose of the shares;
o you may not recognize profit from the sale of such shares if the market
price of the shares increases; and
o you may be required to recognize a loss from the sale of such shares if
the market price decreases.
ABILITY OF BOARD OF DIRECTORS TO CHANGE CERTAIN POLICIES
Our major policies, including our policies with respect to acquisitions,
financing, growth, operations, debt capitalization and distributions, will be
determined by the Board of Directors. The Board of Directors may amend or revise
these policies from time to time without your consent, which could affect our
ability to make distributions.
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PROVISIONS OF OUR CHARTER AND TENNESSEE LAW MAY LIMIT THE ABILITY OF A THIRD
PARTY TO ACQUIRE CONTROL OF THE COMPANY.
OWNERSHIP LIMIT
The 9.9% ownership limit discussed above may have the effect of precluding
acquisition of control of us by a third party without the consent of our Board
of Directors.
PREFERRED STOCK
Our charter authorizes our Board of Directors to issue up to 20 million
shares of preferred stock. The Board of Directors may establish the preferences
and rights of any preferred shares issued. The issuance of preferred stock could
have the effect of delaying or preventing someone from taking control of us,
even if a change in control were in our shareholders' best interests. Currently,
we have the following amounts of preferred stock issued and outstanding:
o 2,000,000 shares of 9.5% Series A Cumulative Preferred Stock;
o 1,938,830 shares of 8 7/8% Series B Cumulative Preferred Stock; and
o 2,000,000 shares of 9 3/8% Series C Cumulative Redeemable Preferred
Stock
TENNESSEE ANTI-TAKEOVER STATUTES
As a Tennessee corporation, we are subject to various legislative acts
which impose restrictions on and require compliance with procedures designed to
protect shareholders against unfair or coercive mergers and acquisitions. These
statutes may delay or prevent offers to acquire us and increase the difficulty
of consummating any such offers, even if our acquisition would be in our
shareholders' best interests.
USE OF PROCEEDS
Unless otherwise described in a prospectus supplement, we will contribute
the net proceeds of any sale of the offered securities to Mid-America
Apartments, L.P. in exchange for units of limited partnership interests having
characteristics similar to those of the offered securities. Mid-America
Apartments, L.P. will use the net proceeds for general purposes, which may
include the acquisition or development of apartment communities, the improvement
of our apartment communities and the repayment of debt.
CONSOLIDATED RATIO OF EARNINGS TO COMBINED
FIXED CHARGES AND PREFERRED STOCK DISTRIBUTIONS AND
CONSOLIDATED RATIO OF EARNINGS TO FIXED CHARGES
The consolidated ratio of earnings to combined fixed charges and preferred
stock distributions for each of the periods indicated is as follows:
<TABLE>
<CAPTION>
SIX MONTHS
YEAR ENDED DECEMBER 31, ENDED
------------------------------------ JUNE 30,
1993 1994 1995 1996 1997 1998
---- ---- ---- ---- ---- ----------
<S> <C> <C> <C> <C> <C> <C>
Ratio of Earnings to Combined Fixed
Charges and Preferred Stock
Distributions...................... 1.32x 1.82x 1.50x 1.52x 1.45x 1.28x
Ratio of Earnings to Fixed Charges... 1.32x 1.82x 1.50x 1.57x 1.70x 1.51x
</TABLE>
For the purpose of calculating the consolidated ratio of earnings to
combined fixed charges and preferred stock distributions and the consolidated
ratio of earnings to fixed charges, earnings consist of net income (loss) before
gain on disposition of properties, extraordinary items and allocation to
minority interests, plus fixed charges less capitalized interest. Fixed charges
consist of interest expense, capitalized interest and amortization of deferred
financing costs. Prior to 1996, we had not issued any Preferred Stock;
therefore, for the years prior to 1996 the ratios of earnings to combined fixed
charges and preferred stock distributions and the ratios of earnings to fixed
charges are the same.
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DESCRIPTION OF CAPITAL STOCK
THE SUMMARY OF THE TERMS OF THE SHARES OF THE CAPITAL STOCK OF MID-AMERICA
APARTMENT COMMUNITIES, INC. (THE "COMPANY") SET FORTH BELOW DOES NOT PURPORT TO
BE COMPLETE AND IS SUBJECT TO AND QUALIFIED IN ITS ENTIRETY BY REFERENCE TO THE
AMENDED AND RESTATED CHARTER OF THE COMPANY AS FURTHER AMENDED, AND THE AMENDED
AND RESTATED BYLAWS OF THE COMPANY, BOTH OF WHICH MAY BE FURTHER AMENDED FROM
TIME TO TIME AND BOTH OF WHICH ARE INCORPORATED HEREIN BY REFERENCE. REFERENCES
TO THE "TBCA" ARE TO THE TENNESSEE BUSINESS CORPORATION ACT, AS AMENDED.
GENERAL
The authorized capital stock of the Company consists of 50,000,000 shares
of Common Stock and 20,000,000 shares of Preferred Stock. Each outstanding share
of Common Stock entitles the holder to one vote on all matters presented to
shareholders for a vote.
COMMON STOCK
Subject to such preferential rights granted by the Board of Directors in
connection with the issuance of the Company's 9.5% Series A Cumulative Preferred
Stock (the "Series A Preferred Stock"), 8 7/8% Series B Cumulative Preferred
Stock (the "Series B Preferred Stock"), 8 3/8% Series C Cumulative Redeemable
Preferred Stock (the "Series C Preferred Stock), and preferential rights as may
be granted by the Board of Directors in connection with the future issuances of
Preferred Stock, holders of shares of Common Stock are entitled to one vote per
share on all matters to be voted on by shareholders and are entitled to receive
ratably such dividends as may be declared in respect of the Common Stock by the
Board of Directors in its discretion from funds legally available therefor. In
the event of the liquidation, dissolution or winding up of the Company, holders
of Common Stock are entitled to share ratably in all assets remaining after
payment of all debts and other liabilities and any liquidation preference of the
holders of the Series A Preferred Stock, the Series B Preferred Stock, the
Series C Preferred Stock and other shares of Preferred Stock which may be issued
in the future. Holders of Common Stock have no subscription, redemption,
conversion or preemptive rights. Matters submitted for shareholder approval
generally require a majority vote of the shares present and voting thereon. The
outstanding shares of Common Stock are fully paid and nonassessable.
PREFERRED STOCK
The following description of the terms of the Preferred Stock sets forth
general terms and provisions of the Preferred Stock to which a Prospectus
Supplement may relate. Specific terms of any series of Preferred Stock offered
by a Prospectus Supplement will be described in that Prospectus Supplement. The
description set forth below is subject to and qualified in its entirety by
reference to the Articles of Amendment to the Charter fixing the preferences,
limitations and relative rights of a particular series of Preferred Stock.
GENERAL
Under the Charter, the Board of Directors of the Company is authorized,
without further shareholder action, to provide for the issuance of up to
20,000,000 shares of Preferred Stock, in such series, with such preferences,
conversion or other rights, voting powers, restrictions, limitations as to
dividends, qualifications or other provisions, as may be fixed by the Board of
Directors. As a result, the Board of Directors may afford the holders of any
series or class of Preferred Stock preferences, powers, and rights, voting or
otherwise, senior to the rights of holders of Common Stock.
The Preferred Stock will have the dividend, liquidation, redemption,
conversion and voting rights set forth below unless otherwise provided in the
Prospectus Supplement relating to a particular series of Preferred Stock.
Reference is made to the Prospectus Supplement relating to the particular series
of Preferred Stock offered thereby for specific terms, including: (i) the title
and liquidation preference per share of such Preferred Stock and the number of
shares offered; (ii) the price at which such series will be issued; (iii) the
dividend rate (or method of calculation), the dates on which dividends shall be
payable and the dates from which dividends shall commence to accumulate; (iv)
any redemption or sinking fund
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provisions of such series; (v) any conversion provisions of such series; and
(vi) any additional dividend, liquidation, redemption, sinking fund and other
rights, preferences, privileges, limitations and restrictions of such series.
The Preferred Stock will, when issued, be fully paid and nonassessable.
Unless otherwise specified in the Prospectus Supplement relating to a particular
series of Preferred Stock, each series will rank on a parity as to dividends and
distributions in the event of a liquidation with each other series of Preferred
Stock and, in all cases, will be senior to the Common Stock.
DIVIDEND RIGHTS
Holders of Preferred Stock of each series will be entitled to receive,
when, as and if declared by the Board of Directors, out of assets of the Company
legally available therefor, cash dividends at such rates and on such dates as
are set forth in the Prospectus Supplement relating to such series of Preferred
Stock. Such rate may be fixed or variable or both and may be cumulative,
noncumulative or partially cumulative.
If the applicable Prospectus Supplement so provides, as long as any shares
of Preferred Stock are outstanding, no dividends will be declared or paid or any
distributions be made on the Common Stock, other than a dividend payable in
Common Stock, unless the accrued dividends on each series of Preferred Stock
have been fully paid or declared and set apart for payment and the Company will
have set apart all amounts, if any, required to be set apart for all sinking
funds, if any, for each series of Preferred Stock.
If the applicable Prospectus Supplement so provides, when dividends are not
paid in full upon any series of Preferred Stock and any other series of
Preferred Stock ranking on a parity as to dividends with such series of
Preferred Stock, all dividends declared upon such series of Preferred Stock and
any other series of Preferred Stock ranking on a parity as to dividends will be
declared pro rata so that the amount of dividends declared per share on such
series of Preferred Stock and such other series will in all cases bear to each
other the same ratio that accrued dividends per share on such series of
Preferred Stock and such other series bear to each other.
Each series of Preferred Stock will be entitled to dividends as described
in the Prospectus Supplement relating to such series, which may be based upon
one or more methods of determination. Different series of Preferred Stock may be
entitled to dividends at different dividend rates or based upon different
methods of determination. Except as provided in the applicable Prospectus
Supplement, no series of Preferred Stock will be entitled to participate in the
earnings or assets of the Company.
RIGHTS UPON LIQUIDATION
In the event of any voluntary or involuntary liquidation, dissolution or
winding up of the Company, the holders of each series of Preferred Stock will be
entitled to receive out of the assets of the Company available for distribution
to shareholders the amount stated or determined on the basis set forth in the
Prospectus Supplement relating to such series, which may include accrued
dividends, if such liquidation, dissolution or winding up is involuntary or may
equal the current redemption price per share (otherwise than for the sinking
fund, if any provided for such series) provided for such series set forth in
such Prospectus Supplement, if such liquidation, dissolution or winding up is
voluntary, and on such preferential basis as is set forth in such Prospectus
Supplement. If, upon any voluntary or involuntary liquidation, dissolution or
winding up of the Company, the amounts payable with respect to Preferred Stock
of any series and any other shares of stock of the Company ranking as to any
such distribution on a parity with such series of Preferred Stock are not paid
in full, the holders of Preferred Stock of such series and of such other shares
will share ratably in any such distribution of assets of the Company in
proportion to the full respective preferential amounts to which they are
entitled or on such other basis as is set forth in the applicable Prospectus
Supplement. The rights, if any, of the holders of any series of Preferred Stock
to participate in the assets of the Company remaining after the holders of other
series of Preferred Stock have been paid their respective specified liquidation
preferences upon any liquidation, dissolution or winding up of the Company will
be described in the Prospectus Supplement relating to such series.
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REDEMPTION
A series of Preferred Stock may be redeemable, in whole or in part, at the
option of the Company, and may be subject to mandatory redemption pursuant to a
sinking fund, in each case upon terms, at the times, the redemption prices and
for the types of consideration set forth in the Prospectus Supplement relating
to such series. The Prospectus Supplement relating to a series of Preferred
Stock which is subject to mandatory redemption shall specify the number of
shares of such series that shall be redeemed by the Company in each year
commencing after a date to be specified, at a redemption price per share to be
specified, together with an amount equal to any accrued and unpaid dividends
thereon to the date of redemption.
If, after giving notice of redemption to the holders of a series of
Preferred Stock, the Company deposits with a designated bank funds sufficient to
redeem such Preferred Stock, then from and after such deposit, all shares called
for redemption will no longer be outstanding for any purpose, other than the
right to receive the redemption price and the right to convert such shares into
other classes of stock of the Company. The redemption price will be stated in
the Prospectus Supplement relating to a particular series of Preferred Stock.
Except as indicated in the applicable Prospectus Supplement, the Preferred
Stock is not subject to any mandatory redemption at the option of the holder.
SINKING FUND
The Prospectus Supplement for any series of Preferred Stock will state the
terms, if any, of a sinking fund for the purchase or redemption of that series.
CONVERSION AND PREEMPTIVE RIGHTS
The Prospectus Supplement for any series of Preferred Stock will state the
terms, if any, on which shares of that series are convertible into or redeemable
for shares of Common Stock or another series of Preferred Stock. The Preferred
Stock will have no preemptive rights.
VOTING RIGHTS
Except as indicated in the Prospectus Supplement relating to a particular
series of Preferred Stock, or except as expressly required by Tennessee law, a
holder of Preferred Stock will not be entitled to vote. Except as indicated in
the Prospectus Supplement relating to a particular series of Preferred Stock, in
the event the Company issues full shares of any series of Preferred Stock, each
such share will be entitled to one vote on matters on which holders of such
series of Preferred Stock are entitled to vote.
Under Tennessee law, the affirmative vote of the holders of a majority of
the outstanding shares of all series of Preferred Stock entitled to vote, voting
as a separate voting group, or of all outstanding votes of all series of
Preferred Stock equally affected, as a voting group, will be required for (i)
the authorization of any class of stock ranking prior to or on a parity with
Preferred Stock or the increase in the number of authorized shares of any such
stock, (ii) any increase in the number of authorized shares of Preferred Stock
and (iii) certain amendments to the Charter that may be adverse to the rights of
Preferred Stock outstanding.
THE SERIES A PREFERRED STOCK
MATURITY
The Series A Preferred Stock has no stated maturity and is not subject to
any sinking fund or mandatory redemption.
RANK
The Series A Preferred Stock, with respect to dividend rights and rights
upon liquidation, dissolution or winding up of the Company, ranks (i) senior to
all classes or series of Common Stock, and to all equity securities ranking
junior to the Series A Preferred Stock, (ii) on 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 Series A Preferred Stock with
respect to dividend rights or rights upon liquidation, dissolution or winding
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up of the Company (including the Series B Preferred Stock and the Series C
Preferred Stock), and (iii) junior to all existing and future indebtedness of
the Company.
DIVIDENDS
Holders of the Series A Preferred Stock are entitled to receive, when and
as declared by the Board of Directors (or a duly authorized committee thereof),
out of funds legally available for the payment of dividends, preferential
cumulative cash distributions at the rate of 9.5% per annum of the $25
liquidation preference per share (equivalent to a fixed annual amount of $2.375
per share).
LIQUIDATION PREFERENCE
Upon any voluntary or involuntary liquidation, dissolution or winding up of
the affairs of the Company, the holders of shares of Series A Preferred Stock
are entitled to be paid out of the assets of the Company legally available for
distribution to its shareholders a liquidation preference of $25 per share, plus
an amount equal to any accrued and unpaid distributions to the date of payment,
but without interest, before any distribution of assets is made to holders of
Common Stock or any other class or series of capital stock of the Company that
ranks junior to the Series A Preferred Stock as to liquidation rights.
REDEMPTION
Except in certain circumstances relating to the preservation of the
Company's status as a REIT, the Series A Preferred Stock is not redeemable prior
to November 1, 2001. On and after such date, the Series A Preferred Stock will
be redeemable for cash at the option of the Company, in whole or in part, at a
redemption price of $25 per share, plus distributions accrued and unpaid to the
redemption date (whether or not declared) without interest.
VOTING RIGHTS
Holders of Series A Preferred Stock generally will have no voting rights
except as required by law. However, whenever distributions on any shares of
Series A Preferred Stock shall be in arrears for 18 or more months, the holders
of such shares (voting separately as a class with all other series of parity
preferred stock upon which like voting rights have been conferred and are
exercisable) will be entitled to vote for the election of two additional
directors of the Company until all distributions accumulated on such shares of
Series A Preferred Stock have been fully paid or declared and a sum sufficient
for the payment thereof set aside for payment. In addition, certain changes to
the terms of the Series A Preferred Stock that would be materially adverse to
the rights of holders of the Series A Preferred Stock cannot be made without the
affirmative vote of the holders of at least two-thirds of the outstanding Series
A Preferred Stock.
CONVERSION
The Series A Preferred Stock is not convertible into or exchangeable for
any other property or securities of the Company.
SERIES B PREFERRED STOCK
MATURITY
The Series B Preferred Stock has no stated maturity and is not subject to
any sinking fund or mandatory redemption.
RANK
The Series B Preferred Stock, with respect to dividend rights and rights
upon liquidation, dissolution or winding up of the Company, ranks (i) senior to
all classes or series of Common Stock of the Company, and to all equity
securities ranking junior to the Series B Preferred Stock with respect to
dividend rights or rights upon liquidation, dissolution or winding up of the
Company; (ii) on a parity with the equity securities of the Company ranking in
parity with the Series B Preferred Stock (including the Series A Preferred Stock
and Series C Preferred Stock); and (iii) junior to all existing and future
indebtedness of the Company.
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DIVIDENDS
Holders of shares of the Series B Preferred Stock are entitled to receive,
when and as declared by the Board of Directors (or a duly authorized committee
thereof), out of funds legally available for the payment of dividends,
preferential cumulative cash dividends at the rate of 8 7/8% per annum of the
$25 liquidation preference per share (equivalent to a fixed annual amount of
$2.21875 per share).
LIQUIDATION PREFERENCE
Upon any voluntary or involuntary liquidation, dissolution or winding up of
the affairs of the Company, the holders of shares of Series B Preferred Stock
are entitled to be paid out of the assets of the Company legally available for
distribution to its shareholders a liquidation preference of $25 per share, plus
an amount equal to any accrued and unpaid dividends to the date of payment, but
without interest, before any distribution of assets is made to holders of Common
Stock or any other class or series of capital stock of the Company that ranks
junior to the Series B Preferred Stock as to liquidation rights.
REDEMPTION
Except in certain circumstances relating to the preservation of the
Company's status as a REIT, the Series B Preferred Stock is not redeemable prior
to December 1, 2002. On and after such date, the Series B Preferred Stock will
be redeemable for cash at the option of the Company, in whole or in part, at a
redemption price of $25 per share, plus distributions accrued and unpaid to the
redemption date (whether or not declared) without interest.
VOTING RIGHTS
Holders of Series B Preferred Stock generally will have no voting rights
except as required by law. However, whenever distributions on any shares of
Series B Preferred Stock shall be in arrears for 18 or more months, the holders
of such shares (voting separately as a class with all other series of parity
preferred stock upon which like voting rights have been conferred and are
exercisable) will be entitled to vote for the election of two additional
directors of the Company until all distributions accumulated on such shares of
Series B Preferred Stock have been fully paid or declared and a sum sufficient
for the payment thereof set aside for payment. In addition, certain changes to
the terms of the Series B Preferred Stock that would be materially adverse to
the rights of holders of the Series B Preferred Stock cannot be made without the
affirmative vote of the holders of at least two-thirds of the outstanding Series
B Preferred Stock.
CONVERSION
The Series B Preferred Stock is not convertible into or exchangeable for
any other property or securities of the Company.
SERIES C PREFERRED STOCK
MATURITY
The Series C Preferred Stock has no stated maturity and is not subject to
any sinking fund or mandatory redemption.
RANK
The Series C Preferred Stock, with respect to dividend rights and rights
upon liquidation, dissolution or winding up of the Company, ranks (i) senior to
all classes or series of Common Stock of the Company, and to all equity
securities ranking junior to the Series C Preferred Stock with respect to
dividend rights or rights upon liquidation, dissolution or winding up of the
Company; (ii) on a parity with the equity securities of the Company ranking in
parity with the Series C Preferred Stock (including the Series A Preferred Stock
and the Series B Preferred Stock); and (iii) junior to all existing and future
indebtedness of the Company.
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DIVIDENDS
Holders of shares of the Series C Preferred Stock are entitled to receive,
when and as declared by the Board of Directors (or a duly authorized committee
thereof), out of funds legally available for the payment of dividends,
preferential cumulative cash dividends at the rate of 9 3/8% per annum of the
$25 liquidation preference per share (equivalent to a fixed annual amount of
$2.34375 per share).
LIQUIDATION PREFERENCE
Upon any voluntary or involuntary liquidation, dissolution or winding up of
the affairs of the Company, the holders of shares of Series C Preferred Stock
are entitled to be paid out of the assets of the Company legally available for
distribution to its shareholders a liquidation preference of $25 per share, plus
an amount equal to any accrued and unpaid dividends to the date of payment, but
without interest, before any distribution of assets is made to holders of Common
Stock or any other class or series of capital stock of the Company that ranks
junior to the Series C Preferred Stock as to liquidation rights.
REDEMPTION
Except in certain circumstances relating to the preservation of the
Company's status as a REIT, the Series C Preferred Stock is not redeemable prior
to June 30, 2003. On and after such date, the Series C Preferred Stock will be
redeemable for cash at the option of the Company, in whole or in part, at a
redemption price of $25 per share, plus distributions accrued and unpaid to the
redemption date (whether or not declared) without interest. The redemption price
(other than the portion thereof consisting of accrued and unpaid dividends) will
be payable solely out of proceeds of the sale of other capital stock of the
Company, which may include other series of the Company's Preferred Stock, and
from no other source.
VOTING RIGHTS
Holders of Series C Preferred Stock generally will have no voting rights
except as required by law. However, whenever distributions on any shares of
Series C Preferred Stock shall be in arrears for 18 or more months, the holders
of such shares (voting separately as a class with all other series of parity
preferred stock upon which like voting rights have been conferred and are
exercisable) will be entitled to vote for the election of two additional
directors of the Company until all distributions accumulated on such shares of
Series C Preferred Stock have been fully paid or declared and a sum sufficient
for the payment thereof set aside for payment. In addition, certain changes to
the terms of the Series C Preferred Stock that would be materially adverse to
the rights of holders of the Series C Preferred Stock cannot be made without the
affirmative vote of the holders of at least two-thirds of the outstanding Series
C Preferred Stock.
CONVERSION
The Series C Preferred Stock is not convertible into or exchangeable for
any other property or securities of the Company.
CHARTER AND BYLAW PROVISIONS
Shareholders' rights and related matters are governed by the TBCA, the
Company's Charter and its Bylaws. Certain provisions of the Charter and Bylaws
of the Company, which are summarized below, may make it more difficult to change
the composition of the Board of Directors and may discourage or make more
difficult any attempt by a person or group to obtain control of the Company.
VOTING REQUIREMENT
The Company's Charter may not be amended without the affirmative vote of at
least a majority of the shares entitled to vote generally in the election of
directors, voting as a single voting group. The Company's Bylaws may be amended
by either the affirmative vote of a majority of all shares outstanding and
entitled to vote generally in the election of directors, voting as a single
group, or by an affirmative vote of a majority of the Board of Directors then
holding office, unless the shareholders prescribe that any such bylaw may not be
amended or repealed by the Board of Directors. Notwithstanding the foregoing,
the Company cannot
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take any action intended to terminate its qualification as a REIT without the
affirmative vote of at least two-thirds of the outstanding shares of Common
Stock.
SPECIAL MEETINGS
Under the Company's Bylaws, special meetings of the shareholders may be
called by shareholders only if such shareholders hold outstanding shares
representing more than 50% of all votes entitled to be cast on any issue
proposed to be considered at any such special meeting.
STAGGERED BOARD OF DIRECTORS
The Company's Board of Directors is divided into three classes of directors
serving staggered three year terms. A majority of the directors must be persons
who are not officers of the Company. The requirements for a majority of
independent directors and the provisions for staggered terms of directors may
not be changed without approval of a majority of the shareholders or by 80% of
the members of the Board of Directors. Certain provisions of the Company's
Charter, including the use of a staggered board, may render more difficult a
change in control of the Company or removal of incumbent management.
ADVANCE NOTICE OF DIRECTOR NOMINATIONS AND NEW BUSINESS
The Bylaws of the Company provide that with respect to an annual meeting of
shareholders, the proposal of business to be considered by shareholders may be
made only (i) by or at the direction of the Board of Directors, or (ii) by a
shareholder who has complied with the advance notice procedures set forth in the
Bylaws. In addition, with respect to any meeting of shareholders, nominations of
persons for election to the Board of Directors may be made only (x) by or at the
direction of the Board of Directors or (y) by any shareholder of the Company who
is entitled to vote at the meeting and has complied with the advance notice
provisions set forth in the Bylaws.
The advance notice provisions of the Bylaws could have the effect of
discouraging a takeover or other transaction in which holders of some, or a
majority, of the shares of Common Stock might receive a premium for their shares
over the then prevailing market price or which such holders might believe to be
otherwise in their best interests.
LIMITATION OF DIRECTORS' LIABILITY
The Company's Charter eliminates, subject to certain exceptions, the
personal liability of a director to the Company or its shareholders for monetary
damages for breaches of such director's duty of care or other duties as a
director. The Charter does not provide for the elimination of or any limitation
on the personal liability of a director for (i) any breach of a director's duty
of loyalty to the Company, (ii) acts or omissions which involve intentional
misconduct or knowing violations of law, (iii) unlawful corporate distributions,
or (iv) acts or omissions which involve transactions from which the director
derived an improper personal benefit. The Charter of the Company further
provides that if the TBCA is amended to authorize corporate action further
eliminating or limiting the personal liability of a director of the Company
shall be eliminated or limited to the fullest extent permitted by the TBCA, as
amended. These provisions of the Charter will limit the remedies available to a
shareholder in the event of breaches of any director's duties to such
shareholder of the Company.
TENNESSEE ANTI-TAKEOVER STATUTES
In addition to certain of the Company's Charter provisions discussed above,
Tennessee has adopted a series of statutes which can have an anti-takeover
effect and may delay or prevent a tender offer or takeover attempt that a
shareholder might consider in its best interest, including those attempts that
might result in a premium over the market price for the Common Stock.
Under the Tennessee Investor Protection Act, unless a company's board of
directors has recommended a takeover offer to shareholders no offeror
beneficially owning 5% or more of any class of equity securities of the offeree
company, any of which was purchased within one year prior to the proposed
takeover offer (unless the offeror, before making such purchase, has made a
public announcement of his intention with
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respect to changing or influencing the management or control of the offeree
company, has made a full, fair and effective disclosure of such intention to the
person from whom he intends to acquire such securities and has filed with the
Tennessee Commissioner of Commerce and Insurance (the "Commissioner") and the
offeree company a statement signifying such intentions and containing such
additional information as the Commissioner by rule prescribes), may offer to
acquire any class of equity security of an offeree company pursuant to a tender
offer if after the acquisition thereof the offeror would be directly or
indirectly a beneficial owner of more than 10% of any class of outstanding
equity securities of the company (a "Takeover Offer"). Such an offeror must
provide that any equity securities of an offeree company deposited or tendered
pursuant to a Takeover Offer may be withdrawn by an offeree at any time within
seven days from the date the offer has become effective following filing with
the Commissioner and the offeree company and public announcement of the terms or
after 60 days from the date the offer has become effective. If an offeror makes
a Takeover Offer for less than all the outstanding equity securities of any
class, and if the number of securities tendered is greater than the number the
offeror has offered to accept and make for, the securities shall be accepted pro
rata. If an offeror varies the terms of a Takeover Offer before its expiration
date by increasing the consideration offered to offeree, the offeror shall make
the increased consideration for all equity securities accepted, whether accepted
before or after the variation in the terms of the offer.
Under the Tennessee Business Combination Act, subject to certain
exceptions, no Tennessee corporation may engage in any "business combination"
with an "interested shareholder" for a period of five years following the date
that such shareholder became an interested shareholder unless prior to such date
the Board of Directors of the corporation approved either the business
combination or the transaction which resulted in the shareholder becoming an
interested shareholder.
A "business combination" is defined by the Tennessee Business Combination
Act as any (i) merger or consolidation; (ii) share exchange; (iii) sale, lease,
exchange, mortgage, pledge or other transfer of assets representing 10% of more
of (A) the aggregate market value of the corporation's consolidated assets, (B)
the aggregate market value of the corporation's shares, or (C) the corporation's
consolidated net income; (iv) issuance or transfer of shares from the
corporation to the interested shareholder, (v) plan of liquidation of
dissolution proposed by the interested shareholder, (vi) transaction or
recapitalization which increases the proportionate share of any outstanding
voting securities owned or controlled by the interested shareholder, or (vii)
financing arrangement whereby any interested shareholder receives, directly or
indirectly, a benefit except proportionately as a shareholder.
An "Interested shareholder" is defined as (i) any person that is the
beneficial owner of 10% or more of the voting power of any class or series of
outstanding voting stock of the corporation or (ii) an affiliate or associate of
the corporation who at any time within the five-year period immediately prior to
the date in question was the beneficial owner, directly or indirectly, of 10% or
more of the voting power of any class or series of the outstanding stock of the
corporation. Consummation of a business combination that is subject to the
five-year moratorium is permitted after such period when the transaction (a) (i)
complies with all applicable charter and bylaw requirements and (ii) is approved
by the holders of two-thirds of the voting stock not beneficially owned by the
interested shareholder, and (b) meets certain fair price criteria.
The Tennessee Greenmail Act prohibits a Tennessee corporation from
purchasing, directly or indirectly, any of its shares at a price above the
market value of such shares (defined as the average of the highest and lowest
closing market price for such shares during the 30 trading days preceding the
purchase and sale or preceding the commencement or announcement of a tender
offer if the seller of such shares has commenced a tender offer or announced an
intention to seek control of the corporation) from any person who holds more
than 3% of the class of securities to be purchased if such person has held such
shares for less than two years, unless the purchase has been approved by the
affirmative vote of a majority of the outstanding shares of each class of voting
stock issued by such corporation or the corporation makes an offer, of at least
equal value per share, to all holders of shares of such class.
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OWNERSHIP LIMITATIONS
For the Company to qualify as a REIT under the Code, among other things, no
more than 50% in value of its outstanding shares of capital stock may be owned,
directly or indirectly, by five or fewer shareholders (as defined in the Code to
include certain entities) during the last half of a taxable year, and such
capital stock must be beneficially owned by 100 or more persons during at least
335 days of a taxable year of 12 months or during a proportionate part of a
shorter taxable year. To ensure that the Company continues to meet the
requirements for qualification as a REIT, the Company's Charter, subject to
certain exceptions, provides that no holder may own, or be deemed to own by
virtue of the attribution provisions of the Code, shares of the Company's
capital stock in excess of the Ownership Limit. The Board of Directors may waive
the Ownership Limit with respect to a shareholder if evidence satisfactory to
the Board of Directors 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 capital stock or any security convertible into
capital stock that would result in a direct or indirect ownership of capital
stock by a shareholder in excess of the Ownership Limit or that would result in
the failure of the Company to meet the requirements for qualification as a REIT,
including any transfer that results in the capital stock 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 capital stock. The foregoing
restrictions on transferability and ownership will not apply if the Board of
Directors 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.
Capital stock owned, or deemed to be owned, or transferred to a shareholder
in excess of the Ownership Limit shall be deemed Excess Shares held by such
holder as agent on behalf of, and in trust for the exclusive benefit of the
transferees (which may include the Company) to whom such capital stock may be
ultimately transferred without violating the Ownership Limit. While the Excess
Shares are held in trust, the holder thereof will not be entitled to vote, the
Excess Shares will not be considered issued and outstanding for purposes of any
shareholder vote or the determination of a quorum for such vote and, except upon
liquidation, 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 capital stock has been
transferred in violation of the Ownership Limitation shall be repaid to the
Company upon demand.
Excess Shares are further subject to transfer at the direction of the Board
of Directors. If the Board of Directors directs a holder of Excess Shares to
sell such Excess Shares, such holder shall pay the Company out of the proceeds
of such sale all expenses incurred by the Company in connection with such sale
plus any remaining amount of such proceeds that exceeds that amount paid by such
holder for the Excess Shares.
In addition, the Company will have the right, for a period of six months
during the time any Excess Shares are held by the holder in trust, to redeem all
or any portion of the Excess Shares from the holder for the lesser of the price
paid for the capital stock by the holder or the market price (as determined in
the manner set forth in the Company's charter) of the capital stock on the date
the Company gives notice of its intent to redeem such Excess Shares. The six
month period begins on the date on which the Company receives written notice of
the transfer or other event resulting in the classification of capital stock as
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 in the Company as the Board of Directors 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.
The Ownership Limitation may have the effect of precluding acquisition of
control of the Company unless the Board of Directors determines that maintenance
of REIT status is no longer in the best interests of the Company.
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OTHER MATTERS
The transfer agent and registrar for the Company's Common Stock is AmSouth
Bank of Alabama, Birmingham, Alabama.
Pursuant to the TBCA, the Company cannot merge with or sell all or
substantially all of the assets of the Company, except pursuant to a resolution
approved by the affirmative vote of a majority of the outstanding shares of
Common Stock entitled to vote on the resolution. In addition, the Partnership
Agreement requires that any merger or sale of all or substantially all of the
assets of or dissolution of the Operating Partnership be approved by the
affirmative vote of a majority of the outstanding units.
DESCRIPTION OF DEBT SECURITIES
CAPITALIZED TERMS NOT OTHERWISE DEFINED HEREIN SHALL HAVE THE MEANINGS SET
FORTH IN THE INDENTURE.
The Debt Securities are to be issued under an Indenture, a copy of the form
of which has been filed as an exhibit to the Registration Statement of which
this Prospectus is a part and incorporated herein by reference, subject to such
supplements and amendments as may be adopted from time to time (each an
"Indenture" and collectively, the "Indentures"). The Indentures will be executed
by the Company and one or more trustees (each a "Trustee"). The Indenture is
subject to, and governed by, the Trust Indenture Act of 1939, as amended (the
"TIA"). The statements made hereunder relating to the Indenture and the Debt
Securities to be issued thereunder are summaries of certain provisions thereof
and do not purport to be complete and are subject to, and are qualified in their
entirety by reference to, all provisions of the Indenture and such Debt
Securities. All section references appearing herein are to sections of the
Indenture, and capitalized terms used but not defined herein shall have the
respective meanings set forth in the Indenture.
GENERAL
The Debt Securities will be direct and unsecured general obligations of the
Company, unless otherwise provided in the Prospectus Supplement. As indicated in
the applicable Prospectus Supplement, the Debt Securities may be either senior
debt, senior to all future subordinated indebtedness of the Company and pari
passu with other current and future unsecured, unsubordinated indebtedness of
the Company, or, in the alternative, subordinated debt, subordinate in right of
payment to current and future senior debt and pari passu with other future
subordinated indebtedness of the Company. The Indenture provides that the Debt
Securities may be issued without limit as to aggregate principal amount, in one
or more series, in each case as established from time to time in or pursuant to
authority granted by a resolution of the Board of Directors of the Company or as
established in one or more Indentures supplemental to the Indenture. All Debt
Securities of one series need not be issued at the same time and, unless
otherwise provided, a series may be reopened, without the consent of the Holders
of the Debt Securities of such series, for issuances of additional Debt
Securities of such series.
The Indenture provides that there may be more than one Trustee thereunder,
each with respect to one or more series of Debt Securities. Any Trustee under
the Indenture may resign or be removed with respect to one or more series of
Debt Securities, and a successor Trustee may be appointed to act with respect to
such series. In the event that two or more persons are acting as Trustee with
respect to different series of Debt Securities, each such Trustee shall be a
Trustee of a trust under the Indenture separate and apart from the trust
administered by any other Trustee, and, except as otherwise indicated herein,
any action described herein to be taken by the Trustee may be taken by each such
Trustee with respect to, and only with respect to, the one or more series of
Debt Securities for which it is Trustee under the Indenture.
Reference is made to the Prospectus Supplement relating to the series of
Debt Securities being offered for the specific terms thereof, including:
1. the title of such Debt Securities (including whether they are senior
debt or subordinated debt and whether they are convertible);
2. the aggregate principal amount of such Debt Securities and any limit
on such aggregate principal amount;
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3. the date or dates, or the method for determining such date or dates,
on which the principal of such Debt Securities will be payable;
4. 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;
5. 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 determining to whom
interest payments will be made, 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;
6. the place or places where the principal of (and premium, if any) and
interest, if any, on such Debt Securities will be payable, where such
Debt Securities may be surrendered for conversion or registration of
transfer or exchange, and where notices or demands to or upon the
Company in respect of such Debt Securities and the Indenture may be
served;
7. the period or periods within which, the price or prices at which, and
the terms and conditions upon which such Debt Securities may be
redeemed, in whole or in part, at the option of the Company, if the
Company is to have such an option;
8. the obligation, if any, of the Company to redeem, repay, or purchase
such Debt Securities pursuant to any sinking fund or analogous
provision or at the option of a Holder thereof, and the period or
periods within which, the price or prices at which, and the terms and
conditions upon which such Debt Securities will be redeemed, repaid or
purchased, in whole or in part, pursuant to such obligation;
9. the price (stated as a percentage of par or the stated principal
amount of the Debt Securities) at which such Debt Securities will be
issued and, if other than 100% of the stated principal amount thereof,
the portion of the stated principal amount thereof payable upon
declaration of acceleration of the maturity thereof, or (if
applicable) the portion of the stated principal amount of such Debt
Securities which is convertible into shares of Common Stock, Preferred
Stock or Debt Securities of another series, or the method by which any
such portion shall be determined;
10. 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;
11. 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;
12. any additions to, modifications of or deletions from the terms of such
Debt Securities with respect to the Events of Default or covenants set
forth in the Indenture;
13. whether such Debt Securities will be issued in certificated or
book-entry form;
14. whether such Debt Securities will be in registered or bearer form and,
if in registered form, the denominations thereof if other than $1,000
and any integral multiple thereof and, if in bearer form, the
denominations thereof and terms and conditions relating thereto;
15. the applicability, if any, of the defeasance and covenant defeasance
provisions of Article XIV of the Indenture;
16. if such Debt Securities are to be issued upon the exercise of Debt
Securities Warrants, the time, manner and place for such Debt
Securities to be authenticated and delivered;
17. the terms, if any, upon which Debt Securities may be convertible into
Common Stock, Preferred Stock or Debt Securities of another series of
the Company, and the terms and conditions upon
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which such conversion will be effected, including, without limitation,
the initial conversion price or rate and the conversion period;
18. if convertible, in connection with the preservation of the Company's
status as a REIT, any applicable limitations on the ownership or
transferability of the Common Stock, Preferred Stock or other capital
stock of the Company into which such Debt Securities are convertible;
19. whether and under what circumstances the Company will pay additional
amounts as contemplated in the Indenture on such Debt Securities in
respect of any tax, assessment or governmental charge and, if so,
whether the Company will have the option to redeem such Debt
Securities in lieu of making such payment;
20. the terms, if any, upon which such Debt Securities will be subordinate
to other debt of the Company; and
21. any other terms of such Debt Securities not inconsistent with the
provisions of the Indenture.
The Debt Securities may provide for less than the entire principal amount
thereof to be payable upon declaration of acceleration of the maturity thereof
or may bear no interest or may bear interest at a rate which at the time of
issuance is below market rates ("Original Issue Discount Securities"). Special
U.S. federal income tax, accounting and other considerations applicable to
Original Issue Discount Securities will be described in the applicable
Prospectus Supplement.
The Indenture does not contain any other provision 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.
However, restrictions on ownership and transfers of the Company's Common Stock
are designed to preserve its status as a REIT and, therefore, may act to prevent
or hinder a change of control. See "Description of the Capital Stock of the
Company." Reference is made to the applicable Prospectus Supplement for
information with respect to any deletion from, modification of or addition to
the Events of Default or covenants of the Company that are described below,
including any addition of a covenant or other provision providing event risk or
similar protection.
DENOMINATIONS, INTEREST, REGISTRATION AND TRANSFER
Unless otherwise described in the applicable Prospectus Supplement, the
Debt Securities of any series will be issuable in denominations of $1,000 and
integral multiples thereof.
Unless otherwise described in the applicable Prospectus Supplement, the
principal of (and premium, if any) and interest on any series of Debt Securities
will be payable at the corporate trust office of the Trustee, 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 transfer record
maintained in respect of such series of Debt Securities or by wire transfer of
funds to such person at an account maintained within the United States.
Any interest not punctually paid or duly provided for on any interest
payment date with respect to a Debt Security ("Defaulted Interest") will
forthwith cease to be payable to the holder on the applicable record date and
may either be paid to the person in whose name such Debt Security is registered
at the close of business on a special record date (the "Special Record Date")
for the payment of such Defaulted Interest to be fixed by the Trustee, notice
whereof shall be given to the holder of such Debt Security not less than 10 days
prior to such Special Record Date, or may be paid at any time in any other
lawful manner, all as more completely described in the Indenture.
Subject to certain limitations imposed upon Debt Securities issued in
book-entry form, the Debt Securities of any series will be exchangeable for
other Debt Securities of the same series and of a like aggregate principal
amount and tenor of different authorized denominations upon surrender of such
Debt Securities at the corporate trust office of the Trustee. In addition,
subject to certain limitations imposed upon Debt Securities issued in book-entry
form, the Debt Securities of any series shall be surrendered for conversion (if
applicable) or registration of transfer thereof at the corporate trust office of
the Trustee. Every
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Debt Security surrendered for conversion, registration of transfer or exchange
shall be duly endorsed or accompanied by a written instrument of transfer. No
service charge will be made for any registration of transfer or exchange of 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 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 the Trustee shall be required to (i) issue,
register the transfer of or exchange Debt Securities of any series during a
period beginning at the opening of business 15 days before any selection of Debt
Securities of that series to be redeemed and ending at the close of business on
the day of mailing of the relevant notice of redemption; (ii) register the
transfer of or exchange any Debt Security, or portion thereof, called for
redemption, except the unredeemed portion of any Debt Security being redeemed in
part; or (iii) issue, register the transfer of or exchange any Debt Security
which has been surrendered for repayment at the option of the holder, except the
portion, if any, of such Debt Security not to be so repaid.
MERGER, CONSOLIDATION OR SALE
The Company, without the consent of the Holders of any of the Debt
Securities, 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 (a) either the Company shall be the continuing corporation or, the
successor corporation (if other than the Company) formed by or resulting from
any such consolidation or merger or which shall have received the transfer of
such assets shall expressly assume payment of the principal of (and premium, if
any) and interest on all of the Debt Securities and the due and punctual
performance and observance of all of the covenants and conditions contained in
the Indenture; (b) immediately after giving effect to such transaction and
treating any indebtedness which becomes an obligation of the Company or any
Subsidiary as a result thereof as having been incurred and be continuing; and
(c) an officer's certificate and legal opinion covering such conditions shall be
delivered to the Trustee.
CERTAIN COVENANTS
EXISTENCE
Except as permitted under "Merger, Consolidation or Sale," the Company will
do or cause to be done all things necessary to preserve and keep in full force
and effect its corporate existence, rights (charter and statutory) and
franchises; PROVIDED, HOWEVER, that the Company shall not be required to
preserve any right or franchise if it determines that the preservation thereof
is no longer desirable in the conduct of its business and that the loss thereof
is not disadvantageous in any material respect to the holders of the Debt
Securities.
MAINTENANCE OF PROPERTIES
The Company will cause all of its properties used or useful in the conduct
of its business or the business of any subsidiary to be maintained and kept in
good condition, repair and working order and supplied with all necessary
equipment and will cause to be made all necessary repairs, renewals,
replacements and improvements thereof, all as in the judgment of the Company may
be necessary so that the business carried on in connection therewith may be
properly and advantageously conducted at all times; PROVIDED, HOWEVER, that the
Company and its subsidiaries shall not be prevented from selling or otherwise
disposing for value its properties in the ordinary course of business.
INSURANCE
The Company will, and will cause each of its subsidiaries to, keep all of
its insurable properties insured against loss or damage in accordance with
industry practices and with insurers of recognized responsibility and of
suitable financial stability.
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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, (i) all taxes, assessments and governmental
charges levied or imposed upon it or any subsidiary or upon the income, profits
or property of the Company or any subsidiary; and (ii) all lawful claims for
labor, materials and supplies which, if unpaid, might by law become a lien upon
the property of the Company or any subsidiary; PROVIDED, HOWEVER, that the
Company shall not be required to pay or discharge or cause to be paid or
discharged any such tax, assessment, charge or claim whose amount, applicability
or validity is being contested in good faith by appropriate proceedings.
PROVISION OF FINANCIAL INFORMATION
Whether or not the Company is subject to Section 13 or 15(d) of the
Exchange Act, the Company will, to the extent permitted under the Exchange Act,
file with the Commission the annual reports, quarterly reports and other
documents which the Company would have been required to file with the Commission
pursuant to such Section 13 or 15(d) (the "Financial Statements") if the Company
were so subject, such documents to be filed with the Commission on or prior to
the respective dates (the "Required Filing Dates") by which the Company would
have been required to file such documents if the Company were so subject. The
Company will also in any event (x) within 15 days of each Required Filing Date
file with the Trustee copies of the annual reports, quarterly reports and other
documents which the Company would have been required to file with the Commission
pursuant to Section 13 or 15(d) of the Exchange Act if the Company were subject
to such section; and (y) if filing such documents by the Company with the
Commission is not permitted under the Exchange Act, promptly upon written
request and payment of the reasonable cost of duplication and delivery, supply
copies of such documents to any holder of Debt Securities.
ADDITIONAL COVENANTS
Any additional covenant 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
The Indenture provides that the following events are "Events of Default"
with respect to any series of Debt Securities issued thereunder: (a) default for
30 days in the payment of any installment of interest on any Debt Security of
such series; (b) default in the payment of the principal of (or premium, if any,
on) any Debt Security of such series at its Maturity or in the deposit of any
sinking fund payment when and as due by the terms of any Debt Security; (c)
default in the performance of any other covenant of the Company contained in the
Indenture (other than a covenant added to the Indenture solely for the benefit
of a series of Debt Securities issued thereunder other than such series),
continued for 60 days after written notice as provided in the Indenture; (d)
default in the payment of an aggregate principal amount not less than
$10,000,000 of any evidence of indebtedness of the Company or any mortgage,
indenture or other instrument under which such indebtedness is issued or by
which such indebtedness is secured, such default having occurred after the
expiration of any applicable grace period and having resulted in the
acceleration of the maturity of such indebtedness, but only if such indebtedness
is not discharged or such acceleration is not rescinded or annulled; (e) certain
events of bankruptcy, insolvency or reorganization, or court appointment of a
receiver, liquidator or trustee of the Company or for substantially all of its
properties; and (f) any other Event of Default provided with respect to a
particular series of Debt Securities.
If an Event of Default under the Indenture with respect to Debt Securities
of any series at the time outstanding occurs and is continuing, then in every
such case the Trustee or the holders of not less than 25% in principal amount of
the outstanding Debt Securities of that series may declare the principal amount
(or, if the Debt Securities of the 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 of the Debt Securities of that series to be due and
payable immediately by written notice thereof to the Company (and to the Trustee
if given by the holders). However, at any time after such a declaration of
acceleration with respect to Debt Securities of
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such series (or of all Debt Securities then outstanding under the Indenture, as
the case may be) has been made, but before a judgment or decree for payment of
the money due has been obtained by the Trustee, the holders of not less than 25%
in principal amount of outstanding Debt Securities of such series (or of all
Debt Securities then outstanding under the Indenture, as the case may be) may
rescind and annul such declaration and its consequences if (a) the Company shall
have deposited with the Trustee all required payments of the principal of (and
premium, if any) and interest on the Debt Securities of such series (or of all
Debt Securities then outstanding under the Indenture, as the case may be), plus
certain fees, expenses, disbursements and advances of the Trustee and (b) all
Events of Default, other than the non-payment of accelerated principal (or
specified portion thereof), with respect to Debt Securities of such series (or
of all Debt Securities then outstanding under the Indenture, as the case may be)
have been cured or waived as provided in the Indenture. The Indenture also
provides that the holders of not less than a majority in principal amount of the
outstanding Debt Securities of any series (or of all Debt Securities then
outstanding under the 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 provisions contained
in the Indenture that cannot be modified or amended without the consent of the
holder of each outstanding Debt Security affected thereby.
The Trustee is required to give notice to the holders of Debt Securities
within 60 days of a default under the Indenture; PROVIDED, HOWEVER, that the
Trustee may withhold notice to the holders of any series of Debt Securities of
any default with respect to such series (except a default in the payment of the
principal of (or premium, if any) or interest on any Debt Security of such
series or in the payment of any sinking fund installment in respect of any Debt
Security of such series) if the Responsible Officers of the Trustee consider
such withholding to be in the interest of such Holders.
The Indenture provides that no holder of Debt Securities of any series may
institute any proceeding, judicial or otherwise, with respect to the Indenture
or for any remedy thereunder, except in the case of failure of the Trustee, for
60 days, to act after it has received a written request to institute proceedings
in respect of an Event of Default from the holders of not less than 25% in
principal amount of the outstanding Debt Securities of such series as well as an
offer of reasonable indemnity. 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.
Subject to provisions in the Indenture relating to its duties in case of
default, the Trustee is under no obligation to exercise any of its rights or
powers under the Indenture at the request or direction of any holder of any
series of Debt Securities then outstanding under the Indenture, unless such
holder shall have offered to the Trustee reasonable security or indemnity. The
holders of not less than a majority in principal amount of the Outstanding Debt
Securities of any series (or of all Debt Securities then outstanding under the
Indenture, as the case may be) shall have the right to direct the time, method
and place of conducting any proceeding for any remedy available to the Trustee,
or of exercising any trust or power conferred upon the Trustee. However, the
Trustee may refuse to follow any direction which is in conflict with any law or
the Indenture, which may involve the 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 must
deliver to the Trustee a certificate, signed by one of several specified
officers, stating whether or not such officer has knowledge of any default under
the Indenture and, if so, specifying each such default and the nature and status
thereof.
MODIFICATION OF THE INDENTURE
Modifications of and amendments to the Indenture may be made only with the
consent of the holders of not less than a majority in principal amount of all
outstanding Debt Securities which are affected by such modification or
amendment; PROVIDED, HOWEVER, that no such modification or amendment may,
without the consent of the holder of each such Debt Security affected thereby,
(a) change the stated maturity of the principal of, or any installment of
interest (or premium, if any) on, any such Debt Security; (b) reduce the
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principal amount of, or the rate or amount of interest on, or any premium 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 majority thereof or would be provable in bankruptcy, or
adversely affect any right of repayment of the holder of any such Debt Security;
(c) change the place of payment, or the coin or currency, for payment of
principal of, premium, if any, or interest on any such Debt Security; (d) impair
the right to institute suit for the enforcement of any payment on or with
respect to any such Debt Security; (e) reduce the above-stated percentage of
outstanding Debt Securities of any series necessary to modify or amend the
Indenture, to waive compliance with certain provisions thereof or certain
defaults and consequences thereunder, or to reduce the quorum or voting
requirements set forth in the Indenture; or (f) modify any of the foregoing
provisions or any of the provisions relating to the waiver of certain past
defaults or certain covenants, except to increase the required percentage to
effect such action or to provide that certain other provisions may not be
modified or waived without the consent of the holder of such Debt Security.
The Holders of not less than a majority in principal amount of each series
of Outstanding Debt Securities have the right to waive compliance by the Company
with certain covenants in the Indenture.
Modifications and amendments of the Indenture may be made by the Company
and the Trustee 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 the Indenture; (ii) to add to the covenants of the
Company for the benefit of the holders of all or any series of Debt Securities
or to surrender any right or power conferred upon the Company in the Indenture;
(iii) to add Events of Default for the benefit of the holders of all or any
series of Securities; (iv) to add or change any provision of the Indenture to
facilitate the issuance of, or to liberalize certain terms of, Debt Securities
in bearer form, or to permit or facilitate the issuance of Debt Securities in
uncertificated form, PROVIDED that such action shall not adversely affect the
interests of the holders of the Debt Securities of any series in any material
respect; (v) to change or eliminate any provision of the Indenture, PROVIDED
that any such change or elimination shall become effective only when there are
no Debt Securities outstanding of any series created prior thereto which are
entitled to the benefit of such provision; (vi) to secure the Debt Securities;
(vii) to establish the form or terms of Debt Securities of any series, including
the provisions and procedures, if applicable, for the conversion of such Debt
Securities into Common Stock or Preferred Stock of the Company; (viii) to
provide for the acceptance of appointment by a successor Trustee or facilitate
the administration of the trusts under the Indenture, by more than one Trustee;
(ix) to cure any ambiguity, correct or supplement any provision which may be
defective or inconsistent or make any other provisions with respect to matters
or questions arising under the Indenture, PROVIDED that such action shall not
adversely affect the interests of Holders of Debt Securities of any series in
any material respect; or (x) to supplement any of the provisions of the
Indenture to the extent necessary to permit or facilitate defeasance and
discharge of any series of such Debt Securities, PROVIDED that such action shall
not adversely affect the interests of the holders of the Debt Securities of any
series in any material respect.
The Indenture provides 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 a Debt Security denominated in a foreign currency that shall be deemed
outstanding shall be the U.S. dollar equivalent, determined on the issue date
for such Debt Security, of the principal amount (or, in the case of an Original
Issue Discount Security, the U.S. dollar equivalent on the issue date of such
Debt Security of the amount determined as provided in (i) above); (iii) the
principal amount of an Indexed Security that shall be deemed outstanding shall
be the principal face amount of such Indexed Security at original issuance,
unless otherwise provided with respect to such Indexed Security pursuant to the
Indenture; and (iv) Debt Securities owned by the Company or any other obligor
upon the Debt Securities or any affiliate of the Company or of such other
obligor shall be disregarded.
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The Indenture contains provisions for convening meetings of the holders of
Debt Securities of a series. A meeting may be called at any time by the Trustee,
and also, upon request, by the Company or the holders of at least 10% in
principal amount of the outstanding Debt Securities of such series, in any such
case upon notice given as provided in the Indenture. Except for any consent that
must be given by the holder of each Debt Security affected by certain
modifications and amendments of the Indenture, any resolution presented at a
meeting or adjourned meeting duly reconvened at which a quorum is present may be
adopted by the affirmative vote of the Holders of a majority in principal amount
of the outstanding Debt Securities of that series; PROVIDED, HOWEVER, that,
except as referred to above, any resolution with respect to any request, demand,
authorization, direction, notice, consent, waiver or other action that may be
made, given or taken by the holders of a specified percentage, which is less
than a majority, in principal amount of the outstanding Debt Securities of a
series may be adopted at a meeting or adjourned meeting duly reconvened at which
a quorum is present by the affirmative vote of the holders of such specified
percentage in principal amount of the outstanding Debt Securities of that
series. Any resolution passed or decision taken at any meeting of holders of
Debt Securities of any series duly held in accordance with the Indenture will be
binding on all holders of Debt Securities of that series. The quorum at any
meeting called to adopt a resolution, and at any reconvened meeting, will be
Persons holding or representing a majority in principal amount of the
outstanding Debt Securities of a series; PROVIDED, HOWEVER, that if any action
is to be taken at such meeting with respect to a consent or waiver 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, if any action is to be taken at a
meeting of holders of Debt Securities of any series with respect to any request,
demand, authorization, direction, notice, consent, waiver or other action that
the Indenture expressly provides may be made, given or taken by the holders of a
specified percentage in principal amount of all outstanding Debt Securities
affected thereby, or of the holders of such series and one or more additional
series: (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 the Indenture.
DISCHARGE, DEFEASANCE AND COVENANT DEFEASANCE
The Company may discharge certain obligations to holders of any series of
Debt Securities that have not already been delivered to the 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 Trustee, in trust, funds in such currency or
currencies, currency unit or units or composite currency or currencies in which
such Debt Securities are payable in an amount sufficient to pay the entire
indebtedness on such Debt Securities in respect of principal (and premium, if
any) and interest to the date of such deposit (if such Debt Securities have
become due and payable) or to the stated maturity or redemption date, as the
case may be.
The Indenture provides that, if the provisions of Article Fourteen thereof
are made applicable to the Debt Securities of or within any series pursuant to
the Indenture, the Company may elect either (a) to defease and be discharged
from any and all obligations with respect to such Debt Securities (except for
the obligation to pay additional amounts, if any, upon the occurrence of certain
events of tax, assessment or governmental charge with respect to payments on
such Debt Securities and the obligations to register the transfer or exchange of
such Debt Securities, to replace temporary or mutilated, destroyed, lost or
stolen Debt Securities, to maintain an office or agency in respect of such Debt
Securities and to hold moneys for payment in trust) ("defeasance") or (b) to be
released from its obligations with respect to such Debt Securities under the
Indenture (being the restrictions described under "Certain Covenants") or, if
provided pursuant to the Indenture, its obligations with respect to any other
covenant, and any omission to comply with such obligations shall not constitute
a default or an Event of Default with respect to such Debt
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Securities ("Covenant Defeasance"), in either case upon the irrevocable deposit
by the Company with the 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 Governmental 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 may only be established if, among other things, the Company
has delivered to the Trustee an opinion of counsel (as specified in the
Indenture) to the effect that the Holders of such Debt Securities will not
recognize income, gain or loss for U.S. federal income tax purposes as a result
of such defeasance or covenant defeasance and will be subject to U.S. federal
income tax on the same amounts, in the same manner and at the same times as
would have been the case if such defeasance or covenant defeasance had not
occurred, and such opinion of counsel, in the case of defeasance, must refer to
and be based upon a ruling of the Internal Revenue Service or a change in
applicable United States federal income tax law occurring after the date of the
Indenture.
"Government Obligations" means securities which are (i) direct obligations
of the United States of America or the government which issued the foreign
currency in which the Debt Securities of a particular series are payable, for
the payment of which its full faith and credit is pledged or (ii) obligations of
a person controlled or supervised by and acting as an agency or instrumentality
of the United States of America or 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 the 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.
Unless otherwise provided in the applicable Prospectus Supplement, if after
the Company has deposited funds and/or Government Obligations to effect
defeasance or covenant defeasance with respect to Debt Securities of any series,
(a) the holder of a Debt Security of such series is entitled to, and does, elect
pursuant to the Indenture or the terms of such Debt Security to receive payment
in a currency, currency unit or composite currency other than that in which such
deposit has been made in respect of such Debt Security, or (b) a Conversion
Event (as defined below) occurs in respect of the currency, currency unit or
composite currency in which such deposit has been made, the indebtedness
represented by such Debt Security shall be deemed to have been and will be,
fully discharged and satisfied through the payment of the principal of (and
premium, if any) and interest on such Debt Security as they become due out of
the proceeds yielded by converting the amount so deposited in respect of such
Debt Security into the currency, currency unit or composite currency in which
such Debt Security becomes payable as a result of such election or such
cessation of usage based on the applicable market exchange rate. "Conversion
Event" means the cessation of use of (i) a currency, currency unit or composite
currency both by the government of the country which issued such currency and
for the settlement of transactions by a central bank or other public
institutions of or within the international banking community, (ii) the ECU both
within the European Monetary System and for the settlement of transactions by
public institutions of or within the European Communities or (iii) any currency
unit or composite currency other than the ECU for the purposes for which it was
established. Unless otherwise provided in the applicable Prospectus Supplement,
all payments of principal of (and premium if any) and interest on any Debt
Security that is payable in foreign currency that ceases to be used by its
government of issuance shall be made in U. S. dollars.
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In the event the Company effects covenant defeasance with respect to any
Debt Securities and such Debt Securities are declared due and payable because of
the occurrence of any Event of Default other than the Event of Default described
in clause (d) under "Events of Default, Notice and Waiver" with respect to the
Indenture (which Sections would no longer be applicable to such Debt Securities)
or described in clause (g) under "Events of Default, Notice and Waiver" with
respect to 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
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 provision described above, with respect to the Debt
Securities of or within a particular series.
CONVERSION RIGHTS
The terms and conditions, if any, upon which the Debt Securities are
convertible into Common Stock, Preferred Stock or Debt Securities of another
series will be set forth in the applicable Prospectus Supplement relating
thereto. Such terms will include whether such Debt Securities are convertible
into Common Stock, Preferred Stock or Debt Securities of another series, 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. To protect the Company's status as a REIT, a Holder may not convert
any Debt Security, and such Debt Security shall not be convertible by any
holder, if as a result of such conversion any person would then be deemed to
own, directly or indirectly, more than 9.9% in value Company's outstanding
capital stock.
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 (the "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. The laws of some jurisdictions require that
certain purchasers of securities take physical delivery of such securities in
definitive form. Such laws may impair the ability to transfer beneficial
interests in Debt Securities represented by Global Securities.
DESCRIPTION OF DEPOSITARY SHARES
GENERAL
The Company may, at its option, elect to offer fractional shares of
Preferred Stock, rather than full shares of Preferred Stock. In such event, the
Company will issue to the public receipts for Depositary Shares, each of which
will represent a fraction (to be set forth in the Prospectus Supplement relating
to a particular series of Preferred Stock) of a share of a particular series of
Preferred Stock as described below.
The shares of any series of Preferred Stock represented by Depositary
Shares will be deposited under a Deposit Agreement (the "Deposit Agreement")
between the Company and the depositary named in the applicable Prospectus
Supplement (the "Depositary"). Subject to the terms of the Deposit Agreement,
each owner of a Depositary Share will be entitled, in proportion to the
applicable fraction of a share of Preferred Stock represented by such Depositary
Share, to all the rights and preferences of the Preferred Stock represented
thereby (including dividend, voting, redemption and liquidation rights).
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The Depositary Shares will be evidenced by depositary receipts issued
pursuant to the Deposit Agreement ("Depositary Receipts"). Depositary Receipts
will be distributed to those persons purchasing the fractional shares of
Preferred Stock in accordance with the terms of the offering. If Depositary
Shares are issued, copies of the forms of Deposit Agreement and Depositary
Receipt will be incorporated by reference in the Registration Statement of which
this Prospectus is a part, and the following summary is qualified in its
entirety by reference to such documents.
Pending the preparation of definitive engraved Depositary Receipts, the
Depositary may, upon the written order of the Company, issue temporary
Depositary Receipts substantially identical to (and entitling the holders
thereof to all the rights pertaining to) the definitive Depositary Receipts but
not in definitive form. Definitive Depositary Receipts will be prepared
thereafter without unreasonable delay, and temporary Depositary Receipts will be
exchangeable for definitive Depositary Receipts at the Company's expense.
DIVIDENDS AND OTHER DISTRIBUTIONS
The Depositary will distribute all cash dividends or other cash
distributions received in respect of the Preferred Stock to the record holders
of Depositary Shares relating to such Preferred Stock in proportion to the
number of such Depositary Shares owned by such holders. The Depositary shall
distribute only such amount, however, as can be distributed without attributing
to any holder of Depositary Shares a fraction of one cent, and the balance not
so distributed shall be added to and treated as part of the next sum received by
the Depositary for distribution to record holders of Depositary Shares.
In the event of a distribution other than in cash, the Depositary will
distribute property received by it to the record holders of Depositary Shares
entitled thereto, unless the Depositary determines that it is not feasible to
make such distribution, in which case the Depositary may, with the approval of
the Company, sell such property and distribute the net proceeds from such sale
to such holders.
The Deposit Agreement will also contain provisions relating to the manner
in which any subscription or similar rights offered by the Company to holders of
the Preferred Stock shall be made available to the holders of Depositary Shares.
REDEMPTION OF DEPOSITARY SHARES
If a series of Preferred Stock represented by Depositary Shares is subject
to redemption, the Depositary Shares will be redeemed from the proceeds received
by the Depositary resulting from the redemption, in whole or in part, of such
series of Preferred Stock held by the Depositary. The redemption price per
Depositary Share will be equal to the applicable fraction of the redemption
price per share payable with respect to such series of Preferred Stock. Whenever
the Company redeems shares of Preferred Stock held by the Depositary, the
Depositary will redeem as of the same redemption date the number of Depositary
Shares representing the shares of Preferred Stock so redeemed. If fewer than all
the Depositary Shares are to be redeemed, the Depositary Shares to be redeemed
will be selected by lot or pro rata as may be determined by the Depositary.
After the date fixed for redemption, the Depositary Shares so called for
redemption will no longer be outstanding and all rights of the holders of the
Depositary Shares will cease, except the right to receive the money, securities
or other property payable upon such redemption and any money, securities or
other property to which the holders of such Depositary Shares were entitled upon
such redemption upon surrender to the Depositary of the Depositary Receipts
evidencing such Depositary Shares.
VOTING THE PREFERRED STOCK
Upon receipt of notice of any meeting at which the holders of Preferred
Stock are entitled to vote, the Depositary will mail the information contained
in such notice of meeting to the record holders of the Depositary Shares
relating to such Preferred Stock. Each record holder of such Depositary Shares
on the record date (which will be the same date as the record date for the
Preferred Stock) will be entitled to instruct the Depositary as to the exercise
of the voting rights pertaining to the amount of Preferred Stock represented by
such holder's Depositary Shares. The Depositary will endeavor, insofar as
practicable, to
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vote the amount of Preferred Stock represented by such Depositary Shares in
accordance with such instructions, and the Company will agree to take all action
which may be deemed necessary by the Depositary in order to enable the
Depositary to do so. The Depositary may abstain from voting shares of Preferred
Stock to the extent it does not receive specific instructions from the holders
of Depositary Shares representing such Preferred Stock.
AMENDMENT AND TERMINATION OF THE DEPOSITARY AGREEMENT
The form of Depositary Receipt evidencing the Depositary Shares and any
provision of the Deposit Agreement may at any time be amended by agreement
between the Company and the Depositary. However, any amendment that materially
and adversely alters the rights of the holders of Depositary Shares will not be
effective unless such amendment has been approved by the holders of at least a
majority of the Depositary Shares then outstanding. The Deposit Agreement may be
terminated by the Company or the Depositary only if (i) all outstanding
Depositary Shares have been redeemed or (ii) there has been a final distribution
in respect of the Preferred Stock in connection with any liquidation,
dissolution or winding up of the Company and such distribution has been
distributed to the holders of Depositary Receipts.
CHARGES OF DEPOSITARY
The Company will pay all transfer and other taxes and governmental charges
arising solely from the existence of the depositary arrangements. The Company
will pay charges of the Depositary in connection with the initial deposit of the
Preferred Stock and any redemption of the Preferred Stock. Holders of Depositary
Receipts will pay other transfer and other taxes and governmental charges and
such other charges, including a fee for the withdrawal of shares of Preferred
Stock upon surrender of Depositary Receipts, as are expressly provided in the
Deposit Agreement to be for their accounts.
MISCELLANEOUS
The Depositary will forward to holders of Depository Receipts all reports
and communications from the Company that are delivered to the Depositary and
that the Company is required to furnish to holders of Preferred Stock.
Neither the Depositary nor the Company will be liable if it is prevented or
delayed by law or any circumstance beyond its control in performing its
obligations under the Deposit Agreement. The obligations of the Company and the
Depositary under the Deposit Agreement will be limited to performance in good
faith of their duties thereunder and they will not be obligated to prosecute or
defend any legal proceeding in respect of any Depositary Shares or Preferred
Stock unless satisfactory indemnity is furnished. They may rely upon written
advice of counsel or accountants, or upon information provided by persons
presenting Preferred Stock for deposit, holders of Depositary Receipts or other
persons believed to be competent and on documents believed to be genuine.
RESIGNATION AND REMOVAL OF THE DEPOSITARY
The Depositary may resign at any time by delivering to the Company notice
of its election to do so, and the Company may at any time remove the Depositary,
any such resignation or removal to take effect upon the appointment of a
successor Depositary and its acceptance of such appointment. Such successor
Depositary must be appointed within 60 days after delivery of the notice of
resignation or removal.
RESTRICTIONS ON OWNERSHIP
In order to safeguard the Company against an inadvertent loss of REIT
status, the Deposit Agreement will contain provisions restricting the ownership
and transfer of Depositary Shares. Such restrictions will be described in the
applicable Prospectus Supplement and will be referenced on the applicable
Depositary Receipts.
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FEDERAL INCOME TAX CONSIDERATIONS
The following summary of material federal income tax considerations that
may be relevant to a prospective holder of the securities offered hereby
("Offered Securities") is based on current law, is for general information only
and is not tax advice. The discussion contained herein does not purport to deal
with all aspects of taxation that may be relevant to particular security holders
in light of their personal investment or tax circumstances, or to certain types
of shareholders (including insurance companies, tax-exempt organizations,
financial institutions or broker-dealers, foreign corporations and persons who
are not citizens or residents of the United States) subject to special treatment
under the federal income tax laws.
The statements in this discussion are based on current provisions of the
Code, existing, temporary and currently proposed Treasury regulations
promulgated under the Code ("Treasury Regulations"), the legislative history of
the Code, existing administrative rulings and practices of the Service and
judicial decisions. No assurance can be given that future legislative, judicial,
or administrative actions or decisions, which may be retroactive in effect, will
not affect the accuracy of any statements in this Prospectus with respect to the
transactions entered into or contemplated prior to the effective date of such
changes. As used in this section, the term "Company" refers solely to
Mid-America Apartment Communities, Inc. and the term "Property Partnership"
refers to all subsidiary partnerships of the Company with the exception of
Mid-America Apartments, L.P., which is referred to as the "Operating
Partnership."
EACH PROSPECTIVE PURCHASER IS ADVISED TO CONSULT HIS TAX ADVISOR REGARDING
THE SPECIFIC TAX CONSEQUENCES TO HIM OF THE PURCHASE, OWNERSHIP AND SALE OF
THE OFFERED SECURITIES AND OF THE COMPANY'S ELECTION TO BE TAXED AS A REIT,
INCLUDING THE FEDERAL, STATE, LOCAL, FOREIGN, AND OTHER TAX CONSEQUENCES OF
SUCH PURCHASE, OWNERSHIP, SALE, AND ELECTION AND OF POTENTIAL CHANGES IN
APPLICABLE TAX LAWS.
GENERAL
The Company has elected to be taxed as a REIT under Sections 856 through
860 of the Code effective for its short taxable year ending on December 31,
1994. The Company believes that, commencing with its 1994 taxable year, it has
been organized and has operated in such a manner as to qualify for taxation as a
REIT under the Code, and the Company intends to continue to operate in such a
manner, but no assurance can be given that the Company will operate in a manner
so as to qualify or remain qualified as a REIT. See "Failure to Qualify."
Baker, Donelson, Bearman & Caldwell has acted as tax counsel to the
Company. The Company has obtained an opinion of Baker, Donelson, Bearman &
Caldwell as to its REIT qualification. Continued qualification and taxation as a
REIT will depend on the Company's ability to meet on a continuing basis, through
actual annual operating results, distribution levels, and stock ownership, the
various qualification tests imposed under the Code discussed below. No assurance
can be given that the actual results of the Company's operation for any
particular taxable year will satisfy such requirements. For a discussion of the
tax consequences of failure to qualify as a REIT, see "-- Failure to Qualify".
The sections of the Code relating to qualification and operation as a REIT
are highly technical and complex. The following discussion sets forth the
material aspects of the Code sections that govern the federal income tax
treatment of a REIT and its shareholders. The discussion is qualified in its
entirety by the applicable Code provisions, Treasury Regulations promulgated
thereunder and administrative and judicial interpretations thereof, all of which
are subject to change prospectively or retrospectively.
If the Company qualifies for taxation as a REIT, it generally will not be
subject to federal corporate income taxes on net income that it currently
distributes to shareholders. This treatment substantially eliminates the "double
taxation" (i.e., taxation at both the corporate and shareholder levels) that
generally results from investment in a corporation. Notwithstanding its REIT
election, however, the Company will be subject to federal income tax in the
following circumstances. First, the Company will be taxed at regular corporate
rates on any undistributed taxable income, including undistributed net capital
gains. Second,
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under certain circumstances, the Company may be subject to the "alterative
minimum tax" on its undistributed 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 by foreclosure or otherwise on default
of a loan secured by the property) that is held primarily for sale to customers
in the ordinary course of business or (ii) other non-qualifying income from
foreclosure property, it will be subject to tax at the highest corporate rate on
such income. Fourth, if the Company has net income from prohibited transactions
(which are, in general, certain sales or other dispositions of property (other
than foreclosure property) held primarily for sale to customers in the ordinary
course of business), such income will be subject to a 100% tax. Fifth, if the
Company should fail to satisfy the 75% gross income test or the 95% gross income
test (as discussed below), and has nonetheless maintained its qualification as a
REIT because certain other requirements have been met, it will be subject to a
100% tax on the gross income attributable to the greater of the amount by which
the Company fails the 75% or 95% test, multiplied by 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 years, the
Company would be subject to a non-deductible 4% excise tax on the excess of such
required distribution over the amounts actually distributed. To the extent that
the Company elects to retain and pay income tax on its net capital gain, such
retained amounts will be treated as having been distributed for purposes of the
4% excise tax. 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 asset) 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 asset's "built-in" gain (i.e. the
excess of the fair market value of such property at the time of acquisition by
the Company over the adjusted basis of such asset at such time), such gain will
be subject to tax at the highest regular corporate rate applicable (as provided
in Treasury Regulations that have not yet been promulgated). The results
described above with respect to the recognition of "built-in" gain assume that
the Company would have an election pursuant to IRS Notice 88-19 if it were to
make any such acquisition. See "-- Recent and Pending Legislation."
REQUIREMENTS FOR QUALIFICATION
The Code defines a REIT as a corporation, trust or association (i) that is
managed by one or more directors or trustees; (ii) the beneficial ownership of
which is evidenced by transferable shares or by transferable certificates of
beneficial interest; (iii) that would be taxable as a domestic corporation, but
for Sections 856 through 860 of the Code; (iv) that 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) 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) during the last half of each taxable year (the "5/50 Rule");
(vii) that makes an election to be a REIT (or has made such election for a
previous taxable year) and satisfies all relevant filing and other
administrative requirements established by the Service that must be met in order
to elect and to maintain REIT status; (viii) that uses a calendar year for
federal income tax purposes and complies with the recordkeeping requirements of
the Code and Treasury Regulations promulgated thereunder; and (ix) that 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 has issued sufficient shares
of Common Stock and Preferred Stock with sufficient diversity of ownership to
allow the Company to satisfy requirements (v) and (vi). In addition, the
Company's Charter contains restrictions regarding the transfer of its shares
that are intended to assist the Company in continuing to satisfy the share
ownership requirements described in (v) and (vi) above. See "Description of the
Capital Stock of the Company -- Ownership Limitations."
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For purposes of determining Share Ownership under the 5/50 Rule, a
supplemental unemployment compensation benefits plan, a private foundation, or a
portion of a trust permanently set aside or used exclusively for charitable
purposes generally is considered an individual. A trust that is a qualified
trust under Code Section 401(a), however, generally is not considered an
individual and the beneficiaries of such trust are treated as holding shares of
a REIT in proportion to their actuarial interests in such trust for purposes of
the 5/50 Rule.
The Company currently has 10 corporate subsidiaries and may have additional
corporate subsidiaries in the future. Code Section 856(i) provides that a
corporation that is a "qualified REIT subsidiary" shall not be treated as a
separate corporation, and all assets, liabilities and items of income, deduction
and credit of a "qualified REIT subsidiary" shall be treated as assets,
liabilities and items of income, deduction and credit of the REIT. A "qualified
REIT subsidiary" is a corporation, 100% of the capital stock of which is owned
by the REIT. Thus, in applying the requirements described herein, the Company's
"qualified REIT subsidiaries" are ignored, and all assets, liabilities and items
of income, deduction and credit of such subsidiaries will be treated as assets,
liabilities and items of income, deduction and credit of the Company. The
Company's corporate subsidiaries are "qualified REIT subsidiaries" and,
consequently, not subject to federal corporate income taxation, although they
may be subject to state and local taxation.
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
(based on the REIT's interest in partnership capital) of the assets of the
partnership and will be deemed to be entitled to the gross income of the
partnership attributable to such proportionate share. In addition, the character
of the assets and gross income of the partnership will retain the same character
in the hands of the REIT for purposes of Section 856 of the Code, including
satisfying the gross income and asset tests (as discussed below). Thus, the
Company's proportionate share of the assets, liabilities and items of income of
the Operating Partnership and the Property Partnerships shall be treated as
assets, liabilities and items of the Company for purposes of applying the
requirements described herein.
INCOME TESTS
In order for the Company to maintain its qualification as a REIT, there are
two requirements relating to the Company's gross income that must be satisfied
annually. First, at least 75% of the Company's gross income (excluding gross
income from prohibited transactions) for each taxable year must consist of
defined types of income 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 temporary investment
income. 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 or temporary investments, and from dividends, interest and
gain from the sale or disposition of stock or securities, or from any
combination of the foregoing. The specific application of these tests to the
Company is discussed below.
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; provided, however, that 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 resident will not qualify as "rents from real property" if the Company,
or an owner of 10% or more of the Company, directly or constructively owns 10%
or more of such resident (a "Related Party Tenant"). Third, if rent attributable
to personal property, leased in connection with a lease of real property, is
greater than 15% of the total rent received under the lease, then the portion of
rent attributable to such personal property will not qualify as "rents from real
property." Finally, for rents received to qualify as "rents from real property,"
the Company generally must not operate or manage the property or furnish or
render services to the tenants of such property, other than through an
"independent contractor" who is adequately compensated and from whom the Company
derives no revenue. The "independent contractor" requirement, however, does not
apply to the extent that the services provided by
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the Company are "usually or customarily rendered" in connection with the rental
of space for occupancy only and are not otherwise considered "rendered to the
occupant." The Company does not charge, and does not anticipate charging, rent
for any portion of any Property that is based in whole or in part on the income
or profits of any person, and the Company does not receive, and does not
anticipate receiving, any rents from Related Party Tenants. The Company does not
anticipate that rent attributable to personal property leased in connection with
any lease of real property will exceed 15% of total rent received under such
lease. The Operating Partnership provides certain services with respect to its
Communities and the Communities of the Property Partnerships.
The Operating Partnership receives fees in consideration of the performance
of management, landscaping and administrative services with respect to
properties that are not wholly owned, directly or indirectly, by the Operating
Partnership. A portion of such fees generally will not qualify under the 75% or
95% gross income tests. The Company will also receive certain other types of
non-qualifying income, such as income from coin-operated laundry machines and
income from corporate and guests apartments. The Company believes, however, that
the aggregate amount of such fees and other non-qualifying income in any taxable
year will not cause the Company to exceed the limits on non-qualifying income
under the 75% and 95% gross income tests.
It is possible that, from time to time, the Company, the Operating
Partnership, or a Property Partnership will enter into hedging transaction with
respect to one or more of its assets or liabilities. Any such hedging
transactions could take a variety of forms, including interest rate swap
contracts, interest rate cap or floor contracts, futures or forward contracts,
and options. To the extent that the Company, the Operating Partnership or a
Property Partnership enters into an interest rate swap or cap contract to hedge
any variable rate indebtedness incurred to acquire or carry real estate assets,
any periodic income or gain from the disposition of such contract should be
qualifying income for purposes of the 95% gross income test. To the extent that
the Company, the Operating Partnership or a Property Partnership hedges with
other types of financial instruments or in other situations, it may not be
entirely clear how the income from those transactions will be treated for
purposes of the various income tests that apply to REITs under the Code. The
Company intends to structure any hedging transactions in a manner that does not
jeopardize its status as a REIT.
Fees to perform property management services for apartment properties that
the Company does not own will not qualify under the 75% or the 95% gross income
tests. Flournoy Development Company, in which the Company owns non-voting common
stock, receives these fees. In addition, the Company (or the Operating
Partnership) may receive certain other types of income with respect to the
Communities that will not qualify for either of these tests. The Company
believes, however, that the aggregate amount of such fees and other
non-qualifying income in any taxable year will not cause the Company to exceed
the limits for non-qualifying income under the 75% and 95% gross income tests.
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 it is entitled to relief under certain provisions of the Code. These relief
provisions generally will be available if the Company's failure to meet such
tests was due to reasonable cause and not due to willful neglect, the Company
attaches a schedule of the sources of its income to its return and any income
information on the schedules was not due to fraud with intent to evade tax. It
is not possible, however, to state whether in all circumstances the Company
would be entitled to the benefit of these relief provisions. As discussed above
in "General," even if these relief provisions were to apply, a tax would be
imposed with respect to the excess net income.
ASSET TESTS
At the close of each quarter of its taxable year, the Company also must
satisfy two tests relating to the nature of its assets. First, at least 75% of
the value of the Company's total assets must be represented by cash or cash
items (including certain receivables), government securities, "real estate
assets" or, in cases where the Company raises new capital through shares or
long-term (at least five years) debt offerings, temporary investments in shares
or debt instruments during the one-year period following the Company's
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receipt of such capital. The term "real estate asset" includes interests in real
property, interests in mortgages on real property to the extent the mortgage
balance does not exceed the value of the associated real property and shares of
other REITS. For purposes of the 75% asset test, the term "interest in real
property" includes an interest in land and improvements thereon, such as
buildings or other inherently permanent structures (including items that are
structural components of such buildings or structures), a leasehold in real
property and an option to acquire real property (or a leasehold in real
property). Second, of the investments not included in the 75% 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 own more than
10% of any one issuer's outstanding voting securities (except for its ownership
interest in the Operating Partnership and the Property Partnerships or the stock
of a qualified REIT subsidiary as defined by Section 856(i) of the Code).
For purposes of the asset tests, the Company is deemed to own its
proportionate share of the assets of the Operating Partnership and the Property
Partnerships, rather that its partnership interests therein. The Company is
deemed to own all assets owned by qualified REIT subsidiaries. The Company
believes that, at all relevant times (i) at least 75% of the value of its total
assets has been and will continue to be represented by real estate assets, cash
and cash items (including receivables) and government securities and (ii) it has
not owned and will not own any securities that do not satisfy the 75% asset
test. In addition, the Company does not intend to acquire or to dispose of, or
cause the Operating Partnership or any of the Property Partnerships or the
qualified REIT subsidiaries to acquire or to dispose of, assets in the future in
a way that would cause it to violate either asset test.
The Operating Partnership owns all of the nonvoting stock and 1% of the
voting stock of Flournoy Development Company which represents 95% of the equity
of Flournoy Development Company with the remaining equity interests currently
owned by certain officers of Mid-America Apartment Communities, Inc. The Company
is considered to own its pro rata share of the assets of the Operating
Partnership, including the securities of Flournoy Development Company. The
Operating Partnership will not own more than 10% of the voting securities of
Flournoy Development Company and, therefore, the Company will not own more than
10% of the voting securities of Flournoy Development Company. In addition, the
Company believes that its pro rata share of the value of the securities of
Flournoy Development Company will not exceed 5% of the total value of its
assets. The Company's belief is based in part upon its analysis of the
anticipated operating cash flows of Flournoy Development Company. No independent
appraisals will be obtained to support this conclusion, and Baker, Donelson,
Bearman & Caldwell in rendering its opinion regarding the Company's
qualification as a REIT, will rely on a representation by the Company with
respect to the value of the interests in Flournoy Development Company. There,
however, can be no assurance that the IRS will not contend that the value of the
securities of Flournoy Development Company exceeds the 5% value limitation.
As noted above, the 5% value requirement must be satisfied at or within 30
days after the end of each quarter during which the Company increases its direct
or indirect ownership of securities of Flournoy Development Company (including
as a result of increasing its interest in the Operating Partnership). Although
the Company plans to take steps to ensure that it will satisfy the 5% value test
for any quarter with respect to which retesting is to occur, there can be no
assurance that such steps always will be successful or will not require a
reduction in the Operating Partnership's overall interest in Flournoy
Development Company.
If the Company should fail to satisfy the asset tests at the end of a
calendar quarter, such a failure would not cause it to lose its REIT status if
(i) it satisfied all of the asset tests at the close of the preceding calendar
quarter and (ii) the discrepancy between the value of the Company's assets and
the asset test requirements arose from changes in the market values of its
assets and was not wholly or partly caused by an acquisition of nonqualifying
assets. If the condition described in clause (ii) of the preceding sentence were
not satisfied, the Company still could avoid disqualification by eliminating any
discrepancy within 30 days after the close of the calendar quarter in which it
arose.
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ANNUAL DISTRIBUTION REQUIREMENTS
The Company, in order to qualify as a REIT and avoid corporate income
taxation of the earnings that it distributes, is required to distribute
distributions (other than capital gain distributions or retained capital gains)
to its shareholders in an amount at least equal to (i) the sum of (A) 95% of the
Company's "REIT taxable income" (computed without regard to the dividends paid
deduction and its net capital gain) and (B) 95% of the net income (after tax),
if any, from foreclosure property, minus (ii) the sum of certain items of
noncash income. Such distributions must be paid in the taxable year to which
they relate, or in the following taxable year if declared before the Company
timely files its tax return for such year and if paid on or before the first
regular distribution payment after such declaration. To the extent that the
Company does not distribute all of its net capital gain or distributes at least
95%, but less than 100%, of its "REIT taxable income," as adjusted, it will be
subject to tax on the undistributed amount at regular capital gains and ordinary
corporate tax rates. Furthermore, 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 income for such year,
and (iii) any undistributed taxable income from prior periods, the Company will
be subject to a 4% nondeductible excise tax on the excess of such required
distribution over the amounts actually distributed. The Company may elect to
retain and pay income tax on the net long-term capital gain it receives in a
taxable year. Any such retained amounts would be treated as having been
distributed by the Company for purposes of the 4% excise tax.
The Company has made and intends to continue to make timely distributions
sufficient to satisfy the annual distribution requirements. In this regard, the
Partnership Agreement authorizes the Company, as general partner, to take such
steps as may be necessary to cause the Operating Partnership to distribute to
its partners an amount sufficient to permit the Company to meet these
distribution requirements. It is possible, however, that the Company, from time
to time, may not have sufficient cash or other liquid assets to meet the
distribution requirements due to timing differences between the actual receipt
of income and actual payment of deductible expenses and the inclusion of such
income and deduction of such expenses in arriving at taxable income of the
Company, or if the amount of nondeductible expenses such as principal
amortization or capital expenditures exceed the amount of noncash deductions. In
the event that such timing differences occur, in order to meet the distribution
requirements, the Company may cause the Operating Partnership to arrange for
short-term, or possibly long-term, borrowing to permit the payment of required
dividends. If the amount of nondeductible expenses exceeds noncash deductions,
the Operating Partnership may refinance its indebtedness to reduce principal
payments and borrow funds for capital expenditures.
Under certain circumstances, the Company may be able to rectify a failure
to meet the distribution requirement for a year by paying "deficiency dividends"
to shareholders in a later year, which may be included in the Company's
deduction for dividends paid for the earlier year. Although the Company may be
able to avoid being taxed on amounts distributed as deficiency dividends, it
will be required to pay interest to the Service based upon the amount of any
deduction taken for deficiency dividends.
ANNUAL RECORD KEEPING REQUIREMENT
Pursuant to applicable Treasury Regulations, in order to be able to elect
to be taxed as a REIT, the Company must maintain certain records and request on
an annual basis certain information from its shareholders designed to disclose
the actual ownership of its outstanding shares. The Company has complied and
will continue to comply with such requirements.
PARTNERSHIP ANTI-ABUSE RULE
Regulations (the "Anti-Abuse Rule") under the partnership provisions of the
Code (the "Partnership Provisions") authorize the Service, in certain abusive
transactions involving partnerships, to disregard the form of a transaction and
recast it for federal tax purposes as the Service deems appropriate. The
Anti-Abuse Rule applies where a partnership is formed or utilized in connection
with a transaction (or series of related transactions) with a principal purpose
of substantially reducing the present value of the partners' aggregate federal
tax liability in a manner inconsistent with the intent of the Partnership
Provisions. The Anti-Abuse Rule states that the Partnership Provisions are
intended to permit taxpayers to conduct joint
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business (including investment) activities through a flexible arrangement that
accurately reflects the partners' economic agreement and clearly reflects the
partners' income without incurring any entity-level tax. The purposes for
structuring a transaction involving a partnership are determined based on all of
the facts and circumstances, including a comparison of the purported business
purpose for a transaction and the claimed tax benefits resulting from the
transaction. A reduction in the present value of the partners' aggregate federal
tax liability through the use of a partnership does not, by itself, establish
inconsistency with the intent of the Partnership Provisions.
The Anti-Abuse Rule contains an example in which a corporation that elects
to be treated as a REIT contributes substantially all of the proceeds from a
public offering to a partnership in exchange for a general partnership interest.
The limited partners of the partnership contribute real property assets to the
partnership, subject to liabilities that exceed their respective aggregate bases
in such property. In addition, some of the limited partners have the right,
beginning two years after the formation of the partnership, to require the
redemption of their limited partnership interests in exchange for cash or REIT
stock (at the REIT's option) equal to the fair market value of their respective
interests in the partnership at the time of the redemption. The example
concludes that the use of the partnership is not inconsistent with the intent of
the Partnership Provisions and, thus, cannot be recast by the Service. However,
the redemption rights held by the limited partners of the Operating Partnership
do not conform in all respects to the redemption rights contained in the
foregoing example. In addition, because the Anti-Abuse Rule is extraordinarily
broad in scope and is applied based on an analysis of all of the facts and
circumstances, there can be no assurance that the Service will not attempt to
apply the Anti-Abuse Rule to the Company. If the conditions of the Anti-Abuse
Rule are met, the Service is authorized to take appropriate enforcement action,
including disregarding the Property Partnerships for federal tax purposes or
treating one or more of its partners as nonpartners. Any such action potentially
could jeopardize the Company's status as a REIT.
FAILURE TO QUALIFY
If the Company fails to qualify for taxation as a REIT in any taxable year
and the relief provisions do not apply, the Company will be subject to tax
(including any applicable alterative 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. In such event, to the extent of current and accumulated
earnings and profits, all distributions to shareholders will be taxable as
ordinary income, and, subject to certain limitations in the Code, corporate
distributees may be eligible for the distributions received deduction. Unless
entitled to relief under specific statutory provisions, the Company also will be
disqualified from taxation as a REIT for the four taxable years following the
year during which the Company ceased to qualify as a REIT. It is not possible to
state whether in all circumstances the Company would be entitled to such
statutory relief.
TAXATION OF TAXABLE U.S. SHAREHOLDERS
As long as the Company qualifies as a REIT, distributions made to the
Company's taxable U.S. shareholders out of current or accumulated earnings and
profits (and not designated as capital gain dividends or retained capital gains)
will be taken into account by such U.S. shareholders as ordinary income and will
not be eligible for the dividends received deduction generally available to
corporations. As used herein, the term "U.S. shareholder" means a holder of
Common Stock or Preferred Stock that for U.S. federal income tax purposes is (i)
a citizen or resident of the United States; (ii) a corporation, partnership or
other entity created or organized in or under the laws of the United States or
of any political subdivision thereof; (iii) an estate whose income from sources
without the United States is includible in gross income for U.S. federal income
tax purposes regardless of its connection with the conduct of a trade or
business within the United States; or (iv) any trust with respect to which (A) a
U.S. court is able to exercise primary supervision over the administration of
such trust and (B) one or more U.S. fiduciaries have the authority to control
all substantial decisions of the trust.
Distributions that are designated as capital gain dividends will be taxed
as long-term capital gains (to the extent they do not exceed the Company's
actual net capital gain for the taxable year) without regard to
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the period for which the shareholder has held his stock. However, corporate
shareholders may be required to treat up to 20% of certain capital gain
dividends as ordinary income. The Company may elect to retain and pay income tax
on the net long-term capital gain it receives in a taxable year. In that case,
the Company's shareholders would include in income their proportionate share of
the Company's undistributed long-term capital gain. In addition, the
shareholders would be deemed to have paid their proportionate share of the tax
paid by the Company, which would be credited or refunded to the shareholders.
Each shareholder's basis in his stock would be increased by the amount of the
undistributed long-term capital gain, included in the shareholder's income, less
the shareholder's share of the tax paid by the Company.
Distributions in excess of current and accumulated earnings and profits
will not be taxable to a shareholder to the extent that they do not exceed the
adjusted basis of the shareholder's stock, but rather will reduce the adjusted
basis of such stock. To the extent that distributions in excess of current and
accumulated earnings and profits exceed the adjusted basis of a shareholder's
stock, such distributions will be included in income as long-term capital gain
(or short-term capital gain if the shares of stock have been held for one year
or less) assuming the shares of stock are capital assets in the hands of the
shareholder. In addition, any distribution declared by the Company in October,
November or December of any year and payable to a shareholder of record on a
specified date in any such month shall be treated as both paid by the Company
and received by the shareholder on December 31 of such year, provided that the
distribution is actually paid by the Company during January of the following
calendar year.
Shareholders may not include in their individual income tax returns any net
operating losses or capital losses of the Company. Instead, such losses would be
carried over by the Company for potential offset against its future income
(subject to certain limitations). Taxable distributions from the Company and
gain from the disposition of the stock will not be treated as passive activity
income and, therefore, shareholders generally will not be able to apply any
"passive activity losses" (such as losses from certain types of limited
partnerships in which the shareholder is a limited partner) against such income.
In addition, taxable distributions from the Company generally will be treated as
investment income for purposes of the investment interest limitations. Capital
gains from the disposition of stock (or distributions treated as such) will be
treated as investment income only if the shareholder so elects, in which case
such capital gains will be taxed at ordinary income rates. The Company will
notify shareholders after the close of the Company's taxable year as to the
portions of the distributions attributable to that year that constitute ordinary
income, return of capital and capital gain.
TAXATION OF SHAREHOLDERS ON THE DISPOSITION OF THE COMMON OR PREFERRED STOCK
In general, any gain or loss realized upon a taxable disposition of the
stock by a shareholder who is not a dealer in securities will be treated as
long-term capital gain or loss if the shares of stock have been held for more
than one year and otherwise as short-term capital gain or loss. However, any
loss upon a sale or exchange of shares of stock by a shareholder who has held
such shares for six months or less (after applying certain holding period
rules), will be treated as a long-term capital loss to the extent of
distributions from the Company required to be treated by such shareholder as
long-term capital gain. All or a portion of any loss realized upon a taxable
disposition of shares of stock may be disallowed if other shares of stock are
purchased within 30 days before or after the disposition.
CAPITAL GAINS AND LOSSES
A capital asset generally must be held for more than one year in order for
gain or loss derived from its sale or exchange to be treated as long-term
capital gain or loss. The highest marginal individual income tax rate is 39.6%.
The maximum tax rate on net long-term capital gains applicable to noncorporate
taxpayers is 20%. The maximum tax rate on long-term capital gain from the sale
or exchange of "section 1250 property" (i.e., depreciable real property) held
for more than 18 months is 25% to the extent that such gain would have been
treated as ordinary income if the property were "section 1245 property." With
respect to distribution designated by the Company as capital gain dividends and
any retained capital gains that the Company is deemed to distribute, the Company
may designate (subject to certain limits) whether such a distribution is taxable
to its shareholders at a 20% or 25% rate. Thus, the tax rate differential
between
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capital gain and ordinary income for individuals may be significant. In
addition, the characterization of income as capital or ordinary may affect the
deductibility of capital losses. Capital losses not offset by capital gains may
be deducted against an individual's ordinary income only up to a maximum annual
amount of $3,000. Unused capital losses may be carried forward. All net capital
gain of a corporate taxpayer is subject to tax at ordinary corporate rates. A
corporate taxpayer can deduct capital losses only to the extent of capital
gains, with unused losses being carried back three years and forward five years.
INFORMATION REPORTING REQUIREMENTS AND BACKUP WITHHOLDING
The Company will report to its U.S. shareholders and to the Service the
amount of distributions paid during each calendar year, and the amount of tax
withheld, if any. Under the backup withholding rules, a shareholder may be
subject to backup withholding at the rate of 31% with respect to distributions
paid unless such holder (i) is a corporation or comes within certain other
exempt categories and, when required, demonstrates this fact or (ii) provides a
taxpayer identification number, certifies as to no loss of exemption from backup
withholding and otherwise complies with the applicable requirements of the
backup withholding rules. A shareholder who does not provide the Company with
his correct taxpayer identification number also may be subject to penalties
imposed by the Service. Any amount paid 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 to any shareholders
who fail to certify their non-foreign status to the Company. The Service has
issued final regulations regarding the backup withholding rules as applied to
Non-U.S. Shareholders. These regulations alter the current system of backup
withholding compliance and are effective for distributions made after December
31, 1998. See "Federal Income Tax Considerations -- Taxation of Non-U.S.
Shareholders."
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 many
investments in real estate generate UBTI, the Service has issued a published
ruling 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, amounts distributed by the Company to Exempt Organizations
generally should not constitute UBTI. However, if an Exempt Organization
finances its acquisition of stock with debt, a portion of its income from the
Company 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, in certain circumstances, a pension trust that owns more than 10% of
the Company's stock is required to treat a percentage of the dividends from the
Company as UBTI (the "UBTI Percentage"). The UBTI Percentage is the gross income
derived by the Company from an unrelated trade or business (determined as if the
Company were a pension trust) divided by the gross income of the Company for the
year in which the dividends are paid. The UBTI rule applies to a pension trust
holding more than 10% of the Company's stock 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 shares
collectively own more than 50% of the value of the Company's shares.
TAXATION OF NON-U.S. SHAREHOLDERS
The rules governing U.S. federal income taxation of nonresident alien
individuals, foreign corporations, foreign partnerships and other foreign
shareholders (collectively, "Non-U.S. Shareholders") are
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complex and no attempt will be made herein to provide more than a summary of
such rules. 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 THE COMMON OR PREFERRED STOCK, INCLUDING ANY
REPORTING REQUIREMENTS.
Distributions to Non-U.S. Shareholders that are not attributable to gain
from sales or exchanges by the Company of U.S. real property interests and are
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 withholding tax equal to 30% of the gross amount of the
distribution unless an applicable tax treaty reduces or eliminates that tax.
However, if income from the investment in the stock is treated as effectively
connected with the Non-U.S. Shareholder's conduct of a U.S. trade or business,
the Non-U.S. Shareholder generally will be subject to federal income tax at
graduated rates, in the same manner as U.S. shareholders are taxed with respect
to such distributions (and also may be subject to the 30% branch profits tax in
the case of a Non-U.S. Shareholder that is a non-U.S. corporation). The Company
expects to withhold U.S. income tax at the rate of 30% on the gross amount of
any such distributions made to a Non-U.S. Shareholder unless (i) a lower treaty
rate applies and any required form evidencing eligibility for that reduced rate
is filed with the Company or (ii) the Non-U.S. Shareholder files an IRS Form
4224 with the Company claiming that the distribution is effectively connected
income. The Service has issued final regulations that modify the manner in which
the Company complies with the withholding requirements.
Distributions in excess of current and accumulated earnings and profits of
the Company will not be taxable to a shareholder to the extent that such
distributions do not exceed the adjusted basis of the shareholder's shares of
stock, but rather will reduce the adjusted basis of such shares. To the extent
that distributions in excess of current and accumulated earnings and profits
exceed the adjusted basis of a Non-U.S. Shareholder's stock, such distributions
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 of stock,
as described below. Because it generally cannot be determined at the time a
distribution is made whether or not such distribution will be in excess of
current and accumulated earnings and profits, the entire amount of any
distribution normally will be subject to withholding at the same rate as a
dividend. However, a Non-U.S. Shareholder can file a claim for refund with the
Service for the overwithheld amount to the extent it is determined subsequently
that such distribution was, in fact, in excess of the current and accumulated
earnings and profits of the Company.
The Company is required to withhold 10% of any distribution in excess of
its 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, to the extent that the Company does not do so, any portion of a
distribution not subject to withholding at a rate of 30% will be subject to
withholding at a rate of 10%.
For any year in which the Company qualifies as a REIT, distributions that
are attributable to gain from sales or exchanges by the Company of U.S. real
property interests will be taxed to a Non-U.S. Shareholder under the provisions
of the Foreign Investment in Real Property Tax Act of 1980 ("FIRPTA"). Under
FIRPTA, distributions attributable to gain from sales of U.S. real property
interests are taxed to a Non-U.S. Shareholder as if such gain were effectively
connected with a U.S. business. Non-U.S. Shareholders thus would 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
nonresident alien individuals). Distributions subject to FIRPTA also may be
subject to a 30% branch profits tax in the hands of a foreign corporate
shareholder not entitled to treaty relief or exemption. The Company is required
to withhold 35% of any distribution that is designated by the Company as a
capital gains dividend. The amount withheld is creditable against the Non-U.S.
Shareholder's FIRPTA tax liability.
Gain recognized by a Non-U.S. Shareholder upon a sale of his shares of
stock generally will not be taxed under FIRPTA if the Company is a "domestically
controlled REIT," defined generally as a REIT in which at all times during a
specified testing period less than 50% in value of the stock was held directly
or
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indirectly by non-U.S., persons. However, because the shares of stock are
publicly traded, no assurance can be given that the Company is or will be a
"domestically controlled REIT." In addition, a Non-U.S. Shareholder that owns,
actually and constructively, 5% or less of the Company's shares throughout a
specified "look-back" period will not recognize gain on the sale of his shares
taxable under FIRPTA if the shares are "regularly traded" on an established
securities market. Finally, gain not subject to FIRPTA will be taxable to a
Non-U.S. Shareholder if (i) investment in the stock is effectively connected
with the Non-U.S. Shareholder's U.S. trade or business, in which case the
Non-U.S. Shareholder will be subject to the same treatment as U.S. shareholders
with respect to such gain; or (ii) the Non-U.S. Shareholder is a nonresident
alien individual who was present in the United States for 183 days or more
during the taxable year and certain other conditions apply, in which case the
nonresident alien individual will be subject to a 30% tax on the individual's
capital gains. If the gain on the sale of the stock 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, a special alternative minimum tax in the case of
nonresident alien individuals, and the possible application of the 30% branch
profits tax in the case of non-U.S. corporations).
FLOURNOY DEVELOPMENT COMPANY
The Company expects a portion of the amounts it will use to fund
distributions to come from distributions on the stock of Flournoy Development
Company. Flournoy Development Company does not qualify as a REIT, and it will
pay federal, state, and local income taxes on its taxable income at normal
corporate rates. Any federal, state, or local income taxes that Flournoy
Development Company pays will reduce the cash available for distribution.
As described above, the value of the stock of Flournoy Development Company
that is attributed to the Company cannot exceed 5% of the value of the Company's
assets at any time when a unit holder in the Operating Partnership exercises his
or her redemption right. See " -- Requirements for Qualification -- Asset
Tests." The Company believes that it currently satisfy this limit though this
limitation may restrict the ability of Flournoy Development Company to increase
the size of its business unless the value of the Company's assets is also
increasing.
OTHER TAX CONSIDERATIONS
The Company, the Property Partnerships and the QRSs, and the Company's
shareholders may be subject to state or local taxation in various state or local
jurisdictions, including those in which it or they own property, transact
business or reside. The state and local tax treatment of the Company and its
shareholders may not conform to the federal income tax consequences discussed
above. Consequently, prospective investors should consult their own tax advisors
regarding the effect of state and local tax laws on an investment in the Common
Stock of the Company.
PLAN OF DISTRIBUTION
The Company may sell the Offered Securities to one or more underwriters or
dealers for public offering and sale by them or may sell the Offered Securities
to investors directly or through designated agents. Any such underwriter, dealer
or agent involved in the offer and sale of the Offered Securities will be named
in the applicable Prospectus Supplement.
Underwriters may offer and sell the Offered Securities at a fixed price or
prices, which may be changed, or from time to time at market prices prevailing
at the time of sale, at prices related to such prevailing market prices or at
negotiated prices. The Company also may, from time to time, authorize
underwriters acting as agents to offer and sell the Offered Securities upon the
terms and conditions set forth in any Prospectus Supplement. Underwriters may
sell the Offered Securities to or through dealers, and such dealers may receive
compensation in the form of discounts, concessions or commissions (which may be
changed from time to time) from the underwriters and/or from the purchasers for
whom they may act as agent.
40
<PAGE>
Any underwriting compensation paid by the Company to underwriters or agents
in connection with the offering of the Offered Securities and any discounts,
concessions or commissions allowed by underwriters to participating dealers will
be set forth in the applicable Prospectus Supplement. Underwriters, dealers and
agents participating in the distribution of the Offered Securities may be deemed
to be underwriters, and any discounts and commissions received by them from the
Company or from purchasers of the Offered Securities and any profit realized by
them on resale of the Offered Securities may be deemed to be underwriting
discounts and commissions under the Securities Act. Underwriters, dealers and
agents may be entitled, under agreements entered into with the Company, to
indemnification against and contribution toward certain civil liabilities,
including liabilities under the Securities Act.
Offers to purchase the Securities may be solicited by agents designated by
the Company from time to time. Any such agent involved in the offer or sale of
the Securities will be named, and any commissions payable by the company to such
agent will be set forth in the Prospectus Supplement. Unless otherwise indicated
in the Prospectus Supplement, any such agent will be acting on a best efforts
basis for the period of its appointment. Any such agent may be deemed to be an
underwriter, as that term is defined in the Securities Act, of the Securities so
offered and sold.
If an underwriter or underwriters are utilized in the sale of Offered
Securities, the Company will execute an underwriting agreement with such
underwriter or underwriters at the time an agreement for such sale is reached,
and the names of the specific managing underwriter or underwriters, as well as
any other underwriters, and the terms of the transactions, including
compensation of the underwriters and dealers, in any, will be set forth in the
Prospectus Supplement, which will be used by the underwriters to make resales of
the Offered Securities.
If a dealer is utilized in the sale of the Offered Securities, the Company
will sell such Offered Securities to the dealer, as principal. The dealer may
then resell such Offered Securities to the public at varying prices to be
determined by such dealer at the time of resale. The name of the dealer and the
terms of the transactions will be set forth in the Prospectus Supplement
relating thereto.
Offers to purchase the securities may be solicited directly by the Company
and sales thereof may be made by the Company directly to institutional investors
or others. The terms of any such sales, including the terms of any bidding or
auction prices, if utilized, will be described in the Prospectus Supplement
relating thereto.
Agents, underwriters and dealers may be entitled under agreements which may
be entered into with the Company to indemnification by the Company against
certain liabilities, including liabilities under the Securities Act, and any
such agents, underwriters or dealers, or their affiliates may be customers of,
engage in transactions with or perform services for the Company in the ordinary
course of business.
If so indicated in the Prospectus Supplement, the Company will authorize
agents and underwriters to solicit offers by certain institutions to purchase
Debt Securities from the Company at the public offering price set forth in the
Prospectus Supplement pursuant to Delayed Delivery Contracts ("Contracts")
providing for payment and delivery on the date stated in the Prospectus
Supplement. Such Contracts will be subject to only those conditions set forth in
the Prospectus Supplement. Each Contract will be for an amount not less than,
and the principal amount of Offered Securities sold pursuant to Contracts shall
not be less nor more than, the respective amounts stated in such Prospectus
Supplement. Institutions with which Contracts, when authorized, may be made
include commercial and savings banks, insurance companies, pension funds,
investment companies, educational and charitable institutions and other
institutions, but will in all cases be subject to approval of the Company.
Contracts will not be subject to any conditions except (i) the purchase by an
institution of the Offered Securities covered by its Contract shall not at the
time of delivery be prohibited under the laws of any jurisdiction in the United
States to which such institution is subject and (ii) the Company shall have sold
to such underwriters the total principal amount of the Offered Securities less
the principal amount thereof covered by Contracts. A commission indicated in the
Prospectus Supplement will be paid to underwriters and agents soliciting
purchases of Debt Securities pursuant to Contracts accepted by the Company.
41
<PAGE>
EXPERTS
The Consolidated Financial Statements incorporated in 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 accountants, given on the authority of said firm as experts in
auditing and accounting.
LEGAL MATTERS
The validity of the issuance of the Offered Securities offered pursuant to
this Prospectus or any Prospectus Supplement will be passed upon for the Company
by Baker, Donelson, Bearman & Caldwell, Memphis, Tennessee. In addition, the
description of federal income tax consequences contained in the section of the
Prospectus entitled "Federal Income Tax Considerations" is based on the opinion
of Baker, Donelson, Bearman & Caldwell.
42
<PAGE>
PART II
INFORMATION NOT REQUIRED IN PROSPECTUS
ITEM 14. OTHER EXPENSES OF ISSUANCE AND DISTRIBUTION.
Set forth below is an estimate of the fees and expenses to be incurred in
connection with the issuance and distribution of the Offered Securities
registered hereby.
Registration fee to the SEC.......... $ 59,000
Printing expense..................... 100,000
Accounting fees and expenses......... 100,000
Legal fees and expenses.............. 150,000
Miscellaneous expenses............... 40,000
----------
Total................................ $ 449,000
==========
ITEM 15. INDEMNIFICATION OF DIRECTORS AND OFFICERS.
The Charter of the Company, generally, limits the liability of the
Company's directors and officers to the Company and the shareholders for money
damages to the fullest extent permitted from time to time by the laws of
Tennessee. The Charter also provides, generally, for the indemnification of
directors and officers, among others, against judgments, settlements, penalties,
fines, and reasonable expenses actually incurred by them in connection with any
proceeding to which they may be made a party by reason of their service in those
or other capacities except in connection with a proceeding by or in the right of
the Company in which the director was adjudged liable to the Company or in
connection with any other proceeding charging a personal benefit was improperly
received by him. Insofar as indemnification for liabilities arising under the
Securities Act of 1933 (the "Securities Act") may be permitted to directors and
officers of the Company pursuant to the foregoing provisions or otherwise, the
Company has been advised that, in the opinion of the Securities and Exchange
Commission, such indemnification is against public policy as expressed in the
Securities Act, and is, therefore, unenforceable.
The Company intends to purchase director and officer liability insurance
for the purpose of providing a source of funds to pay any indemnification
described above.
ITEM 16. EXHIBITS.
<TABLE>
<CAPTION>
EXHIBITS
NUMBER DESCRIPTION
- ------------------------ ------------------------------------------------------------------------------------------
<S> <C> <C> <C>
1.1* -- Form of Underwriting Agreement (for Common Stock)
1.2* -- Form of Underwriting Agreement (for Preferred Stock)
1.3* -- Form of Underwriting Agreement (for Debt Securities)
1.4* -- Form of Underwriting Agreement (for Depositary Shares)
2.1** -- Agreement and Plan of Reorganization made as of September 15, 1997 by and among
Mid-America Apartments, L.P., Mid-America Apartment Communities, Inc. and Flournoy
Development Company
3.1*** -- Amended and Restated Charter of Mid-America
Apartment Communities, Inc. dated as of January 10,
1994, as filed with the Tennessee Secretary of State
on January 25, 1994
3.2*** -- Articles of Amendment to the Charter of Mid-America Apartment Communities, Inc. dated as
of January 28, 1994, as filed with the Tennessee Secretary of State on January 28, 1994
3.3*** -- Articles of Merger of The Cates Company with and into Mid-America Apartment Communities,
Inc. dated February 2, 1994, as filed with the Tennessee Secretary of State on February 3,
1994
II-1
<PAGE>
EXHIBITS
NUMBER DESCRIPTION
- ------------------------ ------------------------------------------------------------------------------------------
3.4*** -- Articles of Merger of America First REIT Advisory Company, a Nebraska corporation, with
and into Mid-America Apartment Communities, Inc., a Tennessee corporation, dated June 29,
1995, as filed with the Tennessee Secretary of State on June 29, 1995
3.5*** -- Mid-America Apartment Communities, Inc. Articles of Amendment to the Amended and Restated
Charter Designating and Fixing the Rights and Preferences of A Series of Preferred Stock
dated as of October 9, 1996, as filed with the Tennessee Secretary of State on October 10,
1996
3.6*** -- Mid-America Apartment Communities, Inc. Articles of Amendment to the Amended and Restated
Charter dated November 17, 1997, as filed with the Tennessee Secretary of State on
November 18, 1997
3.7*** -- Mid-America Apartment Communities, Inc. Articles of Amendment to the Amended and Restated
Charter Designating and Fixing the Rights and Preferences of A Series of Preferred Stock
dated as of November 17, 1997, as filed with the Tennessee Secretary of State on November
18, 1997
3.8*** -- Articles of Merger of Flournoy Development Company (a Georgia corporation) with and into
Mid-America Apartment Communities, Inc. (a Tennessee corporation) dated November 21, 1997,
as filed with the Tennessee Secretary of State on November 25, 1997
3.9*** -- Mid-America Apartment Communities, Inc. Articles of Amendment to the Amended and Restated
Charter dated December 15, 1997, as filed with the Tennessee Secretary of State on
December 31, 1997
3.10*** -- Bylaws of Mid-America Apartment Communities, Inc.
4.1*** -- Form of Common Share Certificate
4.2*** -- Form of 9.5% Series A Cumulative Preferred Stock Certificate
4.3*** -- Form of 8 7/8% Series B Cumulative Preferred Stock Certificate
4.4*** -- Mid-America Apartment Communities, Inc. Articles of Amendment to the Amended and Restated
Charter Designating and Fixing the Rights and Preferences of a Series of Preferred Stock
dated as of October 9, 1996, as filed with the Tennessee Secretary of State on October 10,
1996
4.5*** -- Mid-America Apartment Communities, Inc. Articles of Amendment to the Amended and Restated
Charter Designating and Fixing the Rights and Preferences of a Series of Preferred Stock
dated as of November 17, 1997, as filed with the Tennessee Secretary of State on November
18, 1997
4.6**** -- Form of 9 3/8% Series C Cumulative Preferred Stock Certificate
4.7***** -- Mid-America Apartment Communities, Inc. Articles of
Amendment to the Amended and Restated Charter
Designating and Fixing the Rights and Preferences of a
Series of Preferred Stock, dated as of June 25, 1998,
as filed with the Tennessee Secretary of State on June
30, 1998
4.8* -- Form of Debt Security
4.9* -- Form of Preferred Share Certificate
4.10* -- Form of Depositary Share
4.11* -- Form of Depositary Receipt
4.12* -- Form of Depositary Agreement
4.13 -- Form of Indenture governing the Debt Securities
5.1+ -- Opinion of Baker, Donelson, Bearman & Caldwell Regarding Legality
8.1+ -- Opinion of Baker, Donelson, Bearman & Caldwell Regarding Certain Tax Matters
12.1 -- Statements regarding computation of ratios (Included in Prospectus)
II-2
<PAGE>
EXHIBITS
NUMBER DESCRIPTION
- ------------------------ ------------------------------------------------------------------------------------------
24.1 -- Consent of KPMG Peat Marwick LLP
24.2+ -- Consent of Baker, Donelson, Bearman & Caldwell (Included in Exhibit 5.1)
26.1* -- Form T-1 Statement of Eligibility and Qualification
</TABLE>
- ------------
+ Previously filed
* To be filed by post-effective amendment or by a current report on Form
8-K pursuant to the Securities Exchange Act of 1934, as appropriate.
** Filed as Exhibit 10.20 to the Registrant's Current Report on Form 8-K,
filed with the Commission on September 19, 1997 (Commission File No.
1-12762)
*** Previously filed as exhibits to the Company's Annual Report on Form 10-K
for the Year Ended December 31, 1997. Each Exhibit listed herein is
similarly numbered to the Exhibits filed with the Form 10-K.
**** Previously filed as Exhibit 4.2 to the Registrant's Current Report on
Form 8-A/A filed with the Commission on June 26, 1998
***** Previously filed as Exhibit 4.2 to the Registrant's Current Report on
Form 8-A/A filed with the Commission on June 26, 1998
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 facts or events arising after
the effective date of the Registration Statement (or most recent
post-effective amendment thereof) which, individually, or in the aggregate,
represent a fundamental change in the information set forth in the
Registration Statement. Notwithstanding the foregoing, any increase or
decrease in volume of securities offered (if the total dollar value of
securities offered would not exceed that which was registered) and any
deviation from the low or high end of the estimated maximum offering range
may be reflected in the form of prospectus filed with the Commission
pursuant to Rule 424(b) (230.424(b) of that chapter) 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;
(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) do not apply if
the registration statement is on Form S-3, Form S-8 or Form F-3, and the
information required to be included in a post-effective amendment by those
paragraphs is contained in periodic reports filed with or furnished to the
Commission by the Registrant pursuant to section 13 or section 15(d) of the
Securities Exchange Act of 1934 that are incorporated by reference in the
registration statement.
(2) That, for the purpose of determining any liability under the Securities
Act of 1933, each such post-effective amendment shall be deemed to be a new
Registration Statement relating to the securities offered therein, and the
offering of such securities at that time shall be deemed to be the initial bona
fide offering thereof.
(3) To remove from registration by means of a post-effective amendment any
of the securities being registered which remain unsold at the termination of the
offering.
II-3
<PAGE>
The undersigned Registrant hereby undertakes to file an application for the
purpose of determining the eligibility of the Trustee to act under subsection
(a) of Section 310 of the Trust Indenture Act in accordance with the rules and
regulations prescribed by the Commission under Section 305(b)(2) of the Trust
Indenture Act of 1939, as amended.
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 section 15(d) of the
Securities Exchange Act of 1934 (and, where applicable, each filing of an
employee benefit plan's annual report pursuant to section 15(d) of the
Securities Exchange Act of 1934) that is incorporated by reference in the
Registration Statement shall be deemed to be a new registration statement
relating to the securities offered therein, and the offering of such securities
at that time shall be deemed to be the initial bona fide offering thereof.
Insofar as indemnification for liabilities arising under the Securities Act
of 1933 may be permitted to directors, officers and controlling persons of the
Registrant pursuant to the foregoing provisions or otherwise, 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 for expenses incurred
or paid by a director, officer or controlling person of the Registrant in the
successful defense of any action, suit or proceeding) is asserted by such
director, officer or controlling person in connection with the securities being
registered, the Registrant will, unless in the opinion of its counsel the matter
has been settled by controlling precedent, submit to a court of appropriate
jurisdiction the question whether such indemnification by it is against public
policy as expressed in the Act and will be governed by the final adjudication of
such issue.
II-4
<PAGE>
SIGNATURES
Pursuant to the requirement of the Securities Act of 1933, the Registrant
certifies that it has reasonable grounds to believe that it meets all of the
requirements for filing on Form S-3 and has duly caused this Registration
Statement to be signed on its behalf by the undersigned, thereunto duly
authorized, in the City of Memphis, State of Tennessee, on September 3, 1998.
MID-AMERICA APARTMENT COMMUNITIES, INC.
a Tennessee corporation (Registrant)
By: /s/ GEORGE E. CATES
GEORGE E. CATES,
CHAIRMAN OF THE BOARD AND
CHIEF EXECUTIVE OFFICER
<TABLE>
<CAPTION>
SIGNATURE TITLE DATE
----------------- ------------- --------
<S> <C> <C> <C>
/s/GEORGE E. CATES Chairman of the Board of Directors, September 3, 1998
GEORGE E. CATES and Chief Executive Officer
* Vice Chairman of the Board of September 3, 1998
------------------ Directors
JOHN F. FLOURNOY
* Director, President and Chief September 3, 1998
------------------ Operating Officer
H. ERIC BOLTON
/s/ SIMON R. C. WADSWORTH Director and Chief Financial Officer September 3, 1998
SIMON R. C. WADSWORTH (principal accounting and financial
officer)
* Director September 3, 1998
--------------------
ROBERT F. FOGELMAN
Director September 3, 1998
--------------------
O. MASON HAWKINS
Director September 3, 1998
--------------------
JOHN S. GRINALDS
* Director September 3, 1998
--------------------
RALPH HORN
*By:/s/ SIMON R.C. WADSWORTH
SIMON R.C. WADSWORTH, AS
ATTORNEY IN FACT
</TABLE>
II-5
<PAGE>
INDEX TO EXHIBITS
<TABLE>
<CAPTION>
SEQUENTIALLY
EXHIBITS NUMBERED
NUMBER DESCRIPTION PAGES
---------- ---------------
<S> <C> <C> <C>
1.1* -- Form of Underwriting Agreement (for Common Stock)
1.2* -- Form of Underwriting Agreement (for Preferred Stock)
1.3* -- Form of Underwriting Agreement (for Debt Securities)
1.4* -- Form of Underwriting Agreement (for Depositary Shares)
2.1** -- Agreement and Plan of Reorganization made as of September 15, 1997 by and among Mid-America
Apartments, L.P., Mid-America Apartment Communities, Inc. and Flournoy Development Company
3.1*** -- Amended and Restated Charter of Mid-America
Apartment Communities, Inc. dated as of January 10,
1994, as filed with the Tennessee Secretary of State
on January 25, 1994
3.2*** -- Articles of Amendment to the Charter of Mid-America Apartment Communities, Inc. dated as of
January 28, 1994, as filed with the Tennessee Secretary of State on January 28, 1994
3.3*** -- Articles of Merger of The Cates Company with and into Mid-America Apartment Communities,
Inc. dated February 2, 1994, as filed with the Tennessee Secretary of State on February 3,
1994
3.4*** -- Articles of Merger of America First REIT Advisory Company, a Nebraska corporation, with and
into Mid-America Apartment Communities, Inc., a Tennessee corporation, dated June 29, 1995,
as filed with the Tennessee Secretary of State on June 29, 1995
3.5*** -- Mid-America Apartment Communities, Inc. Articles of Amendment to the Amended and Restated
Charter Designating and Fixing the Rights and Preferences of A Series of Preferred Stock
dated as of October 9, 1996, as filed with the Tennessee Secretary of State on October 10,
1996
3.6*** -- Mid-America Apartment Communities, Inc. Articles of Amendment to the Amended and Restated
Charter dated November 17, 1997, as filed with the Tennessee Secretary of State on November
18, 1997
3.7*** -- Mid-America Apartment Communities, Inc. Articles of Amendment to the Amended and Restated
Charter Designating and Fixing the Rights and Preferences of A Series of Preferred Stock
dated as of November 17, 1997, as filed with the Tennessee Secretary of State on November
18, 1997
3.8*** -- Articles of Merger of Flournoy Development Company (a Georgia corporation) with and into
Mid-America Apartment Communities, Inc. (a Tennessee corporation) dated November 21, 1997,
as filed with the Tennessee Secretary of State on November 25, 1997
3.9*** -- Mid-America Apartment Communities, Inc. Articles of Amendment to the Amended and Restated
Charter dated December 15, 1997, as filed with the Tennessee Secretary of State on December
31, 1997
3.10*** -- Bylaws of Mid-America Apartment Communities, Inc.
4.1*** -- Form of Common Share Certificate
4.2*** -- Form of 9.5% Series A Cumulative Preferred Stock Certificate
4.3*** -- Form of 8 7/8% Series B Cumulative Preferred Stock Certificate
4.4*** -- Mid-America Apartment Communities, Inc. Articles of Amendment to the Amended and Restated
Charter Designating and Fixing the Rights and Preferences of A Series of Preferred Stock
dated as of October 9, 1996, as filed with the Tennessee Secretary of State on October 10,
1996
<PAGE>
SEQUENTIALLY
EXHIBITS NUMBERED
NUMBER DESCRIPTION PAGES
------------ --------------- ----------
4.5*** -- Mid-America Apartment Communities, Inc. Articles of Amendment to the Amended and Restated
Charter Designating and Fixing the Rights and Preferences of A Series of Preferred Stock
dated as of November 17, 1997, as filed with the Tennessee Secretary of State on November
18, 1997
4.6**** -- Form of 9 3/8% Series C Cumulative Preferred Stock Certificate
4.7***** -- Mid-America Apartment Communities, Inc. Articles of
Amendment to the Amended and Restated Charter
Designating and Fixing the Rights and Preferences of a
Series of Preferred Stock, dated as of June 25, 1998,
as filed with the Tennessee Secretary of State on June
30, 1998
4.8* -- Form of Debt Security
4.9* -- Form of Preferred Share Certificate
4.10* -- Form of Depositary Share
4.11* -- Form of Depositary Receipt
4.12* -- Form of Depositary Agreement
4.13 -- Form of Indenture governing the Debt Securities
5.1+ -- Opinion of Baker, Donelson, Bearman & Caldwell Regarding Legality
8.1+ -- Opinion of Baker, Donelson, Bearman & Caldwell Regarding Certain Tax Matters
12.1 -- Statements regarding computation of ratios (Included in Prospectus)
24.1 -- Consent of KPMG Peat Marwick LLP
24.2+ -- Consent of Baker, Donelson, Bearman & Caldwell (Included in Exhibit 5.1)
26.1* -- Form T-1 Statement of Eligibility and Qualification
</TABLE>
- ------------
+ Previously filed.
* To be filed by post-effective amendment or by a current report on Form
8-K pursuant to the Securities Exchange Act of 1934, as appropriate.
** Filed as Exhibit 10.20 to the Registrant's Current Report on Form 8-K,
filed with the Commission on September 19, 1997 (Commission File No.
1-12762)
*** Previously filed as exhibits to the Company's Annual Report on Form 10-K
for the Year Ended December 31, 1997. Each Exhibit listed herein is
similarly numbered to the Exhibits filed with the Form 10-K.
**** Previously filed as Exhibit 4.2 to the Registrant's Current Report on
Form 8-K filed with the Commission on June 26, 1998
***** Previously filed as Exhibit 4.1 to the Registrant's Current Report on
Form 8-A/A filed with the Commission on June 26, 1998
EXHIBIT 4.13
================================================================================
MID-AMERICA APARTMENT COMMUNITIES, INC.,
AS ISSUER
AND
-----------------------,
AS TRUSTEE
INDENTURE
DATED AS OF _________ __, ____
DEBT SECURITIES
================================================================================
<PAGE>
TABLE OF CONTENTS
PAGE
Section 1.1 DEFINITIONS...........................................- 1 -
Section 1.2 COMPLIANCE CERTIFICATES AND OPINIONS..................- 6 -
Section 1.3 FORM OF DOCUMENTS DELIVERED TO TRUSTEE................- 7 -
Section 1.4 ACTS OF HOLDERS.......................................- 7 -
Section 1.5 NOTICES, ETC. TO TRUSTEE AND COMPANY..................- 8 -
Section 1.6 NOTICE TO HOLDERS; WAIVER.............................- 8 -
Section 1.7 COMMUNICATION BY HOLDERS WITH OTHER HOLDERS...........- 9 -
Section 1.8 EFFECT OF HEADINGS AND TABLE OF CONTENTS..............- 9 -
Section 1.9 SUCCESSORS AND ASSIGNS................................- 9 -
Section 1.10 SEVERABILITY CLAUSE..................................- 9 -
Section 1.11 BENEFITS OF INDENTURE................................- 9 -
Section 1.12 GOVERNING LAW........................................- 9 -
Section 1.13 LEGAL HOLIDAYS.......................................- 9 -
ARTICLE II.
SECURITIES FORMS
Section 2.1 FORMS OF SECURITIES..................................- 10 -
Section 2.2 FORM OF TRUSTEE'S CERTIFICATE OF AUTHENTICATION......- 10 -
Section 2.3 SECURITIES ISSUABLE IN GLOBAL FORM...................- 10 -
ARTICLE III.
THE SECURITIES
Section 3.1 AMOUNT UNLIMITED; ISSUABLE IN SERIES.................- 11 -
Section 3.2 DENOMINATIONS........................................- 14 -
Section 3.3 EXECUTION, AUTHENTICATION, DELIVERY AND DATING.......- 14 -
Section 3.4 TEMPORARY SECURITIES.................................- 15 -
Section 3.5 REGISTRATION, REGISTRATION OF TRANSFER AND EXCHANGE..- 16 -
Section 3.6 MUTILATED, DESTROYED, LOST AND STOLEN SECURITIES.....- 17 -
Section 3.7 PAYMENT OF INTEREST; INTEREST RIGHTS PRESERVED.......- 18 -
Section 3.8 PERSONS DEEMED OWNERS................................- 19 -
Section 3.9 CANCELLATION.........................................- 20 -
Section 3.10 COMPUTATION OF INTEREST..............................- 20 -
ARTICLE IV.
SATISFACTION AND DISCHARGE
Section 4.1 SATISFACTION AND DISCHARGE OF INDENTURE.............- 20 -
Section 4.2 APPLICATION OF TRUST FUNDS...........................- 21 -
ARTICLE V.
REMEDIES
Section 5.1 EVENTS OF DEFAULT....................................- 21 -
Section 5.2 ACCELERATION OF MATURITY; RESCISSION AND ANNULMENT...- 23 -
Section 5.3 COLLECTION OF INDEBTEDNESS AND SUITS FOR
ENFORCEMENT BY TRUSTEE..............................- 24 -
Section 5.4 TRUSTEE MAY FILE PROOFS OF CLAIM.....................- 24 -
Section 5.5 TRUSTEE MAY ENFORCE CLAIMS WITHOUT POSSESSION OF
SECURITIES OR COUPONS...............................- 25 -
Section 5.6 APPLICATION OF MONEY COLLECTED.......................- 25 -
i
<PAGE>
PAGE
Section 5.7 LIMITATION ON SUITS..................................- 25 -
Section 5.8 UNCONDITIONAL RIGHT OF HOLDERS TO RECEIVE
PRINCIPAL, PREMIUM, IF ANY, AND INTEREST
AND ADDITIONAL AMOUNTS..............................- 26 -
Section 5.9 RESTORATION OF RIGHTS AND REMEDIES...................- 26 -
Section 5.10 RIGHTS AND REMEDIES CUMULATIVE.......................- 26 -
Section 5.11 DELAY OR OMISSION NOT WAIVER.........................- 26 -
Section 5.12 CONTROL BY HOLDERS OF SECURITIES.....................- 26 -
Section 5.13 WAIVER OF PAST DEFAULTS..............................- 27 -
Section 5.14 WAIVER OF USURY, STAY OR EXTENSION LAWS..............- 27 -
Section 5.15 UNDERTAKING FOR COSTS................................- 27 -
ARTICLE VI.
THE TRUSTEE
Section 6.1 CERTAIN DUTIES AND RESPONSIBILITIES..................- 27 -
Section 6.2 NOTICE OF DEFAULTS...................................- 28 -
Section 6.3 CERTAIN RIGHTS OF TRUSTEE............................- 28 -
Section 6.4 NOT RESPONSIBLE FOR RECITALS OR ISSUANCE OF
SECURITIES..........................................- 29 -
Section 6.5 MAY HOLD SECURITIES..................................- 29 -
Section 6.6 MONEY HELD IN TRUST..................................- 29 -
Section 6.7 COMPENSATION, REIMBURSEMENT AND INDEMNITY............- 29 -
Section 6.8 CORPORATE TRUSTEE REQUIRED; ELIGIBILITY;
CONFLICTING INTERESTS...............................- 30 -
Section 6.9 RESIGNATION AND REMOVAL; APPOINTMENT OF SUCCESSOR....- 30 -
Section 6.10 ACCEPTANCE OF APPOINTMENT BY SUCCESSOR...............- 31 -
Section 6.11 MERGER, CONVERSION, CONSOLIDATION OR SUCCESSION
TO BUSINESS.........................................- 32 -
Section 6.12 APPOINTMENT OF AUTHENTICATING AGENT..................- 32 -
Section 6.13 PREFERENTIAL COLLECTION OF CLAIMS AGAINST COMPANY....- 33 -
ARTICLE VII.
HOLDERS' LISTS AND REPORTS BY TRUSTEE AND COMPANY
Section 7.1 DISCLOSURE OF NAMES AND ADDRESSES OF HOLDERS.........- 33 -
Section 7.2 REPORTS BY TRUSTEE...................................- 33 -
Section 7.3 REPORTS BY COMPANY...................................- 34 -
Section 7.4 COMPANY TO FURNISH TRUSTEE NAMES AND ADDRESSES
OF HOLDERS..........................................- 34 -
ARTICLE VIII.
CONSOLIDATION, MERGER, SALE, LEASE OR CONVEYANCE
Section 8.1 CONSOLIDATIONS AND MERGERS OF COMPANY AND SALES,
LEASES AND CONVEYANCES PERMITTED SUBJECT TO
CERTAIN CONDITIONS..................................- 34 -
Section 8.2 RIGHTS AND DUTIES OF SUCCESSOR CORPORATION...........- 35 -
Section 8.3 OFFICERS' CERTIFICATE AND OPINION OF COUNSEL.........- 35 -
ARTICLE IX.
SUPPLEMENTAL INDENTURES
Section 9.1 SUPPLEMENTAL INDENTURES WITHOUT CONSENT OF HOLDERS...- 35 -
Section 9.2 SUPPLEMENTAL INDENTURES WITH CONSENT OF HOLDERS......- 36 -
Section 9.3 EXECUTION OF SUPPLEMENTAL INDENTURES.................- 37 -
Section 9.4 EFFECT OF SUPPLEMENTAL INDENTURES....................- 37 -
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PAGE
Section 9.5 CONFORMITY WITH TRUST INDENTURE ACT..................- 37 -
Section 9.6 REFERENCE IN SECURITIES TO SUPPLEMENTAL INDENTURES...- 37 -
ARTICLE X.
COVENANTS
Section 10.1 PAYMENT OF PRINCIPAL, PREMIUM, IF ANY, INTEREST
AND ADDITIONAL AMOUNTS.............................- 37 -
Section 10.2 MAINTENANCE OF OFFICE OR AGENCY.....................- 38 -
Section 10.3 MONEY FOR SECURITIES PAYMENTS TO BE HELD IN TRUST...- 38 -
Section 10.4 [Reserved]..........................................- 39 -
Section 10.5 [Reserved]. ........................................- 39 -
Section 10.6 EXISTENCE...........................................- 39 -
Section 10.7 MAINTENANCE OF PROPERTIES...........................- 39 -
Section 10.8 INSURANCE...........................................- 39 -
Section 10.9 PAYMENT OF TAXES AND OTHER CLAIMS...................- 39 -
Section 10.10 PROVISION OF FINANCIAL INFORMATION.................- 39 -
Section 10.11 STATEMENT AS TO COMPLIANCE.........................- 40 -
Section 10.12 ADDITIONAL AMOUNTS.................................- 40 -
Section 10.13 WAIVER OF CERTAIN COVENANTS........................- 40 -
ARTICLE XI.
REDEMPTION OF SECURITIES
Section 11.1 APPLICABILITY OF ARTICLE............................- 41 -
Section 11.2 ELECTION TO REDEEM; NOTICE TO TRUSTEE...............- 41 -
Section 11.3 SELECTION BY TRUSTEE OF SECURITIES TO BE REDEEMED...- 41 -
Section 11.4 NOTICE OF REDEMPTION................................- 41 -
Section 11.5 DEPOSIT OF REDEMPTION PRICE.........................- 42 -
Section 11.6 SECURITIES PAYABLE ON REDEMPTION DATE...............- 42 -
Section 11.7 SECURITIES REDEEMED IN PART.........................- 43 -
ARTICLE XII.
SINKING FUNDS
Section 12.1 APPLICABILITY OF ARTICLE............................- 43 -
Section 12.2 SATISFACTION OF SINKING FUND PAYMENTS WITH
SECURITIES.........................................- 43 -
Section 12.3 REDEMPTION OF SECURITIES FOR SINKING FUND...........- 43 -
ARTICLE XIII.
REPAYMENT AT THE OPTION OF HOLDERS
Section 13.1 APPLICABILITY OF ARTICLE............................- 44 -
Section 13.2 REPAYMENT OF SECURITIES.............................- 44 -
Section 13.3 EXERCISE OF OPTION..................................- 44 -
Section 13.4 WHEN SECURITIES PRESENTED FOR REPAYMENT BECOME
DUE AND PAYABLE....................................- 45 -
Section 13.5 SECURITIES REPAID IN PART...........................- 45 -
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PAGE
ARTICLE XIV.
DEFEASANCE AND COVENANT DEFEASANCE
Section 14.1 APPLICABILITY OF ARTICLE: COMPANY'S OPTION TO EFFECT
DEFEASANCE OR COVENANT DEFEASANCE..................- 45 -
Section 14.2 DEFEASANCE AND DISCHARGE............................- 45 -
Section 14.4 CONDITIONS OF DEFEASANCE OR COVENANT DEFEASANCE.....- 46 -
Section 14.5 DEPOSITED MONEY AND GOVERNMENT OBLIGATIONS
TO BE HELD IN TRUST; OTHER MISCELLANEOUS
PROVISIONS.........................................- 47 -
ARTICLE XV.
MEETINGS OF HOLDERS OF SECURITIES
Section 15.1 PURPOSES FOR WHICH MEETINGS MAY BE CALLED...........- 48 -
Section 15.2 CALL NOTICE AND PLACE OF MEETINGS...................- 48 -
Section 15.3 PERSONS ENTITLED TO VOTE AT MEETINGS................- 48 -
Section 15.4 QUORUM; ACTION......................................- 48 -
Section 15.5 DETERMINATION OF VOTING RIGHTS; CONDUCT AND
ADJOURNMENT OF MEETINGS............................- 49 -
Section 15.6 COUNTING VOTES AND RECORDING ACTION OF MEETINGS.....- 50 -
iv
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INDENTURE, dated as of ___________ __, ____, between MID-AMERICA APARTMENT
COMMUNITIES, INC., a Tennessee real estate investment trust (hereinafter called
the "Company"), having its principal office at 6584 Poplar Avenue, Suite 340,
Memphis, Tennessee 38138, and ________________________________, as Trustee
hereunder (hereinafter called the "Trustee"), having its Corporate Trust Office
at ___________________________.
Each party hereto agrees as follows for the equal and proportionate
benefit of all Holders of the Securities.
ARTICLE I.
DEFINITIONS AND OTHER PROVISIONS OF GENERAL APPLICATION
Section 1.1 DEFINITIONS. For all purposes of this Indenture, except as
otherwise expressly provided or unless the context otherwise requires:
(a) the terms defined in this Article have the meanings assigned to them
in this Article, and include the plural as well as the singular;
(b) all other terms used herein which are defined in the TIA, either
directly or by reference therein, have the meanings assigned to them therein,
and the terms "cash transaction" and "self-liquidating paper," as used in TIA
Section 311 shall have the meanings assigned to them in the rules of the
Commission adopted under the TIA;
(c) all accounting terms not otherwise defined herein have the meanings
assigned to them in accordance with generally accepted accounting principles
("GAAP") as used in the United States applied on a consistent basis; and
(d) 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 1.4.
"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 which shall at the time be
appointing and acting, pursuant to Section 6.12, as an agent of the Trustee to
authenticate Securities.
"AUTHORIZED NEWSPAPER" means a newspaper, printed in the English language
or in an official language of the country of publication, customarily published
on each Business Day, whether or not published on Saturdays, Sundays or
holidays, and of general circulation in each place in connection with which the
term is used or in the financial community of each such place. Whenever
successive publications are required to be made in Authorized Newspapers, the
successive publications may be made in the same or in different Authorized
Newspapers, in the same city meeting the foregoing requirements and in each case
on any Business Day.
"BEARER SECURITY" means any Security which is payable to bearer and,
unless the context otherwise requires, all coupons appertaining thereto.
"BOARD OF DIRECTORS" means the board of directors of the Company, the
executive committee or any committee of that board duly authorized to act
hereunder.
<PAGE>
"BOARD RESOLUTION" means a duly adopted resolution of the Board of
Directors.
"BUSINESS DAY" when used with respect to any Plan 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
3.1, any day, other than a Saturday or Sunday, that is neither a legal holiday
nor a day on which banking institutions in that Place of Payment or particular
location are authorized or required by law, regulation or executive order to
close.
"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.
"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" means, 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 it Treasurer, an Assistant Treasurer,
the Secretary or an Assistant Secretary, of the Company, and delivered to the
Trustee.
"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 Trustee at which, at any
particular time, its corporate trust business shall be principally administered,
which office at the date hereof is located at
- ---------------------------------------------------.
"CORPORATION", whether or not such term is capitalized, includes
corporations, associations, companies and business trusts.
"COUPON" means any interest coupon appertaining to a Bearer Security.
"DEFAULTED INTEREST" has the meaning specified in Section 3.7.
"DEPOSITORY" means, with respect to the Securities of any series issuable
or issued in whole or in part in the form of a global Security, the Person
designated as Depositary by the Company pursuant to Section 3.1 until a
successor Depositary shall have become such pursuant to the applicable
procedures of this Indenture, and thereafter "Depositary" shall mean or include
each Person who is then a Depositary hereunder, and if at any time there is more
than one Person. "Depositary", as used with respect to the Securities of any
such series, shall mean the Depositary with respect to the Securities of that
series.
"DOLLARS" 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.
- 2 -
<PAGE>
"EUROPEAN COMMUNITIES" means the European Economic Community, the European
Coal and the 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 5.1.
"FOREIGN CURRENCY" means any currency, currency unit or composite
currency, including, without limitation, the ECU issued by the government of one
or more countries other than the United States of America or by any recognized
confederation or association of such governments.
"GOVERNMENT OBLIGATIONS" means securities which are (i) directed
obligations of the United States of America of 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 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 such Security is registered in the Security Register and, in the case of a
Bearer Security, the bearer thereof and, when used with respect to any coupon,
shall mean the bearer thereof.
"INDENTURE" means this instrument as originally executed or as it may from
time to time be supplemented or amended by one or more indentures supplemental
hereto entered into pursuant to the applicable provisions hereof, and shall
include the form and terms of particular series of Securities established as
contemplated by Section 3.1; PROVIDED, HOWEVER, that, if at any time more than
one Person is acting as Trustee under this instrument, "INDENTURE" shall mean,
with respect to any one or more series of Securities for which such Person is
Trustee, this instrument as originally executed or as it may from time to time
be supplemented or amended by one or more indentures supplemental hereto entered
into pursuant to the applicable provisions hereof and shall include the terms of
the or those particular series of Securities for which such Person is Trustee
established as contemplated by Section 3.1, exclusive, however, of any
provisions or terms which relate solely to other series of Securities for which
such Person is Trustee, regardless of when such terms or provisions were
adopted, and exclusive of any provisions or terms adopted by means of one or
more indentures supplemental hereto executed and delivered after such Person had
become such Trustee but to which such Person, as such Trustee, was not a party.
"INDEXED SECURITY" means a Security the terms of which provide that the
principal amount thereof payable at Stated Maturity may be more or less than the
principal face amount thereof at original issuance.
"INTEREST", when used with respect to an Original Issue Discount Security
which by its terms bears interest only after Maturity, shall mean interest
payable after Maturity and, when used with respect to a Security which provides
for the payment of Additional Amounts pursuant to Section 10.12, 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.
- 3 -
<PAGE>
"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 hereon provided, whether at the Stated Maturity or by
declaration of acceleration, notice of redemption, notice of option to elect
repayment or otherwise.
"OFFICERS CERTIFICATE" means a certificate signed by the Chairman of the
Board of Directors, the President or a Vice President and by the Treasurer, an
Assistant Treasurer, the Secretary or an Assistant Secretary, of the Company,
and delivered to the Trustee.
"OPINION OF COUNSEL" means written opinion of counsel, who may be counsel
for the Company or who may be an employee of or other counsel for the Company.
"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 5.2.
"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 therefore canceled by the Trustee or delivered to the
Trustee for cancellation;
(ii) Securities, or portions thereof, for whose payment or
redemption or repayment at the option of the Holder, money in the
necessary amount has been theretofore deposited with the Trustee or any
Paying Agent (other than the Company) in trust or set aside and segregated
in trust by the Company (if the Company shall act as its own Paying Agent)
for the Holders of such Securities and any coupons appertaining thereto,
PROVIDED that, if such Securities are to be redeemed, notice of such
redemption has been duly given pursuant to this Indenture or provision
therefor satisfactory to the Trustee has been made;
(iii) Securities, except to the extent provided in Section 14.2 and
14.3, with respect to which the Company has effected defeasance and/or
covenant defeasance as provided in Article 14;
(iv) Securities which have been paid pursuant to Section 3.6 or in
exchange for or in lieu of which other Securities have been authenticated
and delivered pursuant to this Indenture, other than any such Securities
in respect of which there shall have been presented to the Trustee proof
satisfactory to it that such Securities are held by a bona fide purchaser
in whose hands such Securities are valid obligations of the Company; and
(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 3.1;
PROVIDED, HOWEVER, that in determining whether the Holders of the requisite
principal amount of the Outstanding Securities have given any request, demand,
authorization, direction, notice, consent or waiver hereunder or are present at
a meeting of Holders for quorum purposes, and for the purpose of making the
calculations required by TIA Section 313 (i) the principal amount of an Original
Issue Discount Security that may be counted in making such determination or
calculation and that shall be deemed to be Outstanding for such purpose shall be
equal to the amount of principal thereof that would be (or shall have been
declared to be) due and payable, at the time of such determination, upon a
declaration of acceleration of the maturity thereof pursuant to Section 5.2 (ii)
the principal amount of and Security denominated in a Foreign Currency that may
be counted in making such determination or calculation and that shall be deemed
Outstanding for such purpose shall be equal to the Dollar equivalent, determined
pursuant to Section 3.1 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 (1) 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
- 4 -
<PAGE>
outstanding for such purpose shall be equal to the principal face amount of such
Indexed Security at original issuance, unless otherwise provided with respect to
such Security pursuant to Section 3.1, and (iv) Securities owned by the Company
or any other obligor upon the Securities or any Affiliate of the Company or of
such other obligor shall be disregarded and deemed not to be Outstanding, except
that, in determining whether the Trustee shall be protected in making such
calculation or in relying upon any such request, demand, authorization,
direction, notice, consent or waiver, only Securities which the Trustee knows to
be so owned shall be so disregarded. Securities so owned which have been pledged
in good faith may be regarded as Outstanding if the pledgee establishes to the
satisfaction of the Trustee the pledgee's right so to act with respect to such
Securities and that the pledgee is not the Company or any other obligor upon the
Securities or any Affiliate of the Company or of such other obligor.
"PAYING AGENT" means any Person authorized by the Company to pay the
principal of (and premium, if any) or interest on any Securities or coupons on
behalf of the Company.
"PERSON" means any individual, corporation, partnership, joint venture,
association, joint-stock company, trust, unincorporated organization or
government or any agency or political subdivision thereof.
"PLACE OF PAYMENT" when used with respect to the Securities of or within
any series, means the place or places where the principal of (and premium, if
any) and interest on such Securities are payable to specified as contemplated by
Sections 3.1 and 10.2.
"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 3.6 in exchange for or in lieu of a
mutilated, destroyed, lost or stolen Security or a Security to which a
mutilated, destroyed, lost or stolen coupon appertains shall be deemed to
evidence the same debt as the mutilated, destroyed, lost or stolen Security or
the Security to which the mutilated, destroyed, lost or stolen coupon
appertains.
"REDEMPTION DATE" when used with respect to any Security to be redeemed,
in whole or in part means the date fixed for such redemption by or pursuant to
this Indenture.
"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 3.1 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 Trustee, means the
chairman or vice-chairman of the board of directors, the chairman or
vice-chairman of the executive committee of the board of directors, the
president, any vice president (whether or not designated by a number or a word
or words added before or after the title "vice president"), the secretary, any
assistant secretary, the treasurer, any assistant treasurer, the cashier, any
assistant cashier, any trust officer or assistant trust officer, the controller
or any other officer of the Trustee customarily performing functions similar to
those performed by any of the above designated officers and also means with
respect to a particular corporate trust matter, any other officer to whom such
matter is referred because of such officer's knowledge and familiarity with the
particular subject.
"SECURITY" means any Security or Securities authenticated and delivered
under this Indenture, PROVIDED,
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HOWEVER, that, if at any time there is more than one Person acting as Trustee
under this Indenture, "Securities" with respect to the Indenture as to which
such Person is Trustee shall mean Securities authenticated and delivered under
this indenture, exclusive, however, of Securities of any series as to which such
Person is not Trustee.
"SECURITY REGISTER" and "SECURITY REGISTRAR" have the respective meanings
specified in Section 3.5.
"SPECIAL RECORD DATE" for the payment of any Defaulted Interested on the
Securities of or within any series means a date fixed by the Trustee pursuant to
Section 3.7.
"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 as the fixed date on
which the principal of such Security or such installment of principal or
interest is due and payable.
"SUBSIDIARY" means a corporation a majority of the outstanding voting
stock of which is owned, directly or indirectly, by the Company or by one or
more other Subsidiaries of the Company. For the purposes of this definition,
voting stock means stock having voting power 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 indenture was executed, except
as provided in Section 9.5.
"TRUSTEE" means the Person named as the "Trustee" in the first paragraph
of this Indenture, and thereafter "Trustee" shall mean or include each Person
who is then a Trustee hereunder; PROVIDED, HOWEVER, that if at any time there is
more than one such Person, "Trustee" as used with respect to the Securities of
any series shall mean only the Trustee with respect to Securities of that
series.
"UNITED STATES" means, unless otherwise specified with respect to any
Securities pursuant to Section 3.01, the United States of America including the
District of Columbia, its territories, as 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 1.2 COMPLIANCE CERTIFICATES AND OPINIONS. Upon any application or
request by the Company to the Trustee to take any action under any provision of
this Indenture, the Company shall furnish to the Trustee an Officers'
Certificate stating that all conditions precedent, if any, provided for in this
Indenture relating to the proposed action have been complied with and an Opinion
of Counsel stating that in the opinion of such counsel all such conditions
precedent, if any, have been complied with, except that in the case of any such
application or request as to which the furnishing of such documents is
specifically required by any provision of this Indenture relating to such
particular application or request as to which the furnishing of such documents
is specifically required by any provisions 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 shall include:
(a) A statement that each individual signing such certificate or opinion
has read such condition or
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covenant and the definitions herein relating thereto;
(b) 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;
(c) A statement that, in the opinion of each such individual, such
individual has made such examination or investigation as is necessary to enable
such individual to express an informed opinion as to whether or not such
condition or covenant has been complied with; and
(d) A statement as to whether, in the opinion of each such individual,
such condition or covenant has been complied with.
Section 1.3 FORM OF DOCUMENTS DELIVERED TO TRUSTEE. In any case where
several matters are required to be certified by, or covered by an opinion of,
any specified Person, it is not necessary that all such matters be certified by,
or covered by the opinion of, only one such Person, or that they be so certified
or covered by only one document, but one such Person may certify or give an
opinion as to some matters and one or more other such Persons as to other
matters, and any 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 representatives by, an officer or officers of the
Company stating that the information as to such factual matters is in the
possession of the Company, unless such counsel knows that the certificate or
opinion or representations as to such matters are erroneous.
Where any Person is required to make, give or execute two or more
applications, requests, consents, certificates, statements, opinions or other
instruments under this Indenture, they may, but need not, be consolidated and
form one instrument.
Section 1.4 ACTS OF HOLDERS. (a) Any request, demand, authorization,
direction, notice, consent, waiver or other action provided by this Indenture to
be given or taken by Holders of the Outstanding Securities of all series or one
or more series, as the case may be, may be embodied in and evidenced by one or
more instruments of substantially similar tenor signed by such Holders in person
or by agents duly appointed in writing. If Securities of a series are issuable
as Bearer Securities, any request, demand, authorization, direction, notice,
consent, waiver or other action provided by this Indenture to be given or taken
by Holders of Securities of such series may, alternatively, be embodied in and
evidenced by the record of Holders of Securities of such series voting in favor
thereof, either in person or by proxies duly appointed in writing, at any
meeting of Holders of Securities of such series duly called and held in
accordance with the provisions of Article 15, or a combination of such
instruments and any such record. Except as herein otherwise expressly provided,
such action shall become effective when such instrument or instruments or record
or both are delivered to the Trustee and, where it is hereby expressly required,
to the Company. Such instrument or instruments and any such record (and the
action embodied therein and evidenced thereby) are herein sometimes referred to
as the "Act" of the Holders signing 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 shall be sufficient for any purpose of this Indenture,
if made in the manner provided in this Section.
(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 the certificate of any notary public or other officer authorized
by law to take acknowledgments of deeds, certifying that the individual signing
such instrument or writing acknowledged to him the execution thereof. Where such
execution is by a Person acting in other than his individual
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<PAGE>
capacity, such certificate or affidavit shall also constitute sufficient proof
of his authority.
(c) The fact and date of the execution by any Person of any such
instrument or writing, or the authority of the Person executing the same, may
also be proved in any other manner which the Trustee deems sufficient, and the
Trustee may in any instance require further proof with respect to any of the
matters referred to in this Section.
(d) The principal amount and serial number of any Bearer Security held by
any Person, and the date of such Person's holding the same, may be proved by the
production of such Bearer Security or by a certificate executed, as depositary,
by any trust, company, bank or other depositary, wherever situated, if such
certificate shall be deemed by the Trustee to be satisfactory, showing that at
the date therein mentioned such Person had on deposit with such depositary or
exhibited to it, the Bearer Security therein described; or such facts may be
proved by the certificate or affidavit of the Person holding such Bearer
Security, if such certificate or affidavit is deemed by the Trustee to be
satisfactory. The Trustee and the Company may assume that such ownership of any
Bearer Security continues until (1) another certificate or affidavit bearing a
later date issued in respect of the same Bearer Security is produced, or (2)
such Bearer Security is produced to the Trustee by some other Person, or (3)
such Bearer Security is surrendered in exchange for a Registered Security, or
(4) such Bearer Security is no longer Outstanding. The fact and date of
execution of any such instrument or writing, the authority of the Person
executing the same and the principal amount and serial number of any Bearer
Security held by the Person so executing such instrument or writing and the date
of holding the same may also be proved in any other manner which the Trustee
deems sufficient; and the Trustee may in any instance require further proof with
respect to any of the matters referred to in this Section.
The principal amount and serial numbers of Registered Securities held by
any Person, and the date of his holding the same, shall be proved by the
Securities Register.
(e) If the Company shall solicit from the Holders any request, demand,
authorization, direction, notice, consent, waiver or other Act, the Company may,
at its option, by 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. If such a record date is fixed, such request, demand,
authorization, direction, notice, consent, waiver or other Act may be given
before or after such record date, but only the Holders of record at the close of
business on such record date shall be deemed to be Holders for the purposes of
determining whether Holders of the requisite proportion of Outstanding
Securities have authorized or agreed or consented to such request, demand,
authorization, direction, notice, consent, waiver or other Act, and for that
purpose the Outstanding Securities shall be computed as of such record date;
PROVIDED, that no such authorization, agreement or consent by the Holders on
such record date shall be deemed effective unless it shall become effective
pursuant to the provisions of this Indenture not later than eleven months after
the record date.
(f) Any request, demand, authorization, direction, notice, consent,
waiver, or other Act of the Holder of any Security shall bind every future
Holder of the same Security and the Holder of every Security issued upon the
registration of transfer thereof or in exchange therefor or in lieu thereof in
respect of anything done, omitted or suffered to be done by the Trustee, any
Security Registrar, any Paying Agent, any Authenticating Agent or the Company in
reliance thereon, whether or not notation of such action is made upon such
Security.
Section 1.5 NOTICES, ETC. TO TRUSTEE AND COMPANY. Any request, demand,
authorization, direction, notice, consent, waiver or Act of Holders or other
document provided or permitted by this Indenture to be made upon, given or
furnished to, or filed with,
(a) the Trustee by any Holder or by the Company shall be sufficient for
every purpose hereunder if made, given, furnished or filed in writing to with
the Trustee at its Corporate Trust Office, or
(b) the Company by the Trustee or by any Holder shall be sufficient for
every purpose hereunder unless otherwise herein expressly provided if in writing
and mailed, first class postage prepaid, to the Company addressed
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to it at the address of its principal office specified in the first paragraph of
this Indenture or at any other address previously furnished in writing to the
Trustee by the Company.
Section 1.6 NOTICE TO HOLDERS; WAIVER. Where this Indenture provides for
notice of any event to Holders of Registered Securities by the Company or the
Trustee unless otherwise expressly provided herein or in the Officers'
Certificate or supplemental indenture referred to in Section 5.1 with respect to
Securities of any series, such notice shall be sufficiently given if in writing
and mailed, first-class prepaid, to each Holder affected by such event, at his
address as it appears in the Security Register, not later than the latest date,
and not earlier than the earliest date, prescribed for the giving of such
notice. In any case where notice of Holders of Registered Securities is given by
mail, neither the failure to mail such notice, or any defect in any notice so
mailed, to any particular Holder shall reflect 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 any reason of the suspension of or irregularities in regular mail
service or by reason of any other cause it shall be impracticable to give such
notice by mail, then such notification to Holders of Registered Securities as
shall be made with the approval of the Trustee shall constitute a sufficient
notification of such Holders for every purpose hereunder.
Except as otherwise expressly provided herein or otherwise specified with
respect to any Securities pursuant to Section 3.1, where the 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 the other city or cities as may be specified in such Securities on a
Business Day, such publication to be no later than the latest date, and not
earlier then the date, prescribed for the giving of such notice. Any such notice
shall be deemed to have been given on the date of such publication or, if
published more than once, on the date of the first such publication.
If by reason of the suspension of publication of any Authorized Newspaper
or Authorized Newspapers or by reason of any other cause it shall be
impracticable to publish any notice to Holders of Bearer Securities as provided
above, then such notification to Holders of Bearer Securities as shall be given
with the approval of the Trustee shall constitute sufficient notice to such
Holders for every purpose hereunder. Neither the failure to give notice by
publication to any particular Holder of Bearer Securities as provided above, nor
any defect in any notice so published, shall affect the sufficiency of such
notice with respect to other Holders of Beaver Securities or the sufficiency of
any notice to Holders of Registered Securities given as provided herein.
Any request, demand, authorization, direction, notice, consent or waiver
required or permitted under this Indenture shall be in the English language,
except that any published notice may be in an official language of the country
of publication.
Where this Indenture provides for notice in any manner, such notice may be
waived in writing by the Person entitled to receive such notice, either before
or after the event, and such waiver shall be the equivalent of such notice.
Waivers of notice by Holders shall be filed with the Trustee, but such filing
shall not be a condition precedent to the validity of any action taken in
reliance upon such waiver.
Section 1.7 COMMUNICATION BY HOLDERS WITH OTHER HOLDERS. Communication
among Holders with respect to their rights under this Indenture or the
Securities shall be made in accordance with the provisions of TIA ss. 312(b).
The Company, the Trustee, the Securities Registrar or any agent thereof shall be
afforded by the protection provided under TIA ss. 312(c).
Section 1.8 EFFECT OF HEADINGS AND TABLE OF CONTENTS. The Article and
Section headings herein and the Table of Contents are for convenience only and
shall not affect the construction hereof.
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Section 1.9 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 1.10 SEVERABILITY CLAUSE. In case any provision in this Indenture
or in any Security 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 1.11 BENEFITS OF INDENTURE. Nothing in this Indenture or in the
Securities, express or implied, shall give to any Person, other than the parties
hereto, any Security Registrar, any Paying Agent, any Authenticating Agent and
their successors hereunder and the Holders any benefit or any legal or equitable
right remedy or claim under this Indenture.
Section 1.12 GOVERNING LAW. This Indenture and the Securities shall be
governed by and construed in accordance with the law of the State of Tennessee.
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 1.13 LEGAL HOLIDAYS. In any case where any Interest Payment Date,
Redemption Date, Repayment Date, sinking fund payment date, Stated Maturity or
Maturity of any Security shall not be a Business Day at any Place of Payment,
then (notwithstanding any other provision of this Indenture or any Security or
coupon other than a provision in the Securities of any series which specifically
states that such provision shall apply in lieu thereof), payment of interest or
any Additional Amounts or principal (and premium, if any) need not be made at
such Place of Payment on such date, but may be made on the next succeeding
Business Day at such Place of Payment with the same force and effect as if made
on the Interest Payment Date, Redemption Date, Repayment Date or sinking fund
payment date, or at the State Maturity or Maturity, PROVIDED that no interest
shall accrue on the amount so payable for the period from and after such
Interest Payment Date, Redemption Date, Repayment Date, sinking fund payment
date, Stated Maturity or Maturity, as the case may be.
ARTICLE II.
SECURITIES FORMS
Section 2.1 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 the forms (including any global form) as shall be
established by or pursuant to a Board Resolution in one or more indentures
supplemental hereto or approved from time to time by or pursuant to a Board
Resolution in accordance with Section 3.1, shall have such appropriate
insertions, omissions, substitutions and other variations as are required or
permitted by this Indenture or any indenture supplemental hereto (including such
other provisions as are necessary to reflect the global form of any Security,
and the designation of a Depositary for such Security), 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
Security may be listed, or to conform to usage.
Unless otherwise specified as contemplated by Section 3.1, Bearer
Securities shall have interest coupons attached.
The definitive Securities and coupons shall be printed, lithographed or
engraved or produced by any combination of these methods on a steel engraved
border or steel engraved borders or may be produced in any other manner, as
determined by the officers executing such Securities or coupons, as evidenced by
their execution of such Securities or coupons.
Section 2.2 FORM OF TRUSTEE'S CERTIFICATE OF AUTHENTICATION. Subject to
Section 6.11, the Trustee's certificate of authentication shall be in
substantially the following form:
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This is one of the Securities of the series designated herein referred to
in the within-mentioned Indenture.
[Name of Trustee],
as Trustee
By:_______________________
Authorized Signatory
Section 2.3 SECURITIES ISSUABLE IN GLOBAL FORM. If Securities of or within
a series are issuable in global form, as specified as contemplated by Section
3.1, then, notwithstanding the provisions of Sections 3.1 and 3.2, any such
Security shall represent such of the Outstanding Securities of such series as
shall be specified therein and may provide that it shall represent the aggregate
principal amount of Outstanding Securities of such series from time to time
endorsed thereon and that the aggregate principal amount of Outstanding
Securities of such series represented thereby may from time to time be increased
or decreased to reflect exchanges. The Securities in global form may be
permanent or temporary. Any endorsement of a Security in global form to reflect
the principal amount, or any increase or decrease in the amount of Outstanding
Securities represented thereby shall be made by the Trustee in such manner and
upon instructions given by such Person or Persons as shall be specified therein
or in the Company Order to be delivered to the Trustee pursuant to Section 3.3
or 3.4. Subject to the provisions of Section 3.3 and, if applicable, Section
3.4, the Trustee shall deliver and redeliver any Security in permanent global
form in the manner and upon instructions given by the Person or Persons
specified therein or in the applicable Company Order. If a Company Order
pursuant to Section 3.3 or 3.4 has been, or simultaneously is, delivered, any
instructions by the Company with respect to endorsement or delivery or
redelivery of a Security in global form shall be in writing but need not comply
with Section 1.2 and need not be accompanied by an Opinion of Counsel.
The provisions of the last sentence of Section 3.3 shall apply to any
Security represented by a Security in global form if such Security was never
issued and sold by the Company and the Company delivers to the Trustee the
Security in global form together with written instructions (which need not
comply with Section 1.2 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 3.3.
Notwithstanding the provisions of this Indenture, unless otherwise
specified as contemplated by Section 3.1, payment of principal of and any
premium, if any, and interest on any Security in permanent global form shall be
made to the Person or Persons specified therein.
Notwithstanding the provisions of Section 3.8 and except as provided in
the preceding paragraph, the Company, the Trustee and any agent of the Company
and the Trustee shall treat a Person as the Holder of such principal amount of
Outstanding Securities represented by a permanent global Security as shall be
specified in a written statement of the Depositary with respect to such
permanent global Security, only for purposes of obtaining any consents or
directions required to be given by the Holders pursuant to this Indenture.
Unless otherwise provided as contemplated by Section 3.1 with respect to
any series of Securities, any global Security shall provide, in addition to the
provisions established pursuant to Sections 2.1 and 3.1 and set forth in the
preceding paragraphs, that the Depositary will not sell, assign, transfer or
otherwise convey any beneficial interest in such global Security unless such
beneficial interest is in an amount equal to an authorized denomination for
Securities of such series, and that the Depositary, by accepting such global
Security, agrees to be bound by such provision. Any global Security shall also
contain such other provisions as are necessary to reflect the global form of
such Security and the designation of a Depositary for such global Security.
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ARTICLE III.
THE SECURITIES
Section 3.1 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 3.3, set forth, or
determined in the manner provided, in an Officers' Certificate, or established
in one or more indentures supplemental hereto, prior to the issuance of
Securities of any series, any or all of the following, as applicable (each of
which (except for the matters set forth in clauses (1), (2) and (15) below, if
so provided, may be determined from time to time by the Company with respect to
unissued Securities of the series when issued from time to time):
(a) the title of the Securities of the Series (which shall distinguish the
Securities of such series from all other series of Securities);
(b) any limit upon the aggregate principal amount of the Securities of the
series that may be authenticated and delivered under this Indenture (except for
Securities authenticated and delivered upon registration of transfer of, or in
exchange for, or in lieu of, other Securities of the series pursuant to Section
3.4, 3.5, 3.6, 9.6, 11.7 or 13.5);
(c) 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;
(d) the rate or rates at which the Securities of the series shall bear
interest, if any, or the method by which such rate or rates shall be determined,
the date or dates from which such interest shall accrue or the method by which
such date or dates shall be determined, the Interest Payment Dates on which such
interest will be payable and the Regular Record Date, if any, for the interest
payable on any Registered Security on any Interest Payment Date, or the method
by which such date shall be determined, and the basis upon which interest shall
be calculated if other than that of a 360-day year of twelve 30-day months;
(e) the place or places, if any, other than or in addition Memphis,
Tennessee, 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 and the method of such payment;
(f) 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;
(g) the obligation, if any, of the Company to redeem, repay or purchase
Securities of the series pursuant to any sinking fund or analogous provisions 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;
(h) if other than denominations of $1,000 and any integral multiple
thereof, the denominations in which any Securities of the series shall be
issuable;
(i) the identity of the Trustee for the Securities of the series and, if
other than the Trustee, the identity of each Security Registrar and/or Paying
Agent for the Securities of the series;
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(j) 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 5.2 or,
if applicable, the portion of the principal amount of Securities of the series
that is convertible in accordance with the provisions of this Indenture, or the
method by which such portion shall be determined;
(k) if other than Dollars, the Foreign Currency or Currencies in which
payment of the principal of (and premium, if any) or interest or Additional
Amounts, if any, on the Securities of the series shall be payable or in which
the Securities of the series shall be denominated;
(l) whether the amount of payments of principal of (and premium, if any),
or interest, if any, on the Securities of the series may be determined with
reference to an index, formula or other method (which index, formula or method
may be based, without limitation, on one or more currencies, currency units,
composite currencies, commodities, equity indices or other indices), and the
manner in which such amounts shall be determined;
(m) 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 (including the Election Date), and the terms and conditions
upon which, such election may be made, and the time and manner of, and identity
of the exchange rate agent with responsibility for, determining the exchange
rate between the currency or currencies, currency unit or units or composite
currency or currencies in which such Securities are denominated or stated to be
payable and the currency or currencies, currency unit or units or composite
currency or currencies in which such Securities are to be so payable;
(n) provisions, if any, granting special rights to the Holders of
Securities of the series upon the concurrence of such events as may be
specified;
(o) any deletions from, modification 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;
(p) whether Securities of the series are to be issuable as Registered
Securities, Bearer Securities (with or without coupons) or both, any
restrictions applicable to the offer, sale or delivery of Bearer Securities and
the terms upon which Bearer Securities of the series may be exchanged for
Registered Securities of the series and vice versa (if permitted by applicable
laws and regulations). Whether any Securities of the series are to be issuable
initially in temporary global form and whether any Securities of the series are
to be issuable in permanent global form with or without coupons and, if so,
whether beneficial owners of interests in any such permanent global Security may
exchange such interests for Securities of such series and of like tenor of any
authorized form and denomination and circumstances under which any such
exchanges may occur, if other than in the manner provided in Section 3.5, and,
if Registered Securities of the series are to be issuable as a global Security,
the identity of the depositary for such series;
(q) 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;
(r) 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
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on a temporary global Security or an Interest Payment Date will be paid if other
than in the manner provided in Section 3.4;
(s) the applicability, if any, of Sections 14.2 and/or 14.3 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 14;
(t) 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;
(u) 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;
(v) whether and under what circumstances the Company will pay Additional
Amounts as contemplated by Section 10.12 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);
(w) the obligation, if any, of the Company to permit the conversion of the
Securities of such series into 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 preservation of such shares for purposes of
conversion;
(x) the ranking of such Securities; and
(y) 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 as to
denomination, currency, the rate or rates of interest, if any, and the Maturity
and except as may otherwise be provided in or pursuant to such Board Resolution
(subject to Section 3.3) and set forth in such Officers' Certificate or in any
such indenture supplemental hereto. All Securities of any one series need not be
issued at the same time and, unless otherwise provided, a series may be
reopened, without the consent of the Holders for issuances of additional
Securities of such series.
If any of the terms of the Securities of any series are established by
action taken pursuant to one or more Board Resolutions, a copy of an appropriate
record of such action(s) shall be certified by the Secretary or an Assistant
Secretary of the Company and delivered to the Trustee at or prior to the
delivery of the Officers' Certificate setting forth the terms of the Securities
of such series.
Section 3.2 DENOMINATIONS. The Securities of each series shall be issuable
as Bearer Securities, as Registered Securities or in any combination thereof,
and in such denominations and amounts as shall be specified as contemplated by
Section 3.1. 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 Securities issued in global form
(which may be of any denomination), shall be issuable in denominations of $1,000
and any integral multiple thereof.
Section 3.3 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 of Trust Managers, its President or one of its Vice
Presidents, under its corporate seal reproduced thereon, and attested by its
Secretary or one of its
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Assistant Secretaries. The signature of any or all of these officers or 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 Trustee for
authentication, together with a Company Order for the authentication and
delivery of such Securities, and the Trustee in accordance with the Company
Order shall authenticate and deliver such Securities. Such Company Order may
provide that Securities which are the subject thereof will be authenticated and
delivered by the Trustee upon the order of Persons designated in said Company
Order communicated to the Trustee in writing or by telephone or other means set
forth in such Company Order and that such Persons are authorized to determine
such terms and conditions of said Securities as are specified in the Company
Order.
If all the Securities of any series are not to be issued at one time and
if the Board Resolution or supplemental Indenture establishing such series shall
so permit, such Company Order may set forth procedures acceptable to the Trustee
for the issuance of such Securities and determining the terms of particular
Securities of such series, such as interest rate or formula, maturity date, date
of issuance and the date from which interest shall accrue. In authenticating
such Securities, and accepting the additional responsibilities under this
Indenture in relation to such Securities, the Trustee shall be entitled to
receive and (subject to TIA Section 315(a) through 315(d)) shall be fully
protected in relying upon,
(i) an Opinion of Counsel stating that
(A) the form or forms of such Securities and any coupons have
been established in conformity with the provisions of this
Indenture;
(B) the terms of such Securities and any coupons have been
established in conformity with the provisions of this Indenture; and
(C) such Securities, together with any coupons appertaining
thereto, when completed by appropriate insertions and executed and
delivered by the Company to the Trustee for authentication in
accordance with this Indenture, authenticated and delivered by the
Trustee in accordance with this Indenture and issued by the Company
in the manner and subject to any conditions specified in such
Opinion of Counsel, will constitute legal, valid and binding
obligations of the Company, enforceable in accordance with their
terms, subject to applicable bankruptcy, insolvency, reorganization
and other similar laws of general applicability relating to or
affecting the enforcement of creditors' rights generally and to
general equitable principals; and
(ii) an Officers' Certificate stating that all conditions precedent
provided for in this Indenture relating to the issuance of the Securities
have been complied with and that, to the best of the knowledge of the
signers of such certificate, that no Event of Default with respect to any
of the Securities shall have occurred and be continuing.
If such form or terms have been so established, the Trustee shall not be
required to authenticate such Securities if the issue of such Securities
pursuant to this Indenture will affect the Trustee's own rights, duties,
obligations or immunities under the Securities and this Indenture or otherwise
in a manner which is not reasonably acceptable to the Trustee.
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Notwithstanding the provisions of Section 3.1 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 Sections 3.1 or a Company Order, or an Opinion of Counsel or an
Officers' Certificate otherwise required pursuant to the preceding paragraph at
the time of issuance of each Security of such series, but such order, opinion
and certificates, with appropriate modifications to cover such future issuances,
shall be delivered at or before the time of issuance of the first Security of
such series.
Each Registered Security shall be dated the date of its authentication and
each Bearer Security shall be dated as of the date specified as contemplated by
Section 3.1.
No Security or coupon shall be entitled to any benefit under this
Indenture or be valid or obligatory for any purpose unless there appears on such
Security or Security to which such coupon appertains a certificate of
authentication substantially in the form provided for herein duly executed by
the Trustee by manual signature of an authorized officer, and such certificate
upon any Security shall be conclusive evidence, and the only evidence, that such
Security has been duly authenticated and delivered hereunder and is entitled to
the benefits of this Indenture. Notwithstanding the foregoing, if any Security
shall have been authenticated and delivered hereunder but never issued and sold
by the Company, and the Company shall deliver such Security to the Trustee for
cancellation as provided in Section 3.9 together with a written statement (which
need not comply with Section 1.2 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 3.4 TEMPORARY SECURITIES. Pending the preparation of definitive
Securities of any series, the Company may execute, and upon Company Order the
Trustee shall authenticate and deliver, temporary Securities which are printed,
lithographed, typewritten, mimeographed or otherwise produced, in any authorized
denomination, substantially of the tenor of the definitive Securities in lieu of
which they are issued, in registered form, or if authorized, in bearer form with
one or more coupons or without coupons, and with such appropriate insertions,
omissions, substitutions and other variations as the officers executing such
Securities may determine, as conclusively evidenced by their execution of such
Securities. In the case of Securities of any series, such temporary Securities
may be in global form. Except in the case of temporary Securities in global
form, if temporary Securities of any series are issued, the Company will cause
definitive Securities of that series to be prepared without unreasonable delay.
After the preparation of definitive Securities of such series the temporary
Securities of such services shall be exchangeable for definitive Securities of
such series upon surrender of the temporary Securities of such series at the
office or agency of the Company in a Place of Payment for that series, without
charge to the Holder. Upon surrender for cancellation of any one or more
temporary Securities of any series, the Company shall execute and the Trustee
shall authenticate and deliver in exchange therefor a like principal amount of
definitive Securities of the same series of authorized denominations. 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.
Section 3.5 REGISTRATION, REGISTRATION OF TRANSFER AND EXCHANGE. The
Company shall cause to be kept at the Corporate Trust Office of the Trustee, or
in any office or agency of the Company in a Place of Payment a register for each
series of Securities (the registers maintained in such office or in any such
office or agency of the Company in a Place of Payment, it being herein sometimes
referred to collectively as the "Security Register") in which subject to such
reasonable regulations as it may prescribe, the Company shall provide for the
registration of Registered Securities and of transfers of Registered Securities.
The Security Register shall be in written form or any other form capable of
being converted into written form within a reasonable time. The Trustee, at its
Corporate Trust Office, is hereby initially appointed "Security Registrar" for
the purpose of registering Registered Securities and transfers of Registered
Securities on such Security Register as herein provided. In the event that the
Trustee shall cease to be Security Registrar, it shall have the right to examine
the Security Register at all reasonable times.
Subject to the provisions of this Section 3.5, 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
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shall execute, and the Trustee shall authenticate and deliver, in the name of
the designated transferee or transferees, one or more new Registered Securities
of the same series, of any authorized denominations and of a like aggregate
principal amount, bearing a number not contemporaneously outstanding, and
containing identical terms and provisions.
Subject to the provisions of this Section 3.5, at the option of the
Holder, Registered Securities of any series may be exchanged for other
Registered Securities of the same series, of any authorized denomination or
denominations and of a like aggregate principal amount, containing identical
terms and provisions, upon surrender of the Registered Securities to be
exchanged at any such office or agency. Whenever any such Securities are so
surrendered for exchange, the Company shall execute, and the Trustee shall
authenticate and deliver the Registered Securities which the Holder making the
exchange is entitled to receive. Unless otherwise specified with respect to any
series of Securities as contemplated by Section 3.1, 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 3.3) set forth in the applicable Officers' Certificate, or in any
indenture supplemental hereto, delivered as contemplated by Section 3.1, at the
option of the Holder, Bearer Securities of any series may be exchanged for
Registered Securities of the same series of any authorized denominations and of
a like aggregate principal amount and tenor, upon surrender of the Bearer
Securities to be exchanged at any such office or agency, with all unmatured
coupons and all matured coupons in default thereto appertaining. If the Holder
of a Bearer Security is unable to produce any such unmatured coupon or coupons
or matured coupon or coupons in default, any such permitted exchange may be
effected if the Bearer Securities are accompanied by payment in funds acceptable
to the Company in an amount equal to the face amount of such missing coupon or
coupons, or the surrender of such missing coupon or coupons may be waived by the
Company and the Trustee if there is furnished to them such security or indemnity
as they may required to save each of them and any paying Agent harmless. If
thereafter the Holder of such Security shall surrender to any Paying Agent any
such missing coupon in respect of which such a payment shall have been made,
such Holder shall be entitled to receive the amount of payment: PROVIDED,
HOWEVER, that, except as otherwise provided in Section 10.2, interest
represented by coupons shall be payable only upon presentation and surrender of
those coupons at an office of 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 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 Default
Interest, such Bearer Security shall be surrendered without the coupon relating
to such Interest Payment Date or proposed date for payment, as the case may be,
and interest or Defaulted Interest, as the case may be, will not be payable on
such interest Payment Date or proposed date for payment, as the case may be, in
respect of the Registered Security issued in exchange for such Bearer Security,
but will be payable only to the Holder of such coupon when due in accordance
with the provisions of this Indenture. Whenever any Securities are so
surrendered for exchange, the Company shall execute, and the Trustee shall
authenticate and deliver, the Securities which the Holder making the exchange is
entitled to receive.
Notwithstanding the foregoing, except as otherwise specified as
contemplated by Section 3.1, any permanent global Security shall be exchangeable
only as provided in this paragraph. If any beneficial owner of an interest in a
global Security is otherwise entitled to exchange such interest for Securities
of such series, and of like tenor and principal amount of another authorized
form and denomination, as specified as contemplated by Section 3.1 and provided
that any applicable notice provided in the permanent global Security shall have
been given, then without unnecessary delay but in any event not later than the
earliest date on which such interest may be so exchanged, the Company shall
execute, and the Trustee shall authenticate and deliver definitive Securities in
aggregate principal amount equal to the principal amount of such beneficial
owner's interest in such permanent global Security. On or after the earliest
date on which such interests may be so exchanged, such permanent global Security
shall be surrendered for exchange by the Depositary as shall be specified in the
Company Order with respect thereto to the Trustee, as the Company's agent for
such purpose: PROVIDED, HOWEVER, that no such exchanges may occur during a
period beginning at the opening of business 15 days before any selection of
Securities to be
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redeemed and ending on the relevant Redemption Date if the Security for which
exchange is requested may be among those selected for redemption. 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 Default Interest,
as the case may be, will not be payable on such Interest Payment Date or
proposed date for payment, as the case may be, in respect of such Registered
Security, but will be payable on such Interest Payment Date or proposed date for
payment, as the case may be, only to the Person to whom interest in respect of
such portion of such permanent global Security is payable in accordance with the
provisions of this Indenture.
All Securities issued upon any registration of transfer or exchange of
Securities shall be the valid obligations of the Company, evidencing the same
debt, and entitled to the same benefits under this Indenture, as the Securities
surrendered upon such registration of transfer or exchange.
Every Registered Security presented or surrendered for registration of
transfer or for exchange or redemption shall (if so required by the Company or
the Security Registrar) be duly endorsed, or be accompanied by a written
instrument of transfer in form satisfactory to the Company and the Security
Registrar, duly executed by the Holder thereof or his attorney duly authorized
in writing.
No service charge shall be made for any registration of transfer or
exchange of Securities, but the Company may require payment of a sum sufficient
to cover any tax or other governmental charge that may be imposed in connection
with any registration or transfer or exchange of Securities, other than
exchanges pursuant to Section 3.4, 4.6, 11.7 or 13.5 not involving any transfer.
The Company or the Trustee, as applicable, shall not be required (i) to
issue, register the transfer of or exchange any Security if such Security may be
among those selected for redemption during a period beginning at the opening of
business 15 days before selection of the Securities to be redeemed under Section
11.3 and ending at the close of business on (A) if such Securities are issuable
only as Registered Securities, the day of the mailing of the relevant notice of
redemption and (B) if such Securities are issuable as Bearer Securities, the day
of the first publication of the relevant notice of redemption or, if such
Securities are also issuable as Registered Securities and there is no
publication, the mailing of the relevant notice of redemption, or (ii) to
register the transfer of or exchange any Registered Security so selected for
redemption in whole or in part, except, in the case of any Registered Security
to be redeemed in part, the portion thereof not to be redeemed, or (iii) to
exchange any Bearer Security so selected for redemption except that such a
Bearer Security may be exchanged for a Registered Security of that series and
like tenor, PROVIDED that such Registered Security shall be simultaneously
surrendered for redemption, or (iv) to issue, register the transfer of, or
exchange any Security which has been surrendered for repayment at the option of
the Holder, except the portion, if any, of such Security not to be so repaid.
Section 3.6 MUTILATED, DESTROYED, LOST AND STOLEN SECURITIES. If any
mutilated Security or a Security with a mutilated coupon appertaining to it is
surrendered to the Trustee of the Company, together with, in proper cases, such
security or indemnity as may be required by the Company or the Trustee to save
each of them or any agent of either of them harmless, the Company shall execute
and the Trustee shall authenticate and deliver in exchange therefor a new
Security of the same series and principal amount, containing identical terms and
provisions and bearing a number not contemporaneously outstanding, with coupons
corresponding to the coupon, if any, appertaining to the surrendered Security.
If there shall be delivered to the Company and to the Trustee (i) evidence
to their satisfaction of the destruction, loss or theft of any Security or
coupon, and (ii) such security or indemnity as may be required by them to save
each of them and any agent of either of them harmless, then, in the absence of
notice to the Company or the Trustee that such Security or coupon has been
acquired by a bona fide purchaser, the Company shall executed and upon exchange
for the Security to which a destroyed, lost or stolen coupon appertains (with
all appurtenant,
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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 or 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 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, unless otherwise specified as contemplated by Section 3.1, any
interest on Bearer Securities shall be payable only upon presentation and
surrender of the coupons appertaining thereto.
Upon the issuance of any new Security under this Section, the Company may
require the payment of a sum sufficient to cover any tax or other governmental
charge that may be imposed in relation thereto and any other expenses, including
the fees and expenses of the Trustee connected therewith.
Every new Security of any series with its coupons, if any, issued pursuant
to this Section in lieu of any destroyed, lost or stolen Security, or in
exchange for a Security to which a destroyed, lost or stolen coupon appertains,
shall constitute an original additional contractual obligation of the Company,
whether or not the destroyed, lost or stolen Security and its coupons, if any,
or the destroyed, lost or stolen coupon, shall be at any time enforceable by
anyone, and shall be entitled to all the benefits of this Indenture equally and
proportionately with any and all other Securities of that series and their
coupons, if any, duly issued hereunder.
The provisions of this Section are exclusive and shall preclude (to the
extent lawful) all other rights and remedies with respect to the replacement or
payment of mutilated, destroyed, lost or stolen Securities or coupons.
Section 3.7 PAYMENT OF INTEREST; INTEREST RIGHTS PRESERVED. Except as
otherwise specified with respect to a series of Securities in accordance with
the provisions of Section 3.1, 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 the Registered 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 10.2, unless interest is payable
at Maturity, in which case interest shall be paid to the Person entitled to
receive payment of the principal of such Registered Security at Maturity;
PROVIDED HOWEVER, that each installment of interest on any Registered Security
may at the Company's option be paid by mailing a check for such interest,
payable to or upon the written order of the Person entitled thereto pursuant to
Section 3.8, to the address of such Person as it appears on the Security.
In case a Bearer Security of any series is surrendered in exchange for a
Registered Security of such series after the close of business (at an office or
agency) in a Place of Payment for such series) on any Regular Record Date and
before the opening of business (at such office or agency) on the next succeeding
Interest Payment Date, such Bearer Security shall be surrendered without the
coupon relating to such Interest Payment Date and interest will not be payable
on such Interest Payment Date in respect of the Registered Security issued in
exchange for such Bearer Security, but will be payable only to the Holder of
such coupon when due in accordance with the provisions of this Indenture.
Except as otherwise specified with respect to a series of Securities in
accordance with the provisions of Section 3.1, 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 (therein 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 (a) or (b) below.
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(a) The Company may elect to make payment of any Defaulted Interest to the
Persons in whose names the Registered Securities of such series (or their
respective Predecessor Securities) are registered at the close of business on a
Special Record Date for the payment of such Defaulted Interest, which shall be
fixed in the following manner. The Company shall notify the Trustee in writing
of the amount of Defaulted Interest proposed to be paid on each Registered
Security of such series and the date of the proposed payment (which shall not be
less than 20 days after such notice is received by the Trustee), and at the same
time the Company shall deposit with the Trustee an amount of money in the
currency or currencies, currency unit or units or composite currency or
currencies in which the Securities of such series are payable (except as
otherwise specified pursuant to Section 3.1 for the Securities of such series)
equal to the aggregate amount proposed to be paid in respect of such Defaulted
Interest or shall make arrangements satisfactory to the Trustee for such deposit
on or prior to the date of the proposed payment, such money when deposited to be
held in trust for the benefit of the Persons entitled to such Defaulted Interest
as in this clause provided. Thereupon the Trustee shall fix a Special Record
Date for the payment of such Defaulted Interest which shall be not more than 15
days and not less than 10 days prior to the date of the proposed payment and not
less than 10 days after the receipt by the Trustee of the notice of the proposed
payment. The Trustee shall promptly notify the Company of such Special Record
Date and, in the name and at the expense of the Company, shall cause notice of
the proposed payment of such Defaulted Interest and the Special Record Date
therefor to be mailed, first-class postage prepaid, to each Holder of Registered
Securities of such series at his address as it appears in the Security Register
not less than 10 days prior to such Special Record Date. The Trustee may, in its
discretion, in the name and at the expense of the Company, cause a similar
notice to be published at least once in an Authorized Newspaper in each place of
payment, but such publications shall not be a condition precedent to the
establishment of such Special Record Date. Notice of the proposed payment of
such Defaulted Interest and the Special Record Date therefor having been mailed
as aforesaid, such Defaulted Interest shall be paid to the Persons in whose
names the Registered Securities of such series (or their respective Predecessor
Securities are registered at the close of business on such Special Record Date
and shall no longer be payable 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.
(b) The Company may make payment of any Defaulted Interest on the
Registered Securities of any series in any other lawful manner not inconsistent
with the requirements of any securities exchange on which such Securities may be
listed, and upon such notice as may be required by such exchange, if, after
notice given by the Company to the Trustee of the proposed payment pursuant to
this clause, such manner of payment shall be deemed practicable by the Trustee.
Subject to the foregoing provisions of this Section and Section 3.5, each
Security delivered under this Indenture upon registration of transfer 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 3.8 PERSONS DEEMED OWNERS. Prior to due presentment of a
Registered Security for registration of transfer, the Company, the Trustee and
any agent of the Company or the Trustee may treat the Person in whose name such
Registered Security is registered as the owner of such Security for the purpose
of receiving payment of principal of (and premium, if any) and (subject to
Sections 3.5 and 3.7) interest on, such Registered Security and for all other
purposes whatsoever, whether or not such Registered Security be overdue, and
neither the Company, the Trustee nor any agent of the Company or the Trustee
shall be affected by notice to the contrary.
Title to any Bearer Security and any coupons appertaining thereto shall
pass by delivery. The Company, the Trustee and any agent of the Company or the
Trustee may treat the Holder of any Bearer Security and the Holder of any coupon
as the absolute owner of such Security or coupon for the purpose of receiving
payment thereof or on account thereof and for all other purposes whatsoever,
whether or not such Security or coupon be
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overdue, and neither the Company, the Trustee nor any agent of the Company or
the Trustee shall be affected by notice to the contrary.
None of the Company, the Trustee, any Paying Agent or the Security
Registrar will have any responsibility or liability for any aspect of the
records relating to or payments made on account of beneficial ownership
interests of a Security in global form or for maintaining, supervising or
reviewing any records relating to such beneficial ownership interests.
Notwithstanding the foregoing, with respect to any global Security,
nothing herein shall prevent the Company, the Trustee, or any agent of the
Company or the Trustee from giving effect to any written certification proxy or
other authorization furnished by any Depositary or impair, as between such
Depositary as a Holder, with respect to such global Security and owners of
beneficial interests in such global Security, the operation of customary
practices governing the exercise of the rights of such Depositary (or its
nominee) as Holder of such global Security.
Section 3.9 CANCELLATION. All Securities and coupons surrendered for
payment, redemption, repayment at the option of the Holder, registration of
transfer or exchange or for credit against any sinking fund payment shall, if
surrendered to any Person other than the Trustee, be delivered to the Trustee,
and any such Securities and coupons surrendered directly to the Trustee for any
such purpose shall be promptly cancelled by it. The Company may at any time
deliver to the Trustee for cancellation any Securities previously authenticated
and delivered hereunder which the Company may have acquired in any manner
whatsoever, and may deliver to the Trustee (or to any other person for delivery
to the Trustee) for cancellation any Securities previously authenticated
hereunder which the Company has not issued and sold, and all Securities so
delivered shall be promptly cancelled by the Trustee. If the Company shall so
acquire any of the Securities, however, such acquisition shall not operate as a
redemption or satisfaction of the indebtedness represented by such Securities
unless and until the same are surrendered to the Trustee for cancellation. No
Securities shall be authenticated in lieu of or in exchange for any Securities
canceled as provided in this Section, except as expressly permitted by this
Indenture. Cancelled Securities and coupons held by the Trustee shall be
destroyed by the Trustee and the Trustee shall deliver a certificate of such
destruction to the Company, unless by a Company Order the Company directs their
return to it.
Section 3.10 COMPUTATION OF INTEREST. Except as otherwise specified as
contemplated by Section 3.1 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 4.1 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, conversion or exchange of Securities of such series
herein expressly provided for and any right to receive Additional Amounts, as
provided in Section 10.12), and the Trustee, upon receipt of a Company Order,
and at the expense of the Company, shall execute proper instruments
acknowledging satisfaction and discharge of this Indenture as to such series
when
(a) either
(i) all Securities of such series theretofore authenticated and
delivered and all coupons, if any, appertaining thereto (other than (1)
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 3.5, (2) Securities
and coupons of such series which have been destroyed, lost or stolen and
which have been replaced or paid as provided in Section 3.6, (3) coupons
appertaining to Bearer Securities called for redemption and maturing after
the relevant Redemption Date, whose surrender has been waived as provided
in Section 11.6, and (4) Securities and coupons of such series for whose
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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 10.3) have been
delivered to the Trustee for cancellation; or
(ii) all Securities of such series and, in the case of (1) or (2)
below, any coupons appertaining thereto not theretofore delivered to the
Trustee for cancellation,
(A) have become due and payable, or
(B) will become due and payable at their Stated Maturity
within one year, or
(C) if redeemable at the option of the Company, are to be
called for redemption within one year under arrangements
satisfactory to the Trustee for the giving of notice of redemption
by the Trustee in the name, and at the expense, of the Company
and the Company, in the case of (1), (2) or (3) above, has irrevocably
deposited or caused to be deposited with the Trustee as trust funds in
trust for the purpose an amount in the currency or currencies, currency
unit or units or composite currency or currencies in which the Securities
of such series are payable, sufficient to pay and discharge the entire
indebtedness on such Securities and such coupons not theretofore delivered
to the Trustee for cancellation, for principal (and premium, if any) and
interest, and any Additional Amounts with respect thereto to the date of
such deposit (in the case of Securities which may have become due and
payable) or to the Stated Maturity or Redemption Date, as the case may be;
(b) the Company has paid or caused to be paid all other sums payable
hereunder by the Company; and
(c) the Company has delivered to the Trustee an Officers' Certificate and
an Opinion of Counsel, each stating that all conditions precedent herein
provided for relating to the satisfaction and discharge of this Indenture as to
such series have been complied with.
Notwithstanding the satisfaction and discharge of this Indenture, the
obligations of the Company to the Trustee and any predecessor Trustee under
Section 6.7, the obligation of the Company to any authenticating Agent under
Section 6.12, and, if money shall have been deposited with and held by the
Trustee pursuant to subclause (ii) of clause (a) of this Section, the
obligations of the Trustee under Section 4.2 and the last paragraph of Section
10.3 shall survive.
Section 4.2 APPLICATION OF TRUST FUNDS. Subject to the provision of the
last paragraph of Section 10.3, all money deposited with the Trustee pursuant to
Section 4.1 shall be held in trust and applied by it, in accordance with the
provisions of the Securities, the coupons and this Indenture, to the payment,
either directly or through any Paying Agent (including the Company acting as its
own Paying Agent) as the Trustee may determine, to the persons entitled thereto,
of the principal (and premium, if any), and any interest and Additional Amounts
for whose payment such money has been deposited with or received by the Trustee,
but such money need not be segregated from other funds except to the extent
required by law.
ARTICLE V.
REMEDIES
Section 5.1 EVENTS OF DEFAULT. "Events 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 of governmental body):
(a) default in the payment of any interest upon or any Additional Amounts
payable in respect of any
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Security of that series or of any coupon appertaining thereto, when such
interest or Additional Amounts or coupon becomes due and payable, and
continuance of such default for a period of 30 days; or
(b) 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
(c) default in the deposit of any sinking fund payment, when and as due by
the terms of any Security of that series; or
(d) 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 or which has been expressly
included in this Indenture solely for the benefit of a series of Securities
other than that series), and continuance of such default or breach for a period
of 60 days after there has been given, by registered or certified mail, to the
Company by the Trustee or to the Company and the Trustee by the Holders of at
least 25% in principal amount of the Outstanding Securities of that series a
written notice specifying such default or breach and requiring it to be remedied
and stating that such notice is a "Notice Of Default" hereunder; or
(e) a default under any bond, debenture, note or other evidence of
indebtedness of the Company, or under any mortgage, indenture or other
instrument of the Company (including a default with respect to Securities of any
series other than that series) under which there may be issued or by which there
may be secured any indebtedness of the Company, whether such indebtedness now
exists or shall hereafter be created, which default shall constitute a failure
to pay an aggregate principal amount exceeding $10,000,000 of such indebtedness
when due and payable after the expiration of any applicable grace period with
respect thereto and shall have resulted in such indebtedness in an aggregate
principal amount exceeding $10,000,000 becoming or being declared due and
payable prior to the date on which it would otherwise have become due and
payable, without such indebtedness having been discharged, or such acceleration
having been rescinded or annulled, within a period of 10 days after there shall
have been given by registered or certified mail, to the Company by the Trustee
or to the Company and the Trustee by the Holders of at least 25% in principal
amount of the Outstanding Securities of that series a written notice specifying
such default and requiring the Company to cause such indebtedness to be
discharged or cause such acceleration to be rescinded or annulled and stating
that such notice is a "Notice of Default" hereunder, or
(f) the Company pursuant to or within the meaning of any Bankruptcy Law:
(i) commences a voluntary case,
(ii) consents to the entry of an order for relief against it in an
involuntary case,
(iii) consents to the appointment of a Custodian of it or for all or
substantially all of its property, or
(iv) makes a general assignment for the benefit of its creditors; or
(g) a court of competent jurisdiction enters an order or decree under any
Bankruptcy Law that:
(i) is for relief against the Company in an involuntary case,
(ii) appoints a Custodian of the Company or for all or substantially
all of its property, or
(iii) orders the liquidation of the Company.
and the order or decree remains unstayed and in effect for 90 days, or
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(h) any other Event of Default provided with respect to Securities of that
series.
As used in this Section 5.1, 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 5.2 ACCELERATION OF MATURITY; RESCISSION AND ANNULMENT. If an
Event of Default with respect to Securities of any series at the time
Outstanding occurs and is continuing, then and in every such case the Trustee or
the Holders of not less than 25% in principal amount of the Outstanding
Securities of that series may declare the principal (or, if any Securities are
Original Issue Discount Securities or Indexed Securities, such portion of the
principal as may be specified in the terms thereof) of all the Securities of
that series to be due and payable immediately, by a notice in writing to the
Company (and to the Trustee it given by the Holders), and upon any such
declaration such principal or specified portion thereof shall become immediately
due and payable.
At any time after such a declaration of acceleration with respect to
Securities of any series has been made and before a judgment or decree for
payment of the money due has been obtained by the Trustee as hereinafter in this
Article provided, the Holders of a majority in principal amount of the
Outstanding Securities of that series, by written notice to the Company and the
Trustee, may rescind and annul such declaration and its consequences if:
(a) the Company has paid or deposited with the Trustee a sum sufficient to
pay in the currency, currency unit or composite currency in which the Securities
of such series are payable (except as otherwise specified pursuant to Section
3.1 for the Securities of such series):
(i) all overdue installments of interest on and any Additional
Amounts payable in respect of all Outstanding Securities of that series
and any related coupons,
(ii) 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 rate borne
by or provided for in such Securities,
(iii) 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
(iv) all sums paid or advanced by the Trustee hereunder and the
reasonable compensation, expenses, disbursements and advances of the
Trustee, its agent's and counsel; and
(b) 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.
Upon receipt by the Trustee of any declaration of acceleration, or
rescission and annulment thereof, with respect to Securities of a series all or
part of which is represented by the global Security, the Trustee shall establish
a record date for determining Holders of Outstanding Securities of such series
entitled to join in such declaration of acceleration, or rescission and
annulment, as the case may be, which record date shall be at the close of
business on the day the Trustee receives such declaration of acceleration, or
rescission and annulment, as the case may be. The Holders on such record date,
or their duly designated proxies, and only such Persons, shall be entitled to
join in such declaration of acceleration, or rescission and annulment, as the
case may be, whether or not such Holders remain Holders after such record date;
PROVIDED, that unless such declaration of acceleration, or rescission and
annulment, as the case may be, shall have become effective by virtue of the
requisite percentage having been obtained prior to the date which is ninety (90)
days after such record date, such declaration of acceleration, rescission and
annulment,
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as the case may be, shall automatically without further action by any Holder be
canceled and of no further effect. Nothing in this paragraph shall prevent a
Holder, or a proxy of a Holder, from giving, after expiration of such ninety
(90) day period, a new declaration of acceleration, or rescission or annulment
thereof, as the case may be, that is identical to a declaration of acceleration,
or rescission or annulment thereof, which has been canceled pursuant to the
proviso to the preceding sentence, in which event a new record date shall be
established pursuant to the provisions of this Section 5.2.
Section 5.3 COLLECTION OF INDEBTEDNESS AND SUITS FOR ENFORCEMENT BY
TRUSTEE. The Company covenants that if:
(a) 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
(b) default is made in the payment of the principal of (or premium,
if any, on) any Security of the series at its Maturity or in the deposit
of any sinking fund payment, if any, when the same shall have become
payable,
then the Company will, upon demand of the Trustee, pay to the Trustee, for the
benefit of the Holders of such Securities of such series and coupons, the whole
amount then due and payable on such Securities and coupons for principal (and
premium, if any) and interest and Additional Amounts with interest upon any
overdue principal (and premium, if any) and, to the extent that payment of such
interest shall be legally enforceable, upon any overdue premium, if any) and, to
the extent that payment of such interest shall be legally enforceable, upon any
overdue installments of interest or Additional Amounts, if any, at the rate or
rates borne by or provided for in such Securities, and, in addition thereto,
such further amount as shall be sufficient to cover the costs and expenses of
collection, including the reasonable compensation, expenses, disbursements and
advances of the Trustee, its agents and counsel.
If the Company fails to pay such amounts forthwith upon such demand, the
Trustee, in its own name and as trustee of an express trust, may institute a
judicial proceeding for the collection of the sums so due and unpaid, and may
prosecute such proceeding to judgment or final decree, and may enforce the same
against the Company or any other obligor upon such Securities or such series and
collect the moneys adjudged or decreed to be payable in the manner provided by
law out of the property of the Company or any other obligor upon such Securities
of such series, wherever situated.
If an Event of Default with respect to Securities of any series occurs and
is continuing, the Trustee may in its discretion proceed to protect and enforce
its rights and the rights of the Holders of Securities of such series and any
related coupons by such appropriate judicial proceedings as the Trustee shall
deem most effectual to protect and enforce any such rights, whether for the
specific enforcement of any covenant or agreement in this Indenture or in and of
the exercise of any power granted herein, or to enforce any other property
remedy.
Section 5.4 TRUSTEE MAY FILE PROOFS OF CLAIM. In case of the pendency of
any receivership, insolvency, liquidation, bankruptcy, reorganization,
arrangement, adjustment, composition or other judicial proceeding relative to
the Company or any other obligor upon the Securities or the property of the
Company or of such other obligor or their creditors, the Trustee (irrespective
of whether the principal of the Securities of any series shall then be due and
payable as therein expressed or by declaration or otherwise and irrespective of
whether the Trustee shall have made any demand on the Company for the payment of
overdue principal, premium, if any, or interest) shall be entitled and
empowered, by intervention in such proceeding or otherwise:
(a) to file and prove a claim for the whole amount, or such lesser
amount or may be provided for in the Securities of such series, or
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
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necessary or advisable in order to have the claims of the Trustee
(including any claim for the reasonable compensation, expenses,
disbursements and advances of the Trustee, its agents and counsel) and of
the Holders allowed in such judicial proceeding, and
(b) 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 or other proceeding is hereby
authorized by each Holder of Securities of such series and coupons to make such
payments to the Trustee, and in the event that the Trustee shall consent to the
making of such payments directly to the Holders to pay to the Trustee any amount
due to it for the reasonable compensation, expenses, disbursements and advances
of the Trustee and any predecessor Trustee, their agents and counsel, and any
other amounts due the Trustee or any predecessor Trustee under Section 6.7.
Nothing herein contained shall be deemed to authorize the Trustee to
authorize or consent to or accept or adopt on behalf of any Holder of a Security
or coupon any plan of reorganization, arrangement, adjustment or compensation
affecting the Securities or the rights of any Holder thereof, or to authorize
the Trustee to vote in respect of the claim of any Holder or a Security or
coupon in any such proceeding.
Section 5.5 TRUSTEE MAY ENFORCE CLAIMS WITHOUT POSSESSION OF SECURITIES OR
COUPONS. All rights of action and claims under this Indenture or any of the
Securities or coupons may be prosecuted and enforced by the Trustee without the
possession of any of the Securities or coupons or the production thereof in any
proceeding relating thereto, and any such proceeding instituted by the Trustee
shall be brought in its own name as trustee of an express trust, and any
recovery of judgment shall, after provision for the payment of the reasonable
compensation, expenses, disbursements and advances of the Trustee, its agents
and counsel, be for the ratable benefit of the Holders of the Securities and
coupons in respect of which such judgment has been recovered.
Section 5.6 APPLICATION OF MONEY COLLECTED. Any money collected by the
Trustee pursuant to this Article shall be applied in the following order, at the
date or dates fixed by the Bank and, in case of the presentation of the
Securities or coupons, or both, as the case may be, and the notation thereon of
the payment if only partially paid and upon surrender thereof if fully paid:
FIRST: To the payment of all amounts due the Trustee and any predecessor
Trustee under Section 6.7;
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 or any
other Person or Persons entitled thereto.
Section 5.7 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:
(a) Holder has previously given written notice to the Trustee of a
continuing Event of Default with respect to the Securities of that series;
(b) the Holders of not less than 25% in principal amount of the
Outstanding Securities of that series shall have made written request to
the Trustee to institute proceedings in respect of such Event of
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Default in its own name as Trustee hereunder;
(c) such Holder or Holders have offered to the Trustee reasonable
indemnity against the costs, expenses and liabilities to be incurred in
compliance with such request;
(d) the Trustee for 60 days after its receipt of such notice,
request and offer of indemnity has failed to institute any such
proceeding; and
(e) no direction inconsistent with such written request has been
given to the Trustee during such 60-day period by the Holders of a
majority in principal amount of the Outstanding Securities of that series;
it being understood and intended that no one or more of such Holders shall have
any right in any manner whatever by virtue of, or by availing of, any provision
of this Indenture to affect, disturb or prejudice the rights of any other of
such Holders, or to obtain or to seek to obtain priority or preference over any
other of such Holders or to enforce any right under this Indenture, except, in
the manner herein provided and for the equal and ratable benefit of all such
Holders.
Section 5.8 UNCONDITIONAL RIGHT OF HOLDERS TO RECEIVE PRINCIPAL, PREMIUM,
IF ANY, AND INTEREST AND ADDITIONAL AMOUNTS. Notwithstanding any other provision
to this Indenture, the Holder of any Security or coupon shall have the right
which is absolute and unconditional to receive a payment of the principal of
(and premium, if any) and (subject to Sections 3.5 and 3.7) 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 5.9 RESTORATION OF RIGHTS AND REMEDIES. If the Trustee or any
Holder of a Security or coupon has instituted any proceeding to enforce any
right or remedy under this Indenture and such proceeding has been discontinued
or abandoned for any reason, or has been determined adversely to the Trustee or
to such Holder, then and in every such case the Company, the Trustee and the
Holders of Securities and coupons shall, subject to any determination in such
proceeding, be restored severally and respectively to their former positions
hereunder and thereafter all rights and remedies of the Trustee and the Holders
shall continue as though no such proceeding had been instituted.
Section 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 3.6, no right or
remedy herein conferred upon or reserved to the Trustee or to the Holders of
Securities or coupons is intended to be exclusive of any other right or remedy,
and every right and remedy shall, to the extent permitted by law, be cumulative
and in addition to every other right and remedy given hereunder or now or
hereafter existing at law or in equity or otherwise. The assertion or employment
of any right or remedy hereunder, or otherwise shall not prevent the concurrent
assertion or employment of any other appropriate right or remedy.
Section 5.11 DELAY OR OMISSION NOT WAIVER. No delay or omission of the
Trustee or of any Holder of any Security or coupon to exercise any right or
remedy accruing upon any Event of Default shall impair any such right or remedy
or constitute a waiver of any such Event of Default or an acquiescence therein.
Every right and remedy given by this Article or by law to the Trustee or to the
Holders may be exercised from time to time, and as often as may be deemed
expedient, by the Trustee or by the Holders of Securities or coupons, as the
case may be.
Section 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 Trustee or exercise any trust or
power conferred on the Trustee with respect to the Securities of such series,
PROVIDED that
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(a) such direction shall not be in conflict with any rule of law or with
this Indenture,
(b) the Trustee may take any other action deemed proper by the Trustee
which is not inconsistent with such direction, and
(c) the Trustee need not take any action which might involve it in
personal liability or be unduly prejudicial to the Holders of Securities of such
series not joining therein.
Section 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
(a) in the payment of the principal (or premium, if any) or interest on or
Additional Amounts payable in respect of any Security of such series or any
related coupons, or
(b) in respect of a covenant or provision hereof which under Article 9
cannot be modified or amended without the consent of the Holder of each
Outstanding Security of such series affected.
Upon any such waiver, such default shall cease to exist, and any Event of
Default arising therefrom shall be deemed to have been cured, for every purpose
of this Indenture; but no such waiver shall extend to any subsequent or other
default or Event of Default or impair any right consequent thereon.
Section 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 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 Trustee for any action taken or omitted by it as Trustee, the filing by any
party litigant in such suit of any undertaking to pay the costs of such suit,
and that such court may in its discretion assess reasonable costs, including
reasonable attorneys' fees, against any party litigant in such suit having due
regard to the merits and good faith of the claims or defenses made by such party
litigant; but the provisions of this Section shall not apply to any suit
instituted by the Trustee, to any suit instituted by any Holder, or group of
Holders, holding in the aggregate more than 10% in principal amount of the
Outstanding Securities, or to any suit instituted by any Holder for the
enforcement of the payment of the principal of (or premium, if any) or interest,
if any, 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 TRUSTEE
Section 6.1 CERTAIN DUTIES AND RESPONSIBILITIES. (a) Except during the
continuance of an Event of Default,
(i) the Trustee undertakes to perform such duties and only such
duties as are specifically set forth in this Indenture, and, to the extent
lawful, no implied covenants or obligations shall be read into this
Indenture against the Trustee; and
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(ii) in the absence of bad faith on its part, the Trustee may
conclusively rely, as to the truth of the statements and the correctness
of the opinions express therein, upon certificates or opinions furnished
to the Trustee and conforming to the requirements of this Indenture; but
in the case of any such certificates or opinions which by any provision
hereof are specifically required to be furnished to the Trustee, the
Trustee shall be under a duty to examine the same to determine whether or
not they conform to the requirements of this Indenture.
(b) In case an Event of Default has occurred and is continuing, the
Trustee shall exercise such of the rights and powers vested in it by this
Indenture, and use the same degree of care and skill in their exercise, as a
prudent man would exercise or use under the circumstances in the conduct of his
own affairs.
(c) No provision of this Indenture shall be construed to relieve the
Trustee from liability for its own negligent action, its own negligent failure
to act, or its own willful misconduct, EXCEPT that
(i) THIS Subsection shall not be construed to limit the effect of
Subsection (a) of this Section;
(ii) the Trustee shall not be liable for any error of judgment made
in good faith by a Responsible Officer, unless it shall be proved that the
Trustee was negligent in ascertaining the pertinent facts;
(iii) the Trustee shall not be liable with respect to any action
taken or omitted to be taken by it in good faith in accordance with the
direction of the Holders of a majority in principal amount of the
Outstanding Securities of any series relating to the time, method and
place of conducting any proceeding for any remedy available to the
Trustee, or exercising any trust or power conferred upon the Trustee, or
exercising any trust or power conferred upon the Trustee, under this
Indenture with respect to the Securities of that series; and
(iv) no provision of this Indenture shall require the Trustee to
expend or risk its own funds or otherwise incur any financial liability in
the performance of any of its duties hereunder, or in the exercise of any
of its rights or powers if it shall have reasonable grounds for believing
that repayment of such funds or adequate indemnity against such risk or
liability is not assured to it.
(d) Whether or not therein expressly so provided, every provision of this
Indenture relating to the conduct or affecting the liability of or affording
protection to the Trustee shall be subject to the provisions of this Section.
Section 6.2 NOTICE OF DEFAULTS. Within 90 days after the occurrence of any
default hereunder with respect to the Securities of any series, the Trustee
shall transmit in the manner specified under Section 1.6 to all Holders of
Securities of the series, notice of such default hereunder known to the Trustee,
unless such default shall have been cured or waived; PROVIDED, HOWEVER, that,
except in the case of a default in the payment of the principal of (or premium,
if any) or interest on or any Additional Amounts with respect to any Security of
such series, or in the payment of any sinking fund installment with respect to
the Securities of such series. The Trustee shall be protected in withholding
such notice if and so long as Responsible Officers of the Trustee in good faith
determine that the withholding of such notice is in the 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 5.1(d) 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 6.3 CERTAIN RIGHTS OF TRUSTEE. Subject to the provisions of TIA
Sections 315(a) through 315(d): -------------------------
(a) the Trustee may rely and shall be protected in acting or refraining
from acting upon any resolution, certificate, statement, instrument, opinion,
report, notice, request, direction, consent, order, bond, debenture, note,
coupon or other paper or document believed by it to be genuine and to have been
signed or presented by the proper
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party or parties;
(b) any request or direction of the Company mentioned herein shall be
sufficiently evidenced by a Company Request or Company Order (other than
delivery of any Security, together with any coupons appertaining thereto, to the
Trustee for authentication and delivery pursuant to Section 3.3 which shall be
sufficiently evidenced as provided therein) and any resolution of the Board of
Directors may be sufficiently evidenced as provided therein) and any resolution
of the Board of Directors may be sufficiently evidenced by a Board Resolution;
(c) whenever in the administration of this Indenture the Trustee shall
deem it desirable that a matter be proved or established prior to taking,
suffering or omitting any action hereunder, the Trustee (unless other evidence
be herein specifically prescribed) may, in the absence of bad faith on its part,
rely upon an Officers' Certificate;
(d) the Trustee may consult with counsel and the written advice of such
counsel or any Opinion of Counsel shall be full and complete authorization and
protection in respect of any action taken, suffered or omitted by it hereunder
in good faith and in reliance thereon;
(e) the Trustee shall be under no obligation to exercise any of the rights
or powers vested in it by this Indenture at the request or direction of any of
the Holders of Securities of any series or any related coupons pursuant to this
Indenture, unless such Holders shall have offered to the Trustee reasonable
security or indemnity against the costs, expenses and liabilities which might be
incurred by it in compliance with such request or direction;
(f) the Trustee shall not be bound to make any investigation into the
facts or matters stated in any resolution, certificate, statement, instrument,
opinion, report, notice, request, direction, consent, order, bond, debenture,
note, coupon or other paper or document, but the Trustee, in its discretion, may
make such further inquiry or investigation into such facts or matters as it may
see fit, and, if the Trustee shall determine to make such further inquiry or
investigation, it shall be entitled to examine the books, records and premises
of the Company, personally or by agent or attorney;
(g) the Trustee may execute any of the trusts or powers hereunder or
perform any duties hereunder either directly or by or through agents or
attorneys and the Trustee shall not be responsible for any misconduct or
negligence on the part of any agent or attorney appointed with due care by it
hereunder; and
(h) the Trustee shall not be liable for any action taken, suffered or
omitted by it in good faith and reasonably believed by it to be authorized or
within the discretion or rights or powers, if it shall have reasonable grounds
for believing that repayment of such funds or adequate indemnity against such
risk or liability is not reasonably assured to it.
Section 6.4 NOT RESPONSIBLE FOR RECITALS OR ISSUANCE OF SECURITIES. The
recitals contained in the Securities, except the Trustee's certificate of
authentication, shall be taken as the statements of the Company, and neither the
Trustee nor any Authenticating Agent assumes any responsibility for their
correctness. The Trustee makes no representations as to the validity or
sufficiency of this Indenture or of the Securities or coupons, except that the
Trustee represents that it is duly authorized to execute and deliver this
Indenture, authenticate the Securities and perform its obligations hereunder.
Neither the Trustee nor any Authenticating Agent shall be accountable for the
use or application by the Company of Securities or the proceeds thereof.
Section 6.5 MAY HOLD SECURITIES. The Trustee, any Paying Agent, Security
Registrar, Authenticating Agent or any other agent of the Company, in its
individual or any other capacity, may become the owner or pledgee of Securities
and coupons and, subject to TIA Sections 310(b) and 311, may otherwise deal with
the Company with the same rights it would have if it were not Trustee, Paying
Agent, Security Registrar, Authenticating Agent or such other agent.
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Section 6.6 MONEY HELD IN TRUST. Money held by the Trustee in trust
hereunder need not be segregated from other funds except to the extent required
by law. Such amounts shall be invested by the Trustee solely at the written
direction of the Company. The Trustee shall be under no liability for interest
on any money received by it hereunder except as otherwise agreed with the
Company.
Section 6.7 COMPENSATION, REIMBURSEMENT AND INDEMNITY. The Company agrees:
(a) to pay to the Trustee from time to time reasonable compensation for
all services rendered by it hereunder (which compensation shall not be limited
by any provision of law in regard to the compensation of a trustee of an express
trust);
(b) except as otherwise expressly provided herein, to reimburse each of
the Trustee and any predecessor Trustee upon its request for all reasonable
expenses, disbursements and advances incurred or made by the Trustee in
accordance with any provision of this Indenture (including the reasonable
compensation and the expenses and disbursements of its agents and counsel),
except any such expense, disbursement or advance as may be attributable to its
negligence or bad faith; and
(c) to indemnify each of the Trustee and any predecessor Trustee for, and
to hold it harmless against, any loss, liability or expense incurred without
negligence or bad faith on its own part, arising out of or in connection with
the acceptance or administration of the trust or trusts hereunder, including the
costs and expenses of defending itself against any claim or liability in
connection with the exercise or performance of any of its powers or duties
hereunder. When the Trustee incurs expenses or renders services in connection
with an Event of Default specified in Section 5.1(e) or Section 5.1(f), the
expenses (including the reasonable charges and expenses of its counsel) and the
compensation for the services are intended to constitute expenses of
administration under any applicable Federal or state bankruptcy, insolvency or
other similar law.
As security for the performance of the obligations of the Company under
this Section, the Trustee shall have a lien prior to the Securities upon all
property and funds held or collected by the Trustee as such, except funds held
in trust for the payment of principal of (or premium, if any) or interest on
particular Securities or any coupons.
The provisions of this Section shall survive the termination of this
Indenture.
Section 6.8 CORPORATE TRUSTEE REQUIRED; ELIGIBILITY; CONFLICTING
INTERESTS. There shall at all times be a Trustee hereunder which shall be
eligible to act as Trustee under TIA Section 310(a)(1) and (a)(5) and shall have
a combined capital and surplus of at least $100,000,000. If such corporation
publishes reports of condition at least annually, pursuant to law or the
requirements of Federal, State, Territorial or District of Columbia supervising
or examining authority, then for the purposes of this Section, the combined
capital and surplus of such corporation shall be deemed to be its combined
capital and surplus as set forth in its most recent report of condition so
published. If at any time the Trustee shall cease to be eligible in accordance
with the provisions of this Section, it shall resign immediately in the manner
and with the effect hereinafter specified in this Article.
The Trustee shall at all times be subject to the conflict of interest
provisions of TIA Section 310(b), including the optional provision of TIA
Section 310(b)(9), permitted by the second sentence thereof. Furthermore, the
conflict of interest provisions of TIA Section 310(b)(1) regarding conflicts
arising between different indentures shall also apply to any conflicts arising
between series of Securities issued under this Indenture.
Section 6.9 RESIGNATION AND REMOVAL; APPOINTMENT OF SUCCESSOR. (a) No
resignation or removal of the Trustee and no appointment of a successor Trustee
pursuant to this Article shall become effective until the acceptance of
appointment by the successor Trustee in accordance with the applicable
requirements of Section 6.10.
(b) The Trustee may resign at any time with respect to the Securities of
one or more series by giving written notice thereof to the Company. If an
instrument of acceptance by a successor Trustee shall not have been
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delivered to the Trustee within 30 days after the giving of such notice of
resignation, the resigning Trustee may petition any court of competent
jurisdiction for the appointment of successor Trustee.
(c) The Trustee may be removed at any time with respect to the Securities
of any series by Act of the Holders of a majority in principal amount of the
Outstanding Securities of such series delivered to the Trustee and to the
Company.
(d) If at any time:
(i) the Trustee shall fail to comply with the provisions of TIA
Section 310(b) after written request therefor by the Company or by any
Holder of a Security who has been a bona fide Holder of a Security for at
least six months, or
(ii) the Trustee shall cease to be eligible under Section 6.8 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
(iii) the Trustee shall become incapable of acting or shall be
adjudged a bankrupt or insolvent or a receiver of the Trustee or of its
property shall be appointed or any public officer shall take charge or
control of the Trustee or of its property or affairs for the purpose of
rehabilitation, conservation or liquidation,
then, in any such case, (1) the Company by or pursuant to a Board Resolution may
remove the Trustee and appoint a successor Trustee with respect to all
Securities, or (2) subject to TIA Section 315(e), any Holder of a Security who
has been a bona fide Holder of a Security for at least six months may, on behalf
of himself and all others similarly situated, petition any court of competent
jurisdiction for the removal of the Trustee with respect to all Securities and
the appointment of a successor Trustee or Trustees.
(e) If the Trustee shall resign, be removed or become incapable of acting,
or if a vacancy shall occur in the office of Trustee for any cause with respect
to the Securities of one or more series, the Company by or pursuant to a Board
Resolution, shall promptly appoint a successor Trustee or Trustees with respect
to the Securities of that or those series (it being understood that any such
successor Trustee may be appointed with respect to the Securities or more or all
of such series and that at any time there shall be only one Trustee with respect
to the Securities of any particular series). If, within one year after such
redesignation, removal or incapability, or the occurrence of such vacancy, a
successor Trustee with respect to the Securities of any series shall be
appointed by Act of the Holders of a majority in principal amount of the
Outstanding Securities of such series delivered to the Company and the retiring
Trustee, the successor Trustee so appointed shall, forthwith upon its acceptance
of such appointment become the successor Trustee with respect to the Securities
of such series and to that extent supersede the successor Trustee appointed by
the Company. If no successor Trustee with respect to the Securities of any
series shall have been so appointed by the Company or the Holders of Securities
and accepted appointment in the manner hereinafter provided, any Holder of a
Security who has been a bona fide Holder of a Security of such series for at
least six months may, on behalf of himself and all others similarly situated,
petition any court of competent jurisdiction for the appointment of a successor
Trustee with respect to Securities of such series.
(f) The Company shall give notice of each resignation and each removal of
the Trustee with respect to the Securities of any series and each appointment of
a successor Trustee with respect to the Securities of any series in the manner
provide for notices to the Holders of Securities in Section 1.6. Each notice
shall include the name of the successor Trustee with respect to the Securities
of such series and the address of its Corporate Trust Office.
Section 6.10 ACCEPTANCE OF APPOINTMENT BY SUCCESSOR. (a) In case of the
appointment hereunder of a successor Trustee with respect to all Securities,
every such successor Trustee shall execute, acknowledge and deliver to the
Company and to the retiring Trustee an instrument accepting such appointment,
and thereupon the
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resignation or removal of the retiring Trustee shall become effective and such
successor Trustee, without any further act, deed or conveyance, shall become
vested with all the rights, powers, trusts and duties of the retiring Trustee,
but, on request of the Company or the successor Trustee, such retiring Trustee
shall, upon payment of its charges execute and deliver an instrument
transferring to such successor Trustee all the rights, powers and trusts and
duties of the retiring Trustee, and shall duly assign, transfer and deliver to
such successor Trustee all property and money held by such retiring Trustee
hereunder, subject nevertheless to its claim, if any, provided for in Section
6.7;
(b) In case of the appointment hereunder of a successor Trustee with
respect to the Securities of one or more (but not all) series, the Company, the
retiring Trustee and each successor Trustee with respect to the Securities of
one or more series shall execute and deliver an indenture supplemental hereto,
pursuant to Article 9 hereof, wherein each successor Trustee shall accept such
appointment and which (1) shall contain such provisions as shall be necessary or
desirable to transfer and confirm to and to vest in, each successor Trustee all
the rights, powers, trust and duties of the retiring Trustee with respect to the
Securities of that or those series to which the appointment of such successor
Trustee relates, (2) if the retiring Trustee is not retiring with respect to all
Securities, shall contain such provisions as shall be deemed necessary or
desirable to confirm that all the rights, powers, trusts and duties of the
retiring Trustee with respect to the Securities of that or those series as to
which the retiring Trustee is not retiring shall continue to be vested in the
retiring Trustee, and (3) shall add to or change any of the provisions of this
Indenture as shall be necessary to provide for or facilitate the administration
of the trusts hereunder by more than one Trustee, it being understood that
nothing herein or in such supplemental indenture shall constitute such Trustees
co-trustees of the same trust and that each such Trustee shall be trustee of a
trust or trusts hereunder separate and apart from any of the trust or trusts
hereunder administered by any other such Trustee; and upon the execution and
delivery of such supplemental indenture the resignation or removal of the
retiring Trustee shall become effective to the extent provided therein and each
such successor Trustee, without any further act, deed or conveyance, shall
become vested with all the rights, powers, trusts and duties of the retiring
Trustee with respect to the Securities of that or those series to which the
appointment of such successor Trustee relates; but on request of the Company or
any successor Trustee, such retiring Trustee shall duly assign, transfer and
deliver to such successor Trustee all property and money held by such retiring
Trustee hereunder with respect to the Securities of that or those series to
which the appointment of such successor Trustee relates.
(c) Upon request of any such successor Trustee, the Company shall execute
any and all instruments for more fully and certainly vesting in and confirming
to such successor Trustee all such rights, powers and trusts referred to in
paragraph (a) or (b) of this Section, as the case may be.
(d) No successor Trustee shall accept its appointment unless at the time
of such acceptance successor Trustee shall be qualified and eligible under this
Article.
Section 6.11 MERGER, CONVERSION, CONSOLIDATION OR SUCCESSION TO BUSINESS.
Any corporation into which the Trustee may be merged or converted or with which
it may be consolidated, or any corporation resulting from any merger, conversion
or consolidation to which the Trustee shall be a party, or any corporation
succeeding to all or substantially all of the corporate trust business of the
Trustee, shall be the successor of the Trustee hereunder, PROVIDED such
corporation shall be otherwise qualified and eligible under this Article,
without the execution or filing of any paper or any further act on the part of
any of the parties hereto. In case any Securities or coupons shall have been
authenticated, but not delivered, by the Trustee then in office, any successor
by merger, conversion or consolidation to such authenticating Trustee may adopt
such authentication and deliver the Securities or coupons so authenticated with
the same effect as if such successor Trustee had itself authenticated such
Securities or coupons. In case any Securities or coupons shall not have been
authenticated by such predecessor Trustee, any such successor Trustee may
authenticate and deliver such Securities or coupons, in either its own name or
that of its predecessor Trustee, with the full force and effect which this
Indenture provides for the certificate of authentication of the Trustee.
Section 6.12 APPOINTMENT OF AUTHENTICATING AGENT. At any time when any of
the Securities remain Outstanding, the Trustee may appoint an Authenticating
Agent or Agents with respect to one or more series of
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Securities which shall be authorized to act on behalf of the Trustee to
authenticate Securities of such series issued upon exchange, registration of
transfer or partial redemption or repayment thereof, and Securities so
authenticated shall be entitled to the benefits of this Indenture and shall be
valid and obligatory for all purposes as if authenticated by the Trustee
hereunder. Any such appointment shall be evidenced by an instrument in writing
signed by a Responsible Officer of the Trustee, a copy of which instrument shall
be promptly furnished to the Company. Wherever reference is made in this
Indenture to the authentication and delivery of Securities by the Trustee or the
Trustee's certificate of authentication, such reference shall be deemed to
include authentication and delivery on behalf of the Trustee by an
Authenticating Agent and a certificate of authentication executed on behalf of
the Trustee by an Authenticating Agent. Each Authenticating Agent shall be
acceptable to the Company and, except as may otherwise be provided pursuant to
Section 3.1, shall at all times be a bank or trust company or corporation
organized and doing business and in good standing under the laws of the United
States of America or of any State or the District of Columbia, authorized under
such laws to act as Authenticating Agent, having a combined capital and surplus
of not less than $50,000,000 and subject to supervision or examination by
Federal or State authorities. If such Authenticating Agent publishes reports of
condition at least annually, pursuant to law or the requirements of the
aforesaid supervising or examining authority, then for the purpose of this
Section, the combined capital and surplus of such Authenticating Agent shall be
deemed to be its combined capital and surplus as set forth in its most recent
report of condition so published. In case at any time an Authenticating Agent
shall cease to be eligible in accordance with the provisions of this Section,
such Authenticating Agent shall resign immediately in the manner and with the
effect specified in this Section.
Any corporation into which an Authenticating Agent may be merged or
converted or with which it may be consolidated, or any corporation resulting
from any merger, conversion or consolidation to which such Authenticating Agent
shall be a party, or any corporation succeeding to the corporate agency or
corporate trust business of an Authenticating Agent, shall continue to be an
Authenticating Agent, provided such corporation shall be otherwise eligible
under this Section, without the execution or filing of any paper or further act
on the part of the Trustee or the Authenticating Agent.
An Authenticating Agent for any series of Securities may at any time
resign by giving written notice of resignation to the Trustee for such series
and to the Company. The Trustee for any series of Securities may at any time
terminate the agency of an Authenticating Agent by giving written notice of
termination to such Authenticating Agent and to the Company. Upon receiving such
a notice of resignation or upon such a termination, or in case at any time such
Authenticating Agent shall cease to be eligible in accordance with the
provisions of this Section, the Trustee for such series may appoint a successor
Authenticating Agent which shall be acceptable to the Company and shall give
notice of such appointment to all Holders of Securities of the series with
respect to which such Authenticating Agent will serve in the manner set forth in
Section 1.6. Any successor Authenticating Agent upon acceptance of its
appointment hereunder shall become vested with all the rights, powers and duties
of its predecessor hereunder, with like effect as if originally named as an
Authenticating Agent herein. No successor Authenticating Agent shall be
appointed unless eligible under the provisions of this Section.
The Company agrees to pay to each Authenticating Agent from time to time
reasonable compensation including reimbursement of its reasonable expenses for
its services under this Section.
If an appointment with respect to one or more series is made pursuant to
this Section, the Securities of such series may have endorsed thereon, in
addition to or in lieu of the Trustee's certificate of authentication, an
alternate certificate of authentication substantially in the following form:
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This is one of the Securities of the series designated herein referred to
in the within-mentioned Indenture.
[Name of Trustee],
as Trustee
By:_____________________________
as Authenticating Agent
By:_____________________________
Authorized Signatory
Section 6.13 PREFERENTIAL COLLECTION OF CLAIMS AGAINST COMPANY. The
Trustee shall comply with TIA Section 311(a), excluding any creditor
relationship listed in TIA Section 311(b). A Trustee who has resigned or been
removed shall be subject to TIA Section 311(a) to the extent indicated in
Section 311(a).
ARTICLE VII.
HOLDERS' LISTS AND REPORTS BY TRUSTEE AND COMPANY
Section 7.1 DISCLOSURE OF NAMES AND ADDRESSES OF HOLDERS. Every Holder of
Securities or coupons, by receiving and holding the same, agrees with the
Company and the Trustee that neither the Company nor the Trustee nor any
Authenticating Agent nor any Paying Agent nor any Security Registrar shall be
held accountable by reason of the disclosure of any information as to the names
and addresses of the Holders of Securities in accordance with TIA Section 312,
regardless of the source from which such information was derived, and that the
Trustee shall not be held accountable by reason of mailing any material pursuant
to a request made under TIA Section 312(b).
Section 7.2 REPORTS BY TRUSTEE. Within 60 days after May 15 of each year
commending with the first May 15 after the first issuance of Securities pursuant
to this Indenture, the Trustee shall transmit by mail to all Holders of
Securities as provided in TIA Section 313(c) a brief report dated as of such May
15 if required by TIA Section 313(a). The Trustee shall also comply with TIA
Section 313(b)(2). A copy of each report shall, at the time of transmission to
Holders of Securities, be filed with each stock exchange upon which the
indenture securities are listed, and also with the Commission.
Section 7.3 REPORTS BY COMPANY. The Company will:
(a) file with the Trustee, within 15 days after the Company is required to
file the same with the Commission, copies of the annual reports and of the
information, documents and other reports (or copies of such portions of any of
the foregoing as the Commission may from time to time by rules and regulations
prescribe) which the Company may be required to file with the Commission
pursuant to Section 13 or Section 15(d) of the Securities Exchange Act of 1934;
or, if the Company is not required to file information, documents or reports
pursuant to either of such Sections, then it will file with the Trustee and the
Commission, in accordance 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;
(b) file with the Trustee and the Commission, in accordance with rules and
regulations prescribed from time to time by the Commission, such additional
information, documents and reports with respect to compliance by the Company
with the conditions and covenants of this Indenture as may be required from time
to time by such rules and regulations; and
(c) transmit by mail to the Holders of Securities, within 30 days after
the filing thereof with the Trustee, in the manner and to the extent provided in
TIA Section 313(c), such summaries of any information, documents and
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reports required to be filed by the Company pursuant to paragraphs (a) and (b)
of this Section as may be required by rules and regulations prescribed from time
to time by the Commission.
Section 7.4 COMPANY TO FURNISH TRUSTEE NAMES AND ADDRESSES OF HOLDERS. The
Company will furnish or cause to be furnished to the Trustee:
(a) semi-annually, not later than 15 days after the Regular Record Date
for interest for each series of Securities, a list, in such form as the Trustee
may reasonably require, of the names and addresses of the Holders of Registered
Securities of such series as of such Regular Record Date, or if there is no
Regular Record Date for interest for such series of Securities, 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 Trustee may request in writing, within 30
days after the receipt by the Company of any such request, a list of similar
form and content as of a date not more than 15 days prior to the time such list
is furnished, PROVIDED, HOWEVER, that, so long as the Trustee is the Security
Registrar, no such list shall be required to be furnished.
ARTICLE VIII.
CONSOLIDATION, MERGER, SALE, LEASE OR CONVEYANCE
Section 8.1 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 10.12) 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 9 hereof, satisfactory to the Trustee, executed and
delivered to the Trustee by such corporation and (ii) immediately after giving
effect to such transaction and treating any indebtedness which becomes an
obligation of the Company or any Subsidiary as a result thereof as having been
incurred by the Company or such Subsidiary at the time 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 8.2 RIGHTS AND DUTIES OF SUCCESSOR CORPORATION. In case of any
such consolidation, merger, sale, lease or conveyance and upon any such
assumption by the successor corporation, such successor corporation shall
succeed to and be substituted for the Company, with the same effect as if it had
been named herein as the party of the first part, and the predecessor
corporation, except in the event of a lease, shall be relieved of any further
obligation under this Indenture and the Securities. Such successor corporation
thereupon may cause to be signed, and may issue either in its own name or in the
name of the Company, any or all of the Securities issuable hereunder which
theretofore shall not have been signed by the Company and delivered to the
Trustee; and, upon the order of such successor corporation, instead of the
Company, and subject to all the terms, conditions and limitations in this
indenture prescribed, the Trustee shall authenticate and shall deliver any
Securities which previously shall have been signed and delivered by the officers
of the Company to the Trustee for authentication, and any Securities which such
successor corporation thereafter shall cause to be signed and delivered to the
Trustee for that purpose. All the Securities so issued shall in all respects
have the same legal rank and benefit under this Indenture as the Securities
theretofore or thereafter issued in accordance with the terms of this Indenture
as though all of such Securities had been issued at the time of the execution
hereof.
In case of any such consolidation, merger, sale, lease, or conveyance,
such changes in phraseology and form (but not in substance) may be made in the
Securities thereafter to be issued may be appropriate.
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Section 8.3 OFFICERS' CERTIFICATE AND OPINION OF COUNSEL. Any
consolidation, merger, sale, lease or conveyance permitted under Section 8.1 is
also subject to the condition that the Trustee receive an Officers' Certificate
and an Opinion of Counsel to the effect that any such consolidation, merger,
sale, lease or conveyance, and the assumption by any successor corporation,
complies with the provisions of this Article and that all conditions precedent
herein provided for relating to such transaction have been complied with.
ARTICLE IX.
SUPPLEMENTAL INDENTURES
Section 9.1 SUPPLEMENTAL INDENTURES WITHOUT CONSENT OF HOLDERS. Without
the consent of any Holders of Securities or coupons, the Company, when
authorized by or pursuant to a Board Resolution, and the Trustee, at any time
and from time to time, may enter into one or more indentures supplemental
hereto, in form satisfactory to the Trustee, for any of the following purposes:
(a) 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
(b) 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
(c) to add any additional Events of Default for the benefit of the Holders
of all or any series of Securities (and if such Events of Default are to be for
the benefit of less than all series of Securities, stating that such Events of
Default are expressly being included solely for the benefit of such series);
PROVIDED, HOWEVER, that in respect of any such additional Events of Default such
supplemental indenture may provide for a particular period of grace after
default (which period may be shorter or longer than that allowed in the case of
other defaults) or may provide for an immediate enforcement upon such default or
may limit the remedies available to the Trustee upon such default or may limit
the right of the Holders of a majority in aggregate principal amount of that or
those series of Securities to which such additional Events of Default apply to
waive such default; or
(d) 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
(e) 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
(f) to secure the Securities; or
(g) to establish the form or terms of Securities of any series and any
related coupons as permitted by Sections 2.1 and 3.1 including the provisions
and procedures relating to Securities convertible into Common Shares or
Preferred Shares, as the case may be; or
(h) to evidence and provide for the acceptance of appointment hereunder by
a successor Trustee with respect to the Securities of one or more series and to
add to or change any of the provisions of this Indenture as shall be necessary
to provide for or facilitate the administration of the trusts hereunder by more
than one Trustee; or
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(i) 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
(j) 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 14.1, 14.2 AND 14.3; PROVIDED that
any such action shall not adversely affect the interests of the Holders of
Securities of such series or any other series and any related coupons of
Securities in any material respect.
Section 9.2 SUPPLEMENTAL INDENTURES WITH CONSENT OF HOLDERS. With the
consent of the Holders of not less than a majority in principal amount of all
Outstanding Securities affected by such supplemental indenture, by Act of said
Holders delivered to the Company and the Trustee, the Company, when authorized
by or pursuant to a Board Resolution, and the Trustee may enter into an
indenture or indentures supplemental hereto for the purpose of adding any
provisions to or changing in any manner or eliminating any of the provisions of
this Indenture or of modifying in any manner the rights of the Holders of
Securities and any related coupons under this Indenture; PROVIDED, HOWEVER, that
no such supplemental indenture shall, without the consent of the Holder of each
Outstanding Security affected thereby:
(a) 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 1.12 (except as contemplated by Section 8.1(a) and
permitted by Section 9.1(a)), or reduce the amount of the principal of an
Original Issue Discount Security that would be due and payable upon a
declaration of acceleration of the Maturity thereof pursuant to Section 5.2 or
the amount thereof provable in bankruptcy pursuant to Section 5.4, 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
(b) 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 15.4 for quorum or
voting, or
(c) modify any of the provisions of this Section, Section 5.13 or Section
1.13, except to increase the required percentage to effect such action or to
provide that certain other provisions of this Indenture cannot be modified or
waived without the consent of the Holder of each Outstanding Security affected
thereby.
It shall not be necessary for any Act of Holders under this Section to
approve the particular form of any proposed supplemental indenture, but it shall
be sufficient if such Act shall approve the substance thereof.
A supplemental indenture which changes or eliminates any covenant or other
provision of this Indenture which has expressly been included solely for the
benefit of one or more particular series of Securities, or which modifies the
rights of the Holders of Securities of such series with respect to such covenant
or other provision, shall be deemed not to affect the rights under this
Indenture of the Holders of Securities of any other series.
Section 9.3 EXECUTION OF SUPPLEMENTAL INDENTURES. In executing, or
accepting the additional trusts created
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by, any supplemental indenture permitted by this Article or the Modification
thereby of the trusts created by this Indenture, the Trustee shall be entitled
to receive, and shall be fully protected in relying upon, an Opinion of Counsel
stating that the execution of such supplemental indenture is authorized or
permitted by this Indenture. The Trustee may, but shall not be obligated to,
enter into any such supplemental indenture which affects the Trustee's own
rights, duties or immunities under this Indenture or otherwise.
Section 9.4 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 9.5 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 9.6 REFERENCE IN SECURITIES TO SUPPLEMENTAL INDENTURES. Securities
of any series authenticated and delivered after the execution of any
supplemental indenture pursuant to this Article may, and shall, if required by
the Trustee, bear a notation in form approved by the Trustee as to any matter
provided for in such supplemental indenture. If the Company shall so determine,
new Securities of any series so modified as to conform, in the opinion of the
Trustee and the Company, to any such supplemental indenture may be prepared and
executed by the Company and authenticated and delivered by the Trustee in
exchange for Outstanding Securities of such series.
ARTICLE X.
COVENANTS
Section 10.1 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 premiums, 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 3.1 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 1.12 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 3.1, at
the option of the Company, all payments of principal may be paid by check to
Holder of the Registered Security or other person entitled thereto against
surrender of such Security.
Section 10.2 MAINTENANCE OF OFFICE OR AGENCY. The Company will maintain in
the City of Memphis, Tennessee, an office or agency where, unless otherwise set
forth in the Officers' Certificate or supplemental indenture referred to in
Section 3.1 with respect to any Securities of a series, Securities may be
presented or surrendered for payment or conversion, Securities may be
surrendered for registration of transfer or exchange, and notices and demands to
or upon the Company in respect of the Securities and this Indenture may be
served. The Company will give prompt written notice to the Trustee of any change
in the location of any such office or agency. If, at any time, the Company shall
fail to maintain such office or agency or shall fail to furnish the Trustee with
the address thereof, such presentations, surrenders, notices and demands may be
made or served at the Corporate Trust Office of the Trustee, and the Company
hereby appoints the Corporate Trust Office of the Trustee its agent to receive
all such presentations, surrenders, notices and demands.
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 constitute and appoint one
or more Paying Agents for the payment of the Securities of that or those series
in one or more cities, and may from time to time rescind such designations and
appointments; PROVIDED, HOWEVER, that no such
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designation, appointment or rescission shall in any manner relieve the Company
of its obligation to maintain an office or agency in accordance with the
requirements set forth above for Securities of any series for such purposes. The
Company will give prompt written notice to the Trustee of any such designation
or rescission and of any change in the location of any such other office or
agency.
Section 10.3 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 3.1 for the Securities of such series), sufficient to pay
the principal (and premium, if any) or interest or Additional Amounts as
becoming due until such sums shall be paid to such Persons or otherwise disposed
of as herein provided, and will promptly notify the Trustee of its action or
failure so to act.
Whenever the Company shall have one or more Paying Agents for any series
of Securities and any related coupons, it will, on or before each due date of
the principal of (and premium, if any), or interest or Additional Amounts in
respect of, any Securities of that series, deposit with a Paying Agent a sum (in
the currency or currencies, currency unit or units or composite currency or
currencies described in the preceding paragraph) sufficient to pay the principal
(and premium, if any) or interest or Additional Amounts, so becoming due, such
sum to be held in trust for the benefit of the Persons entitled to such
principal, premium or interest or Additional Amounts and (unless such Paying
Agent is the Trustee) the Company will promptly notify the Trustee of its action
or failure so to act.
The Company will cause each Paying Agent other than the Trustee to execute
and deliver to the Trustee an instrument in which such Paying Agent shall agree
with the Trustee, subject to the provisions of this Section, that such Paying
Agent will
(a) hold all sums held by it for the 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;
(b) give the Trustee notice of any default by the Company (or any other
obligor upon the Securities) in making of any such payment of principal (and
premium, if any) or interest; and
(c) at any time during the continuance of any such default upon the
written request of the Trustee, forthwith pay to the Trustee all sums so held in
trust by such Paying Agent.
The Company may at any time, or the purpose of obtaining the satisfaction
and discharge of this indenture, or for any other purpose, pay, or by Company
Order direct any Paying Agent to pay, to the Trustee all sums held in trust by
the Company or such Paying Agent, such sums to be held by the Trustee upon the
same trust as those upon which such sums were held by the Company or such Paying
Agent; and, upon such payment by any Paying Agent to the Trustee, such Paying
Agent shall be released from all further liability with respect to such sums.
Except as otherwise provided in the Securities of any series, any money
deposited with the Trustee or any Paying Agent or then held by the Company, in
trust for the payment of the principal of (and premium, if any) or interest on,
or any Additional Amounts in respect of, any Security of any series and
remaining unclaimed for two years after such principal (and premium, if any),
interest or Additional Amounts has become due and payable shall be paid to the
Company upon Company Request or (if then held by the Company) shall be
discharged from such trust; and the Holder of such Security shall thereafter, as
an unsecured general creditor, look only to the Company for payment of such
principal of (and premium, if any) or interest on, or any Additional Amounts in
respect of, any Security, without interest thereon, and all liability of the
Trustee or such Paying Agent with respect to such trust
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money, and all liability of the Company as trustee thereof, shall thereupon
cease; PROVIDED, HOWEVER, that the Trustee or such Paying Agent, before being
required to make any such repayment, may at the expense of the Company cause to
be published once, in an Authorized Newspaper, notice that such money remains
unclaimed and that, after a date specified therein, which shall not be less than
30 days from the date of such publication, any unclaimed balance of such money
then remaining will be repaid to the Company.
Section 10.4 [Reserved].
Section 10.5 [Reserved].
Section 10.6 EXISTENCE. Subject to Article 8, the Company will do or cause
to be done all things necessary to preserve and to keep in full force and effect
its corporate existence, rights (charter and statutory) and franchises;
PROVIDED, HOWEVER, that the Company shall not be required to preserve any right
or franchise if the Board of Directors shall determine that the preservation
thereof is no longer desirable in the conduct of the business of the Company and
that the loss thereof is not disadvantageous in any material respect to the
Holders.
Section 10.7 MAINTENANCE OF PROPERTIES. The Company will cause all of its
properties used or useful in the conduct of its business or the business of any
Subsidiary to be maintained and kept in good condition, repair and working order
and supplied with all necessary equipment and will cause to be made all
necessary repairs, renewals and replacements, improvements thereof, all as in
the judgment of the Company may be necessary so that the business carried on in
connection therewith may be properly and advantageously conducted at all times;
PROVIDED, HOWEVER, that nothing in this Section shall prevent the Company of any
Subsidiary from selling or otherwise disposing for value its properties in the
ordinary course of its business.
Section 10.8 INSURANCE. The Company will, and will cause each of its
Subsidiaries to, keep all of its insurable properties insured against loss or
damage at least equal to their then full insurable value with insurers of
recognized responsibility.
Section 10.9 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, (a) 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 (b) all lawful claims for labor, materials and
supplies which, if unpaid, might by law become a lien upon the property of the
Company or the 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 10.10 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, to the extent permitted under the Securities Exchange
Act of 1934, file with the Commission the annual reports, quarterly reports and
other documents which the Company would have been required to file with the
Commission pursuant to such Section 13 or 15(d) (the "Financial Statements") if
the Company were so subject, such documents to be filed with the Commission on
or prior to the respective dates (the "Required Filing Dates") by which the
Company would have been required so to file such documents if the Company were
so subject.
Section 10.11 STATEMENT AS TO COMPLIANCE. The Company will deliver to the
Trustee, within 120 days after the end of each fiscal year, a brief certificate
from the principal executive officer, principal financial officer or principal
accounting officer as to his or her knowledge of the Company's compliance with
all conditions and covenants under this Indenture and in the event of any
noncompliance, specifying such noncompliance and the nature and status thereof.
For purposes of this Section 10.11, such compliance shall be determined without
regard to any period of grace or requirement of notice under this Indenture.
Section 10.12 ADDITIONAL AMOUNTS. If any Securities of a series provide
for the payment of Additional
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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 3.1. Whenever in this Indenture there is mentioned, in
any context except in the case of Section 5.2(a), 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 3.1 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 3.1, if the
Securities of a series provide for the payment of Additional Amounts, at least
10 days prior to the first Interest Payment Date with respect to that series of
Securities (or if the Securities of that series will not bear interest prior to
Maturity, the first day on which a payment of principal and any premium is
made), and at least 10 days prior to each date of payment of principal and any
premium or interest if there has been any change with respect to the matters set
forth in the below-mentioned Officers' Certificate, the Company will furnish the
Trustee and the Company's principal Paying Agent or Paying Agents, if other than
the Trustee, with an Officers' Certificate instructing the Trustee and such
Paying Agent or Paying Agents whether such payment of principal of and any
premium or interest on the Securities of that series shall be made to Holders of
Securities of that series or any related coupons who are not United States
persons without withholding for or on account of any tax, assessment or other
governmental charge described in the Securities of the series. If any such
withholding shall be required, then such Officers' Certificate shall specify by
country the amount, if any, required to be withheld on such payments to such
Holders of Securities of that series or related coupons and the Company will pay
to the Trustee or such Paying Agent the Additional Amounts required by the terms
of such Securities. In the event that the Trustee or any Paying Agent, as the
case may be, shall not so receive the above-mentioned certificate, then the
Trustee or such Paying Agent shall be entitled (i) to assume that no such
withholding or deduction is required with respect to any payment of principal or
interest with respect to any Securities of a series or related coupons until it
shall have received a certificate advising otherwise and (ii) to make all
payments of principal and interest with respect to the Securities of a series or
related coupons without withholding or deductions until otherwise advised. The
Company covenants to indemnify the Trustee and any Paying Agent for, and to hold
them harmless against, any loss, liability or expense reasonably incurred
without negligence or bad faith on their part arising out of or in connection
with actions taken or omitted by any of them or in reliance on any Officers'
Certificate furnished pursuant to this Section or in reliance on the Company's
not furnishing such an Officers' Certificate.
Section 10.13 WAIVER OF CERTAIN COVENANTS. The Company may omit in any
particular instance to comply with any term, provision or condition set forth in
Sections 10.6 to 10.10, inclusive, if before or after the time for such
compliance the Holders of at least a majority in principal amount of all
outstanding Securities of such series, by Act of such Holders, either waive such
compliance in such instance or generally waive compliance with such covenant or
condition, but no such waiver shall extend to or affect such covenant or
condition except to the extent so expressly waived, and, until such waiver shall
become effective, the obligations of the Company and the duties of the Trustee
in respect of any such term, provision or condition shall remain in full force
and effect.
ARTICLE XI.
REDEMPTION OF SECURITIES
Section 11.1 APPLICABILITY OF ARTICLE. Securities of any series which are
redeemable before their Stated Maturity shall be redeemable in accordance with
their terms and (except as otherwise specified as contemplated by Section 3.1
for Securities of any series) in accordance with this Article.
Section 11.2 ELECTION TO REDEEM; NOTICE TO TRUSTEE. The election of the
Company to redeem any Securities shall be evidenced by or pursuant to a Board
Resolution. In case of any redemption at the election of the Company of less
than all of the Securities of any series, the Company shall, at least 45 days
prior to the giving of the
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notice of redemption in Section 11.4 (unless a shorter notice shall be
satisfactory to the Trustee), notify the Trustee of such Redemption Date and of
the principal amount of Securities of such series to be redeemed. In the case of
any redemption of Securities prior to the expiration of any restriction on such
redemption provided in the terms of such Securities or elsewhere in this
Indenture, the Company shall furnish the Trustee with an Officers' Certificate
evidencing compliance with such restriction.
Section 11.3 SELECTION BY TRUSTEE OF SECURITIES TO BE REDEEMED. If less
than all the Securities of any series issued on the same day with the same terms
are to be redeemed, the particular Securities to be redeemed shall be selected
not more than 60 days prior to the Redemption Date by the Trustee, from the
Outstanding Securities of such series issued on such date with the same terms
not previously called for redemption, by such method as the Trustee shall deem
fair and appropriate and which may provide for the selection for redemption of
portions (equal to the minimum authorized denomination for Securities of that
series or any integral multiple thereof) of the principal amount of Securities
of such series of a denomination larger than the minimum authorized denomination
for Securities of that series.
The Trustee shall promptly notify the Company and the Security Registrar
(if other than itself) in writing of the Securities selected for redemption and,
in the case of any Securities selected for partial redemption, the principal
amount thereof to be redeemed.
For all purposes of this Indenture, unless the context requires, all
provisions relating to the redemption of Securities shall relate, in the case of
any Security redeemed or to be redeemed only in part, to the portion of the
principal amount of such Security which has been or is to be redeemed.
Section 11.4 NOTICE OF REDEMPTION. Notice of redemption shall be given in
the manner provided in Section 1.6, not less than 30 days nor more than 60 days
prior to the Redemption Date, unless a shorter period is specified by the terms
of such series established pursuant to Section 3.1, to each Holder of Securities
to be redeemed, but failure to give such notice in the manner herein provided to
the Holder of any Security designated for redemption as a whole or in part, or
any defect in the notice to any such Holder, shall not affect the validity of
the proceedings for the redemption of any other such Security or portion
thereof.
Any notice that is mailed to the Holders of Registered Securities in the
manner herein provided shall be conclusively presumed to have been duly given,
whether or not the Holder receives the notice.
All notices of redemption shall state:
(a) the Redemption Date,
(b) The Redemption Price, accrued interest to the Redemption Date payable
as provided in Section 11.6, if any, and Additional Amounts, if any,
(c) 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,
(d) 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,
(e) that on the Redemption Date the Redemption Price and accrued interest
to the Redemption Date payable as provided in Section 11.6, if any, will become
due and payable upon each such Security, or the portion thereof, to be redeemed
and, if applicable, the interest thereon shall cease to be accrued on and after
said date,
(f) the Place or Places of Payment where such Securities, together in the
case of Bearer Securities with all
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coupons appertaining thereto, if any, maturing after the Redemption Date, are to
be surrendered for payment of the Redemption Price and accrued interest, if any,
or for conversion,
(g) that the redemption is for a sinking fund, if such is the case,
(h) that, unless otherwise specified in such notice, Bearer Securities of
any series, if any, surrendered for redemption must be accompanied by all
coupons maturing subsequent to the date fixed for redemption or the amount of
any such missing coupon, or coupons will be deducted from the Redemption Price,
unless security or indemnity satisfactory to the Company, the Trustee for such
series and any Paying Agent is furnished,
(i) if Bearer Securities of any series are to be redeemed and any
Registered Securities of such series are not be redeemed, and if such Bearer
Securities may be exchanged for Registered Securities not subject to redemption
on this Redemption Date pursuant to Section 3.4 or otherwise, the last date, as
determined by the Company, on which such exchanges may be made,
(j) the CUSIP number of such Security, if any, and
(k) if applicable, that a Holder of Securities who desires to convert
Securities for redemption must satisfy the requirements for conversion contained
in such Securities, the then existing conversion price or rate, and the date and
time when the option to convert shall expire.
Notice of redemption of Securities to be redeemed shall be given by the
Company or, at the Company's request, by the Trustee in the name and at the
expense of the Company.
Section 11.5 DEPOSIT OF REDEMPTION PRICE. On or prior to any Redemption
Date, the Company shall deposit with the Trustee or with a Paying Agent (or, if
the Company is acting as its own Paying Agent, which it may not do in the case
of a sinking fund payment under Article 12, segregate and hold in trust as
provided in Section 10.3) 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 3.1 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 on Interest Payment Date) accrued interest on, all the Securities or
portions thereof which are to be redeemed on that date.
Section 11.6 SECURITIES PAYABLE ON REDEMPTION DATE. Notice of redemption
having been given as aforesaid, the Securities to be redeemed shall, on the
Redemption Date, become due and payable at the Redemption Price therein
specified in the currency or currencies, currency unit or units or composite
currency or currencies in which the Securities of such series are payable
(except as otherwise specified pursuant to Section 3.1 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 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 except as otherwise
provided with respect to Securities convertible into Common Shares or Preferred
Shares, installments of interest on Securities whose Stated Maturity is on or
prior to the Redemption Date shall be payable to the Holders of such Securities,
or one or more Predecessor Securities, registered as such at the close of
business on the relevant Record Dates according to their terms and the
provisions of Section 3.7.
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 coupons or
coupons
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may be waived the Company and the Trustee if there be furnished to them such
security or indemnity as they may require to save each of them and any Paying
Agent harmless. If thereafter the Holder of such Security shall surrender to the
Trustee or any Paying Agent any such missing coupon in respect of which a
deduction shall have been made from the Redemption Price, such Holder shall be
entitled to receive the amount so deducted; provided, however, that interest
represented by coupons shall be payable only 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 11.7 SECURITIES REDEEMED IN PART. Any Registered Security which is
to be redeemed only in part (pursuant to the provisions of this Article or of
Article 12) shall be surrendered at a Place of Payment therefor (with, if the
Company or the Trustee so requires, due endorsement by, or a written instrument
to transfer in form satisfactory to the Company and the Trustee duly executed
by, the Holder thereof or his attorney duly authorized in writing; and the
Company shall execute and the Trustee shall authenticate and deliver to the
Holder of such Security without service charge a new Security or Securities of
the same series, of any authorized denomination as requested by such Holder in
aggregate principal amount equal to and in exchange for the unredeemed portion
of the principal of the Security so surrendered. If a Security in global form is
so surrendered, such new Security so issued shall be a new global Security.
ARTICLE XII.
SINKING FUNDS
Section 12.1 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 3.1 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 12.2. 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 12.2 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, (a) 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 (b) 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 Trustee at the applicable Redemption Price specified in
such Securities for redemption through operation of the sinking fund and the
amount of such mandatory sinking fund payment shall be reduced accordingly.
Section 12.3 REDEMPTION OF SECURITIES FOR SINKING FUND. Not less than 60
days prior to each sinking fund payment date for Securities of any series, the
Company will deliver to the Trustee an Officers' Certificate specifying the
amount of the next ensuing mandatory sinking fund payment for that series
pursuant to the terms of that series, the portion thereof, if any, which is to
be satisfied by payment of case 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 other
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specified pursuant to Section 3.1 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 12.2, and the optional amount, if
any, to be added in cash to the next ensuing mandatory sinking fund payment, and
will also deliver to the Trustee any Securities to be so delivered and credited.
If such Officers' Certificate shall specify an optional amount to be added in
cash to the next ensuing mandatory sinking fund payment, the Company shall
thereupon be obligated to pay the amount therein specified. Not less than 30
days before each such sinking fund payment date the Trustee shall select the
Securities to be redeemed upon such sinking fund payment date in the manner
specified in Section 11.3 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 11.4. Such notice having been duly given, the redemption of such
Securities shall be made upon the terms and in the manner stated in Sections
11.6 and 11.7.
ARTICLE XIII.
REPAYMENT AT THE OPTION OF HOLDERS
Section 13.1 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
3.1) in accordance with this Article.
Section 13.2 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 before the Repayment Date it will deposit with
the Trustee or with a Paying Agent (or, if the Company is acting as its own
Paying Agent, segregate and hold in trust as provided in Section 10.3) 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 3.1 for the Securities of
such series) sufficient to pay the principal (or, if so provided b 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 13.3 EXERCISE OF OPTION. Securities of any series subject to
repayment at the option of the Holder thereof will contain an "Option to Elect
Repayment" form on the reverse of such Securities. In order for any Security to
be repaid at the option of the Holder, the Trustee must receive at the Place of
Payment therefor specified in terms of such Security (or as 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 by 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 duly completed form entitled
"Option to Elect Repayment" on the reverse of the Security, will be received by
the Trustee not latter than the fifth Business Day after the date of such
telegram, telex, facsimile transmission or letter; PROVIDED, HOWEVER, that such
telegram, telex, facsimile transmission or letter shall only be effective if
such Security and form duly completed are received by the Trustee by such fifth
Business Day. If less than the entire principal amount of such Security is to be
repaid in accordance with the terms of such Security, the principal amount of
such Security to be repaid, in increments of the minimum denomination for
Securities of such series, and the denomination or denominations of the Security
or Securities to be issued to the Holder for the portion of the principal amount
of such Security surrendered that is not 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
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denomination of Securities of the series of which such Security to be repaid is
a part. Except as otherwise may be provided by the terms of any Security
providing for repayment at the option of the Holder thereof, exercise of the
repayment option by the Holder shall be irrevocable unless waived by the
Company.
Section 13.4 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 of 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 State Maturity is on or prior to the
Repayment Date shall be payable unless otherwise specified pursuant to Section
3.1, 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 other terms and the provisions of Section 3.7.
If any Bearer Security surrendered for repayment shall not be accompanied
by all appurtenant coupons maturing after the Repayment Date, such Security may
be paid after deducting form the amount payable therefor as provided in Section
13.2 an amount equal to the face amount of all such missing coupons, or the
surrender of such missing coupon or coupons may be waived by the Company and the
Trustee if there be furnished to them such security or indemnity as they may
require to save each of them and any Paying Agent harmless. If thereafter the
Holder of such Security shall surrender to the Trustee or any Paying Agent any
such missing coupon in respect of which a deduction shall have been made as
provided in the preceding sentence, such Holder shall be entitled to receive the
amount so deducted; provided, however, that interest represented by coupons
shall be payable unless otherwise specified as contemplated by Section 3.1, only
upon presentation and surrender of those coupons.
If the principal amount of any Security surrendered for repayment shall
not be so repaid upon surrender thereof, such principal amount (together with
interest, if any, thereon accrued to such Repayment Date) shall, until paid,
bear interest from the Repayment Date at the rate of interest or Yield to
Maturity in the case of Original Issue Discount Securities) set forth in such
Security.
Section 13.5 SECURITIES REPAID IN PART. Upon surrender of any Registered
Security which is to be repaid in part only, the Company shall execute and the
Trustee shall authenticate and deliver to the Holder of such Security, without
service charge and at the expense of the Company, a new Registered Security or
Securities of the same series, of any authorized denomination specified by the
Holder, in an aggregate principal amount equal to and in exchange for the
portion of the principal of such Security so surrendered which is not be repaid.
ARTICLE XIV.
DEFEASANCE AND COVENANT DEFEASANCE
Section 14.1 APPLICABILITY OF ARTICLE: COMPANY'S OPTION TO EFFECT
DEFEASANCE OR COVENANT DEFEASANCE. If pursuant to Section 3.1, provision is made
for either or both of (a) defeasance of the Securities of or within a series
under Section 14.2 or (b) covenant defeasance of the Securities of or within a
series under Section 14.3, 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 3.1 with respect
to any Securities), shall be applicable to such Securities and any coupons
appertaining thereto, and the Company may at is option by Board Resolution, at
any time, with respect to such Securities and any coupons appertaining thereto,
elect to have Section
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14.2 (if applicable) or Section 14.3 (if applicable) be applied to such
Outstanding Securities and any coupons appertaining thereto upon compliance with
the conditions set forth below in the Article.
Section 14.2 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 appertaining
thereto on the date the conditions set forth in Section 14.4 are satisfied
(thereinafter "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 14.5 and the other Sections of this Indenture referred to in clauses (a)
and (b) below, and to have satisfied all of its other obligations under such
Securities and any coupons appertaining thereto and this Indenture insofar as
such Securities and any coupons appertaining thereto are concerned (and the
Trustee, at the expense of the Company, shall execute proper instruments
acknowledging the same), except for the following which shall survive until
otherwise terminated or discharged hereunder: (a) the rights of Holders of such
Outstanding Securities and any coupons appertaining thereto to receive, solely
from the trust fund described in Section 14.4 and as more fully set forth in
such Section, payments in respect to 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 3.5, 3.6, 10.2, and 10.3 and with respect to the
payment of Additional Amounts, if any, on such Securities as contemplated by
Section 1.12, (c) the rights, powers, trusts, duties and immunities of the
Trustee hereunder and (d) this Article. Subject to compliance with this Article
14 the Company may exercise its option under this Section notwithstanding the
prior exercise of its option Under Section 14.3 with respect to such Securities
and any coupons appertaining thereto.
Section 14.3 COVENANT DEFEASANCE. Upon the Company's exercise of the above
option applicable to the Section with respect to any Securities of or within a
series, the Company shall be released from its obligations under Sections 10.6
to 10.10, inclusive, and, if specified pursuant to Section 3.1, its obligations
under the conditions set forth in Section 14.4 are satisfied (hereinafter,
"covenant defeasance"), and such Securities and any coupons appertaining thereto
shall thereafter been deemed to be not "Outstanding" for all other purposes
hereunder. For this purpose, such covenant defeasance means that, with respect
to such Outstanding Securities and any coupons appertaining thereto, the Company
may omit to comply with and shall have no liability in respect of any term,
condition or limitation set forth in any such Section or such other covenant,
whether directly or indirectly, by reason of any reference elsewhere herein to
any such Section or such other covenant or by reason of reference in any such
Section or such 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 5.1(d) or 5.1(h) 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 14.4 CONDITIONS OF DEFEASANCE OR COVENANT DEFEASANCE. The
following shall be the conditions to application of Section 14.2 or Section 14.3
to any Outstanding Securities of or within a series and any coupons appertaining
thereto:
(a) The Company shall irrevocably have deposited or caused to be deposited
with the Trustee (or another trustee satisfying the requirements of Section 6.8
who shall agree to comply with the provisions of this Article 14 applicable to
it) as trust funds in trust for the purpose of making the following payments,
specifically pledged as security for, and dedicated solely to, the benefit of
the Holders of such Securities and any coupons appertaining thereto, (i) 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 (ii) Government Obligations applicable to such Securities and any
coupons appertaining thereto (determined on the basis of the currency,
currencies or currency unit in which such Securities and any coupons
appertaining thereto are then specified as payable at Stated Maturity) which
through the scheduled payment of principal and interest in respect thereof in
accordance with their terms will provide, not later than one day before the due
date of any payment of principal of (and premium, if any) and interest, if any,
on such Securities and any coupons appertaining thereto, money in an amount, or
(iii) a
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combination thereof in an amount, sufficient, in the opinion of a nationally
recognized firm of independent public accountants expressed in a written
certification thereof delivered to the Trustee, to pay and discharge, and which
shall be applied by the Trustee (or other qualifying trustee) to pay and
discharge, (1) 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 of installment of principal or interest and (2) 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 the 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 5.1(f) and 5.1(g) 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 14.2, the Company shall have
delivered to the Trustee an Opinion of Counsel stating that (i) the Company has
received from, or there has been published by the Internal Revenue Service a
ruling, or (ii) since the date of execution of this Indenture, there has been a
change in the applicable Federal income tax law, in either case to the effect
that, and based thereon such opinion shall confirm that, the Holders of such
Outstanding Securities and any coupons appertaining thereto will not recognize
income, gain or loss for Federal income tax purposes as a result of such
defeasance and will be subject to Federal income tax on the same amounts, in the
same manner and at the same times as would have been the case if such defeasance
had not occurred.
(e) In the case of an election under Section 14.3, the Company shall have
delivered to the Trustee and Opinion of Counsel to the effect that the Holders
of such Outstanding Securities and any coupons appertaining thereto will not
recognize income, gain or loss for Federal income tax purposes as a result of
such covenant defeasance and will be subject to Federal income tax on the same
amounts, in the same manner and at the same times as would have been the case if
such covenant defeasance had not occurred.
(f) The Company shall have delivered to the Trustee an Officers'
Certificate and Opinion of Counsel, each stating that all conditions precedent
to the defeasance under Section 14.2 or the covenant defeasance under Section
14.3 (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
(above and the related exercise of the Company's option under Section 14.2 or
Section 14.3 (as they case may be), registration is not required under the
Investment Company Act of 1940, as amended, by the Company, with respect to the
trust funds representing such deposit or by the Trustee for such trust funds or
(ii) all necessary registrations under said Act have been effected.
(g) Notwithstanding any other provisions of the Section, such defeasance
or covenant defeasance shall be effected in compliance with any additional or
substitute terms, conditions or limitations which may be imposed on the Company
in connection therewith pursuant to Section 3.1.
Section 14.5 DEPOSITED MONEY AND GOVERNMENT OBLIGATIONS TO BE HELD IN
TRUST; OTHER MISCELLANEOUS PROVISIONS. Subject to the provisions of the last
paragraph of Section 10.3, all money and Government Obligations (or other
property as may be provided pursuant to Section 3.1)(including the proceeds
thereof) deposited with the Trustee (or other qualifying trustee, collectively
for purposes of this Section 14.5, the "Trustee") pursuant to Section 14.4 in
respect of any Outstanding Securities of any series and any coupons appertaining
thereto shall be held in trust and applied by the Trustee, in accordance with
the provisions of such Securities and any coupons appertaining
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thereto and this Indenture, to the payment, either directly or through any
Paying Agent (including the Company acting as its own Paying Agent) as the
Trustee may determine, to the Holder of such Securities and any coupons
appertaining thereto of all sums due and to become due thereon in respect of
principal (and premium, if any) and interest and Additional Amounts, if any, out
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 3.1, if, after a deposit referred to in Section 14.4(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 3.1 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 14.4(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 14.4(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 proceeds yielded by
covering from time to time as specified below in the case of any such election)
the amount or other property deposited in respect of such Security into the
currency or currency unit in which such Security becomes payable as a result of
such election or Conversion Event based on the applicable market exchange rate
for such currency or currency unit in effect on the second Business Day prior to
each payment date, except, with respect to a Conversion Event, for such currency
or currency unit in effect (as nearly as feasible) at the time of the Conversion
Event.
The Company shall pay and indemnify the Trustee against any tax, fee or
other charge imposed on or assessed against the Government Obligations,
deposited pursuant to Section 14.4 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 hereto.
Anything in this Article to the contrary notwithstanding, the Trustee
shall deliver or pay to the Company from time to time upon Company Request any
money or Government Obligations (or other property and any proceeds therefrom)
held by it as provided in Section 14.4 which, in the opinion of a nationally
recognized firm of independent public accountants expressed in a written
certification thereof delivered to the Trustee, are in excess of the amount
thereof which would then be required to be deposited to effect a defeasance or
covenant defeasance, as applicable, in accordance with this Article.
ARTICLE XV.
MEETINGS OF HOLDERS OF SECURITIES
Section 15.1 PURPOSES FOR WHICH MEETINGS MAY BE CALLED. A meeting of
Holders of Securities of any series may be called at any time and from time to
time pursuant to this Article to make, give or take any request, demand,
authorization, direction, notice, consent, waiver or other action provide by
this Indenture to be made, given or taken by Holders of Securities of such
series.
Section 15.2 CALL NOTICE AND PLACE OF MEETINGS. (a) The Trustee may at any
time call a meeting of Holders of Securities of any series for any purpose
specified in Section 15.1, to be held at such time and at such place, as the
Trustee shall determine. Notice of every meeting of Holders of Securities of any
series, setting forth the time and the place of such meeting and in general
terms the action proposed to be taken at such meeting, shall be given, in the
manner provided in Section 1.6, not less than 21 nor more than 180 days prior to
the date fixed for the meeting.
(b) In case at any time the Company, pursuant to a Board Resolution, or
the Holders of at least 10% in principal amount of the Outstanding Securities of
any series shall have requested the Trustee to call a meeting of the Holders of
Securities of such series for any purpose specified in Section 15.1, by written
request setting forth in reasonable detail the account proposed to be taken at
the meeting, and the Trustee shall not have made the first
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publication of the notice of such meeting within 21 days after receipt of such
request or shall not thereafter proceed to cause the meeting to be held as
provided herein, then the Company or the Holders of Securities of such series in
an amount above specified, as the case may be, may determine that 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 15.3 PERSONS ENTITLED TO VOTE AT MEETINGS. To be entitled to vote
at any meeting of Holder of Securities of any series, a Person shall be (a) a
Holder of one or more Outstanding Securities of such series, or (b) 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 of Holders. The only
Persons who shall be entitled to be present or to speak at any meeting of
Holders of Securities of any series shall be the Persons entitled to vote at
such meeting and their counsel, any representatives of the Trustee and its
counsel and any representatives of the Company and its counsel.
Section 15.4 QUORUM; ACTION. The Person entitled to vote a majority in
principal amount of the Outstanding Securities of a series shall constitute a
quorum for a meeting of Holders of Securities of such series; PROVIDED, HOWEVER,
that if any action is to be taken at such meeting with respect to a consent or
waiver which this Indenture expressly provides may be given by the Holders of
not less than a specified percentage in principal amount of the Outstanding
Securities of a series, the Persons entitled to vote such specified percentage
in principal amount of the Outstanding Securities of such series shall
constitute a quorum. In the absence of a quorum within 30 minutes after the time
appointed for any such meeting, the meeting shall, if convened at the request of
Holders of Securities of such series, be dissolved. In any other case the
meeting may be adjourned for a period of not less than 10 days as determined by
the chairman of the meeting prior to the adjournment of such meeting. In the
absence of a quorum at any such adjourned meeting, such adjourned meeting may
further adjourned for a period of not less than 10 days as determined by the
chairman of the meeting prior to the adjournment of such adjourned meeting.
Notice of the reconvening of any adjourned meeting shall be given as provided in
Section 15.2(a), except that such notice need be given only once not less than
five days prior to the date on which the meeting is scheduled to be reconvened.
Notice of the reconvening of any adjourned meeting shall state expressly the
percentage, as provided above, of the principal amount of the Outstanding
Securities of each series which shall constitute a quorum.
Except as limited the proviso to Section 9.2, any resolution presented to
a meeting or adjourned meeting duly reconvened at which a quorum is present as
aforesaid may be adopted by the affirmative vote of the Holders of a majority in
principal amount of the Outstanding Securities of that series; PROVIDED,
HOWEVER, that, except as limited by the proviso to Section 9.2 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 15.4, if any
action is to be taken at a meeting of Holders of Securities of any series 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:
(a) there shall be no minimum quorum requirement for such meeting; and
(b) the principal amount of the Outstanding Securities of such series that
vote in favor of such request,
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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 15.5 DETERMINATION OF VOTING RIGHTS; CONDUCT AND ADJOURNMENT OF
MEETINGS. (a) Notwithstanding any provisions of this Indenture, the Trustee may
make such reasonable regulations as it may deem advisable for any meeting of
Holders of Securities of a series in regard to proof of the holding of
Securities of such series and of the appointment of proxies and in regard to the
appointment and duties of inspectors of votes, the submission and examination of
proxies, certificates and other evidence of the right to vote, and such other
matters concerning the conduct of the meeting as it shall deem appropriate.
Except as otherwise permitted or required by any such regulations, the holding
of Securities shall be proved in the manner specified in Section 1.4 and the
appointment of any proxy shall be proved in the manner specified in Section 1.4
or by having the signature of the Person executing the proxy witnessed or
guaranteed by any trust company, bank or banker authorized by Section 1.4 to
certify to the holding of Bearer Securities. Such regulations may provide that
written instruments appointing proxies, regular on their face, may be presumed
valued and genuine without the proof specified in Section 1.4 or other proof.
(b) The Trustee shall, by an instrument in writing appoint a temporary
chairman of the meeting, unless the meeting shall have been called by the
Company or by Holders of Securities as provided in Section 15.2(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 presented 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 not 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 15.2 at which a quorum is present may be adjourned from time
to time by Persons entitled to vote a majority in principal amount of the
Outstanding Securities of such series represented at the meeting, and the
meeting may be held as so adjourned without further notice.
Section 15.6 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 a 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 15.2 and, if applicable, Section 15.4. Each copy shall be
signed and verified by the affidavits of the permanent chairman and secretary of
the meeting and one such copy shall be delivered to the Company and another to
the Trustee to be preserved by the Trustee, the latter to have attached thereto
the ballots voted at the meeting. Any records so signed and verified shall be
conclusive evidence of the matters therein stated.
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*****
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.
IN WITNESS WHEREOF, the parties hereto have cause this Indenture to be
duly executed, and their respective corporate seals to be hereunto affixed and
attested. All as of the date and year first above written.
MID-AMERICA APARTMENT COMMUNITIES, INC.
By:_______________________________________________
[SEAL] Title:__________________________________________________
Attest:
______________________
Title
-----------------------
By:_______________________________________________
Title:____________________________________________
[SEAL]
Attest:
______________________
Title
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EXHIBIT 24.1
CONSENT OF INDEPENDENT AUDITORS
We consent to incorporation by reference in the registration statement on Form
S-3 of Mid-America Apartment Communities, Inc. of our report dated March 27,
1998 to the consolidated balance sheets of Mid-America Apartment Communities,
Inc. (the "Company") as of December 31, 1997 and 1996, and the related
consolidated statements of operations, shareholders' equity and cash flows for
each of the years in the three-year period ended December 31, 1997, which report
is included in the 1997 annual report on Form 10-K of Mid-America Apartment
Communities, Inc. and to the reference to our firm under the heading of
"Experts" in the Prospectus. Our report refers to the Company's change in its
accounting method to capitalize replacement purchases for major appliances and
carpet in 1996.
KPMG Peat Marwick LLP
Memphis, Tennessee
September 9, 1998
