<PAGE>
As filed with the Securities and Exchange Commission on August 8, 1996
Registration No. 333-
================================================================================
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
_____________________
Form S-3
REGISTRATION STATEMENT
UNDER
THE SECURITIES ACT OF 1933
_____________________
COLUMBUS REALTY TRUST
(Exact name of Registrant as specified in its charter)
Texas 15851 Dallas Parkway 75-2509086
(State or other Suite 855 (I.R.S. Employer
jurisdiction of Dallas, Texas 75248-5421 Identification No.)
incorporation or (214) 387-1492
organization)
(Address, including zip code, and telephone number, including
area code, of Registrant's Principal Executive Offices)
_____________________
Robert L. Shaw
Chief Executive Officer
Columbus Realty Trust
15851 Dallas Parkway, Suite 855
Dallas, Texas 75248-5421
(214) 387-1492
(Name, address, including zip code, and telephone number, including area code,
of agent for service)
_____________________
Copies to:
Michelle P. Goolsby, 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.
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CALCULATION OF REGISTRATION FEE
<TABLE>
<CAPTION>
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<S> <C> <C> <C> <C>
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
- -----------------------------------------------------------------------------------------------------------------------
Debt Securities (1)(2) (3) (1)(2) NA
- -----------------------------------------------------------------------------------------------------------------------
Common Shares of Beneficial Interest, (1)(4) (3) (1)(4) NA
par value $.01 per share
- -----------------------------------------------------------------------------------------------------------------------
Preferred Shares of Beneficial Interest,
par value $.01 per share (1)(5) (3) (1)(5) NA
- -----------------------------------------------------------------------------------------------------------------------
Securities Warrants (1)(6) (3) (1)(6) NA
- -----------------------------------------------------------------------------------------------------------------------
Subscription Rights for Common Shares of
Beneficial Interest (1)(7) NA NA NA
- -----------------------------------------------------------------------------------------------------------------------
Total $200,000,000 (3) $200,000,000 $68,965.52(8)
========================================================================================================================
</TABLE>
(1) In no event will the aggregate maximum offering price of all securities
issued pursuant to this Registration Statement exceed $200,000,000 or, if
any Debt Securities are issued with original issue discount, such greater
amount as shall result in an aggregate offering price of $200,000,000. 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 Common Shares (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 Common Shares 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 Preferred Shares (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 Preferred Shares as shall
be issuable upon conversion of Debt Securities or exercise of Securities
Warrants registered hereby.
(6) Subject to Footnote (1), there is being registered hereunder an
indeterminate number of Debt Securities Warrants, Common Shares Warrants
and Preferred Shares Warrants representing rights to purchase Debt
Securities, Common Shares and Preferred Shares, respectively, registered
pursuant to this Registration Statement.
(7) Subject to Footnote (1), there is being registered hereunder such
indeterminate number of Subscription Rights as may be issued as a dividend,
for which no separate consideration will be received, to holders of Common
Shares of Beneficial Interest entitling such holders to subscribe for and
purchase Common Shares.
(8) Calculated pursuant to Rule 457(o) of the rules and regulations under the
Securities Act of 1933, as amended.
<PAGE>
++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++
+ Information contained herein is subject to completion or amendment. A +
+ registration statement relating to these securities has been filed with the +
+ Securities and Exchange Commission. These securities may not be sold nor +
+ may offers to buy be accepted prior to the time the registration statement +
+ becomes effective. This prospectus shall not constitute an offer to sell or +
+ the solicitation of an offer to buy nor shall there be any sale of these +
+ securities in any State in which such offer, solicitation or sale would be +
+ unlawful prior to registration or qualification under the securities laws +
+ of any such State. +
++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++
SUBJECT TO COMPLETION, DATED AUGUST 8, 1996
PROSPECTUS
COLUMBUS REALTY TRUST
$200,000,000 Debt Securities, Common Shares, Preferred Shares
and Securities Warrants
_____________________
Columbus Realty Trust (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 ("Senior Securities") or subordinated debt securities
("Subordinated Securities" and, together with Senior Securities, the "Debt
Securities"), (ii) common shares of beneficial interest, par value $.01 per
share (the "Common Shares"), (iii) preferred shares of beneficial interest, par
value $.01 per share (the "Preferred Shares"); and (iv) warrants to purchase
Common Shares (the "Common Shares Warrants"), warrants to purchase Preferred
Shares (the "Preferred Shares Warrants") and warrants to purchase Debt
Securities (the "Debt Securities Warrants" and, collectively with the Common
Shares Warrants and the Preferred Shares Warrants, the "Securities Warrants")
with an aggregate public offering price of up to $200,000,000, in amounts, at
prices and on terms to be determined by market conditions at the time of
offering. The Debt Securities, Common Shares, Preferred Shares 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 Shares, the
specific number of shares and issuance price per share will be set forth in the
applicable Prospectus Supplement. The terms of the Preferred Shares, 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 Shares 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 Declaration of Trust 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 _____________, 1996.
<PAGE>
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 Shares 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 information requirements of the Securities
Exchange Act of 1934, as amended (the "Exchange Act"), and in accordance
therewith, files reports, proxy and information statements and other information
with the Commission. The reports, proxy and information statements, the
Registration Statement and exhibits thereto, and other information filed by the
Company with the Commission can be inspected and copied at the Public Reference
Section of the Commission at Room 1024, Judiciary Plaza, 450 Fifth Street, N.W.,
Washington, D.C. 20549, and at the regional offices of the Commission located at
13th Floor, 7 World Trade Center, New York, New York 10048, and at 500 West
Madison Street, Suite 1400, Chicago, Illinois 60661-2511. Copies of the
material can be obtained from the Public Reference Section of the Commission at
Room 1024, Judiciary Plaza, 450 Fifth Street, N.W., Washington, D.C. 20549 at
prescribed rates. The Company's Common Stock is listed on the New York Stock
Exchange (the "NYSE") under the symbol "CLB." The reports, proxy and
information statements and other information 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
There are incorporated herein by reference the following documents
heretofore filed by the Company with the Commission:
(a) The Company's Annual Report on Form 10-K for the fiscal year ended
December 31, 1995;
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(b) The Company's Quarterly Report on Form 10-Q for the quarter ended
March 31, 1996;
(c) The description of the Common Shares contained in the Company's
Registration Statement on Form 8-A filed December 16, 1993.
All documents filed by the Company pursuant to Sections 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 this offering 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 or in an accompanying prospectus
supplement, if any, 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 Mr. J. Michael
Lewis, Senior Vice President and Treasurer, Columbus Realty Trust, 15851 Dallas
Parkway, Suite 855, Dallas, Texas 75248-5421.
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<PAGE>
THE COMPANY
Columbus Realty Trust (the "Company") is a self-administered and self-
managed real estate investment trust ("REIT") formed pursuant to the Texas Real
Estate Investment Trust Act, as amended (the "Texas REIT Act"). The Company
presently owns and operates (i) 22 multifamily residential properties comprising
a total of 4,883 apartment units, (ii) two industrial properties, and (iii) one
retail property (collectively, the "Properties"), all but two of which are
located in the greater Dallas, Texas metropolitan area. The residential
Properties completed at June 30, 1996 had an occupancy rate of approximately 96%
as of such date. The Company also owns seven parcels of land in the greater
Dallas metropolitan area which currently are under development (the "Development
Properties"). Upscale multifamily residential communities are presently under
construction on five of the Development Properties. The Company anticipates
that the Development Properties currently under construction will add 1,720
apartment units to the Company's portfolio upon completion. The Company expects
that approximately 1,036 of these additional apartment units will be completed
in 1996 and the remaining 684 will be completed in 1997. When the Development
Properties currently under construction are complete, the Company will own a
total of 6,603 units in 27 residential properties.
The Company intends to develop each of the Development Properties and
additional communities targeted for development with the same quality of
construction, innovation in design and uniqueness of setting that have
distinguished prior communities developed by the Company and its predecessors.
The Company also may from time to time make acquisitions of additional income-
producing properties which further its strategies, satisfy its standards for
quality and provide potential for attractive returns on investment.
The Company's core strategy is to acquire and develop dense concentrations
of units in close proximity in targeted areas which are near major employment
centers and which have long term growth potential. The Company believes these
strategies enable it to realize operating efficiencies, offer enhanced resident
amenities, and better serve its residents, thereby providing the Company with a
competitive advantage over others who do not have concentrated unit ownership.
The Company generally targets residents who are "renters by choice," that
is, those who prefer the convenience and luxury afforded by the Company's
residential Properties to home ownership and who have income levels in excess of
that necessary to enable them to afford the Company's rental rates. The Company
intensively manages its communities and responds to the needs and lifestyles of
its residents. Management believes that these practices enable it to attract and
retain residents. The Company utilizes proprietary leasing software, private
telephone systems, private cable television systems, energy management systems
and other management and operating applications to generate additional revenue
and achieve operating efficiencies and cost savings.
The Common Shares of the Company are listed on the NYSE under the symbol
"CLB." On April 15, 1996, the Company paid a dividend of $0.375 per Common
Share for the first quarter of 1996 to all shareholders of record on March 25,
1996. On July 15, 1996, the
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Company paid a dividend of $0.395 per Common Share for the second quarter of
1996 to all shareholders of record on June 28, 1996. The Company intends to
continue making regular quarterly distributions to its shareholders.
Distributions depend upon a variety of factors, and there can be no assurance
that distributions will be made.
The Company's principal executive office is located at 15851 Dallas
Parkway, Suite 855, Dallas, Texas 75248 and its telephone number is (214) 387-
1492.
USE OF PROCEEDS
Unless otherwise described in the Prospectus Supplement which accompanies
this Prospectus, the Company intends to use the net proceeds from the sale of
the Offered Securities for general corporate purposes, which may include the
development and acquisition of multifamily residential properties as suitable
opportunities arise and the repayment of certain then-outstanding secured or
unsecured indebtedness.
DESCRIPTION OF COMMON SHARES OF BENEFICIAL INTEREST
The Declaration of Trust of the Company provides that the Company may issue
up to one hundred ten million (110,000,000) shares of beneficial interest of the
Company, par value $.01 per share, consisting of one hundred million
(100,000,000) Common Shares and ten million (10,000,000) Preferred Shares. As of
July 30, 1996, 11,717,049 Common Shares were issued and outstanding and no
Preferred Shares were issued or outstanding.
The following description of the Common Shares sets forth certain general
terms and provisions of the Common Shares to which any Prospectus Supplement may
relate, including a Prospectus Supplement providing that Common Shares will be
issuable upon conversion of Debt Securities or Preferred Shares of the Company
or upon the exercise of the Securities Warrants issued by the Company. The
statements below describing the Common Shares are in all respects subject to and
qualified in their entirety by reference to the applicable provisions of the
Company's Declaration of Trust and Bylaws.
Voting Rights
Subject to the provisions of the Declaration of Trust regarding Excess
Securities (as defined in the Declaration of Trust) and to such preferential
rights as may be granted by the Board of Trust Managers in connection with the
future issuance of Preferred Shares, each outstanding Common Share entitles the
holder to one vote on all matters submitted to a vote of shareholders, including
the election of Trust Managers. There is no cumulative voting in the election of
Trust Managers, which means that the holders of two-thirds of the outstanding
Common Shares can elect all of the Trust Managers then standing for election.
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Dividends
Subject to the provisions of the Declaration of Trust regarding Excess
Securities and to such preferential rights as may be granted by the Board of
Trust Managers in connection with the future issuance of Preferred Shares,
holders of Common Shares are entitled to receive ratably such dividends, in
cash, property or shares of beneficial interest, as may be declared from time to
time by the Board of Trust Managers. The Company is prohibited from declaring or
paying any dividend when the Company is unable to pay its debts as they become
due in the usual course or when the payment of such dividend would result in the
Company becoming unable to pay its debts as they become due.
Liquidation Rights
Subject to the provisions of the Declaration of Trust regarding Excess
Securities, in the event of any liquidation, dissolution or winding-up of the
affairs of the Company, holders of Common Shares will be entitled to share
ratably in the assets of the Company remaining after provision for liabilities
to creditors and payment of liquidation preferences to holders of Preferred
Shares or senior debt securities.
Restrictions on Transfer
For the Company to qualify as a REIT under the Code, among other things,
not more than 50% in value of its outstanding Shares may be owned, directly or
indirectly, by five or fewer individuals (as defined in the Code to include
certain entities) during the last half of a taxable year, and such Shares must
be beneficially owned by 100 or more persons during at least 335 days of a
taxable year of 12 months, or during a proportionate part of a shorter taxable
year.
Because the Board of Trust Managers believes it is essential for the
Company to continue to qualify as a REIT, the Declaration of Trust provides,
subject to certain exceptions, that no holder of Shares may own, or be deemed to
own by virtue of the attribution provisions of the Code, more than 9.8% (the
"Ownership Limit") of the total outstanding Shares. The Trust Managers may not
waive the Ownership Limit except with respect to the initial acquisition by
certain entities of Common Shares in connection with the Company's initial
public offering of its Common Shares. Any transfer of Shares that would (i)
create a direct or indirect ownership of Shares in excess of the Ownership
Limit, (ii) result in the Shares being owned by fewer than 100 persons, (iii)
result in the Company being "closely held" within the meaning of Section 856(h)
of the Code, or (iv) result in the disqualification of the Company as a REIT,
shall be null and void, and the intended transferee will acquire no rights to
the Shares.
The Company's Declaration of Trust provides that Shares owned, or deemed to
be owned, or transferred to a shareholder in excess of the Ownership Limit will
automatically be deemed to be Excess Securities and as such will be transferred,
by operation of law, to the Company as trustee of a trust for the exclusive
benefit of the transferees to whom such Shares ultimately may be transferred
without violating the Ownership Limit. While the Excess Securities are held in
trust, they will not be entitled to vote, they will not be considered for
purposes of any
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shareholder vote or the determination of a quorum for such vote, and they will
not be entitled to participate in dividends or other distributions. Any dividend
or distribution paid to a proposed transferee of Excess Securities prior to the
discovery by the Company that Shares have been transferred in violation of the
provisions of the Company's Declaration of Trust shall be repaid to the Company
upon demand. The Excess Securities are not treasury stock, but rather constitute
a separate class of issued and outstanding Shares of the Company. The original
transferee-shareholder may, at any time the Excess Securities are held by the
Company in trust, transfer the interest in the trust representing the Excess
Securities to any individual whose ownership of the Shares that have been deemed
to be Excess Securities would be permitted under the Ownership Limit, at a price
not in excess of the price paid by the original transferee-shareholder for the
Shares that were exchanged into Excess Securities. Immediately upon the transfer
to the permitted transferee, the Excess Securities will be automatically deemed
to be Shares of the class from which they were converted. If the foregoing
transfer restrictions are determined to be void or invalid by virtue of any
legal decision, statute, rule or regulation, then the intended transferee-
shareholder of any Excess Securities may be deemed, at the option of the
Company, to have acted as an agent on behalf of the Company in acquiring the
Excess Securities and to hold the Excess Securities on behalf of the Company.
In addition to the foregoing transfer restrictions, the Company will have
the right, for a period of 90 days during the time any Excess Securities are
held by the Company in trust, to purchase all or any portion of the Excess
Securities from the original transferee-shareholder at the lesser of the price
paid for the Shares by the original transferee-shareholder and the market price
(as determined in the manner set forth in the Declaration of Trust) of the
Shares on the date the Company exercises its option to purchase. The 90-day
period begins on the later of the date of the violative transfer or date the
Board of Trust Managers determines that a violative transfer has been made.
All certificates representing Shares will bear a legend referring to the
restrictions described above.
Each shareholder shall be required upon request to disclose to the Company
in writing any information with respect to the direct, indirect, and
constructive ownership of beneficial interests as the Board of Trust Managers
deems necessary to comply with the provisions of the Code applicable to REITs,
to comply with the requirements of any taxing authority or governmental agency
or to determine any such compliance.
The Ownership Limit may have the effect of precluding acquisition of
control of the Company unless the Board of Trust Managers and the shareholders
determine that maintenance of REIT status is no longer in the best interests of
the Company.
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Other Terms
Holders of Common Shares have no redemption, preference, conversion,
exchange or preemptive rights to subscribe to any securities of the Company. All
outstanding Common Shares will be fully paid and nonassessable.
Both the Texas REIT Act and the Declaration of Trust provide that no
shareholder of the Company will be personally liable for any debt, act, omission
or obligation incurred by the Company or its Trust Managers. However, certain
jurisdictions may not recognize the limited liability afforded shareholders
under the Texas REIT Act; therefore, a shareholder may be held personally liable
to the extent such claims are not satisfied by the Company. Due to this
uncertainty which may exist in the laws of certain states, the Company may hold
properties in states other than Texas in wholly owned subsidiaries, if it
determines that there would exist in that state a significant risk of
shareholder liability if the property were owned directly by the Company. The
Company will use such subsidiaries to the fullest extent it can in those states
where the law is unclear regarding limited shareholder liability in an effort to
minimize the possibility of shareholder liability.
In addition, the Company's Bylaws provide that the Company shall indemnify
each shareholder against any claim or liability to which the shareholder may
become subject by reason of being or having been a shareholder, and that the
Company shall reimburse each shareholder for all legal and other expenses
reasonably incurred by such shareholder in connection with any such claim or
liability. Further, it is the Company's policy to include a provision in its
contracts governed by laws other than those of the State of Texas which provides
that shareholders assume no personal liability for obligations entered into on
behalf of the Company. However, with respect to tort claims, contractual claims
where liability is not so negated, claims for taxes and certain statutory
liability, the shareholders may, in some jurisdictions, be personally liable to
the extent such claims are not paid by the Company. Because the Company will
carry public liability insurance which it believes is adequate, any risk of
personal liability to shareholders is limited to situations in which the
Company's assets plus its insurance coverage would be insufficient to satisfy
the claims against the Company and its shareholders.
Meetings of Shareholders
The Bylaws provide that annual meetings of shareholders will be held no
later than the last day of May of each year. Special meetings of the share-
holders may be called by the Trust Managers, any officer of the Company or
the holders of at least ten percent (10%) of all of the Shares entitled to vote
at the meetings.
Transfer Agent and Registrar
The Company has appointed The First National Bank of Boston to act as
transfer agent and registrar for the Common Shares.
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DESCRIPTION OF PREFERRED SHARES
The following description of the terms of the Preferred Shares sets forth
certain general terms and provisions of the Preferred Shares to which any
Prospectus Supplement may relate. Certain other terms of any series of the
Preferred Shares offered by any Prospectus Supplement will be described in such
Prospectus Supplement. The description of certain provisions of the Preferred
Shares 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
Company's Declaration of Trust and the Board of Trust Managers' resolution or
resolutions relating to each series of the Preferred Shares 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 Shares.
General
The Board of Trust Managers is empowered to issue Preferred Shares from
time to time in one or more series, without shareholder approval, and with
respect to each series to determine, subject to limitations prescribed by law,
(i) the number of shares constituting such series, (ii) the dividend rate on the
shares of each series, whether such dividends shall be cumulative and the
relation of such dividends to the dividends payable on any other class of stock,
(iii) whether the shares of each series shall be redeemable and the terms
thereof, (iv) whether the shares shall be convertible into Common Shares and the
terms thereof, (v) the amount per share payable on each series or other rights
of holders of such shares on liquidation or dissolution of the Company, (vi) the
voting rights, if any, of shares of each series, and (vii) generally any other
rights and privileges not in conflict with the Declaration of Trust or the Texas
REIT Act for each series and any qualifications, limitations or restrictions
thereof.
The Preferred Shares 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 Shares. Reference is
made to the Prospectus Supplement relating to the particular series of the
Preferred Shares offered thereby for specific terms, including:
(i) the designation and stated value per share of such Preferred Shares
and the number of shares offered;
(ii) the amount of liquidation preference per share;
(iii) the initial public offering price at which such Preferred Shares
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;
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(vi) any conversion right and the terms and conditions thereof;
(vii) any listing of such Preferred Shares on any securities exchange;
(viii) a discussion of the federal income tax considerations applicable to
such Preferred Shares;
(ix) the relative ranking and preferences of such Preferred Shares as to
dividend rights and rights upon liquidation, dissolution or winding
up of the affairs of the Company;
(x) any limitations on issuance of any series of Preferred Shares
ranking senior to or on a parity with such series of Preferred
Shares as to dividend rights and rights upon liquidation,
dissolution or winding up of the affairs of the Company;
(xi) any limitations on direct or beneficial ownership and restrictions
on transfer, in each case as may be appropriate to preserve the
status of the Company as a REIT; and
(xii) any additional voting, dividend, liquidation, redemption, sinking
fund and other rights, preferences, privileges, limitations and
restrictions not in conflict with the Declaration of Trust or the
Texas REIT Act.
The Preferred Shares will, when issued for lawful consideration therefor, be
fully paid and nonassessable and will have no preemptive rights.
Rank
Unless otherwise specified in the Prospectus Supplement, the Preferred
Shares will, with respect to dividend rights and rights upon liquidation,
dissolution or winding up of the Company, rank (i) senior to all classes or
series of Common Shares and to all equity securities ranking junior to such
Preferred Shares; (ii) on a parity with all equity securities issued by the
Company the terms of which specifically provide that such equity securities rank
on a parity with the Preferred Shares; and (iii) junior to all equity securities
issued by the Company the terms of which specifically provide that such equity
securities rank senior to the Preferred Shares. The rights of the holders of
each series of the Preferred Shares will be subordinate to those of the
Company's general creditors.
Dividends
Holders of each series of Preferred Shares shall be entitled to receive,
when, as and if declared by the Board of Trust Managers of the Company, out of
assets of the Company legally available therefor, 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
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Company on such record dates as shall be fixed by the Board of Trust Managers of
the Company, as specified in the Prospectus Supplement relating to such series
of Preferred Shares.
Dividends on any series of the Preferred Shares may be cumulative or non-
cumulative, as provided in the applicable Prospectus Supplement. Dividends, if
cumulative, will be cumulative from and after the date set forth in the
applicable Prospectus Supplement. If the Board of Trust Managers of the Company
fails to declare a dividend payable on a dividend payment date on any series of
the Preferred Shares for which dividends are non-cumulative, then the holders of
such series of the Preferred Shares will have no right to receive a dividend in
respect of the dividend period ending on such dividend payment date, and the
Company will have no obligation to pay the dividend accrued for such period,
whether or not dividends on such series are declared payable on any future
dividend payment date.
So long as any series of the Preferred Shares 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 Preferred Shares of such series and all other classes
and series of Preferred Shares of the Company (other than Junior Shares, as
defined below); and (ii) the repurchase or other mandatory retirement of, or
with respect to any sinking or other analogous fund for, any Preferred Shares of
such series or any other Preferred Shares of the Company of any class or series
(other than Junior Shares), the Company may not declare any dividends on any
Common Shares of the Company or any other shares of the Company ranking as to
dividends or distributions of assets junior to such series of Preferred Shares
(the Common Shares and any such other shares being herein referred to as "Junior
Shares"), 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 Shares or make any distribution in respect thereof, whether
in cash or property or in obligations or shares of the Company, other than
Junior Shares which are neither convertible into, nor exchangeable or
exercisable for, any securities of the Company other than Junior Shares.
Any dividend payment made on a series of Preferred Shares shall first be
credited against the earliest accrued but unpaid dividend due with respect to
shares of such series which remains payable. No interest, or sum of money in
lieu of interest, shall be payable in respect of any dividend payment or
payments on Preferred Shares of such series which may be in arrears.
Redemption
A series of Preferred Shares 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. Preferred Shares redeemed by the Company will be
restored to the status of authorized but unissued Preferred Shares of the
Company.
The Prospectus Supplement relating to a series of Preferred Shares that is
subject to mandatory redemption will specify the number of shares of such
Preferred Shares that shall be redeemed by the Company in each year commencing
after a date to be specified, at a redemption
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price per share to be specified, together with an amount equal to all accrued
and unpaid dividends thereon (which shall not, if such Preferred Shares do not
have a cumulative dividend, include any accumulation in respect of unpaid
dividends for prior dividend periods) to the date of redemption. The redemption
price may be payable in cash or other property, as specified in the applicable
Prospectus Supplement. If the redemption price for Preferred Shares of any
series is payable only from the net proceeds of the issuance of shares of
beneficial interest of the Company, the terms of such Preferred Shares may
provide that, if no such shares shall have been issued or to the extent the net
proceeds from any issuance are insufficient to pay in full the aggregate
redemption price then due, such Preferred Shares shall automatically and
mandatorily be converted into shares of the applicable shares of beneficial
interest of the Company pursuant to conversion provisions specified in the
applicable Prospectus Supplement.
So long as any dividends on shares of any series of the Preferred Shares or
any other series of Preferred Shares of the Company ranking on a parity as to
dividends and distribution of assets with such series of the Preferred Shares
are in arrears, no shares of any such series of the Preferred Shares or such
other series of Preferred Shares 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
the Preferred Shares 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 Preferred Shares 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 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 Shares, the holders of each series of Preferred Shares
shall be entitled to receive, out of assets of the Company legally available for
distribution to shareholders, liquidating distributions in the amount of the
liquidation preference per share (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 series of Preferred Shares 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 Shares will
have no right or claim to any of the remaining assets of the Company. In the
event that, upon any such voluntary or involuntary liquidation, dissolution or
winding up, the available assets of the Company are
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insufficient to pay the amount of the liquidating distributions on all
outstanding Preferred Shares and the corresponding amounts payable on all shares
of other classes or series of shares of beneficial interest of the Company
ranking on a parity with the Preferred Shares in the distribution of assets,
then the holders of the Preferred Shares and all other such classes or series of
shares of beneficial interest shall share ratably in any such distribution of
assets in proportion to the full liquidating distributions to which they would
otherwise respectively be entitled.
If liquidating distributions shall have been made in full to all holders of
Preferred Shares, the remaining assets of the Company shall be distributed among
the holders of Junior Shares, 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 property 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 the Preferred Shares, or except as required by applicable
law, holders of the Preferred Shares will not be entitled to vote for any
purpose.
So long as any series of Preferred Shares remain outstanding, the consent
or the affirmative vote of the holders of at least 66-2/3% of the votes entitled
to be cast with respect to the then outstanding shares of such series of the
Preferred Shares together with any Other Preferred Shares (as defined below),
voting as one class, either expressed in writing or at a meeting called for that
purpose, will be necessary (i) to permit, effect or validate the authorization,
or any increase in the authorized amount, of any class or series of shares of
the Company ranking prior to the Preferred Shares of such series as to
dividends, voting or upon distribution of assets; and (ii) to repeal, amend or
otherwise change any of the provisions applicable to the Preferred Shares of
such series in any manner which adversely affects the powers, preferences,
voting power or other rights or privileges of such series of the Preferred
Shares. In case any series of the Preferred Shares would be so affected by any
such action referred to in clause (ii) above in a different manner than one or
more series of the Other Preferred Shares which will be similarly affected, the
holders of the Preferred Shares of such series, together with any series of the
Other Preferred Shares which will be similarly affected, will be entitled to
vote as a class, and the Company will not take such action without the consent
or affirmative vote, as above provided, of at least 66-2/3% of the total number
of votes entitled to be cast with respect to each such series of the Preferred
Shares and the Other Preferred Shares, then outstanding, in lieu of the consent
or affirmative vote hereinabove otherwise required.
With respect to any matter as to which the Preferred Shares of any series
are entitled to vote, holders of the Preferred Shares of such series and any
other series of Preferred Shares of the Company ranking on a parity with such
series of the Preferred Shares as to dividends and distributions of assets and
which by its terms provides for similar voting rights (the "Other Preferred
Shares") will be entitled to cast the number of votes set forth in the
Prospectus
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Supplement with respect to that series of Preferred Shares. As a result of the
provisions described in the preceding paragraph requiring the holders of shares
of a series of the Preferred Shares to vote together as a class with the holders
of shares of one or more series of Other Preferred Shares, it is possible that
the holders of such shares of Other Preferred Shares could approve action that
would adversely affect such series of Preferred Shares, including the creation
of a class of shares of beneficial interest ranking prior to such series of
Preferred Shares as to dividends, voting or distributions of assets.
Conversion Rights
The terms and conditions, if any, upon which shares of any series of
Preferred Shares are convertible into Common Shares will be set forth in the
applicable Prospectus Supplement relating thereto. Such terms will include the
number of shares of Common Shares into which the Preferred Shares are
convertible, the conversion price (or manner of calculation thereof), the
conversion period, provisions as to whether conversion will be at the option of
the holders of the Preferred Shares or the Company, the events requiring an
adjustment of the conversion price and provisions affecting conversion.
Restrictions on Ownership
See "Description of Common Shares--Restrictions on Transfer" for a
discussion of the restrictions on ownership of shares of beneficial interest
necessary for the Company to qualify as a REIT under the Code.
Transfer Agent and Registrar
The transfer agent and registrar for shares of each series of the Preferred
Shares will be set forth in the applicable Prospectus Supplement.
DESCRIPTION OF DEBT SECURITIES
The Senior Securities are to be issued under an Indenture, as amended or
supplemented from time to time (the "Senior Securities Indenture"), between the
Company and a trustee to be selected by the Company (the "Senior Securities
Trustee") and the Subordinated Securities are to be issued under an Indenture,
as amended or supplemented from time to time (the "Subordinated Securities
Indenture"), between the Company and a trustee to be selected by the Company
(the "Subordinated Securities Trustee"). The Senior Securities Indenture and
the Subordinated Securities Indenture are referred to herein individually as the
"Indenture" and collectively as the "Indentures," and the Senior Securities
Trustee and the Subordinated Securities Trustee are referred to herein
individually as the "Trustee" and collectively as the "Trustees." A form of the
Senior Securities Indenture and of the Subordinated Securities Indenture will be
filed as an exhibit to an amendment to the Registration Statement of which this
Prospectus is a part and will be available for inspection at the corporate trust
office of the Senior Securities Trustee and of the Subordinated Securities
Trustee, respectively, or as described above under
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"Available Information." The Indentures will be subject to, and governed by,
the Trust Indenture Act of 1939, as amended (the "TIA"). The descriptions of
the Indentures set forth below assume that the Company has entered into the
Indentures. The Company will execute the applicable Indenture when and if the
Company issues Debt Securities. The statements made hereunder relating to the
Indentures and the Debt Securities to be issued thereunder are summaries of
certain anticipated provisions thereof and do not purport to be complete and are
subject to, and are qualified in their entirety by reference to, all provisions
of the Indentures and such Debt Securities. Unless otherwise specified, all
section references appearing herein are to sections of the Indentures, and
capitalized terms used but not defined herein shall have the meanings set forth
in the Indentures.
Provisions Applicable to Both Senior Securities and Subordinated Securities
The Debt Securities will be direct, unsecured obligations of the Company.
Senior Securities will rank pari passu with certain other senior debt of the
Company that may be outstanding from time to time, and will rank senior to all
Subordinated Securities that may be outstanding from time to time. The
particular terms of the Debt Securities offered by a Prospectus Supplement will
be described in the applicable Prospectus Supplement, along with any applicable
modifications of or additions to the general terms of the Debt Securities as
described herein and in the applicable Indenture and any applicable federal
income tax considerations. Accordingly, for a description of the terms of any
series of Debt Securities, reference must be made to both the Prospectus
Supplement relating thereto and the description of the Debt Securities set forth
in this Prospectus.
Each Indenture provides that the Debt Securities may be issued without
limit as to aggregate principal amount (up to $200,000,000 in the aggregate), 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 Trust Managers or
as established in one or more indentures supplemental to the Indenture. All
Debt Securities of one series need not be issued at the same time and, unless
otherwise provided, a series may be reopened, without the consent of the holders
of the Debt Securities of such series, for issuances of additional Debt
Securities of such series.
Each Indenture provides that there may be more than one Trustee thereunder,
each with respect to one or more series of Debt Securities. Any Trustee under
either 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. Reference is made to the Prospectus
Supplement relating to the series of Debt Securities being offered for the
specific terms thereof, including:
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(i) the title of such Debt Securities;
(ii) the classification of such Debt Securities as Senior Securities or
Subordinated Securities;
(iii) the aggregate principal amount of such Debt Securities and any limit
on such aggregate principal amount;
(iv) the price (expressed as a percentage of the principal amount
thereof) at which such Debt Securities will be issued and, if other
than the principal amount thereof, the portion of the principal
amount thereof payable upon declaration of acceleration of the
maturity thereof, or (if applicable) the portion of the principal
amount of such Debt Securities which is convertible into Common
Shares or Preferred Shares or Debt Securities of another series, or
the method by which any such portion shall be determined;
(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 such interest will accrue, the Interest Payment Dates
on which any such interest will be payable, the Regular Record Dates
for such Interest Payment Dates, or the method by which such dates
shall be determined, the Persons to whom such interest shall be
payable, and the basis upon which interest shall be calculated if
other than that of a 360-day year of twelve 30-day months;
(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 Indenture may be served;
(ix) the period or periods within which, the price or prices at which and
the other 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 other
terms and conditions upon which such Debt Securities will
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be redeemed, repaid or purchased, as a whole or in part, pursuant
to such obligation;
(xi) if other than United States 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) whether such Debt Securities will be issued in the form of one or
more global securities and whether such global securities are to be
issuable in a temporary global form or a permanent global form and,
if in global form, the identity of the depositary for such Debt
Securities;
(xiv) any additions to, modifications of or deletions from the terms of
such Debt Securities with respect to the Events of Default or
covenants set forth in the Indenture and any change in the right of
any Trustee or any of the holders to declare the principal amount
of any of such Debt Securities due and payable;
(xv) whether such Debt Securities will be issued in certificated or
book-entry form and, if in the book-entry form, the identity of the
depositary for such Debt Securities;
(xvi) whether such Debt Securities will be in registered or bearer form
and, if in registered form, the denominations thereof if other than
$1,000 and any integral multiple thereof and, if in bearer form,
the denominations thereof and terms and conditions relating
thereto;
(xvii) the applicability, if any, of the defeasance and covenant
defeasance provisions of the Indenture;
(xviii) if such Debt Securities are to be issued upon the exercise of Debt
Securities Warrants, the time, manner and place for such Debt
Securities to be authenticated and delivered;
(xix) the terms, if any, upon which Debt Securities may be convertible
into Common Shares, Preferred Shares or Debt Securities of another
series of the Company and the terms and conditions upon which such
conversion will be effected, including, without limitation, the
initial conversion price or rate and the conversion period;
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(xx) if convertible, in connection with the preservation of the Company's
status as a REIT, any applicable limitations on the ownership or
transferability of the Common Shares or Preferred Shares into which
such Debt Securities are convertible;
(xxi) whether and under what circumstances the Company will pay Additional
Amounts as contemplated in the Indenture on such Debt Securities in
respect of any tax, assessment or governmental charge and, if so,
whether the Company will have the option to redeem such Debt
Securities in lieu of making such payment; and
(xxii) any other terms of such Debt Securities not inconsistent with the
provisions of the Indenture.
If so provided in the applicable Prospectus Supplement, the Debt Securities
may be issued at a discount below their principal amount and provide for less
than the entire principal amount thereof to be payable upon declaration of
acceleration of the maturity thereof or bear no interest or bear interest at a
rate which at the time of issuance is below market rates ("Original Issue
Discount Securities"). Special Federal income tax, accounting and other
considerations applicable to Original Issue Discount Securities will be
described in the applicable Prospectus Supplement.
Except as set forth below under "Certain Covenants--Limitations on
Incurrence of Debt," the Indentures do not contain any other provisions that
would limit the ability of the Company to incur indebtedness or that would
afford holders of Debt Securities protection in the event of a highly leveraged
or similar transaction involving the Company or in the event of a change of
control. However, restrictions on ownership and transfers of the Common Shares
and Preferred Shares are designed to preserve its status as a REIT and,
therefore, may act to prevent or hinder a change of control. See "--
Restrictions on Transfer." Reference is made to the applicable Prospectus
Supplement for information with respect to any deletions from, modifications of
or additions to the Events of Default or covenants of the Company that are
described below, including any addition of a covenant or other provision
providing event risk or similar protection.
Denominations, Interest, Registration and Transfer
Unless otherwise described in the applicable Prospectus Supplement, the
Debt Securities of any series will be issuable in denominations of $1,000 and
integral multiples thereof.
Unless otherwise specified in the applicable Prospectus Supplement, the
principal of (and premium, if any) and interest on any series of Debt Securities
will be payable at the corporate trust office of the Trustee, provided that, at
the option of the Company, payment of interest may be made by check mailed to
the address of the Person entitled thereto as it appears in the Security
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
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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 be paid at any time in any other lawful manner, all as more
completely described in the Indenture.
Subject to certain limitations imposed upon Debt Securities issued in book-
entry form, the Debt Securities of any series will be exchangeable for other
Debt Securities of the same series and of a like aggregate principal amount and
tenor of different authorized denominations upon surrender of such Debt
Securities at the corporate trust office of the Trustee. In addition, subject
to certain limitations imposed upon Debt Securities issued in book-entry form,
the Debt Securities of any series may be surrendered for conversion or
registration of transfer thereof at the corporate trust office of the 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 Company may require payment of a sum
sufficient to cover any tax or other governmental charge payable in connection
therewith. If the applicable Prospectus Supplement refers to any transfer agent
(in addition to the Trustee) initially designated by the Company with respect to
any series of Debt Securities, the Company may at any time rescind the
designation of any such transfer agent or approve a change in the location
through which any such transfer agent acts, except that the Company will be
required to maintain a transfer agent in each Place of Payment for such series.
The Company may at any time designate additional transfer agents with respect to
any series of Debt Securities.
Neither the Company nor the Trustee shall be required to (i) issue,
register the transfer of or exchange Debt Securities of any series during a
period beginning at the opening of business 15 days before any selection of Debt
Securities of that series to be redeemed and ending at the close of business on
the day of mailing of the relevant notice of redemption; (ii) register the
transfer of or exchange any Debt Security, or portion thereof, called for
redemption, except the unredeemed portion of any Debt Security being redeemed in
part; or (iii) issue, register the transfer of or exchange any Debt Security
which has been surrendered for repayment at the option of the holder, except the
portion, if any, of such Debt Security not to be so repaid.
Merger, Consolidation or Sale of Assets
The Indenture will provide that the Company, without the consent of the
Holders of any outstanding Debt Securities, may consolidate with, or sell, lease
or convey all or substantially all of its assets to, or merge with or into, any
other 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 on all of the Debt Securities and the due and
punctual performance and observance of all of the covenants and conditions
contained in the Indenture; (ii) immediately after giving effect to such
transaction and treating any indebtedness which becomes an obligation of the
Company or any
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Subsidiary as a result thereof as having been incurred by the Company or such
Subsidiary at the time of such transaction, no Event of Default under the
Indenture, and no event 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
Restrictions on Dividends and Other Distributions. The Indentures provide
-------------------------------------------------
that the Company will not (i) declare or pay any dividend or make any
distribution on its shares of beneficial interest or to holders of its shares of
beneficial interest (other than dividends or distributions payable in its shares
of beneficial interest or other than as the Company determines is necessary to
maintain its status as a REIT); or (ii) purchase, redeem or otherwise acquire or
retire for value any of its shares of beneficial interest, or any warrants,
rights or options or other securities to purchase or acquire any of its shares
of beneficial interest (other than the Debt Securities) or permit any Subsidiary
to do so, if at the time of such action an Event of Default has occurred and is
continuing or would exist immediately after giving effect to such action.
Existence. Except as permitted under "--Merger, Consolidation or Sale of
---------
Assets," the Company will do or cause to be done all things necessary to
preserve and keep in full force and effect its corporate existence, rights
(charter and statutory) and franchises; provided, however, that the Company
shall not be required to preserve any right or franchise if it determines that
the preservation thereof is no longer desirable in the conduct of its business
and that the loss thereof is not disadvantageous in any material respect to the
holders of the Debt Securities.
Maintenance of Properties. The Indentures provide that the Company will
-------------------------
cause all of its material properties used or useful in the conduct of its
business or the business of any Subsidiary to be maintained and kept in good
condition, repair and working order and supplied with all necessary equipment
and will cause to be made all necessary repairs, renewals, replacements and
improvements thereof, all as in the judgment of the Company may be necessary so
that the business carried on in connection therewith may be properly and
advantageously conducted at all times; provided, however, that the Company and
its Subsidiaries shall not be prevented from selling or otherwise disposing of
for value its properties in the ordinary course of business.
Insurance. The Indentures provide that the Company will, and will cause
---------
each of its Subsidiaries to, keep all of its insurable properties insured
against loss or damage in accordance with industry practices and with insurers
of recognized responsibility and of suitable financial stability.
Payment of Taxes and Other Claims. The Indentures provide that the Company
---------------------------------
will pay or discharge or cause to be paid or discharged, before the same shall
become delinquent, (i) all taxes, assessments and governmental charges levied or
imposed upon it or any Subsidiary or upon the income, profits or property of the
Company or any Subsidiary; and (ii) all lawful claims for labor, materials and
supplies which, if unpaid, might by law become a lien upon the property of
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the Company or any Subsidiary; provided, however, that the Company shall not be
required to pay or discharge or cause to be paid or discharged any such tax,
assessment, charge or claim whose amount, applicability or validity is being
contested in good faith by appropriate proceedings.
Provision of Financial Information. The Indentures provide that, whether
----------------------------------
or not the Company is subject to Section 13 or 15(d) of the Securities Exchange
Act of 1934, as amended (the "Exchange Act") the Company will, to the extent
permitted under the Exchange Act, file with the Securities and Exchange
Commission (the "Commission") the annual reports, quarterly reports and other
documents which the Company would have been required to file with the Commission
pursuant to such Section 13 or 15(d) (the "Financial Statements") if the Company
were so subject, such documents to be filed with the Commission on or prior to
the respective dates (the "Required Filing Dates") by which the Company would
have been required so to file such documents if the Company were so subject.
The Company also will in any event (i) within 15 days of each Required Filing
Date file with the Trustee copies of the annual reports, quarterly reports and
other documents which the Company would have been required to file with the
Commission pursuant to Section 13 or 15(d) of the Exchange Act if the Company
were subject to such Sections; and (ii) if filing such documents by the Company
with the Commission is not permitted under the Exchange Act, promptly upon
written request and payment of the reasonable cost of duplication and delivery,
supply copies of such documents to any prospective Holder.
Additional Covenants. Any additional covenants of the Company with respect
--------------------
to any series of Debt Securities will be set forth in the Prospectus Supplement
relating thereto.
Events of Default, Notice and Waiver
The Indentures provide that the following events are "Events of Default"
with respect to any series of Debt Securities issued thereunder: (i) default for
30 days in the payment of any installment of interest on any Debt Security of
such series; (ii) default in the payment of 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 Indenture (other than a covenant added to the Indenture solely
for the benefit of a series of Debt Securities issued thereunder other than such
series), continued for 60 days after written notice as provided in the
Indenture; (v) default in the payment of an aggregate principal amount exceeding
$5,000,000 of any evidence of indebtedness of the Company or any mortgage,
indenture or other instrument under which such indebtedness is issued or by
which such indebtedness is secured, such default having occurred after the
expiration of any applicable grace period and having resulted in the
acceleration of the maturity of such indebtedness, but only if such indebtedness
is not discharged or such acceleration is not rescinded or annulled; (vi)
certain events of bankruptcy, insolvency or reorganization, or court appointment
of a receiver, liquidator or trustee of the Company or for substantially all of
its properties; and (vii) any other Event of Default provided with respect to a
particular series of Debt Securities.
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If an Event of Default under the applicable Indenture with respect to Debt
Securities of any series at the time Outstanding occurs and is continuing, then
in every such case the Trustee or the Holders of not less than 25% in principal
amount of the Outstanding Debt Securities of that series may declare the
principal amount (or, if the Debt Securities of 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 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 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 Trustee all
required payments of the principal of (and premium, if any) and interest on the
Debt Securities of such series (or of all Debt Securities then Outstanding under
the applicable Indenture, as the case may be), plus certain fees, expenses,
disbursements and advances of the Trustee and (ii) all Events of Default, other
than the non-payment of accelerated principal (or specified portion thereof),
with respect to Debt Securities of such series (or 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. The Indentures 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
(a) in the payment of the principal of (or premium, if any) or interest on any
Debt Security of such series or (b) in respect of a covenant or provision
contained in the applicable Indenture that cannot be modified or amended without
the consent of the Holder of each outstanding Debt Security affected thereby.
The Trustee is required to give notice to the holders of Debt Securities
within 90 days of a default under the applicable Indenture; provided, however,
that the Trustee may withhold notice to the Holders of any series of Debt
Securities of any default with respect to such series (except a default in the
payment of the principal of (or premium, if any) or interest on any Debt
Security of such series or in the payment of any sinking fund installment in
respect of any Debt Security of such series) if the Responsible Officers of the
Trustee consider such withholding to be in the interest of such Holders.
The Indentures provide that no holders of Debt Securities of any series may
institute any proceedings, judicial or otherwise, with respect to the Indenture
or for any remedy thereunder, except in the case of failure of the Trustee, for
60 days, to act after it has received a written request to institute proceedings
in respect of an Event of Default from the holders of not less than 25% in
principal amount of the Outstanding Debt Securities of such series, as well as
an offer of reasonable indemnity. This provision will not prevent, however, any
Holder of Debt Securities from instituting suit for the enforcement of payment
of the principal of (and premium, if any) and interest on such Debt Securities
at the respective due dates thereof.
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Subject to provisions in the Indentures relating to its duties in case of
default, the Trustee is under no obligation to exercise any of its rights or
powers under the Indenture at the request or direction of any Holders of any
series of Debt Securities then outstanding under the Indenture, unless such
Holders shall have offered to the Trustee reasonable security or indemnity. The
Holders of not less than a majority in principal amount of the Outstanding Debt
Securities of any series (or of all Debt Securities then Outstanding under the
Indenture, as the case may be) shall have the right to direct the time, method
and place of conducting any proceeding for any remedy available to the Trustee,
or of exercising any trust or power conferred upon the Trustee. However, the
Trustee may refuse to follow any direction which is in conflict with any law or
the Indenture, which may involve the Trustee in personal liability or which may
be unduly prejudicial to the holders of Debt Securities of such series not
joining therein.
Within 120 days after the close of each fiscal year, the Company must
deliver to the Trustee a certificate, signed by one of several specified
officers, stating whether or not such officer has knowledge of any default under
the Indenture and, if so, specifying each such default and the nature and status
thereof.
Modification of the Indenture
Modifications and amendments of the applicable Indenture may be made only
with the consent of the Holders of not less than a majority in principal amount
of all outstanding Debt Securities which are affected by such modification or
amendment; provided, however, that no such modification or amendment may,
without the consent of the Holder of each such Debt Security affected thereby,
(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
Indenture, to waive compliance with certain provisions thereof or certain
defaults and consequences thereunder or to reduce the quorum or voting
requirements set forth in the Indenture; or (vi) modify any of the foregoing
provisions or any of the provisions relating to the waiver of certain past
defaults or certain covenants, except to increase the required percentage to
effect such action or to provide that certain other provisions may not be
modified or waived without the consent of the holder of such Debt Security.
The holders of not less than a majority in principal amount of each series
of Outstanding Debt Securities have the right, on behalf of all holders of Debt
Securities of that series, to waive compliance by the Company with certain
covenants in the Indenture with respect to such series.
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Modifications and amendments of the applicable Indenture may be made by the
Company and the Trustee without the consent of any holder of Debt Securities for
any of the following purposes: (i) to evidence the succession of another person
to the Company as obligor under the Indenture; (ii) to add to the covenants of
the Company for the benefit of the Holders of all or any series of Debt
Securities or to surrender any right or power conferred upon the Company in the
Indenture; (iii) to add Events of Default for the benefit of the Holders of all
or any series of Debt Securities; (iv) to add or change any provisions of the
applicable Indenture to facilitate the issuance of, or to liberalize certain
terms of, Debt Securities in bearer form, or to permit or facilitate the
issuance of Debt Securities in uncertificated form, provided that such action
shall not adversely affect the interest of the holders of the Debt Securities of
any series in any material respect; (v) to change or eliminate any provisions of
the applicable 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 Shares or
Preferred Shares of the Company; (viii) to provide for the acceptance of
appointment by a successor Trustee or facilitate the administration of the
trusts under the Indenture by more than one Trustee; (ix) to cure any ambiguity,
correct or supplement any provision which may be defective or inconsistent or
make any other provisions with respect to matters or questions arising under the
applicable Indenture, provided that such action shall not adversely affect the
interests of Holders of Debt Securities of any series in any material respect;
(x) to supplement any of the provisions of the Indenture to the extent necessary
to permit or facilitate defeasance and discharge of any series of such Debt
Securities, provided that such action shall not adversely affect the interests
of the Holders of the Debt Securities of any series in any material respect or
(xi) to comply with the TIA.
The Indentures 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 United States 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 United States dollar equivalent on the
issue date of such Debt Security of the amount determined as provided in (i)
above); (iii) the principal amount of an Indexed Security that shall be deemed
outstanding shall be the principal face amount of such Indexed Security at
original issuance, unless otherwise provided with respect to such Indexed
Security pursuant to the Indenture; and (iv) Debt Securities owned by the
Company or any other obligor upon the Debt Securities or any Affiliate of the
Company or of such other obligor shall be disregarded.
The Indentures contain provisions for convening meetings of the holders of
Debt Securities of a series. A meeting may be called at any time by the
Trustee, and also, upon request, by the Company or the holders of at least 10%
in principal amount of the Outstanding
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Debt Securities of such series, in any such case upon notice given as provided
in the applicable 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 of that
series. Any resolution passed or decision taken at any meeting of holders of
Debt Securities of any series duly held in accordance with the 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, if any action is to be taken at a
meeting of holders of Debt Securities of any series with respect to any request,
demand, authorization, direction, notice, consent, waiver or other action that
the applicable Indenture expressly provides may be made, given or taken by the
holders of a specified percentage in principal amount of all Outstanding Debt
Securities affected thereby, or of the holders of such series and one or more
additional series: (i) there shall be no minimum quorum requirement for such
meeting; and (ii) the principal amount of the Outstanding Debt Securities of
such series that vote in favor of such request, demand, authorization,
direction, notice, consent, waiver or other action shall be taken into account
in determining whether such request, demand, authorization, direction, notice,
consent, waiver or other action has been made, given or taken under the
Indenture.
Discharge, Defeasance and Covenant Defeasance
Unless otherwise indicated in the applicable Prospectus Supplement, the
Company may discharge certain obligations to holders of any series of Debt
Securities that have not already been delivered to the Trustee for cancellation
and that either have become due and payable or will become due and payable
within one year (or scheduled for redemption within one year) by irrevocably
depositing with the Trustee, in trust, funds in such currency or currencies,
currency unit or units or composite currency or currencies in which such Debt
Securities are payable in an amount sufficient to pay the entire indebtedness on
such Debt Securities in respect of principal (and premium, if any) and interest
to the date of such deposit (if such Debt Securities have become due and
payable) or to the Stated Maturity or Redemption Date, as the case may be.
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The Indentures provide that, if the provisions of the applicable Indenture
relating to defeasance are made applicable to the Debt Securities of or within
any series pursuant to the 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 covenants of the applicable Indenture (being the
restrictions described under "-- Certain Covenants") or, if provided pursuant to
the applicable 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 Trustee, in trust, of an amount, in such currency or currencies, currency
unit or units or composite currency or currencies in which such Debt Securities
are payable at Stated Maturity, or Government Obligations (as defined below), or
both, applicable to such Debt Securities which through the scheduled payment of
principal and interest in accordance with their terms will provide money in an
amount sufficient to pay the principal of (and premium, if any) and interest on
such Debt Securities, and any mandatory sinking fund or analogous payments
thereon, on the scheduled due dates therefor.
Such a trust may be established only 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, and such Opinion of Counsel, in the case of defeasance, must refer to
and be based upon a ruling of the Internal Revenue Service or a change in
applicable Federal income tax law occurring after the date of the Indenture. In
the event of such defeasance, the holders of such Debt Securities would
thereafter be able to look only to such trust fund for payment of principal (and
premium, if any) and interest.
"Government Obligations" means securities which are (i) direct obligations
of the United States of America or the government which issued the Foreign
Currency in which the Debt Securities of a particular series are payable, for
the payment of which its full faith and credit is pledged or (ii) obligations of
a Person controlled or supervised by and acting as an agency or instrumentality
of the United States of America or such government which issued the Foreign
Currency in which the Debt Securities of such series are payable, the payment of
which is unconditionally guaranteed as a full faith and credit obligation by the
United States of America or such other government, which, in either case, are
not callable or redeemable at the option of the issuer thereof, and also shall
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
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holder of a depository receipt, provided that (except as required by law) such
custodian is not authorized to make any deduction from the amount payable to the
holder of such depository receipt from any amount received by the custodian in
respect of the Government Obligation or the specific payment of interest on or
principal of the Government Obligation evidenced by such depository receipt.
Unless otherwise provided in the applicable Prospectus Supplement, if after
the Company has deposited funds and/or Government Obligations to effect
defeasance or covenant defeasance with respect to Debt Securities of any series,
(i) the Holder of a Debt Security of such series is entitled to, and does, elect
pursuant to the Indenture or the terms of such Debt Security to receive payment
in a currency, currency unit or composite currency other than that in which such
deposit has been made in respect of such Debt Security, or (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 on such Debt Security as they become due out of
the proceeds yielded by converting the amount so deposited in respect of such
Debt Security into the currency, currency unit or composite currency in which
such Debt Security becomes payable as a result of such election or such
cessation of usage based on the applicable market exchange rate. "Conversion
Event" means the cessation of use of (a) a currency, currency unit or composite
currency both by the government of the country which issued such currency and
for the settlement of transactions by a central bank or other public
institutions of or within the international banking community, (b) the European
Currency Unit ("ECU") both within the European Monetary System and for the
settlement of transactions by public institutions of or within the European
Communities or (c) any currency unit or composite currency other than the ECU
for the purposes for which it was established. Unless otherwise provided in the
applicable Prospectus Supplement, all payments of principal of (and premium, if
any) and interest on any Debt Security that is payable in a Foreign Currency
that ceases to be used by its government of issuance shall be made in United
States 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" (which 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 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.
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The applicable Prospectus Supplement may further describe the provisions,
if any, permitting such defeasance or covenant defeasance, including any
modifications to the provisions described above, with respect to the Debt
Securities of or within a particular series.
Conversion Rights
The terms and conditions, if any, upon which the Debt Securities are
convertible into Common Shares, Preferred Shares or Debt Securities of another
series will be set forth in the applicable Prospectus Supplement relating
thereto. Such terms will include whether such Debt Securities are convertible
into Common Shares, Preferred Shares or Debt Securities of another series, the
conversion price (or manner of calculation thereof), the conversion period,
provisions as to whether conversion will be at the option of the Holders or the
Company, the events requiring an adjustment of the conversion price and
provisions affecting conversion in the event of the redemption of such Debt
Securities. To protect the Company's status as a REIT, a holder may not convert
any Debt Security, and such Debt Security shall not be convertible by any
holder, if as a result of such conversion any person would then be deemed to
own, directly or indirectly, more than 9.8% of the Company's shares of
beneficial interest.
Global Securities
The Debt Securities of a series may be issued in whole or in part in the
form of one or more fully registered global securities (the "Global Securities")
that will be deposited with, or on behalf of, a depositary (the "Depositary")
identified in the applicable Prospectus Supplement relating to such series.
Global Securities are expected to be deposited with The Depository Trust
Company, as Depositary. Global Securities may be issued in either registered or
bearer form and in either temporary or permanent form.
Unless and until it is exchanged in whole or in part for the individual
Debt Securities represented thereby, a Global Security may not be transferred
except as a whole by the Depositary for such Global Security to a nominee of
such Depositary or by a nominee of such Depositary to such Depositary or another
nominee of such Depositary or by the Depositary or any nominee of such
Depositary to a successor Depositary or any nominee of such successor.
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. Unless otherwise indicated in the applicable
Prospectus Supplement, the Company anticipates that the following provisions
will apply to depositary arrangements.
Upon the issuance of a Global Security, the Depositary for such Global
Security or its nominee will credit on its book-entry registration and transfer
system the respective principal amounts of the individual Debt Securities
represented by such Global Security to the accounts of persons that have
accounts with such Depositary ("Participants"). Such accounts shall be
designated by the underwriters, dealers or agents with respect to such Debt
Securities or by the Company if such Debt Securities are offered and sold
directly by the Company. Ownership of beneficial interests in a Global Security
will be limited to Participants or persons that may hold
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interests through Participants. Ownership of beneficial interests in such
Global Security will be shown on, and the transfer of that ownership will be
effected only through, records maintained by the applicable Depositary or its
nominee (with respect to beneficial interests of Participants) and records of
Participants (with respect to beneficial interests of persons who hold through
Participants). The laws of some states require that certain purchasers of
securities take physical delivery of such securities in definitive form. Such
limits and laws may impair the ability to own, pledge or transfer beneficial
interest in a Global Security.
So long as the Depositary for a Global Security or its nominee is the
registered owner of such Global Security, such Depositary or such nominee, as
the case may be, will be considered the sole owner or holder of the Debt
Securities represented by such Global Security for all purposes under the
applicable Indenture. Except as provided below or in the applicable Prospectus
Supplement, owners of a beneficial interest in a Global Security will not be
entitled to have any of the individual Debt Securities of the series represented
by such Global Security registered in their names, will not receive or be
entitled to receive physical delivery of any such Debt Securities of such series
in definitive form and will not be considered the owners or holders thereof
under the applicable Indenture.
Payments of principal of, premium, if any, and any interest on, or any
Additional Amounts payable with respect to, individual Debt Securities
represented by a Global Security registered in the name of a Depositary or its
nominee will be made to the Depositary or its nominee, as the case may be, as
the registered owner of the Global Security representing such Debt Securities.
None of the Company, the Trustees, any Paying Agent or the Security Registrar
for such Debt Securities will have any responsibility or liability for any
aspect of the records relating to or payments made on account of beneficial
ownership interests in the Global Security for such Debt Securities or for
maintaining, supervising or reviewing any records relating to such beneficial
ownership interests.
The Company expects that the Depositary for a series of Debt Securities or
its nominee, upon receipt of any payment of principal, premium or interest in
respect of a permanent Global Security representing any of such Debt Securities,
will immediately credit Participants' accounts with payments in amounts
proportionate to their respective beneficial interests in the principal amount
of such Global Security for such Debt Securities as shown on the records of such
Depositary or its nominee. The Company also expects that payments by
Participants to owners of beneficial interests in such Global Security held
through such Participants will be governed by standing instructions and
customary practices, as is the case with securities held for the account of
customers in bearer form or registered in "street name." Such payments will be
the responsibility of such Participants.
If a Depositary for a series of Debt Securities is at any time unwilling,
unable or ineligible to continue as depositary and a successor depositary is not
appointed by the Company within 90 days, the Company will issue individual Debt
Securities of such series in exchange for the Global Security representing such
series of Debt Securities. In addition, the Company may, at any time and in its
sole discretion, subject to any limitations described in the applicable
Prospectus Supplement relating to such Debt Securities, determine not to have
any Debt Securities of such
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series represented by one or more Global Securities and, in such event, will
issue individual Debt Securities of such series in exchange for the Global
Security or Securities representing such series of Debt Securities. Individual
Debt Securities of such series so issued will be issued in denominations, unless
otherwise specified by the Company, of $1,000 and integral multiples thereof.
Payment
Unless otherwise specified in the applicable Prospectus Supplement, the
principal of (and applicable premium, if any) and interest on any series of Debt
Securities will be payable at the corporate trust office of the Trustee, the
address of which will be stated in the applicable Prospectus Supplement;
provided that, at the option of the Company, payment of interest may be made by
check mailed to the address of the person entitled thereto as it appears in the
applicable register for such Debt Securities or by wire transfer of funds to
such person at an account maintained within the United States.
All moneys paid by the Company to a paying agent or the Trustee for the
payment of the principal of or any premium or interest on any Debt Security
which remain unclaimed at the end of two years after such principal, premium or
interest has become due and payable will be repaid to the Company, and the
holder of such Debt Security thereafter may look only to the Company for payment
thereof.
No Personal Liability
No past, present or future trustee, officer, trust manager, employee or
shareholder, as such, of the Company or any successor thereof shall have any
liability for any obligations of the Company under the Debt Securities or the
applicable Indenture or for any claim based on, in respect of, or by reason of,
such obligations or their creation. Each Holder of Debt Securities by accepting
such Debt Securities waives and releases all such liability. The waiver and
release are part of the consideration for the issue of Debt Securities. Each
Holder of Debt Securities shall look solely to the assets of the Company for
satisfaction of any liability of the Company in respect of the applicable
Indenture or the Debt Securities and will not seek recourse or commence any
action against any of the trustees, officers, trust manager, employees or
shareholders of the Company or any of their personal assets for the performance
or payment of any obligation thereunder.
Provisions Applicable Solely To Subordinated Securities
General. Subordinated Securities will be issued under the Subordinated
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Securities Indenture and will rank pari passu with certain other subordinated
debt of the Company that may be outstanding from time to time and will rank
junior to all Senior Indebtedness (as defined below) of the Company (including
any Senior Securities) that may be outstanding from time to time.
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The term "Senior Indebtedness" will be defined in the Subordinated
Securities Indenture as indebtedness incurred by the Company for money borrowed
whether outstanding on the effective date of the Subordinated Securities
Indenture or thereafter, all deferrals, renewals or extensions of any such
indebtedness and all evidences of indebtedness issued in exchange for any such
indebtedness and guarantees by the Company of the foregoing items of
indebtedness for money borrowed by persons other than the Company, unless, in
any such case, such indebtedness or guarantee provides by its terms that it
shall not constitute Senior Indebtedness.
If Subordinated Securities are issued under the Subordinated Securities
Indenture, the aggregate principal amount of Senior Indebtedness outstanding as
of a recent date will be set forth in the Prospectus Supplement relating to the
Subordinated Securities. The Subordinated Securities Indenture does not
restrict the amount of Senior Indebtedness that the Company may incur.
Subordination. The payment of the principal of (and premium, if any) and
-------------
interest on the Subordinated Securities is expressly subordinated, to the extent
and in the manner set forth in the Subordinated Securities Indenture, in right
of payment to the prior payment in full of all Senior Indebtedness of the
Company.
Upon (i) any acceleration of the principal amount due on the Subordinated
Securities or (ii) any payment or distribution of assets of the Company of any
kind or character, whether in cash, property or securities, to creditors upon
any dissolution or winding-up or total or partial liquidation or reorganization
of the Company, whether voluntary or involuntary, or in bankruptcy, insolvency,
receivership or other proceedings, all principal and premium, if any, and
interest due upon all Senior Indebtedness will first be paid in full, or payment
thereof provided for in money or money's worth in accordance with its terms,
before any payment is made on account of the principal of, premium, if any, or
interest on the indebtedness evidenced by the Subordinated Securities, and upon
any such acceleration, dissolution or winding-up or liquidation or
reorganization, any payment or distribution of assets of the Company of any kind
or character, whether in cash, property or securities, to which the holders of
the Subordinated Securities would be entitled, except for the provisions of the
Subordinated Indenture, will (subject to the power of a court of competent
jurisdiction to make other equitable provision reflecting the rights conferred
by the provisions of the Subordinated Securities upon the Senior Indebtedness
and the holders thereof with respect to the Subordinated Securities and the
holders thereof by a lawful plan of reorganization under applicable bankruptcy
law) be paid by the Company or any receiver, trustee in bankruptcy, liquidating
trustee, agent or other person making such payment or distribution, or by the
holders of the Subordinated Securities if received by them, directly to the
holders of Senior Indebtedness (pro rata to each such holder on the basis of the
respective amounts of Senior Indebtedness held by such holder) or their
representatives, to the extent necessary to pay all Senior Indebtedness
(including interest thereon) in full, in money or money's worth, after giving
effect to any concurrent payments or distribution to or for the holders of
Senior Indebtedness, before any payment or distribution is made to the holders
of the indebtedness evidenced by the Subordinated Securities. The consolidation
of the Company with or the merger of the Company into another Person or the
liquidation or dissolution of the Company following the conveyance or transfer
of its property as an entirety, or substantially as
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an entirety, to another Person upon the terms and conditions provided in the
Subordinated Securities Indenture will not be deemed a dissolution, winding-up,
liquidation or reorganization for these purposes.
In the event that any payment or distribution of assets of the Company of
any kind or character not permitted by the foregoing provisions, whether in
cash, property or securities, will be received by the holders of Subordinated
Securities before all Senior Indebtedness is paid in full, or provision made for
such payment, in accordance with its terms, such payment or distribution will be
held in trust for the benefit of, and shall be paid over or delivered to, the
holders of such Senior Indebtedness or their representative or representatives,
or to the trustee or trustees under any indenture pursuant to which any
instruments evidencing any of such Senior Indebtedness may have been issued, as
their respective interests may appear, for application to the payment of all
Senior Indebtedness remaining unpaid to the extent necessary to pay all such
Senior Indebtedness in full in accordance with its terms, after giving effect to
any concurrent payment or distribution to the holders of such Senior
Indebtedness.
No payment on account of principal of, premium, if any, sinking funds or
interest on the Subordinated Securities will be made unless full payment of
amounts then due for principal, premium, if any, sinking funds and interest on
any Senior Indebtedness has been made or duly provided for in money or money's
worth in accordance with the terms of such Senior Indebtedness. No payment on
account of principal, premium, if any, sinking funds or interest on the
Subordinated Securities will be made if, at the time of such payment or
immediately after giving effect thereto, (i) there shall exist a default in the
payment of principal, premium, if any, sinking fund or interest with respect to
any Senior Indebtedness or (ii) there shall have occurred an event of default
(other than a default in the payment of principal, premium, if any, sinking
funds or interest) with respect to any Senior Indebtedness, as defined therein
or in the instrument under which the same is outstanding, permitting the holders
thereof to accelerate the maturity thereof, and such event of default shall not
have been cured or waived or shall not have ceased to exist.
Subrogation. From and after the payment in full of all Senior
-----------
Indebtedness, the holders of the Subordinated Securities (together with the
holders of any other indebtedness of the Company which is subordinate in right
of payment to the payment in full of all Senior Indebtedness, which is not
subordinate in right of payment to the Subordinated Securities and which by its
terms grants such right of subrogation to the holder thereof) shall be
subrogated to the rights of the holders of Senior Indebtedness to receive
payments or distributions of assets or securities of the Company applicable to
the Senior Indebtedness until the Subordinated Securities shall be paid in full,
and, for the purposes of such subrogation, no such payments or distributions to
the holders of Senior Indebtedness of assets or securities, which otherwise
would have been payable or distributable to holders of the Subordinated
Securities, shall, as between the Company, its creditors other than the holders
of Senior Indebtedness, and the holders of the Subordinated Securities, be
deemed to be a payment by the Company to or on account of the Senior
Indebtedness, it being understood that these provisions of the Subordinated
Securities Indenture are and are intended solely for the purpose of defining the
relative rights of the holders of the Subordinated Securities, on the one hand,
and the holders of the Senior Indebtedness, on the other
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<PAGE>
hand, and nothing contained in the Subordinated Securities Indenture is intended
to or shall impair as between the Company, its creditors other than the holders
of Senior Indebtedness, and the holders of the Subordinated Securities, the
obligation of the Company, which is unconditional and absolute, to pay to the
holders of the Subordinated Securities the principal of, premium, if any, and
interest on the Subordinated Securities as and when the same shall become due
and payable in accordance with their terms, or to affect the relative rights of
the holders of the Subordinated Securities and creditors of the Company other
than the holders of the Senior Indebtedness, nor shall anything therein prevent
the Holder of any Subordinated Security from exercising all remedies otherwise
permitted by applicable law upon default under such Security subject to the
rights of the holders of Senior Indebtedness to receive cash, property or
securities of the Company otherwise payable or deliverable to the holders of the
Subordinated Securities or to a representative of such holders, on their behalf.
DESCRIPTION OF SECURITIES WARRANTS
General
The Company may issue Securities Warrants for the purchase of Debt
Securities, Preferred Shares or Common Shares. 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 shareholders 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
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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 Shares or
Common Shares, 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 for Preferred Shares, the designation,
aggregate number and terms of the series of Preferred Shares purchasable upon
exercise of such Securities Warrants; (v) the designation and terms of any
series of Preferred Shares with which such Securities Warrants are being offered
and the number of such Securities Warrants being offered with such Preferred
Shares; (vi) the date, if any, on and after which such Securities Warrants and
the related series of Preferred Shares or Common Shares 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 Securities 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 Shares or Common Shares, holders of such Securities Warrants
will not have any rights of holders of such Preferred Shares or Common Shares,
including the right to receive payments of dividends, if any, on such Preferred
Shares or Common Shares, 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 Shares or
Common Shares, 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.
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<PAGE>
Securities Warrants may be exercised by delivering to the Securities
Warrant Agent payment as provided in the applicable Prospectus Supplement of the
amount required to purchase the Debt Securities, Preferred Shares or Common
Shares, 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 Securities
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 Shares or Common Shares, 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 Shares covered by, a
Common Shares Warrant are subject to adjustment in certain events, including (i)
payment of a dividend on the Common Shares payable in shares of beneficial
interest and share splits, combinations or reclassification of the Common
Shares; (ii) issuance to all holders of Common Shares of rights or warrants to
subscribe for or purchase shares of Common Shares at less than their current
market price (as defined in the Warrant Agreement for such series of Common
Shares 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 retained earnings or dividends payable in
Common Shares) 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 Shares covered by, a
Common Shares Warrant will not be adjusted for the issuance of Common Shares or
any securities convertible into or exchangeable for Common Shares, 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 Shares covered by, a Common Shares 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 or retained earnings.
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<PAGE>
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 Shares); (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 Shares (other than solely a change in par
value or from par value to no par value), then any holder of a Common Shares
Warrant will be entitled, on or after the occurrence of any such event, to
receive on exercise of such Common Shares Warrant the kind and amount of shares
of beneficial interest 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 Shares Warrant immediately prior to the
occurrence of such event. If the consideration to be received upon exercise of
the Common Shares 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 Shares Warrant will be subject to the same anti-
dilution and other adjustments described in the second preceding paragraph,
applied as if such common shares were Common Shares.
RATIO OF EARNINGS TO FIXED CHARGES
The ratios of earnings to fixed charges for the six months ended June 30,
1996 and each of the last five fiscal years for the Company (including its
predecessors in interest) are presented below. The ratio of earnings to fixed
charges for the Company is computed by dividing earnings by fixed charges. To
date, the Company has not issued any Preferred Shares; therefore, the ratios of
earnings to combined fixed charges and preferred share dividends are the same as
the ratios of earnings to fixed charges presented below.
For purposes of computing this ratio, earnings have been calculated by
adding fixed charges to net income (loss). Fixed charges include interest on
indebtedness, capitalized interest and amortization of loan costs.
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<PAGE>
<TABLE>
<CAPTION>
Columbus Realty Trust Columbus Predecessors
---------------------------------------------------------------------------------------------
Three Months Year Year December 29 January 1
Ended Ended Ended to to
March 31, December 31, December 31, December 31, December 28, Year Ended December 31,
-----------------------
1996 1995 1994 1993 1993 1992 1991
------------ ------------ ------------ ------------ ------------ --------- ----------
<S> <C> <C> <C> <C> <C> <C> <C>
Ratio of earnings to
fixed charges 1.38x 1.80x 2.83x 7.62x * .96x** *
Dollar amount of $(973) $(278)** $(1,514)
coverage deficiency
(in thousands)
</TABLE>
* Prior to the completion of the Company's initial public offering in December
1993 (the "IPO"), the Company's predecessors maintained different capital
structures from that which the Company maintains. Although the Company's
properties, while owned by the predecessors, historically generated positive
cash flow, the results of operations of the predecessors indicate net losses
for the period from January 1, 1993 through December 28, 1993, and for the
fiscal year ended December 31, 1991. The computation of the ratio of
earnings to fixed charges reflects that earnings were inadequate to cover
fixed charges by approximately $973,000 and $1,514,000, respectively, for
such periods. The proceeds from completion of the Company's IPO enabled the
Company to significantly deleverage its properties, resulting in improved
ratios of earnings to fixed charges for periods subsequent to the IPO.
** Although the Company's properties, while owned by the predecessors,
generated net income of $322,000 for the year ended December 31, 1992, the
computation of the ratio of earnings to fixed charges reflects interest
capitalized of $600,000, resulting in earnings that were inadequate to cover
fixed charges by approximately $278,000. The proceeds from completion of the
Company's IPO enabled the Company to significantly deleverage its
properties, resulting in improved ratios of earnings to fixed charges for
periods subsequent to the IPO.
FEDERAL INCOME TAX CONSIDERATIONS
The following discussion is a general summary of the Code provisions
governing the United States federal income tax treatment of a REIT and is not
tax advice. The discussion is based upon the Code, Treasury regulations, and
Internal Revenue Service ("IRS") rulings and judicial decisions now in effect,
all of which are subject to change at any time, possibly with retroactive
effect, by legislative, judicial or administrative action. The tax treatment of
a holder of any of the Offered Securities will vary depending upon the terms of
the specific securities acquired by such holder, as well as his particular
situation, and this discussion does not attempt to address any aspects of
Federal income taxation relating to holders of Offered Securities. Certain
Federal income tax consideration relevant to holders of the Offered Securities
will be provided in the applicable Prospectus Supplement relating thereto.
EACH INVESTOR IS ADVISED TO CONSULT THE APPLICABLE PROSPECTUS SUPPLEMENT,
AS WELL AS HIS OR HER OWN TAX ADVISOR, REGARDING THE TAX CONSEQUENCES OF THE
ACQUISITION, OWNERSHIP AND SALE OF THE OFFERED SECURITIES, INCLUDING THE
FEDERAL, STATE, LOCAL, FOREIGN AND OTHER TAX CONSEQUENCES OF SUCH ACQUISITION,
OWNERSHIP, AND SALE AND OF POTENTIAL CHANGES IN APPLICABLE TAX LAWS.
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<PAGE>
FEDERAL INCOME TAXATION OF THE COMPANY
General
The Company has elected to be taxed as a REIT under Sections 856 through
860 of the Code, commencing with its taxable year ended December 31, 1993. The
Company believes that, commencing with its taxable year ended December 31, 1993,
it was organized and operated in such a manner as to qualify for taxation as a
REIT under the Code, and the Company intends to continue to operate in such a
manner, but no assurance can be given that it will operate in a manner so as to
qualify or remain qualified.
Winstead Sechrest & Minick P.C. has opined that, commencing with
the Company's taxable year ended December 31, 1993, the Company was organized in
conformity with the requirements for qualification as a REIT, and its method of
operation enabled it to meet the requirements for qualification and taxation as
a REIT under the Code. It must be emphasized that this opinion was based on
various assumptions and was conditioned upon certain representations made by the
Company as to factual matters. Moreover, such qualification and taxation as a
REIT depends upon the Company's ability to meet, through actual annual operating
results, distribution levels, diversity of share ownership, and the various
other qualification tests imposed under the Code discussed below, the results of
which have not been and will not be reviewed by Winstead Sechrest & Minick P.C.
Accordingly, no assurance can be given that the actual results of the Company's
operation for any one taxable year will satisfy such requirements. See "--
Failure to Qualify as a Real Estate Investment Trust."
If the Company qualifies for tax treatment as a REIT, it will generally not
be subject to Federal corporate taxation on its net income to the extent
currently distributed to its shareholders. This substantially eliminates the
"double taxation" (at both the corporate and stockholder levels) that typically
results from the use of corporate investment vehicles.
The Company will be subject to Federal income tax, however, as follows:
First, the Company will be taxed at regular corporate rates on its undistributed
REIT taxable income, including undistributed net capital gains. Second, under
certain circumstances, the Company may be subject to the "alternative minimum
tax" to the extent that tax exceeds its regular tax. Third, if the Company has
net income from the sale or other disposition of "foreclosure property" that is
held primarily for sale to customers in the ordinary course of business or other
nonqualifying income from foreclosure property, it will be subject to tax at the
highest corporate rate on such income. Fourth, any net income that the Company
has from prohibited transactions (which are, in general, certain sales or other
dispositions of property other than foreclosure property held primarily for sale
to customers in the ordinary course of business) will be subject to a 100% tax.
Fifth, if the Company should fail to satisfy either the 75% or 95% gross income
tests (as discussed below), and has nonetheless maintained its qualification as
a REIT because certain other requirements have been met, it will be subject to a
100% tax on an amount equal to (a) the gross income attributable to the greater
of the amount by which the Company fails the 75% or 95% test, multiplied by (b)
a fraction intended to reflect the Company's profitability. Sixth, if the
Company fails to distribute during each year at least the sum of (i) 85% of its
REIT ordinary
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income for such year, (ii) 95% of its REIT capital gain net income for such
year, and (iii) any undistributed taxable income from preceding periods, the
Company will be subject to a 4% excise tax on the excess of such required
distribution over the amounts actually distributed. Seventh, if an election is
made pursuant to IRS Notice 88-19 and during the 10-year period commencing on
the first day of the first taxable year that the Company qualifies as a REIT,
the Company recognizes a gain from the disposition of an asset held by the
Company at the beginning of such period, or if during the 10-year period
commencing on the day on which an asset acquired by the Company from a C
corporation in a transaction in which the Company inherits the tax basis of the
asset from the C corporation, the Company recognizes a gain from the disposition
of such asset, then the Company will be subject to tax at the highest regular
corporate rate on the excess, if any, of the fair market value over the adjusted
basis of any such asset as of the beginning of the relevant period (the "Built-
In-Gain").
Requirements for Qualification
A REIT is defined in the Code as a corporation, trust or association: (1)
which is managed by one or more trustees or directors; (2) the beneficial
ownership of which is evidenced by transferable shares or by transferable
certificates of beneficial interest; (3) which would be taxable as a domestic
corporation, but for Sections 856 through 860 of the Code; (4) which is neither
a financial institution nor an insurance company subject to certain provisions
of the Code; (5) the beneficial ownership of which is held by 100 or more
persons; (6) not more than 50% in value of the outstanding stock of which is
owned during the last half of each taxable year, directly or indirectly, by or
for five or fewer individuals (as defined in the Code to include certain
entities) (the "Five or Fewer Requirement"); and (7) which meets certain income
and asset tests described below. Conditions (1) to (4), inclusive, must be met
during the entire taxable year and condition (5) must be met during at least 335
days of a taxable year of 12 months or during a proportionate part of a taxable
year of less than 12 months. However, conditions (5) and (6) will not apply
until after the first taxable year for which an election is made to be taxed as
REIT. For purposes of conditions (5) and (6), pension funds and certain other
tax-exempt entities are treated as individuals, subject to a "look-through"
exception in the case of condition (6).
The Company has satisfied the share ownership requirements set forth in (5)
and (6) above. In addition, the Company's Declaration of Trust provides
restrictions regarding the transfer of its Shares which are intended to assist
the Company in continuing to satisfy the shares ownership requirements described
in (5) and (6) above. Such transfer restrictions are described in "Description
of Common Shares of Beneficial Interest - Restrictions on Transfer."
Income Tests
There are three percentage tests relating to the sources of the Company's
gross income. First, at least 75% of the Company's gross income (excluding gross
income from certain sales of property held primarily for sale and from discharge
of indebtedness) must be directly or indirectly derived each taxable year from
investments relating to real property or mortgages on real property or certain
temporary investments. Second, at least 95% of the Company's gross income
(excluding gross income from certain sales of property held primarily for sale
and from
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<PAGE>
discharge of indebtedness) must be directly or indirectly derived each taxable
year from any of the sources qualifying for the 75% test and from dividends,
interest, and gain from the sale or disposition of stock or securities. Third,
in each taxable year short-term gains from sales of stock or securities, gains
from sales of property (other than foreclosure property) held primarily for sale
and gains from the sale or other taxable disposition of real property held for
less than four years (other than from involuntary conversions and foreclosure
property) must represent less than 30% of the Company's gross income. In
applying these tests, if the Company invests in a partnership, the Company will
be treated as realizing its share of the income and bearing its share of the
loss of the partnership, and the character of such income or loss, as well as
other partnership items, will be determined at the partnership level.
Rents received by the Company will qualify as "rents from real property"
for purposes of satisfying the gross income tests for a REIT only if several
conditions are met. First, the amount of rent must not be based in whole or in
part on the income or profits of any person, although rents generally will not
be excluded merely because they are based on a fixed percentage of receipts or
sales. None of the rents under the Company's existing leases are based on income
or profits of a kind that would disqualify such rents from being treated as
rents from real property. Second, rents received from a tenant will not qualify
as "rents from real property" if the REIT, or an owner of 10% or more of the
REIT, also directly or constructively owns 10% or more of such tenant. Third, if
rent attributable to personal property leased in connection with a lease of real
property is greater than 15% of the total rent received under the lease, then
the portion of rent attributable to such personal property will not qualify as
"rents from real property." Finally, for rents to qualify as "rents from real
property," the REIT generally must not operate or manage the property or furnish
or render services to the tenants of such property, other than through an
independent contractor from whom the REIT derives no income; provided, however,
the Company may directly perform certain services other than services which are
considered rendered to the occupant of the property. The Company will, in a
timely manner, hire independent contractors from whom it derives no revenue to
perform such services, except that the Company may directly perform services
under certain of its leases in the event it receives an opinion of counsel that
its performance of such services will not cause the rents received with respect
to such leases to fail to qualify as "rents from real property."
The term "interest" generally does not include any amount if the
determination of such amount depends in whole or in part on the income or
profits of any person, although an amount generally will not be excluded from
the term "interest" solely by reason of being based on a fixed percentage of
receipts or sales.
If the Company fails to satisfy one or both of the 75% or 95% gross income
tests for any taxable year, it may be nevertheless qualify as a REIT for such
year if it is eligible for relief under certain provisions of the Code. These
relief provisions will be generally available if the Company's failure to meet
such tests was due to reasonable cause and not due to willful neglect, the
Company attaches a schedule of the sources of its income to its return, and any
incorrect information on the schedule was not due to fraud with intent to evade
tax. It is not now possible to determine the circumstances under which the
Company may be entitled to the benefit of these relief provisions. If these
relief provisions apply, a 100% tax is imposed on the net income
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<PAGE>
attributable to the greater of the amount by which the Company failed the 75%
test or the 95% test.
Asset Test
At the close of each quarter of its taxable year, the Company must also
satisfy several tests relating to the nature and diversification of its assets.
First, at least 75% of the value of the Company's total assets must be
represented by real estate assets, cash, cash items (including receivables
arising in the ordinary course of the Company's operation) and government
securities. In addition, not more than 25% of the Company's total assets may be
represented by securities other than those includible in the 75% asset class.
Moreover, of the investments included in the 25% asset class, the value of any
one issuer's securities owned by the Company may not exceed 5% of the Company's
total assets. Finally, of the investments included in the 25% asset class, the
Company may not own more than 10% of any one issuer's outstanding voting
securities.
Annual Distribution Requirements
The Company, in order to avoid being taxed as a regular corporation, is
required to make distributions (other than capital gain distributions) to its
shareholders which qualify for the dividends paid deduction in an amount at
least equal to (A) the sum of (i) 95% of the Company's "REIT taxable income"
(computed without regard to the dividends paid deduction and the Company's net
capital gain) and (ii) 95% of the after-tax net income, if any, from foreclosure
property, minus (B) the sum of certain items of non-cash income. Such
distributions must be paid in the taxable year to which they relate, or in the
following taxable year if declared before the Company timely files its tax
return for such year and if paid on or before the first regular distribution
payment after such declaration. To the extent that the Company does not
distribute all of its net capital gain or distributes at least 95%, but less
than 100%, of its "REIT taxable income," as adjusted, it will be subject to tax
thereon at regular corporate tax rates. Finally, as discussed above, the Company
may be subject to an excise tax if it fails to meet certain other distribution
requirements.
It is possible that the Company, from time to time, may not have sufficient
cash or other liquid assets to meet the 95% distribution requirement, or to
distribute such greater amount as may be necessary to avoid income and excise
taxation, due to timing differences between (i) the actual receipt of income and
actual payment of deductible expenses and (ii) the inclusion of such income and
deduction of such expenses in arriving at taxable income of the Company. In the
event that such timing differences occur, the Company may find it necessary to
arrange for borrowings or, if possible, pay taxable share distributions in order
to meet the distribution requirement.
Under certain circumstances, if as a result of a deficiency determined by
the IRS, the Company may be able to rectify a resulting failure to meet the
distribution requirement for a year by paying "deficiency dividends" to
shareholders in a later year, which may be included in the Company's deduction
for distributions paid for the earlier year. Thus, although the Company may be
able to avoid being taxed on amounts distributed as deficiency distributions, it
will be
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required to pay interest based upon the amount of any deduction taken for
deficiency distributions.
Failure to Qualify as a Real Estate Investment Trust
The Company's election to be treated as a REIT will be automatically
terminated if the Company fails to meet the requirements described above. In
that event, the Company will be subject to tax (including any applicable minimum
tax) on its taxable income at regular corporate rates, and distributions to
shareholders will not be deductible by the Company. All distributions to
shareholders will be taxable as ordinary income to the extent of current and
accumulated earnings and profits and will be eligible for the 70% dividends
received deduction for corporate shareholders (although special rules apply in
the case of any "extraordinary dividend" as defined in Code Section 1059). The
Company will not be eligible again to elect REIT status until the fifth taxable
year which begins after the year for which the Company's election was terminated
unless the Company did not willfully fail to file a timely return with respect
to the termination taxable year, inclusion of incorrect information in such
return was not due to fraud with intent to evade tax, and the Company
establishes that failure to meet the requirement was due to reasonable cause and
not willful neglect. Failure to qualify for even one year could result in the
Company incurring substantial indebtedness (to the extent borrowings are
feasible) or liquidating substantial investments in order to pay the resulting
taxes.
FEDERAL INCOME TAXATION OF SHAREHOLDERS
General
So long as the Company qualifies for taxation as a REIT, distributions with
respect to the Common Shares made out of current or accumulated earnings and
profits (and not designated as capital gain dividends) will be includible by the
shareholders as ordinary income for Federal income tax purposes. For this
purpose, the current and accumulated earnings and profits of the Company will be
allocated first to distributions with respect to Convertible Preferred Shares
and then to distributions with respect to Common Shares. None of these
distributions will be eligible for the dividends received deduction for
corporate shareholders. Distributions that are designated as capital gain
dividends will be taxed as long-term capital gains (to the extent they do not
exceed the Company's actual net capital gain for the taxable year) without
regard to the period for which the shareholder has held his share. Corporate
shareholders, however, may be required to treat up to 20% of certain capital
gain dividends as ordinary income.
Distributions in excess of current or accumulated earnings and profits will
not be taxable to a shareholder to the extent that they do not exceed the
adjusted basis of the shareholder's Shares. Shareholders will be required to
reduce the tax basis of their Shares by the amount of such distributions until
such basis has been reduced to zero, after which such distributions will be
taxable as capital gain (ordinary income in the case of a shareholder who holds
his Shares as a dealer). The tax basis as so reduced will be used in computing
the capital gain or loss, if any, realized upon sale of the Shares. Any loss
upon a sale or exchange of Shares by a shareholder who held such Shares for six
months or less (after applying certain holding period rules) will
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generally be treated as a long-term capital loss to the extent such shareholder
previously received capital gain distributions with respect to such Shares.
In general, net capital gains of noncorporate shareholders are taxed at a
maximum rate of 28%, while short-term capital gains and ordinary income are
taxable at a maximum rate of 39.6%. In general, net capital gains, short-term
capital gains and ordinary income of corporate shareholders are taxed at a
maximum rate of 34% (35% for taxable income in excess of $10 million).
Shareholders may not include in their individual Federal income tax returns
any net operating losses or capital loss of the Company. In addition, any
distribution declared by the Company in October, November or December of any
year payable to a shareholder of record on a specified date in any such month
shall be treated as both paid by the Company and received by the shareholder on
December 31 of such year, provided that the dividend is actually paid by the
Company no later than January 31 of the following year. The Company may be
required to withhold a portion of capital gain distributions to any shareholders
who fail to certify their non-foreign status to the Company.
Upon the sale or exchange of Common Shares to or with a person other than
the Company, a holder will recognize capital gain or loss equal to the
difference between the amount realized on such sale or exchange and the holder's
adjusted tax basis in such shares. Any capital gain or loss recognized will
generally be treated as long-term capital gain or loss if the holder held such
shares for more than one year.
Backup Withholding and Information Reporting
A noncorporate holder of the Common Shares who is not otherwise exempt from
backup withholding may be subject to backup withholding at the rate of 31% with
respect to dividends paid on, or the proceeds of a sale, exchange or redemption
of, the Common Shares. Generally, backup withholding applies only when the
taxpayer (i) fails to furnish or certify his correct taxpayer identification
number to the payor in the manner requested, (ii) is notified by the IRS that he
has failed to report payments of interest or dividends properly, or (iii) under
certain circumstances, fails to certify that he has not been notified by the IRS
that he is subject to backup withholding for failure to report interest or
dividend payments. Any amounts withheld under the backup withholding rules from
a payment to a holder will be allowed as a credit against the holder's federal
income tax liability or as a refund, provided that the required information is
furnished to the IRS. Holders should consult their own tax advisors regarding
their qualification for exemption from backup withholding and the procedure for
obtaining any applicable exemption.
Foreign Shareholders
The rules governing United States Federal income taxation of nonresident
alien individuals, foreign corporations, foreign partnerships and other foreign
shareholders (collectively, "Non-U.S. Shareholders") are complex and no attempt
is made herein to provide more than a
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general summary of such rules. Prospective Non-U.S. Shareholders should consult
with their own tax advisors to determine the impact of Federal, state and local
income tax laws with regard to an investment in Shares, including any reporting
requirements, as well as the tax treatment of such an investment under their
home country laws.
Distributions that are not attributable to gain from sales or exchanges by
the Company of United States real property interests and not designated by the
Company as capital 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 distributions ordinarily will be subject to a
withholding tax equal to 30% of the gross amount of the distribution unless an
applicable tax treaty reduces or eliminates that tax. However, if income from
the investment in the Shares is treated as effectively connected with the Non-
U.S. Shareholder's conduct of a United States trade or business, the Non-U.S.
Shareholder generally will be subject to a tax at graduated rates, in the same
manner as U.S. Shareholders are taxed with respect to such dividends (and may
also be subject to the 30% branch profits tax in the case of a shareholder 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. Shareholder unless (i) a lower treaty rate applies and the Non-U.S.
Shareholder files an IRS Form 1001 with the Company claiming a lower treaty rate
or (ii) the Non-U.S. Shareholder files an IRS Form 4224 with the Company
claiming that the distribution is effectively connected income. Distributions in
excess of current and accumulated earnings and profits of the Company will not
be taxable to a shareholder to the extent that they do not exceed the adjusted
basis of the shareholder's Shares, but rather will reduce the adjusted basis of
such Shares. To the extent that such distributions exceed the adjusted basis of
a Non-U.S. Shareholder's Shares, they will give rise to tax liability if the
Non-U.S. Shareholder would otherwise be subject to tax on any gain from the sale
or disposition of his Shares in the Company, as described below. If it cannot be
determined at the time a distribution is made whether or not such distribution
will be in excess of current and accumulated earnings and profits, the
distributions will be subject to withholding at the same rate as dividends.
However, amounts thus withheld are refundable if it is subsequently determined
that such distribution, was, in fact, in excess of current and accumulated
earnings and profits of the Company.
For any year in which the Company qualifies as a REIT, distributions that
are attributable to gain from sales or exchanges by the Company of United States
real property interests will be taxed to a Non-U.S. Shareholder under the
provisions of the Foreign Investment in Real Property Tax Act of 1980
("FIRPTA"). Under FIRPTA, these distributions are taxed to a Non-U.S.
Shareholder as if such gain were effectively connected with a United States
business. Non-U.S. Shareholders would thus be taxed at the normal capital gains
rates applicable to U.S. shareholders (subject to applicable alternative minimum
tax and a special alternative minimum tax in the case of nonresident alien
individuals). Also, distributions subject to FIRPTA may be subject to a 30%
branch profits tax in the hands of a foreign corporate shareholder not entitled
to treaty exemption. The Company is required to withhold 35% of any distribution
that could be designated by the Company as a capital gain dividend. This amount
is creditable against the Non-U.S. Shareholder's FIRPTA tax liability.
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Gain recognized by a Non-U.S. Shareholder upon a sale of Shares generally
will not be taxed under FIRPTA if the Company is a "domestically controlled
REIT," defined generally as a REIT in which at all times during 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 that therefore the sale of Shares will
not be subject to taxation under FIRPTA. However, gain not subject to FIRPTA
will be taxable to a Non-U.S. Shareholder if (i) investment in the Shares is
effectively connected with the Non-U.S. Shareholder's United States trade or
business, in which case the Non-U.S. Shareholder will be subject to the same
treatment as U.S. shareholders with respect to such gain, or (ii) the Non-U.S.
Shareholder is a nonresident alien individual who was present in the United
States for 183 days or more during the taxable year and 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 gain on the sale of Shares
were to be subject to taxation under FIRPTA, the Non-U.S. Shareholder will be
subject to the same treatment as U.S. shareholders with respect to such gain
(subject to applicable alternative minimum tax and a special alternative minimum
tax in the case of nonresident alien individuals).
Tax-Exempt Shareholders
Dividends from the Company to a tax-exempt employee pension trust or other
domestic tax-exempt shareholder generally will not constitute "unrelated
business taxable income" ("UBTI") unless the shareholder has borrowed to acquire
or carry its Shares. Qualified trusts that hold more than 10% (by value) of the
shares of certain REITs, however, may be required to treat a certain percentage
of such a REIT's distributions as UBTI. This requirement will apply only if
(i) the REIT would not qualify as such for Federal income tax purposes but for
the application of a "look-through" exception to the Five or Fewer Requirement
applicable to shares held by qualified trusts and (ii) the REIT is
"predominantly held" by qualified trusts. A REIT is predominantly held by
qualified trusts if either (i) a single qualified trust holds more than 25% by
value of the interests in the REIT or (ii) one or more qualified trusts, each
owning more than 10% by value of the interests in the REIT, hold in the
aggregate more than 50% of the interests in the REIT. The percentage of any REIT
dividend treated as UBTI is equal to the ratio of (a) the UBTI earned by the
REIT (treating the REIT as it were a qualified trust and therefore subject to
tax on UBTI) to (b) the total gross income of the REIT. A de minimis exception
applies where the percentage is less than 5% for any year. For these purposes, a
qualified trust is any trust described in section 401(a) of the Code and exempt
from tax under section 501(a) of the Code. The provisions requiring qualified
trusts to treat a portion of REIT distributions as UBTI will not apply if the
REIT is able to satisfy the Five or Fewer Requirement without relying upon the
"look-through" exception.
Proposed Legislation
Various proposals are pending before the U.S. Congress to change the
federal income tax laws, including a proposal to lower the effective rate of tax
for individuals on capital gains. Prospective holders of Offered Securities
should consult their own tax advisors regarding any possible change in the tax
law.
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<PAGE>
State, Local and Foreign Taxation
The Company and its shareholders may be subject to state, local or foreign
taxation in various state, local or foreign jurisdictions, including those in
which it or they transact business or reside. Such state, local or foreign
taxation may differ from the Federal income tax treatment described above.
Consequently, prospective holders of Offered Securities should consult their own
tax advisors regarding the effect of state, local and foreign tax laws on an
investment in the Company.
PLAN OF DISTRIBUTION
The Company may sell the Offered Securities to one or more underwriters for
public offering and sale by them or may sell the Offered Securities to investors
directly or through agents in exchange for cash, real property or other
consideration as may be specified in the applicable Prospectus Supplement. Any
such underwriter or agent involved in the offer and sale of the Offered
Securities will be named in the applicable Prospectus Supplement. Direct sales
to investors also may be accomplished through subscription rights distributed on
a pro rata basis to the Company's shareholders, which may or may not be
transferable by such shareholders. In connection with any distribution of
subscription rights to shareholders, if all of the underlying Offered Securities
are not subscribed for, the Company may sell the unsubscribed Offered Securities
directly to third parties or may engage the services of one or more
underwriters, dealers or agents, including standby underwriters, to sell
unsubscribed Offered Securities to third parties.
Underwriters may offer and sell the Offered Securities at a fixed price or
prices, which may be changed, at prices related to the prevailing market prices
at the time of sale or at negotiated prices. The Company also may offer and sell
the Offered Securities in exchange for one or more of its then outstanding
issues of debt or convertible debt securities. The Company also may, from time
to time, authorize underwriters acting as the Company's agents to offer and sell
the Offered Securities upon such terms and conditions as are set forth in the
applicable Prospectus Supplement. In connection with the sale of Offered
Securities, underwriters may be deemed to have received compensation from the
Company in the form of underwriting discounts or commissions and also may
receive commissions from purchasers of Offered Securities for whom they may act
as agent. Underwriters may sell 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 agent.
Any underwriting compensation paid by the Company to underwriters or agents
in connection with the offering of Offered Securities, and any discounts,
concessions or commissions allowed by underwriters to participating dealers,
will be set forth in the applicable Prospectus Supplement. Underwriters, dealers
and agents participating in the distribution of the Offered Securities may be
deemed to be underwriters, and any discounts and commissions received by them
and any profit realized by them on resale of the Offered Securities may be
deemed to be underwriting discounts and commissions, under the Securities Act.
Underwriters,
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dealers and agents may be entitled, under agreements entered into with the
Company, to indemnification against and contribution toward certain civil
liabilities, including liabilities under the Securities Act.
If so indicated in the applicable Prospectus Supplement, the Company will
authorize dealers acting as the Company's agents to solicit offers by certain
institutions to purchase Offered Securities from the Company at the public
offering price set forth in such Prospectus Supplement pursuant to Delayed
Delivery Contracts ("Contracts") providing for payment and delivery on the date
or dates stated in such Prospectus Supplement. Each Contract will be for an
amount not less than, and the aggregate principal amount of Offered Securities
sold pursuant to Contracts shall be not less nor more than, the respective
amounts stated in the applicable Prospectus Supplement. Institutions with whom
Contracts, when authorized, may be made include commercial and savings banks,
insurance companies, pension funds, investment companies, educational and
charitable institutions, and other institutions but will in all cases be subject
to the approval of the Company. Contracts will not be subject to any conditions
except (i) the purchase by an institution of the Offered Securities covered by
its Contracts shall not at the time of delivery be prohibited under the laws of
any jurisdiction in the United States to which such institution is subject; and
(ii) if the Offered Securities are being sold to underwriters, the Company shall
have sold to such underwriters the total principal amount of the Offered
Securities less the principal amount thereof covered by the Contracts. If in
conjunction with the sale of Offered Securities to institutions under Contracts,
Offered Securities also are being sold to the public, the consummation of the
sale under the Contracts shall occur simultaneously with the consummation of the
sale to the public. The underwriters and such other agents will have no
responsibility in respect of the validity or performance of such Contracts.
Unless otherwise specified in the related Prospectus Supplement, each
series of Offered Securities will be a new issue with no established trading
market, other than the Common Shares, which are listed on the NYSE. Any Common
Shares sold pursuant to a Prospectus Supplement will be listed on the NYSE,
subject to official notice of issuance. The Company may elect to list any series
of Debt Securities or Preferred Shares on an exchange, but is not obligated to
do so. It is possible that one or more underwriters may make a market in a
series of 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.
In order to comply with the securities laws of certain states, if
applicable, the Offered Securities will be sold in such jurisdictions only
through registered or licensed brokers or dealers. In addition, in certain
states Offered Securities may not be sold unless they have been registered or
qualified for sale in the applicable state or an exemption from the registration
or qualification requirement is available and is complied with.
Under applicable rules and regulations under the Exchange Act, any person
engaged in the distribution of the Offered Securities may not simultaneously
engage in market making activities with respect to the Offered Securities for a
period of two business days prior to the commencement of such distribution.
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Certain of the underwriters and their affiliates may be customers of,
engage in transactions with and perform services for the Company and its
subsidiaries in the ordinary course of business.
LEGAL MATTERS
The validity of the Offered Securities will be passed upon for the Company
by Winstead Sechrest & Minick P.C., Dallas, Texas.
EXPERTS
The Company's consolidated financial statements and schedule as of
December 31, 1995 and 1994, and for the years ended December 31, 1995 and 1994
and for the period from October 12, 1993 (inception) through December 31, 1993,
appearing in the Company's Annual Report on Form 10-K for the year ended
December 31, 1995, have been audited by Ernst & Young LLP, independent auditors,
as set forth in their report thereon and have been included therein and
incorporated herein by reference in reliance upon such report given upon the
authority of such firm as experts in accounting and auditing.
The combined financial statements and schedule of the Columbus Group at
December 28, 1993, and for the period from January 1, 1993 through December
28, 1993 and the year ended December 31, 1992, appearing in the Company's Annual
Report on Form 10-K for the year ended December 31, 1995, have been audited by
Ernst & Young LLP, independent auditors, as set forth in their report thereon
and have been included therein and incorporated herein by reference in reliance
upon such report given upon the authority of such firm as experts in accounting
and auditing.
The combined financial statements and schedule of the Texana Group at
December 28, 1993, and for the period from January 1, 1993 through December 28,
1993 and the year ended December 31, 1992, appearing in the Company's Annual
Report on Form 10-K for the year ended December 31, 1995, have been audited by
Coopers & Lybrand L.L.P., independent auditors, as set forth in their reports
thereon and have been included therein and incorporated herein by reference in
reliance upon such report given upon the authority of such firm as experts in
accounting and auditing.
Such consolidated and combined financial statements and schedules referred
to above are, and audited financial statements and schedules to be included in
subsequently filed documents will be, incorporated herein in reliance upon the
reports of Ernst & Young LLP and Coopers & Lybrand L.L.P. pertaining to such
financial statements and schedules (to the extent covered by consents filed with
the Securities and Exchange Commission) given upon the authority of such firms
as experts in accounting and auditing.
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================================================================================
No dealer, salesperson or any other person has been authorized to give any
information or to make any representations other than those contained in this
Prospectus in connection with the offer made by this Prospectus and, if given or
made, such information or representations must not be relied upon as having been
authorized by the Company. This Prospectus does not constitute an offer to sell,
or a solicitation of an offer to buy, the securities offered hereby in any
jurisdiction in which such an offer or solicitation is not authorized, or to any
person to whom it is unlawful to make such an offer or solicitation. Neither the
delivery of this Prospectus nor any sale made hereunder shall, under any
circumstances, create any implication that any information contained herein is
correct as of any time subsequent to the date hereof.
______________
TABLE OF CONTENTS
Page
Available Information....................................
Incorporation of Certain Documents by
Reference.............................................
The Company..............................................
Use of Proceeds..........................................
Description of Common Shares.............................
Description of Preferred Shares..........................
Description of Debt Securities...........................
Description of Securities Warrants.......................
Ratio of Earnings to Fixed Charges.......................
Federal Income Tax Considerations........................
Federal Income Taxation of the Company...................
Federal Income Taxation of Shareholders..................
Plan of Distribution.....................................
Legal Matters............................................
Experts..................................................
================================================================================
================================================================================
$200,000,000
Columbus Realty Trust
Securities
__________
PROSPECTUS
__________
_________, 1996
================================================================================
<PAGE>
PART II
INFORMATION NOT REQUIRED IN PROSPECTUS
Item 14. Other Expenses of Issuance and Distribution
Estimated expenses to be paid by the Company in connection with the
issuance and distribution of the securities being registered are as follows:
<TABLE>
<S> <C>
Registration Fee Legal Fees and Expenses....................... $68,965.52
Accounting Fees and Expenses.................................... *
Blue Sky Fees and Expenses...................................... *
Printing Fees................................................... *
Transfer Agent or Trustee Fees.................................. *
Miscellaneous................................................... *
----------
Total.................................................... $ *
==========
</TABLE>
_____________
* To be supplied by amendment
Item 15. Indemnification of Directors and Officers
Pursuant to the Texas Real Estate Investment Trust Act (the "Texas
REIT Act") and the Declaration of Trust, no Trust Manager shall be liable for
any act, omission, loss, damage or expense arising from the performance of his
or her duty to a REIT, except for such Trust Manager's own willful misfeasance,
willful malfeasance or gross negligence. In addition, pursuant to the Texas REIT
Act, a Trust Manager shall not be liable for any claims or damages that may
result from his or her acts in the discharge of any duty imposed or power
conferred upon him by the REIT, if, in the exercise of ordinary care, such Trust
Manager acted in good faith and in reliance upon information, opinions, reports
or statements, including financial statements and other financial data,
concerning the REIT or another person, that were prepared or presented by (i)
officers or employees of the REIT, (ii) legal counsel, public accountants,
investment bankers or other persons as to matters such Trust Manager reasonably
believes are within the person's professional or expert competence, or (iii) a
committee of the Trust Managers of which such Trust Manager is not a member.
The Declaration of Trust and Bylaws provide that the Company shall
indemnify every Indemnitee (as defined below) against all judgments, penalties,
fines, amounts paid in settlement and reasonable expenses actually incurred by
the Indemnitee in connection with any Proceeding (as defined in the Declaration
of Trust and Bylaws) in which such Indemnitee was, is or is threatened to be
named defendant or respondent or called as a witness, by reason of serving or
having served in various capacities for the Company if it is determined that the
Indemnitee conducted himself in good faith, reasonably believed that his
conduct was in the Company's best interests (or, in certain cases, not opposed
to the Company's best interests) and, in the case of any criminal proceeding,
had no reasonable cause to believe that his conduct was unlawful. For purposes
of the Declaration of Trust and Bylaws, "Indemnitee" shall mean (i) any present
or former
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Trust Manager or officer of the Company, (ii) any person who while serving in
any of such capacities served at the Company's request as a trust manager,
director, officer, partner, venturer, proprietor, Trust Manager, employee, agent
or similar functionary of another REIT or other enterprise, and (iii) any person
nominated or designated by the Board of Trust Managers or any committee thereof
to serve in any of the capacities referred to in the preceding clauses (i) or
(ii).
In addition to the foregoing, pursuant to the indemnification agreements
entered into between the Company and each of its Trust Managers and executive
officers, the Company has agreed to indemnify such Trust Managers and executive
officers to the fullest extent permitted by Texas law.
The Company has obtained directors' and officers' liability insurance
coverage in the aggregate amount of approximately $3.0 million. Directors' and
officers' insurance insures (i) the officers and Trust Managers of the Company
from any claim arising out of an alleged wrongful act by the Trust Managers and
officers of the Company in their respective capacities as Trust Managers and
officers of the Company, and (ii) the Company, to the extent that the Company
has indemnified the Trust Managers and officers for such loss.
The Underwriting Agreements between the Company and Prudential
Securities Incorporated, as representative of the underwriters of the Company's
previous public offerings, provide for indemnification by the several
underwriters named therein of the Company, its Trust Managers and executive
officers and other persons for certain liabilities, including liabilities
arising under the Act.
The Registration Rights Agreement entered into between the Company and
the former owners of the interests in certain of the Company's Properties
provides for indemnification by such former owners, and their respective
partners, of the Company, its Trust Managers and executive officers and other
persons for certain liabilities, including liabilities under the Act.
<TABLE>
<CAPTION>
Item 16. Exhibits
Exhibit
No. Description
--- -----------
<S> <C>
3.1 - Amended and Restated Declaration of Trust *
3.2 - Amended and Restated Bylaws *
4.1 - Form of Indenture governing the Debt Securities, by and
between the Registration and ___________________, as Trustee *
4.2 - Form of Debt Securities (Senior Securities and Subordinated
Securities) **
4.3 - Form of Securities Warrant Agreement **
4.4 - Form of Certificate of Preferences, Conversion and Other
Rights of Preferred Shares of Beneficial Interest **
4.5 - Form of certificate representing preferred shares of
beneficial interest, par value $.01 per share, of the
Company **
</TABLE>
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<TABLE>
<S> <C>
4.6 - Form of certificate representing common shares of beneficial
interest, par value $.01 per share, of the Company (1)
5.1 - Opinion of Winstead Sechrest & Minick P.C. regarding the
validity of the securities being registered **
8.1 - Opinion of Winstead Sechrest & Minick P.C. regarding certain
tax matters **
10.1 - Form of Registration Rights Agreement among the Company and
the persons named therein (2)
10.2 - Second Amended and Restated Loan Agreement between the
Company, Bank One, Texas, NA, Bank United of Texas FSB,
Comerica Bank - Texas, Texas Commerce Bank NA, Wells Fargo
Realty Advisors Funding, Incorporated and Bank One, Texas, NA
as agent for the Banks (3)
10.3 - Columbus Realty Trust Share Bonus Plan (No. 2) (3)
10.4 - Dividend Reinvestment and Share Purchase Plan (4)
10.5 - Columbus Realty Trust Employee Stock Purchase Plan (5)
10.6 - Columbus Realty Trust Long-Term Management Incentive Plan (6)
12.1 - Statement re Computation of Ratios *
23.1 - Consent of Winstead Sechrest & Minick P.C. (included as part
of Exhibits 5.1 and 8.1) **
23.2 - Consent of Ernst & Young LLP *
23.3 - Consent of Coopers & Lybrand L.L.P. *
24.1 - Power of Attorney (included on signature page) *
25.1 - Form T-1 Statement of Eligibility and Qualification **
</TABLE>
- ----------------
* Filed herewith.
** To be filed by amendment or incorporated by reference in connection with
the offering of the Offered Securities.
(1) Previously filed with Amendment No. 3 to the Company's Registration
Statement on Form S-11 (Registration No. 33-70218), filed with the
Securities and Exchange Commission on December 15, 1993, and incorporated
herein by reference.
(2) Previously filed with Amendment No. 1 to the Company's Registration
Statement on Form S-11 (Registration No. 33-70218), filed with the
Securities and Exchange Commission on November 26, 1993, and incorporated
herein by reference.
(3) Previously filed with the Company's Registration Statement on Form S-8
(Registration No. 33-90492), filed with the Securities and Exchange
Commission on March 21, 1995, and incorporated herein by reference.
(4) Previously filed with the Company's Registration Statement on Form S-3
(Registration No. 33-90146), filed with the Securities and Exchange
Commission on March 6, 1995, and incorporated herein by reference.
II-3
<PAGE>
(5) Previously filed with the Company's Registration Statement on Form S-8
(Registration No. 33-94798), filed with the Securities and Exchange
Commission on July 20, 1995, and incorporated herein by reference.
(6) Previously filed with the Company's Registration Statement on Form S-8
(Registration No. 333-02276), filed with the Securities and Exchange
Commission on March 12, 1996, and incorporated herein by reference.
Item 17. Undertakings
(a) The undersigned Registrant hereby undertakes:
(1) To file, during any period in which offers or sales are being
made, a post-effective amendment to this registration statement:
(i) To include any prospectus required by section 10(a)(3)
of the Securities Act;
(ii) To reflect in the prospectus any facts or events
arising after the effective date of the registration
statement (or the most recent post-effective amendment
thereof) which, individually or in the aggregate,
represent a fundamental change in the information set
forth in the registration statement. Notwithstanding
the foregoing, any increase or decrease in volume of
securities offered (if the total dollar value of
securities offered would not exceed that which was
registered) and any deviation from the low or high end
of the estimated offering range may be reflected in the
form of prospectus filed with the Commission pursuant
to Rule 424(b) if, in the aggregate, the changes in
volume and price represent no more than a 20% change in
the maximum aggregate offering price set forth in the
"Calculation of Registration Fee" table in the
effective registration statement; and
(iii) To include any material information with respect to the
plan of distribution not previously disclosed in the
registration statement or any material change to such
information in the registration statement;
provided, however, that paragraphs (a)(1)(i) and (a)(1)(ii) do not
apply if the information required to be included in a post-effective
amendment by those paragraphs is contained in periodic reports filed by the
Registrant pursuant to Section 13 or Section 15(d) of the Exchange Act,
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.
II-4
<PAGE>
(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.
(4) To file an application for the purpose of determining
eligibility of the Trustee to act under subsection (a) of Section 310 of
the Trust Indenture Act of 1939, as amended (the "Trust Indenture Act"), in
accordance with the rules and regulations prescribed by the Commission
under Section 305(b)(2) of the Trust Indenture Act.
(b) The undersigned registrant hereby undertakes that, for purposes of
determining any liability under the Securities Act, each filing of the
registrants' annual report pursuant to Section 13(a) or Section 15(d) of the
Exchange Act (and, where applicable, each filing of an employee benefit plan's
annual report pursuant to Section 15(d) of the Exchange Act) that is
incorporated by reference in the registration statement shall be deemed to be a
new registration statement relating to the securities offered therein, and the
offering of such securities at that time shall be deemed to be the initial bona
fide offering thereof.
(c) Insofar as indemnification for liabilities arising under the
Securities Act may be permitted to Trust Managers, 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 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 Trust Manager, officer or
controlling person of the Registrant in the successful defense of any action,
suit or proceeding) is asserted against the Registrant by such Trust Manager,
officer or controlling person in connection with the securities being
registered, the Registrant will, unless in the opinion of its counsel the matter
has been settled by controlling precedent, submit to a court of appropriate
jurisdiction the question whether such indemnification by it is against public
policy as expressed in the Securities Act and will be governed by the final
adjudication of such issue.
(d) The undersigned registrant hereby undertakes that:
(1) For purposes of determining any liability under the Securities
Act of 1933, the information omitted from the form of prospectus filed as
part of this registration statement in reliance upon Rule 430A and
contained in a form of prospectus filed by the registrant pursuant to Rule
424(b)(1) or (4) or 497(h) under the Securities Act shall be deemed to be
part of this registration statement as of the time it was declared
effective.
(2) For the purpose of determining any liability under the
Securities Act of 1933, each post-effective amendment that contains a form
of prospectus 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.
II-5
<PAGE>
SIGNATURES
Pursuant to the requirements of the Securities Act of 1933, as amended, the
Registrant certifies that it has reasonable grounds to believe that it meets all
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 Dallas, Texas on August 8, 1996.
COLUMBUS REALTY TRUST
By: /s/ Robert L. Shaw
-------------------------------------
Robert L. Shaw,
Chief Executive Officer
and Trust Manager
KNOW ALL MEN BY THESE PRESENTS, that each person whose signature appears
below constitutes and appoints Robert L. Shaw and Will Cureton, and each of
them, his true and lawful attorneys-in-fact and agents, with full power of
substitution and resubstitution, to do any and all acts and things and execute,
in the name of the undersigned, any and all instruments which said attorneys-in-
fact and agents may deem necessary or advisable in order to enable Columbus
Realty Trust to comply with the Securities Act of 1933 and any requirements of
the Securities and Exchange Commission in respect thereof, in connection with
the filing with the Securities and Exchange Commission of the registration
statement on Form S-3 under the Securities Act of 1933, including specifically
but without limitation, power and authority to sign the name of the undersigned
to such registration statement, and to file the same with all exhibits thereto
and other documents in connection therewith, with the Securities and Exchange
Commission, granting unto said attorneys-in-fact and agents, and each of them,
full power and authority to do and to perform each and every act and thing
requisite or necessary to be done in and about the premises, as fully and to all
intents and purposes as the undersigned might or could do in person, hereby
ratifying and confirming all that said attorneys-in-fact and agents, and any of
them, or their substitutes, may lawfully do or cause to be done by virtue
hereof.
II-6
<PAGE>
Pursuant to the requirements of the Securities Act of 1933, this
Registration Statement has been signed by the following persons in the
capacities and on the dates indicated.
Signature Title Date
--------- ----- ----
/s/ Richard L. Bloch
- ------------------------ Chairman of the Board August 5, 1996
Richard L. Bloch and Trust Manager
/s/ Robert L. Shaw
- ------------------------ Chief Executive Officer and August 8, 1996
Robert L. Shaw Trust Manager (Principal
Executive Officer)
/s/ Will Cureton
- ------------------------ Chief Operating Officer August 8, 1996
Will Cureton and Trust Manager
/s/ Richard R. Reupke
- ------------------------ Chief Financial Officer August 8, 1996
Richard R. Reupke (Principal Financial and
Accounting Officer)
/s/ Roger T. Staubach
- ------------------------ Trust Manager August 8, 1996
Roger T. Staubach
/s/ James C. Leslie
- ------------------------ Trust Manager August 8, 1996
James C. Leslie
/s/ Jack Kemp
- ------------------------ Trust Manager August 8, 1996
Jack Kemp
/s/ Hugh G. Robinson
- ------------------------ Trust Manager August 8, 1996
Hugh G. Robinson
/s/ Gregg L. Engles
- ------------------------ Trust Manager August 8, 1996
Gregg L. Engles
II-7
<PAGE>
EXHIBIT INDEX
<TABLE>
<CAPTION>
Sequentially
Exhibit Numbered
No. Description Page
- --- ----------- ----
<C> <S> <C>
3.1 -- Amended and Restated Declaration of Trust *
3.2 -- Amended and Restated Bylaws *
4.1 -- Form of Indenture governing the Debt
Securities, by and between the Registration
and ___________________, as Trustee *
4.2 -- Form of Debt Security **
4.3 -- Form of Securities Warrant Agreement **
4.4 -- Form of Certificate of Preferences, Conversion
and Other Rights of Preferred Shares of
Beneficial Interest **
4.5 -- Form of certificate representing preferred
shares of beneficial interest, par value
$.01 per share, of the Company **
4.6 -- Form of certificate representing common shares
of beneficial interest, par value $.01 per share,
of the Company (1)
5.1 -- Opinion of Winstead Sechrest & Minick P.C.
regarding the validity of the securities being
registered **
8.1 -- Opinion of Winstead Sechrest & Minick P.C.
regarding certain tax matters **
10.1 -- Form of Registration Rights Agreement among
the Company and the persons named therein (2)
10.2 -- Second Amended and Restated Loan Agreement
between the Company, Bank One, Texas, NA,
Bank United of Texas FSB, Comerica Bank - Texas,
Texas Commerce Bank NA, Wells Fargo Realty
Advisors Funding, Incorporated and Bank One,
Texas, NA as agent for the Banks (3)
10.3 -- Columbus Realty Trust Share Bonus Plan (No. 2) (3)
10.4 -- Dividend Reinvestment and Share Purchase Plan (4)
10.5 -- Columbus Realty Trust Employee Stock Purchase
Plan (5)
10.6 -- Columbus Realty Trust Long-Term Management
Incentive Plan (6)
12.1 -- Statement re Computation of Ratios *
23.1 -- Consent of Winstead Sechrest & Minick P.C.
(included as part of Exhibits 5.1 and 8.1) **
23.2 -- Consent of Ernst & Young LLP *
23.3 -- Consent of Coopers & Lybrand L.L.P. *
24.1 -- Power of Attorney (included on signature page) *
25.1 -- Form T-1 Statement of Eligibility and
Qualification **
</TABLE>
<PAGE>
- -----------
* Filed herewith.
** To be filed by amendment or incorporated by reference in connection with
the offering of the Offered Securities.
(1) Previously filed with Amendment No. 3 to the Company's Registration
Statement on Form S-11 (Registration No. 33-70218), filed with the
Securities and Exchange Commission on December 15, 1993, and incorporated
herein by reference.
(2) Previously filed with Amendment No. 1 to the Company's Registration
Statement on Form S-11 (Registration No. 33-70218), filed with the
Securities and Exchange Commission on November 26, 1993, and incorporated
herein by reference.
(3) Previously filed with the Company's Registration Statement on Form S-8
(Registration No. 33-90492), filed with the Securities and Exchange
Commission on March 21, 1995, and incorporated herein by reference.
(4) Previously filed with the Company's Registration Statement on Form S-3
(Registration No. 33-90146), filed with the Securities and Exchange
Commission on March 6, 1995, and incorporated herein by reference.
(5) Previously filed with the Company's Registration Statement on Form S-8
(Registration No. 33-94798), filed with the Securities and Exchange
Commission on July 20, 1995, and incorporated herein by reference.
(6) Previously filed with the Company's Registration Statement on Form S-8
(Registration No. 333-02276), filed with the Securities and Exchange
Commission on March 12, 1996, and incorporated herein by reference.
<PAGE>
Exhibit 3.1
DECLARATION OF TRUST
OF
COLUMBUS REALTY TRUST
---------------------
The undersigned, acting as the Trust Managers of a real estate investment
trust under the Texas Real Estate Investment Trust Act, as amended (the "Texas
REIT Act"), hereby adopt the following Amended and Restated Declaration of Trust
(this "Declaration of Trust").
ARTICLE I
The name of the trust (the "Trust") is "Columbus Realty Trust." An assumed
name certificate setting forth such name has been filed in the manner prescribed
by law.
ARTICLE II
The Trust is formed pursuant to the Texas REIT Act and has the following as
its purpose:
To purchase, hold, lease, manage, sell, exchange, develop, subdivide and
improve real property and interests in real property, and in general, to
carry on any other business and do any other acts in connection with the
foregoing and to have and exercise all powers conferred by the laws of the
State of Texas upon real estate investment trusts formed under the Texas
REIT Act, and to do any or all of the things hereafter set forth to the
same extent as natural persons might or could do. The term "real property"
and the term "interests in real property" for the purposes stated herein
shall not include severed mineral, oil or gas royalty interests.
ARTICLE III
The address of the Trust's initial principal office and place of business
is 15851 Dallas Parkway, Suite 855, Dallas, Texas 75248. The address of the
Trust's registered office is 15851 Dallas Parkway, Suite 855, Dallas, Texas
75248 and the name of its registered agent at that address is Robert L. Shaw.
ARTICLE IV
The names and business mailing addresses of the Trust Managers are as
follows:
-1-
<PAGE>
<TABLE>
<CAPTION>
Name Mailing Address
---- ---------------
<S> <C>
Richard L. Bloch 123 E. Marcy Street
Suite 205
Santa Fe, New Mexico 87501
Robert L. Shaw 15851 Dallas Parkway
Suite 855
Dallas, Texas 75248
Will Cureton 15851 Dallas Parkway
Suite 855
Dallas, Texas 75248
Roger T. Staubach 6750 LBJ Freeway
Suite 1100
Dallas, Texas 75240
James C. Leslie 6750 LBJ Freeway
Suite 1100
Dallas, Texas 75240
Jack E. Kemp 1776 "I" Street N.W.
Suite 890
Washington, D.C. 20006
Hugh G. Robinson 8150 North Central Expressway
Suite 550
Dallas, Texas 75206
Gregg L. Engles 3811 Turtle Creek Blvd.
Suite 1300
Dallas, Texas 75219
</TABLE>
ARTICLE V
The period of the Trust's duration is perpetual. The Trust may be sooner
terminated by the vote of the holders of at least a two-thirds majority of the
voting power of the outstanding Shares.
-2-
<PAGE>
ARTICLE VI
The aggregate number of shares of beneficial interest which the Trust
shall have authority to issue is one hundred million (100,000,000) common
shares, par value $.01 per share ("Common Shares"), and ten million (10,000,000)
preferred shares, par value $.01 per share ("Preferred Shares"). All of the
Common Shares shall be equal in all respects to every other such Common Share,
and shall have no preference, conversion, exchange or preemptive rights.
Unless otherwise specified, in this Declaration of Trust the term
"Shares" shall be deemed to refer to the Common Shares and, solely to the extent
specifically required by law or as specifically provided in any resolution or
resolutions of the Trust Managers providing for the issue of any particular
series of Preferred Shares, to the Preferred Shares. For purposes of Articles
IX and XVIII (other than Article XVIII (j)) of this Declaration of Trust, the
term Shares shall be deemed to refer to both the Common Shares and the Preferred
Shares and, for purposes of such Articles IX and XVIII (other than Article XVIII
(j)), the number of outstanding Shares shall be deemed to be equal to the value
of the Trust's outstanding Shares as determined from time to time by resolution
of the Trust Managers, such determination to include an allocation of relative
value among the Common Shares and any outstanding series of Preferred Shares.
The Trust may issue one or more series of Preferred Shares, each such
series to consist of such number of shares as shall be determined by resolution
of the Trust Managers creating such series. The Preferred Shares of each such
series shall have such designations, preferences, conversion, exchange or other
rights, participations, voting powers, options, restrictions, limitations,
special rights or relations, limitations as to dividends, qualifications or
terms, or conditions of redemption thereof, as shall be stated and expressed by
the Trust Managers in the resolution or resolutions providing for the issuance
of such series of Preferred Shares pursuant to the authority to do so which is
hereby expressly vested in the Trust Managers.
Except as otherwise specifically provided in any resolution or
resolutions of the Trust Managers providing for the issue of any particular
series of Preferred Shares, the number of shares of any such series so set forth
in such resolution or resolutions may be increased or decreased (but not below
the number of shares of such series then outstanding) by a resolution or
resolutions likewise adopted by the Trust Managers.
Except as otherwise specifically provided in any resolution or
resolutions of the Trust Managers providing for the issue of any particular
series of Preferred Shares, Preferred Shares redeemed or otherwise acquired by
the Trust shall assume the status of authorized but unissued Preferred Shares
and shall be unclassified as to series and may thereafter, subject to the
provisions of this Article VI and to any restrictions contained in any
resolution or resolutions of the Trust Managers providing for the issuance of
any such series of Preferred Shares, be reissued in the same manner as other
authorized but unissued Preferred Shares.
-3-
<PAGE>
Except as otherwise specifically provided in any resolution or
resolutions of the Trust Managers providing for the issue of any particular
series of Preferred Shares, holders of Preferred Shares shall have no preemptive
rights.
Except as otherwise specifically required by law or this Declaration
of Trust or as specifically provided in any resolution or resolutions of the
Trust Managers providing for the issuance of any particular series of Preferred
Shares, the exclusive voting power of the Trust shall be vested in the Common
Shares of the Trust. Each Common Share entitles the holder thereof to one vote
at all meetings of the shareholders of the Trust.
ARTICLE VII
The Trust shall issue Shares only for a tangible or intangible benefit
to the Trust, including cash, promissory notes, services performed, contracts
for services to be performed, or other securities of the Trust.
ARTICLE VIII
The Trust Managers shall manage all money and property received for
the issuance of Shares for the benefit of the shareholders of the Trust.
ARTICLE IX
The Trust will not commence business until it has received for the
issuance of shares of beneficial interest consideration of at least $1,000
value, consisting of any tangible or intangible benefit to the Trust, including
cash, promissory notes, services performed, contracts for services to be
performed, or other securities of the Trust.
ARTICLE X
The Trust shall not engage in any activities beyond the scope of the
purpose of a real estate investment trust formed pursuant to the Texas REIT Act,
as such purpose is set forth in Article II hereof.
ARTICLE XI
Cumulative voting for the election of Trust Managers is prohibited.
ARTICLE XII
(a) The affirmative vote of the holders of not less than 80% of the
outstanding Shares of the Trust, including the affirmative vote of the holders
of not less than 50% of the outstanding Shares not owned, directly or
indirectly, by any "Related Person" (as hereinafter defined), shall be required
for the approval or authorization of any "Business Combination" (as hereinafter
defined); provided, however, that the 50% voting requirement referred to above
shall not be applicable if the Business Combination is approved by the
-4-
<PAGE>
affirmative vote of the holders of not less than 90% of the outstanding Shares;
provided further, that neither the 80% voting requirement nor the 50% voting
requirement referred to above shall be applicable if:
(i) The Trust Managers of the Trust by a vote of not less than 80% of
the Trust Managers then holding office (A) have expressly approved in
advance the acquisition of Shares of the Trust that caused the Related
Person to become a Related Person or (B) have expressly approved the
Business Combination prior to the date on which the Related Person involved
in the Business Combination shall have become a Related Person; or
(ii) The Business Combination is solely between the Trust and another
corporation, 100% of the voting stock of which is owned directly or
indirectly by the Trust; or
(iii) The Business Combination is proposed to be consummated within
one year of the consummation of a Fair Tender Offer (as hereinafter
defined) by the Related Person in which Business Combination the cash or
Fair Market Value (as hereinafter defined) of the property, securities or
other consideration to be received per Share by all remaining holders of
Shares of the Trust in the Business Combination is not less than the price
offered in the Fair Tender Offer; or
(iv) All of conditions (A) through (D) of this subparagraph (iv) shall
have been met: (A) if and to the extent permitted by law, the Business
Combination is a merger or consolidation, consummation of which is proposed
to take place within one year of the date of the transaction pursuant to
which such person became a Related Person and the cash or Fair Market Value
of the property, securities or other consideration to be received per share
by all remaining holders of Shares of the Trust in the Business Combination
is not less than the Fair Price (as hereinafter defined); (B) the
consideration to be received by such holders is either cash or, if the
Related Person shall have acquired the majority of its holdings of the
Trust's Shares for a form of consideration other than cash, in the same
form of consideration with which the Related Person acquired such majority;
(C) after such person has become a Related Person and prior to consummation
of such Business Combination: (1) there shall have been no reduction in the
annual rate of dividends, if any, paid per share on the Trust's Shares
(adjusted as appropriate for recapitalizations and for Share splits,
reverse Share splits and Share dividends) except any reduction in such rate
that is made proportionately with any decline in the Trust's net income for
the period for which such dividends are declared and except as approved by
a majority of the Continuing Trust Managers (as hereinafter defined), and
(2) such Related Person shall not have received the benefit, directly or
indirectly (except proportionately as a shareholder), of any loans,
advances, guarantees, pledges or other financial assistance or any tax
credits or other tax advantages provided by the Trust prior to the
consummation of such Business Combination (other than in connection with
financing a Fair Tender Offer); and (D) a proxy statement that conforms in
all respects with the provisions of the
-5-
<PAGE>
Securities Exchange Act of 1934 (the "Exchange Act") and the rules and
regulations thereunder (or any subsequent provisions replacing the Exchange
Act or the rules or regulations thereunder) shall be mailed to holders of
the Trust's Shares at least 30 days prior to the consummation of the
Business Combination for the purpose of soliciting shareholder approval of
the Business Combination; or
(v) The "Rights" (as defined in paragraph (b) of this Article XII)
shall have become exercisable.
(b) If a person has become a Related Person and within one year after the
date (the "Acquisition Date") of the transaction pursuant to which the Related
Person became a Related Person (x) a Business Combination meeting all of the
requirements of subparagraph (iv) of the proviso to paragraph (a) of this
Article XII regarding the applicability of the 80% voting requirement shall not
have been consummated and (y) a Fair Tender offer shall not have been
consummated and (z) the Trust shall not have been dissolved and liquidated,
then, in such event the beneficial owner of each Share (not including Shares
beneficially owned by the Related Person) (each such beneficial owner being
hereinafter referred to as a "Holder") shall have the right (individually a
"Right" and collectively the "Rights"), which may be exercised subject to the
provisions of paragraph (d) of this Article XII, commencing at the opening of
business on the one-year anniversary date of the Acquisition Date and continuing
for a period of 90 days thereafter, subject to extensions as provided in
paragraph (d) of this Article XII (the "Exercise Period"), to sell to the Trust
on the terms set forth herein one Share upon exercise of such Right. Within
five business days after the commencement of the Exercise Period the Trust shall
notify the Holders of the commencement of the Exercise Period, specifying
therein the terms and conditions for exercise of the Rights. During the
Exercise Period, each certificate representing Shares beneficially owned by a
Holder (a "Certificate") shall also represent the number of Rights equal to the
number of Shares represented thereby and the surrender for transfer of any
number of Shares represented thereby and the surrender for transfer of any
Certificate shall also constitute the transfer of the Rights represented by such
Shares. At 5:00 P.M., Dallas, Texas time, on the last day of the Exercise
Period, each Right not exercised shall become void, all rights in respect
thereof shall cease as of such time and the Certificates shall no longer
represent Rights.
(c) The purchase price for a Share upon exercise of an accompanying Right
shall be equal to the then-applicable Fair Price paid by the Related Person
(plus, as an allowance for interest, an amount equal to the prime rate of
interest of NationsBank of Texas, N.A., or such other bank as may be selected by
the Trust Managers from time to time, as in effect from time to time from the
Acquisition Date until the date of the payment for such Share but less the
amount of any cash and the Fair Market Value of any property or securities
distributed with respect to such Shares as dividends or otherwise during such
time period), pursuant to the exercise of the Right relating thereto. In the
event the Related Person shall have acquired any of its holdings of the Trust's
Shares for a form of consideration other than cash, the value of such other
consideration shall be the Fair Market Value thereof.
-6-
<PAGE>
(d) Notwithstanding the foregoing in paragraph (b) of this Article XII, the
Exercise Period will be deferred in the event (a "Deferral Event") that the
Trust is otherwise prohibited under applicable law from repurchasing Shares
pursuant to the Rights. In the event the Exercise Period is deferred, or if at
any time the Trust reasonably anticipates that a Deferral Event will exist, the
Trust will, as soon as practicable, notify the Holders. If at the end of any
fiscal quarter the Deferral Event ceases to exist, notice shall be given to the
Holders of the commencement of the deferred Exercise Period, which Exercise
Period shall commence no sooner than 15 days nor more than 45 days from the date
of such notice and which shall continue in effect for a period of time equal in
duration to the previously unexpired portion of the Exercise Period.
Notwithstanding any other provision of this Declaration of Trust to the
contrary, during the Exercise Period (including during the existence of any
Deferral Event), neither the Trust nor any subsidiary may declare or pay any
dividend or make any distribution on its shares or to its shareholders (other
than dividends or distributions payable in its shares or, in the case of any
subsidiary, dividends payable to the Trust) or purchase, redeem or otherwise
acquire or retire for value, or permit any subsidiary to purchase or otherwise
acquire for value, any Shares of the Trust if, upon giving effect to such
dividend, distribution, purchase, redemption, or other acquisition or
retirement, the aggregate amount expended for all such purposes (the amount
expended for such purposes, if other than in cash, to be determined by a
majority of the Continuing Trust Managers, whose determination shall be
conclusive) would prejudice the ability of the Trust to satisfy its maximum
obligation to purchase Shares upon exercise of the Rights; provided, however,
that the Trust may declare and pay dividends during the Exercise Period if, but
only to the extent, necessary to maintain the Trust's status as a real estate
investment trust in accordance with Sections 856 through 860 of the Code and
applicable Treasury Regulations.
(e) Rights may be exercised upon surrender to the Trust's principal
transfer agent (the "Transfer Agent") at its principal office, or such other
office as may be determined from time to time by the Trust Managers, of the
Certificate or Certificates evidencing the Shares to be tendered for purchase by
the Trust, together with the form on the reverse thereof completed and duly
signed in accordance with the instructions thereon. In the event that a Holder
shall tender a Certificate which represents greater than the number of Shares
which the Holder elects to require the Trust to purchase upon exercise of the
Rights, the Holder shall designate on the reverse side of such Certificate the
number of Shares to be sold from such Certificate. The Transfer Agent shall
thereupon issue a new Certificate or Certificates for the balance of the number
of Shares not sold to the Trust, which new Certificate or Certificates shall
also represent Rights for an equivalent number of Shares.
(f) For the purposes of this Article:
(i) The term "Business Combination" shall mean (A) any merger or
consolidation, if and to the extent permitted by law, of the Trust or a
subsidiary, with or into a Related Person, (B) any sale, lease, exchange,
mortgage, pledge, transfer or other disposition, of all or any Substantial
Part (as hereinafter defined) of the assets of the Trust and its
subsidiaries (taken as a whole) (including, without
-7-
<PAGE>
limitation, any voting securities of a subsidiary) to or with a Related
Person, (C) the issuance or transfer by the Trust or a subsidiary (other
than by way of a pro rata distribution to all shareholders) of any
securities of the Trust or a subsidiary of the Trust to a Related Person,
(D) any reclassification of securities (including any reverse Share split)
or recapitalization by the Trust, the effect of which would be to increase
the voting power (whether or not currently exercisable) of the Related
Person, (E) the adoption of any plan or proposal for the liquidation or
dissolution of the Trust proposed by or on behalf of a Related Person which
involves any transfer of assets, or any other transaction, in which the
Related Person has any direct or indirect interest (except proportionately
as a shareholder), (F) any series or combination of transactions having,
directly or indirectly, the same or substantially the same effect as any of
the foregoing, and (G) any agreement, contract or other arrangement
providing, directly or indirectly, for any of the foregoing.
(ii) The term "Continuing Trust Manager" shall mean (x) any Trust
Manager of the Trust who is not affiliated with a Related Person and who
was a Trust Manager immediately prior to the time that the Related person
became a Related Person, and (y) any other Trust Manager who is not
affiliated with the Related Person and is recommended either by a majority
of the persons described in clause (x) of this subparagraph (ii) or by
persons described in this clause (y) who are then Trust Managers of the
Trust to succeed a person described in either the said clause (x) or clause
(y) as a Trust Manager of the Trust.
(iii) The term "Fair Market Value" shall mean (A) in the case of
securities, the highest closing sale price during the 30-day period
immediately preceding the date in question of such security on the
Composite Tape for New York Stock Exchange-Listed Stocks, or, if such
security is not quoted on the Composite Tape, on the New York Stock
Exchange, or, if such security is not listed on such Exchange, on the
principal United States securities exchange registered under the Exchange
Act on which such security is listed, or, if such security is not listed on
any such exchange, the highest closing bid quotation with respect to such
security during the 30-day period preceding the date in question on the
National Association of Securities Dealers, Inc. Automated Quotation
System or any system then in use, or if no such quotations are available,
the fair market value on the date in question of such security as
reasonably determined by an independent appraiser selected by a majority of
the Continuing Trust Managers (or, if there are no Continuing Trust
Managers, as reasonably determined by Prudential Securities Incorporated)
in good faith; and (B) in the case of property other than cash or stock,
the fair market value of such property on the date in question as
reasonably determined by an independent appraiser selected by a majority of
the Continuing Trust Managers (or, if there are no Continuing Trust
Managers, by Prudential Securities Incorporated) in good faith. In each
case hereunder in which an independent appraiser is to be selected to
determine Fair Market Value, (1) in the event (x) there are no Continuing
Trust Managers, and (y) Prudential Securities Incorporated is unable or
elects not to serve as such appraiser, or (2) in the event
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there are Continuing Trust Managers that do not select an independent
appraiser within 10 business days of a request for such appointment made by
a Related Person, such independent appraiser may be selected by such
Related Person.
(iv) The term "Fair Price" shall mean the highest per-Share price
(which, to the extent not paid in cash, shall equal the Fair Market Value
of any other consideration paid), with appropriate adjustments for
recapitalizations and for Share splits, reverse Share splits and Share
dividends, paid by a person in acquiring any of its holdings of the Trust's
Shares.
(v) The term "Fair Tender Offer" shall mean a bona fide tender offer
for all of the Trust's Shares outstanding (and owned by persons other than
a Related Person if the tender offer is made by the Related Person),
whether or not such offer is conditional upon any minimum number of Shares
being tendered, in which the aggregate amount of cash or the Fair Market
Value of any securities or other property to be received by all holders who
tender their Shares for each Share so tendered shall be at least equal to
the then applicable Fair Price paid by a Related Person or paid by the
person making the tender offer if such person is not a Related Person. In
the event that at the time such tender offer is commenced the terms and
conduct thereof are not directly regulated by Section 14(d) or 13(e) of the
Exchange Act and the general rules and regulations promulgated thereunder,
then the terms of such tender offer regarding the time such offer is held
open and regarding withdrawal rights shall conform in all respects with
such terms applicable to tender offers regulated by either of such Sections
of the Exchange Act. A Fair Tender Offer shall not be deemed to be
"consummated" until Shares are purchased and payment in full has been made
for all duly tendered Shares.
(vi) The term "Related Person" shall mean and include any individual,
corporation, partnership or other "person" (as defined in Section 13(d)(3)
of the Exchange Act), and the "Affiliates" and "Associates" (as defined in
Rule 12b-2 of the Exchange Act) of any such individual, corporation,
partnership or other person which individually or together is the
"Beneficial Owner" (as defined in Rule 13d-3 of the Exchange Act) in the
aggregate of more than 500% of the Shares of the Trust, other than the
Trust or any employee benefit plan(s) sponsored by the Trust.
(vii) The term "Substantial Part" shall mean more than 35% of the
book value of the total assets of the Trust and its subsidiaries (taken as
a whole) as of the end of the fiscal year ending prior to the time the
determination is being made.
(viii) Any person (as such term is defined in subsection (vi) of this
paragraph (f)) that has the right to acquire any Shares of the Trust
pursuant to any agreement, or upon the exercise of conversion rights,
warrants or options, or otherwise, shall be deemed a Beneficial Owner of
such Shares for purposes of determining whether such person, individually
or together with its Affiliates and Associates, is a Related Person.
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(ix) For purposes of subparagraph (iii) of paragraph (a) of this
Article XII, the term "other consideration to be received" shall
include, without limitation, Shares of the Trust retained by its
existing public shareholders in the event of a Business Combination in
which the Trust is the surviving entity.
(g) The affirmative vote of the holders of not less than 80% of the
outstanding Shares of the Trust, including the affirmative vote of the holders
of not less than 50% of the outstanding Shares not owned, directly or
indirectly, by any Related Person (such 50% voting requirement shall not be
applicable if such amendment, alteration, change, repeal or rescission is
approved by the affirmative vote of not less than 90% of the outstanding Shares)
shall be required to amend, alter, change, repeal or rescind, or adopt any
provisions inconsistent with, this Article XII.
(h) The provisions of this Article XII shall be subject to all valid and
applicable laws, including, without limitation, the Texas REIT Act, and, in the
event this Article XII or any of the provisions hereof are found to be
inconsistent with or contrary to any such valid laws, such laws shall be deemed
to control and this Article XII shall be regarded as modified accordingly, and,
as so modified, to continue in full force and effect.
ARTICLE XIII
The Trust Managers may from time to time authorize, and the Trust may make,
distributions on its outstanding Shares in cash, in property or in its Shares,
except that no distribution shall be made if (i) after giving effect to the
distribution, the Trust would be insolvent or (ii) the distribution exceeds the
surplus of the Trust, except as set forth in the Texas REIT Act.
ARTICLE XIV
A holder of Shares, an owner of any beneficial interest in shares, or a
subscriber for shares whose subscription has been accepted is not under an
obligation to the Trust or to its obligees, with respect to the shares, other
than the obligation to pay to the Trust the full amount of the consideration for
which the shares were or are to be issued; with respect to any contractual
obligation of the Trust, on the basis that the holder, owner, or subscriber is
or was the alter ego of the Trust, or on the basis of actual fraud or
constructive fraud, a sham to perpetrate a fraud, or other similar theory,
unless the obligee demonstrates that the holder, owner, or subscriber caused the
Trust to be used for the purpose of perpetrating and did perpetrate an actual
fraud on the obligee primarily for the direct personal benefit of the holder,
owner, or subscriber; or, with respect to any obligation of the Trust, on the
basis of the failure of the Trust to observe any formality, including the
failure to comply with any requirement of the Texas REIT Act or of the
Declaration of Trust or Bylaws of the Trust or to observe any requirement
prescribed by the Texas REIT Act or by the Declaration of Trust or Bylaws for
acts taken by the Trust, its Trust Managers, or its shareholders.
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ARTICLE XV
(a) In this Article:
(i) "Indemnitee" means (A) any present or former Trust Manager or
officer of the Trust, (B) any person who while serving in any of the
capacities referred to in clause (A) hereof served at the Trust's request
as a trust manager, director, officer, partner, venturer, proprietor,
trustee, employee, agent or similar functionary of another real estate
investment trust or foreign or domestic corporation, partnership, joint
venture, sole proprietorship, trust, employee benefit plan or other
enterprise and (C) any person nominated or designated by (or pursuant to
authority granted by) the Trust Managers or any committee thereof to serve
in any of the capacities referred to in clauses (A) or (B) hereof.
(ii) "Official Capacity" means (A) when used with respect to a Trust
Manager, the office of Trust Manager of the Trust and (B) when used with
respect to a person other than a Trust Manager, the elective or appointive
office of the Trust held by such person or the employment or agency
relationship undertaken by such person on behalf of the Trust, but in each
case does not include service for any other real estate investment trust or
foreign or domestic corporation or any partnership, joint venture, sole
proprietorship, trust, employee benefit plan or other enterprise.
(iii) "Proceeding" means any threatened, pending or completed action,
suit or proceeding, whether civil, criminal, administrative, arbitrative or
investigative, any appeal in such an action, suit or proceeding, and any
inquiry or investigation that could lead to such an action, suit or
proceeding.
(iv) "Trust" includes any domestic or foreign predecessor of the Trust
in a merger, consolidation, or other transaction in which the liabilities
of the predecessor are transferred to the Trust by operation of law and in
any other transaction in which the Trust assumes the liabilities of the
predecessor but does not specifically exclude liabilities that are the
subject of this Article.
(b) The Trust shall indemnify every Indemnitee against all judgments,
penalties (including excise and similar taxes), fines, amounts paid in
settlement and reasonable expenses actually incurred by the Indemnitee in
connection with any Proceeding in which he was, is or is threatened to be named
defendant or respondent, or in which he was or is a witness without being named
a defendant or respondent, by reason, in whole or in part, of his serving or
having served, or having been nominated or designated to serve, in any of the
capacities referred to in paragraph (a)(i) of this Article XV, to the fullest
extent that indemnification is permitted by Texas law in accordance with the
Bylaws of the Trust. An Indemnitee shall be deemed to have been found liable in
respect of any claim, issue or matter only after the Indemnitee shall have been
so adjudged by a court of competent jurisdiction after exhaustion of all appeals
therefrom. Reasonable expenses
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shall include, without limitation, all court costs and all fees and
disbursements of attorneys for the Indemnitee.
(c) Without limitation of paragraph (b) of this Article XV and in addition
to the indemnification provided for in paragraph (b) of this Article XV, the
Trust shall indemnify every Indemnitee against reasonable expenses incurred by
such person in connection with any Proceeding in which he is a witness or a
named defendant or respondent because he served in any of the capacities
referred to in paragraph (a)(i) of this Article XV, if such person has been
wholly successful, on the merits or otherwise, in defense of the Proceeding.
(d) Reasonable expenses (including court costs and attorneys' fees)
incurred by an Indemnitee who was or is a witness or was, is or is threatened to
be made a named defendant or respondent in a Proceeding shall be paid or
reimbursed by the Trust at reasonable intervals in advance of the final
disposition of such Proceeding after receipt by the Trust of a written
affirmation from the Indemnitee of his good faith belief that he has met the
standard of conduct necessary for indemnification under this Article XV and a
written undertaking by or on behalf of such Indemnitee to repay the amount paid
or reimbursed by the Trust if it shall ultimately be determined that he is not
entitled to be indemnified by the Trust as authorized in this Article XV. Such
written undertaking shall be an unlimited general obligation of the Indemnitee
but need not be secured and it may be accepted without reference to financial
ability to make repayment. Notwithstanding any other provision of this Article
XV, the Trust may pay or reimburse expenses incurred by an Indemnitee in
connection with his appearance as a witness or other participation in a
Proceeding at a time when he is not named a defendant or respondent in the
Proceeding.
(e) The indemnification provided by this Article XV shall (i) not be deemed
exclusive of, or to preclude, any other rights to which those seeking
indemnification may at any time be entitled under the Trust's Bylaws, any law,
agreement or vote of shareholders or disinterested Trust Managers, or otherwise,
or under any policy or policies of insurance purchased and maintained by the
Trust on behalf of any Indemnitee, both as to action in his Official Capacity
and as to action in any other capacity, (ii) continue as to a person who has
ceased to be in the capacity by reason of which he was an Indemnitee with
respect to matters arising during the period he was in such capacity, and (iii)
inure to the benefit of the heirs, executors and administrators of such a
person.
(f) The provisions of this Article XV (i) are for the benefit of, and may
be enforced by, each Indemnitee of the Trust, the same as if set forth in their
entirety in a written instrument duly executed and delivered by the Trust and
such Indemnitee and (ii) constitute a continuing offer to all present and
future Indemnities. The Trust, by its adoption of this Declaration of Trust,
(x) acknowledges and agrees that each Indemnitee of the Trust has relied upon
and will continue to rely upon the provisions of this Article XV in becoming,
and serving in any of the capacities referred to in paragraph (a)(i) of this
Article XV, (y) waives reliance upon, and all notices of acceptance of, such
provisions by such Indemnities and (z) acknowledges and agrees that no present
or future Indemnitee
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shall be prejudiced in his right to enforce the provisions of this Article XV in
accordance with their terms by any act or failure to act on the part of the
Trust.
(g) No amendment, modification or repeal of this Article XV or any
provision of this Article XV shall in any manner terminate, reduce or impair the
right of any past, present or future Indemnities to be indemnified by the Trust,
nor the obligation of the Trust to indemnify any such Indemnities, under and in
accordance with the provisions of this Article XV as in effect immediately prior
to such amendment, modification or repeal with respect to claims arising from or
relating to matters occurring, in whole or in part, prior to such amendment,
modification or repeal, regardless of when such claims may be asserted.
(h) If the indemnification provided in this Article XV is either (i)
insufficient to cover all costs and expenses incurred by any Indemnitee as a
result of such Indemnitee being made or threatened to be made a defendant or
respondent in a Proceeding by reason of his holding or having held a position
named in paragraph (a)(i) of this Article XV or (ii) not permitted by Texas law,
the Trust shall indemnify, to the fullest extent that indemnification is
permitted by Texas law, every Indemnitee with respect to all costs and expenses
incurred by such Indemnitee as a result of such Indemnitee being made or
threatened to be made a defendant or respondent in a Proceeding by reason of his
holding or having held a position named in paragraph (a)(i) of this Article XV.
(i) The indemnification provided by this Article XV shall be subject to all
valid and applicable laws, including, without limitation, the Texas REIT Act,
and, in the event this Article XV or any of the provisions hereof or the
indemnification contemplated hereby are found to be inconsistent with or
contrary to any such valid laws, such laws shall be deemed to control and this
Article XV shall be regarded as modified accordingly, and, as so modified, to
continue in full force and effect.
(j) The indemnification provisions contained in this Article XV may be
amended only by the affirmative vote of the holders of at least two-thirds of
the outstanding Shares.
ARTICLE XVI
No Trust Manager or officer of the Trust shall be liable to the Trust for
any act, omission, loss, damage, or expense arising from the performance of his
duty under the Trust save only for his own willful misfeasance or willful
malfeasance or gross negligence. In discharging their duties to the Trust,
Trust Managers and officers of the Trust shall be entitled to rely upon experts
and other matters as provided in the Texas REIT Act.
ARTICLE XVII
The number of Trust Managers shall be fixed from time to time by the Trust
Managers as provided in the Bylaws of the Trust. Each Trust Manager shall serve
until his successor is elected and qualified or until his death, retirement,
resignation or removal. In the event of any increase or decrease in the
authorized number of Trust
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Managers, each Trust Manager then serving as such shall nevertheless continue as
a Trust Manager until the expiration of his current term, or his prior death,
retirement, resignation or removal.
Immediately after the initial public offering of Common Shares of the
Trust, the Board of Trust Managers of the Trust shall be divided into three
classes, each class to consist as nearly as possible of one-third of the Trust
Managers. The term of office of one class of Trust Managers shall expire each
year. The initial term of office of the Class I Trust Managers shall expire at
the 1995 annual meeting of shareholders. The initial term of office of the
Class II Trust Managers shall expire at the 1996 annual meeting of shareholders.
The initial term of office of the Class III Trust Managers shall expire at the
1997 annual meeting of shareholders. Commencing with the 1995 annual meeting of
shareholders, the Trust Managers of the class elected at each annual meeting of
shareholders shall hold office for a term of three years.
The Trust Managers for the class of Trust Managers whose term is expiring
at such annual meeting shall be elected at the annual meeting of the
shareholders by the affirmative vote of the holders of two-thirds (2/3) of the
shares outstanding and entitled to vote for the election of Trust Managers. A
Trust Manager may be removed by the vote of the holders of two-thirds of the
outstanding Shares at a special meeting of the shareholders called for such
purpose pursuant to the Trust's Bylaws.
ARTICLE XVIII
(a) From and after the Initial Public Offering (as hereinafter defined), no
person may own more than 9.8% of the outstanding Shares (the limitation on the
ownership of outstanding Shares is referred to in this Article XVIII as the
"Ownership Limit" and the 9.8% threshold is referred to in this Article XVIII as
the "Percentage Limit"), and no Securities (as hereinafter defined) shall be
accepted, purchased, or in any manner acquired by any person if such issuance or
transfer would result in that person's ownership of Shares exceeding the
Percentage Limit. Notwithstanding the foregoing, the Board of Trust Managers
may, in their discretion, waive the Ownership Limit with respect to the initial
acquisition by certain entities of Common Shares pursuant to the initial public
offering of the Trust's Common Shares. For purposes of determining if the
Ownership Limit is exceeded by a person, Convertible Securities (as hereinafter
defined) owned by such person shall be treated as if the Convertible Securities
owned by such person had been converted into Shares if the effect of such
treatment would be to increase the ownership percentage of such person in the
Trust. The Ownership Limit shall not apply to acquisitions of Securities by any
person that has made a tender offer for all outstanding Shares of the Trust
(including Convertible Securities) in conformity with applicable federal
securities laws, to the acquisition of Securities of the Trust by an underwriter
in a public offering of Securities of the Trust, or in any transaction involving
the issuance of Securities by the Trust, in which a majority of the Trust
Managers determines that the underwriter or other person or party initially
acquiring such Securities will timely distribute such Securities to or among
others so that, following such distribution, none of such
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Securities will be Excess Securities (as hereinafter defined), or to the
acquisition of Securities pursuant to the exercise of employee share options.
(b) Nothing in this Article XVIII shall preclude the settlement of any
transaction in Securities entered into through the facilities of the New York
Stock Exchange. If any Securities are accepted, purchased, or in any manner
acquired by any person resulting in a violation of paragraph (a) or (e) hereof,
such issuance or transfer shall be valid only with respect to such amount of
Securities issued or transferred as does not result in a violation of paragraph
(a) or (e) hereof, and such acceptance, purchase or acquisition shall be void ab
--
initio with respect to the amount of Securities that results in a violation of
- ------
paragraph (a) or (e) hereof (the "Excess Securities"), and the intended
transferee of such Excess Securities shall acquire no rights in such Excess
Securities except as set forth in paragraph (d) below.
(c) Ownership of Securities is conditional upon the owner or prospective
owner having provided to the Trust definitive written information respecting his
ownership of Securities. Failure to provide such information, upon reasonable
request, shall result in the Securities so owned being treated as Excess
Securities pursuant to paragraph (b) hereof for so long as such failure
continues.
(d) The Excess Securities, and the owners thereof, shall have the following
characteristics, rights and powers:
(i) Upon any purported transfer that results in Excess Securities
pursuant to paragraphs (a) or (e) of this Article XVIII, such Excess
Securities shall be deemed to have been transferred to the Trust, as
trustee of a trust for the exclusive benefit of such beneficiary or
beneficiaries to whom an interest in such Excess Securities may later be
transferred pursuant to subparagraph (v) of this paragraph (d). Any such
Excess Securities so held in trust shall be issued and outstanding stock of
the Trust. The purported transferee shall have no rights in such Excess
Securities except as provided in subparagraph (v) of this paragraph (d).
(ii) Excess Securities shall not be entitled to any dividends,
interest payments or other distributions. Any dividend or distribution
paid prior to the discovery by the Trust that the Securities have become
Excess Securities shall be repaid to the Trust upon demand.
(iii) In the event of any voluntary or involuntary liquidation,
dissolution or winding up of, or any distribution of the assets of, the
Trust, each holder of Excess Securities shall be entitled to receive,
ratably with each other holder of Securities and Excess Securities, that
portion of the assets of the Trust available for distribution to its
shareholders as the number of shares of the Excess Securities held by such
holder bears to the total number of shares of Securities and Excess
Securities then outstanding. The Trust, as holder of the Excess Securities
in trust, or if the Trust shall have been dissolved, any trustee of such
trust appointed by the
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Trust prior to its dissolution, shall distribute ratably to the
beneficiaries of such trust, when determined, any such assets received in
respect of the Excess Securities in any liquidation, dissolution or winding
up of, or any distribution of the assets of, the Trust.
(iv) The holders of shares of Excess Securities shall not be entitled
to vote on any matters (except as required by law).
(v) Except as otherwise provided in this Article XVIII, Excess
Securities shall not be transferable. The purported transferee may freely
designate a beneficiary of an interest in the trust (representing the
number of shares of Excess Securities held by the trust attributable to a
purported transfer that resulted in the Excess Securities), if (A) the
shares of Excess Securities held in the trust would not be Excess
Securities in the hands of such beneficiary and (B) the purported
transferee does not receive a price from such beneficiary that reflects a
price per share for such Excess Securities that exceeds (x) the price per
share such purported transferee paid for the Securities in the purported
transfer that resulted in the Excess Securities, or (y) if the purported
transferee did not give value for such Excess Securities (through a gift,
devise or other transaction), a price per share equal to the Market Price
on the date of the purported transfer that resulted in Excess Securities.
Upon such transfer of an interest in the trust, the corresponding shares of
Excess Securities in the trust shall be automatically exchanged for an
equal number of shares of the applicable Securities and such Securities
shall be transferred of record to the transferee of the interest in the
trust if such Securities would not be Excess Securities in the hands of
such transferee. Prior to any transfer of any interest in the trust, the
purported transferee must give advance notice to the Trust of the intended
transfer and the Trust must have waived in writing its purchase rights
under subparagraph (vi) of this paragraph (d). Notwithstanding the
foregoing, if a purported transferee receives a price for designating a
beneficiary of an interest in the trust that exceeds the amounts allowable
under the foregoing provisions of this subparagraph (v), such purported
transferee shall pay, or cause such beneficiary to pay, such excess to the
Trust.
(vi) Excess Securities shall be deemed to have been offered for sale
to the Trust, or its designee, at a price per share equal to the lesser of
(A) the price per share in the transaction that created such Excess
Securities (or, in the case of a devise or gift, the Market Price at the
time of such devise or gift) and (B) the Market Price on the date the
Trust, or its designee, accepts such offer. The Trust shall have the right
to accept such offer for a period of 90 days after the later of (x) the
date of the transfer which resulted in such Excess Securities and (y) the
date the Trust Managers determine in good faith that a transfer resulting
in Excess Securities has occurred.
(e) Any sale, transfer, gift, assignment, devise or other disposition of
Shares (a "transfer") that, if effective, would result in (i) the Shares being
owned by less than 100 persons (determined without reference to any rules of
attribution) shall be void ab initio
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as to the Shares which would otherwise be beneficially owned by the transferee,
(ii) the Trust being "closely held" within the meaning of Section 856(h) of the
Internal Revenue Code of 1986, as amended (the "Code"), shall be void ab initio
-- ------
as to the transfer of the Shares that would cause the Trust to be "closely held"
within the meaning of Section 856(h) of the Code, and (iii) the disqualification
of the Trust as a REIT shall be void ab initio as to the transfer of the Shares
-- ------
that would cause the Trust to be disqualified as a REIT, and, in the case of
each of clauses (i), (ii) and (iii) of this paragraph (e), the intended
transferee shall acquire no rights in such Shares except as set forth in
paragraph (d) above.
(f) For purposes of this Article XVIII:
(i) The term "Convertible Securities" means any securities of the
Trust that are convertible into Shares.
(ii) The term "individual" means any natural person and those
organizations treated as natural persons in Section 542(a) of the Code.
(iii) The term "Initial Public Offering" means the initial sale of
Common Shares to the public pursuant to the Trust's first effective
registration statement for such Common Shares filed under the Securities
Act of 1933, as amended.
(iv) The term "Market Price" means the last reported sales price of
Common Shares reported on the New York Stock Exchange on the trading day
immediately preceding the relevant date, or if the Common Shares are not
then traded on the New York Stock Exchange, the last reported sales price
of the Common Shares on the trading day immediately preceding the relevant
date as reported on any exchange or quotation system over which the Common
Shares may be traded, or if the common Shares are not then traded over any
exchange or quotation system, then the market price of the Common Shares on
the relevant date as determined in good faith by the Trust Managers.
(v) The term "ownership" (including "own" or "owns") of Shares means
beneficial ownership. Beneficial ownership, for this purpose shall be
defined in accordance with or by reference to Sections 856, 542 and 544 of
the Code Internal Revenue Code of 1986, as amended (the "Code").
(vi) The term "person" includes an individual, corporation,
partnership, association, joint stock company, trust, unincorporated
association or other entity and also includes a "group" as that term is
defined in Section 13(d)(3) of the Exchange Act.
(vii) The term "REIT" means a "real estate investment trust" in
accordance with the provisions of Sections 856 through 860 of the Code and
applicable Treasury Regulations.
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(viii) The term "Securities" means Shares and Convertible Securities.
(g) If any of the restrictions on transfer set forth in this Article XVIII
are determined to be void, invalid or unenforceable by virtue of any legal
decision, statute, rule or regulation, then the intended transferee of any
Excess Securities may be deemed, at the option of the Trust, to have acted as an
agent on behalf of the Trust in acquiring the Excess Securities and to hold the
Excess Securities on behalf of the Trust.
(h) Nothing herein contained shall limit the ability of the Trust to impose
or to seek judicial or other imposition of additional restrictions if deemed
necessary or advisable to protect the Trust and the interests of its security
holders by preservation of the Trust's status as a qualified real estate
investment trust under the Code.
(i) All persons who own 5% or more of the Trust's outstanding Shares during
any taxable year of the Trust shall file with the Trust an affidavit setting
forth the number of Shares during such taxable year (i) owned directly (held of
record by such person or by a nominee or nominees of such person) and (ii) owned
indirectly (by reason of Sections 542, 544 and 856 of the Code or for purposes
of Rule 13(d) of the Exchange Act) by the person filing the affidavit. The
affidavit to be filed with the Trust shall set forth all the information
required to be reported (i) in returns of shareholders under income tax
regulation 1.857-9 or similar provisions of any successor regulation and (ii) in
reports to be filed under Section 13(d) of the Exchange Act. The affidavit or
an amendment to a previously filed affidavit shall be filed with the Trust
annually within 60 days after the close of the Trust's taxable year. A person
shall have satisfied the requirements of this paragraph (i) if the person
furnishes to the Trust the information in such person's possession after such
person has made a good faith effort to determine the Shares it indirectly owns
and to acquire the information required by income tax regulation 1.857-9 or
similar provisions of any successor regulation. Notwithstanding the foregoing,
if the Trust has less than 2,000 record shareholders, the affidavit requirements
of this paragraph (i) shall apply to holders of 1% or more of the Trust's
outstanding Shares, or to the holders of 0.5% or more of the Trust's outstanding
Shares if the Trust has 200 or fewer record shareholders.
(j) The affirmative vote of the holders of not less than 80% of all
outstanding Shares of the Trust entitled to vote in the election of Trust
Managers, considered for purposes of this Article XVIII as one class, shall be
required to amend, alter, change, repeal or rescind any provision of this
Article XVIII or to adopt any provisions inconsistent with this Article XVIII.
ARTICLE XIX
Upon resolution adopted by the Trust Managers, the Trust shall be entitled
to purchase, directly or indirectly, its own Shares, provided that following
such repurchase the Trust would continue to be able to pay its debts as they
become due in the ordinary course of its business.
-18-
<PAGE>
ARTICLE XX
This Declaration of Trust may be amended from time to time by the
affirmative vote of the holders of at least two-thirds of the outstanding Shares
entitled to vote on the proposed amendment, except that (i) Article X hereof
(relating to the prohibition against engaging in non-real estate investment
trust businesses); (ii) Article XII hereof (relating to the approval of Business
Combinations); (iii) Article XVIII hereof (relating to Share ownership
requirements) and (iv) this Article XX may not be amended or repealed, and
provisions inconsistent therewith and herewith may not be adopted, except by the
affirmative vote of the holders of at least 80% of the outstanding Shares.
ARTICLE XXI
If any provision of this Declaration of Trust or any application of
any such provision is determined to be invalid by any federal or state court
having jurisdiction over the issue, the validity of the remaining provisions
shall not be affected and other applications of such provision shall be affected
only to the extent necessary to comply with the determination of such court.
This Declaration of Trust may be executed in one or more counterparts, each of
which shall be deemed to be an original and all of which shall be deemed to be
one and the same instrument.
-19-
<PAGE>
IN WITNESS WHEREOF, the undersigned Trust Managers do hereby execute
this Amended and Restated Declaration of Trust effective as of the 20th day of
May, 1996.
Richard L. Bloch
--------------------------------------------------
Robert L. Shaw
--------------------------------------------------
Will Cureton
--------------------------------------------------
Roger T. Staubach
--------------------------------------------------
James C. Leslie
--------------------------------------------------
Jack E. Kemp
--------------------------------------------------
Hugh G. Robinson
--------------------------------------------------
Gregg L. Engles
-20-
<PAGE>
ACKNOWLEDGEMENT
STATE OF (S)
----------------
(S)
COUNTY OF (S)
----------------
On June ___, 1996, before me, the undersigned Notary Public, duly
commissioned and qualified within and for the State and County aforesaid,
personally came and appeared Richard L. Bloch, personally known to me (or proved
to me on the basis of satisfactory evidence) to be the person whose name is
subscribed to the within instrument, and acknowledged to me that he executed the
same in his authorized capacity as Trust Manager of Columbus Realty Trust.
Witness my hand and official seal.
----------------------------------------
----------------------------------------
NOTARY PUBLIC
-21-
<PAGE>
ACKNOWLEDGEMENT
STATE OF TEXAS (S)
(S)
COUNTY OF DALLAS (S)
On June ___, 1996, before me, the undersigned Notary Public, duly
commissioned and qualified within and for the State and County aforesaid,
personally came and appeared Robert L. Shaw, personally known to me (or proved
to me on the basis of satisfactory evidence) to be the person whose name is
subscribed to the within instrument, and acknowledged to me that he executed the
same in his authorized capacity as Trust Manager of Columbus Realty Trust.
Witness my hand and official seal.
---------------------------------------
---------------------------------------
NOTARY PUBLIC
-22-
<PAGE>
ACKNOWLEDGEMENT
STATE OF TEXAS (S)
(S)
COUNTY OF DALLAS (S)
On June ___, 1996, before me, the undersigned Notary Public, duly
commissioned and qualified within and for the State and County aforesaid,
personally came and appeared Will Cureton, personally known to me (or proved to
me on the basis of satisfactory evidence) to be the person whose name is
subscribed to the within instrument, and acknowledged to me that he executed the
same in his authorized capacity as Trust Manager of Columbus Realty Trust.
Witness my hand and official seal.
---------------------------------------
---------------------------------------
NOTARY PUBLIC
-23-
<PAGE>
ACKNOWLEDGEMENT
STATE OF TEXAS (S)
(S)
COUNTY OF DALLAS (S)
On June ___, 1996, before me, the undersigned Notary Public, duly
commissioned and qualified within and for the State and County aforesaid,
personally came and appeared Roger T. Staubach, personally known to me (or
proved to me on the basis of satisfactory evidence) to be the person whose name
is subscribed to the within instrument, and acknowledged to me that he executed
the same in his authorized capacity as Trust Manager of Columbus Realty Trust.
Witness my hand and official seal.
---------------------------------------
---------------------------------------
NOTARY PUBLIC
-24-
<PAGE>
ACKNOWLEDGEMENT
STATE OF TEXAS (S)
(S)
COUNTY OF DALLAS (S)
On June ___, 1996, before me, the undersigned Notary Public, duly
commissioned and qualified within and for the State and County aforesaid,
personally came and appeared James C. Leslie, personally known to me (or proved
to me on the basis of satisfactory evidence) to be the person whose name is
subscribed to the within instrument, and acknowledged to me that he executed the
same in his authorized capacity as Trust Manager of Columbus Realty Trust.
Witness my hand and official seal.
---------------------------------------
---------------------------------------
NOTARY PUBLIC
-25-
<PAGE>
ACKNOWLEDGEMENT
STATE OF (S)
----------------
(S)
COUNTY OF (S)
-----------------
On June ___, 1996, before me, the undersigned Notary Public, duly
commissioned and qualified within and for the State and County aforesaid,
personally came and appeared Jack E. Kemp, personally known to me (or proved to
me on the basis of satisfactory evidence) to be the person whose name is
subscribed to the within instrument, and acknowledged to me that he executed the
same in his authorized capacity as Trust Manager of Columbus Realty Trust.
Witness my hand and official seal.
---------------------------------------
---------------------------------------
NOTARY PUBLIC
-26-
<PAGE>
ACKNOWLEDGEMENT
STATE OF TEXAS (S)
(S)
COUNTY OF DALLAS (S)
On June ___, 1996, before me, the undersigned Notary Public, duly
commissioned and qualified within and for the State and County aforesaid,
personally came and appeared Hugh G. Robinson, personally known to me (or proved
to me on the basis of satisfactory evidence) to be the person whose name is
subscribed to the within instrument, and acknowledged to me that he executed the
same in his authorized capacity as Trust Manager of Columbus Realty Trust.
Witness my hand and official seal.
---------------------------------------
---------------------------------------
NOTARY PUBLIC
-27-
<PAGE>
ACKNOWLEDGEMENT
STATE OF TEXAS (S)
(S)
COUNTY OF DALLAS (S)
On June ___, 1996, before me, the undersigned Notary Public, duly
commissioned and qualified within and for the State and County aforesaid,
personally came and appeared Gregg L. Engles, personally known to me (or proved
to me on the basis of satisfactory evidence) to be the person whose name is
subscribed to the within instrument, and acknowledged to me that he executed the
same in his authorized capacity as Trust Manager of Columbus Realty Trust.
Witness my hand and official seal.
---------------------------------------
---------------------------------------
NOTARY PUBLIC
-28-
<PAGE>
EXHIBIT 3.2
BYLAWS
OF
COLUMBUS REALTY TRUST
Amended and Restated
as of January 8, 1996
<PAGE>
TABLE OF CONTENTS
-----------------
Page
----
ARTICLE I - OFFICES.......................................................... 1
Section 1.1 Principal Office........................................... 1
Section 1.2 Other Offices.............................................. 1
ARTICLE II - MEETINGS OF SHAREHOLDERS....................................... 1
Section 2.1 Place of Meetings.......................................... 1
Section 2.2 Annual Meeting............................................. 1
Section 2.3 Special Meetings........................................... 1
Section 2.4 Notice of Meetings......................................... 2
Section 2.5 Voting Lists............................................... 2
Section 2.6 Quorum..................................................... 2
Section 2.7 Organization............................................... 3
Section 2.8 Proxies.................................................... 3
Section 2.9 Voting of Shares........................................... 4
Section 2.10 Voting of Shares by Certain Holders........................ 4
Section 2.11 Election of Trust Managers................................. 5
Section 2.12 Telephone Meetings......................................... 5
Section 2.13 Action Without Meeting..................................... 5
Section 2.14 Inspectors and Voting Procedures........................... 5
ARTICLE III - TRUST MANAGERS................................................ 6
Section 3.1 Powers and Responsibilities................................ 6
Section 3.2 Number and Qualification................................... 6
Section 3.3 Classified Board........................................... 6
Section 3.4 Election and Term of Office................................ 7
Section 3.5 Resignation................................................ 7
Section 3.6 Removal.................................................... 7
Section 3.7 Vacancies.................................................. 7
Section 3.8 Bond Not Required; Time Commitment......................... 8
Section 3.9 Compensation............................................... 8
Section 3.10 Execution of Documents..................................... 8
ARTICLE IV - MEETINGS OF THE TRUST MANAGERS.................................. 8
Section 4.1 Place of Meetings.......................................... 8
Section 4.2 Annual Meeting............................................. 8
Section 4.3 Regular Meetings........................................... 8
Section 4.4 Special Meetings........................................... 8
Section 4.5 Quorum and Action.......................................... 9
Section 4.6 Presumption of Assent to Action............................ 9
Section 4.7 Telephone Meeting.......................................... 9
Section 4.8 Action Without Meeting..................................... 9
Section 4.9 Minutes.................................................... 9
-i-
<PAGE>
TABLE OF CONTENTS
-----------------
(Continued)
Page
----
Section 4.10 Interest of Trust Managers................................. 9
Section 4.11 Right of Trust Managers and Officers to Own Shares
or Other Property and to Engage in Other Business......... 9
Section 4.12 Transactions Between Trust Managers and the Trust.......... 10
Section 4.13 Persons Dealing with Trust Managers or Officers............ 11
Section 4.14 Reliance................................................... 11
Section 4.15 Liability of Trust Managers................................ 11
ARTICLE V - COMMITTEES OF THE TRUST MANAGERS................................. 11
Section 5.1 Membership and Authorities................................. 11
Section 5.2 Minutes and Rules of Procedure............................. 12
Section 5.3 Vacancies.................................................. 12
Section 5.4 Telephone Meetings......................................... 12
Section 5.5 Action Without Meeting..................................... 12
ARTICLE VI - OFFICERS........................................................ 12
Section 6.1 Number..................................................... 12
Section 6.2 Election, Term of Office and Qualification................. 12
Section 6.3 Subordinate Officers....................................... 12
Section 6.4 Resignation................................................ 13
Section 6.5 Removal.................................................... 13
Section 6.6 Vacancies.................................................. 13
Section 6.7 Chairman of the Board...................................... 13
Section 6.8 Chief Executive Officer.................................... 13
Section 6.9 Chief Operating Officer.................................... 14
Section 6.10 President.................................................. 14
Section 6.11 Vice Presidents............................................ 14
Section 6.12 The Secretary.............................................. 14
Section 6.13 Assistant Secretaries...................................... 15
Section 6.14 The Treasurer.............................................. 15
Section 6.15 Assistant Treasurers....................................... 15
Section 6.16 Treasurer's Bond........................................... 15
Section 6.17 Salaries................................................... 15
Section 6.18 Execution of Documents..................................... 16
ARTICLE VII - TRUST SHARES................................................... 16
Section 7.1 Share Certificates......................................... 16
Section 7.2 Lost Certificates, etc..................................... 17
Section 7.3 Transfer of Shares......................................... 17
Section 7.4 Ownership of Shares........................................ 17
Section 7.5 Closing of Transfer Books.................................. 17
-ii-
<PAGE>
TABLE OF CONTENTS
-----------------
(Continued)
Page
----
Section 7.6 Distributions.............................................. 18
Section 7.7 Reserves................................................... 18
ARTICLE VIII - INDEMNIFICATION.............................................. 18
Section 8.1 Definitions................................................ 18
Section 8.2 Indemnification............................................ 19
Section 8.3 Successful Defense......................................... 20
Section 8.4 Determinations............................................. 20
Section 8.5 Advancement of Expenses.................................... 20
Section 8.6 Employee Benefit Plans..................................... 21
Section 8.7 Other Indemnification and Insurance........................ 21
Section 8.8 Notice..................................................... 21
Section 8.9 Construction............................................... 21
Section 8.10 Continuing offer, Reliance. etc............................ 22
Section 8.11 Indemnification of Shareholders............................ 22
Section 8.12 Effect of Amendment........................................ 22
ARTICLE IX - GENERAL PROVISIONS............................................. 22
Section 9.1 General Policies........................................... 22
Section 9.2 Limited Liability of Shareholders and Subscribers.......... 22
Section 9.3 Waiver of Notice........................................... 23
Section 9.4 Seal....................................................... 23
Section 9.5 Fiscal Year................................................ 23
Section 9.6 Checks, Notes, etc......................................... 23
Section 9.7 Examination of Books and Records........................... 24
Section 9.8 Voting of Shares Held by the Trust......................... 24
Section 9.9 Number, Gender, etc........................................ 24
ARTICLE X - AMENDMENTS...................................................... 24
Section 10.1 Amendment of Bylaws........................................ 24
ARTICLE XI - SUBJECT TO ALL LAWS........................................... 24
Section 11.1 Subject to All Laws....................................... 24
-iii-
<PAGE>
COLUMBUS REALTY TRUST
(the "Trust")
BYLAWS
ARTICLE I
OFFICES
-------
Section 1.1 Principal Office. The principal office of the Trust shall be
----------------
in the City of Dallas, Dallas County, Texas.
Section 1.2 Other Offices. The Trust may also have offices at such other
-------------
places, both within and without the State of Texas, as the Trust Managers may
from time to time determine or the business of the Trust may require.
ARTICLE II
MEETINGS OF SHAREHOLDERS
------------------------
Section 2.1 Place of Meetings. The Trust Managers may designate any
-----------------
place, either within or without the State of Texas, as the place of meeting for
any annual meeting or for any special meeting called by the Trust Managers. A
waiver of notice signed by all shareholders entitled to vote at a meeting may
designate any place, either within or without the State of Texas, as the place
for the holding of such meeting. If no designation is made, or if a special
meeting be otherwise called, the place of meeting shall be the principal office
of the Trust.
Section 2.2 Annual Meeting. The annual meeting of shareholders commencing
--------------
with the year 1994 shall be held at such time, on such day and at such place as
may be designated by the Trust Managers; provided, however, commencing with the
calendar year 1995, such meeting shall be held no later than the last day in May
of each year. At the annual meeting the shareholders shall elect Trust Managers
and transact such other business as may properly be brought before the meeting.
Notwithstanding the above, the Trust Managers may from time to time by
resolution provide that the annual meeting of the shareholders be held on a date
after the last day in May of each year.
Section 2.3 Special Meetings. Special meetings of the shareholders for
----------------
any purpose or purposes, unless otherwise prescribed by law or by the
Declaration of Trust, may be called by the Trust Managers, any executive officer
or secretary of the Trust or the holders of at least ten percent (10%) of all of
the shares entitled to vote at the meetings. Business transacted at all special
meetings shall be confined to the purpose or purposes stated in the call.
<PAGE>
Section 2.4 Notice of Meetings. Written or printed notice of all meetings
------------------
of shareholders stating the place, day and hour thereof, and in the case of a
special meeting the purpose or purposes for which the meeting is called, shall
be personally delivered or mailed, not less than ten (10) days nor more than
sixty (60) days prior to the date of the meeting, to the shareholders of record
entitled to vote at such meeting. If mailed, such notice shall be deemed to be
delivered when deposited in the United States Mail addressed to the shareholder
at his address as it appears on the share transfer books of the Trust and the
postage shall be prepaid. Personal delivery of any such notice to any officer
of a corporation or association, or to any member of a partnership, shall
constitute delivery of such notice to such corporation, association or
partnership. Notice need not be given to a shareholder if (1) notice of two
consecutive annual meetings and all notices of any meetings held during the
period between those annual meetings or (2) all (but in no event less than two)
payments (if sent by first class mail) of distributions or interest on
securities during a 12-month period have been mailed to the shareholder at the
address as shown on the share transfer records of the Trust, and have been
returned undeliverable. If such a shareholder delivers to the Trust a written
notice setting forth his current address, the notice requirement of this Section
shall be reinstated.
Section 2.5 Voting Lists. The officer or agent having charge of the share
------------
transfer books for shares of the Trust shall make, at least ten (10) days before
each meeting of the shareholders, a complete list of shareholders entitled to
vote at such meeting or any adjournment thereof, arranged in alphabetical order,
with the address of each and the number of shares held by each, which list, for
a period of ten (10) days prior to such meeting, shall be kept on file at the
registered office of the Trust and shall be subject to inspection by any
shareholder at any time during usual business hours. Such list shall also be
produced and kept open at the time and place of the meeting and shall be subject
to the inspection of any shareholder for the duration of the meeting. The
original share transfer books shall be prima facie evidence as to who are the
shareholders entitled to examine such list or transfer books or to vote at any
meeting of shareholders. Failure to comply with this Section 2.5 with respect
to any meeting of shareholders shall not affect the validity of any action taken
at such meeting.
Section 2.6 Quorum. The holders of a majority of the shares entitled to
------
vote, present in person or represented by proxy, shall constitute a quorum at
all meetings of the shareholders for the transaction of business, except as
otherwise provided by law or by the Declaration of Trust, but in no event shall
a quorum consist of holders of less than one-third of the shares entitled to
vote at such meeting. If, however, such quorum shall not be present or
represented at any meeting of the shareholders, the shareholders entitled to
vote at such meeting, present in person or represented by proxy, shall have the
power to adjourn the meeting until such time and to such place as may be
determined by a vote of the holders of a majority of the shares represented in
person or by proxy at that meeting. At such adjourned meeting at which a quorum
shall be present or represented any business may be transacted which might have
been transacted at the meeting as originally convened. The shareholders present
at a duly organized meeting at which a quorum was present may continue to
transact business until adjournment notwithstanding the withdrawal of enough
shareholders to leave less than a quorum
-2-
<PAGE>
present. A holder of a share shall be treated as being present at a meeting if
the holder of such share is (i) present in person at the meeting or (ii)
represented at the meeting by a valid proxy, whether the instrument granting
such proxy is marked as casting a vote or abstaining, is left blank or does not
empower such proxy to vote with respect to some or all matters to be voted upon
at the meeting.
Section 2.7 Organization.
------------
(a) The Chairman of the Board, if one shall be elected, shall preside at
all meetings of the shareholders. In the absence of the Chairman of the Board
or, should one not be elected, the Chief Executive Officer or, in his absence,
the Chief Operating Officer shall preside. In the absence of all of these
officers, any shareholder or the duly appointed proxy of any shareholder may
call the meeting to order and a chairman shall be elected from among the
shareholders present. The presiding officer shall fix the agenda for the
meeting, shall conduct all aspects of the meeting and shall establish and
interpret the rules of order for the conduct of the meeting.
(b) The Secretary of the Trust shall act as secretary at all meetings of
the shareholders. In his absence an Assistant Secretary shall so act and, in
the absence of all of these officers, the presiding officer may appoint any
person to act as secretary of the meeting.
Section 2.8 Proxies.
-------
(a) At any meeting of the shareholders, every shareholder entitled to
vote at such meeting shall be entitled to vote in person or by proxy executed in
writing by such shareholder or by his duly authorized attorney-in-fact. Proxies
shall be filed with the Secretary or Trust Managers immediately after the
meeting has been called to order.
(b) No proxy shall be valid after eleven (11) months from the date of its
execution unless such proxy otherwise provides.
(c) A proxy shall be revocable unless the proxy form conspicuously states
that the proxy is irrevocable and the proxy is coupled with an interest. A
proxy which is revocable as aforesaid may be revoked at any time by filing with
the Secretary an instrument revoking it or a duly executed proxy bearing a later
date. Any revocable proxy which is not so revoked shall, subject to paragraph
(b) above, continue in full force and effect.
(d) In the event that any instrument in writing shall designate two (2)
or more persons to act as proxies, a majority of such persons present at the
meeting or, if only one shall be present, then that one, shall have and may
exercise all of the powers conferred by such written instrument upon all the
persons so designated unless the instrument shall otherwise provide.
-3-
<PAGE>
Section 2.9 Voting of Shares. Except as otherwise provided by law or the
----------------
Declaration of Trust, each shareholder shall be entitled at each meeting of
shareholders to one (1) vote on each matter submitted to a vote at such meeting
for each share having voting rights registered in his name on the books of the
Trust at the time of the closing of the share transfer books (or at the record
date) for such meeting. When a quorum is present at any meeting in accordance
with Section 2.6 of these Bylaws, the votes of holders of a majority of the
shares entitled to vote, present in person or represented by proxy, shall decide
any matter submitted to such meeting, unless the matter is one upon which by law
or by express provision of the Declaration of Trust or of these Bylaws the vote
of a greater number is required, in which case the vote of such greater number
shall govern and control the decision of such matter. In determining the number
of shares entitled to vote, shares abstaining from voting or not voted on a
matter (including elections) will not be treated as entitled to vote. The
provisions of this Section 2.9 will govern with respect to all votes of
shareholders except as otherwise provided for in these Bylaws or in the
Declaration of Trust or by some specific statutory provision superseding the
provisions contained in these Bylaws or the Declaration of Trust.
Section 2.10 Voting of Shares by Certain Holders.
-----------------------------------
(a) Shares held in the name of another business organization may be voted
by such officer, agent or proxy as the organizational documents of such
organization may authorize or, in the absence of such authorization, as may be
determined by the governing body of such organization.
(b) Shares held by an administrator, executor, guardian or conservator
may be voted by him, either in person or by proxy, without a transfer of such
shares into his name so long as such shares forming a part of an estate are in
the possession and form a part of the estate being served by him. Shares held in
the name of a trustee may be voted by him, either in person or by proxy, but no
trustee shall be entitled to vote shares held by him without a transfer of such
shares into his name as trustee.
(c) Shares held in the name of a receiver may be voted by such receiver,
and shares held by or under the control of a receiver may be voted by such
receiver without the transfer thereof into his name if authority to do so is
contained in an appropriate order of the court by which such receiver was
appointed.
(d) A shareholder whose shares are pledged shall be entitled to vote such
shares until the shares have been transferred into the name of the pledgee, and
thereafter the pledgee shall be entitled to vote the shares so transferred.
(e) Shares of the Trust's stock (i) owned by the Trust itself or (ii)
owned by another real estate investment trust or corporation, the majority of
the voting stock of which is owned or controlled by the Trust, shall not be
voted, directly or indirectly, at any meeting, and, except for Excess Securities
(as defined in the Declaration of Trust), shall not be counted in determining
the total number of outstanding shares at any given time.
-4-
<PAGE>
Section 2.11 Election of Trust Managers. At each election of Trust
--------------------------
Managers, each shareholder entitled to vote at such election shall, unless
otherwise provided by the Declaration of Trust or by applicable law, have the
right to vote, in person or by proxy, the number of shares owned by him for as
many persons as there are to be elected and for whose election he has a right to
vote. Unless otherwise provided by the Declaration of Trust, no shareholder
shall have the right or be permitted to cumulate his votes on any basis.
Section 2.12 Telephone Meetings. Subject to the provisions of law, the
------------------
Declaration of Trust and these Bylaws regarding notice of meetings, shareholders
may participate in and hold a meeting of the shareholders by means of
conference telephone or similar communications equipment by means of which all
persons participating in the meeting can hear each other, and participation in a
meeting pursuant to this Section shall constitute presence in person at such
meeting, except where a person participates in the meeting for the express
purpose of objecting to the transaction of any business on the ground that the
meeting is not lawfully called or convened.
Section 2.13 Action Without Meeting. Any action required or permitted by
----------------------
any provision of law or of the Declaration of Trust or these Bylaws to be taken
at a meeting of the shareholders may be taken without a meeting if a consent in
writing, setting forth the action so taken, shall be signed by all of the
shareholders entitled to vote with respect to the subject matter thereof, and
such consent shall have the same force and effect as action taken at a meeting.
Section 2.14 Inspectors and Voting Procedures.
--------------------------------
(a) The Trust shall, in advance of any meeting of shareholders, appoint
one or more inspectors to act at the meeting and make a written report thereof.
The Trust may designate one or more persons as alternate inspectors to replace
any inspector who fails to act. If no inspector or alternate is able to act at a
meeting of shareholders, the person presiding at the meeting shall appoint one
or more inspectors to act at the meeting. Each inspector, before entering upon
the discharge of his duties, shall take and sign an oath faithfully to execute
the duties of inspector with strict impartiality and according to the best of
his ability.
(b) The inspectors shall (i) ascertain the number of shares outstanding
and the voting power of each, (ii) determine the shares represented at a meeting
and the validity of proxies and ballots, (iii) count all votes and ballots, (iv)
determine and retain for a reasonable period a record of the disposition of any
challenges made to any determination by the inspectors, and (v) certify their
determination of the number of shares represented at the meeting, and their
count of all votes and ballots. The inspectors may appoint or retain other
persons or entities to assist the inspectors in the performance of the duties of
the inspectors.
(c) The date and time of the opening and closing of the polls for each
matter upon which the shareholders will vote at a meeting shall be announced at
the meeting.
-5-
<PAGE>
No ballots, proxies or votes, nor any revocations thereof or changes thereto,
shall be accepted by the inspectors after the closing of the polls unless a
court of appropriate jurisdiction, upon application by a shareholder, shall
determine otherwise.
(d) In determining the validity and counting of proxies and ballots, the
inspectors may examine and consider such records or factors as allowed by the
Texas Real Estate Investment Trust Act, as amended (the "Texas REIT Act").
ARTICLE III
TRUST MANAGERS
--------------
Section 3.1 Powers and Responsibilities. The business and affairs of the
---------------------------
Trust shall be managed under the direction of its Trust Managers who may
exercise all such powers of the Trust and do all such lawful acts and things as
are not by statute, the Declaration of Trust or these Bylaws directed or
required to be exercised or done by the shareholders. The enumeration of any
specific power or authority herein shall not be construed as limiting the
aforesaid powers or the general powers or authority or any other specified power
or authority conferred herein upon the Trust Managers. Among other things, the
Trust Managers shall be responsible for (a) supervising the Trust's operation
and management of the Trust's properties, (b) evaluating the capability and
performances of the managers of the Trust's properties, (c) reviewing the
Trust's investment policies, (d) determining that the fees and expenses of the
Trust are reasonable, (e) reviewing the aggregate borrowings of the Trust, (f)
authorizing the issuance of the capital stock of the Trust, (g) approving the
acquisition and disposition of real property and interests therein, (h)
ratifying the appointments of independent accountants for the Trust and of
independent appraisers of the Trust's properties, and (i) establishing and
reviewing guidelines for leasing and management of the Trust's properties.
Section 3.2 Number and Qualification. There shall at all times be no less
------------------------
than two (2) nor more than eleven (11) Trust Managers who shall be elected at
the annual meeting of the shareholders (except as provided in Section 3.7).
Subject to any limitations specified by law or in the Declaration of Trust, the
number of Trust Managers may be fixed from time to time by resolution adopted by
a majority of the Trust Managers. No decrease in the number of Trust Managers
shall have the effect of shortening the term of any incumbent Trust Manager.
Trust Managers need not be shareholders, must be at least eighteen (18) years of
age, must not be subject to any legal disability and need not be residents of
the State of Texas.
Section 3.3 Classified Board. The Board of Trust Managers of the Trust
----------------
shall be divided into three classes, each class to consist as nearly as possible
of one-third of the Trust Managers. Subject to Section 3.4 below, the term of
-----------
office of one class of Trust Managers shall expire each year with the initial
term of office of the Class I Trust Managers expiring at the 1995 annual meeting
of shareholders; the initial term of office of the Class II Trust Managers
expiring at the 1996 annual meeting of shareholders; and
-6-
<PAGE>
the initial term of office of the Class III Trust Managers expiring at the 1997
annual meeting of shareholders. Subject to Section 3.4 below, commencing with
-----------
the 1995 annual meeting of shareholders, the Trust Managers of the class elected
at each annual meeting of shareholders shall hold office for a term of three
years.
Section 3.4 Election and Term of Office. The Trust Managers for the class
---------------------------
of Trust Managers whose term is expiring at such annual meeting shall be elected
at the annual meeting of the shareholders (except as provided in Section 3.7) by
the affirmative vote of the holders of two-thirds (2/3) of the outstanding
shares of the Trust. Each Trust Manager shall hold office for the term set
forth in the Declaration of Trust and until his successor is elected and
qualified, or until his death, resignation or removal in the manner provided in
these Bylaws.
Section 3.5 Resignation. Any Trust Manager may resign at any time by
-----------
giving written notice to the remaining Trust Managers. Such resignation shall
take effect at the time specified therein, and unless otherwise specified
therein, the acceptance of such resignation shall not be necessary to make it
effective. A Trust Manager judged incompetent or for whom a guardian or
conservator has been appointed, shall be deemed to have resigned as of the date
of such adjudication or appointment.
Section 3.6 Removal. A Trust Manager may be removed at any time with or
-------
without cause by the vote of holders of shares representing two-thirds (2/3) of
the total votes authorized to be cast by shares then outstanding and entitled to
vote thereon. Upon the resignation or removal of any Trust Manager, or his
otherwise ceasing to be a Trust Manager, he shall execute and deliver such
documents as the remaining Trust Managers shall require for the conveyance of
any Trust property held in his name, shall account to the remaining Trust
Managers as they require for all property which he holds as Trust Manager and
shall thereupon be discharged as Trust Manager. Upon the incapacity or death of
any Trust Manager, his legal representative shall perform the acts set forth in
the preceding sentence and the discharge mentioned therein shall run to such
legal representative and to the incapacitated Trust Manager or the estate of the
deceased Trust Manager, as the case may be.
Section 3.7 Vacancies. If any or all of the Trust Managers cease to be
---------
Trust Managers hereunder, whether by reason of resignation, removal, incapacity,
death or otherwise, such event shall not terminate the Trust or affect its
continuity. Until vacancies are filled, the remaining Trust Manager or Trust
Managers (even though fewer than two) may exercise the powers of the Trust
Managers hereunder. Vacancies may be filled by successor Trust Managers either
appointed by a majority of the remaining Trust Managers or elected by the vote
of the holders of at least two-thirds of the outstanding shares at an annual or
special meeting of the shareholders. Any Trust Manager elected to fill a
vacancy created by the resignation, removal, incapacity or death of a former
Trust Manager shall hold office for the unexpired term of such former Trust
Manager and until the Trust Manager's successor is elected and qualified. The
appointment or election of a successor Trust Manager shall be considered an
amendment to the Declaration of Trust.
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Section 3.8 Bond Not Required; Time Commitment. Unless otherwise required
----------------------------------
by law, no Trust Manager shall be required to give bond, surety or security in
any jurisdiction for the performance of his duties or obligations to the Trust.
No Trust Manager and no Chairman of the Board who is not otherwise an officer of
the Trust shall be required to devote his entire time to the business and
affairs of the Trust.
Section 3.9 Compensation. Trust Managers shall receive such compensation
------------
as shall be fixed from time to time by the Board of Trust Managers. Trust
Managers who are officers of the Trust shall not receive such fees. Trust
Managers also may participate in the Trust's share option plans upon such terms
as may be approved by the Executive Compensation Committee.
Section 3.10 Execution of Documents. Each Trust Manager and any one of
----------------------
them is authorized to execute on behalf of the Trust any document or instrument
of any nature whatsoever, provided that the execution by the Trust of any such
document or instrument shall have been previously authorized by such action of
the Trust Managers as may be required by statute, the Declaration of Trust or
these Bylaws.
ARTICLE IV
MEETINGS OF THE TRUST MANAGERS
------------------------------
Section 4.1 Place of Meetings. The Trust Managers of the Trust may hold
-----------------
their meetings, both regular and special, either within or without the State of
Texas.
Section 4.2 Annual Meeting. The annual meeting of the Trust Managers
--------------
shall be held immediately following the adjournment of the annual meeting of the
shareholders and no notice of such meeting shall be necessary to the Trust
Managers in order legally to constitute the meeting, provided a quorum shall be
present, or they may meet at such time and place as shall be fixed by the
consent in writing of all of the Trust Managers.
Section 4.3 Regular Meetings. Regular meetings of the Trust Managers, in
----------------
addition to the annual meetings referred to in Section 4.2, may be held without
notice at such time and place as shall from time to time be determined by the
Trust Managers.
Section 4.4 Special Meetings. Special meetings of the Trust Managers may
----------------
be called by the Chairman of the Board, if one shall be elected, or by the Chief
Executive Officer or Chief Operating Officer, if a Chairman of the Board is not
elected, on one (1) day's notice (oral or written) to each Trust Manager.
Special meetings shall be called by the Chairman of the Board (if one shall be
elected), the Chief Executive Officer, the Chief Operating Officer or the
Secretary on like notice on the written request of any Trust Manager. Neither
the purpose of, nor the business to be transacted at, any special meeting of the
Trust Managers need be specified in the notice or waiver of notice of such
meeting. Attendance of a Trust Manager at a meeting shall constitute a waiver
of notice of such meeting except where a Trust Manager attends a meeting for the
express
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purpose of objecting to the transaction of any business on the grounds that the
meeting is not lawfully called or convened.
Section 4.5 Quorum and Action. At all meetings of the Trust Managers, the
-----------------
presence of a majority of the Trust Managers shall be necessary and sufficient
to constitute a quorum for the transaction of business, and the act of a
majority of the Trust Managers at any meeting at which a quorum is present shall
be the act of the Trust Managers unless the act of a greater number is required
by law, the Declaration of Trust or these Bylaws. If a quorum shall not be
present at any meeting of Trust Managers, the Trust Managers present may adjourn
the meeting from time to time without notice other than announcement at the
meeting until a quorum shall be present.
Section 4.6 Presumption of Assent to Action. A Trust Manager who is
-------------------------------
present at a meeting of the Trust Managers at which action on any Trust matter
is taken shall be presumed to have assented to the action taken unless his
dissent shall be entered in the minutes of the meeting or unless he shall file
his written dissent to such action with the secretary of the meeting before the
adjournment thereof or shall forward such dissent by registered mail to the
Secretary of the Trust immediately after the adjournment of the meeting. Such
right to dissent shall not apply to a Trust Manager who voted in favor of such
action.
Section 4.7 Telephone Meetings. Trust Managers may participate in and
------------------
hold a meeting of the Trust Managers by means of conference telephone or similar
communications equipment by means of which all persons participating in the
meeting can hear each other. Participation in a meeting pursuant to this
Section shall constitute presence in person at such meeting, except where a
person participates in the meeting for the express purpose of objecting to the
transaction of any business on the ground that the meeting is not lawfully
called or convened.
Section 4.8 Action Without Meeting. Any action required or permitted to
----------------------
be taken at a meeting of the Trust Managers may be taken without a meeting if a
consent in writing, setting forth the action so taken, is signed by all of the
Trust Managers, and such consent shall have the same force and effect as a
unanimous vote at a meeting.
Section 4.9 Minutes. The Trust Managers shall keep regular minutes of
-------
their proceedings. The minutes shall be placed in the minute book of the Trust.
Section 4.10 Interest of Trust Managers. With respect to the actions of
--------------------------
the Trust Managers, Trust Managers who have any direct or indirect interest in
connection with any matter being acted upon may be counted for all quorum
purposes under this Article IV.
Section 4.11 Right of Trust Managers and Officers to Own Shares or Other
-----------------------------------------------------------
Property and to Engage in Other Business. Any Trust Manager or officer of the
- ----------------------------------------
Trust may acquire, own, hold and dispose of shares of the Trust for his
individual account, and may exercise all rights of a shareholder to the same
extent and in the same manner as if he were not a Trust Manager or officer of
the Trust. Except as provided specifically to
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the contrary in a written agreement with the Trust, any Trust Manager or officer
of the Trust may, in a capacity other than that of Trust Manager or officer of
the Trust, have business interests and engage in business activities similar to
or in addition to those relating to the Trust, which interests and activities
may be similar to and competitive with those of the Trust and may include,
without limitation, the acquisition, syndication, holding, management,
development, operation or disposition, for his own account or for the account of
others, of interests in mortgages, interests in real property, or interests in
entities engaged in the real estate business. Except as provided specifically
to the contrary in a written agreement with the Trust, each Trust Manager and
officer of the Trust shall be free of any obligation to present to the Trust any
investment opportunity which comes to him in any capacity other than solely as
Trust Manager or agent of the Trust, even if such opportunity is of a character
which, if presented to the Trust, could be exploited by the Trust. Subject to
the provisions of Article III hereof, any Trust Manager or officer of the Trust
may be a trustee, officer, director, shareholder, partner, member, advisor or
employee of, or otherwise have a direct or indirect interest in any person who
may be engaged to render advice or services to the Trust, and may receive
compensation from such person as well as compensation as Trust Manager or
officer or otherwise hereunder.
Section 4.12 Transactions Between Trust Managers and the Trust.
---------------------------------------------------
(a) A contract or transaction between the Trust and one or more of the
Trust Managers or officers of the Trust, or between the Trust and any other real
estate investment trust, corporation, partnership, association, or other
organization, is not void or voidable solely because one or more of the Trust
Managers or officers of the Trust are trust managers, directors, or officers or
have a financial interest in the other real estate investment trust,
corporation, partnership, association, or other organization; solely because the
Trust Manager or officer is present at or participates in the meeting of the
Trust Managers or committee of Trust Managers that authorizes the contract or
transaction; or solely because the Trust Managers or officer's votes are counted
for the authorization if: (i) the material facts as to the Trust Managers or
officer's relationship or interest and as to the contract or transaction are
disclosed or are known to the Trust Managers or the committee, and the Trust
Managers or committee in good faith authorizes the contract or transaction by
the affirmative vote of a majority of the disinterested Trust Managers, even
though the number of disinterested Trust Managers is less than a quorum; (ii)
the material facts as to the Trust Manager's or officer's relationship or
interest and as to the contract or transaction are disclosed or are known to the
shareholders entitled to vote on the contract or transaction, and the contract
or transaction is specifically approved in good faith by the vote of the
shareholders; or (iii) the contract or transaction is fair as to the Trust as of
the time the contract or transaction is authorized, approved, or ratified by the
Trust Managers, a committee of Trust Managers, or the shareholders.
(b) Common or interested Trust Managers may be counted in determining the
presence of a quorum at a meeting of the Trust Managers or of a committee of
Trust Managers that authorizes the contract or transaction.
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Section 4.13 Persons Dealing with Trust Managers or Officers. Any act of
-----------------------------------------------
the Trust Managers or officers of the Trust purporting to be done in their
capacity as such shall, as to any person dealing with such Trust Managers or
officers, conclusively be deemed to be within the purposes of the Trust and
within the powers of the Trust Managers or officers. No person dealing with the
Trust Managers or any of them or with the officers of the Trust or any of them,
shall be bound to see to the application of any funds or property passing into
their hands or control. The receipt of the Trust Managers or any of the
officers of the Trust or moneys or other consideration shall be binding upon the
Trust.
Section 4.14 Reliance. Trust Managers and officers of the Trust shall not
--------
be liable for any claims or damages that may result from their acts in the
discharge of any duty imposed or power conferred upon them by the Trust, if, in
the exercise of ordinary care, they acted in good faith and in reliance upon
information, opinions, reports, or statements, including financial statements
and other financial data, concerning the Trust or another person, that were
prepared or presented by (a) one or more officers or employees of the Trust,
other than the Trust Manager; (b) legal counsel, public accountants, investment
bankers, or other persons as to matters the Trust Manager reasonably believes
are within the person's professional or expert competence; or (c) a committee of
the Trust Managers of which the Trust Manager is not a member.
Section 4.15 Liability of Trust Managers. No Trust Manager of the Trust
---------------------------
shall be liable to the Trust for any act, omission, loss, damage or expense
arising from the performance of this duty under the Trust, except to the extent
specifically required by statute, the Declaration of Trust or these Bylaws.
ARTICLE V
COMMITTEES OF THE TRUST MANAGERS
--------------------------------
Section 5.1 Membership and Authorities. The Trust Managers, by resolution
--------------------------
adopted by a majority or the Trust Managers, may designate one (1) or more Trust
Managers to constitute an Executive Committee, an Audit Committee, an Executive
Compensation Committee and such other committees as the Trust Managers may
determine, each of which committees to the extent provided in such resolution
shall have and may exercise all of the authority of the Trust Managers in the
business and affairs of the Trust, except in those cases where the authority of
the Trust Managers is specifically denied to the Executive Committee or such
other committee or committees by the Trust Managers, applicable law, the
Declaration of Trust or these Bylaws. Neither the Executive Committee, nor any
other such committee shall have the power to alter or to repeal any resolution
adopted by the Trust Managers. The designation of an Executive Committee or
other committee and the delegation thereto of authority shall not operate to
relieve the Trust Managers, or any member thereof, of any responsibility imposed
upon him by law. The members of each such committee shall serve at the pleasure
of the Trust Managers.
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Section 5.2 Minutes and Rules of Procedure. Each committee designated by
------------------------------
the Trust Managers shall keep regular minutes of its proceedings and report the
same to the Trust Managers when required. Subject to the provisions of these
Bylaws, the members of any committee may fix such committee's own rules of
procedure.
Section 5.3 Vacancies. The Trust Managers shall have the power at any
---------
time to fill vacancies in, to change the membership of, or to dissolve, any
committee.
Section 5.4 Telephone Meetings. Members of any committee designated by
------------------
the Trust Managers may participate in and hold a meeting by use of conference
telephone or similar communications equipment by means of which all persons
participating in the meeting can hear each other. Participation in a meeting
pursuant to this Section shall constitute presence in person at such meeting,
except where a person participates in the meeting for the express purpose of
objecting to the transaction of any business on the grounds that the meeting is
not lawfully called or convened.
Section 5.5 Action Without Meeting. Any action required or permitted to
----------------------
be taken at a meeting of any committee designated by the Trust Managers may be
taken without a meeting if a consent in writing, setting forth the action so
taken, shall be signed by all the members of the committee, and such consent
shall have the same force and effect as a unanimous vote at a meeting.
ARTICLE VI
OFFICERS
--------
Section 6.1 Number. The officers of the Trust shall include a Chief
------
Executive Officer, a Chief Operating officer and a Secretary. The Trust
Managers also may elect a Chairman of the Board, a President, one (1) or more
Vice Presidents, a Treasurer, one (1) or more Assistant Secretaries and one (1)
or more Assistant Treasurers. One (1) person may hold any two (2) or more of
these offices.
Section 6.2 Election, Term of Office and Qualification. The Trust
------------------------------------------
Managers shall designate officers, none of whom need be a Trust Manager, except
for the Chairman of the Board, if one shall be elected, at its annual meeting
after each annual meeting of shareholders. Each officer so elected shall hold
office until his successor shall have been duly elected and qualified or until
his death, resignation or removal in the manner hereinafter provided.
Section 6.3 Subordinate Officers. The Trust Managers may designate such
--------------------
other officers and agents as it shall deem necessary who shall hold their
offices for such terms, have such authority and perform such duties as the Trust
Managers may from time to time determine. The Trust Managers may delegate to
any committee or officer the power to appoint any such subordinate officer or
agent. No subordinate officer appointed by any committee or superior officer as
aforesaid shall be considered as an officer of the Trust,
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<PAGE>
the officers of the Trust being limited to the officers designated as such by
the Trust Managers.
Section 6.4 Resignation. Any officer may resign at any time by giving
-----------
written notice to the Trust Managers or to the President or Secretary of the
Trust. Any such resignation shall take effect at the time specified therein
and, unless otherwise specified therein, the acceptance of such resignation
shall not be necessary to make it effective.
Section 6.5 Removal. Any officer designated by the Trust Managers may be
-------
removed by the Trust Managers at any time with or without cause by majority vote
of the entire Board of Trust Managers. Any other officer may be removed at any
time with or without cause by the Trust Managers or by any committee or superior
officer upon whom such power of removal may be conferred by the Trust Managers.
The removal of any officer shall be without prejudice to the contract rights, if
any, of the person so removed. Designation of an officer or agent shall not of
itself create any contract rights.
Section 6.6 Vacancies. A vacancy in any office shall be filled for the
---------
unexpired portion of the term by the Trust Managers, but in case of a vacancy
occurring in an office filled by a committee or superior officer in accordance
with the provisions of Section 6.3, such vacancy may be filled by such committee
or superior officer.
Section 6.7 Chairman of the Board. The Chairman of the Board, if one
---------------------
shall be elected, shall preside at all meetings of the shareholders and Trust
Managers and shall be an ex officio member of all standing committees. The
Chairman of the Board may sign, with any other proper officer, certificates for
shares of the Trust and any deeds, bonds, mortgages, contracts and other
documents which the Trust Managers have authorized to be executed, except where
required by law to be otherwise signed and executed and except where the signing
and execution thereof shall be expressly delegated by the Trust Managers or
these Bylaws, to some other officer or agent of the Trust. In addition, the
Chairman of the Board shall perform whatever duties and shall exercise all
powers that are given to him by the Trust Managers.
Section 6.8 Chief Executive Officer. The Chief Executive Officer shall be
-----------------------
the chief executive officer of the Trust and, together with the Chief Operating
Officer, shall have general and active management of the business and affairs of
the Trust, shall have the general supervision and direction of all other
officers of the Trust with full power to see that their duties are properly
performed and shall see that all orders and resolutions of the Trust Managers
are carried into effect. If no Chairman of the Board is elected, the Chief
Executive Officer shall have the powers and duties of the Chairman of the Board
as set forth in Section 6.7. In the absence of the Chairman of the Board, if one
shall be elected, the Chief Executive Officer shall preside at all meetings of
the shareholders and Trust Managers. The Chief Executive Officer may sign, with
any other proper officer, certificates for shares of the Trust and any deeds,
bonds, mortgages, contracts and other documents which the Trust Managers have
authorized to be executed, except where required by law to be otherwise signed
and executed and except where the signing and execution thereof shall be
expressly delegated by the Trust Managers or these Bylaws,
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<PAGE>
to some other officer or agent of the Trust. In addition, the Chief Executive
Officer shall perform whatever duties and shall exercise all powers that are
given to him by the Trust Managers.
Section 6.9 Chief Operating Officer. The Chief Operating Officer shall be
-----------------------
the Chief Operating Officer of the Trust and, together with the Chief Executive
Officer, shall have general and active management of the business and affairs of
the Trust, shall have the general supervision and direction of all other
officers of the Trust with full power to see that their duties are properly
performed and shall see that all orders and resolutions of the Trust Managers
are carried into effect. The Chief Operating Officer may sign, with any other
proper officer, certificates for shares of the Trust and any deeds, bonds,
mortgages, contracts and other documents which the Trust Managers have
authorized to be executed, except where required by law be otherwise signed and
executed and except where the signing and execution thereof shall be expressly
delegated by the Trust Managers or these Bylaws, to some other officer or agent
of the Trust. In addition, the Chief Operating Officer shall perform whatever
duties and shall exercise all powers that are given to him by the Trust
Managers.
Section 6.10 President. The President, if one shall be elected, shall be
---------
responsible for the general supervision of the business of the Company. The
President may sign, with any other proper officer, certificates for shares of
the Trust and any deeds, bonds, mortgages, contracts and other documents which
the Trust Managers have authorized to be executed, except where required by law
to be otherwise signed and executed and except where the signing and execution
thereof shall be expressly delegated by the Trust Managers or these Bylaws, to
some other officer or agent of the Trust. In addition, the President shall
perform whatever duties and shall exercise whatever powers given to him by the
Trust Managers or by the Chairman of the Board, if one shall be elected, or by
the Chief Executive Officer.
Section 6.11 Vice Presidents. The Vice Presidents shall perform such
---------------
duties as are given to them by these Bylaws and as may from time to time be
assigned to them by the Trust Managers, by the Chairman of the Board, if one
shall be elected, or by the Chief Executive Officer or the Chief Operating
Officer, or by the President, if one shall be elected, and may sign, with any
other proper officer, certificates for shares of the Trust. At the request of
the Chief Executive Officer, or in his absence or disability, the Vice President
designated by the Chief Executive Officer or the Chief Operating Officer (or in
the absence of such designation, the senior Vice President), shall perform the
duties and exercise the powers of the Chief Executive Officer or the Chief
Operating Officer.
Section 6.12 The Secretary. The Secretary, when available, shall attend
-------------
all meetings of the Trust Managers and all meetings of the shareholders and
record all votes and the minutes of all proceedings in a book to be kept for
that purpose and shall perform like duties for the Executive Committee and
standing committees when required. The Secretary shall give, or cause to be
given, notice of all meetings of the shareholders and special meetings of the
Trust Managers as required by law or these Bylaws, be custodian of the Trust
records and have general charge of the share books of the Trust and shall
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<PAGE>
perform such other duties as may be prescribed by the Trust Managers, by the
Chairman of the Board, if one shall be elected, or by the Chief Executive
Officer and Chief Operating Officer, if a Chairman of the Board is not elected,
under whose supervision he shall be. The Secretary may sign, with any other
proper officer, certificates for shares of the Trust and shall keep in safe
custody the seal of the Corporation, and, when authorized by the Trust Managers,
affix the same to any instrument requiring it, and, when so affixed, it shall be
attested by his signature or by the signature of the Treasurer or an Assistant
Secretary.
Section 6.13 Assistant Secretaries. The Assistant Secretaries shall
---------------------
perform such duties as are given to them by these Bylaws or as may from time to
time be assigned to them by the Trust Managers or by the Secretary. At the
request of the Secretary, or in his absence or disability, the Assistant
Secretary designed by the Secretary (or in the absence of such designation the
senior Assistant Secretary), shall perform the duties and exercise the powers of
the Secretary.
Section 6.14 The Treasurer. The Treasurer shall have the custody and be
-------------
responsible for all Trust funds and securities and shall keep full and accurate
accounts of receipts and disbursements in books belonging to the Trust and shall
deposit all monies and other valuable effects in the name and to the credit of
the Trust in such depositories as may be designated by the Trust Managers. The
Treasurer shall disburse the funds of the Trust as may be ordered by the Trust
Managers, taking proper vouchers for such disbursements, and shall render to the
Chairman of the Board, if one shall be elected, the Chief Executive Officer, the
Chief Operating Officer, the President, if one shall be elected, and the Trust
Managers, at the regular meetings of the Trust Managers, or whenever they may
require it, an account of all his transactions as Treasurer and of the financial
condition of the Trust. The Treasurer may sign, with any other proper officer,
certificates for shares of the Trust.
Section 6.15 Assistant Treasurers. The Assistant Treasurer shall perform
--------------------
such duties as are given to them by these Bylaws or as may from time to time be
assigned to them by the Trust Managers or by the Treasurer. At the request of
the Treasurer, or in his absence or disability, the Assistant Treasurer
designated by the Treasurer (or in the absence of such designation, the senior
Assistant Treasurer), shall perform the duties and exercise the powers of the
Treasurer.
Section 6.16 Treasurer's Bond. If required by the Trust Managers, the
----------------
Treasurer and any Assistant Treasurer shall give the Trust a bond in such sum
and with such surety or sureties as shall be satisfactory to the Trust Managers
for the faithful performance of the duties of his office and for the restoration
to the Trust, in case of his death, resignation, retirement or removal from
office, of all books, papers, vouchers, money and other property of whatever
kind in his possession or under his control belonging to the Trust.
Section 6.17 Salaries. The salary or other compensation of officers shall
--------
be fixed from time to time by the Trust Managers. The Trust Managers may
delegate to any
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<PAGE>
committee or officer the power to fix from time to time the salary or other
compensation of subordinate officers and agents appointed in accordance with the
provisions of Section 6.3.
Section 6.18 Execution of Documents. Each officer of the Trust and any
----------------------
one of them is authorized to execute on behalf of the Trust any document or
instrument of any nature whatsoever, provided that the execution by the Trust of
any such document or instrument shall have been previously authorized by such
action of the Trust Managers as may be required by statute, the Declaration of
Trust or these Bylaws.
ARTICLE VII
TRUST SHARES
------------
Section 7.1 Share Certificates.
------------------
(a) The certificates representing shares of beneficial interests of the
Trust shall be in such form, not inconsistent with statutory provisions and the
Declaration of Trust, as shall be approved by the Trust Managers. The
certificates shall be signed by the Chairman of the Board, if one shall be
elected, the Chief Executive Officer, the Chief Operating Officer, the
President, if one shall be elected, or a Vice President and by a Secretary or
Assistant Secretary, or such other or additional officers as may be prescribed
from time to time by the Trust Managers. The signatures of such officer or
officers upon a certificate may be facsimiles if the certificate is
countersigned by a transfer agent or registered by a registrar, either of which
is other than the Trust itself or an employee of the Trust. In case any officer
who has signed or whose facsimile signature has been placed upon a certificate
shall have ceased to be such officer before such certificate is issued, it may
be issued with the same effect as if he were such officer at the date of its
issuance.
(b) In the event the Trust has, by its Declaration of Trust, limited or
denied the preemptive right of shareholders, there shall be set forth on the
face or back of the certificates, which the Trust shall issue to represent
beneficial interests, such legends or statements, if any, as shall be required
by applicable law or the Declaration of Trust or as may be approved by the Trust
Managers.
(c) All certificates shall be consecutively numbered and the name of the
person owning the shares represented thereby, with the number of such shares and
the date of issue, shall be entered on the Trust's books.
(d) All certificates surrendered to the Trust shall be cancelled, and,
except as provided in Section 7.2 with respect to lost, destroyed or mutilated
certificates, no new certificate shall be issued until the former certificate
for the same number of shares has been surrendered and cancelled.
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Section 7.2 Lost Certificates, etc. The Trust Managers may direct a new
-----------------------
certificate or certificates to be issued in place of any certificate or
certificates theretofore issued by the Trust alleged to have been lost or
destroyed, upon the making of an affidavit of that fact by the person claiming
the certificate of stock to be lost or destroyed. In authorizing such issue of
a new certificate or certificates, the Trust Managers may, in their discretion
and as a condition precedent to the issue thereof, require the owner of such
lost or destroyed certificate or certificates, or his legal representative, to
advertise the same in such manner as the Trust Managers shall require and/or
indemnify the Trust as the Trust Managers may prescribe.
Section 7.3 Transfer of Shares. Subject to any restrictions upon
------------------
transfer, upon surrender to the Trust or the transfer agent of the Trust of a
certificate for shares duly endorsed or accompanied by proper evidence of
succession, assignment or authority to transfer and satisfaction of the Trust
that the requested transfer complies with the provisions of applicable state and
federal laws and regulations, the Declaration of Trust and any agreements to
which the Trust is a party, the Trust shall issue a new certificate to the
person entitled thereto, cancel the old certificate and record the transaction
upon its books.
Section 7.4 Ownership of Shares. The Trust shall be entitled to treat and
-------------------
recognize the holder of record of any share or shares as the holder in fact
thereof and, accordingly, shall not be bound to recognize any equitable or other
claim to or interest in such share or shares on the part of any other person,
whether or not it shall have express or other notice thereof, except as
otherwise provided by the laws of the State of Texas.
Section 7.5 Closing of Transfer Books.
-------------------------
(a) For the purpose of determining shareholders entitled to notice of or
to vote at any meeting of shareholders or any adjournment thereof, or entitled
to receive a distribution by the Trust (other than a distribution involving a
purchase or redemption by the Trust of its own shares) or a share dividend, or
in order to make a determination of shareholders for any other proper purpose,
the Trust Managers may provide that the share transfer books shall be closed for
a stated period but not to exceed, in any case, sixty (60) days. If the share
transfer books shall be closed for the purpose of determining shareholders
entitled to notice of or to vote at a meeting of shareholders, such books shall
be closed for at least ten (10) days immediately preceding such meeting. In lieu
of closing the share transfer books, the Trust Managers may fix in advance a
date as the record date for any such determination of shareholders, such date in
any case to be not more than sixty (60) days and, in case of a meeting of
shareholders, not less than ten (10) days prior to the date on which the
particular action requiring such determination of shareholders is to be taken,
and the determination of shareholders on such record date shall apply with
respect to the particular action requiring the same notwithstanding any transfer
of shares on the books of the Trust after such record date.
(b) Unless a record date has previously been fixed or determined pursuant
to this section, when action by shareholders is proposed to be taken by written
consent
-17-
<PAGE>
without a meeting of shareholders, the Trust Managers may fix a record date for
the purpose of determining shareholders entitled to consent to that action,
which record date shall not precede, and shall not be more than ten (10) days
after, the date upon which the Trust Managers adopt the resolution fixing the
record date. If no record date has been fixed by the Trust Managers and the
prior action of the Trust Managers is not required by the Texas REIT Act, the
record date for determining shareholders entitled to consent to action in
writing without a meeting shall be the first date on which a signed written
consent setting forth the action taken or proposed to be taken is delivered by
hand or by certified or registered mail, return receipt requested, to the Trust
in the manner provided by Section 2.13. If no record date shall have been fixed
by the Trust Managers and prior action of the Trust Managers is required by the
Texas REIT Act, the record date for determining shareholders entitled to consent
to action in writing without a meeting shall be at the close of business on the
date on which the Trust Managers adopt a resolution taking such prior action.
Section 7.6 Distributions. The Trust Managers may, from time to time,
-------------
authorize, and the Trust may make, distributions on its outstanding shares in
the manner and upon the terms and conditions provided by the Declaration of
Trust and by law, such dividends to be paid in cash or in property or in shares
of beneficial interests of the Trust, except that no distribution shall be made
if (i) after giving effect to the distribution, the Trust would be insolvent or
(ii) the distribution exceeds the surplus of the Trust, except as set forth in
the Texas REIT Act.
Section 7.7 Reserves. By resolution the Trust Managers may create such
--------
reserve or reserves of the Trust as the Trust Managers from time to time, in
their absolute discretion, determine to be proper as a reserve or reserves to
meet contingencies, or for equalizing dividends, or for repairing or maintaining
any property of the Trust, or for such other purpose as the Trust Managers shall
determine to be beneficial to the interest of the Trust. The Trust Managers may
modify or abolish any such reserve in the manner in which it was created.
ARTICLE VIII
INDEMNIFICATION
---------------
Section 8.1 Definitions. In this Article:
-----------
(a) "Indemnitee" means (i) any present or former Trust Manager or officer
of the Trust, (ii) any person who while serving in any of the capacities
referred to in clause (i) hereof served at the Trust's request as a director,
officer, partner, venturer, proprietor, trustee, employee, agent or similar
functionary of another real estate investment trust or foreign or domestic
corporation, partnership, joint venture, sole proprietorship, trust, employee
benefit plan or other enterprise, and (iii) any person nominated or designed by
(or pursuant to authority granted by) the Trust Managers or any committee
thereof to serve in any of the capacities referred to in clause (i) or (ii)
hereof.
-18-
<PAGE>
(b) "Official Capacity" means (i) when used with respect to a Trust
Manager, the office of Trust Manager of the Trust and (ii) when used with
respect to a person other than a Trust Manager, the elective or appointive
office of the Trust held by such person or the employment or agency relationship
undertaken by such person on behalf of the Trust, but in each case does not
include service for any other real estate investment trust or foreign or
domestic corporation or any partnership, joint venture, sole proprietorship,
trust, employee benefit plan or other enterprise.
(c) "Proceeding" means any threatened, pending or completed action, suit
or proceeding, whether civil, criminal, administrative, arbitrative or
investigative, any appeal in such an action, suit or proceeding, and any inquiry
or investigation that could lead to such an action, suit or proceeding.
(d) "Trust" includes any domestic or foreign predecessor of the Trust in
a merger, consolidation, or other transaction in which the liabilities of the
predecessor are transferred to the Trust by operation of law and in any other
transaction in which the Trust assumes the liabilities of the predecessor but
does not specifically exclude liabilities that are the subject of this Article.
Section 8.2 Indemnification. The Trust shall indemnify every Indemnitee
---------------
against all judgments, penalties (including excise and similar taxes), fines,
amounts paid in settlement and reasonable expenses actually incurred by the
Indemnitee in connection with any Proceeding in which he was, is or is
threatened to be named defendant or respondent, or in which he was or is a
witness without being named a defendant or respondent, by reason, in whole or in
part, of his serving or having served, or having been nominated or designated to
serve, in any of the capacities referred to in Section 8.1(a), if it is
determined in accordance with Section 8.4 that the Indemnitee (a) conducted
himself in good faith, (b) reasonably believed, in the case of conduct in his
Official Capacity, that his conduct was in the Trust's best interests and, in
all other cases, that his conduct was at least not opposed to the Trust's best
interests, and (c) in the case of any criminal proceeding, had no reasonable
cause to believe that his conduct was unlawful; provided, however, that in the
event that an Indemnitee is found liable to the Trust or is found liable on the
basis that personal benefit was improperly received by the Indemnitee the
indemnification (i) is limited to reasonable expenses actually incurred by the
Indemnitee in connection with the Proceeding and (ii) shall not be made in
respect of any Proceeding in which the Indemnitee shall have been found liable
for willful or intentional misconduct in the performance of his duty to the
Trust. Except as provided in the immediately preceding proviso to the first
sentence of this Section 8.2, no indemnification shall be made under this
Section 8.2 in respect of any Proceeding in which such Indemnitee shall have
been (x) found liable on the basis that personal benefit was improperly received
by him, whether or not the benefit resulted from an action taken in the
Indemnitee's Official Capacity, or (y) found liable to the Trust. The
termination of any Proceeding by judgment, order, settlement or conviction, or
on a plea of nolo contendere or its equivalent, is not of itself determinative
that the Indemnitee did not meet the requirements set forth in clauses (a), (b)
or (c) in the first sentence of this Section 8.2. An Indemnitee shall be deemed
to have been found liable in respect of any claim, issue
-19-
<PAGE>
or matter only after the Indemnitee shall have been so adjudged by a court of
competent jurisdiction after exhaustion of all appeals therefrom. Reasonable
expenses shall include, without limitation, all court costs and all fees and
disbursements of attorneys for the Indemnitee.
Section 8.3 Successful Defense. Without limitation of Section 8.2 and in
------------------
addition to the indemnification provided for in Section 8.2, the Trust shall
indemnify every Indemnitee against reasonable expenses incurred by such person
in connection with any Proceeding in which he is a witness or a named defendant
or respondent because he served in any of the capacities referred to in Section
8.1(a), if such person has been wholly successful, on the merits or otherwise,
in defense of the Proceeding.
Section 8.4 Determinations. Any indemnification under Section 8.2 (unless
--------------
ordered by a court of competent jurisdiction) shall be made by the Trust only
upon a determination that indemnification of the Indemnitee is proper in the
circumstances because he has met the applicable standard of conduct. Such
determination shall be made (a) by the Trust Managers by a majority vote of a
quorum consisting of Trust Managers who, at the time of such vote, are not named
defendants or respondents in the Proceeding; (b) if such a quorum cannot be
obtained, then by a majority vote of a committee of the Trust Managers, duly
designated to act in the matter by a majority vote of all Trust Managers (in
which designation Trust Managers who are named defendants or respondents in the
Proceeding may participate), such committee to consist solely of two (2) or more
Trust Managers who, at the time of the committee vote, are not named defendants
or respondents in the Proceeding; (c) by special legal counsel selected by the
Trust Managers or a committee thereof by vote as set forth in clauses (a) or (b)
of this Section 8.4 or, if the requisite quorum of all of the Trust Managers
cannot be obtained and such committee cannot be established, by a majority vote
of all of the Trust managers (in which Trust Managers who are named defendants
or respondents in the Proceeding may participate); or (d) by the shareholders in
a vote that excludes the shares held by Trust Managers that are named defendants
or respondents in the Proceeding. Determination as to reasonableness of
expenses shall be made in the same manner as the determination that
indemnification is permissible, except that if the determination that
indemnification is permissible is made by special legal counsel, determination
as to reasonableness of expenses must be made in the manner specified in clause
(c) of the preceding sentence for the selection of special legal counsel. In
the event a determination is made under this Section 8.4 that the Indemnitee has
met the applicable standard of conduct as to some matters but not as to others,
amounts to be indemnified may be reasonably prorated.
Section 8.5 Advancement of Expenses. Reasonable expenses (including court
-----------------------
costs and attorneys' fees) incurred by an Indemnitee who was or is a witness or
was, is or is threatened to be made a named defendant or respondent in a
Proceeding shall be paid or reimbursed by the Trust at reasonable intervals in
advance of the final disposition of such Proceeding, and without making any of
the determinations specified in Section 8.4, after receipt by the Trust of (a) a
written affirmation by such Indemnitee of his good faith belief that he has met
the standard of conduct necessary for indemnification
-20-
<PAGE>
by the Trust under this Article VIII and (b) a written undertaking by or on
behalf of such Indemnitee to repay the amount paid or reimbursed by the Trust if
it shall ultimately be determined that he is not entitled to be indemnified by
the Trust as authorized in this Article VIII. Such written undertaking shall be
an unlimited general obligation of the Indemnitee but need not be secured and it
may be accepted without reference to financial ability to make repayment.
Notwithstanding any other provision of this Article VIII, the Trust may pay or
reimburse expenses incurred by an Indemnitee in connection with his appearance
as a witness or other participation in a Proceeding at a time when he is not
named a defendant or respondent in the Proceeding.
Section 8.6 Employee Benefit Plans. For purposes of this Article VIII,
----------------------
the Trust shall be deemed to have requested an Indemnitee to serve an employee
benefit plan whenever the performance by him of his duties to the Trust also
imposed or imposes duties on or otherwise involved or involves services by him
to the plan or participants or beneficiaries of the plan. Excise taxes assessed
on an Indemnitee with respect to an employee benefit plan pursuant to applicable
law shall be deemed fines. Action taken or omitted by an Indemnitee with
respect to an employee benefit plan in the performance of his duties for a
purpose reasonably believed by him to be in the interest of the participants and
beneficiaries of the plan shall be deemed to be for a purpose which is not
opposed to the best interests of the Trust.
Section 8.7 Other Indemnification and Insurance. The indemnification
-----------------------------------
provided by this Article VIII shall (a) not be deemed exclusive of, or to
preclude, any other rights to which those seeking indemnification may at any
time be entitled under the Trust's Declaration of Trust, any law, agreement or
vote of shareholders or disinterested Trust Managers, or otherwise, or under any
policy or policies of insurance purchased and maintained by the Trust on behalf
of any Indemnitee, both as to action in his Official Capacity and as to action
in any other capacity, (b) continue as to a person who has ceased to be in the
capacity by reason of which he was an Indemnitee with respect to matters arising
during the period he was in such capacity, and (c) inure to the benefit of the
heirs, executors and administrators of such a person.
Section 8.8 Notice. Any indemnification of or advance of expenses to an
------
Indemnitee in accordance with this Article VIII shall be reported in writing to
the shareholders of the Trust with or before the notice or waiver of notice of
the next shareholders' meeting or with or before the next submission to
shareholders of a consent to action without a meeting and, in any case, within
the twelve-month period immediately following the date of the indemnification or
advance.
Section 8.9 Construction. The indemnification provided by this Article
------------
VIII shall be subject to all valid and applicable laws, including, without
limitation, the Texas REIT Act, and, in the event this Article VIII or any of
the provisions hereof or the indemnification contemplated hereby are found to be
inconsistent with or contrary to any such valid laws, the latter shall be deemed
to control and this Article VIII shall be regarded as modified accordingly, and,
as so modified, shall continue in full force and effect.
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<PAGE>
Section 8.10 Continuing offer, Reliance. etc. The provisions of this
--------------------------------
Article VIII (a) are for the benefit of, and may be enforced by, each Indemnitee
of the Trust, the same as if set forth in their entirety in a written instrument
duly executed and delivered by the Trust and such Indemnitee and (b) constitute
a continuing offer to all present and future Indemnitees. The Trust, by its
adoption of these Bylaws, (x) acknowledges and agrees that each Indemnitee of
the Trust has relied upon and will continue to rely upon the provisions of this
Article VIII in becoming, and serving in any of the capacities referred to in
Section 8.1 hereof, (y) waives reliance upon, and all notices of acceptance of,
such provisions by such Indemnitees and (z) acknowledges and agrees that no
present or future Indemnitee shall be prejudiced in his right to enforce the
provisions of this Article VIII in accordance with their terms by any act or
failure to act on the part of the Trust.
Section 8.11 Indemnification of Shareholders. The Trust shall indemnify
-------------------------------
each shareholder against any claim or liability to which the shareholder may
become subject by reason of being or having been a shareholder. The Trust shall
reimburse each shareholder for all legal and other expenses reasonably incurred
by such shareholder in connection with any such claim or liability.
Section 8.12 Effect of Amendment. No amendment, modification or repeal of
-------------------
this Article VIII or any provision of this Article VIII shall in any manner
terminate, reduce or impair the right of any past, present or future Indemnitees
to be indemnified by the Trust, nor the obligation of the Trust to indemnify any
such Indemnitees, under and in accordance with the provisions of this Article
VIII as in effect immediately prior to such amendment, modification or repeal
with respect to claims arising from or relating to matters occurring, in whole
or in part, prior to such amendment, modification or repeal, regardless of when
such claims may be asserted.
ARTICLE IX
GENERAL PROVISIONS
------------------
Section 9.1 General Policies. The Trust intends to make investments that
----------------
are consistent with the applicable requirements of the Internal Revenue Code of
1986, as amended, and the Texas REIT Act, and related regulations with respect
to the composition of the Trust's investments and the derivation of its income.
Section 9.2 Limited Liability of Shareholders and Subscribers. A holder
-------------------------------------------------
of shares, an owner of any beneficial interest in shares, or a subscriber for
shares whose subscription has been accepted is not under an obligation to the
Trust or to its obligees with respect to:
(a) the shares other than the obligation to pay to the Trust the
full amount of the consideration for which the shares were or are to be
issued;
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<PAGE>
(b) any contractual obligation of the Trust on the basis that the
holder, owner, or subscriber is or was the alter ego of the Trust, or on
the basis of actual fraud or constructive fraud, a sham to perpetrate a
fraud, or other similar theory, unless the obligee demonstrates that the
holder, owner, or subscriber caused the Trust to be used for the purpose of
perpetrating and did perpetrate an actual fraud on the obligee primarily
for the direct personal benefit of the holder, owner, or subscriber; or
(c) any obligation of the Trust on the basis of the failure of the
Trust to observe any formality, including the failure to:
(i) comply with any requirement of the Texas REIT Act or of
the Declaration of Trust or Bylaws of the Trust; or
(ii) observe any requirement prescribed by the Texas REIT Act
or by the Declaration of Trust or Bylaws for acts taken by the Trust,
its Trust Managers, or its shareholders.
Section 9.3 Waiver of Notice.
----------------
(a) Whenever, under the provisions of applicable law or of the
Declaration of Trust or of these Bylaws, any notice is required to be given to
any shareholder or Trust Manager, a waiver thereof in writing signed by the
person or persons entitled to such notice, whether before or after the time
stated therein, shall be equivalent to the giving of such notice.
(b) Attendance of a Trust Manager at a meeting shall constitute a waiver
of notice of such meeting except where a Trust Manager attends a meeting for the
express purpose of objecting, at the beginning of the meeting, to the
transaction of any business on the grounds that the meeting is not lawfully
called or convened.
Section 9.4 Seal. If one be adopted, the Trust seal shall have inscribed
----
thereon the name of the Trust and shall be in such form as may be approved by
the Trust Managers. Said seal shall be kept in the custody of the Secretary and
may be used by causing it or a facsimile of it to be impressed or affixed or in
any manner reproduced.
Section 9.5 Fiscal Year. The fiscal year of the Trust shall be fixed by
-----------
resolution of the Trust Managers.
Section 9.6 Checks, Notes, etc. All checks or demands for money and notes
-------------------
of the Trust shall be signed by such officer or officers or such other person or
persons as the Trust Managers may from time to time designate. The Trust
Managers may authorize any officer or officers or such other person or persons
to enter into any contract or execute and deliver any instrument in the name of
and on behalf of the Trust, and such authority may be general or confined to
specific instances.
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Section 9.7 Examination of Books and Records. The Trust Managers shall
--------------------------------
determine from time to time whether, and if allowed, when and under what
conditions and regulations the accounts and books of the Trust (except such as
may be specifically opened to inspection) or any of them shall be open to
inspection by the shareholders, and the shareholders' rights in this respect are
and shall be restricted and limited accordingly.
Section 9.8 Voting of Shares Held by the Trust. Unless otherwise ordered
----------------------------------
by the Trust Managers, the Chief Executive Officer, acting on behalf of the
Trust, shall have full power and authority to attend and to act and to vote at
any meeting of shareholders of any corporation in which the Trust may hold
shares and at any such meeting, shall possess and may exercise any and all of
the rights and powers incident to the ownership of such shares which, as the
owner thereof, the Trust might have possessed and exercised, if present. The
Trust Managers by resolution from time to time may confer like powers upon any
other person or persons.
Section 9.9 Number, Gender, etc. Whenever the singular number is used in
--------------------
these Bylaws and when required by the context, the same shall include the
plural, and the masculine gender shall include the feminine and neuter genders.
The term "person", as used herein and as the context requires shall mean and
include individuals, corporations, limited partnerships, general partnerships,
joint stock companies or associations, joint ventures, associations, companies,
trusts, banks, trust companies, land trusts, business trusts, or other entities
and governments and agencies and political subdivisions thereof.
ARTICLE X
AMENDMENTS
----------
Section 10.1 Amendment of Bylaws. Except as otherwise provided by
-------------------
applicable law or the Declaration of Trust, the power to alter, amend or repeal
these Bylaws or to adopt new Bylaws shall be vested in the Trust Managers and
(to the extent not inconsistent with the Texas REIT Act and the Declaration of
Trust and specified in the notice of the meeting) the shareholders, and such
action shall be taken by the affirmative vote of a majority of the Trust
Managers or by the affirmative vote of the holders of a majority of the Trust's
outstanding shares.
ARTICLE XI
SUBJECT TO ALL LAWS
-------------------
Section 11.1 Subject to All Laws. The provisions of these Bylaws shall be
-------------------
subject to all valid and applicable laws, including, without limitation, the
Texas REIT Act as now or hereafter amended, and in the event that any of the
provisions of these Bylaws are found to be inconsistent with or contrary to any
such valid laws, the latter shall be
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<PAGE>
deemed to control and these Bylaws shall be deemed modified accordingly, and, as
so modified, shall continue in full force and effect.
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<PAGE>
EXHIBIT 4.1
================================================================================
COLUMBUS REALTY TRUST,
as Issuer
and
---------------------------------------------------,
as Trustee
============================
INDENTURE
Dated as of 1996
---------------------,
============================
Debt Securities
================================================================================
<PAGE>
CROSS-REFERENCE TABLE
Trust Indenture Act Section Indenture Section
- --------------------------- -----------------
<TABLE>
<CAPTION>
<S> <C>
(S) 310 (a)(1)........................................................... 6.8
(a)(2)........................................................... 6.8
(a)(3)........................................................... N.A.
(a)(4)........................................................... N.A.
(a)(5)........................................................... 6.8
(b).............................................................. 6.9
(c).............................................................. N.A.
(S) 311 (a).............................................................. 6.13
(b).............................................................. 6.13
(c).............................................................. N.A.
(S) 312 (a).............................................................. 7.4
(b).............................................................. 7.1
(c).............................................................. 7.1
(S) 313 (a).............................................................. 7.2
(b)(1)........................................................... N.A.
(b)(2)........................................................... 7.2
(c).............................................................. 7.2
(d).............................................................. 7.2
(S) 314 (a).............................................................. 7.3
(a)(4)........................................................... 11.1
(b).............................................................. N.A.
(c)(1)........................................................... 1.2
(c)(2)........................................................... 1.2
(c)(3)........................................................... N.A.
(d).............................................................. N.A.
(e).............................................................. 1.2
(f).............................................................. N.A.
(S) 315 (a).............................................................. 6.3
(b).......................................................... 6.2,6.3
(c).............................................................. 6.3
(d).............................................................. 6.3
(e).............................................................. 5.15
(S) 316 (a)(last sentence)..................................1.1("Outstanding")
(a)(1)(A).....................................................5.2,5.12
(a)(1)(B)........................................................ 5.13
(b).............................................................. 5.8
(c).............................................................. 1.4
</TABLE>
<PAGE>
<TABLE>
<S> <C> <C>
(S) 317 (a)(1)........................................................... 5.3
(a)(2)........................................................... 5.4
(b).............................................................. 10.3
(S) 318 (a).............................................................. 1.12
</TABLE>
- ----------------------------
N.A. means "Not Applicable"
NOTE: This cross-reference table shall not, for any purpose, be deemed to be
a part of the Indenture.
Attention should also be directed to Section 318(c) of the 1939 Act, which
provides that the provisions of Sections 310 to and including 317 of the 1939
Act are a part of and govern every qualified indenture, whether or not
physically contained therein.
<PAGE>
Page
----
ARTICLE I - DEFINITIONS AND OTHER PROVISIONS OF GENERAL APPLICATION
<TABLE>
<CAPTION>
<S> <C> <C>
SECTION 1.1. Definitions.................................................. 1
SECTION 1.2. Compliance Certificates and Opinions......................... 8
SECTION 1.3. Form of Documents to be Delivered to Trustee................. 9
SECTION 1.4. Acts of Holders.............................................. 9
SECTION 1.5. Notices, etc., to Trustee and Company........................ 11
SECTION 1.6. Notice to Holders; Waiver.................................... 12
SECTION 1.7. Communication by Holders with Other Holders.................. 13
SECTION 1.8. Effect of Headings and Table of Contents..................... 13
SECTION 1.9. Successors and Assigns....................................... 13
SECTION 1.10. Severability Clause......................................... 13
SECTION 1.11. Benefits of Indenture....................................... 13
SECTION 1.12. GOVERNING LAW............................................... 13
SECTION 1.13. Legal Holidays.............................................. 13
ARTICLE II - SECURITIES FORMS
SECTION 2.1. Forms of Securities.......................................... 14
SECTION 2.2. Form of Trustee's Certificate of Authentication.............. 14
SECTION 2.3. Securities Issuable in Global Form........................... 14
ARTICLE III - THE SECURITIES
SECTION 3.1. Amount Unlimited; Issuable in Series......................... 16
SECTION 3.2. Denominations................................................ 19
SECTION 3.3. Execution, Authentication, Delivery and Dating............... 20
SECTION 3.4. Temporary Securities......................................... 22
SECTION 3.5. Registration, Registration of Transfer and Exchange.......... 22
SECTION 3.6. Mutilated, Destroyed, Lost and Stolen Securities............. 25
SECTION 3.7. Payment of Interest; Interest Rights Preserved............... 26
SECTION 3.8. Persons Deemed Owners........................................ 28
SECTION 3.9. Cancellation................................................. 28
SECTION 3.10. Computation of Interest..................................... 29
ARTICLE IV - SATISFACTION AND DISCHARGE
SECTION 4.1. Satisfaction and Discharge of Indenture...................... 29
SECTION 4.2. Application of Trust Funds................................... 30
</TABLE>
-i-
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<TABLE>
<S> <C> <C>
ARTICLE V - REMEDIES
SECTION 5.1. Events of Default............................................ 30
SECTION 5.2. Acceleration of Maturity; Rescission and Annulment........... 32
SECTION 5.3. Collection of Indebtedness and Suits for Enforcement by
Trustee...................................................... 34
SECTION 5.4. Trustee May File Proofs of Claim............................. 34
SECTION 5.5. Trustee May Enforce Claims Without Possession of Securities
or Coupons................................................... 35
SECTION 5.6. Application of Money Collected............................... 35
SECTION 5.7. Limitation on Suits.......................................... 36
SECTION 5.8. Unconditional Right of Holders to Receive Principal, Premium,
if any, Interest and Additional Amounts...................... 36
SECTION 5.9. Restoration of Rights and Remedies........................... 37
SECTION 5.10 Rights and Remedies Cumulative............................... 37
SECTION 5.11. Delay or Omission Not Waiver................................. 37
SECTION 5.12. Control by Holders of Securities............................. 37
SECTION 5.13. Waiver of Past Defaults...................................... 38
SECTION 5.14. Waiver of Usury, Stay or Extension Laws...................... 38
SECTION 5.15. Undertaking for Costs........................................ 38
ARTICLE VI - THE TRUSTEE
SECTION 6.1. Certain Duties and Responsibilities.......................... 39
SECTION 6.2. Notice of Defaults........................................... 40
SECTION 6.3. Certain Rights of Trustee.................................... 40
SECTION 6.4. Not Responsible for Recitals or Issuance of Securities....... 41
SECTION 6.5. May Hold Securities.......................................... 42
SECTION 6.6. Money Held in Trust.......................................... 42
SECTION 6.7. Compensation, Reimbursement and Indemnity.................... 42
SECTION 6.8. Corporate Trustee Required; Eligibility; Conflicting
Interests.................................................... 42
SECTION 6.9. Resignation and Removal; Appointment of Successor............ 43
SECTION 6.10. Acceptance of Appointment by Successor....................... 45
SECTION 6.11. Merger, Conversion, Consolidation or Succession to Business.. 46
SECTION 6.12. Appointment of Authenticating Agent.......................... 46
SECTION 6.13. Preferential Collection of Claims Against Company............ 48
ARTICLE VII - HOLDERS' LISTS AND REPORTS BY TRUSTEE AND COMPANY
SECTION 7.1. Disclosure of Names and Addresses of Holders................. 48
SECTION 7.2. Reports by Trustee........................................... 48
SECTION 7.3. Reports by Company........................................... 49
SECTION 7.4. Company to Furnish Trustee Names and Addresses of Holders.... 49
</TABLE>
-ii-
<PAGE>
<TABLE>
<S> <C> <C>
ARTICLE VIII - CONSOLIDATION, MERGER, SALE, LEASE OR CONVEYANCE
SECTION 8.1. Consolidations and Mergers of Company and Sales, Leases and
Conveyances Permitted Subject to Certain Conditions........... 50
SECTION 8.2. Rights and Duties of Successor Corporation................... 50
SECTION 8.3. Officers' Certificate and Opinion of Counsel................. 51
ARTICLE IX - SUPPLEMENTAL INDENTURES
SECTION 9.1. Supplemental Indentures Without Consent of Holders........... 51
SECTION 9.2. Supplemental Indentures with Consent of Holders.............. 52
SECTION 9.3. Execution of Supplemental Indentures......................... 53
SECTION 9.4. Effect of Supplemental Indentures............................ 54
SECTION 9.5. Conformity with Trust Indenture Act.......................... 54
SECTION 9.6. References in Securities to Supplemental Indentures.......... 54
ARTICLE X - COVENANTS
SECTION 10.1. Payment of Principal, Premium, if any, Interest and
Additional Amounts............................................ 54
SECTION 10.2. Maintenance of Office or Agency............................. 55
SECTION 10.3. Money for Securities Payments to Be Held in Trust........... 55
SECTION 10.4. Restrictions on Dividends and Other Distributions........... 57
SECTION 10.5. Existence................................................... 57
SECTION 10.6. Maintenance of Properties................................... 57
SECTION 10.7. Insurance................................................... 57
SECTION 10.8. Payment of Taxes and Other Claims........................... 57
SECTION 10.9. Provision of Financial Information......................... 58
SECTION 10.10. Statement as to Compliance................................. 58
SECTION 10.11. Additional Amounts......................................... 58
SECTION 10.12. Waiver of Certain Covenants................................ 59
ARTICLE XI - REDEMPTION OF SECURITIES
SECTION 11.1. Applicability of Article.................................... 60
SECTION 11.2. Election to Redeem; Notice to Trustee....................... 60
SECTION 11.3. Selection by Trustee of Securities to Be Redeemed........... 60
SECTION 11.4. Notice of Redemption........................................ 60
SECTION 11.5. Deposit of Redemption Price................................. 62
SECTION 11.6. Securities Payable on Redemption Date....................... 62
SECTION 11.7. Securities Redeemed in Part................................. 63
ARTICLE XII - SINKING FUNDS
SECTION 12.1. Applicability of Article.................................... 63
</TABLE>
-iii-
<PAGE>
<TABLE>
<S> <C> <C>
SECTION 12.2. Satisfaction of Sinking Fund Payments with Securities....... 63
SECTION 12.3. Redemption of Securities for Sinking Fund................... 64
ARTICLE XIII - REPAYMENT AT THE OPTION OF HOLDERS
SECTION 13.1. Applicability of Article.................................... 64
SECTION 13.2. Repayment of Securities..................................... 64
SECTION 13.3. Exercise of Option.......................................... 65
SECTION 13.4. When Securities Presented for Repayment Become Due and
Payable..................................................... 65
SECTION 13.5. Securities Repaid in Part................................... 66
ARTICLE XIV - DEFEASANCE AND COVENANT DEFEASANCE
SECTION 14.1. Applicability of Article; Company's Option to Effect
Defeasance or Covenant Defeasance........................... 66
SECTION 14.2. Defeasance and Discharge.................................... 67
SECTION 14.3. Covenant Defeasance......................................... 67
SECTION 14.4. Conditions to Defeasance or Covenant Defeasance............. 68
SECTION 14.5. Deposited Money and Government Obligations to Be Held in
Trust; Other Miscellaneous Provisions....................... 69
ARTICLE XV - MEETINGS OF HOLDERS OF SECURITIES
SECTION 15.1. Purposes for Which Meetings May Be Called................... 70
SECTION 15.2. Call, Notice and Place of Meetings.......................... 71
SECTION 15.3. Persons Entitled to Vote at Meetings........................ 71
SECTION 15.4. Quorum: Action.............................................. 71
SECTION 15.5. Determination of Voting Rights; Conduct and Adjournment of
Meetings.................................................... 72
SECTION 15.6. Counting Votes and Recording Action of Meetings............. 73
</TABLE>
-iv-
<PAGE>
INDENTURE, dated as of_____, 1996, between COLUMBUS REALTY TRUST, a Texas
real estate investment trust (hereinafter called the "Company"), having its
principal office at 15851 Dallas Parkway, Suite 855, Dallas, Texas 75248 and
_______, as Trustee hereunder (hereinafter called the "Trustee"), having its
Corporate Trust Office at _______.
Each party hereto agrees as follows for the equal and proportionate benefit
of all Holders of the Securities:
ARTICLE I
DEFINITIONS AND OTHER PROVISIONS OF GENERAL APPLICATION
SECTION 1.1. Definitions. For all purposes of this Indenture, except as
-----------
otherwise expressly provided or unless the context otherwise requires:
(a) the terms defined in this Article have the meanings assigned to them
in this Article, and include the plural as well as the singular;
(b) all other terms used herein which are defined in the TIA, either
directly or by reference therein, have the meanings assigned to them
therein, and the terms "cash transaction" and "self-liquidating
paper," as used in TIA Section 311, shall have the meanings assigned
to them in the rules of the Commission adopted under the TIA;
(c) all accounting terms not otherwise defined herein have the meanings
assigned to them in accordance with generally accepted accounting
principles ("GAAP") as used in the United States applied on a
consistent basis; and
(d) the words "herein," "hereof" and "hereunder" and other words of
similar import refer to this Indenture as a whole and not to any
particular Article, Section or other subdivision.
"Act," when used with respect to any Holder, has the meaning specified in
---
Section 1.4.
"Additional Amounts" means any additional amounts which are required by a
------------------
Security or by or pursuant to a Board Resolution, under circumstances specified
therein, to be paid by the Company in respect of certain taxes imposed on
certain Holders and which are owing to such Holders.
"Affiliate" of any specified Person means any other Person directly or
---------
indirectly controlling or controlled by or under direct or indirect common
control with such specified Person. For the purposes of this definition,
"control" when used with respect to any specified Person means the power to
direct the management and polices 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.
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<PAGE>
"Authenticating Agent" means any Person which shall at the time be
--------------------
appointed and acting, pursuant to Section 6.12, as an agent of the Trustee to
authenticate Securities.
"Authorized Newspaper" means a newspaper, printed in the English language
--------------------
or in an official language of the country of publication, customarily published
on each Business Day, whether or not published on Saturdays, Sundays or
holidays, and of general circulation in each place in connection with which the
term is used or in the financial community of each such place. Whenever
successive publications are required to be made in Authorized Newspapers, the
successive publications may be made in the same or in different Authorized
Newspapers in the same city meeting the foregoing requirements and in each case
on any Business Day.
"Bearer Security" means any Security which is payable to bearer and, unless
---------------
the context otherwise requires, all coupons appertaining thereto.
"Board of Trust Managers" means the board of trust managers of the Company,
-----------------------
the executive committee or any committee of that board duly authorized to act
hereunder.
"Board Resolution" means a duly adopted resolution of the Board of Trust
----------------
Managers.
"Business Day," when used with respect to any Place of Payment or any other
------------
particular location referred to in this Indenture or in the Securities, means,
unless otherwise specified with respect to any Securities pursuant to Section
3.1, any day, other than a Saturday or Sunday, that is neither a legal holiday
nor a day on which banking institutions in that Place of Payment or particular
location are authorized or required by law, regulation or executive order to
close.
"Commission" means the Securities and Exchange Commission, as from time to
----------
time constituted, created under the Securities Exchange Act of 1934, or, if at
any time after execution of this instrument such Commission is not existing and
performing the duties now assigned to it under the Trust Indenture Act, then the
body performing such duties on such date.
"Company" means the Person named as the "Company" in the first paragraph of
-------
this Indenture until a successor corporation shall have become such pursuant to
the applicable provision of this Indenture, and thereafter "Company" shall mean
such successor corporation.
"Company Request" and "Company Order" mean, respectively, a written request
--------------- -------------
or order signed in the name of the Company by the Chairman of the Board, the
President or a Vice President, and by the Treasurer, an Assistant Treasurer, the
Secretary or an Assistant Secretary, of the Company, and delivered to the
Trustee.
"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.
-2-
<PAGE>
"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 Blue Hills Office Parks, 150
Royall Street, Canton, Massachusetts 02021.
"Corporation," whether or not such term is capitalized, includes
-----------
corporations, associations, companies, business trusts and real estate
investment trusts.
"Coupon" means any interest coupon appertaining to a Bearer Security.
------
"Defaulted Interest" has the meaning specified in Section 3.7.
------------------
"Depositary" means, with respect to the Securities of any series issuable
----------
or issued in whole or in part in the form of a global Security, the Person
designated as Depositary by the Company pursuant to Section 3.1 until a
successor Depositary shall have become such pursuant to the applicable
procedures of this Indenture, and thereafter "Depositary" shall mean or include
each Person who is then a Depositary hereunder, and if at any time there is more
than one Person. "Depositary," as used with respect to the Securities of any
such series, shall mean the Depositary with respect to the Securities of that
series.
"Dollar" or "$" means a dollar or other equivalent unit in such coin or
------ -
currency of the United States of America as at the time shall be legal tender
for the payment of public and private debts.
"ECU" means the European Currency Unit as defined and revised from time to
---
time by the Council of the European Communities.
"European Communities" means the European Economic Community, the European
--------------------
Coal and Steel Community and the European Atomic Energy Community.
"European Monetary System" means the European Monetary System established
------------------------
by the Resolution of December 5, 1978 of the Council of the European
Communities.
"Event of Default" has the meaning specified in Section 5.1.
----------------
"Foreign Currency" means any currency, currency unit or composite currency,
----------------
including, without limitation, the ECU issued by the government of one or more
countries other than the United States of America or by any recognized
confederation or association of such governments.
"Government Obligations" means securities which are (i) 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
-3-
<PAGE>
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 such Security is registered in the Security Register and, in the case of a
Bearer Security, the bearer thereof and, when used with respect to any coupon,
shall mean the bearer thereof.
"Indenture" means this instrument as originally executed or as it may from
---------
time to time be supplemented or amended by one or more indentures supplemental
hereto entered into pursuant to the applicable provisions hereof, and shall
include the form and terms of particular series of Securities established as
contemplated by Section 3.1; provided, however, that, if at any time more than
-------- -------
one Person is acting as Trustee under this instrument, "Indenture" shall mean,
---------
with respect to any one or more series of Securities for which such Person is
Trustee, this instrument as originally executed or as it may from time to time
be supplemented or amended by one or more indentures supplemental hereto entered
into pursuant to the applicable provisions hereof and shall include the terms of
the or those particular series of Securities for which such Person is Trustee
established as contemplated by Section 3.1, exclusive, however, of any
provisions or terms which relate solely to other series of Securities for which
such Person is Trustee, regardless of when such terms or provisions were
adopted, and exclusive of any provisions or terms adopted by means of one or
more indentures supplemental hereto executed and delivered after such Person had
become such Trustee but to which such Person, as such Trustee, was not a party.
"Indexed Security" means a Security the terms of which provide that the
----------------
principal amount thereof payable at Stated Maturity may be more or less than the
principal face amount thereof at original issuance.
"Interest," when used with respect to an Original Issue Discount Security
--------
which by its terms bears interest only after Maturity, shall mean interest
payable after Maturity, and, when used with respect to a Security which provides
for the payment of Additional Amounts pursuant to Section 10.11, includes such
Additional Amounts.
"Interest Payment Date," when used with respect to any Security, means the
---------------------
Stated Maturity of an installment of interest on such Security.
"Maturity," when used with respect to any Security, means the date on which
--------
the principal of such Security or an installment of principal becomes due and
payable as therein or herein provided, whether at the Stated Maturity or by
declaration of acceleration, notice of redemption, notice of option to elect
repayment or otherwise.
-4-
<PAGE>
"Officers' Certificate" means a certificate signed by the Chairman of the
---------------------
Board of Trust Managers, the President or a Vice President and by the Treasurer,
an Assistant Treasurer, the Secretary or an Assistant Secretary, of the Company,
and delivered to the Trustee.
"Opinion of Counsel" means a written opinion of counsel, who may be counsel
------------------
for the Company or who may be an employee of or other counsel for the Company.
"Original Issue Discount Security" means any Security which provides for an
--------------------------------
amount less than the principal amount thereof to be due and payable upon a
declaration of acceleration of the Maturity thereof pursuant to Section 5.2.
"Outstanding," when used with respect to Securities, means, as of the date
-----------
of determination, all Securities theretofore authenticated and delivered under
this Indenture, except:
------
(a) Securities theretofore cancelled by the Trustee or delivered to the
Trustee for cancellation;
(b) Securities, or portions thereof, for whose payment or redemption or
repayment at the option of the Holder, money in the necessary amount
has been theretofore deposited with the Trustee or any Paying Agent
(other than the Company) in trust or set aside and segregated in trust
by the Company (if the Company shall act as its own Paying Agent) for
the Holders of such Securities and any coupons appertaining thereto,
provided that, if such Securities are to be redeemed, notice of such
--------
redemption has been duly given pursuant to this Indenture or provision
therefor satisfactory to the Trustee has been made;
(c) Securities, except to the extent provided in Sections 14.2 and 14.3,
with respect to which the Company has effected defeasance and/or
covenant defeasance as provided in Article Fourteen;
(d) Securities which have been paid pursuant to Section 3.6 or in exchange
for or in lieu of which other Securities have been authenticated and
delivered pursuant to this Indenture, other than any such Securities
in respect of which there shall have been presented to the Trustee
proof satisfactory to it that such Securities are held by a bona fide
purchaser in whose hands such Securities are valid obligations of the
Company; and
(e) Securities converted into Common Shares or Preferred Shares pursuant
to or in accordance with this Indenture if the terms of such
Securities provide for convertibility pursuant to Section 3.1;
provided, however, that in determining whether the Holders of the requisite
- -------- -------
principal amount of the Outstanding Securities have given any request, demand,
authorization, direction, notice, consent or waiver hereunder or are present at
a meeting of Holders for quorum purposes, and for the purpose of making the
calculations required by TIA Section 313, (i) the principal amount of an
Original Issue Discount Security that may be counted in making such
determination or
-5-
<PAGE>
calculation and that shall be deemed to be Outstanding for such purpose shall be
equal to the amount of principal thereof that would be (or shall have been
declared to be) due and payable, at the time of such determination, upon a
declaration of acceleration of the maturity thereof pursuant to Section 5.2,
(ii) the principal amount of 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 3.1 as of the date such Security is originally
issued by the Company, of the principal amount (or, in the case of an Original
Issue Discount Security, the Dollar equivalent as of such date of original
issuance of the amount determined as provided in clause (i) above) of such
Security, (iii) the principal amount of any Indexed Security that may be counted
in making such determination or calculation and that shall be deemed outstanding
for such purpose shall be equal to the principal face amount of such Indexed
Security at original issuance, unless otherwise provided with respect to such
Security pursuant to Section 3.1, and (iv) Securities owned by the Company or
any other obligor upon the Securities or any Affiliate of the Company or of such
other obligor shall be disregarded and deemed not to be Outstanding, except
that, in determining whether the Trustee shall be protected in making such
calculation or in relying upon any such request, demand, authorization,
direction, notice, consent or waiver, only Securities which the Trustee knows to
be so owned shall be so disregarded. Securities so owned which have ben pledged
in good faith may be regarded as Outstanding if the pledgee establishes to the
satisfaction of the Trustee the pledgee's right so to act with respect to such
Securities and that the pledgee is not the Company or any other obligor upon the
Securities or any Affiliate of the Company or of such other obligor.
"Paying Agent" means any Person authorized by the Company to pay the
------------
principal of (and premium, if any) or interest on any Securities or coupons on
behalf of the Company.
"Person" means any individual, corporation, partnership, joint venture,
------
association, joint-stock company, trust, unincorporated organization or
government or any agency or political subdivision thereof.
"Place of Payment," when used with respect to the Securities of or within
----------------
any series, means the place or places where the principal of (and premium, if
any) and interest on such Securities are payable as specified as contemplated by
Sections 3.1 and 10.2.
"Predecessor Security" of any particular Security means every previous
--------------------
Security evidencing all or a portion of the same debt as that evidenced by such
particular Security; and, for the purposes of this definition, any Security
authenticated and delivered under Section 3.6 in exchange for or in lieu of a
mutilated, destroyed, lost or stolen Security or a Security to which a
mutilated, destroyed, lost or stolen coupon appertains shall be deemed to
evidence the same debt as the mutilated, destroyed, lost or stolen Security or
the Security to which the mutilated, destroyed, lost or stolen coupon
appertains.
"Redemption Date," when used with respect to any Security to be redeemed,
---------------
in whole or in part, means the date fixed for such redemption by or pursuant to
this Indenture.
-6-
<PAGE>
"Redemption Price," when used with respect to any Security to be redeemed,
----------------
means the price at which it is to be redeemed pursuant to this Indenture.
"Registered Security" shall mean any Security which is registered in the
-------------------
Security Register.
"Regular Record Date" for the interest payable on any Interest Payment Date
-------------------
on the Registered Securities of or within any series means the date specified
for that purpose as contemplated by Section 3.1, whether or not a Business Day.
"Repayment Date" means, when used with respect to any Security to be repaid
--------------
at the option of the Holder, the date fixed for such repayment by or pursuant to
this Indenture.
"Responsible Officer," when used with respect to the Trustee, means the
-------------------
chairman or vice-chairman of the board of directors, the chairman or vice-
chairman of the executive committee of the board of directors, the president,
any vice president (whether or not designated by a number or a word or words
added before or after the title "vice president), the secretary, any assistant
secretary, the treasurer, any assistant treasurer, the cashier, any assistant
cashier, any trust officer or assistant trust officer, the controller or any
other officer of the Trustee customarily performing functions similar to those
performed by any of the above designated officers and also means, with respect
to a particular corporate trust matter, any other officer to whom such matter is
referred because of such officer's knowledge and familiarity with the particular
subject.
"Security" means any Security or Securities authenticated and delivered
--------
under this Indenture which Securities shall rank equally with all other
unsecured and unsubordinated indebtedness of the Company; 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 mean Securities authenticated and delivered under this Indenture,
exclusive, however, of Securities of any series as to which such Person is not
Trustee.
"Security Register" and "Security Registrar" have the respective meanings
----------------- ------------------
specified in Section 3.5.
"Special Record Date" for the payment of any Defaulted Interest on the
-------------------
Securities or within any series means a date fixed by the Trustee pursuant to
Section 3.7.
"Stated Maturity," when used with respect to any Security or any
---------------
installment of principal thereof or interest thereon, means the date specified
in such Security or a coupon representing such installment of interest as the
fixed date on which the principal of such Security or such installment of
principal or interest is due and payable.
"Subsidiary" means a corporation a majority of the outstanding voting stock
----------
of which is owned, directly or indirectly, by the Company or by one or more
other Subsidiaries of the Company. For the purposes of this definition, "voting
stock" means stock having voting power for the election of directors, whether at
all times or only so long as no senior class of stock has such voting power by
reason of any contingency.
-7-
<PAGE>
"Trust Indenture Act" or "TIA" means the Trust Indenture Act of 1939, as
-------------------
amended and as in force at the date as of which this Indenture was executed,
except as provided in Section 9.5.
"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 3.1, the United States of America (including the
District of Columbia), its territories, its possessions and other areas subject
to its jurisdiction.
"United States person" means, unless otherwise specified with respect to
--------------------
any Securities pursuant to Section 3.1, an individual who is a citizen or
resident of the United States, a corporation, partnership or other entity
created or organized in or under the laws of the United States or an estate or
trust the income of which is subject to United States federal income taxation
regardless of its source.
"Yield to Maturity" means the yield to maturity, computed at the time of
-----------------
issuance of a Security (or, if applicable, at the most recent redetermination of
interest on such Security) and as set forth in such Security in accordance with
generally accepted United States bond yield computation principles.
SECTION 1.2. Compliance Certificates and Opinions. Upon any application
------------------------------------
or request by the Company to the Trustee to take any action under any provision
of this Indenture, the Company shall furnish to the Trustee an Officers'
Certificate stating that all conditions precedent, if any, provided for in this
Indenture relating to the proposed action have been complied with and an Opinion
of Counsel stating that in the opinion of such counsel all such conditions
precedent, if any, have been complied with, except that in the case of any such
application or request as to which the furnishing of such documents is
specifically required by any provision of this Indenture relating to such
particular application or request, no additional certificate or opinion need be
furnished.
Every certificate or opinion with respect to compliance with a condition or
covenant provided for in this Indenture shall include:
(a) a statement that each individual signing such certificate or opinion
has read such condition or covenant and the definitions herein
relating thereto;
(b) a brief statement as to the nature and scope of the examination or
investigation upon which the statements or opinions contained in such
certificate or opinion are based;
-8-
<PAGE>
(c) a statement that, in the opinion of each such individual, such
individual has made such examination or investigation as is necessary
to enable such individual to express an informed opinion as to whether
or not such condition or covenant has been complied with; and
(d) a statement as to whether, in the opinion of each such individual,
such condition or covenant has been complied with.
SECTION 1.3. Form of Documents to be Delivered to Trustee. In any case
--------------------------------------------
where several matters are required to be certified by, or covered by an opinion
of, any specified Person, it is not necessary that all such matters be certified
by, or covered by the opinion of only one such Person, or that they be so
certified or covered by only one document, but one such Person may certify or
give an opinion as to some matters and one or more other such Persons as to
other matters, and any such Person may certify or give an opinion as to such
matters in one or several documents.
Any certificate or opinion of an officer of the Company may be based,
insofar as it relates to legal matters, upon an Opinion of Counsel, or a
certificate or representations by counsel, unless such officer knows, or in the
exercise of reasonable care should know, that the opinion, certificate or
representations with respect to the matters upon which his certificate or
opinion is based are erroneous. Any such Opinion of Counsel or certificate or
representations may be based, insofar as it relates to factual matters, upon a
certificate or opinion of, or representations by, an officer or officers of the
Company stating that the information as to such factual matters is in the
possession of the Company, unless such counsel knows that the certificate or
opinion or representations as to such matters are erroneous.
Where any Person is required to make, give or execute two or more
applications, requests, consents, certificates, statements, opinions or other
instruments under this Indenture, they may, but need not, be consolidated and
form one instrument.
SECTION 1.4. Acts of Holders.
---------------
(a) Any request, demand, authorization, direction, notice, consent, waiver
or other action provided by this Indenture to be given or taken by
Holders of the Outstanding Securities of all series or one or more
series, as the case may be, may be embodied in and evidenced by one or
more instruments of substantially similar tenor signed by such Holders
in person or by agents duly appointed in writing. If Securities of a
series are issuable as Bearer Securities, any request, demand,
authorization, direction, notice, consent, waiver or other action
provided by this Indenture to be given or taken by Holders of
Securities of such series may, alternatively, be embodied in and
evidenced by the record of Holders of Securities of such series voting
in favor thereof, either in person or by proxies duly appointed in
writing, at any meeting of Holders of Securities of such series duly
called and held in accordance with the provisions of Article XV, or a
combination of such instruments and any such record. Except as herein
otherwise expressly provided, such action shall become effective when
such instrument or instruments
-9-
<PAGE>
or record or both are delivered to the Trustee and, where it is hereby
expressly required, to the Company. Such instrument or instruments
and any such record (and the action embodied therein and evidenced
thereby) are herein sometimes referred to as the "Act" of the Holders
signing such instrument or instruments or so voting at any such
meeting. Proof of execution of any such instrument or of a writing
appointing any such agent shall be sufficient for any purpose of this
Indenture, if made in the manner provided in this Section.
(b) The fact and date of the execution by any Person of any such
instrument or writing may be proved by the affidavit of a witness of
such execution or by the certificate of any notary public or other
officer authorized by law to take acknowledgements of deeds,
certifying that the individual signing such instrument or writing
acknowledged to him the execution thereof. Where such execution is by
a Person acting in other than his individual capacity, such
certificate or affidavit shall also constitute sufficient proof of his
authority.
(c) The fact and date of the execution by any Person of any such
instrument or writing, or the authority of the Person executing the
same, may also be proved in any other manner which the Trustee deems
sufficient, and the Trustee may in any instance require further proof
with respect to any of the matters referred to in this Section.
(d) The principal amount and serial number of any Bearer Security held by
any Person, and the date of such Person's holding the same, may be
proved by the production of such Bearer Security or by a certificate
executed, as depositary, by any trust, company, bank, 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 Security therein described; or such facts
may be proved by the certificate or affidavit of the Person holding
such Bearer Security, if such certificate or affidavit is deemed by
the Trustee to be satisfactory. The Trustee and the Company may
assume that such ownership of any Bearer Security continues until (1)
another certificate or affidavit bearing a later date issued in
respect of the same Bearer Security is produced, or (2) such Bearer
Security is produced to the Trustee by some other Person, or (3) such
Bearer Security is surrendered in exchange for a Registered Security,
or (4) such Bearer Security is no longer Outstanding. The fact and
date of execution of any such instrument or writing, the authority of
the Person executing the same and the principal amount and serial
number of any Bearer Security held by the Person so executing such
instrument or writing and the date of holding the same may also be
proved in any other manner which the Trustee deems sufficient; and the
Trustee may in any instance require further proof with respect to any
of the matters referred to in this Section.
-10-
<PAGE>
(e) The principal amount and serial numbers of Registered Securities held
by any Person, and the date of his holding the same, shall be proved
by the Securities Register.
(f) If the Company shall solicit from the Holders any request, demand,
authorization, direction, notice, consent, waiver or other Act, the
Company may, at its option, by Board Resolution, fix in advance a
record date for the determination of Holders entitled to give such
request, demand, authorization, direction, notice, consent, waiver or
other Act, but the Company shall have no obligation to do so. If such
a record date is fixed, such request, demand, authorization,
direction, notice, consent, waiver or other Act may be given before or
after such record date, but only the Holders of record at the close of
business on such record date shall be deemed to be Holders for the
purposes of determining whether Holders of the requisite proportion of
Outstanding Securities have authorized or agreed to 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.
(g) Any request, demand, authorization, direction, notice, consent, waiver
or other Act of the Holder of any Security shall bind every future
Holder of the same Security and the Holder of every Security issued
upon the registration of transfer thereof or in exchange therefor or
in lieu thereof in respect of anything done, omitted or suffered to be
done by the Trustee, any Security Registrar, any Paying Agent, any
Authenticating Agent or the Company in reliance thereon, whether or
not notation of such action is made upon such Security.
SECTION 1.5. Notices, etc., to Trustee and Company. Any request, demand,
-------------------------------------
authorization, direction, notice, consent, waiver or Act of Holders or other
document provided or permitted by this Indenture to be made upon, given or
furnished to, or filed with,
(a) the Trustee by any Holder or by the Company shall be sufficient for
every purpose hereunder if made, given, furnished or filed in writing
to or with the Trustee at its corporate Trust Office, or
(b) the Company by the Trustee or by any Holder shall be sufficient for
every purpose hereunder (unless otherwise herein expressly provided)
if in writing and mailed, first class postage prepaid, to the Company
addressed to it at the address of its principal office specified in
the first paragraph of this Indenture or at any other address
previously furnished in writing to the Trustee by the Company.
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<PAGE>
SECTION 1.6. Notice to Holders; Waiver. Where this Indenture provides for
-------------------------
notice of any event to Holders of Registered Securities by the Company or the
Trustee unless otherwise expressly provided herein or in the Officers'
Certificate or supplemental indenture referred to in Section 3.1 with respect to
Securities of any series, such notice shall be sufficiently given 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 3.1, where this Indenture provides
for notice to Holders of Bearer Securities of any event, such notice shall be
sufficiently given if published in an Authorized Newspaper in The City of New
York and in such other city or cities as may be specified in such Securities on
a Business Day, such publication to be not later than the latest date, 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 given
with the approval of the Trustee shall constitute sufficient notice to such
Holders for every purpose hereunder. Neither the failure to give notice by
publication to any particular Holder of Bearer Securities as provided above, nor
any defect in any notice so published, shall affect the sufficiency of such
notice with respect to other Holders of Bearer Securities or the sufficiency of
any notice to Holders of Registered Securities given as provided herein.
Any request, demand, authorization, direction, notice, consent or waiver
required or permitted under this Indenture shall be in the English language,
except that any published notice may be in an official language of the country
of publication.
Where this Indenture provides for notice in any manner, such notice may be
waived in writing by the Person entitled to receive such notice, either before
or after the event, and such waiver shall be the equivalent of such notice.
Waivers of notice by Holders shall be filed with
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the Trustee, but such filing shall not be a condition precedent to the validity
of any action taken in reliance upon such waiver.
SECTION 1.7. Communication by Holders with Other Holders. Communication
-------------------------------------------
among Holders with respect to their rights under this Indenture or the
Securities shall be made in accordance with the provisions of TIA (S) 312(b).
The Company, the Trustee, the Securities Registrar or any agent thereof shall be
afforded the protection provided under TIA (S) 312(c).
SECTION 1.8. Effect of Headings and Table of Contents. The Article and
----------------------------------------
Section headings herein and the Table of Contents are for convenience only and
shall not affect the construction hereof.
SECTION 1.9. Successors and Assigns. All covenants and agreements in this
----------------------
Indenture by the Company shall bind its successors and assigns, whether so
expressed or not.
SECTION 1.10. Severability Clause. In case any provision in this
-------------------
Indenture or in any Security shall be invalid, illegal or unenforceable, the
validity, legality and enforceability of the remaining provisions shall not in
any way be affected or impaired thereby.
SECTION 1.11. Benefits of Indenture. Nothing in this Indenture or in the
---------------------
Securities, express or implied, shall give to any Person, other than the parties
hereto, any Security Registrar, any Paying Agent, any Authenticating Agent and
their successors hereunder and the Holders any benefit or any legal or equitable
right, remedy or claim under this Indenture.
SECTION 1.12. GOVERNING LAW. THIS INDENTURE AND THE SECURITIES SHALL BE
-------------
GOVERNED BY AND CONSTRUED IN ACCORDANCE WITH THE LAW OF THE STATE OF 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 1.13. Legal Holidays. In any case where any Interest Payment
--------------
Date, Redemption Date, Repayment Date, sinking fund payment date, Stated
Maturity or Maturity of any Security shall not be a Business Day at any Place of
Payment, then (notwithstanding any other provision of this Indenture or any
Security or coupon other than a provision in the Securities of any series which
specifically states that such provision shall apply in lieu 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 or sinking fund
payment date, or at the Stated Maturity or Maturity, as the case may be.
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ARTICLE II
SECURITIES FORMS
SECTION 2.1. Forms of Securities. The Registered Securities, if any, of
-------------------
each series and the Bearer Securities, if any, of each series and related
coupons shall be in substantially the forms (including any global form) as shall
be established by or pursuant to a Board Resolution in one or more indentures
supplemental hereto or approved from time to time by or pursuant to a Board
Resolution in accordance with Section 3.1, shall have such appropriate
insertions, omissions, substitutions and other variations as are required or
permitted by this Indenture or any indenture supplemental hereto (including such
other provisions as are necessary to reflect the global form of any Security,
and the designation of a Depositary for such Security), and may have such
letters, numbers or other marks of identification or designation and such
legends or endorsements placed thereon as the Company may deem appropriate and
as are not inconsistent with the provisions of this Indenture, or as may be
required to comply with any law or with any rule or regulation made pursuant
thereto or with any rule or regulation of any stock exchange on which the
Securities may be listed, or to conform to usage.
Unless otherwise specified as contemplated by Section 3.1, Bearer
Securities shall have interest coupons attached.
The definitive Securities and coupons shall be printed, lithographed or
engraved or produced by any combination of these methods on a steel engraved
border or steel engraved borders or may be produced in any other manner, all as
determined by the officers executing such Securities or coupons, as evidenced by
their execution of such Securities or coupons.
SECTION 2.2. Form of Trustee's Certificate of Authentication. Subject to
-----------------------------------------------
Section 6.11, the Trustee's certificate of authentication shall be in
substantially the following form:
This is one of the Securities of the series designated herein referred to
in the within-mentioned Indenture.
[Name of Trustee],
as Trustee
By:
-----------------------------------------------
Authorized Signatory
SECTION 2.3. Securities Issuable in Global Form. If Securities of or
----------------------------------
within a series are issuable in global form, as specified as contemplated by
Section 3.1, then, notwithstanding the provisions of Sections 3.1 and 3.2, any
such Security shall represent such of the Outstanding Securities of such series
as shall be specified therein and may provide that it shall represent the
aggregate principal amount of Outstanding Securities of such series from time to
time endorsed thereon and that the aggregate principal amount of Outstanding
Securities of such series
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<PAGE>
represented thereby may from time to time be increased or decreased to reflect
exchanges. The Securities in global form may be permanent or temporary. Any
endorsement of a Security in global form to reflect the principal amount, or any
increase or decrease in the amount, of Outstanding Securities represented
thereby shall be made by the Trustee in such manner and upon instructions given
by such Person or Persons as shall be specified therein or in the Company Order
to be delivered to the Trustee pursuant to Section 3.3 or 3.4. Subject to the
provisions of Section 3.3 and, if applicable, Section 3.4, the Trustee shall
deliver and redeliver any Security in permanent global form in the manner and
upon instructions given by the Person or Persons specified therein or in the
applicable Company Order. If a Company Order pursuant to Section 3.3 or 3.4 has
been, or simultaneously is, delivered, any instructions by the Company with
respect to endorsement or delivery or redelivery of a Security in global form
shall be in writing but need not comply with Section 1.2 and need not be
accompanied by an Opinion of Counsel.
The provisions of the last sentence of Section 3.3 shall apply to any
Security represented by a Security in global form if such Security was never
issued and sold by the Company and the Company delivers to the Trustee the
Security in global form together with written instructions (which need not
comply with Section 1.2 and need not be accompanied by an Opinion of Counsel)
with regard to the reduction in the principal amount of Securities represented
thereby, together with the written statement contemplated by the last sentence
of Section 3.3.
Notwithstanding the other provisions of this Indenture, unless otherwise
specified as contemplated by Section 3.1, payment of principal of (and any
premium, if any) and interest on any Security in permanent global form shall be
made to the Person or Persons specified therein.
Notwithstanding the provisions of Section 3.8 and except as provided in the
preceding paragraph, the Company, the Trustee and any agent of the Company and
the Trustee shall treat a Person as the Holder of such principal amount of
Outstanding Securities represented by a permanent global Security as shall be
specified in a written statement of the Depositary with respect to such
permanent global Security, only for purposes of obtaining any consents or
directions required to be given by the Holders pursuant to this Indenture.
Unless otherwise provided as contemplated by Section 3.1 with respect to any
series of Securities, any global Security shall provide, in addition to the
provisions established pursuant to Sections 2.1 and 3.1 and set forth in the
preceding paragraphs, that the Depositary will not sell, assign, transfer or
otherwise convey any beneficial interest in such global Security unless such
beneficial interest is in an amount equal to an authorized denomination for
Securities of such series, and that the Depositary, by accepting such global
Security, agrees to be bound by such provision. Any global Security shall also
contain such other provisions as are necessary to reflect the global form of
such Security and the designation of a Depositary for such global Security.
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<PAGE>
ARTICLE III
THE SECURITIES
SECTION 3.1. Amount Unlimited; Issuable in Series. The aggregate
------------------------------------
principal amount of Securities which may be authenticated and delivered under
this Indenture is unlimited.
The Securities may be issued in one or more series. There shall be
established in one or more Board Resolutions or pursuant to authority granted by
one or more Board Resolutions and, subject to Section 3.3, set forth, or
determined in the manner provided, in an Officers' Certificate, or established
in one or more indentures supplemental hereto, prior to the issuance of
Securities of any series, any or all of the following, as applicable (each of
which (except for the matters set forth in clauses (a), (b) and (o) below), if
so provided, may be determined from time to time by the Company with respect to
unissued Securities of the series when issued from time to time):
(a) the title of the Securities of the series (which shall distinguish the
Securities of such series from all other series of Securities);
(b) any limit upon the aggregate principal amount of the Securities of the
series that may be authenticated and delivered under this Indenture
(except for Securities authenticated and delivered upon registration
of transfer of, or in exchange for, or in lieu of, other Securities of
the series pursuant to Section 3.4, 3.5, 3.6, 9.6, 11.7 or 13.5);
(c) the date or dates, or the method by which such date or dates will be
determined, on which the principal of the Securities of the series
shall be payable;
(d) the rate or rates at which the Securities of the series shall bear
interest, if any, or the method by which such rate or rates shall be
determined, the date or dates from which such interest shall accrue or
the method by which such date or dates shall be determined, the
Interest Payment Dates on which such interest will be payable and the
Regular Record Date, if any, for the interest payable on any
Registered Security on any Interest Payment Date, or the method by
which such date shall be determined, and the basis upon which interest
shall be calculated if other than that of a 360-day year of twelve 30-
day months.
(e) the place or places, if any, other than or in addition to the Borough
of Manhattan, The City of New York, where the principal of (and
premium, if any), interest, if any, on, and Additional Amounts, if
any, payable in respect of, Securities of the series shall be payable,
any Registered Securities of the series may be surrendered for
registration of transfer, exchange or conversion and notices or
demands to or upon the Company in respect of the Securities of the
series and this Indenture may be served and the method of such
payment;
(f) the period or periods within which, the price or prices at which, the
currency or currencies, currency unit or units or composite currency
or currencies in which,
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<PAGE>
and other terms and conditions upon which Securities of the series may
be redeemed, in whole or in part, at the option of the Company, if the
Company is to have the option;
(g) the obligation, if any, of the Company to redeem, repay or purchase
Securities of the series pursuant to any sinking fund or analogous
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;
(h) if other than denominations of $1,000 and any integral multiple
thereof, the denominations in which any Securities of the series shall
be issuable;
(i) the identity of the Trustee for the Securities of the series and, if
other than the Trustee, the identity of each Security Registrar and/or
Paying Agent for the Securities of the series;
(j) if other than the principal amount thereof, the portion of the
principal amount of Securities of the series that shall be payable
upon declaration of acceleration of the Maturity thereof pursuant to
Section 5.2 or, if applicable, the portion of the principal amount of
Securities of the series that is convertible in accordance with the
provisions of this Indenture, or the method by which such portion
shall be determined;
(k) if other than Dollars, the Foreign Currency or Currencies in which
payment of the principal of (and premium, if any) or interest or
Additional Amounts, if any, on the Securities of the series shall be
payable or in which the Securities of the series shall be denominated;
(l) whether the amount of payments of principal of (and premium, if any)
or interest, if any, on the Securities of the series may be determined
with reference to an index, formula or other method (which index,
formula or method may be based, without limitation, on one or more
currencies, currency units, composite currencies, commodities, equity
indices or other indices), and the manner in which such amounts shall
be determined;
(m) whether the principal of (and premium, if any) or interest or
Additional Amounts, if any, on the Securities of the series are to be
payable, at the election of the Company or a Holder thereof, in a
currency or currencies, currency unit or units or composite currency
or currencies other than that in which such Securities are denominated
or stated to be payable, the period or periods within which (including
the Election Date), and the terms and conditions upon which, such
election may be made, and the time and manner of, and identity of the
exchange rate agent with responsibility for, determining the exchange
rate between the currency or
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<PAGE>
currencies, currency unit or units or composite currency or currencies
in which such Securities are denominated or stated to be payable and
the currency or currencies, currency unit or units or composite
currency or currencies in which such Securities are to be so payable;
(n) provisions, if any, granting special rights to the Holders of
Securities of the series upon the occurrence of such events as may be
specified;
(o) any deletions from, modifications of or additions to the Events of
Default or covenants of the Company with respect to Securities of the
series, whether or not such Events of Default or covenants are
consistent with the Events of Default or covenants set forth herein;
(p) whether Securities of the series are to be issuable as Registered
Securities, Bearer Securities (with or without coupons) or both, any
restrictions applicable to the offer, sale or delivery of Bearer
Securities and the terms upon which Bearer Securities of the series
may be exchanged for Registered Securities of the series and vice
versa (if permitted by applicable laws and regulations), whether any
Securities of the series are to be issuable initially in temporary
global form and whether any Securities of the series are to be
issuable in permanent global form with or without coupons and, if so,
whether beneficial owners of interests in any such permanent global
Security may exchange such interests for Securities of such series and
of like tenor of any authorized form and denomination and the
circumstances under which any such exchanges may occur, if other than
in the manner provided in Section 3.5, and, if Registered Securities
of the series are to be issuable as a global Security, the identity of
the depositary for such series;
(q) the date as of which any Bearer Securities of the series and any
temporary global Security representing Outstanding Securities of the
series shall be dated if other than the date of original issuance of
the first Security of the series to be issued;
(r) the Person to whom any interest on any Registered Security of the
series shall be payable, if other than the Person in whose name that
Security (or one or more Predecessor Securities) is registered at the
close of business on the Regular Record Date for such interest, the
manner in which, or the Person to whom, any interest on any Bearer
Security of the series shall be payable, if otherwise than upon
presentation and surrender of the coupons appertaining thereto as they
severally mature, and the extent to which, or the manner in which, any
interest payable on a temporary global Security on an Interest Payment
Date will be paid if other than in the manner provided in Section 3.4;
(s) the applicability, if any, of Sections 14.2 and/or 14.3 to the
Securities of the series and any provisions in modification of, in
addition to or in lieu of any of the provisions of Article 14;
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<PAGE>
(t) if the Securities of such series are to be issuable in definitive form
(whether upon original issue or upon exchange of a temporary Security
of such series) only upon receipt of certain certificates or other
documents or satisfaction of other conditions, then the form and/or
terms of such certificates, documents or conditions;
(u) if the Securities of the series are to be issued upon the exercise of
warrants, the time, manner and place for such Securities to be
authenticated and delivered;
(v) whether and under what circumstances the Company will pay Additional
Amounts as contemplated by Section 10.11 on the Securities of the
series to any Holder who is not a United States person (including any
modification to the definition of such term) in respect of any tax,
assessment or governmental charge and, if so, whether the Company will
have the option to redeem such Securities rather than pay such
Additional Amounts (and the terms of any such option);
(w) the obligation, if any, of the Company to permit the conversion of the
Securities of the series into Common Shares or Preferred Shares, as
the case may be, and the terms and conditions upon which such
conversion shall be effected (including, without limitation, the
initial conversion price or rate, the conversion period, any
adjustment of the applicable conversion price and any requirements
relative to the reservation of such shares for purposes of conversion;
and
(x) any other terms of the series (which terms shall not be inconsistent
with the provisions of this Indenture).
All Securities of any one series and the coupons appertaining to any Bearer
Securities of such series shall be substantially identical except as to
denomination, currency, the rate or rates of interest, if any, and the Maturity
and except as may otherwise be provided in or pursuant to such Board Resolution
(subject to Section 3.3) and set forth in such Officers' Certificate or in any
such indenture supplemental hereto. All Securities of any one series need not
be issued at the same time and, unless otherwise provided, a series may be
reopened, without the consent of the Holders, for issuances of additional
Securities of such series.
If any of the terms of the Securities of any series are established by
action taken pursuant to one or more Board Resolutions, a copy of an appropriate
record of such action(s) shall be certified by the Secretary or an Assistant
Secretary of the Company and delivered to the Trustee at or prior to the
delivery of the Officers' Certificate setting forth the terms of the Securities
of such series.
SECTION 3.2. Denominations. The Securities of each series shall be
-------------
issuable as Bearer Securities, as Registered Securities or in any combination
thereof, and in such denominations and amounts as shall be specified as
contemplated by Section 3.1. With respect to Securities of any series
denominated in Dollars, in the absence of any such provisions with respect to
the Securities of any series, the Securities of such series, other than
Securities issued in global form (which
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<PAGE>
may be of any denomination), shall be issuable in denominations of $1,000 and
any integral multiple thereof.
SECTION 3.3. Execution, Authentication, Delivery and Dating. The Securities
----------------------------------------------
and any coupons appertaining thereto shall be executed on behalf of the Company
by its Chairman of the Board, 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 or all of these officers on the
Securities and coupons may be manual or facsimile signatures of the present or
any future such authorized officer and may be imprinted or otherwise reproduced
on the Securities.
Securities or coupons bearing the manual or facsimile signatures of
individuals who were at any time the proper officers of the Company shall bind
the Company, notwithstanding that such individuals or any of them have ceased to
hold such offices prior to the authentication and delivery of such Securities or
did not hold such offices at the date of such Securities or coupons.
At any time and from time to time after the execution and delivery of this
Indenture, the Company may deliver Securities of any series, together with any
coupon appertaining thereto, executed by the Company to the Trustee for
authentication, together with a Company Order for the authentication and
delivery of such Securities, and the Trustee in accordance with the Company
Order shall authenticate and deliver such Securities. Such Company Order may
provide that Securities which are the subject thereof will be authenticated and
delivered by the Trustee upon the order of Persons designated in said Company
Order communicated to the Trustee in writing or by telephone or other means set
forth in such Company Order and that such Persons are authorized to determine
such terms and conditions of said Securities as are specified in the Company
Order.
If all the Securities of any series are not to be issued at one time and if
the Board Resolution or supplemental indenture establishing such series shall so
permit, such Company Order may set forth procedures acceptable to the Trustee
for the issuance of such Securities and determining the terms of particular
Securities of such series, such as interest rate or formula, maturity date, date
of issuance and date from which interest shall accrue. In authenticating such
Securities, and accepting the additional responsibilities under this Indenture
in relation to such Securities, the Trustee shall be entitled to receive, and
(subject to TIA Section 315(a) through 315(d)) shall be fully protected in
relying upon,
(a) an Opinion of Counsel stating that
(i) the form or forms of such Securities and any coupons have been
established in conformity with the provisions of this
Indenture;
(ii) the terms of such Securities and any coupons have been
established in conformity with the provisions of this
Indenture; and
(iii) such Securities, together with any coupons appertaining
thereto, when completed by appropriate insertions and executed
and delivered by the
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Company to the Trustee for authentication in accordance with this
Indenture, authenticated and delivered by the Trustee in
accordance with this Indenture and issued by the Company in the
manner and subject to any conditions specified in such Opinion of
Counsel, will constitute legal, valid and binding obligations of
the Company, enforceable in accordance with their terms, subject
to applicable bankruptcy, insolvency, reorganization and other
similar laws of general applicability relating to or affecting
the enforcement of creditors' rights generally and to general
equitable principles; and
(b) an Officers' Certificate stating that all conditions precedent
provided for in this Indenture relating to the issuance of the
Securities have been complied with and that, to the best of the
knowledge of the signers of such certificate, that no Event of Default
with respect to any of the Securities shall have occurred and be
continuing.
If such form or terms have been so established, the Trustee shall not be
required to authenticate such Securities if the issue of such Securities
pursuant to this Indenture will affect the Trustee's own rights, duties,
obligations or immunities under the Securities and this Indenture or otherwise
in a manner which is not reasonably acceptable to the Trustee.
Notwithstanding the provisions of Section 3.1 and of the preceding
paragraph, if all the Securities of any series are not to be issued at one time,
it shall not be necessary to deliver an Officers' Certificate otherwise required
pursuant to Section 3.1 or a Company Order, or an Opinion of Counsel or an
Officers' Certificate otherwise required pursuant to the preceding paragraph at
the time of issuance of each Security of such series, but such order, opinion
and certificates, with appropriate modifications to cover such future issuances,
shall be delivered at or before the time of issuance of the first Security of
such series.
Each Registered Security shall be dated the date of its authentication and
each Bearer Security shall be dated as of the date specified as contemplated by
Section 3.1.
No Security or coupon shall be entitled to any benefit under this Indenture
or be valid or obligatory for any purpose unless there appears on such Security
or Security to which such coupon appertains a certificate of authentication
substantially in the form provided for herein duly executed by the Trustee by
manual signature of an authorized officer, and such certificate upon any
Security shall be conclusive evidence, and the only evidence, that such Security
has been duly authenticated and delivered hereunder and is entitled to the
benefits of this Indenture. Notwithstanding the foregoing, if any Security
shall have been authenticated and delivered hereunder but never issued and sold
by the Company, and the Company shall deliver such Security to the Trustee for
cancellation as provided in Section 3.9 together with a written statement (which
need not comply with Section 1.2 and need not be accompanied by an Opinion of
Counsel) stating that such Security has never been issued and sold by the
Company, for all purposes of this Indenture such Security shall be deemed never
to have been authenticated and delivered hereunder and shall never be entitled
to the benefits of this Indenture.
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SECTION 3.4. Temporary Securities. Pending the preparation of definitive
--------------------
Securities of any series, the Company may execute, and upon Company Order the
Trustee shall authenticate and deliver, temporary Securities which are printed,
lithographed, typewritten, mimeographed or otherwise produced, in any authorized
denomination, substantially of the tenor of the definitive Securities in lieu of
which they are issued, in registered form, or, if authorized, in bearer form
with one or more coupons or without coupons, and with such appropriate
insertions, omissions, substitutions and other variations as the officers
executing such Securities may determine, as conclusively evidenced by their
execution of such Securities. In the case of Securities of any series, such
temporary Securities may be in global form. Except in the case of temporary
Securities in global form, if temporary Securities of any series are issued, the
Company will cause definitive Securities of that series to be prepared without
unreasonable delay. After the preparation of definitive Securities of such
series, the temporary Securities of such series shall be exchangeable for
definitive Securities of such series upon surrender of the temporary Securities
of such series at the office or agency of the Company in a Place of Payment for
that series, without charge to the Holder. Upon surrender for cancellation of
any one or more temporary Securities of any series, the Company shall execute
and the Trustee shall authenticate and deliver in exchange therefor a like
principal amount of definitive Securities of the same series of authorized
denominations. Until so exchanged, the temporary Securities of any series shall
in all respects be entitled to the same benefits under this Indenture as
definitive Securities of such series.
SECTION 3.5. Registration, Registration of Transfer and Exchange. The
---------------------------------------------------
Company shall cause to be kept at the Corporate Trust Office of the Trustee or
in any office or agency of the Company in a Place of Payment a register for each
series of Securities (the registers maintained in such office or in any such
office or agency of the Company in a Place of Payment being herein sometimes
referred to collectively as the "Security Register") in which, subject to such
reasonable regulations as it may prescribe, the Company shall provide for the
registration of Registered Securities and of transfers of Registered Securities.
The Security Register shall be in written form or any other form capable of
being converted into written form within a reasonable time. The Trustee, at its
Corporate Trust Office, is hereby initially appointed "Security Registrar" for
the purpose of registering Registered Securities and transfers of Registered
Securities on such Security Register as herein provided. In the event that the
Trustee shall cease to be Security Registrar, it shall have the right to examine
the Security Register at all reasonable times.
Subject to the provisions of this Section 3.5, upon surrender for
registration of transfer of any Registered Security of any series at any office
or agency of the Company in a Place of Payment for that series, the Company
shall execute, and the Trustee shall authenticate and deliver, in the name of
the designated transferee or transferees, one of more new Registered Securities
of the same series, of any authorized denominations and of a like aggregate
principal amount, bearing a number not contemporaneously outstanding, and
containing identical terms and provisions.
Subject to the provisions of this Section 3.5, at the option of the Holder,
Registered Securities of any series may be exchanged for other Registered
Securities of the same series, of any authorized denomination or denominations
and of a like aggregate principal amount,
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containing identical terms and provisions, upon surrender of the Registered
Securities to be exchanged at any such office or agency. Whenever any such
Securities are so surrendered for exchange, the Company shall execute, and the
Trustee shall authenticate and deliver, the Registered Securities which the
Holder making the exchange is entitled to receive. Unless otherwise specified
with respect to any series of Securities as contemplated by Section 3.1, Bearer
Securities may not be issued in exchange for Registered Securities.
If (but only if) permitted by the applicable Board Resolution and (subject
to Section 3.3) set forth in the applicable Officers' Certificate, or in any
indenture supplemental hereto, delivered as contemplated by Section 3.1, at the
option of the Holder, Bearer Securities of any series may be exchanged for
registered Securities of the same series of any authorized denominations and of
a like aggregate principal amount and tenor, upon surrender of the Bearer
Securities to be exchanged at any such office or agency, with all unmatured
coupons and all matured coupons in default thereto appertaining. If the Holder
of a Bearer Security is unable to produce any such unmatured coupon or coupons
or matured coupon or coupons in default, any such permitted exchange may be
effected if the Bearer Securities are accompanied by payment in funds acceptable
to the Company in an amount equal to the face amount of such missing coupon or
coupons, or the surrender of such missing coupon or coupons may be waived by the
Company and the Trustee if there is furnished to them such security or indemnity
as they may require to save each of them and any Paying Agent harmless. If
thereafter the Holder of such Security shall surrender to any Paying Agent any
such missing coupon in respect of which such a payment shall have been made,
such Holder shall be entitled to receive the amount of such payment; provided,
---------
however, that, except as otherwise provided in Section 10.2, interest
- -------
represented by coupons shall be payable only upon presentation and surrender of
those coupons at an office or agency located outside the United States.
Notwithstanding the foregoing, in case a Bearer Security of any series is
surrendered at any such office or agency in a permitted exchange for a
Registered Security of the same series and like tenor after the close of
business at such office or agency on (i) any Regular Record Date and before the
opening of business at such office or agency on the relevant Interest Payment
Date, or (ii) any Special Record Date and before the opening of business at such
office or agency on the related proposed date for payment of Defaulted Interest,
such Bearer Security shall be surrendered without the coupon relating to such
Interest Payment Date or proposed date for payment, as the case may be, and
interest or Defaulted Interest, as the case may be, will not be payable on such
Interest Payment Date or proposed date for payment, as the case may be, in
respect of the Registered Security issued in exchange for such Bearer Security,
but will be payable only to the Holder of such coupon when due in accordance
with the provisions of this Indenture. Whenever any Securities are so
surrendered for exchange, the Company shall execute, and the Trustee shall
authenticate and deliver, the Securities which the Holder making the exchange is
entitled to receive.
Notwithstanding the foregoing, except as otherwise specified as
contemplated by Section 3.1, any permanent global Security shall be exchangeable
only as provided in this paragraph. If any beneficial owner of an interest in a
global Security is otherwise entitled to exchange such interest for Securities
of such series and of like tenor and principal amount of another authorized form
and denomination, as specified as contemplated by Section 3.1 and provided that
any applicable notice provided in the permanent global Security shall have been
given, then without unnecessary delay but in any event not later than the
earliest date on which
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such interest may be so exchanged, the Company shall execute, and the Trustee
shall authenticate and deliver, definitive Securities in aggregate principal
amount equal to the principal amount of such beneficial owner's interest in such
permanent global Security. On or after the earliest date on which such
interests may be so exchanged, such permanent global Security shall be
surrendered for exchange by the Depositary as shall be specified in the Company
Order with respect thereto to the Trustee, as the Company's agent for such
purpose; provided, however, that no such exchanges may occur during a period
-----------------
beginning at the opening of business 15 days before any selection of Securities
to be redeemed and ending on the relevant Redemption Date if the Security for
which exchange is requested may be among those selected for redemption. If a
Registered Security is issued in exchange for any portion of a permanent global
Security after the close of business at the office or agency where such exchange
occurs on (i) any Regular Record Date and before the opening of business at
such office or agency on the relevant Interest Payment Date, or (ii) any Special
Record Date and the opening of business at such office or agency on the related
proposed date for payment of Defaulted Interest, interest or Defaulted Interest,
as the case may be, will not be payable on such Interest Payment Date or
proposed date for payment, as the case may be, in respect of such Registered
Security, but will be payable on such Interest Payment Date or proposed date for
payment, as the case may be, only to the Person to whom interest in respect of
such portion of such permanent global Security is payable in accordance with the
provisions of this Indenture.
All Securities issued upon any registration of transfer or exchange of
Securities shall be the valid obligations of the Company, evidencing the same
debt, and entitled to the same benefits under this Indenture, as the Securities
surrendered upon such registration of transfer or exchange.
Every Registered Security presented or surrendered for registration of
transfer or for exchange or redemption shall (if so required by the Company or
the Security Registrar) be duly endorsed, or be accompanied by a written
instrument of transfer in form satisfactory to the Company and the Security
Registrar, duly executed by the Holder thereof or his attorney duly authorized
in writing.
No service charge shall be made for any registration of transfer or
exchange of Securities, but the Company may require payment of a sum sufficient
to cover any tax or other governmental charge that may be imposed in connection
with any registration of transfer or exchange of Securities, other than
exchanges pursuant to Section 3.4, 9.6, 11.7 or 13.5 not involving any transfer.
The Company or the Trustee, as applicable, shall not be required (i) to
issue, register the transfer of or exchange any Security if such Security may be
among those selected for redemption during a period beginning at the opening of
business 15 days before selection of the Securities to be redeemed under Section
11.3 and ending at the close of business on (A) if such Securities are issuable
only as Registered Securities, the day of the mailing of the relevant notice of
redemption and (B) if such Securities are issuable as Bearer Securities, the day
of the first publication of the relevant notice of redemption or, if such
Securities are also issuable as Registered Securities and there is no
publication, the mailing of the relevant notice of redemption, or (ii) to
register the transfer of or exchange any Registered Security so selected for
redemption in whole or in part, except, in the case of any Registered Security
to be redeemed in part, the
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portion thereof not to be redeemed, or (iii) to exchange any Bearer Security so
selected for redemption except that such a Bearer Security may be exchanged for
a Registered Security of that series and like tenor, provided that such
--------
Registered Security shall be simultaneously surrendered for redemption, or (iv)
to issue, register the transfer of or exchange any Security which has been
surrendered for repayment at the option of the Holder, except the portion, if
any, of such Security not to be so repaid.
SECTION 3.6. Mutilated, Destroyed, Lost and Stolen Securities. If any
------------------------------------------------
mutilated Security or a Security with a mutilated coupon appertaining to it is
surrendered to the Trustee or the Company, together with, in proper cases, such
security or indemnity as may be required by the Company or the Trustee to save
each of them or any agent of either of them harmless, the Company shall execute
and the Trustee shall authenticate and deliver in exchange therefor a new
Security of the same series and principal amount, containing identical terms and
provisions and bearing a number not contemporaneously outstanding, with coupons
corresponding to the coupons, if any, appertaining to the surrendered Security.
If there shall be delivered to the Company and to the Trustee (i) evidenced
to their satisfaction of the destruction, loss or theft of any Security or
coupon, and (ii) such security or indemnity as may be required by them to save
each of them and any agent of either of them harmless, then, in the absence of
notice to the Company or the Trustee that such Security or coupon has been
acquired by a bona fide purchaser, the Company shall 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 has become or is about to
become due and payable, the Company in its discretion may, instead of issuing a
new Security, with coupons corresponding to the coupons, if any, appertaining to
such destroyed, lost or stolen Security or to the Security to which such
destroyed, lost or stolen coupon appertains, pay such Security or coupon;
provided, however, unless otherwise specified as contemplated by Section 3.1,
- -----------------
any interest on Bearer Securities shall be payable only upon presentation and
surrender of the coupons appertaining thereto.
Upon the issuance of any new Security under this Section, the Company may
require the payment of a sum sufficient to cover any tax or other governmental
charge that may be imposed in relation thereto and any other expenses (including
the fees and expenses of the Trustee) connected therewith.
Every new Security of any series with its coupons, if any, issued pursuant
to this Section in lieu of any destroyed, lost or stolen Security, or in
exchange for a Security to which a destroyed, lost or stolen coupon appertains,
shall constitute an original additional contractual
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obligation of the Company, whether or not the destroyed, lost or stolen Security
and its coupons, if any, or the destroyed, lost or stolen coupon shall be at any
time enforceable by anyone, and shall be entitled to all the benefits of this
Indenture equally and proportionately with any and all other Securities of that
series and their coupons, if any, duly issued hereunder.
The provisions of this Section are exclusive and shall preclude (to the
extent lawful) all other rights and remedies with respect to the replacement or
payment of mutilated, destroyed, lost or stolen Securities or coupons.
SECTION 3.7. Payment of Interest; Interest Rights Preserved. Except as
----------------------------------------------
otherwise specified with respect to a series of Securities in accordance with
the provisions of Section 3.1, interest on any Registered Security that is
payable, and is punctually paid or duly provided for, on any Interest Payment
Date shall be paid to the Person in whose name that Registered Security (or one
or more Predecessor Securities) is registered at the close of business on the
Regular Record Date for such interest at the office or agency of the Company
maintained for such purpose pursuant to Section 10.2, unless interest is payable
at Maturity, in which case interest shall be paid to the Person entitled to
receive payment of the principal of such Registered Security at Maturity;
provided, however, that each installment of interest on any Registered Security
- -------- -------
may at the Company's option be paid by (i) mailing a check for such interest,
payable to or upon the written order of the Person entitled thereto pursuant to
Section 3.8, to the address of such Person as it appears on the Security
Register.
In case a Bearer Security of any series is surrendered in exchange for a
Registered Security of such series after the close of business (at an office or
agency in a Place of Payment for such series) on any Regular Record Date and
before the opening of business (at such office or agency) on the next succeeding
Interest Payment Date, such Bearer Security shall be surrendered without the
coupon relating to such Interest Payment Date and interest will not be payable
on such Interest Payment Date in respect of the Registered Security issued in
exchange for such Bearer Security, but will be payable only to the Holder of
such coupon when due in accordance with the provisions of this Indenture.
Except as otherwise specified with respect to a series of Securities in
accordance with the provisions of Section 3.1, any interest on any Registered
Security of any series that is payable, but is not punctually paid or duly
provided for, on any Interest Payment Date (herein called "Defaulted Interest")
shall forthwith cease to be payable to the registered Holder thereof on the
relevant Regular Record Date by virtue of having been such Holder, and such
Defaulted Interest may be paid by the Company, at its election in each case, as
provided in clause (a) or (b) below:
(a) The Company may elect to make payment of any Defaulted Interest to the
Persons in whose names the Registered Securities of such series (or
their respective Predecessor Securities) are registered at the close
of business on a Special Record Date for the payment of such Defaulted
Interest proposed to be paid on each Registered Security of such
series and the date of the proposed payment (which shall not be less
than 20 days after such notice is received by the Trustee), and at the
same time the Company shall deposit with the Trustee an amount of
money in the currency or currencies, currency unit or units or
composite currency or
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currencies in which the Securities of such series are payable (except
as otherwise specified pursuant to Section 3.1 for Securities of such
series) equal to the aggregate amount proposed to be paid in respect
of such Defaulted Interest or shall make arrangements satisfactory to
the Trustee for such deposit on or prior to the date of the proposed
payment, such money when deposited to be held in trust for the benefit
of the Persons entitled to such Defaulted Interest as in this clause
provided. Thereupon the Trustee shall fix a Special Record Date for
the payment of such Defaulted Interest which shall be not more than 15
days and not less than 10 days prior to the date of the proposed
payment and not less than 10 days after the receipt by the Trustee of
the notice of the proposed payment. The Trustee shall promptly notify
the Company of such Special Record Date and, in the name and at the
expense of the Company, shall cause notice of the proposed payment of
such Defaulted Interest and the Special Record Date therefor to be
mailed, first-class postage prepaid, to each Holder of Registered
Securities of such series at his address as it appears in the Security
Register not less than 10 days prior to such Special Record Date. The
Trustee may, in its discretion, in the name and at the expense of the
Company, cause a similar notice to be published at least once in an
Authorized Newspaper in each Place of Payment, but such publications
shall not be a condition precedent to the establishment of such
Special Record Date. Notice of the proposed payment of such Defaulted
Interest and the Special Record Date therefor having been mailed as
aforesaid, such Defaulted Interest shall be paid to the Persons in
whose names the Registered Securities of such series (or their
respective Predecessor Securities) are registered at the close of
business on such Special Record Date and shall no longer be payable
pursuant to the following clause (b). 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.
(b) The Company may make payment of any Defaulted Interest on the
Registered Securities of any series in any other lawful manner not
inconsistent with the requirements of any securities exchange on which
such Securities may be listed, and upon such notice as may be required
by such exchange, if, after notice given by the Company to the Trustee
of the proposed payment pursuant to this clause, such manner of
payment shall be deemed practicable by the Trustee.
Subject to the foregoing provisions of this Section and Section 3.5, each
Security delivered under this Indenture upon registration of transfer of or in
exchange for or in lieu of any other Security shall carry the rights to interest
accrued and unpaid, and to accrue, which were carried by such other Security.
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SECTION 3.8. Persons Deemed Owners. Prior to due presentment of a
---------------------
Registered Security for registration of transfer, the Company, the Trustee and
any agent of the Company or the Trustee may treat the Person in whose name such
Registered Security is registered as the owner of such Security for the purpose
of receiving payment of principal of (and premium, if any), and (subject to
Sections 3.5 and 3.7) interest on, such Registered Security and for all other
purposes whatsoever, whether or not such Registered Security be overdue, and
neither the Company, the Trustee nor any agent of the Company or the Trustee
shall be affected by notice to the contrary.
Title to any Bearer Security and any coupons appertaining thereto shall
pass by delivery. The Company, the Trustee and any agent of the Company or the
Trustee may treat the Holder of any Bearer Security and the Holder of any coupon
as the absolute owner of such Security or coupon for the purpose of receiving
payment thereof or on account thereof and for all other purposes whatsoever,
whether or not such Security or coupon be overdue, and neither the Company, the
Trustee nor any agent of the Company or the Trustee shall be affected by notice
to the contrary.
None of the Company, the Trustee, any Paying Agent or the Security
Registrar will have any responsibility or liability for any aspect of the
records relating to or payments made on account of beneficial ownership
interests of a Security in global form or for maintaining, supervising or
reviewing any records relating to such beneficial ownership interests.
Notwithstanding the foregoing, with respect to any global Security, nothing
herein shall prevent the Company, the Trustee, or any agent of the Company or
the Trustee, from giving effect to any written certification, proxy or other
authorization furnished by any Depositary or impair, as between such Depositary
as a Holder, with respect to such global Security, and owners of beneficial
interests in such global Security, the operation of customary practices
governing the exercise of rights of such Depositary (or its nominee) as Holder
of such global Security.
SECTION 3.9. Cancellation. All Securities and coupons surrendered for
------------
payment, redemption, repayment at the option of the Holder, registration of
transfer or exchange or for credit against any sinking fund payment shall, if
surrendered to any Person other than the Trustee, be delivered to the Trustee,
and any such Securities and coupons surrendered directly to the Trustee for any
such purpose shall be promptly cancelled by it. The Company may at any time
deliver to the Trustee for cancellation any Securities previously authenticated
and delivered hereunder which the Company may have acquired in any manner
whatsoever, and may deliver to the Trustee (or to any other Person for delivery
to the Trustee) for cancellation any Securities previously authenticated
hereunder which the Company has not issued and sold, and all Securities so
delivered shall be promptly canceled by the Trustee. If the Company shall so
acquire any of the Securities, however, such acquisition shall not operate as a
redemption or satisfaction of the indebtedness represented by such Securities
unless and until the same are surrendered to the Trustee for cancellation. No
securities shall be authenticated in lieu of or in exchange for any Securities
canceled as provided in this Section, except as expressly permitted by this
Indenture. Canceled Securities and coupons held by the Trustee shall be
destroyed by the Trustee and the Trustee shall deliver a certificate of such
destruction to the Company, unless by a Company Order the Company directs their
return to it.
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SECTION 3.10. Computation of Interest. Except as otherwise specified as
-----------------------
contemplated by Section 3.1 with respect to Securities of any series, interest
on the Securities of each series shall be computed on the basis of a 360-day
year consisting of twelve 30-day months.
ARTICLE IV
SATISFACTION AND DISCHARGE
SECTION 4.1. Satisfaction and Discharge of Indenture. This Indenture
---------------------------------------
shall upon Company Request cease to be of further effect with respect to any
series of Securities specified in such Company Request (except as to any
surviving rights of registration of transfer, conversion or exchange of
Securities of such series herein expressly provided for and any right to receive
Additional Amounts, as provided in Section 10.11), and the Trustee, upon receipt
of a Company Order, and at the expense of the Company, shall execute proper
instruments acknowledging satisfaction and discharge of this Indenture as to
such series when
(a) either
(i) all Securities of such series theretofore authenticated and
delivered and all coupons, if any, appertaining thereto (other
than (A) coupons appertaining to Bearer Securities surrendered
for exchange for Registered Securities and maturing after such
exchange, whose surrender is not required or has been waived as
provided in Section 3.5, (B) Securities and coupons of such
series which have been destroyed, lost or stolen and which have
been replaced or paid as provided in Section 3.6, (C) coupons
appertaining to Bearer Securities called for redemption and
maturing after the relevant Redemption Date, whose surrender has
been waived as provided in Section 11.6, and (D) Securities and
coupons of such series for whose payment money has theretofore
been deposited in trust or segregated and held in trust by the
Company and thereafter repaid to the Company or discharged from
such trust, as provided in Section 10.3) have been delivered to
the Trustee for cancellation; or
(ii) all Securities of such series and, in the case of (A) or (B)
below, any coupons appertaining thereto not theretofore delivered
to the Trustee for cancellation
(A) have become due and payable, or
(B) will become due and payable at their Stated Maturity within
one year, or
(C) if redeemable at the option of the Company, are to be
called for redemption within one year under arrangements
satisfactory to the Trustee for the giving of notice of
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redemption by the Trustee in the name, and at the expense,
of the Company,
and the Company, in the case of (A), (B) or (C) above, has
irrevocably deposited or caused to be deposited with the Trustee
as trust funds in trust for the purpose an amount in the currency
or currencies, currency unit or units or composite currency or
currencies in which the Securities of such series are payable,
sufficient to pay and discharge the entire indebtedness on such
Securities and such coupons not theretofore delivered to the
Trustee for cancellation, for principal (and premium, if any) and
interest, and any Additional Amounts with respect thereto, to the
date of such deposit (in the case of Securities which have become
due and payable) or to the Stated Maturity or Redemption Date, as
the case may be;
(b) the Company has paid or caused to be paid all other sums payable
hereunder by the Company; and
(c) the Company has delivered to the Trustee an Officers' Certificate and
an Opinion of Counsel, each stating that all conditions precedent
herein provided for relating to the satisfaction and discharge of this
Indenture as to such series have been complied with.
Notwithstanding the satisfaction and discharge of this Indenture, the
obligations of the Company to the Trustee and any predecessor Trustee under
Section 6.7, the obligations of the Company to any Authenticating Agent under
Section 6.12 and, if money shall have been deposited with and held by the
Trustee pursuant to subclause (ii) of clause (a) of this Section, the
obligations of the Trustee under Section 4.2 and the last paragraph of Section
10.3 shall survive.
SECTION 4.2. Application of Trust Funds. Subject to the provisions of the
--------------------------
last paragraph of Section 10.3, all money deposited with the Trustee pursuant to
Section 4.1 shall be held in trust and applied by it, in accordance with the
provisions of the Securities, the coupons and this Indenture, to the payment,
either directly or through any Paying Agent (including the Company acting as its
own Paying Agent) as the Trustee may determine, to the Persons entitled thereto,
of the principal (and premium, if any), and any interest and Additional Amounts
for whose payment such money has been deposited with or received by the Trustee,
but such money need not be segregated from other funds except to the extent
required by law.
ARTICLE V
REMEDIES
SECTION 5.1. Events of Default. "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
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<PAGE>
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):
(a) default in the payment of any interest upon or any Additional Amounts
payable in respect of any Security of that series or of any coupon
appertaining thereto, when such interest or Additional Amounts or
coupon becomes due and payable, and continuance of such default for a
period of 30 days; or
(b) default in the payment of the principal of (or premium, if any, on)
any Security of that series when it becomes due and payable at its
Maturity; or
(c) default in the deposit of any sinking fund payment, when and as due by
the terms of any Security of that series; or
(d) default in the performance, or breach, of any covenant or warranty of
the Company in this Indenture with respect to any Security of that
series (other than a covenant or warranty a default in whose
performance or whose breach is elsewhere in this Section specifically
dealt with or which has been expressly included in this Indenture
solely for the benefit of a series of Securities other than that
series), and continuance of such default or breach for a period of 60
days after there has been given, by registered or certified mail, to
the Company by the Trustee or to the Company and the Trustee by the
Holders of at least 25% in principal amount of the Outstanding
Securities of that series a written notice specifying such default or
breach and requiring it to be remedied and stating that such notice is
a "Notice of Default" hereunder; or
(e) a default under any bond, debenture, note or other evidence of
indebtedness of the Company, or under any mortgage, indenture or other
instrument of the Company (including a default with respect to
Securities of any series other than that series) under which there may
be issued or by which there may be secured any indebtedness of the
Company, whether such indebtedness now exists or shall hereafter be
created, which default shall constitute a failure to pay an aggregate
principal amount exceeding $5,000,000 of such indebtedness when due
and payable after the expiration of any applicable grace period with
respect thereto and shall have resulted in such indebtedness in an
aggregate principal amount exceeding $5,000,000 becoming or being
declared due and payable prior to the date on which it would otherwise
have become due and payable, without such indebtedness having been
discharged, or such acceleration having been rescinded or annulled,
within a period of 10 days after there shall have been given, by
registered or certified mail, to the Company by the Trustee or to the
Company and the Trustee by the Holders of at least 10% in principal
amount of the Outstanding Securities of that series a written notice
specifying such default and requiring the Company to cause such
indebtedness to be discharged or cause such acceleration to be
rescinded or annulled and stating that such notice is a "Notice of
Default" hereunder; or
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(f) the Company pursuant to or within the meaning of any Bankruptcy Law:
(i) commences a voluntary case,
(ii) consents to the entry of an order for relief against it in an
involuntary case,
(iii) consents to the appointment of a Custodian of it or for all or
substantially all of its property, or
(iv) makes a general assignment for the benefit of its creditors; or
(g) a court of competent jurisdiction enters an order or decree under any
Bankruptcy Law that:
(i) is for relief against the Company in an involuntary case,
(ii) appoints a Custodian of the Company or for all or substantially
all of its property, or
(iii) orders the liquidation of the Company,
and the order or decree remains unstayed and in effect for 90 days; or
(h) any other Event of Default provided with respect to Securities of that
series.
As used in this Section 5.1, the term "Bankruptcy Law" means title 11, U.S. Code
or any similar Federal or State law for the relief of debtors and the term
"Custodian" means any receiver, trustee, assignee, liquidator or other similar
official under any Bankruptcy Law.
SECTION 5.2. Acceleration of Maturity; Rescission and Annulment. If an
--------------------------------------------------
Event of Default with respect to Securities of any series at the time
Outstanding occurs and is continuing, then and in every such case the Trustee or
the Holders of not less than 25% in principal amount of the Outstanding
Securities of that series may declare the principal (or, if any Securities are
Original Issue Discount Securities or Indexed Securities, such portion of the
principal as may be specified in the terms thereof) of all the Securities of
that series to be due and payable immediately, by a notice in writing to the
Company (and to the Trustee if given by the Holders), and upon any such
declaration such principal or specified portion thereof shall become immediately
due and payable.
At any time after such a declaration of acceleration with respect to
Securities of any series has been made and before a judgment or decree for
payment of the money due has been obtained by the Trustee as hereinafter in this
Article provided, the Holders of a majority in principal amount of the
Outstanding Securities of that series, by written notice to the Company and the
Trustee, may rescind and annul such declaration and its consequences if:
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(a) the Company has paid or deposited with the Trustee a sum sufficient to
pay in the currency, currency unit or composite currency in which the
Securities of such series are payable (except as otherwise specified
pursuant to Section 3.1 for the Securities of such series):
(i) all overdue installments of interest on and any Additional
Amounts payable in respect of all Outstanding Securities of
that series and any related coupons,
(ii) the principal of (and premium, if any, on) any Outstanding
Securities of that series which have become due otherwise than
by such declaration of acceleration and interest thereon at the
rate or rates borne by or provided for in such Securities,
(iii) to the extent that payment of such interest is lawful, interest
upon overdue installments of interest and any Additional
Amounts at the rate or rates borne by or provided for in such
Securities, and
(iv) all sums paid or advanced by the Trustee hereunder and the
reasonable compensation, expenses, disbursements and advances
of the Trustee, its agents and counsel; and
(b) all Events of Default with respect to Securities of that series, other
than the nonpayment of the principal of (or premium, if any) or
interest on Securities of that series which have become due solely by
such declaration of acceleration, have been cured or waived as
provided in Section 5.13.
No such rescission shall affect any subsequent default or impair any right
consequent thereon.
Upon receipt by the Trustee of any declaration of acceleration, or
recession and annulment thereof, with respect to Securities of a series all or
part of which is represented by a global Security, the Trustee shall establish a
record date for determining Holders of Outstanding Securities of such series
entitled to join in such declaration of acceleration, or rescission and
annulment, as the case may be, which record date shall be at the close of
business on the day the Trustee receives such declaration of acceleration, or
rescission and annulment, as the case may be. The Holders on such record date,
or their duly designated proxies, and only such Persons, shall be entitled to
join in such declaration of acceleration, or rescission and annulment, as the
case may be, whether or not such Holders remain Holders after such record date;
provided, that unless such declaration of acceleration, or rescission and
- --------
annulment, as the case may be, shall have become effective by virtue of the
requisite percentage having been obtained prior to the date which is ninety (90)
days after such record date, such declaration of acceleration, or rescission and
annulment, as the case may be, shall automatically without further action by any
Holder be canceled and of no further effect. Nothing in this paragraph shall
prevent a Holder, or a proxy of a Holder, from giving, after expiration of such
ninety (90) day period, a new declaration of acceleration, or rescission or
annulment thereof, as the case may be, that is identical to a declaration of
acceleration, or rescission or annulment thereof, which has been canceled
pursuant
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<PAGE>
to the proviso to the preceding sentence, in which event a new record date shall
be established pursuant to the provisions of this Section 5.2.
SECTION 5.3. Collection of Indebtedness and Suits for Enforcement by
-------------------------------------------------------
Trustee.
- -------
The Company covenants that if:
(a) default is made in the payment of any installment of interest or
Additional Amounts, if any, on any Security of any series and any related
coupon when such interest or Additional Amount becomes due and payable and
such default continues for a period of 30 days, or
(b) default is made in the payment of the principal of (or premium, if
any, on) any Security of any series at its Maturity or in the deposit of
any sinking fund payment, if any, when the same shall have become payable,
then the Company will, upon demand of the Trustee, pay to the Trustee, for the
benefit of the Holders of such Securities of such series and coupons, the whole
amount then due and payable on such Securities and coupons for principal (and
premium, if any) and interest and Additional Amounts with interest upon any
overdue principal (and premium, if any) and, to the extent that payment of such
interest shall be legally enforceable, upon any overdue installments of interest
or Additional Amounts, if any, at the rate or rates borne by or provided for in
such Securities, and, in addition thereto, such further amount as shall be
sufficient to cover the costs and expenses of collection, including the
reasonable compensation, expenses, disbursements and advances of the Trustee,
its agents and counsel.
If the Company fails to pay such amounts forthwith upon such demand,
the Trustee, in its own name and as trustee of an express trust, may institute a
judicial proceeding for the collection of the sums so due and unpaid, and may
prosecute such proceeding to judgment or final decree, and may enforce the same
against the Company or any other obligor upon such Securities of such series and
collect the moneys adjudged or decreed to be payable in the manner provided by
law out of the property of the Company or any other obligor upon such Securities
of such series, wherever situated.
If an Event of Default with respect to Securities of any series occurs
and is continuing, the Trustee may in its discretion proceed to protect and
enforce its rights and the rights of the Holders of Securities of such series
and any related coupons by such appropriate judicial proceedings as the Trustee
shall deem most effectual to protect and enforce any such rights, whether for
the specific enforcement of any covenant or agreement in this Indenture or in
aid of the exercise of any power granted herein, or to enforce any other proper
remedy.
SECTION 5.4. Trustee May File Proofs of Claim. In case of the pendency of
--------------------------------
any receivership, insolvency, liquidation, bankruptcy, reorganization,
arrangement, adjustment, composition or other judicial proceeding relative to
the Company or any other obligor upon the Securities or the property of the
Company or of such other obligor or their creditors, the Trustee (irrespective
of whether the principal of the Securities of any series shall then be due and
payable
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<PAGE>
as therein expressed or by declaration or otherwise and irrespective of whether
the Trustee shall have made any demand on the Company for the payment of overdue
principal, premium, if any, or interest) shall be entitled and empowered, by
intervention in such proceeding or otherwise:
(a) to file and prove a claim for the whole amount, or such lesser amount
as may be provided for in the Securities of such series, of principal
(and premium, if any) and interest and Additional Amounts, if any,
owing and unpaid in respect of the Securities and to file such other
papers or documents as may be necessary or advisable in order to have
the claims of the Trustee (including any claim for the reasonable
compensation, expenses, disbursements and advances of the Trustee, its
agents and counsel) and of the Holders allowed in such judicial
proceeding, and
(b) to collect and receive any moneys or other property payable or
deliverable on any such claims and to distribute the same;
and any custodian, receiver, assignee, trustee, liquidator, sequestrator (or
other similar official) in any such judicial or other proceeding is hereby
authorized by each Holder of Securities of such series and coupons to make such
payments to the Trustee, and in the event that the Trustee shall consent to the
making of such payments directly to the Holders, to pay to the Trustee any
amount due to it for the reasonable compensation, expenses, disbursements and
advances of the Trustee and any predecessor Trustee, their agents and counsel,
and any other amounts due the Trustee or any predecessor Trustee under Section
6.7.
Nothing herein contained shall be deemed to authorize the Trustee to
authorize or consent to or accept or adopt on behalf of any Holder of a Security
or coupon any plan of reorganization, arrangement, adjustment or composition
affecting the Securities or the rights of any Holder thereof, or to authorize
the Trustee to vote in respect of the claim of any Holder of a Security or
coupon in any such proceeding.
SECTION 5.5. Trustee May Enforce Claims Without Possession of Securities
-----------------------------------------------------------
or Coupons. All rights of action and claims under this Indenture or any of the
- ----------
Securities or coupons may be prosecuted and enforced by the Trustee without the
possession of any of the Securities or coupons or the production thereof in any
proceeding relating thereto, and any such proceeding instituted by the Trustee
shall be brought in its own name as trustee of an express trust, and any
recovery of judgment shall, after provision for the payment of the reasonable
compensation, expenses, disbursements and advances of the Trustee, its agents
and counsel, be for the ratable benefit of the Holders of the Securities and
coupons in respect of which such judgment has been recovered.
SECTION 5.6. Application of Money Collected. Any money collected by the
------------------------------
Trustee pursuant to this Article shall be applied in the following order, at the
date or dates fixed by the Trustee and, in case of the distribution of such
money on account of principal (or premium, if any) or interest and any
Additional Amounts upon presentation of the Securities or coupons, or both, as
the case may be, and the notation thereon of the payment if only partially paid
and upon surrender thereof if fully paid:
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<PAGE>
FIRST: To the payment of all amounts due the Trustee and any predecessor
Trustee under Section 6.7;
SECOND: To the payment of the amounts then due and unpaid upon the
Securities and coupons for principal (and premium, if any) and
interest and any Additional Amounts payable in respect of which
or for the benefit of which such money has been collected,
ratably, without preference or priority of any kind, according to
the aggregate amounts due and payable on such Securities and
coupons for principal (and premium, if any), interest and
Additional Amounts respectively; and
THIRD: To the payment of the remainder, if any, to the Company or any
other Person or Persons entitled thereto.
SECTION 5.7. Limitation on Suits. No Holder of any Security of any series
-------------------
or any related coupon shall have any right to institute any proceeding, judicial
or otherwise, with respect to this Indenture, or for the appointment of a
receiver or trustee, or for any other remedy hereunder, unless:
(a) such Holder has previously given written notice to the Trustee of a
continuing Event of Default with respect to the Securities of that
series;
(b) the Holders of not less than 25% in principal amount of the
Outstanding Securities of that series shall have made written request
to the Trustee to institute proceedings in respect of such Event of
Default in its own name as Trustee hereunder;
(c) such Holder or Holders have offered to the Trustee reasonable
indemnity against the costs, expenses and liabilities to be incurred
in compliance with such request;
(d) the Trustee for 60 days after its receipt of such notice, request and
offer of indemnity has failed to institute any such proceeding; and
(e) no direction inconsistent with such written request has been given to
the Trustee during such 60-day period by the Holders of a majority in
principal amount of the Outstanding Securities of that series;
it being understood and intended that no one or more of such Holders shall have
any right in any manner whatever by virtue of, or by availing of, any provision
of this Indenture to affect, disturb or prejudice the rights of any other of
such Holders, or to obtain or to seek to obtain priority or preference over any
other of such Holders or to enforce any right under this Indenture, except in
the manner herein provided and for the equal and ratable benefit of all such
Holders.
SECTION 5.8. Unconditional Right of Holders to Receive Principal, Premium,
-------------------------------------------------------------
if any, 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
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<PAGE>
receive payment of the principal of (and premium, if any) and (subject to
Sections 3.5 and 3.7) interest on, and any Additional Amounts in respect of such
Security or payment of such coupon on the respective due dates expressed in such
Security or coupon (or, in the case of redemption, on the Redemption Date) and
to institute suit for the enforcement of any such payment, and such rights shall
not be impaired without the consent of such Holder.
SECTION 5.9. Restoration of Rights and Remedies. If the Trustee or any
----------------------------------
Holder of a Security or coupon has instituted any proceeding to enforce any
right or remedy under this Indenture and such proceeding has been discontinued
or abandoned for any reason, or has been determined adversely to the Trustee or
to such Holder, then and in every such case the Company, the Trustee and the
Holders of Securities and coupons shall, subject to any determination in such
proceeding, be restored severally and respectively to their former positions
hereunder and thereafter all rights and remedies of the Trustee and the Holders
shall continue as though no such proceeding had been instituted.
SECTION 5.10. Rights and Remedies Cumulative. Except as otherwise
------------------------------
provided with respect to the replacement or payment of mutilated, destroyed,
lost or stolen Securities or coupons in the last paragraph of Section 3.6, no
right or remedy herein conferred upon or reserved to the Trustee or to the
Holders of Securities or coupons is intended to be exclusive of any other right
or remedy, and every right and remedy shall, to the extent permitted by law, be
cumulative and in addition to every other right and remedy given hereunder or
now or hereafter existing at law or in equity or otherwise. The assertion or
employment of any right or remedy hereunder, or otherwise, shall not prevent the
concurrent assertion or employment of any other appropriate right or remedy.
SECTION 5.11. Delay or Omission Not Waiver. No delay or omission of the
----------------------------
Trustee or any Holder of any Security or coupon to exercise any right or remedy
accruing upon any Event of Default shall impair any such right or remedy or
constitute a waiver of any such Event of Default or an acquiescence therein.
Every right and remedy given by this Article or by law to the Trustee or to the
Holders may be exercised from time to time, and as often as may be deemed
expedient, by the Trustee or by the Holders of Securities or coupons, as the
case may be.
SECTION 5.12. Control by Holders of Securities. The Holders of not less
--------------------------------
than a majority in principal amount of the Outstanding Securities of any series
shall have the right to direct the time, method and place of conducting any
proceeding for any remedy available to the Trustee or exercising any trust or
power conferred on the Trustee with respect to the Securities of such series,
provided that
- --------
(a) such direction shall not be in conflict with any rule of law or with
this Indenture,
(b) the Trustee may take any other action deemed proper by the Trustee
which is not inconsistent with such direction, and
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<PAGE>
(c) the Trustee need not take any action which might involve it in
personal liability or be unduly prejudicial to the Holders of
Securities of such series not joining therein.
SECTION 5.13. Waiver of Past Defaults. The Holders of not less than a
-----------------------
majority in principal amount of the Outstanding Securities of any series may on
behalf of the Holders of all the Securities of such series and any related
coupons waive any past default hereunder with respect to such series and its
consequences, except a default
(a) in the payment of the principal 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
(b) in respect of a covenant or provision hereof which under Article IX
cannot be modified or amended without the consent of the Holder of
each Outstanding Security of such series affected.
Upon any such waiver, such default shall cease to exist, and any Event of
Default arising therefrom shall be deemed to have been cured, for every purpose
of this Indenture; but no such waiver shall extend to any subsequent or other
default or Event of Default or impair any right consequent thereon.
SECTION 5.14. Waiver of Usury, Stay or Extension Laws. The Company
---------------------------------------
covenants (to the extent that it may lawfully do so) that it will not at any
time insist upon, or plead, or in any manner whatsoever claim or take the
benefit or advantage of, any usury, stay or extension law wherever enacted, now
or at any time hereafter in force, which may affect the covenants or the
performance of this Indenture; and the Company (to the extent that it may
lawfully do so) hereby expressly waives all benefit or advantage of any such
law, and covenants that it will not hinder, delay or impede the execution of any
power herein granted to the Trustee, but will suffer and permit the execution of
every such power as though no such law had been enacted.
SECTION 5.15. Undertaking for Costs. All parties to this Indenture agree,
---------------------
and each Holder of any Security by his acceptance thereof shall be deemed to
have agreed, that any court may in its discretion require, in any suit for the
enforcement of any right or remedy under this Indenture, or in any suit against
the Trustee for any action taken or omitted by it as Trustee, the filing by any
party litigant in such suit of any undertaking to pay the costs of such suit,
and that such court may in its discretion assess reasonable costs, including
reasonable attorneys' fees, against any party litigant in such suit having due
regard to the merits and good faith of the claims or defenses made by such party
litigant; but the provisions of this Section shall not apply to any suit
instituted by the Trustee, to any suit instituted by any Holder, or group of
Holders, holding in the aggregate more than 10% in principal amount of the
Outstanding Securities, or to any suit instituted by any Holder for the
enforcement of the payment of the principal of (or premium, if any) or interest,
if any, on any Security on or after the respective Stated Maturities expressed
in such Security (or, in the case of redemption, on or after the Redemption
Date).
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<PAGE>
ARTICLE VI
THE TRUSTEE
SECTION 6.1. Certain Duties and Responsibilities.
-----------------------------------
(a) Except during the continuance of an Event of Default,
(i) the Trustee undertakes to perform such duties and only such
duties as are specifically set forth in this Indenture, and, to
the extent lawful, no implied covenants or obligations shall be
read into this Indenture against the Trustee; and
(ii) in the absence of bad faith on its part, the Trustee may
conclusively rely, as to the truth of the statements and the
correctness of the opinions expressed therein, upon certificates
or opinions furnished to the Trustee and conforming to the
requirements of this Indenture; but in the case of any such
certificates or opinions which by any provision hereof are
specifically required to be furnished to the Trustee, the Trustee
shall be under a duty to examine the same to determine whether or
not they conform to the requirements of this Indenture.
(b) In case an Event of Default has occurred and is continuing, the
Trustee shall exercise such of the rights and powers vested in it by
this Indenture, and use the same degree of care and skill in their
exercise, as a prudent man would exercise or use under the
circumstances in the conduct of his own affairs.
(c) No provision of this Indenture shall be construed to relieve the
Trustee from liability for its own negligent action, its own negligent
failure to act, or its own willful misconduct, except that
------
(i) this Subsection shall not be construed to limit the effect of
Subsection (a) of this Section;
(ii) the Trustee shall not be liable for any error of judgment made in
good faith by a Responsible Officer, unless it shall be proved
that the Trustee was negligent in ascertaining the pertinent
facts;
(iii) the Trustee shall not be liable with respect to any action
taken or omitted to be taken by it in good faith in accordance
wit the direction of the Holders of a majority in principal
amount of the Outstanding Securities of any series relating to
the time, method and place of conducting any proceeding for any
remedy available to the Trustee, or exercising any trust or power
conferred upon the Trustee, or exercising any trust or power
conferred upon the Trustee, under this Indenture with respect to
the Securities of that series; and
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<PAGE>
(iv) no provision of this Indenture shall require the Trustee to expend or
risk its own funds or otherwise incur any financial liability in the
performance of any of its duties hereunder, or in the exercise of any
of its rights or powers if it shall have reasonable grounds for
believing that repayment of such funds or adequate indemnity against
such risk or liability is not reasonably assured to it.
(d) Whether or not therein expressly so provided, every provision of this
Indenture relating to the conduct or affecting the liability of or
affording protection to the Trustee shall be subject to the provisions
of this Section.
SECTION 6.2. Notice of Defaults. Within 90 days after the occurrence of
------------------
any default hereunder with respect to the Securities of any series, the Trustee
shall transmit in the manner specified under Section 1.6 to all Holders of
Securities of the series, notice of such default hereunder known to the Trustee,
unless such default shall have been cured or waived; provided, however, that
-----------------
except in the case of a default in the payment of the principal of (or premium,
if any) or interest on or any Additional Amounts with respect to any Security of
such series, or in the payment of any sinking fund installment with respect to
the Securities of such series, the Trustee shall be protected in withholding
such notice if and so long as Responsible Officers of the Trustee in good faith
determine that the withholding of such notice is in the interests of the Holders
of the Securities and coupons of such series; and provided further that in the
----------------
case of any default or breach of the character specified in Section 5.1(d) with
respect to the Securities and coupons of such series, no such notice to Holders
shall be given until at least 60 days after the occurrence thereof. For the
purpose of this Section, the term "default" means any event which is, or after
notice or lapse of time or both would become, an Event of Default with respect
to the Securities of such series.
SECTION 6.3. Certain Rights of Trustee. Subject to the provisions of TIA
-------------------------
Sections 315(a) through 315(d):
(a) the Trustee may rely and shall be protected in acting or refraining
from acting upon any resolution, certificate, statement, instrument,
opinion, report, notice, request, direction, consent, order, bond,
debenture, note, coupon or other paper or document believed by it to
be genuine and to have been signed or presented by the proper party or
parties;
(b) any request or direction of the Company mentioned herein shall be
sufficiently evidenced by a Company Request or Company Order (other
than delivery of any Security, together with any coupons appertaining
thereto, to the Trustee for authentication and delivery pursuant to
Section 3.3 which shall be sufficiently evidenced as provided therein)
and any resolution of the Board of Trust Managers may be sufficiently
evidenced by a Board Resolution;
(c) whenever in the administration of this Indenture the Trustee shall
deem it desirable that a matter be proved or established prior to
taking, suffering or omitting any action hereunder, the Trustee
(unless other evidence be herein
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<PAGE>
specifically prescribed) may, in the absence of bad faith on its part,
rely upon an Officers' Certificate;
(d) the Trustee may consult with counsel and the written advice of such
counsel or any Opinion of Counsel shall be full and complete
authorization and protection in respect of any action taken, suffered
or omitted by it hereunder in good faith and in reliance thereon;
(e) the Trustee shall be under no obligation to exercise any of the rights
or powers vested in it by this Indenture at the request or direction
of any of the Holders of Securities of any series or any related
coupons pursuant to this Indenture, unless such holders shall have
offered to the Trustee reasonable security or indemnity against the
costs, expenses and liabilities which might be incurred by it in
compliance with such request or direction;
(f) the Trustee shall not be bound to make any investigation into the
facts or matters stated in any resolution, certificate, statement,
instrument, opinion, report, notice, request, direction, consent,
order, bond, debenture, note, coupon or other paper or document, but
the Trustee, in its discretion, may make such further inquiry or
investigation into such facts or matters as it may see fit, and, if
the Trustee shall determine to make such further inquiry or
investigation, it shall be entitled to examine the books, records and
premises of the Company, personally or by agent or attorney;
(g) the Trustee may execute any of the trusts or powers hereunder or
perform any duties hereunder either directly or by or through agents
or attorneys and the Trustee shall not be responsible for any
misconduct or negligence on the part of any agent or attorney
appointed with due care by it hereunder; and
(h) the Trustee shall not be liable for any action taken, suffered or
omitted by it in good faith and reasonably believed by it to be
authorized or within the discretion or rights or powers 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.
SECTION 6.4. Not Responsible for Recitals or Issuance of Securities. The
------------------------------------------------------
recitals contained in the Securities, except the Trustee's certificate of
authentication, shall be taken as the statements of the Company, and neither the
Trustee nor any Authenticating Agent assumes any responsibility for their
correctness. The Trustee makes no representations as to the validity or
sufficiency of this Indenture or of the Securities or coupons, except that the
Trustee represents that it is duly authorized to execute and deliver this
Indenture, authenticate the Securities and perform its obligations hereunder.
Neither the Trustee nor any Authenticating Agent shall be accountable for the
use or application by the Company of Securities or the proceeds thereof.
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<PAGE>
SECTION 6.5. May Hold Securities. The Trustee, any Paying Agent, Security
-------------------
Registrar, Authenticating Agent or any other agent of the Company, in its
individual or any other capacity, may become the owner or pledgee of Securities
and coupons and, subject to TIA Sections 310(b) and 311, may otherwise deal with
the Company with the same rights it would have if it were not Trustee, Paying
Agent, Security Registrar, Authenticating Agent or such other agent.
SECTION 6.6. Money Held in Trust. Money held by the Trustee in trust
-------------------
hereunder need not be segregated from other funds except to the extent required
by law. Such amounts shall be invested by the Trustee solely at the written
direction of the Company. The Trustee shall be under no liability for interest
on any money received by it hereunder except as otherwise agreed with the
Company.
SECTION 6.7. Compensation, Reimbursement and Indemnity. The Company
-----------------------------------------
agrees:
(a) to pay to the Trustee from time to time reasonable compensation for
all services rendered by it hereunder (which compensation shall not be
limited by any provision of law in regard to the compensation of a
trustee of an express trust);
(b) except as otherwise expressly provided herein, to reimburse each of
the Trustee and any predecessor Trustee upon its request for all
reasonable expenses, disbursements and advances incurred or made by
the Trustee in accordance with any provision of this Indenture
(including the reasonable compensation and the expenses and
disbursements of its agents and counsel), except any such expense,
disbursement or advance as may be attributable to its negligence or
bad faith; and
(c) to indemnify each of the Trustee and any predecessor Trustee for, and
to hold it harmless against, any loss, liability or expense incurred
without negligence or bad faith on its own part, arising out of or in
connection with the acceptance or administration of the trust or
trusts hereunder, including the costs and expenses of defending itself
against any claim or liability in connection with the exercise or
performance of any of its powers or duties hereunder. When the
Trustee incurs expenses or renders services in connection with an
Event of Default specified in Section 5.1(e) or Section 5.1(f), the
expenses (including the reasonable charges and expenses of its
counsel) and the compensation for the services are intended to
constitute expenses of administration under any applicable Federal or
state bankruptcy, insolvency or other similar law.
As security for the performance of the obligations of the Company under
this Section, the Trustee shall have a lien prior to the Securities upon all
property and funds held or collected by the Trustee as such, except funds held
in trust for the payment of principal of (or premium, if any) or interest on
particular Securities or any coupons.
The provisions of this Section shall survive the termination of this
Indenture.
SECTION 6.8. Corporate Trustee Required; Eligibility; Conflicting
----------------------------------------------------
Interests. There shall at all times be a Trustee hereunder which shall be
- ---------
eligible to act as Trustee under TIA Section
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<PAGE>
310(a)(1) and (a)(5) and shall have a combined capital and surplus of at least
$25,000,000. If such corporation publishes reports of condition at least
annually, pursuant to law or the requirements of Federal, State, Territorial or
District of Columbia supervising or examining authority, then for the purposes
of this Section, the combined capital and surplus of such corporation shall be
deemed to be its combined capital and surplus as set forth in its most recent
report of condition so published. If at any time the Trustee shall cease to be
eligible in accordance with the provisions of this Section, it shall resign
immediately in the manner and with the effect hereinafter specified in this
Article.
The Trustee shall at all times be subject to the conflict of interest
provisions of TIA (s) 310(b), including the optional provision of TIA (s)
310(b)(9), permitted by the second sentence thereof. Furthermore, the conflict
of interest provisions of TIA (s) 310(b)(1) regarding conflicts arising between
different indentures shall also apply to any conflicts arising between series of
Securities issued under this Indenture.
SECTION 6.9. Resignation and Removal; Appointment of Successor.
-------------------------------------------------
(a) No resignation or removal of the Trustee and no appointment of a
successor Trustee pursuant to this Article shall become effective
until the acceptance of appointment by the successor Trustee in
accordance with the applicable requirements of Section 6.10.
(b) The Trustee may resign at any time with respect to the Securities of
one or more series by giving written notice thereof to the Company.
If an instrument of acceptance by a successor Trustee shall not have
been 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 Company.
(d) If at any time:
(i) the Trustee shall fail to comply with the provisions of TIA
Section 310(b) after written request therefor by the Company or
by any Holder of a Security who has been a bona fide Holder of a
Security for at least six months, or
(ii) the Trustee shall cease to be eligible under Section 6.8 and
shall fail to resign after written request therefor by the
Company or by any Holder of a Security who has been a bona fide
Holder of a Security for at least six months, or
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<PAGE>
(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, (x) the Company by or pursuant to a Board
Resolution may remove the Trustee and appoint a successor Trustee with
respect to all Securities, or (y) subject to TIA Section 315(e), any
Holder of a Security who has been a bona fide Holder of a Security for
at least six months may, on behalf of himself and all others similarly
situated, petition any court of competent jurisdiction for the removal
of the Trustee with respect to all Securities and the appointment of a
successor Trustee or Trustees.
(e) If the Trustee shall resign, be removed or become incapable of acting,
or if a vacancy shall occur in the office of Trustee for any cause
with respect to the Securities of one or more series, the Company, by
or pursuant to a Board Resolution, shall promptly appoint a successor
Trustee or Trustees with respect to the Securities of that or those
series (it being understood that any such successor Trustee may be
appointed with respect to the Securities 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 Company and the retiring Trustee, the
successor Trustee so appointed shall, forthwith upon its acceptance of
such appointment, become the successor Trustee with respect to the
Securities of such series and to that extent supersede the successor
Trustee appointed by the Company. If no successor Trustee with
respect to the Securities of any series shall have been so appointed
by the Company or the Holders of Securities and accepted appointment
in the manner hereinafter provided, any Holder of a Security who has
been a bona fide Holder of a Security of such series for at least six
months may, on behalf of himself and all others similarly situated,
petition any court of competent jurisdiction for the appointment of a
successor Trustee with respect to Securities of such series.
(f) The Company shall give notice of each resignation and each removal of
the Trustee with respect to the Securities of any series and each
appointment of a successor Trustee with respect to the Securities of
any series in the manner provided for notices to the Holders of
Securities in Section 1.6. Each notice shall include the name of the
successor Trustee with respect to the Securities of such series and
the address of its Corporate Trust Office.
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SECTION 6.10. Acceptance of Appointment by Successor.
--------------------------------------
(a) In case of the appointment hereunder of a successor Trustee with
respect to all Securities, every such successor Trustee shall execute,
acknowledge and deliver to the Company and to the retiring Trustee an
instrument accepting such appointment, and thereupon the resignation
or removal of the retiring Trustee shall become effective and such
successor Trustee, without any further act, deed or conveyance, shall
become vested with all the rights, powers, trusts and duties of the
retiring Trustee; but, on request of the Company or the successor
Trustee, such retiring Trustee shall, upon payment of its charges,
execute and deliver an instrument transferring to such successor
Trustee all the rights, powers and trusts of the retiring Trustee, and
shall duly assign, transfer and deliver to such successor Trustee all
property and money held by such retiring Trustee hereunder, subject
nevertheless to its claim, if any, provided for in Section 6.7.
(b) In case of the appointment hereunder of a successor Trustee with
respect to the Securities of one or more (but not all) series, the
Company, the retiring Trustee and each successor Trustee with respect
to the Securities of one or more series shall execute and deliver an
indenture supplemental hereto, pursuant to Article IX hereof, wherein
each successor Trustee shall accept such appointment and which (1)
shall contain such provisions as shall be necessary or desirable to
transfer and confirm to, and to vest in, each successor Trustee all
the rights, powers, trusts and duties of the retiring Trustee with
respect to the Securities of that or those series to which the
appointment of such successor Trustee relates, (2) if the retiring
Trustee is not retiring with respect to all Securities, shall contain
such provisions as shall be deemed necessary or desirable to confirm
that all the rights, powers, trusts and duties of the retiring Trustee
with respect to the Securities of that or those series as to which the
retiring Trustee is not retiring shall continue to be vested in the
retiring Trustee, and (3) shall add to or change any of the provisions
of this Indenture as shall be necessary to provide for or facilitate
the administration of the trusts hereunder by more than one Trustee,
it being understood that nothing herein or in such supplemental
indenture shall constitute such Trustees co-trustees of the same trust
and that each such Trustee shall be trustee of a trust or trusts
hereunder separate and apart from any trust or trusts hereunder
administered by any other Trustee; and upon the execution and delivery
of such supplemental indenture the resignation or removal of the
retiring Trustee shall become effective to the extent provided therein
and each such successor Trustee, without any further act, deed or
conveyance, shall become vested with all the rights, powers, trusts
and duties of the retiring Trustee with respect to the Securities of
that or those series to which the appointment of such successor
Trustee relates; but, on request of the Company of 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.
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(c) Upon request of any such successor Trustee, the Company shall execute
any and all instruments for more fully and certainly vesting in and
confirming to such successor Trustee all such rights, powers and
trusts referred to in paragraph (a) or (b) of this Section, as the
case may be.
(d) No successor Trustee shall accept its appointment unless at the time
of such acceptance such successor Trustee shall be qualified and
eligible under this Article.
SECTION 6.11. Merger, Conversion, Consolidation or Succession to Business.
-----------------------------------------------------------
Any corporation into which the Trustee may be merged or converted or with which
it may be consolidated, or any corporation resulting from any merger, conversion
or consolidation to which the Trustee shall be a party, or any corporation
succeeding to all or substantially all of the corporate trust business of the
Trustee, shall be the successor of the Trustee hereunder, provided such
--------
corporation shall be otherwise qualified and eligible under this Article,
without the execution or filing of any paper or any further act on the part of
any of the parties hereto. In case any Securities or coupons shall have been
authenticated, but not delivered, by the Trustee then in office, any successor
by merger, conversion or consolidation to such authenticating Trustee may adopt
such authentication and deliver the Securities or coupons so authenticated with
the same effect as if such successor Trustee had itself authenticated such
Securities or coupons. In case any Securities or coupons shall not have been
authenticated by such predecessor Trustee, any such successor Trustee may
authenticate and deliver such Securities or coupons, in either its own name or
that of its predecessor Trustee, with the full force and effect which this
Indenture provides for the certificate of authentication of the Trustee.
SECTION 6.12. Appointment of Authenticating Agent. At any time when any
-----------------------------------
of the Securities remain Outstanding, the Trustee may appoint an Authenticating
Agent or Agents with respect to one or more series of Securities which shall be
authorized to act on behalf of the Trustee to authenticate Securities of such
series issued upon exchange, registration of transfer or partial redemption or
repayment thereof, and Securities so authenticated shall be entitled to the
benefits of this Indenture and shall be valid and obligatory for all purposes as
if authenticated by the Trustee hereunder. Any such appointment shall be
evidenced by an instrument in writing signed by a Responsible Officer of the
Trustee, a copy of which instrument shall be promptly furnished to the Company.
Wherever reference is made in this Indenture to the authentication and delivery
of Securities by the Trustee or the Trustee's certificate of authentication,
such reference shall be deemed to include authentication and delivery on behalf
of the Trustee by an Authenticating Agent and a certificate of authentication
executed on behalf of the Trustee by an Authenticating Agent. Each
Authenticating Agent shall be acceptable to the Company and, except as may
otherwise be provided pursuant to Section 3.1, shall at all times be a bank or
trust company or corporation organized and doing business and in good standing
under the laws of the United States of America or of any State or the District
of Columbia, authorized under such laws to act as Authenticating Agent, having a
combined capital and surplus of not less than $50,000,000 and subject to
supervision or examination by Federal or State authorities. If such
Authenticating Agent publishes reports of condition at least annually, pursuant
to law or the requirements of the aforesaid supervising or examining authority,
then for the purposes of this Section, the combined capital and surplus of such
Authenticating Agent shall be deemed to be
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its combined capital and surplus as set forth in its most recent report of
condition so published. In case at any time an Authenticating Agent shall cease
to be eligible in accordance with the provisions of this Section, such
Authenticating Agent shall resign immediately in the manner and with the effect
specified in this Section.
Any corporation into which an Authenticating Agent may be merged or
converted or with which it may be consolidated, or any corporation resulting
from any merger, conversion or consolidation to which such Authenticating Agent
shall be a party, or any corporation succeeding to the corporate agency or
corporate trust business of an Authenticating Agent, shall continue to be an
Authenticating Agent, provided such corporation shall be otherwise eligible
under this Section, without the execution or filing of any paper or further act
on the part of the Trustee or the Authenticating Agent.
An Authenticating Agent for any series of Securities may at any time resign
by giving written notice of resignation to the Trustee for such series and to
the Company. The Trustee for any series of Securities may at any time terminate
the agency of an Authenticating Agent by giving written notice of termination to
such Authenticating Agent and to the Company. Upon receiving such a notice of
resignation or upon such a termination, or in case at any time such
Authenticating Agent shall cease to be eligible in accordance with the
provisions of this Section, the Trustee for such series may appoint a successor
Authenticating Agent which shall be acceptable to the Company and shall give
notice of such appointment to all Holders of Securities of the series with
respect to which such Authenticating Agent will serve in the manner set forth in
Section 1.6. Any successor Authenticating Agent upon acceptance of its
appointment hereunder shall become vested with all the rights, powers and duties
of its predecessor hereunder, with like effect as if originally named as
Authenticating Agent herein. No successor Authenticating Agent shall be
appointed unless eligible under the provisions of this Section.
The Company agrees to pay to each Authenticating Agent from time to time
reasonable compensation including reimbursement of its reasonable expenses for
its services under this Section.
If an appointment with respect to one or more series is made pursuant to
this Section, the Securities of such series may have endorsed thereon, in
addition to or in lieu of the Trustee's certificate of authentication, an
alternate certificate of authentication substantially in the following form:
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<PAGE>
This is one of the Securities of the series designated herein referred to
in the within-mentioned Indenture.
[Name of Trustee],
as Trustee
By:
----------------------------------------------
as Authenticating Agent
By:
----------------------------------------------
Authorized Signatory
SECTION 6.13. Preferential Collection of Claims Against Company. The
-------------------------------------------------
Trustee shall comply with TIA Section 311(a), excluding any creditor
relationship listed in TIA Section 311(b). A Trustee who has resigned or been
removed shall be subject to TIA Section 311(a) to the extent indicated in
Section 311(a).
ARTICLE VII
HOLDERS' LISTS AND REPORTS BY TRUSTEE AND COMPANY
SECTION 7.1. Disclosure of Names and Addresses of Holders. Every Holder of
--------------------------------------------
Securities or coupons, by receiving and holding the same, agrees with the
Company and the Trustee that neither the Company nor the Trustee nor any
Authenticating Agent nor any Paying Agent nor any Security Registrar shall be
held accountable by reason of the disclosure of any information as to the names
and addresses of the Holders of Securities in accordance with TIA Section 312,
regardless of the source from which such information was derived, and that the
Trustee shall not be held accountable by reason of mailing any material pursuant
to a request made under TIA Section 312(b).
SECTION 7.2. Reports by Trustee. Within 60 days after May 15 of each year
------------------
commencing with the first May 15 after the first issuance of Securities pursuant
to this Indenture, the Trustee shall transmit by mail to all Holders of
Securities as provided in TIA Section 313(c) a brief report dated as of such May
15 if required by TIA Section 313(a). The Trustee shall also comply with TIA
Section 313(b)(2). A copy of each report shall, at the time of transmission to
Holders of Securities, be filed with each stock exchange upon which the
indenture securities are listed, and also with the Commission.
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SECTION 7.3. Reports by Company. The Company will:
------------------
(a) file with the Trustee, within 15 days after the Company is required to
file the same with the Commission, copies of the annual reports and of
the information, documents and other reports (or copies of such
portions of any of the foregoing as the Commission may from time to
time by rules and regulations prescribe) which the Company may be
required to file with the Commission pursuant to Section 13 or Section
15(d) of the Securities Exchange Act of 1934; or, if the Company is
not required to file information, documents or reports pursuant to
either of such Sections, then it will file with the Trustee and the
Commission, in accordance with rules and regulations prescribed from
time to time by the Commission, in accordance with rules and
regulations prescribed from time to time by the Commission, such of
the supplementary and periodic information, documents and reports
which may be required pursuant to Section 13 of the Securities
Exchange Act of 1934 in respect of a security listed and registered on
a national securities exchange as may be prescribed from time to time
in such rules and regulations;
(b) file with the Trustee and the Commission, in accordance with rules and
regulations prescribed from time to time by the Commission, such
additional information, documents and reports with respect to
compliance by the Company with the conditions and covenants of this
Indenture as may be required from time to time by such rules and
regulations; and
(c) transmit by mail to the Holders of Securities, within 30 days after
the filing thereof with the Trustee, in the manner and to the extent
provided in TIA Section 313(c), such summaries of any information,
documents and reports required to be filed by the Company pursuant to
paragraphs (a) and (b) of this Section as may be required by rules and
regulations prescribed from time to time by the Commission.
SECTION 7.4. Company to Furnish Trustee Names and Addresses of Holders.
---------------------------------------------------------
The Company will furnish or cause to be furnished to the Trustee:
(a) semi-annually, not later than 15 days after the Regular Record Date
for interest for each series of Securities, a list, in such form as
the Trustee may reasonably require, of the names and addresses of the
Holders of Registered Securities of such series as of such Regular
Record Date, or if there is no Regular Record Date for interest for
such series of Securities, semiannually, upon such dates as are set
forth in the Board Resolution or indenture supplemental hereto
authorizing such series, and
(b) at such other times as the Trustee may request in writing, within 30
days after the receipt by the Company of any such request, a list of
similar form and content as of a date not more than 15 days prior to
the time such list is furnished, provided,
---------
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<PAGE>
however, that so long as Trustee is the Security Registrar, no such
-------
list shall be required to be furnished.
ARTICLE VIII
CONSOLIDATION, MERGER, SALE, LEASE OR CONVEYANCE
SECTION 8.1. Consolidations and Mergers of Company and Sales, Leases and
-----------------------------------------------------------
Conveyances Permitted Subject to Certain Conditions. The Company may
- ---------------------------------------------------
consolidate with, or sell, lease or convey all or substantially all of its
assets to, or merge with or into any other corporation, provided that in any
such case, (i) either the Company shall be the continuing corporation or the
successor corporation shall be a corporation organized and existing under the
laws of the United States or a State thereof and such successor corporation
shall expressly assume the due and punctual payment of the principal of (and
premium, if any) and any interest (including all Additional Amounts, if any,
payable pursuant to Section 10.12) on all of the Securities, according to their
tenor, and the due and punctual performance and observance of all of the
covenants and conditions of this Indenture to be performed by the Company by
supplemental indenture, complying with Article IX hereof, satisfactory to the
Trustee, executed and delivered to the Trustee by such corporation and (ii)
immediately after giving effect to such transaction and treating any
indebtedness which becomes an obligation of the Company or any Subsidiary as a
result thereof as having been incurred by the Company or such Subsidiary at the
time of such transaction, no Event of Default, and no event which, after notice
or the lapse of time, or both, would become an Event of Default, shall have
occurred and be continuing.
SECTION 8.2. Rights and Duties of Successor Corporation. In case of any
------------------------------------------
such consolidation, merger, sale, lease or conveyance and upon any such
assumption by the successor corporation, such successor corporation shall
succeed to and be substituted for the Company, with the same effect as if it had
been named herein as the party of the first part, and the predecessor
corporation, except in the event of a lease, shall be relieved of any further
obligation under this Indenture and the Securities. Such successor corporation
thereupon may cause to be signed, and may issue either in its own name or in the
name of the Company, any or all of the Securities issuable hereunder which
theretofore shall not have been signed by the Company and delivered to the
Trustee; and, upon the order of such successor corporation, instead of the
Company, and subject to all the terms, conditions and limitations in this
Indenture prescribed, the Trustee shall authenticate and shall deliver any
Securities which previously shall have been signed and delivered by the officers
of the Company to the Trustee for authentication, and any Securities which such
successor corporation thereafter shall cause to be signed and delivered to the
Trustee for that purpose. All the Securities so issued shall in all respects
have the same legal rank and benefit under this Indenture as the Securities
theretofore or thereafter issued in accordance with the terms of this Indenture
as though all of such Securities had been issued at the 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.
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SECTION 8.3. Officers' Certificate and Opinion of Counsel. Any
--------------------------------------------
consolidation, merger, sale, lease or conveyance permitted under Section 8.1 is
also subject to the condition that the Trustee receive an Officers' Certificate
and an Opinion of Counsel to the effect that any such consolidation, merger,
sale, lease or conveyance, and the assumption by any successor corporation,
complies with the provisions of this Article and that all conditions precedent
herein provided for relating to such transaction have been complied with.
ARTICLE IX
SUPPLEMENTAL INDENTURES
SECTION 9.1. Supplemental Indentures Without Consent of Holders. Without
--------------------------------------------------
the consent of any Holders of Securities or coupons, the Company, when
authorized by or pursuant to a Board Resolution, and the Trustee, at any time
and from time to time, may enter into one or more indentures supplemental
hereto, in form satisfactory to the Trustee, for any of the following purposes:
(a) to evidence the succession of another Person to the Company and the
assumption by any such successor of the covenants of the Company
herein and in the Securities contained; or
(b) to add to the covenants of the Company for the benefit of the Holders
of all or any series of Securities (and if such covenants are to be
for the benefit of less than all series of Securities, stating that
such covenants are expressly being included solely for the benefit of
such series) or to surrender any right or power herein conferred upon
the Company; or
(c) to add any additional Events of Default for the benefit of the Holders
of all or any series of Securities (and if such Events of Default are
to be for the benefit of less than all series of Securities, stating
that such Events of Default are expressly being included solely for
the benefit of such series); provided, however, that in respect of any
-----------------
such additional Events of Default such supplemental indenture may
provide for a particular period of grace after default (which period
may be shorter or longer than that allowed in the case of other
defaults) or may provide for an immediate enforcement upon such
default or may limit the remedies available to the Trustee upon such
default or may limit the right of the Holders of a majority in
aggregate principal amount of that or those series of Securities to
which such additional Events of Default apply to waive such default;
or
(d) to add to or change any of the provisions of this Indenture to provide
that Bearer Securities may be registrable as to principal, to change
or eliminate any restrictions on the payment of principal of or any
premium or interest on Bearer Securities, to permit Bearer Securities
to be issued in exchange for Registered Securities, to permit Bearer
Securities to be issued in exchange for Bearer Securities of other
authorized denominations or to permit or facilitate the issuance
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of Securities in uncertificated form; provided that any such action
--------
shall not adversely affect the interests of the Holders of Securities
of any series or any related coupons in any material respect; or
(e) to change or eliminate any of the provisions of this Indenture,
provided that any such change or elimination shall become effective
--------
only when there is no Security Outstanding of any series created prior
to the execution of such supplemental indenture which is entitled to
the benefit of such provision; or
(f) to secure the Securities; or
(g) to establish the form or terms of Securities of any series and any
related coupons as permitted by Sections 2.1 and 3.1, including the
provisions and procedures relating to Securities convertible into
Common Shares or Preferred Shares, as the case may be; or
(h) to evidence and provide for the acceptance of appointment hereunder by
a successor Trustee with respect to the Securities of one or more
series and to add to or change any of the provisions of this Indenture
as shall be necessary to provide for or facilitate the administration
of the trusts hereunder by more than one Trustee; or
(i) to cure any ambiguity, to correct or supplement any provision herein
which may be defective or inconsistent with any other provision
herein, or to make any other provisions with respect to matters or
questions arising under this Indenture which shall not be inconsistent
with the provisions of this Indenture, provided such provisions shall
--------
not adversely affect the interests of the Holders of Securities of any
series or any related coupons in any material respect; or
(j) to supplement any of the provisions of this Indenture to such extent
as shall be necessary to permit or facilitate the defeasance and
discharge of any series of Securities pursuant to Sections 14.1, 14.2
and 14.3; provided that any such action shall not adversely affect the
--------
interests of the Holders of Securities of such series or any other
series and any related coupons of Securities in any material respect.
SECTION 9.2. Supplemental Indentures with Consent of Holders. With the
-----------------------------------------------
consent of the Holders of not less than a majority in principal amount of all
Outstanding Securities affected by such supplemental indenture, by Act of said
Holder delivered to the Company and the Trustee, the Company, when authorized by
or pursuant to a Board Resolution, and the Trustee may enter into an indenture
or indentures supplemental hereto for the purpose of adding any provisions to or
changing in any manner or eliminating any of the provisions of this Indenture or
of modifying in any manner the rights of the Holders of Securities and any
related coupons under this Indenture; provided, however, that no such
-----------------
supplemental indenture shall, without the consent of the Holder of each
Outstanding Security affected thereby:
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<PAGE>
(a) change the Stated Maturity of the principal of (or premium, if any,
on) or any installment of principal of or interest on, any Security;
or reduce the principal amount thereof or the rate or amount of
interest thereon or any Additional Amounts payable in respect thereof,
or any premium payable upon the redemption thereof, or change any
obligations of the Company to pay Additional Amounts pursuant to
Section 10.11 (except as contemplated by Section 8.1 and permitted by
Section 9.1(a)), or reduce the amount of the principal of an Original
Issue Discount Security that would be due and payable upon a
declaration of acceleration of the Maturity thereof pursuant to
Section 5.2 or the amount thereof provable in bankruptcy pursuant to
Section 5.4, or adversely affect any right of repayment at the option
of the Holder of any Security, or change any Place of Payment where,
or the currency or currencies, currency unit or units or composite
currency or currencies in which, any Security or any premium or the
interest thereon is payable, or impair the right to institute suit for
the enforcement of any such payment on or after the Stated Maturity
thereof (or, in the case of redemption or repayment at the option of
the Holder, on or after the Redemption Date or the Repayment Date, as
the case may be), or
(b) reduce the percentage in principal amount of the Outstanding
Securities of any series, the consent of whose Holders is required for
any such supplemental indenture, or the consent of whose Holders is
required for any waiver with respect to such series (or compliance
with certain provisions of this Indenture or certain defaults
hereunder and their consequences) provided for in this Indenture, or
reduce the requirements of Section 15.4 for quorum or voting, or
(c) modify any of the provisions of this Section, Section 5.13 or Section
10.12, except to increase the required percentage to effect such
action or to provide that certain other provisions of this Indenture
cannot be modified or waived without the consent of the Holder of each
Outstanding Security affected thereby.
It shall not be necessary for any Act of Holders under this Section to
approve the particular form of any proposed supplemental indenture, but it shall
be sufficient if such Act shall approve the substance thereof.
A supplemental indenture which changes or eliminates any covenant or other
provision of this Indenture which has expressly been included solely for the
benefit of one or more particular series of Securities, or which modifies the
rights of the Holders of Securities of such series with respect to such covenant
or other provision, shall be deemed not to affect the rights under this
Indenture of the Holders of Securities of any other series.
SECTION 9.3. Execution of Supplemental Indentures. In executing, or
------------------------------------
accepting the additional trusts created 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
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<PAGE>
Trustee may, but shall not be obligated to, enter into any such supplemental
indenture which affects the Trustee's own rights, duties or immunities under
this Indenture or otherwise.
SECTION 9.4. Effect of Supplemental Indentures. Upon the execution of any
---------------------------------
supplemental indenture under this Article, this Indenture shall be modified in
accordance therewith, and such supplemental indenture shall form a part of this
Indenture for all purposes; and every Holder of Securities theretofore or
thereafter authenticated and delivered hereunder and of any coupon appertaining
thereto shall be bound thereby.
SECTION 9.5. Conformity with Trust Indenture Act. Every supplemental
-----------------------------------
indenture executed pursuant to this Article shall conform to the requirements of
the Trust Indenture Act as then in effect.
SECTION 9.6. References in Securities to Supplemental Indentures.
---------------------------------------------------
Securities of any series authenticated and delivered after the execution of any
supplemental indenture pursuant to this Article may, and shall, if required by
the Trustee, bear a notation in form approved by the Trustee as to any matter
provided for in such supplemental indenture. If the Company shall so determine,
new Securities of any series so modified as to conform, in the opinion of the
Trustee and the Company, to any such supplemental indenture may be prepared and
executed by the Company and authenticated and delivered by the Trustee in
exchange for Outstanding Securities of such series.
ARTICLE X
COVENANTS
SECTION 10.1. Payment of Principal, Premium, if any, Interest and
---------------------------------------------------
Additional Amounts. The Company covenants and agrees for the benefit of the
- ------------------
Holders of each series of Securities that it will duly and punctually pay the
principal of (and premium, if any) and interest on and any Additional Amounts
payable in respect of the Securities of that series in accordance with the terms
of such series of Securities, any coupons appertaining thereto and this
Indenture. Unless otherwise specified as contemplated by Section 3.1 with
respect to any series of Securities, any interest due on and any Additional
Amounts payable in respect of Bearer Securities on or before Maturity, other
than Additional Amounts, if any, payable as provided in Section 10.11 in respect
of principal of (or premium, if any, on) such a Security, shall be payable only
upon presentation and surrender of the several coupons for such interest
installments as are evidenced thereby as they severally mature. Unless
otherwise specified with respect to Securities of any series pursuant to Section
3.1, at the option of the Company, all payments of principal may be paid by
check to the registered Holder of the Registered Security or other person
entitled thereto against surrender of such Security.
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SECTION 10.2. Maintenance of Office or Agency. The Company will maintain
-------------------------------
in the City of New York an office or agency where, unless otherwise set forth in
the Officers' Certificate or supplemental indenture referred to in Section 3.1
with respect to any Securities of a series, Securities may be presented or
surrendered for payment or conversion, Securities may be surrendered for
registration of transfer or exchange, and notices and demands to or upon the
Company in respect of the Securities and this Indenture may be served. The
Company will give prompt written notice to the Trustee of any change in the
location of any such office or agency. If, at any time, the Company shall fail
to maintain such office or agency or shall fail to furnish the Trustee with the
address thereof, such presentations, surrenders, notices and demands may be made
or served at the Corporate Trust Office of the Trustee, and the Company hereby
appoints the Corporate Trust Office of the Trustee its agent to receive all such
presentations, surrenders, notices and demands.
The Company may from time to time designate one or more other offices or
agencies where the Securities of one or more series may be presented or
surrendered for any or all of such purposes and may constitute and appoint one
or more Paying Agents for the payment of the Securities of that or those series
in one or more cities, and may from time to time rescind such designations and
appointments; provided, however, that no such designation, appointment or
-------- -------
rescission shall in any manner relieve the Company of its obligation to maintain
an office or agency in accordance with the requirements set forth above for
Securities of any series for such purposes. The Company will give prompt
written notice to the Trustee of any such designation or rescission and of any
change in the location of any such other office or agency.
SECTION 10.3. Money for Securities Payments to Be Held in Trust. If the
-------------------------------------------------
Company shall at any time act as its own Paying Agent with respect to any series
of any Securities and any related coupons, it will, on or before each due date
of the principal of (and premium, if any), or interest on or Additional Amounts
in respect of any of the Securities of that series, segregate and hold in trust
for the benefit of the Persons entitled thereto a sum in the currency or
currencies, currency unit or units or composite currency or currencies in which
the Securities of such series are payable (except as otherwise specified
pursuant to Section 3.1 for the Securities of such series) sufficient to pay the
principal (and premium, if any) or interest or Additional Amounts 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 actions or failure
so to act.
Whenever the Company shall have one or more Paying Agents for any series of
Securities and any related coupons, it will, on or before each due date of the
principal of (and premium, if any), or interest on or Additional Amounts in
respect of, any Securities of that series, deposit with a Paying Agent a sum (in
the currency or currencies, currency unit or units or composite currency or
currencies described in the preceding paragraph) sufficient to pay the principal
(and premium, if any) or interest or Additional Amounts, so becoming due, such
sum to be held in trust for the benefit of the Persons entitled to such
principal, premium or interest or Additional Amounts and (unless such Paying
Agent is the Trustee) the Company will promptly notify the Trustee of its action
or failure so to act.
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<PAGE>
The Company will cause each Paying Agent other than the Trustee to execute
and deliver to the Trustee an instrument in which such Paying Agent shall agree
with the Trustee, subject to the provisions of this Section, that such Paying
Agent will
(a) hold all sums held by it for the payment of principal of (and premium,
if any) or interest on Securities in trust for the benefit of the
Persons entitled thereto until such sums shall be paid to such Persons
or otherwise disposed of as herein provided;
(b) give the Trustee notice of any default by the Company (or any other
obligor upon the Securities) in the making of any such payment of
principal (and premium, if any) or interest; and
(c) at any time during the continuance of any such default upon the
written request of the Trustee, forthwith pay to the Trustee all sums
so held in trust by such Paying Agent.
The Company may at any time, for the purpose of obtaining the satisfaction
and discharge of this Indenture or for any other purpose, pay, or by Company
Order direct any Paying Agent to pay, to the Trustee all sums held in trust by
the Company or such Paying Agent, such sums to be held by the Trustee upon the
same trusts as those upon which such sums were held by the Company or such
Paying Agent; and, upon such payment by any Paying Agent to the Trustee, such
Paying Agent shall be released from all further liability with respect to such
sums.
Except as otherwise provided in the Securities of any series, any money
deposited with the Trustee or any Paying Agent, or then held by the Company, in
trust for the payment of the principal of (and premium, if any) or interest on,
or any Additional Amounts in respect of, any Security of any series and
remaining unclaimed for two years after such principal (and premium, if any),
interest or Additional Amounts has become due and payable shall be paid to the
Company upon Company Request or (if then held by the Company) shall be
discharged from such trust; and the Holder of such Security shall thereafter, as
an unsecured general creditor, look only to the Company for payment of such
principal of (and premium, if any) or interest on, or any Additional Amounts in
respect of, any Security, without interest thereon, and all liability of the
Trustee or such Paying Agent with respect to such trust money, and all liability
of the Company as trustee thereof, shall thereupon cease; provided, however,
-----------------
that the Trustee or such Paying Agent, before being required to make any such
repayment, may at the expense of the Company cause to be published once, in an
Authorized Newspaper, notice that such money remains unclaimed and that, after a
date specified therein, which shall not be less than 30 days from the date of
such publication, any unclaimed balance of such money then remaining will be
repaid to the Company.
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SECTION 10.4. Restrictions on Dividends and Other Distributions. The
-------------------------------------------------
Company will not (i) declare or pay any dividend or make any distribution on its
capital stock or to holders of its capital stock (other than dividends or
distributions payable in its capital stock or other than as the Company
determines is necessary to maintain its status as a REIT) or (ii) purchase,
redeem or otherwise acquire or retire for value any of its capital stock, or any
warrants, rights or options or other securities to purchase or acquire any
shares of its capital stock (other than the Securities) or permit any Subsidiary
to do so, if at the time of such action an Event of Default has occurred and is
continuing or would exist immediately after giving effect to such action.
SECTION 10.5. Existence. Subject to Article VIII, the Company will do or
---------
cause to be done all things necessary to preserve and keep in full force and
effect its corporate existence, rights (charter and statutory) and franchises;
provided, however, that the Company shall not be required to preserve any right
- -----------------
or franchise if the Board of Trust Managers shall determine that the
preservation thereof is no longer desirable in the conduct of the business of
the Company and that the loss thereof is not disadvantageous in any material
respect to the Holders.
SECTION 10.6. Maintenance of Properties. The Company will cause all of
-------------------------
its properties used or useful in the conduct of its business or the business of
any Subsidiary to be maintained and kept in good condition, repair and working
order and supplied with all necessary equipment and will cause to be made all
necessary repairs, renewals, replacements, betterments and improvements thereof,
all as in the judgment of the Company may be necessary so that the business
carried on in connection therewith may be properly and advantageously conducted
at all times; provided, however, that nothing in this Section shall prevent the
-----------------
Company or any Subsidiary from selling or otherwise disposing of for value its
properties in the ordinary course of its business.
SECTION 10.7. Insurance. The Company will, and will cause each of its
---------
Subsidiaries to, keep all of its insurable properties insured against loss or
damage at least equal to their then full insurable value with insurers of
recognized responsibility and having a rating of at least A:VIII in Best's Key
Rating Guide.
SECTION 10.8. Payment of Taxes and Other Claims. The Company will pay or
---------------------------------
discharge or cause to be paid or discharged, before the same shall become
delinquent, (i) all taxes, assessments and governmental charges levied or
imposed upon it or any Subsidiary or upon the income, profits or property of the
Company or any Subsidiary, and (ii) all lawful claims for labor, materials and
supplies which, if unpaid, might by law become a lien upon the property of the
Company or any Subsidiary; provided, however, that the Company shall not be
-------- -------
required to pay or discharge or cause to be paid or discharged any such tax,
assessment, charge or claim
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whose amount, applicability or validity is being contested in good faith by
appropriate proceedings.
SECTION 10.9. Provision of Financial Information. Whether or not the
----------------------------------
Company is subject to Section 13 or 15(d) of the Securities Exchange Act of
1934, the Company will, to the extent permitted under the Securities Exchange
Act of 1934, file with the Commission the annual reports, quarterly reports and
other documents which the Company would have been required to file with the
Commission pursuant to such Section 13 or 15(d) (the "Financial Statements") if
the Company were so subject, such documents to be filed with the Commission on
or prior to the respective dates (the "Required Filing Dates") by which the
Company would have been required so to file such documents if the Company were
so subject.
The Company will also in any event (x) within 15 days of each Required
Filing Date (i) transmit by mail to all Holders, as their names and addresses
appear in the Security Register, without cost to such Holders copies of the
annual reports and quarterly reports which the Company would have been required
to file with the Commission pursuant to Section 13 or 15(d) of the Securities
Exchange Act of 1934 if the Company were subject to such Sections, and (ii) file
with the Trustee copies of the annual reports, quarterly reports and other
documents which the Company would have been required to file with the Commission
pursuant to Section 13 or 15(d) of the Securities Exchange Act of 1934 if the
Company were subject to such Sections and (y) if filing such documents by the
Company with the Commission is not permitted under the Securities Exchange Act
of 1934, promptly upon written request and payment of the reasonable cost of
duplication and delivery, supply copies of such documents to any prospective
Holder.
SECTION 10.10. Statement as to Compliance. The Company will deliver to
--------------------------
the Trustee, within 120 days after the end of each fiscal year, a brief
certificate from the principal executive officer, principal financial officer or
principal accounting officer as to his or her knowledge of the Company's
compliance with all conditions and covenants under this Indenture and, in the
event of any noncompliance, specifying such noncompliance and the nature and
status thereof. For purposes of this Section 10.10, such compliance shall be
determined without regard to any period of grace or requirement of notice under
this Indenture.
SECTION 10.11. Additional Amounts. If any Securities of a series provide
------------------
for the payment of Additional Amounts, the Company will pay to the Holder of any
Security of such series or any coupon appertaining thereto Additional Amounts as
may be specified as contemplated by Section 3.1. Whenever in this Indenture
there is mentioned, in any context except in the case of Section 5.2(a), the
payment of the principal of or any premium or interest on, or in respect of, any
Security of any series or payment of any related coupon or the net proceeds
received on the sale or exchange of any Security of any series, such mention
shall be deemed to include mention of the payment of Additional Amounts provided
by the terms of such series established pursuant to Section 3.1 to the extent
that, in such context, Additional Amounts are, were or would be payable in
respect thereof pursuant to such terms and express mention of the payment of
Additional Amounts (if applicable) in any provisions hereof shall not be
construed as excluding Additional Amounts in those provisions hereof where such
express mention is not made.
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<PAGE>
Except as otherwise specified as contemplated by Section 3.1, if the
Securities of a series provide for the payment of Additional Amounts, at least
10 days prior to the first Interest Payment Date with respect to that series of
Securities (or if the Securities of that series will not bear interest prior to
Maturity, the first day on which a payment of principal and any premium is made)
and at least 10 days prior to each date of payment of principal and any premium
or interest if there has been any change with respect to the matters set forth
in the below-mentioned Officers' Certificate, the Company will furnish the
Trustee and the Company's principal Paying Agent or Paying Agents, if other than
the Trustee, with an Officers' Certificate instructing the Trustee and such
Paying Agent or Paying Agents whether such payment of principal of and any
premium or interest on the Securities of that series shall be made to Holders of
Securities of that series or any related coupons who are not United States
persons without withholding for or on account of any tax, assessment or other
governmental charge described in the Securities of the series. If any such
withholding shall be required, then such Officers' Certificate shall specify by
country the amount, if any, required to be withheld on such payments to such
Holders of Securities of that series or related coupons and the Company will pay
to the Trustee or such Paying Agent the Additional Amounts required by the terms
of such Securities. In the event that the Trustee or any Paying Agent, as the
case may be, shall not so receive the above-mentioned certificate, then the
Trustee or such Paying Agent shall be entitled (i) to assume that no such
withholding or deduction is required with respect to any payment of principal or
interest with respect to any Securities of a series or related coupons until it
shall have received a certificate advising otherwise and (ii) to make all
payments of principal and interest with respect to the Securities of a series or
related coupons without withholding or deductions until otherwise advised. The
Company covenants to indemnify the Trustee and any Paying Agent for, and to hold
them harmless against, any loss, liability or expense reasonably incurred
without negligence or bad faith on their part arising out of or in connection
with actions taken or omitted by any of them or in reliance on any Officers'
Certificate furnished pursuant to this Section or in reliance on the Company's
not furnishing such an Officers' Certificate.
SECTION 10.12. Waiver of Certain Covenants. The Company may omit in any
---------------------------
particular instance to comply with any term, provision or condition set forth in
Section 10.4 to 10.9, inclusive, if before or after the time for such
compliance the Holders of at least a majority in principal amount of all
outstanding Securities of such series, by Act of such Holders, either waive such
compliance in such instance or generally waive compliance with such covenant or
condition, but no such waiver shall extend to or affect such covenant or
condition except to the extent so expressly waived, and, until such waiver shall
become effective, the obligations of the Company and the duties of the Trustee
in respect of any such term, provision or condition shall remain in full force
and effect.
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ARTICLE XI
REDEMPTION OF SECURITIES
SECTION 11.1. Applicability of Article. Securities of any series
------------------------
which are redeemable before their Stated Maturity shall be redeemable in
accordance with their terms and (except as otherwise specified as contemplated
by Section 3.1 for Securities of any series) in accordance with this Article.
SECTION 11.2. Election to Redeem; Notice to Trustee. The election of
-------------------------------------
the Company to redeem any Securities shall be evidenced by or pursuant to a
Board Resolution. In case of any redemption at the election of the Company of
less than all of the Securities of any series, the Company shall, at least 45
days prior to the giving of the notice of redemption in Section 11.4 (unless a
shorter notice shall be satisfactory to the Trustee), notify the Trustee of such
Redemption Date and of the principal amount of Securities of such series to be
redeemed. In the case of any redemption of Securities prior to the expiration
of any restriction on such redemption provided in the terms of such Securities
or elsewhere in this Indenture, the Company shall furnish the Trustee with an
Officers' Certificate evidencing compliance with such restriction.
SECTION 11.3. Selection by Trustee of Securities to Be Redeemed. If
-------------------------------------------------
less than all the Securities of any series issued on the same day with the same
terms are to be redeemed, the particular Securities to be redeemed shall be
selected not more than 60 days prior to the Redemption Date by the Trustee, from
the Outstanding Securities of such series issued on such date with the same
terms not previously called for redemption, by such method as the Trustee shall
deem fair and appropriate and which may provide for the selection for redemption
of portions (equal to the minimum authorized denomination for Securities of that
series or any integral multiple thereof) of the principal amount of Securities
of such series of a denomination larger than the minimum authorized denomination
for Securities of that series.
The Trustee shall promptly notify the Company and the Security
Registrar (if other than itself) in writing of the Securities selected for
redemption and, in the case of any Securities selected for partial redemption,
the principal amount thereof to be redeemed.
For all purposes of this Indenture, unless the context 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 11.4. Notice of Redemption. Notice of redemption shall be
--------------------
given in the manner provided in Section 1.6, not less than 30 days nor more than
60 days prior to the Redemption Date, unless a shorter period is specified by
the terms of such series established pursuant to Section 3.1, to each Holder of
Securities to be redeemed, but failure to give such notice in the manner herein
provided to the Holder of any Security designated for redemption as a whole or
in part, or any defect in the notice to any such Holder, shall not affect the
validity of the proceedings for the redemption of any other such Security or
portion thereof.
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Any notice that is mailed to the Holders of Registered Securities in
the manner herein provided shall be conclusively presumed to have been duly
given, whether or not the Holder receives the notice.
All notices of redemption shall state:
(a) the Redemption Date.
(b) the Redemption Price, accrued interest to the Redemption Date payable
as provided in Section 11.6, if any, and Additional Amounts, if any,
(c) if less than all Outstanding Securities of any series are to be
redeemed, the identification (and, in the case of partial redemption,
the principal amount) of the particular Security or Securities to be
redeemed,
(d) in case any Security is to be redeemed in part only, the notice which
relates to such Security shall state that on and after the Redemption
Date, upon surrender of such Security, the holder will receive,
without a charge, a new Security or Securities of authorized
denominations for the principal amount thereof remaining unredeemed,
(e) that on the Redemption Date the Redemption Price and accrued interest
to the Redemption Date payable as provided in Section 11.6, if any,
will become due and payable upon each such Security, or the portion
thereof, to be redeemed and, if applicable, that interest thereon
shall cease to accrue on and after said date,
(f) 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,
(g) that the redemption is for a sinking fund, if such is the case,
(h) that, unless otherwise specified in such notice, Bearer Securities of
any series, if any, surrendered for redemption must be accompanied by
all coupons maturing subsequent to the date fixed for redemption or
the amount of any such missing coupon or coupons will be deducted from
the Redemption Price, unless security or indemnity satisfactory to the
Company, the Trustee for such series and any Paying Agent is
furnished,
(i) if Bearer Securities of any series are to be redeemed and any
Registered Securities of such series are not to be redeemed, and if
such Bearer securities may be exchanged for Registered Securities not
subject to redemption on this Redemption Date pursuant to Section 3.5
or otherwise, the last date, as determined by the Company, on which
such exchanges may be made,
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<PAGE>
(j) the CUSIP number of such Security, if any, and
(k) if applicable, that a Holder of Securities who desires to convert
Securities for redemption must satisfy the requirements for conversion
contained in such Securities, the then existing conversion price or
rate, and the date and time when the option to convert shall expire.
Notice of redemption of Securities to be redeemed shall be given by the
Company or, at the Company's request, by the Trustee in the name and at the
expense of the Company.
SECTION 11.5. Deposit of Redemption Price. On or prior to any Redemption
---------------------------
Date, the Company shall deposit with the Trustee or with a Paying Agent (or, if
the Company is acting as its own Paying Agent, which it may not do in the case
of a sinking fund payment under Article XII, segregate and hold in trust as
provided in Section 10.3) an amount of money in the currency or currencies,
currency unit or units or composite currency or currencies in which the
Securities of such series are payable (except as otherwise specified pursuant to
Section 3.1 for the Securities of such series) sufficient to pay on the
Redemption Date the Redemption Price of, and (except if the Redemption Date
shall be an Interest Payment Date) accrued interest on, all the Securities or
portions thereof which are to be redeemed on that date.
SECTION 11.6. Securities Payable on Redemption Date. Notice of redemption
-------------------------------------
having been given as aforesaid, the Securities 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 3.1 for the Securities of
such series) (together with accrued interest, if any, to the Redemption Date),
and from and after such date (unless the Company shall default in the payment of
the Redemption Price and accrued interest) such Securities shall, if the same
were interest-bearing, cease to bear interest and the coupons for such interest
appertaining to any Bearer Securities so to be redeemed, except to the extent
provided below, shall be void. Upon surrender of any such Security for
redemption in accordance with said notice, together with all coupons, if any,
appertaining thereto maturing after the Redemption Date, such Security shall be
paid by the Company at the Redemption Price, together with accrued interest, if
any, to the Redemption Date; provided, however, that, except as otherwise
-------- -------
provided with respect to Securities convertible into Common Shares or Preferred
Shares, installments of interest on Securities whose Stated Maturity is on or
prior to the Redemption Date shall be payable to the Holders of such Securities,
or one or more Predecessor Securities, registered as such at the close of
business on the relevant Record Dates according to their terms and the
provisions of Section 3.7.
If any Bearer Security surrendered for redemption shall not be accompanied
by all appurtenant coupons maturing after the Redemption Date, such Security may
be paid after deducting from the Redemption Price an amount equal to the face
amount of all such missing coupons, or the surrender of such missing coupon or
coupons may be waived by the Company and the Trustee if there be furnished to
them such security or indemnity as they may require to save each of them and any
Paying Agent harmless. If thereafter the Holder of such Security shall
surrender to the Trustee or any Paying Agent any such missing coupon in respect
of which a
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<PAGE>
deduction shall have been made from the Redemption Price, such Holder shall be
entitled to receive the amount so deducted; provided, however, that interest
represented by coupons shall be payable only upon presentation and surrender of
those coupons.
If any Security called for redemption shall not be so paid upon surrender
thereof for redemption, the principal (and premium, if any) shall, until paid,
bear interest from the Redemption Date at the rate borne by the Security.
SECTION 11.7. Securities Redeemed in Part. Any Registered Security which
---------------------------
is to be redeemed only in part (pursuant to the provisions of this Article or of
Article XII) shall be surrendered at a Place of Payment therefor (with, if the
Company or the Trustee so requires, due endorsement by, or a written instrument
of transfer in form satisfactory to the Company and the Trustee duly executed
by, the Holder thereof or his attorney duly authorized in writing) and the
Company shall execute and the Trustee shall authenticate and deliver to the
Holder of such Security without service charge a new Security or Securities of
the same series, of any authorized denomination as requested by such Holder in
aggregate principal amount equal to and in exchange for the unredeemed portion
of the principal of the Security so surrendered. If a Security in global form
is so surrendered, such new Security so issued shall be a new global Security.
ARTICLE XII
SINKING FUNDS
SECTION 12.1. Applicability of Article. The provisions of this Article
------------------------
shall be applicable to any sinking fund for the retirement of Securities of a
series except as otherwise specified as contemplated by Section 3.1 for
Securities of such series.
The minimum amount of any sinking fund payment provided for by the terms of
Securities of any series is herein referred to as a "mandatory sinking fund
payment," and any payment in excess of such minimum amount provided for by the
terms of such Securities of any series is herein referred to as an "optional
sinking fund payment." If provided for by the terms of any Securities of any
series, the cash amount of any mandatory sinking fund payment may be subject to
reduction as provided in Section 12.2. Each sinking fund payment shall be
applied to the redemption of Securities of any series as provided for by the
terms of Securities of such series.
SECTION 12.2. Satisfaction of Sinking Fund Payments with Securities. The
-----------------------------------------------------
Company may, in satisfaction of all or any part of any mandatory sinking fund
payment with respect to the Securities of a series, (1) deliver Outstanding
Securities of such series (other than any previously called for redemption)
together in the case of any Bearer Securities of such series with all unmatured
coupons appertaining thereto and (2) apply as a credit Securities of such series
which have been redeemed either at the election of the Company pursuant to the
terms of such Securities or through the application of permitted optional
sinking fund payments pursuant to the terms of such Securities, as provided for
by the terms of such Securities, or which have otherwise
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<PAGE>
been acquired by the Company; provided that such Securities so delivered or
--------
applied as a credit have not been previously so credited. Such Securities shall
be received and credited for such purpose by the Trustee at the applicable
Redemption Price specified in such Securities for redemption through operation
of the sinking fund and the amount of such mandatory sinking fund payment shall
be reduced accordingly.
SECTION 12.3. Redemption of Securities for Sinking Fund. Not less than 60
-----------------------------------------
days prior to each sinking fund payment date for Securities of any series, the
Company will deliver to the Trustee an Officers' Certificate specifying the
amount of the next ensuing mandatory sinking fund payment for that series
pursuant to the terms of that series, the portion thereof, if any, which is to
be satisfied by payment of cash in the currency or currencies, currency unit or
units or composite currency or currencies in which the Securities of such series
are payable (except as otherwise specified pursuant to Section 3.1 for the
Securities of such series) and the portion thereof, if any, which is to be
satisfied by delivering and crediting Securities of that series pursuant to
Section 12.2, and the optional amount, if any, to be added in cash to the next
ensuing mandatory sinking fund payment and will also deliver to the Trustee any
Securities to be so delivered and credited. If such Officers' Certificate shall
specify an optional amount to be added in cash to the next ensuing mandatory
sinking fund payment, the Company shall thereupon be obligated to pay the amount
therein specified. Not less than 30 days before each such sinking fund payment
date the Trustee shall select the Securities to be redeemed upon such sinking
fund payment date in the manner specified in Section 11.3 and cause notice of
the redemption thereof to be given in the name of and at the expense of the
Company in the manner provided in Section 11.4. Such notice having been duly
given, the redemption of such Securities shall be made upon the terms and in the
manner stated in Section 11.6 and 11.7.
ARTICLE XIII
REPAYMENT AT THE OPTION OF HOLDERS
SECTION 13.1. Applicability of Article. Repayment of Securities of any
------------------------
series before their Stated Maturity at the option of Holders thereof shall be
made in accordance with the terms of such Securities, if any, and (except as
otherwise specified by the terms of such series established pursuant to Section
3.1) in accordance with this Article.
SECTION 13.2. Repayment of Securities. Securities of any series subject
-----------------------
to repayment in whole or in part at the option of the Holders thereof will,
unless otherwise provided in the terms of such Securities, be repaid at a price
equal to the principal amount thereof, together with interest, if any, thereon
accrued to the Repayment Date specified in or pursuant to the terms of such
Securities. The Company covenants that on or before the Repayment Date it will
deposit with the Trustee or with a Paying Agent (or, if the Company is acting as
its own Paying Agent, segregate and hold in trust as provided in Section 10.3)
an amount of money in the currency or currencies, currency unit or units or
composite currency or currencies in which the Securities of such series are
payable (except as otherwise specified pursuant to Section 3.1 for the
Securities of such series) sufficient to pay the principal (or, if so provided
by the terms of the Securities of any series, a percentage of the principal) of,
and (except if the Repayment Date shall be an
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Interest Payment Date) accrued interest on, all the Securities or portions
thereof, as the case may be, to be repaid on such date.
SECTION 13.3. Exercise of Option. Securities of any series subject to
------------------
repayment at the option of the Holders thereof will contain an "Option to Elect
Repayment" form on the reverse of such Securities. In order for any Security to
be repaid at the option of the Holder, the Trustee must receive at the Place of
Payment therefor specified in the terms of such Security (or at such other place
or places of which the Company shall from time to time notify the Holders of
such Securities) not earlier than 60 days nor later than 30 days prior to the
Repayment Date (1) the Security so providing for such repayment together with
the "Option to Elect Repayment" form on the reverse thereof duly completed by
the Holder (or by the Holder's attorney duly authorized in writing) or (2) a
telegram, telex, facsimile transmission or a letter from a member of a national
securities exchange, or the National Association of Securities Dealers, Inc.
("NASD"), or a commercial bank or trust company in the United States setting
forth the name of the Holder of the Security, the principal amount of the
Security, the principal amount of the Security to be repaid, the CUSIP number,
if any, or a description of the tenor and terms of the Security, a statement
that the option to elect repayment is being exercised thereby and a guarantee
that the Security to be repaid, together with the duly completed form entitled
"Option to Elect Repayment" on the reverse of the Security, will be received by
the 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
Company.
SECTION 13.4. When Securities Presented for Repayment Become Due and
------------------------------------------------------
Payable. If Securities of any series providing for repayment at the option of
- -------
the Holders thereof shall have surrendered as provided in this Article and as
provided by or pursuant to the terms of such Securities, such Securities or the
portions thereof, as the case may be, to be repaid shall become due and payable
and shall be paid by the Company on the Repayment Date therein specified, and on
and after such Repayment Date (unless the Company shall default in the payment
of such Securities on such Repayment Date) such Securities shall, if the same
were interest-bearing, cease to bear interest and the coupons for such interest
appertaining to any Bearer Securities so to be repaid, except to the extent
provided below, shall be void. Upon surrender of any such Security for
repayment in accordance with such provisions, together with all coupons, if any,
appertaining thereto maturing after the Repayment Date, the principal amount of
such Security so to be repaid shall be paid by the Company, together with
accrued interest, if any, to the Repayment Date;
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provided, however, that coupons whose Stated Maturity is on or prior to the
- -------- -------
Repayment Date shall be payable, unless otherwise specified pursuant to Section
3.1, only upon presentation and surrender of such coupons; and provided further
that, in the case of Registered Securities, installments of interest, if any,
whose Stated Maturity is on or prior to the Repayment Date shall be payable (but
without interest thereon, unless the Company shall default in the payment
thereof) to the Holders of such Securities, or one or more Predecessor
Securities, registered as such at the close of business on the relevant Record
Dates according to their terms and the provisions of Section 3.7.
If any Bearer Security surrendered for repayment shall not be accompanied
by all appurtenant coupons maturing after the Repayment Date, such Security may
be paid after deducting from the amount payable therefor as provided in Section
13.2 an amount equal to the face amount of all such missing coupons, or the
surrender of such missing coupon or coupons may be waived by the Company and the
Trustee if there be furnished to them such security or indemnity as they may
require to save each of them and any Paying Agent harmless. If thereafter the
Holder of such Security shall surrender to the Trustee or any Paying Agent any
such missing coupon in respect of which a deduction shall have been made as
provided in the preceding sentence, such Holder shall be entitled to receive the
amount so deducted; provided, however, that interest represented by coupons
shall be payable unless otherwise specified as contemplated by Section 3.1, only
upon presentation and surrender of those coupons.
If the principal amount of any Security surrendered for repayment shall not
be so repaid upon surrender thereof, such principal amount (together with
interest, if any, thereon accrued to such Repayment Date) shall, until paid,
bear interest from the Repayment Date at the rate of interest or Yield to
Maturity (in the case of Original Issue Discount Securities) set forth in such
Security.
SECTION 13.5. Securities Repaid in Part. Upon surrender of any Registered
-------------------------
Security which is to be repaid in part only, the Company shall execute and the
Trustee shall authenticate and deliver to the Holder of such Security, without
service charge and at the expense of the Company, a new Registered Security or
Securities of the same series, of any authorized denomination specified by the
Holder, in an aggregate principal amount equal to and in exchange for the
portion of the principal of such Security so surrendered which is not to be
repaid.
ARTICLE XIV
DEFEASANCE AND COVENANT DEFEASANCE
SECTION 14.1. Applicability of Article; Company's Option to Effect
----------------------------------------------------
Defeasance or Covenant Defeasance. If, pursuant to Section 3.1, provision is
- ---------------------------------
made for either or both of (a) defeasance of the Securities of or within a
series under Section 14.2 or (b) covenant defeasance of the Securities of or
within a series under Section 14.3, then the provisions of such Section or
Sections, as the case may be, together with the other provisions of this Article
(with such modifications thereto as may be specified pursuant to Section 3.1
with respect to any Securities), shall be applicable to such Securities and any
coupons appertaining thereto, and the
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Company may at its option by Board Resolution, at any time, with respect to such
Securities and any coupons appertaining thereto, elect to have Section 14.2 (if
applicable) or Section 14.3 (if applicable) be applied to such Outstanding
Securities and any coupons appertaining thereto upon compliance with the
conditions set forth below in this Article.
SECTION 14.2. Defeasance and Discharge. Upon the Company's exercise of
------------------------
the above option applicable to this Section with respect to any Securities of or
within a series, the Company shall be deemed to have been discharged from its
obligations with respect to such Outstanding Securities and any coupons
appertaining thereto on the date the conditions set forth in Section 14.4 are
satisfied (hereinafter, "defeasance"). For this purpose, such defeasance means
that the Company shall be deemed to have paid and discharged the entire
indebtedness represented by such Outstanding Securities and any coupons
appertaining thereto, which shall thereafter be deemed to be "Outstanding" only
for the purposes of Section 14.5 and the other Sections of this Indenture
referred to in clauses (a) and (b) below, and to have satisfied all of its other
obligations under such Securities and any coupons appertaining thereto and this
Indenture insofar as such Securities and any coupons appertaining thereto are
concerned (and the Trustee, at the expense of the Company, shall execute proper
instruments acknowledging the same), except for the following which shall
survive until otherwise terminated or discharged hereunder: (a) the rights of
Holders of such Outstanding Securities and any coupons appertaining thereto to
receive, solely from the trust fund described in Section 14.4 and as more fully
set forth in such Section, payments in respect of the principal of (and premium,
if any) and interest, if any, on such Securities and any coupons appertaining
thereto when such payments are due, (b) the Company's obligations with respect
to such Securities under Sections 3.5, 3.6, 10.2 and 10.3 and with respect to
the payment of Additional Amounts, if any, on such Securities as contemplated by
Section 10.11, (c) the rights, powers, trusts, duties and immunities of the
Trustee hereunder and (d) this Article. Subject to compliance with this Article
XIV, the Company may exercise its option under this Section notwithstanding the
prior exercise of its option under Section 14.3 with respect to such Securities
and any coupons appertaining thereto.
SECTION 14.3. Covenant Defeasance. Upon the Company's exercise of the
-------------------
above option applicable to this Section with respect to any Securities of or
within a series, the Company shall be released from its obligations under
Sections 10.4 to 10.9, inclusive, and, if specified pursuant to Section 3.1,
its obligations under any other covenant, with respect to such Outstanding
Securities and any coupons appertaining thereto on and after the date the
conditions set forth in Section 14.4 are satisfied (hereinafter, "covenant
defeasance"), and such Securities and any coupons appertaining thereto shall
thereafter be deemed to be not "Outstanding" for the purposes of any direction,
waiver, consent or declaration or Act of Holders (and the consequences of any
thereof) in connection with Sections 10.4 to 10.9, inclusive, or such other
covenant, but shall continue to be deemed "Outstanding" for all other purposes
hereunder. For this purpose, such covenant defeasance means that, with respect
to such Outstanding Securities and any coupons appertaining thereto, the Company
may omit to comply with and shall have no liability in respect of any term,
condition or limitation set forth in any such Section or such other covenant,
whether directly or indirectly, by reason of any reference elsewhere herein to
any such Section or such other covenant or by reason of reference in any such
Section or such other covenant to any other provision herein or in any other
document and such omission to comply shall not constitute a default or an Event
of Default under Section 5.1(d) or 5.1(h) or otherwise, as the case may be,
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<PAGE>
but, except as specified above, the remainder of this Indenture and such
Securities and any coupons appertaining thereto shall be unaffected thereby.
SECTION 14.4. Conditions to Defeasance or Covenant Defeasance. The
-----------------------------------------------
following shall be the conditions to application of Section 14.2 or Section 14.3
to any Outstanding Securities of or within a series and any coupons appertaining
thereto:
(a) The Company shall irrevocably have deposited or caused to be deposited
with the Trustee (or another trustee satisfying the requirements of
Section 6.8 who shall agree to comply with the provisions of this
Article XIV 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, (1) an amount in such
currency, currencies or currency unit in which such Securities and any
coupons appertaining thereto are then specified as payable at Stated
Maturity, or (2) Government Obligations applicable to such Securities
and any coupons appertaining thereto (determined on the basis of the
currency, currencies or currency unit in which such Securities and any
coupons appertaining thereto are then specified as payable at Stated
Maturity) which through the scheduled payment of principal and
interest in respect thereof in accordance with their terms will
provide, not later than one day before the due date of any payment of
principal of (and premium, if any) and interest, if any, on such
Securities and any coupons appertaining thereto, money in an amount,
or (3) a combination thereof in an amount, sufficient, in the opinion
of a nationally recognized firm of independent public accountants
expressed in a written certification thereof delivered to the Trustee,
to pay and discharge, (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 payment or analogous payments applicable to such Outstanding
Securities and any coupons appertaining thereto on the day on which
such payments are due and payable in accordance with the terms of this
Indenture and of such Securities and any coupons appertaining thereto.
(b) Such defeasance or covenant defeasance shall not result in a breach or
violation of, or constitute a default under, this Indenture or any
other material agreement or instrument to which the Company is a party
or by which it is bound.
(c) No Event of Default or event which with notice or lapse of time or
both would become an Event of Default with respect to such Securities
and any coupons appertaining thereto shall have occurred and be
continuing on the date of such deposit or, insofar as Sections 5.1(f)
and 5.1(g) are concerned, at any time during the period ending on the
91st day after the date of such deposit (it being understood that this
condition shall not be deemed satisfied until the expiration of such
period).
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<PAGE>
(d) In the case of an election under Section 14.2, the Company shall have
delivered to the Trustee an Opinion of Counsel stating that (i) the
Company has received from, or there has been published by, the
Internal Revenue Service a ruling, or (ii) since the date of execution
of this Indenture, there has been a change in the applicable Federal
income tax law, in either case to the effect that, and based thereon
such opinion shall confirm that, the Holders of such Outstanding
Securities and any coupons appertaining thereto will not recognize
income, gain or loss for Federal income tax purposes as a result of
such defeasance and will be subject to Federal income tax on the same
amounts, in the same manner and at the same times as would have been
the case if such defeasance had not occurred.
(e) In the case of an election under Section 14.3, the Company shall have
delivered to the Trustee an Opinion of Counsel to the effect that the
Holders of such Outstanding Securities and any coupons appertaining
thereto will not recognize income gain or loss for Federal income tax
purposes as a result of such covenant defeasance and will be subject
to Federal income tax on the same amounts, in the same manner and at
the same times as would have been the case if such covenant defeasance
had not occurred.
(f) The Company shall have delivered to the Trustee an Officers'
Certificate and an Opinion of Counsel, each stating that all
conditions precedent to the defeasance under Section 14.2 or the
covenant defeasance under Section 14.3 (as the case may be) have been
complied with and an Opinion of Counsel to the effect that either (i)
as a result of a deposit pursuant to subsection (a) above and the
related exercise of the Company's option under Section 14.2 or Section
14.3 (as the case may be), registration is not required under the
Investment Company Act of 1940, as amended, by the Company, with
respect to the trust funds representing such deposit or by the Trustee
for such trust funds or (ii) all necessary registrations under said
Act have been effected.
(g) Notwithstanding any other provisions of this Section, such defeasance
or covenant defeasance shall be effected in compliance with any
additional or substitute terms, conditions or limitations which may be
imposed on the Company in connection therewith pursuant to Section
3.1.
SECTION 14.5. Deposited Money and Government Obligations to Be Held in
--------------------------------------------------------
Trust; Other Miscellaneous Provisions. Subject to the provisions of the last
- -------------------------------------
paragraph of Section 10.3, all money and Government Obligations (or other
property as may be provided pursuant to Section 3.1) (including the proceeds
thereof) deposited with the Trustee (or the qualifying trustee, collectively for
purposes of this Section 14.5, the "Trustee") pursuant to Section 14.4 in
respect of any Outstanding Securities of any series and any coupons appertaining
thereto shall be held in trust and applied by the Trustee, in accordance with
the provisions of such Securities and any coupons appertaining thereto and this
Indenture, to the payment, either directly or through any Paying Agent
(including the Company acting as its own Paying Agent) as the Trustee may
determine, to the Holders of such Securities and any coupons appertaining
thereto of all sums due and to become due thereon in respect of principal (and
premium, if any) and interest and
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<PAGE>
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
3.1, if, after a deposit referred to in Section 14.4(a) has been made (a) the
Holder of a Security in respect of which such deposit was made is entitled to,
and does, elect pursuant to Section 3.1 or the terms of such Security to receive
payment in a currency or currency unit other than that in which the deposit
pursuant to Section 14.4(a) has been made in respect of such Security, or (b) a
Conversion Event occurs in respect of the currency or currency unit in which the
deposit pursuant to Section 14.4(a) has been made, the indebtedness represented
by such Security and any coupons appertaining thereto shall be deemed to have
been, and will be, fully discharged and satisfied through the payment of the
principal of (and premium, if any), and interest, if any, on such Security as
the same becomes due out of the proceeds yielded by converting (from time to
time as specified below in the case of any such election) the amount or other
property deposited in respect of such Security into the currency or currency
unit in which such Security becomes payable as a result of such election or
Conversion Event based on the applicable market exchange rate for such currency
or currency unit in effect on the second Business Day prior to each payment
date, except, with respect to a Conversion Event, for such currency or currency
unit in effect (as nearly as feasible) at the time of the Conversion Event.
The Company shall pay and indemnify the Trustee against any tax, fee or
other charge imposed on or assessed against the Government Obligations deposited
pursuant to Section 14.4 or the principal and interest received in respect
thereof other than any such tax, fee or other charge which by law is for the
account of the Holders of such Outstanding Securities and any coupons
appertaining thereto.
Anything in this Article to the contrary notwithstanding, the Trustee shall
deliver or pay to the Company from time to time upon Company Request any money
or Government Obligations (or other property and any proceeds there from) held
by it as provided in Section 14.4 which, in the opinion of a nationally
recognized firm of independent public accountants expressed in a written
certification thereof delivered to the Trustee, are in excess of the amount
thereof which would then be required to be deposited to effect a defeasance or
covenant defeasance, as applicable, in accordance with this Article.
ARTICLE XV
MEETINGS OF HOLDERS OF SECURITIES
SECTION 15.1. Purposes for Which Meetings May Be Called.
-----------------------------------------
A meeting of Holders of Securities of any series may be called at any time
and from time to time pursuant to this Article to make, give or take any
request, demand, authorization, direction, notice, consent, waiver or other
action provided by this Indenture to be made, given or taken by Holders of
Securities of such series.
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<PAGE>
SECTION 15.2. Call, Notice and Place of Meetings.
----------------------------------
(a) The Trustee may at any time call a meeting of Holders of Securities of
any series for any purpose specified in Section 15.1, to be held at
such time and at such place in the Borough of Manhattan, The City of
New York as the Trustee may determine. Notice of every meeting of
Holders of Securities of any series, setting forth the time and the
place of such meeting and in general terms the action proposed to be
taken at such meeting, shall be given, in the manner provided in
Section 1.6, not less than 21 nor more than 180 days prior to the date
fixed for the meeting.
(b) In case at any time the Company, pursuant to a Board Resolution, or
the Holders of at least 10% in principal amount of the Outstanding
Securities of any series shall have requested the Trustee to call a
meeting of the Holders of Securities of such series for any purpose
specified in Section 15.1, by written request setting forth in
reasonable detail the 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 Company or the Holders of Securities of such series in the
amount above specified, as the case may be, may determine the time and
the place in the Borough of Manhattan, The City of New York for such
meeting and may call such meeting for such purposes by giving notice
thereof as provided in subsection (a) of this Section.
SECTION 15.3. Persons Entitled to Vote at Meetings. To be entitled to
------------------------------------
vote at any meeting of 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 Company and its counsel.
SECTION 15.4. 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 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
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<PAGE>
prior to the adjournment of such adjourned meeting. Notice of the reconvening
of any adjourned meeting shall be given as provided in Section 15.2(a), except
that such notice need be given only once not less than five days prior to the
date on which the meeting is scheduled to be reconvened. Notice of the
reconvening of any adjourned meeting shall state expressly the percentage, as
provided above, of the principal amount of the Outstanding Securities of such
series which shall constitute a quorum.
Except as limited by the proviso to Section 9.2, any resolution presented
to a meeting or adjourned meeting duly reconvened at which a quorum is present
as aforesaid may be adopted by the affirmative vote of the Holders of a majority
in principal amount of the Outstanding Securities of that series; provided,
--------
however, that, except as limited by the proviso to Section 9.2, any resolution
- -------
with respect to any request, demand, authorization, direction, notice, consent,
waiver or other action which this Indenture expressly provides may be made,
given or taken by the Holders of a specified percentage, which is less than a
majority, in principal amount of the Outstanding Securities of a series may be
adopted at a meeting or an adjourned meeting duly reconvened and at which a
quorum is present as aforesaid by the affirmative vote of the Holders of such
specified percentage in principal amount of the Outstanding Securities of that
series.
Any resolution passed or decision taken at any meeting of Holders of
Securities of any series duly held in accordance with this Section shall be
binding on all the Holders of Securities of such series and the related coupons,
whether or not present or represented at the meeting.
Notwithstanding the foregoing provisions of this Section 15.4, if any
action is to be taken at a meeting of Holders of Securities of any series with
respect to any request, demand, authorization, direction, notice, consent,
waiver or other action that this Indenture expressly provides may be made, given
or taken by the Holders of a specified percentage in principal amount of all
Outstanding Securities affected thereby, or of the Holders of such series and
one or more additional series:
(a) there shall be no minimum quorum requirement for such meeting; and
(b) the principal amount of the Outstanding Securities of such series that
vote in favor of such request, demand, authorization, direction,
notice, consent, waiver or other action shall be taken into account in
determining whether such request, demand, authorization, direction,
notice, consent, waiver or other action has been made, given or taken
under this Indenture.
SECTION 15.5. Determination of Voting Rights; Conduct and Adjournment of
----------------------------------------------------------
Meetings.
--------
(a) Notwithstanding any provisions of this Indenture, the Trustee may make
such reasonable regulations as it may deem advisable for any meeting
of Holders of Securities of a series in regard to proof of the holding
of Securities of such series and of the appointment of proxies and in
regard to the appointment and duties of inspectors of votes, the
submission and examination of proxies, certificates and other evidence
of the right to vote, and such other matters concerning the conduct of
the meeting as it shall deem appropriate. Except as otherwise
permitted or
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<PAGE>
required by any such regulations, the holding of Securities shall be
proved in the manner specified in Section 1.4 and the appointment of
any proxy shall be proved in the manner specified in Section 1.4 or by
having the signature of the Person executing the proxy witnessed or
guaranteed by any trust company, bank or banker authorized by Section
1.4 to certify to the holding of Bearer Securities. Such regulations
may provide that written instruments appointing proxies, regular on
their face, may be presumed valid and genuine without the proof
specified in Section 1.4 or other proof.
(b) The Trustee shall, by an instrument in writing appoint a temporary
chairman of the meeting, unless the meeting shall have been called by
the Company or by Holders of Securities as provided in Section
15.2(b), in which case the Company or the Holders of Securities of the
series calling the meeting, as the case may be, shall in like manner
appoint a temporary chairman. A permanent chairman and a permanent
secretary of the meeting shall be elected by vote of the Persons
entitled to vote a majority in principal amount of the Outstanding
Securities of such series represented at the meeting.
(c) At any meeting each Holder of a Security of such series or proxy shall
be entitled to one vote for each $1,000 principal amount of the
Outstanding Securities of such series held or represented by him;
provided, however, that no vote shall be cast or counted at any
-------- -------
meeting in respect of any Security challenged as not Outstanding and
ruled by the chairman of the meeting to be not Outstanding. The
chairman of the meeting shall have no right to vote, except as a
Holder of a Security of such series or proxy.
(d) Any meeting of Holders of Securities of any series duly called
pursuant to Section 15.2 at which a quorum is present may be adjourned
from time to time by Persons entitled to vote a majority in principal
amount of the Outstanding Securities of such series represented at the
meeting, and the meeting may be held as so adjourned without further
notice.
SECTION 15.6. Counting Votes and Recording Action of Meetings. The vote
-----------------------------------------------
upon any resolution submitted to any meeting of Holders of Securities of any
series shall be by written ballots on which shall be subscribed the signatures
of the Holders of Securities of such series or of their representatives by proxy
and the principal amounts and serial numbers of the Outstanding Securities of
such series held or represented by them. The permanent chairman of the meeting
shall appoint two inspectors of votes who shall count all votes cast at the
meeting for or against any resolution and who shall make and file with the
secretary of the meeting their verified written reports in duplicate of all
votes cast at the meeting. A record, at least in duplicate, of the proceedings
of each meeting of Holders of Securities of any Series shall be prepared by the
secretary of the meeting and there shall be attached to said record the original
reports of the inspectors of votes on any vote by ballot taken thereat and
affidavits by one or more persons having knowledge of the fact, setting forth a
copy of the notice of the meeting and showing that said notice was given as
provided in Section 15.2 and, if applicable, Section 15.4. Each copy shall be
signed and verified by the affidavits of the permanent chairman and secretary of
the
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<PAGE>
meeting and one such copy shall be delivered to the Company and another to the
Trustee to be preserved by the Trustee, the latter to have attached thereto the
ballots voted at the meeting. Any record so signed and verified shall be
conclusive evidence of the matters therein stated.
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.
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<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.
COLUMBUS REALTY TRUST
By:_____________________________
Name:________________________
Title:_______________________
[SEAL]
Attest:
_____________________________
Title:_______________________
[TRUSTEE]
By:_____________________________
Name:________________________
Title:_______________________
[SEAL]
Attest:
_____________________________
Title:_______________________
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<PAGE>
Exhibit 12.1
COLUMBUS REALTY TRUST
Computation of Ratio of Earnings to Combined Fixed Charges
(Dollars in Thousands)
<TABLE>
<CAPTION>
Columbus Realty Trust Columbus Predecessors
------------------------------------------------------ -----------------------------------------------
December 29 January 1
Three Months Year Ended December 31, to to Year Ended December 31
Ended ----------------------- December December 28, ----------------------
March 31, 1996 1995 1994 31, 1993 1993 1992 1991
------------------------------------------------------ -----------------------------------------------
<S> <C> <C> <C> <C> <C> <C> <C>
Income (Loss) before $2,696 $10,428 $8,761 $86 ($849) $322 ($1,259)
Extraordinary Item
Add:
Expensed Interest on
Indebtedness 1,495 5,596 2,848 9 -- 6,520 --
Capitalized Interest on
Indebtedness -- -- -- -- (124) -- (255)
Amortization of financing
costs 67 515 474 4 -- 102 --
------------------------------------------------------ ---------------------------------------------
Earnings (Deficiency) $4,258 $16,539 $12,083 $99 ($973) $6,944 ($1,514)
====================================================== =============================================
Fixed Charges:
Expensed Interest on
Indebtedness $1,495 $5,596 $2,848 $9 N/A $6,520 N/A
Capitalized Interest on
Indebtedness 1,514 3,072 941 -- N/A 600 N/A
Amortization of financing
costs 67 515 474 4 N/A 102 N/A
------------------------------------------------------ ---------------------------------------------
Total Fixed Charges $3,076 $9,183 $4,263 $ 13 N/A $7,222 N/A
====================================================== =============================================
Earnings Coverage Deficiency N/A N/A N/A N/A (973) (278) (1,514)
Ratio of earnings to fixed
charges 1.38 1.80 2.83 7.62 N/A 0.96 N/A
</TABLE>
<PAGE>
EXHIBIT 23.2
We consent to the reference to our firm under the caption "Experts" in the
Registration Statement (Form S-3) of Columbus Realty Trust and to the
incorporation by reference therein of our reports (a) dated January 31, 1996,
except for Note 12, as to which the date is March 15, 1996, with respect to the
consolidated financial statements and schedule of Columbus Realty Trust as of
December 31, 1995 and 1994 and for the years ended December 31, 1995 and 1994
and for the period from October 12, 1993 (inception) to December 31, 1993,
included in its Annual Report on Form 10-K for the year ended December 31, 1995
and (b) dated March 11, 1994, with respect to the combined financial statements
and schedule of the Columbus Group as of December 28, 1993 and for the period
from January 1, 1993 to December 28, 1993 and the year ended December 31, 1992,
included in Columbus Realty Trust's Annual Report on Form 10-K for the year
ended December 31, 1995, all filed with the Securities and Exchange Commission.
/s/ Ernst & Young LLP
ERNST & YOUNG LLP
Dallas, Texas
August 2, 1996
<PAGE>
EXHIBIT 23.3
CONSENT OF INDEPENDENT ACCOUNTANTS
We consent to the incorporation by reference in the registration statement on
Form S-3 to be filed on or about August 8, 1996 of Columbus Realty Trust of our
report dated February 18, 1994, on our audits of the combined financial
statements and financial statement schedule of The Texana Group. We also consent
to the reference to our Firm under the caption "Experts."
/s/ COOPERS & LYBRAND LLP
Dallas, Texas
August 8, 1996
