As filed with the Securities and Exchange Commission on October 21, 1997
Registration No. 333-______
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
_____________________
Form S-3
REGISTRATION STATEMENT
UNDER
THE SECURITIES ACT OF 1933
_____________________
WALDEN RESIDENTIAL PROPERTIES, INC.
(Exact name of Registrant as specified in its charter)
Maryland
(State or other jurisdiction of incorporation or organization)
One Lincoln Centre
5400 LBJ Freeway
Suite 400
Dallas, Texas 75240
(972) 788-0510
(Address, including zip code, and telephone number,
including area code, or Registrant's Principal Executive Offices)
75-2506197
(I.R.S. Employer Identification No.)
_____________________
Mark S. Dillinger
Executive Vice President and
Chief Financial Officer
Walden Residential Properties, Inc.
One Lincoln Centre
5400 LBJ Freeway, Suite 400
Dallas, Texas 75240
(972) 788-0510
(Name, address, including zip code, and telephone number,
including area code, of agent for service)
_____________________
Copies to:
Kenneth L. Betts, Esq.
Winstead Sechrest & Minick P.C.
1201 Elm Street, Suite 5400
Dallas, Texas 75270
_____________________
Approximate date of commencement of proposed sale to public:
From time to time following the effective date of this
Registration Statement as determined by market conditions.
If the only securities being registered on this Form are being
offered pursuant to dividend or interest reinvestment plans, please
check the following box.
If any of the securities being registered on this Form are to
be offered on a delayed or continuous basis pursuant to Rule 415
under the Securities Act of 1933, other than securities offered
only in connection with dividend or interest reinvestment plans,
check the following box. X
-
If this Form is filed to register additional securities for an
offering pursuant to Rule 462(b) under the Securities Act, 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 the 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.
(Calculation of Registration Fee appears on next page.)
CALCULATION OF REGISTRATION FEE
<TABLE>
<CAPTION>
Proposed Proposed
Maximum Maximum
Title of Each Class of Amount to be Offering Price Aggregate Offering Amount of
Securities to be Registered Registered per Unit Price Registration Fee
--------------------------- ------------ -------------- ------------------ ----------------
<S> <C> <C> <C> <C>
Debt Securities (1) (2) (3) (1) (2) N/A
Common Stock, par value $.01 per share (1) (4) (3) (1) (4) N/A
Preferred Stock, par value $.01 per share (1) (5) (3) (1) (5) N/A
Securities Warrants (1) (6) (3) (1) (6) N/A
Total $500,000,000 (3) $500,000,000 $151,516 (7)
</TABLE>
(1) In no event will the aggregate maximum offering price of all
securities issued pursuant to this Registration Statement exceed
$500,000,000 or, if any Debt Securities are issued with original
issue discount, such greater amount as shall result in an aggregate
offering price of $500,000,000. Any securities registered
hereunder may be sold separately or as units with other securities
registered hereunder.
(2) Subject to Footnote (1), there is being registered hereunder an
indeterminate principal amount of Debt Securities.
(3) The proposed maximum offering price per unit will be determined,
from time to time, by the Registrant in connection with the
issuance by the Registrant of the securities registered hereunder.
(4) Subject to Footnote (1), there is being registered hereunder an
indeterminate number of shares of Common Stock (par value $.01 per
share) as may be sold, from time to time, by the Registrant. There
is also being registered hereunder an indeterminate number of
shares of Common Stock as shall be issuable upon conversion of Debt
Securities or exercise of Securities Warrants registered hereby.
(5) Subject to Footnote (1), there is being registered hereunder an
indeterminate number of shares of Preferred Stock (par value $.01
per share) as may be sold, from time to time, by the Registrant.
There is also being registered hereunder an indeterminate number of
shares of Common Stock as shall be issuable upon conversion of
shares of Preferred Stock registered hereby.
(6) Subject to Footnote (1), there is being registered hereunder an
indeterminate number of Debt Securities Warrants, Common Stock
Warrants and Preferred Stock Warrants representing rights to
purchase Debt Securities, shares of Common Stock and shares of
Preferred Stock, respectively, registered pursuant to this
Registration Statement.
(7) Calculated pursuant to Rule 457(o) of the rules and regulations
under the Securities Act of 1933, as amended.
SUBJECT TO COMPLETION, DATED OCTOBER 21, 1997
PROSPECTUS
WALDEN RESIDENTIAL PROPERTIES, INC.
$500,000,000 Debt Securities, Common Stock, Preferred Stock
and Securities Warrants
_____________________
Walden Residential Properties, Inc., a Maryland corporation
(the "Company"), may from time to time offer and sell in one or
more series (i) its unsecured debt securities, which may be either
senior debt securities or subordinated debt securities (the "Debt
Securities"), (ii) shares of common stock, par value $.01 per share
(the "Common Stock"), (iii) shares of preferred stock, par value
$.01 per share (the "Preferred Stock"); and (iv) warrants to
purchase Common Stock (the "Common Stock Warrants"), warrants to
purchase Preferred Stock (the "Preferred Stock Warrants") and
warrants to purchase Debt Securities (the "Debt Securities
Warrants" and, collectively with the Common Stock Warrants and the
Preferred Stock Warrants, the "Securities Warrants") with an
aggregate public offering price of up to $500,000,000, in amounts,
at prices and on terms to be determined by market conditions at the
time of offering. The Debt Securities, Common Stock, Preferred
Stock and Securities Warrants (collectively, the "Offered
Securities") may be offered separately or together, in separate
series, in amounts and at prices and terms to be set forth in one
or more supplements to this Prospectus (each, a "Prospectus
Supplement").
With respect to the Debt Securities, the specific title,
aggregate principal amount, ranking, currency, form (which may be
registered or bearer, or certified or global), authorized
denominations, maturity, rate (or manner of calculation thereof)
and time of payment of interest, terms for redemption at the option
of the Company or repayment at the option of the holder, any
sinking fund provisions and any conversion provisions will be set
forth in the applicable Prospectus Supplement. In the case of the
Common Stock, the specific number of shares and issuance price per
share will be set forth in the applicable Prospectus Supplement.
The terms of the Preferred Stock, including the specific
designation and stated value per share, any dividend, liquidation,
redemption, conversion, voting and other rights, the issuance price
per share and all other specific terms of the Preferred Stock will
be set forth in the applicable Prospectus Supplement. In the case
of the Securities Warrants, the duration, offering price, exercise
price and detachability, if applicable, will be set forth in the
applicable Prospectus Supplement. In addition, such specific terms
may include limitations on direct or beneficial ownership and
restrictions on transfer of the Offered Securities, in each case as
may be consistent with the Company's Articles of Incorporation, as
amended, or otherwise appropriate to preserve the status of the
Company as a real estate investment trust ("REIT") for Federal
income tax purposes. The applicable Prospectus Supplement also
will contain information, where applicable, about certain Federal
income tax considerations relating to, and any listing on a
securities exchange of, the Offered Securities covered by such
Prospectus Supplement.
The Offered Securities may be offered directly, through agents
designated from time to time by the Company, or to or through
underwriters or dealers. If any agents or underwriters are
involved in the sale of any of the Offered Securities, their names,
and any applicable purchase price, fee, commission or discount
arrangement between or among them, will be set forth, or will be
calculable from the information set forth, in the applicable
Prospectus Supplement. See "Plan of Distribution." No Offered
Securities may be sold without delivery of the applicable
Prospectus Supplement describing the method and terms of the
offering of such series of Offered Securities.
_____________________
THESE SECURITIES HAVE NOT BEEN APPROVED OR DISAPPROVED BY THE
SECURITIES AND EXCHANGE COMMISSION OR ANY STATE SECURITIES
COMMISSION NOR HAS THE COMMISSION OR ANY STATE SECURITIES
COMMISSION PASSED UPON THE ACCURACY OR ADEQUACY OF
THIS PROSPECTUS. ANY REPRESENTATION TO THE
CONTRARY IS A CRIMINAL OFFENSE.
THE ATTORNEY GENERAL OF THE STATE OF NEW YORK HAS NOT
PASSED ON OR ENDORSED THE MERITS OF THIS OFFERING. ANY
REPRESENTATION TO THE CONTRARY IS UNLAWFUL.
_____________________
The date of this Prospectus is October ___, 1997.
AVAILABLE INFORMATION
The Company has filed with the Securities and Exchange
Commission (the "Commission") a Registration Statement (of which
this Prospectus is a part) on Form S-3 under the Securities Act of
1933, as amended (the "Securities Act"), with respect to the
securities offered hereby. This Prospectus does not contain all of
the information set forth in the Registration Statement, certain
portions of which have been omitted as permitted by the rules and
regulations of the Commission. Statements contained in this
Prospectus as to the content of any contract or other document are
not necessarily complete, and in each instance reference is made to
the copy of the contract or other document filed as an exhibit to
the Registration Statement, each statement being qualified in all
respects by that reference and the exhibits to the Registration
Statement. For further information regarding the Company and the
securities offered hereby, reference is hereby made to the
Registration Statement and the exhibits to the Registration
Statement which may be obtained from the Commission at its
principal office in Washington, D.C., upon payment of fees
prescribed by the Commission.
The Company is subject to the informational requirements of
the Securities Exchange Act of 1934, as amended ("Exchange Act"),
and, in accordance therewith, files reports, proxy statements and
other information with the Commission. Reports, proxy statements
and other information filed by the Company can be inspected and
copied, at prescribed rates, at the public reference facilities
maintained by the Commission at 450 Fifth Street, N.W., Washington,
D.C. 20549; and at its Regional Offices located at Suite 1400, 500
West Madison Street, Chicago, Illinois 60661; and 13th Floor, Seven
World Trade Center, New York, New York 10048. Copies of such
material can be obtained from the Public Reference Section of the
Commission, 450 Fifth Street, N.W., Washington, D.C. 20549. The
Commission maintains a Web site that contains reports, proxy and
information statements and other information regarding registrants
that file electronically with the Commission. The address of the
Commission's Web site is: http://www.sec.gov. The Common Stock,
the Company's 9.16% Series B Convertible Redeemable Preferred
Stock and the Company's 9.20% Senior Preferred Stock
are listed on the New York Stock Exchange, Inc. (the "NYSE"),
and such reports, proxy statements and other information concerning
the Company also can be inspected at the offices of the NYSE, 20
Broad Street, New York, New York 10005.
The Company furnishes its stockholders with annual reports
containing financial statements audited by its independent auditors
and with quarterly reports containing unaudited summary financial
information for each of the first three quarters of each fiscal
year.
INCORPORATION OF CERTAIN DOCUMENTS BY REFERENCE
The following documents filed with the Commission by the
Company pursuant to the Exchange Act are hereby incorporated by
reference in this Prospectus:
(a) The Company's Annual Report on Form 10-K for the
fiscal year ended December 31, 1996 (the "Form 10-K").
(b) Amendment No. 1 on Form 10-K/A to the Form 10-K.
(c) Amendment No. 2 on Form 10-K/A to the Form 10-K.
(d) The Company's Quarterly Report on Form 10-Q for the
quarter ended March 31, 1997.
(e) Amendment No. 1 to the Company's Quarterly Report on
Form 10-Q for the fiscal quarter ended March 31, 1997.
(f) The Company's Quarterly Report on Form 10-Q for the
fiscal quarter ended June 30, 1997.
(g) The Company's Current Report on Form 8-K filed
August 2, 1997.
(h) The Company's Current Report on Form 8-K filed
October 16, 1997.
(i) Description of the Common Stock contained in the
Company's registration statement on Form 8-A filed November
19, 1993.
(j) Description of the Company's 9.16% Series B
Cumulative Redeemable Preferred Stock contained in the
Company's registration statement on Form 8-A filed June 3,
1996.
(k) Description of the Company's 9.20% Senior Preferred
Stock contained in the Company's registration statement on
Form 8-A filed December 20, 1996.
All documents filed by the Company pursuant to Section 13(a),
13(c), 14 or 15(d) of the Exchange Act subsequent to the date of
this Prospectus and prior to the termination of the offering made
hereby shall be deemed to be incorporated by reference into this
Prospectus.
Any statement contained in a document all or a portion of
which is incorporated or deemed to be incorporated by reference
herein shall be deemed to be modified or superseded for purposes of
the Registration Statement and this Prospectus to the extent that
a statement contained in the Registration Statement, this
Prospectus or any other subsequently filed document that is also
incorporated by reference herein modifies or supersedes that
statement. Any statement so modified or superseded shall not be
deemed, except as so modified or superseded, to constitute a part
of this Prospectus.
The Company hereby undertakes to provide without charge to
each person, including any beneficial owner, to whom a Prospectus
is delivered, upon written or oral request of that person, a copy
of any document incorporated herein by reference (other than
exhibits to those documents unless the exhibits are specifically
incorporated by reference into the documents that this Prospectus
incorporates by reference). Requests should be directed to Deborah
B. Attner, Stockholder Relations, Walden Residential Properties,
Inc., One Lincoln Centre, 5400 LBJ Freeway, Suite 400, Dallas,
Texas 75240.
THE COMPANY
The Company is a self-administered, self-managed, fully
integrated real estate investment trust focused on middle income
multifamily residential properties located primarily in selected
Southwestern and Southeastern markets. The Company, a Maryland
corporation with headquarters in Dallas, Texas, was formed in
September 1993 to continue and expand the multifamily property
ownership, management, acquisition and marketing operations and
related business objectives and strategies of The Walden Group,
Inc. and its subsidiaries and affiliates (collectively, the "Walden
Predecessors"). The Company currently owns and operates 154
multifamily residential properties containing 41,362 apartment
units. Approximately 92% of the Properties are located in the
Houston, Dallas/Fort Worth, Austin, Phoenix, Nashville, Jacksonville,
Oklahoma City, San Antonio, Tampa, Tulsa and Salt Lake City areas, with the
remaining Properties primarily located in other areas in the
Southwest and Southeast regions of the United States. The
Properties had a weighted average occupancy rate of approximately
95.0% at October 6, 1997. The Company also manages on a fee basis
for third parties three additional multifamily residential
properties containing 1,179 apartment units.
Upon completion of its initial public offering in February
1994, the Company purchased the multifamily operations of the
Walden Predecessors, including 18 Properties containing 5,895
apartment units (of which three properties containing 827 units
were sold in 1995 and 1996), and concurrently purchased two
additional Properties containing 448 apartment units, one of which
was owned by a third party and the other of which was principally
owned by the Walden Predecessors. Since the consummation of the
initial public offering in February 1994, the Company has acquired
140 Properties (of which three properties containing 938 units were
sold in 1995 and 1996), containing an aggregate 36,784 apartment
units, for an aggregate purchase price of approximately $1,299
million. Management believes that these activities are consistent
with its core acquisition strategy of acquiring well located garden
apartment properties at costs less than replacement costs, which
serve middle income residents and can benefit from the Company's
comprehensive management programs.
The Company's six senior executives have an average tenure
with the Company, Drever Partners, Inc. and the Walden Predecessors
of 16 years and have an average of 21 years experience in the
multifamily property business. The Company is fully integrated
with operations that include multifamily property acquisitions,
redevelopment services, management, marketing, finance, leasing and
asset management.
The Company's executive offices are located at One Lincoln
Centre, Suite 400, 5400 LBJ Freeway, Dallas, Texas 75240. The
telephone number is (972) 788-0510. The Company was incorporated
in Maryland on September 29, 1993 and the duration of its existence
is perpetual.
RATIO OF EARNINGS TO COMBINED FIXED CHARGES
AND PREFERRED DISTRIBUTIONS
The Company's ratio of earnings to combined fixed charges and
preferred distributions for the six months ended June 30, 1997
and its fiscal year ended December 31, 1996 and 1995 and the year
ended December 31, 1994 (which includes results of operations of
the Walden Predecessors for the period of January 1, 1994 through
February 8, 1994) and for the years ended December 31, 1993 and
1992 (which are based on the results of the Walden Predecessors)
was 1.28x, 1.59x, 1.52x, 1.68x, .63x and .57x, respectively. The
Company had no preferred distribution requirement in any of such years
prior to 1995; therefore, the ratio of earnings to combined fixed
charges and preferred distributions are the same as the ratio of
earnings to fixed charges for such years. Earnings were calculated
by adding certain fixed charges (consisting of interest on
indebtedness and amortization and financing costs) to the Company's
income before extraordinary items. The Company's earnings (in
thousands) were inadequate to cover fixed charges by $45, $4,795
and $5,209 for the period from January 1, 1994 to February 8, 1994
and the years ended December 31, 1993 and 1992, respectively, all
of which were prior to the Company's initial public offering in
February of 1994.
USE OF PROCEEDS
Unless otherwise described in the applicable Prospectus
Supplement, the Company intends to use the net proceeds from the
sale of the Offered Securities for general corporate purposes,
which may include acquiring additional multifamily residential
garden apartment properties or interests in entities owning
multifamily residential garden apartment properties as suitable
opportunities arise, making improvements to properties, repaying
certain then-outstanding secured or unsecured indebtedness and for
working capital. Pending use for the foregoing purposes, such
proceeds may be invested in short-term, interest-bearing time or
demand deposits with financial institutions, cash items or
qualified government securities.
DESCRIPTION OF COMMON STOCK
The summary of the terms of the Common Stock set forth below
does not purport to be complete and is subject to, and qualified in
its entirety by, reference to the Company's Articles of
Incorporation, as amended and restated (the "Articles"), and the
Company's Bylaws.
The Articles authorize the Company to issue up to 50 million
shares of Common Stock, 10 million shares of Preferred Stock and 60
million shares of excess stock, par value $.01 per share (the
"Excess Stock"). At September 30, 1997, 17,913,739 shares of
Common Stock were issued and outstanding, all of which are fully
paid and nonassessable. Under the Maryland General Corporation Law
(the "MGCL"), stockholders generally are not liable for the
corporation's debts or obligations.
GENERAL
All shares of Common Stock offered pursuant to a Prospectus
Supplement will be duly authorized, fully paid and nonassessable.
Subject to the preferential rights of shares of the Preferred
Stock, including the Series B Preferred Stock and Senior Preferred
Stock (as such terms are hereinafter defined), and any other shares
or series of stock hereinafter designated by the Board of Directors
of the Company (the "Board of Directors"), holders of shares of
Common Stock are entitled to receive dividends on the stock if, as
and when authorized and declared by the Board of Directors out of
assets legally available therefor and to share ratably in the
assets of the Company legally available for distribution to its
stockholders in the event of its liquidation, dissolution or
winding-up after payment of, or adequate provision for payment of,
all known debts and liabilities of the Company. The Company has
paid regular quarterly dividends to date and intends to continue
paying regular quarterly dividends.
Each outstanding share of Common Stock entitles the holder
thereof to one vote on all matters submitted to a vote of
stockholders, including the election of directors and, except as
otherwise required by law or except as provided with respect to any
other class or series of stock, the holders of shares of Common
Stock will possess the exclusive voting power. There is no
cumulative voting in the election of directors, which means that
the holders of a majority of the outstanding shares of Common Stock
can elect all of the directors then standing for election and the
holders of the remaining shares will not be able to elect any
directors. Holders of shares of Common Stock have no conversion,
sinking fund or redemption rights or preemptive rights to subscribe
for any securities of the Company, except that the Common Stock is
convertible into Excess Stock as provided in the Articles.
Subject to the provisions of the Articles regarding Excess
Stock, shares of Common Stock have equal dividend, distribution,
liquidation and other rights and will have no preference or
exchange rights.
Pursuant to the MGCL, a corporation generally cannot dissolve,
amend its charter, merge, sell all or substantially all of its
assets, engage in a share exchange or engage in similar
transactions unless approved by the holders of at least two-thirds
of the shares of stock entitled to vote on the matter unless a
lesser percentage (but not less than a majority of all of the votes
entitled to be cast on the matter) is set forth in the
corporation's charter. The Articles provide for the vote of the
holders of a majority of the shares of stock outstanding and
entitled to vote on the matter to approve any of such actions,
except for amendments to the Articles relating to the number of
directors and the classification of the Board of Directors which
require approval of holders of at least two-thirds of the shares of
stock entitled to vote on the matter.
The transfer agent and registrar for the Common Stock is
Boston EquiServe, L.P.
RESTRICTIONS ON TRANSFER
For the Company to qualify as a REIT under the Internal
Revenue Code of 1986, as amended (the "Code"), shares of Common
Stock must be beneficially owned by 100 or more persons during at
least 335 days of a taxable year of twelve months (other than the
first year) or during a proportionate part of a shorter taxable
year. Further, not more than 50% of the value of the issued and
outstanding shares of capital stock of the Company may be owned,
directly or indirectly, by five or fewer individuals (as defined in
the Code to include, except in limited circumstances, certain
entities such as qualified private pension plans) during the last
half of a taxable year (other than the first year) or during a
proportionate part of a shorter taxable year.
Since the Board of Directors believes it is essential for the
Company to maintain its status as a REIT under the Code, the
Articles provide that no person, except Mr. Daseke, may own, or be
deemed to own by virtue of the attribution provisions of the Code,
more than 9.0% (the "Ownership Limit") of the aggregate value of
all outstanding shares of capital stock of the Company. Mr. Daseke
beneficially owns in the aggregate approximately 6.8% of the shares
of Common Stock and may acquire additional shares of Common Stock;
provided, however, that Mr. Daseke may not own, directly or
indirectly, more than 13.0% of the aggregate value of all
outstanding shares of capital stock of the Company (the "Existing
Holder Limit"). The Board of Directors, upon receipt of evidence
and assurances satisfactory to the Board of Directors, may also
exempt a proposed transferee from the Ownership Limit or Existing
Holder Limit. In connection therewith, the Board of Directors may
require opinions of counsel, affidavits, undertakings or agreements
as it may deem necessary or advisable in order to determine or
ensure the Company's status as a REIT. Any acquisition or transfer
of shares of Common Stock that would: (i) result in the shares of
Common Stock being owned by fewer than 100 persons or (ii) result
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 shares of Common 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 and the Articles are amended
accordingly.
Any purported transfer of shares of capital stock that would
result in a person owning shares of capital stock in excess of the
Ownership Limit or Existing Holder Limit will result in the shares
subject to such purported transfer being automatically exchanged
for an equal number of shares of Excess Stock. Under the Articles,
Excess Stock shall be deemed to have been transferred to the
Company as trustee of a separate trust (the "Trust") for the
exclusive benefit of the person or persons to whom the interest in
the Trust can ultimately be transferred.
Excess Stock is not transferable. The purported transferee of
any shares of capital stock that are exchanged for Excess Stock may
designate a transferee of the interest in the Trust if the Excess
Stock held in the Trust and represented by such Trust interest to
be transferred would not be Excess Stock in the hands of the
designated transferee at a price not to exceed the price paid by
the purported transferee (or, if no consideration was paid, the
Market Price (as hereinafter defined) measured on the date of the
original attempted transfer) at which point such Excess Stock will
automatically be exchanged for the shares of Common Stock or
Preferred Stock to which the Excess Stock is attributable. In
addition, Excess Stock is subject to purchase by the Company at a
purchase price equal to the lesser of: (i) the price paid for the
shares of capital stock by the intended transferee (or, if no
consideration was paid, the Market Price of the shares of capital
stock the attempted transfer of which resulted in Excess Stock,
measured on the date of the transfer); or (ii) the Market Price of
the shares of capital stock the attempted transfer of which
resulted in Excess Stock measured on the date on which the Company
elects to purchase the Excess Stock. "Market Price" means the
average daily per share closing sales price of a share of capital
stock if such shares of capital stock are listed on a national
securities exchange or quoted on Nasdaq National Market or if not
then traded on any exchange or quotation system, the mean between
the average per share closing bid prices and the average per share
closing asked prices, in each case, during the 30 calendar day
period ending on the business day prior to the measurement date, or
if there have been no sales on a national securities exchange or
the Nasdaq National Market and no published bid and asked
quotations with respect to shares of such stock during such 30
calendar day period, then the market price of the shares of capital
stock on the relevant date shall be as determined in good faith by
the Board of Directors.
From and after the intended transfer to the purported
transferee of the shares of Excess Stock, the purported transferee
shall cease to be entitled to distributions (except upon
liquidation), voting rights and other benefits with respect to the
Excess Stock except the right to payment of the purchase price for
the applicable shares of underlying capital stock. Any dividend or
distribution paid to a purported transferee on Excess Stock prior
to the discovery by the Company that the shares have been
transferred in violation of the Articles shall be repaid to the
Company upon demand. If the foregoing transfer restrictions are
determined to be void or invalid by virtue of any legal decision,
statute, rule or regulation, then the intended transferee of any
Excess Stock may be deemed, at the option of the Company, to have
acted as an agent on behalf of the Company in acquiring the Excess
Stock and to hold the Excess Stock on behalf of the Company. All
certificates representing shares of capital stock will bear a
legend referring to the restrictions described above.
In addition, each stockholder shall, upon demand, be required
to disclose to the Company in writing all information regarding the
direct and indirect beneficial ownership of shares of capital stock
as the Board of Directors deems reasonably necessary to comply with
the provisions of the Code applicable to a REIT, to comply with the
requirements of any taxing authority or governmental agency or to
determine any such compliance.
These ownership limitations could have the effect of
discouraging a takeover or other transaction in which holders of
some, or a majority, of shares of capital stock might receive a
premium for their shares over the then-prevailing market price or
which these holders might believe to be otherwise in their best
interest.
DESCRIPTION OF PREFERRED STOCK
The following description of terms of the Preferred Stock sets
forth certain general terms and provisions of the Preferred Stock
to which any Prospectus Supplement may relate. Certain other terms
of any series of the Preferred Stock offered by any Prospectus
Supplement will be described in such Prospectus Supplement. The
description of certain provisions of the Preferred Stock set forth
below and in any Prospectus Supplement does not purport to be
complete and is subject to and qualified in its entirety by
reference to the Articles and the Board of Directors' resolution or
resolutions relating to each series of the Preferred Stock which
will be filed with the Commission and incorporated by reference as
an exhibit to the Registration Statement of which this Prospectus
is a part at or prior to the time of the issuance of such series of
Preferred Stock.
GENERAL
Subject to limitations prescribed by the MGCL and the
Articles, the Board of Directors is authorized to issue shares of
Preferred Stock in one or more series, to establish from time to
time the number of shares of Preferred Stock to be included in any
such series and to fix for any such series the designation and any
preferences, conversion and other rights, voting powers,
restrictions, limitations as to dividends, qualifications and terms
and conditions of redemption. The Company is authorized to issue
10 million shares of Preferred Stock. At September 30, 1997,
1,715,982 shares of the Company's 9.16% Series B Convertible
Redeemable Preferred Stock (the "Series B Preferred Stock") and
4,000,000 shares of the Company's 9.20% Senior Preferred Stock (the
"Senior Preferred Stock") were outstanding. For purposes of the
following description of the Preferred Stock, the Series B
Preferred Stock and the Senior Preferred Stock will sometimes be
collectively referred to as the "Outstanding Preferred Stock."
The Preferred Stock shall have the dividend, liquidation,
redemption and voting rights set forth below unless otherwise
provided in a Prospectus Supplement relating to a particular series
of the Preferred Stock. Reference is made to the Prospectus
Supplement relating to the particular series of the Preferred Stock
offered thereby for specific terms, including: (i) the designation
and stated value per share of such Preferred Stock and the number
of shares offered; (ii) the amount of liquidation preference per
share; (iii) the initial public offering price at which such
Preferred Stock will be issued; (iv) the dividend rate (or method
of calculation), the dates on which dividends shall be payable and
the dates from which dividends shall commence to cumulate, if any;
(v) any redemption or sinking fund provisions; (vi) any conversion
right; (vii) any listing of the Preferred Stock on any securities
exchange; (viii) any additional voting, dividend, liquidation,
redemption, sinking fund and other rights, preferences, privileges,
limitations and restrictions not in conflict with the Articles or
the MGCL; (ix) a discussion of Federal income tax considerations
applicable to the Preferred Stock; (x) the relative ranking and
preferences of the Preferred Stock as to dividends and rights upon
liquidation; and (xi) any limitations on direct or beneficial
ownership and restrictions on transfer. The Preferred Stock will,
when issued for lawful consideration therefor, be fully paid and
nonassessable and will have no preemptive rights.
Unless otherwise indicated in a Prospectus Supplement relating
thereto, The First Bank of Boston will be the transfer agent and
registrar for shares of each series of Preferred Stock.
RANK
Unless otherwise specified in the Prospectus Supplement, the
Preferred Stock will, with respect to dividend rights upon
liquidation, dissolution or winding up of the Company, rank
(i) senior to all classes or series of Common Stock and to all
equity securities ranking junior to such Preferred Stock; (ii) on
a parity with all equity securities issued by the Company the terms
of which specifically provide that such equity securities rank on
a parity with the Preferred Stock; and (iii) junior to all equity
securities issued by the Company the terms of which specifically
provide that such equity securities rank senior to the Preferred
Stock. The rights of the holders of each series of Preferred Stock
will be subordinate to those of the Company's general creditors.
DIVIDENDS
Holders of each series of Preferred Stock shall be entitled to
receive, when, as and if declared by the Board of Directors, out of
assets of the Company legally available for payment, cash dividends
at such rates and on such dates as will be set forth in the
applicable Prospectus Supplement. Such rate may be fixed or
variable or both. Each such dividend shall be payable to holders
of record as they appear on the share transfer books of the Company
on such record dates as shall be fixed by the Board of Directors,
as specified in the Prospectus Supplement relating to such series
of Preferred Stock.
Dividends on any series of Preferred Stock may be cumulative
or non-cumulative, as provided in the applicable Prospectus
Supplement. Dividends, if cumulative, will be cumulative from and
after the date set forth in the applicable Prospectus Supplement.
If the Board of Directors fails to declare a dividend payable on a
dividend payment date on any series of Preferred Stock for which
dividends are noncumulative, then the holders of such series of
Preferred Stock will have no right to receive a dividend in respect
of the dividend period ending on such dividend payment date, and
the Company will have no obligation to pay the dividend accrued for
such period, whether or not dividends on such series are declared
payable on any future dividend payment date. Dividends on shares
of each series of Preferred Stock for which dividends are
cumulative will accrue from the date on which the Company initially
issues shares of such series.
So long as any series of Preferred Stock shall be outstanding,
unless (i) full dividends (including, if such dividends are
cumulative, dividends for prior dividend periods) shall have been
paid or declared and set apart for payment on all outstanding
shares of Preferred Stock of such series and all other classes and
series of Preferred Stock (other than Junior Stock, as hereinafter
defined) and (ii) the repurchase or other mandatory retirement of,
or with respect to any sinking or other analogous fund for, any
shares of Preferred Stock of such series or any other Preferred
Stock of any class or series (other than Junior Stock), the Company
may not declare any dividends on any Common Stock or any other
equity securities of the Company ranking as to dividends or
distributions of assets junior to such series of Preferred Stock
(the Common Stock and any such other equity securities being herein
referred to as "Junior Stock"), or make any payment on account of,
or set apart money for, the purchase, redemption or other
retirement of, or for a sinking or other analogous fund, for, any
Junior Stock or make any distribution in respect thereof, whether
in cash or property or in obligations or equity securities of the
Company, other than shares of Junior Stock which are neither
convertible into, nor exchangeable or exercisable for, any
securities of the Company other than shares of Junior Stock.
Any dividend payment made on a series of Preferred Stock shall
first be credited against the earliest accrued but unpaid dividend
due with respect to shares of such series which remains payable.
REDEMPTION
A series of Preferred Stock may be redeemable, in whole or
from time to time in part, at the option of the Company, and may be
subject to mandatory redemption pursuant to a sinking fund or
otherwise, in each case upon the terms, at the times and at the
redemption prices set forth in the Prospectus Supplement relating
to such series. Shares of Preferred Stock redeemed by the Company
will be restored to the status of authorized but unissued Preferred
Stock of the Company.
The Prospectus Supplement relating to a series of Preferred
Stock that is subject to mandatory redemption will specify the
number of shares of such Preferred Stock that shall be redeemed by
the Company in each year commencing after a date to be specified,
at a redemption price per share to be specified, together with an
amount equal to all accrued and unpaid dividends thereon (which
shall not, if such Preferred Stock does not have a cumulative
dividend, include any accumulation in respect of unpaid dividends
for prior dividend periods) to the date of redemption. The
redemption price may be payable in cash or other property, as
specified in the applicable Prospectus Supplement. If the
redemption price for Preferred Stock of any series is payable only
from the net proceeds of the issuance of equity securities of the
Company, the terms of such series of Preferred Stock may provide
that, if no such equity securities shall have been issued or to the
extent the net proceeds from any issuance are insufficient to pay
in full the aggregate redemption price then due, such Preferred
Stock shall automatically and mandatorily be converted into the
applicable equity securities of the Company pursuant to conversion
provisions specified in the applicable Prospectus Supplement.
So long as any dividends on shares of any series of Preferred
Stock or any other series of Preferred Stock of the Company ranking
on a parity as to dividends and distribution of assets which such
series of Preferred Stock are in arrears, no shares of any such
series of Preferred Stock or such other series of Preferred Stock
of the Company will be redeemed (whether by mandatory or optional
redemption) unless all such shares are simultaneously redeemed, and
the Company will not purchase or otherwise acquire any such shares;
provided, however, that the foregoing will not prevent the purchase
or acquisition of such shares pursuant to a purchase or exchange
offer made on the same terms to holders of all such shares
outstanding.
In the event that fewer than all of the outstanding shares of
a series of Preferred Stock are to be redeemed, whether by
mandatory or optional redemption, the number of shares to be
redeemed will be determined by lot or pro rata (subject to rounding
to avoid fractional shares) as may be determined by the Company or
by any other method as may be determined by the Company in its sole
discretion to be equitable. From and after the redemption date
(unless default shall be made by the Company in providing for the
payment of the redemption price plus accumulated and unpaid
dividends, if any), dividends shall cease to accumulate on the
shares of Preferred Stock called for redemption and all rights of
the holders thereof (except the right to receive the redemption
price plus accumulated and unpaid dividends, if any) shall cease.
LIQUIDATION PREFERENCE
Upon any voluntary or involuntary liquidation, dissolution or
winding up of the affairs of the Company, then, before any
distribution or payment shall be made to the holders of any Junior
Stock, the holders of each series of Preferred Stock shall be
entitled to receive out of assets of the Company legally available
for distribution to stockholders, liquidating distributions in the
amount of the liquidation preference per share (set forth in the
applicable Prospectus Supplement), plus an amount equal to all
dividends accrued and unpaid thereon (which shall not include any
accumulation in respect of unpaid dividends for prior dividend
periods if such Preferred Stock does not have a cumulative
dividend). After payment of the full amount of the liquidating
distributions to which they are entitled, the holders of Preferred
Stock will have no right or claim to any of the remaining assets of
the Company. In the event that, upon any such voluntary or
involuntary liquidation, dissolution or winding up, the available
assets of the Company are insufficient to pay the amount of the
liquidating distributions on all outstanding Preferred Stock and
the corresponding amounts payable on all shares of other classes or
series of equity securities of the Company ranking on a parity with
the Preferred Stock in the distribution of assets, then the holders
of the Preferred Stock and all other such classes or series of
equity securities shall share ratably in any such distribution of
assets in proportion to the full liquidating distributions to which
they would otherwise be respectively entitled.
If liquidating distributions shall have been made in full to
all holders of Preferred Stock, the remaining assets of the Company
shall be distributed among the holders of shares of Junior Stock,
according to their respective rights and preferences and in each
case according to their respective number of shares. For such
purposes, the consolidation or merger of the Company with or into
any other corporation, or the sale, lease or conveyance of all or
substantially all of the assets or business of the Company, shall
not be deemed to constitute a liquidation, dissolution or winding
up of the Company.
VOTING RIGHTS
Except as indicated below or in a Prospectus Supplement
relating to a particular series of Preferred Stock, or except as
required by applicable law, holders of the Preferred Stock will not
be entitled to vote for any purpose. The following is a summary of
the voting rights applicable to the Outstanding Preferred Stock,
which, unless provided otherwise in the applicable Prospectus
Supplement, will apply to each series of Preferred Stock.
Subject to the provisions in the Articles regarding Excess
Stock, in any matter in which the Outstanding Preferred Stock may
vote, including any action by written consent, each share of
Outstanding Preferred Stock will be entitled to one vote. The
holders of each share of Outstanding Preferred Stock may separately
designate a proxy for the vote to which that share of Outstanding
Preferred Stock is entitled.
Whenever dividends on any shares of Series B Preferred Stock
and/or the Senior Preferred Stock have been in arrears for six or
more quarterly periods, the holders of such shares of Outstanding
Preferred Stock (voting separately as a class with all other series
of Preferred Stock upon which rights to vote on such matter with
the Outstanding Preferred Stock have been conferred and are then
exercisable) will be entitled to vote for the election of two
additional directors of the Company at a special meeting called by
the holders of record of at least 10% of the Outstanding Preferred
Stock and such other Preferred Stock, if any (unless such request
is received less than 90 days before the date fixed for the next
annual or special meeting of the stockholders), or at the next
annual meeting of stockholders, and at each subsequent annual
meeting until all dividends accumulated on such shares of
Outstanding Preferred Stock for the past dividend periods and the
then current dividend period have been fully paid or declared and
a sum sufficient for the payment thereof set aside for payment. In
such event, the entire Board of Directors will be increased by two
directors. Each of such two directors will be elected to serve
until the earlier of (i) the election and qualification of such
director's successor or (ii) payment of the dividend arrearage for
the Outstanding Preferred Stock.
So long as any shares of Outstanding Preferred Stock remain
outstanding, the Company will not (i) without the affirmative vote
or consent of the holders of at least a majority of the shares of
Outstanding Preferred Stock outstanding at the time, given in
person or by proxy, either in writing or at a meeting (such series
voting separately as a class), authorize or create, or increase the
authorized or issued amount of, any class or series of capital
stock ranking senior to the Outstanding Preferred Stock with
respect to payment of dividends or the distribution of assets upon
liquidation, dissolution or winding up of the Company, or create,
authorize or issue any obligation or security convertible into or
evidencing the right to purchase any such shares; or (ii) without
the affirmative vote or consent of the holders of at least
two-thirds of the shares of Series B Preferred Stock and/or Senior
Preferred Stock outstanding at the time, given in person or by
proxy, either in writing or at a meeting (such series voting
separately as a class), amend, alter or repeal the provisions of
the Articles, whether by merger, consolidation or otherwise, so as
to materially and adversely affect any right, preference, privilege
or voting power of the Outstanding Preferred Stock or the holders
thereof; provided, however, that any increase in the amount of the
authorized Preferred Stock or the creation or issuance of any other
series of Preferred Stock, or any increase in the amount of
authorized shares of Outstanding Preferred Stock or any other
series of Preferred Stock, in each case ranking on a parity with or
junior to the Outstanding Preferred Stock with respect to payment
of dividends or the distribution of assets upon liquidation,
dissolution or winding up, will not be deemed to materially and
adversely affect such rights, preferences, privileges or voting
powers.
The foregoing voting provisions will not apply if, at or prior
to the time when the act with respect to which such vote would
otherwise be required is effected, all outstanding shares of
Outstanding Preferred Stock have been redeemed or called for
redemption upon proper notice and sufficient funds have been
deposited in trust to effect such redemption.
CONVERSION RIGHTS
The terms and conditions, if any, upon which shares of any
series of Preferred Stock are convertible into Common Stock will be
set forth in the applicable Prospectus Supplement relating thereto.
Such terms will include the number of shares of Common Stock into
which the Preferred Stock is convertible, the conversion price (or
manner of calculation thereof), the conversion period, the
provisions as to whether conversion will be at the option of the
holders of the Preferred Stock or the Company, the events requiring
an adjustment of the conversion price and the provisions affecting
conversion.
RESTRICTIONS ON TRANSFER
See "Description of Common Stock Restrictions on Transfer" for
a discussion of the restrictions on transfer of shares of capital
stock, including shares of Preferred Stock, necessary for the
Company to qualify as a REIT under the Code.
DESCRIPTION OF DEBT SECURITIES
The Debt Securities will be direct unsecured obligations of
the Company. The Debt Securities will be issued under one or more
indentures ("Indentures"), each dated as of a date prior to the
issuance of the Debt Securities to which it relates, in each case
between the Company and a trustee ("Trustee") meeting the
requirements of the Trust Indenture Act of 1939, as amended
("TIA"), and in the form that has been filed as an exhibit to the
Registration Statement of which this Prospectus is a part, subject
to such amendments or supplements as may be adopted from time to
time. The Indentures will be subject to and governed by the TIA.
The statements made under this heading relating to the Debt
Securities and the Indentures are summaries of the anticipated
provisions thereof, do not purport to be complete and are qualified
in their entirety by reference to the description of such Debt
Securities contained in the applicable Prospectus Supplement and to
the Indenture relating to such Debt Securities.
Capitalized terms used, but not defined, under this caption
shall have the meanings assigned to them in the applicable
Indenture.
GENERAL
The Debt Securities will be direct, unsecured obligations of
the Company and, unless subordinated (see " Subordination" below),
will rank pari passu with all other unsecured and unsubordinated
indebtedness of the Company. Under the applicable Indenture, 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 (the
"Board of Directors") or as established in one or more indentures
supplemental to the applicable Indenture. All Debt Securities of
one series need not be issued at the same time and, unless
otherwise provided in the applicable Indenture, a series may be
reopened, without the consent of the holders of the Debt Securities
of such series, for issuances of additional Debt Securities of such
series.
Each Indenture will provide that the Company may, but need
not, designate more than one Trustee thereunder, each with respect
to one or more series of Debt Securities. Any Trustee under the
applicable 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 applicable Indenture separate and apart from the
trust administered by any other Trustee, and, except as otherwise
indicated herein, any action described herein to be taken by 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 applicable Indenture.
The following summaries set forth certain general terms and
provisions of the Indentures and the Debt Securities. The
Prospectus Supplement relating to the series of Debt Securities
being offered will contain further terms thereof, including, where
applicable, the following:
(i) the title of such Debt Securities, whether such are
senior Debt Securities or subordinated Debt Securities;
(ii) the aggregate principal amount of such Debt Securities
and any limit on such aggregate principal amount;
(iii) the percentage of the principal amount at which
such Debt Securities will be issued and, if other
than the principal amount thereof, the portion of
the principal amount thereof payable upon
declaration of acceleration of the maturity
thereof, or (if applicable) the portion of the
principal amount of such Debt Securities which is
convertible into Common Stock, or the method by
which any such portion shall be determined;
(iv) if convertible, any applicable limitations on the
ownership or transferability of the Common Stock into
which such Debt Securities are convertible related to the
preservation of the Company's status as a REIT;
(v) the date or dates, or the method for determining such
date or dates, on which the principal of such Debt
Securities will be payable;
(vi) 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;
(vii) the date or dates, or the method for determining
such date or dates, from which any interest will
accrue, the dates on which any such interest will
be payable, the record dates for such interest
payment dates, or the method by which any such date
shall be determined, the person 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 12 months consisting of 30 days
each;
(viii) the place or places where the principal of (and
premium, if any) and interest, if any, on such Debt
Securities will be payable, such Debt Securities
may be surrendered for conversion or registration
of transfer or exchange and notices or demands to
or upon the Company in respect of such Debt
Securities and the applicable Indenture may be
served;
(ix) 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, as a whole or in part,
at the option of the Company, if the Company is to have
such an option;
(x) the obligation, if any, of the Company to redeem, repay
or purchase such Debt Securities pursuant to any sinking
fund or analogous provision or at the option of a holder
thereof, and the period or periods within which, the
price or prices at which and the terms and conditions
upon which such Debt Securities will be redeemed, repaid
or purchased, as a whole or in part, pursuant to such
obligation;
(xi) 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;
(xii) 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;
(xiii) the events of default or covenants of such Debt
Securities, to the extent different from or in
addition to those described herein;
(xiv) whether such Debt Securities will be issued in
certificated and/or book-entry form;
(xv) 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
if other than $5,000 and terms and conditions relating
thereto;
(xvi) the applicability, if any, of the defeasance and
covenant defeasance provisions described herein or
any modification thereof;
(xvii) if such Debt Securities are to be issued upon the
exercise of debt warrants, the time, manner and
place for such Debt Securities to be authenticated
and delivered;
(xviii) the terms and conditions, if any, upon which such
Debt Securities may be subordinated to other
indebtedness of the Company;
(xix) whether and under what circumstances the Company
will pay additional amounts on such Debt Securities
in respect of any tax, assessment or governmental
charge and, if so, whether the Company will have
the option to redeem such Debt Securities in lieu
of making such payment;
(xx) with respect to any Debt Securities subject to optional
redemption, prepayment or conversion upon the occurrence
of certain events (such as a change of control of the
Company), (i) the possible effects of such provisions on
the market price of the Company's securities or in
deterring certain mergers, tender offers or other
takeover attempts, and the intention of the Company to
comply with the requirements of Rule 14e-1 and, to the
extent convertible Debt Securities are issued by the
Company, Rule 13e-4 under the Exchange Act and any other
applicable securities laws in connection with such
provisions; (ii) whether the occurrence of the specified
events may give rise to cross-defaults on other
indebtedness such that payment on such Debt Securities
may be effectively subordinated; and (iii) the existence
of any limitation on the Company's financial or legal
ability to repurchase such Debt Securities upon the
occurrence of such an event (including, if true, the lack
of assurance that such a repurchase can be effected) and
the impact, if any, under the applicable Indenture of
such a failure, including whether and under what
circumstances such a failure may constitute an Event of
Default; and
(xxi) any other terms of such Debt Securities not
inconsistent with the provisions of the applicable
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 ("Original Issue Discount
Securities"). If material or applicable, the federal income tax,
accounting and other considerations applicable to Original Issue
Discount Securities will be described in the applicable Prospectus
Supplement.
Except as described under " Merger, Consolidation or Sale" or
as may be set forth in any Prospectus Supplement, the Indentures
will not contain any other provisions that would limit the ability
of the Company to incur indebtedness or that would afford holders
of the Debt Securities protection in the event of (i) a highly
leveraged or similar transaction involving the Company, the
management of the Company or any affiliate of any such party,
(ii) a change of control or (iii) a reorganization, restructuring,
merger or similar transaction involving the Company that may
adversely affect the holders of the Debt Securities. In addition,
subject to the limitations set forth under " Merger, Consolidation
or Sale," the Company may, in the future, enter into certain
transactions, such as the sale of all or substantially all of its
assets or the merger or consolidation of the Company that would
increase the amount of the Company's indebtedness or substantially
reduce or eliminate the Company's assets, which may have an adverse
effect on the Company's ability to service its indebtedness,
including the Debt Securities. In addition, restrictions on
ownership and transfers of the Company's capital 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 Common Stock"
and "Description of Preferred Stock." Reference is made to the
applicable Prospectus Supplement for information with respect to
any deletions from, modifications of or additions to the events of
default or covenants that are described below, including any
addition of a covenant or other provisions providing event risk or
similar protection.
Reference is made to " Certain Covenants" below and to the
description of any additional covenants with respect to a series of
Debt Securities in the applicable Prospectus Supplement. Except as
otherwise described in the applicable Prospectus Supplement,
compliance with such covenants generally may not be waived with
respect to a series of Debt Securities by the Board of Directors on
behalf of the Company or by the Trustee unless the holders of at
least a majority in principal amount of all outstanding Debt
Securities of such series consent to such waiver, except to the
extent that the defeasance and covenant defeasance provisions of
the Indentures described under " Discharge, Defeasance and Covenant
Defeasance" below apply to such series of Debt Securities. See
" Modification of the Indentures."
DENOMINATIONS, INTEREST, REGRISTRATION AND TRANSFER
Unless otherwise described in the applicable Prospectus
Supplement, the Debt Securities of any series which are registered
securities, other than registered securities issued in global form
(which may be of any denomination), shall be issuable in
denominations of $1,000 and any integral multiple thereof and the
Debt Securities which are bearer securities, other than bearer
securities issued in global form (which may be of any
denomination), shall be issuable in denominations of $5,000.
Unless otherwise specified in the applicable Prospectus
Supplement, the principal of (and premium, if any) and interest, if
any, on any series of Debt Securities will be payable at the
corporate trust office of the Trustee, initially at the address
which will be set forth in the applicable Prospectus Supplement,
provided that, at the option of the Company payment of interest may
be made by check mailed to the address of the person entitled
thereto as it appears in the applicable register 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 regular record date and may either be paid to the person
in whose name such Debt Security is registered at the close of
business on a special record date (the "Special Record Date") for
the payment of such Defaulted Interest to be fixed by the Trustee,
notice whereof shall be given to the holder of such Debt Security
not less than 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 Indentures.
Subject to certain limitations imposed upon Debt Securities
issued in book-entry form, the Debt Securities of any series will
be exchangeable for other Debt Securities of the same series and of
a like aggregate principal amount and tenor of different authorized
denominations upon surrender of such Debt Securities at the
corporate trust office of the applicable Trustee. In addition,
subject to certain limitations imposed upon Debt Securities issued
in book-entry form, the Debt Securities of any series may be
surrendered for conversion or registration of transfer thereof at
the corporate trust office of the applicable Trustee. Every 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 any Debt Securities, but
the Trustee or 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 any Trustee shall be required (i) to
issue, register the transfer of or exchange Debt Securities of any
series during a period beginning at the opening of business 15 days
before any selection of Debt Securities of that series to be
redeemed and ending at the close of business on (a) if such Debt
Securities are issuable only as registered securities, the day of
the mailing of the relevant notice of redemption and (b) if such
Debt Securities are issuable as bearer securities, the day of the
first publication of the relevant notice of redemption or, if such
Debt Securities are also issuable as registered securities and
there is no publication, the day of the mailing of the relevant
notice of redemption, or (ii) to register the transfer or exchange
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 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 may consolidate with, or sell, lease or convey all
or substantially all of its assets to, or merge with or into, any
other entity, provided that (i) either the Company shall be the
continuing entity or the successor entity (if other than the
Company) formed by or resulting from any such consolidation or
merger or which shall have received the transfer of such assets
shall expressly assume payment of the principal of (and premium, if
any) and interest, if any, on all of the Debt Securities and the
due and punctual performance and observance of all of the covenants
and conditions contained in any Indenture; (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
under the Indentures, and no event which, after notice or the lapse
of time, or both, would become such an event of default, shall have
occurred and be continuing; and (iii) 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 be required to do or cause to be done
all things necessary to preserve and keep in full force and effect
its existence, rights and franchises; provided, however, that the
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.
Payment of Taxes and Other Claims. The Company will be
prepared to pay or discharge or cause to be paid or discharged,
before the same shall become delinquent, (i) all taxes, assessments
and governmental charges levied or imposed upon it or any
subsidiary or upon the income, profits or property of the Company
or any subsidiary and (ii) all lawful claims for labor, materials
and supplies which, if unpaid, might by law become a lien upon the
property of the Company or any subsidiary; provided, however, that
the Company shall not be required to pay or discharge or cause to
be paid or discharged any such tax, assessment, charge or claim
whose amount, applicability or validity is being contested in good
faith by appropriate proceedings.
Additional Covenants. Any additional or different covenants
of the Company with respect to any series of Debt Securities will
be set forth in the Prospectus Supplement relating thereto.
EVENTS OF DEFAULT, NOTICE AND WAIVER
Each Indenture provides that the following events are "Events
of Default" with respect to any series of Debt Securities issued
thereunder: (i) default for 30 days in the payment of any
installment of interest on any Debt Security of such series;
(ii) default in the payment of the principal of (or premium, if
any, on) any Debt Security of such series at its maturity;
(iii) default in making any sinking fund payment as required for
any Debt Security of such series; (iv) default in the performance
of any other covenant of the Company contained in the applicable
Indenture (other than a covenant added to such Indenture solely for
the benefit of a series of Debt Securities issued thereunder other
than such series), such default having continued for 60 days after
written notice as provided in such Indenture; (v) default in the
payment of an aggregate principal amount exceeding a specified
dollar amount 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; (vi)
certain events of bankruptcy, insolvency or reorganization, or
court appointment of a receiver, liquidator or trustee of the
Company or any Significant Subsidiary (as hereinafter defined) or
any of their respective property; and (vii) any other event of
default provided with respect to a particular series of Debt
Securities. The term "Significant Subsidiary" means each
significant subsidiary (as defined in Regulation S-X promulgated
under the Securities Act) of the Company.
If an event of default under the Indentures with respect to
Debt Securities of any series at the time outstanding occurs and is
continuing, then in every such case the applicable Trustee or the
holders of not less than 25% in principal amount of the outstanding
Debt Securities of that series may declare the principal amount
(or, if the Debt Securities of that series are Original Issue
Discount Securities or indexed securities, such portion of the
principal amount as may be specified in the terms thereof) of all
of the Debt Securities of that series to be due and payable
immediately by written notice thereof to the Company (and to the
applicable Trustee if given by the holders). However, at any time
after such a declaration of acceleration with respect to Debt
Securities of such series (or of all Debt Securities then
outstanding under the applicable Indenture, as the case may be) has
been made, but before a judgment or decree for payment of the money
due has been obtained by the applicable Trustee, the holders of not
less than a majority in principal amount of outstanding Debt
Securities of such series (or of all Debt Securities then
outstanding under the applicable Indenture, as the case may be) may
rescind and annul such declaration and its consequences if (i) the
Company shall have deposited with the applicable Trustee all
required payments of the principal of (and premium, if any) and
interest, if any, on the Debt Securities of such series (or of all
Debt Securities then outstanding under the applicable Indenture, as
the case may be), plus certain fees, expenses, disbursements and
advances of the applicable Trustee and (ii) all events of default,
other than the non-payment of accelerated principal (or specified
portion thereof), or premium (if any) or interest on the Debt
Securities of such series (or of all Debt Securities then
outstanding under the applicable Indenture, as the case may be)
have been cured or waived as provided in the applicable Indenture.
Each Indenture will also provide that the holders of not less than
a majority in principal amount of the outstanding Debt Securities
of any series (or of all Debt Securities then outstanding under the
applicable Indenture, as the case may be) may waive any past
default with respect to such series and its consequences, except a
default (i) in the payment of the principal of (or premium, if any)
or interest, if any, on any Debt Security of such series or (ii) in
respect of a covenant or provision contained in the applicable
Indenture that cannot be modified or amended without the consent of
the holder of each outstanding Debt Security affected thereby.
Each Trustee will be required to give notice to the holders of
Debt Securities within 90 days of a default under the applicable
Indenture unless such default has been cured or waived; provided,
however, that such Trustee may withhold notice to the holders of
any series of Debt Securities of any default with respect to such
series (except a default in the payment of the principal of (or
premium, if any) or interest, if any, on any Debt Security of such
series or in the payment of any sinking fund installment in respect
of any Debt Security of such series) if specified responsible
officers of such Trustee consider such withholding to be in the
interest of such holders.
Each Indenture will provide that no holders of Debt Securities
of any series may institute any proceedings, judicial or otherwise,
with respect to such Indenture or for any remedy thereunder, except
in the case of failure of the applicable Trustee, for 60 days, to
act after it has received a written request to institute
proceedings in respect of an event of default from the holders of
not less than 25% in principal amount of the outstanding Debt
Securities of such series, as well as an offer of indemnity
reasonably satisfactory to it. 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, if any, on such Debt Securities at the
respective due dates thereof.
Subject to provisions in the applicable Indenture relating to
its duties in case of default, no Trustee will be under any
obligation to exercise any of its rights or powers under the
applicable Indenture at the request or direction of any holders of
any series of Debt Securities then outstanding under such
Indenture, unless such holders shall have offered to the Trustee
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
applicable Indenture, as the case may be) shall have the right to
direct the time, method and place of conducting any proceeding for
any remedy available to the applicable Trustee, or of exercising
any trust or power conferred upon such Trustee. However, a
Trustee may refuse to follow any direction which is in conflict
with any law or the applicable Indenture, which may involve such
Trustee in personal liability or which may be unduly prejudicial to
the holders of Debt Securities of such series not joining therein.
Within 120 days after the close of each fiscal year, the
Company will be required to deliver to each Trustee a certificate,
signed by one of several specified officers of the Company, stating
whether or not such officer has knowledge of any default under the
applicable Indenture and, if so, specifying each such default and
the nature and status thereof.
MODIFICATION OF THE INDENTURES
Modifications and amendments of the applicable Indenture will
be permitted to be made only with the consent of the holders of not
less than a majority in principal amount of all outstanding Debt
Securities or series of 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, (i) change the
stated maturity of the principal of, or any installment of interest
(or premium, if any) on, any such Debt Security; (ii) reduce the
principal amount of, or the rate or amount of interest on, or any
premium payable on redemption of, any such Debt Security, or reduce
the amount of principal of an Original Issue Discount Security that
would be due and payable upon declaration of acceleration of the
maturity thereof or would be provable in bankruptcy, or adversely
affect any right of repayment of the holder of any such Debt
Security; (iii) change the place of payment, or the coin or
currency, for payment of principal of, premium, if any, or interest
on any such Debt Security; (iv) impair the right to institute suit
for the enforcement of any payment on or with respect to any such
Debt Security; (v) reduce the above-stated percentage of
outstanding Debt Securities of any series necessary to modify or
amend the applicable Indenture, to waive compliance with certain
provisions thereof or certain defaults and consequences thereunder
or to reduce the quorum or voting requirements set forth in such
Indenture; or (vi) modify any of the foregoing provisions or any of
the provisions relating to the waiver of certain past defaults or
certain covenants, except to increase the required percentage to
effect such action or to provide that certain other provisions may
not be modified or waived without the consent of the holder of such
Debt Security.
Each Indenture will provide that the holders of not less than
a majority in principal amount of a series of outstanding Debt
Securities have the right to waive compliance by the Company with
certain covenants relating to such series of Debt Securities in the
applicable Indenture.
Modifications and amendments of the Indentures will be
permitted to be made by the Company and the respective Trustee
thereunder without the consent of any holder of Debt Securities for
any of the following purposes: (i) to evidence the succession of
another person to the Company as obligor under such Indenture;
(ii) to add to the covenants of the Company for the benefit of the
holders of all or any series of Debt Securities or to surrender any
right or power conferred upon the Company in such Indenture;
(iii) to add events of default for the benefit of the holders of
all or any series of Debt Securities; (iv) to add or change any
provisions of such Indenture to 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 in any material respect; (v) to change or eliminate any
provisions of such 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; (viii) to provide for the acceptance of appointment
by a successor Trustee or facilitate the administration of the
trusts under such Indenture by more than one Trustee; (ix) to cure
any ambiguity, defect or inconsistency in such 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 such 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.
Each Indenture will provide that in determining whether the
holders of the requisite principal amount of outstanding Debt
Securities of a series have given any request, demand,
authorization, direction, notice, consent or waiver thereunder or
whether a quorum is present at a meeting of holders of Debt
Securities, (i) the principal amount of an Original Issue Discount
Security that shall be deemed to be outstanding shall be the amount
of the principal thereof that would be due and payable as of the
date of such determination upon declaration of acceleration of the
maturity thereof, (ii) the principal amount of 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 such Indenture, and (iv) Debt Securities owned by the Company or
any other obligor upon the Debt Securities or any affiliate of the
Company or of such other obligor shall be disregarded.
Each Indenture will contain provisions for convening meetings
of the holders of Debt Securities of a series. A meeting will be
permitted to be called at any time by a 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 such Indenture. Except
for any consent that must be given by the holder of each Debt
Security affected by certain modifications and amendments of the
applicable 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 for 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 applicable Indenture will be binding on all holders of
Debt Securities of that series. The quorum at any meeting called
to adopt a resolution, and at any reconvened meeting, will be
persons holding or representing a majority in principal amount of
the outstanding Debt Securities of a series; provided, however,
that if any action is to be taken at such meeting with respect to
a consent or waiver which may be given by the holders of not less
than a specified percentage in principal amount of the outstanding
Debt Securities of a series, the persons holding or representing
such specified percentage in principal amount of the outstanding
Debt Securities of such series will constitute a quorum.
Notwithstanding the foregoing provisions, each Indenture will
provide that if any action is to be taken at a meeting of holders
of Debt Securities of any series with respect to any request,
demand, authorization, direction, notice, consent, waiver or other
action that such Indenture expressly provides may be made, given or
taken by the holders of such series and one or more additional
series: (i) there shall be no minimum quorum requirement for such
meeting and (ii) the principal amount of the outstanding Debt
Securities of such series that vote in favor of such request,
demand, authorization, direction, notice, consent, waiver or other
action shall be taken into account in determining whether such
request, demand, authorization, direction, notice, consent, waiver
or other action has been made, given or taken under such Indenture.
SUBORDINATION
The terms and conditions, if any, upon which the Debt
Securities are subordinated to other indebtedness of the Company
will be set forth in the applicable Prospectus Supplement relating
thereto. Such terms will include a description of the indebtedness
ranking senior to the Debt Securities, the restrictions on payments
to the holders of such Debt Securities while default with respect
to such senior indebtedness is continuing, the restrictions, if
any, on payments to the holders of such Debt Securities following
an Event of Default, and provisions requiring holders of such Debt
Securities to remit certain payments to holders of senior
indebtedness. If this Prospectus is being delivered in connection
with a series of Debt Securities, which by its terms are
subordinated to other indebtedness of the Company, the applicable
Prospectus Supplement or the information incorporated herein by
reference will set forth the approximate amount of such other
indebtedness outstanding at the end of the Company's most recent
fiscal quarter. Further, the applicable Prospectus Supplement
relating to the issuance of Debt Securities by the Company will
describe the extent to which any such Debt Securities will be
structurally subordinate to indebtedness of the subsidiaries of the
Company.
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 applicable 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 such Trustee, in trust, funds in such currency or
currencies, currency unit or units or composite currency or
currencies in which such Debt Securities are payable in an amount
sufficient to pay the entire indebtedness on such Debt Securities
in respect of principal (and premium, if any) and interest to the
date of such deposit (if such Debt Securities have become due and
payable) or to the stated maturity or redemption date, as the case
may be.
Each Indenture will provide that, if certain provisions
thereof are made applicable to the Debt Securities of or within a
series pursuant to such Indenture, the Company may elect either
(i) 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 (ii) to be
released from its obligations with respect to such Debt Securities
under certain sections of such Indenture (including the
restrictions described under " Certain Covenants") and, if provided
pursuant to such 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 Securities ("covenant defeasance"), in either case
upon the irrevocable deposit by the Company with the applicable
Trustee, in trust, of an amount, in such currency or currencies,
currency unit or units of composite currency or currencies in which
such Debt Securities are payable at stated maturity, or Government
Obligations (as defined below), or both, applicable to such Debt
Securities which through the scheduled payment of principal and
interest in accordance with their terms will provide money in an
amount sufficient to pay the principal of (and premium, if any) and
interest on such Debt Securities, and any mandatory sinking fund or
analogous payments thereon, on the scheduled dates therefor.
Such a trust will only be permitted to be established if,
among other things, the Company has delivered to the Trustee an
opinion of counsel (as specified in the applicable Indenture) to
the effect that the holders of such Debt Securities will not
recognize income, gain or loss for federal income tax purposes as
a result of such defeasance or covenant defeasance and will be
subject to federal income tax on the same amounts, in the same
manner and at the same times as would have been the case if such
defeasance or covenant defeasance had not occurred.
"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
a particular series are payable, the payment of which is
unconditionally guaranteed as a full faith and credit obligation by
the United States of America or such other government, which, in
either case, are not callable or redeemable at the option of the
issuer thereof, and shall also include a depository receipt issued
by a bank or trust company as custodian with respect to any such
Government Obligation or a specific payment of interest on or
principal of any such Government Obligation held by such custodian
for the account of the holder of a depository receipt, provided
that (except as required by law) such custodian is not authorized
to make any deduction from the amount payable to the holder of such
depository receipt from any amount received by the custodian in
respect of the Government Obligations or the specific payment of
interest on or principal of the Government Obligations evidenced by
such depository receipt.
Unless otherwise provided in the applicable Prospectus
Supplement, if after the Company has deposited funds and/or
Government Obligations to effect defeasance or covenant defeasance
with respect to Debt Securities of any series, (i) the holder of a
Debt Security of such series is entitled to, and does, elect
pursuant to the applicable Indenture or the terms of such Debt
Security to receive payment in a currency, currency unit or
composite currency other than that in which such deposit has been
made in respect of such Debt Security, or (ii) a Conversion Event
(as defined below) occurs in respect of the currency, currency unit
or composite currency in which such deposit has been made, the
indebtedness represented by such Debt Security 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 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 European Currency Unit (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, if any, on any
Debt Security that is payable in a foreign currency that ceases to
be used by its government of issuance shall be made in U.S.
dollars.
In the event the Company effects covenant defeasance with
respect to any Debt Securities and such Debt Securities are
declared due and payable because of the occurrence of any event of
default other than the event of default described in clause (iv)
under " Events of Default, Notice and Waiver" with respect to
certain sections of the applicable Indenture (which sections would
no longer be applicable to such Debt Securities) or described in
clause (vii) under " Events of Default, Notice and Waiver" with
respect to any other covenant as to which there has been covenant
defeasance, the amount in such currency, currency unit or composite
currency in which such Debt Securities are payable, and Government
Obligations on deposit with the applicable Trustee, will be
sufficient to pay amounts due on such Debt Securities at the time
of their stated maturity but may not be sufficient to pay amounts
due on such Debt Securities at the time of the acceleration
resulting from such event of default. However, the Company would
remain liable to make payment of such amounts due at the time of
acceleration.
The applicable Prospectus Supplement may further describe the
provisions, if any, permitting such defeasance or covenant
defeasance, including any modifications to the provisions described
above, with respect to the Debt Securities of or within a
particular series.
CONVERSION RIGHTS
The terms and conditions, if any, upon which the Debt
Securities are convertible into Common Stock will be set forth in
the applicable Prospectus Supplement relating thereto. Such terms
will include the conversion price (or manner of calculation
thereof), the conversion period, provisions as to whether
conversion will be at the option of the holders or the Company, the
events requiring an adjustment of the conversion price and
provisions affecting conversion in the event of the redemption of
such Debt Securities and any restrictions on conversion, including
restrictions directed at maintaining the Company's REIT status.
GLOBAL SECURITIES
The Debt Securities of a series may be issued in whole or in
part in the form of one or more global securities (the "Global
Securities") that will be deposited with, or on behalf of, a
depositary identified in the applicable Prospectus Supplement
relating to such series. Global Securities may be issued in either
registered or bearer form and in either temporary or permanent
form. The specific terms of the depositary arrangement with
respect to a series of Debt Securities will be described in the
applicable Prospectus Supplement relating to such series.
DESCRIPTION OF SECURITIES WARRANTS
GENERAL
The Company may issue Securities Warrants for the purchase of
Debt Securities, Preferred Stock or Common Stock. Securities
Warrants may be issued independently or together with any other
Offered Securities offered by any Prospectus Supplement or through
a dividend or other distribution to the Company's stockholders and
may be attached to or separate from such Offered Securities. Each
series of Securities Warrants will be issued under a separate
warrant agreement (each, a "Warrant Agreement") to be entered into
between the Company and a warrant agent specified in the applicable
Prospectus Supplement (the "Warrant Agent"). The Warrant Agent
will act solely as an agent of the Company in connection with the
Securities Warrants of such series and will not assume any
obligation or relationship of agency or trust for or with any
holders or beneficial owners of Securities Warrants. The following
summaries of certain provisions of the Securities Warrant Agreement
and the Securities Warrants do not purport to be complete and are
subject to, and are qualified in their entirety by reference to,
all the provisions of the Securities Warrant Agreement and the
Securities Warrant certificates relating to each series of
Securities Warrants which will be filed with the Commission and
incorporated by reference as an exhibit to the Registration
Statement of which this Prospectus is a part at or prior to the
time of the issuance of such series of Securities Warrants.
If Securities Warrants are offered, the applicable Prospectus
Supplement will describe the terms of such Securities Warrants,
including, in the case of Securities Warrants for the purchase of
Debt Securities, the following where applicable: (i) the title of
such Securities Warrants; (ii) the aggregate number of such
Securities Warrants; (iii) the offering price; (iv) the
denominations and terms of the series of Debt Securities
purchasable upon exercise of such Securities Warrants; (v) the
designation and terms of any series of Debt Securities with which
such Securities Warrants are being offered and the number of such
Securities Warrants being offered with such Debt Securities;
(vi) the date, if any, on and after which such Securities Warrants
and the related series of Debt Securities will be transferable
separately; (vii) the principal amount of the series of Debt
Securities purchasable upon exercise of each such Securities
Warrant and the price at which such principal amount of Debt
Securities of such series may be purchased upon such exercise;
(viii) the date on which the right to exercise such Securities
Warrants shall commence and the date on which such right shall
expire (the "Expiration Date"); (ix) whether the Securities
Warrants will be issued in registered or bearer form; (x) any
special Federal income tax consequences; (xi) the terms, if any,
on which the Company may accelerate the date by which the
Securities Warrants must be exercised; and (xii) any other material
terms of such Securities Warrants.
In the case of Securities Warrants for the purchase of
Preferred Stock or Common Stock, the applicable Prospectus
Supplement will describe the terms of such Securities Warrants,
including the following where applicable: (i) the title of such
Securities Warrants; (ii) the aggregate number of such Securities
Warrants; (iii) the offering price; (iv) the aggregate number of
shares purchasable upon exercise of such Securities Warrants, the
exercise price, and in the case of Securities Warrants exercisable
for Preferred Stock, the designation, aggregate number and terms of
the series of Preferred Stock purchasable upon exercise of such
Securities Warrants exercisable, (v) the designation and terms of
any series of Preferred Stock with which such Securities Warrants
are being offered and the number of such Securities Warrants being
offered with such Preferred Stock; (vi) the date, if any, on and
after which such Securities Warrants and the related series of
Preferred Stock or Common Stock will be transferable separately;
(vii) the date on which the right to exercise such Securities
Warrants shall commence and the Expiration Date; (viii) any special
Federal income tax consequences; and (ix) any other material terms
of such Securities Warrants.
Securities Warrant certificates may be exchanged for new
Securities Warrant certificates of different denominations, may (if
in registered form) be presented for registration of transfer, and
may be exercised at the corporate trust office of the Warrant Agent
or any other office indicated in the applicable Prospectus
Supplement. Prior to the exercise of any Securities Warrants to
purchase Debt Securities, holders of such Securities Warrants will
not have any of the rights of holders of the Debt Securities
purchasable upon such exercise, including the right to receive
payments of principal, premium, if any, or interest, if any, on
such Debt Securities or to enforce covenants in the applicable
Indenture. Prior to the exercise of any Securities Warrants to
purchase Preferred Stock or Common Stock, holders of such
Securities Warrants will not have any rights of holders of such
Preferred Stock or Common Stock, including the right to receive
payments of dividends, if any, on such Preferred Stock or Common
Stock, or to exercise any applicable right to vote.
EXERCISE OF SECURITIES WARRANTS
Each Securities Warrant will entitle the holder thereof to
purchase such principal amount of Debt Securities or number of
shares of Preferred Stock or Common Stock, as the case may be, at
such exercise price as shall in each case be set forth in, or
calculable from, the Prospectus Supplement relating to the offered
Securities Warrants. After the close of business on the Expiration
Date (or such later date to which such Expiration Date may be
extended by the Company), unexercised Securities Warrants will
become void.
Securities Warrants may be exercised by delivering to the
Warrant Agent payment as provided in the applicable Prospectus
Supplement of the amount required to purchase the Debt Securities,
Preferred Stock or Common Stock, as the case may be, purchasable
upon such exercise together with certain information set forth on
the reverse side of the Securities Warrant certificate. Securities
Warrants will be deemed to have been exercised upon receipt of
payment of the exercise price, subject to the receipt within five
(5) business days of the Securities Warrant certificate evidencing
such Securities Warrants. Upon receipt of such payment and the
Securities Warrant certificate properly completed and duly executed
at the corporate trust office of the Warrant Agent or any other
office indicated in the applicable Prospectus Supplement, the
Company will, as soon as practicable, issue and deliver the Debt
Securities, Preferred Stock or Common Stock, as the case may be,
purchasable upon such exercise. If fewer than all of the
Securities Warrants represented by such Securities Warrant
certificate are exercised, a new Securities Warrant certificate
will be issued for the remaining amount of Securities Warrants.
AMENDMENTS AND SUPPLEMENTS TO WARRANT AGREEMENT
The Warrant Agreements may be amended or supplemented without
the consent of the holders of the Securities Warrants issued
thereunder to effect changes that are not inconsistent with the
provisions of the Securities Warrants and that do not adversely
affect the interests of the holders of the Securities Warrants.
ADJUSTMENTS
Unless otherwise indicated in the applicable Prospectus
Supplement, the exercise price of, and the number of shares of
Common Stock covered by, a Common Stock Warrant are subject to
adjustment in certain events, including (i) payment of a dividend
on the Common Stock payable in shares of capital stock and stock
splits, combinations or reclassification of the Common Stock; (ii)
issuance to all holders of Common Stock of rights or warrants to
subscribe for or purchase shares of Common Stock at less than their
current market price (as defined in the Warrant Agreement for such
series of Common Stock Warrants); and (iii) certain distributions
of evidences of indebtedness or assets (including securities but
excluding cash dividends or distributions paid out of consolidated
earnings or dividends payable in Common Stock) or of subscription
rights and warrants (excluding those referred to above).
No adjustment will be required unless such adjustment would
require a change of at least 1% in the exercise price then in
effect. Except as stated above, the exercise price of, and the
number of Common Stock covered by, a Common Stock Warrant will not
be adjusted for the issuance of Common Stock or any securities
convertible into or exchangeable for Common Stock, or carrying the
right or option to purchase or otherwise acquire the foregoing, in
exchange for cash, other property or services. No adjustment in
the exercise price of, and the number of Common Stock covered by,
a Common Stock Warrant will be made for regular quarterly or other
periodic or recurring cash dividends or distributions or for cash
dividends or distributions to the extent paid from consolidated
earnings.
In the event of any (i) consolidation or merger of the Company
with or into any entity (other than a consolidation or a merger
that does not result in any reclassification, conversion, exchange
or cancellation of outstanding shares of Common Stock); (ii) sale,
transfer, lease or conveyance of all or substantially all of the
assets of the Company; or (iii) reclassification, capital
reorganization or change of the Common Stock (other than solely a
change in par value or from par value to no par value), then any
holder of a Common Stock Warrant will be entitled, on or after the
occurrence of any such event, to receive on exercise of such Common
Stock Warrant the kind and amount of shares of capital stock or
other securities, cash or other property (or any combination
thereof) that the holder would have received had such holder
exercised such holder's Common Stock Warrant immediately prior to
the occurrence of such event. If the consideration to be received
upon exercise of the Common Stock Warrant following any such event
consists of common shares of the surviving entity, then from and
after the occurrence of such event, the exercise price of such
Common Stock Warrant will be subject to the same anti-dilution and
other adjustments described in the second preceding paragraph,
applied as if such shares were Common Stock.
FEDERAL INCOME TAX CONSIDERATIONS
The following is a summary of the material Federal income tax
considerations affecting the Company and its stockholders. This
discussion is directed principally at investors who are United
States citizens or residents or domestic corporations, and does not
address in all material respects considerations that might
adversely affect the treatment of investors who are subject to
special treatment under the tax laws (such as insurance companies,
cooperatives, financial institutions, broker-dealers, tax exempt
organizations or foreign investors). The discussion in this
section is based on existing provisions of the Code, existing and
proposed Treasury regulations, existing court decisions and
existing rulings and other administrative interpretations. There
can be no assurance that future Code provisions or other legal
authorities will not alter significantly the tax consequences
described below. The Taxpayer Relief Act of 1997 (the "Tax Act")
contains several provisions affecting REITs and is generally
effective January 1, 1998. No rulings have been obtained from the
Internal Revenue Service ("IRS") concerning any of the matters
discussed in this section. Because the following represents only
a summary, it is qualified in its entirety by the applicable
provisions of the Code, and regulations, court decisions and IRS
rulings and other IRS pronouncements.
Each prospective purchaser of shares of Common Stock and/or
Preferred Stock is advised to consult his or her own tax advisor
about the Federal, state, local, foreign and other tax consequences
of buying, holding and selling shares of Common Stock and/or
Preferred Stock, and of the Company's election to be taxed as a
REIT, particularly in light of that purchaser's specific
circumstances.
REIT QUALIFICATION
Entities like the Company that invest principally in real
estate and that otherwise would be taxed as regular corporations
may elect to be treated as REITs when they satisfy certain detailed
requirements imposed by the Code. If the Company qualifies for
taxation as a REIT, it generally will not be subject to corporate
income tax to the extent the Company currently distributes its REIT
taxable income to its stockholders. This treatment effectively
eliminates the "double taxation" (i.e., taxation at both the
corporate and stockholder levels) imposed on investments in most
regular corporations. A qualifying REIT, however, may be subject
to certain excise and other taxes, as well as to normal corporate
tax on taxable income that is not currently distributed to its
stockholders. See " Taxation of the Company as a REIT." In
addition, if the Company fails to qualify as a REIT in any taxable
year, it will be subject to Federal income tax at regular corporate
rates on all of its taxable income. The current maximum Federal
tax rate for corporations is 35%, but that rate may increase.
The Company has elected to be treated as a REIT for Federal
income tax purposes commencing with its taxable year ended
December 31, 1994, and for each subsequent taxable year. The
Company believes that, commencing with such taxable year, it has
been organized and has operated in such a manner as to qualify for
taxation as a REIT under the Code, commencing with such taxable
year, and the Company intends to continue to operate in such a
manner. Winstead Sechrest & Minick P.C., counsel to the Company,
is of the opinion that the Company is organized in conformity with
the requirements for qualification as a REIT, and its method of
operation will enable it to continue to meet the requirements for
qualification and taxation as a REIT under the Code. This opinion
is based on various assumptions and is conditioned upon such
assumptions and certain representations made by the Company as to
factual matters. The rules governing REITs are highly technical
and require ongoing compliance with a variety of tests that depend,
among other things, on future operating results. Winstead Sechrest
& Minick P.C. will not monitor the Company's compliance with these
requirements. While the Company expects to satisfy these tests,
and will use its best efforts to do so, no assurance can be given
that the Company will qualify as a REIT for any particular year, or
that the applicable law will not change and adversely affect the
Company and its stockholders. See " Failure to Qualify as a
REIT."
General Qualification Requirements. The Company must be
organized as an entity that would, if it does not maintain its REIT
status, be taxable as a regular corporation. It cannot be a
financial institution or an insurance company. The Company must be
managed by one or more directors. The Company currently meets and
expects to continue to meet, each of these requirements. The
Company also expects to satisfy the requirements that are
separately described below concerning share ownership and
reporting, the nature and amounts of the Company's income and
assets and the levels of required annual distributions.
Share Ownership; Reporting. Beneficial ownership of the
Company must be and is evidenced by transferable shares (or
transferable certificates of beneficial interest). The shares of
Common Stock must be held by at least 100 persons for approximately
92% of the days in each taxable year. Not more than 50% of the
value of the shares of capital stock may be held, directly or
indirectly, applying certain constructive ownership rules, by five
or fewer individuals at any time during the last half of each of
the Company's taxable years. The Company is not required to
satisfy these 100 person and 50% tests until its second taxable
year for which an election is made to be taxed as a REIT. The
Company believes that its shares of Common Stock are owned by a
sufficient number of investors and in appropriate proportions to
permit it to continue satisfying these requirements. To protect
against violations of these requirements, the Articles provide that
no person is permitted to own (applying certain constructive
ownership tests) more than the Ownership Limit. The Ownership
Limit does not apply to (i) acquisitions by any person that has
made a tender offer for all outstanding shares of Common Stock in
conformity with applicable securities laws; (ii) the acquisition of
shares of Common Stock by an underwriter in a public offering;
(iii) the acquisition of shares of Common Stock pursuant to the
exercise of employee share options; or (iv) acquisitions approved
by the Board. In addition, the Articles contain restrictions on
transfers of the Company's shares of Common Stock, as well as
provisions that automatically convert shares of Common Stock into
nonvoting, non-dividend paying Excess Stock to the extent that the
ownership otherwise might jeopardize the Company's REIT status.
See "Description of Common Stock Restrictions on Transfer."
Special rules for determining stock ownership apply to certain
qualified pension and profit sharing trusts. See " Taxation of
Tax Exempt Entities."
To monitor the Company's compliance with the share ownership
requirements, the Company is required to maintain records
disclosing the actual ownership of shares of Common Stock. To do
so, the Company must demand written statements each year from the
record holders of certain percentages of shares of Common Stock in
which the record holders are to disclose the actual owners of the
shares (i.e., the persons required to include in gross income the
REIT dividends). (A REIT with 2,000 or more record stockholders
must demand statements from record holders of 5% or more of its
shares, one with fewer than 2,000, but more than 200 record
stockholders must demand statements from record holders of 1% or
more of the shares, while a REIT with 200 or fewer record
stockholders must demand statements from record holders of 0.5% or
more of the shares.) A list of those persons failing or refusing
to comply with this demand must be maintained as part of the
Company's records. Stockholders who fail or refuse to comply with
the demand must submit a statement with their tax returns
disclosing the actual ownership of the shares of Common Stock and
certain other information.
Sources of Gross Income. In order to qualify as a REIT for a
particular year, the Company also must meet three tests governing
the sources of its income. These tests are designed to ensure that
a REIT derives its income principally from passive real estate
investments. The Company satisfied these three tests for its
taxable year ended December 31, 1996. In evaluating a REIT's
income, the REIT will be treated as receiving its proportionate
share of the income produced by any partnership in which the REIT
invests, and any such income will retain the character that it has
in the hands of the partnership. The Code allows the Company to
own and operate a number of its properties through wholly-owned
subsidiaries which are "qualified REIT subsidiaries." The Code
provides that a qualified REIT subsidiary is not treated as a
separate corporation, and all of its assets, liabilities and items
of income, deduction and credit are treated as assets, liabilities
and such items of the REIT.
75% Gross Income Test. At least 75% of a REIT's gross income
for each taxable year must be derived from specified classes of
income that principally are real estate related. The permitted
categories of principal importance to the Company are: (a) rents
from real property; (b) interest on loans secured by real property;
(c) gain from the sale of real property or loans secured by real
property (excluding gain from the sale of property held primarily
for sale to customers in the ordinary course of the Company's trade
or business, referred to below as "dealer property"); (d) income
from the operation and gain from the sale of certain property
acquired in connection with the foreclosure of a mortgage securing
that property ("foreclosure property"); (e) distributions on, or
gain from the sale of, shares of other qualifying REITs;
(f) abatements and refunds of real property taxes; and
(g) "qualified temporary investment income" (described below). In
evaluating the Company's compliance with the 75% income test (as
well as the 95% income test described below), gross income does not
include gross income from "prohibited transactions." A prohibited
transaction is one involving a sale of dealer property, not
including foreclosure property and certain dealer property held by
the Company for at least four years.
The Company expects that substantially all of its operating
gross income from the Properties will be considered rent from real
property. Rent from real property is qualifying income for
purposes of the 75% income test only if certain conditions are
satisfied. Rent from real property includes charges for services
customarily rendered to residents, and rent attributable to
personal property leased together with the real property so long as
the personal property rent is less than 15% of the total rent. The
Company does not expect to earn material amounts in these
categories. Rent from real property generally does not include
rent based on the income or profits derived from the property.
Also excluded is rent received from a person or corporation in
which the Company (or any of its 10% or greater owners) owns a 10%
or greater interest. The Company does not expect to earn income in
these two excluded categories. A third exclusion covers amounts
received with respect to real property if the Company furnishes
services to the residents or manages or operates the property,
other than through an "independent contractor" from whom the
Company does not derive any income. The obligation to operate
through an independent contractor generally does not apply,
however, if any services provided by the Company are "usually or
customarily rendered" in connection with the rental of space for
occupancy only and are not considered rendered primarily for the
convenience of the resident (applying standards that govern in
evaluating whether rent from real property would be unrelated
business taxable income when received by a tax exempt owner of the
property). The Tax Act provides a de minimis rule for
non-customary services which is effective for taxable years
beginning after August 5, 1997. If the value of the non-customary
service income with respect to a property (valued at no less than
150% of the Company's direct cost of performing such services) is
1% or less of the total income derived from the property, then all
rental income except the non-customary service income will qualify
as "rents from real property." This provision will be effective
for the Company's taxable year ending December 31, 1998.
The Company will, in most instances, directly operate and
manage the Properties without using an "independent contractor."
The Company believes that the only material services to be provided
to the residents will be those usually or customarily rendered in
connection with the rental of space for occupancy only. The
Company will not provide services that might be considered rendered
primarily for the convenience of the residents, such as hotel,
health care or extensive recreational or social services.
Consequently, the Company believes that substantially all of its
rental income from the Properties will be qualifying income under
the 75% income test, and that the Company's provision of services
will not cause the rental income to fail to be included under that
test.
Upon the Company's ultimate sale of its Properties, any gains
realized also are expected to constitute qualifying income, as gain
from the sale of real property (not involving a prohibited
transaction).
95% Gross Income Test. In addition to earning 75% of its
gross income from the sources listed above, at least an additional
20% of the Company's gross income for each taxable year must come
either from those sources, or from dividends, interest or gains
from the sale or other disposition of stock or other securities
that do not constitute dealer property. This test permits a REIT
to earn a significant portion of its income from traditional
"passive" investment sources that are not necessarily real estate
related. The term "interest" (under both the 75% and 95% tests)
does not include amounts that are based on the income or profits of
any person, unless the computation is based only on a fixed
percentage of receipts or sales.
Failing the 75% or 95% Tests; Reasonable Cause. As a result
of the 75% and 95% tests, REITs generally are not permitted to earn
more than 5% of their gross income from active sources (such as
brokerage commissions or other fees for services rendered). This
type of income will not qualify for the 75% test or 95% test but is
not expected to be significant and such income and other
nonqualifying income are expected to be at all times less than 5%
of the Company's annual gross income. While the Company does not
anticipate that it will earn substantial amounts of nonqualifying
income, if nonqualifying income exceeds 5% of the Company's gross
income, the Company could lose its status as a REIT. The Company
may establish subsidiaries of which the Company will hold less than
10% of the voting stock to hold assets generating non-qualifying
income. The gross income generated by these subsidiaries would not
be included in the Company's gross income. However, dividends from
such subsidiaries to the Company would be included in the Company's
gross income and qualify for the 95% income test.
If the Company fails to meet either the 75% or 95% income
tests during a taxable year, it may still qualify as a REIT for
that year if (a) it reports the source and nature of each item of
its gross income in its Federal income tax return for that year;
(b) the inclusion of any incorrect information in its return is not
due to fraud with intent to evade tax; and (c) the failure to meet
the tests is due to reasonable cause and not to willful neglect.
However, in that case the Company would be subject to a 100% tax
based on the greater of the amount by which it fails either the 75%
or 95% income tests for such year. See " Taxation of the Company
as a REIT."
30% Income Test. The Company also must earn less than 30% of
its gross income from the sale or other disposition of: (a) real
property and loans secured by real property held for less than four
years (other than foreclosure property and involuntarily
conversions), (b) stock or securities held by the Company for less
than one year and (c) property in a prohibited transaction. The
30% income test does not have a reasonable cause exception as do
the 75% and 95% income tests. Consequently, a failure to meet the
30% income test would terminate the Company's status as a REIT
automatically. Because the Company expects to hold its assets for
long-term investment and does not anticipate selling them within
four years, the Company expects to comply with this requirement.
The Tax Act repeals the 30% gross income tax for taxable years
beginning after its enactment on August 5, 1997. Thus, the 30%
gross income tax will apply only to the Company's taxable years
ending December 31, 1997.
Character of Assets Owned. On the last day of each calendar
quarter, the Company also must meet two tests concerning the nature
of its investments. First, at least 75% of the value of the total
assets of the Company generally must consist of real estate assets,
cash, cash items (including receivables) and government securities.
For this purpose, "real estate assets" include interests in real
property, interests in loans secured by mortgages on real property
or by certain interests in real property, shares in other REITs and
certain options, but exclude mineral, oil or gas royalty interests.
The temporary investment of new capital in debt instruments also
qualifies under this 75% asset test, but only for the one-year
period beginning on the date the Company receives the new capital.
Second, although the balance of the Company's assets generally may
be invested without restriction, the Company will not be permitted
to own (a) securities of any one non-governmental issuer that
represent more than 5% of the value of the Company's total assets
or (b) more than 10% of the outstanding voting securities of any
single issuer. A REIT, however, may own 100% of the stock of a
qualified REIT subsidiary, in which case the assets, liabilities
and items of income, deduction and credit of the subsidiary are
treated as those of the REIT. In evaluating a REIT's assets, if
the REIT invests in a partnership, it is deemed to own its
proportionate share of the assets of the partnership.
The Company anticipates that it complies with these asset
tests. While some portion of its assets initially was invested in
qualifying temporary debt investments, substantially all of the
Company's investments are in its Properties, which should represent
qualifying real estate assets.
Annual Distributions to Stockholders. To maintain REIT
status, the Company generally must distribute to its stockholders
in each taxable year at least 95% of its net ordinary income
(capital gain is not required to be distributed). More precisely,
the Company must distribute an amount equal to (a) 95% of the sum
of (i) its "REIT Taxable Income" before deduction of dividends paid
and excluding any net capital gain and (ii) any net income from
foreclosure property less the tax on such income, minus (b) certain
limited categories of "excess noncash income" (including as a
result of the Tax Act, among other things, cancellation of
indebtedness and original issue discount income). REIT Taxable
Income is defined to be the taxable income of the REIT, computed as
if it were an ordinary corporation, with certain modifications.
For example, the deduction for dividends paid is allowed, but
neither net income from foreclosure property, nor net income from
prohibited transactions, is included. In addition, the REIT may
carry over, but not carry back, a net operating loss for 15 years
following the year in which it was incurred.
A REIT may satisfy the 95% distribution test with dividends
paid during the taxable year and with certain dividends paid after
the end of the taxable year. Dividends paid in January that were
declared during the last calendar quarter of the prior year and
were payable to stockholders of record on a date during the last
calendar quarter of that prior year are treated as paid on
December 31 of the prior year (for both the Company and its
stockholders). Other dividends declared before the due date of the
Company's tax return for the taxable year (including extensions)
also will be treated as paid in the prior year for the Company if
they are paid (a) within 12 months of the end of such taxable year
and (b) no later than the Company's next regular distribution
payment. Dividends that are paid after the close of a taxable year
and do not qualify under the rule governing payments made in
January that is described above will be taxable to the stockholders
in the year paid, even though they may be taken into account by the
Company for a prior year. A nondeductible excise tax equal to 4%
will be imposed on the Company for each calendar year to the extent
that dividends declared and distributed or deemed distributed
before December 31 are less than the sum of (i) 85% of the
Company's "ordinary income" plus (ii) 95% of the Company's capital
gain net income plus (iii) any undistributed income from prior
periods.
The Company will be taxed at regular corporate rates to the
extent that it retains any portion of its taxable income (e.g., if
the Company distributes only the required 95% of its taxable
income, it would be taxed on the retained 5%). Under certain
circumstances the Company may not have sufficient cash or other
liquid assets to meet the distribution requirement. This could
arise because of competing demands for the Company's funds, or due
to timing differences between tax reporting and cash receipts and
disbursements (i.e., income may have to be reported before cash is
received, or expenses may have to be paid before a deduction is
allowed). Although the Company does not anticipate any difficulty
in meeting this requirement, no assurance can be given that
necessary funds will be available.
If the Company fails to meet the 95% distribution requirement
because of an adjustment to the Company's taxable income by the
IRS, the Company may be able to cure the failure retroactively by
paying a "deficiency dividend" (as well as applicable interest and
penalties) within a specified period.
TAXATION OF THE COMPANY AS A REIT
The Company has adopted the calendar year for Federal income
tax purposes, and uses the accrual method of accounting. For each
taxable year in which the Company qualifies as a REIT, it generally
will be taxed only on the portion of its taxable income that it
retains (which will include undistributed net capital gain),
because the Company will be entitled to a deduction for its
dividends paid to stockholders during the taxable year. A
dividends paid deduction is not available for dividends that are
considered preferential within any given class of shares or as
between classes except to the extent such class is entitled to such
preference. The Company does not anticipate that it will pay any
such preferential dividends. The Articles provide for the
automatic exchange of outstanding shares of Common Stock or
Preferred Stock for Excess Stock in circumstances in which the
Company's REIT status might otherwise be put into jeopardy (i.e.,
if a person attempts to acquire a block of shares that would be
sufficient to cause the Company to fail the requirement that five
or fewer individuals may not own more than 50% of the value of the
outstanding shares). Because Excess Stock will represent a
separate class of outstanding shares, the fact that those shares
will not be entitled to dividends should not adversely affect the
Company's ability to deduct its dividend payments.
Regardless of its qualification as a REIT, the Company will be
subject to tax in certain circumstances. The Company would be
subject to tax on any income or gain from foreclosure property at
the highest corporate rate (currently 35%). A confiscatory tax of
100% applies to any net income from prohibited transactions. In
addition, if the Company fails to meet either the 75% or 95% source
of income tests described above, but still qualifies for REIT
status under the reasonable cause exception to those tests, a 100%
tax would be imposed equal to the amount obtained by multiplying
(a) the greater of the amount, if any, by which it failed either
the 75% income test or the 95% income test, times (b) the ratio of
the Company's REIT Taxable Income to the Company's gross income
(excluding capital gain and certain other items). The Company also
will be subject to the minimum tax on items of tax preference
(excluding items specifically allocable to the Company's
stockholders). Finally, under regulations that are to be
promulgated, the Company also may be taxed at the highest regular
corporate tax rate on any built-in gain (i.e., the excess of value
over adjusted tax basis) attributable to assets that the Company
acquires in certain tax-free corporate transactions, to the extent
the gain is recognized during the first ten years after the Company
acquires such assets.
FAILURE TO QUALIFY AS A REIT
For any taxable year in which the Company fails to qualify as
a REIT, it would be taxed at the usual corporate rates on all of
its taxable income. Distributions to its stockholders would not be
deductible in computing that taxable income, and distributions
would no longer be required. Any corporate level taxes generally
would reduce the amount of cash available to the Company for
distribution to its stockholders and, because the stockholders
would continue to be taxed on the distributions they receive, the
net after tax yield to the stockholders from their investment in
the Company likely would be reduced substantially. As a result,
the Company's failure to qualify as a REIT during any taxable year
could have a material adverse effect upon the Company and its
stockholders. If the Company loses its REIT status, unless certain
relief provisions apply, the Company will not be eligible to elect
REIT status again until the fifth taxable year which begins after
the first year for which the Company's election was terminated.
If, after forfeiting its REIT status, the Company later
qualifies and elects to be taxed as a REIT again, the Company may
face significant adverse tax consequences. Prior to the end of the
year in which the Company sought to qualify again as a REIT, the
Company would be required to make distributions sufficient to
eliminate any earnings and profits accumulated during its period of
non-REIT status. Moreover, immediately prior to the effectiveness
of the election to return to REIT status, the Company would be
treated as having disposed of all of its assets in a taxable
transaction, triggering taxable gain with respect to the Company's
appreciated assets. In that event, however, the Company would be
permitted to elect an alternative treatment under which those gains
would be taken into account only as and when they actually are
recognized upon sales of the appreciated property occurring within
a ten-year period. The Company would be required to distribute at
least 95% of any such recognized gains, but it would not receive
the benefit of a dividends paid deduction to reduce those taxable
gains. Thus, any such gains on appreciated assets would be subject
to double taxation (i.e., at the corporate level as well as the
stockholder level).
TAXATION OF STOCKHOLDERS
Distributions generally will be taxable to stockholders as
ordinary income to the extent of the Company's earning and profits.
Dividends declared during the last quarter of a calendar year and
actually paid during January of the immediately following calendar
year are generally treated as if received by the stockholders on
December 31 of the calendar year during which they were declared.
Distributions paid to stockholders will not constitute passive
activity income, and as a result generally cannot be offset by
losses from passive activities of a stockholder who is subject to
the passive activity rules. Distributions designated by the
Company as capital gains dividends generally will be taxed as long
term capital gains to stockholders to the extent that the
distributions do not exceed the Company's actual net capital gain
for the taxable year. Corporate stockholders may be required to
treat up to 20% of any such capital gains dividends as ordinary
income. The Tax Act provides that beginning with the taxable year
ended December 31, 1998, if the Company elects to retain and pay
income tax on any net long-term capital gain, stockholders of the
Company would include in their income as long-term capital gain
their proportionate share of such net long-term capital gain. Such
stockholders would receive a credit for such stockholders'
proportionate share of the tax paid by the Company on such retained
capital gains and an increase in basis in the stock of the Company
in an amount equal to the difference between the undistributed
long-term capital gains and the amount of tax paid by the Company.
Distributions by the Company, whether characterized as ordinary
income or as capital gains, are not eligible for the dividends
received deduction for corporations. Stockholders are not
permitted to deduct losses or loss carry-forwards of the Company.
Future regulations may require that the stockholders take into
account, for purposes of computing their individual alternative
minimum tax liability, certain tax preference items of the Company.
The Company may generate cash in excess of its net earnings.
If the Company distributes cash to stockholders in excess of the
Company's current and accumulated earnings and profits (other than
as a capital gain dividend), the excess cash will be deemed to be
a return of capital to each stockholder to the extent of the
adjusted tax basis of the stockholder's shares of Common Stock.
Distributions in excess of the adjusted tax basis will be treated
as gain from the sale or exchange of the shares of stock. A
stockholder who has received a distribution in excess of current
and accumulated earnings and profits of the Company may, upon the
sale of the shares, realize a higher taxable gain or a smaller loss
because the basis of the shares of Common Stock as reduced will be
used for purposes of computing the amount of the gain or loss.
Generally, gain or loss realized by a stockholder upon the
sale of shares of Common Stock will be reportable as capital gain
or loss. If a stockholder receives a long-term capital gain
dividend from the Company and has held the shares of Common Stock
for six months or less, any loss incurred on the sale or exchange
of the shares of Common Stock is treated as a long-term capital
loss, to the extent of the corresponding long-term capital gain
dividend received.
In any year in which the Company fails to qualify as a REIT,
the stockholders generally will continue to be treated in the same
fashion described above, except that no Company dividends will be
eligible for treatment as capital gains dividends, corporate
stockholders will qualify for the dividends received deduction and
the stockholders will not be required to report any share of the
Company's tax preference items.
BACKUP WITHHOLDING
The Company will report to its stockholders and the IRS the
amount of dividends paid during each calendar year and the amount
of tax withheld, if any. If a stockholder is subject to backup
withholding, the Company will be required to deduct and withhold
from any dividends payable to that stockholder a tax of 31%. These
rules may apply (a) when a stockholder fails to supply a correct
taxpayer identification number, (b) when the IRS notifies the
Company that the stockholder is subject to the rules or has
furnished an incorrect taxpayer identification number or (c) in the
case of corporations or others within certain exempt categories,
when they fail to demonstrate that fact when required. A
stockholder that does not provide a correct taxpayer identification
number may also be subject to penalties imposed by the IRS. Any
amount withheld as backup withholding may be credited against the
stockholder's Federal income tax liability. The Company also may
be required to withhold a portion of capital gain distributions
made to stockholders who fail to certify their non-foreign status
to the Company.
TAXATION OF TAX EXEMPT ENTITIES
In general, a tax exempt entity that is a stockholder of the
Company will not be subject to tax on distributions from the
Company or gain realized on the sale of shares of Common Stock. In
Revenue Ruling 66-106, the IRS specifically confirmed that a REIT's
distributions to a tax exempt employees' pension trust did not
constitute unrelated business taxable income ("UBTI"). A tax
exempt entity may be subject to UBTI, however, to the extent that
it has financed the acquisition of its shares with "acquisition
indebtedness" within the meaning of the Code. The Revenue
Reconciliation Act of 1993 has modified the rules for tax exempt
employees' pension and profit sharing trusts which qualify under
Code Section 401(a) and are exempt from tax under Code
Section 501(a) ("qualified trusts") for tax years beginning after
December 31, 1993. Under the new rules, in determining the number
of stockholders a REIT has for purposes of the "50% test" described
above under " REIT Qualification Share Ownership; Reporting,"
generally, any stock held by a qualified trust will be treated as
held directly by its beneficiaries in proportion to their actuarial
interests in such trust and will not be treated as held by such
trust.
A qualified trust owning more than 10% of a REIT may be
required to treat a percentage of dividends from the REIT as
unrelated business taxable income. The percentage is determined by
dividing the REIT's gross income (less direct expenses related
thereto) derived from an unrelated trade or business for the year
by the gross income of the REIT for the year in which the dividends
are paid. However, if this percentage is less than 5%, dividends
are not treated as UBTI. These UBTI rules apply only if the REIT
qualifies as a REIT because of the change in the 50% test discussed
above and if the trust is "predominantly held" by a qualified
trust. A REIT is predominantly held by qualified trusts if at
least one pension trust owns more than 25% of the value of the REIT
or a group of pension trusts individually holding more than 10% of
the value of the REIT collectively owns more than 50% of the value
of the REIT.
For social clubs, voluntary employee benefit associations,
supplemental unemployment benefit trusts and qualified group legal
services plans exempt from Federal income taxation under
Sections 501(c)(7), (c)(9), (c)(17) and (c)(20) of the Code,
respectively, income from an investment in the Company will
constitute UBTI unless the organization is able to deduct an amount
properly set aside or placed in reserve for certain purposes so as
to offset the UBTI generated by the investment in the Company.
These prospective investors should consult their own tax advisors
concerning the "set aside" and reserve requirements.
TAXATION OF FOREIGN INVESTORS
The rules governing Federal income taxation of nonresident
alien individuals, foreign corporations, foreign partnerships and
other foreign stockholders (collectively, "Non-U.S. Stockholders")
are complex and no attempt will be made herein to provide more than
a summary of such rules. Prospective Non-U.S. Stockholders should
consult with their own tax advisors to determine the impact of
Federal, state and local income tax laws with regard to an
investment in shares of Common Stock, including any reporting
requirements, as well as the tax treatment of such an investment
under the laws of their home country.
Dividends that are not attributable to gain from sales or
exchanges by the Company of United States real property interests
and not designated by the Company as capital gain dividends will be
treated as dividends of ordinary income to the extent that they are
made out of current or accumulated earnings and profits of the
Company. Such dividends ordinarily will be subject to a
withholding tax equal to 30% of the gross amount of the dividend
unless an applicable tax treaty reduces or eliminates that tax.
However, if income from the investment in the shares of Common
Stock is treated as effectively connected with the Non-U.S.
Stockholder's conduct of a United States trade or business, the
Non-U.S. Stockholder generally will be subject to a tax at
graduated rates, in the same manner as U.S. stockholders are taxed
with respect to such dividends (and may also be subject to the 30%
branch profits tax in the case of a stockholder that is a foreign
corporation). The Company expects to withhold United States income
tax at the rate of 30% on the gross amount of any such dividends
paid to a Non-U.S. Stockholder unless (i) the Non-U.S. Stockholder
files on IRS Form 1001 claiming that a lower treaty rate applies or
(ii) the Non-U.S. Stockholder files an IRS Form 4224 with the
Company claiming that the dividend is effectively connected income.
Dividends in excess of current and accumulated earnings and profits
of the Company will not be taxable to a stockholder to the extent
that they do not exceed the adjusted basis of the stockholder's
shares of Common Stock, but rather will reduce the adjusted basis
of such shares of Common Stock. To the extent that such dividends
exceed the adjusted basis of a Non-U.S. Stockholder's shares of
Common Stock, they will give rise to tax liability if the Non-U.S.
Stockholder would otherwise be subject to tax on any gain from the
sale or disposition of his shares of Common Stock, as described
below. If it cannot be determined at the time a dividend is paid
whether or not such dividend will be in excess of current and
accumulated earnings and profits, the dividends will be subject to
such withholding. The Company does not intend to make quarterly
estimates of that portion of the dividends that are in excess of
earnings and profits, and as a result, all dividends will be
subject to such withholding. However, the Non-U.S. Stockholder may
seek a refund of such amounts from the IRS.
For any year in which the Company qualifies as a REIT,
dividends that are attributable to gain from sales or exchanges by
the Company of United States real property interests will be taxed
to a Non-U.S. Stockholder under the provisions of the Foreign
Investment in Real Property Tax Act of 1980 ("FIRPTA"). Under
FIRPTA, those dividends are taxed to a Non-U.S. Stockholder as if
such gain were effectively connected with a United States business.
Non-U.S. Stockholders would thus be taxed at the normal capital
gain rates applicable to U.S. stockholders (subject to applicable
alternative minimum tax and a special alternative minimum tax in
the case of nonresident alien individuals). Also, dividends
subject to FIRPTA may be subject to a 30% branch profits tax in the
hands of a foreign corporate stockholder not entitled to treaty
exemption. The Company is required by the Code and applicable
Treasury Regulations to withhold 35% of any dividend that could be
designated by the Company as a capital gain dividend. This amount
is creditable against the Non-U.S. Stockholder's FIRPTA tax
liability.
Gain recognized by a Non-U.S. Stockholder upon a sale of
shares of Common Stock generally will not be taxed under FIRPTA if
the Company is a "domestically controlled REIT," defined generally
as a REIT in which at all times during a specified testing period
less than 50% in value of the stock was held directly or indirectly
by foreign persons. It is currently anticipated that the Company
will be a "domestically controlled REIT," and therefore the sale of
shares of Common Stock will not be subject to taxation under
FIRPTA. Because the Common Stock is publicly traded, however, no
assurance can be given that the Company will remain a "domestically
controlled REIT." However, gain not subject to FIRPTA will be
taxable to a Non-U.S. Stockholder if (i) investment in the shares
of Common Stock is effectively connected with the Non-U.S.
Stockholder's United States trade or business, in which case the
Non-U.S. Stockholder will be subject to the same treatment as U.S.
stockholders with respect to such gain (and may also be subject to
the 30% branch profits tax in the case of a stockholder that is a
foreign corporation), or (ii) the Non-U.S. Stockholder is a
nonresident alien individual who was present in the United States
for 183 days or more during the taxable year and has a "tax home"
in the United States, in which case the nonresident alien
individual will be subject to a 30% tax on the individual's capital
gains. If the Company were not a domestically controlled REIT,
whether or not a Non-U.S. Stockholder's sale of shares of Common
Stock would be subject to tax under FIRPTA would depend on whether
or not the shares of Common Stock were regularly traded on an
established securities market (such as the NYSE) and on the size of
the selling Non-U.S. Stockholder's interest in the Company. If the
gain on the sale of shares were to be subject to taxation under
FIRPTA, the Non-U.S. Stockholder will be subject to the same
treatment as U.S. stockholders with respect to such gain (subject
to applicable alternative minimum tax and a special alternative
minimum tax in the case of nonresident alien individuals) and the
purchaser of such shares may be required to withhold 10% of the
gross purchase price.
Upon the death of a foreign individual stockholder, the
investor's shares will be treated as part of the investor's U.S.
estate for purposes of the U.S. estate tax, except as may be
otherwise provided in an applicable estate tax treaty.
TAX ASPECTS OF TRANSFERRED INTERESTS
The following discussion summarizes certain Federal income tax
considerations applicable solely to Walden's interests in
Walden/Drever Operating Partnership, L.P. and other partnerships
which own multifamily residential properties and which have third
party partners (the "Acquisition Partnerships").
Classification as a Partnership. Walden includes in its
income its distributive share of the Acquisition Partnerships'
income and deducts its distributive share of the Acquisition
Partnerships' losses only if the Acquisition Partnerships are
classified, for Federal income tax purposes, (i) as partnerships
rather than as associations taxable as corporations and (ii) not as
"publicly traded partnerships."
Walden believes that the Acquisition Partnerships will be
treated as partnerships rather than as associations taxable as
corporations.
If for any reason the Acquisition Partnerships were taxable as
corporations rather than as partnerships for Federal income tax
purposes, Walden may not be able to satisfy the income and asset
requirements for status as a REIT. Further, items of income and
deduction of the Acquisition Partnerships would not pass through to
their partners; their partners would be treated as stockholders for
tax purposes. The Acquisition Partnerships would be required to
pay income tax at regular corporate tax rates on their net income
and distributions to partners would constitute dividends to the
extent of the Acquisition Partnerships' earnings and profits. In
addition, any change in the Acquisition Partnerships' status for
tax purposes might be treated as a taxable event, in which case
Walden might incur taxable income without any related cash
distribution. Walden has not requested, and does not intend to
request, a ruling from the IRS that the Acquisition Partnerships
will be treated as "partnerships" for Federal income tax purposes.
Partners, Not the Partnership, Subject to Tax. Partnerships
are not taxable entities for Federal income tax purposes. Rather,
Walden is required to take into account its allocable share of the
Acquisition Partnerships' income, gains, losses, deductions and
credits for any taxable year of the partnerships ending within or
with the taxable year of Walden without regard to whether Walden
has received or will receive any cash distributions from the
Acquisition Partnerships. For purposes of income tests and asset
tests which govern classification of Walden as a REIT, Walden must
include its proportionate share (based upon capital interests) of
the income and assets of any partnership in which it has a direct
or indirect interest.
Partnership Allocations. Although a partnership agreement
will generally determine the allocation of income and losses among
partners, the allocations provided in a partnership agreement will
be disregarded for tax purposes under Section 704(b) of the Code if
they do not comply with the provisions of such Section and the
Treasury Regulations promulgated thereunder. If an allocation is
not recognized for Federal income tax purposes, the item subject to
the allocation will be reallocated in accordance with the partners'
interests in the partnership, which will be determined by taking
into account all of the facts and circumstances relating to the
economic arrangement of the partners with respect to such item.
The Acquisition Partnerships' allocations of taxable income and
loss are intended to comply with the requirements of Section 704(b)
of the Code and the Treasury Regulations promulgated thereunder.
Basis in Partnership Interests. Walden's adjusted tax basis
in a particular partnership interest generally (i) is equal to the
fair market value of the partnership interest as of the date
acquired; (ii) is increased by (a) its allocable share of the
partnership's income and (b) its allocable share of indebtedness of
the partnership on the date acquired and its allocable share of any
increases in such indebtedness thereafter; and (iii) is reduced,
but not below zero, by Walden's allocable share of (a) the
partnership's loss and (b) the amount of cash distributed to
Walden, the basis of property distributed to Walden and
constructive distributions resulting from a reduction in Walden's
share of the indebtedness of the partnership thereafter.
If the allocation of Walden's distributive share of a
partnership's loss would reduce the adjusted tax basis of Walden's
partnership interest in the partnership below zero, the recognition
of such loss will be deferred until such time as the recognition of
such loss would not reduce Walden's adjusted tax basis below zero.
To the extent that a partnership distribution or any decrease in
Walden's share of the indebtedness of a partnership (each such
decrease being considered a constructive cash distribution to the
partners) would reduce Walden's adjusted tax basis in the
partnership below zero, such distributions (including such
constructive distributions) would constitute taxable income to
Walden. Such distributions and constructive distributions normally
will be characterized as a capital gain, and if Walden's
partnership interest in such partnership has been held for longer
than the long-term capital gain holding period, the distributions
and constructive distributions will constitute long-term capital
gains.
STATE AND LOCAL TAXES
The Company and its stockholders may be subject to state or
local taxation in various state or local jurisdictions, including
those in which it or they transact business or reside.
Consequently, prospective stockholders should consult their own tax
advisors regarding the effect of state and local tax laws on an
investment in the Company.
ERISA CONSIDERATIONS
A fiduciary of a pension, profit-sharing, retirement or other
employee benefit plan subject to the Employee Retirement Income
Security Act of 1974, as amended ("ERISA") (a "Plan"), should
consider the fiduciary standards under ERISA in the context of the
Plan's particular circumstances before authorizing an investment of
a portion of such Plan's assets in the shares of Common Stock. In
particular, such fiduciary should consider (i) whether the
investment satisfies the diversification requirements of Section
404(a)(1)(c) of ERISA, (ii) whether the investment is in accordance
with the documents and instruments governing the Plan as required
by Section 404(a)(1)(D) of ERISA, (iii) whether the investment is
for the exclusive purpose of providing benefits to participants in
the Plan and their beneficiaries or defraying reasonable
administrative expenses of the Plan, and (iv) whether the
investment is prudent under ERISA. In addition to the imposition of
general fiduciary standards of investment prudence and
diversification, ERISA, and the corresponding provisions of the
Code, prohibit a wide range of transactions involving the assets of
a Plan or an individual retirement account ("IRA") and persons who
have certain specified relationships to the Plan or an IRA
("parties in interest" within the meaning of ERISA, "disqualified
persons" within the meaning of the Code). Thus, a fiduciary of a
Plan or an IRA considering an investment in the shares of Common
Stock also should consider whether the acquisition or the continued
holding of the shares of Common Stock might constitute or give rise
to a direct or indirect prohibited transaction.
The Department of Labor (the "DOL") has issued final
regulations (the "Regulations") as to what constitutes assets of an
employee benefit plan under ERISA. Under the Regulations, if a Plan
or an IRA acquires an equity interest in an entity, which interest
is neither a "publicly offered security" nor a security issued by
an investment company registered under the Investment Company Act
of 1940, as amended, the Plan's and IRA's assets would include, for
purposes of the fiduciary responsibility provisions of ERISA and
the prohibited transaction provisions of ERISA and the Code, both
the equity interest and an undivided interest in each of the
entity's underlying assets unless certain specified exceptions
apply. The Regulations define a publicly-offered security as a
security that is "widely held," "freely transferable," and either
part of a class of securities registered under the Exchange Act, or
sold pursuant to an effective registration statement under the
Securities Act (provided the securities are registered under the
Exchange Act within 120 days after the end of the fiscal year of
the issuer during which the offering occurred). The Offered
Securities will be sold in an offering registered under the
Securities Act and are or will be registered under the Exchange
Act.
The Regulations provide that a security is "widely held" only
if it is part of a class of securities that is owned by 100 or more
investors independent of the issuer and of one another. A security
will not fail to be "widely held" because the number of independent
investors falls below 100 subsequent to the initial public offering
as a result of events beyond the issuer's control.
The Regulations provide that whether a security is "freely
transferable" is a factual question to be determined on the basis
of all relevant facts and circumstances. The DOL Regulations
further provide that when a security is part of an offering in
which the minimum investment is $10,000 or less certain
restrictions ordinarily will not, alone or in combination, affect
the finding that such securities are freely transferable. The
Company believes that the restrictions imposed under the Articles
on the transfer of the capital stock are limited to the
restrictions on transfer generally permitted under the Regulations
and are not likely to result in the failure of the capital stock to
be "freely transferable." The Company also believes that certain
restrictions that apply to the capital stock held by the Company or
which may be derived from contractual arrangements requested by the
underwriters in connection with Offered Securities offered pursuant
to an underwritten agreement are unlikely to result in the failure
of the capital stock to be "freely transferable." The Regulations
only establish a presumption in favor of the finding of free
transferability, and, therefore, no assurance can be given that the
DOL and the U.S. Treasury Department will not reach a contrary
conclusion.
Assuming that the Offered Securities will be "widely held,"
the Company believes that the Offered Securities will be publicly
offered securities for purposes of the Regulations and that the
assets of the Company will not be deemed to be "plan assets" of any
Plan or IRA that invests in the Offered Securities.
PLAN OF DISTRIBUTION
The Company may sell the Offered Securities through
underwriters or dealers, directly to one or more purchasers
(including executive officers of the Company or other persons that
may be deemed affiliates of the Company), through agents or through
a combination of any such methods of sale. Any underwriter
involved in the offer and sale of the Offered Securities will be
named in the applicable Prospectus Supplement.
The distribution of the Offered Securities may be effected
from time to time in one or more transactions at a fixed price or
prices, which may be changed, at market prices prevailing at the
time of the sale, at prices related to such prevailing market
prices or at negotiated prices. Further, the distribution of any
Common Stock in one or more special offerings pursuant to a
dividend reinvestment plan or other similar plan of the Company may
be effected from time to time at a fixed price or prices, which may
be changed, at market prices prevailing at the time of the sale, at
prices related to such prevailing market prices or at negotiated
prices.
In connection with the sale of the Offered Securities,
underwriters or agents may receive compensation from the Company or
from purchasers of the Offered Securities, for whom they may act as
agents in the form of discounts, concessions or commissions.
Underwriters may sell the Offered Securities to or through dealers,
and such dealers may receive compensation in the form of discounts,
concessions or commissions from the underwriters and/or commissions
from the purchasers for whom they may act as agents. Underwriters,
dealers and agents that participate in the distribution of the
Offered Securities may be deemed to be underwriters under the
Securities Act, and any discounts or commissions they receive from
the Company and any profit on the resale of the Offered Securities
they realize may be deemed to be underwriting discounts and
commissions under the Securities Act. Any such underwriter or
agent will be identified, and any such compensation received from
the Company will be described, in the applicable Prospectus
Supplement.
Unless otherwise specified in the applicable Prospectus
Supplement, each series of the Offered Securities will be a new
issue with no established trading market, other than the Common
Stock which is listed on the NYSE. Any shares of Common Stock sold
pursuant to a Prospectus Supplement will be listed on the NYSE,
subject to official notice of issuance. The Company may elect to
list any series of Securities Warrants, Preferred Stock or Debt
Securities on an exchange, but is not obligated to do so. It is
possible that one or more underwriters may make a market in a
series of the Offered Securities, but will not be obligated to do
so and may discontinue any market making at any time without
notice. Therefore, no assurance can be given as to the liquidity
of, or the trading market for, the Offered Securities.
Under agreements into which the Company may enter,
underwriters, dealers and agents who participate in the
distribution of the Offered Securities may be entitled to
indemnification by the Company, as the case may be, against certain
liabilities, including liabilities under the Securities Act.
Underwriters, dealers and agents may engage in transactions
with, or perform services for, or be tenants of, the Company in the
ordinary course of business.
LEGAL MATTERS
Certain legal matters in connection with the Offered
Securities, including the validity of the Offered Securities, will
be passed upon for the Company by Winstead Sechrest & Minick P.C.,
Dallas, Texas.
EXPERTS
The consolidated financial statements and the related
financial statement schedules of Walden Residential Properties,
Inc. and the combined statements of operations and cash flows of
Walden Predecessors for the period January 1, 1994 through February
8, 1994 which are incorporated in this prospectus by reference from
the Company's Annual Report on Form 10-K for the year ended
December 31, 1996; the combined financial statements of Drever
Partners, Inc. and affiliates as of December 31, 1996 and 1995 and
for each of the three years in the period ended December 31, 1996
which are incorporated in this prospectus by reference from the
Company's Current Report on Form 8-K dated October 16, 1997; the
combined statement of revenues and certain expenses of Arbor Park,
Arbors of Bedford, Arbors of Carrollton, Arbors of Euless, Arbors
of Forest Lane and Arbors of Austin for the year ended December 31,
1996 which is incorporated in this prospectus by reference from the
Company's Current Report on Form 8-K dated August 2, 1997, have
been audited by Deloitte & Touche LLP, independent auditors, as
stated in their reports which are incorporated by reference herein,
and have been so incorporated in reliance upon the reports of such
firm given upon their authority as experts in accounting and
auditing.
INFORMATION NOT REQUIRED IN PROSPECTUS
ITEM 14. OTHER EXPENSES OF ISSUANCE AND DISTRIBUTION.
The estimated expenses expected to be paid by the Company in
connection with the issuance and distribution of the securities
being registered are as follows:
SEC Registration Fee. . . . . . . . . . $ 151,516
Legal Fees and Expenses . . . . . . . . 150,000
Accountant's Fees and Expenses. . . . . 75,000
Blue sky fees and expenses
(including legal fees) . . . . . . . 30,000
Printing and engineering expenses . . . 60,000
Miscellaneous Expenses. . . . . . . . . 33,484
----------
Total . . . . . . . . . . . . . . . $ 500,000
ITEM 15. INDEMNIFICATION OF DIRECTORS AND OFFICERS.
The Company's Articles of Incorporation, as amended and
restated (the "Articles of Incorporation"), provide certain
limitations on the liability of the Company's directors and
officers for monetary damages to the Company. The Articles of
Incorporation obligate the Company to indemnify its directors and
officers, and permit the Company to indemnify its employees and
other agents, against certain liabilities incurred in connection
with their service in such capacities. These provisions could
reduce the legal remedies available to the Company and the
stockholders against these individuals. See "Certain Provisions of
Maryland Law and of the Company's Articles and Bylaws Limitation of
Liability and Indemnification."
The Articles of Incorporation require it to indemnify (a) the
Company's directors and officers whether serving the Company or at
its request any other entity who have been successful, on the
merits or otherwise, in the defense of a proceeding to which he was
made a party by reason of his service in that capacity against
reasonable expenses incurred by him in connection with the
proceeding unless it is established that (i) his act or omission
was material to the matter giving rise to the proceeding and was
committed in bad faith or was the result of active and deliberate
dishonesty, (ii) he actually received an improper personal benefit
in money, property or services, or (iii) in the case of a criminal
proceeding, he had reasonable cause to believe that his act or
omission was unlawful and (b) other employees and agents of the
Company to such extent as shall be authorized by the Board of
Directors or the Company's Bylaws and be permitted by law. In
addition, the Articles of Incorporation require the Company to pay
or reimburse, in advance of the final disposition of a proceeding,
reasonable expenses incurred by a director or officer who is a
party to a proceeding under procedures provided for under the
Maryland General Corporation Law (the "MGCL"). The Company's
Bylaws also permit the Company to provide such other and further
indemnification or payment or reimbursement of expenses as the
Board of Directors deems to be in the interest of the Company and
as may be permitted by the MGCL for directors, officers and
employees of Maryland corporations.
The Company has entered into indemnification agreements with
each of the Company's officers and directors. The indemnification
agreements require, among other things, that the Company indemnify
its officers and directors to the fullest extent permitted by law
and advance to the officers and directors all related expenses,
subject to reimbursement if it is subsequently determined that
indemnification is not permitted. The Company must also indemnify
and advance all expenses incurred by officers and directors seeking
to enforce their rights under the indemnification agreements and
cover officers and directors under the Company's directors' and
officers' liability insurance. Although the indemnification
agreements offer substantially the same scope of coverage afforded
by law, they provide assurance to directors and officers that
indemnification will be available because such contracts cannot be
modified unilaterally in the future by the Board of Directors or
the stockholders to eliminate the rights they provide.
ITEM 16. EXHIBITS
3.1 Articles of Amendment and Restatement of the Company
(incorporated by reference to Exhibit 3.1 of the Company's
Registration Statement on Form S-11 (File No. 33-90138))
3.2 Restated Bylaws of the Company (incorporated by reference to
Exhibit 3.2 to the Company's Registration Statement on Form
S-11 (File No. 33-90138))
3.3 Form of Articles Supplementary relating to Preferred Stock*
4.1 Specimen of certificate representing shares of Common Stock
(incorporated by reference to Exhibit 4.1 to the Company's
Registration Statement on Form S-11 (File No. 33-90138))
4.2 Form of Indenture**
4.3 Form of certificate representing shares of Preferred Stock*
5.1 Opinion of Winstead Sechrest & Minick P.C.**
12.1 Computation of Ratio of Earnings to Combined Fixed Charges and
Preferred Stock Dividends**
23.1 Consent of Deloitte & Touche LLP**
23.2 Consent of Winstead Sechrest & Minick P.C. (included in
Exhibit 5.1)
24.1 Power of Attorney (included on signature page)
25.1 Form T-1 Statement of Eligibility and Qualification under the
Trust Indenture Act of 1939 of State Street Bank and Trust
Company.**
______________
* To be filed by amendment or by a current report on Form 8-K
pursuant to the Securities Exchange Act of 1934, as amended,
as appropriate.
** Filed herewith.
ITEM 17. UNDERTAKINGS.
The undersigned registrant hereby undertakes:
(1) To file, during any period in which offers or sales
are being made, a post-effective amendment to this
registration statement:
(i) To include any prospectus required by
section 10(a)(3) of the Securities Act of 1933:
(ii) To reflect in the prospectus any facts or events
arising after the effective date of the
registration statement (or the most recent
post-effective amendment thereof) which,
individually or in the aggregate, represent a
fundamental change in the information set forth in
the registration statement;
(iii) To include any material information with
respect to the plan of distribution not
previously disclosed in the registration
statement or any material change to such
information in the registration statement.
Provided, however, that paragraphs (1)(i) and (1)(ii) do not
apply if the information required to be included in a
post-effective amendment by those paragraphs is contained in
periodic reports filed by the Company 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, 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.
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
Securities Act of 1933 and is, therefore, unenforceable. In the
event that a claim for indemnification against such liabilities
(other than the payment by the registrant of expenses incurred or
paid by a director, officer or controlling person of the registrant
in the successful defense of any action, suit or proceeding) is
asserted by such director, officer or controlling person in
connection with the securities being registered, the registrant
will, unless in the opinion of its counsel the matter has been
settled by controlling precedent, submit to a court of appropriate
jurisdiction the question whether such indemnification by it is
against public policy as expressed in the Securities Act of 1933
and will be governed by the final adjudication of such issue.
SIGNATURES
Pursuant to the requirements of the Securities Act, 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
Dallas, State of Texas, on October 20, 1997.
WALDEN RESIDENTIAL PROPERTIES, INC.,
a Maryland corporation
By: /s/ Don R. Daseke
----------------------------------
Don R. Daseke
Chief Executive Officer and
Chairman of the Board of Directors
KNOW ALL MEN BY THESE PRESENTS, that each person whose
signature appears below hereby constitutes and appoints Don R.
Daseke or Mark S. Dillinger or either of them, his or her
attorneys-in-fact and agents, each with full power of substitution
and resubstitution for him or her in any and all capacities, to
sign any or all amendments or post-effective amendments to this
Registration Statement, and to file the same, with exhibits thereto
and other documents in connection therewith with the Commission,
granting unto each of such attorneys-in-fact and agents full power
and authority to do and perform each and every act and thing
requisite and necessary in connection with such matters and hereby
ratifying and confirming all that each of such attorneys-in-fact
and agents or his substitutes may do or cause to be done by virtue
hereof.
Pursuant to the requirements of the Securities Act, this
Registration Statement has been signed by the following persons in
the capacities and on the dates indicated.
<TABLE>
<CAPTION>
Signature Title Date
- --------- ----- ----
<S> <C> <C>
/s/ Don R. Daseke Chairman of the Board of Directors, October 20, 1997
- ---------------------------- Chief Executive Officer and Director
Don R. Daseke (Principal Executive Officer)
/s/ Mark S. Dillinger Executive Vice President, Chief Financial October 20, 1997
- ---------------------------- Officer and Director (Principal Financial
Mark S. Dillinger and Accounting Officer)
/s/ Marshall B. Edwards President, Chief Acquisitions Officer October 20, 1997
- ---------------------------- and Director
Marshall B. Edwards
/s/ Linda Walker Bynoe Director October 20, 1997
- ----------------------------
Linda Walker Bynoe
/s/ Maxwell B. Drever Director October 20, 1997
- ----------------------------
Maxwell B. Drever
/s/ Francesco Galesi Director October 20, 1997
- ----------------------------
Francesco Galesi
/s/ Robert L. Honstein Director October 20, 1997
- ----------------------------
Robert L. Honstein
/s/ Michael E. Masterson Director October 20, 1997
- ----------------------------
Michael E. Masterson
/s/ Arch K. Jacobson Director October 20, 1997
- ----------------------------
Arch K. Jacobson
/s/ Louis G. Munin Director October 20, 1997
- ----------------------------
Louis G. Munin
/s/ J. Otis Winters Director October 20, 1997
- ----------------------------
J. Otis Winters
</TABLE>
EXHIBIT 4.2
INDENTURE, dated as of ______________, 199__, between WALDEN
RESIDENTIAL PROPERTIES, INC., a Maryland corporation (the
"Issuer"), having its principal offices at One Lincoln Centre, 5400
LBJ Freeway, Suite 400, Dallas, Texas 75240 and STATE STREET BANK
AND TRUST COMPANY, a trust company organized under the laws of
Commonwealth of Massachusetts, as Trustee hereunder (the
"Trustee"), having its Corporate Trust Office at 225 Franklin
Street, Boston, Massachusetts 02110.
RECITALS OF THE ISSUER
The Issuer deems it necessary to issue from time to time for
its lawful purposes debt securities (hereinafter called the
"Securities") evidencing its unsecured indebtedness, and has duly
authorized the execution and delivery of this Indenture to provide
for the issuance from time to time of the Securities, unlimited as
to principal amount, to bear interest at the rates or formulas, to
mature at such times and to have such other provisions as shall be
fixed as hereinafter provided.
This Indenture is subject to the provisions of the Trust
Indenture Act of 1939, as amended, that are deemed to be
incorporated into this Indenture and shall, to the extent
applicable, be governed by such provisions.
All things necessary to make this Indenture a valid agreement
of the Issuer, in accordance with its terms, have been done.
NOW, THEREFORE, THIS INDENTURE WITNESSETH:
For and in consideration of the premises and the purchase of
the Securities by the holders thereof, it is mutually covenanted
and agreed, for the equal and proportionate benefit of all Holders
of the Securities, as follows:
ARTICLE ONE
DEFINITIONS AND OTHER PROVISIONS OF GENERAL APPLICATION
SECTION 101. Definitions. For all purposes of this
Indenture, except as otherwise expressly provided or unless the
context otherwise requires:
(i) the terms defined in this Article have the meanings
assigned to them in this Article, and include the plural as
well as the singular;
(ii) all other terms used herein which are defined in the
TIA, either directly or by reference therein, have the
meanings assigned to them therein;
(iii) all accounting terms not otherwise defined
herein have the meanings assigned to them in accordance with
GAAP; and
(iv) the words "herein," "hereof" and "hereunder" and
other words of similar import refer to this Indenture as a
whole and not to any particular Article, Section or other
subdivision.
"Act," when used with respect to any Holder, has the meaning
specified in Section 104.
"Additional Amounts" means any additional amounts which are
required by a Security or by or pursuant to a Board Resolution,
under circumstances specified therein, to be paid by the Issuer 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.
"Annual Service Charge" as of any date means the amount which
is expensed in any 12-month period for interest on Debt.
"Authenticating Agent" means any authenticating agent
appointed by the Trustee pursuant to Section 611.
"Authorized Newspaper" means a newspaper, printed in the
English language or in an official language of the country of
publication, customarily published on each Business Day, whether or
not published on Saturdays, Sundays or holidays, and of general
circulation in each place in connection with which the term is used
or in the financial community of each such place. Whenever
successive publications are required to be made in Authorized
Newspapers, the successive publications may be made in the same or
in different Authorized Newspapers in the same city meeting the
foregoing requirements and in each case on any Business Day.
"Bankruptcy Law" has the meaning specified in Section 501.
"Bearer Security" means any Security established pursuant to
Section 201 which is payable to bearer.
"Board of Directors" means the board of directors of the
Issuer or any committee of such board of directors duly authorized
to act hereunder.
"Board Resolution" means a copy of a resolution certified by
the Secretary or an Assistant Secretary of the Issuer to have been
duly adopted by the Board of Directors and to be in full force and
effect on the date of such certification, and delivered to the
Trustee.
"Business Day," when used with respect to any Place of Payment
or any other particular location referred to in this Indenture or
in the Securities, means, unless otherwise specified with respect
to any Securities pursuant to Section 301, any day, other than a
Saturday or Sunday, that is neither a legal holiday nor a day on
which banking institutions in that Place of Payment or particular
location are authorized or required by law, regulation or executive
order to close.
"CEDEL" means Centrale de Livraison de Valeurs Mobilieres,
S.A., or its successor.
"Commission" means the Securities and Exchange Commission, as
from time to time constituted, created under the Securities
Exchange Act of 1934, or, if at anytime after execution of this
instrument such Commission is not existing and performing the
duties now assigned to it under the TIA, then the body performing
such duties on such date.
"Common Shares" means, with respect to any Person, capital
stock issued by such Person other than Preferred Shares.
"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 225 Franklin Street, Boston, Massachusetts 02110.
"corporation" includes corporations, associations,
partnerships, companies and business trusts.
"coupon" means any interest coupon appertaining to a Bearer
Security.
"Custodian" has the meaning specified in Section 501.
"Debt" of the Issuer or any Subsidiary means any indebtedness
of the Issuer or any Subsidiary, whether or not contingent, in
respect of (i) borrowed money or evidenced by bonds, notes,
debentures or similar instruments, (ii) indebtedness secured by any
mortgage, pledge, lien, charge, encumbrance or any security
interest existing on property owned by the Issuer or any
Subsidiary, (iii) the reimbursement obligations, contingent or
otherwise, in connection with any letters of credit actually issued
or amounts representing the balance deferred and unpaid of the
purchase price of any property except any such balance that
constitutes an accrued expense or trade payable or (iv) any lease
of property by the Issuer or any Subsidiary as lessee which is
reflected on the Issuer's consolidated balance sheet as a
capitalized lease in accordance with GAAP, in the case of items of
indebtedness under (i) through (iii) above to the extent that any
such items (other than letters of credit) would appear as a
liability on the Issuer's consolidated balance sheet in accordance
with GAAP, and also includes, to the extent not otherwise included,
any obligation by the Issuer or any Subsidiary to be liable for, or
to pay, as obligor, guarantor or otherwise (other than for purposes
of collection in the ordinary course of business), indebtedness of
another person (other than the Issuer or any Subsidiary) (it being
understood that Debt shall be deemed to be incurred by the Issuer
and its Subsidiaries on a consolidated basis whenever the Issuer
and its Subsidiaries on a consolidated basis shall create, assume,
guarantee or otherwise become liable in respect thereof).
"Defaulted Interest" has the meaning specified in Section 307.
"Dollar" or "$" means a dollar or other equivalent unit in
such coin or currency of the United States of America as at the
time shall be legal tender for the payment of public and private
debts.
"DTC" means The Depository Trust Company.
"ECU" means the European Currency Unit as defined and revised
from time to time by the Council of the European Communities.
"Euroclear" means Morgan Guaranty Trust Company of New York,
Brussels Office, or its successor as operator of the Euroclear
System.
"European Communities" means the European Economic Community,
the European Coal and Steel Community and the European Atomic
Energy Community.
"European Monetary System" means the European Monetary System
established by the Resolution of December 5, 1978 of the Council of
the European Communities.
"Event of Default" has the meaning specified in Section 501.
"Foreign Currency" means any currency, currency unit or
composite currency, including, without limitation, the ECU issued
by the government of one or more countries other than the United
States of America or by any recognized confederation or association
of such governments.
"GAAP" means generally accepted accounting principles, as in
effect from time to time, as used in the United States applied on
a consistent basis.
"Government Obligations" means securities which are (i) direct
obligations of the United States of America or the government which
issued the Foreign Currency in which the Securities of a particular
series are payable, for the payment of which its full faith and
credit is pledged or (ii) obligations of a Person controlled or
supervised by and acting as an agency or instrumentality of the
United States of America or such government which issued the
foreign currency in which the Securities of such series are
payable, the payment of which is unconditionally guaranteed as a
full faith and credit obligation by the United States of America or
such other government, which, in either case, are not callable or
redeemable at the option of the issuer thereof, and shall also
include a depository receipt issued by a bank or trust company as
custodian with respect to any such Government Obligation or a
specific payment of interest on or principal of any such Government
Obligation held by such custodian for the account of the holder of
a depository receipt; provided that (except as required by law)
such custodian is not authorized to make any deduction from the
amount payable to the holder of such depository receipt from any
amount received by the custodian in respect of the Government
Obligation or the specific payment of interest on or principal of
the Government Obligation evidenced by such depository receipt.
"Holder" means, in the case of a Registered Security, the
Person in whose name a Security is registered in the Security
Register and, in the case of a Bearer Security, the bearer thereof
and, when used with respect to any coupon, shall mean the bearer
thereof.
"Indenture" means this instrument as originally executed or as
it may from time to time be supplemented or amended by one or more
indentures supplemental hereto entered into pursuant to the
applicable provisions hereof, and shall include the terms of
particular series of Securities established as contemplated by
Section 301; provided, however, that, if at any time more than one
Person is acting as Trustee under this instrument, "Indenture"
shall mean, with respect to any one 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 301, exclusive,
however, of any provisions or terms which relate solely to other
series of Securities for which such Person is not 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 1008, 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.
"Issuer" means the Person named as the "Issuer" in the first
paragraph of this Indenture until a successor shall have become
such pursuant to the applicable provisions of this Indenture, and
thereafter "Issuer" shall mean such successor.
"Issuer Request" and "Issuer Order" mean, respectively, a
written request or order signed in the name of the Issuer by its
Chairman of the Board, the Chief Executive Officer, the President
or a Vice President, and by its Treasurer, an Assistant Treasurer,
the Secretary or an Assistant Secretary, and delivered to the
Trustee.
"Maturity," when used with respect to any Security, means the
date on which the principal of such Security or an installment of
principal becomes due and payable as therein or herein provided,
whether at the Stated Maturity or by declaration of acceleration,
notice of redemption, notice of option to elect repayment or
otherwise.
"Officers' Certificate" means a certificate signed by the
Issuer's 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, and delivered to the Trustee.
"Opinion of Counsel" means a written opinion of counsel, who
may be counsel for the Issuer or who may be an employee of or other
counsel for the Issuer and who shall be satisfactory to the
Trustee.
"Original Issue Discount Security" means any Security which
provides for an amount less than the principal amount thereof to be
due and payable upon a declaration of acceleration of the Maturity
thereof pursuant to Section 502.
"Outstanding," when used with respect to Securities, means, as
of the date of determination, all Securities theretofore
authenticated and delivered under this Indenture, except:
(i) Securities theretofore cancelled 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 Issuer)
in trust or set aside and segregated in trust by the Issuer
(if the Issuer shall act as its own Paying Agent) for the
Holders of such Securities and any coupons appertaining
thereto; provided that, if such Securities are to be redeemed,
notice of such redemption has been duly given pursuant to this
Indenture or provision therefor satisfactory to the Trustee
has been made;
(iii) Securities, except to the extent provided in
Sections 1402 and 1403, with respect to which the Issuer has
effected defeasance and/or covenant defeasance as provided in
Article Fourteen;
(iv) Securities which have been paid pursuant to
Section 306 or in exchange for or in lieu of which other
Securities have been authenticated and delivered pursuant to
this Indenture, other than any such Securities in respect of
which there shall have been presented to the Trustee proof
satisfactory to it that such Securities are held by a bona
fide purchaser in whose hands such Securities are valid
obligations of the Issuer; and
(v) Securities converted into Common Shares
pursuant to or in accordance with this Indenture if the terms
of such Securities provide for convertibility pursuant to
Section 301;
provided, however, that in determining whether the Holders of the
requisite principal amount of the Outstanding Securities have given
any request, demand, authorization, direction, notice, consent or
waiver hereunder or are present at a meeting of Holders for quorum
purposes, and for the purpose of making the calculations required
by Section 313 of the TIA, (i) the principal amount of an Original
Issue Discount Security that may be counted in making such
determination or calculation and that shall be deemed to be
Outstanding for such purpose shall be equal to the amount of
principal thereof that would be (or shall have been declared to be)
due and payable, at the time of such determination, upon a
declaration of acceleration of the maturity thereof pursuant to
Section 502, (ii) the principal amount of any Security denominated
in a Foreign Currency that may be counted in making such
determination or calculation and that shall be deemed Outstanding
for such purpose shall be equal to the Dollar equivalent,
determined pursuant to Section 301 as of the date such Security is
originally issued by the Issuer, of the principal amount (or, in
the case of an Original Issue Discount Security, the Dollar
equivalent as of such date of original issuance of the amount
determined as provided in clause (i) above) of such Security, (iii)
the principal amount of any Indexed Security that may be counted in
making such determination or calculation and that shall be deemed
Outstanding for such purpose shall be equal to the principal face
amount of such Indexed Security at original issuance, unless
otherwise provided with respect to such Security pursuant to
Section 301, and (iv) Securities owned by the Issuer or any other
obligor upon the Securities or any Affiliate of the Issuer 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 Issuer or any other obligor upon the Securities or any
Affiliate of the Issuer or of such other obligor.
"Paying Agent" means any Person authorized by the Issuer to
pay the principal of (and premium, if any) or interest, if any, on
any Securities or coupons on behalf of the Issuer.
"Person" means any individual, corporation, partnership,
limited liability company, joint venture, association, joint-stock
company, trust, unincorporated organization or government or any
agency or political subdivision thereof.
"Place of Payment," when used with respect to the Securities
of or within any series, means the place or places where the
principal of (and premium, if any) and interest, if any, on such
Securities are payable as specified as contemplated by Sections 301
and 1002.
"Predecessor Security" of any particular Security means every
previous Security evidencing all or a portion of the same debt as
that evidenced by such particular Security; and, for the purposes
of this definition, any Security authenticated and delivered under
Section 306 in exchange for or in lieu of a mutilated, destroyed,
lost or stolen Security or a Security to which a mutilated,
destroyed, lost or stolen coupon appertains shall be deemed to
evidence the same debt as the mutilated, destroyed, lost or stolen
Security or the Security to which the mutilated, destroyed, lost or
stolen coupon appertains.
"Preferred Shares" means, with respect to any Person, capital
shares issued by such Person that are entitled to a preference or
priority over any other capital shares issued by such Person upon
any distribution of such Person's assets, whether by dividend or
upon liquidation.
"Redemption Date," when used with respect to any Security to
be redeemed, in whole or in part, means the date fixed for such
redemption by or pursuant to this Indenture.
"Redemption Price," when used with respect to any Security to
be redeemed, means the price at which it is to be redeemed pursuant
to this Indenture.
"Registered Security" shall mean any Security which is
registered in the Security Register.
"Regular Record Date" for the interest payable on any Interest
Payment Date on the Registered Securities of or within any series
means the date specified for that purpose as contemplated by
Section 301, whether or not a Business Day.
"Repayment Date" means, when used with respect to any Security
to be repaid at the option of the Holder, the date fixed for such
repayment by or pursuant to this Indenture.
"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 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 or any other officer of the
Trustee customarily performing functions similar to those performed
by any of the above designated officers and also means, with
respect to a particular corporate trust matter, any other officer
to whom such matter is referred because of such officer's knowledge
and familiarity with the particular subject.
"Security" has the meaning stated in the first recital of this
Indenture and, more particularly, means any Security or Securities
authenticated and delivered under this Indenture; provided,
however, that, if at any time there is more than one Person acting
as Trustee under this Indenture, "Securities" with respect to the
Indenture as to which such Person is Trustee shall have the meaning
stated in the first recital of this Indenture and shall more
particularly mean Securities authenticated and delivered under this
Indenture, exclusive, however, of Securities of any series as to
which such Person is not Trustee.
"Security Register" and "Security Registrar" have the
respective meanings specified in Section 305.
"Significant Subsidiary" means any Subsidiary which is a
"significant subsidiary" (as defined in Article I, Rule 1-02 of
Regulation S-X, promulgated under the Securities Act of 1933) of
the Issuer.
"Special Record Date" for the payment of any Defaulted
Interest on the Registered Securities of or within any series means
a date fixed by the Trustee pursuant to Section 307.
"Stated Maturity," when used with respect to any Security or
any installment of principal thereof or interest thereon, means the
date specified in such Security or a coupon representing such
installment of interest as the fixed date on which the principal of
such Security or such installment of principal or interest is due
and payable.
"Subsidiary" means a corporation, partnership or limited
liability company a majority of the outstanding voting stock,
partnership interests or membership interests, as the case may be,
of which is owned or controlled, directly or indirectly, by the
Issuer or by one or more other Subsidiaries of the Issuer. For the
purposes of this definition, "voting stock" means stock having
voting power for the election of directors, or trustees, as the
case may be, whether at all times or only so long as no senior
class of stock has such voting power by reason of any contingency.
"Trust Indenture Act" or "TIA" means the Trust Indenture Act
of 1939, as amended and as in force at the date as of which this
Indenture was executed, except as provided in Section 905.
"Trustee" means the Person named as the "Trustee" in the first
paragraph of this Indenture until a successor Trustee shall have
become such pursuant to the applicable provisions of this
Indenture, and thereafter "Trustee" shall mean or include each
Person who is then a Trustee hereunder; provided, however, that, if
at any time there is more than one such Person, "Trustee" as used
with respect to the Securities of any series shall mean only the
Trustee with respect to Securities of that series.
"United States" means, unless otherwise specified with respect
to any Securities pursuant to Section 301, the United States of
America (including the states and the District of Columbia), its
territories, its possessions and other areas subject to its
jurisdiction.
"Unsecured Debt" means Debt of the Issuer or any Subsidiary
which is not secured by any mortgage, lien, charge, pledge or
security interest of any kind upon any of the properties owned by
the Issuer or any of its Subsidiaries.
"Yield to Maturity" means the yield to maturity, computed at
the time of issuance of a Security (or, if applicable, at the most
recent redetermination of interest on such Security) and as set
forth in such Security in accordance with generally accepted United
States bond yield computation principles.
SECTION 102. Compliance Certificates and Opinions. Upon any
application or request by the Issuer to the Trustee to take any
action under any provision of this Indenture, the Issuer shall
furnish to the Trustee an Officers' Certificate stating that all
conditions precedent, if any, provided for in this Indenture
relating to the proposed action have been complied with and an
Opinion of Counsel stating that in the opinion of such counsel all
such conditions precedent, if any, have been complied with, except
that in the case of any such application or request as to which the
furnishing of such documents is specifically required by any
provision of this Indenture relating to such particular application
or request, no additional certificate or opinion need be furnished.
Every certificate or opinion with respect to compliance with
a condition or covenant provided for in this Indenture (including
certificates delivered pursuant to Section 1007) shall include:
(i) a statement that each individual signing such
certificate or opinion has read such condition or covenant and
the definitions herein relating thereto;
(ii) 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;
(iii) a statement that, in the opinion of each such
individual, he or she has made such examination or
investigation as is necessary to enable him to express an
informed opinion as to whether or not such condition or
covenant has been complied with; and
(iv) a statement as to whether, in the opinion of each
such individual, such condition or covenant has been complied
with.
SECTION 103. Form of Documents Delivered to Trustee. In any
case where several matters are required to be certified by, or
covered by an opinion of, any specified Person, it is not necessary
that all such matters be certified by, or covered by the opinion
of, only one such Person, or that they be so certified or covered
by only one document, but one such Person may certify or give an
opinion as to some matters and one or more other such Persons as to
other matters, and any such Person may certify or give an opinion
as to such matters in one or several documents.
Any certificate or opinion of an officer of the Issuer may be
based, insofar as it relates to legal matters, upon an Opinion of
Counsel, or a certificate or representations by counsel, unless
such officer knows, or in the exercise of reasonable care should
know, that the opinion, certificate or representations with respect
to the matters upon which his certificate or opinion is based are
erroneous. Any such Opinion of Counsel or certificate or
representations may be based, insofar as it relates to factual
matters, upon a certificate or opinion of, or representations by,
an officer or officers of the Issuer stating that the information
as to such factual matters is in the possession of the Issuer,
unless such counsel knows that the certificate or opinion or
representations as to such matters are erroneous.
Where any Person is required to make, give or execute two or
more applications, requests, consents, certificates, statements,
opinions or other instruments under this Indenture, they may, but
need not, be consolidated and form one instrument.
SECTION 104. Acts of Holders. (A) Any request, demand,
authorization, direction, notice, consent, waiver or other action
provided by this Indenture to be given or taken by Holders of the
Outstanding Securities of all series or one or more series, as the
case may be, may be embodied in and evidenced by one or more
instruments of substantially similar tenor signed by such Holders
in person or by agents duly appointed in writing. If Securities of
a series are issuable as Bearer Securities, any request, demand,
authorization, direction, notice, consent, waiver or other action
provided by this Indenture to be given or taken by Holders of
Securities of such series may, alternatively, be embodied in and
evidenced by the record of Holders of Securities of such series
voting in favor thereof, either in person or by proxies duly
appointed in writing, at any meeting of Holders of Securities of
such series duly called and held in accordance with the provisions
of Article Fifteen, or a combination of such instruments and any
such record. Except as herein otherwise expressly provided, such
action shall become effective when such instrument or instruments
or record or both are delivered to the Trustee and, where it is
hereby expressly required, to the Issuer. Such instrument or
instruments and any such record (and the action embodied therein
and evidenced thereby) are herein sometimes referred to as the
"Act" of the Holders signing such instrument or instruments or so
voting at any such meeting. Proof of execution of any such
instrument or of a writing appointing any such agent, or of the
holding by any Person of a Security, shall be sufficient for any
purpose of this Indenture. The record of any meeting of Holders of
Securities shall be proved in the manner provided in Section 1506.
(B) The fact and date of the execution by any Person of any
such instrument or writing may be proved by the affidavit of a
witness of such execution or by a certificate of a notary public or
other officer authorized by law to take acknowledgments of deeds,
certifying that the individual signing such instrument or writing
acknowledged to him the execution thereof. Where such execution is
by a signer acting in a capacity other than his individual
capacity, such certificate or affidavit shall also constitute
sufficient proof of his authority. The fact and date of the
execution of any such instrument or writing, or the authority of
the Person executing the same, may also be proved in any other
reasonable manner which the Trustee deems sufficient.
(C) The ownership of Registered Securities shall be proved by
the Security Register.
(D) The ownership of Bearer Securities may be proved by the
production of such Bearer Securities or by a certificate executed,
as depositary, by any trust company, bank, banker or other
depositary, wherever situated, if such certificate shall be deemed
by the Trustee to be satisfactory, showing that at the date therein
mentioned such Person had on deposit with such depositary, or
exhibited to it, the Bearer Securities therein described; or such
facts may be proved by the certificate or affidavit of the Person
holding such Bearer Securities, if such certificate or affidavit is
deemed by the Trustee to be satisfactory. The Trustee and the
Issuer may assume that such ownership of any Bearer Security
continues until (i) another certificate or affidavit bearing a
later date issued in respect of the same Bearer Security is
produced, (ii) such Bearer Security is produced to the Trustee by
some other Person, (iii) such Bearer Security is surrendered in
exchange for a Registered Security or (iv) such Bearer Security is
no longer Outstanding. The ownership of Bearer Securities may also
be proved in any other manner which the Trustee deems sufficient.
(E) If the Issuer shall solicit from the Holders of
Registered Securities any request, demand, authorization,
direction, notice, consent, waiver or other Act, the Issuer may, at
its option, in or pursuant to a Board Resolution, fix in advance a
record date for the determination of Holders entitled to give such
request, demand, authorization, direction, notice, consent, waiver
or other Act, but the Issuer shall have no obligation to do so.
Notwithstanding Section 316(c) of the TIA, such record date shall
be the record date specified in or pursuant to such Board
Resolution, which shall be a date not earlier than the date 30 days
prior to the first solicitation of Holders generally in connection
therewith and not later than the date such solicitation is
completed. If such a record date is fixed, such request, demand,
authorization, direction, notice, consent, waiver or other Act may
be given before or after such record date, but only the Holders of
record at the close of business on such record date shall be deemed
to be Holders for the purposes of determining whether Holders of
the requisite proportion of Outstanding Securities have authorized
or agreed or consented to such request, demand, authorization,
direction, notice, consent, waiver or other Act, and for that
purpose the Outstanding Securities shall be computed as of such
record date; provided that no such authorization, agreement or
consent by the Holders on such record date shall be deemed
effective unless it shall become effective pursuant to the
provisions of this Indenture not later than eleven months after the
record date.
(F) Any request, demand, authorization, direction, notice,
consent, waiver or other Act of the Holder of any Security shall
bind every future Holder of the same Security and the Holder of
every Security issued upon the registration of transfer thereof or
in exchange therefor or in lieu thereof in respect of anything
done, omitted or suffered to be done by the Trustee, any Security
Registrar, any Paying Agent, any Authenticating Agent or the Issuer
in reliance thereon, whether or not notation of such action is made
upon such Security.
SECTION 105. Notices, etc., to Trustee and Issuer. 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:
(i) the Trustee by any Holder or by the Issuer shall be
sufficient for every purpose hereunder if made, given,
furnished or filed in writing to or with the Trustee at 225
Franklin Street, Boston, Massachusetts 02110; Attention:
Corporate Trust Division/Walden Residential Properties, Inc.;
and
(ii) the Issuer 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 Issuer addressed to it at the
address of its principal office specified in the first
paragraph of this Indenture or at any other address previously
furnished in writing to the Trustee by the Issuer.
SECTION 106. Notice to Holders; Waiver. Where this
Indenture provides for notice of any event to Holders of Registered
Securities by the Issuer or the Trustee, such notice shall be
sufficiently given (unless otherwise herein expressly provided) if
in writing and mailed, first-class postage prepaid, to each such
Holder affected by such event, at his address as it appears in the
Security Register, not later than the latest date, and not earlier
than the earliest date, prescribed for the giving of such notice.
In any case where notice to Holders of Registered Securities is
given by mail, neither the failure to mail such notice, nor any
defect in any notice so mailed, to any particular Holder shall
affect the sufficiency of such notice with respect to other Holders
of Registered Securities or the sufficiency of any notice to
Holders of Bearer Securities given as provided herein. Any notice
mailed to a Holder in the manner herein prescribed shall be
conclusively deemed to have been received by such Holder, whether
or not such Holder actually receives such notice.
If by reason of the suspension of or irregularities in regular
mail service or by reason of any other cause it shall be
impracticable to give such notice by mail, then such notification
to Holders of Registered Securities as shall be made with the
approval of the Trustee shall constitute a sufficient notification
to such Holders for every purpose hereunder.
Except as otherwise expressly provided herein or otherwise
specified with respect to any Securities pursuant to Section 301,
where this Indenture provides for notice to Holders of Bearer
Securities of any event, such notice shall be sufficiently given if
published in an Authorized Newspaper in New York City and in such
other city or cities as may be specified in such Securities on a
Business Day, such publication to be not later than the latest
date, and not earlier than the earliest date, prescribed for the
giving of such notice. Any such notice shall be deemed to have
been given on the date of such publication or, if published more
than once, on the date of the first such publication.
If by reason of the suspension of publication of any
Authorized Newspaper or Authorized Newspapers or by reason of any
other cause it shall be impracticable to publish any notice to
Holders of Bearer Securities as provided above, then such
notification to Holders of Bearer Securities as shall be deemed
appropriate by the Issuer, after consultation with the Trustee,
shall constitute sufficient notice to such Holders for every
purpose hereunder. Neither the failure to give notice by
publication to any particular Holder of Bearer Securities as
provided above, nor any defect in any notice so published, shall
affect the sufficiency of such notice with respect to other Holders
of Bearer Securities or the sufficiency of any notice to Holders of
Registered Securities given as provided herein.
Any request, demand, authorization, direction, notice,
consent, waiver or other action required or permitted under this
Indenture shall be in the English language, except that any
published notice may be in an official language of the country of
publication.
Where this Indenture provides for notice in any manner, such
notice may be waived in writing by the Person entitled to receive
such notice, either before or after the event, and such waiver
shall be the equivalent of such notice. Waivers of notice by
Holders shall be filed with the Trustee, but such filing shall not
be a condition precedent to the validity of any action taken in
reliance upon such waiver.
SECTION 107. Effect of Headings and Table of Contents. The
Article and Section headings herein and the Table of Contents are
for convenience only and shall not affect the construction hereof.
SECTION 108. Successors and Assigns. All covenants and
agreements in this Indenture by the Issuer shall bind its
successors and assigns, whether so expressed or not.
SECTION 109. Separability Clause. In case any provision in
this Indenture or in any Security or coupon shall be invalid,
illegal or unenforceable, the validity, legality and enforceability
of the remaining provisions shall not in any way be affected or
impaired thereby.
SECTION 110. Benefits of Indenture. Nothing in this
Indenture or in the Securities or coupons, express or implied,
shall give to any Person, other than the parties hereto, any
Security Registrar, any Paying Agent, any Authenticating Agent and
their successors hereunder and the Holders any benefit or any legal
or equitable right, remedy or claim under this Indenture.
SECTION 111. Governing Law. This Indenture and the
Securities and coupons shall be governed by and construed in
accordance with the laws of the State of New York. This Indenture
is subject to the provisions of the TIA that are required to be
part of this Indenture and shall, to the extent applicable, be
governed by such provisions.
SECTION 112. Legal Holidays. In any case where any Interest
Payment Date, Redemption Date, Repayment Date, sinking fund payment
date, Stated Maturity or Maturity of any Security shall not be a
Business Day at any Place of Payment, then (notwithstanding any
other provision of this Indenture or any Security or coupon other
than a provision in the Securities of any series which specifically
states that such provision shall apply in lieu hereof), payment of
interest or any Additional Amounts or principal (and premium, if
any) need not be made at such Place of Payment on such date, but
may be made on the next succeeding Business Day at such Place of
Payment with the same force and effect as if made on the Interest
Payment Date, Redemption Date, Repayment Date or sinking fund
payment date, or at the Stated Maturity or Maturity; provided that
no interest shall accrue on the amount so payable for the period
from and after such Interest Payment Date, Redemption Date,
Repayment Date, sinking fund payment date, Stated Maturity or
Maturity, as the case may be.
ARTICLE TWO
SECURITIES FORMS
SECTION 201. Forms of Securities. The Registered
Securities, if any, of each series and the Bearer Securities, if
any, of each series and related coupons, and the form of any
guarantee shall be in substantially the forms as shall be
established in one or more indentures supplemental hereto or
approved from time to time by or pursuant to a Board Resolution in
accordance with Section 301, shall have such appropriate
insertions, omissions, substitutions and other variations as are
required or permitted by this Indenture or any indenture
supplemental hereto, and may have such letters, numbers or other
marks of identification or designation and such legends or
endorsements placed thereon as the Issuer may deem appropriate and
as are not inconsistent with the provisions of this Indenture, or
as may be required to comply with any law or with any rule or
regulation made pursuant thereto or with any rule or regulation of
any stock exchange on which the Securities may be listed, or to
conform to usage.
Unless otherwise specified as contemplated by Section 301,
Bearer Securities shall have interest coupons attached.
The definitive Securities and coupons shall be printed,
lithographed or engraved or produced by any combination of these
methods on a steel engraved border or steel engraved borders or may
be produced in any other manner, all as determined by the officers
executing such Securities or coupons, as evidenced by their
execution of such Securities or coupons.
SECTION 202. Form of Trustee's Certificate of
Authentication. Subject to Section 611, the Trustee's certificate
of authentication shall be in substantially the following form:
This is one of the Securities of the series
designated therein referred to in the within-mentioned
Indenture.
STATE STREET BANK AND TRUST
COMPANY, as Trustee
By _______________________
Authorized Signatory
SECTION 203. Securities Issuable in Global Form. If
Securities of or within a series are issuable in global form, as
specified as contemplated by Section 301, then, notwithstanding
clause (x) of Section 301 and the provisions of Section 302, any
such Security shall represent such of the Outstanding Securities of
such series as shall be specified therein and may provide that it
shall represent the aggregate amount of Outstanding Securities of
such series from time to time endorsed thereon and that the
aggregate amount of Outstanding Securities of such series
represented thereby may from time to time be increased or decreased
to reflect exchanges. Any endorsement of a Security in global form
to reflect the amount, or any increase or decrease in the amount,
of Outstanding Securities represented thereby shall be made by the
Trustee in such manner and upon instructions given by such Person
or Persons as shall be specified therein or in the Issuer Order to
be delivered to the Trustee pursuant to Section 303 or 304.
Subject to the provisions of Section 303 and, if applicable,
Section 304, the Trustee shall deliver and redeliver any Security
in permanent global form in the manner and upon instructions given
by the Person or Persons specified therein or in the applicable
Issuer Order. If an Issuer Order pursuant to Section 303 or 304
has been, or simultaneously is, delivered, any instructions by the
Issuer with respect to endorsement or delivery or redelivery of a
Security in global form shall be in writing but need not comply
with Section 102 and need not be accompanied by an Opinion of
Counsel.
The provisions of the last sentence of Section 303 shall apply
to any Security represented by a Security in global form if such
Security was never issued and sold by the Issuer and the Issuer
delivers to the Trustee the Security in global form together with
written instructions (which need not comply with Section 102 and
need not be accompanied by an Opinion of Counsel) with regard to
the reduction in the principal amount of Securities represented
thereby, together with the written statement contemplated by the
last sentence of Section 303.
Notwithstanding the provisions of Section 307, unless
otherwise specified as contemplated by Section 301, payment of
principal of and any premium and interest on any Security in
permanent global form shall be made to the Person or Persons
specified therein.
Notwithstanding the provisions of Section 308 and except as
provided in the preceding paragraph, the Issuer, the Trustee and
any agent of the Issuer and the Trustee shall treat as the Holder
of such principal amount of Outstanding Securities represented by
a permanent global Security (i) in the case of a permanent global
Security in registered form, the Holder of such permanent global
Security in registered form, or (ii) in the case of a permanent
global Security in bearer form, Euroclear or CEDEL.
ARTICLE THREE
THE SECURITIES
SECTION 301. Amount Unlimited; Issuable in Series. The
aggregate principal amount of Securities which may be authenticated
and delivered under this Indenture is unlimited. Any Securities
issued hereunder may be unconditionally guaranteed by a guarantor
to be named in an indenture supplemental hereto as to payment of
principal, premium, if any, and interest.
The Securities may be issued in one or more series. There
shall be established in one or more Board Resolutions or pursuant
to authority granted by one or more Board Resolutions and, subject
to Section 303, set forth, or determined in the manner provided, in
an Officers' Certificate, or established in one or more indentures
supplemental hereto, prior to the issuance of Securities of any
series, any or all of the following, as applicable, each of which,
if so provided, may be determined from time to time by the Issuer
with respect to unissued Securities of the series when issued from
time to time:
(i) the title of the Securities of the series (which
shall distinguish the Securities of such series from all other
series of Securities);
(ii) the aggregate principal amount and 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, in exchange for, or in lieu of,
other Securities of the series pursuant to Section 304, 305,
306, 906, 1107 or 1305);
(iii) the percentage of the principal amount at which
the Securities of the series will be issued and, if other than
the principal amount thereof, the portion of the principal
amount thereof payable upon declaration of acceleration of
maturity thereof, or (if applicable) the portion of the
principal amount of such Securities which is convertible into
Common Shares, or the method by which any such portion shall
be determined;
(iv) if convertible, in connection with the preservation
of the Issuer's status as a REIT, any applicable limitations
on the ownership or transferability of the Common Shares into
which such Securities are convertible;
(v) 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;
(vi) 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;
(vii) the Place of Payment, if any, other than or in
addition to the Borough of Manhattan, New York City or Boston,
Massachusetts, 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 Issuer in respect of the Securities
of the series and this Indenture may be served;
(viii) 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
Issuer, if the Issuer is to have the option;
(ix) the obligation, if any, of the Issuer to redeem,
repay or purchase Securities of the series pursuant to any
sinking fund or analogous provision or at the option of a
Holder thereof, and the period or periods within which or the
date or dates on which, the price or prices at which, the
currency or currencies, currency unit or units or composite
currency or currencies in which, and other terms and
conditions upon which Securities of the series shall be
redeemed, repaid or purchased, in whole or in part, pursuant
to such obligation;
(x) if other than denominations of $1,000 and any
integral multiple thereof, the denominations in which any
Registered Securities of the series shall be issuable and, if
other than denominations of $5,000 and any integral multiple
thereof, the denomination or denominations in which any Bearer
Securities of the series shall be issuable;
(xi) if other than the Trustee, the identity of each
Security Registrar and/or Paying Agent;
(xii) if other than the principal amount thereof, the
portion of the principal amount of Securities of the series
that shall be payable upon declaration of acceleration of the
Maturity thereof pursuant to Section 502 or, if applicable,
the portion of the principal amount of Securities of the
series that is convertible in accordance with the provisions
of this Indenture, or the method by which such portion shall
be determined;
(xiii) if other than Dollars, the Foreign Currency or
Currencies in which payment of the principal of (and premium,
if any) or interest, if any, 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;
(xiv) 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;
(xv) whether the principal of (and premium, if any) or
interest, if any, or Additional Amounts, if any, on the
Securities of the series are to be payable, at the election of
the Issuer or a Holder thereof, in a currency or currencies,
currency unit or units or composite currency or currencies
other than that in which such Securities are denominated or
stated to be payable, the period or periods within which, and
the terms and conditions upon which, such election may be
made, and the time and manner of, and identity of the exchange
rate agent with responsibility for, determining the exchange
rate between the currency or currencies, currency unit or
units or composite currency or currencies in which such
Securities are denominated or stated to be payable and the
currency or currencies, currency unit or units or composite
currency or currencies in which such Securities are to be so
payable;
(xvi) provisions, if any, granting special rights to
the Holders of Securities of the series upon the occurrence of
such events as may be specified;
(xvii) any deletions from, modifications of or
additions to the Events of Default or covenants of the Issuer
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;
(xviii) whether Securities of the series are to be
issuable as Registered Securities, Bearer Securities (with or
without coupons) or both, any restrictions applicable to the
offer, sale or delivery of Bearer Securities and the terms
upon which Bearer Securities of the series may be exchanged
for Registered Securities of the series and vice versa (if
permitted by applicable laws and regulations), whether any
Securities of the series are to be issuable initially in
temporary global form and whether any Securities of the series
are to be issuable in permanent global form with or without
coupons and, if so, whether beneficial owners of interests in
any such permanent global Security may exchange such interests
for Securities of such series and of like tenor of any
authorized form and denomination and the circumstances under
which any such exchanges may occur, if other than in the
manner provided in Section 305, and, if Registered Securities
of the series are to be issuable as a global Security, the
identity of the depositary for such series;
(xix) 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;
(xx) the Person to whom any interest on any Registered
Security of the series shall be payable, if other than the
Person in whose name that Security (or one or more Predecessor
Securities) is registered at the close of business on the
Regular Record Date for such interest, the manner in which, or
the Person to whom, any interest on any Bearer Security of the
series shall be payable, if otherwise than upon presentation
and surrender of the coupons appertaining thereto as they
severally mature, and the extent to which, or the manner in
which, any interest payable on a temporary global Security on
an Interest Payment Date will be paid if other than in the
manner provided in Section 304;
(xxi) the applicability, if any, of Sections 1402
and/or 1403 to the Securities of the series and any provisions
in modification of, in addition to or in lieu of any of the
provisions of Article Fourteen;
(xxii) if the Securities of the 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;
(xxiii) 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;
(xxiv) if the Securities of the series are
subordinated in right of payment to any other class or classes
of Debt of the Issuer, the terms and conditions of such
subordination;
(xxv) if the Securities of the series are to be
guaranteed, the terms and conditions of such guarantee;
(xxvi) whether and under what circumstances the Issuer
will pay Additional Amounts as contemplated by Section 1008 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 Issuer will have the option to
redeem such Securities rather than pay such Additional Amounts
(and the terms of any such option); and
(xxvii) any other terms of the Securities of the series
(which terms shall not be inconsistent with the provisions of
this Indenture).
All Securities of any one series and the coupons appertaining
to any Bearer Securities of such series shall be substantially
identical except, in the case of Registered Securities, as to
denomination and except as may otherwise be provided in or pursuant
to such Board Resolution (subject to Section 303) and set forth in
such Officers' Certificate or in any such indenture supplemental
hereto. All Securities of any one series need not be issued at the
same time and, unless otherwise provided, a series may be reopened,
without the consent of the Holders, for issuances of additional
Securities of such series.
If any of the terms of the Securities of any series are
established by action taken pursuant to one or more Board
Resolutions, a copy of an appropriate record of such action(s)
shall be certified by the Secretary or an Assistant Secretary of
the Issuer and delivered to the Trustee at or prior to the delivery
of the Officers' Certificate setting forth the terms of the
Securities of such series.
SECTION 302. Denominations. The Securities of each series
shall be issuable in such denominations as shall be specified as
contemplated by Section 301. With respect to Securities of any
series denominated in Dollars, in the absence of any such
provisions with respect to the Securities of any series, the
Registered Securities of such series, other than Registered
Securities issued in global form (which may be of any
denomination), shall be issuable in denominations of $1,000 and any
integral multiple thereof and the Bearer Securities of such series,
other than Bearer Securities issued in global form (which may be of
any denomination), shall be issuable in denominations of $5,000 and
any integral multiple thereof.
SECTION 303. Execution, Authentication, Delivery and Dating.
The Securities and any coupons appertaining thereto shall be
executed on behalf of the Issuer by its Chairman of the Board, its
President or one of its Vice Presidents, under its corporate seal
reproduced thereon, and attested by its Secretary or one of its
Assistant Secretaries. The signature of any of these officers on
the Securities and coupons may be manual or facsimile signatures of
the present or any future such authorized officer and may be
imprinted or otherwise reproduced on the Securities.
Securities or coupons bearing the manual or facsimile
signatures of individuals who were at any time the proper officers
of the Issuer shall bind the Issuer, 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 Issuer may deliver Securities of
any series, together with any coupon appertaining thereto, executed
by the Issuer to the Trustee for authentication, together with an
Issuer Order for the authentication and delivery of such
Securities, and the Trustee in accordance with the Issuer Order
shall authenticate and deliver such Securities; provided, however,
that, in connection with its original issuance, no Bearer Security
shall be mailed or otherwise delivered to any location in the
United States; and provided further that, unless otherwise
specified with respect to any series of Securities pursuant to
Section 301, a Bearer Security may be delivered in connection with
its original issuance only if the Person entitled to receive such
Bearer Security shall have furnished a certificate to Euroclear or
CEDEL, as the case may be, in the form set forth in Exhibit A-1 to
this Indenture or such other certificate as may be specified with
respect to any series of Securities pursuant to Section 301, dated
no earlier than 15 days prior to the earlier of the date on which
such Bearer Security is delivered and the date on which any
temporary Security first becomes exchangeable for such Bearer
Security in accordance with the terms of such temporary Security
and this Indenture. If any Security shall be represented by a
permanent global Bearer Security, then, for purposes of this
Section and Section 304, the notation of a beneficial owner's
interest therein upon original issuance of such Security or upon
exchange of a portion of a temporary global Security shall be
deemed to be delivery in connection with its original issuance of
such beneficial owner's interest in such permanent global Security.
Except as permitted by Section 306, the Trustee shall not
authenticate and deliver any Bearer Security unless all appurtenant
coupons for interest then matured have been detached and cancelled.
If all the Securities of any series are not to be issued at
one time and if the Board Resolution or supplemental indenture
establishing such series shall so permit, such Issuer Order may set
forth procedures acceptable to the Trustee for the issuance of such
Securities and determining the terms of particular Securities of
such series, such as interest rate or formula, maturity date, date
of issuance and date from which interest shall accrue. In
authenticating such Securities, and accepting the additional
responsibilities under this Indenture in relation to such
Securities, the Trustee shall be entitled to receive, and (subject
to Section 315(a) through 315(d) of the TIA) 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 Issuer 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 Issuer
in the manner and subject to any conditions specified in
such Opinion of Counsel, will constitute legal, valid and
binding obligations of the Issuer, enforceable in
accordance with their terms, subject to applicable
bankruptcy, insolvency, reorganization and other similar
laws of general applicability relating to or affecting
the enforcement of creditors' rights generally and to
general equitable principles; and
(ii) an Officers' Certificate stating that all
conditions precedent provided for in this Indenture relating
to the issuance of the Securities have been complied with and
that, to the best of the knowledge of the signers of such
certificate, no Event of Default with respect to any of the
Securities shall have occurred and be continuing.
If such form or terms have been so established, the Trustee shall
not be required to authenticate such Securities if the issue of
such Securities pursuant to this Indenture will affect the
Trustee's own rights, duties, obligations or immunities under the
Securities and this Indenture or otherwise in a manner which is not
reasonably acceptable to the Trustee.
Notwithstanding the provisions of Section 301 and of the
preceding paragraph, if all the Securities of any series are not to
be issued at one time, it shall not be necessary to deliver an
Officers' Certificate otherwise required pursuant to Section 301 or
an Issuer Order, or an Opinion of Counsel or an Officers'
Certificate otherwise required pursuant to the preceding paragraph
at the time of issuance of each Security of such series, but such
order, opinion and certificates, with appropriate modifications to
cover such future issuances, shall be delivered at or before the
time of issuance of the first Security of such series.
Each Registered Security shall be dated the date of its
authentication and each Bearer Security shall be dated as of the
date specified as contemplated by Section 301.
No Security or coupon shall be entitled to any benefit under
this Indenture or be valid or obligatory for any purpose unless
there appears on such Security or Security to which such coupon
appertains a certificate of authentication substantially in the
form provided for herein duly executed by the Trustee by manual
signature of an authorized signatory, and such certificate upon any
Security shall be conclusive evidence, and the only evidence, that
such Security has been duly authenticated and delivered hereunder
and is entitled to the benefits of this Indenture. Notwithstanding
the foregoing, if any Security shall have been authenticated and
delivered hereunder but never issued and sold by the Issuer, and
the Issuer shall deliver such Security to the Trustee for
cancellation as provided in Section 309 together with a written
statement (which need not comply with Section 102 and need not be
accompanied by an Opinion of Counsel) stating that such Security
has never been issued and sold by the Issuer, for all purposes of
this Indenture such Security shall be deemed never to have been
authenticated and delivered hereunder and shall never be entitled
to the benefits of this Indenture.
SECTION 304. Temporary Securities. (A) Pending the
preparation of definitive Securities of any series, the Issuer may
execute, and upon Issuer Order the Trustee shall authenticate and
deliver, temporary Securities which are printed, lithographed,
typewritten, mimeographed or otherwise produced, in any authorized
denomination, substantially of the tenor of the definitive
Securities in lieu of which they are issued, in registered form,
or, if authorized, in bearer form with one or more coupons or
without coupons, and with such appropriate insertions, omissions,
substitutions and other variations as the officers executing such
Securities may determine, as conclusively evidenced by their
execution of such Securities. In the case of Securities of any
series, such temporary Securities may be in global form.
Except in the case of temporary Securities in global form
(which shall be exchanged in accordance with Section 304(B) or as
otherwise provided in or pursuant to a Board Resolution), if
temporary Securities of any series are issued, the Issuer will
cause definitive Securities of that series to be prepared without
unreasonable delay. After the preparation of definitive Securities
of such series, the temporary Securities of such series shall be
exchangeable for definitive Securities of such series upon
surrender of the temporary Securities of such series at the office
or agency of the Issuer in a Place of Payment for that series,
without charge to the Holder. Upon surrender for cancellation of
any one or more temporary Securities of any series (accompanied by
any nonmatured coupons appertaining thereto), the Issuer shall
execute and the Trustee shall authenticate and deliver in exchange
therefor a like principal amount of definitive Securities of the
same series of authorized denominations; provided, however, that no
definitive Bearer Security shall be delivered in exchange for a
temporary Registered Security; and provided further that a
definitive Bearer Security shall be delivered in exchange for a
temporary Bearer Security only in compliance with the conditions
set forth in Section 303. Until so exchanged, the temporary
Securities of any series shall in all respects be entitled to the
same benefits under this Indenture as definitive Securities of such
series.
(B) Unless otherwise provided in or pursuant to a Board
Resolution, this Section 304(B) shall govern the exchange of
temporary Securities issued in global form other than through the
facilities of DTC. If any such temporary Security is issued in
global form, then such temporary global Security shall, unless
otherwise provided therein, be delivered to the London office of a
depositary or common depositary (the "Common Depositary"), for the
benefit of Euroclear and CEDEL, for credit to the respective
accounts of the beneficial owners of such Securities (or to such
other accounts as they may direct).
Without unnecessary delay, but in any event not later than the
date specified in, or determined pursuant to the terms of, any such
temporary global Security (the "Exchange Date"), the Issuer shall
deliver to the Trustee definitive Securities, in aggregate
principal amount equal to the principal amount of such temporary
global Security, executed by the Issuer. On or after the Exchange
Date, such temporary global Security shall be surrendered by the
Common Depositary to the Trustee, as the Issuer's agent for such
purpose, to be exchanged, in whole or from time to time in part,
for definitive Securities without charge, and the Trustee shall
authenticate and deliver, in exchange for each portion of such
temporary global Security, an equal aggregate principal amount of
definitive Securities of the same series of authorized
denominations and of like tenor as the portion of such temporary
global Security to be exchanged. The definitive Securities to be
delivered in exchange for any such temporary global Security shall
be in bearer form, registered form, permanent global bearer form or
permanent global registered form, or any combination thereof, as
specified as contemplated by Section 301, and, if any combination
thereof is so specified, as requested by the beneficial owner
thereof; provided, however, that, unless otherwise specified in
such temporary global Security, upon such presentation by the
Common Depositary, such temporary global Security is accompanied by
a certificate dated the Exchange Date or a subsequent date and
signed by Euroclear as to the portion of such temporary global
Security held for its account then to be exchanged and a
certificate dated the Exchange Date or a subsequent date and signed
by CEDEL as to the portion of such temporary global Security held
for its account then to be exchanged, each in the form set forth in
Exhibit A-2 to this Indenture or in such other form as may be
established pursuant to Section 301; and provided further that
definitive Bearer Securities shall be delivered in exchange for a
portion of a temporary global Security only in compliance with the
requirements of Section 303.
Unless otherwise specified in such temporary global Security,
the interest of a beneficial owner of Securities of a series in a
temporary global Security shall be exchanged for definitive
Securities of the same series and of like tenor following the
Exchange Date when the account holder instructs Euroclear or CEDEL,
as the case may be, to request such exchange on his behalf and
delivers to Euroclear or CEDEL, as the case may be, a certificate
in the form set forth in Exhibit A-1 to this Indenture (or in such
other form as may be established pursuant to Section 301), dated no
earlier than 15 days prior to the Exchange Date, copies of which
certificate shall be available from the offices of Euroclear and
CEDEL, the Trustee, any Authenticating Agent appointed for such
series of Securities and each Paying Agent. Unless otherwise
specified in such temporary global Security, any such exchange
shall be made free of charge to the beneficial owners of such
temporary global Security, except that a Person receiving
definitive Securities must bear the cost of insurance, postage,
transportation and the like unless such Person takes delivery of
such definitive Securities in person at the offices of Euroclear or
CEDEL. Definitive Securities in bearer form to be delivered in
exchange for any portion of a temporary global Security shall be
delivered only outside the United States.
Until exchanged in full as hereinabove provided, the temporary
Securities of any series shall in all respects be entitled to the
same benefits under this Indenture as definitive Securities of the
same series and of like tenor authenticated and delivered
hereunder, except that, unless otherwise specified as contemplated
by Section 301, interest payable on a temporary global Security on
an Interest Payment Date for Securities of such series occurring
prior to the applicable Exchange Date shall be payable to Euroclear
and CEDEL on such Interest Payment Date upon delivery by Euroclear
and CEDEL to the Trustee of a certificate or certificates in the
form set forth in Exhibit A-2 to this Indenture (or in such other
forms as may be established pursuant to Section 301), for credit
without further interest on or after such Interest Payment Date to
the respective accounts of Persons who are the beneficial owners of
such temporary global Security on such Interest Payment Date and
who have each delivered to Euroclear or CEDEL, as the case may be,
a certificate dated no earlier than 15 days prior to the Interest
Payment Date occurring prior to such Exchange Date in the form set
forth as Exhibit A-1 to this Indenture (or in such other forms as
may be established pursuant to Section 301). Notwithstanding
anything to the contrary herein contained, the certifications made
pursuant to this paragraph shall satisfy the certification
requirements of the preceding two paragraphs of this Section 304(B)
and of the third paragraph of Section 303 of this Indenture and the
interests of the Persons who are the beneficial owners of the
temporary global Security with respect to which such certification
was made will be exchanged for definitive Securities of the same
series and of like tenor on the Exchange Date or the date of
certification if such date occurs after the Exchange Date, without
further act or deed by such beneficial owners. Except as otherwise
provided in this paragraph, no payments of principal or interest
owing with respect to a beneficial interest in a temporary global
Security will be made unless and until such interest in such
temporary global Security shall have been exchanged for an interest
in a definitive Security. Any interest so received by Euroclear
and CEDEL and not paid as herein provided shall be returned to the
Trustee prior to the expiration of two years after such Interest
Payment Date in order to be repaid to the Issuer.
SECTION 305. Registration, Registration of Transfer and
Exchange. The Issuer shall cause to be kept at the Corporate Trust
Office of the Trustee or in any office or agency of the Issuer 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 Issuer in a Place of Payment being herein sometimes referred
to collectively as the "Security Register") in which, subject to
such reasonable regulations as it may prescribe, the Issuer 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 appointed "Security Registrar"
for the purpose of registering Registered Securities and transfers
of Registered Securities on such Security Register as herein
provided. In the event that the Trustee shall cease to be Security
Registrar, it shall have the right to examine the Security Register
at all reasonable times.
Subject to the provisions of this Section 305, upon surrender
for registration of transfer of any Registered Security of any
series at any office or agency of the Issuer in a Place of Payment
for that series, the Issuer shall execute, and the Trustee shall
authenticate and deliver, in the name of the designated transferee
or transferees, one or more new Registered Securities of the same
series, of any authorized denominations and of a like aggregate
principal amount, bearing a number not contemporaneously
outstanding, and containing identical terms and provisions.
Subject to the provisions of this Section 305, at the option
of the Holder, Registered Securities of any series may be exchanged
for other Registered Securities of the same series, of any
authorized denomination or denominations and of a like aggregate
principal amount, containing identical terms and provisions, upon
surrender of the Registered Securities to be exchanged at any such
office or agency. Whenever any such Registered Securities are so
surrendered for exchange, the Issuer shall execute, and the Trustee
shall authenticate and deliver, the Registered Securities which the
Holder making the exchange is entitled to receive. Unless
otherwise specified with respect to any series of Securities as
contemplated by Section 301, Bearer Securities may not be issued in
exchange for Registered Securities.
If (but only if) permitted by the applicable Board Resolution
and (subject to Section 303) set forth in the applicable Officers'
Certificate, or in any indenture supplemental hereto, delivered as
contemplated by Section 301, at the option of the Holder, Bearer
Securities of any series may be exchanged for Registered Securities
of the same series of any authorized denominations and of a like
aggregate principal amount and tenor, upon surrender of the Bearer
Securities to be exchanged at any such office or agency, with all
unmatured coupons and all matured coupons in default thereto
appertaining. If the Holder of a Bearer Security is unable to
produce any such unmatured coupon or coupons or matured coupon or
coupons in default, any such permitted exchange may be effected if
the Bearer Securities are accompanied by payment in funds
acceptable to the Issuer 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 Issuer and the Trustee if
there is furnished to them such security or indemnity as they may
require to save each of them and any Paying Agent harmless. If
thereafter the Holder of such Security shall surrender to any
Paying Agent any such missing coupon in respect of which such a
payment shall have been made, such Holder shall be entitled to
receive the amount of such payment; provided, however, that, except
as otherwise provided in Section 1002, interest represented by
coupons shall be payable only upon presentation and surrender of
those coupons at an office or agency located outside the United
States. Notwithstanding the foregoing, in case a Bearer Security
of any series is surrendered at any such office or agency in a
permitted exchange for a Registered Security of the same series and
like tenor after the close of business at such office or agency on
(i) any Regular Record Date and before the opening of business at
such office or agency on the relevant Interest Payment Date or (ii)
any Special Record Date and before the opening of business at such
office or agency on the related proposed date for payment of
Defaulted Interest, such Bearer Security shall be surrendered
without the coupon relating to such Interest Payment Date or
proposed date for payment, as the case may be, and interest or
Defaulted Interest, as the case may be, will not be payable on such
Interest Payment Date or proposed date for payment, as the case may
be, in respect of the Registered Security issued in exchange for
such Bearer Security, but will be payable only to the Holder of
such coupon when due in accordance with the provisions of this
Indenture. Whenever any Securities are so surrendered for
exchange, the Issuer shall execute, and the Trustee shall
authenticate and deliver, the Securities which the Holder making
the exchange is entitled to receive.
Notwithstanding the foregoing, except as otherwise specified
as contemplated by Section 301, any permanent global Security shall
be exchangeable only as provided in this paragraph. If the
depositary for any permanent global Security is DTC, then, unless
the terms of such global Security expressly permit such global
Security to be exchanged in whole or in part for definitive
Securities, a global Security may be transferred, in whole but not
in part, only to a nominee of DTC, or by a nominee of DTC to DTC,
or to a successor to DTC for such global Security selected or
approved by the Issuer or to a nominee of such successor to DTC.
If at any time DTC notifies the Issuer that it is unwilling or
unable to continue as depositary for the applicable global Security
or Securities or if at any time DTC ceases to be a clearing agency
registered under the Exchange Act if so required by applicable law
or regulation, the Issuer shall appoint a successor depositary with
respect to such global Security or Securities. If (i) a successor
depositary for such global Security or Securities is not appointed
by the Issuer within 90 days after the Issuer receives such notice
or becomes aware of such unwillingness, inability or ineligibility,
(ii) an Event of Default has occurred and is continuing and the
beneficial owners representing a majority in principal amount of
the applicable series of Securities represented by such global
Security or Securities advise DTC to cease acting as depositary for
such global Security or Securities or (iii) the Issuer, in its sole
discretion, determines at any time that all Outstanding Securities
(but not less than all) of any series issued or issuable in the
form of one or more global Securities shall no longer be
represented by such global Security or Securities, then the Issuer
shall execute, and the Trustee shall authenticate and deliver,
definitive Securities of like series, rank, tenor and terms in
definitive form in an aggregate principal amount equal to the
principal amount of such global Security or Securities. If any
beneficial owner of an interest in a permanent global Security is
otherwise entitled to exchange such interest for Securities of such
series and of like tenor and principal amount of another authorized
form and denomination, as specified as contemplated by Section 301
and provided that any applicable notice provided in the permanent
global Security shall have been given, then without unnecessary
delay but in any event not later than the earliest date on which
such interest may be so exchanged, the Issuer shall execute, and
the Trustee shall authenticate and deliver definitive Securities in
aggregate principal amount equal to the principal amount of such
beneficial owner's interest in such permanent global Security. On
or after the earliest date on which such interests may be so
exchanged, such permanent global Security shall be surrendered for
exchange by DTC or such other depositary as shall be specified in
the Issuer Order with respect thereto to the Trustee, as the
Issuer's agent for such purpose; provided, however, that no such
exchanges may occur during a period beginning at the opening of
business 15 days before any selection of Securities to be redeemed
and ending on the relevant Redemption Date if the Security for
which exchange is requested may be among those selected for
redemption; and provided further that no Bearer Security delivered
in exchange for a portion of a permanent global Security shall be
mailed or otherwise delivered to any location in the United States.
If a Registered Security is issued in exchange for any portion of
a permanent global Security (i) after the close of business at the
office or agency where such exchange occurs on any Regular Record
Date and before the opening of business at such office or agency on
the relevant Interest Payment Date or (ii) after the close of
business at the office or agency where such exchange occurs on any
Special Record Date and the opening of business at such office or
agency on the related proposed date for payment of Defaulted
Interest, interest or Defaulted Interest, as the case may be, will
not be payable on such Interest Payment Date or proposed date for
payment, as the case may be, in respect of such Registered
Security, but will be payable on such Interest Payment Date or
proposed date for payment, as the case may be, only to the Person
to whom interest in respect of such portion of such permanent
global Security is payable in accordance with the provisions of
this Indenture.
All Securities issued upon any registration of transfer or
exchange of Securities shall be the valid obligations of the
Issuer, 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 Issuer or the Security Registrar) be duly endorsed,
or be accompanied by a written instrument of transfer in form
satisfactory to the Issuer 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 Issuer may require
payment of a sum sufficient to cover any tax or other governmental
charge that may be imposed in connection with any registration of
transfer or exchange of Securities, other than exchanges pursuant
to Section 304, 906, 1107 or 1305 not involving any transfer.
The Issuer or the Trustee, as applicable, shall not be
required (i) to issue, register the transfer of or exchange any
Security if such Security may be among those selected for
redemption during a period beginning at the opening of business 15
days before selection of the Securities to be redeemed under
Section 1103 and ending at the close of business on (a) if such
Securities are issuable only as Registered Securities, the day of
the mailing of the relevant notice of redemption and (b) if such
Securities are issuable as Bearer Securities, the day of the first
publication of the relevant notice of redemption or, if such
Securities are also issuable as Registered Securities and there is
no publication, the mailing of the relevant notice of redemption,
(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, (iii) to exchange any Bearer
Security so selected for redemption except that such a Bearer
Security may be exchanged for a Registered Security of that series
and like tenor; provided that such Registered Security shall be
simultaneously surrendered for redemption, or (iv) to issue,
register the transfer of or exchange any Security which has been
surrendered for repayment at the option of the Holder, except the
portion, if any, of such Security not to be so repaid.
SECTION 306. Mutilated, Destroyed, Lost and Stolen
Securities. If any mutilated Security or a Security with a
mutilated coupon appertaining to it is surrendered to the Trustee
or the Issuer, together with, in proper cases, such security or
indemnity as may be required by the Issuer or the Trustee to hold
each of them or any agent of either of them harmless, the Issuer
shall execute and the Trustee shall authenticate and deliver in
exchange therefor a new Security of the same series and principal
amount, containing identical terms and provisions and bearing a
number not contemporaneously outstanding, with coupons
corresponding to the coupons, if any, appertaining to the
surrendered Security.
If there shall be delivered to the Issuer 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 hold each of them and any agent of
either of them harmless, then, in the absence of notice to the
Issuer or the Trustee that such Security or coupon has been
acquired by a bona fide purchaser, the Issuer shall execute and
upon its request the Trustee shall authenticate and deliver, in
lieu of any such destroyed, lost or stolen Security or in exchange
for the Security to which a destroyed, lost or stolen coupon
appertains (with all appurtenant coupons not destroyed, lost or
stolen), a new Security of the same series and principal amount,
containing identical terms and provisions and bearing a number not
contemporaneously outstanding, with coupons corresponding to the
coupons, if any, appertaining to such destroyed, lost or stolen
Security or to the Security to which such destroyed, lost or stolen
coupon appertains.
Notwithstanding the provisions of the previous two paragraphs,
in case any such mutilated, destroyed, lost or stolen Security or
coupon has become or is about to become due and payable, the Issuer
in its discretion may, instead of issuing a new Security, with
coupons corresponding to the coupons, if any, appertaining to such
destroyed, lost or stolen Security or to the Security to which such
destroyed, lost or stolen coupon appertains, pay such Security or
coupon; provided, however, that payment of principal of (and
premium, if any), any interest on and any Additional Amounts with
respect to, Bearer Securities shall, except as otherwise provided
in Section 1002, be payable only at an office or agency located
outside the United States and, unless otherwise specified as
contemplated by Section 301, any interest on Bearer Securities
shall be payable only upon presentation and surrender of the
coupons appertaining thereto.
Upon the issuance of any new Security under this Section, the
Issuer 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 Issuer, whether
or not the destroyed, lost or stolen Security and its coupons, if
any, or the destroyed, lost or stolen coupon shall be at any time
enforceable by anyone, and shall be entitled to all the benefits of
this Indenture equally and proportionately with any and all other
Securities of that series and their coupons, if any, duly issued
hereunder.
The provisions of this Section are exclusive and shall
preclude (to the extent lawful) all other rights and remedies with
respect to the replacement or payment of mutilated, destroyed, lost
or stolen Securities or coupons.
SECTION 307. Payment of Interest; Interest Rights Preserved.
Except as otherwise specified with respect to a series of
Securities in accordance with the provisions of Section 301,
interest on any Registered Security that is payable, and is
punctually paid or duly provided for, on any Interest Payment Date
shall be paid to the Person in whose name that Security (or one or
more Predecessor Securities) is registered at the close of business
on the Regular Record Date for such interest at the office or
agency of the Issuer maintained for such purpose pursuant to
Section 1002; provided, however, that each installment of interest
on any Registered Security may at the Issuer's option be paid by
(i) mailing a check for such interest, payable to or upon the
written order of the Person entitled thereto pursuant to Section
308, to the address of such Person as it appears on the Security
Register or (ii) transfer to an account maintained by the payee
located inside the United States.
Unless otherwise provided as contemplated by Section 301 with
respect to the Securities of any series, payment of interest may be
made, in the case of a Bearer Security, by transfer to an account
maintained by the payee with a bank located outside the United
States.
Unless otherwise provided as contemplated by Section 301,
every permanent global Security will provide that interest, if any,
payable on any Interest Payment Date will be paid to DTC, Euroclear
and/or CEDEL, as the case may be, with respect to that portion of
such permanent global Security held for its account by Cede & Co.
or the Common Depositary, as the case may be, for the purpose of
permitting such party to credit the interest received by it in
respect of such permanent global Security to the accounts of the
beneficial owners thereof.
In case a Bearer Security of any series is surrendered in
exchange for a Registered Security of such series after the close
of business (at an office or agency where such exchange occurs) on
any Regular Record Date and before the opening of business (at such
office or agency) on the next succeeding Interest Payment Date,
such Bearer Security shall be surrendered without the coupon
relating to such Interest Payment Date and interest will not be
payable on such Interest Payment Date in respect of the Registered
Security issued in exchange for such Bearer Security, but will be
payable only to the Holder of such coupon when due in accordance
with the provisions of this Indenture.
Except as otherwise specified with respect to a series of
Securities in accordance with the provisions of Section 301, any
interest on any Registered Security of any series that is payable,
but is not punctually paid or duly provided for, on any Interest
Payment Date (herein called "Defaulted Interest") shall forthwith
cease to be payable to the registered Holder thereof on the
relevant Regular Record Date by virtue of having been such Holder,
and such Defaulted Interest may be paid by the Issuer, at its
election in each case, as provided in clause (i) or (ii) below:
(i) the Issuer 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 Issuer 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 Issuer shall deposit with the Trustee an amount of money
in the currency or currencies, currency unit or units or
composite currency or currencies in which the Securities of
such series are payable (except as otherwise specified
pursuant to Section 301 for the Securities of such series)
equal to the aggregate amount proposed to be paid in respect
of such Defaulted Interest or shall make arrangements
satisfactory to the Trustee for such deposit on or prior to
the date of the proposed payment, such money when deposited to
be held in trust for the benefit of the Persons entitled to
such Defaulted Interest as provided in this clause.
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 Issuer of such Special
Record Date and, in the name and at the expense of the Issuer,
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 Issuer, cause a similar notice to be
published at least once in an Authorized Newspaper in each
Place of Payment, but such publications shall not be a
condition precedent to the establishment of such Special
Record Date. Notice of the proposed payment of such Defaulted
Interest and the Special Record Date therefor having been
mailed as aforesaid, such Defaulted Interest shall be paid to
the Persons in whose names the Registered Securities of such
series (or their respective Predecessor Securities) are
registered at the close of business on such Special Record
Date and shall no longer be payable pursuant to the following
clause (ii). In case a Bearer Security of any series is
surrendered at the office or agency in a Place of Payment for
such series in exchange for a Registered Security of such
series after the close of business at such office or agency on
any Special Record Date and before the opening of business at
such office or agency on the related proposed date for payment
of Defaulted Interest, such Bearer Security shall be
surrendered without the coupon relating to such proposed date
of payment and Defaulted Interest will not be payable on such
proposed date of payment in respect of the Registered Security
issued in exchange for such Bearer Security, but will be
payable only to the Holder of such coupon when due in
accordance with the provisions of this Indenture; or
(ii) the Issuer 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 Issuer to the Trustee
of the proposed payment pursuant to this clause, such manner
of payment shall be deemed practicable by the Trustee.
Subject to the foregoing provisions of this Section and
Section 305, each Security delivered under this Indenture upon
registration of transfer of, in exchange for or in lieu of any
other Security shall carry the rights to interest accrued and
unpaid, and to accrue, which were carried by such other Security.
SECTION 308. Persons Deemed Owners. Prior to due
presentment of a Registered Security for registration of transfer,
the Issuer, the Trustee and any agent of the Issuer or the Trustee
may treat the Person in whose name such Registered Security is
registered as the owner of such Security for the purpose of
receiving payment of principal of (and premium, if any), and
(subject to Sections 305 and 307) interest, if any, on, such
Registered Security and for all other purposes whatsoever, whether
or not such Registered Security be overdue, and neither the Issuer,
the Trustee nor any agent of the Issuer 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 Issuer, the Trustee and any
agent of the Issuer or the Trustee may treat the Holder of any
Bearer Security and the Holder of any coupon as the absolute owner
of such Security or coupon for the purpose of receiving payment
thereof or on account thereof and for all other purposes
whatsoever, whether or not such Security or coupon be overdue, and
neither the Issuer, the Trustee nor any agent of the Issuer or the
Trustee shall be affected by notice to the contrary.
None of the Issuer, 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 Issuer, the Trustee or
any agent of the Issuer or the Trustee, from giving effect to any
written certification, proxy or other authorization furnished by
any depositary, as a Holder, with respect to such global Security
or impair, as between such depositary and owners of beneficial
interests in such global Security, the operation of customary
practices governing the exercise of the rights of such depositary
(or its nominee) as Holder of such global Security.
SECTION 309. Cancellation. All Securities and coupons
surrendered for payment, redemption, repayment at the option of the
Holder, registration of transfer or exchange or for credit against
any sinking fund payment shall, if surrendered to any Person other
than the Trustee, be delivered to the Trustee, and any such
Securities and coupons and Securities and coupons surrendered
directly to the Trustee for any such purpose shall be promptly
cancelled by it; provided, however, where the Place of Payment is
located outside of the United States, the Paying Agent at such
Place of Payment may cancel the Securities surrendered to it for
such purposes prior to delivering the Securities to the Trustee.
The Issuer may at any time deliver to the Trustee for cancellation
any Securities previously authenticated and delivered hereunder
which the Issuer 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 Issuer has not issued and sold,
and all Securities so delivered shall be promptly cancelled by the
Trustee. If the Issuer shall so acquire any of the Securities,
however, such acquisition shall not operate as a redemption or
satisfaction of the indebtedness represented by such Securities
unless and until the same are surrendered to the Trustee for
cancellation. No Securities shall be authenticated in lieu of or
in exchange for any Securities cancelled as provided in this
Section, 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 Issuer, unless by an Issuer
Order the Issuer directs their return to it.
SECTION 310. Computation of Interest. Except as otherwise
specified as contemplated by Section 301 with respect to Securities
of any series, interest on the Securities of each series shall be
computed on the basis of a 360-day year consisting of 12 30-day
months.
ARTICLE FOUR
SATISFACTION AND DISCHARGE
SECTION 401. Satisfaction and Discharge of Indenture. This
Indenture shall upon Issuer Request cease to be of further effect
with respect to any series of Securities specified in such Issuer
Request (except as to any surviving rights of registration of
transfer or exchange of Securities of such series herein expressly
provided for and any right to receive Additional Amounts, as
provided in Section 1008), and the Trustee, upon receipt of an
Issuer Order, and at the expense of the Issuer, shall execute
proper instruments acknowledging satisfaction and discharge of this
Indenture as to such series when
(i) either
(a) all Securities of such series theretofore
authenticated and delivered and all coupons, if any,
appertaining thereto (other than (i) coupons appertaining
to Bearer Securities surrendered for exchange for
Registered Securities and maturing after such exchange,
whose surrender is not required or has been waived as
provided in Section 305, (ii) Securities and coupons of
such series which have been destroyed, lost or stolen and
which have been replaced or paid as provided in Section
306, (iii) coupons appertaining to Securities called for
redemption and maturing after the relevant Redemption
Date, whose surrender has been waived as provided in
Section 1106, and (iv) Securities and coupons of such
series for whose payment money has theretofore been
deposited in trust or segregated and held in trust by the
Issuer and thereafter repaid to the Issuer or discharged
from such trust, as provided in Section 1003) have been
delivered to the Trustee for cancellation; or
(b) all Securities of such series and, in the case
of (1) or (2) below, any coupons appertaining thereto not
theretofore delivered to the Trustee for cancellation
(1) have become due and payable,
(2) will become due and payable at their
Stated Maturity within one year, or
(3) if redeemable at the option of the
Issuer, 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
Issuer,
and the Issuer, 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, if any, and any Additional Amounts with respect
thereto, to the date of such deposit (in the case of
Securities which have become due and payable) or to the
Stated Maturity or Redemption Date, as the case may be;
(ii) the Issuer has paid or caused to be paid all other
sums payable hereunder by the Issuer; and
(iii) the Issuer 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 Issuer to the Trustee and any predecessor
Trustee under Section 606, the obligations of the Issuer to any
Authenticating Agent under Section 611 and, if money shall have
been deposited with and held by the Trustee pursuant to subclause
(b) of clause (i) of this Section, the obligations of the Trustee
under Section 402 and the last paragraph of Section 1003 shall
survive.
SECTION 402. Application of Trust Funds. Subject to the
provisions of the last paragraph of Section 1003, all money
deposited with the Trustee pursuant to Section 401 shall be held in
trust and applied by it, in accordance with the provisions of the
Securities, the coupons and this Indenture, to the payment, either
directly or through any Paying Agent (including the Issuer acting
as its own Paying Agent) as the Trustee may determine, to the
Persons entitled thereto, of the principal (and premium, if any),
and interest, if any, and Additional Amounts for whose payment such
money has been deposited with or received by the Trustee, but such
money need not be segregated from other funds except to the extent
required by law.
ARTICLE FIVE
REMEDIES
SECTION 501. Events of Default. "Event of Default,"
wherever used herein with respect to any particular series of
Securities, means any one of the following events (whatever the
reason for such Event of Default and whether or not it shall be
voluntary or involuntary or be effected by operation of law or
pursuant to any judgment, decree or order of any court or any
order, rule or regulation of any administrative or governmental
body):
(i) default in the payment of any interest on or any
Additional Amounts payable in respect of any Security of that
series or of any coupon appertaining thereto, when such
interest, Additional Amounts or coupon becomes due and
payable, and continuance of such default for a period of 30
days;
(ii) 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;
(iii) default in the deposit of any sinking fund
payment, when and as due by the terms of any Security of that
series;
(iv) default in the performance, or breach, of any
covenant or warranty of the Issuer in this Indenture with
respect to any Security of that series (other than a covenant
or warranty a default in whose performance or whose breach is
elsewhere in this Section specifically dealt with), and
continuance of such default or breach for a period of 60 days
after there has been given, by registered or certified mail,
to the Issuer by the Trustee or to the Issuer 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;
(v) default under any evidence of recourse indebtedness
of the Issuer, or under any mortgage, indenture or other
instrument of the Issuer (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
recourse indebtedness of the Issuer (or by any Subsidiary, the
repayment of which the Issuer has guaranteed or for which the
Issuer is directly responsible or liable as obligor or
guarantor), whether such indebtedness now exists or shall
hereafter be created, which default shall constitute a failure
to pay an aggregate principal amount exceeding $__________ 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 $__________ 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 Issuer by
the Trustee or to the Issuer and the Trustee by the Holders of
at least 10% in principal amount of the Outstanding Securities
of that series a written notice specifying such default and
requiring the Issuer 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;
(vi) the Issuer or any Significant Subsidiary, pursuant
to or within the meaning of any Bankruptcy Law (a) becomes
insolvent, (b) fails generally to pay its debts as they become
due, (c) admits in writing its inability to pay its debts
generally as they become due, (d) commences a voluntary case
or proceeding, (e) consents to the entry of a judgment, decree
or order for relief against it in an involuntary case or
proceeding, (f) consents to the appointment of a Custodian of
it or for any part of its property, (g) consents to or
acquiesces in the institution of bankruptcy or insolvency
against it, (h) applies for, consents to or acquiesces in the
appointment of or taking possession by a Custodian of the
Issuer or any Significant Subsidiary or for any part of its
property, (i) makes a general assignment for the benefit of
its creditors, or (j) takes any corporate action in
furtherance of or to facilitate, conditionally or otherwise,
any of the foregoing;
(vii) a court of competent jurisdiction enters a
judgment, decree or order for relief in respect of the Issuer
or any Significant Subsidiary in an involuntary case or
proceeding under any Bankruptcy Law which shall (a) order the
winding-up or liquidation of its affairs; (b)(1) approve as
properly filed a petition seeking reorganization, arrangement,
adjustment or composition in respect of the Company or any
Subsidiary or (2) appoint a Custodian of the Issuer or any
Significant Subsidiary or for any part of its property and
such judgment or decree shall remain unstayed and in effect
for a period of 30 consecutive days; or (c) any bankruptcy or
insolvency petition or application is filed, or any bankruptcy
or insolvency proceeding is commenced, against the Issuer or
any Significant Subsidiary and such petition, application or
proceeding is not dismissed within 60 days; or any warrant of
attachment is issued against any portion of the property of
the Issuer or any Significant Subsidiary which is not released
within 60 days of service; or
(viii) any other Event of Default provided with
respect to Securities of that series.
As used in this Section 501, the term "Bankruptcy Law" means Title
11 of the United States Code or any similar Federal or State law
for the relief of debtors and the term "Custodian" means any
receiver, trustee, assignee, liquidator or other similar official
under any Bankruptcy Law.
SECTION 502. Acceleration of Maturity; Rescission and
Annulment. If an Event of Default (other than an Event of Default
specified in Section 501(vi) or (vii)) 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 Issuer (and to the
Trustee if given by the Holders), and upon any such declaration
such principal or specified portion thereof shall become
immediately due and payable. If an Event of Default specified in
Section 501(vi) or (vii) occurs, all unpaid principal and accrued
interest on the Outstanding Securities then outstanding shall ipso
facto become and be immediately due and payable without any
declaration or other act on the part of the Trustee or any
Securityholder.
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 Issuer and the Trustee, may
rescind and annul such declaration and its consequences if:
(i) the Issuer has paid or deposited with the Trustee a
sum sufficient to pay in the currency or currency unit or
composite currency in which the Securities of such series are
payable (except as otherwise specified pursuant to Section 301
for the Securities of such series):
(a) all overdue installments of interest on and any
Additional Amounts payable in respect of all Outstanding
Securities of that series and any related coupons,
(b) the principal of (and premium, if any, on) any
Outstanding Securities of that series which have become
due otherwise than by such declaration of acceleration
and interest thereon at the rate or rates borne by or
provided for in such Securities,
(c) to the extent that payment of such interest is
lawful, interest upon overdue installments of interest
and any Additional Amounts at the rate or rates borne by
or provided for in such Securities, and
(d) all sums paid or advanced by the Trustee
hereunder and the reasonable compensation, expenses,
disbursements and advances of the Trustee, its agents and
counsel; and
(ii) 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, if any, on Securities of that
series which have become due solely by such declaration of
acceleration, have been cured or waived as provided in Section
513.
No such rescission shall affect any subsequent default or impair
any right consequent thereon.
SECTION 503. Collection of Indebtedness and Suits for
Enforcement by Trustee. The Issuer covenants that if:
(i) 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
(ii) default is made in the payment of the principal of
(or premium, if any, on) any Security of any series at its
Maturity,
then the Issuer 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, if any, and Additional Amounts, with interest upon any
overdue principal (and premium, if any) and, to the extent that
payment of such interest shall be legally enforceable, upon any
overdue installments of interest or Additional Amounts, if any, at
the rate or rates borne by or provided for in such Securities, and,
in addition thereto, such further amount as shall be sufficient to
cover the costs and expenses of collection, including the
reasonable compensation, expenses, disbursements and advances of
the Trustee, its agents and counsel.
If the Issuer 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
Issuer or any other obligor upon such Securities of such series and
collect the moneys adjudged or decreed to be payable in the manner
provided by law out of the property of the Issuer 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 effective to protect and enforce any such rights, whether for
the specific enforcement of any covenant or agreement in this
Indenture or in aid of the exercise of any power granted herein, or
to enforce any other proper remedy.
SECTION 504. Trustee May File Proofs of Claim. In case of
the pendency of any receivership, insolvency, liquidation,
bankruptcy, reorganization, arrangement, adjustment, composition or
other judicial proceeding relative to the Issuer or any other
obligor upon the Securities or the property of the Issuer 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 Issuer for the payment of overdue principal, premium, if
any, or interest, if any) shall be entitled and empowered, by
intervention in such proceeding or otherwise:
(i) to file and prove a claim for the whole amount,
or such lesser amount as may be provided for in the Securities
of such series, of principal (and premium, if any) and
interest, if any, and Additional Amounts, if any, owing and
unpaid in respect of the Securities and to file such other
papers or documents as may be necessary or advisable in order
to have the claims of the Trustee (including any claim for the
reasonable compensation, expenses, disbursements and advances
of the Trustee, its agents and counsel) and of the Holders
allowed in such judicial proceeding, and
(ii) to collect and receive any moneys or other
property payable or deliverable on any such claims and to
distribute the same;
and any custodian, receiver, assignee, trustee, liquidator,
sequestrator (or other similar official) in any such judicial
proceeding is hereby authorized by each Holder of Securities of
such series and coupons to make such payments to the Trustee, and
in the event that the Trustee shall consent to the making of such
payments directly to the Holders, to pay to the Trustee any amount
due to it for the reasonable compensation, expenses, disbursements
and advances of the Trustee and any predecessor Trustee, their
agents and counsel, and any other amounts due the Trustee or any
predecessor Trustee under Section 606.
Nothing herein contained shall be deemed to authorize the
Trustee to authorize or consent to or accept or adopt on behalf of
any Holder of a Security or coupon any plan of reorganization,
arrangement, adjustment or composition affecting the Securities or
coupons or the rights of any Holder thereof, or to authorize the
Trustee to vote in respect of the claim of any Holder of a Security
or coupon in any such proceeding.
SECTION 505. Trustee May Enforce Claims Without Possession
of Securities or Coupons. All rights of action and claims under
this Indenture or any of the Securities or coupons may be
prosecuted and enforced by the Trustee without the possession of
any of the Securities or coupons or the production thereof in any
proceeding relating thereto, and any such proceeding instituted by
the Trustee shall be brought in its own name as trustee of an
express trust, and any recovery of judgment shall, after provision
for the payment of the reasonable compensation, expenses,
disbursements and advances of the Trustee, its agents and counsel,
be for the ratable benefit of the Holders of the Securities and
coupons in respect of which such judgment has been recovered.
SECTION 506. Application of Money Collected. Any money
collected by the Trustee pursuant to this Article shall be applied
in the following order, at the date or dates fixed by the Trustee
and, in case of the distribution of such money on account of
principal (or premium, if any) or interest, if any, and any
Additional Amounts, upon presentation of the Securities or coupons,
or both, as the case may be, and the notation thereon of the
payment if only partially paid and upon surrender thereof if fully
paid:
FIRST: to the payment of all amounts due the Trustee and
any predecessor Trustee under Section 606;
SECOND: to the payment of the amounts then due and
unpaid upon the Securities and coupons for principal (and
premium, if any) and interest, if any, 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
Issuer.
SECTION 507. Limitation on Suits. No Holder of any Security
of any series or any related coupon shall have any right to
institute any proceeding, judicial or otherwise, with respect to
this Indenture, or for the appointment of a receiver or trustee, or
for any other remedy hereunder, unless:
(i) such Holder has previously given written notice to
the Trustee of a continuing Event of Default with respect to
the Securities of that series;
(ii) the Holders of not less than 25% in principal amount
of the Outstanding Securities of that series shall have made
written request to the Trustee to institute proceedings in
respect of such Event of Default in its own name as Trustee
hereunder;
(iii) such Holder or Holders have offered to the
Trustee indemnity reasonably satisfactory to the Trustee
against the costs, expenses and liabilities to be incurred in
compliance with such request;
(iv) the Trustee for 60 days after its receipt of such
notice, request and offer of indemnity has failed to institute
any such proceeding; and
(v) 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 whatsoever by virtue of,
or by availing to, any provision of this Indenture to affect,
disturb or prejudice the rights of any other of such Holders, to
obtain or to seek to obtain priority or preference over any other
of such Holders or to enforce any right under this Indenture,
except in the manner herein provided and for the equal and ratable
benefit of all such Holders.
SECTION 508. Unconditional Right of Holders to Receive
Principal, Premium, if any, Interest and Additional Amounts.
Notwithstanding any other provision in this Indenture, the Holder
of any Security or coupon shall have the right which is absolute
and unconditional to receive payment of the principal of (and
premium, if any) and (subject to Sections 305 and 307) interest, if
any, on, and any Additional Amounts in respect of, such Security or
payment of such coupon on the respective due dates expressed in
such Security or coupon (or, in the case of redemption, on the
Redemption Date) and to institute suit for the enforcement of any
such payment, and such rights shall not be impaired without the
consent of such Holder.
SECTION 509. Restoration of Rights and Remedies. If the
Trustee or any Holder of a Security or coupon has instituted any
proceeding to enforce any right or remedy under this Indenture and
such proceeding has been discontinued or abandoned for any reason,
or has been determined adversely to the Trustee or to such Holder,
then and in every such case, the Issuer, the Trustee and the
Holders of Securities and coupons shall, subject to any
determination in such proceeding, be restored severally and
respectively to their former positions hereunder and thereafter all
rights and remedies of the Trustee and the Holders shall continue
as though no such proceeding had been instituted.
SECTION 510. Rights and Remedies Cumulative. Except as
otherwise provided with respect to the replacement or payment of
mutilated, destroyed, lost or stolen Securities or coupons in the
last paragraph of Section 306, no right or remedy herein conferred
upon or reserved to the Trustee or to the Holders of Securities or
coupons is intended to be exclusive of any other right or remedy,
and every right and remedy shall, to the extent permitted by law,
be cumulative and in addition to every other right and remedy given
hereunder or now or hereafter existing at law or in equity or
otherwise. The assertion or employment of any right or remedy
hereunder, or otherwise, shall not prevent the concurrent assertion
or employment of any other appropriate right or remedy.
SECTION 511. Delay or Omission Not Waiver. No delay or
omission of the Trustee or of any Holder of any Security or coupon
to exercise any right or remedy accruing upon any Event of Default
shall impair any such right or remedy or constitute a waiver of any
such Event of Default or an acquiescence therein. Every right and
remedy given by this Article or by law to the Trustee or to the
Holders may be exercised from time to time, and as often as may be
deemed expedient, by the Trustee or by the Holders of Securities or
coupons, as the case may be.
SECTION 512. Control by Holders of Securities. The Holders
of not less than a majority in principal amount of the Outstanding
Securities of any series shall have the right to direct the time,
method and place of conducting any proceeding for any remedy
available to the Trustee or exercising any trust or power conferred
on the Trustee with respect to the Securities of such series;
provided that:
(i) such direction shall not be in conflict with any
rule of law or with this Indenture;
(ii) the Trustee may take any other action deemed proper
by the Trustee which is not inconsistent with such direction;
and
(iii) the Trustee need not take any action which
might involve it in personal liability or be unduly
prejudicial to the Holders of Securities of such series not
joining therein.
SECTION 513. Waiver of Past Defaults. The Holders of not
less than a majority in principal amount of the Outstanding
Securities of any series may on behalf of the Holders of all the
Securities of such series and any related coupons waive any past
default hereunder with respect to such series and its consequences,
except a default:
(i) in the payment of the principal of (or premium, if
any) or interest on, or Additional Amounts payable in respect
of, any Security of such series or any related coupons; or
(ii) in respect of a covenant or provision hereof which
under Article Nine cannot be modified or amended without the
consent of the Holder of each Outstanding Security of such
series affected.
Upon any such waiver, such default shall cease to exist, and
any Event of Default arising therefrom shall be deemed to have been
cured, for every purpose of this Indenture, but no such waiver
shall extend to any subsequent or other default or Event of Default
or impair any right consequent thereon.
SECTION 514. Waiver of Usury, Stay or Extension Laws. The
Issuer 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 Issuer (to the extent that
it may lawfully do so) hereby expressly waives all benefit or
advantage of any such law, and covenants that it will not hinder,
delay or impede the execution of any power herein granted to the
Trustee, but will suffer and permit the execution of every such
power as though no such law had been enacted.
SECTION 515. Undertaking for Costs. All parties to this
Indenture agree, and each Holder of any Security by his acceptance
thereof shall be deemed to have agreed, that any court may in its
discretion require, in any suit for the enforcement of any right or
remedy under this Indenture, or in any suit against the Trustee for
any action taken or omitted by it as Trustee, the filing by any
party litigant in such suit of any undertaking to pay the costs of
such suit, and that such court may in its discretion assess
reasonable costs, including reasonable attorneys' fees, against any
party litigant in such suit having due regard to the merits and
good faith of the claims or defenses made by such party litigant;
but the provisions of this Section shall not apply to any suit
instituted by the Trustee, to any suit instituted by any Holder, or
group of Holders, holding in the aggregate more than 10% in
principal amount of the Outstanding Securities, or to any suit
instituted by any Holder for the enforcement of the payment of the
principal of (or premium, 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 SIX
THE TRUSTEE
SECTION 601. Notice of Defaults. Within 90 days after the
occurrence of any default hereunder with respect to the Securities
of any series, the Trustee shall transmit in the manner and to the
extent provided in Section 313(c) of the TIA, 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, if any, on or any Additional Amounts with
respect to any Security of such series, or in the payment of any
sinking fund installment with respect to the Securities of such
series, the Trustee shall be protected in withholding such notice
if and so long as Responsible Officers of the Trustee in good faith
determine that the withholding of such notice is in the interests
of the Holders of the Securities and coupons of such series; and
provided further that in the case of any default or breach of the
character specified in Section 501(iv) with respect to the
Securities and coupons of such series, no such notice to Holders
shall be given until at least 60 days after the occurrence thereof.
For the purpose of this Section, the term "default" means any event
which is, or after notice or lapse of time or both would become, an
Event of Default with respect to the Securities of such series.
SECTION 602. Certain Rights of Trustee. Subject to the
provisions of Section 315(a) through 315(d) of the TIA:
(i) the Trustee may rely and shall be protected in
acting or refraining from acting upon any resolution,
certificate, statement, instrument, opinion, report, notice,
request, direction, consent, order, bond, debenture, note,
coupon or other paper or document believed by it to be genuine
and to have been signed or presented by the proper party or
parties;
(ii) any request or direction of the Issuer mentioned
herein shall be sufficiently evidenced by an Issuer Request or
Issuer Order (other than delivery of any Security, together
with any coupons appertaining thereto, to the Trustee for
authentication and delivery pursuant to Section 303 which
shall be sufficiently evidenced as provided therein) and any
resolution of the Board of Trustees may be sufficiently
evidenced by a Board Resolution;
(iii) 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;
(iv) the Trustee may consult with counsel and the advice
of such counsel or any Opinion of Counsel shall be full and
complete authorization and protection in respect of any action
taken, suffered or omitted by it hereunder in good faith and
in reliance thereon;
(v) the Trustee shall be under no obligation to exercise
any of the rights or powers vested in it by this Indenture at
the request or direction of any of the Holders of Securities
of any series or any related coupons pursuant to this
Indenture, unless such Holders shall have offered to the
Trustee security or indemnity reasonably satisfactory to the
Trustee against the costs, expenses and liabilities which
might be incurred by it in compliance with such request or
direction;
(vi) 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 Issuer, personally or by
agent or attorney following reasonable notice to the Issuer;
(vii) 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
(viii) the Trustee shall not be liable for any action
taken, suffered or omitted by it in good faith and reasonably
believed by it to be authorized or within the discretion or
rights or powers conferred upon it by this Indenture.
The Trustee shall not be required to expend or risk its own
funds or otherwise incur any financial liability in the performance
of any of its duties hereunder, or in the exercise of any of its
rights or powers, if it shall have reasonable grounds for believing
that repayment of such funds or adequate indemnity against such
risk or liability is not reasonably assured to it.
Except during the continuance of an Event of Default, the
Trustee undertakes to perform only such duties as are specifically
set forth in this Indenture, and no implied covenants or
obligations shall be read into this Indenture against the Trustee.
SECTION 603. Not Responsible for Recitals or Issuance of
Securities. The recitals contained herein and in the Securities,
except the Trustee's certificate of authentication, and in any
coupons shall be taken as the statements of the Issuer, 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 Issuer of Securities or the proceeds
thereof.
SECTION 604. May Hold Securities. The Trustee, any Paying
Agent, Security Registrar, Authenticating Agent or any other agent
of the Issuer, in its individual or any other capacity, may become
the owner or pledgee of Securities and coupons and, subject to
Sections 310(b) and 311 of the TIA, may otherwise deal with the
Issuer with the same rights it would have if it were not Trustee,
Paying Agent, Security Registrar, Authenticating Agent or such
other agent.
SECTION 605. Money Held in Trust. Money held by the Trustee
in trust hereunder need not be segregated from other funds except
to the extent required by law. The Trustee shall be under no
liability for interest on any money received by it hereunder except
as otherwise agreed with the Issuer.
SECTION 606. Compensation and Reimbursement. The Issuer
agrees:
(i) 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);
(ii) 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
(iii) to indemnify each of the Trustee and any
predecessor Trustee for, and to hold it harmless against, any
loss, liability or expense incurred without negligence or bad
faith on its own part, arising out of or in connection with
the acceptance or administration of the trust or trusts
hereunder, including the costs and expenses of defending
itself against any claim or liability in connection with the
exercise or performance of any of its powers or duties
hereunder.
When the Trustee incurs expenses or renders services in
connection with an Event of Default specified in Section 501(vi) or
Section 501(vii), 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
Issuer 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, if any, on
particular Securities or any coupons.
The provisions of this Section shall survive the termination
of this Indenture.
SECTION 607. Corporate Trustee Required; Eligibility;
Conflicting Interests. There shall at all times be a Trustee
hereunder which shall be eligible to act as Trustee under Section
310(a)(1) of the TIA and shall have a combined capital and surplus
of at least $50,000,000. If such corporation publishes reports of
condition at least annually, pursuant to law or the requirements of
Federal, State, Territorial or District of Columbia supervising or
examining authority, then for the purposes of this Section, the
combined capital and surplus of such corporation shall be deemed to
be its combined capital and surplus as set forth in its most recent
report of condition so published. If at any time the Trustee shall
cease to be eligible in accordance with the provisions of this
Section, it shall resign immediately in the manner and with the
effect hereinafter specified in this Article.
SECTION 608. Resignation and Removal; Appointment of
Successor. (A) No resignation or removal of the Trustee and no
appointment of a successor Trustee pursuant to this Article shall
become effective until the acceptance of appointment by the
successor Trustee in accordance with the applicable requirements of
Section 609.
(B) The Trustee may resign at any time with respect to the
Securities of one or more series by giving written notice thereof
to the Issuer. If an instrument of acceptance by a successor
Trustee shall not have been delivered to the Trustee within 30 days
after the giving of such notice of resignation, the resigning
Trustee may petition any court of competent jurisdiction for the
appointment of a successor Trustee.
(C) The Trustee may be removed at any time with respect to
the Securities of any series by Act of the Holders of a majority in
principal amount of the Outstanding Securities of such series
delivered to the Trustee and to the Issuer.
(D) If at any time:
(i) the Trustee shall fail to comply with the provisions
of Section 310(b) of the TIA after written request therefor by
the Issuer 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
607 and shall fail to resign after written request therefor by
the Issuer 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, (i) the Issuer by or pursuant to a Board
Resolution may remove the Trustee and appoint a successor Trustee
with respect to all Securities or (ii) subject to Section 315(e) of
the TIA, 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 Issuer, by or pursuant to a Board Resolution, shall
promptly appoint a successor Trustee or Trustees with respect to
the Securities of that or those series (it being understood that
any such successor Trustee may be appointed with respect to the
Securities of one or more or all of such series and that at any
time there shall be only one Trustee with respect to the Securities
of any particular series). If, within one year after such
resignation, removal or incapability, or the occurrence of such
vacancy, a successor Trustee with respect to the Securities of any
series shall be appointed by Act of the Holders of a majority in
principal amount of the Outstanding Securities of such series
delivered to the Issuer 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 Issuer. If no successor Trustee
with respect to the Securities of any series shall have been so
appointed by the Issuer 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 Issuer shall give notice of each resignation and each
removal of the Trustee with respect to the Securities of any series
and each appointment of a successor Trustee with respect to the
Securities of any series in the manner provided for notices to the
Holders of Securities in Section 106. Each notice shall include
the name of the successor Trustee with respect to the Securities of
such series and the address of its Corporate Trust Office.
SECTION 609. Acceptance of Appointment by Successor. (A) In
case of the appointment hereunder of a successor Trustee with
respect to all Securities, every such successor Trustee shall
execute, acknowledge and deliver to the Issuer and to the retiring
Trustee an instrument accepting such appointment, and thereupon the
resignation or removal of the retiring Trustee shall become
effective and such successor Trustee, without any further act, deed
or conveyance, shall become vested with all the rights, powers,
trusts and duties of the retiring Trustee; but, on request of the
Issuer or the successor Trustee, such retiring Trustee shall, upon
payment of its charges, execute and deliver an instrument
transferring to such successor Trustee all the rights, powers and
trusts of the retiring Trustee, and shall duly assign, transfer and
deliver to such successor Trustee all property and money held by
such retiring Trustee hereunder, subject nevertheless to its claim,
if any, provided for in Section 606.
(B) In case of the appointment hereunder of a successor
Trustee with respect to the Securities of one or more (but not all)
series, the Issuer, the retiring Trustee and each successor Trustee
with respect to the Securities of one or more series shall execute
and deliver an indenture supplemental hereto, pursuant to Article
Nine hereof, wherein each successor Trustee shall accept such
appointment and which (i) shall contain such provisions as shall be
necessary or desirable to transfer and confirm to, and to vest in,
each successor Trustee all the rights, powers, trusts and duties of
the retiring Trustee with respect to the Securities of that or
those series to which the appointment of such successor Trustee
relates, (ii) 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 (iii) 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 Trustee's co-trustees
of the same trust and that each such Trustee shall be trustee of a
trust or trusts hereunder separate and apart from any trust or
trusts hereunder administered by any other such Trustee; and upon
the execution and delivery of such supplemental indenture the
resignation or removal of the retiring Trustee shall become
effective to the extent provided therein and each such successor
Trustee, without any further act, deed or conveyance, shall become
vested with all the rights, powers, trusts and duties of the
retiring Trustee with respect to the Securities of that or those
series to which the appointment of such successor Trustee relates;
but, on request of the Issuer 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 Issuer
shall execute any and all instruments for more fully and certainly
vesting in and confirming to such successor Trustee all such
rights, powers and trusts referred to in paragraph (A) or (B) of
this Section, as the case may be.
(D) No successor Trustee shall accept its appointment unless
at the time of such acceptance such successor Trustee shall be
qualified and eligible under this Article.
SECTION 610. Merger, Conversion, Consolidation or Succession
to Business. Any corporation into which the Trustee may be merged
or converted or with which it may be consolidated, or any
corporation resulting from any merger, conversion or consolidation
to which the Trustee shall be a party, or any corporation
succeeding to all or substantially all of the corporate trust
business of the Trustee, shall be the successor of the Trustee
hereunder; provided that 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 611. Appointment of Authenticating Agent. At any
time when any of the Securities remain Outstanding, the Trustee may
appoint an Authenticating Agent or Agents with respect to one or
more series of Securities which shall be authorized to act on
behalf of the Trustee to authenticate Securities of such series
issued upon exchange, registration of transfer or partial
redemption or repayment thereof, and Securities so authenticated
shall be entitled to the benefits of this Indenture and shall be
valid and obligatory for all purposes as if authenticated by the
Trustee hereunder. Any such appointment shall be evidenced by an
instrument in writing signed by a Responsible Officer of the
Trustee, a copy of which instrument shall be promptly furnished to
the Issuer. 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 Issuer and shall at all times be a bank or trust
company or corporation organized and doing business and in good
standing under the laws of the United States of America or of any
State or the District of Columbia, authorized under such laws to
act as Authenticating Agent, having a combined capital and surplus
of not less than $50,000,000 and subject to supervision or
examination by Federal or State authorities. If such
Authenticating Agent publishes reports of condition at least
annually, pursuant to law or the requirements of the aforesaid
supervising or examining authority, then for the purposes of this
Section, the combined capital and surplus of such Authenticating
Agent shall be deemed to be its combined capital and surplus as set
forth in its most recent report of condition so published. In case
at any time an Authenticating Agent shall cease to be eligible in
accordance with the provisions of this Section, such Authenticating
Agent shall resign immediately in the manner and with the effect
specified in this Section.
Any corporation into which an Authenticating Agent may be
merged or converted or with which it may be consolidated, or any
corporation resulting from any merger, conversion or consolidation
to which such Authenticating Agent shall be a party, or any
corporation succeeding to the corporate agency or corporate trust
business of an Authenticating Agent, shall continue to be an
Authenticating Agent; provided such corporation shall be otherwise
eligible under this Section, without the execution or filing of any
paper or further act on the part of the Trustee or the
Authenticating Agent.
An Authenticating Agent for any series of Securities may at
any time resign by giving written notice of resignation to the
Trustee for such series and to the Issuer. 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 Issuer. 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 Issuer and shall give notice of such
appointment to all Holders of Securities of the series with respect
to which such Authenticating Agent will serve in the manner set
forth in Section 106. Any successor Authenticating Agent upon
acceptance of its appointment hereunder shall become vested with
all the rights, powers and duties of its predecessor hereunder,
with like effect as if originally named as an Authenticating Agent
herein. No successor Authenticating Agent shall be appointed
unless eligible under the provisions of this Section.
The Issuer agrees to pay to each Authenticating Agent from
time to time reasonable compensation including reimbursement of its
reasonable expenses for its services under this Section.
If an appointment with respect to one or more series is made
pursuant to this Section, the Securities of such series may have
endorsed thereon, in addition to or in lieu of the Trustee's
certificate of authentication, an alternate certificate of
authentication substantially in the following form:
This is one of the Securities of the series
designated therein referred to in the within-mentioned
Indenture.
STATE STREET BANK AND TRUST
COMPANY, as Trustee
By: ----------------------,
as Authenticating Agent
By: ----------------------
Authorized Signatory
ARTICLE SEVEN
HOLDERS' LISTS AND REPORTS BY TRUSTEE AND ISSUER
SECTION 701. Disclosure of Names and Addresses of Holders.
Every Holder of Securities or coupons, by receiving and holding the
same, agrees with the Issuer and the Trustee that neither the
Issuer 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 Section
312 of the TIA, 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 Section 312(b) of the TIA.
SECTION 702. Reports by Trustee. Within 60 days after
__________ of each year commencing with the first ___________ after
the first issuance of Securities pursuant to this Indenture, the
Trustee shall transmit by mail to all Holders of Securities as
provided in Section 313(c) of the TIA a brief report dated as of
such ___________ if required by Section 313(a) of the TIA.
SECTION 703. Reports by Issuer. The Issuer will:
(i) 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 Issuer with the
conditions and covenants of this Indenture as may be required
from time to time by such rules and regulations; and
(ii) 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 Section 313(c) of the
TIA, such summaries of any information, documents and reports
required to be filed by the Issuer pursuant to Section 1006
and paragraph (i) of this Section as may be required by rules
and regulations prescribed from time to time by the
Commission.
SECTION 704. Issuer to Furnish Trustee Names and Addresses
of Holders. The Issuer will furnish or cause to be furnished to
the Trustee:
(i) semiannually, not later than 15 days after the Regular
Record Date for interest for each series of Securities, a list, in
such form as the Trustee may reasonably require, of the names and
addresses of the Holders of 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
(ii) at such other times as the Trustee may request in
writing, within 30 days after the receipt by the Issuer of any such
request, a list of similar form and content as of a date not more
than 15 days prior to the time such list is furnished;
provided, however, that, so long as the Trustee is the Security
Registrar, no such list shall be required to be furnished.
ARTICLE EIGHT
CONSOLIDATION, MERGER, SALE, LEASE OR CONVEYANCE
SECTION 801. Consolidations and Mergers of Issuer and Sales,
Leases and Conveyances Permitted Subject to Certain Conditions.
The Issuer 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, (i) either the Issuer
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 1008) 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 Issuer by
supplemental indenture, complying with Article Nine 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 Issuer or any Subsidiary as a result thereof as
having been incurred by the Issuer or such Subsidiary at the time
of such transaction, no Event of Default, and no event which, after
notice or the lapse of time, or both, would become an Event of
Default, shall have occurred and be continuing.
SECTION 802. Rights and Duties of Successor Corporation. In
case of any such consolidation, merger, sale, lease or conveyance
and upon any such assumption by the successor corporation, such
successor corporation shall succeed to and be substituted for the
Issuer, 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 Issuer, any or all of the
Securities issuable hereunder which theretofore shall not have been
signed by the Issuer and delivered to the Trustee; and, upon the
order of such successor corporation, instead of the Issuer, 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 Issuer to the Trustee for
authentication, and any Securities which such successor corporation
thereafter shall cause to be signed and delivered to the Trustee
for that purpose. All the Securities so issued shall in all
respects have the same legal rank and benefit under this Indenture
as the Securities theretofore or thereafter issued in accordance
with the terms of this Indenture as though all of such Securities
had been issued at the date of the execution hereof.
In case of any such consolidation, merger, sale, lease or
conveyance, such changes in phraseology and form (but not in
substance) may be made in the Securities thereafter to be issued as
may be appropriate.
SECTION 803. Officers' Certificate and Opinion of Counsel.
Any consolidation, merger, sale, lease or conveyance permitted
under Section 801 is also subject to the condition that the Trustee
receive an Officers' Certificate and an Opinion of Counsel to the
effect that any such consolidation, merger, sale, lease or
conveyance, and the assumption by any successor corporation,
complies with the provisions of this Article and that all
conditions precedent herein provided for relating to such
transaction have been complied with.
ARTICLE NINE
SUPPLEMENTAL INDENTURES
SECTION 901. Supplemental Indentures without Consent of
Holders. Without the consent of any Holders of Securities or
coupons, the Issuer, 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:
(i) to evidence the succession of another Person to the
Issuer and the assumption by any such successor of the
covenants of the Issuer herein and in the Securities
contained;
(ii) to add to the covenants of the Issuer 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 Issuer;
(iii) 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;
(iv) 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;
(v) 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;
(vi) to secure the Securities;
(vii) to establish the form or terms of Securities of
any series and any related coupons as permitted by Sections
201 and 301, including the provisions and procedures relating
to Securities convertible into Common Shares;
(viii) 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;
(ix) 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
(x) to supplement any of the provisions of this
Indenture to such extent as shall be necessary to permit or
facilitate the defeasance and discharge of any series of
Securities pursuant to Sections 401, 1402 and 1403; provided
that any such action shall not adversely affect the interests
of the Holders of Securities of such series and any related
coupons or any other series of Securities in any material
respect.
SECTION 902. Supplemental Indentures with Consent of
Holders. With the consent of the Holders of not less than a
majority in principal amount of all Outstanding Securities affected
by such supplemental indenture, by Act of said Holders delivered to
the Issuer and the Trustee, the Issuer, 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:
(i) 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 Issuer to pay Additional Amounts pursuant to Section
1008 (except as contemplated by Section 801(i) and permitted
by Section 901(i)), or reduce the amount of the principal of
an Original Issue Discount Security that would be due and
payable upon a declaration of acceleration of the Maturity
thereof pursuant to Section 502 or the amount thereof provable
in bankruptcy pursuant to Section 504, or adversely affect any
right of repayment at the option of the Holder of any
Security, or change any Place of Payment where, or the
currency or currencies, currency unit or units or composite
currency or currencies in which, any Security or any premium
or the interest thereon is payable, or impair the right to
institute suit for the enforcement of any such payment on or
after the Stated Maturity thereof (or, in the case of
redemption or repayment at the option of the Holder, on or
after the Redemption Date or the Repayment Date, as the case
may be);
(ii) reduce the percentage in principal amount of the
Outstanding Securities of any series, the consent of whose
Holders is required for any such supplemental indenture, or
the consent of whose Holders is required for any waiver with
respect to such series (or compliance with certain provisions
of this Indenture or certain defaults hereunder and their
consequences) provided for in this Indenture, or reduce the
requirements of Section 1504 for quorum or voting; or
(iii) modify any of the provisions of this Section,
Section 513 or Section 1009, except to increase the required
percentage to effect such action or to provide that certain
other provisions of this Indenture cannot be modified or
waived without the consent of the Holder of each Outstanding
Security affected thereby.
It shall not be necessary for any Act of Holders under this
Section to approve the particular form of any proposed supplemental
indenture, but it shall be sufficient if such Act shall approve the
substance thereof.
A supplemental indenture which changes or eliminates any
covenant or other provision of this Indenture which has expressly
been included solely for the benefit of one or more particular
series of Securities, or which modifies the rights of the Holders
of Securities of such series with respect to such covenant or other
provision, shall be deemed not to affect the rights under this
Indenture of the Holders of Securities of any other series.
SECTION 903. Execution of Supplemental Indentures. In
executing, or accepting the additional trusts created by, any
supplemental indenture permitted by this Article or the
modification thereby of the trusts created by this Indenture, the
Trustee shall be entitled to receive, and shall be fully protected
in relying upon, an Opinion of Counsel stating that the execution
of such supplemental indenture is authorized or permitted by this
Indenture. The Trustee may, but shall not be obligated to, enter
into any such supplemental indenture which affects the Trustee's
own rights, duties or immunities under this Indenture or otherwise.
SECTION 904. Effect of Supplemental Indentures. Upon the
execution of any supplemental indenture under this Article, this
Indenture shall be modified in accordance therewith, and such
supplemental indenture shall form a part of this Indenture for all
purposes; and every Holder of Securities theretofore or thereafter
authenticated and delivered hereunder and of any coupon
appertaining thereto shall be bound thereby.
SECTION 905. Conformity with Trust Indenture Act. Every
supplemental indenture executed pursuant to this Article shall
conform to the requirements of the TIA as then in effect.
SECTION 906. Reference in Securities to Supplemental
Indentures. Securities of any series authenticated and delivered
after the execution of any supplemental indenture pursuant to this
Article may, and shall, if required by the Trustee, bear a notation
in form approved by the Trustee as to any matter provided for in
such supplemental indenture. If the Issuer shall so determine, new
Securities of any series so modified as to conform, in the opinion
of the Trustee and the Issuer, to any such supplemental indenture
may be prepared and executed by the Issuer and authenticated and
delivered by the Trustee in exchange for Outstanding Securities of
such series.
ARTICLE TEN
COVENANTS
SECTION 1001. Payment of Principal, Premium, if any, Interest
and Additional Amounts. The Issuer covenants and agrees for the
benefit of the Holders of each series of Securities that it will
duly and punctually pay the principal of (and premium, if any) and
interest, if any, on and any Additional Amounts payable in respect
of the Securities of that series in accordance with the terms of
such series of Securities, any coupons appertaining thereto and
this Indenture. Unless otherwise specified as contemplated by
Section 301 with respect to any series of Securities, any interest
due on and any Additional Amounts payable in respect of Bearer
Securities on or before Maturity, other than Additional Amounts, if
any, payable as provided in Section 1008 in respect of principal of
(or premium, if any, on) such a Security, shall be payable only
upon presentation and surrender of the several coupons for such
interest installments as are evidenced thereby as they severally
mature. Unless otherwise specified with respect to Securities of
any series pursuant to Section 301, at the option of the Issuer,
all payments of principal may be paid by check to the registered
Holder of the Registered Security or other person entitled thereto
against surrender of such Security.
SECTION 1002. Maintenance of Office or Agency. If Securities
of a series are issuable only as Registered Securities, the Issuer
shall maintain in each Place of Payment for any series of
Securities an office or agency where Securities of that series may
be presented or surrendered for payment or conversion, where
Securities of that series may be surrendered for registration of
transfer or exchange and where notices and demands to or upon the
Issuer in respect of the Securities of that series and this
Indenture may be served. If Securities of a series are issuable as
Bearer Securities, the Issuer will maintain: (i) in the Borough of
Manhattan, New York City or Boston, Massachusetts, an office or
agency where any Registered Securities of that series may be
presented or surrendered for payment or conversion, where any
Registered Securities of that series may be surrendered for
registration of transfer, where Securities of that series may be
surrendered for exchange, where notices and demands to or upon the
Issuer in respect of the Securities of that series and this
Indenture may be served and where Bearer Securities of that series
and related coupons may be presented or surrendered for payment or
conversion in the circumstances described in the following
paragraph (and not otherwise); (ii) subject to any laws or
regulations applicable thereto, in a Place of Payment for that
series which is located outside the United States, an office or
agency where Securities of that series and related coupons may be
presented and surrendered for payment (including payment of any
Additional Amounts payable on Securities of that series pursuant to
Section 1008) or conversion; provided, however, that if the
Securities of that series are listed on the Luxembourg Stock
Exchange or any other stock exchange located outside the United
States and such stock exchange shall so require, the Issuer will
maintain a Paying Agent for the Securities of that series in
Luxembourg or any other required city located outside the United
States, as the case may be, so long as the Securities of that
series are listed on such exchange; and (iii) subject to any laws
or regulations applicable thereto, in a Place of Payment for that
series located outside the United States an office or agency where
any Registered Securities of that series may be surrendered for
registration of transfer, where Securities of that series may be
surrendered for exchange and where notices and demands to or upon
the Issuer in respect of the Securities of that series and this
Indenture may be served. The Issuer will give prompt written
notice to the Trustee of the location, and any change in the
location, of each such office or agency. If at any time the Issuer
shall fail to maintain any such required office or agency or shall
fail to furnish the Trustee with the address thereof, such
presentations, surrenders, notices and demands may be made or
served at the Corporate Trust Office of the Trustee, except that
Bearer Securities of that series and the related coupons may be
presented and surrendered for payment (including payment of any
Additional Amounts payable on Bearer Securities of that series
pursuant to Section 1008) or conversion at the offices specified in
the Security, in London, England, and the Issuer hereby appoints
the same as its agent to receive such respective presentations,
surrenders, notices and demands, and the Issuer hereby appoints the
Trustee its agent to receive all such presentations, surrenders,
notices and demands.
Unless otherwise specified with respect to any Securities
pursuant to Section 301, no payment of principal, premium or
interest on or Additional Amounts in respect of Bearer Securities
shall be made at any office or agency of the Issuer in the United
States or by check mailed to any address in the United States or by
transfer to an account maintained with a bank located in the United
States; provided, however, that, if the Securities of a series are
payable in Dollars, payment of principal of and any premium and
interest on any Bearer Security (including any Additional Amounts
payable on Securities of such series pursuant to Section 1008)
shall be made at the office of the designated agent of the Issuer's
Paying Agent in the Borough of Manhattan, New York City, if (but
only if) payment in Dollars of the full amount of such principal,
premium, interest or Additional Amounts, as the case may be, at all
offices or agencies outside the United States maintained for the
purpose by the Issuer in accordance with this Indenture, is illegal
or effectively precluded by exchange controls or other similar
restrictions.
The Issuer may from time to time designate one or more other
offices or agencies where the Securities of one or more series may
be presented or surrendered for any or all of such purposes, and
may from time to time rescind such designations; provided, however,
that no such designation or rescission shall in any manner relieve
the Issuer 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 Issuer will give prompt written
notice to the Trustee of any such designation or rescission and of
any change in the location of any such other office or agency.
Unless otherwise specified with respect to any Securities pursuant
to Section 301 with respect to a series of Securities, the Issuer
hereby designates as a Place of Payment for each series of
Securities the office or agency of the Issuer in the Borough of
Manhattan, New York City or Boston, Massachusetts, and initially
appoints the Trustee at its Corporate Trust Office as Paying Agent
in such city and as its agent to receive all such presentations,
surrenders, notices and demands.
Unless otherwise specified with respect to any Securities
pursuant to Section 301, if and so long as the Securities of any
series (i) are denominated in a Foreign Currency or (ii) may be
payable in a Foreign Currency, or so long as it is required under
any other provision of the Indenture, then the Issuer will maintain
with respect to each such series of Securities, or as so required,
at least one exchange rate agent.
SECTION 1003. Money for Securities Payments to Be Held in
Trust. If the Issuer shall at any time act as its own Paying Agent
with respect to any series of any Securities and any related
coupons, it will, on or before each due date of the principal of
(and premium, if any), or interest on or Additional Amounts in
respect of, any of the Securities of that series, segregate and
hold in trust for the benefit of the Persons entitled thereto a sum
in the currency or currencies, currency unit or units or composite
currency or currencies in which the Securities of such series are
payable (except as otherwise specified pursuant to Section 301 for
the Securities of such series) sufficient to pay the principal (and
premium, if any) or interest or Additional Amounts so becoming due
until such sums shall be paid to such Persons or otherwise disposed
of as herein provided, and will promptly notify the Trustee of its
action or failure so to act.
Whenever the Issuer shall have one or more Paying Agents for
any series of Securities and any related coupons, it will, before
each due date of the principal of (and premium, if any), or
interest on or Additional Amounts in respect of, any Securities of
that series, deposit with a Paying Agent a sum (in the currency or
currencies, currency unit or units or composite currency or
currencies described in the preceding paragraph) sufficient to pay
the principal (and premium, if any) or interest or Additional
Amounts, so becoming due, such sum to be held in trust for the
benefit of the Persons entitled to such principal, premium or
interest or Additional Amounts and (unless such Paying Agent is the
Trustee) the Issuer will promptly notify the Trustee of its action
or failure so to act.
The Issuer 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:
(i) hold all sums held by it for the payment of
principal of (and premium, if any) or interest on Securities
or Additional Amounts 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;
(ii) give the Trustee notice of any default by the Issuer
(or any other obligor upon the Securities) in the making of
any such payment of principal (and premium, if any) or
interest or Additional Amounts; and
(iii) 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 Issuer may at any time, for the purpose of obtaining the
satisfaction and discharge of this Indenture or for any other
purpose, pay, or by Issuer Order direct any Paying Agent to pay, to
the Trustee all sums held in trust by the Issuer or such Paying
Agent, such sums to be held by the Trustee upon the same trusts as
those upon which such sums were held by the Issuer 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 Issuer, in trust for the payment of the principal of
(and premium, if any) or interest, if any, 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 Issuer upon Issuer Request or (if then held by the
Issuer) shall be discharged from such trust; and the Holder of such
Security shall thereafter, as an unsecured general creditor, look
only to the Issuer for payment of such principal of (and premium,
if any) or interest, if any, on, or any Additional Amounts in
respect of, any Security, without interest thereon, and all
liability of the Trustee or such Paying Agent with respect to such
trust money, and all liability of the Issuer 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 Issuer 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 Issuer.
SECTION 1004. Existence. Subject to Article Eight, the
Issuer will do or cause to be done all things necessary to preserve
and keep in full force and effect its existence, rights and
franchises; provided, however, that the Issuer 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 Issuer and
that the loss thereof is not disadvantageous in any material
respect to the Holders.
SECTION 1005. Payment of Taxes and Other Claims. The Issuer
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 Issuer 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 Issuer or any Subsidiary; provided, however, that
the Issuer 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 1006. Provision of Financial Information. Whether or
not the Issuer is subject to Section 13 or 15(d) of the Exchange
Act and for so long as any Securities are outstanding, the Issuer
will, to the extent permitted under the Exchange Act, file with the
Commission the annual reports, quarterly reports and other
documents which the Issuer would have been required to file with
the Commission pursuant to such Section 13 or 15(d) (the "Financial
Statements") if the Issuer 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 Issuer would have been
required so to file such documents if the Issuer were so subject.
The Issuer will also in any event (i) within 15 days of each
Required Filing Date (a) transmit by mail to all Holders, as their
names and addresses appear in the Security Register, without cost
to such Holders copies of the annual reports and quarterly reports
which the Issuer would have been required to file with the
Commission pursuant to Section 13 or 15(d) of the Exchange Act if
the Issuer were subject to such Sections and (b) file with the
Trustee copies of the annual reports, quarterly reports and other
documents which the Issuer would have been required to file with
the Commission pursuant to Section 13 or 15(d) of the Exchange Act
if the Issuer were subject to such Sections and (ii) if filing such
documents by the Issuer with the Commission is not permitted under
the Exchange Act, promptly upon written request and payment of the
reasonable cost of duplication and delivery, supply copies of such
documents to any prospective Holder.
SECTION 1007. Statement as to Compliance. The Issuer will
deliver to the Trustee, within 120 days after the end of each
fiscal year, a brief certificate from its principal executive
officer, principal financial officer or principal accounting
officer as to his or her knowledge of the Issuer'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 1007, such
compliance shall be determined without regard to any period of
grace or requirement of notice under this Indenture.
SECTION 1008. Additional Amounts. If any Securities of a
series provide for the payment of Additional Amounts, the Issuer
will pay to the Holder of any Security of such series or any coupon
appertaining thereto Additional Amounts as may be specified as
contemplated by Section 301. Whenever in this Indenture there is
mentioned, in any context except in the case of Section 502(i), the
payment of the principal of or any premium or interest on, or in
respect of, any Security of any series or payment of any related
coupon or the net proceeds received on the sale or exchange of any
Security of any series, such mention shall be deemed to include
mention of the payment of Additional Amounts provided by the terms
of such series established pursuant to Section 301 to the extent
that, in such context, Additional Amounts are, were or would be
payable in respect thereof pursuant to such terms and express
mention of the payment of Additional Amounts (if applicable) in any
provisions hereof shall not be construed as excluding Additional
Amounts in those provisions hereof where such express mention is
not made.
Except as otherwise specified as contemplated by Section 301,
if the Securities of a series provide for the payment of Additional
Amounts, at least 10 days prior to the first Interest Payment Date
with respect to that series of Securities (or if the Securities of
that series will not bear interest prior to Maturity, the first day
on which a payment of principal and any premium is made), and at
least 10 days prior to each date of payment of principal and any
premium or interest if there has been any change with respect to
the matters set forth in the below-mentioned Officers' Certificate,
the Issuer will furnish the Trustee and the Issuer'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 Issuer will pay to the Trustee or such Paying Agent the
Additional Amounts required by the terms of such Securities. If
the Trustee or any Paying Agent, as the case may be, shall not so
receive the above-mentioned certificate, then the Trustee or such
Paying Agent shall be entitled (i) to assume that no such
withholding or deduction is required with respect to any payment of
principal or interest with respect to any Securities of a series or
related coupons until it shall have received a certificate advising
otherwise and (ii) to make all payments of principal and interest
with respect to the Securities of a series or related coupons
without withholding or deductions until otherwise advised. The
Issuer 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 Issuer's not
furnishing such an Officers' Certificate.
SECTION 1009. Waiver of Certain Covenants. The Issuer may
omit in any particular instance to comply with any term, provision
or condition applicable to one or more series of Securities set
forth in Sections 1004 to 1009, 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 Issuer and the
duties of the Trustee in respect of any such term, provision or
condition shall remain in full force and effect.
ARTICLE ELEVEN
REDEMPTION OF SECURITIES
SECTION 1101. Applicability of Article. Securities of any
series which are redeemable before their Stated Maturity shall be
redeemable in accordance with their terms and (except as otherwise
specified as contemplated by Section 301 for Securities of any
series) in accordance with this Article.
SECTION 1102. Election to Redeem; Notice to Trustee. The
election of the Issuer to redeem any Securities shall be evidenced
by or pursuant to a Board Resolution. In case of any redemption at
the election of the Issuer of less than all of the Securities of
any series, the Issuer shall, at least 45 days prior to the giving
of the notice of redemption in Section 1104 (unless a shorter
notice shall be satisfactory to the Trustee), notify the Trustee of
such Redemption Date and of the principal amount of Securities of
such series to be redeemed. In the case of any redemption of
Securities prior to the expiration of any restriction on such
redemption provided in the terms of such Securities or elsewhere in
this Indenture, the Issuer shall furnish the Trustee with an
Officers' Certificate evidencing compliance with such restriction.
SECTION 1103. Selection by Trustee of Securities to Be
Redeemed. If less than all the Securities of any series issued on
the same day with the same terms are to be redeemed, the particular
Securities to be redeemed shall be selected not more than 60 days
prior to the Redemption Date by the Trustee, from the Outstanding
Securities of such series issued on such date with the same terms
not previously called for redemption, by such method as the Trustee
shall deem fair and appropriate and which may provide for the
selection for redemption of portions (equal to the minimum
authorized denomination for Securities of that series or any
integral multiple thereof) of the principal amount of Securities of
such series of a denomination larger than the minimum authorized
denomination for Securities of that series.
The Trustee shall promptly notify the Issuer and the Security
Registrar (if other than itself) in writing of the Securities
selected for redemption and, in the case of any Securities selected
for partial redemption, the principal amount thereof to be
redeemed.
For all purposes of this Indenture, unless the context
otherwise requires, all provisions relating to the redemption of
Securities shall relate, in the case of any Security redeemed or to
be redeemed only in part, to the portion of the principal amount of
such Security which has been or is to be redeemed.
SECTION 1104. Notice of Redemption. Notice of redemption
shall be given in the manner provided in Section 106, not less than
30 days nor more than 60 days prior to the Redemption Date, unless
a shorter period is specified by the terms of such series
established pursuant to Section 301, to each Holder of Securities
to be redeemed, but failure to give such notice in the manner
herein provided to the Holder of any Security designated for
redemption as a whole or in part, or any defect in the notice to
any such Holder, shall not affect the validity of the proceedings
for the redemption of any other such Security or portion thereof.
Any notice that is mailed to the Holders of Registered
Securities in the manner herein provided shall be conclusively
presumed to have been duly given, whether or not the Holder
receives the notice.
All notices of redemption shall state:
(i) the Redemption Date,
(ii) the Redemption Price, accrued interest to the
Redemption Date payable as provided in Section 1106, if any,
and Additional Amounts, if any,
(iii) 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,
(iv) 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,
(v) that on the Redemption Date the Redemption Price and
accrued interest to the Redemption Date payable as provided in
Section 1106, if any, will become due and payable upon each
such Security, or the portion thereof, to be redeemed and, if
applicable, that interest thereon shall cease to accrue on and
after said date,
(vi) the Place or Places of Payment where such
Securities, together in the case of Bearer Securities with all
coupons appertaining thereto, if any, maturing after the
Redemption Date, are to be surrendered for payment of the
Redemption Price and accrued interest, if any, or for
conversion,
(vii) that the redemption is for a sinking fund, if
such is the case,
(viii) 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 Issuer, the Trustee for such series and any Paying Agent
is furnished,
(ix) if Bearer Securities of any series are to be
redeemed and any Registered Securities of such series are not
to be redeemed, and if such Bearer Securities may be exchanged
for Registered Securities not subject to redemption on this
Redemption Date pursuant to Section 305 or otherwise, the last
date, as determined by the Issuer, on which such exchanges may
be made,
(x) the CUSIP number of such Security, if any, and
(xi) 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 Issuer or, at the Issuer's request, by the Trustee in
the name and at the expense of the Issuer.
SECTION 1105. Deposit of Redemption Price. At least one
Business Day prior to any Redemption Date, the Issuer shall deposit
with the Trustee or with a Paying Agent (or, if the Issuer is
acting as its own Paying Agent, which it may not do in the case of
a sinking fund payment under Article Twelve, segregate and hold in
trust as provided in Section 1003) an amount of money in the
currency or currencies, currency unit or units or composite
currency or currencies in which the Securities of such series are
payable (except as otherwise specified pursuant to Section 301 for
the Securities of such series) sufficient to pay on the Redemption
Date the Redemption Price of, and (except if the Redemption Date
shall be an Interest Payment Date) accrued interest on, all the
Securities or portions thereof which are to be redeemed on that
date.
SECTION 1106. Securities Payable on Redemption Date. Notice
of redemption having been given as aforesaid, the Securities so to
be redeemed shall, on the Redemption Date, become due and payable
at the Redemption Price therein specified in the currency or
currencies, currency unit or units or composite currency or
currencies in which the Securities of such series are payable
(except as otherwise specified pursuant to Section 301 for the
Securities of such series) (together with accrued interest, if any,
to the Redemption Date), and from and after such date (unless the
Issuer shall default in the payment of the Redemption Price and
accrued interest) such Securities shall, if the same were interest-bearing,
cease to bear interest and the coupons for such interest
appertaining to any Bearer Securities so to be redeemed, except to
the extent provided below, shall be void. Upon surrender of any
such Security for redemption in accordance with said notice,
together with all coupons, if any, appertaining thereto maturing
after the Redemption Date, such Security shall be paid by the
Issuer at the Redemption Price, together with accrued interest, if
any, to the Redemption Date; provided, however, that installments
of interest on Bearer Securities whose Stated Maturity is on or
prior to the Redemption Date shall be payable only at an office or
agency located outside the United States (except as otherwise
provided in Section 1002) and, unless otherwise specified as
contemplated by Section 301, only upon presentation and surrender
of coupons for such interest; and provided further that, except as
otherwise provided with respect to Securities convertible into
Common Shares, installments of interest on Registered Securities
whose Stated Maturity is on or prior to the Redemption Date shall
be payable to the Holders of such Securities, or one or more
Predecessor Securities, registered as such at the close of business
on the relevant Record Dates according to their terms and the
provisions of Section 307.
If any Bearer Security surrendered for redemption shall not be
accompanied by all appurtenant coupons maturing after the
Redemption Date, such Security may be paid after deducting from the
Redemption Price an amount equal to the face amount of all such
missing coupons, or the surrender of such missing coupon or coupons
may be waived by the Issuer and the Trustee if there be furnished
to them such security or indemnity as they may require to save each
of them and any Paying Agent harmless. If thereafter the Holder of
such Security shall surrender to the Trustee or any Paying Agent
any such missing coupon in respect of which a deduction shall have
been made from the Redemption Price, such Holder shall be entitled
to receive the amount so deducted; provided, however, that interest
represented by coupons shall be payable only at an office or agency
located outside the United States (except as otherwise provided in
Section 1002) and, unless otherwise specified as contemplated by
Section 301, only upon presentation and surrender of those coupons.
If any Security called for redemption shall not be so paid
upon surrender thereof for redemption, the principal (and premium,
if any) shall, until paid, bear interest from the Redemption Date
at the rate borne by the Security.
SECTION 1107. Securities Redeemed in Part. Any Registered
Security which is to be redeemed only in part (pursuant to the
provisions of this Article or of Article Twelve) shall be
surrendered at a Place of Payment therefor (with, if the Issuer or
the Trustee so requires, due endorsement by, or a written
instrument of transfer in form satisfactory to the Issuer and the
Trustee duly executed by, the Holder thereof or his attorney duly
authorized in writing) and the Issuer shall execute and the Trustee
shall authenticate and deliver to the Holder of such Security
without service charge a new Security or Securities of the same
series, of any authorized denomination as requested by such Holder
in aggregate principal amount equal to and in exchange for the
unredeemed portion of the principal of the Security so surrendered.
ARTICLE TWELVE
SINKING FUNDS
SECTION 1201. Applicability of Article. The provisions of
this Article shall be applicable to any sinking fund for the
retirement of Securities of a series except as otherwise specified
as contemplated by Section 301 for Securities of such series.
The minimum amount of any sinking fund payment provided for by
the terms of Securities of any series is herein referred to as a
"mandatory sinking fund payment," and any payment in excess of such
minimum amount provided for by the terms of such Securities of any
series is herein referred to as an "optional sinking fund payment."
If provided for by the terms of any Securities of any series, the
cash amount of any mandatory sinking fund payment may be subject to
reduction as provided in Section 1202. Each sinking fund payment
shall be applied to the redemption of Securities of any series as
provided for by the terms of Securities of such series.
SECTION 1202. Satisfaction of Sinking Fund Payments with
Securities. The Issuer may, in satisfaction of all or any part of
any mandatory sinking fund payment with respect to the Securities
of a series, (i) 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 (ii) apply as a credit Securities
of such series which have been redeemed either at the election of
the Issuer 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 Issuer;
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 1203. Redemption of Securities for Sinking Fund. Not
less than 60 days prior to each sinking fund payment date for
Securities of any series, the Issuer will deliver to the Trustee an
Officers' Certificate specifying the amount of the next ensuing
mandatory sinking fund payment for that series pursuant to the
terms of that series, the portion thereof, if any, which is to be
satisfied by payment of cash in the currency or currencies,
currency unit or units or composite currency or currencies in which
the Securities of such series are payable (except as otherwise
specified pursuant to Section 301 for the Securities of such
series) and the portion thereof, if any, which is to be satisfied
by delivering and crediting Securities of that series pursuant to
Section 1202, and the optional amount, if any, to be added in cash
to the next ensuing mandatory sinking fund payment, and will also
deliver to the Trustee any Securities to be so delivered and
credited. If such Officers' Certificate shall specify an optional
amount to be added in cash to the next ensuing mandatory sinking
fund payment, the Issuer shall thereupon be obligated to pay the
amount therein specified. Not less than 30 days before each such
sinking fund payment date the Trustee shall select the Securities
to be redeemed upon such sinking fund payment date in the manner
specified in Section 1103 and cause notice of the redemption
thereof to be given in the name of and at the expense of the Issuer
in the manner provided in Section 1104. Such notice having been
duly given, the redemption of such Securities shall be made upon
the terms and in the manner stated in Sections 1106 and 1107.
ARTICLE THIRTEEN
REPAYMENT AT THE OPTION OF HOLDERS
SECTION 1301. Applicability of Article. Repayment of
Securities of any series before their Stated Maturity at the option
of Holders thereof shall be made in accordance with the terms of
such Securities, if any, and (except as otherwise specified by the
terms of such series established pursuant to Section 301) in
accordance with this Article.
SECTION 1302. Repayment of Securities. Securities of any
series subject to repayment in whole or in part at the option of
the Holders thereof will, unless otherwise provided in the terms of
such Securities, be repaid at a price equal to the principal amount
thereof, together with interest, if any, thereon accrued to the
Repayment Date specified in or pursuant to the terms of such
Securities. The Issuer covenants that at least one Business Day
prior to the Repayment Date it will deposit with the Trustee or
with a Paying Agent (or, if the Issuer is acting as its own Paying
Agent, segregate and hold in trust as provided in Section 1003) an
amount of money in the currency or currencies, currency unit or
units or composite currency or currencies in which the Securities
of such series are payable (except as otherwise specified pursuant
to Section 301 for the Securities of such series) sufficient to pay
the principal (or, if so provided by the terms of the Securities of
any series, a percentage of the principal) of, and (except if the
Repayment Date shall be an Interest Payment Date) accrued interest
on, all the Securities or portions thereof, as the case may be, to
be repaid on such date.
SECTION 1303. Exercise of Option. Securities of any series
subject to repayment at the option of the Holders thereof will
contain an "Option to Elect Repayment" form on the reverse of such
Securities. In order for any Security to be repaid at the option
of the Holder, the Trustee must receive at the Place of Payment
therefor specified in the terms of such Security (or at such other
place or places of which the Issuer 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 (i) 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 (ii) a
telegram, telex, facsimile transmission or a letter from a member
of a national securities exchange, or the National Association of
Securities Dealers, Inc., or a commercial bank or trust company in
the United States setting forth the name of the Holder of the
Security, the principal amount of the Security, the principal
amount of the Security to be repaid, the CUSIP number, if any, or
a description of the tenor and terms of the Security, a statement
that the option to elect repayment is being exercised thereby and
a guarantee that the Security to be repaid, together with the duly
completed form entitled "Option to Elect Repayment" on the reverse
of the Security, will be received by the Trustee not later than the
fifth Business Day after the date of such telegram, telex,
facsimile transmission or letter; provided, however, that such
telegram, telex, facsimile transmission or letter shall only be
effective if such Security and form duly completed are received by
the Trustee by such fifth Business Day. If less than the entire
principal amount of such Security is to be repaid in accordance
with the terms of such Security, the principal amount of such
Security to be repaid, in increments of the minimum denomination
for Securities of such series, and the denomination or
denominations of the Security or Securities to be issued to the
Holder for the portion of the principal amount of such Security
surrendered that is not to be repaid, must be specified. The
principal amount of any Security providing for repayment at the
option of the Holder thereof may not be repaid in part if,
following such repayment, the unpaid principal amount of such
Security would be less than the minimum authorized denomination of
Securities of the series of which such Security to be repaid is a
part. Except as otherwise may be provided by the terms of any
Security providing for repayment at the option of the Holder
thereof, exercise of the repayment option by the Holder shall be
irrevocable unless waived by the Issuer.
SECTION 1304. When Securities Presented for Repayment Become
Due and Payable. If Securities of any series providing for
repayment at the option of the Holders thereof shall have been
surrendered as provided in this Article 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 Issuer on the Repayment Date
therein specified, and on and after such Repayment Date (unless the
Issuer shall default in the payment of such Securities on such
Repayment Date) such Securities shall, if the same were interest-bearing,
cease to bear interest and the coupons for such interest
appertaining to any Bearer Securities so to be repaid, except to
the extent provided below, shall be void. Upon surrender of any
such Security for repayment in accordance with such provisions,
together with all coupons, if any, appertaining thereto maturing
after the Repayment Date, the principal amount of such Security so
to be repaid shall be paid by the Issuer, together with accrued
interest, if any, to the Repayment Date; provided, however, that
coupons whose Stated Maturity is on or prior to the Repayment Date
shall be payable only at an office or agency located outside the
United States (except as otherwise provided in Section 1002) and,
unless otherwise specified pursuant to Section 301, only upon
presentation and surrender of such coupons; and provided further
that, in the case of 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 Issuer shall default in the payment thereof) to the
Holders of such Securities, or one or more Predecessor Securities,
registered as such at the close of business on the relevant Record
Dates according to their terms and the provisions of Section 307.
If any Bearer Security surrendered for repayment shall not be
accompanied by all appurtenant coupons maturing after the Repayment
Date, such Security may be paid after deducting from the amount
payable therefor as provided in Section 1302 an amount equal to the
face amount of all such missing coupons, or the surrender of such
missing coupon or coupons may be waived by the Issuer and the
Trustee if there be furnished to them such security or indemnity as
they may require to save each of them and any Paying Agent
harmless. If thereafter the Holder of such Security shall
surrender to the Trustee or any Paying Agent any such missing
coupon in respect of which a deduction shall have been made as
provided in the preceding sentence, such Holder shall be entitled
to receive the amount so deducted; provided, however, that interest
represented by coupons shall be payable only at an office or agency
located outside the United States (except as otherwise provided in
Section 1002) and, unless otherwise specified as contemplated by
Section 301, only upon presentation and surrender of those coupons.
If the principal amount of any Security surrendered for
repayment shall not be so repaid upon surrender thereof, such
principal amount (together with interest, if any, thereon accrued
to such Repayment Date) shall, until paid, bear interest from the
Repayment Date at the rate of interest or Yield to Maturity (in the
case of Original Issue Discount Securities) set forth in such
Security.
SECTION 1305. Securities Repaid in Part. Upon surrender of
any Registered Security which is to be repaid in part only, the
Issuer shall execute and the Trustee shall authenticate and deliver
to the Holder of such Security, without service charge and at the
expense of the Issuer, a new Registered Security or Securities of
the same series, of any authorized denomination specified by the
Holder, in an aggregate principal amount equal to and in exchange
for the portion of the principal of such Security so surrendered
which is not to be repaid.
ARTICLE FOURTEEN
DEFEASANCE AND COVENANT DEFEASANCE
SECTION 1401. Applicability of Article; Issuer's Option to
Effect Defeasance or Covenant Defeasance. If, pursuant to Section
301, provision is made for either or both of (i) defeasance of the
Securities of or within a series under Section 1402 or (ii)
covenant defeasance of the Securities of or within a series under
Section 1403, then the provisions of such Section or Sections, as
the case may be, together with the other provisions of this Article
(with such modifications thereto as may be specified pursuant to
Section 301 with respect to any Securities), shall be applicable to
such Securities and any coupons appertaining thereto, and the
Issuer may at its option by Board Resolution, at any time, with
respect to such Securities and any coupons appertaining thereto,
elect to have Section 1402 (if applicable) or Section 1403 (if
applicable) be applied to such Outstanding Securities and any
coupons appertaining thereto upon compliance with the conditions
set forth below in this Article.
SECTION 1402. Defeasance and Discharge. Upon the Issuer's
exercise of the above option applicable to this Section with
respect to any Securities of or within a series, the Issuer shall
be deemed to have been discharged from its obligations with respect
to such Outstanding Securities and any coupons appertaining thereto
on the date the conditions set forth in Section 1404 are satisfied
(hereinafter, "defeasance"). For this purpose, such defeasance
means that the Issuer shall be deemed to have paid and discharged
the entire indebtedness represented by such Outstanding Securities
and any coupons appertaining thereto, which shall thereafter be
deemed to be "Outstanding" only for the purposes of Section 1405
and the other Sections of this Indenture referred to in clauses (i)
and (ii) 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
Issuer, shall execute proper instruments acknowledging the same),
except for the following which shall survive until otherwise
terminated or discharged hereunder: (i) the rights of Holders of
such Outstanding Securities and any coupons appertaining thereto to
receive, solely from the trust fund described in Section 1404 and
as more fully set forth in such Section, payments in respect of the
principal of (and premium, if any) and interest, if any, on such
Securities and any coupons appertaining thereto when such payments
are due, (ii) the Issuer's obligations with respect to such
Securities under Sections 305, 306, 1002 and 1003 and with respect
to the payment of Additional Amounts, if any, on such Securities as
contemplated by Section 1008, (iii) the rights, powers, trusts,
duties and immunities of the Trustee hereunder and (iv) this
Article. Subject to compliance with this Article Fourteen, the
Issuer may exercise its option under this Section notwithstanding
the prior exercise of its option under Section 1403 with respect to
such Securities and any coupons appertaining thereto.
SECTION 1403. Covenant Defeasance. Upon the Issuer's
exercise of the above option applicable to this Section with
respect to any Securities of or within a series, the Issuer shall
be released from its obligations under Sections 1004 to 1009,
inclusive, and, if specified pursuant to Section 301, its
obligations under any other covenant, with respect to such
Outstanding Securities and any coupons appertaining thereto on and
after the date the conditions set forth in Section 1404 are
satisfied (hereinafter, "covenant defeasance"), and such Securities
and any coupons appertaining thereto shall thereafter be deemed to
be not "Outstanding" for the purposes of any direction, waiver,
consent or declaration or Act of Holders (and the consequences of
any thereof) in connection with Sections 1004 to 1009, inclusive,
or such other covenant, but shall continue to be deemed
"Outstanding" for all other purposes hereunder. For this purpose,
such covenant defeasance means that, with respect to such
Outstanding Securities and any coupons appertaining thereto, the
Issuer may omit to comply with and shall have no liability in
respect of any term, condition or limitation set forth in any such
Section or such other covenant, whether directly or indirectly, by
reason of any reference elsewhere herein to any such Section or
such other covenant or by reason of reference in any such Section
or such other covenant to any other provision herein or in any
other document and such omission to comply shall not constitute a
default or an Event of Default under Section 501(iv) or 501(viii)
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 1404. Conditions to Defeasance or Covenant
Defeasance. The following shall be the conditions to application
of Section 1402 or Section 1403 to any Outstanding Securities of or
within a series and any coupons appertaining thereto:
(i) The Issuer shall irrevocably have deposited or caused to
be deposited with the Trustee (or another trustee satisfying the
requirements of Section 607 who shall agree to comply with the
provisions of this Article Fourteen applicable to it) as trust
funds in trust for the purpose of making the following payments,
specifically pledged as security for, and dedicated solely to, the
benefit of the Holders of such Securities and any coupons
appertaining thereto, (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, (ii)
Government Obligations applicable to such Securities and coupons
appertaining thereto (determined on the basis of the currency,
currencies or currency unit in which such Securities and coupons
appertaining thereto are then specified as payable at Stated
Maturity) which through the scheduled payment of principal and
interest in respect thereof in accordance with their terms will
provide, not later than one day before the due date of any payment
of principal of (and premium, if any) and interest, if any, on such
Securities and any coupons appertaining thereto, money in an
amount, or (iii) a combination thereof, in any case, in an amount,
sufficient, without consideration of any reinvestment of such
principal and interest, in the opinion of a nationally recognized
firm of independent public accountants expressed in a written
certification thereof delivered to the Trustee, to pay and
discharge, and which shall be applied by the Trustee (or other
qualifying trustee) to pay and discharge, (i) the principal of (and
premium, if any) and interest, if any, on such Outstanding
Securities and any coupons appertaining thereto on the Stated
Maturity of such principal or installment of principal or interest
and (ii) any mandatory sinking fund payments or analogous payments
applicable to such Outstanding Securities and any coupons
appertaining thereto on the day on which such payments are due and
payable in accordance with the terms of this Indenture and of such
Securities and any coupons appertaining thereto.
(ii) Such defeasance or covenant defeasance shall not result
in a breach or violation of, or constitute a default under, this
Indenture or any other material agreement or instrument to which
the Issuer is a party or by which it is bound.
(iii) No Event of Default or event which with notice or
lapse of time or both would become an Event of Default with respect
to such Securities and any coupons appertaining thereto shall have
occurred and be continuing on the date of such deposit or, insofar
as Sections 501(vi) and 501(vii) 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).
(iv) In the case of an election under Section 1402, the Issuer
shall have delivered to the Trustee an Opinion of Counsel stating
that (i) the Issuer 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.
(v) In the case of an election under Section 1403, the Issuer
shall have delivered to the Trustee an Opinion of Counsel to the
effect that the Holders of such Outstanding Securities and any
coupons appertaining thereto will not recognize income, gain or
loss for Federal income tax purposes as a result of such covenant
defeasance and will be subject to Federal income tax on the same
amounts, in the same manner and at the same times as would have
been the case if such covenant defeasance had not occurred.
(vi) The Issuer shall have delivered to the Trustee an
Officers' Certificate and an Opinion of Counsel, each stating that
all conditions precedent to the defeasance under Section 1402 or
the covenant defeasance under Section 1403 (as the case may be)
have been complied with and an Opinion of Counsel to the effect
that either (a) as a result of a deposit pursuant to subsection (i)
above and the related exercise of the Issuer's option under Section
1402 or Section 1403 (as the case may be), registration is not
required under the Investment Company Act of 1940, as amended, by
the Issuer, with respect to the trust funds representing such
deposit or by the Trustee for such trust funds or (b) all necessary
registrations under said Act have been effected.
(vii) Notwithstanding any other provisions of this
Section, such defeasance or covenant defeasance shall be effected
in compliance with any additional or substitute terms, conditions
or limitations which may be imposed on the Issuer in connection
therewith pursuant to Section 301.
SECTION 1405. Deposited Money and Government Obligations to
Be Held in Trust; Other Miscellaneous Provisions. Subject to the
provisions of the last paragraph of Section 1003, all money and
Government Obligations (or other property as may be provided
pursuant to Section 301) (including the proceeds thereof) deposited
with the Trustee (or other qualifying trustee, collectively for
purposes of this Section 1405, the "Trustee") pursuant to Section
1404 in respect of any Outstanding Securities of any series and any
coupons appertaining thereto shall be held in trust and applied by
the Trustee, in accordance with the provisions of such Securities
and any coupons appertaining thereto and this Indenture, to the
payment, either directly or through any Paying Agent (including the
Issuer acting as its own Paying Agent) as the Trustee may
determine, to the Holders of such Securities and any coupons
appertaining thereto of all sums due and to become due thereon in
respect of principal (and premium, if any) and interest and
Additional Amounts, if any, but such money need not be segregated
from other funds except to the extent required by law.
Unless otherwise specified with respect to any Security
pursuant to Section 301, if, after a deposit referred to in Section
1404(i) has been made, (i) the Holder of a Security in respect of
which such deposit was made is entitled to, and does, elect
pursuant to Section 301 or the terms of such Security to receive
payment in a currency or currency unit other than that in which the
deposit pursuant to Section 1404(i) has been made in respect of
such Security or (ii) a Conversion Event occurs in respect of the
currency or currency unit in which the deposit pursuant to Section
1404(i) has been made, the indebtedness represented by such
Security and any coupons appertaining thereto shall be deemed to
have been, and will be, fully discharged and satisfied through the
payment of the principal of (and premium, if any), and interest, if
any, on such Security as the same becomes due out of the proceeds
yielded by converting (from time to time as specified below in the
case of any such election) the amount or other property deposited
in respect of such Security into the currency or currency unit in
which such Security becomes payable as a result of such election or
Conversion Event based on the applicable market exchange rate for
such currency or currency unit in effect on the second Business Day
prior to each payment date, except, with respect to a Conversion
Event, for such currency or currency unit in effect (as nearly as
feasible) at the time of the Conversion Event.
The Issuer shall pay and indemnify the Trustee against any
tax, fee or other charge imposed on or assessed against the
Government Obligations deposited pursuant to Section 1404 or the
principal and interest received in respect thereof other than any
such tax, fee or other charge which by law is for the account of
the Holders of such Outstanding Securities and any coupons
appertaining thereto.
Anything in this Article to the contrary notwithstanding,
subject to Section 606, the Trustee shall deliver or pay to the
Issuer from time to time upon Issuer Request any money or
Government Obligations (or other property and any proceeds
therefrom) held by it as provided in Section 1404 which, in the
opinion of a nationally recognized firm of independent public
accountants expressed in a written certification thereof delivered
to the Trustee, are in excess of the amount thereof which would
then be required to be deposited to effect a defeasance or covenant
defeasance, as applicable, in accordance with this Article.
ARTICLE FIFTEEN
MEETINGS OF HOLDERS OF SECURITIES
SECTION 1501. Purposes for Which Meetings May Be Called. A
meeting of Holders of Securities of any series may be called at any
time and from time to time pursuant to this Article to make, give
or take any request, demand, authorization, direction, notice,
consent, waiver or other action provided by this Indenture to be
made, given or taken by Holders of Securities of such series.
SECTION 1502. Call, Notice and Place of Meetings. (A) The
Trustee may at any time call a meeting of Holders of Securities of
any series for any purpose specified in Section 1501, to be held at
such time and at such place in the Borough of Manhattan, New York
City, Boston, Massachusetts, or in London as the Trustee shall
determine. Notice of every meeting of Holders of Securities of any
series, setting forth the time and the place of such meeting and in
general terms the action proposed to be taken at such meeting,
shall be given, in the manner provided in Section 106, not less
than 21 nor more than 180 days prior to the date fixed for the
meeting.
(B) In case at any time the Issuer, pursuant to a Board
Resolution, or the Holders of at least 10% in principal amount of
the Outstanding Securities of any series shall have requested the
Trustee to call a meeting of the Holders of Securities of such
series for any purpose specified in Section 1501, by written
request setting forth in reasonable detail the action proposed to
be taken at the meeting, and the Trustee shall not have made the
first publication of the notice of such meeting within 21 days
after receipt of such request or shall not thereafter proceed to
cause the meeting to be held as provided herein, then the Issuer or
the Holders of Securities of such series in the amount above
specified, as the case may be, may determine the time and the place
in the Borough of Manhattan, New York City, Boston, Massachusetts,
or in London for such meeting and may call such meeting for such
purposes by giving notice thereof as provided in subsection A. of
this Section.
SECTION 1503. Persons Entitled to Vote at Meetings. To be
entitled to vote at any meeting of Holders of Securities of any
series, a Person shall be (i) a Holder of one or more Outstanding
Securities of such series or (ii) a Person appointed by an
instrument in writing as proxy for a Holder or Holders of one or
more Outstanding Securities of such series by such Holder or
Holders. The only Persons who shall be entitled to be present or
to speak at any meeting of Holders of Securities of any series
shall be the Persons entitled to vote at such meeting and their
counsel, any representatives of the Trustee and its counsel and any
representatives of the Issuer and its counsel.
SECTION 1504. Quorum; Action. The Persons entitled to vote
a majority in principal amount of the Outstanding Securities of a
series shall constitute a quorum for a meeting of Holders of
Securities of such series; provided, however, that if any action is
to be taken at such meeting with respect to a consent or waiver
which this Indenture expressly provides may be given by the Holders
of not less than a specified percentage in principal amount of the
Outstanding Securities of a series, the Persons entitled to vote
such specified percentage in principal amount of the Outstanding
Securities of such series shall constitute a quorum. In the
absence of a quorum within 30 minutes after the time appointed for
any such meeting, the meeting shall, if convened at the request of
Holders of Securities of such series, be dissolved. In any other
case the meeting may be adjourned for a period of not less than 10
days as determined by the chairman of the meeting prior to the
adjournment of such meeting. In the absence of a quorum at the
reconvening of any such adjourned meeting, such adjourned meeting
may be further adjourned for a period of not less than 10 days as
determined by the chairman of the meeting prior to the adjournment
of such adjourned meeting. Notice of the reconvening of any
adjourned meeting shall be given as provided in Section 1502(A),
except that such notice need be given only once not less than five
days prior to the date on which the meeting is scheduled to be
reconvened. Notice of the reconvening of any adjourned meeting
shall state expressly the percentage, as provided above, of the
principal amount of the Outstanding Securities of such series which
shall constitute a quorum.
Except as limited by the proviso to Section 902, any
resolution presented to a meeting or adjourned meeting duly
reconvened at which a quorum is present as aforesaid may be adopted
by the affirmative vote of the persons entitled to vote a majority
in aggregate principal amount of the Outstanding Securities
represented at such meeting; provided, however, that, except as
limited by the proviso to Section 902, any resolution with respect
to any request, demand, authorization, direction, notice, consent,
waiver or other action which this Indenture expressly provides may
be made, given or taken by the Holders of a specified percentage,
which is less than a majority, in principal amount of the
Outstanding Securities of a series may be adopted at a meeting or
an adjourned meeting duly reconvened and at which a quorum is
present as aforesaid by the affirmative vote of the Holders of such
specified percentage in principal amount of the Outstanding
Securities of that series.
Any resolution passed or decision taken at any meeting of
Holders of Securities of any series duly held in accordance with
this Section shall be binding on all the Holders of Securities of
such series and the related coupons, whether or not present or
represented at the meeting.
Notwithstanding the foregoing provisions of this Section 1504,
if any action is to be taken at a meeting of Holders of Securities
of any series with respect to any request, demand, authorization,
direction, notice, consent, waiver or other action that this
Indenture expressly provides may be made, given or taken by the
Holders of a specified percentage in principal amount of all
Outstanding Securities affected thereby, or of the Holders of such
series and one or more additional series:
(i) there shall be no minimum quorum requirement
for such meeting; and
(ii) the principal amount of the Outstanding
Securities of such series that vote in favor of such request,
demand, authorization, direction, notice, consent, waiver or
other action shall be taken into account in determining
whether such request, demand, authorization, direction,
notice, consent, waiver or other action has been made, given
or taken under this Indenture.
SECTION 1505. Determination of Voting Rights; Conduct and
Adjournment of Meetings. (A) Notwithstanding any provisions of
this Indenture, the Trustee may make such reasonable regulations as
it may deem advisable for any meeting of Holders of Securities of
a series in regard to proof of the holding of Securities of such
series and of the appointment of proxies and in regard to the
appointment and duties of inspectors of votes, the submission and
examination of proxies, certificates and other evidence of the
right to vote, and such other matters concerning the conduct of the
meeting as it shall deem appropriate. Except as otherwise
permitted or required by any such regulations, the holding of
Securities shall be proved in the manner specified in Section 104
and the appointment of any proxy shall be proved in the manner
specified in Section 104 or by having the signature of the Person
executing the proxy witnessed or guaranteed by any trust company,
bank or banker authorized by Section 104 to certify to the holding
of Bearer Securities. Such regulations may provide that written
instruments appointing proxies, regular on their face, may be
presumed valid and genuine without the proof specified in Section
104 or other proof.
(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 Issuer or by Holders of Securities as provided
in Section 1502(B), in which case the Issuer or the Holders of
Securities of the series calling the meeting, as the case may be,
shall in like manner appoint a temporary chairman. A permanent
chairman and a permanent secretary of the meeting shall be elected
by vote of the Persons entitled to vote a majority in principal
amount of the Outstanding Securities of such series represented at
the meeting.
(C) At any meeting each Holder of a Security of such series
or proxy shall be entitled to one vote for each $1,000 principal
amount of the Outstanding Securities of such series held or
represented by him; provided, however, that no vote shall be cast
or counted at any meeting in respect of any Security challenged as
not Outstanding and ruled by the chairman of the meeting to be not
Outstanding. The chairman of the meeting shall have no right to
vote, except as a Holder of a Security of such series or proxy.
(D) Any meeting of Holders of Securities of any series duly
called pursuant to Section 1502 at which a quorum is present may be
adjourned from time to time by Persons entitled to vote a majority
in principal amount of the Outstanding Securities of such series
represented at the meeting, and the meeting may be held as so
adjourned without further notice.
SECTION 1506. Counting Votes and Recording Action of
Meetings. The vote upon any resolution submitted to any meeting of
Holders of Securities of any series shall be by written ballots on
which shall be subscribed the signatures of the Holders of
Securities of such series or of their representatives by proxy and
the principal amounts and serial numbers of the Outstanding
Securities of such series held or represented by them. The
permanent chairman of the meeting shall appoint two inspectors of
votes who shall count all votes cast at the meeting for or against
any resolution and who shall make and file with the secretary of
the meeting their verified written reports in duplicate of all
votes cast at the meeting. A record, at least in duplicate, of the
proceedings of each meeting of Holders of Securities of any Series
shall be prepared by the secretary of the meeting and there shall
be attached to said record the original reports of the inspectors
of votes on any vote by ballot taken thereat and affidavits by one
or more persons having knowledge of the fact, setting forth a copy
of the notice of the meeting and showing that said notice was given
as provided in Section 1502 and, if applicable, Section 1504. Each
copy shall be signed and verified by the affidavits of the
permanent chairman and secretary of the meeting and one such copy
shall be delivered to the Issuer and another to the Trustee to be
preserved by the Trustee, the latter to have attached thereto the
ballots voted at the meeting. Any record so signed and verified
shall be conclusive evidence of the matters therein stated.
* * * * *
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.
<PAGE>
IN WITNESS WHEREOF, the parties hereto have caused this
Indenture to be duly executed, and their respective corporate seals
to be hereunto affixed and attested, all as of the day and year
first above written.
WALDEN RESIDENTIAL PROPERTIES, INC.
By: ______________________________
Name:
Title:
Attest:
________________________
Name:
Title:
STATE STREET BANK AND TRUST
COMPANY, as Trustee
By: _______________________________
Name:
Title:
Attest:
________________________
Name:
Title:
STATE OF ___________ )
) ss:
COUNTY OF __________ )
On the _____ day of ____________ 199___, before me personally
came ____________________, to me known, who, being by me duly
sworn, did depose and say that he/she resides at
_____________________________________, that he/she is
________________ of WALDEN RESIDENTIAL PROPERTIES, INC., one of the
parties described in and which executed the foregoing instrument,
and that he/she signed his/her name thereto by authority the Board
of Trustees.
[Notarial Seal]
Notary Public
COMMISSION EXPIRES
STATE OF ____________ )
) ss:
COUNTY OF ____________ )
On the _____ day of ____________ 199___, before me personally
came ____________________, to me known, who, being by me duly
sworn, did depose and say that he/she resides at
_____________________________________, that he/she is
________________ of WALDEN RESIDENTIAL PROPERTIES, INC., one of the
parties described in and which executed the foregoing instrument,
and that he/she signed his/her name thereto by authority of the
Board of Directors.
[Notarial Seal]
Notary Public
COMMISSION EXPIRES
EXHIBIT A
FORMS OF CERTIFICATION
EXHIBIT A-1
FORM OF CERTIFICATE TO BE GIVEN BY PERSON ENTITLED
TO RECEIVE BEARER SECURITY OR TO OBTAIN INTEREST
PAYABLE PRIOR TO THE EXCHANGE DATE
CERTIFICATE
[Insert title or sufficient description of Securities to be
delivered]
This is to certify that, as of the date hereof, and except as
set forth below, the above-captioned Securities held by you for our
account (i) are owned by person(s) that are not citizens or
residents of the United States, domestic partnerships, domestic
corporations or any estate or trust the income of which is subject
to United States federal income taxation regardless of its source
("United States person(s)"), (ii) are owned by United States
person(s) that are (a) foreign branches of United States financial
institutions (financial institutions, as defined in United States
Treasury Regulations Section 2.165-12(c)(1)(v) are herein referred
to as "financial institutions") purchasing for their own account or
for resale, or (b) United States person(s) who acquired the
Securities through foreign branches of United States financial
institutions and who hold the Securities through such United States
financial institutions on the date hereof (and in either case (a)
or (b), each such United States financial institution hereby
agrees, on its own behalf or through its agent, that you may advise
WALDEN RESIDENTIAL PROPERTIES, INC. or its agent that such
financial institution will comply with the requirements of Section
165(j)(3)(A), (B) or (C) of the United States Internal Revenue Code
of 1986, as amended, and the regulations thereunder), or (iii) are
owned by United States or foreign financial institution(s) for
purposes of resale during the restricted period (as defined in
United States Treasury Regulations Section 1.163-5(c)(2)(i)(D)(7)),
and, in addition, if the owner is a United States or foreign
financial institution described in clause (iii) above (whether or
not also described in clause (i) or (ii)), this is to further
certify that such financial institution has not acquired the
Securities for purposes of resale directly or indirectly to a
United States person or to a person within the United States or its
possessions.
As used herein, "United States" means the United States of
America (including the States and the District of Columbia); and
its "possessions" include Puerto Rico, the U.S. Virgin Islands,
Guam, American Samoa, Wake Island and the Northern Mariana Islands.
We undertake to advise you promptly by tested telex on or
prior to the date on which you intend to submit your certification
relating to the above-captioned Securities held by you for our
account in accordance with your Operating Procedures if any
applicable statement herein is not correct on such date, and in the
absence of any such notification it may be assumed that this
certification applies as of such date.
This certificate excepts and does not relate to U.S.$
_______________ of such interest in the above-captioned Securities
in respect of which we are not able to certify and as to which we
understand an exchange for an interest in a Permanent Global
Security or an exchange for and delivery of definitive Securities
(or, if relevant, collection of any interest) cannot be made until
we do so certify.
We understand that this certificate may be required in
connection with certain tax legislation in the United States. If
administrative or legal proceedings are commenced or threatened in
connection with which this certificate is or would be relevant, we
irrevocably authorize you to produce this certificate or a copy
thereof to any interested party in such proceedings.
Dated: __________________, 19__
[To be dated no earlier than the 15th day prior
to (i) the Exchange Date or (ii) the relevant
Interest Payment Date occurring prior to the
Exchange Date, as applicable]
[Name of Person Making Certification]
_____________________________________
(Authorized Signatory)
Name:
Title:
EXHIBIT A-2
FORM OF CERTIFICATE TO BE GIVEN BY EUROCLEAR
AND CEDEL S.A. IN CONNECTION WITH THE EXCHANGE OF
A PORTION OF A TEMPORARY GLOBAL SECURITY OR TO
OBTAIN INTEREST PAYABLE PRIOR TO THE EXCHANGE DATE
CERTIFICATE
[Insert title or sufficient description of Securities to be
delivered]
This is to certify that, based solely on written
certifications that we have received in writing, by tested telex or
by electronic transmission from each of the persons appearing in
our records as persons entitled to a portion of the principal
amount set forth below (our "Member Organizations") substantially
in the form attached hereto, as of the date hereof, [U.S.$]
_______________ principal amount of the above-captioned Securities
(i) is owned by person(s) that are not citizens or residents of the
United States, domestic partnerships, domestic corporations or any
estate or trust the income of which is subject to United States
Federal income taxation regardless of its source ("United States
person(s)"), (ii) is owned by United States person(s) that are (a)
foreign branches of United States financial institutions (financial
institutions, as defined in U.S. Treasury Regulations Section
1.165-12(c)(1)(v) are herein referred to as "financial
institutions") purchasing for their own account or for resale, or
(b) United States person(s) who acquired the Securities through
foreign branches of United States financial institutions and who
hold the Securities through such United States financial
institutions on the date hereof (and in either case (a) or (b),
each such financial institution has agreed, on its own behalf or
through its agent, that we may advise WALDEN RESIDENTIAL
PROPERTIES, INC. or its agent that such financial institution will
comply with the requirements of Section 165(j)(3)(A), (B) or (C) of
the Internal Revenue Code of 1986, as amended, and the regulations
thereunder), or (iii) is owned by United States or foreign
financial institution(s) for purposes of resale during the
restricted period (as defined in United States Treasury Regulations
Section 1.163-5(c)(2)(i)(D)(7)), and, to the further effect, that
financial institutions described in clause (iii) above (whether or
not also described in clause (i) or (ii)) have certified that they
have not acquired the Securities for purposes of resale directly or
indirectly to a United States person or to a person within the
United States or its possessions.
As used herein, "United States" means the United States of
America (including the States and the District of Columbia); and
its "possessions" include Puerto Rico, the U.S. Virgin Islands,
Guam, American Samoa, Wake Island and the Northern Mariana Islands.
We further certify that (i) we are not making available
herewith for exchange (or, if relevant, collection of any interest)
any portion of the temporary global Security representing the
above-captioned Securities excepted in the above-referenced
certificates of Member Organizations and (ii) as of the date hereof
we have not received any notification from any of our Member
Organizations to the effect that the statements made by such Member
Organizations with respect to any portion of the part submitted
herewith for exchange (or, if relevant, collection of any interest)
are no longer true and cannot be relied upon as of the date hereof.
We understand that this certification is required in
connection with certain tax legislation in the United States. If
administrative or legal proceedings are commenced or threatened in
connection with which this certificate is or would be relevant, we
irrevocably authorize you to produce this certificate or a copy
thereof to any interested party in such proceedings.
Dated: _____________ 19__
[To be dated no earlier than the Exchange Date
or the relevant Interest Payment Date occurring
prior to the Exchange Date, as applicable]
[Morgan Guaranty Trust Company of New York,
Brussels Office,]
as Operator of the Euroclear System
[CEDEL S.A.]
By: _______________________________
WALDEN RESIDENTIAL PROPERTIES, INC.
Issuer
TO
STATE STREET BANK AND TRUST COMPANY
Trustee
-----------------
Form of Indenture
Dated as of _________________, 199_
-----------------
Debt Securities
TABLE OF CONTENTS
Page
PARTIES. . . . . . . . . . . . . . . . . . . . . . . . . . . . .1
RECITALS OF THE ISSUER . . . . . . . . . . . . . . . . . . . . .1
ARTICLE ONE
DEFINITIONS AND OTHER PROVISIONS OF GENERAL APPLICATION
SECTION 101. Definitions. . . . . . . . . . . . . . . . . . . 1
Act . . . . . . . . . . . . . . . . . . . . . . . . . . . 2
Additional Amounts. . . . . . . . . . . . . . . . . . . . 2
Affiliate . . . . . . . . . . . . . . . . . . . . . . . . 2
Annual Service Charge . . . . . . . . . . . . . . . . . . 2
Authenticating Agent. . . . . . . . . . . . . . . . . . . 2
Authorized Newspaper. . . . . . . . . . . . . . . . . . . 2
Bankruptcy Law. . . . . . . . . . . . . . . . . . . . . . 2
Bearer Security . . . . . . . . . . . . . . . . . . . . . 2
Board of Directors. . . . . . . . . . . . . . . . . . . . 2
Board Resolution. . . . . . . . . . . . . . . . . . . . . 2
Business Day. . . . . . . . . . . . . . . . . . . . . . . 3
CEDEL . . . . . . . . . . . . . . . . . . . . . . . . . . 3
Commission. . . . . . . . . . . . . . . . . . . . . . . . 3
Common Shares . . . . . . . . . . . . . . . . . . . . . . 3
Conversion Event. . . . . . . . . . . . . . . . . . . . . 3
Corporate Trust Office. . . . . . . . . . . . . . . . . . 3
corporation . . . . . . . . . . . . . . . . . . . . . . . 3
coupon. . . . . . . . . . . . . . . . . . . . . . . . . . 3
Custodian . . . . . . . . . . . . . . . . . . . . . . . . 3
Debt. . . . . . . . . . . . . . . . . . . . . . . . . . . 3
Defaulted Interest. . . . . . . . . . . . . . . . . . . . 4
Dollar" or "$ . . . . . . . . . . . . . . . . . . . . . . 4
DTC . . . . . . . . . . . . . . . . . . . . . . . . . . . 4
ECU . . . . . . . . . . . . . . . . . . . . . . . . . . . 4
Euroclear . . . . . . . . . . . . . . . . . . . . . . . . 4
European Communities. . . . . . . . . . . . . . . . . . . 4
European Monetary System. . . . . . . . . . . . . . . . . 4
Event of Default. . . . . . . . . . . . . . . . . . . . . 4
Foreign Currency. . . . . . . . . . . . . . . . . . . . . 4
GAAP. . . . . . . . . . . . . . . . . . . . . . . . . . . 4
Government Obligations. . . . . . . . . . . . . . . . . . 4
Holder. . . . . . . . . . . . . . . . . . . . . . . . . . 5
Indenture . . . . . . . . . . . . . . . . . . . . . . . . 5
Indexed Security. . . . . . . . . . . . . . . . . . . . . 5
Interest. . . . . . . . . . . . . . . . . . . . . . . . . 5
Interest Payment Date . . . . . . . . . . . . . . . . . . 5
Issuer. . . . . . . . . . . . . . . . . . . . . . . . . . 5
Issuer Request" and "Issuer Order . . . . . . . . . . . . 6
Maturity. . . . . . . . . . . . . . . . . . . . . . . . . 6
Officers' Certificate . . . . . . . . . . . . . . . . . . 6
Opinion of Counsel. . . . . . . . . . . . . . . . . . . . 6
Original Issue Discount Security. . . . . . . . . . . . . 6
Outstanding . . . . . . . . . . . . . . . . . . . . . . . 6
Paying Agent. . . . . . . . . . . . . . . . . . . . . . . 7
Person. . . . . . . . . . . . . . . . . . . . . . . . . . 7
Place of Payment. . . . . . . . . . . . . . . . . . . . . 7
Predecessor Security. . . . . . . . . . . . . . . . . . . 8
Preferred Shares. . . . . . . . . . . . . . . . . . . . . 8
Redemption Date . . . . . . . . . . . . . . . . . . . . . 8
Redemption Price. . . . . . . . . . . . . . . . . . . . . 8
Registered Security . . . . . . . . . . . . . . . . . . . 8
Regular Record Date . . . . . . . . . . . . . . . . . . . 8
Repayment Date. . . . . . . . . . . . . . . . . . . . . . 8
Repayment Price . . . . . . . . . . . . . . . . . . . . . 8
Responsible Officer . . . . . . . . . . . . . . . . . . . 8
Security. . . . . . . . . . . . . . . . . . . . . . . . . 8
Security Register" and "Security Registrar. . . . . . . . 9
Significant Subsidiary. . . . . . . . . . . . . . . . . . 9
Special Record Date . . . . . . . . . . . . . . . . . . . 9
Stated Maturity . . . . . . . . . . . . . . . . . . . . . 9
Subsidiary. . . . . . . . . . . . . . . . . . . . . . . . 9
Trust Indenture Act" or "TIA. . . . . . . . . . . . . . . 9
Trustee . . . . . . . . . . . . . . . . . . . . . . . . . 9
United States . . . . . . . . . . . . . . . . . . . . . . 9
Unsecured Debt. . . . . . . . . . . . . . . . . . . . . . 9
Yield to Maturity . . . . . . . . . . . . . . . . . . . . 10
SECTION 102. Compliance Certificates and Opinions . . . . . . 10
SECTION 103. Form of Documents Delivered to Trustee . . . . . 10
SECTION 104. Acts of Holders. . . . . . . . . . . . . . . . . 11
SECTION 105. Notices, etc., to Trustee and Issuer . . . . . . 12
SECTION 106. Notice to Holders; Waiver. . . . . . . . . . . . 13
SECTION 107. Effect of Headings and Table of Contents . . . . 14
SECTION 108. Successors and Assigns . . . . . . . . . . . . . 14
SECTION 109. Separability Clause. . . . . . . . . . . . . . . 14
SECTION 110. Benefits of Indenture. . . . . . . . . . . . . . 14
SECTION 111. Governing Law. . . . . . . . . . . . . . . . . . 14
SECTION 112. Legal Holidays . . . . . . . . . . . . . . . . . 14
ARTICLE TWO
SECURITIES FORMS
SECTION 201. Forms of Securities. . . . . . . . . . . . . . . 15
SECTION 202. Form of Trustee's Certificate of Authentication. 15
SECTION 203. Securities Issuable in Global Form . . . . . . . 15
ARTICLE THREE
THE SECURITIES
SECTION 301. Amount Unlimited; Issuable in Series . . . . . . 16
SECTION 302. Denominations. . . . . . . . . . . . . . . . . . 20
SECTION 303. Execution, Authentication, Delivery and Dating . 21
SECTION 304. Temporary Securities . . . . . . . . . . . . . . 23
SECTION 305. Registration, Registration of Transfer and
Exchange. . . . . . . . . . . . . . . . . . . . . . . . . 25
SECTION 306. Mutilated, Destroyed, Lost and Stolen Securities 28
SECTION 307. Payment of Interest; Interest Rights Preserved . 29
SECTION 308. Persons Deemed Owners. . . . . . . . . . . . . . 31
SECTION 309. Cancellation . . . . . . . . . . . . . . . . . . 32
SECTION 310. Computation of Interest. . . . . . . . . . . . . 33
ARTICLE FOUR
SATISFACTION AND DISCHARGE
SECTION 401. Satisfaction and Discharge of Indenture. . . . . 33
SECTION 402. Application of Trust Funds . . . . . . . . . . . 34
ARTICLE FIVE
REMEDIES
SECTION 501. Events of Default. . . . . . . . . . . . . . . . 34
SECTION 502. Acceleration of Maturity; Rescission and
Annulment . . . . . . . . . . . . . . . . . . . . . . . . 36
SECTION 503. Collection of Indebtedness and Suits for
Enforcement by Trustee. . . . . . . . . . . . . . . . . . 37
SECTION 504. Trustee May File Proofs of Claim . . . . . . . . 38
SECTION 505. Trustee May Enforce Claims Without Possession of
Securities or Coupons . . . . . . . . . . . . . . . . . . 39
SECTION 506. Application of Money Collected . . . . . . . . . 39
SECTION 507. Limitation on Suits. . . . . . . . . . . . . . . 39
SECTION 508. Unconditional Right of Holders to Receive
Principal, Premium, if any, Interest and
Additional Amounts . . . . . . . . . . . . . . . 40
SECTION 509. Restoration of Rights and Remedies . . . . . . . 40
SECTION 510. Rights and Remedies Cumulative . . . . . . . . . 41
SECTION 511. Delay or Omission Not Waiver . . . . . . . . . . 41
SECTION 512. Control by Holders of Securities . . . . . . . . 41
SECTION 513. Waiver of Past Defaults. . . . . . . . . . . . . 41
SECTION 514. Waiver of Usury, Stay or Extension Laws. . . . . 42
SECTION 515. Undertaking for Costs. . . . . . . . . . . . . . 42
ARTICLE SIX
THE TRUSTEE
SECTION 601. Notice of Defaults . . . . . . . . . . . . . . . 42
SECTION 602. Certain Rights of Trustee. . . . . . . . . . . . 43
SECTION 603. Not Responsible for Recitals or Issuance of
Securities. . . . . . . . . . . . . . . . . . . . . . . . 44
SECTION 604. May Hold Securities. . . . . . . . . . . . . . . 44
SECTION 605. Money Held in Trust. . . . . . . . . . . . . . . 44
SECTION 606. Compensation and Reimbursement . . . . . . . . . 45
SECTION 607. Corporate Trustee Required; Eligibility;
Conflicting Interests . . . . . . . . . . . . . . . . . . 45
SECTION 608. Resignation and Removal; Appointment of Successor 46
SECTION 609. Acceptance of Appointment by Successor . . . . . 47
SECTION 610. Merger, Conversion, Consolidation or Succession
to Business . . . . . . . . . . . . . . . . . . . . . . . 48
SECTION 611. Appointment of Authenticating Agent. . . . . . . 48
ARTICLE SEVEN
HOLDERS' LISTS AND REPORTS BY TRUSTEE AND ISSUER
SECTION 701. Disclosure of Names and Addresses of Holders . . 50
SECTION 702. Reports by Trustee . . . . . . . . . . . . . . . 50
SECTION 703. Reports by Issuer. . . . . . . . . . . . . . . . 50
SECTION 704. Issuer to Furnish Trustee Names and Addresses of
Holders . . . . . . . . . . . . . . . . . . . . . . . . . 51
ARTICLE EIGHT
CONSOLIDATION, MERGER, SALE, LEASE OR CONVEYANCE
SECTION 801. Consolidations and Mergers of Issuer and Sales,
Leases and Conveyances Permitted Subject to
Certain Conditions . . . . . . . . . . . . . . . 51
SECTION 802. Rights and Duties of Successor Corporation . . . 51
SECTION 803. Officers' Certificate and Opinion of Counsel . . 52
ARTICLE NINE
SUPPLEMENTAL INDENTURES
SECTION 901. Supplemental Indentures without Consent of
Holders . . . . . . . . . . . . . . . . . . . . . . . . . 52
SECTION 902. Supplemental Indentures with Consent of Holders. 54
SECTION 903. Execution of Supplemental Indentures . . . . . . 55
SECTION 904. Effect of Supplemental Indentures. . . . . . . . 55
SECTION 905. Conformity with Trust Indenture Act. . . . . . . 55
SECTION 906. Reference in Securities to Supplemental
Indentures. . . . . . . . . . . . . . . . . . . . . . . . 55
ARTICLE TEN
COVENANTS
SECTION 1001. Payment of Principal, Premium, if any, Interest
and Additional Amounts. . . . . . . . . . . 56
SECTION 1002. Maintenance of Office or Agency . . . . . . 56
SECTION 1003. Money for Securities Payments to Be Held in Trust 57
SECTION 1004. Existence . . . . . . . . . . . . . . . . . 59
SECTION 1005. Payment of Taxes and Other Claims . . . . . 59
SECTION 1006. Provision of Financial Information. . . . . 59
SECTION 1007. Statement as to Compliance. . . . . . . . . 60
SECTION 1008. Additional Amounts. . . . . . . . . . . . . 60
SECTION 1009. Waiver of Certain Covenants . . . . . . . . 61
ARTICLE ELEVEN
REDEMPTION OF SECURITIES
SECTION 1101. Applicability of Article. . . . . . . . . . 61
SECTION 1102. Election to Redeem; Notice to Trustee . . . 61
SECTION 1103. Selection by Trustee of Securities to Be Redeemed 61
SECTION 1104. Notice of Redemption. . . . . . . . . . . . 62
SECTION 1105. Deposit of Redemption Price . . . . . . . . 63
SECTION 1106. Securities Payable on Redemption Date . . . 63
SECTION 1107. Securities Redeemed in Part . . . . . . . . 64
ARTICLE TWELVE
SINKING FUNDS
SECTION 1201. Applicability of Article. . . . . . . . . . 65
SECTION 1202. Satisfaction of Sinking Fund Payments with
Securities. . . . . . . . . . . . . . . . . . . . . . . . 65
SECTION 1203. Redemption of Securities for Sinking Fund . 65
ARTICLE THIRTEEN
REPAYMENT AT THE OPTION OF HOLDERS
SECTION 1301. Applicability of Article. . . . . . . . . . 66
SECTION 1302. Repayment of Securities . . . . . . . . . . 66
SECTION 1303. Exercise of Option. . . . . . . . . . . . . 66
SECTION 1304. When Securities Presented for Repayment Become
Due and Payable . . . . . . . . . . . . . . . . . . . . . 67
SECTION 1305. Securities Repaid in Part . . . . . . . . . 68
ARTICLE FOURTEEN
DEFEASANCE AND COVENANT DEFEASANCE
SECTION 1401. Applicability of Article; Issuer's Option to
Effect Defeasance or Covenant Defeasance. . 68
SECTION 1402. Defeasance and Discharge. . . . . . . . . . 68
SECTION 1403. Covenant Defeasance . . . . . . . . . . . . 69
SECTION 1404. Conditions to Defeasance or Covenant Defeasance 69
SECTION 1405. Deposited Money and Government Obligations to Be
Held in Trust; Other Miscellaneous Provisions 71
ARTICLE FIFTEEN
MEETINGS OF HOLDERS OF SECURITIES
SECTION 1501. Purposes for Which Meetings May Be Called . 72
SECTION 1502. Call, Notice and Place of Meetings. . . . . 72
SECTION 1503. Persons Entitled to Vote at Meetings. . . . 73
SECTION 1504. Quorum; Action. . . . . . . . . . . . . . . 73
SECTION 1505. Determination of Voting Rights; Conduct and
Adjournment of Meetings . . . . . . . . . . . . . . . . . 74
SECTION 1506. Counting Votes and Recording Action of Meetings 75
<PAGE>
WALDEN RESIDENTIAL PROPERTIES, INC.
Reconciliation and tie between Trust Indenture Act of 1939 (the
"TIA") and Indenture, dated as of _________, 199_
Trust Indenture Act Section Indenture Section
Sec. . . . . . . . . . . . . . . . . . . . . 310(a)(1) 607
(a)(2). . . . . . . . . . . . . . . . . . . . . . . 607
(b) . . . . . . . . . . . . . . . . . . . . . . . . 607, 608
Sec. . . . . . . . . . . . . . . . . . . . . . .312(a) 704
Sec.312(c) . . . . . . . . . . . . . . . . . . . . . . 701
Sec. . . . . . . . . . . . . . . . . . . . . . .313(a) 702
(c) . . . . . . . . . . . . . . . . . . . . . . . . 702
Sec. . . . . . . . . . . . . . . . . . . . . . .314(a) 1006
(a)(4). . . . . . . . . . . . . . . . . . . . . . . 1007
(c)(1). . . . . . . . . . . . . . . . . . . . . . . 102
(c)(2). . . . . . . . . . . . . . . . . . . . . . . 102
(e) . . . . . . . . . . . . . . . . . . . . . . . . 102
Sec 315(b) . . . . . . . . . . . . . . . . . . . . . . 601
Sec 316(a) (last sentence) . . . . . . . . . . . . . . 101 ("Outstanding")
(a)(1)(A) . . . . . . . . . . . . . . . . . . . . . 502, 512
(a)(1)(B) . . . . . . . . . . . . . . . . . . . . . 513
(b) . . . . . . . . . . . . . . . . . . . . . . . . 508
Sec 317(a)(1). . . . . . . . . . . . . . . . . . . . . 503
(a)(2). . . . . . . . . . . . . . . . . . . . . . . 504
Sec 318(a) . . . . . . . . . . . . . . . . . . . . . . 111
(c) . . . . . . . . . . . . . . . . . . . . . . . . 111
____________________
NOTE: This reconciliation and tie shall not, for any purpose, be
deemed to be a part of the Indenture.
Attention should also be directed to Section 318(c) of the
TIA, which provides that the provisions of Sections 310 to and
including 317 of the TIA are a part of and govern every qualified
indenture, whether or not physically contained therein.
EXHIBIT 5.1
WINSTEAD SECHREST & MINICK P.C.
5400 Renaissance Tower
1201 Elm Street
Dallas, Texas 75240
Direct Dial: 214-745-5724
[email protected]
October 20, 1997
Walden Residential Properties, Inc.
One Lincoln Center
5400 LBJ Freeway
Suite 400
Dallas, Texas 75240
Dear Ladies and Gentlemen::
We have acted as counsel to Walden Residential Properties,
Inc., a Maryland corporation (the "Company"), in connection with
the Company's registration statement on Form S-3 (as the same may
be amended or supplemented from time to time, the "Registration
Statement"), including the prospectus included therein at the time
the Registration Statement is declared effective (the
"Prospectus"), filed with the Securities and Exchange Commission
(the "Commission") under the Securities Act of 1933, as amended
(the "Act"), for offering by the Company from time to time of up to
$500,000,000 aggregate initial offering price of (i) debt
securities (the "Debt Securities"); (ii) shares of common stock,
par value $0.01 per share (the "Common Stock"); (iii) shares of
preferred stock, par value $0.01 per share (the "Preferred Stock");
and (iv) warrants to purchase shares of Common Stock and Preferred
Stock and Debt Securities (the "Warrants"). The Debt Securities,
the Common Stock, the Preferred Stock and the Warrants are
collectively referred to as the "Securities." The Registration
Statement provides that the Securities may be offered separately or
together, in separate series, in amounts, at prices and on terms to
be set forth in one or more supplements to the Prospectus (each, a
"Prospectus Supplement"). This opinion is being provided at your
request in connection with the filing of the Registration
Statement.
The Debt Securities will be issued from time to time pursuant
to an indenture in substantially the form included in the
Registration Statement as Exhibit 4.1 (the "Indenture"). The
Warrants will be issued under one or more warrant agreements (each,
a "Warrant Agreement"), each to be between the Company and a
financial institution identified therein as warrant agent (each, a
"Warrant Agent").
In rendering the opinions expressed herein, we have examined
the Registration Statement, the Indenture, the Company's Amended
and Restated Articles of Incorporation (the "Charter") and Restated
Bylaws and certain minutes of corporate proceedings and/or written
consents of the Company's Board of Directors. We have also
examined and relied as to factual matters upon the representations,
warranties and other statements contained in originals or copies,
certified or otherwise identified to our satisfaction, of such
records, documents, certificates and other instruments as in our
judgment are necessary or appropriate to enable us to render the
opinions expressed below.
In our examination of the aforesaid documents, we have assumed
the genuineness of all signatures, the authenticity of all
documents, certificates and instruments submitted to us as
originals and the conformity with originals of all documents
submitted to us as copies.
We assume that (i) prior to the issuance of any shares of
Common Stock or Preferred Stock (or Securities convertible into
shares of Common Stock or Preferred Stock), there will exist, under
the Charter, the requisite number of authorized but unissued shares
of Common Stock or Preferred Stock, as the case may be, and
(ii) appropriate certificates representing shares of Common Stock
or Preferred Stock, as the case may be, will be executed and
delivered upon issuance and sale of any such shares, and will
comply with all applicable requirements of Maryland law.
We assume that the issuance, sale, amount and terms of the
Securities to be offered from time to time will be authorized and
determined by proper action of the Board of Directors of the
Company in accordance with the parameters described in the
Registration Statement (each, a "Board Action") and in accordance
with the Charter, the Indenture or any applicable supplemental
Indenture, as the case may be, and applicable Maryland law.
To the extent that the obligations of the Company under the
Indenture may be dependent upon such matters, we assume for
purposes of this opinion that the financial institution identified
in such Indenture as trustee (the "Trustee") is duly organized,
validly existing and in good standing under the laws of its
jurisdiction of organization; that the Trustee is duly qualified to
engage in the activities contemplated by such Indenture; that such
Indenture has been duly authorized, executed and delivered by the
Trustee and constitutes the legally valid and binding obligation of
the Trustee enforceable against the Trustee in accordance with its
terms; that the Trustee is in compliance, generally, with respect
to acting as a trustee under such Indenture, with all applicable
laws and regulations; and that the Trustee has the requisite
organizational and legal power and authority to perform its
obligations under the Indenture.
To the extent that the obligations of the Company under a
Warrant Agreement may be dependent upon such matters, we assume for
purposes of this opinion that the Warrant Agent is duly organized,
validly existing and in good standing under the laws of its
jurisdiction of organization; that the Warrant Agent is duly
qualified to engage in the activities contemplated by the Warrant
Agreement; that the Warrant Agreement has been duly authorized,
executed and delivered by the Warrant Agent and constitutes the
legally valid and binding obligation of the Warrant Agent
enforceable against the Warrant Agent in accordance with its terms;
that the Warrant Agent is in compliance, generally, with respect to
acting as Warrant Agent under the Warrant Agreement, with all
applicable laws and regulations; and that the Warrant Agent has the
requisite organizational and legal power and authority to perform
its obligations under the Warrant Agreement.
Based on the foregoing, and such examination of law as we have
deemed necessary, we are of the opinion that:
1. The Indenture has been duly authorized by all necessary
Board Actions, and when executed and delivered by the
Company and assuming due authorization, execution and
delivery by the trustee, will constitute valid and
binding obligations of the Company.
2. When the Registration Statement has become effective
under the Act and the Debt Securities have been (a) duly
established by the Indenture or a Supplemental Indenture,
(b) duly authenticated by the Trustee, and (c) duly
executed and delivered on behalf of the Company against
payment therefor in accordance with the terms and
provisions of the applicable Board Action, the Indenture,
any applicable Supplemental Indenture and as contemplated
by the Registration Statement, the Prospectus or the
applicable Prospectus Supplement and, if applicable, an
underwriting agreement relating to the issuance of such
Debt Securities, the Debt Securities will be duly
authorized and will constitute valid and binding
obligations of the Company.
3. When the Registration Statement has become effective
under the Act and a series of the Preferred Stock has
been duly authorized and established in accordance with
the applicable Board Action, the terms of the Charter and
applicable Maryland law, and upon payment for such shares
(a) in the manner contemplated by the applicable Board
Action, the Registration Statement, the Prospectus or the
applicable Prospectus Supplement and, if applicable, an
underwriting agreement relating to the issuance of such
Preferred Stock, or (b) pursuant to the exercise of
validly issued Warrants in accordance with the terms of
an applicable Warrant Agreement, such shares of Preferred
Stock issued thereby will be duly authorized, validly
issued, fully paid and non-assessable.
4. When the Registration Statement has become effective
under the Act and a series of Warrants has been (a) duly
established by the related Warrant Agreement and (b) duly
authenticated by the Warrant Agent and duly authorized
and established by the applicable Board Action, and
warrant certificates representing the Warrants have been
duly executed and delivered on behalf of the Company
against payment therefor in accordance with the terms and
provisions of the applicable Board Action, the Warrant
Agreement and as contemplated by the Registration
Statement, the Prospectus or the applicable Prospectus
Supplement and, if applicable, an underwriting agreement
relating to the issuance of such Warrants, such Warrants
will be duly authorized and will constitute valid and
binding obligations of the Company.
5. When the Registration Statement has become effective
under the Act and payment for such shares of Common Stock
has been made (a) in the manner contemplated by the
applicable Board Action, the Registration Statement, the
Prospectus or the applicable Prospectus Supplement and,
if applicable, an underwriting agreement relating to the
issuance of such shares, or (b) pursuant to (i) the
conversion of validly issued and fully paid and
non-assessable shares of Preferred Stock in accordance
with the established terms of such Preferred Stock,
(ii) the conversion of valid and binding Debt Securities
in accordance with terms of the applicable Indenture or
Supplemental Indenture relating to such Debt Securities,
or (iii) the exercise of validly issued Warrants in
accordance with the terms of an applicable Warrant
Agreement, such shares of Common Stock issued thereby
will be duly authorized, validly issued, fully paid and
non-assessable by the Company.
The opinions stated herein relating to the validity and
binding nature of obligations of the Company are subject to (i) the
effect of any applicable bankruptcy, insolvency (including, without
limitation, all laws relating to fraudulent transfers),
reorganization, moratorium or similar laws affecting creditors'
rights generally and (ii) the effect of general principles of
equity (regardless of whether considered in a proceeding in equity
or at law).
The opinions expressed herein are as of the date hereof and
are based on the assumptions set forth herein and the laws and
regulations currently in effect, and we do not undertake and hereby
disclaim any obligations to advise you of any change with respect
to any matter set forth herein. To the extent that the opinion set
forth herein is governed by laws other than the federal laws of the
United States, our opinion is based solely upon our review of the
General Corporation Law of the State of Maryland and upon
certificates from public officials or governmental offices of such
state. We express no opinion as to any matter other than as
expressly set forth herein, and no opinion is to, or may, be
inferred or implied herefrom.
We hereby consent to the filing of this opinion as an exhibit
to the Registration Statement and the reference to us under the
heading "Legal Matters" in the Prospectus contained therein. In
giving our consent, we do not hereby admit that we are in the
category of persons whose consent is required under Section 7 of
the Securities Act or the rules and regulations of the Commission
thereunder.
Very truly yours,
WINSTEAD SECHREST & MINICK P.C.
By: /s/ Kenneth L. Betts
--------------------------
Kenneth L. Betts
KLB:cfe
Exhibit 12.1
WALDEN RESIDENTIAL PROPERTIES, INC.
and Walden Predecessors
Computation of Ratio of Earnings to Combined Fixed Charges
and Preferred Distributions
(Dollars in thousands)
<TABLE>
<CAPTION>
The Company Walden Predecessors
---------------------------------------------------- -------------------------------------
February 9, January 1,
Six Months Year Ended Year Ended 1994 to 1994 to Year Ended Year Ended
Ended December 31, December 31, December 31, February 8, December 31, December 31,
June 30, 1997 1996 1995 1994 1994 1993 1992
------------- ------------ ------------ ------------ ----------- ------------ ------------
<S> <C> <C> <C> <C> <C> <C> <C>
Income before extraordinary item. . . $12,420 $19,122 $10,685 $ 5,356 $ (45) $(4,795) $(5,209)
Add:
Interest on indebtedness. . . . . . 10,121 20,573 17,111 6,288 1,075 11,456 11,751
Amortization and financing costs. . 411 916 900 371 20 1,417 418
------- ------- ------- ------- ------- ------- -------
Earnings . . . . . . . . . . . . $22,952 $40,611 $28,696 $12,015 $ 1,050 $ 8,078 $ 6,960
======= ======= ======= ======= ======= ======= =======
Fixed charges and preferred
distributions:
Interest on indebtedness. . . . . . $10,121 $20,573 $17,111 $ 6,288 $ 1,075 $11,456 $11,751
Amortization and financing costs. . 411 916 900 371 20 1,417 418
------- ------- ------- ------- ------- ------- -------
Fixed charges. . . . . . . . . . 10,532 21,489 18,011 6,659 1,095 12,873 12,169
Add:
Preferred distributions (1). . . 7,419 4,092 922 -- -- -- --
Combined fixed charges and ------- ------- ------- ------- ------- ------- -------
preferred distributions. . . $17,951 $25,581 $18,933 $ 6,659 $ 1,095 $12,873 $12,169
======= ======= ======= ======= ======= ======= =======
Earnings coverage deficiency. . . . . N/A N/A N/A N/A $ 45 $ 4,795 $ 5,209
======= ======= ======= ======= ======= ======= =======
Ratio of earnings to fixed charges. . 2.18x 1.89x 1.59x 1.80x 0.96x 0.63x 0.57x
Ratio of earnings to fixed charges and
preferred distributions . . . . . . 1.28x 1.59x 1.52x 1.80x 0.96x 0.63x 0.57x
</TABLE>
(1) Includes distributions on convertible equity securities and
preferred stock.
Exhibit 23.1
INDEPENDENT AUDITORS' CONSENT
We consent to the incorporation by reference in the Registration
Statement on Form S-3 of Walden Residential Properties, Inc. and in
the related prospectus of: our report dated March 3, 1997 (which
expresses an unqualified opinion and includes an explanatory paragraph
relating to a change in the method of accounting for the cost of
replacement carpets as discussed in Note 2), with respect
to the consolidated financial statements and schedule of Walden
Residential Properties, Inc. included in the Annual Report on
Form 10-K for the year ended December 31, 1996; our report dated March
3, 1995, with respect to the combined financial statements of
Walden Predecessors, included in the Annual Report on Form 10-K for
the year ended December 31, 1996; and our report dated April 18,
1997, with respect to the combined statement of revenues and certain
expenses (defined as being operating revenues less direct operating
expenses) of Arbor Park, Arbors of Bedford, Arbors of Carrollton,
Arbors of Euless, Arbors of Forest Lane and Arbors of Austin
("Arbors Apartments") for the year ended December 31, 1996, included
in the Current Report on Form 8-K of Walden Residential Properties,
Inc. dated April 21, 1997.
/s/ Deloitte & Touche LLP
- --------------------------
DELOITTE & TOUCHE LLP
Dallas, Texas
August 27, 1997
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM T-1
________
STATEMENT OF ELIGIBILITY UNDER THE
TRUST INDENTURE ACT OF 1939 OF A
CORPORATION DESIGNATED TO ACT AS TRUSTEE
Check if an Application to Determine Eligibility
of a Trustee Pursuant to Section 305(b)(2) _X_
STATE STREET BANK AND TRUST COMPANY
(Exact name of trustee as specified in its charter)
Massachusetts
(Jurisdiction of
incorporation or
organization if not a U.S.
national bank)
04-1867445
(I.R.S. Employer
Identification No.)
225 Franklin Street, Boston, Massachusetts 02110
(Address of principal executive offices) (Zip Code)
John R. Towers, Esq. Executive Vice President and General Counsel
225 Franklin Street, Boston, Massachusetts 02110
(617) 654-3253
(Name, address and telephone number of agent for service)
Walden Residential Properties, Inc.
(Exact name of obligor as specified in its charter)
Maryland
(State or other jurisdiction
of
incorporation or
organization)
(75-2506197)
(I.R.S. Employer
Identification No.)
One Lincoln Centre
5400 LBJ Freeway
Suite 400
Dallas, Texas 75240
(Address of principal executive offices) (Zip Code)
Debt Securities
GENERAL
Item 1. General Information.
Furnish the following information as to the trustee:
(a) Name and address of each examining or supervisory
authority to which it is subject.
Department of Banking and Insurance of The Commonwealth
of Massachusetts, 100 Cambridge Street, Boston,
Massachusetts.
Board of Governors of the Federal Reserve System,
Washington, D.C., Federal Deposit Insurance Corporation,
Washington, D.C.
(b) Whether it is authorized to exercise corporate trust
powers.
Trustee is authorized to exercise corporate trust powers.
Item 2. Affiliations with Obligor.
If the Obligor is an affiliate of the trustee, describe each
such affiliation.
The obligor is not an affiliate of the trustee or of its
parent, State Street Corporation.
(See note on page 2.)
Item 3. through Item 15. Not applicable.
Item 16. List of Exhibits.
List below all exhibits filed as part of this statement of
eligibility.
1. A copy of the articles of association of the trustee as
now in effect.
A copy of the Articles of Association of the trustee, as
now in effect, is on file with the Securities and
Exchange Commission as Exhibit 1 to Amendment No. 1 to
the Statement of Eligibility and Qualification of Trustee
(Form T-1) filed with the Registration Statement of Morse
Shoe, Inc. (File No. 22-17940) and is incorporated herein
by reference thereto.
2. A copy of the certificate of authority of the trustee to
commence business, if not contained in the articles of
association.
A copy of a Statement from the Commissioner of Banks of
Massachusetts that no certificate of authority for the
trustee to commence business was necessary or issued is
on file with the Securities and Exchange Commission as
Exhibit 2 to Amendment No. 1 to the Statement of
Eligibility and Qualification of Trustee (Form T-1) filed
with the Registration Statement of Morse Shoe, Inc. (File
No. 22-17940) and is incorporated herein by reference
thereto.
3. A copy of the authorization of the trustee to exercise
corporate trust powers, if such authorization is not
contained in the documents specified in paragraph (1) or
(2), above.
A copy of the authorization of the trustee to exercise
corporate trust powers is on file with the Securities and
Exchange Commission as Exhibit 3 to Amendment No. 1 to
the Statement of Eligibility and Qualification of Trustee
(Form T-1) filed with the Registration Statement of Morse
Shoe, Inc. (File No. 22-17940) and is incorporated herein
by reference thereto.
4. A copy of the existing by-laws of the trustee, or
instruments corresponding thereto.
A copy of the by-laws of the trustee, as now in effect,
is on file with the Securities and Exchange Commission as
Exhibit 4 to the Statement of Eligibility and
Qualification of Trustee (Form T-1) filed with the
Registration Statement of Eastern Edison Company (File
No. 33-37823) and is incorporated herein by reference
thereto.
5. A copy of each indenture referred to in Item 4. if the
obligor is in default.
Not applicable.
6. The consents of United States institutional trustees
required by Section 321(b) of the Act.
The consent of the trustee required by Section 321(b) of
the Act is annexed hereto as Exhibit 6 and made a part
hereof.
7. A copy of the latest report of condition of the trustee
published pursuant to law or the requirements of its
supervising or examining authority.
A copy of the latest report of condition of the trustee
published pursuant to law or the requirements of its
supervising or examining authority is annexed hereto as
Exhibit 7 and made a part hereof.
NOTES
In answering any item of this Statement of Eligibility
which relates to matters peculiarly within the knowledge of the
obligor or any underwriter for the obligor, the trustee has
relied upon information furnished to it by the obligor and the
underwriters, and the trustee disclaims responsibility for the
accuracy or completeness of such information.
The answer furnished to Item 2. of this statement will be
amended, if necessary, to reflect any facts which differ from
those stated and which would have been required to be stated if
known at the date hereof.
SIGNATURE
Pursuant to the requirements of the Trust Indenture Act of
1939, as amended, the trustee, State Street Bank and Trust Company,
a corporation organized and existing under the laws of The
Commonwealth of Massachusetts, has duly caused this statement of
eligibility to be signed on its behalf by the undersigned,
thereunto duly authorized, all in the City of Boston and The
Commonwealth of Massachusetts, on the October 15, 1997.
STATE STREET BANK AND TRUST COMPANY
By: ______________________________
NAME Chi C. Ma
TITLE Assistant Vice President
EXHIBIT 6
CONSENT OF THE TRUSTEE
Pursuant to the requirements of Section 321(b) of the Trust
Indenture Act of 1939, as amended, in connection with the proposed
issuance by Walden Residential Properties, Inc. of its Debt
Securities, we hereby consent that reports of examination by
Federal, State, Territorial or District authorities may be
furnished by such authorities to the Securities and Exchange
Commission upon request therefor.
STATE STREET BANK AND TRUST COMPANY
By: ______________________________
NAME Chi C. Ma
TITLE Assistant Vice President
Dated: October 15, 1997
EXHIBIT 7
Consolidated Report of Condition of State Street Bank and Trust
Company, Massachusetts and foreign and domestic subsidiaries, a
state banking institution organized and operating under the banking
laws of this commonwealth and a member of the Federal Reserve
System, at the close of business June 30, 1997, published in
accordance with a call made by the Federal Reserve Bank of this
District pursuant to the provisions of the Federal Reserve Act and
in accordance with a call made by the Commissioner of Banks under
General Laws, Chapter 172, Section 22(a).
Thousands of
ASSETS Dollars
Cash and balances due from depository institutions:
Noninterest-bearing balances and currency and coin . . 1,842,337
Interest-bearing balances. . . . . . . . . . . . . . . 8,771,397
Securities . . . . . . . . . . . . . . . . . . . . . . . 10,596,119
Federal funds sold and securities purchased
under agreements to resell in domestic offices
of the bank and its Edge subsidiary. . . . . . . . . . 5,953,036
Loans and lease financing receivables:
Loans and leases, net of unearned income . . . . . . . 5,769,090
Allowance for loan and lease losses. . . . . . . . . . 74,031
Allocated transfer risk reserve. . . . . . . . . . . . 0
Loans and leases, net of unearned income and
allowances . . . . . . . . . . . . . . . . . . . . . 5,695,059
Assets held in trading accounts. . . . . . . . . . . . . 916,608
Premises and fixed assets. . . . . . . . . . . . . . . . 374,999
Other real estate owned. . . . . . . . . . . . . . . . . 755
Investments in unconsolidated subsidiaries . . . . . . . 28,992
Customers' liability to this bank on acceptances
outstanding. . . . . . . . . . . . . . . . . . . . . . 99,209
Intangible assets. . . . . . . . . . . . . . . . . . . . 229,412
Other assets . . . . . . . . . . . . . . . . . . . . . . 1,589,526
----------
Total assets . . . . . . . . . . . . . . . . . . . . . . 36,097,449
==========
LIABILITIES
Deposits:
In domestic offices. . . . . . . . . . . . . . . . . . 11,082,135
Noninterest-bearing . . . . . . . . . . . . . . . 8,932,019
Interest-bearing. . . . . . . . . . . . . . . . . 2,150,116
In foreign offices and Edge subsidiary . . . . . . . . 13,811,677
Noninterest-bearing . . . . . . . . . . . . . . . 112,281
Interest-bearing. . . . . . . . . . . . . . . . . 13,699,396
Federal funds purchased and securities sold under
agreements to repurchase in domestic offices of
the bank and of its Edge subsidiary. . . . . . . . . . 6,785,263
Demand notes issued to the U.S. Treasury and Trading
Liabilities. . . . . . . . . . . . . . . . . . . . . . 755,676
Other borrowed money . . . . . . . . . . . . . . . . . . 716,013
Subordinated notes and debentures. . . . . . . . . . . . 0
Bank's liability on acceptances executed and
outstanding. . . . . . . . . . . . . . . . . . . . . . 99,605
Other liabilities. . . . . . . . . . . . . . . . . . . . 841,566
Total liabilities. . . . . . . . . . . . . . . . . . . . 34,091,935
----------
EQUITY CAPITAL
Perpetual preferred stock and related surplus Common
stock. . . . . . . . . . . . . . . . . . . . . . . . . . 29,931
Surplus. . . . . . . . . . . . . . . . . . . . . . . . . 437,183
Undivided profits and capital reserves/Net unrealized
holding gains (losses) . . . . . . . . . . . . . . . . . 1,542,695
Cumulative foreign currency translation adjustments. . . (4,295)
Total equity capital . . . . . . . . . . . . . . . . . . 2,005,514
----------
Total liabilities and equity capital . . . . . . . . . . 36,097,449
==========
I, Rex S. Schuette, Senior Vice President and Comptroller of the
above named bank do hereby declare that this Report of Condition
has been prepared in conformance with the instructions issued by
the Board of Governors of the Federal Reserve System and is true to
the best of my knowledge and belief.
Rex S. Schuette
We, the undersigned directors, attest to the correctness of this
Report of Condition and declare that it has been examined by us and
to the best of our knowledge and belief has been prepared in
conformance with the instructions issued by the Board of Governors
of the Federal Reserve System and is true and correct.
David A. Spina
Marshall N. Carter
Truman S. Casner
