<PAGE> 1
AS FILED WITH THE SECURITIES AND EXCHANGE COMMISSION ON AUGUST 13, 1998
REGISTRATION NO. 333-
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SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C., 20549
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FORM S-3
REGISTRATION STATEMENT UNDER THE SECURITIES ACT OF 1933
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APARTMENT INVESTMENT AND MANAGEMENT COMPANY
AIMCO PROPERTIES, L.P.
(Exact name of co-registrant as specified in its charter)
<TABLE>
<S> <C>
MARYLAND 84-1259577
DELAWARE 84-1275621
(State or other jurisdiction of incorporation or (I.R.S. Employer Identification Number)
organization)
</TABLE>
<TABLE>
<S> <C>
1873 SOUTH BELLAIRE STREET, 17TH FLOOR TERRY CONSIDINE
DENVER, COLORADO 80222 CHAIRMAN OF THE BOARD OF DIRECTORS
(303) 757-8101 1873 SOUTH BELLAIRE STREET, 17TH FLOOR
(Address, including zip code, and telephone number, DENVER, COLORADO 80222
including area code, or registrant's principal executive (303) 757-8101
offices) (Name, address, including zip code, and telephone
number,
including area code, of agent for service)
</TABLE>
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Copy to:
THOMAS C. JANSON, JR.
SKADDEN, ARPS, SLATE, MEAGHER & FLOM LLP
300 SOUTH GRAND AVENUE
LOS ANGELES, CALIFORNIA 90071
(213) 687-5000
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Approximate date of commencement of proposed sale to the public: From time
to time after this Registration Statement becomes effective.
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, as amended (the "Securities Act"), 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
registration statement for the same offering. [ ]
If this Form is a post-effective amendment filed pursuant to Rule 462(c)
under the Securities Act, check the following box and list the Securities Act
registration statement number of the earlier effective registration statement
for the same offering. [ ]
If delivery of the prospectus is expected to be made pursuant to Rule 434,
please check the following box. [ ]
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CALCULATION OF REGISTRATION FEE
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TITLE OF EACH PROPOSED MAXIMUM PROPOSED MAXIMUM
CLASS OF SECURITIES AMOUNT TO BE OFFERING PRICE PER AGGREGATE OFFERING AMOUNT OF
TO BE REGISTERED REGISTERED(1) UNIT(2) PRICE(1)(2) REGISTRATION FEE(3)
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<S> <C> <C> <C> <C>
Debt Securities(4)..........................
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Preferred Stock, par value $.01 per
share(4)..................................
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Class A Common Stock, par value $.01 per
share(4)..................................
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Warrants(4)(5)..............................
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Guarantees(4)(6)............................
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Total............................... $1,000,000,000 $295,000
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</TABLE>
1. The aggregate initial offering price of the above-referenced securities
(collectively, the "Securities") registered hereby will not exceed
$1,000,000,000. Such amount represents the principal amount of any Debt
Securities issued at their principal amount, the issue price rather than the
principal amount of any Debt Securities issued at an original issue discount,
the liquidation preference (or, if different, the issue price) of any
Preferred Stock, and the issue price of any Class A Common Stock or Warrants
(but not the exercise price of any Securities issuable upon the exercise of
such Warrants). Any Securities registered hereunder may be sold separately,
together as units with other Securities registered hereunder or under other
registration statements filed by Apartment Investment and Management Company
("AIMCO") or by AIMCO Properties, L.P. (the "AIMCO Operating Partnership"
and, together with AIMCO, the "Registrants"), or upon exercise or conversion
of any such Securities. The Debt Securities and Warrants to purchase Debt
Securities registered hereunder may be offered from time to time by either of
the Registrants. All other Securities registered hereunder will be offered
only by AIMCO.
2. The proposed maximum offering price per unit will be determined, from time to
time, by the Registrants in connection with the offering of the Securities
hereunder.
3. Calculated pursuant to Rule 457(o) of the rules and regulations under the
Securities Act, as amended, based on the maximum aggregate offering price of
all the Securities.
4. Subject to footnote (1), there is being registered hereunder such
indeterminate principal amount of Debt Securities, such indeterminate number
of shares of Preferred Stock, such indeterminate number of shares of Class A
Common Stock, such indeterminate number of Warrants and such indeterminate
number of Guarantees as may be issued from time to time by the Registrants,
including Securities issued upon conversion, exchange or exercise of Warrants
or convertible or exchangeable Debt Securities or Preferred Stock.
5. Represents Warrants to purchase Debt Securities, Preferred Stock or Class A
Common Stock which may be issued by AIMCO or Warrants to purchase Debt
Securities which may be issued by the AIMCO Operating Partnership.
6. Represents Guarantees by AIMCO of Debt Securities of the AIMCO Operating
Partnership which may be issued in connection with such Debt Securities.
Pursuant to Rule 429 under the Securities Act, there is included herein such
additional Securities as have an issue price equal to the issue price of
Securities which have been registered but remain unsold at the effective date of
this Registration Statement under AIMCO's Registration Statement (No. 333-26415)
previously filed under the Securities Act.
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THE REGISTRANTS HEREBY AMEND THIS REGISTRATION STATEMENT ON SUCH DATE OR
DATES AS MAY BE NECESSARY TO DELAY ITS EFFECTIVE DATE UNTIL THE REGISTRANTS
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, OR UNTIL THE REGISTRATION STATEMENT SHALL BECOME EFFECTIVE
ON SUCH DATE AS THE COMMISSION, ACTING PURSUANT TO SAID SECTION 8(a), MAY
DETERMINE.
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<PAGE> 2
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 THE REGISTRATION OR QUALIFICATION UNDER THE SECURITIES LAWS OF ANY SUCH
STATE.
SUBJECT TO COMPLETION, DATED AUGUST 13, 1998
PROSPECTUS
$1,000,000,000
APARTMENT INVESTMENT AND MANAGEMENT COMPANY
DEBT SECURITIES
PREFERRED STOCK
CLASS A COMMON STOCK
WARRANTS
GUARANTEES
AIMCO PROPERTIES, L.P.
DEBT SECURITIES
WARRANTS
Apartment Investment and Management Company, a Maryland corporation
("AIMCO"), which has elected to be taxed for federal income tax purposes as a
real estate investment trust (a "REIT"), may offer from time to time (i) senior,
senior subordinated or subordinated debt securities (the "Debt Securities")
consisting of debentures, notes and/or other unsecured evidences of
indebtedness, (ii) shares of its preferred stock, par value $.01 per share (the
"Preferred Stock"), (iii) shares of its Class A Common Stock, par value $.01 per
share (the "Class A Common Stock"), and (iv) Warrants to purchase Debt
Securities, Preferred Stock or Class A Common Stock, as shall be designated by
AIMCO at the time of the offering (the "Warrants"). AIMCO Properties, L.P., a
Delaware limited partnership and a subsidiary of AIMCO (the "AIMCO Operating
Partnership"), may offer from time to time (i) Debt Securities consisting of
debentures, notes, and/or other unsecured evidences of indebtedness, which may
or may not be fully and unconditionally guaranteed by AIMCO (any such guarantees
being referred to herein as "Guarantees"), and (ii) Warrants to purchase Debt
Securities. The Debt Securities, the Preferred Stock, the Class A Common Stock,
the Warrants and the Guarantees are collectively referred to as the "Securities"
and will have an aggregate initial offering price of up to $1,000,000,000. The
Securities may be offered separately or together (in any combination) and as
separate series, in any case, in amounts, at prices and on terms to be
determined at the time of sale.
To the extent not otherwise described herein, the form in which the
Securities are to be issued, and the terms of such Securities, including without
limitation, their specific designation, aggregate principal amount or aggregate
initial offering price, maturity, if any, rate and times of payment of interest
or dividends, if any, redemption, conversion, exchange and sinking fund terms,
if any, voting or other rights, if any, exercise price and detachability, if
any, and other specific terms will be set forth in a Prospectus Supplement (the
"Prospectus Supplement"), together with the terms of offering of such
Securities. If so specified in the applicable Prospectus Supplement, Debt
Securities of a series may be issued in whole or in part in the form of one or
more temporary or permanent global securities. The Prospectus Supplement will
also contain information, as applicable, about certain material United States
Federal income tax considerations relating to the particular Securities offered
thereby. The Prospectus Supplement will also contain information, where
applicable, as to any listing on a national securities exchange of the
Securities covered by such Prospectus Supplement.
The Securities may be offered directly, through agents designated from time
to time by AIMCO or the AIMCO Operating Partnership (collectively, the
"Registrants"), or to or through underwriters or dealers. If any agents or
underwriters are involved in the sale of any of the Securities, their names, and
any applicable purchase price, fee, commission or discount arrangement between
or among them, will be set forth, or will be calculable from the information set
forth, in the applicable Prospectus Supplement. See "Plan of Distribution." No
Securities may be sold without delivery of the applicable Prospectus Supplement
describing the method and terms of the offering of such Securities.
PROSPECTIVE INVESTORS SHOULD CAREFULLY CONSIDER THE MATTERS DISCUSSED
UNDER "RISK FACTORS" SET FORTH IN THE APPLICABLE PROSPECTUS SUPPLEMENT.
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THESE SECURITIES HAVE NOT BEEN APPROVED OR DISAPPROVED BY THE SECURITIES AND
EXCHANGE COMMISSION OR ANY STATE SECURITIES COMMISSION NOR HAS THE SECURITIES
AND EXCHANGE COMMISSION OR ANY STATE SECURITIES COMMISSION PASSED UPON THE
ACCURACY OR ADEQUACY OF THIS PROSPECTUS. ANY REPRESENTATION TO THE CONTRARY IS A
CRIMINAL OFFENSE.
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August 13, 1998
<PAGE> 3
CERTAIN PERSONS PARTICIPATING IN THIS OFFERING MAY ENGAGE IN TRANSACTIONS
THAT STABILIZE, MAINTAIN, OR OTHERWISE AFFECT THE PRICE OF THE SECURITIES
OFFERED HEREBY OR BY ANY PROSPECTUS SUPPLEMENT OR OTHER SECURITIES OF AIMCO OR
THE AIMCO OPERATING PARTNERSHIP. SUCH TRANSACTIONS MAY BE EFFECTED THROUGH THE
NEW YORK STOCK EXCHANGE OR OTHERWISE. FOR A DESCRIPTION OF THESE ACTIVITIES, SEE
"PLAN OF DISTRIBUTION" INCLUDED ELSEWHERE HEREIN AND IN THE ACCOMPANYING
PROSPECTUS SUPPLEMENT.
AVAILABLE INFORMATION
Each of AIMCO and the AIMCO Operating Partnership is subject to the
informational requirements of the Securities Exchange Act of 1934, as amended
(the "Exchange Act"), and, in accordance therewith, file reports, proxy
statements and other information with the Securities and Exchange Commission
(the "Commission"). Such reports, proxy statements and other information filed
by AIMCO or the AIMCO Operating Partnership with the Commission can be inspected
and copied at the public reference facilities maintained by the Commission at
Judiciary Plaza, 450 Fifth Street, N.W., Washington, D.C. 20549; 7 World Trade
Center, 13th Floor, New York, New York 10048; and Citicorp Center, Suite 1400,
500 West Madison Street, Chicago, Illinois 60661. Copies of such material can be
obtained at prescribed rates from the Public Reference Room of the Commission at
450 Fifth Street, N.W., Washington, D.C. 20549. Information on the operation of
the Public Reference Room may be obtained by calling the Commission at
1-800-SEC-0330. Such material relating to AIMCO can also be inspected at the New
York Stock Exchange, 20 Broad Street, New York, New York 10005. The Commission
also maintains a site on the World Wide Web at http://www.sec.gov that contains
reports, proxy and information statements and other information regarding
registrants that file electronically with the Commission.
AIMCO and the AIMCO Operating Partnership have filed with the Commission a
registration statement on Form S-3 (herein, together with all amendments and
exhibits, referred to as the "Registration Statement") under the Securities Act
of 1933, as amended (the "Securities Act"), with respect to the Securities
offered hereby. As permitted by the rules and regulations of the Commission,
this Prospectus does not contain all of the information set forth in the
Registration Statement and the exhibits and schedules thereto. Such additional
information is available for inspection and copying at the offices of the
Commission. Statements contained in this Prospectus, in any Prospectus
Supplement or in any document incorporated or deemed to be incorporated by
reference herein or therein as to the contents of any contract or other document
referred to herein or therein are not necessarily complete, and in each instance
reference is made to the copy of such contract or other document filed as an
exhibit to, or incorporated or deemed to be incorporated by reference in, the
Registration Statement, each such statement being qualified in all respects by
such reference.
INCORPORATION OF CERTAIN DOCUMENTS BY REFERENCE
The following documents, previously filed by AIMCO with the Commission
pursuant to the Exchange Act (File No. 1-13232), are incorporated herein by
reference:
(i) AIMCO's Annual Report on Form 10-K for the year ended December 31,
1997, including Amendment No. 1 thereto filed April 14, 1998;
(ii) AIMCO's Quarterly Report on Form 10-Q for the quarter ended March
31, 1998, including Amendment No. 1 thereto filed June 23, 1998 and
Amendment No. 2 thereto filed July 3, 1998; and
(iii) AIMCO's Current Reports on Form 8-K dated December 23, 1997 (and
Amendment No. 1 thereto filed February 6, 1998 and Amendment No. 2 thereto
filed May 22, 1998), January 31, 1998 and March 17, 1998 (and Amendment No.
1 thereto filed April 3, 1998, Amendment No. 2 thereto filed June 22, 1998,
Amendment No. 3 thereto filed July 2, 1998 and Amendment No. 4 thereto
filed August 6, 1998).
2
<PAGE> 4
The following document, previously filed by the AIMCO Operating Partnership
with the Commission pursuant to the Exchange Act (File No. 0-24497), is
incorporated herein by reference:
(i) The AIMCO Operating Partnership's Registration Statement on Form
10, dated June 22, 1998.
All documents filed by AIMCO or the AIMCO Operating Partnership pursuant to
Section 13(a), 13(c), 14 or 15(d) of the Exchange Act subsequent to the date of
this Prospectus and prior to the termination of the offering of Securities made
hereby shall be deemed to be incorporated by reference into this Prospectus and
to be a part hereof from the date of filing such documents.
Any statement contained herein or in a document incorporated or deemed to
be incorporated by reference herein shall be deemed to be modified or superseded
for purposes of this Prospectus to the extent that a statement contained herein
(or in the applicable Prospectus Supplement) or in any other subsequently filed
document that is or is deemed to be incorporated by reference herein modifies or
supersedes such previous statement. Any statement so modified or superseded
shall not be deemed to constitute a part of this Prospectus, except as so
modified or superseded.
Copies of all documents that are incorporated herein by reference (other
than the exhibits to such documents, unless such exhibits are specifically
incorporated by reference herein), will be provided without charge to any person
to whom this Prospectus has been delivered, upon request. Requests for such
copies should be directed to Apartment Investment and Management Company, 1873
South Bellaire Street, 17th Floor, Denver, Colorado 80222, Attention: Corporate
Secretary, telephone number (303) 757-8101.
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No dealer, salesman or other person has been authorized to give any
information or to make any representation not contained in this Prospectus or
any Prospectus Supplement and, if given or made such information or
representation must not be relied upon as having been authorized by AIMCO or the
AIMCO Operating Partnership or any underwriter or agent. This Prospectus and any
Prospectus Supplement do not constitute an offer to sell, or a solicitation of
an offer to buy, any of the securities offered hereby in any jurisdiction where,
or to any person to whom, it is unlawful to make such offer or solicitation.
Neither the delivery of this Prospectus or any Prospectus Supplement nor any
sale made hereunder or thereunder shall, under any circumstances, create any
implication that the information herein or therein is correct as of any time
subsequent to their respective dates.
3
<PAGE> 5
AIMCO AND THE AIMCO OPERATING PARTNERSHIP
AIMCO, a Maryland corporation formed on January 10, 1994, is a
self-administered and self-managed REIT engaged in the ownership, acquisition,
development, expansion and management of multi-family apartment properties.
AIMCO is the second largest owner and manager of multi-family apartment
properties in the United States, based on apartment unit data compiled by the
National Multi Housing Council as of January 1, 1998.
As of March 31, 1998, through its controlling interests in the AIMCO
Operating Partnership and other limited partnerships and limited liability
companies (collectively, the "Subsidiary Partnerships") and other subsidiaries,
AIMCO owned or controlled 41,886 units in 153 apartment properties (the "Owned
Properties"), held an equity interest in 75,109 units in 480 apartment
properties (the "Equity Properties"), and managed 67,665 units in 356 apartment
properties for third party owners and affiliates (the "Managed Properties" and,
together with the Owned Properties and Equity Properties, the "AIMCO
Properties"), bringing the total portfolio to 184,660 units in 989 apartment
properties as of March 31, 1998. The AIMCO Properties are located in 42 states,
the District of Columbia and Puerto Rico.
Substantially all of the operations of AIMCO are conducted through the
AIMCO Operating Partnership and its subsidiaries. As of March 31, 1998, AIMCO,
through its wholly owned subsidiaries, AIMCO-GP, Inc., the sole general partner
of the AIMCO Operating Partnership (the "AIMCO-GP" or the "General Partner"),
and AIMCO-LP, Inc., a limited partner in the AIMCO Operating Partnership (the
"Special Limited Partner"), held approximately an 88% interest in the AIMCO
Operating Partnership. AIMCO, together with its consolidated subsidiaries,
including the AIMCO Operating Partnership, is herein sometimes referred to as
the "Company."
The principal executive offices of AIMCO and the AIMCO Operating
Partnership are located at 1873 South Bellaire Street, Denver, Colorado 80222,
and their telephone number is (303) 757-8101.
USE OF PROCEEDS
Unless otherwise described in the applicable Prospectus Supplement, AIMCO
and the AIMCO Operating Partnership intend to use the net proceeds from the sale
of the Securities for working capital and general corporate purposes, which may
include the repayment or refinancing of outstanding indebtedness, the financing
of future acquisitions (which may include real properties, interests therein or
real estate-related securities) and the financing of improvements or expansion
of the Owned Properties. Pending the use thereof, AIMCO and the AIMCO Operating
Partnership intend to invest any net proceeds in short-term, interest-bearing
securities. Neither AIMCO nor the AIMCO Operating Partnership will receive any
proceeds from the registered resale of any Securities pursuant to this
Prospectus.
4
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RATIO OF EARNINGS TO FIXED CHARGES
The table below reflects AIMCO's ratios of earnings to fixed charges and
ratios of earnings to combined fixed charges and preferred stock dividends for
the following periods: (i) the three months ended March 31, 1998 and 1997, (ii)
the years ended December 31, 1997, 1996 and 1995, (iii) the period January 10,
1994 to December 31, 1994, (iv) the period January 1, 1994 to July 28, 1994, and
(v) the year ended December 31, 1993. The ratios of earnings to fixed charges
and the ratios of earnings to combined fixed charges and partnership preferred
unit distributions for the AIMCO Operating Partnership are the same as the
ratios of earnings to fixed charges and the ratios of earnings to combined fixed
charges and preferred stock dividends, respectively, for such periods.
<TABLE>
<CAPTION>
AIMCO
AIMCO PREDECESSORS(1)
------------------------------------------------- -------------------
FOR THE FOR THE
PERIOD PERIOD FOR THE
FOR THE THREE JAN. 10, JAN. 1, YEAR
MONTHS ENDED FOR THE YEARS ENDED 1994 TO 1994 TO ENDED
MARCH 31, DECEMBER 31, DEC. 31, JULY 28, DEC. 31,
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1998 1997 1997 1996 1995 1994 1994(3) 1993
----- ----- ----- ----- ----- --------- -------- --------
<S> <C> <C> <C> <C> <C> <C> <C> <C>
Ratio of earnings to fixed charges(2).... 2.2:1 1.6:1 2.3:1 1.6:1 2.1:1 5.8:1 N/A 1.2:1
Ratio of earnings to combined fixed
charges and preferred stock
dividends(4)(5)........................ 1.7:1 1.6:1 2.2:1 1.6:1 1.5:1 2.0:1 N/A 1.2:1
</TABLE>
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(1) On July 29, 1994, AIMCO completed its initial public offering of 9,075,000
shares of Class A Common Stock. On such date, AIMCO and Property Asset
Management, L.L.C., and its affiliated companies and PDI Realty Enterprises,
Inc. (collectively, the "AIMCO Predecessors") engaged in a business
combination and consummated a series of related transactions which enabled
AIMCO to continue and to expand the property management and related
businesses of the AIMCO Predecessors.
(2) The ratio of earnings to fixed charges for AIMCO was computed by dividing
earnings by fixed charges. For this purpose, "earnings" consists of income
before minority interest plus fixed charges (other than any interest which
has been capitalized); and "fixed charges" consists of interest expense
(including amortization of loan costs) and interest which has been
capitalized. The ratio of earnings to fixed charges for the AIMCO
Predecessors was computed by dividing earnings by fixed charges. For this
purpose, "earnings" consists of income (loss) before extraordinary items and
income taxes plus fixed charges and "fixed charges" consists of interest
expense (including amortization of loan costs).
(3) The earnings of the AIMCO Predecessors for the period from January 1, 1994
to July 28, 1994 were inadequate to cover fixed charges by $1,463,000.
(4) The ratio of earnings to combined fixed charges and preferred stock
dividends for AIMCO was computed by dividing earnings by the total of fixed
charges and preferred stock dividends. For this purpose, "earnings" consists
of income before minority interest plus fixed charges (other than any
interest which has been capitalized); "fixed charges' consists of interest
expense (including amortization of loan costs) and interest which has been
capitalized; and "preferred stock dividends' consists of the amount of
pre-tax earnings that would be required to cover preferred stock dividend
requirements.
(5) The AIMCO Predecessors did not have any shares of preferred stock
outstanding during the period from January 1, 1993 through July 28, 1994.
5
<PAGE> 7
DESCRIPTION OF DEBT SECURITIES
GENERAL
The following description sets forth certain general terms and provisions
of the Debt Securities to which any Prospectus Supplement may relate. The
particular terms of the Debt Securities offered by any Prospectus Supplement and
the extent, if any, to which such general provisions may apply to the Debt
Securities so offered will be described in the Prospectus Supplement relating to
such Debt Securities.
The Debt Securities may be issued by either AIMCO or the AIMCO Operating
Partnership, from time to time, in one or more series, and will constitute
either senior Debt Securities ("Senior Debt Securities"), senior subordinated
Debt Securities ("Senior Subordinated Debt Securities") or subordinated Debt
Securities ("Subordinated Debt Securities"). Senior Debt Securities may be
issued under an Indenture (the "Senior Debt Securities Indenture") to be entered
into between either AIMCO or the AIMCO Operating Partnership, and a trustee to
be named in the applicable Prospectus Supplement (the "Senior Debt Securities
Trustee"). The Senior Subordinated Debt Securities may be issued from time to
time under an Indenture (the "Senior Subordinated Debt Securities Indenture") to
be entered into between either AIMCO or the AIMCO Operating Partnership, and a
trustee to be named in the applicable Prospectus Supplement (the "Senior
Subordinated Debt Securities Trustee"). The Subordinated Debt Securities may be
issued from time to time under an Indenture (the "Subordinated Debt Securities
Indenture") to be entered into between either AIMCO or the AIMCO Operating
Partnership, and a trustee to be named in the applicable Prospectus Supplement
(the "Subordinated Debt Securities Trustee").
The Senior Debt Securities Indenture, the Senior Subordinated Debt
Securities Indenture, and the Subordinated Debt Securities Indenture are
referred to herein individually as an "Indenture" and, collectively, as the
"Indentures." The Senior Debt Securities Trustee, the Senior Subordinated Debt
Securities Trustee and the Subordinated Debt Securities Trustee are referred to
herein individually as a "Trustee" and collectively as the "Trustees." Forms of
the Indentures are filed as exhibits to the Registration Statement of which this
Prospectus is a part. The Indentures will be subject to and governed by the
Trust Indenture Act of 1939, as amended (the "TIA"). Capitalized terms used in
this section which are not otherwise defined in this Prospectus shall have the
meanings set forth in the Indenture to which they relate. The statements made
under this heading relating to the Debt Securities and the Indentures are
summaries of the anticipated provisions of the Debt Securities and the
Indentures, do not purport to be complete and are subject to, and are qualified
in their entirety by reference to, all the provisions of the Indentures and the
Debt Securities, including the definitions therein of certain terms.
The Debt Securities will be direct, unsecured obligations of either AIMCO
or the AIMCO Operating Partnership. The Indentures do not limit the aggregate
principal amount of Debt Securities that may be issued thereunder and provide
that Debt Securities may be issued thereunder from time to time in one or more
series. Under the Indentures, both AIMCO and the AIMCO Operating Partnership
will have the ability to issue Debt Securities with terms different from those
of Debt Securities previously issued, without the consent of the holders of
previously issued series of Debt Securities, in an aggregate principal amount
determined by either AIMCO or the AIMCO Operating Partnership.
The applicable Prospectus Supplement or Prospectus Supplements relating to
any Senior Subordinated Debt Securities or Subordinated Debt Securities will set
forth the aggregate amount of outstanding indebtedness, as of the most recent
practicable date, that by the terms of such Debt Securities would be senior to
such Debt Securities and any limitation on the issuance of additional senior
indebtedness.
Debt Securities may be issued and sold at a discount below their principal
amount ("Discount Securities"). Special United States Federal income tax
considerations applicable to Debt Securities issued with original issue
discount, including Discount Securities, will be described in more detail in any
applicable Prospectus Supplement. Even if Debt Securities are not issued at a
discount below their principal amount, such Debt Securities may, for United
States Federal income tax purposes, be deemed to have been issued with "original
issue discount" ("OID") because of certain interest payment characteristics. In
addition, special United States Federal tax considerations or other restrictions
or terms applicable to any Debt Securities
6
<PAGE> 8
offered exclusively to United States Aliens or denominated in a currency other
than United States dollars will be set forth in a Prospectus Supplement relating
thereto.
The applicable Prospectus Supplement or Prospectus Supplements will specify
whether such Debt Securities are being issued by AIMCO or by the AIMCO Operating
Partnership and will describe, among other things, the following terms of the
Debt Securities offered thereby (the "Offered Debt Securities"): (i) the title
of the Offered Debt Securities; (ii) any limit on the aggregate principal amount
of the Offered Debt Securities; (iii) whether the Offered Debt Securities may be
represented initially by a Debt Security in temporary or permanent global form,
and if so, the initial Depositary with respect to such temporary or permanent
global Debt Security and whether and the circumstances under which beneficial
owners of interests in any such temporary or permanent global Debt Security may
exchange such interests for Debt Securities of such series and of like tenor of
any authorized form and denomination; (iv) the price or prices at which the
Offered Debt Securities will be issued; (v) the date or dates on which the
principal of the Offered Debt Securities is payable or the method of
determination thereof; (vi) the place or places where and the manner in which
the principal of and premium, if any, and interest, if any, on such Offered Debt
Securities will be payable and the place or places where such Offered Debt
Securities may be presented for transfer and, if applicable, conversion or
exchange; (vii) the rate or rates at which the Offered Debt Securities will bear
interest, or the method of calculating such rate or rates, if any, and the date
or dates from which such interest, if any, will accrue; (viii) the dates (the
"Interest Payment Dates"), if any, on which any interest on the Offered Debt
Securities will be payable, and the regular record date (the "Regular Record
Date") for any interest payable on any Offered Debt Securities; (ix) the right
or obligation, if any, of AIMCO or the AIMCO Operating Partnership to redeem or
purchase Debt Securities of the series pursuant to any sinking fund or analogous
provisions or at the option of a holder thereof, the conditions, if any, giving
rise to such right or obligation, and the period or periods within which, and
the price or prices at which and the terms and conditions upon which Debt
Securities of the series shall be redeemed or purchased, in whole or part, and
any provisions for the remarketing of such Debt Securities; (x) whether such
Offered Debt Securities are convertible or exchangeable into other debt
securities of AIMCO or the AIMCO Operating Partnership or equity securities of
AIMCO, and, if so, the terms and conditions upon which such conversion or
exchange will be effected, including the initial conversion or exchange price or
rate and any adjustments thereto, the conversion or exchange period and other
conversion or exchange provisions; (xi) any terms applicable to such Offered
Debt Securities which are Discount Securities, including the issue price thereof
and the rate or rates at which original issue discount will accrue; (xii) if
other than the principal amount thereof, the portion of the principal amount of
the Offered Debt Securities which will be payable upon declaration or
acceleration of the maturity thereof pursuant to an Event of Default; (xiii) any
deletions from, modifications of or additions to the Events of Default or
covenants of AIMCO or the AIMCO Operating Partnership with respect to such
Offered Debt Securities, whether or not such Events of Default or covenants are
consistent with the Events of Default or covenants set forth herein; (xiv) any
special United States Federal income tax considerations applicable to the
Offered Debt Securities; (xv) in the case of Debt Securities issued by the AIMCO
Operating Partnership, whether the Offered Debt Securities will be guaranteed by
AIMCO and the terms of any such Guarantee; and (xvi) any other terms of the
Offered Debt Securities not inconsistent with the provisions of the Indenture.
The applicable Prospectus Supplement will also describe the following terms of
any series of Senior Subordinated Debt Securities or Subordinated Debt
Securities offered hereby in respect of which this Prospectus is being
delivered: (a) the rights, if any, to defer payments of interest on the Senior
Subordinated Debt Securities or Subordinated Debt Securities of such series by
extending the interest payment period, and the duration of such extensions, and
(b) the subordination terms of the Senior Subordinated Debt Securities or
Subordinated Debt Securities of such series. The foregoing is not intended to be
an exclusive list of the terms that may be applicable to any Offered Debt
Securities and shall not limit in any respect the ability of AIMCO or the AIMCO
Operating Partnership to issue Debt Securities with terms different from or in
addition to those described above or elsewhere in this Prospectus provided that
such terms are not inconsistent with the applicable Indenture. Any such
Prospectus Supplement will also describe any special provisions for the payment
of additional amounts with respect to the Offered Debt Securities.
Since the operations of AIMCO and the AIMCO Operating Partnership are
currently conducted principally through their respective subsidiaries, AIMCO's
and the AIMCO Operating Partnership's cash
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flow and their consequent ability to service debt, including the Debt
Securities, will be dependent, in large part, upon the earnings of their
subsidiaries and the distribution of those earnings to AIMCO and the AIMCO
Operating Partnership, whether by dividends, loans or otherwise. The payment of
dividends and the making of loans and advances to AIMCO and the AIMCO Operating
Partnership by their subsidiaries may be subject to statutory or contractual
restrictions, are contingent upon the earnings of those subsidiaries and are
subject to various business considerations. Any right of AIMCO or the AIMCO
Operating Partnership to receive assets of any of their subsidiaries upon their
liquidation or reorganization (and the consequent right of the holders of the
Debt Securities to participate in those assets) will be effectively subordinated
to the claims of that subsidiary's creditors (including trade creditors), except
to the extent that AIMCO or the AIMCO Operating Partnership is recognized as a
creditor of such subsidiary, in which case the claims of AIMCO or the AIMCO
Operating Partnership would still be subordinate to any security interests in
the assets of such subsidiary and any indebtedness of such subsidiary senior to
that held by AIMCO or the AIMCO Operating Partnership.
FORM, EXCHANGE, REGISTRATION AND TRANSFER
The Debt Securities of a series may be issued solely as registered Debt
Securities. Debt Securities of a series may be issuable in whole or in part in
the form of one or more global Debt Securities, as described below under "Global
Debt Securities." Unless otherwise indicated in an applicable Prospectus
Supplement, Debt Securities will be issuable in denominations of $1,000 and
integral multiples thereof. Debt Securities of any series will be exchangeable
for other Debt Securities of the same series of any authorized denominations and
of a like aggregate principal amount and tenor.
Debt Securities may be presented for exchange as provided above and, unless
otherwise indicated in an applicable Prospectus Supplement, may be presented for
registration of transfer, at the office or agency of AIMCO or the AIMCO
Operating Partnership designated as registrar or co-registrar with respect to
such series of Debt Securities, without service charge and upon payment of any
taxes, assessments or other governmental charges as described in the Indenture.
Such transfer or exchange will be effected on the books of the registrar or any
other transfer agent appointed by AIMCO or the AIMCO Operating Partnership upon
such registrar or transfer agent, as the case may be, being satisfied with the
documents of title and identity of the person making the request. AIMCO and the
AIMCO Operating Partnership intend to initially appoint the Trustee for the
Offered Debt Securities as the registrar for such Offered Debt Securities and
the name of any different or additional registrar designated by AIMCO or the
AIMCO Operating Partnership with respect to the Offered Debt Securities will be
included in the Prospectus Supplement relating thereto. If a Prospectus
Supplement refers to any transfer agents (in addition to the registrar)
designated by AIMCO or the AIMCO Operating Partnership with respect to any
series of Debt Securities, AIMCO or the AIMCO Operating Partnership 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 AIMCO and
the AIMCO Operating Partnership will be required to maintain a transfer agent in
the Borough of Manhattan, the City of New York. AIMCO and the AIMCO Operating
Partnership may at any time designate additional transfer agents with respect to
any series of Debt Securities.
In the event of any partial redemption of Debt Securities of any series,
AIMCO and the AIMCO Operating Partnership will not be required to (i) issue,
register the transfer of or exchange Debt Securities of that 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; or (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.
PAYMENT AND PAYING AGENTS
Unless otherwise indicated in an applicable Prospectus Supplement, payment
of principal of, and interest, if any, on, Debt Securities will be made at the
office of such paying agent or paying agents as AIMCO or the AIMCO Operating
Partnership may designate from time to time, except that, at the option of AIMCO
or the AIMCO Operating Partnership, payment of principal or interest may be made
by check or by wire transfer to an account maintained by the payee. Unless
otherwise indicated in an applicable Prospectus Supplement,
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payment of any installment of interest on Debt Securities will be made to the
person in whose name such Debt Security is registered at the close of business
on the Regular Record Date for such interest.
Unless otherwise indicated in an applicable Prospectus Supplement, the
Trustee for the Offered Debt Securities will be designated as AIMCO's or the
AIMCO Operating Partnership's sole paying agent for payments with respect to the
Offered Debt Securities. Any other paying agents initially designated by AIMCO
or the AIMCO Operating Partnership for the Offered Debt Securities will be named
in an applicable Prospectus Supplement. AIMCO and the AIMCO Operating
Partnership may at any time designate additional paying agents or rescind the
designation of any paying agent or approve a change in the office through which
any paying agent acts, except that AIMCO and the AIMCO Operating Partnership
will be required to maintain a paying agent in the Borough of Manhattan, The
City of New York.
All moneys paid by AIMCO or the AIMCO Operating Partnership to a paying
agent for the payment of principal of, or interest, if any, on, any Debt
Security which remains unclaimed at the end of two years after such principal or
interest shall have become due and payable will be repaid to AIMCO or the AIMCO
Operating Partnership, and the holder of such Debt Security or any coupon will
thereafter look only to AIMCO or the AIMCO Operating Partnership for payment
thereof.
GUARANTEES
If the AIMCO Operating Partnership issues any Debt Securities that are
rated below investment grade at the time of issuance, AIMCO will fully and
unconditionally guarantee, on a senior or subordinated basis, the due and
punctual payment of principal or premium, if any, and interest on such Debt
Securities, and the due and punctual payment of any sinking fund payments
thereon, when and as the same shall become due and payable, whether at a
maturity date, by declaration of acceleration, call for redemption or otherwise.
The applicability and terms of any such Guarantees relating to a series of Debt
Securities will be set forth in the Prospectus Supplement relating to such Debt
Securities.
GLOBAL DEBT SECURITIES
The Debt Securities of a series may be issued in whole or in part in global
form. A Debt Security in global form will be deposited with, or on behalf of, a
depositary, which will be identified in the applicable Prospectus Supplement. A
global Debt Security may be issued only in registered form and in either
temporary or permanent form. A Debt Security in global form may not be
transferred except as a whole to the depositary for such Debt Security or to a
nominee or successor of such depositary. If any Debt Securities of a series are
issuable in global form, the applicable Prospectus Supplement will describe the
circumstances, if any, under which beneficial owners of interests in any such
global Debt Security may exchange such interests for definitive Debt Securities
of such series and of like tenor and principal amount in any authorized form and
denomination, the manner of payment of principal of and interest, if any, on any
such global Debt Security and the specific terms of the depositary arrangement
with respect to any such global Debt Security.
MERGERS AND SALES OF ASSETS
Neither AIMCO nor the AIMCO Operating Partnership may consolidate with or
merge into any other person or convey, transfer or lease their properties and
assets substantially as an entirety to another person, unless, among other
things, (i) the resulting, surviving or transferee person (if other than AIMCO
or the AIMCO Operating Partnership) is organized and existing under the laws of
the United States, any state thereof or the District of Columbia and such person
expressly assumes all obligations of AIMCO or the AIMCO Operating Partnership
under the Debt Securities and the Indenture, and (ii) immediately after giving
effect to such transaction, no Default or Event of Default shall have occurred
or be continuing under the Indenture. Upon the assumption of AIMCO's or the
AIMCO Operating Partnership's obligations by a person to whom such properties or
assets are conveyed, transferred or leased, subject to certain exceptions, AIMCO
or, if applicable, the AIMCO Operating Partnership, shall be discharged from all
obligations under the Debt Securities and the Indenture.
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EVENTS OF DEFAULT
Each Indenture provides that, if an Event of Default specified therein
shall have occurred and be continuing, with respect to each series of the Debt
Securities outstanding thereunder individually, the Trustee or the holders of
not less than 25% in aggregate principal amount of the outstanding Debt
Securities of such series may declare the principal amount (or, if any of the
Debt Securities of such series are Discount Securities, such portion of the
principal amount of such Debt Securities as may be specified by the terms
thereof) of the Debt Securities of such series to be immediately due and
payable. Under certain circumstances, the holders of a majority in aggregate
principal amount of the outstanding Debt Securities of such series may rescind
such a declaration.
Under each Indenture, an Event of Default is defined as, with respect to
each series of Debt Securities outstanding thereunder individually, any of the
following: (i) default in payment of the principal of any Debt Securities of
such series; (ii) default in payment of any interest on any Debt Securities of
such series when due, continuing for 30 days (or 60 days, in the case of Senior
Subordinated Debt Securities or Subordinated Debt Securities); (iii) default by
AIMCO or the AIMCO Operating Partnership, as the case may be, in compliance with
their other agreements in the Debt Securities of such series (including any
related Guarantee) or the Indenture relating to the Debt Securities of such
series (including any related Guarantee) upon the receipt by AIMCO or the AIMCO
Operating Partnership, as the case may be, of notice of such default given by
the Trustee for such Debt Securities or the holders of at least 25% in aggregate
principal amount of the outstanding Debt Securities of such series and AIMCO's
or the AIMCO Operating Partnership's failure to cure such default within 60 days
after receipt by AIMCO or the AIMCO Operating Partnership of such notice; (iv)
certain events of bankruptcy or insolvency; and (v) any other Event of Default
set forth in an applicable Prospectus Supplement with respect to the Debt
Securities of such series.
The Trustee shall give notice to holders of the Debt Securities of any
continuing default known to the Trustee within 90 days after the occurrence
thereof; provided, that the Trustee may withhold such notice, as to any default
other than a payment default, if it determines in good faith that withholding
the notice is in the interests of the holders.
The holders of a majority in principal amount of the outstanding Debt
Securities of any series may 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 Debt Securities of such
series; provided that such direction shall not be in conflict with any law or
the Indenture and subject to certain other limitations. Before proceeding to
exercise any right or power under the Indenture at the direction of such
holders, the Trustee shall be entitled to receive from such holders reasonable
security or indemnity satisfactory to it against the costs, expenses and
liabilities which might be incurred by it in complying with any such direction.
With respect to each series of Debt Securities, no holder will have any right to
pursue any remedy with respect to the Indenture or such Debt Securities, unless
(i) such holder shall have previously given the Trustee written notice of a
continuing Event of Default with respect to the Debt Securities of such series;
(ii) the holders of at least 25% in aggregate principal amount of the
outstanding Debt Securities of such series shall have made a written request to
the Trustee to pursue such remedy; (iii) such holder or holders have offered to
the Trustee reasonable indemnity satisfactory to the Trustee; (iv) the holders
of a majority in aggregate principal amount of the outstanding Debt Securities
of such series have not given the Trustee a direction inconsistent with such
request within 60 days after receipt of such request; and (v) the Trustee shall
have failed to comply with the request within such 60-day period.
Notwithstanding the foregoing, the right of any holder of any Debt
Securities to receive payment of the principal of and interest in respect of
such Debt Securities on the date specified in such Debt Securities as the fixed
date on which an amount equal to the principal of such Debt Securities or an
installment of principal thereof or interest thereon is due and payable (the
"Stated Maturity" or "Stated Maturities") or to institute suit for the
enforcement of any such payments shall not be impaired or adversely affected
without such holder's consent. The holders of at least a majority in aggregate
principal amount of the outstanding Debt Securities of any series may waive an
existing default with respect to such series and its consequences, other than
(i) any default in any payment of the principal of, or interest on, any Debt
Securities of such series or
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(ii) any default in respect of certain covenants or provisions in the Indenture
which may not be modified without the consent of the holder of each of the
outstanding Debt Securities of such series affected as described in
"Modification and Waiver," below.
Each Indenture provides that AIMCO or the AIMCO Operating Partnership shall
deliver to the Trustee within 120 days after the end of each fiscal year of
AIMCO or the AIMCO Operating Partnership an officers' certificate stating
whether or not the signers know of any default that occurred during such period.
MODIFICATION AND WAIVER
AIMCO or the AIMCO Operating Partnership and the Trustee may execute a
supplemental indenture without the consent of the holders of the Debt Securities
(i) to add to the covenants, agreements and obligations of AIMCO or the AIMCO
Operating Partnership for the benefit of the holders of all the Debt Securities
of any series or to surrender any right or power conferred in the Indenture upon
AIMCO or the AIMCO Operating Partnership; (ii) to evidence the succession of
another corporation, partnership or other Person to AIMCO or the AIMCO Operating
Partnership, respectively, and the assumption by such corporation, partnership
or other Person of the obligations of AIMCO or the AIMCO Operating Partnership,
respectively, under the Indenture and the Debt Securities; (iii) to establish
the form or terms of Debt Securities of any series as permitted by the
Indenture; (iv) to provide for the acceptance of appointment under the Indenture
of a successor Trustee with respect to the Debt Securities of one or more series
and to add to or change any provisions of the Indenture as shall be necessary to
provide for or facilitate the administration of the trusts by more than one
Trustee; (v) to cure any ambiguity, defect or inconsistency; (vi) to add to,
change or eliminate any provisions (which addition, change or elimination may
apply to one or more series of Debt Securities), provided that any such
addition, change or elimination does not (a) apply to any Debt Securities of any
series created prior to the execution of such supplemental indenture that is
entitled to the benefit of such provision or (b) modify the rights of the holder
of any such Debt Securities with respect to such provision; (vii) to secure the
Debt Securities; or (viii) to make any other change that does not adversely
affect the rights of any holder of Debt Securities.
Each Indenture provides that, with the consent of the holders of not less
than a majority in aggregate principal amount of the outstanding Debt Securities
of the series affected by such supplemental indenture, AIMCO or the AIMCO
Operating Partnership and the Trustee may also execute a supplemental indenture
to add provisions to, or change in any manner or eliminate any provisions of,
the Indenture with respect to such series of Debt Securities or modify in any
manner the rights of the holders of the Debt Securities of such series; provided
that no such supplemental indenture will, without the consent of the holder of
each such outstanding Debt Security affected thereby (i) change the stated
maturity of the principal of, or any installment of principal or interest on,
any such Debt Security or any premium payable upon redemption or repurchase
thereof, or reduce the amount of principal of any Debt Security that is a
Discount Security and that would be due and payable upon declaration of
acceleration of maturity thereof; (ii) reduce the principal amount of, or the
rate of interest on, any such Debt Security; (iii) change the place or currency
of payment of principal or interest, if any, 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
holders of Debt Securities of any series necessary to modify or amend the
Indenture for such Debt Securities; (vi) modify the foregoing requirements or
reduce the percentage in principal amount of outstanding Debt Securities of any
series necessary to waive any covenant or past default; or (vii) in the case of
Senior Subordinated Debt Securities or Subordinated Debt Securities, amend or
modify any of the provisions of such Indenture relating to subordination of the
Debt Securities in any manner adverse to the holders of such Debt Securities.
Holders of not less than a majority in principal amount of the outstanding Debt
Securities of any series may waive certain past defaults and may waive
compliance by AIMCO or the AIMCO Operating Partnership with certain of the
restrictive covenants described above with respect to the Debt Securities of
such series.
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DISCHARGE AND DEFEASANCE
Unless otherwise indicated in an applicable Prospectus Supplement, each
Indenture provides that AIMCO or the AIMCO Operating Partnership may satisfy and
discharge obligations thereunder with respect to the Debt Securities of any
series by delivering to the Trustee for cancellation all outstanding Debt
Securities of such series or depositing with the Trustee, after such outstanding
Debt Securities have become due and payable, cash sufficient to pay at Stated
Maturity all of the outstanding Debt Securities of such series and paying all
other sums payable under the Indenture with respect to such series.
In addition, unless otherwise indicated in an applicable Prospectus
Supplement, each Indenture provides that: AIMCO or the AIMCO Operating
Partnership (a) shall be discharged from its obligations in respect of the Debt
Securities of such series ("defeasance and discharge"), or (b) may cease to
comply with certain restrictive covenants ("covenant defeasance"), including
those described under "Mergers and Sales of Assets," and any such omission shall
not be an Event of Default with respect to the Debt Securities of such series,
in each case, at any time prior to the Stated Maturity or redemption thereof,
when AIMCO or the AIMCO Operating Partnership has irrevocably deposited with the
Trustee, in trust, (i) sufficient funds to pay the principal of and interest to
Stated Maturity (or redemption) on, the Debt Securities of such series, or (ii)
such amount of direct obligations of, or obligations the principal of (and
premium, if any) and interest on which are fully guaranteed by, the government
of the United States and which are not subject to prepayment, redemption or
call, as will, together with the predetermined and certain income to accrue
thereon without consideration of any reinvestment thereof, be sufficient to pay
when due the principal of (and premium, if any) and interest to Stated Maturity
(or redemption) on, the Debt Securities of such series. Upon such defeasance and
discharge, the holders of the Debt Securities of such series shall no longer be
entitled to the benefits of the Indenture, except for the purposes of
registration of transfer and exchange of the Debt Securities of such series and
replacement of lost, stolen or mutilated Debt Securities and shall look only to
such deposited funds or obligations for payment.
THE TRUSTEES
The Senior Debt Securities Trustee, the Senior Subordinated Debt Securities
Trustee and the Subordinated Debt Securities Trustee will be named in the
applicable Prospectus Supplement. Each Trustee will be permitted to engage in
other transactions with AIMCO or the AIMCO Operating Partnership and each of
their subsidiaries; however, if a Trustee acquires any conflicting interest, it
must eliminate such conflict or resign.
DESCRIPTION OF PREFERRED STOCK
GENERAL
AIMCO may issue, from time to time, shares of one or more series or classes
of Preferred Stock. The following description sets forth certain general terms
and provisions of the Preferred Stock to which any Prospectus Supplement may
relate. The particular terms of any series of Preferred Stock that may be issued
and sold pursuant hereto, and the extent, if any, to which such general
provisions may apply to the series of Preferred Stock so offered will be
described in the Prospectus Supplement relating to such Preferred Stock. The
following summary of certain provisions of the Preferred Stock do not purport to
be complete and is subject to, and is qualified in its entirety by express
reference to, the provisions of AIMCO's Charter (the "Charter") relating to a
specific series of the Preferred Stock, which will be in the form filed as an
exhibit to or incorporated by reference in the Registration Statement of which
this Prospectus is a part at or prior to the time of issuance of such series of
Preferred Stock.
The Charter authorizes the issuance of up to 510,750,000 shares of capital
stock with a par value of $.01 per share, of which 750,000 shares are classified
as Class B Preferred Stock, all of which are issued and outstanding, 2,760,000
shares are classified as Class C Preferred Stock, of which 2,400,000 shares are
issued and outstanding, 4,600,000 shares are classified as Class D Preferred
Stock, of which 4,200,000 shares are issued and outstanding, 4,050,000 shares
are classified as Class G Preferred Stock, all of which are issued and
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outstanding and 2,300,000 shares are classified as Class H Preferred Stock. See
"Outstanding Stock." The Board of Directors of AIMCO (the "AIMCO Board") is
authorized to issue shares of Preferred Stock, in one or more classes or
subclasses, and may classify and reclassify any of its unissued capital Stock
into shares of Preferred Stock by setting or changing in any one or more
respects the preferences, conversion or other rights, voting powers,
restrictions, limitations as to dividends, qualifications or terms or conditions
of redemption of such shares of capital Stock including, but not limited to,
ownership restrictions consistent with the Ownership Limit (defined below) with
respect to each series or class of capital Stock, and the number of shares
constituting each series or class, and to increase or decrease the number of
shares of any such series or class, to the extent permitted by the Maryland
General Corporation Law (the "MGCL").
The AIMCO Board shall be authorized to determine for each series of
Preferred Stock, and the Prospectus Supplement shall set forth with respect to
each series that may be issued and sold pursuant hereto: (i) the designation of
such shares and the number of shares that constitute such series, (ii) the
dividend rate (or the method of calculation thereof), if any, on the shares of
such series and the priority as to payment of dividends with respect to other
classes or series of capital stock of AIMCO, (iii) the dividend periods (or the
method of calculation thereof), (iv) the voting rights of the shares, (v) the
liquidation preference and the priority as to payment of such liquidation
preference with respect to other classes or series of capital stock of AIMCO and
any other rights of the shares of such series upon any liquidation or winding-up
of AIMCO, (vi) whether or not and on what terms the shares of such series will
be subject to redemption or repurchase at the option of AIMCO, (vii) whether and
on what terms the shares of such series will be convertible into or exchangeable
for other debt or equity securities of AIMCO, (viii) whether the shares of such
series of Preferred Stock will be listed on a securities exchange, (ix) any
special United States federal income tax considerations applicable to such
series, and (x) the other rights and privileges and any qualifications,
limitations or restrictions of such rights or privileges of such series not
inconsistent with the Charter and the MGCL.
DIVIDENDS
Holders of shares of Preferred Stock, shall be entitled to receive, when
and as declared by the AIMCO Board, out of funds of AIMCO legally available
therefor, an annual cash dividend payable at such dates and at such rates, if
any, per share per annum as set forth in the applicable Prospectus Supplement.
Unless otherwise set forth in the applicable Prospectus Supplement, each
series of Preferred Stock that may be issued and sold pursuant hereto, will rank
junior as to dividends to any Preferred Stock that may be issued in the future
that is expressly senior as to dividends to the Preferred Stock. If at any time
AIMCO has failed to pay accrued dividends on any such senior shares at the time
such dividends are payable, AIMCO may not pay any dividend on the Preferred
Stock or redeem or otherwise repurchase shares of Preferred Stock until such
accumulated but unpaid dividends on such senior shares have been paid or set
aside for payment in full by AIMCO.
Unless otherwise set forth herein or in the applicable Prospectus
Supplement relating to any class or series of Preferred Stock that may be issued
and sold pursuant hereto, no dividends (other than in Class A Common Stock or
Class B Common Stock (collectively, the "Common Stock") or other capital Stock
ranking junior to the Preferred Stock of any series as to dividends and upon
liquidation) shall be declared or paid or set aside for payment, nor shall any
other distribution be declared or made upon the Common Stock, or any other
capital stock of AIMCO ranking junior to or on a parity with the Preferred Stock
of such series as to dividends, nor shall any Common Stock or any other capital
stock of AIMCO ranking junior to or on a parity with the Preferred Stock of such
series as to dividends or upon liquidation be redeemed, purchased or otherwise
acquired for any consideration (or any moneys be paid to or made available for a
sinking fund for the redemption of any shares of any such stock) by AIMCO
(except by conversion into or exchange for other capital stock of AIMCO ranking
junior to the Preferred Stock of such series as to dividends and upon
liquidation) unless (i) if such series of Preferred Stock has a cumulative
dividend, full cumulative dividends on the Preferred Stock of such series have
been or contemporaneously are declared and paid or declared and a sum sufficient
for the payment thereof set apart for all past dividend periods and the then
current dividend period and (ii) if such series of Preferred Stock does not have
a cumulative dividend, full dividends on the
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Preferred Stock of such series have been or contemporaneously are declared and
paid or declared and a sum sufficient for the payment thereof set apart for
payment for the then current dividend period; provided, however, that any monies
theretofore deposited in any sinking fund with respect to any Preferred Stock in
compliance with the provisions of such sinking fund may thereafter be applied to
the purchase or redemption of such Preferred Stock in accordance with the terms
of such sinking fund, regardless of whether at the time of such application full
cumulative dividends upon shares of the Preferred Stock outstanding on the last
dividend payment date shall have been paid or declared and set apart for
payment; and provided, further, that any such junior or parity preferred stock
or Common Stock may be converted into or exchanged for stock of AIMCO ranking
junior to the Preferred Stock as to dividends.
The amount of dividends payable for the initial dividend period or any
period shorter than a full dividend period shall be computed on the basis of a
360-day year of twelve 30-day months. Accrued but unpaid dividends will not bear
interest.
CONVERTIBILITY
No series of Preferred Stock that may be issued and sold pursuant hereto
will be convertible into, or exchangeable for, other securities or property,
except as set forth in the applicable Prospectus Supplement, which will set
forth the terms and conditions upon which such conversion or exchange may be
effected, including the initial conversion or exchange rate and any adjustments
thereto, the conversion or exchange period and any other conversion or exchange
provisions.
REDEMPTION AND SINKING FUND
No series of Preferred Stock that may be issued and sold pursuant hereto
will be redeemable or be entitled to receive the benefit of a sinking fund,
except as set forth in the applicable Prospectus Supplement, which will set
forth the terms and conditions thereof, including the dates and redemption
prices of any such redemption, any conditions thereto, and any other redemption
or sinking fund provisions.
LIQUIDATION RIGHTS
Unless otherwise set forth herein or in the applicable Prospectus
Supplement, in the event of any liquidation, dissolution or winding up of AIMCO,
the holders of shares of each series of Preferred Stock that may be issued and
sold pursuant hereto are entitled to receive out of assets of AIMCO available
for distribution to stockholders, before any distribution of assets is made to
holders of: (i) any other shares of Preferred Stock ranking junior to such
series of Preferred Stock as to rights upon liquidation, dissolution or winding
up; and (ii) shares of Common Stock, liquidating distributions per share in the
amount of the liquidation preference specified in the applicable Prospectus
Supplement for such series of Preferred Stock plus any dividends accrued and
accumulated but unpaid to the date of final distribution; but the holders of
each series of Preferred Stock will not be entitled to receive the liquidating
distribution of, plus such dividends on, such shares until the liquidation
preference of any shares of AIMCO's capital stock ranking senior to such series
of the Preferred Stock as to the rights upon liquidation, dissolution or winding
up shall have been paid (or a sum set aside therefor sufficient to provide for
payment) in full. If upon any liquidation, dissolution or winding up of AIMCO,
the amounts payable with respect to the Preferred Stock, and any other Preferred
Stock ranking as to any such distribution on a parity with the Preferred Stock
are not paid in full, the holders of the Preferred Stock and such other parity
preferred stock will share ratably in any such distribution of assets in
proportion to the full respective preferential amount to which they are
entitled. Unless otherwise specified in a Prospectus Supplement for a series of
Preferred Stock, after payment of the full amount of the liquidating
distribution to which they are entitled, the holders of shares of Preferred
Stock will not be entitled to any further participation in any distribution of
assets by AIMCO. Neither a consolidation or merger of AIMCO with another
corporation nor a sale of securities shall be considered a liquidation,
dissolution or winding up of AIMCO.
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VOTING RIGHTS
Holders of Preferred Stock that may be issued and sold pursuant hereto will
not have any voting rights except as set forth below or in the applicable
Prospectus Supplement or as otherwise from time to time required by law.
Whenever dividends on any applicable series of Preferred Stock or any other
class or series of stock ranking on a parity with the applicable series of
Preferred Stock with respect to the payment of dividends shall be in arrears for
the equivalent of six quarterly dividend periods, whether or not consecutive,
the holders of shares of such series of Preferred Stock (voting separately as a
class with all other series of Preferred Stock then entitled to such voting
rights) will be entitled to vote for the election of two of the authorized
number of directors of AIMCO at the next annual meeting of stockholders and at
each subsequent meeting until all dividends accumulated on such series of
Preferred Stock shall have been fully paid or set apart for payment. The term of
office of all directors elected by the holders of such Preferred Stock shall
terminate immediately upon the termination of the right of the holders of such
Preferred Stock to vote for directors. Unless otherwise set forth in the
applicable Prospectus Supplement, holders of shares of Preferred Stock that may
be issued and sold pursuant hereto will have one vote for each share held.
So long as any shares of any series of Preferred Stock remain outstanding,
AIMCO shall not, without the consent of holders of at least two-thirds of the
shares of such series of Preferred Stock outstanding at the time, voting
separately as a class with all other series of Preferred Stock of AIMCO upon
which like voting rights have been conferred and are exercisable, (i) issue or
increase the authorized amount of any class or series of stock ranking prior to
the outstanding Preferred Stock as to dividends or upon liquidation or (ii)
amend, alter or repeal the provisions of the Charter relating to such series of
Preferred Stock, whether by merger, consolidation or otherwise, so as to
materially adversely affect any power, preference or special right of such
series of Preferred Stock or the holders thereof; provided, however, that any
increase in the amount of the authorized Common Stock or authorized preferred
Stock or any increase or decrease in the number of shares of any series of
Preferred Stock or the creation and issuance of other series of Common Stock or
Preferred Stock ranking on a parity with or junior to Preferred Stock as to
dividends and upon liquidation, dissolution or winding up shall not be deemed to
materially adversely affect such powers, preferences or special rights.
MISCELLANEOUS
The holders of Preferred Stock will have no preemptive rights. The
Preferred Stock that may be issued and sold pursuant hereto, upon issuance
against full payment of the purchase price therefor, will be fully paid and
nonassessable. Shares of Preferred Stock redeemed or otherwise reacquired by
AIMCO shall resume the status of authorized and unissued shares of Preferred
Stock undesignated as to series, and shall be available for subsequent issuance.
There are no restrictions on repurchase or redemption of the Preferred Stock
while there is any arrearage on sinking fund installments except as may be set
forth in an applicable Prospectus Supplement. Payment of dividends on, and the
redemption or repurchase of, any series of Preferred Stock may be restricted by
loan agreements, indentures and other agreements entered into by AIMCO. The
accompanying Prospectus Supplement will describe any material contractual
restrictions on such dividend payments.
NO OTHER RIGHTS
The shares of a series of Preferred Stock that may be issued and sold
pursuant hereto will not have any preferences, voting powers or relative,
participating, optional or other special rights except as set forth above or in
the applicable Prospectus Supplement or the Charter or as otherwise required by
law.
TRANSFER AGENT AND REGISTRAR
The transfer agent and registrar for each series of Preferred Stock that
may be issued and sold pursuant hereto will be designated in the applicable
Prospectus Supplement.
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DESCRIPTION OF CLASS A COMMON STOCK
GENERAL
The Charter authorizes the issuance of up to 510,750,000 shares of capital
stock with a par value of $.01 per share, of which 496,027,500 shares were
classified as Class A Common Stock and 262,500 shares were classified as Class B
Common Stock as of August 11, 1998 (the Class A Common Stock and the Class B
Common Stock are collectively referred to as the "Common Stock"). As of July 31,
1998, there were 48,106,837 shares of Class A Common Stock issued and
outstanding and 162,500 share of Class B Common Stock issued and outstanding. In
addition, up to 150,000 shares of Class A Common Stock have been reserved for
issuance under AIMCO's 1994 Stock Option Plan, up to 500,000 shares of Class A
Common Stock have been reserved for issuance under AIMCO's 1996 Stock Award and
Incentive Plan, and up to 500,000 shares of Class A Common Stock have been
reserved for issuance under AIMCO's Non-Qualified Stock Option Plan. Under
AIMCO's 1997 Stock Award and Incentive Plan, AIMCO may issue up to 20,000,000
shares of Common Stock. The Class A Common Stock is traded on the NYSE under the
symbol "AIV." BankBoston, N.A. serves as transfer agent and registrar of the
Class A Common Stock.
Holders of the Class A Common Stock are entitled to receive dividends, when
and as declared by the AIMCO Board, out of funds legally available therefor. The
holders of shares of Class A Common Stock, upon any liquidation, dissolution or
winding up of AIMCO, are entitled to receive ratably any assets remaining after
payment in full of all liabilities of AIMCO and the liquidation preferences of
preferred stock. The shares of Class A Common Stock possess ordinary voting
rights for the election of Directors and in respect of other corporate matters,
each share entitling the holder thereof to one vote. Holders of shares of Class
A Common Stock do not have cumulative voting rights in the election of
Directors, which means that holders of more than 50% of the shares of Class A
Common Stock voting for the election of Directors can elect all of the Directors
if they choose to do so and the holders of the remaining shares cannot elect any
Directors. Holders of shares of Class A Common Stock do not have preemptive
rights, which means they have no right to acquire any additional shares of Class
A Common Stock that may be issued by AIMCO at a subsequent date.
RESTRICTIONS ON TRANSFER
For AIMCO to qualify as a REIT under the Code, not more than 50% in value
of its outstanding capital stock 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 the shares of capital stock must be
beneficially owned by 100 or more persons during at least 335 days of a taxable
year of 12 months or during a proportionate part of a shorter taxable year.
Because the AIMCO Board believes that it is essential for AIMCO to continue to
qualify as a REIT and to provide additional protection for AIMCO's stockholders
in the event of certain transactions, the AIMCO Board has adopted, and the
stockholders have approved, provisions of The Charter restricting the
acquisition of shares of Common Stock.
Subject to certain exceptions specified in the Charter, no holder may own,
or be deemed to own by virtue of various attribution and constructive ownership
provisions of the Code and Rule 13d-3 under the Exchange Act, more than 8.7% (or
15% in the case of certain pension trusts described in the Code, investment
companies registered under the Investment Company Act of 1940 and Mr. Considine)
of the outstanding shares of Common Stock. For purposes of calculating the
amount of stock owned by a given individual, the individual's Common Stock and
Common OP Units are aggregated. The AIMCO Board may waive the Ownership Limit if
evidence satisfactory to the AIMCO Board and AIMCO's tax counsel is presented
that such ownership will not then or in the future jeopardize AIMCO's status as
a REIT. However, in no event may such holder's direct or indirect ownership of
Common Stock exceed 9.8% of the total outstanding shares of Common Stock. As a
condition of such waiver, the AIMCO Board may require opinions of counsel
satisfactory to it and/or an undertaking from the applicant with respect to
preserving the REIT status of AIMCO. The foregoing restrictions on
transferability and ownership will not apply if the AIMCO Board determines that
it is no longer in the best interests of AIMCO to attempt to qualify, or to
continue to qualify
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as a REIT and a resolution terminating AIMCO's status as a REIT and amending the
Charter to remove the foregoing restrictions is duly adopted by the AIMCO Board
and a majority of AIMCO's stockholders. If shares of Common Stock in excess of
the Ownership Limit, or shares of Common Stock which would cause the REIT to be
beneficially owned by fewer than 100 persons, or which would result in AIMCO
being "closely held," within the meaning of Section 856(h) of the Code, or which
would otherwise result in AIMCO failing to qualify as a REIT, are issued or
transferred to any person, such issuance or transfer shall be null and void to
the intended transferee, and the intended transferee would acquire no rights to
the stock. Shares of Common Stock transferred in excess of the Ownership Limit
or other applicable limitations will automatically be transferred to a trust for
the exclusive benefit of one or more qualifying charitable organizations to be
designated by AIMCO. Shares transferred to such trust will remain outstanding,
and the trustee of the trust will have all voting and dividend rights pertaining
to such shares. The trustee of such trust may transfer such shares to a person
whose ownership of such shares does not violate the Ownership Limit or other
applicable limitation. Upon a sale of such shares by the trustee, the interest
of the charitable beneficiary will terminate, and the sales proceeds would be
paid, first, to the original intended transferee, to the extent of the lesser of
(a) such transferee's original purchase price (or the original market value of
such shares if purportedly acquired by gift or devise) and (b) the price
received by the trustee, and, second, any remainder to the charitable
beneficiary. In addition, shares of stock held in such trust are purchasable by
AIMCO for a 90-day period at a price equal to the lesser of the price paid for
the stock by the original intended transferee (or the original market value of
such shares if purportedly acquired by gift or devise) and the market price for
the stock on the date that AIMCO determines to purchase the stock. The 90-day
period commences on the date of the violative transfer or the date that the
AIMCO Board determines in good faith that a violative transfer has occurred,
whichever is later. All certificates representing shares of Common Stock bear a
legend referring to the restrictions described above.
All persons who own, directly or by virtue of the attribution provisions of
the Code and Rule 13d-3 under the Exchange Act, more than a specified percentage
of the outstanding shares of Common Stock must file a written statement or an
affidavit with AIMCO containing the information specified in the Charter within
30 days after January 1 of each year. In addition, each stockholder shall upon
demand be required to disclose to AIMCO in writing such information with respect
to the direct, indirect and constructive ownership of shares as the AIMCO Board
deems necessary to comply with the provisions of the Code applicable to a REIT
or to comply with the requirements of any taxing authority or governmental
agency.
The ownership limitations may have the effect of precluding acquisition of
control of AIMCO by a third party unless the AIMCO Board determines that
maintenance of REIT status is no longer in the best interests of AIMCO.
BUSINESS COMBINATIONS
Under the MGCL, certain "business combinations" (including a merger,
consolidation, share exchange or, in certain circumstances, an asset transfer or
issuance or reclassification of equity securities) between a Maryland
corporation and any person who beneficially owns 10% or more of the voting power
of the corporation's shares or an affiliate of the corporation who, at any time
within the two-year period prior to the date in question, was the beneficial
owner of 10% or more of the voting power of the then-outstanding voting stock of
the corporation (an "Interested Stockholder") or an affiliate thereof are
prohibited for five years after the most recent date on which the Interested
Stockholder became an Interested Stockholder. Thereafter, any such business
combination must be recommended by the board of directors of the corporation and
approved by the affirmative vote of at least (a) 80% of the votes entitled to be
cast by holders of outstanding voting shares of the corporation, voting together
as a single voting group, and (b) two-thirds of the votes entitled to be cast by
holders of outstanding voting shares of the corporation other than shares held
by the Interested Stockholder or an affiliate of the Interested Stockholder with
whom the business combination is to be effected, unless, among other conditions,
the corporation's stockholders receive a minimum price (as defined in the MGCL)
for their shares and the consideration is received in cash or in the same form
as previously paid by the Interested Stockholder for its shares. For purposes of
determining whether a person is an Interested Stockholder, ownership of Common
OP Units will be treated as beneficial ownership of the shares of
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Common Stock for which the Common OP Units may be redeemed. The business
combination statute could have the effect of discouraging offers to acquire
AIMCO and of increasing the difficulty of consummating any such offer. These
provisions of the MGCL do not apply, however, to business combinations that are
approved or exempted by the board of directors of the corporation prior to the
time that the Interested Stockholder becomes an Interested Stockholder. The
AIMCO Board has not passed such a resolution.
CONTROL SHARE ACQUISITIONS
The MGCL provides that "control shares" of a Maryland corporation acquired
in a "control share acquisition" have no voting rights except to the extent
approved by a vote of two-thirds of the votes entitled to be cast on the matter,
excluding shares of stock owned by the acquiror or by officers or directors who
are employees of the corporation. "Control shares" are voting shares of stock
that, if aggregated with all other shares of stock previously acquired by that
person, would entitle the acquiror to exercise voting power in electing
directors within one of the following ranges of voting power: (i) one-fifth or
more but less than one-third, (ii) one-third or more but less than a majority or
(iii) a majority or more of all voting power. Control shares do not include
shares the acquiring person is then entitled to vote as a result of having
previously obtained stockholder approval.
A "control share acquisition" means the acquisition of control shares,
subject to certain exceptions. A person who has made or proposes to make a
control share acquisition, upon satisfaction of certain conditions (including an
undertaking to pay expenses), may compel the corporation's board of directors to
call a special meeting of stockholders, to be held within 50 days of demand, to
consider the voting rights of the shares. If no request for a meeting is made,
the corporation may itself present the question at any stockholders meeting.
If voting rights are not approved at the meeting or if the acquiring person
does not deliver an "acquiring person statement" as required by the statute,
then, subject to certain conditions and limitations, the corporation may redeem
any or all of the control shares (except those for which voting rights have
previously been approved) for fair value determined, without regard to the
absence of voting rights, as of the date of the last control share acquisition
or of any meeting of stockholders at which the voting rights of such shares were
considered and not approved. If voting rights for control shares are approved at
a stockholders meeting and the acquiror becomes entitled to vote a majority of
the shares entitled to vote, all other stockholders may exercise appraisal
rights. The fair value of the shares as determined for purposes of the appraisal
rights may not be less than the highest price per share paid in the control
share acquisition, and certain limitations and restrictions otherwise applicable
to the exercise of dissenters' rights do not apply in the context of a control
share acquisition.
The control share acquisition statute does not apply to shares acquired in
a merger, consolidation or share exchange if the corporation is a party to the
transaction, or to acquisitions approved or exempted by the corporation's
articles of incorporation or bylaws prior to the control share acquisition. No
such exemption appears in the Charter or in AIMCO's bylaws (the "Bylaws"). The
control share acquisition statute could have the effect of discouraging offers
to acquire AIMCO and of increasing the difficulty of consummating any such
offer.
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OUTSTANDING STOCK
CLASS B PREFERRED STOCK
On August 4, 1997, AIMCO issued 750,000 shares of its Class B Preferred
Stock to an institutional investor (the "Preferred Share Investor") for $75.0
million. The Class B Preferred Stock has an aggregate liquidation value of $75
million and, with respect to dividend rights and rights upon liquidation,
dissolution or winding up of AIMCO, ranks (a) prior or senior to the Common
Stock and any other class or series of capital stock of AIMCO if the holders of
the Class B Preferred Stock shall be entitled to the receipt of dividends or of
amounts distributable upon liquidation, dissolution or winding-up in preference
or priority to the holders of shares of such class or series ("Class B Junior
Stock"), (b) on a parity with the Class C Preferred Stock, the Class D Preferred
Stock, the Class G Preferred Stock and the Class H Preferred Stock and with any
other class or series of capital stock of AIMCO if the holders of such class or
series of stock and the Class B Preferred Stock shall be entitled to the receipt
of dividends or of amounts distributable upon liquidation, dissolution or
winding-up in proportion to their respective amounts of accrued and unpaid
dividends per share or liquidation preferences, without preference or priority
of one over the other ("Class B Parity Stock") and (c) junior to any class or
series of capital stock of AIMCO if the holders of such class or series shall be
entitled to the receipt of dividends or amounts distributable upon liquidation,
dissolution or winding-up in preference or priority to the holders of the Class
B Preferred Stock. Holders of the Class B Preferred Stock are entitled to
receive, when, as and if declared by the AIMCO Board, quarterly cash dividends
per share equal to the greater of (i) $1.78125 (the "Base Rate") and (ii) the
cash dividends declared on the number of shares of Class A Common Stock into
which one share of Class B Preferred Stock is convertible. On or after August 4,
1998, each share of Class B Preferred Stock may be converted at the option of
the holder into 3.28407 shares of Class A Common Stock, subject to certain
anti-dilution adjustments. AIMCO may redeem any or all of the Class B Preferred
Stock on or after August 4, 2002, at a redemption price of $100 per share, plus
unpaid dividends accrued on the shares redeemed.
Holders of Class B Preferred Stock, voting as a class with the holders of
all Class B Parity Stock, will be entitled to elect (i) two directors of AIMCO
if six quarterly dividends (whether or not consecutive) on the Class B Preferred
Stock or any Class B Parity Stock are in arrears, and (ii) one director of AIMCO
if for two consecutive quarterly dividend periods AIMCO fails to pay at least
$0.4625 in dividends on the Class A Common Stock and, in any such case, the
number of directors constituting the AIMCO Board of Directors shall be increased
by one or two, as the case may be (if not already increased by reason of similar
types of provisions with respect to shares of Class B Parity Stock). The
affirmative vote of the holders of two-thirds of the outstanding shares of Class
B Preferred Stock will be required to amend the Charter in any manner that would
adversely affect the rights of the holders of Class B Preferred Stock, and to
approve the issuance of any capital stock that ranks senior to the Class B
Preferred Stock with respect to payment of dividends or upon liquidation,
dissolution, winding up or otherwise. If the IRS were to make a final
determination that AIMCO does not qualify as a REIT in accordance with Sections
856 through 860 of the Code, the Base Rate for the quarterly cash dividends on
the Class B Preferred Stock would increase to $3.03125 per share.
The agreement pursuant to which AIMCO issued the Class B Preferred Stock
(the "Preferred Share Purchase Agreement") provides that the Preferred Share
Investor may require AIMCO to repurchase such investor's Class B Preferred Stock
in whole or in part at a price of 105% of the liquidation preference thereof,
plus accrued and unpaid dividends on the purchased shares, if (i) AIMCO shall
fail to continue to be taxed as a REIT pursuant to Sections 856 through 860 of
the Code, or (ii) upon the occurrence of a change of control (as defined in the
Preferred Share Purchase Agreement). The Preferred Share Purchase Agreement also
provides that, so long as the Preferred Share Investor owns Class B Preferred
Stock with an aggregate liquidation preference of at least $18.75 million,
neither AIMCO, the AIMCO Operating Partnership nor any subsidiary of AIMCO may
issue preferred securities or incur indebtedness for borrowed money if
immediately following such issuance and after giving effect thereto and the
application of the net proceeds therefrom, AIMCO's ratio of aggregate
consolidated earnings before interest, taxes, depreciation and amortization to
aggregate consolidated fixed charges for the four fiscal quarters immediately
preceding such issuance would be less than 1.5 to 1.
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Subject to certain exceptions specified in the provisions of the Charter
establishing the terms of the Class B Preferred Stock, no holder may own, or be
deemed to own by virtue of various attribution and constructive ownership
provisions of the Code and Rule 13d-3 under the Exchange Act, shares of Class B
Preferred Stock with a value in excess of the excess of (i) 8.7% (or 15% in the
case of certain pension trusts described in the Code, investment companies
registered under the Investment Company Act of 1940 and Mr. Considine) of the
aggregate value of all shares of capital stock of AIMCO over (ii) the aggregate
value of all shares of capital stock of AIMCO other than Class B Preferred Stock
that are owned by such holder (the "Class B Preferred Ownership Limit"). The
AIMCO Board may waive such ownership limit if evidence satisfactory to the AIMCO
Board and AIMCO's tax counsel is presented that such ownership will not then or
in the future jeopardize AIMCO's status as a REIT. As a condition of such
waiver, the AIMCO Board may require opinions of counsel satisfactory to it
and/or an undertaking from the applicant with respect to preserving the REIT
status of AIMCO. If shares of Class B Preferred Stock in excess of the Class B
Preferred Ownership Limit, or shares of Class B Preferred Stock which would
result in AIMCO being "closely held," within the meaning of Section 856(h) of
the Code, or which would otherwise result in AIMCO failing to qualify as a REIT,
are issued or transferred to any person, such issuance or transfer will be null
and void to the intended transferee, and the intended transferee would acquire
no rights to the stock. Shares of Class B Preferred Stock transferred in excess
of the Class B Preferred Ownership Limit or other applicable limitations will
automatically be transferred to a trust for the exclusive benefit of one or more
qualifying charitable organizations to be designated by AIMCO. Shares
transferred to such trust will remain outstanding, and the trustee of the trust
will have all voting and dividend rights pertaining to such shares. The trustee
of such trust may transfer such shares to a person whose ownership of such
shares does not violate the Class B Preferred Ownership Limit or other
applicable limitation. Upon a sale of such shares by the trustee, the interest
of the charitable beneficiary will terminate, and the sales proceeds would be
paid, first, to the original intended transferee, to the extent of the lesser of
(a) such transferee's original purchase price (or the original market value of
such shares if purportedly acquired by gift or devise) and (b) the price
received by the trustee, and, second, any remainder to the charitable
beneficiary. In addition, shares of stock held in such trust are purchasable by
AIMCO for a 90-day period at a price equal to the lesser of the price paid for
the stock by the original intended transferee (or the original market value of
such shares if purportedly acquired by gift or devise) and the market price for
the stock on the date that AIMCO determines to purchase the stock. The 90-day
period commences on the date of the violative transfer or the date that the
AIMCO Board determines in good faith that a violative transfer has occurred,
whichever is later. All certificates representing shares of Class B Preferred
Stock bear a legend referring to the restrictions described above.
CLASS C PREFERRED STOCK
On December 23, 1997, AIMCO issued 2,400,000 shares of its 9% Class C
Preferred Stock in an underwritten public offering, for net proceeds of
approximately $57.9 million. The Class C Preferred Stock, with respect to
dividend rights and rights upon liquidation, dissolution or winding up of AIMCO,
ranks (a) prior or senior to the Common Stock and any other class or series of
capital stock of AIMCO if the holders of the Class C Preferred Stock shall be
entitled to the receipt of dividends or of amounts distributable upon
liquidation, dissolution or winding-up in preference or priority to the holders
of shares of such class or series ("Class C Junior Stock"), (b) on a parity with
the Class B Preferred Stock, the Class D Preferred Stock, the Class G Preferred
Stock and the Class H Preferred Stock and with any other class or series of
capital stock of AIMCO if the holders of such class or series of stock and the
Class C Preferred Stock shall be entitled to the receipt of dividends and of
amounts distributable upon liquidation, dissolution or winding up in proportion
to their respective amounts of accrued and unpaid dividends per share or
liquidation preferences, without preference or priority of one over the other
("Class C Parity Stock") and (c) junior to any class or series of capital stock
of AIMCO if the holders of such class or series shall be entitled to the receipt
of dividends or amounts distributable upon liquidation, dissolution or winding
up in preference or priority to the holders of the Class C Preferred Stock
("Class C Senior Stock").
Holders of Class C Preferred Stock are entitled to receive cash dividends
at the rate of 9% per annum of the $25 liquidation preference (equivalent to
$2.25 per annum per share). Such dividends are cumulative from the date of
original issue, and are payable quarterly on or before January 15, April 15,
July 15 and October 15
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of each year. Upon any liquidation, dissolution or winding up of AIMCO, before
payment or distribution by AIMCO shall be made to or set apart for the holders
of any shares of Class C Junior Stock, the holders of Class C Preferred Stock
shall be entitled to receive a liquidation preference of $25 per share (the
"Class C Liquidation Preference"), plus an amount equal to all accumulated,
accrued and unpaid dividends to the date of final distribution to such holders;
but such holders shall not be entitled to any further payment. If proceeds
available for distribution shall be insufficient to pay the preference described
above and any liquidating payments on any other shares of any class or series of
Class C Parity Stock, then such proceeds shall be distributed among the holders
of Class C Preferred Stock and any such other Class C Parity Stock ratably in
the same proportion as the respective amounts that would be payable on such
Class C Preferred Stock and any such other Class C Parity Stock if all amounts
payable thereon were paid in full.
On and after December 23, 2002, AIMCO may redeem shares of Class C
Preferred Stock, in whole or in part, at a cash redemption price equal to 100%
of the Class C Liquidation Preference plus all accrued and unpaid dividends to
the date fixed for redemption. The Class C Preferred Stock has no stated
maturity and will not be subject to any sinking find or mandatory redemption
provisions.
Holders of shares of Class C Preferred Stock have no voting rights, except
that if distributions on Class C Preferred Stock or any series or class of Class
C Parity Stock shall be in arrears for six or more quarterly periods, the number
of directors constituting the AIMCO Board shall be increased by two and the
holders of Class C Preferred Stock (voting together as a single class with all
other shares of Class C Parity Stock which are entitled to similar voting
rights) will be entitled to vote for the election of the two additional
directors of AIMCO at any annual meeting of stockholders or at a special meeting
of the holders of the Class C Preferred Stock called for such purpose. The
affirmative vote of the holders of two thirds of the outstanding shares of Class
C Preferred Stock will be required to amend the Charter in any manner that would
adversely affect the rights of the holders of Class C Preferred Stock, and to
approve the issuance of any capital Stock that ranks senior to the Class C
Preferred Stock with respect to payment of dividends or upon liquidation,
dissolution, winding up or otherwise.
Subject to certain exceptions specified in the provisions of the Charter
establishing the terms of the Class C Preferred Stock, no holder may own shares
of Class C Preferred Stock with a value in excess of (i) 8.7% (or 15% in the
case of certain pension trusts described in the Code, investment companies
registered under the Investment Company Act of 1940 and Mr. Considine) of the
aggregate value of all shares of capital stock of AIMCO over (ii) the aggregate
value of all shares of capital stock of AIMCO other than Class C Preferred Stock
that are owned by such holder (the "Class C Preferred Ownership Limit"). The
AIMCO Board may waive such ownership limit if evidence satisfactory to the AIMCO
Board and AIMCO's tax counsel is presented that such ownership will not then or
in the future jeopardize AIMCO's status as a REIT. As a condition of such
waiver, the AIMCO Board may require opinions of counsel satisfactory to it
and/or an undertaking from the applicant with respect to preserving the REIT
status of AIMCO. If shares of Class C Preferred Stock in excess of the Class C
Preferred Ownership Limit, or shares of Class C Preferred Stock which would
result in AIMCO being "closely held," within the meaning of Section 856(h) of
the Code, or which would otherwise result in AIMCO failing to qualify as a REIT,
are issued or transferred to any person, such issuance or transfer will be null
and void to the intended transferee, and the intended transferee would acquire
no rights to the stock. Shares of Class C Preferred Stock transferred in excess
of the Class C Preferred Ownership Limit or other applicable limitations will
automatically be transferred to a trust for the exclusive benefit of one or more
qualifying charitable organizations to be designated by AIMCO. Shares
transferred to such trust will remain outstanding, and the trustee of the trust
will have all voting and dividend rights pertaining to such shares. The trustee
of such trust may transfer such shares to a person whose ownership of such
shares does not violate the Class C Preferred Ownership Limit or other
applicable limitation. Upon a sale of such shares by the trustee, the interest
of the charitable beneficiary will terminate, and the sales proceeds would be
paid, first, to the original intended transferee, to the extent of the lesser of
(a) such transferee's original purchase price (or the original market value of
such shares if purportedly acquired by gift or devise) and (b) the price
received by the trustee, and, second, any remainder to the charitable
beneficiary. In addition, shares of stock held in such trust are purchasable by
AIMCO for a 90-day period at a price equal to the lesser of the price paid for
the stock by the original intended transferee (or the original market value of
such shares if
21
<PAGE> 23
purportedly acquired by gift or devise) and the market price for the stock on
the date that AIMCO determines to purchase the stock. The 90-day period
commences on the date of the violative transfer or the date that the AIMCO Board
determines in good faith that a violative transfer or the date that the AIMCO
Board determines in good faith that a violative transfer has occurred, whichever
is later. All certificates representing shares of Class C Preferred Stock bear a
legend referring to the restrictions described above.
CLASS D PREFERRED STOCK
On February 19, 1998, AIMCO issued 4,200,000 shares of its 8 3/4% Class D
Preferred Stock in an underwritten public offering, for net proceeds of
approximately $101.5 million. The Class D Preferred Stock, with respect to
dividend rights and rights upon liquidation, dissolution or winding up of AIMCO,
ranks (a) prior or senior to the Common Stock and any other class or series of
capital stock of AIMCO if the holders of the Class D Preferred Stock shall be
entitled to the receipt of dividends or of amounts distributable upon
liquidation, dissolution or winding-up in preference or priority to the holders
of shares of such class or series ("Class D Junior Stock"), (b) on a parity with
the Class B Preferred Stock, the Class C Preferred Stock, the Class G Preferred
Stock and the Class H Preferred Stock and with any other class or series of
capital stock of AIMCO if the holders of such class or series of stock and the
Class D Preferred Stock shall be entitled to the receipt of dividends and of
amounts distributable upon liquidation, dissolution or winding-up in proportion
to their respective amounts of accrued and unpaid dividends per share or
liquidation preferences, without preference or priority of one over the other
("Class D Parity Stock") and (c) junior to any class or series of capital stock
of AIMCO if the holders of such class or series shall be entitled to the receipt
of dividends or amounts distributable upon liquidation, dissolution or winding
up in preference or priority to the holders of the Class D Preferred Stock
("Class D Senior Stock").
Holders of Class D Preferred Stock are entitled to receive cash dividends
at the rate of 8 3/4% per annum of the $25 liquidation preference (equivalent to
$2.1875 per annum per share). Such dividends are cumulative from the date of
original issue, and are payable quarterly on or before January 15, April 15,
July 15 and October 15 of each year. Upon any liquidation, dissolution or
winding up of AIMCO, before payment or distribution by AIMCO shall be made to or
set apart for the holders of any shares of Class D Junior Stock, the holders of
Class D Preferred Stock shall be entitled to receive a liquidation preference of
$25 per share (the "Class D Liquidation Preference"), plus an amount equal to
all accumulated, accrued and unpaid dividends to the date of final distribution
to such holders; but such holders shall not be entitled to any further payment.
If proceeds available for distribution shall be insufficient to pay the
preference described above and any liquidating payments on any other shares of
any class or series of Class D Parity Stock, then such proceeds shall be
distributed among the holders of Class D Preferred Stock and any such other
Class D Parity Stock ratably in the same proportion as the respective amounts
that would be payable on such Class D Preferred Stock and any such other Class D
Parity Stock if all amounts payable thereon were paid in full.
On and after February 19, 2003, AIMCO may redeem shares of Class D
Preferred Stock, in whole or in part, at a cash redemption price equal to 100%
of the Class D Liquidation Preference plus all accrued and unpaid dividends to
the date fixed for redemption. The Class D Preferred Stock has no stated
maturity and will not be subject to any sinking fund or mandatory redemption
provisions.
Holders of shares of Class D Preferred Stock have no voting rights, except
that if distributions on Class D Preferred Stock or any series or class of Class
D Parity Stock shall be in arrears for six or more quarterly periods, the number
of directors constituting the AIMCO Board shall be increased by two and the
holders of Class D Preferred Stock (voting together as a single class with all
other shares of Class D Parity Stock which are entitled to similar voting
rights) will be entitled to vote for the election of the two additional
directors of AIMCO at any annual meeting of stockholders or at a special meeting
of the holders of the Class D Preferred Stock called for the purpose. The
affirmative vote of the holders of two-thirds of the outstanding shares of Class
D Preferred Stock will be required to amend the Charter in any manner that would
adversely affect the rights of the holders of Class D Preferred Stock, and to
approve the issuance of any capital stock that ranks senior to the Class D
Preferred Stock with respect to payment of dividends or upon liquidation,
dissolution, winding up or otherwise.
22
<PAGE> 24
Subject to certain exceptions specified in the provisions of the Charter
establishing the terms of the Class D Preferred Stock, no holder may own shares
of Class D Preferred Stock with a value in excess of the excess of (i) 8.7% (or
15% in the case of certain pension trusts described in the Code, investment
companies registered under the Investment Company Act of 1940 and Mr. Considine)
of the aggregate value of all shares of capital stock of AIMCO over (ii) the
aggregate value of all shares of capital stock of AIMCO other than Class D
Preferred Stock that are owned by such holder (the "Class D Preferred Ownership
Limit"). The AIMCO Board may waive such ownership limit if evidence satisfactory
to the AIMCO Board and AIMCO's tax counsel is presented that such ownership will
not then or in the future jeopardize AIMCO's status as a REIT. As a condition of
such waiver, AIMCO Board may require opinions of counsel satisfactory to it
and/or an undertaking from the applicant with respect to preserving the REIT
status of AIMCO. If shares of Class D Preferred Stock in excess of the Class D
Preferred Ownership Limit, or shares of Class D Preferred Stock which would
result in AIMCO being "closely held," within the meaning of Section 856(h) of
the Code, or which would otherwise result in AIMCO failing to qualify as a REIT,
are issued or transferred to any person, such issuance or transfer will be null
and void to the intended transferee, and the intended transferee would acquire
no rights to the stock. Shares of Class D Preferred Stock transferred in excess
of the Class D Preferred Ownership Limit or other applicable limitations will
automatically be transferred to a trust for the exclusive benefit of one or more
qualifying charitable organizations to be designated by AIMCO. Shares
transferred to such trust will remain outstanding, and the trustee of the trust
will have all voting and dividend rights pertaining to such shares. The trustee
of such trust may transfer such shares to a person whose ownership of such
shares does not violate the Class D Preferred Ownership Limit or other
applicable limitation. Upon a sale of such shares by the trustee, the interest
of the charitable beneficiary will terminate, and the sales proceeds would be
paid, first, to the original intended transferee, to the extent of the lesser of
(a) such transferee's original purchase price (or the original market value of
such shares if purportedly acquired by gift or devise) and (b) the price
received by the trustee, and, second, any remainder to the charitable
beneficiary. In addition, shares of stock held in such trust are purchasable by
AIMCO for a 90-day period at a price equal to the lesser of the price paid for
the stock by the original intended transferee (or the original market value of
such shares if purportedly acquired by gift or devise) and the market price for
the stock on the date that AIMCO determines to purchase the stock. The 90-day
period commences on the date of the violative transfer or the date that the
AIMCO Board determines in good faith that a violative transfer or the date that
the AIMCO Board determines in good faith that a violative transfer has occurred,
whichever is later. All certificates representing shares of Class D Preferred
Stock bear a legend referring to the restrictions described above.
CLASS G PREFERRED STOCK
On July 15, 1998, AIMCO issued 4,050,000 shares of its Class G Preferred
Stock in an underwritten public offering for net proceeds of approximately
$101.2 million. The Class G Preferred Stock, with respect to dividend rights and
rights upon liquidation, dissolution or winding up of AIMCO, ranks (a) prior or
senior to the Common Stock and any other class or series of capital Stock of
AIMCO if the holders of the Class G Preferred Stock shall be entitled to the
receipt of dividends or of amounts distributable upon liquidation, dissolution
or winding-up in preference or priority to the holders of shares of such class
or series ("Class G Junior Stock"), (b) on a parity with the Class B Preferred
Stock, the Class C Preferred Stock, the Class D Preferred Stock and the Class H
Preferred Stock and with any other class or series of capital stock of AIMCO if
the holders of such class or series of stock and the Class G Preferred Stock
shall be entitled to the receipt of dividends and of amounts distributable upon
liquidation, dissolution or winding-up in proportion to their respective amounts
of accrued and unpaid dividends per share or liquidation preferences, without
preference or priority of one over the other ("Class G Parity Stock") and (c)
junior to any class or series of capital stock of AIMCO if the holders of such
class or series shall be entitled to the receipt of dividends or amounts
distributable upon liquidation, dissolution or winding-up in preference or
priority to the holders of the Class G Preferred Stock ("Class G Senior Stock").
Holders of Class G Preferred Stock are entitled to receive cash dividends
at the rate of 9 3/8% per annum of the $25 liquidation preference (equivalent to
$2.34375 per annum per share). Such dividends are cumulative from the date of
original issue, and are payable quarterly on or before January 15, April 15,
July 15 and October 15 of each year, commencing October 15, 1998. Upon any
liquidation, dissolution or winding up of
23
<PAGE> 25
AIMCO, before payment or distribution by AIMCO shall be made to or set apart for
the holders of any shares of Class G Junior Stock, the holders of Class G
Preferred Stock shall be entitled to receive a liquidation preference of $25 per
share (the "Class G Liquidation Preference"), plus an amount equal to all
accumulated, accrued and unpaid dividends to the date of final distribution to
such holders; but such holders shall not be entitled to any further payment. If
proceeds available for distribution shall be insufficient to pay the preference
described above and any liquidating payments on any other shares of any class or
series of Class G Parity Stock, then such proceeds shall be distributed among
the holders of Class G Preferred Stock and any such other Class G Parity Stock
ratably in the same proportion as the respective amount that would be payable on
such Class G Preferred Stock and any such other Class G Parity Stock if all
amounts payable thereon were paid in full.
On and after July 15, 2008, AIMCO may redeem shares of Class G Preferred
Stock, in whole or in part, at a cash redemption price equal to 100% of the
Class G Liquidation Preference plus all accrued and unpaid dividends to the date
fixed for redemption. The Class G Preferred Stock has no stated maturity and
will not be subject to any sinking fund or mandatory redemption provisions.
Holders of shares of Class G Preferred Stock have no voting rights, except
that if distributions on Class G Preferred Stock or any series or class of Class
G Parity Stock shall be in arrears for six or more quarterly periods, the number
of directors constituting the AIMCO Board shall be increased by two and the
holders of Class G Preferred Stock (voting together as a single class with all
other shares of Class G Parity Stock, which are entitled to similar voting
rights) will be entitled to vote for the election of the two additional
directors of AIMCO at any annual meeting of stockholders or at a special meeting
of the holders of the Class G Preferred Stock called for the purpose. The
affirmative vote of the holders of two-thirds of the outstanding shares of Class
G Preferred Stock will be required to amend the Charter in any manner that would
adversely affect the rights of the holders of Class G Preferred Stock, and to
approve the issuance of any capital Stock that ranks senior to the Class G
Preferred Stock with respect to payment of dividends or upon liquidation,
dissolution, winding up or otherwise.
Subject to certain exceptions specified in the provisions of the Charter
establishing the terms of the Class G Preferred Stock, no holder may own shares
of Class G Preferred Stock with a value in excess of the excess of (i) 8.7% (or
15% in the case of certain pension trusts described in the Code, investment
companies registered under the Investment Company Act of 1940 and Mr. Considine)
of the aggregate value of all shares of capital Stock of AIMCO over (ii) the
aggregate value of all shares of capital Stock of AIMCO other than Class G
Preferred Stock that are owned by such holder (the "Class G Preferred Ownership
Limit"). The AIMCO Board may waive such ownership limit if evidence satisfactory
to the AIMCO Board and AIMCO's tax counsel is presented that such ownership will
not then or in the future jeopardize AIMCO's status as a REIT. As a condition of
such waiver, the AIMCO Board may require opinions of counsel satisfactory to it
and/or an undertaking from the applicant with respect to preserving the REIT
status of AIMCO. If shares of Class G Preferred Stock in excess of the Class G
Preferred Ownership Limit, or shares of Class G Preferred Stock which would
result in AIMCO being "closely held," within the meaning of Section 856(h) of
the Code, or which would otherwise result in AIMCO failing to qualify as a REIT,
are issued or transferred to any person, such issuance or transfer will be null
and void to the intended transferee, and the intended transferee would acquire
no rights to the Stock. Shares of Class G Preferred Stock transferred in excess
of the Class G Preferred Ownership Limit or other applicable limitations will
automatically be transferred to a trust for the exclusive benefit of one or more
qualifying charitable organizations to be designated by AIMCO. Shares
transferred to such trust will remain outstanding, and the trustee of the trust
will have all voting and dividend rights pertaining to such shares. The trustee
of such trust may transfer such shares to a person whose ownership of such
shares does not violate the Class G Preferred Ownership Limit or other
applicable limitation. Upon a sale of such shares by the trustee, the interest
of the charitable beneficiary will terminate, and the sales proceeds would be
paid, first, to the original intended transferee, to the extent of the lesser of
(a) such transferee's original purchase price (or the original market value of
such shares if purportedly acquired by gift or devise) and (b) the price
received by the trustee, and, second, any remainder to the charitable
beneficiary. In addition, shares of Stock held in such trust are purchasable by
AIMCO for a 90-day period at a price equal to the lesser of the price paid for
the Stock by the original intended transferee (or the
24
<PAGE> 26
original market value of such shares if purportedly acquired by gift or devise)
and the market price for the Stock on the date that AIMCO determines to purchase
the Stock. The 90-day period commences on the date of the violative transfer or
the date that the AIMCO Board determines in good faith that a violative transfer
or the date that the AIMCO Board determines in good faith that a violative
transfer has occurred, whichever is later. All certificates representing shares
of Class G Preferred Stock bear a legend referring to the restrictions described
above.
CLASS H PREFERRED STOCK
On August 11, 1998, AIMCO entered into an underwriting agreement to issue
up to 2,300,000 shares (2,000,000 shares plus an underwriter over-allotment
option of 300,000 shares) of its Class H Preferred Stock for net proceeds of
approximately $48.1 million, or, if the over-allotment option is exercised,
approximately $55.4 million. The Class H Preferred Stock will, with respect to
dividend rights and rights upon liquidation, dissolution or winding up of AIMCO,
rank (a) prior or senior to the Common Stock and any other class or series of
capital Stock of AIMCO if the holders of the Class H Preferred Stock shall be
entitled to the receipt of dividends or of amounts distributable upon
liquidation, dissolution or winding-up in preference or priority to the holders
of shares of such class or series ("Class H Junior Stock"), (b) on a parity with
the Class B Preferred Stock, the Class C Preferred Stock, the Class D Preferred
Stock and the Class G Preferred Stock and with any other class or series of
capital stock of AIMCO if the holders of such class or series of stock and the
Class H Preferred Stock shall be entitled to the receipt of dividends and of
amounts distributable upon liquidation, dissolution or winding-up in proportion
to their respective amounts of accrued and unpaid dividends per share or
liquidation preferences, without preference or priority of one over the other
("Class H Parity Stock") and (c) junior to any class or series of capital stock
of AIMCO if the holders of such class or series shall be entitled to the receipt
of dividends or amounts distributable upon liquidation, dissolution or
winding-up in preference or priority to the holders of the Class H Preferred
Stock ("Class H Senior Stock").
Holders of Class H Preferred Stock are entitled to receive cash dividends
at the rate of 9 1/2% per annum of the $25 liquidation preference (equivalent to
$2.375 per annum per share). Such dividends are cumulative from the date of
original issue, and are payable quarterly on or before January 15, April 15,
July 15 and October 15 of each year, commencing October 15, 1998. Upon any
liquidation, dissolution or winding up of AIMCO, before payment or distribution
by AIMCO shall be made to or set apart for the holders of any shares of Class H
Junior Stock, the holders of Class H Preferred Stock shall be entitled to
receive a liquidation preference of $25 per share (the "Class H Liquidation
Preference"), plus an amount equal to all accumulated, accrued and unpaid
dividends to the date of final distribution to such holders; but such holders
shall not be entitled to any further payment. If proceeds available for
distribution shall be insufficient to pay the preference described above and any
liquidating payments on any other shares of any class or series of Class H
Parity Stock, then such proceeds shall be distributed among the holders of Class
H Preferred Stock and any such other Class H Parity Stock ratably in the same
proportion as the respective amount that would be payable on such Class H
Preferred Stock and any such other Class H Parity Stock if all amounts payable
thereon were paid in full.
On and after August 14, 2003, AIMCO may redeem shares of Class H Preferred
Stock, in whole or in part, at a cash redemption price equal to 100% of the
Class H Liquidation Preference plus all accrued and unpaid dividends to the date
fixed for redemption. The Class H Preferred Stock has no stated maturity and
will not be subject to any sinking fund or mandatory redemption provisions.
Holders of shares of Class H Preferred Stock have no voting rights, except
that if distributions on Class H Preferred Stock or any series or class of Class
H Parity Stock shall be in arrears for six or more quarterly periods, the number
of directors constituting the AIMCO Board shall be increased by two and the
holders of Class H Preferred Stock (voting together as a single class with all
other shares of Class H Parity Stock, which are entitled to similar voting
rights) will be entitled to vote for the election of the two additional
directors of AIMCO at any annual meeting of stockholders or at a special meeting
of the holders of the Class H Preferred Stock called for the purpose. The
affirmative vote of the holders of two-thirds of the outstanding shares of Class
H Preferred Stock will be required to amend the Charter in any manner that would
adversely affect the rights of the holders of Class H Preferred Stock, and to
approve the issuance of any capital Stock that ranks
25
<PAGE> 27
senior to the Class H Preferred Stock with respect to payment of dividends or
upon liquidation, dissolution, winding up or otherwise.
Subject to certain exceptions specified in the provisions of the Charter
establishing the terms of the Class H Preferred Stock, no holder may own shares
of Class H Preferred Stock with a value in excess of the excess of (i) 8.7% (or
15% in the case of certain pension trusts described in the Code, investment
companies registered under the Investment Company Act of 1940 and Mr. Considine)
of the aggregate value of all shares of capital Stock of AIMCO over (ii) the
aggregate value of all shares of capital Stock of AIMCO other than Class H
Preferred Stock that are owned by such holder (the "Class H Preferred Ownership
Limit"). The AIMCO Board may waive such ownership limit if evidence satisfactory
to the AIMCO Board and AIMCO's tax counsel is presented that such ownership will
not then or in the future jeopardize AIMCO's status as a REIT. As a condition of
such waiver, the AIMCO Board may require opinions of counsel satisfactory to it
and/or an undertaking from the applicant with respect to preserving the REIT
status of AIMCO. If shares of Class H Preferred Stock in excess of the Class H
Preferred Ownership Limit, or shares of Class H Preferred Stock which would
result in AIMCO being "closely held," within the meaning of Section 856(h) of
the Code, or which would otherwise result in AIMCO failing to qualify as a REIT,
are issued or transferred to any person, such issuance or transfer will be null
and void to the intended transferee, and the intended transferee would acquire
no rights to the Stock. Shares of Class H Preferred Stock transferred in excess
of the Class H Preferred Ownership Limit or other applicable limitations will
automatically be transferred to a trust for the exclusive benefit of one or more
qualifying charitable organizations to be designated by AIMCO. Shares
transferred to such trust will remain outstanding, and the trustee of the trust
will have all voting and dividend rights pertaining to such shares. The trustee
of such trust may transfer such shares to a person whose ownership of such
shares does not violate the Class H Preferred Ownership Limit or other
applicable limitation. Upon a sale of such shares by the trustee, the interest
of the charitable beneficiary will terminate, and the sales proceeds would be
paid, first, to the original intended transferee, to the extent of the lesser of
(a) such transferee's original purchase price (or the original market value of
such shares if purportedly acquired by gift or devise) and (b) the price
received by the trustee, and, second, any remainder to the charitable
beneficiary. In addition, shares of Stock held in such trust are purchasable by
AIMCO for a 90-day period at a price equal to the lesser of the price paid for
the Stock by the original intended transferee (or the original market value of
such shares if purportedly acquired by gift or devise) and the market price for
the Stock on the date that AIMCO determines to purchase the Stock. The 90-day
period commences on the date of the violative transfer or the date that the
AIMCO Board determines in good faith that a violative transfer or the date that
the AIMCO Board determines in good faith that a violative transfer has occurred,
whichever is later. All certificates representing shares of Class H Preferred
Stock bear a legend referring to the restrictions described above.
CLASS B COMMON STOCK
In connection with the initial formation of AIMCO, Terry Considine, Peter
Kompaniez, Steven Ira and Robert P. Lacy (a former officer of AIMCO) acquired an
aggregate of 650,000 shares of Class B Common Stock. The Charter, which
initially authorized 750,000 shares of Class B Common Stock, was amended in June
1998 to authorize 262,500 shares of Class B Common Stock, of which 162,500
shares are issued and outstanding. The Class B Common Stock does not have voting
or dividend rights and, unless converted into Class A Common Stock, as described
below, is subject to repurchase by AIMCO as described below. As of December 31
of each of the years 1994 through 1998 (each, a "Year-End Testing Date"), a
number of the shares of Class B Common Stock outstanding as of such date (the
"Eligible Class B Shares") become eligible for automatic conversion (subject to
the Ownership Limit) into an equal number of shares of Class A Common Stock
(subject to adjustment upon the occurrence of certain events in respect of the
Class A Common Stock, including stock dividends, subdivisions, combinations and
reclassifications). Once Class B Common Stock has been converted into Class A
Common Stock, holders of such shares of converted Class A Common Stock will have
voting and dividend rights of Class A Common Stock generally. Once converted or
forfeited, the Class B Common Stock may not be reissued by AIMCO.
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<PAGE> 28
The Eligible Class B Shares convert to Class A Common Stock if (i) AIMCO's
Funds from Operations Per Share (as defined below) reaches certain annual and
cumulative growth targets and (ii) the average market price for a share of Class
A Common Stock for a 90 calendar day period beginning on any day on or after the
October 1 immediately preceding the relevant Year-End Testing Date equals or
exceeds a specified target price. "Funds from Operations Per Share" or "FFO Per
Share" means, for any period, (i) net income (loss), computed in accordance with
generally accepted accounting principles, excluding gains (or losses) from debt
restructuring and sales of property, plus depreciation and amortization, and
after adjustments for unconsolidated partnerships and joint ventures, less any
preferred stock dividend payments, divided by (ii) the sum of (a) the number of
shares of the Class A Common Stock outstanding on the last day of such period
(excluding any shares of the Class A Common Stock into which shares of the Class
B Common Stock shall have been converted as a result of the conversion of shares
of the Class B Common Stock on the last day of such period) and (b) the number
of shares of the Class A Common Stock issuable to acquire units of limited
partnership that (x) may be tendered for redemption in any limited partnership
in which AIMCO serves as general partner and (y) are outstanding on the last day
of such period.
Set forth below for each of the remaining Year-End Testing Dates is (i) the
number of shares of Class B Common Stock that become Eligible Class B Shares as
of such date, (ii) the annual FFO Per Share growth target (as a percentage
increase in FFO Per Share from the prior year), (iii) the cumulative FFO Per
Share growth target (in FFO Per Share) and (iv) the average market price target:
<TABLE>
<CAPTION>
ANNUAL FFO PER CUMULATIVE FFO PER
ELIGIBLE CLASS B SHARE GROWTH SHARE GROWTH AVERAGE MARKET
YEAR-END TESTING DATE SHARES(1) TARGET TARGET PRICE TARGET
--------------------- ---------------- -------------- ------------------ --------------
<S> <C> <C> <C> <C>
December 31, 1998........ 162,500 8.5% $2.760 $26.373
</TABLE>
- ---------------
(1) Assumes that only the shares of Class B Common Stock outstanding as of
December 31, 1997 remain outstanding until converted into shares of Class A
Common Stock.
Any Class B Common Stock that has not been converted into Class A Common
Stock following December 31, 1998 will be subject to repurchase by AIMCO at a
price of $0.10 per share. Class B Common Stock is also subject to automatic
conversion upon the occurrence of certain events, including a change of control
(as defined in The Charter). The AIMCO Board may increase the number of shares
which are eligible for conversion as of any Year-End Testing Date and may, under
certain circumstances, accelerate the conversion of outstanding Class B Common
Stock at such time and in such amount as it may determine appropriate.
All of the 65,000 shares of Class B Common Stock eligible for conversion as
of the December 31, 1994 Year-End Testing Date, all of the 130,000 shares of
Class B Common Stock eligible for conversion as of the December 31, 1995
Year-End Testing Date, all of the 130,000 shares of Class B Common Stock
eligible for conversion as of December 31, 1996 and all of the 162,500 shares of
Class B Common Stock eligible for conversion as of December 31, 1997, have been
converted into shares of Class A Common Stock. As of December 31, 1997, the
outstanding Class B Common Stock was held as follows: 93,428 shares by Mr.
Considine, 41,438 shares by Mr. Kompaniez, 13,821 shares by Mr. Ira and 13,813
shares by Mr. Lacy.
27
<PAGE> 29
DESCRIPTION OF WARRANTS
GENERAL
AIMCO may issue, together with other Securities or separately, warrants for
the purchase of Debt Securities, Preferred Stock or Class A Common Stock, and
the AIMCO Operating Partnership may issue warrants for the purchase of Debt
Securities (the "Warrants"). The Warrants may be issued under a Warrant
Agreement (each, a "Warrant Agreement") to be entered into between AIMCO or the
AIMCO Operating Partnership and a bank or trust company, as warrant agent (the
"Warrant Agent"), as set forth in the applicable Prospectus Supplement relating
to any or all Warrants in respect of which this Prospectus is being delivered.
The Warrant Agent will act solely as an agent of AIMCO or the AIMCO Operating
Partnership in connection with the Warrants of a particular series and will not
assume any obligation or relationship of agency or trust for or with any holders
or beneficial owners of Warrants. The Warrant Agreement for each Warrant,
including the forms of certificates representing the Warrants ("Warrant
Certificates"), will be filed as an exhibit to, or incorporated by reference in,
the Registration Statement of which this Prospectus forms a part at or prior to
the time of the issuance of such Warrants.
The following description sets forth certain general terms and provisions
of the Warrants to which any Prospectus Supplement may relate. The particular
terms of the Warrants to which any Prospectus Supplement may relate and the
extent, if any, to which such general provisions may apply to the Warrants so
offered will be described in the applicable Prospectus Supplement. Capitalized
terms used in this section which are not otherwise defined in this Prospectus
shall have the meanings set forth in the Warrant Agreement and Warrant
Certificate. The following summary of certain provisions of the Warrants,
Warrant Agreement and Warrant Certificate does not purport to be complete and is
subject to, and is qualified in its entirety by express reference to, all the
provisions of the Warrant Agreement and Warrant Certificate, including the
definitions therein of certain terms.
Reference is made to the applicable Prospectus Supplement for the terms of
Warrants in respect of which this Prospectus is being delivered, the Warrant
Agreement relating to such Warrants and the Warrant Certificates representing
such Warrants, including the following: (i) the designation, aggregate principal
amount and terms of the Debt Securities of AIMCO or the AIMCO Operating
Partnership or the designation and terms of the Preferred Stock, if any,
purchasable upon exercise of such Warrants; (ii) the procedures and conditions
relating to the exercise of such Warrants; (iii) the designation and terms of
any related Securities with which such Warrants are issued and the number of
such Warrants issued with each such Security; (iv) the date, if any, on and
after which such Warrants and the related Securities will be separately
transferable; (v) the offering price of the Warrants, if any; (vi) the principal
amount of Debt Securities of AIMCO or the AIMCO Operating Partnership or the
number of shares of Preferred Stock or Common Stock purchasable upon exercise of
each Warrant and the price at which such principal amount of Debt Securities of
AIMCO or the AIMCO Operating Partnership or shares of Preferred Stock or Class A
Common Stock may be purchased upon such exercise, or the method of determining
such number and price; (vii) the date on which the right to exercise such
Warrants shall commence and the date on which such right shall expire; (viii) a
discussion of United States Federal income tax considerations applicable to the
ownership or exercise of such Warrants; (ix) whether the Warrants represented by
the Warrant Certificates will be issued in registered or bearer form, and, if
registered, where they may be transferred and registered; (x) call provisions of
such Warrants, if any; and (xi) any other terms of the Warrants.
Warrant Certificates will be exchangeable for new Warrant Certificates of
different denominations and Warrants may be exercised at the corporate trust
office of the Warrant Agent or any other office indicated in the applicable
Prospectus Supplement. Prior to the exercise of their Warrants, holders of
Warrants will not have any of the rights of holders of the Securities
purchasable upon such exercise and will not be entitled to payments of principal
of (or premium, if any) or interest, if any, on the Debt Securities of AIMCO or
the AIMCO Operating Partnership purchasable upon such exercise or to any
dividend payments or voting rights that holders of the Preferred Stock or Common
Stock purchasable upon such exercise may be entitled to.
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Each Warrant will entitle the holder to purchase for cash such principal
amount of Debt Securities of AIMCO or the AIMCO Operating Partnership, or such
number of shares of Preferred Stock or Class A Common Stock, at such exercise
price as shall, in each case, be set forth in, or be determinable as set forth
in, the applicable Prospectus Supplement relating to the Warrants offered
thereby. Unless otherwise specified in the applicable Prospectus Supplement,
Warrants may be exercised at any time up to 5:00 p.m. New York City time on the
expiration date set forth in the applicable Prospectus Supplement. After 5:00
p.m. New York City time on the expiration date, unexercised Warrants will become
void.
Warrants may be exercised as set forth in the applicable Prospectus
Supplement relating to the Warrants. Upon receipt of payment and the Warrant
Certificate properly completed and duly executed at the corporate trust office
of the Warrant Agent on any other office indicated in the applicable Prospectus
Supplement, AIMCO or, the AIMCO Operating Partnership, as the case may be, will,
as soon as practicable, forward the Securities purchasable upon such exercise.
If less than all of the Warrants represented by such Warrant Certificate are
exercised, a new Warrant Certificate will be issued for the remaining amount of
Warrants.
PLAN OF DISTRIBUTION
AIMCO or the AIMCO Operating Partnership may sell the Securities to one or
more underwriters for public offering and sale by them or may sell the
Securities to investors directly or through agents or dealers. Any such
underwriter, agent or dealer involved in the offer and sale of the Securities
will be named in the applicable Prospectus Supplement.
Underwriters may offer and sell the Securities at a fixed price or prices,
which may be changed, or from time to time at market prices prevailing at the
time of sale, at prices related to the prevailing market prices at the time of
sale or at negotiated prices. AIMCO or the AIMCO Operating Partnership also may,
from time to time, authorize underwriters acting as AIMCO's or the AIMCO
Operating Partnership's agents to offer and sell the Securities upon the terms
and conditions set forth in the applicable Prospectus Supplement. In connection
with the sale of Securities, underwriters may be deemed to have received
compensation from AIMCO or the AIMCO Operating Partnership in the form of
underwriting discounts or commissions and may also receive commissions from
purchasers of Securities for whom they may act as agent. Underwriters may sell
Securities to or through dealers, and such dealers may receive compensation in
the form of discounts, concessions or commissions (which may be changed from
time to time) from the underwriters and/or commissions from the purchasers for
whom they may act as agent.
Any underwriting compensation paid by AIMCO or the AIMCO Operating
Partnership to underwriters or agents in connection with the offering of
Securities, and any discounts, concessions or commissions allowed by
underwriters to participating dealers, will be set forth in the applicable
Prospectus Supplement. Underwriters, dealers and agents participating in the
distribution of the Securities may be deemed to be underwriters under the
Securities Act, and any discounts and commissions received by them and any
profit realized by them on resale of the Securities may be deemed to be
underwriting discounts and commissions under the Securities Act. Underwriters,
dealers and agents may be entitled under agreements entered into with AIMCO or
the AIMCO Operating Partnership, to indemnification against and contribution
toward certain civil liabilities, including liabilities under the Securities
Act.
If a dealer is utilized in the sale of the Securities in respect of which
this Prospectus is delivered, AIMCO or the AIMCO Operating Partnership will sell
such Securities to such dealer, as principal. The dealer may then resell such
Securities to the public at varying prices to be determined by such dealer at
the time of resale.
If so indicated in the applicable Prospectus Supplement, AIMCO or the AIMCO
Operating Partnership will authorize dealers acting as AIMCO's or the AIMCO
Operating Partnership's agents to solicit offers by certain institutions to
purchase Securities from AIMCO or the AIMCO Operating Partnership at the public
offering price set forth in such Prospectus Supplement pursuant to Delayed
Delivery Contracts ("Contracts") providing for payment and delivery on the date
or dates stated in such Prospectus Supplement. Each Contract will be for an
amount not less than, and the aggregate principal amount of Securities sold
pursuant to Contracts shall not be less nor more than, the respective amounts
stated in the applicable Prospectus
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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 AIMCO or the
AIMCO Operating Partnership. The terms and conditions of any Contracts will be
set forth in any Prospectus Supplement relating to the Securities being offered.
Agents and underwriters will have no responsibility in respect of the delivery
or performance of Contracts.
Until the distribution of the Securities offered pursuant to any Prospectus
Supplement is completed, the Commission's rules may limit the ability of any
underwriter participating in such distribution to bid for and purchase the
Securities offered thereby and other securities of AIMCO or the AIMCO Operating
Partnership. As an exception to these rules, the underwriters are permitted to
engage in certain transactions that stabilize or maintain the price of such
securities. Such transactions consist of bids or purchases for the purpose of
pegging, fixing or maintaining the price of such securities. If any such
underwriter creates a short position in such securities in connection with the
offering, such underwriter may reduce such short position by purchasing
securities.
In general, bids for or purchases of a security for the purpose of
stabilization or to reduce a short position could cause the price of the
security to be higher than it might otherwise be in the absence of such bids or
purchases.
Neither AIMCO nor the AIMCO Operating Partnership nor any underwriter
participating in any distribution makes any representation or prediction as to
the direction or magnitude of any effect that the transactions described above
may have on the price of the offered Securities or other securities of AIMCO or
the AIMCO Operating Partnership. In addition, neither AIMCO nor the AIMCO
Operating Partnership nor any such underwriter makes any representation that
such underwriter will engage in such transactions or that such transactions,
once commenced, will not be discontinued without notice.
Certain of the underwriters, if any, and their affiliates may be customers
of, engage in transactions with and perform services for AIMCO or the AIMCO
Operating Partnership in the ordinary course of business.
The Securities may or may not be listed on a national securities exchange.
No assurances can be given that there will be a market for any of the
Securities.
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CERTAIN FEDERAL INCOME TAX CONSEQUENCES
The following is a summary of certain federal income tax consequences
resulting from the acquisition of, holding, exchanging, and otherwise disposing
of Securities. This discussion is based upon the Code, the Treasury Regulations,
rulings issued by the IRS, and judicial decisions, all in effect as of the date
of this Registration Statement and all of which are subject to change, possibly
retroactively. Such summary is also based on the assumptions that the operation
of AIMCO, the AIMCO Operating Partnership and the Subsidiary Partnerships will
be in accordance with their respective organizational documents and partnership
agreements. This summary is for general information only and does not purport to
discuss all aspects of federal income taxation which may be important to a
particular investor in light of its investment or tax circumstances, or to
certain types of investors subject to special tax rules (including financial
institutions, broker-dealers, insurance companies, and, except to the extent
discussed below, tax-exempt organizations and foreign investors, as determined
for United States federal income tax purposes). This summary assumes that
investors will hold their Securities as "capital assets" (generally, property
held for investment). No advance ruling has been or will be sought from the IRS
regarding any matter discussed in this Registration Statement.
THE FEDERAL INCOME TAX TREATMENT OF HOLDERS OF SECURITIES DEPENDS IN SOME
INSTANCES ON DETERMINATIONS OF FACT AND INTERPRETATIONS OF COMPLEX PROVISIONS OF
FEDERAL INCOME TAX LAW FOR WHICH NO CLEAR PRECEDENT OR AUTHORITY MAY BE
AVAILABLE. ACCORDINGLY, EACH PROSPECTIVE INVESTOR SHOULD CONSULT ITS TAX ADVISOR
REGARDING THE FEDERAL, STATE, LOCAL AND FOREIGN TAX CONSEQUENCES OF ACQUIRING,
HOLDING, EXCHANGING, OR OTHERWISE DISPOSING OF SECURITIES AND OF AIMCO'S
ELECTION TO BE SUBJECT TO TAX, FOR FEDERAL INCOME TAX PURPOSES, AS A REAL ESTATE
INVESTMENT TRUST.
GENERAL
The REIT provisions of the Code are highly technical and complex. The
following summary sets forth certain aspects of the provisions of the Code that
govern the federal income tax treatment of a REIT and its stockholders. This
summary is qualified in its entirety by the applicable Code provisions, Treasury
Regulations, and administrative and judicial interpretations thereof, all of
which are subject to change, possibly retroactively.
AIMCO has elected to be taxed as a REIT under the Code commencing with its
taxable year ending December 31, 1994, and AIMCO intends to continue such
election. In the opinion of Skadden, Arps, Slate, Meagher & Flom LLP
("Counsel"), commencing with the AIMCO's initial taxable year ended December 31,
1994, AIMCO was organized in conformity with the requirements for qualification
as a REIT, and its proposed method of operation, and its actual method of
operation since its formation, will enable it to meet the requirements for
qualification and taxation as a REIT under the Code. It must be emphasized that
this opinion is based and conditioned upon certain assumptions and
representations made by AIMCO as to factual matters (including representations
of AIMCO concerning its business and properties as set forth in this
Registration Statement). The opinion is expressed as of its date and Counsel has
no obligation to advise holders of Securities of any subsequent change in the
matters stated, represented or assumed or any subsequent change in the
applicable law. Moreover, such qualification and taxation as a REIT depends upon
AIMCO's ability to meet, through actual annual operating results, distribution
levels and diversity of stock ownership, the various qualification tests imposed
under the Code as discussed below, the results of which will not be reviewed by
Counsel. Accordingly, no assurance can be given that the actual results of
AIMCO's operation for any tax year will satisfy such requirements. See
"-- Failure to Qualify." An opinion of counsel is not binding on the IRS, and no
assurance can be given that the IRS will not challenge AIMCO's eligibility for
taxation as a REIT.
Provided AIMCO qualifies for taxation as a REIT, it will generally not be
subject to federal corporate income tax on its net income that is currently
distributed to its stockholders. This treatment substantially eliminates the
"double taxation" (at the corporate and stockholder levels) that generally
results from investment in a corporation. However, notwithstanding AIMCO's
qualification as a REIT, AIMCO will be
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subject to federal income tax as follows: First, AIMCO will be taxed at regular
corporate rates on any undistributed REIT taxable income, including
undistributed net capital gains. Second, under certain circumstances, AIMCO may
be subject to the "alternative minimum tax" on its items of tax preference.
Third, if AIMCO has net income from prohibited transactions (which are, in
general, certain sales or other dispositions of property held primarily for sale
to customers in the ordinary course of business other than foreclosure
property), such income will be subject to a 100% tax. Fourth, if AIMCO should
fail to satisfy the 75% gross income test or the 95% gross income test (as
discussed below), but 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 AIMCO fails the 75% or 95% test multiplied by (b) a fraction
intended to reflect AIMCO's profitability. Fifth, if AIMCO should fail to
distribute during each calendar year at least the sum of (i) 85% of its REIT
ordinary income for such year, (ii) 95% of its REIT capital gain net income for
such year (other than certain long-term capital gains that AIMCO elects to
retain and pay the tax thereon), and (iii) any undistributed taxable income from
prior periods, AIMCO would be subjected to a 4% excise tax on the excess of such
required distribution over the amounts actually distributed. Sixth, if AIMCO
acquires assets from a subchapter C corporation in a transaction in which the
adjusted tax basis of the assets in the hands of AIMCO is determined by
reference to the adjusted tax basis of such assets in the hands of the
subchapter C corporation, under Treasury Regulations not yet promulgated, the
subchapter C corporation would be required to recognize any net built-in gain
that would have been realized if the Subchapter C corporation had liquidated on
the day before the date of the transfer. Pursuant to IRS Notice 88-19, AIMCO may
elect, in lieu of the treatment described above, to be subject to tax if it
recognizes gain on the disposition of any such assets during the ten-year period
beginning on the day on which it acquires such assets at the highest regular
corporate tax rate on such gain to the extent of the excess, if any, of the fair
market value over the adjusted basis of such asset as of the beginning of the
ten-year period ("Built-in Gain"). AIMCO intends to make such an election and,
therefore, will be taxed at the highest regular corporate rate on such Built-in
Gain if, and to the extent, such assets are sold within the specified ten-year
period. It should be noted that AIMCO intends to acquire a significant amount of
assets with Built-in Gain and a taxable disposition by AIMCO of these assets
within ten years of their acquisitions would subject AIMCO to tax under the
foregoing rule. Seventh, AIMCO could be subject to foreign taxes on its
investments and activities in foreign jurisdictions. In addition, AIMCO could
also be subject to tax in certain situations and on certain transactions not
presently contemplated.
Requirements for Qualification
The Code defines a REIT as a corporation, trust or association (1) that 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 the special Code provisions applicable to REITs; (4) that 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) in which, during the last half of each taxable year, not more than 50% in
value of the outstanding stock is owned, directly or indirectly, by five or
fewer individuals (as defined in the Code to include certain entities); and (7)
which meets certain other tests described below (including with respect to the
nature of its income and assets). The Code provides that conditions (1) through
(4) must be met during the entire taxable year, and that 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. AIMCO's Charter
provides certain restrictions regarding transfers of its shares, which
provisions are intended to assist AIMCO in satisfying the share ownership
requirements described in conditions (5) and (6) above.
To monitor AIMCO's compliance with the share ownership requirements, AIMCO
is required to maintain records regarding the actual ownership of its shares. To
do so, AIMCO must demand written statements each year from the record holders of
certain percentages of its stock in which the record holders are to disclose the
actual owners of the shares (i.e., the persons required to include in gross
income the dividends paid by AIMCO). A list of those persons failing or refusing
to comply with this demand must be maintained as part of AIMCO's records. A
stockholder who fails or refuses to comply with the demand must submit a
statement with its tax return disclosing the actual ownership of the shares and
certain other information.
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In addition, a corporation may not elect to become a REIT unless its
taxable year is the calendar year. AIMCO satisfies this requirement.
Ownership of Partnership Interests
In the case of a REIT that is a partner in a partnership, Treasury
Regulations provide that the REIT is deemed to own its proportionate share of
the partnership's assets and to earn its proportionate share of the
partnership's income. In addition, the assets and gross income of the
partnership retain the same character in the hands of the REIT for purposes of
the gross income and asset tests applicable to REITs as described below. Thus,
AIMCO's proportionate share of the assets, liabilities and items of income of
the partnerships and limited liability companies in which it has ownership
interests (the "Subsidiary Partnerships") will be treated as assets, liabilities
and items of income of AIMCO for purposes of applying the REIT requirements
described herein. A summary of certain rules governing the federal income
taxation of partnerships and their partners is provided below in "Tax Aspects of
AIMCO's Investments in Partnerships."
Income Tests
In order to maintain qualification as a REIT, AIMCO annually must satisfy
two gross income requirements. First, at least 75% of AIMCO's gross income
(excluding gross income from "prohibited transactions," i.e., certain sales of
property held primarily for sale to customers in the ordinary course of
business) for each taxable year must be derived directly or indirectly from
investments relating to real property or mortgages on real property (including
"rents from real property" and, in certain circumstances, interest) or from
certain types of temporary investments. Second, at least 95% of AIMCO's gross
income (excluding gross income from prohibited transactions) for each taxable
year must be derived from such real property investments, and from dividends,
interest and gain from the sale or disposition of stock or securities (or from
any combination of the foregoing).
Rents received by AIMCO through the Subsidiary Partnerships will qualify as
"rents from real property" in satisfying the gross income requirements described
above, only if several conditions are met, including the following. 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." Moreover, for rents received 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 which the REIT derives no revenue.
However, AIMCO (or its affiliates) is permitted to directly perform services
that are "usually or customarily rendered" in connection with the rental of
space for occupancy only and are not otherwise considered rendered to the
occupant of the property. In addition, AIMCO (or its affiliates) may provide
non-customary services to tenants of its properties without disqualifying all of
the rent from the property if the payment for such services does not exceed 1%
of the total gross income from the property. For purposes of this test, the
income received from such non-customary services is deemed to be at least 150%
of the direct cost of providing the services.
PAMS LP and the other subsidiaries of the Company that manage the Managed
Properties (collectively, the "Management Subsidiaries") receive management fees
and other income. A portion of such fees and other income accrue to AIMCO
through the AIMCO Operating Partnership's general partnership interest in PAMS
LP. Such fees and other income generally will not qualify under the 95% gross
income test. AIMCO also indirectly receives distributions from the Management
Subsidiaries that will be classified as dividend income to the extent of the
earnings and profits of the Management Subsidiaries. Such distributions will
generally qualify under the 95% gross income test but not under the 75% gross
income test.
If AIMCO fails to satisfy one or both of the 75% or 95% gross income tests
for any taxable year, it may nevertheless qualify as a REIT for such year if it
is entitled to relief under certain provisions of the Code. These relief
provisions will be generally available if AIMCO's failure to meet such tests was
due to reasonable cause and not due to willful neglect, AIMCO 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 possible,
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however, to state whether in all circumstances AIMCO would be entitled to the
benefit of these relief provisions. If these relief provisions are inapplicable
to a particular set of circumstances involving AIMCO, AIMCO will not qualify as
a REIT. As discussed above in "-- General," even where these relief provisions
apply, a tax is imposed with respect to the excess net income.
Asset Tests
AIMCO, at the close of each quarter of its taxable year, must also satisfy
three tests relating to the nature of its assets. First, at least 75% of the
value of AIMCO's total assets must be represented by real estate assets
(including its allocable share of real estate assets held by the Subsidiary
Partnerships), certain stock or debt instruments purchased by AIMCO with new
capital, cash, cash items and U.S. government securities. Second, not more than
25% of AIMCO's total assets may be represented by securities other than those in
the 75% asset class. Third, of the investments included in the 25% asset class,
the value of any one issuer's securities owned by AIMCO may not exceed 5% of the
value of AIMCO's total assets, and AIMCO may not own more than 10% of any one
issuer's outstanding voting securities.
AIMCO indirectly owns interests in the Management Subsidiaries. As set
forth above, the ownership of more than 10% of the voting securities of any one
issuer by a REIT or the investment of more than 5% of the REIT's total assets in
any one issuer's securities is prohibited by the asset tests. AIMCO believes
that its indirect ownership interests in the Management Subsidiaries qualify
under these rules. However, no independent appraisals have been obtained to
support AIMCO's conclusions as to the value of the AIMCO Operating Partnership's
total assets and the value of the AIMCO Operating Partnership's interest in the
Management Subsidiaries and these values are subject to change in the future.
Accordingly, there can be no assurance that the IRS will not contend that the
AIMCO Operating Partnership's ownership interests in the Management Subsidiaries
disqualifies AIMCO from treatment as a REIT.
AIMCO's indirect interests in the AIMCO Operating Partnership and other
Subsidiary Partnerships are held through wholly owned corporate subsidiaries of
AIMCO organized and operated as "qualified REIT subsidiaries" within the meaning
of the Code. Qualified REIT subsidiaries are not treated as separate entities
from their parent REIT for federal income tax purposes. Instead, all assets,
liabilities and items of income, deduction and credit of each qualified REIT
subsidiary are treated as assets, liabilities and items of AIMCO. Each qualified
REIT subsidiary therefore will not be subject to federal corporate income
taxation, although it may be subject to state or local taxation. In addition,
AIMCO's ownership of the voting stock of each qualified REIT subsidiary does not
violate the general restriction against ownership of more than 10% of the voting
securities of any issuer.
Annual Distribution Requirements
AIMCO, in order to qualify as a REIT, is required to distribute dividends
(other than capital gain dividends) to its stockholders in an amount at least
equal to (A) the sum of (i) 95% of AIMCO's "REIT taxable income" (computed
without regard to the dividends paid deduction and AIMCO's net capital gain) and
(ii) 95% of the net income (after tax), if any, from foreclosure property, minus
(B) the sum of certain items of noncash income. Such distributions must be paid
in the taxable year to which they relate, or in the following taxable year if
declared before AIMCO timely files its tax return for such year and if paid with
or before the first regular dividend payment after such declaration. To the
extent that AIMCO distributes at least 95%, but less than 100%, of its "REIT
taxable income," as adjusted, it will be subject to tax thereon at ordinary
corporate tax rates. AIMCO may elect to retain, rather than distribute, its net
long-term capital gains and pay tax on such gains. In such a case, AIMCO's
stockholders would include their proportionate share of such undistributed
long-term capital gains in income and receive a credit for their share of the
tax paid by AIMCO. AIMCO's stockholders would then increase the adjusted basis
of their AIMCO shares by the difference between the designated amounts included
in their long-term capital gains and the tax deemed paid with respect to their
shares. If AIMCO should fail to distribute during each calendar year at least
the sum of (i) 85% of its REIT ordinary income for such year and (ii) 95% of its
REIT capital gain net income for such year (excluding retained long-term capital
gains), and (iii) any undistributed taxable income from prior periods, AIMCO
would be subject to a 4% excise tax on the excess of such required distribution
over the
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amounts actually distributed. AIMCO believes that it has made, and intends to
make, timely distributions sufficient to satisfy this annual distribution
requirement.
It is possible that AIMCO, from time to time, may not have sufficient cash
to meet the 95% distribution requirement due to timing differences between (i)
the actual receipt of cash (including receipt of distributions from the AIMCO
Operating Partnership) and (ii) the inclusion of certain items in income by
AIMCO for federal income tax purposes. In the event that such timing differences
occur, in order to meet the 95% distribution requirement, AIMCO may find it
necessary to arrange for short-term, or possibly long-term, borrowings or to pay
dividends in the form of taxable distributions of property.
Under certain circumstances, AIMCO may be able to rectify a failure to meet
the distribution requirement for a year by paying "deficiency dividends" to
stockholders in a later year, which may be included in AIMCO's deduction for
dividends paid for the earlier year. Thus, AIMCO may be able to avoid being
taxed on amounts distributed as deficiency dividends; however, AIMCO will be
required to pay interest and a penalty based on the amount of any deduction
taken for deficiency dividends.
Absence of Earnings and Profits
The Code provides that when a REIT acquires a corporation that is currently
a subchapter C corporation, the REIT may qualify as a REIT only if, as of the
close of the year of acquisition, the REIT has no "earnings and profits"
acquired from such subchapter C corporation. If AIMCO succeeds to the earnings
and profits of a subchapter C corporation in connection with an acquisition of
its assets or otherwise, AIMCO must distribute such earnings and profits
effective on or before December 31, of the year of such acquisition. Any
adjustments to the subchapter C corporation's income for taxable years ending on
or before the closing of such acquisition by AIMCO, including as a result of an
examination of its returns by the IRS and the receipt of certain indemnity or
other payments, could affect the calculation of its earnings and profits.
Furthermore, the determination of earnings and profits requires the resolution
of certain technical tax issues with respect to which there is no authority
directly on point and, consequently, the proper treatment of these issues for
earnings and profits purposes is not free from doubt. There can be no assurance
that the IRS will not examine the tax returns of a subchapter C corporation
acquired by AIMCO and propose adjustments to increase its taxable income and
therefore its earnings and profits. In this regard, the IRS can consider all
taxable years of the subchapter C corporation as open for review for purposes of
determining the amount of its earnings and profits. AIMCO's failure to
distribute an amount equal to the earnings and profits acquired from a
subchapter C corporation effective on or before December 31, of the year of such
acquisition, would result in AIMCO's failure to qualify as a REIT.
Failure to Qualify
If AIMCO fails to qualify for taxation as a REIT in any taxable year, and
the relief provisions do not apply, AIMCO will be subject to tax (including any
applicable alternative minimum tax) on its taxable income at regular corporate
rates. Distributions to stockholders in any year in which AIMCO fails to qualify
will not be deductible by AIMCO nor will they be required to be made. In such
event, to the extent of current and accumulated earnings and profits, all
distributions to stockholders will be taxable as ordinary income, and, subject
to certain limitations of the Code, corporate distributees may be eligible for
the dividends received deduction. Unless AIMCO is entitled to relief under
specific statutory provisions, AIMCO would also be disqualified from taxation as
a REIT for the four taxable years following the year during which qualification
was lost. It is not possible to state whether in all circumstances AIMCO would
be entitled to such statutory relief.
TAX ASPECTS OF AIMCO'S INVESTMENTS IN PARTNERSHIPS
General
Substantially all of AIMCO's investments are held indirectly through the
AIMCO Operating Partnership. In general, partnerships are "pass-through"
entities that are not subject to federal income tax. Rather, partners are
allocated their proportionate shares of the items of income, gain, loss,
deduction and credit of a partnership, and are potentially subject to tax
thereon, without regard to whether the partners receive a
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distribution from the partnership. AIMCO will include in its income its
proportionate share of the foregoing partnership items for purposes of the
various REIT income tests and in the computation of its REIT taxable income.
Moreover, for purposes of the REIT asset tests, AIMCO will include its
proportionate share of assets held by the Subsidiary Partnerships. See
"-- Certain Federal Income Tax Consequences -- General -- Ownership of
Partnership Interests."
Entity Classification
AIMCO's direct and indirect investment in partnerships involves special tax
considerations, including the possibility of a challenge by the IRS of the
status of any of the Subsidiary Partnerships as a partnership (as opposed to an
association taxable as a corporation) for federal income tax purposes. If any of
these entities were treated as an association for federal income tax purposes,
it would be taxable as a corporation and therefore subject to an entity-level
tax on its income. In such a situation, the character of AIMCO's assets and
items of gross income would change and could preclude AIMCO from satisfying the
asset tests and the income tests (see "-- Certain Federal Income Tax
Consequences -- Asset Tests" and "-- Certain Federal Income Tax
Consequences -- Income Tests"), and in turn could prevent AIMCO from qualifying
as a REIT. See "-- Certain Federal Income Tax Consequences -- Failure to
Qualify" above for a discussion of the effect of AIMCO's failure to meet such
tests for a taxable year. In addition, any change in the status of any of the
Subsidiary Partnerships for tax purposes might be treated as a taxable event, in
which case AIMCO might incur a tax liability without any related cash
distributions.
Tax Allocations with Respect to the Properties
Under the Code and the Treasury Regulations, income, gain, loss and
deduction attributable to appreciated or depreciated property that is
contributed to a partnership in exchange for an interest in the partnership must
be allocated in a manner such that the contributing partner is charged with, or
benefits from, respectively, the unrealized gain or unrealized loss associated
with the property at the time of the contribution. The amount of such unrealized
gain or unrealized loss is generally equal to the difference between the fair
market value of the contributed property at the time of contribution, and the
adjusted tax basis of such property at the time of contribution (a "Book - Tax
Difference"). Such allocations are solely for federal income tax purposes and do
not affect the book capital accounts or other economic or legal arrangements
among the partners. The AIMCO Operating Partnership was formed by way of
contributions of appreciated property (including certain of the Owned
Properties). Consequently, allocations must be made in a manner consistent with
these requirements. Where a partner contributes cash to a partnership that holds
appreciated property, the Treasury Regulations provide for a similar allocation
of such items to the other partners. These rules apply to the contribution by
AIMCO to the AIMCO Operating Partnership of the cash proceeds received in any
offerings of its stock.
In general, certain holders of interests in the AIMCO Operating Partnership
will be allocated lower amounts of depreciation deductions for tax purposes and
increased taxable income and gain on the sale by the AIMCO Operating Partnership
or other Subsidiary Partnerships of the contributed properties. This will tend
to eliminate the Book-Tax Difference over the life of these partnerships.
However, the special allocations do not always entirely rectify the Book-Tax
Difference on an annual basis or with respect to a specific taxable transaction
such as a sale. Thus, the carryover basis of the contributed properties in the
hands of the AIMCO Operating Partnership or other Subsidiary Partnerships may
cause AIMCO to be allocated lower depreciation and other deductions, and
possibly greater amounts of taxable income in the event of a sale of such
contributed assets in excess of the economic or book income allocated to it as a
result of such sale. This may cause AIMCO to recognize taxable income in excess
of cash proceeds, which might adversely affect AIMCO's ability to comply with
the REIT distribution requirements. See "-- Certain Federal Income Tax
Consequences -- Annual Distribution Requirements."
With respect to any property purchased or to be purchased by any of the
Subsidiary Partnerships (other than through the issuance of AIMCO Operating
Partnership Units) subsequent to the formation of AIMCO, such property will
initially have a tax basis equal to its fair market value and the special
allocation provisions described above will not apply.
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<PAGE> 38
Sale of the Properties
AIMCO's share of any gain realized by the AIMCO Operating Partnership or
other Subsidiary Partnership on the sale of any property held as inventory or
primarily for sale to customers in the ordinary course of business will be
treated as income from a prohibited transaction that is subject to a 100%
penalty tax. See "-- Certain Federal Income Tax Consequences -- General." Under
existing law, whether property is held as inventory or primarily for sale to
customers in the ordinary course of a partnership's trade or business is a
question of fact that depends on all the facts and circumstances with respect to
the particular transaction. The AIMCO Operating Partnership and the other
Subsidiary Partnerships intend to hold the Owned Properties for investment with
a view to long-term appreciation, to engage in the business of acquiring,
developing, owning and operating the Owned Properties and to make such
occasional sales of the Owned Properties, including peripheral land, as are
consistent with AIMCO's investment objectives.
TAXATION OF MANAGEMENT SUBSIDIARIES
A portion of the amounts to be used to fund distributions to stockholders
is expected to come from distributions made by the Management Subsidiaries to
the AIMCO Operating Partnership, distributions paid to the AIMCO Operating
Partnership as the general partner of PAMS LP, and interest paid by the
Management Subsidiaries on certain notes held by the AIMCO Operating
Partnership. In general, the Management Subsidiaries pay federal, state and
local income taxes on their taxable income at normal corporate rates. Any
federal, state or local income taxes that the Management Subsidiaries are
required to pay will reduce AIMCO's cash flow from operating activities and its
ability to make payments to holders of its securities.
TAXATION OF TAXABLE DOMESTIC STOCKHOLDERS
Distributions
Provided AIMCO qualifies as a REIT, distributions made to AIMCO's taxable
domestic stockholders out of current or accumulated earnings and profits (and
not designated as capital gain dividends) will be taken into account by them as
ordinary income and will not be eligible for the dividends received deduction
for corporations. Distributions (and retained long-term capital gains) that are
designated as capital gain dividends will be taxed as long-term capital gains
(to the extent that they do not exceed AIMCO's actual net capital gain for the
taxable year) without regard to the period for which the stockholder has held
its stock. However, corporate stockholders may be required to treat up to 20% of
certain capital gain dividends as ordinary income.
Distributions in excess of current and accumulated earnings and profits
will not be taxable to a stockholder to the extent that they do not exceed the
adjusted basis of the stockholder's shares in respect of which the distributions
were made, but rather will reduce the adjusted basis of such shares. To the
extent that such distributions exceed the adjusted basis of a stockholder's
shares in respect of which the distributions were made, they will be included in
income as long-term capital gain (or short-term capital gain if the shares have
been held for one year or less) provided that the shares are a capital asset in
the hands of the stockholder. In addition, any dividend declared by AIMCO in
October, November or December of any year and payable to a stockholder of record
on a specified date in any such month shall be treated as both paid by AIMCO and
received by the stockholder on December 31 of such year, provided that the
dividend is actually paid by AIMCO during January of the following calendar
year. Stockholders may not include in their individual income tax returns any
net operating losses or capital losses of AIMCO.
Dispositions of AIMCO Stock
In general, under the recently enacted Internal Revenue Service
Restructuring and Reform Act of 1988, capital gains recognized by individuals
and other non-corporate stockholders upon the sale or disposition of shares of
AIMCO stock will be subject to a maximum federal income tax rate of 20% if the
AIMCO stock is held for more than 12 months and will be taxed at ordinary income
rates if the AIMCO stock is held for 12 months or less. Capital losses
recognized by a stockholder upon the disposition of AIMCO stock held for more
than one year at the time of disposition will be a long-term capital loss. In
addition, any loss upon a sale
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<PAGE> 39
or exchange of shares of AIMCO stock by a stockholder who has held such shares
for six months or less (after applying certain holding period rules) will be
treated as a long-term capital loss to the extent of distributions from AIMCO
required to be treated by such stockholder as long-term capital gain.
A redemption of the Preferred Stock will be treated under Section 302 of
the Code as a dividend subject to tax at ordinary income tax rates (to the
extent of AIMCO's current or accumulated earnings and profits), unless the
redemption satisfies certain tests set forth in Section 302(b) of the Code
enabling the redemption to be treated as a sale or exchange of the Preferred
Stock. The redemption will satisfy such test if it (i) is "substantially
disproportionate" with respect to the holder (which will not be the case if only
the Preferred Stock is redeemed, since it generally does not have voting
rights), (ii) results in a "complete termination" of the holder's stock interest
in AIMCO, or (iii) is "not essentially equivalent to a dividend" with respect to
the holder, all within the meaning of Section 302(b) of the Code. In determining
whether any of these tests have been met, shares considered to be owned by the
holder by reason of certain constructive ownership rules set forth in the Code,
as well as shares actually owned, must generally be taken into account. Because
the determination as to whether any of the alternative tests of Section 302(b)
of the Code is satisfied with respect to any particular holder of the Preferred
Stock will depend upon the facts and circumstances as of the time the
determination is made, prospective investors are advised to consult their own
tax advisors to determine such tax treatment. If a redemption of the Preferred
Stock is treated as a distribution that is taxable as a dividend, the amount of
the distribution would be measured by the amount of cash and the fair market
value of any property received by the stockholders. The stockholder's adjusted
tax basis in such redeemed Preferred Stock would be transferred to the holder's
remaining stockholdings in AIMCO. If, however, the stockholder has no remaining
stockholdings in AIMCO, such basis may, under certain circumstances, be
transferred to a related person or it may be lost entirely.
TAXATION OF FOREIGN STOCKHOLDERS
The following is a discussion of certain anticipated U.S. federal income
and estate tax consequences of the ownership and disposition of AIMCO stock
applicable to Non-U.S. Holders of AIMCO stock. A "Non-U.S. Holder" is any person
other than (i) a citizen or resident of the United States, (ii) a corporation or
partnership created or organized in the United States or under the laws of the
United States or of any state thereof or the District of Columbia, (iii) an
estate whose income is includible in gross income for U.S. federal income tax
purposes regardless of its source or (iv) a trust if a United States court is
able to exercise primary supervision over the administration of such trust and
one or more United States fiduciaries have the authority to control all
substantial decisions of such trust. The discussion is based on current law and
is for general information only. The discussion addresses only certain and not
all aspects of U.S. federal income and estate taxation.
Ordinary Dividends
The portion of dividends received by Non-U.S. Holders payable out of
AIMCO's earnings and profits which are not attributable to capital gains of
AIMCO and which are not effectively connected with a U.S. trade or business of
the Non-U.S. Holder will be subject to U.S. withholding tax at the rate of 30%
(unless reduced by treaty). In general, Non-U.S. Holders will not be considered
engaged in a U.S. trade or business solely as a result of their ownership of
AIMCO stock. In cases where the dividend income from a Non-U.S. Holder's
investment in AIMCO stock is (or is treated as) effectively connected with the
Non-U.S. Holder's conduct of a U.S. trade or business, the Non-U.S. Holder
generally will be subject to U.S. tax at graduated rates, in the same manner as
U.S. Holders are taxed with respect to such dividends (and may also be subject
to the 30% branch profits tax in the case of a Non-U.S. Holder that is a
corporation).
Non-Dividend Distributions
Unless AIMCO stock constitutes a United States Real Property Interest (a
"USRPI"), distributions by AIMCO which are not dividends out of the earnings and
profits of AIMCO will not be subject to U.S. income or withholding tax. 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 distribution will be subject
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to withholding at the rate applicable to dividends. However, the Non-U.S. Holder
may seek a refund of such amounts from the IRS if it is subsequently determined
that such distribution was, in fact, in excess of current and accumulated
earnings and profits of AIMCO. If AIMCO stock constitutes a USRPI, such
distributions will be subject to 10% withholding and taxed pursuant to the
Foreign Investment in Real Property Tax Act of 1980 ("FIRPTA") at a rate of 35%
to the extent such distributions exceed a stockholder's basis in his or her
AIMCO stock.
Capital Gain Dividends
Under FIRPTA, a distribution made by AIMCO to a Non-U.S. Holder, to the
extent attributable to gains from dispositions of USRPIs such as the properties
beneficially owned by AIMCO ("USRPI Capital Gains"), will be considered
effectively connected with a U.S. trade or business of the Non-U.S. Holder and
subject to U.S. income tax at the rates applicable to U.S. individuals or
corporations, without regard to whether such distribution is designated as a
capital gain dividend. In addition, AIMCO will be required to withhold tax equal
to 35% of the amount of dividends to the extent such dividends constitute USRPI
Capital Gains. Distributions subject to FIRPTA may also be subject to a 30%
branch profits tax in the hands of Non-U.S. Holder that is a corporation.
Dispositions of AIMCO Stock
Unless AIMCO stock constitutes a USRPI, a sale of such stock by a Non-U.S.
Holder generally will not be subject to U.S. taxation under FIRPTA. The stock
will not constitute a USRPI if AIMCO is a "domestically controlled REIT." A
domestically controlled REIT is a REIT in which, at all times during a specified
testing period, less than 50% in value of its shares is held directly or
indirectly by Non-U.S. Holders. AIMCO believes that it is, and it expects to
continue to be, a domestically controlled REIT and, therefore, the sale of AIMCO
stock should not be subject to taxation under FIRPTA. Because AIMCO's Class A
Common Stock is publicly traded, however, no assurance can be given that AIMCO
will continue to be a domestically controlled REIT.
If AIMCO does not constitute a domestically controlled REIT, a Non-U.S.
Holder's sale of stock generally will still not be subject to tax under FIRPTA
as a sale of a USRPI provided that (i) the stock is "regularly traded" (as
defined by applicable Treasury Regulations) on an established securities market
(e.g., the NYSE, on which AIMCO stock is listed) and (ii) the selling Non-U.S.
Holder held 5% or less of AIMCO's outstanding stock at all times during a
specified testing period.
If gain on the sale of stock of AIMCO were subject to taxation under
FIRPTA, the Non-U.S. Holder would be subject to the same treatment as a U.S.
stockholder with respect to such gain (subject to applicable alternative minimum
tax and a special alternative minimum tax in the case of nonresident alien
individuals) and the purchaser of the stock could be required to withhold 10% of
the purchase price and remit such amount to the IRS.
Gain from the sale of AIMCO stock that would not otherwise be subject to
FIRPTA will nonetheless be taxable in the United States to a Non-U.S. Holder in
two cases: (i) if the Non-U.S. Holder's investment in the AIMCO stock is
effectively connected with a U.S. trade or business conducted by such Non-U.S.
Holder, the Non-U.S. Holder will be subject to the same treatment as a U.S.
stockholder with respect to such gain, or (ii) if the Non-U.S. Holder 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, the
nonresident alien individual will be subject to a 30% tax on the individual's
capital gain.
Estate Tax
AIMCO stock owned or treated as owned by an individual who is not a citizen
or resident (as specially defined for U.S. federal estate tax purposes) of the
United States at the time of death will be includible in the individual's gross
estate for U.S. federal estate tax purposes, unless an applicable estate tax
treaty provides otherwise. Such individual's estate may be subject to U.S.
federal estate tax on the property includible in the estate for U.S. federal
estate tax purposes.
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INFORMATION REPORTING REQUIREMENTS AND BACKUP WITHHOLDING
AIMCO will report to its U.S. stockholders and to the IRS the amount of
distributions paid during each calendar year, and the amount of tax withheld, if
any. Under the backup withholding rules, a stockholder may be subject to backup
withholding at the rate of 31% with respect to distributions paid unless such
holder (i) is a corporation or comes within certain other exempt categories and,
when required, demonstrates this fact or (ii) provides a taxpayer identification
number, certifies as to no loss of exemption from backup withholding, and
otherwise complies with the applicable requirements of the backup withholding
rules. A stockholder who does not provide AIMCO with his correct taxpayer
identification number also may be subject to penalties imposed by the IRS. Any
amount paid as backup withholding will be creditable against the stockholder's
income tax liability. In addition, AIMCO may be required to withhold a portion
of capital gain distributions to any Non-U.S. Holders who fail to certify their
foreign status to AIMCO. The IRS has issued final Treasury Regulations regarding
the backup withholding rules as applied to Non-U.S. Holders. Those final
Treasury Regulations alter the current system of backup withholding compliance
and will be effective for payments made after December 31, 1999. Prospective
investors in Securities should consult their tax advisors regarding the
application of these Treasury Regulations.
TAXATION OF TAX-EXEMPT STOCKHOLDERS
Tax-exempt entities, including qualified employee pension and profit
sharing trusts and individual retirement accounts ("Exempt Organizations"),
generally are exempt from federal income taxation. However, they are subject to
taxation on their unrelated business taxable income ("UBTI"). While many
investments in real estate generate UBTI, the IRS has ruled that dividend
distributions from a REIT to an exempt employee pension trust do not constitute
UBTI, provided that the shares of the REIT are not otherwise used in an
unrelated trade or business of the exempt employee pension trust. Based on that
ruling, amounts distributed by AIMCO to Exempt Organizations should generally
not constitute UBTI. However, if an Exempt Organization finances its acquisition
of the AIMCO stock with debt, a portion of its income from AIMCO will constitute
UBTI pursuant to the "debt-financed property" rules. Furthermore, social clubs,
voluntary employee benefit associations, supplemental unemployment benefit
trusts, and qualified group legal services plans that are exempt from taxation
under paragraphs (7), (9), (17) and (20), respectively, of Section 501(c) of the
Code are subject to different UBTI rules, which generally will require them to
characterize distributions from AIMCO as UBTI. In addition, in certain
circumstances, a pension trust that owns more than 10% of AIMCO's stock is
required to treat a percentage of the dividends from AIMCO as UBTI (the "UBTI
Percentage"). The UBTI Percentage is the gross income derived by AIMCO from an
unrelated trade or business (determined as if AIMCO were a pension trust)
divided by the gross income of AIMCO for the year in which the dividends are
paid. The UBTI rule applies to a pension trust holding more than 10% of AIMCO's
stock only if (i) the UBTI Percentage is at least 5%, (ii) AIMCO qualifies as a
REIT by reason of the modification of the 5/50 Rule that allows the
beneficiaries of the pension trust to be treated as holding shares of AIMCO in
proportion to their actuarial interest in the pension trust, and (iii) either
(A) one pension trust owns more than 25% of the value of AIMCO's stock or (B) a
group of pension trusts each individually holding more than 10% of the value of
AIMCO's stock collectively owns more that 50% of the value of AIMCO's stock. The
restrictions on ownership and transfer of AIMCO's stock should prevent an Exempt
Organization from owning more than 10% of the value of AIMCO's stock.
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OTHER TAX CONSEQUENCES
POSSIBLE LEGISLATIVE OR OTHER ACTIONS AFFECTING REITS
The rules dealing with federal income taxation are constantly under review
by persons involved in the legislative process and by the IRS and the U.S.
Treasury Department. Changes to the federal laws and interpretations thereof
could adversely affect an investment in AIMCO or the AIMCO Operating
Partnership. For example, a proposal issued by President Clinton on February 2,
1998, if enacted into law, may adversely affect the ability of AIMCO to expand
the present activities of its Management Subsidiaries. It cannot be predicted
whether, when, in what forms, or with what effective dates, the tax laws
applicable to AIMCO or the AIMCO Operating Partnership, or an investment in
AIMCO or the AIMCO Operating Partnership, will be changed.
STATE, LOCAL AND FOREIGN TAXES
The AIMCO Operating Partnership and its partners and AIMCO and its
stockholders may be subject to state, local or foreign taxation in various
jurisdictions, including those in which it or they transact business, own
property or reside. It should be noted that the AIMCO Operating Partnership owns
properties located in a number of states and local jurisdictions, and the AIMCO
Operating Partnership may be required to file income tax returns in some or all
of those jurisdictions. The state, local or foreign tax treatment of the AIMCO
Operating Partnership and its partners and of AIMCO and its stockholders may not
conform to the federal income tax consequences discussed above. Consequently,
prospective investors should consult their own tax advisors regarding the
application and effect of state, local foreign tax laws on an investment in the
Securities.
LEGAL MATTERS
Certain tax matters will be passed upon for AIMCO by Skadden, Arps, Slate,
Meagher & Flom LLP, Los Angeles, California. The validity of the Securities
offered hereby will be passed upon for AIMCO by Piper & Marbury L.L.P.,
Baltimore, Maryland and for the AIMCO Operating Partnership by Skadden, Arps,
Slate, Meagher & Flom LLP, Los Angeles, California.
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EXPERTS
The consolidated financial statements of AIMCO included in AIMCO's Annual
Report on Form 10-K/A for the year ended December 31, 1997, have been audited by
Ernst & Young LLP, independent auditors, as set forth in their report thereon
included therein and incorporated herein by reference. The consolidated
financial statements of the AIMCO Operating Partnership as of December 31, 1997
and 1996 and for each of the three years in the period ended December 31, 1997
included in the AIMCO Operating Partnership's Form 10 have been audited by Ernst
& Young LLP, independent auditors, as set forth in their report thereon included
therein and incorporated herein by reference. The consolidated financial
statements of Ambassador Apartments, Inc. as of December 31, 1997 and 1996, and
for each of the three years in the period ended December 31, 1997 included in
AIMCO's Current Report on Form 8-K dated March 17, 1998 (as amended on April 3,
1998), and the consolidated financial statements of Ambassador Apartments, Inc.
as of December 31, 1996 and 1995, and for each of the two years in the period
ended December 31, 1996 and the period from August 31, 1994 through December 31,
1994, and the combined financial statements of Prime Properties (Predecessor to
Ambassador Apartments, Inc.) for the period from January 1, 1994 through August
30, 1994, included in Amendment No. 1 to AIMCO's Current Report on Form 8-K
dated December 23, 1997, filed on February 6, 1998, have been audited by Ernst &
Young LLP, independent auditors, as set forth in their reports thereon included
therein and incorporated herein by reference. The consolidated financial
statements of Insignia Financial Group, Inc. as of December 31, 1997 and 1996
included in AIMCO's Current Report on Form 8-K dated March 17, 1998 (and
Amendment No. 1 thereto filed April 3, 1998), have been audited by Ernst & Young
LLP, independent auditors, as set forth in their report thereon included therein
and incorporated herein by reference. Such consolidated financial statements are
incorporated herein by reference in reliance upon such reports given upon the
authority of such firm as experts in accounting and auditing.
Any financial statements and schedules hereafter filed by AIMCO or the
AIMCO Operating Partnership pursuant to Sections 13(a), 13(c), 14 or 15(d) of
the Exchange Act and incorporated herein by reference in this Prospectus that
have been examined and are the subject of a report by independent accountants
will be so incorporated herein by reference in reliance upon such reports given
and upon the authority of such firms as experts in accounting and auditing to
the extent covered by consents filed with the Commission.
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PART II
INFORMATION NOT REQUIRED IN PROSPECTUS
ITEM 14. OTHER EXPENSES OF ISSUANCE AND DISTRIBUTIONS.
The estimated expenses, other than underwriting discounts and commissions,
in connection with the offering of the Securities, are as follows:
<TABLE>
<S> <C>
Registration Fee -- Securities and Exchange Commission...... $295,000
Printing and Engraving Expenses............................. 125,000
Legal Fees and Expenses (other than Blue Sky)............... 50,000
Accounting Fees and Expenses................................ 75,000
Blue Sky Fees and Expenses (including fees of counsel)...... 20,000
Trustee's and registrar's fees and expenses................. 5,000
Miscellaneous............................................... 10,000
--------
TOTAL............................................. $580,000
========
</TABLE>
ITEM 15. INDEMNIFICATION OF DIRECTORS AND OFFICERS.
AIMCO
AIMCO's Charter limits the liability of AIMCO's directors and officers to
AIMCO and its stockholders to the fullest extent permitted from time to time by
Maryland law. Maryland law presently permits the liability of directors and
officers to a corporation or its stockholders for money damages to be limited,
except (i) to the extent that it is proved that the director or officer actually
received an improper benefit or profit in money, property or services for the
amount of the benefit or profit in money, property or services actually
received, or (ii) if a judgment or other final adjudication is entered in a
proceeding based on a finding that the director's or officer's action, or
failure to act, was the result of active and deliberate dishonesty and was
material to the cause of action adjudicated in the proceeding. This provision
does not limit the ability of AIMCO or its stockholders to obtain other relief,
such as an injunction or rescission.
AIMCO's Charter and Bylaws require AIMCO to indemnify its directors,
officers and certain other parties to the fullest extent permitted from time to
time by Maryland law. The MGCL permits a corporation to indemnify its directors,
officers and certain other parties against judgments, penalties, fines,
settlements and reasonable expenses actually incurred by them in connection with
any proceeding to which they may be made a party by reason of their service to
or at the request of the corporation, unless it is established that (i) the act
or omission of the indemnified party was material to the matter giving rise to
the proceeding and (x) was committed in bad faith or (y) was the result of
active and deliberate dishonesty, (ii) the indemnified party actually received
an improper personal benefit in money, property or services or (iii) in the case
of any criminal proceeding, the indemnified party had reasonable cause to
believe that the act or omission was unlawful. Indemnification may be made
against judgments, penalties, fines, settlements and reasonable expenses
actually incurred by the director or officer in connection with the proceeding;
provided, however, that if the proceeding is one by or in the right of the
corporation, indemnification may not be made with respect to any proceeding in
which the director or officer has been adjudged to be liable to the corporation.
In addition, a director or officer may not be indemnified with respect to any
proceeding charging improper personal benefit to the director or officer in
which the director or officer was adjudged to be liable on the basis that
personal benefit was improperly received. The termination of any proceeding by
conviction, or upon a plea of nolo contendere or its equivalent, or an entry of
any order of probation prior to judgment, creates a rebuttable presumption that
the director or officer did not meet the requisite standard of conduct required
for indemnification to be permitted. It is the position of the Commission that
indemnification of directors and officers for liabilities arising under the
Securities Act is against public policy and is unenforceable pursuant to Section
14 of the Securities Act.
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AIMCO has entered into agreements with certain of its officers, pursuant to
which AIMCO has agreed to indemnify such officers to the fullest extent
permitted by applicable law.
THE AIMCO OPERATING PARTNERSHIP
The AIMCO Operating Partnership Agreement requires the AIMCO Operating
Partnership to indemnify its directors and officers of the General Partner (each
an "Indemnitee") to the fullest extent authorized by applicable law against any
and all losses, claims, damages, liabilities, joint or several, expenses
(including, without limitation, attorney's fees and other legal fees and
expenses), judgments, fines, settlements and other amounts arising from any and
all claims, demands, actions, suits or proceedings, civil, criminal,
administrative or investigative, that relate to the operations of the AIMCO
Operating Partnership. Such indemnification continues after the Indemnitee
ceases to be a director or officer. The right to indemnification includes the
right to be paid by the AIMCO Operating Partnership the expenses incurred in
defending any proceeding in advance of its final disposition upon the delivery
of an undertaking by or on behalf of the Indemnitee to repay all amounts
advanced if a final judicial decision is rendered that such Indemnitee did not
meet the standard of conduct permitting indemnification under the AIMCO
Operating Partnership Agreement or applicable law.
The AIMCO Operating Partnership maintains insurance, at its expense, to
protect against any liability or loss, regardless of whether any director or
officer is entitled to indemnification under the AIMCO Operating Partnership
Agreement or applicable law.
ITEM 16. EXHIBITS.
<TABLE>
<C> <S>
*1.1 -- Form of Underwriting Agreement for Debt Securities of
Apartment Investment and Management Company.
*1.2 -- Form of Underwriting Agreement for Preferred Stock of
Apartment Investment and Management Company.
*1.3 -- Form of Underwriting Agreement for Class A Common Stock
of Apartment Investment and Management Company.
*1.4 -- Form of Underwriting Agreement for Warrants to purchase
Securities of Apartment Investment and Management
Company.
*1.5 -- Form of Underwriting Agreement for Debt Securities of
AIMCO Properties, L.P.
*1.6 -- Form of Underwriting Agreement for Warrants to purchase
Debt Securities of AIMCO Properties, L.P.
4.1 -- Form of Senior Debt Securities Indenture for Apartment
Investment and Management Company (including form of
Note).
4.2 -- Form of Senior Subordinated Debt Securities Indenture for
Apartment Investment and Management Company (including
form of Note).
4.3 -- Form of Subordinated Debt Securities Indenture for
Apartment Investment and Management Company (including
form of Note).
*4.4 -- Form of Senior Debt Securities Indenture for AIMCO
Properties, L.P. (including form of Note)
*4.5 -- Form of Senior Subordinated Debt Securities Indenture for
AIMCO Properties, L.P. (including form of Note)
*4.6 -- Form of Subordinated Debt Securities Indenture for AIMCO
Properties, L.P. (including form of Note)
4.7 -- Form of Warrant Agreement (including form of Warrant
Certificate) for Apartment Investment and Management
Company.
*4.8 -- Form of Warrant Agreement (including form of Warrant
Certificate) for AIMCO Properties, L.P.
</TABLE>
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<PAGE> 46
<TABLE>
<C> <S>
*4.8 -- Form of Preferred Stock Certificate for Apartment
Investment and Management Company.
**4.9 -- Specimen certificate for Class A Common Stock of
Apartment Investment and Management Company.
*5.1 -- Opinion of Piper & Marbury L.L.P. regarding the validity
of the securities of Apartment Investment and Management
Company offered hereby.
*5.2 -- Opinion of Skadden, Arps, Slate, Meagher & Flom LLP
regarding the validity of the securities of AIMCO
Properties, L.P. offered hereby.
*8.1 -- Opinion of Skadden, Arps, Slate, Meagher & Flom LLP
regarding tax matters.
***12.1 -- Computation of ratio of earnings to fixed charges.
***12.2 -- Computation of ratio of earnings to combined fixed
charges and preferred stock dividends.
23.1 -- Consent of Ernst & Young LLP Dallas, Texas, dated August
11, 1998.
23.2 -- Consent of Ernst & Young LLP Chicago, Illinois, dated
August 11, 1998.
23.3 -- Consent of Ernst & Young LLP Greenville, South Carolina,
dated August 12, 1998.
*23.4 -- Consent of Skadden, Arps, Slate, Meagher & Flom LLP
(included in opinion filed as Exhibit 8.1).
*23.5 -- Consent of Piper & Marbury L.L.P. (included in opinion
filed as Exhibit 5.1).
24.1 -- Power of Attorney for Apartment Investment and Management
Company (included on page II-5).
24.2 -- Power of Attorney for AIMCO Properties, L.P. (included on
page II-6).
*25.1 -- Statement of Eligibility and Qualification of Trustee
under the Senior Debt Securities Indenture for Apartment
Investment and Management Company.
*25.2 -- Statement of Eligibility and Qualification of Trustee
under the Senior Subordinated Debt Securities Indenture
for Apartment Investment and Management Company.
*25.3 -- Statement of Eligibility and Qualification of Trustee
under the Subordinated Debt Securities Indenture for
Apartment Investment and Management Company.
*25.4 -- Statement of Eligibility and Qualification of Trustee
under the Senior Debt Securities Indenture for AIMCO
Properties, L.P.
*25.5 -- Statement of Eligibility and Qualification of Trustee
under the Senior Subordinated Debt Securities Indenture
for AIMCO Properties, L.P.
*25.6 -- Statement of Eligibility and Qualification of Trustee
under the Subordinated Debt Securities Indenture for
AIMCO Properties, L.P.
</TABLE>
- ---------------
* To be filed by amendment or incorporated by reference prior to the offering
of Securities.
** Incorporated by reference from AIMCO's Registration Statement on Form 8-A
filed on July 19, 1994.
*** Incorporated by reference from Amendment No. 4 to AIMCO's Form 8-K dated
March 17, 1998, filed August 6, 1998.
ITEM 17. UNDERTAKINGS.
(a) The undersigned registrants hereby undertake:
(1) To file, during any period in which offers or sales are being
made, a post-effective amendment to this registration statement:
(i) To include any prospectus required by section 10(a)(3) of the
Securities Act of 1933;
(ii) To reflect in the prospectus any facts or events arising after
the effective date of the registration statement (or the most recent
post-effective amendment thereof) which, individually or
II-3
<PAGE> 47
in the aggregate, represent a fundamental change in the information set
forth in the registration statement. Notwithstanding the foregoing, any
increase or decrease in volume of securities offered (if the total
dollar value of securities offered would not exceed that which was
registered) and any deviation from the low or high end of the estimated
maximum offering range may be reflected in the form of prospectus filed
with the Commission pursuant to Rule 424(b) if, in the aggregate, the
changes in volume and price represent no more than a 20% change in the
maximum aggregate offering price set forth in the "Calculation of
Registration Fee" table in the effective registration statement;
(iii) To include any material information with respect to the plan
of distribution not previously disclosed in the registration statement
or any material change to such information in the registration
statement;
provided, however, that paragraphs (a)(1)(i) and (a)(1)(ii) shall not
apply if the information required to be included in a post-effective
amendment by those paragraphs is contained in periodic reports filed with
or furnished to the Commission by the registrant pursuant to section 13 or
section 15(d) of the Securities Exchange Act of 1934 that are incorporated
by reference in the registration statement.
(2) That, for the purpose of determining any liability under the
Securities Act of 1933, each such post-effective amendment shall be deemed
to be a new registration statement relating to the securities offered
therein, and the offering of such securities at that time shall be deemed
to be the initial bona fide offering thereof.
(3) To remove from registration by means of a post-effective amendment
any of the securities being registered which remain unsold at the
termination of the offering.
(b) The undersigned registrants hereby undertake that, for purposes of
determining any liability under the Securities Act of 1933, each filing of the
registrants' annual reports pursuant to Section 13(a) or 15(d) of the Securities
Exchange Act of 1934 (and, where applicable, each filing of an employee benefit
plan's annual report pursuant to Section 15(d) of the Securities Exchange Act of
1934) that is incorporated by reference in the registration statement shall be
deemed to be a new registration statement relating to the securities offered
therein, and the offering of such securities at that time shall be deemed to be
the initial bona fide offering thereof.
(c) Insofar as indemnification for liabilities arising under the Securities
Act of 1933 may be permitted to directors, officers and controlling persons of
the registrants pursuant to the foregoing provisions, or otherwise, the
registrants have been advised that in the opinion of the Securities and Exchange
Commission such indemnification is against public policy as expressed in the Act
and is, therefore, unenforceable. In the event that a claim for indemnification
against such liabilities (other than the payment by the registrants of expenses
incurred or paid by a director, officer or controlling person of the registrants
in the successful defense of any action, suit, or proceeding) is asserted by
such director, officer or controlling person in connection with the securities
being registered, the registrants will, unless in the opinion of its counsel the
matter has been settled by controlling precedent, submit to a court of
appropriate jurisdiction the question whether such indemnification by it is
against public policy as expressed in the Act and will be governed by the final
adjudication of such issue.
(d) The undersigned registrants hereby undertake to file an application for
the purpose of determining the eligibility of the trustee to act under
subsection (a) of Section 310 of the Trust Indenture Act in accordance with the
rules and regulations prescribed by the Commission under Section 305(b)(2) of
the Securities Act.
II-4
<PAGE> 48
POWER OF ATTORNEY
Each person whose signature appears below authorizes Terry Considine and
Peter Kompaniez, and each of them, each of whom may act without joinder of the
other, as his true and lawful attorneys-in-fact and agents, with full power of
substitution and resubstitution, for him and in his name, place and stead, in
any and all capacities to execute in the name of each such person who is then an
officer or director of Apartment Investment and Management Company, and to file
any amendments (including post-effective amendments) to this Registration
Statement and any registration statement for the same offering filed pursuant to
Rule 462 under the Securities Act of 1933, and to file the same, with all
exhibits thereto and all other documents in connection therewith, with the
Commission, granting unto said attorneys-in-fact and agents full power and
authority to do and perform each and every act and thing appropriate or
necessary to be done, as fully and for all intents and purposes as he might or
could do in person, hereby ratifying and confirming all that said
attorneys-in-fact and agents or their substitute or substitutes may lawfully do
or cause to be done by virtue hereof.
SIGNATURES
Pursuant to the requirements of the Securities Act of 1933, Apartment
Investment and Management Company has duly caused this Registration Statement to
be signed on its behalf by the undersigned, thereunto duly authorized, in the
City of Denver, State of Colorado, on August 13, 1998.
APARTMENT INVESTMENT AND
MANAGEMENT COMPANY
By: /s/ TROY D. BUTTS
----------------------------------
Troy D. Butts,
Senior Vice President and Chief
Financial Officer
Pursuant to the requirements of the Securities Act of 1933, this
Registration Statement on Form S-3 has been signed below by the following
persons in the capacities and on the dates indicated.
<TABLE>
<CAPTION>
SIGNATURE TITLE DATE
--------- ----- ----
<C> <S> <C>
/s/ TERRY CONSIDINE Chairman and Chief Executive August 13, 1998
- ----------------------------------------------------- Officer
Terry Considine
/s/ PETER K. KOMPANIEZ Vice Chairman and President August 13, 1998
- -----------------------------------------------------
Peter K. Kompaniez
/s/ TROY D. BUTTS Senior Vice President and Chief August 13, 1998
- ----------------------------------------------------- Financial Officer
Troy D. Butts
/s/ RICHARD S. ELLWOOD Director August 13, 1998
- -----------------------------------------------------
Richard S. Ellwood
/s/ J. LANDIS MARTIN Director August 13, 1998
- -----------------------------------------------------
J. Landis Martin
Director
- -----------------------------------------------------
Thomas L. Rhodes
/s/ JOHN D. SMITH Director August 13, 1998
- -----------------------------------------------------
John D. Smith
</TABLE>
II-5
<PAGE> 49
POWER OF ATTORNEY
Each person whose signature appears below authorizes Terry Considine and
Peter Kompaniez, and each of them, each of whom may act without joinder of the
other, as his true and lawful attorneys-in-fact and agents, with full power of
substitution and resubstitution, for him and in his name, place and stead, in
any and all capacities to execute in the name of each such person who is then an
officer or director of AIMCO Properties, L.P., and to file any amendments
(including post-effective amendments) to this Registration Statement and any
registration statement for the same offering filed pursuant to Rule 462 under
the Securities Act of 1933, and to file the same, with all exhibits thereto and
all other documents in connection therewith, with the Commission, granting unto
said attorneys-in-fact and agents full power and authority to do and perform
each and every act and thing appropriate or necessary to be done, as fully and
for all intents and purposes as he might or could do in person, hereby ratifying
and confirming all that said attorneys-in-fact and agents or their substitute or
substitutes may lawfully do or cause to be done by virtue hereof.
SIGNATURES
Pursuant to the requirements of the Securities Act of 1933, AIMCO
Properties, L.P. has duly caused this Registration Statement to be signed on its
behalf by the undersigned, thereunto duly authorized, in the City of Denver,
State of Colorado, on August 13, 1998.
AIMCO PROPERTIES, L.P.
By: AIMCO-GP, INC.
its General Partner
By: /s/ TROY D. BUTTS
----------------------------------
Troy D. Butts
Senior Vice President and Chief
Financial Officer
Pursuant to the requirements of the Securities Act of 1933, this
Registration Statement on Form S-3 has been signed below by the following
persons in the capacities and on the dates indicated.
<TABLE>
<CAPTION>
SIGNATURE TITLE DATE
--------- ----- ----
<C> <S> <C>
/s/ TERRY CONSIDINE Chairman and Chief Executive August 13, 1998
- ----------------------------------------------------- Officer of the General Partner
Terry Considine
/s/ PETER K. KOMPANIEZ Vice Chairman and President of the August 13, 1998
- ----------------------------------------------------- General Partner
Peter K. Kompaniez
/s/ TROY D. BUTTS Senior Vice President and Chief August 13, 1998
- ----------------------------------------------------- Financial Officer of the General
Troy D. Butts Partner
</TABLE>
II-6
<PAGE> 50
EXHIBIT INDEX
<TABLE>
<C> <S>
**1.1 -- Form of Underwriting Agreement for Debt Securities of
Apartment Investment and Management Company.
**1.2 -- Form of Underwriting Agreement for Preferred Stock of
Apartment Investment and Management Company.
**1.3 -- Form of Underwriting Agreement for Class A Common Stock
of Apartment Investment and Management Company.
**1.4 -- Form of Underwriting Agreement for Warrants to purchase
Securities of Apartment Investment and Management
Company.
**1.5 -- Form of Underwriting Agreement for Debt Securities of
AIMCO Properties, L.P..
**1.6 -- Form of Underwriting Agreement for Warrants to purchase
Debt Securities of AIMCO Properties, L.P.
4.1 -- Form of Senior Debt Securities Indenture for Apartment
Investment and Management Company (including form of
Note).
4.2 -- Form of Senior Subordinated Debt Securities Indenture for
Apartment Investment and Management Company (including
form of Note).
4.3 -- Form of Subordinated Debt Securities Indenture for
Apartment Investment and Management Company (including
form of Note).
**4.4 -- Form of Senior Debt Securities Indenture for AIMCO
Properties, L.P. (including form of Note)
**4.5 -- Form of Senior Subordinated Debt Securities Indenture for
AIMCO Properties, L.P. (including form of Note)
**4.6 -- Form of Subordinated Debt Securities Indenture for AIMCO
Properties, L.P. (including form of Note)
4.7 -- Form of Warrant Agreement (including form of Warrant
Certificate) for Apartment Investment and Management
Company.
**4.8 -- Form of Warrant Agreement (including form of Warrant
Certificate) for AIMCO Properties, L.P.
**4.8 -- Form of Preferred Stock Certificate for Apartment
Investment and Management Company.
*4.9 -- Specimen certificate for Class A Common Stock of
Apartment Investment and Management Company.
**5.1 -- Opinion of Piper & Marbury L.L.P. regarding the validity
of the securities of Apartment Investment and Management
Company offered hereby.
**5.2 -- Opinion of Skadden, Arps, Slate, Meagher & Flom LLP
regarding the validity of the securities of AIMCO
Properties, L.P. offered hereby.
**8.1 -- Opinion of Skadden, Arps, Slate, Meagher & Flom LLP
regarding tax matters.
***12.1 -- Computation of ratio of earnings to fixed charges.
***12.2 -- Computation of ratio of earnings to combined fixed
charges and preferred stock dividends.
23.1 -- Consent of Ernst & Young LLP Dallas, Texas, dated
August 11, 1998.
23.2 -- Consent of Ernst & Young LLP Chicago, Illinois,
dated August 11, 1998.
23.3 -- Consent of Ernst & Young LLP Greenville, South
Carolina, dated August 12, 1998.
**23.4 -- Consent of Skadden, Arps, Slate, Meagher & Flom LLP.
(included in opinion filed as Exhibit 8.1).
**23.5 -- Consent of Piper & Marbury L.L.P. (included in opinion
filed as Exhibit 5.1).
</TABLE>
<PAGE> 51
<TABLE>
<C> <S>
24.1 -- Power of Attorney for Apartment Investment and Management
Company (included on page II-5).
24.2 -- Power of Attorney for AIMCO Properties, L.P. (included on
page II-6).
**25.1 -- Statement of Eligibility and Qualification of Trustee
under the Senior Debt Securities Indenture for Apartment
Investment and Management Company.
**25.2 -- Statement of Eligibility and Qualification of Trustee
under the Senior Subordinated Debt Securities Indenture
for Apartment Investment and Management Company.
**25.3 -- Statement of Eligibility and Qualification of Trustee
under the Subordinated Debt Securities Indenture for
Apartment Investment and Management Company.
**25.4 -- Statement of Eligibility and Qualification of Trustee
under the Senior Debt Securities Indenture for AIMCO
Properties, L.P.
**25.5 -- Statement of Eligibility and Qualification of Trustee
under the Senior Subordinated Debt Securities Indenture
for AIMCO Properties, L.P.
**25.6 -- Statement of Eligibility and Qualification of Trustee
under the Subordinated Debt Securities Indenture for
AIMCO Properties, L.P.
</TABLE>
- ---------------
* Incorporated by reference from AIMCO's Registration Statement on Form 8-A
filed on July 19, 1994.
** To be filed by amendment or incorporated by reference prior to the offering
of Securities.
*** Incorporated by reference from AIMCO's Form 8-K filed on July 2, 1998.
<PAGE> 1
EXHIBIT 4.1
================================================================================
- --------------------------------------------------------------------------------
APARTMENT INVESTMENT AND
MANAGEMENT COMPANY
SENIOR DEBT SECURITIES
------------------------------
INDENTURE
Dated as of __________
------------------------------
UNITED STATES TRUST COMPANY OF NEW YORK,
Trustee
================================================================================
- --------------------------------------------------------------------------------
<PAGE> 2
CROSS REFERENCE TABLE(1)
<TABLE>
<CAPTION>
TIA INDENTURE
SECTION SECTION
- ------- -----------
<S> <C> <C>
310 (a)(1) . . . . . . . . . . . . . . . . . . . . . . . . . . . 7.8; 7.10
(a)(2) . . . . . . . . . . . . . . . . . . . . . . . . . . . 7.10
(a)(3) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . N.A.
(a)(4) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . N.A.
(a)(5) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 7.10
(b) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 7.8; 7.10
(c) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . N.A
311 (a) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 7.11
(b) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 7.11
(c) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . N.A.
312 (a) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 2.7
(b) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 12.3
(c) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 12.3
313 (a) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 7.6
(b) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 7.6
(c) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 7.6; 12.2
(d) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 7.6
314 (a) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 4.2; 12.2
(b) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . N.A.
(c)(1) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 12.4
(c)(2) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 12.4
(c)(3) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . N.A.
(d) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . N.A.
(e) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 12.5
(f) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 4.3
315 (a) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 7.1
(b) . . . . . . . . . . . . . . . . . . . . . . . . . . . . 7.5; 12.2
(c) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 7.1
(d) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 7.1
(e) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 6.11
316 (a)(1)(A) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 6.5
(a)(1)(B) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 6.4
(a)(2) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . N.A.
(b) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 6.7
(c) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . N.A.
</TABLE>
- --------------------
(1) Note: This Cross Reference Table shall not, for any purpose, be deemed
to be part of the Indenture.
<PAGE> 3
<TABLE>
<CAPTION>
TIA INDENTURE
SECTION SECTION
- ------- -----------
<S> <C> <C>
317 (a)(1) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 6.8
(a)(2) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 6.9
(b) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 2.6
318 (a) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 12.1
</TABLE>
<PAGE> 4
TABLE OF CONTENTS(2)
<TABLE>
<S> <C> <C>
ARTICLE I
DEFINITIONS AND INCORPORATION BY REFERENCE
SECTION 1.1 Definitions. . . . . . . . . . . . . . . . . . . . . . . . . . 1
SECTION 1.2 Other Definitions. . . . . . . . . . . . . . . . . . . . . . . 5
SECTION 1.3 Incorporation by Reference of Trust Indenture Act. . . . . . . 5
SECTION 1.4 Rules of Construction. . . . . . . . . . . . . . . . . . . . . 6
ARTICLE II
THE SECURITIES
SECTION 2.1 Forms Generally. . . . . . . . . . . . . . . . . . . . . . . . 6
SECTION 2.2 Securities in Global Form. . . . . . . . . . . . . . . . . . . 7
SECTION 2.3 Title, Terms and Denominations. . . . . . . . . . . . . . . . 8
SECTION 2.4 Execution, Authentication, Delivery and Dating . . . . . . . . 10
SECTION 2.5 Registrar and Paying Agent. . . . . . . . . . . . . . . . . . 13
SECTION 2.6 Paying Agent to Hold Money and Securities in Trust. . . . . . 14
SECTION 2.7 Securityholder Lists. . . . . . . . . . . . . . . . . . . . . 14
SECTION 2.8 Transfer and Exchange. . . . . . . . . . . . . . . . . . . . . 14
SECTION 2.9 Replacement Securities. . . . . . . . . . . . . . . . . . . . 17
SECTION 2.10 Outstanding Securities; Determinations of Holders' Action. . 18
SECTION 2.11 Temporary Securities. . . . . . . . . . . . . . . . . . . . . 19
SECTION 2.12 Cancellation. . . . . . . . . . . . . . . . . . . . . . . . . 19
SECTION 2.13 Payment of Interest; Interest Rights Preserved. . . . . . . . 20
SECTION 2.14 Persons Deemed Owners. . . . . . . . . . . . . . . . . . . . 21
SECTION 2.15 Computation of Interest . . . . . . . . . . . . . . . . . . . 21
ARTICLE III
REDEMPTION
SECTION 3.1 Right to Redeem; Notices to Trustee. . . . . . . . . . . . . . 21
SECTION 3.2 Selection of Securities to be Redeemed. . . . . . . . . . . . 22
SECTION 3.3 Notice of Redemption. . . . . . . . . . . . . . . . . . . . . 22
</TABLE>
- --------------------
(2) Note: This Table of Contents shall not, for any reason, be deemed to
be part of the Indenture.
i
<PAGE> 5
<TABLE>
<S> <C> <C>
SECTION 3.4 Effect of Notice of Redemption. . . . . . . . . . . . . . . . 23
SECTION 3.5 Deposit of Redemption Price. . . . . . . . . . . . . . . . . . 23
SECTION 3.6 Securities Redeemed in Part. . . . . . . . . . . . . . . . . . 23
ARTICLE IV
COVENANTS
SECTION 4.1 Payment of Securities. . . . . . . . . . . . . . . . . . . . . 24
SECTION 4.2 SEC Reports. . . . . . . . . . . . . . . . . . . . . . . . . . 24
SECTION 4.3 Compliance Certificate. . . . . . . . . . . . . . . . . . . . 24
SECTION 4.4 Further Instruments and Acts. . . . . . . . . . . . . . . . . 24
SECTION 4.5 Maintenance of Office or Agency. . . . . . . . . . . . . . . . 24
ARTICLE V
SUCCESSOR CORPORATION
SECTION 5.1 When Company May Merge or Transfer Assets. . . . . . . . . . . 25
ARTICLE VI
DEFAULTS AND REMEDIES
SECTION 6.1 Events of Default. . . . . . . . . . . . . . . . . . . . . . . 26
SECTION 6.2 Acceleration. . . . . . . . . . . . . . . . . . . . . . . . . 27
SECTION 6.3 Other Remedies. . . . . . . . . . . . . . . . . . . . . . . . 28
SECTION 6.4 Waiver of Past Defaults. . . . . . . . . . . . . . . . . . . . 28
SECTION 6.5 Control by Majority. . . . . . . . . . . . . . . . . . . . . . 28
SECTION 6.6 Limitation on Suits. . . . . . . . . . . . . . . . . . . . . . 29
SECTION 6.7 Rights of Holders to Receive Payment. . . . . . . . . . . . . 29
SECTION 6.8 Collection Suit by Trustee. . . . . . . . . . . . . . . . . . 29
SECTION 6.9 Trustee May File Proofs of Claim. . . . . . . . . . . . . . . 30
SECTION 6.10 Priorities. . . . . . . . . . . . . . . . . . . . . . . . . . 30
SECTION 6.11 Undertaking for Costs. . . . . . . . . . . . . . . . . . . . 31
SECTION 6.12 Waiver of Stay, Extension or Usury Laws . . . . . . . . . . . 31
ARTICLE VII
TRUSTEE
SECTION 7.1 Duties of Trustee. . . . . . . . . . . . . . . . . . . . . . . 32
SECTION 7.2 Rights of Trustee. . . . . . . . . . . . . . . . . . . . . . . 33
</TABLE>
ii
<PAGE> 6
<TABLE>
<CAPTION>
PAGE
----
<S> <C> <C>
SECTION 7.3 Individual Rights of Trustee, etc. . . . . . . . . . . . . . . 33
SECTION 7.4 Trustee's Disclaimer. . . . . . . . . . . . . . . . . . . . . 33
SECTION 7.5 Notice of Defaults. . . . . . . . . . . . . . . . . . . . . . 33
SECTION 7.6 Reports by Trustee to Holders. . . . . . . . . . . . . . . . . 34
SECTION 7.7 Compensation and Indemnity. . . . . . . . . . . . . . . . . . 34
SECTION 7.8 Replacement of Trustee. . . . . . . . . . . . . . . . . . . . 35
SECTION 7.9 Successor Trustee by Merger. . . . . . . . . . . . . . . . . . 36
SECTION 7.10 Eligibility; Disqualification. . . . . . . . . . . . . . . . 36
SECTION 7.11 Preferential Collection of Claims Against Company. . . . . . 37
ARTICLE VIII
SATISFACTION AND DISCHARGE
SECTION 8.1 Discharge of Liability on Securities. . . . . . . . . . . . . 37
SECTION 8.2 Repayment to the Company. . . . . . . . . . . . . . . . . . . 37
SECTION 8.3 Option to Effect Defeasance or Covenant Defeasance. . . . . . 38
SECTION 8.4 Defeasance and Discharge. . . . . . . . . . . . . . . . . . . 38
SECTION 8.5 Covenant Defeasance. . . . . . . . . . . . . . . . . . . . . . 38
SECTION 8.6 Condition to Defeasance or Covenant Defeasance. . . . . . . . 39
ARTICLE IX
SUPPLEMENTAL INDENTURES
SECTION 9.1 Supplemental Indentures without Consent of Holders. . . . . . 39
SECTION 9.2 Supplemental Indentures with Consent of Holders. . . . . . . . 40
SECTION 9.3 Compliance with Trust Indenture Act. . . . . . . . . . . . . . 41
SECTION 9.4 Revocation and Effect of Consents, Waivers and Actions. . . . 41
SECTION 9.5 Notation on or Exchange of Securities. . . . . . . . . . . . . 41
SECTION 9.6 Trustee to Sign Supplemental Indentures. . . . . . . . . . . . 42
SECTION 9.7 Effect of Supplemental Indentures. . . . . . . . . . . . . . . 42
ARTICLE X
SINKING FUNDS
SECTION 10.1 Applicability of Article. . . . . . . . . . . . . . . . . . . 42
SECTION 10.2 Satisfaction of Sinking Fund Payments with Securities. . . . 42
</TABLE>
iii
<PAGE> 7
<TABLE>
<CAPTION>
PAGE
----
<S> <C> <C>
SECTION 10.3 Redemption of Securities for Sinking Fund. . . . . . . . . . 43
ARTICLE XI
ACTIONS OF HOLDERS OF SECURITIES
SECTION 11.1 Purposes for which Meetings may be Called. . . . . . . . . . 43
SECTION 11.2 Call, Notice and Place of Meetings. . . . . . . . . . . . . . 43
SECTION 11.3 Persons Entitled to Vote at Meetings. . . . . . . . . . . . . 44
SECTION 11.4 Quorum; Action. . . . . . . . . . . . . . . . . . . . . . . . 44
SECTION 11.5 Determination of Voting Rights; Conduct and
Adjournment of Meetings. . . . . . . . . . . . . . . . . . 45
SECTION 11.6 Counting Votes and Recording Action of Meetings. . . . . . . 46
SECTION 11.7 Actions of Holders Generally. . . . . . . . . . . . . . . . . 46
ARTICLE XII
MISCELLANEOUS
SECTION 12.1 Trust Indenture Act Controls. . . . . . . . . . . . . . . . . 47
SECTION 12.2 Notices. . . . . . . . . . . . . . . . . . . . . . . . . . . 47
SECTION 12.3 Communication by Holders with Other Holders. . . . . . . . . 49
SECTION 12.4 Certificate and Opinion as to Conditions Precedent. . . . . . 49
SECTION 12.5 Statements Required in Certificate or Opinion. . . . . . . . 49
SECTION 12.6 Separability Clause. . . . . . . . . . . . . . . . . . . . . 49
SECTION 12.7 Rules by Trustee, Paying Agent and Registrar. . . . . . . . . 50
SECTION 12.8 Legal Holidays. . . . . . . . . . . . . . . . . . . . . . . . 50
SECTION 12.9 Governing Law. . . . . . . . . . . . . . . . . . . . . . . . 50
SECTION 12.10 No Recourse Against Others. . . . . . . . . . . . . . . . . 50
SECTION 12.11 Successors. . . . . . . . . . . . . . . . . . . . . . . . . 50
SECTION 12.12 Effect of Headings and Table of Contents. . . . . . . . . . 50
SECTION 12.13 Benefits of Indenture. . . . . . . . . . . . . . . . . . . . 51
SECTION 12.14 Multiple Originals. . . . . . . . . . . . . . . . . . . . . 51
</TABLE>
iv
<PAGE> 8
INDENTURE dated as of ____________, by and among Apartment Investment
and Management Company, a Maryland corporation ("Company"), and United States
Trust Company of New York, as trustee ("Trustee").
RECITALS OF THE COMPANY
The Company has duly authorized the execution and delivery of this
Indenture to provide for the issuance from time to time of its unsecured
debentures, notes or other evidences of indebtedness (herein called the "Secu-
rities") to be issued in one or more series as in this Indenture provided.
For and in consideration of the premises and the purchase of the
Securities by the Holders thereof, it is mutually covenanted and agreed, for
the equal and ratable benefit of the Holders of the Securities or each series
thereof as follows:
ARTICLE I
DEFINITIONS AND INCORPORATION BY REFERENCE
SECTION 1.1 Definitions.
"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 or cause the direction of the management and policies of such person,
directly or indirectly, whether through the ownership of voting securities, by
contract or otherwise; and the terms "controlling" and "controlled" have
meanings correlative to the foregoing.
"Board of Directors" means either the board of directors of the Company
or any committee of such board authorized with respect to any matter to
exercise the powers of the Board of Directors of the Company.
"Board Resolution" means a copy of a resolution certified by the
Secretary or an Assistant Secretary of the Company to have been duly adopted by
the Board of Directors and to be in full force and effect on the date of such
certification, and delivered to the Trustee.
"Business Day" means, except as otherwise specified as contemplated by
Section 2.3(a), with respect to any Place of Payment or any other particular
location referred to in this Indenture or m the Securities, means each Monday,
Tuesday, Wednesday,
<PAGE> 9
Thursday and Friday which is not a day on which banking institutions in that
Place of Payment or other location are authorized or obligated by law or
executive order to close.
"Capital Stock" for any corporation means any and all shares, interests,
rights to purchase, warrants, options, participations or other equivalents of
or interests in (however designated) stock issued by that corporation.
"cash" means such coin or currency of the United States as at any time
of payment is legal tender for the payment of public and private debts.
"Company" means the party named as the "Company" in the first paragraph
of this Indenture until a successor replaces it pursuant to the applicable
provisions of this Indenture and, thereafter, shall mean such successor.
"Company Request" or "Company Order" means a written request or order
signed in the name of the Company, by its Chairman of the Board, a Vice Chair-
man, its President or a Vice President, and by its Treasurer, an Assistant
Treasurer, its Secretary or an Assistant Secretary, and delivered to the
Trustee or, with respect to Sections 2.4, 2.8, 2.11 and 7.2, any other employee
of the Company named in an Officers' Certificate delivered to the Trustee.
"Default" means any event which is, or after notice or passage of time
or both would be, an Event of Default.
"Depositary" means, with respect to the Securities of any series
issuable or issued in whole or in part in global form, the Person specified as
contemplated by Section 2.3(a) as the Depositary with respect to such series of
Securities, until a successor shall have become such pursuant to the applicable
provisions of this Indenture, and thereafter "Depositary" shall mean or include
such successor.
"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 6.2.
"Dollar" or "$" means a dollar or other equivalent unit in such coin or
currency of the United States as at the time shall be legal tender for the
payment of public and private debts.
"Exchange Act" means the Securities Exchange Act of 1934, as amended.
"Holder" or "Securityholder," when used with respect to any Security,
means a person in whose name a Security is registered on the Registrar's books.
2
<PAGE> 10
"Indenture" means this Indenture, as amended or supplemented from time
to time in accordance with the terms hereof and shall include the terms of a
particular series of Securities established as contemplated in Section 2.3(a).
"interest," when used with respect to a Discount Security which by its
terms bears interest only after Maturity, means interest payable after Maturi-
ty.
"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 or, in the
case of a Discount Security, the Principal Amount payable upon a declaration of
acceleration pursuant to Section 6.2, becomes due and payable as therein or
herein provided, whether at the Stated Maturity or by declaration of accelera-
tion, call for redemption or otherwise.
"Officer" means the Chairman of the Board, any Vice Chairman, the
President, any Vice President, the Treasurer, the Secretary, any Assistant
Treasurer or any Assistant Secretary of the Company.
"Officers' Certificate" means a written certificate containing the
information specified in Sections 12.4 and 12.5, signed in the name of the
Company by its Chairman of the Board, a Vice Chairman, its President or a Vice
President, and by its Treasurer, an Assistant Treasurer, its Secretary or an
Assistant Secretary, and delivered to the Trustee.
"Opinion of Counsel" means a written opinion containing the information
specified in Sections 12.4 and 12.5, from legal counsel who is acceptable to
the Trustee. The counsel may be an employee of, or counsel to, the Company or
the Trustee.
"Periodic Offering" means an offering of Securities of a series from
time to time the specific terms of which Securities, including, without limita-
tion, the rate or rates of interest, if any, thereon, the Stated Maturity or
Maturities thereof, the original issue date or dates thereof, the redemption
provisions, if any, and any other terms specified as contemplated by Section
2.3(a) with respect thereto, are to be determined by the Company, or one or
more of the Company's agents designated in an Officers' Certificate, upon the
issuance of such Securities.
"person" means any individual, corporation, partnership, joint venture,
association, joint-stock company, trust, unincorporated organization, or
government or any agency or political subdivision thereof.
3
<PAGE> 11
"Place of Payment," when used with respect to the Securities of any
series, means the place or places where, subject to the provisions of Section
4.5, the Principal of and any interest on the Securities of that series are
payable as specified as contemplated by Section 2.3(a).
"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 2.9 in exchange for or in lieu of a
mutilated, destroyed, lost or stolen Security shall be deemed to evidence the
same debt as the mutilated, destroyed, lost or stolen Security.
"Principal" or "Principal Amount" of a Security, except as otherwise
specifically provided in this Indenture, means the outstanding principal of the
Security plus the premium, if any, of the Security.
"Redemption Date" or "redemption date," when used with respect to any
Security to be redeemed, shall mean the date specified for redemption of such
Security in accordance with the terms of such Security and this Indenture.
"Redemption Price" or "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.
"Regular Record Date" for the interest payable on any Interest Payment
Date on the Securities of any series means the date specified for that purpose
as contemplated by Section 2.3(a).
"SEC" means the Securities and Exchange Commission.
"Securities" has the meaning stated in the first recital of this
Indenture and more particularly means any Securities authenticated and deliv-
ered under this Indenture.
"Securityholder" or "Holder," when used with respect to any Security,
means a person in whose name a Security is registered on the Registrar's books.
"Special Record Date" for the payment of any Defaulted Interest on the
Securities of any issue means a date fixed by the Trustee pursuant to Section
2.13.
"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 as the fixed date on which an amount equal to the Principal of
such Security or an installment of Principal thereof or interest there on is
due and payable.
4
<PAGE> 12
"Subsidiary" means, with respect to any person, a corporation of which a
majority of the Capital Stock having voting power under ordinary circumstances
to elect a majority of the board of directors of such corporation is owned by
(i) such person, (ii) such person and one or more Subsidiaries of such person
or (iii) one or more Subsidiaries of such person.
"TIA" means the Trust Indenture Act of 1939 as in effect on the date of
this Indenture, except as provided in Section 9.3.
"Trust Officer" means any officer of the Trustee assigned by the Trustee
to administer its corporate trust matters.
"Trustee" means the party named as the "Trustee" in the first paragraph
of this Indenture until a successor replaces it pursuant to the applicable
provisions of this Indenture and, thereafter, shall mean such successor.
"United States" means the United States of America, its territories, its
possessions (including the Commonwealth of Puerto Rico), and other areas
subject to its jurisdiction.
SECTION 1.2 Other Definitions.
<TABLE>
<CAPTION>
Defined in
Term Section
---- -------
<S> <C>
"Bankruptcy Law" 6.1
"Custodian" 6.1
"Defaulted Interest" 2.13
"Event of Default" 6.1
"Exchange Date" 2.11
"Legal Holiday" 13.8
"Notice of Default " 6.1
"Outstanding" 2.10
"Paying Agent" 2.5
"Registrar" 2.5
</TABLE>
SECTION 1.3 Incorporation by Reference of Trust Indenture Act.
Whenever this Indenture refers to a provision of the TIA, the provision is
incorporated by reference in and made a part of this Indenture. The following
TIA terms used in this Indenture have the following meanings:
"Commission" means the SEC.
5
<PAGE> 13
"indenture securities" means the Securities.
"indenture security holder" means a Holder or Securityholder.
"indenture to be qualified" means this Indenture.
"indenture trustee" or "institutional trustee" means the Trustee.
"obligor" on the indenture securities means the Company.
All other TIA terms used in this Indenture that are defined by the TIA,
defined by TIA reference to another statute or defined by SEC rule have the
meanings assigned to them by such definitions.
SECTION 1.4 Rules of Construction. Unless the context otherwise
requires:
(1) a term has the meaning assigned to it;
(2) an accounting term not otherwise defined has the meaning
assigned to it in accordance with generally accepted accounting princi-
ples in the United States as in effect from time to time;
(3) "or" is not exclusive;
(4) "including" means including, without limitation; and
(5) words in the singular include the plural, and words in the
plural include the singular.
ARTICLE II
THE SECURITIES
SECTION 2.1 Forms Generally. The Securities of each series shall be in
substantially such form (including global form) as shall be established by
delivery to the Trustee of an Officers' Certificate or in one or more inden-
tures supplemental hereto, in each case with such appropriate insertions,
omissions, substitutions and other variations as are required or permitted by
this Indenture, and may have such letters, numbers or other marks of identifi-
cation and such legends or endorsements placed thereon as may be required to
comply with the rules of any securities exchange or as may, consistently
herewith, be determined by the Officers executing such Securities as evidenced
by their execution of the Securities. The Officers' Certificate so establish-
ing the form of Security
6
<PAGE> 14
of any series shall be delivered to the Trustee at or prior to the delivery of
the Company Order contemplated by Section 2.4 for the authentication and
delivery of such Securities.
The permanent Securities shall be printed, lithographed or engraved or
produced by any combination of these methods or may be produced in any other
manner, provided, that such method is permitted by the rules of any securities
exchange on which such Securities may be listed, all as determined by the
Officers executing such Securities as evidenced by their execution of such
Securities.
SECTION 2.2 Securities in Global Form. If Securities of a series are
issuable in temporary or permanent global form, as specified as contemplated by
Section 2.3(a), then, notwithstanding clause (10) of Section 2.3(a) and the
provisions of Section 2.3(b), any such Security shall represent such of the
Outstanding Securities of such series as shall be specified therein and may
provide that it shall represent the aggregate amount of Outstanding Securities
from time to time endorsed thereon and that the aggregate amount of Outstanding
Securities represented thereby may from time to time be reduced to reflect
exchanges. Any endorsement of a Security in global form to reflect the amount
of 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 2.4 or Section 2.11.
Subject to the provisions of Section 2.4 and, if applicable, Section 2.11, the
Trustee shall deliver and redeliver any Security in 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 2.4 or
2.11 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 12.4 or 12.5 and need
not be accompanied by an Opinion of Counsel.
The provisions of the last sentence of Section 2.4 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 12.4 or 12.5 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 2.4.
Notwithstanding the provisions of Sections 2.1 and 2.13, unless other-
wise specified as contemplated by Section 2.3(a), payment of Principal of and
any interest on any Security in global form shall be made to the person or
persons specified therein.
7
<PAGE> 15
SECTION 2.3 Title, Terms and Denominations.
(a) The aggregate Principal Amount of Securities which may be authenti-
cated and delivered under this Indenture shall be unlimited.
The Securities may be issued in one or more series. There shall be
established and, subject to Section 2.4, set forth, or determined in the manner
provided, in an Officers' Certificate of the Company, or established in one or
more indentures supplemental hereto:
(1) the title of the Securities of the series (which shall
distinguish the Securities of the series from all other Securities);
(2) any limit upon the aggregate Principal Amount of the Securi-
ties of the series which 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 Sections 2.8, 2.9, 2.11, 3.6, 9.5
or 10.3 and except for any Securities which, pursuant to Section 2.4,
are deemed never to have been authenticated and delivered hereunder);
(3) whether any Securities of the series may be represented
initially by a Security in temporary or permanent global form and, if
so, the initial Depositary with respect to any such temporary or perma-
nent global Security, and if other than as provided in Section 2.8 or
Section 2.11, as applicable, whether and the circumstances under which
beneficial owners of interests in any such temporary or permanent global
Security may exchange such interests for Securities of such series and
of like tenor of any authorized form and denomination;
(4) the person to whom any interest on any 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, and the
extent to which, or the manner in which (including any certification
requirement and other terms and conditions under which), any interest
payable on a temporary or permanent global Security on an Interest
Payment Date will be paid if other than in the manner provided in
Section 2.2 and Section 2.4, as applicable;
(5) the date or dates on which the Principal of the Securities
of the series is payable or the method of determination thereof;
(6) the rate or rates at which the Securities of the series
shall bear interest, if any, the date or dates from which any such
interest shall accrue, the
8
<PAGE> 16
Interest Payment Dates on which any such interest shall be payable and
the Regular Record Date for any interest payable on any Securities on
any Interest Payment Date;
(7) the place or places where, subject to the provisions of
Section 4.5, the Principal of and any interest on Securities of the
series shall be payable, any Securities of the series may be surrendered
for registration of transfer, Securities of the series may be surren-
dered for exchange and notices and demands to or upon the Company in
respect of the Securities of the series and this Indenture may be
served;
(8) the period or periods within which, the price or prices at
which and the terms and conditions upon which, Securities of the series
may be redeemed, in whole or in part, at the option of the Company;
(9) the obligation, if any, of the Company to redeem or purchase
Securities of the series pursuant to any sinking fund or analogous
provisions or at the option of a Holder thereof, the conditions, if any,
giving rise to such obligation, and the period or periods within which,
the price or prices at which and the terms and conditions upon which
Securities of the series shall be redeemed or purchased, in whole or in
part, and any provisions for the remarketing of such Securities;
(10) the denominations in which any Securities of the series
shall be issuable, if other than denominations of $1,000 and any inte-
gral multiple thereof;
(11) if other than the Principal Amount thereof, the portion of
the Principal Amount of any Securities of the series which shall be
payable upon declaration of acceleration of the Maturity thereof pursu-
ant to Section 6.2;
(12) if other than as defined in Section 1.1, the meaning of
"Business Day" when used with respect to any Securities of the series;
(13) if and the terms and conditions upon which the Securities
of the series may or must be converted into securities of the Company or
exchanged for securities of the Company;
(14) any terms applicable to Original Issue Discount, if any (as
that term is defined in the Internal Revenue Code of 1986 and the
Regulations thereunder), including the rate or rates at which such
Original Issue Discount, if any, shall accrue;
9
<PAGE> 17
(15) if the Securities of the series may be issued or delivered
(whether upon original issuance or upon exchange of a temporary Security
of such series or otherwise), or any installment of Principal of or any
interest is payable, only upon receipt of certain certificates or other
documents or satisfaction of other conditions in addition to those
specified in this Indenture, the form and terms of such certificates,
documents or conditions; and
(16) any other terms of the series (which terms shall not be
inconsistent with the provisions of this Indenture, except as permitted
by Section 9.1(7)).
All Securities of any one series shall be substantially identical except
as to denomination and the rate or rates of interest, if any, and Stated
Maturity, the date from which interest, if any, shall accrue and except as may
otherwise be provided in or pursuant to an Officers' Certificate pursuant to
this Section 2.3(a) or in any 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 for issuances of additional Securities of
such series or for the establishment of additional terms with respect to the
Securities of such series.
If any of the terms of the series are established by action taken
pursuant to a Board Resolution, a copy of any appropriate record of such action
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 series. With respect to Securities
of a series subject to a Periodic Offering, such Board Resolution or Officers'
Certificate may provide general terms for Securities of such series and provide
either that the specific terms of particular Securities of such series shall be
specified in a Company Order or that such terms shall be determined by the
Company, or one or more of the Company's agents designated in an Officers'
Certificate, in accordance with the Company Order as contemplated by the first
proviso of the third paragraph of Section 2.4.
(b) Unless otherwise provided as contemplated by Section 2.3(a) with
respect to any series of Securities, any Securities of a series shall be
issuable in denominations of $1,000 and any integral multiple thereof.
SECTION 2.4 Execution, Authentication, Delivery and Dating. The
Securities shall be executed on behalf of the Company by its Chairman of the
Board, one of its Vice Chairmen, its President or one of its Vice Presidents,
or the Treasurer or any Assistant Treasurer, under its corporate seal repro-
duced thereon attested by its Secretary or one of its Assistant Secretaries.
The signature of any of these officers on the Securities may be manual or
facsimile.
10
<PAGE> 18
Securities 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.
At any time and from time to time after the execution and delivery of
this Indenture, the Company may deliver Securities of any series 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 such Company Order shall authenticate and deliver such Securi-
ties; provided, however, that, with respect to Securities of a series subject
to a Periodic Offering, (a) such Company Order may be delivered by the Company
to the Trustee prior to the delivery to the Trustee of such Securities for
authentication and delivery, (b) the Trustee shall authenticate and deliver
Securities of such series for original issue from time to time, in an aggregate
Principal Amount not exceeding the aggregate Principal Amount established for
such series, pursuant to a Company Order or pursuant to such procedures accept-
able to the Trustee as may be specified from time to time by a Company Order,
(c) the rate or rates of interest, if any, the Stated Maturity or Maturities,
the original issue date or dates, the redemption provisions, if any, and any
other terms of Securities of such series shall be determined by a Company Order
or pursuant to such procedures and (d) if provided for in such procedures, such
Company Order may authorize authentication and delivery pursuant to oral or
electronic instructions from the Company, or the Company's duly authorized
agent or agents designated in an Officers' Certificate, which oral instructions
shall be promptly confirmed in writing.
If the forms or terms of the Securities of the series have been estab-
lished in or pursuant to one or more Officers' Certificates as permitted by
Sections 2.1 and 2.3(a), in authenticating such Securities, and accepting the
additional responsibilities under this Indenture in relation to such Securi-
ties, the Trustee shall be entitled to receive, and (subject to Section 7.1)
shall be fully protected in relying upon, an Opinion of Counsel stating:
(a) that the form and terms of such Securities have been duly autho-
rized by the Company and established in conformity with the provisions of this
Indenture; and
(b) that such Securities when authenticated and delivered by the
Trustee and issued by the Company in the manner and subject to any conditions
specified in such Opinion of Counsel, will constitute valid and legally binding
obligations of the Company, enforceable in accordance with their terms, subject
to customary exceptions;
provided, however, that, with respect to Securities of a series subject to a
Periodic Offering, the Trustee shall be entitled to receive such Opinion of
Counsel only once at or
11
<PAGE> 19
prior to the time of the first authentication of Securities of such series and
that the Opinion of Counsel above may state:
(x) that the forms of such Securities have been, and the terms of
such Securities (when established in accordance with such procedures as
may be specified from time to time in a Company Order, all as contem-
plated by and in accordance with a Board Resolution or an Officers'
Certificate pursuant to Section 2.3(a), as the case may be) will have
been, duly authorized by the Company and established in conformity with
the provisions of this Indenture; and
(y) that such Securities when (1) executed by the Company, (2)
completed, authenticated and delivered by the Trustee in accordance with
this Indenture, and (3) issued by the Company in the manner and subject
to any conditions specified in such Opinion of Counsel, will constitute
valid and legally binding obligations of the Company, enforceable in
accordance with their terms, subject to customary exceptions.
With respect to Securities of a series subject to a Periodic Offering,
the Trustee may conclusively rely, as to the authorization by the Company of
any of such Securities, the form and terms thereof and the legality, validity,
binding effect and enforceability thereof, upon the Opinion of Counsel and
other documents delivered pursuant to Sections 2.1 and 2.3(a) and this Section,
as applicable, at or prior to the time of the first authentication of Securi-
ties of such series unless and until it has received written notification that
such opinion or other documents have been superseded or revoked. In connection
with the authentication and delivery of Securities of a series subject to a
Periodic Offering, the Trustee shall be entitled to assume, unless it has
actual knowledge to the contrary, that the Company's instructions to authenti-
cate and deliver such Securities do not violate any rules, regulations or
orders of any governmental agency or commission having jurisdiction over the
Company.
Notwithstanding the provisions of Section 2.3(a) and of the preceding
three paragraphs, if all Securities of a series are subject to a Periodic
Offering, it shall not be necessary to deliver the Officers' Certificate
otherwise required pursuant to Section 2.3(a) at or prior to the time of
authentication of each Security of such series if such Officers' Certificate is
delivered at or prior to the authentication upon original issuance of the first
Security of such series to be issued.
Each Security shall be dated the date of its authentication.
The Trustee may appoint an authenticating agent acceptable to the
Company to authenticate Securities. Unless otherwise provided in the appoint-
ment, an authenticating agent may authenticate Securities whenever the Trustee
may do so. Each reference in this Indenture to authentication by the Trustee
includes authentication by such agent.
12
<PAGE> 20
No Security shall be entitled to any benefit under this Indenture or be
valid or obligatory for any purpose unless there appears on such Security a
certificate of authentication substantially in the form provided for herein
duly executed by the Trustee by manual signature of an authorized signatory,
and such certificate upon any Security shall be conclusive evidence, and the
only evidence, that such Security has been duly authenticated and delivered
hereunder. The Trustee's certificate of authentication shall be in substan-
tially the following form:
This is one of the Securities of the series designated therein
referred to in the within-mentioned Indenture.
United States Trust Company of New
York, as Trustee
By:
-------------------------------
Authorized Signatory
Notwithstanding the foregoing, if any Security shall have been duly authenti-
cated 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 2.12 together with a written statement (which need not comply with
Section 12.4 or 12.5 and need not be accompanied by an Opinion of Counsel)
stating that such Security has never been issued and sold by the Company, for
all purposes of this Indenture such Security shall be deemed never to have been
authenticated and delivered hereunder and shall never be entitled to the
benefits of this Indenture.
SECTION 2.5 Registrar and Paying Agent. The Company shall maintain,
with respect to each series of Securities, an office or agency where such
Securities may be presented for registration of transfer or for exchange
("Registrar") and, in the Borough of Manhattan, The City of New York, an office
or agency where such Securities may be presented for purchase or payment
("Paying Agent"). The Registrar shall keep a register of the Securities and of
their transfer and exchange. The Company may have one or more co-registrars
and one or more additional paying agents. The term Paying Agent includes any
additional paying agent.
The Company shall enter into an appropriate agency agreement with
respect to each series of Securities with any Registrar, Paying Agent or co-
registrar (if not the Trustee). The agreement shall implement the provisions
of this Indenture that relate to such agent. The Company shall notify the
Trustee of the name and address of any such agent. If the Company fails to
maintain a Registrar or Paying Agent for a particular
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<PAGE> 21
series of Securities, the Trustee shall act as such and shall be entitled to
appropriate compensation therefor pursuant to Section 7.7. The Company or any
Subsidiary or an Affiliate of either of them may act as Paying Agent, Registrar
or co-registrar.
The Company initially appoints the Trustee as the Registrar and Paying
Agent in connection with such Securities.
SECTION 2.6 Paying Agent to Hold Money and Securities in Trust. Except
as otherwise provided herein, prior to or on each due date of payments in
respect of any series of Securities, the Company shall deposit with the Paying
Agent with respect to such Securities a sum of money sufficient to make such
payments when so becoming due. The Company shall require each Paying Agent
(other than the Trustee) to agree in writing that the Paying Agent shall hold
in trust for the benefit of Holders or the Trustee all money held by such
Paying Agent for the making of payments in respect of the Securities of such
series and shall notify the Trustee of any default by the Company in making any
such payment. At any time during the continuance of any such default, a Paying
Agent shall, upon the written request of the Trustee, forthwith pay to the
Trustee all money so held in trust with respect to such Securities. If the
Company, a Subsidiary or an Affiliate of either of them acts as Paying Agent
for a series of Securities, it shall segregate the money held by it as Paying
Agent with respect to such Securities and hold it as a separate trust fund.
The Company at any time may require a Paying Agent for a series of Securities
to pay all money held by it with respect to such Securities to the Trustee and
to account for any money disbursed by it. Upon doing so, such Paying Agent
shall have no further liability for the money.
SECTION 2.7 Securityholder Lists. The Trustee shall preserve in as
current a form as is reasonably practicable the most recent list available to
it of the names and addresses of Holders of each series of Securities. If the
Trustee is not the Registrar for any series of Securities, the Company shall
cause to be furnished to the Trustee at least semiannually on June 1 and
December 1 a listing of Holders of such series of Securities dated within 15
days of the date on which the list is furnished and at such other times as the
Trustee may request in writing a list in such form and as of such date as the
Trustee may reasonably require of the names and addresses of Securityholders of
such series of Securities.
SECTION 2.8 Transfer and Exchange. Upon surrender for registration of
transfer of any Security at the office or agency of the Company designated
pursuant to Section 4.5 for such purpose, the Company shall execute, and the
Trustee shall authenticate and deliver, in the name of the designated transfer-
ee or transferees, one or more new Securities of any authorized denomination or
denominations of a like aggregate Principal Amount and tenor. The Company
shall not charge a service charge for any registration of transfer or exchange,
but the Company may require payment of a sum sufficient to pay all taxes,
assessments or other governmental charges that may be
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<PAGE> 22
imposed in connection with the transfer or exchange of the Securities from the
Securityholder requesting such transfer or exchange (other than any exchange of
a temporary Security for a definitive Security not involving any change in
ownership or any exchange pursuant to Section 2.11, 3.6, 9.5 or 10.3, not
involving any transfer).
Notwithstanding any other provisions (other than the provisions set
forth in the sixth and seventh paragraphs) of this Section, a Security in
global form representing all or a portion of the Securities of a series may not
be transferred except as a whole by the Depositary for such series to a nominee
of such Depositary or by a nominee of such Depositary to such Depositary or
another nominee of such Depositary or by such Depositary or any such nominee to
a successor Depositary for such series or a nominee of such successor Deposi-
tary.
At the option of the Holder, Securities of any series may be exchanged
for other Securities of the same series of any authorized denomination or
denominations, of a like aggregate Principal Amount and tenor, upon surrender
of the Securities to be exchanged at such office or agency. 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.
Whenever any Securities are so surrendered for exchange, the Company
shall execute, and the Trustee or a duly appointed authenticating agent shall
authenticate and deliver, the Securities which the Holder making the exchange
is entitled to receive.
If at any time the Depositary for the Securities of a series notifies
the Company that it is unwilling or unable to continue as Depositary for the
Securities of such series, the Company shall appoint a successor Depositary
with respect to the Securities of such series. If a successor Depositary for
the Securities of such series is not appointed by the Company within 90 days
after the Company receives such notice, the Company will execute, and the
Trustee, upon receipt of a Company Order for the authentication and delivery of
definitive Securities of such series, will authenticate and deliver Securities
of such series in definitive form in an aggregate Principal Amount equal to the
Principal Amount of the Security or Securities in global form representing such
series in exchange for such Security or Securities in global form.
The Company may at any time and in its sole discretion determine that
the Securities of any series issued in the form of one or more global Securi-
ties shall no longer be represented by such global Security or Securities. In
such event the Company will execute, and the Trustee, upon receipt of a Company
Order for the authentication and delivery of definitive Securities of such
series, will authenticate and deliver Securities of such series in definitive
form and in an aggregate Principal Amount equal to the Principal Amount of the
Security or Securities in global form representing such series in exchange for
such Security or Securities in global form.
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<PAGE> 23
Notwithstanding the foregoing, except as otherwise specified in the
preceding two paragraphs or as contemplated by Section 2.3(a), any permanent
global Security shall be exchangeable only as provided in this paragraph. If
the beneficial owners of interests in a permanent global Security are entitled
to exchange such interests for definitive Securities of such series and of like
Principal Amount and tenor but of another authorized form and denomination, as
specified as contemplated by Section 2.3(a), then without unnecessary delay but
in any event not later than the earliest date on which such interests may be so
exchanged, the Company shall deliver to the Trustee definitive Securities in
aggregate Principal Amount equal to the Principal Amount of such permanent
global Security, executed by the Company. On or after the earliest date on
which such interests may be so exchanged, such permanent global Security shall
be surrendered by the Depositary with respect thereto to the Trustee, as the
Company's agent for such purpose, to be exchanged, in whole or from time to
time in part, for definitive Securities without charge and the Trustee shall
authenticate and deliver, in exchange for each portion of such permanent global
Security, an equal aggregate Principal Amount of definitive Securities of the
same series of authorized denominations and of like tenor as the portion of
such permanent global Security to be exchanged; provided, however, that not-
withstanding the last paragraph of this Section 2.8, no such exchanges may
occur during a period beginning at the opening of business 15 days before any
selection of Securities of that series to be redeemed and ending on the rele-
vant Redemption Date. If a 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 Inter-
est, 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 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.
Upon the exchange of a Security in global form for Securities in
definitive form, such Security in global form shall be cancelled by the Trust-
ee. Securities issued in exchange for a Security in global form pursuant to
this Section 2.8 shall be registered in such names and in such authorized
denominations as the Depositary for such Security in global form, pursuant to
instructions from its direct or indirect participants or otherwise, shall
instruct the Trustee. The Trustee shall deliver such Securities to the persons
in whose names such Securities are so registered.
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.
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<PAGE> 24
Every Security presented or surrendered for registration of transfer or
for exchange shall (if so required by the Company or the Trustee) be duly
endorsed, or be accompanied by a written instrument of transfer in form satis-
factory to the Company and the Registrar duly executed, by the Holder thereof
or his attorney duly authorized in writing.
The Company shall not be required (i) to issue, register the transfer of
or exchange Securities of any series during a period beginning at the opening
of business 15 days before any selection of Securities of that series to be
redeemed and ending (except as otherwise provided in the first proviso in the
eighth paragraph of this Section 2.8) at the close of business on the day of
the mailing of the relevant notice of redemption, or (ii) to register the
transfer of or exchange any Security so selected for redemption, in whole or in
part, except the unredeemed portion of any Security being redeemed in part.
SECTION 2.9 Replacement Securities. If (a) any mutilated Security is
surrendered to the Trustee, or (b) the Company and the Trustee receive evidence
to their satisfaction of the destruction, loss or theft of any Security, and
there is delivered to the Company and the Trustee such security or indemnity as
may be required by them to save each of them harmless, then, in the absence of
notice to the Company or the Trustee that such Security has been acquired by a
bona fide purchaser, the Company shall execute and upon its written request the
Trustee shall authenticate and deliver, in exchange for any such mutilated
Security or in lieu of any such destroyed, lost or stolen Security, a new
Security of the same series and of like tenor and Principal Amount, bearing a
number not contemporaneously outstanding.
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, pay such Security.
Upon the issuance of any new Securities under this Section, the Company
may require the payment of a sum sufficient to cover any tax or other govern-
mental 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 issued pursuant to this Section in lieu
of any mutilated, destroyed, lost or stolen Security shall constitute an
original additional contractual obligation of the Company, whether or not the
destroyed, lost or stolen Security shall be at any time enforceable by anyone,
and any such new Security shall be entitled to all benefits of this Indenture
equally and proportionately with any and all other Securities of that issue
duly issued hereunder.
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<PAGE> 25
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.
SECTION 2.10 Outstanding Securities; Determinations of Holders' Action.
Securities of any series "Outstanding" at any time are, as of the date of
determination, all the Securities of such series theretofore authenticated by
the Trustee for such series except for those cancelled by it, those delivered
to it for cancellation and those described in this Section 2.10 as not out-
standing. A Security does not cease to be "Outstanding" because the Company or
an Affiliate thereof holds the Security; provided, however, that in determining
whether the Holders of the requisite Principal Amount of Outstanding Securities
have given or concurred in any request, demand, authorization, direction,
notice, consent or waiver hereunder, Securities owned by the Company or any
other obligor upon the Securities or any Affiliate of the Company or such other
obligor shall be disregarded and deemed not to be outstanding, except that, in
determining whether the Trustee shall be protected in relying upon any such
request, demand, authorization, direction, notice, consent or waiver, only
Securities which the Trustee knows to be so owned shall be so disregarded.
Securities so owned which have been pledged in good faith may be regarded as
Outstanding if the pledgee establishes to the satisfaction of the Trustee the
pledgee's right so to act with respect to such Securities and that the pledgee
is not the Company or any other obligor upon the Securities or any Affiliate of
the Company or of such other obligor. Subject to the foregoing, only Securi-
ties outstanding at the time of such determination shall be considered in any
such determination (including, without limitation, determinations pursuant to
Articles 6 and 9). In addition, in determining whether the Holders of the
requisite Principal Amount of Outstanding Securities have given or concurred in
any request, demand, authorization, direction, notice, consent or waiver
hereunder, the Principal Amount of a 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 acceleration of the
Maturity thereof pursuant to Section 6.2.
If a Security has been paid pursuant to Section 2.9 or in exchange for
or in lieu of which another Security has been authenticated and delivered
pursuant to this Indenture, it ceases to be outstanding unless the Trustee
receives proof satisfactory to it that the replaced Security is held by a bona
fide purchaser.
If the Trustee (other than the Company) holds, in accordance with this
Indenture, on a Redemption Date or on Stated Maturity, money sufficient to pay
Securities payable on that date, then on and after that date such Securities
shall cease to be outstanding and interest, if any, on such Securities shall
cease to accrue; 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.
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<PAGE> 26
SECTION 2.11 Temporary Securities. Pending the preparation of defini-
tive 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 Securi-
ties in lieu of which they are issued, in registered form, 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. Such temporary Securities may be in global
form.
If temporary Securities for some or all of the Securities of any series
are issued, the Company will cause definitive Securities representing such
Securities to be prepared without unreasonable delay. After the preparation of
such definitive Securities, the temporary Securities shall be exchangeable for
such definitive Securities of like tenor upon surrender of the temporary
Securities at the office or agency of the Company designated for such purpose
pursuant to Section 4.5 for such series for the purpose of exchanges of Securi-
ties of such series, without charge to the Holder. Upon surrender for cancel-
lation 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 and of like
tenor of authorized denominations. Until so exchanged the temporary Securities
shall in all respects be entitled to the same benefits under this Indenture as
definitive Securities.
Until exchanged in full as hereinabove provided, the temporary Securi-
ties of any series shall in all respects be entitled to the same benefits under
this Indenture as permanent Securities of the same series and of like tenor
authenticated and delivered hereunder.
SECTION 2.12 Cancellation. All Securities surrendered for payment,
redemption, 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 all Securities so delivered shall be
promptly cancelled by it. The Company may at any time deliver to the Trustee
for cancellation any Securities previously authenticated and delivered hereun-
der which the Company may have acquired in any manner whatsoever (including
Securities received by the Company in exchange or payment for other Securities
of the Company) and may deliver to the Trustee (or to any other person for
delivery to the Trustee) for cancellation any Securities previously authenti-
cated hereunder which the Company has not issued and sold, and all Securities
so delivered shall be promptly cancelled by the Trustee. The Company may not
reissue, or issue new Securities to replace, Securities it has paid or deliv-
ered to the Trustee for cancellation. No Securities shall be authenticated in
lieu of or in exchange for any Securities cancelled as provided in this Sec-
tion, except as expressly permitted in the form of Securities for any particu-
lar series or as permitted by this Indenture. All cancelled Securities held by
the
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<PAGE> 27
Trustee shall be destroyed by the Trustee and evidence of their destruction
delivered to the Company unless the Company directs by Company Order that the
Trustee deliver cancelled Securities to the Company.
SECTION 2.13 Payment of Interest; Interest Rights Preserved. Unless
otherwise provided as contemplated by Section 2.3(a) with respect to any series
of Securities, interest on any Security which is payable, and is punctually
paid or duly provided for, on any Interest Payment Date shall be paid to the
person in whose name that Security (or one or more Predecessor Securities) is
registered at the close of business on the Regular Record Date for such inter-
est.
Any interest on any Security of any series which 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 Holder
on the relevant Regular Record Date by virtue of having been such Holder, and
such Defaulted Interest may be paid by the Company, at its election in each
case, as provided in clause (1) or (2) below:
(1) The Company may elect to make payment of any Defaulted
Interest to the persons in whose names the Securities of such series (or
their respective Predecessor Securities) are registered at the close of
business on a Special Record Date for the payment of such Defaulted
Interest, which shall be fixed in the following manner. The Company
shall notify the Trustee in writing of the amount of Defaulted Interest
proposed to be paid on each Security and the date of the proposed
payment, and at the same time the Company shall deposit with the Trustee
an amount of money equal to the aggregate amount proposed to be paid in
respect of such Defaulted Interest or shall make arrangements satisfac-
tory to the Trustee for such deposit 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 Securities at his address as it
appears in the Security Register, not less than 10 days prior to such
Special Record Date. Notice of the proposed payment of such Defaulted
Interest and the Special Record Date therefor having been so mailed,
such Defaulted Interest shall be paid to the persons in whose names the
Securities (or their respective Predecessor Securities) are registered
at the close of business on such Special Record Date and shall no longer
be payable pursuant to the following Clause (2).
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<PAGE> 28
(2) The Company may make payment of any Defaulted Interest on
the Securities 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 practi-
cable by the Trustee.
Subject to the foregoing provisions of this Section and Section 2.8,
each Security delivered under this Indenture upon registration of transfer of
or in exchange for or in lieu of any other Security shall carry the rights to
interest accrued and unpaid, and to accrue, which were carried by such other
Security.
SECTION 2.14 Persons Deemed Owners. Prior to due presentment of a
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 Security
is registered as the owner of such Security for the purpose of receiving
payment of Principal of and (except as otherwise specified as contemplated by
Section 2.3(a) and subject to Section 2.8 and Section 2.13) interest on such
Security and for all other purposes whatsoever, whether or not such 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.
None of the Company, the Trustee, any Paying Agent or the 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.
SECTION 2.15 Computation of Interest . Except as otherwise specified
as contemplated by Section 2.3(a) for Securities of any series, (i) interest on
any Securities which bear interest at a fixed rate shall be computed on the
basis of a 360-day year comprised of twelve 30-day months and (ii) interest on
any Securities which bear interest at a variable rate shall be computed on the
basis of the actual number of days in an interest period divided by 360.
ARTICLE III
REDEMPTION
SECTION 3.1 Right to Redeem; Notices to Trustee. 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 2.3(a) for Securities of any series) in accordance with this Arti-
cle. In the case of any redemption at the election of the Company of less than
all of the Securities of any series, the Company shall, within the time period
set forth below, notify the Trustee in writing of the
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<PAGE> 29
Redemption Date, the Principal Amount and any other information necessary to
identify the Securities of such series to be redeemed and the Redemption Price.
The Company shall give the notice to the Trustee provided for in this
Section 3.1 at least 60 days before the Redemption Date (unless a shorter
notice shall be satisfactory to the Trustee).
SECTION 3.2 Selection of Securities to be Redeemed. Unless otherwise
specified as contemplated by Section 2.3(a) with respect to any series of
Securities, if less than all the Securities of any series with the same issue
date, interest rate and Stated Maturity are to be redeemed, the Trustee shall
select the particular Securities to be redeemed by a method the Trustee consid-
ers fair and appropriate, which method 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 make
the selection not more than 60 days before the Redemption Date from Outstanding
Securities of such series not previously called for redemption. Provisions of
this Indenture that apply to Securities called for redemption also apply to
portions of Securities called for redemption. The Trustee shall notify the
Company promptly in writing of the Securities to be redeemed and, in the case
of any portions of Securities to be redeemed, the principal amount thereof to
be redeemed.
SECTION 3.3 Notice of Redemption. Unless otherwise specified as
contemplated by Section 2.3(a) with respect to any series of Securities, at
least 30 days but not more than 60 days before a Redemption Date, the Company
shall mail a notice of redemption by first-class mail, postage prepaid, to each
Holder of Securities to be redeemed.
The notice shall identify the Securities to be redeemed and shall state:
(1) the Redemption Date;
(2) the Redemption Price;
(3) if fewer than all the Outstanding Securities of any series
are to be redeemed, the identification (and, in the case of partial
redemption, the Principal Amounts) of the particular Securities to be
redeemed;
(4) that on the Redemption Date the Redemption Price will become
due and payable upon each such Security (or portion thereof) to be
redeemed and, if applicable, that interest thereon will cease to accrue
on and after said date;
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<PAGE> 30
(5) the place or places where such Securities maturing after the
Redemption Date, are to be surrendered for payment of the Redemption
Price; and
(6) that the redemption is for a sinking fund, if such is the
case.
At the Company's request, the Trustee shall give the notice of redemp-
tion in the Company's name and at the Company's expense; provided, however,
that, in all cases, the text of such Company Notice shall be prepared by the
Company.
SECTION 3.4 Effect of Notice of Redemption. Once notice of redemption
is given, Securities called for redemption become due and payable on the
Redemption Date and at the Redemption Price stated in the notice, and from and
after such date (unless the Company shall default in the payment of the Redemp-
tion Price and accrued interest) such Securities shall cease to bear interest.
Upon surrender of any such Security for redemption in accordance with said
notice, such Security shall be paid by the Company at the Redemption Price,
together with accrued interest to the Redemption Date; provided, however, that,
unless otherwise specified as contemplated by Section 2.3(a), 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 Prede-
cessor Securities, registered as such at the close of business on the relevant
Regular Record Dates according to their terms and the provisions of Sections
2.8 and 2.13.
If any Security called for redemption shall not be so paid upon surren-
der thereof for redemption, the Principal shall, until paid, bear interest from
the Redemption Date at the rate prescribed therefor in the Security.
SECTION 3.5 Deposit of Redemption Price. Prior to or on the Redemption
Date, the Company shall deposit with the Paying Agent (or if the Company or a
Subsidiary or an Affiliate of either of them is the Paying Agent, shall segre-
gate and hold in trust) money sufficient to pay the Redemption Price and
(except if the Redemption Date shall be an Interest Payment Date) accrued
interest on, of all Securities to be redeemed on that date other than Securi-
ties or portions of Securities called for redemption which prior thereto have
been delivered by the Company to the Trustee for cancellation. If such money
is then held by the Company in trust and is not required for such purpose, it
shall be discharged from such trust.
SECTION 3.6 Securities Redeemed in Part. Any Security which is to be
redeemed only in part shall be surrendered at the office or agency of the
Company designated therefor pursuant to Section 4.5 (with, if the Company or
the Trustee so requires, due endorsement by, or a written instrument of trans-
fer in form satisfactory to the Company and the Trustee duly executed by, the
Holder thereof or his attorney duly authorized in writing), and upon such
surrender, the Company shall execute and the Trustee shall authenticate and
deliver to the Holder of such Security a new Security or Securities of the
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<PAGE> 31
same series and of like tenor, in an authorized denomination as requested by
such Holder, equal in aggregate Principal Amount to and in exchange for the
unredeemed portion of the Principal of the Security surrendered.
ARTICLE IV
COVENANTS
SECTION 4.1 Payment of Securities. The Company shall promptly make all
payments in respect of each series of Securities on the dates and in the manner
provided in the Securities and, to the extent not otherwise so provided,
pursuant to this Indenture. An installment of Principal of or interest on the
Securities shall be considered paid on the date it is due if the Trustee or a
Paying Agent (other than the Company or an Affiliate of the Company) holds on
that date funds designated for and sufficient to pay such installment. At the
Company's option, payments of Principal or interest may be made by check or by
transfer to an account maintained by the payee.
SECTION 4.2 SEC Reports. The Company shall file with the Trustee,
within 15 days after it files such annual and quarterly reports, information,
documents and other reports with the SEC, copies of its annual report and of
the information, documents and other reports (or copies of such portions of any
of the foregoing as the SEC may by rules and regulations prescribe) which the
Company is required to file with the SEC pursuant to Section 13 or 15(d) of the
Exchange Act. The Company also shall comply with the other provisions of TIA
Section 314(a).
SECTION 4.3 Compliance Certificate. The Company shall deliver to the
Trustee within 120 days after the end of each fiscal year of the Company
(beginning with the first fiscal year ending on or after the date hereof) an
Officers' Certificate stating whether or not the signers know of any Default
that occurred during such period. If they do, such Officers' Certificate shall
describe the Default and its status.
SECTION 4.4 Further Instruments and Acts. Upon request of the Trustee,
the Company will execute and deliver such further instruments and do such
further acts as may be reasonably necessary or proper to carry out more effec-
tively the purposes of this Indenture.
SECTION 4.5 Maintenance of Office or Agency. The Company
will maintain in the Borough of Manhattan, the City of New York, an office or
agency where Securities of that series may be presented or surrendered for
payment, where any Securities of that series may be surrendered for
registration of transfer, where Securities of that series may be surrendered
for exchange, purchase or redemption and where notices and demands to or upon
the Company in respect of the Securities of that series and this Indenture may
be served. The office of the Trustee in New York, New York shall be such
office or
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agency for all of the aforesaid purposes unless the Company shall maintain some
other office or agency for such purposes and shall give prompt written notice
to the Trustee of the location, and any change in the location, of such other
office or agency. If at any time the Company shall fail to maintain any such
required office or agency in respect of any series of Securities or shall fail
to furnish the Trustee with the address thereof, such presentations and surren-
ders of Securities of that series may be made and notices and demands may be
made or served at the address of the Trustee set forth in Section 12.2, and the
Company hereby appoints the same as its agent to receive such respective
presentations, surrenders, notices and demands.
The Company may also 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 such purposes and may from time to time rescind
such designations; provided, however, that no such designation or rescission
shall in any manner relieve the Company of its obligation to maintain an office
or agency in accordance with the requirements set forth above for Securities of
any series for such purposes. The Company will give prompt written notice to
the Trustee of any such designation or rescission and of any change in the
location of any such other office or agency.
ARTICLE V
SUCCESSOR CORPORATION
SECTION 5.1 When Company May Merge or Transfer Assets. The Company
shall not consolidate with or merge with or into any other person or convey,
transfer or lease its properties and assets substantially as an entirety to any
person, unless:
(a) either (1) the Company shall be the continuing corporation
or (2) the person (if other than the Company) formed by such consolida-
tion or into which the Company is merged or the person which acquires by
conveyance, transfer or lease the properties and assets of the Company
substantially as an entirety (i) shall be a corporation, partnership or
trust organized and validity existing under the laws of the United
States or any state thereof or the District of Columbia and (ii) shall
expressly assume, by an indenture supplemental hereto, executed and
delivered to the Trustee, in form satisfactory to the Trustee, all of
the obligations of the Company under the Securities and this Indenture;
(b) immediately after giving effect to such transaction, no
Default shall have occurred and be continuing; and
(c) the Company shall have delivered to the Trustee an Officers'
Certificate and an Opinion of Counsel, each stating that such consolida-
tion, merger,
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conveyance, transfer or lease and, if a supplemental indenture is
required in connection with such transaction, such supplemental inden-
ture, comply with this Article and that all conditions precedent herein
relating to such transaction have been satisfied.
The successor person formed by such consolidation or into which the
Company is merged or the successor person to which such conveyance, transfer or
lease is made shall succeed to, and be substituted for, and may exercise every
right and power of, the Company under this Indenture with the same effect as if
such successor had been named as the Company herein; and thereafter, except in
the case of a lease of its properties and assets substantially as an entirety,
the Company shall be discharged from all obligations and covenants under this
Indenture and the Securities.
ARTICLE VI
DEFAULTS AND REMEDIES
SECTION 6.1 Events of Default. Unless otherwise specified as contem-
plated by Section 2.3(a) with respect to any series of securities, an "Event of
Default" occurs, with respect to each series of the Securities individually,
if:
(1) the Company defaults in (a) the payment of the principal of
any Security of such series at its Maturity or (b) the payment of any
interest upon any Security of such series when the same becomes due and
payable and continuance of such default for a period of 30 days;
(2) the Company fails to comply with any of its agreements in
the Securities or this Indenture (other than those referred to in clause
(1) above and 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 such series) and
such failure continues for 60 days after receipt by the Company of a
Notice of Default;
(3) there shall have been the entry by a court of competent
jurisdiction of (a) a decree or order for relief in respect of the
Company in an involuntary case or proceeding under any applicable
Bankruptcy Law or (b) a decree or order adjudging the Company bankrupt
or insolvent, or seeking reorganization, arrangement, adjustment or
composition of or in respect of the Company under any applicable federal
or state law, or appointing a custodian, receiver, liquidator, assignee,
trustee, sequestrator (or other similar official) of the Company or of
any substantial part of its property, or ordering the wind up or liqui-
dation of its affairs, and any such
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decree or order for relief shall continue to be in effect, or any such
other decree or order shall be unstayed and in effect, for a period of
60 consecutive days;
(4) (a) the Company commences a voluntary case or proceeding
under any applicable Bankruptcy Law or any other case or proceeding to
be adjudicated bankrupt or insolvent, (b) the Company consents to the
entry of a decree or order for relief in respect of the Company in an
involuntary case or proceeding under any applicable Bankruptcy Law or to
the commencement of any bankruptcy or insolvency case or proceeding
against it, (c) the Company files a petition or answer or consent
seeking reorganization or substantially comparable relief under any
applicable federal state law, (d) the Company (x) consents to the filing
of such petition or the appointment of, or taking possession by, a
custodian, receiver, liquidator, assignee, trustee, sequestrator or
similar official of the Company or of any substantial part of its
property, (y) makes an assignment for the benefit of creditors or (z)
admits in writing its inability to pay its debts generally as they
become due or (e) the Company takes any corporate action in furtherance
of any such actions in this clause (4); or
(5) any other Event of Default provided with respect to Securi-
ties of that series.
"Bankruptcy Law" means Title 11, United States Code, or any
similar Federal or state law for the relief of debtors. "Custodian" means any
receiver, trustee, assignee, liquidator, custodian or similar official under
any Bankruptcy Law.
A Default under clause (2) above is not an Event of Default until
the Trustee notifies the Company, or the Holders of at least 25% in aggregate
Principal Amount of the Outstanding Securities of such series notify the
Company and the Trustee, of the Default and the Company does not cure such
Default within the time specified in clause (2) above after receipt of such
notice. Any such notice must specify the Default, demand that it be remedied
and state that such notice is a "Notice of Default."
SECTION 6.2 Acceleration. If an Event of Default with respect to
Securities of any series at the time Outstanding (other than an Event of
Default specified in Section 6.1(3) or (4)) occurs and is continuing, the
Trustee by notice to the Company, or the Holders of at least 25% in aggregate
Principal Amount of the Outstanding Securities of that series by notice to the
Company and the Trustee, may declare the Principal Amount (or, if any of the
Securities of that series are Discount Securities, such portion of the Princi-
pal Amount of such Securities as may be specified in the terms thereof) of all
the Securities of that series to be immediately due and payable. Upon such a
declaration, such Principal (or portion thereof) shall be due and payable
immediately. If an Event of Default specified in Section 6.1(3) or (4) occurs
and is continuing, the Principal (or portion thereof) of all the Securities of
that series shall become and be immediately due
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and payable without any declaration or other act on the part of the Trustee or
any Securityholders. The Holders of a majority in aggregate Principal Amount
of the Outstanding Securities of any series, by notice to the Trustee (and
without notice to any other Securityholder) may rescind an acceleration with
respect to that series and its consequences if the rescission would not con-
flict with any judgment or decree and all existing Events of Default with
respect to Securities of such series have been cured or waived except nonpay-
ment of the Principal (or portion thereof) of Securities of such series that
has become due solely as a result of such acceleration and if all amounts due
to the Trustee under Section 7.7 have been paid. No such rescission shall
affect any subsequent Default or impair any right consequent thereto.
SECTION 6.3 Other Remedies. If an Event of Default with respect to a
series of Outstanding Securities occurs and is continuing, the Trustee may
pursue any available remedy to (a) collect the payment of the whole amount then
due and payable on such Securities for Principal and interest, with interest
upon the overdue Principal and, to the extent that payment of such interest
shall be legally enforceable, upon overdue installments of interest from the
date such interest was due, at the rate or rates prescribed therefor in such
Securities and, in addition thereto, such further amount as shall be sufficient
to cover the costs and expenses of collection, including amounts due the
Trustee under Section 7.7 or (b) enforce the performance of any provision of
the Securities or this Indenture.
The Trustee may maintain a proceeding even if the Trustee does
not possess any of the Securities or does not produce any of the Securities in
the proceeding. A delay or omission by the Trustee or any Securityholder in
exercising any right or remedy accruing upon an Event of Default shall not
impair the right or remedy or constitute a waiver of, or acquiescence in, the
Event of Default. No remedy is exclusive of any other remedy. All available
remedies are cumulative.
SECTION 6.4 Waiver of Past Defaults. The Holders of a majority in
aggregate Principal Amount of the Outstanding Securities of any series, by
notice to the Trustee (and without notice to any other Securityholder), may on
behalf of the Holders of all the Securities of such series waive an existing
Default with respect to such series and its consequences except (1) an Event of
Default described in Section 6.1(1) with respect to such series or (2) a
Default in respect of a provision that under Section 9.2 cannot be amended
without the consent of the Holder of each Outstanding Security of such series
affected. When a Default is waived, it is deemed cured, but no such waiver
shall extend to any subsequent or other Default or impair any consequent right.
SECTION 6.5 Control by Majority. The Holders of a majority in aggre-
gate Principal Amount of the Outstanding Securities of any series may direct
the time, method and place of conducting any proceeding for any remedy avail-
able to the Trustee or of exercising any trust or power conferred on the
Trustee with respect to the Securities of
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such series. However, the Trustee may refuse to follow any direction that
conflicts with law or this Indenture or that the Trustee determines in good
faith is unduly prejudicial to the rights of other Securityholders or would
involve the Trustee in personal liability.
SECTION 6.6 Limitation on Suits. A Holder of any Security of any
series may not pursue any remedy with respect to this Indenture or the Securi-
ties unless:
(1) the Holder gives to the Trustee written notice stating that
an Event of Default with respect to the Securities of that series is
continuing;
(2) the Holders of at least 25% in aggregate Principal Amount of
the Outstanding Securities of that series make a written request to the
Trustee to pursue the remedy;
(3) such Holder or Holders offer to the Trustee reasonable
security or indemnity against any loss, liability or expense satisfacto-
ry to the Trustee;
(4) the Trustee does not comply with the request within 60 days
after receipt of the notice, the request and the offer of security or
indemnity; and
(5) the Holders of a majority in aggregate Principal Amount of
the Outstanding Securities of that series do not give the Trustee a
direction inconsistent with such request during such 60-day period.
A Securityholder may not use this Indenture to prejudice the
rights of any other Securityholder or to obtain a preference or priority over
any other Securityholder.
SECTION 6.7 Rights of Holders to Receive Payment. Notwithstanding any
other provision of this Indenture, the right, which is absolute and uncondi-
tional, of any Holder of any Security to receive payment of the Principal of
and (subject to Section 2.13) interest on such Security on the Stated Maturity
or Maturities expressed in such Security (or, in the case of redemption, on the
Redemption Date) held by such Holder, on or after the respective due dates
expressed in the Securities or any Redemption Date, or to bring suit for the
enforcement of any such payment on or after such respective dates, shall not be
impaired or affected adversely without the consent of each such Holder.
SECTION 6.8 Collection Suit by Trustee. If an Event of Default
described in Section 6.1(1) with respect to Securities of any series occurs and
is continuing, the Trustee may recover judgment in its own name and as trustee
of an express trust against the Company for the whole amount owing with respect
to such series of Securities and the amounts provided for in Section 7.7.
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SECTION 6.9 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 shall then be due and payable as
therein expressed or by declaration or otherwise and irrespective of whether
the Trustee shall have made any demand on the Company for the payment of
overdue Principal 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 of Principal
and interest 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 reason-
able compensation, expenses, disbursements and advances of the Trustee,
its agents and counsel and any other amount due the Trustee under
Section 7.7) and of the Holders of Securities 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
similar official in any such judicial proceeding is hereby authorized by each
Holder of Securities 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 of Securities, to pay the Trustee any amount due it for the reasonable
compensation, expenses, disbursements and advances of the Trustee, its agents
and counsel, and any other amounts due the Trustee under Section 7.7.
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 Securi-
ty 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 in any such pro-
ceeding.
SECTION 6.10 Priorities. If the Trustee collects any money pursuant to
this Article 6, it shall pay out the money in the following order and, in case
of the distribution of such money on account of Principal or interest, upon
presentation of the Securities, or both, as the case may be, and the notation
thereon of the payment if only partially paid and upon surrender thereof if
fully paid:
FIRST: to the Trustee for amounts due under Section 7.7;
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SECOND: to Securityholders for amounts due and unpaid for the Principal
and interest on the Securities 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 amounts due and payable on such Securities for Principal
and interest, respectively; and
THIRD: the balance, if any, to the Company.
The Trustee may fix a record date and payment date for any payment to
Securityholders pursuant to this Section 6.10. At least 15 days before such
record date, the Company shall mail to each Securityholder and the Trustee a
notice that states the record date, the payment date and amount to be paid.
SECTION 6.11 Undertaking for Costs. 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, a court in its discretion may
require the filing by any party litigant in the suit of an undertaking to pay
the costs of the suit, and the court in its discretion may assess reasonable
costs, including reasonable attorneys' fees, against any party litigant in the
suit, having due regard to the merits and good faith of the claims or defenses
made by the party litigant. This Section 6.11 does not apply to a suit by the
Trustee, a suit by a Holder pursuant to Section 6.7 or a suit by Holders of
more than 10% in aggregate Principal Amount of the Outstanding Securities of
any series, or to any suit instituted by any Holder of any Security for the
enforcement of the payment of the Principal of or interest on any Security on
or after the Stated Maturity or Maturities expressed in such Security (or, in
the case of redemption, on or after the Redemption Date).
SECTION 6.12 Waiver of Stay, Extension or Usury 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 stay or extension law or any usury or other 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 enact-
ed.
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ARTICLE VII
TRUSTEE
SECTION 7.1 Duties of Trustee.
(a) If an Event of Default has occurred and is continuing, the Trustee
shall exercise the rights and powers vested in it by this Indenture and use the
same degree of care and skill in its exercise as a prudent man would exercise
or use under the circumstances in the conduct of his own affairs.
(b) Except during the continuance of an Event of Default:
(1) the Trustee need perform only those duties that are specifi-
cally set forth in this Indenture and no others and shall not be liable
except for the performance of such duties; and
(2) 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 fur-
nished to the Trustee and conforming to the requirements of this Inden-
ture. However, the Trustee shall examine the certificates and opinions
to determine whether or not they conform to the requirements of this
Indenture.
(c) The Trustee may not be relieved from liability for its own negli-
gent action, its own negligent failure to act or its own willful misconduct,
except that:
(1) this paragraph (c) does not limit the effect of paragraph
(b) of this Section 7.1;
(2) the Trustee shall not be liable for any error of judgment
made in good faith by a Trust Officer unless it is proved that the
Trustee was negligent in ascertaining the pertinent facts; and
(3) the Trustee shall not be liable with respect to any action
it takes or omits to take in good faith in accordance with a direction
received by it pursuant to Section 6.5.
(d) Every provision of this Indenture that in any way relates to the
Trustee is subject to paragraphs (a), (b), (c) and (e) of this Section 7.1.
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(e) The Trustee may refuse to perform any duty or exercise any right or
power or extend or risk its own funds or otherwise incur any financial liabili-
ty unless it receives indemnity satisfactory to it against any loss, liability
or expense.
(f) Money held by the Trustee in trust hereunder need not be segregated
from other funds except to the extent required by law. The Trustee shall not
be liable for any interest on any money received by it except as the Trustee
may otherwise agree with the Company.
SECTION 7.2 Rights of Trustee. (a) The Trustee may rely on any
document believed by it to be genuine and to have been signed or presented by
the proper person. The Trustee need not investigate any fact or matter stated
in the document.
(b) Before the Trustee acts or refrains from acting, it may require an
Officers' Certificate or an Opinion of Counsel. The Trustee shall not be
liable for any action it takes or omits to take in good faith in reliance on
such Officers' Certificate or Opinion of Counsel.
(c) The Trustee may act through agents and shall not be responsible for
the misconduct or negligence of any agent appointed with due care.
(d) Subject to the provisions of Section 7.1 (c), the Trustee shall not
be liable for any action it takes or omits to take in good faith which it
believes to be authorized or within its rights or powers.
SECTION 7.3 Individual Rights of Trustee, etc. The Trustee in its
individual or any other capacity may become the owner or pledgee of Securities
and may otherwise deal with the Company or its Affiliates with the same rights
it would have if it were not Trustee. Any Paying Agent, Registrar or co-
registrar or any other agent of the Company may do the same with like rights.
However, the Trustee must comply with Sections 7.10 and 7.11.
SECTION 7.4 Trustee's Disclaimer. The Trustee makes no representation
as to the validity or adequacy of this Indenture or the Securities. The
Trustee shall not be accountable for the Company's use of the proceeds from the
Securities and, shall not be responsible for any statement in the registration
statement for the Securities under the Securities Act of 1933, as amended, or
in the Indenture or the Securities (other than its certificate of authentica-
tion) or for the determination as to which beneficial owners are entitled to
receive any notices hereunder.
SECTION 7.5 Notice of Defaults. If a Default with respect to the
Securities of any series occurs and is continuing and if it is known to the
Trustee, the Trustee shall give to each Holder of Securities of such series
notice of such Default in the manner set forth in
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<PAGE> 41
TIA Section 315(b) within 90 days after it occurs. The Trustee shall have no
duty to inquire as to the performance of the Company's covenants in Article IV
hereof. In addition, the Trustee shall not be deemed to have knowledge of any
Default or Event of Default except (i) any Event of Default occurring pursuant
to Section 4.1 or 6.1(l) or (ii) any Default or Event of Default of which the
Trustee shall have received written notification or obtained actual knowledge.
SECTION 7.6 Reports by Trustee to Holders. Within 60 days after each
May 15 beginning with the May 15 following the date of this Indenture, the
Trustee shall mail to each Holder of Securities a brief report dated as of such
May 15 that complies with TIA Section 313(a). The Trustee also shall comply
with TIA Section 313(b) and (c).
A copy of each report at the time of its mailing to Holders of Securi-
ties shall be filed with the SEC and each stock exchange on which the Securi-
ties of that series may be listed. The Company agrees to notify the Trustee
whenever the Securities of a particular series become listed on any stock
exchange and of any delisting thereof.
SECTION 7.7 Compensation and Indemnity. The Company agrees:
(a) to pay to the Trustee from time to time reasonable compensa-
tion 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) to reimburse the 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 reason-
able compensation and the expenses, advances 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 the Trustee for, and to hold it harmless
against, any loss, liability or expense incurred without negligence or
bad faith on its part, arising out of or in connection with the accep-
tance or administration of this trust, 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.
To secure the Company's payment obligations in this Section 7.7, the
Trustee shall have a lien prior to the Securities on all money or property held
or collected by the Trustee, except that held in trust to pay the Principal of
or interest, if any, on particular Securities.
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The Company's payment obligations pursuant to this Section 7.7 shall
survive the discharge of this Indenture. When the Trustee incurs expenses
after the occurrence of a Default specified in Section 6.1(3) or (4), the
expenses are intended to constitute expenses of administration under any
Bankruptcy Law.
SECTION 7.8 Replacement of Trustee. The Trustee may resign by so
notifying the Company; provided, however, no such resignation shall be effec-
tive until a successor Trustee has accepted its appointment pursuant to this
Section 7.8. The Holders of a majority in aggregate Principal Amount of the
Outstanding Securities of any series at the time outstanding may remove the
Trustee with respect to the Securities of such series by so notifying the
Trustee and may appoint a successor Trustee. The Company shall remove the
Trustee if:
(1) the Trustee fails to comply with Section 7.10;
(2) the Trustee is adjudged bankrupt or insolvent;
(3) a receiver or public officer takes charge of the Trustee or
its property; or
(4) the Trustee otherwise becomes incapable of acting.
If the Trustee resigns or is removed or if a vacancy exists in the
office of Trustee for any reason, with respect to the Securities of one or more
series, the Company shall promptly appoint, by resolution of its Board of
Directors, a successor Trustee 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
series).
In the case of the appointment hereunder of a successor Trustee with
respect to all Securities, every such successor Trustee shall deliver a written
acceptance of its appointment to the retiring Trustee and to the Company.
Thereupon, the resignation or removal of the retiring Trustee shall become
effective and the successor Trustee shall have all the rights, powers and
duties of the Trustee under this Indenture. The successor Trustee shall mail a
notice of its succession to Holders of Securities of the particular series with
respect to which such successor Trustee has been appointed. The retiring
Trustee shall promptly transfer all property held by it as Trustee to the
successor Trustee, subject to the lien provided for in Section 7.7.
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 retir-
ing Trustee and each successor Trustee with respect to the Securities of one or
more series shall execute and deliver an indenture supplemental hereto wherein
each successor Trustee shall accept
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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 succes-
sor 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 consti-
tute such Trustees as co-Trustees of the same trust and that each such Trustee
shall be trustee of a trust or trusts hereunder separate and apart from any
trust or trusts hereunder administered by any other such Trustee; and upon the
execution and delivery of such supplemental indenture the resignation or
removal of the retiring Trustee shall become effective to the extent provided
therein and each such successor Trustee, without any further act, deed or
conveyance, shall become vested with all the rights, powers, trusts and duties
of the retiring Trustee with respect to the Securities of that or those series
to which the appointment of such successor Trustee relates; but, on request of
the Company or any successor Trustee, such retiring Trustee shall duly assign,
transfer and deliver to such successor Trustee all property and money held by
such retiring Trustee hereunder with respect to the Securities of that or those
series to which the appointment of such successor Trustee relates, subject,
nevertheless, to its lien, if any, provided for in Section 7.7.
If a successor Trustee with respect to the Securities of any series does
not take office within 30 days after the retiring Trustee resigns or is re-
moved, the retiring Trustee, the Company or the Holders of a majority in
aggregate Principal Amount of the Outstanding Securities of such series at the
time outstanding may petition any court of competent jurisdiction for the
appointment of a successor Trustee with respect to the Securities of such
series.
If the Trustee fails to comply with Section 7.10, any Holder of a
Security of such series may petition any court of competent jurisdiction for
the removal of such Trustee and the appointment of a successor Trustee.
SECTION 7.9 Successor Trustee by Merger. If the Trustee consolidates
with, merges or converts into, or transfers all or substantially all its
corporate trust business or assets to, another corporation, the resulting,
surviving or transferee corporation without any further act shall be the
successor Trustee.
SECTION 7.10 Eligibility; Disqualification. The Trustee shall at all
times satisfy the requirements of TIA Section 310(a)(1) and 310(a)(5). The
Trustee shall have a
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combined capital and surplus of at least $50,000,000 as set forth in its most
recent published annual report of condition. The Trustee shall comply with TIA
Section 310(b). In determining whether the Trustee has conflicting interests
as defined in TIA Section 310(b)(1), the provisions contained in the proviso to
TIA Section 310(b)(1) shall be deemed incorporated herein.
SECTION 7.11 Preferential Collection of Claims Against Company. The
Trustee shall comply with TIA Section 311(a), excluding any creditor relation-
ship 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 therein.
ARTICLE VIII
SATISFACTION AND DISCHARGE
SECTION 8.1 Discharge of Liability on Securities. Except as otherwise
provided as contemplated by Section 2.3(a), when (a) the Company delivers to
the Trustee all Outstanding Securities or all Outstanding Securities of any
series, as the case may be, theretofore authenticated and delivered (other than
(i) Securities which have been destroyed, lost or stolen and which have been
replaced or paid as provided in Section 2.9, (ii) Securities 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 2.6) for cancellation or (b) all Outstanding
Securities have become due and payable and the Company deposits with the
Trustee cash sufficient to pay at Stated Maturity the Principal Amount of all
Principal of and interest on Outstanding Securities or all Outstanding Securi-
ties of such series (other than Securities replaced pursuant to Section 2.9),
and if in either case the Company pays all other sums payable hereunder by the
Company, then this Indenture shall, subject to Section 7.7, cease to be of
further effect as to all Outstanding Securities or all Outstanding Securities
of any series, as the case may be. The Trustee shall join in the execution of
a document prepared by the Company acknowledging satisfaction and discharge of
this Indenture on demand of the Company accompanied by an Officers' Certificate
and Opinion of Counsel and at the cost and expense of the Company.
SECTION 8.2 Repayment to the Company. The Trustee and the Paying Agent
shall return to the Company on Company Request any money held by them for the
payment of any amount with respect to the Securities that remains unclaimed for
two years; provided, however, that the Trustee or such Paying Agent, before
being required to make any such return, may at the expense and direction of the
Company mail to each Holder of such Securities 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 mailing, any unclaimed money then remaining
will be returned to the Company. After return to the
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Company, Holders entitled to the money must look to the Company for payment as
general creditors unless an applicable abandoned property law designates
another person.
SECTION 8.3 Option to Effect Defeasance or Covenant Defeasance. Unless
otherwise specified as contemplated by Section 2.3(a) with respect to
Securities of a particular series, the Company, may at its option, by Board
Resolution, at any time, with respect to any series of Securities, elect to
have either Section 8.4 or Section 8.5 be applied to all of the outstanding
Securities of any series (the "Defeased Securities"), upon compliance with the
conditions set forth below in this Article VIII.
SECTION 8.4 Defeasance and Discharge. Upon the Company's exercise
under Section 8.3 of the option applicable to this Section 8.4, the Company
shall be deemed to have been discharged from its obligations with respect to
the Defeased Securities on the date the conditions set forth below are satis-
fied (hereinafter "defeasance"). For this purpose, such defeasance means that
the Company shall be deemed to have paid and discharged the entire indebtedness
represented by the defeased Securities, which shall thereafter be deemed to be
"outstanding" only for the purposes of Sections 2.4, 2.5, 2.6, 2.9, 2.11, 2.12,
4.1, 4.5, 6.6, 6.7, 7.7, 7.8 and 8.2 of this Indenture and to have satisfied
all its other obligations under such series of Securities and this Indenture
insofar as such series of Securities are concerned (and the Trustee, at the
expense of the Company, and, upon written request, shall execute proper instru-
ments acknowledging the same). Subject to compliance with this Article VIII,
the Company may exercise its option under this Section 8.4 notwithstanding the
prior exercise of its option under Section 8.5 with respect to a series of
Securities.
SECTION 8.5 Covenant Defeasance. Upon the Company's exercise under
Section 8.3 of the option applicable to this Section 8.5, the Company shall be
released from its obligations under Sections 4.2 and 4.3 and Article V and such
other provisions as may be provided as contemplated by Section 2.3(a) with
respect to Securities of a particular series and with respect to the Defeased
Securities on and after the date the conditions set forth below are satisfied
(hereinafter "covenant defeasance"), and the Defeased Securities 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 if any
thereof) in connection with such covenants, but shall continue to be deemed
"outstanding" for all other purposes hereunder. For this purpose, such covenant
defeasance means that, with respect to the Defeased Securities, 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 Article, whether
directly or indirectly, by reason of any reference elsewhere herein to any such
Section or Article or by reason of any reference in any such Section or Article
to any other provisions herein or in any other document and such omission to
comply shall not constitute a Default or an Event of Default under Section 6.1
but, except as specified above, the remainder of this Indenture and such
Defeased Securities shall be unaffected thereby.
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SECTION 8.6 Condition to Defeasance or Covenant Defeasance. It
shall be a condition to the application of either Section 8.4 or Section 8.5 to
a series of outstanding Securities that the Company shall have irrevocably
deposited with the Trustee, in trust, (i) sufficient funds to pay the Principal
of and interest to Stated Maturity (or redemption) on, the Debt Securities of
such series, or (ii) such amount of direct obligations of, or obligations the
principal of and interest on which are fully guaranteed by, the government of
the United States, and which are not subject to prepayment, redemption or call,
as will, together with the predetermined and certain income to accrue thereon
without consideration of any reinvestment thereof, be sufficient to pay when
due the Principal of, and interest to Stated Maturity (or redemption) on, the
Debt Securities of such series.
ARTICLE IX
SUPPLEMENTAL INDENTURES
SECTION 9.1 Supplemental Indentures without Consent of Holders.
Without the consent of any Holders of Securities, the Company and the Trustee,
at any time and from time to time, may enter into one or more indentures
supplemental hereto, in form satisfactory to the Trustee, for any of the
following purposes:
(1) to evidence the succession of another corporation to the
Company and the assumption by any such successor of the covenants of the
Company herein and in the Securities; or
(2) to add to the covenants, agreements and obligations of the
Company for the benefit of the Holders of all of the Securities or any
series thereof, or to surrender any right or power herein conferred upon
the Company; or
(3) to establish the form or terms of Securities of any series
as permitted by Sections 2.1 and 2.3(a), respectively; or
(4) 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 admin-
istration of the trusts hereunder by more than one Trustee, pursuant to
the requirements of Section 7.8; or
(5) to cure any ambiguity, defect or inconsistency; or
(6) to add to, change or eliminate any of the provisions of this
Indenture (which addition, change or elimination may apply to one or
more series of Securities), provided that any such addition, change or
elimination shall neither (A) apply to any Security of any series
created prior to the execution of such supplemental
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<PAGE> 47
indenture and entitled to the benefit of such provision nor (B) modify
the rights of the Holder of any such Security with respect to such
provision; or
(7) to secure the Securities; or
(8) to make any other change that does not adversely affect the
rights of any Securityholder.
SECTION 9.2 Supplemental Indentures with Consent of Holders. With the
written consent of the Holders of at least a majority in aggregate Principal
Amount of the Outstanding Securities of each series affected by such supplemen-
tal indenture, the Company and the Trustee may amend this Indenture or the
Securities of any series or may enter into an indenture or indentures supple-
mental 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 the Securities of such series under
this Indenture; provided, however, that no such amendment or supplemental
indenture shall, without the consent of the Holder of each Outstanding Security
affected thereby:
(1) change the Stated Maturity of the Principal of, or any
installment of Principal of or interest on, any such Security, or reduce
the Principal Amount thereof or the rate of interest thereon or any
premium payable upon redemption thereof or reduce the amount of Princi-
pal of any such Discount Security that would be due and payable upon a
declaration of acceleration of maturity thereof pursuant to Section 6.2,
or change the Place of Payment, or change the coin or currency in which,
any Principal of, or any installment of interest on, any such Security
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, on or after the Redemption Date);
(2) reduce the percentage in Principal Amount of the Outstanding
Securities of any series, the consent of whose Holders is required for
any such amendment or supplemental indenture, or the consent of whose
Holders is required for any waiver (of compliance with certain provi-
sions of this Indenture or certain defaults hereunder and their conse-
quences) with respect to the Securities of such series provided for in
this Indenture; or
(3) modify any of the provisions of this Section, Section 6.4 or
6.7, except to increase the percentage of Outstanding Securities of such
series required for such actions 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.
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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.
It shall not be necessary for the consent of the Holders under this
Section 9.2 to approve the particular form of any proposed amendment or supple-
mental indenture, but it shall be sufficient if such consent approves the
substance thereof.
After an amendment or supplemental indenture under this Section 9.2
becomes effective, the Company shall mail to each Holder of the particular
Securities affected thereby a notice briefly describing the amendment.
SECTION 9.3 Compliance with Trust Indenture Act. Every supplemental
indenture executed pursuant to this Article shall comply with the TIA as then
in effect.
SECTION 9.4 Revocation and Effect of Consents, Waivers and Actions.
Until an amendment or waiver with respect to a series of Securities becomes
effective, a consent to it or any other action by a Holder of a Security of
that series hereunder is a continuing consent by the Holder and every subse-
quent Holder of that Security or portion of that Security that evidences the
same obligation as the consenting Holder's Security, even if notation of the
consent, waiver or action is not made on the Security. However, any such
Holder or subsequent Holder may revoke the consent, waiver or action as to such
Holder's Security or portion of the Security if the Trustee receives the notice
of revocation before the Company or an agent of the Company certifies to the
Trustee that the consent of the requisite aggregate Principal Amount of the
Securities of that series has been obtained. After an amendment, waiver or
action becomes effective, it shall bind every Holder of Securities of that
series.
The Company may, but shall not be obligated to, fix a record date for
the purpose of determining the Holders entitled to consent to any amendment or
waiver with respect to a series of Securities. If a record date is fixed, then
notwithstanding the first two sentences of the immediately preceding paragraph,
those persons who were Holders of Securities of that series at such record date
(or their duly designated proxies), and only those persons, shall be entitled
to revoke any consent previously given, whether or not such persons continue to
be Holders after such record date. No such consent shall be valid or effective
for more than 90 days after such record date.
SECTION 9.5 Notation on or Exchange of Securities. Securities of any
series authenticated and delivered after the execution of any supplemental
indenture with respect to such series pursuant to this Article may, and shall
if required by the Trustee, bear a
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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
such series so modified as to conform, in the opinion of the Trustee and the
Board of Directors, 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 that series.
SECTION 9.6 Trustee to Sign Supplemental Indentures. The Trustee shall
sign any supplemental indenture authorized pursuant to this Article 9 if the
amendment does not adversely affect the rights, duties, liabilities or immuni-
ties of the Trustee. If it does, the Trustee may, but need not, sign it. In
signing such amendment, the Trustee shall be entitled to receive, and (subject
to the provisions of Section 7.1) shall be fully protected in relying upon, an
Officers' Certificate and an Opinion of Counsel stating that such amendment is
authorized or permitted by this Indenture.
SECTION 9.7 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 shall be bound thereby, except
to the extent otherwise set forth thereon.
ARTICLE X
SINKING FUNDS
SECTION 10.1 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 2.3(a) 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 Securities of any series is herein referred to as an "optional sinking
fund payment." If provided for by the terms of Securities of any series, the
cash amount of any sinking fund payment may be subject to reduction as provided
in Section 10.2. Each sinking fund payment shall be applied to the redemption
of Securities of any series as provided for by the terms of the Securities of
such series.
SECTION 10.2 Satisfaction of Sinking Fund Payments with Securities.
The Company (1) may deliver Outstanding Securities of a series with the same
issue date, interest rate and Stated Maturity (other than any previously called
for redemption), and (2) may apply as a credit Securities of a series with the
same issue date, interest rate and Stated Maturity which have been redeemed
either at the election of the Company
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pursuant to the terms of such Securities or through the application of permit-
ted optional sinking fund payments pursuant to the terms of such Securities, in
each case, in satisfaction of all or any part of any mandatory sinking fund
payment with respect to the Securities of such series with the same issue date,
interest rate and Stated Maturity; provided that such Securities have not been
previously so credited. Such Securities shall be received and credited for
such purpose by the Trustee at the Redemption Price specified in such Securi-
ties for redemption through operation of the sinking fund and the amount of
such sinking fund payment shall be reduced accordingly.
SECTION 10.3 Redemption of Securities for Sinking Fund. Not less than
60 days (or such shorter period as shall be acceptable to the Trustee) prior to
each sinking fund payment date for any series of Securities, the Company will
deliver to the Trustee an Officers' Certificate specifying the amount of the
next 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 and
the portion thereof, if any, which is to be satisfied by delivering and credit-
ing Securities of that series pursuant to Section 10.2 and will also deliver to
the Trustee any Securities to be so delivered. 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 3.2 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 3.3.
Such notice having been duly given, the redemption of such Securities shall be
made upon the terms and in the manner stated in Sections 3.4 and 3.6.
ARTICLE XI
ACTIONS OF HOLDERS OF SECURITIES
SECTION 11.1 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.
SECTION 11.2 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 11.1, to be held at such time and at such place in
the Borough of Manhattan, The City of New York or, with the approval of the
Company, at any other place. 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 12.2, not less than 21 nor more than 180 days
prior to the date fixed for the meeting.
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(b) In case at any time the Company or the Holders of at least 10% in
Principal Amount of the Outstanding Securities of any series shall have re-
quested the Trustee to call a meeting of the Holders of Securities of such
series for any purpose specified in Section 11.1, 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, or in such other place as shall be determined and ap-
proved by the Company, for such meeting and may call such meeting for such
purposes by giving notice thereof as provided in subsection (a) of this Section
11.2.
SECTION 11.3 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
(1) a Holder of one or more Outstanding Securities of such series, or (2) a
person appointed by an instrument in writing as proxy for a Holder or Holders
of one or more Outstanding Securities of such series by such Holder or Holders.
The only persons who shall be entitled to be present or to speak at any meeting
of Holders of Securities of any series shall be the persons entitled to vote at
such meeting and their counsel, any representatives of the Trustee and its
counsel and any representatives of the Company and its counsel.
SECTION 11.4 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. In the absence
of a quorum within 30 minutes of 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 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 determined by the
chairman of the meeting prior to the adjournment of such adjourned meeting.
Notice of the reconvening of any adjourned meeting shall be given as provided
in Section 11.2(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 an 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 present-
ed 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,
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direction, notice, consent, waiver or other action which this Indenture ex-
pressly 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 Outstand-
ing 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 affirma-
tive 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, whether or not present
or represented at the meeting.
SECTION 11.5 Determination of Voting Rights; Conduct and Adjournment of
Meetings. (a) Notwithstanding any other 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 examina-
tion 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 appropri-
ate. Except as otherwise permitted or required by any such regulations, the
holding of Securities shall be proved in the manner specified in Section 11.7
and the appointment of any proxy shall be proved in the manner specified in
Section 11.7. 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 11.7 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 11.2 (b), in which
case the Company or the Holders of Securities of the series calling the meet-
ing, 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 vote with respect to 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 11.2 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
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such series represented at the meeting; and the meeting may be held as so
adjourned without further notice.
SECTION 11.6 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 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 origi-
nal reports of the inspectors of votes on any vote by ballot taken thereat and
affidavits by one or more persons having knowledge of the facts setting forth a
copy of the notice of the meeting and showing that said notice was given as
provided in Section 11.2 and, if applicable, Section 11.4. Each copy shall be
signed and verified by the affidavits of the permanent chairman and secretary
of the meeting and one such copy shall be delivered to the Company, and another
to the Trustee to be preserved by the Trustee, the latter to have attached
thereto the ballots voted at the meeting. Any record so signed and verified
shall be conclusive evidence of the matters therein stated.
SECTION 11.7 Actions of Holders Generally. (a) Any request, demand,
authorization, direction, notice, consent, waiver or other action provided by
this Indenture to be given or taken by Holders may be embodied in and evidenced
by one or more instruments of substantially similar tenor signed by such
Holders in person or by an agent duly appointed in writing. Except as herein
otherwise expressly provided, such action shall become effective when such
instrument or instruments or record or both are delivered to the Trustee and,
where it is hereby expressly required, to the Company. Proof of execution of
any such instrument or of a writing appointing any such agent, or of the
holding by any person of a Security, shall be sufficient for any purpose of
this Indenture and (subject to Section 7.1) conclusive in favor of the Trustee
and the Company, if made in the manner provided in this Section. The record of
any meeting of Holders of Securities shall be proved in the manner provided in
Section 11.6.
(b) The fact and date of the execution by any person of any such
instrument or writing, or the authority of the persons executing the same, may
be proved in any reasonable manner which the Trustee deems sufficient.
(c) The Principal Amount and serial numbers of Securities held by the
person, and the date of holding the same, shall be proved by the books of the
Registrar.
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(d) Any request, demand, authorization, direction, notice, consent,
waiver or other act of the Holder of any Security in accordance with this
Section 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 or the Company in reliance thereon, whether or not
notation of such action is made upon such Security.
(e) If the Company shall solicit from the Holders any request, demand,
authorization, direction, notice, consent, waiver or other act in accordance
with this Section, the Company may, at its option, by or pursuant to an Office-
rs' Certificate delivered to the Trustee, fix in advance a record date for the
determination of Holders entitled to give such request, demand, authorization,
direction, notice, consent, waiver or such 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 percentage of Out-
standing Securities or Outstanding Securities of a series, as the case may be,
have authorized or agreed or consented to such request, demand, authorization,
direction, notice, consent, waiver or other act, and for that purpose the
Outstanding Securities or Outstanding Securities of the series, as the case may
be, shall be computed as of such record date; provided, that no such authoriza-
tion, agreement or consent by the Holders on the record date shall be deemed
effective unless such request, demand, authorization, direction, notice,
consent, waiver or other act shall become effective pursuant to the provisions
of clause (a) of this Section 11.7 not later than six months after the record
date.
ARTICLE XII
MISCELLANEOUS
SECTION 12.1 Trust Indenture Act Controls. If any provision of this
Indenture limits, qualifies or conflicts with another provision hereof which is
required to be included in this Indenture by the TIA, the required provision
shall control.
SECTION 12.2 Notices. Any notice or communication shall be in writing
and delivered in person or mailed by first-class mail, postage prepaid, ad-
dressed as follows:
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if to the Company:
Apartment Investment and Management Company
1873 South Bellaire Street, 17th Floor
Denver, Colorado 80222
Attention: [ ]
if to the Trustee:
United States Trust Company of New York
114 West 47th Street
New York, NY 10036
Attention: Corporate Trust Department
The Company or the Trustee by notice to the other may designate addi-
tional or different addresses for subsequent notices or communications.
Any notice or communication given to a Holder of Securities shall be
mailed to such Securityholder at the Securityholder's address as it appears on
the registration books of the Registrar and shall be sufficiently given if so
mailed within the time prescribed.
Where this Indenture provides for notice in any manner, such notice may
be waived in writing by the person entitled to receive such notice, either
before or after the event, and such waiver shall be the equivalent of such
notice. Waivers of notice by Holders shall be filed with the Trustee, but such
filing shall not be a condition precedent to the validity of any action taken
in reliance upon such waiver.
Failure to mail a notice or communication to a Securityholder or any
defect in it shall not affect its sufficiency with respect to other Holders of
Securities of the same series. If a notice or communication is mailed in the
manner provided above, it is duly given, whether or not received by the ad-
dressee.
If the Company mails a notice or communication to the Holders of
Securities of a particular series, it shall mail a copy to the Trustee and each
Registrar, co-registrar or Paying Agent, as the case may be, with respect to
such series.
In case by reason of the suspension of regular mail service or by reason
of any other cause it shall be impracticable to give notice to Holders of
Securities by mail, then such notification as shall be made with the acceptance
of the Trustee shall constitute a sufficient notification for every purpose
hereunder. In any case where notice to Holders of Securities is given by mail,
neither the failure to mail such notice, nor any defect in
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<PAGE> 56
any notice so mailed, to any particular Holder of a Security shall affect the
sufficiency of such notice with respect to other Holders of Securities given as
provided herein.
SECTION 12.3 Communication by Holders with Other Holders. Securityhol-
ders may communicate pursuant to TIA Section 312(b) with other Securityholders
with respect to their rights under this Indenture or the Securities. The
Company and the Trustee, the Registrar or the Paying Agent with respect to a
particular series of Securities, and anyone else, shall have the protection of
TIA Section 312(c).
SECTION 12.4 Certificate and Opinion as to Conditions Precedent. Upon
any request or application by the Company to the Trustee to take any action
under this Indenture, the Company shall furnish to the Trustee:
(1) an Officers' Certificate stating that, in the opinion of the
signers, all conditions precedent, if any, provided for in this Inden-
ture relating to the proposed action have been complied with; and
(2) an Opinion of Counsel stating that, in the opinion of such
counsel, all such conditions precedent have been complied with.
SECTION 12.5 Statements Required in Certificate or Opinion. Each
Officers' Certificate or Opinion of Counsel with respect to compliance with a
covenant or condition provided for in this Indenture shall include:
(1) statement that each person making such Officers' Certificate
or Opinion of Counsel has read such covenant or condition;
(2) a brief statement as to the nature and scope of the examina-
tion or investigation upon which the statements or opinions contained in
such Officers' Certificate or Opinion of Counsel are based;
(3) a statement that, in the opinion of each such person, he has
made such examination or investigation as is necessary to enable such
person to express an informed opinion as to whether or not such covenant
or condition has been complied with; and
(4) a statement that, in the opinion of such person, such
covenant or condition has been complied with.
SECTION 12.6 Separability Clause. In case any provision in this
Indenture or in the Securities 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.
49
<PAGE> 57
SECTION 12.7 Rules by Trustee, Paying Agent and Registrar. With
respect to the Securities of a particular series, the Trustee with respect to
such series of Securities may make reasonable rules for action by or a meeting
of Holders of such series of Securities. With respect to the Securities of a
particular series, the Registrar and the Paying Agent with respect to such
series of Securities may make reasonable rules for their functions.
SECTION 12.8 Legal Holidays. A "Legal Holiday" is any day other than a
Business Day. If any specified date (including an Interest Payment Date,
Redemption Date or Stated Maturity of any Security, or a date for giving
notice) is a Legal Holiday at any Place of Payment or place for giving notice,
then (notwithstanding any other provision of this Indenture or of the Securi-
ties other than a provision in the Securities of any series which specifically
states that such provision shall apply in lieu of this Section) payment of
interest or Principal need not be made at such Place of Payment, or such other
action need not be taken, on such date, but the action shall be taken on the
next succeeding day that is not a Legal Holiday at such Place of Payment with
the same force and effect as if made on the Interest Payment Date or Redemption
Date, or at the Stated Maturity or such other date and to the extent applicable
no Original Issue Discount or interest, if any, shall accrue for the interven-
ing period.
SECTION 12.9 Governing Law. THIS INDENTURE AND THE SECURITIES SHALL BE
GOVERNED BY AND CONSTRUED IN ACCORDANCE WITH THE LAWS OF THE STATE OF NEW YORK,
AS APPLIED TO CONTRACTS MADE AND PERFORMED WITHIN THE STATE OF NEW YORK,
WITHOUT REGARD TO PRINCIPLES OF CONFLICTS OF LAW.
SECTION 12.10 No Recourse Against Others. A director, officer,
employee or stockholder, as such, of the Company shall not have any liability
for any obligations of the Company under the Securities or this Indenture or
for any claim based on, in respect of or by reason of such obligations or their
creation. By accepting a Security, each Holder of such Security shall waive and
release all such liability. The waiver and release shall be part of the
consideration for the issue of the Securities.
SECTION 12.11 Successors. All agreements of the Company in this
Indenture and the Securities shall bind its respective successor. All agree-
ments of the Trustee in this Indenture shall bind its successor.
SECTION 12.12 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.
50
<PAGE> 58
SECTION 12.13 Benefits of Indenture. Nothing in this Indenture or in
the Securities, express or implied, shall give to any person, other than the
parties hereto and their successors hereunder and the Holders of Securities,
any benefits or any legal or equitable right, remedy or claim under this
Indenture.
SECTION 12.14 Multiple Originals. The parties may sign any number of
copies of this Indenture. Each signed copy shall be an original, but all of
them together represent the same agreement. One signed copy is enough to prove
this Indenture.
51
<PAGE> 59
APARTMENT INVESTMENT AND MANAGEMENT COMPANY
By:
------------------------------------------
Name:
Title:
Attest:
- -------------------------------
Name:
Title:
UNITED STATES TRUST COMPANY OF NEW YORK,
as Trustee
By
-------------------------------------------
Name:
Title:
Attest:
- -------------------------------
Name:
Title:
52
<PAGE> 1
EXHIBIT 4.2
================================================================================
- --------------------------------------------------------------------------------
APARTMENT INVESTMENT AND
MANAGEMENT COMPANY
SENIOR SUBORDINATED DEBT SECURITIES
INDENTURE
Dated as of __________
UNITED STATES TRUST COMPANY OF NEW YORK,
Trustee
================================================================================
- --------------------------------------------------------------------------------
<PAGE> 2
CROSS REFERENCE TABLE(1)
<TABLE>
<CAPTION>
TIA INDENTURE
SECTION SECTION
- ------- -----------
<S> <C> <C>
310 (a)(1) . . . . . . . . . . . . . . . . . . . . . . . . . . . 7.8; 7.10
(a)(2) . . . . . . . . . . . . . . . . . . . . . . . . . . . 7.10
(a)(3) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . N.A.
(a)(4) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . N.A.
(a)(5) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 7.10
(b) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 7.8; 7.10
(c) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . N.A
311 (a) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 7.11
(b) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 7.11
(c) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . N.A.
312 (a) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 2.7
(b) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 13.3
(c) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 13.3
313 (a) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 7.6
(b) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 7.6
(c) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 7.6; 13.2
(d) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 7.6
314 (a) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 4.2; 13.2
(b) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . N.A.
(c)(1) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 13.4
(c)(2) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 13.4
(c)(3) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . N.A.
(d) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . N.A.
(e) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 13.5
(f) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 4.3
315 (a) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 7.1
(b) . . . . . . . . . . . . . . . . . . . . . . . . . . . . 7.5; 13.2
(c) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 7.1
(d) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 7.1
(e) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 6.11
316 (a)(1)(A) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 6.5
(a)(1)(B) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 6.4
(a)(2) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . N.A.
(b) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 6.7
(c) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . N.A.
</TABLE>
- --------------------
(1) Note: This Cross Reference Table shall not, for any purpose, be
deemed to be part of the Indenture.
<PAGE> 3
<TABLE>
<CAPTION>
TIA INDENTURE
SECTION SECTION
- ------- ---------
<S> <C> <C>
317 (a)(1) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 6.8
(a)(2) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 6.9
(b) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 2.6
318 (a) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 13.1
</TABLE>
<PAGE> 4
TABLE OF CONTENTS(2)
<TABLE>
<S> <C> <C>
ARTICLE I
DEFINITIONS AND INCORPORATION BY REFERENCE
SECTION 1.1 Definitions. . . . . . . . . . . . . . . . . . . . . . . . . . 1
SECTION 1.2 Other Definitions. . . . . . . . . . . . . . . . . . . . . . . 5
SECTION 1.3 Incorporation by Reference of Trust Indenture Act. . . . . . . 6
SECTION 1.4 Rules of Construction. . . . . . . . . . . . . . . . . . . . . 6
ARTICLE II
THE SECURITIES
SECTION 2.1 Forms Generally. . . . . . . . . . . . . . . . . . . . . . . . 7
SECTION 2.2 Securities in Global Form. . . . . . . . . . . . . . . . . . . 7
SECTION 2.3 Title, Terms and Denominations. . . . . . . . . . . . . . . . 8
SECTION 2.4 Execution, Authentication, Delivery and Dating . . . . . . . . 11
SECTION 2.5 Registrar and Paying Agent. . . . . . . . . . . . . . . . . . 13
SECTION 2.6 Paying Agent to Hold Money and Securities in Trust. . . . . . 14
SECTION 2.7 Securityholder Lists. . . . . . . . . . . . . . . . . . . . . 14
SECTION 2.8 Transfer and Exchange. . . . . . . . . . . . . . . . . . . . . . 15
SECTION 2.9 Replacement Securities. . . . . . . . . . . . . . . . . . . . 17
SECTION 2.10 Outstanding Securities; Determinations of Holders' Action. . 18
SECTION 2.11 Temporary Securities. . . . . . . . . . . . . . . . . . . . . 19
SECTION 2.12 Cancellation. . . . . . . . . . . . . . . . . . . . . . . . . 19
SECTION 2.13 Payment of Interest; Interest Rights Preserved. . . . . . . . 20
SECTION 2.14 Persons Deemed Owners. . . . . . . . . . . . . . . . . . . . 21
SECTION 2.15 Computation of Interest . . . . . . . . . . . . . . . . . . . 21
ARTICLE III
REDEMPTION
SECTION 3.1 Right to Redeem; Notices to Trustee. . . . . . . . . . . . . . 22
SECTION 3.2 Selection of Securities to be Redeemed. . . . . . . . . . . . 22
SECTION 3.3 Notice of Redemption. . . . . . . . . . . . . . . . . . . . . 22
</TABLE>
- --------------------
(2) Note: This Table of Contents shall not, for any reason, be
deemed to be part of the Indenture.
i
<PAGE> 5
<TABLE>
<S> <C> <C>
SECTION 3.4 Effect of Notice of Redemption. . . . . . . . . . . . . . . . 23
SECTION 3.5 Deposit of Redemption Price. . . . . . . . . . . . . . . . . . 23
SECTION 3.6 Securities Redeemed in Part. . . . . . . . . . . . . . . . . . 24
ARTICLE IV
COVENANTS
SECTION 4.1 Payment of Securities. . . . . . . . . . . . . . . . . . . . . 24
SECTION 4.2 SEC Reports. . . . . . . . . . . . . . . . . . . . . . . . . . 24
SECTION 4.3 Compliance Certificate. . . . . . . . . . . . . . . . . . . . 24
SECTION 4.4 Further Instruments and Acts. . . . . . . . . . . . . . . . . 25
SECTION 4.5 Maintenance of Office or Agency. . . . . . . . . . . . . . . . 25
SECTION 4.6 Limitations on the Incurrence of Certain Other Debt. . . . . . 25
ARTICLE V
SUCCESSOR CORPORATION
SECTION 5.1 When Company May Merge or Transfer Assets. . . . . . . . . . . 26
ARTICLE VI
DEFAULTS AND REMEDIES
SECTION 6.1 Events of Default. . . . . . . . . . . . . . . . . . . . . . . 26
SECTION 6.2 Acceleration. . . . . . . . . . . . . . . . . . . . . . . . . 28
SECTION 6.3 Other Remedies. . . . . . . . . . . . . . . . . . . . . . . . 28
SECTION 6.4 Waiver of Past Defaults. . . . . . . . . . . . . . . . . . . . 29
SECTION 6.5 Control by Majority. . . . . . . . . . . . . . . . . . . . . . 29
SECTION 6.6 Limitation on Suits. . . . . . . . . . . . . . . . . . . . . . 29
SECTION 6.7 Rights of Holders to Receive Payment. . . . . . . . . . . . . 30
SECTION 6.8 Collection Suit by Trustee. . . . . . . . . . . . . . . . . . 30
SECTION 6.9 Trustee May File Proofs of Claim. . . . . . . . . . . . . . . 30
SECTION 6.10 Priorities. . . . . . . . . . . . . . . . . . . . . . . . . . 31
SECTION 6.11 Undertaking for Costs. . . . . . . . . . . . . . . . . . . . 31
SECTION 6.12 Waiver of Stay, Extension or Usury Laws . . . . . . . . . . . 32
ARTICLE VII
TRUSTEE
SECTION 7.1 Duties of Trustee. . . . . . . . . . . . . . . . . . . . . . . 32
</TABLE>
ii
<PAGE> 6
<TABLE>
<CAPTION>
PAGE
----
<S> <C> <C>
SECTION 7.2 Rights of Trustee. . . . . . . . . . . . . . . . . . . . . . . 33
SECTION 7.3 Individual Rights of Trustee, etc. . . . . . . . . . . . . . . 33
SECTION 7.4 Trustee's Disclaimer. . . . . . . . . . . . . . . . . . . . . 34
SECTION 7.5 Notice of Defaults. . . . . . . . . . . . . . . . . . . . . . 34
SECTION 7.6 Reports by Trustee to Holders. . . . . . . . . . . . . . . . . 34
SECTION 7.7 Compensation and Indemnity. . . . . . . . . . . . . . . . . . 34
SECTION 7.8 Replacement of Trustee. . . . . . . . . . . . . . . . . . . . 35
SECTION 7.9 Successor Trustee by Merger. . . . . . . . . . . . . . . . . . 37
SECTION 7.10 Eligibility; Disqualification. . . . . . . . . . . . . . . . 37
SECTION 7.11 Preferential Collection of Claims Against Company. . . . . . 37
ARTICLE VIII
SATISFACTION AND DISCHARGE
SECTION 8.1 Discharge of Liability on Securities. . . . . . . . . . . . . 37
SECTION 8.2 Repayment to the Company. . . . . . . . . . . . . . . . . . . 38
SECTION 8.3 Option to Effect Defeasance or Covenant Defeasance. . . . . . 38
SECTION 8.4 Defeasance and Discharge. . . . . . . . . . . . . . . . . . . 38
SECTION 8.5 Covenant Defeasance. . . . . . . . . . . . . . . . . . . . . . 38
SECTION 8.6 Condition to Defeasance or Covenant Defeasance. . . . . . . . 39
ARTICLE IX
SUPPLEMENTAL INDENTURES
SECTION 9.1 Supplemental Indentures without Consent of Holders. . . . . . 39
SECTION 9.2 Supplemental Indentures with Consent of Holders. . . . . . . . 40
SECTION 9.3 Compliance with Trust Indenture Act. . . . . . . . . . . . . . 41
SECTION 9.4 Revocation and Effect of Consents, Waivers and Actions. . . . 41
SECTION 9.5 Notation on or Exchange of Securities. . . . . . . . . . . . . 42
SECTION 9.6 Trustee to Sign Supplemental Indentures. . . . . . . . . . . . 42
SECTION 9.7 Effect of Supplemental Indentures. . . . . . . . . . . . . . . 42
</TABLE>
iii
<PAGE> 7
<TABLE>
<CAPTION>
PAGE
----
<S> <C> <C>
ARTICLE X
SINKING FUNDS
SECTION 10.1 Applicability of Article. . . . . . . . . . . . . . . . . . . 43
SECTION 10.2 Satisfaction of Sinking Fund Payments with Securities. . . . 43
SECTION 10.3 Redemption of Securities for Sinking Fund. . . . . . . . . . 43
ARTICLE XI
ACTIONS OF HOLDERS OF SECURITIES
SECTION 11.1 Purposes for which Meetings may be Called. . . . . . . . . . 44
SECTION 11.2 Call, Notice and Place of Meetings. . . . . . . . . . . . . . 44
SECTION 11.3 Persons Entitled to Vote at Meetings. . . . . . . . . . . . . 44
SECTION 11.4 Quorum; Action. . . . . . . . . . . . . . . . . . . . . . . . 45
SECTION 11.5 Determination of Voting Rights; Conduct and
Adjournment of Meetings. . . . . . . . . . . . . . . . . . 45
SECTION 11.6 Counting Votes and Recording Action of Meetings. . . . . . . 46
SECTION 11.7 Actions of Holders Generally. . . . . . . . . . . . . . . . . 47
ARTICLE XII
SUBORDINATION
SECTION 12.1 Securities Subordinate to Senior Indebtedness. . . . . . . . 48
SECTION 12.2 Payment Over of Proceeds upon Dissolution, Etc. . . . . . . . 49
SECTION 12.3 Acceleration of Securities . . . . . . . . . . . . . . . . . 50
SECTION 12.4 Default in Senior Indebtedness . . . . . . . . . . . . . . . 51
SECTION 12.5 Payment Permitted if No Default . . . . . . . . . . . . . . . 52
SECTION 12.6 Subrogation Rights of Holders of Senior Indebtedness . . . . 52
SECTION 12.7 Provision Solely to Define Relative Rights . . . . . . . . . 52
SECTION 12.8 Trustee to Effectuate Subordination . . . . . . . . . . . . . 53
SECTION 12.9 No Waiver of Subordination Provisions . . . . . . . . . . . . 53
SECTION 12.10 Notice to Trustee . . . . . . . . . . . . . . . . . . . . . 54
SECTION 12.11 Reliance on Judicial Order or Certificate of Liquidating
Agent . . . . . . . . . . . . . . . . . . . . . . . . . . 54
SECTION 12.12 Trustee Not Fiduciary for Holders of Senior Indebtedness . . 55
SECTION 12.13 Rights of Trustee as Holder of Senior Indebtedness;
Preservation of Trustee's Rights . . . . . . . . . . . . 55
</TABLE>
iv
<PAGE> 8
<TABLE>
<CAPTION>
PAGE
----
<S> <C> <C>
SECTION 12.14 Article XII Applicable to Paying Agents . . . . . . . . . . 55
ARTICLE XIII
MISCELLANEOUS
SECTION 13.1 Trust Indenture Act Controls. . . . . . . . . . . . . . . . . 56
SECTION 13.2 Notices. . . . . . . . . . . . . . . . . . . . . . . . . . . 56
SECTION 13.3 Communication by Holders with Other Holders. . . . . . . . . 57
SECTION 13.4 Certificate and Opinion as to Conditions Precedent. . . . . . 57
SECTION 13.5 Statements Required in Certificate or Opinion. . . . . . . . 57
SECTION 13.6 Separability Clause. . . . . . . . . . . . . . . . . . . . . 58
SECTION 13.7 Rules by Trustee, Paying Agent and Registrar. . . . . . . . . 58
SECTION 13.8 Legal Holidays. . . . . . . . . . . . . . . . . . . . . . . . 58
SECTION 13.9 Governing Law. . . . . . . . . . . . . . . . . . . . . . . . 58
SECTION 13.10 No Recourse Against Others. . . . . . . . . . . . . . . . . 58
SECTION 13.11 Successors. . . . . . . . . . . . . . . . . . . . . . . . . 59
SECTION 13.12 Effect of Headings and Table of Contents. . . . . . . . . . 59
SECTION 13.13 Benefits of Indenture. . . . . . . . . . . . . . . . . . . . 59
SECTION 13.14 Multiple Originals. . . . . . . . . . . . . . . . . . . . . 60
</TABLE>
v
<PAGE> 9
INDENTURE dated as of __________, by and among Apartment Investment and
Management Company, a Maryland corporation ("Company"), and United States Trust
Company of New York, as trustee ("Trustee").
RECITALS OF THE COMPANY
The Company has duly authorized the execution and delivery of this
Indenture to provide for the issuance from time to time of its unsecured
debentures, notes or other evidences of indebtedness (herein called the
"Securities") to be issued in one or more series as in this Indenture provided.
For and in consideration of the premises and the purchase of the
Securities by the Holders thereof, it is mutually covenanted and agreed, for
the equal and ratable benefit of the Holders of the Securities or each series
thereof as follows:
ARTICLE I
DEFINITIONS AND INCORPORATION BY REFERENCE
SECTION 1.1 Definitions.
"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 or cause the direction of the management and policies of such person,
directly or indirectly, whether through the ownership of voting securities, by
contract or otherwise; and the terms "controlling" and "controlled" have
meanings correlative to the foregoing.
"Board of Directors" means either the board of directors of the Company
or any committee of such board authorized with respect to any matter to
exercise the powers of the Board of Directors of the Company.
"Board Resolution" means a copy of a resolution certified by the
Secretary or an Assistant Secretary of the Company to have been duly adopted by
the Board of Directors and to be in full force and effect on the date of such
certification, and delivered to the Trustee.
"Business Day" means, except as otherwise specified as contemplated by
Section 2.3(a), with respect to any Place of Payment or any other particular
location referred to in this Indenture or m the Securities, means each Monday,
Tuesday, Wednesday,
<PAGE> 10
Thursday and Friday which is not a day on which banking institutions in that
Place of Payment or other location are authorized or obligated by law or
executive order to close.
"Capital Stock" for any corporation means any and all shares, interests,
rights to purchase, warrants, options, participations or other equivalents of
or interests in (however designated) stock issued by that corporation.
"cash" means such coin or currency of the United States as at any time
of payment is legal tender for the payment of public and private debts.
"Company" means the party named as the "Company" in the first paragraph
of this Indenture until a successor replaces it pursuant to the applicable
provisions of this Indenture and, thereafter, shall mean such successor.
"Company Request" or "Company Order" means a written request or order
signed in the name of the Company, by its Chairman of the Board, a Vice
Chairman, its President or a Vice President, and by its Treasurer, an Assistant
Treasurer, its Secretary or an Assistant Secretary, and delivered to the
Trustee or, with respect to Sections 2.4, 2.8, 2.11 and 7.2, any other employee
of the Company named in an Officers' Certificate delivered to the Trustee.
"Debt" means with respect to any person at any date, without duplication
(i) all obligations of such person for borrowed money, (ii) all obligations of
such person evidenced by bonds, debentures, notes or other similar instruments,
(iii) all Debt of others secured by a lien on any asset of such person, whether
or not such Debt is assumed by such person, (iv) all obligations of such person
pursuant to leases which are required to be capitalized under generally
accepted accounting principles consistently applied and (v) all Debt of others
for the payment of which such person is responsible or liable as obligor or
guarantor.
"Default" means any event which is, or after notice or passage of time
or both would be, an Event of Default.
"Depositary" means, with respect to the Securities of any series
issuable or issued in whole or in part in global form, the Person specified as
contemplated by Section 2.3(a) as the Depositary with respect to such series of
Securities, until a successor shall have become such pursuant to the applicable
provisions of this Indenture, and thereafter "Depositary" shall mean or include
such successor.
"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 6.2.
2
<PAGE> 11
"Dollar" or "$" means a dollar or other equivalent unit in such coin or
currency of the United States as at the time shall be legal tender for the
payment of public and private debts.
"Exchange Act" means the Securities Exchange Act of 1934, as amended.
"Holder" or "Securityholder," when used with respect to any Security,
means a person in whose name a Security is registered on the Registrar's books.
"Indenture" means this Indenture, as amended or supplemented from time
to time in accordance with the terms hereof and shall include the terms of a
particular series of Securities established as contemplated in Section 2.3(a).
"interest," when used with respect to a Discount Security which by its
terms bears interest only after Maturity, means interest payable after
Maturity.
"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 or, in the
case of a Discount Security, the Principal Amount payable upon a declaration of
acceleration pursuant to Section 6.2, becomes due and payable as therein or
herein provided, whether at the Stated Maturity or by declaration of
acceleration, call for redemption or otherwise.
"Officer" means the Chairman of the Board, any Vice Chairman, the
President, any Vice President, the Treasurer, the Secretary, any Assistant
Treasurer or any Assistant Secretary of the Company.
"Officers' Certificate" means a written certificate containing the
information specified in Sections 13.4 and 13.5, signed in the name of the
Company by its Chairman of the Board, a Vice Chairman, its President or a Vice
President, and by its Treasurer, an Assistant Treasurer, its Secretary or an
Assistant Secretary, and delivered to the Trustee.
"Opinion of Counsel" means a written opinion containing the information
specified in Sections 13.4 and 13.5, from legal counsel who is acceptable to
the Trustee. The counsel may be an employee of, or counsel to, the Company or
the Trustee.
"Periodic Offering" means an offering of Securities of a series from
time to time the specific terms of which Securities, including, without
limitation, the rate or rates of interest, if any, thereon, the Stated Maturity
or Maturities thereof, the original issue date or dates thereof, the redemption
provisions, if any, and any other terms specified as
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<PAGE> 12
contemplated by Section 2.3(a) with respect thereto, are to be determined by
the Company, or one or more of the Company's agents designated in an Officers'
Certificate, upon the issuance of such Securities.
"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 any
series, means the place or places where, subject to the provisions of Section
4.5, the Principal of and any interest on the Securities of that series are
payable as specified as contemplated by Section 2.3(a).
"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 2.9 in exchange for or in lieu of a
mutilated, destroyed, lost or stolen Security shall be deemed to evidence the
same debt as the mutilated, destroyed, lost or stolen Security.
"Principal" or "Principal Amount" of a Security, except as otherwise
specifically provided in this Indenture, means the outstanding principal of the
Security plus the premium, if any, of the Security.
"Redemption Date" or "redemption date," when used with respect to any
Security to be redeemed, shall mean the date specified for redemption of such
Security in accordance with the terms of such Security and this Indenture.
"Redemption Price" or "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.
"Regular Record Date" for the interest payable on any Interest Payment
Date on the Securities of any series means the date specified for that purpose
as contemplated by Section 2.3(a).
"SEC" means the Securities and Exchange Commission.
"Securities" has the meaning stated in the first recital of this
Indenture and more particularly means any Securities authenticated and
delivered under this Indenture.
"Securityholder" or "Holder," when used with respect to any Security,
means a person in whose name a Security is registered on the Registrar's books.
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<PAGE> 13
"Special Record Date" for the payment of any Defaulted Interest on the
Securities of any issue means a date fixed by the Trustee pursuant to Section
2.13.
"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 as the fixed date on which an amount equal to the Principal of
such Security or an installment of Principal thereof or interest there on is
due and payable.
"Subsidiary" means, with respect to any person, a corporation of which a
majority of the Capital Stock having voting power under ordinary circumstances
to elect a majority of the board of directors of such corporation is owned by
(i) such person, (ii) such person and one or more Subsidiaries of such person
or (iii) one or more Subsidiaries of such person.
"TIA" means the Trust Indenture Act of 1939 as in effect on the date of
this Indenture, except as provided in Section 9.3.
"Trust Officer" means any officer of the Trustee assigned by the Trustee
to administer its corporate trust matters.
"Trustee" means the party named as the "Trustee" in the first paragraph
of this Indenture until a successor replaces it pursuant to the applicable
provisions of this Indenture and, thereafter, shall mean such successor.
"United States" means the United States of America, its territories, its
possessions (including the Commonwealth of Puerto Rico), and other areas
subject to its jurisdiction.
SECTION 1.2 Other Definitions.
<TABLE>
<CAPTION>
Defined in
Term Section
---- -------
<S> <C>
"Bankruptcy Law" 6.1
"Custodian" 6.1
"Defaulted Interest" 2.13
"Event of Default" 6.1
"Exchange Date" 2.11
"Legal Holiday" 13.8
"Notice of Default " 6.1
"Outstanding" 2.10
"Paying Agent" 2.5
"Registrar" 2.5
"Senior Indebtedness" 13.1
</TABLE>
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<PAGE> 14
SECTION 1.3 Incorporation by Reference of Trust Indenture Act.
Whenever this Indenture refers to a provision of the TIA, the provision is
incorporated by reference in and made a part of this Indenture. The following
TIA terms used in this Indenture have the following meanings:
"Commission" means the SEC.
"indenture securities" means the Securities.
"indenture security holder" means a Holder or Securityholder.
"indenture to be qualified" means this Indenture.
"indenture trustee" or "institutional trustee" means the Trustee.
"obligor" on the indenture securities means the Company.
All other TIA terms used in this Indenture that are defined by the TIA,
defined by TIA reference to another statute or defined by SEC rule have the
meanings assigned to them by such definitions.
SECTION 1.4 Rules of Construction. Unless the context otherwise
requires:
(1) a term has the meaning assigned to it;
(2) an accounting term not otherwise defined has the meaning
assigned to it in accordance with generally accepted accounting
principles in the United States as in effect from time to time;
(3) "or" is not exclusive;
(4) "including" means including, without limitation; and
(5) words in the singular include the plural, and words in the
plural include the singular.
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<PAGE> 15
ARTICLE II
THE SECURITIES
SECTION 2.1 Forms Generally. The Securities of each series shall be in
substantially such form (including global form) as shall be established by
delivery to the Trustee of an Officers' Certificate or in one or more
indentures supplemental hereto, in each case with such appropriate insertions,
omissions, substitutions and other variations as are required or permitted by
this Indenture, and may have such letters, numbers or other marks of
identification and such legends or endorsements placed thereon as may be
required to comply with the rules of any securities exchange or as may,
consistently herewith, be determined by the Officers executing such Securities
as evidenced by their execution of the Securities. The Officers' Certificate
so establishing the form of Security of any series shall be delivered to the
Trustee at or prior to the delivery of the Company Order contemplated by
Section 2.4 for the authentication and delivery of such Securities.
The permanent Securities shall be printed, lithographed or engraved or
produced by any combination of these methods or may be produced in any other
manner, provided, that such method is permitted by the rules of any securities
exchange on which such Securities may be listed, all as determined by the
Officers executing such Securities as evidenced by their execution of such
Securities.
SECTION 2.2 Securities in Global Form. If Securities of a series are
issuable in temporary or permanent global form, as specified as contemplated by
Section 2.3(a), then, notwithstanding clause (10) of Section 2.3(a) and the
provisions of Section 2.3(b), any such Security shall represent such of the
Outstanding Securities of such series as shall be specified therein and may
provide that it shall represent the aggregate amount of Outstanding Securities
from time to time endorsed thereon and that the aggregate amount of Outstanding
Securities represented thereby may from time to time be reduced to reflect
exchanges. Any endorsement of a Security in global form to reflect the amount
of 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 2.4 or Section 2.11.
Subject to the provisions of Section 2.4 and, if applicable, Section 2.11, the
Trustee shall deliver and redeliver any Security in 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 2.4 or
2.11 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 13.4 or 13.5 and need
not be accompanied by an Opinion of Counsel.
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<PAGE> 16
The provisions of the last sentence of Section 2.4 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 13.4 or 13.5 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 2.4.
Notwithstanding the provisions of Sections 2.1 and 2.13, unless
otherwise specified as contemplated by Section 2.3(a), payment of Principal of
and any interest on any Security in global form shall be made to the person or
persons specified therein.
SECTION 2.3 Title, Terms and Denominations.
(a) The aggregate Principal Amount of Securities which may be
authenticated and delivered under this Indenture shall be unlimited.
The Securities may be issued in one or more series. There shall be
established and, subject to Section 2.4, set forth, or determined in the manner
provided, in an Officers' Certificate of the Company, or established in one or
more indentures supplemental hereto:
(1) the title of the Securities of the series (which shall
distinguish the Securities of the series from all other Securities);
(2) any limit upon the aggregate Principal Amount of the
Securities of the series which 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 Sections 2.8, 2.9, 2.11, 3.6, 9.5
or 10.3 and except for any Securities which, pursuant to Section 2.4,
are deemed never to have been authenticated and delivered hereunder);
(3) whether any Securities of the series may be represented
initially by a Security in temporary or permanent global form and, if
so, the initial Depositary with respect to any such temporary or
permanent global Security, and if other than as provided in Section 2.8
or Section 2.11, as applicable, whether and the circumstances under
which beneficial owners of interests in any such temporary or permanent
global Security may exchange such interests for Securities of such
series and of like tenor of any authorized form and denomination;
(4) the person to whom any interest on any Security of the
series shall be payable, if other than the person in whose name that
Security (or one or more
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<PAGE> 17
Predecessor Securities) is registered at the close of business on the
Regular Record Date for such interest, and the extent to which, or the
manner in which (including any certification requirement and other terms
and conditions under which), any interest payable on a temporary or
permanent global Security on an Interest Payment Date will be paid if
other than in the manner provided in Section 2.2 and Section 2.4, as
applicable;
(5) the date or dates on which the Principal of the Securities
of the series is payable or the method of determination thereof;
(6) the rate or rates at which the Securities of the series
shall bear interest, if any, the date or dates from which any such
interest shall accrue, the Interest Payment Dates on which any such
interest shall be payable and the Regular Record Date for any interest
payable on any Securities on any Interest Payment Date;
(7) the place or places where, subject to the provisions of
Section 4.5, the Principal of and any interest on Securities of the
series shall be payable, any Securities of the series may be surrendered
for registration of transfer, Securities of the series may be
surrendered for exchange and notices and demands to or upon the Company
in respect of the Securities of the series and this Indenture may be
served;
(8) the period or periods within which, the price or prices at
which and the terms and conditions upon which, Securities of the series
may be redeemed, in whole or in part, at the option of the Company;
(9) the obligation, if any, of the Company to redeem or purchase
Securities of the series pursuant to any sinking fund or analogous
provisions or at the option of a Holder thereof, the conditions, if any,
giving rise to such obligation, and the period or periods within which,
the price or prices at which and the terms and conditions upon which
Securities of the series shall be redeemed or purchased, in whole or in
part, and any provisions for the remarketing of such Securities;
(10) the denominations in which any Securities of the series
shall be issuable, if other than denominations of $1,000 and any
integral multiple thereof;
(11) if other than the Principal Amount thereof, the portion of
the Principal Amount of any Securities of the series which shall be
payable upon declaration of acceleration of the Maturity thereof
pursuant to Section 6.2;
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(12) if other than as defined in Section 1.1, the meaning of
"Business Day" when used with respect to any Securities of the series;
(13) if and the terms and conditions upon which the Securities
of the series may or must be converted into securities of the Company or
exchanged for securities of the Company;
(14) any terms applicable to Original Issue Discount, if any (as
that term is defined in the Internal Revenue Code of 1986 and the
Regulations thereunder), including the rate or rates at which such
Original Issue Discount, if any, shall accrue;
(15) if the Securities of the series may be issued or delivered
(whether upon original issuance or upon exchange of a temporary Security
of such series or otherwise), or any installment of Principal of or any
interest is payable, only upon receipt of certain certificates or other
documents or satisfaction of other conditions in addition to those
specified in this Indenture, the form and terms of such certificates,
documents or conditions; and
(16) any other terms of the series (which terms shall not be
inconsistent with the provisions of this Indenture, except as permitted
by Section 9.1(7)).
All Securities of any one series shall be substantially identical except
as to denomination and the rate or rates of interest, if any, and Stated
Maturity, the date from which interest, if any, shall accrue and except as may
otherwise be provided in or pursuant to an Officers' Certificate pursuant to
this Section 2.3(a) or in any 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 for issuances of additional Securities of
such series or for the establishment of additional terms with respect to the
Securities of such series.
If any of the terms of the series are established by action taken
pursuant to a Board Resolution, a copy of any appropriate record of such action
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 series. With respect to Securities
of a series subject to a Periodic Offering, such Board Resolution or Officers'
Certificate may provide general terms for Securities of such series and provide
either that the specific terms of particular Securities of such series shall be
specified in a Company Order or that such terms shall be determined by the
Company, or one or more of the Company's agents designated in an Officers'
Certificate, in accordance with the Company Order as contemplated by the first
proviso of the third paragraph of Section 2.4.
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<PAGE> 19
(b) Unless otherwise provided as contemplated by Section 2.3(a) with
respect to any series of Securities, any Securities of a series shall be
issuable in denominations of $1,000 and any integral multiple thereof.
SECTION 2.4 Execution, Authentication, Delivery and Dating. The
Securities shall be executed on behalf of the Company by its Chairman of the
Board, one of its Vice Chairmen, its President or one of its Vice Presidents,
or the Treasurer or any Assistant Treasurer, under its corporate seal
reproduced thereon attested by its Secretary or one of its Assistant
Secretaries. The signature of any of these officers on the Securities may be
manual or facsimile.
Securities 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.
At any time and from time to time after the execution and delivery of
this Indenture, the Company may deliver Securities of any series 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 such Company Order shall authenticate and deliver such
Securities; provided, however, that, with respect to Securities of a series
subject to a Periodic Offering, (a) such Company Order may be delivered by the
Company to the Trustee prior to the delivery to the Trustee of such Securities
for authentication and delivery, (b) the Trustee shall authenticate and deliver
Securities of such series for original issue from time to time, in an aggregate
Principal Amount not exceeding the aggregate Principal Amount established for
such series, pursuant to a Company Order or pursuant to such procedures
acceptable to the Trustee as may be specified from time to time by a Company
Order, (c) the rate or rates of interest, if any, the Stated Maturity or
Maturities, the original issue date or dates, the redemption provisions, if
any, and any other terms of Securities of such series shall be determined by a
Company Order or pursuant to such procedures and (d) if provided for in such
procedures, such Company Order may authorize authentication and delivery
pursuant to oral or electronic instructions from the Company, or the Company's
duly authorized agent or agents designated in an Officers' Certificate, which
oral instructions shall be promptly confirmed in writing.
If the forms or terms of the Securities of the series have been
established in or pursuant to one or more Officers' Certificates as permitted
by Sections 2.1 and 2.3(a), in authenticating such Securities, and accepting
the additional responsibilities under this Indenture in relation to such
Securities, the Trustee shall be entitled to receive, and (subject to Section
7.1) shall be fully protected in relying upon, an Opinion of Counsel stating:
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<PAGE> 20
(a) that the form and terms of such Securities have been duly
authorized by the Company and established in conformity with the provisions of
this Indenture; and
(b) that such Securities when authenticated and delivered by the
Trustee and issued by the Company in the manner and subject to any conditions
specified in such Opinion of Counsel, will constitute valid and legally binding
obligations of the Company, enforceable in accordance with their terms, subject
to customary exceptions;
provided, however, that, with respect to Securities of a series subject to a
Periodic Offering, the Trustee shall be entitled to receive such Opinion of
Counsel only once at or prior to the time of the first authentication of
Securities of such series and that the Opinion of Counsel above may state:
(x) that the forms of such Securities have been, and the terms of
such Securities (when established in accordance with such procedures as
may be specified from time to time in a Company Order, all as
contemplated by and in accordance with a Board Resolution or an
Officers' Certificate pursuant to Section 2.3(a), as the case may be)
will have been, duly authorized by the Company and established in
conformity with the provisions of this Indenture; and
(y) that such Securities when (1) executed by the Company, (2)
completed, authenticated and delivered by the Trustee in accordance with
this Indenture, and (3) issued by the Company in the manner and subject
to any conditions specified in such Opinion of Counsel, will constitute
valid and legally binding obligations of the Company, enforceable in
accordance with their terms, subject to customary exceptions.
With respect to Securities of a series subject to a Periodic Offering,
the Trustee may conclusively rely, as to the authorization by the Company of
any of such Securities, the form and terms thereof and the legality, validity,
binding effect and enforceability thereof, upon the Opinion of Counsel and
other documents delivered pursuant to Sections 2.1 and 2.3(a) and this Section,
as applicable, at or prior to the time of the first authentication of
Securities of such series unless and until it has received written notification
that such opinion or other documents have been superseded or revoked. In
connection with the authentication and delivery of Securities of a series
subject to a Periodic Offering, the Trustee shall be entitled to assume, unless
it has actual knowledge to the contrary, that the Company's instructions to
authenticate and deliver such Securities do not violate any rules, regulations
or orders of any governmental agency or commission having jurisdiction over the
Company.
Notwithstanding the provisions of Section 2.3(a) and of the preceding
three paragraphs, if all Securities of a series are subject to a Periodic
Offering, it shall not be necessary to deliver the Officers' Certificate
otherwise required pursuant to Section
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<PAGE> 21
2.3(a) at or prior to the time of authentication of each Security of such
series if such Officers' Certificate is delivered at or prior to the
authentication upon original issuance of the first Security of such series to
be issued.
Each Security shall be dated the date of its authentication.
The Trustee may appoint an authenticating agent acceptable to the
Company to authenticate Securities. Unless otherwise provided in the
appointment, an authenticating agent may authenticate Securities whenever the
Trustee may do so. Each reference in this Indenture to authentication by the
Trustee includes authentication by such agent.
No Security shall be entitled to any benefit under this Indenture or be
valid or obligatory for any purpose unless there appears on such Security a
certificate of authentication substantially in the form provided for herein
duly executed by the Trustee by manual signature of an authorized signatory,
and such certificate upon any Security shall be conclusive evidence, and the
only evidence, that such Security has been duly authenticated and delivered
hereunder. The Trustee's certificate of authentication shall be in
substantially the following form:
This is one of the Securities of the series designated therein
referred to in the within-mentioned Indenture.
United States Trust Company of New York, as
Trustee
By:
-----------------------------------------
Authorized Signatory
Notwithstanding the foregoing, if any Security shall have been duly
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 2.12 together with a written statement (which need not
comply with Section 13.4 or 13.5 and need not be accompanied by an Opinion of
Counsel) stating that such Security has never been issued and sold by the
Company, for all purposes of this Indenture such Security shall be deemed never
to have been authenticated and delivered hereunder and shall never be entitled
to the benefits of this Indenture.
SECTION 2.5 Registrar and Paying Agent. The Company shall maintain,
with respect to each series of Securities, an office or agency where such
Securities may be presented for registration of transfer or for exchange
("Registrar") and, in the Borough
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<PAGE> 22
of Manhattan, The City of New York, an office or agency where such Securities
may be presented for purchase or payment ("Paying Agent"). The Registrar shall
keep a register of the Securities and of their transfer and exchange. The
Company may have one or more co-registrars and one or more additional paying
agents. The term Paying Agent includes any additional paying agent.
The Company shall enter into an appropriate agency agreement with
respect to each series of Securities with any Registrar, Paying Agent or co-
registrar (if not the Trustee). The agreement shall implement the provisions
of this Indenture that relate to such agent. The Company shall notify the
Trustee of the name and address of any such agent. If the Company fails to
maintain a Registrar or Paying Agent for a particular series of Securities, the
Trustee shall act as such and shall be entitled to appropriate compensation
therefor pursuant to Section 7.7. The Company or any Subsidiary or an
Affiliate of either of them may act as Paying Agent, Registrar or co-registrar.
The Company initially appoints the Trustee as the Registrar and Paying
Agent in connection with such Securities.
SECTION 2.6 Paying Agent to Hold Money and Securities in Trust. Except
as otherwise provided herein, prior to or on each due date of payments in
respect of any series of Securities, the Company shall deposit with the Paying
Agent with respect to such Securities a sum of money sufficient to make such
payments when so becoming due. The Company shall require each Paying Agent
(other than the Trustee) to agree in writing that the Paying Agent shall hold
in trust for the benefit of Holders or the Trustee all money held by such
Paying Agent for the making of payments in respect of the Securities of such
series and shall notify the Trustee of any default by the Company in making any
such payment. At any time during the continuance of any such default, a Paying
Agent shall, upon the written request of the Trustee, forthwith pay to the
Trustee all money so held in trust with respect to such Securities. If the
Company, a Subsidiary or an Affiliate of either of them acts as Paying Agent
for a series of Securities, it shall segregate the money held by it as Paying
Agent with respect to such Securities and hold it as a separate trust fund.
The Company at any time may require a Paying Agent for a series of Securities
to pay all money held by it with respect to such Securities to the Trustee and
to account for any money disbursed by it. Upon doing so, such Paying Agent
shall have no further liability for the money.
SECTION 2.7 Securityholder Lists. The Trustee shall preserve in as
current a form as is reasonably practicable the most recent list available to
it of the names and addresses of Holders of each series of Securities. If the
Trustee is not the Registrar for any series of Securities, the Company shall
cause to be furnished to the Trustee at least semiannually on June 1 and
December 1 a listing of Holders of such series of Securities dated within 15
days of the date on which the list is furnished and at such other times as the
Trustee may request in writing a list in such form and as of such date as the
Trustee
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<PAGE> 23
may reasonably require of the names and addresses of Securityholders of such
series of Securities.
SECTION 2.8 Transfer and Exchange. Upon surrender for registration of
transfer of any Security at the office or agency of the Company designated
pursuant to Section 4.5 for such purpose, the Company shall execute, and the
Trustee shall authenticate and deliver, in the name of the designated
transferee or transferees, one or more new Securities of any authorized
denomination or denominations of a like aggregate Principal Amount and tenor.
The Company shall not charge a service charge for any registration of transfer
or exchange, but the Company may require payment of a sum sufficient to pay all
taxes, assessments or other governmental charges that may be imposed in
connection with the transfer or exchange of the Securities from the
Securityholder requesting such transfer or exchange (other than any exchange of
a temporary Security for a definitive Security not involving any change in
ownership or any exchange pursuant to Section 2.11, 3.6, 9.5 or 10.3, not
involving any transfer).
Notwithstanding any other provisions (other than the provisions set
forth in the sixth and seventh paragraphs) of this Section, a Security in
global form representing all or a portion of the Securities of a series may not
be transferred except as a whole by the Depositary for such series to a nominee
of such Depositary or by a nominee of such Depositary to such Depositary or
another nominee of such Depositary or by such Depositary or any such nominee to
a successor Depositary for such series or a nominee of such successor
Depositary.
At the option of the Holder, Securities of any series may be exchanged
for other Securities of the same series of any authorized denomination or
denominations, of a like aggregate Principal Amount and tenor, upon surrender
of the Securities to be exchanged at such office or agency. 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.
Whenever any Securities are so surrendered for exchange, the Company
shall execute, and the Trustee or a duly appointed authenticating agent shall
authenticate and deliver, the Securities which the Holder making the exchange
is entitled to receive.
If at any time the Depositary for the Securities of a series notifies
the Company that it is unwilling or unable to continue as Depositary for the
Securities of such series, the Company shall appoint a successor Depositary
with respect to the Securities of such series. If a successor Depositary for
the Securities of such series is not appointed by the Company within 90 days
after the Company receives such notice, the Company will execute, and the
Trustee, upon receipt of a Company Order for the authentication and delivery of
definitive Securities of such series, will authenticate and deliver Securities
of such series in definitive form in an aggregate Principal Amount equal to the
Principal
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<PAGE> 24
Amount of the Security or Securities in global form representing such series in
exchange for such Security or Securities in global form.
The Company may at any time and in its sole discretion determine that
the Securities of any series issued in the form of one or more global
Securities shall no longer be represented by such global Security or
Securities. In such event the Company will execute, and the Trustee, upon
receipt of a Company Order for the authentication and delivery of definitive
Securities of such series, will authenticate and deliver Securities of such
series in definitive form and in an aggregate Principal Amount equal to the
Principal Amount of the Security or Securities in global form representing such
series in exchange for such Security or Securities in global form.
Notwithstanding the foregoing, except as otherwise specified in the
preceding two paragraphs or as contemplated by Section 2.3(a), any permanent
global Security shall be exchangeable only as provided in this paragraph. If
the beneficial owners of interests in a permanent global Security are entitled
to exchange such interests for definitive Securities of such series and of like
Principal Amount and tenor but of another authorized form and denomination, as
specified as contemplated by Section 2.3(a), then without unnecessary delay but
in any event not later than the earliest date on which such interests may be so
exchanged, the Company shall deliver to the Trustee definitive Securities in
aggregate Principal Amount equal to the Principal Amount of such permanent
global Security, executed by the Company. On or after the earliest date on
which such interests may be so exchanged, such permanent global Security shall
be surrendered by the Depositary with respect thereto to the Trustee, as the
Company's agent for such purpose, to be exchanged, in whole or from time to
time in part, for definitive Securities without charge and the Trustee shall
authenticate and deliver, in exchange for each portion of such permanent global
Security, an equal aggregate Principal Amount of definitive Securities of the
same series of authorized denominations and of like tenor as the portion of
such permanent global Security to be exchanged; provided, however, that
notwithstanding the last paragraph of this Section 2.8, no such exchanges may
occur during a period beginning at the opening of business 15 days before any
selection of Securities of that series to be redeemed and ending on the
relevant Redemption Date. If a 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 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.
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Upon the exchange of a Security in global form for Securities in
definitive form, such Security in global form shall be cancelled by the
Trustee. Securities issued in exchange for a Security in global form pursuant
to this Section 2.8 shall be registered in such names and in such authorized
denominations as the Depositary for such Security in global form, pursuant to
instructions from its direct or indirect participants or otherwise, shall
instruct the Trustee. The Trustee shall deliver such Securities to the persons
in whose names such Securities are so registered.
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 Security presented or surrendered for registration of transfer or
for exchange shall (if so required by the Company or the Trustee) be duly
endorsed, or be accompanied by a written instrument of transfer in form
satisfactory to the Company and the Registrar duly executed, by the Holder
thereof or his attorney duly authorized in writing.
The Company shall not be required (i) to issue, register the transfer of
or exchange Securities of any series during a period beginning at the opening
of business 15 days before any selection of Securities of that series to be
redeemed and ending (except as otherwise provided in the first proviso in the
eighth paragraph of this Section 2.8) at the close of business on the day of
the mailing of the relevant notice of redemption, or (ii) to register the
transfer of or exchange any Security so selected for redemption, in whole or in
part, except the unredeemed portion of any Security being redeemed in part.
SECTION 2.9 Replacement Securities. If (a) any mutilated Security is
surrendered to the Trustee, or (b) the Company and the Trustee receive evidence
to their satisfaction of the destruction, loss or theft of any Security, and
there is delivered to the Company and the Trustee such security or indemnity as
may be required by them to save each of them harmless, then, in the absence of
notice to the Company or the Trustee that such Security has been acquired by a
bona fide purchaser, the Company shall execute and upon its written request the
Trustee shall authenticate and deliver, in exchange for any such mutilated
Security or in lieu of any such destroyed, lost or stolen Security, a new
Security of the same series and of like tenor and Principal Amount, bearing a
number not contemporaneously outstanding.
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, pay such Security.
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Upon the issuance of any new Securities 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 issued pursuant to this Section in lieu
of any mutilated, destroyed, lost or stolen Security shall constitute an
original additional contractual obligation of the Company, whether or not the
destroyed, lost or stolen Security shall be at any time enforceable by anyone,
and any such new Security shall be entitled to all benefits of this Indenture
equally and proportionately with any and all other Securities of that issue
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.
SECTION 2.10 Outstanding Securities; Determinations of Holders' Action.
Securities of any series "Outstanding" at any time are, as of the date of
determination, all the Securities of such series theretofore authenticated by
the Trustee for such series except for those cancelled by it, those delivered
to it for cancellation and those described in this Section 2.10 as not
outstanding. A Security does not cease to be "Outstanding" because the Company
or an Affiliate thereof holds the Security; provided, however, that in
determining whether the Holders of the requisite Principal Amount of
Outstanding Securities have given or concurred in any request, demand,
authorization, direction, notice, consent or waiver hereunder, Securities owned
by the Company or any other obligor upon the Securities or any Affiliate of the
Company or such other obligor shall be disregarded and deemed not to be
outstanding, except that, in determining whether the Trustee shall be protected
in relying upon any such request, demand, authorization, direction, notice,
consent or waiver, only Securities which the Trustee knows to be so owned shall
be so disregarded. Securities so owned which have been pledged in good faith
may be regarded as Outstanding if the pledgee establishes to the satisfaction
of the Trustee the pledgee's right so to act with respect to such Securities
and that the pledgee is not the Company or any other obligor upon the
Securities or any Affiliate of the Company or of such other obligor. Subject
to the foregoing, only Securities outstanding at the time of such determination
shall be considered in any such determination (including, without limitation,
determinations pursuant to Articles 6 and 9). In addition, in determining
whether the Holders of the requisite Principal Amount of Outstanding Securities
have given or concurred in any request, demand, authorization, direction,
notice, consent or waiver hereunder, the Principal Amount of a 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 acceleration of the Maturity thereof pursuant to Section
6.2.
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If a Security has been paid pursuant to Section 2.9 or in exchange for
or in lieu of which another Security has been authenticated and delivered
pursuant to this Indenture, it ceases to be outstanding unless the Trustee
receives proof satisfactory to it that the replaced Security is held by a bona
fide purchaser.
If the Trustee (other than the Company) holds, in accordance with this
Indenture, on a Redemption Date or on Stated Maturity, money sufficient to pay
Securities payable on that date, then on and after that date such Securities
shall cease to be outstanding and interest, if any, on such Securities shall
cease to accrue; 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.
SECTION 2.11 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, 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. Such temporary Securities may be in global
form.
If temporary Securities for some or all of the Securities of any series
are issued, the Company will cause definitive Securities representing such
Securities to be prepared without unreasonable delay. After the preparation of
such definitive Securities, the temporary Securities shall be exchangeable for
such definitive Securities of like tenor upon surrender of the temporary
Securities at the office or agency of the Company designated for such purpose
pursuant to Section 4.5 for such series for the purpose of exchanges of
Securities of such 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
and of like tenor of authorized denominations. Until so exchanged the
temporary Securities shall in all respects be entitled to the same benefits
under this Indenture as definitive Securities.
Until exchanged in full as hereinabove provided, the temporary
Securities of any series shall in all respects be entitled to the same benefits
under this Indenture as permanent Securities of the same series and of like
tenor authenticated and delivered hereunder.
SECTION 2.12 Cancellation. All Securities surrendered for payment,
redemption, 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
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all Securities so delivered 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 (including Securities received by the Company in exchange
or payment for other Securities of the Company) and may deliver to the Trustee
(or to any other person for delivery to the Trustee) for cancellation any
Securities previously authenticated hereunder which the Company has not issued
and sold, and all Securities so delivered shall be promptly cancelled by the
Trustee. The Company may not reissue, or issue new Securities to replace,
Securities it has paid or delivered to the Trustee for cancellation. No
Securities shall be authenticated in lieu of or in exchange for any Securities
cancelled as provided in this Section, except as expressly permitted in the
form of Securities for any particular series or as permitted by this Indenture.
All cancelled Securities held by the Trustee shall be destroyed by the Trustee
and evidence of their destruction delivered to the Company unless the Company
directs by Company Order that the Trustee deliver cancelled Securities to the
Company.
SECTION 2.13 Payment of Interest; Interest Rights Preserved. Unless
otherwise provided as contemplated by Section 2.3(a) with respect to any series
of Securities, interest on any Security which is payable, and is punctually
paid or duly provided for, on any Interest Payment Date shall be paid to the
person in whose name that Security (or one or more Predecessor Securities) is
registered at the close of business on the Regular Record Date for such
interest.
Any interest on any Security of any series which 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 Holder
on the relevant Regular Record Date by virtue of having been such Holder, and
such Defaulted Interest may be paid by the Company, at its election in each
case, as provided in clause (1) or (2) below:
(1) The Company may elect to make payment of any Defaulted
Interest to the persons in whose names the Securities of such series (or
their respective Predecessor Securities) are registered at the close of
business on a Special Record Date for the payment of such Defaulted
Interest, which shall be fixed in the following manner. The Company
shall notify the Trustee in writing of the amount of Defaulted Interest
proposed to be paid on each Security and the date of the proposed
payment, and at the same time the Company shall deposit with the Trustee
an amount of money 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 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
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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 Securities at his address as it appears in the Security
Register, not less than 10 days prior to such Special Record Date.
Notice of the proposed payment of such Defaulted Interest and the
Special Record Date therefor having been so mailed, such Defaulted
Interest shall be paid to the persons in whose names the Securities (or
their respective Predecessor Securities) are registered at the close of
business on such Special Record Date and shall no longer be payable
pursuant to the following Clause (2).
(2) The Company may make payment of any Defaulted Interest on
the Securities 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 2.8,
each Security delivered under this Indenture upon registration of transfer of
or in exchange for or in lieu of any other Security shall carry the rights to
interest accrued and unpaid, and to accrue, which were carried by such other
Security.
SECTION 2.14 Persons Deemed Owners. Prior to due presentment of a
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 Security
is registered as the owner of such Security for the purpose of receiving
payment of Principal of and (except as otherwise specified as contemplated by
Section 2.3(a) and subject to Section 2.8 and Section 2.13) interest on such
Security and for all other purposes whatsoever, whether or not such 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.
None of the Company, the Trustee, any Paying Agent or the 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.
SECTION 2.15 Computation of Interest . Except as otherwise specified
as contemplated by Section 2.3(a) for Securities of any series, (i) interest on
any Securities which bear interest at a fixed rate shall be computed on the
basis of a 360-day year comprised of twelve 30-day months and (ii) interest on
any Securities which bear interest
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at a variable rate shall be computed on the basis of the actual number of days
in an interest period divided by 360.
ARTICLE III
REDEMPTION
SECTION 3.1 Right to Redeem; Notices to Trustee. 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 2.3(a) for Securities of any series) in accordance with this
Article. In the case of any redemption at the election of the Company of less
than all of the Securities of any series, the Company shall, within the time
period set forth below, notify the Trustee in writing of the Redemption Date,
the Principal Amount and any other information necessary to identify the
Securities of such series to be redeemed and the Redemption Price.
The Company shall give the notice to the Trustee provided for in this
Section 3.1 at least 60 days before the Redemption Date (unless a shorter
notice shall be satisfactory to the Trustee).
SECTION 3.2 Selection of Securities to be Redeemed. Unless otherwise
specified as contemplated by Section 2.3(a) with respect to any series of
Securities, if less than all the Securities of any series with the same issue
date, interest rate and Stated Maturity are to be redeemed, the Trustee shall
select the particular Securities to be redeemed by a method the Trustee
considers fair and appropriate, which method 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 make
the selection not more than 60 days before the Redemption Date from Outstanding
Securities of such series not previously called for redemption. Provisions of
this Indenture that apply to Securities called for redemption also apply to
portions of Securities called for redemption. The Trustee shall notify the
Company promptly in writing of the Securities to be redeemed and, in the case
of any portions of Securities to be redeemed, the principal amount thereof to
be redeemed.
SECTION 3.3 Notice of Redemption. Unless otherwise specified as
contemplated by Section 2.3(a) with respect to any series of Securities, at
least 30 days but not more than 60 days before a Redemption Date, the Company
shall mail a notice of redemption by first-class mail, postage prepaid, to each
Holder of Securities to be redeemed.
The notice shall identify the Securities to be redeemed and shall state:
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(1) the Redemption Date;
(2) the Redemption Price;
(3) if fewer than all the Outstanding Securities of any series
are to be redeemed, the identification (and, in the case of partial
redemption, the Principal Amounts) of the particular Securities to be
redeemed;
(4) that on the Redemption Date the Redemption Price will become
due and payable upon each such Security (or portion thereof) to be
redeemed and, if applicable, that interest thereon will cease to accrue
on and after said date;
(5) the place or places where such Securities maturing after the
Redemption Date, are to be surrendered for payment of the Redemption
Price; and
(6) that the redemption is for a sinking fund, if such is the
case.
At the Company's request, the Trustee shall give the notice of
redemption in the Company's name and at the Company's expense; provided,
however, that, in all cases, the text of such Company Notice shall be prepared
by the Company.
SECTION 3.4 Effect of Notice of Redemption. Once notice of redemption
is given, Securities called for redemption become due and payable on the
Redemption Date and at the Redemption Price stated in the notice, and from and
after such date (unless the Company shall default in the payment of the
Redemption Price and accrued interest) such Securities shall cease to bear
interest. Upon surrender of any such Security for redemption in accordance
with said notice, such Security shall be paid by the Company at the Redemption
Price, together with accrued interest to the Redemption Date; provided,
however, that, unless otherwise specified as contemplated by Section 2.3(a),
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 Regular Record Dates according to their terms and the provisions
of Sections 2.8 and 2.13.
If any Security called for redemption shall not be so paid upon
surrender thereof for redemption, the Principal shall, until paid, bear
interest from the Redemption Date at the rate prescribed therefor in the
Security.
SECTION 3.5 Deposit of Redemption Price. Prior to or on the Redemption
Date, the Company shall deposit with the Paying Agent (or if the Company or a
Subsidiary or an Affiliate of either of them is the Paying Agent, shall
segregate and hold in trust) money sufficient to pay the Redemption Price and
(except if the Redemption Date shall be an Interest Payment Date) accrued
interest on, of all Securities to be redeemed on that
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date other than Securities or portions of Securities called for redemption
which prior thereto have been delivered by the Company to the Trustee for
cancellation. If such money is then held by the Company in trust and is not
required for such purpose, it shall be discharged from such trust.
SECTION 3.6 Securities Redeemed in Part. Any Security which is to be
redeemed only in part shall be surrendered at the office or agency of the
Company designated therefor pursuant to Section 4.5 (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 upon such
surrender, the Company shall execute and the Trustee shall authenticate and
deliver to the Holder of such Security a new Security or Securities of the same
series and of like tenor, in an authorized denomination as requested by such
Holder, equal in aggregate Principal Amount to and in exchange for the
unredeemed portion of the Principal of the Security surrendered.
ARTICLE IV
COVENANTS
SECTION 4.1 Payment of Securities. The Company shall promptly make all
payments in respect of each series of Securities on the dates and in the manner
provided in the Securities and, to the extent not otherwise so provided,
pursuant to this Indenture. An installment of Principal of or interest on the
Securities shall be considered paid on the date it is due if the Trustee or a
Paying Agent (other than the Company or an Affiliate of the Company) holds on
that date funds designated for and sufficient to pay such installment. At the
Company's option, payments of Principal or interest may be made by check or by
transfer to an account maintained by the payee.
SECTION 4.2 SEC Reports. The Company shall file with the Trustee,
within 15 days after it files such annual and quarterly reports, information,
documents and other reports with the SEC, copies of its annual report and of
the information, documents and other reports (or copies of such portions of any
of the foregoing as the SEC may by rules and regulations prescribe) which the
Company is required to file with the SEC pursuant to Section 13 or 15(d) of the
Exchange Act. The Company also shall comply with the other provisions of TIA
Section 314(a).
SECTION 4.3 Compliance Certificate. The Company shall deliver to the
Trustee within 120 days after the end of each fiscal year of the Company
(beginning with the first full fiscal year ending on or after the date hereof)
an Officers' Certificate stating whether or not the signers know of any Default
that occurred during such period. If they do, such Officers' Certificate shall
describe the Default and its status.
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SECTION 4.4 Further Instruments and Acts. Upon request of the Trustee,
the Company will execute and deliver such further instruments and do such
further acts as may be reasonably necessary or proper to carry out more
effectively the purposes of this Indenture.
SECTION 4.5 Maintenance of Office or Agency. The Company
will maintain in the Borough of Manhattan, the City of New York, an office or
agency where Securities of that series may be presented or surrendered for
payment, where any Securities of that series may be surrendered for
registration of transfer, where Securities of that series may be surrendered
for exchange, purchase or redemption and where notices and demands to or upon
the Company in respect of the Securities of that series and this Indenture may
be served. The office of the Trustee in New York, New York shall be such
office or agency for all of the aforesaid purposes unless the Company shall
maintain some other office or agency for such purposes and shall give prompt
written notice to the Trustee of the location, and any change in the location,
of such other office or agency. If at any time the Company shall fail to
maintain any such required office or agency in respect of any series of
Securities or shall fail to furnish the Trustee with the address thereof, such
presentations and surrenders of Securities of that series may be made and
notices and demands may be made or served at the address of the Trustee set
forth in Section 13.2, and the Company hereby appoints the same as its agent to
receive such respective presentations, surrenders, notices and demands.
The Company may also 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 such purposes and may from time to time rescind
such designations; provided, however, that no such designation or rescission
shall in any manner relieve the Company of its obligation to maintain an office
or agency in accordance with the requirements set forth above for Securities of
any series for such purposes. The Company will give prompt written notice to
the Trustee of any such designation or rescission and of any change in the
location of any such other office or agency.
. SECTION 4.6 Limitations on the Incurrence of Certain Other Debt. The
Company shall not create, incur, issue, assume, guaranty or otherwise become
directly or indirectly liable for or with respect to or otherwise permit to
exist any Debt of the Company that is subordinate in right of payment to any
Debt of the Company unless such Debt is either pari passu with the Securities
or subordinate in right of payment to the Securities pursuant to subordination
provisions that are at least as favorable to the holders of the Securities as
the subordination provision set forth in this Indenture with respect to Senior
Indebtedness.
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ARTICLE V
SUCCESSOR CORPORATION
SECTION 5.1 When Company May Merge or Transfer Assets. The Company
shall not consolidate with or merge with or into any other person or convey,
transfer or lease its properties and assets substantially as an entirety to any
person, unless:
(a) either (1) the Company shall be the continuing corporation
or (2) the person (if other than the Company) formed by such
consolidation or into which the Company is merged or the person which
acquires by conveyance, transfer or lease the properties and assets of
the Company substantially as an entirety (i) shall be a corporation,
partnership or trust organized and validity existing under the laws of
the United States or any state thereof or the District of Columbia and
(ii) shall expressly assume, by an indenture supplemental hereto,
executed and delivered to the Trustee, in form satisfactory to the
Trustee, all of the obligations of the Company under the Securities and
this Indenture;
(b) immediately after giving effect to such transaction, no
Default shall have occurred and be continuing; and
(c) the Company shall have delivered to the Trustee an Officers'
Certificate and an Opinion of Counsel, each stating that such
consolidation, merger, conveyance, transfer or lease and, if a
supplemental indenture is required in connection with such transaction,
such supplemental indenture, comply with this Article and that all
conditions precedent herein relating to such transaction have been
satisfied.
The successor person formed by such consolidation or into which the
Company is merged or the successor person to which such conveyance, transfer or
lease is made shall succeed to, and be substituted for, and may exercise every
right and power of, the Company under this Indenture with the same effect as if
such successor had been named as the Company herein; and thereafter, except in
the case of a lease of its properties and assets substantially as an entirety,
the Company shall be discharged from all obligations and covenants under this
Indenture and the Securities.
ARTICLE VI
DEFAULTS AND REMEDIES
SECTION 6.1 Events of Default. Unless otherwise specified as
contemplated by Section 2.3(a) with respect to any series of securities, an
"Event of Default" occurs, with respect to each series of the Securities
individually, if:
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(1) the Company defaults in (a) the payment of the principal of
any Security of such series at its Maturity or (b) the payment of any
interest upon any Security of such series when the same becomes due and
payable and continuance of such default for a period of 30 days;
(2) the Company fails to comply with any of its agreements in
the Securities or this Indenture (other than those referred to in clause
(1) above and 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 such series) and
such failure continues for 60 days after receipt by the Company of a
Notice of Default;
(3) there shall have been the entry by a court of competent
jurisdiction of (a) a decree or order for relief in respect of the
Company in an involuntary case or proceeding under any applicable
Bankruptcy Law or (b) a decree or order adjudging the Company bankrupt
or insolvent, or seeking reorganization, arrangement, adjustment or
composition of or in respect of the Company under any applicable federal
or state law, or appointing a custodian, receiver, liquidator, assignee,
trustee, sequestrator (or other similar official) of the Company or of
any substantial part of its property, or ordering the wind up or
liquidation of its affairs, and any such decree or order for relief
shall continue to be in effect, or any such other decree or order shall
be unstayed and in effect, for a period of 60 consecutive days;
(4) (a) the Company commences a voluntary case or proceeding
under any applicable Bankruptcy Law or any other case or proceeding to
be adjudicated bankrupt or insolvent, (b) the Company consents to the
entry of a decree or order for relief in respect of the Company in an
involuntary case or proceeding under any applicable Bankruptcy Law or to
the commencement of any bankruptcy or insolvency case or proceeding
against it, (c) the Company files a petition or answer or consent
seeking reorganization or substantially comparable relief under any
applicable federal state law, (d) the Company (x) consents to the filing
of such petition or the appointment of, or taking possession by, a
custodian, receiver, liquidator, assignee, trustee, sequestrator or
similar official of the Company or of any substantial part of its
property, (y) makes an assignment for the benefit of creditors or (z)
admits in writing its inability to pay its debts generally as they
become due or (e) the Company takes any corporate action in furtherance
of any such actions in this clause (4); or
(5) any other Event of Default provided with respect to
Securities of that series.
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"Bankruptcy Law" means Title 11, United States Code, or any
similar Federal or state law for the relief of debtors. "Custodian" means any
receiver, trustee, assignee, liquidator, custodian or similar official under
any Bankruptcy Law.
A Default under clause (2) above is not an Event of Default until
the Trustee notifies the Company, or the Holders of at least 25% in aggregate
Principal Amount of the Outstanding Securities of such series notify the
Company and the Trustee, of the Default and the Company does not cure such
Default within the time specified in clause (2) above after receipt of such
notice. Any such notice must specify the Default, demand that it be remedied
and state that such notice is a "Notice of Default."
SECTION 6.2 Acceleration. If an Event of Default with respect to
Securities of any series at the time Outstanding (other than an Event of
Default specified in Section 6.1(3) or (4)) occurs and is continuing, the
Trustee by notice to the Company, or the Holders of at least 25% in aggregate
Principal Amount of the Outstanding Securities of that series by notice to the
Company and the Trustee, may declare the Principal Amount (or, if any of the
Securities of that series are Discount Securities, such portion of the
Principal Amount of such Securities as may be specified in the terms thereof)
of all the Securities of that series to be immediately due and payable. Upon
such a declaration, such Principal (or portion thereof) shall be due and
payable immediately. If an Event of Default specified in Section 6.1(3) or (4)
occurs and is continuing, the Principal (or portion thereof) of all the
Securities of that series shall become and be immediately due and payable
without any declaration or other act on the part of the Trustee or any
Securityholders. The Holders of a majority in aggregate Principal Amount of
the Outstanding Securities of any series, by notice to the Trustee (and without
notice to any other Securityholder) may rescind an acceleration with respect to
that series and its consequences if the rescission would not conflict with any
judgment or decree and all existing Events of Default with respect to
Securities of such series have been cured or waived except nonpayment of the
Principal (or portion thereof) of Securities of such series that has become due
solely as a result of such acceleration and if all amounts due to the Trustee
under Section 7.7 have been paid. No such rescission shall affect any
subsequent Default or impair any right consequent thereto.
SECTION 6.3 Other Remedies. If an Event of Default with respect to a
series of Outstanding Securities occurs and is continuing, the Trustee may
pursue any available remedy to (a) collect the payment of the whole amount then
due and payable on such Securities for Principal and interest, with interest
upon the overdue Principal and, to the extent that payment of such interest
shall be legally enforceable, upon overdue installments of interest from the
date such interest was due, at the rate or rates prescribed therefor in such
Securities and, in addition thereto, such further amount as shall be sufficient
to cover the costs and expenses of collection, including amounts due the
Trustee under Section 7.7 or (b) enforce the performance of any provision of
the Securities or this Indenture.
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The Trustee may maintain a proceeding even if the Trustee does
not possess any of the Securities or does not produce any of the Securities in
the proceeding. A delay or omission by the Trustee or any Securityholder in
exercising any right or remedy accruing upon an Event of Default shall not
impair the right or remedy or constitute a waiver of, or acquiescence in, the
Event of Default. No remedy is exclusive of any other remedy. All available
remedies are cumulative.
SECTION 6.4 Waiver of Past Defaults. The Holders of a majority in
aggregate Principal Amount of the Outstanding Securities of any series, by
notice to the Trustee (and without notice to any other Securityholder), may on
behalf of the Holders of all the Securities of such series waive an existing
Default with respect to such series and its consequences except (1) an Event of
Default described in Section 6.1(1) with respect to such series or (2) a
Default in respect of a provision that under Section 9.2 cannot be amended
without the consent of the Holder of each Outstanding Security of such series
affected. When a Default is waived, it is deemed cured, but no such waiver
shall extend to any subsequent or other Default or impair any consequent right.
SECTION 6.5 Control by Majority. The Holders of a majority in
aggregate Principal Amount of the Outstanding Securities of any series may
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 on the
Trustee with respect to the Securities of such series. However, the Trustee
may refuse to follow any direction that conflicts with law or this Indenture or
that the Trustee determines in good faith is unduly prejudicial to the rights
of other Securityholders or would involve the Trustee in personal liability.
SECTION 6.6 Limitation on Suits. A Holder of any Security of any
series may not pursue any remedy with respect to this Indenture or the
Securities unless:
(1) the Holder gives to the Trustee written notice stating that
an Event of Default with respect to the Securities of that series is
continuing;
(2) the Holders of at least 25% in aggregate Principal Amount of
the Outstanding Securities of that series make a written request to the
Trustee to pursue the remedy;
(3) such Holder or Holders offer to the Trustee reasonable
security or indemnity against any loss, liability or expense
satisfactory to the Trustee;
(4) the Trustee does not comply with the request within 60 days
after receipt of the notice, the request and the offer of security or
indemnity; and
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(5) the Holders of a majority in aggregate Principal Amount of
the Outstanding Securities of that series do not give the Trustee a
direction inconsistent with such request during such 60-day period.
A Securityholder may not use this Indenture to prejudice the
rights of any other Securityholder or to obtain a preference or priority over
any other Securityholder.
SECTION 6.7 Rights of Holders to Receive Payment. Notwithstanding any
other provision of this Indenture, the right, which is absolute and
unconditional, of any Holder of any Security to receive payment of the
Principal of and (subject to Section 2.13) interest on such Security on the
Stated Maturity or Maturities expressed in such Security (or, in the case of
redemption, on the Redemption Date) held by such Holder, on or after the
respective due dates expressed in the Securities or any Redemption Date, or to
bring suit for the enforcement of any such payment on or after such respective
dates, shall not be impaired or affected adversely without the consent of each
such Holder.
SECTION 6.8 Collection Suit by Trustee. If an Event of Default
described in Section 6.1(1) with respect to Securities of any series occurs and
is continuing, the Trustee may recover judgment in its own name and as trustee
of an express trust against the Company for the whole amount owing with respect
to such series of Securities and the amounts provided for in Section 7.7.
SECTION 6.9 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 shall then be due and payable as
therein expressed or by declaration or otherwise and irrespective of whether
the Trustee shall have made any demand on the Company for the payment of
overdue Principal 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 of Principal
and interest 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 any other amount due the Trustee
under Section 7.7) and of the Holders of Securities 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;
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and any Custodian, receiver, assignee, trustee, liquidator, sequestrator or
similar official in any such judicial proceeding is hereby authorized by each
Holder of Securities 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 of Securities, to pay the Trustee any amount due it for the reasonable
compensation, expenses, disbursements and advances of the Trustee, its agents
and counsel, and any other amounts due the Trustee under Section 7.7.
Nothing herein contained shall be deemed to authorize the Trustee or the
holders of Senior Indebtedness to authorize or consent to or accept or adopt on
behalf of any Holder of a Security 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 in any such proceeding.
SECTION 6.10 Priorities. If the Trustee collects any money pursuant to
this Article 6, it shall pay out the money in the following order and, in case
of the distribution of such money on account of Principal or interest, upon
presentation of the Securities, or both, as the case may be, and the notation
thereon of the payment if only partially paid and upon surrender thereof if
fully paid:
FIRST: to the Trustee for amounts due under Section 7.7;
SECOND: to holders of Senior Indebtedness as provided for in Article
XII;
THIRD: to Securityholders for amounts due and unpaid for the Principal
and interest on the Securities 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 amounts due and payable on such Securities for Principal
and interest, respectively; and
FOURTH: the balance, if any, to the Company.
The Trustee may fix a record date and payment date for any payment to
Securityholders pursuant to this Section 6.10. At least 15 days before such
record date, the Company shall mail to each Securityholder and the Trustee a
notice that states the record date, the payment date and amount to be paid.
SECTION 6.11 Undertaking for Costs. 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, a court in its discretion may
require the filing by any party litigant in the suit of an undertaking to pay
the costs of the suit, and the court in its discretion may assess reasonable
costs, including reasonable attorneys' fees, against any party litigant in the
suit, having due regard to the merits and good faith of the claims or defenses
made by the party litigant. This Section 6.11 does not apply to a suit by the
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Trustee, a suit by a Holder pursuant to Section 6.7 or a suit by Holders of
more than 10% in aggregate Principal Amount of the Outstanding Securities of
any series, or to any suit instituted by any Holder of any Security for the
enforcement of the payment of the Principal of or interest on any Security on
or after the Stated Maturity or Maturities expressed in such Security (or, in
the case of redemption, on or after the Redemption Date).
SECTION 6.12 Waiver of Stay, Extension or Usury 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 stay or extension law or any usury or other 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.
ARTICLE VII
TRUSTEE
SECTION 7.1 Duties of Trustee.
(a) If an Event of Default has occurred and is continuing, the Trustee
shall exercise the rights and powers vested in it by this Indenture and use the
same degree of care and skill in its exercise as a prudent man would exercise
or use under the circumstances in the conduct of his own affairs.
(b) Except during the continuance of an Event of Default:
(1) the Trustee need perform only those duties that are
specifically set forth in this Indenture and no others and shall not be
liable except for the performance of such duties; and
(2) 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. However, the Trustee shall examine the certificates and
opinions to determine whether or not they conform to the requirements of
this Indenture.
(c) The Trustee may not be relieved from liability for its own
negligent action, its own negligent failure to act or its own willful
misconduct, except that:
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(1) this paragraph (c) does not limit the effect of paragraph
(b) of this Section 7.1;
(2) the Trustee shall not be liable for any error of judgment
made in good faith by a Trust Officer unless it is proved that the
Trustee was negligent in ascertaining the pertinent facts; and
(3) the Trustee shall not be liable with respect to any action
it takes or omits to take in good faith in accordance with a direction
received by it pursuant to Section 6.5.
(d) Every provision of this Indenture that in any way relates to the
Trustee is subject to paragraphs (a), (b), (c) and (e) of this Section 7.1.
(e) The Trustee may refuse to perform any duty or exercise any right or
power or extend or risk its own funds or otherwise incur any financial
liability unless it receives indemnity satisfactory to it against any loss,
liability or expense.
(f) Money held by the Trustee in trust hereunder need not be segregated
from other funds except to the extent required by law. The Trustee shall not
be liable for any interest on any money received by it except as the Trustee
may otherwise agree with the Company.
SECTION 7.2 Rights of Trustee. (a) The Trustee may rely on any
document believed by it to be genuine and to have been signed or presented by
the proper person. The Trustee need not investigate any fact or matter stated
in the document.
(b) Before the Trustee acts or refrains from acting, it may require an
Officers' Certificate or an Opinion of Counsel. The Trustee shall not be
liable for any action it takes or omits to take in good faith in reliance on
such Officers' Certificate or Opinion of Counsel.
(c) The Trustee may act through agents and shall not be responsible for
the misconduct or negligence of any agent appointed with due care.
(d) Subject to the provisions of Section 7.1 (c), the Trustee shall not
be liable for any action it takes or omits to take in good faith which it
believes to be authorized or within its rights or powers.
SECTION 7.3 Individual Rights of Trustee, etc. The Trustee in its
individual or any other capacity may become the owner or pledgee of Securities
and may otherwise deal with the Company or its Affiliates with the same rights
it would have if it were not Trustee. Any Paying Agent, Registrar or co-
registrar or any other agent of the Company
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may do the same with like rights. However, the Trustee must comply with
Sections 7.10 and 7.11.
SECTION 7.4 Trustee's Disclaimer. The Trustee makes no representation
as to the validity or adequacy of this Indenture or the Securities. The
Trustee shall not be accountable for the Company's use of the proceeds from the
Securities and, shall not be responsible for any statement in the registration
statement for the Securities under the Securities Act of 1933, as amended, or
in the Indenture or the Securities (other than its certificate of
authentication) or for the determination as to which beneficial owners are
entitled to receive any notices hereunder.
SECTION 7.5 Notice of Defaults. If a Default with respect to the
Securities of any series occurs and is continuing and if it is known to the
Trustee, the Trustee shall give to each Holder of Securities of such series
notice of such Default in the manner set forth in TIA Section 315(b) within 90
days after it occurs. The Trustee shall have no duty to inquire as to the
performance of the Company's covenants in Article IV hereof. In addition, the
Trustee shall not be deemed to have knowledge of any Default or Event of
Default except (i) any Event of Default occurring pursuant to Section 4.1 or
6.1(l) or (ii) any Default or Event of Default of which the Trustee shall have
received written notification or obtained actual knowledge.
SECTION 7.6 Reports by Trustee to Holders. Within 60 days after each
May 15 beginning with the May 15 following the date of this Indenture, the
Trustee shall mail to each Holder of Securities a brief report dated as of such
May 15 that complies with TIA Section 313(a). The Trustee also shall comply
with TIA Section 313(b) and (c).
A copy of each report at the time of its mailing to Holders of
Securities shall be filed with the SEC and each stock exchange on which the
Securities of that series may be listed. The Company agrees to notify the
Trustee whenever the Securities of a particular series become listed on any
stock exchange and of any delisting thereof.
SECTION 7.7 Compensation 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) to reimburse the 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, advances and disbursements of
its agents and counsel), except any
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such expense, disbursement or advance as may be attributable to its
negligence or bad faith; and
(c) to indemnify the Trustee for, and to hold it harmless
against, any loss, liability or expense incurred without negligence or
bad faith on its part, arising out of or in connection with the
acceptance or administration of this trust, 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.
To secure the Company's payment obligations in this Section 7.7, the
Trustee shall have a lien prior to the Securities on all money or property held
or collected by the Trustee, except that held in trust to pay the Principal of
or interest, if any, on particular Securities.
The Company's payment obligations pursuant to this Section 7.7 shall
survive the discharge of this Indenture. When the Trustee incurs expenses
after the occurrence of a Default specified in Section 6.1(3) or (4), the
expenses are intended to constitute expenses of administration under any
Bankruptcy Law.
SECTION 7.8 Replacement of Trustee. The Trustee may resign by so
notifying the Company; provided, however, no such resignation shall be
effective until a successor Trustee has accepted its appointment pursuant to
this Section 7.8. The Holders of a majority in aggregate Principal Amount of
the Outstanding Securities of any series at the time outstanding may remove the
Trustee with respect to the Securities of such series by so notifying the
Trustee and may appoint a successor Trustee. The Company shall remove the
Trustee if:
(1) the Trustee fails to comply with Section 7.10;
(2) the Trustee is adjudged bankrupt or insolvent;
(3) a receiver or public officer takes charge of the Trustee or
its property; or
(4) the Trustee otherwise becomes incapable of acting.
If the Trustee resigns or is removed or if a vacancy exists in the
office of Trustee for any reason, with respect to the Securities of one or more
series, the Company shall promptly appoint, by resolution of its Board of
Directors, a successor Trustee 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
series).
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In the case of the appointment hereunder of a successor Trustee with
respect to all Securities, every such successor Trustee shall deliver a written
acceptance of its appointment to the retiring Trustee and to the Company.
Thereupon, the resignation or removal of the retiring Trustee shall become
effective and the successor Trustee shall have all the rights, powers and
duties of the Trustee under this Indenture. The successor Trustee shall mail a
notice of its succession to Holders of Securities of the particular series with
respect to which such successor Trustee has been appointed. The retiring
Trustee shall promptly transfer all property held by it as Trustee to the
successor Trustee, subject to the lien provided for in Section 7.7.
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
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
as co-Trustees of the same trust and that each such Trustee shall be trustee of
a trust or trusts hereunder separate and apart from any trust or trusts
hereunder administered by any other such Trustee; and upon the execution and
delivery of such supplemental indenture the resignation or removal of the
retiring Trustee shall become effective to the extent provided therein and each
such successor Trustee, without any further act, deed or conveyance, shall
become vested with all the rights, powers, trusts and duties of the retiring
Trustee with respect to the Securities of that or those series to which the
appointment of such successor Trustee relates; but, on request of the Company
or any successor Trustee, such retiring Trustee shall duly assign, transfer and
deliver to such successor Trustee all property and money held by such retiring
Trustee hereunder with respect to the Securities of that or those series to
which the appointment of such successor Trustee relates, subject, nevertheless,
to its lien, if any, provided for in Section 7.7.
If a successor Trustee with respect to the Securities of any series does
not take office within 30 days after the retiring Trustee resigns or is
removed, the retiring Trustee, the Company or the Holders of a majority in
aggregate Principal Amount of the Outstanding Securities of such series at the
time outstanding may petition any court of competent
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jurisdiction for the appointment of a successor Trustee with respect to the
Securities of such series.
If the Trustee fails to comply with Section 7.10, any Holder of a
Security of such series may petition any court of competent jurisdiction for
the removal of such Trustee and the appointment of a successor Trustee.
SECTION 7.9 Successor Trustee by Merger. If the Trustee consolidates
with, merges or converts into, or transfers all or substantially all its
corporate trust business or assets to, another corporation, the resulting,
surviving or transferee corporation without any further act shall be the
successor Trustee.
SECTION 7.10 Eligibility; Disqualification. The Trustee shall at all
times satisfy the requirements of TIA Section 310(a)(1) and 310(a)(5). The
Trustee shall have a combined capital and surplus of at least $50,000,000 as
set forth in its most recent published annual report of condition. The Trustee
shall comply with TIA Section 310(b). In determining whether the Trustee has
conflicting interests as defined in TIA Section 310(b)(1), the provisions
contained in the proviso to TIA Section 310(b)(1) shall be deemed incorporated
herein.
SECTION 7.11 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 therein.
ARTICLE VIII
SATISFACTION AND DISCHARGE
SECTION 8.1 Discharge of Liability on Securities. Except as otherwise
provided as contemplated by Section 2.3(a), when (a) the Company delivers to
the Trustee all Outstanding Securities or all Outstanding Securities of any
series, as the case may be, theretofore authenticated and delivered (other than
(i) Securities which have been destroyed, lost or stolen and which have been
replaced or paid as provided in Section 2.9, (ii) Securities 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 2.6) for cancellation or (b) all Outstanding
Securities have become due and payable and the Company deposits with the
Trustee cash sufficient to pay at Stated Maturity the Principal Amount of all
Principal of and interest on Outstanding Securities or all Outstanding
Securities of such series (other than Securities replaced pursuant to Section
2.9), and if in either case the Company pays all other sums payable hereunder
by the Company, then this Indenture shall, subject to Section 7.7, cease to be
of further effect as to all Outstanding
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Securities or all Outstanding Securities of any series, as the case may be.
The Trustee shall join in the execution of a document prepared by the Company
acknowledging satisfaction and discharge of this Indenture on demand of the
Company accompanied by an Officers' Certificate and Opinion of Counsel and at
the cost and expense of the Company.
SECTION 8.2 Repayment to the Company. The Trustee and the Paying Agent
shall return to the Company on Company Request any money held by them for the
payment of any amount with respect to the Securities that remains unclaimed for
two years; provided, however, that the Trustee or such Paying Agent, before
being required to make any such return, may at the expense and direction of the
Company mail to each Holder of such Securities 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 mailing, any unclaimed money then remaining
will be returned to the Company. After return to the Company, Holders entitled
to the money must look to the Company for payment as general creditors unless
an applicable abandoned property law designates another person.
SECTION 8.3 Option to Effect Defeasance or Covenant Defeasance. Unless
otherwise specified as contemplated by Section 2.3(a) with respect to
Securities of a particular series, the Company, may at its option, by Board
Resolution, at any time, with respect to any series of Securities, elect to
have either Section 8.4 or Section 8.5 be applied to all of the outstanding
Securities of any series (the "Defeased Securities"), upon compliance with the
conditions set forth below in this Article VIII.
SECTION 8.4 Defeasance and Discharge. Upon the Company's exercise
under Section 8.3 of the option applicable to this Section 8.4, the Company
shall be deemed to have been discharged from its obligations with respect to
the Defeased Securities on the date the conditions set forth below 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 the defeased Securities, which shall thereafter be
deemed to be "outstanding" only for the purposes of Sections 2.4, 2.5, 2.6,
2.9, 2.11, 2.12, 4.1, 4.5, 6.6, 6.7, 7.7, 7.8 and 8.2 of this Indenture and to
have satisfied all its other obligations under such series of Securities and
this Indenture insofar as such series of Securities are concerned (and the
Trustee, at the expense of the Company, and, upon written request, shall
execute proper instruments acknowledging the same). Subject to compliance with
this Article VIII, the Company may exercise its option under this Section 8.4
notwithstanding the prior exercise of its option under Section 8.5 with respect
to a series of Securities.
SECTION 8.5 Covenant Defeasance. Upon the Company's
exercise under Section 8.3 of the option applicable to this Section 8.5, the
Company shall be released from its obligations under Sections 4.2 and 4.3 and
Article V and such other provisions as may be provided as contemplated by
Section 2.3(a) with respect to Securities of a particular series and with
respect to the Defeased Securities on and after the date the
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conditions set forth below are satisfied (hereinafter "covenant defeasance"),
and the Defeased Securities 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 if any thereof) in connection with such
covenants, but shall continue to be deemed "outstanding" for all other purposes
hereunder. For this purpose, such covenant defeasance means that, with respect
to the Defeased Securities, 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 Article, whether directly or indirectly, by reason of any
reference elsewhere herein to any such Section or Article or by reason of any
reference in any such Section or Article to any other provisions herein or in
any other document and such omission to comply shall not constitute a Default
or an Event of Default under Section 6.1 but, except as specified above, the
remainder of this Indenture and such Defeased Securities shall be unaffected
thereby.
SECTION 8.6 Condition to Defeasance or Covenant Defeasance. The
following shall be the conditions to application of either Section 8.4 or
Section 8.5 to a series of outstanding Securities.
(a) The Company shall have irrevocably deposited with the Trustee, in
trust, (i) sufficient funds to pay the Principal of and interest to Stated
Maturity (or redemption) on, the Debt Securities of such series, or (ii) such
amount of direct obligations of, or obligations the principal of and interest
on which are fully guaranteed by, the government of the United States, and
which are not subject to prepayment, redemption or call, as will, together with
the predetermined and certain income to accrue thereon without consideration of
any reinvestment thereof, be sufficient to pay when due the Principal of, and
interest to Stated Maturity (or redemption) on, the Debt Securities of such
series.
(b) The Company shall have delivered to the Trustee an opinion of
counsel to the effect that the funds deposited pursuant to Section 8.6(a) will
not be subject to any rights of the holders of Senior Indebtedness.
ARTICLE IX
SUPPLEMENTAL INDENTURES
SECTION 9.1 Supplemental Indentures without Consent of Holders.
Without the consent of any Holders of Securities, the Company and the Trustee,
at any time and from time to time, may enter into one or more indentures
supplemental hereto, in form satisfactory to the Trustee, for any of the
following purposes:
(1) to evidence the succession of another corporation to the
Company and the assumption by any such successor of the covenants of the
Company herein and in the Securities; or
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(2) to add to the covenants, agreements and obligations of the
Company for the benefit of the Holders of all of the Securities or any
series thereof, or to surrender any right or power herein conferred upon
the Company; or
(3) to establish the form or terms of Securities of any series
as permitted by Sections 2.1 and 2.3(a), respectively; or
(4) 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,
pursuant to the requirements of Section 7.8; or
(5) to cure any ambiguity, defect or inconsistency; or
(6) to add to, change or eliminate any of the provisions of this
Indenture (which addition, change or elimination may apply to one or
more series of Securities), provided that any such addition, change or
elimination shall neither (A) apply to any Security of any series
created prior to the execution of such supplemental indenture and
entitled to the benefit of such provision nor (B) modify the rights of
the Holder of any such Security with respect to such provision; or
(7) to secure the Securities; or
(8) to make any other change that does not adversely affect the
rights of any Securityholder.
SECTION 9.2 Supplemental Indentures with Consent of Holders. With the
written consent of the Holders of at least a majority in aggregate Principal
Amount of the Outstanding Securities of each series affected by such
supplemental indenture, the Company and the Trustee may amend this Indenture or
the Securities of any series or 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 modify-
ing in any manner the rights of the Holders of the Securities of such series
under this Indenture; provided, however, that no such amendment or supplemental
indenture shall, without the consent of the Holder of each Outstanding Security
affected thereby:
(1) change the Stated Maturity of the Principal of, or any
installment of Principal of or interest on, any such Security, or reduce
the Principal Amount thereof or the rate of interest thereon or any
premium payable upon redemption thereof or reduce the amount of
Principal of any such Discount Security that would be due and payable
upon a declaration of acceleration of maturity thereof pursuant to
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Section 6.2, or change the Place of Payment, or change the coin or
currency in which, any Principal of, or any installment of interest on,
any such Security 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, on or after the Redemption
Date);
(2) reduce the percentage in Principal Amount of the Outstanding
Securities of any series, the consent of whose Holders is required for
any such amendment or supplemental indenture, or the consent of whose
Holders is required for any waiver (of compliance with certain
provisions of this Indenture or certain defaults hereunder and their
consequences) with respect to the Securities of such series provided for
in this Indenture;
(3) make any change in the terms of the Subordination of the
Securities in a manner adverse to the Holders of any series of
outstanding Securities; or
(4) modify any of the provisions of this Section, Section 6.4 or
6.7, except to increase the percentage of Outstanding Securities of such
series required for such actions 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.
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.
It shall not be necessary for the consent of the Holders under this
Section 9.2 to approve the particular form of any proposed amendment or
supplemental indenture, but it shall be sufficient if such consent approves the
substance thereof.
After an amendment or supplemental indenture under this Section 9.2
becomes effective, the Company shall mail to each Holder of the particular
Securities affected thereby a notice briefly describing the amendment.
SECTION 9.3 Compliance with Trust Indenture Act. Every supplemental
indenture executed pursuant to this Article shall comply with the TIA as then
in effect.
SECTION 9.4 Revocation and Effect of Consents, Waivers and Actions.
Until an amendment or waiver with respect to a series of Securities becomes
effective, a consent to it or any other action by a Holder of a Security of
that series hereunder is a continuing
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consent by the Holder and every subsequent Holder of that Security or portion
of that Security that evidences the same obligation as the consenting Holder's
Security, even if notation of the consent, waiver or action is not made on the
Security. However, any such Holder or subsequent Holder may revoke the
consent, waiver or action as to such Holder's Security or portion of the
Security if the Trustee receives the notice of revocation before the Company or
an agent of the Company certifies to the Trustee that the consent of the
requisite aggregate Principal Amount of the Securities of that series has been
obtained. After an amendment, waiver or action becomes effective, it shall
bind every Holder of Securities of that series.
The Company may, but shall not be obligated to, fix a record date for
the purpose of determining the Holders entitled to consent to any amendment or
waiver with respect to a series of Securities. If a record date is fixed, then
notwithstanding the first two sentences of the immediately preceding paragraph,
those persons who were Holders of Securities of that series at such record date
(or their duly designated proxies), and only those persons, shall be entitled
to revoke any consent previously given, whether or not such persons continue to
be Holders after such record date. No such consent shall be valid or effective
for more than 90 days after such record date.
SECTION 9.5 Notation on or Exchange of Securities. Securities of any
series authenticated and delivered after the execution of any supplemental
indenture with respect to such series 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 such series so modified as to conform, in
the opinion of the Trustee and the Board of Directors, 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 that series.
SECTION 9.6 Trustee to Sign Supplemental Indentures. The Trustee shall
sign any supplemental indenture authorized pursuant to this Article 9 if the
amendment does not adversely affect the rights, duties, liabilities or
immunities of the Trustee. If it does, the Trustee may, but need not, sign it.
In signing such amendment, the Trustee shall be entitled to receive, and
(subject to the provisions of Section 7.1) shall be fully protected in relying
upon, an Officers' Certificate and an Opinion of Counsel stating that such
amendment is authorized or permitted by this Indenture.
SECTION 9.7 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 shall be bound thereby, except
to the extent otherwise set forth thereon.
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ARTICLE X
SINKING FUNDS
SECTION 10.1 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 2.3(a) 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 Securities of any series is herein referred to as an "optional sinking
fund payment." If provided for by the terms of Securities of any series, the
cash amount of any sinking fund payment may be subject to reduction as provided
in Section 10.2. Each sinking fund payment shall be applied to the redemption
of Securities of any series as provided for by the terms of the Securities of
such series.
SECTION 10.2 Satisfaction of Sinking Fund Payments with Securities.
The Company (1) may deliver Outstanding Securities of a series with the same
issue date, interest rate and Stated Maturity (other than any previously called
for redemption), and (2) may apply as a credit Securities of a series with the
same issue date, interest rate and Stated Maturity 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, in each case, in satisfaction of all or any
part of any mandatory sinking fund payment with respect to the Securities of
such series with the same issue date, interest rate and Stated Maturity;
provided that such Securities have not been previously so credited. Such
Securities shall be received and credited for such purpose by the Trustee at
the Redemption Price specified in such Securities for redemption through
operation of the sinking fund and the amount of such sinking fund payment shall
be reduced accordingly.
SECTION 10.3 Redemption of Securities for Sinking Fund. Not less than
60 days (or such shorter period as shall be acceptable to the Trustee) prior to
each sinking fund payment date for any series of Securities, the Company will
deliver to the Trustee an Officers' Certificate specifying the amount of the
next 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 and
the portion thereof, if any, which is to be satisfied by delivering and
crediting Securities of that series pursuant to Section 10.2 and will also
deliver to the Trustee any Securities to be so delivered. 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 3.2 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 3.3. Such notice having been duly
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given, the redemption of such Securities shall be made upon the terms and in
the manner stated in Sections 3.4 and 3.6.
ARTICLE XI
ACTIONS OF HOLDERS OF SECURITIES
SECTION 11.1 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.
SECTION 11.2 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 11.1, to be held at such time and at such place in
the Borough of Manhattan, The City of New York or, with the approval of the
Company, at any other place. 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 13.2, 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 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 11.1, 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, or in such other place as shall be determined and
approved by the Company, for such meeting and may call such meeting for such
purposes by giving notice thereof as provided in subsection (a) of this Section
11.2.
SECTION 11.3 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
(1) a Holder of one or more Outstanding Securities of such series, or (2) a
person appointed by an instrument in writing as proxy for a Holder or Holders
of one or more Outstanding Securities of such series by such Holder or Holders.
The only persons who shall be entitled to be present or to speak at any meeting
of Holders of Securities of any series shall be the persons entitled to vote at
such meeting and their counsel, any representatives of the Trustee and its
counsel and any representatives of the Company and its counsel.
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SECTION 11.4 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. In the absence
of a quorum within 30 minutes of 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 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 determined by the
chairman of the meeting prior to the adjournment of such adjourned meeting.
Notice of the reconvening of any adjourned meeting shall be given as provided
in Section 11.2(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 an 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, whether or not present
or represented at the meeting.
SECTION 11.5 Determination of Voting Rights; Conduct and Adjournment of
Meetings. (a) Notwithstanding any other provisions of this Indenture, the
Trustee may make such reasonable regulations as it may deem advisable for any
meeting of Holders of Securities of a series in regard to proof of the holding
of Securities of such series and of the appointment of proxies and in regard to
the appointment and duties of inspectors of votes, the submission and
examination of proxies, certificates and other evidence of the right to vote,
and such other matters concerning the conduct of the meeting as it shall deem
appropriate. Except as otherwise permitted or required by any such regulations,
the holding of Securities shall be proved in the manner specified in Section
11.7 and the appointment of any proxy shall be proved in the manner specified
in Section 11.7. Such regulations may provide that written instruments
appointing proxies, regular on their
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face, may be presumed valid and genuine without the proof specified in Section
11.7 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 11.2 (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 vote with respect to 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 11.2 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 11.6 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 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 facts setting
forth a copy of the notice of the meeting and showing that said notice was
given as provided in Section 11.2 and, if applicable, Section 11.4. Each copy
shall be signed and verified by the affidavits of the permanent chairman and
secretary of the meeting and one such copy shall be delivered to the Company,
and another to the Trustee to be preserved by the Trustee, the latter to have
attached thereto the ballots voted at the meeting. Any record so signed and
verified shall be conclusive evidence of the matters therein stated.
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SECTION 11.7 Actions of Holders Generally. (a) Any request, demand,
authorization, direction, notice, consent, waiver or other action provided by
this Indenture to be given or taken by Holders may be embodied in and evidenced
by one or more instruments of substantially similar tenor signed by such
Holders in person or by an agent duly appointed in writing. Except as herein
otherwise expressly provided, such action shall become effective when such
instrument or instruments or record or both are delivered to the Trustee and,
where it is hereby expressly required, to the Company. Proof of execution of
any such instrument or of a writing appointing any such agent, or of the
holding by any person of a Security, shall be sufficient for any purpose of
this Indenture and (subject to Section 7.1) conclusive in favor of the Trustee
and the Company, if made in the manner provided in this Section. The record of
any meeting of Holders of Securities shall be proved in the manner provided in
Section 11.6.
(b) The fact and date of the execution by any person of any such
instrument or writing, or the authority of the persons executing the same, may
be proved in any reasonable manner which the Trustee deems sufficient.
(c) The Principal Amount and serial numbers of Securities held by the
person, and the date of holding the same, shall be proved by the books of the
Registrar.
(d) Any request, demand, authorization, direction, notice, consent,
waiver or other act of the Holder of any Security in accordance with this
Section 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 or the Company in reliance thereon, whether or not
notation of such action is made upon such Security.
(e) If the Company shall solicit from the Holders any request, demand,
authorization, direction, notice, consent, waiver or other act in accordance
with this Section, the Company may, at its option, by or pursuant to an
Officers' Certificate delivered to the Trustee, fix in advance a record date
for the determination of Holders entitled to give such request, demand,
authorization, direction, notice, consent, waiver or such 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
percentage of Outstanding Securities or Outstanding Securities of a series, as
the case may be, have authorized or agreed or consented to such request,
demand, authorization, direction, notice, consent, waiver or other act, and for
that purpose the Outstanding Securities or Outstanding Securities of the
series, as the case may be, shall be computed as of such record date; provided,
that no such authorization, agreement or consent by the Holders on the record
date shall be deemed effective unless such request, demand, authorization,
direction, notice, consent, waiver or other act shall
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become effective pursuant to the provisions of clause (a) of this Section 11.7
not later than six months after the record date.
ARTICLE XII
SUBORDINATION
SECTION 12.1 Securities Subordinate to Senior Indebtedness. Unless
otherwise specified as contemplated by Section 2.3(a), the Securities shall be
subordinated to Senior Indebtedness as set forth in this Article XII. The
Company covenants and agrees, and each Holder of a Security of any series by
such Holder's acceptance thereof likewise covenants and agrees, that, to the
extent and in the manner hereinafter set forth in this Article XII, the
indebtedness represented by the Securities and the payment of the Principal
Amount, interest and such other amounts as provided for in Section 2.3(a), if
any, in respect of each and all of the Securities are hereby expressly made
subordinate and subject in right of payment to the prior payment in full of all
Senior Indebtedness.
"Senior Indebtedness" means the principal of (and premium, if any) and
interest on (including interest accruing after the filing of a petition
initiating any proceeding pursuant to any Bankruptcy Law, but only to the
extent allowed or permitted to the holder of such Debt of the Company against
the bankruptcy or any other insolvency estate of the Company in such
proceeding) and other amounts due on or in connection with any Debt of the
Company incurred, assumed or guaranteed by the Company, whether outstanding on
the date of the Indenture or thereafter incurred, assumed or guaranteed and all
renewals, extensions and refundings of any such Debt of the Company; provided,
however, that the following will not constitute Senior Indebtedness:
(a) any Debt of the Company as to which, in the instrument creating
the same or evidencing the same or pursuant to which the same is
outstanding, it is expressly provided that such Debt of the Company
shall be subordinated to any other Debt of the Company;
(b) any Debt of the Company which by its terms states that such Debt
of the Company shall not be senior in right of payment to the
Securities;
(c) Debt of the Company in respect of the Securities;
(d) any Debt of the Company to any Affiliate of the Company or
Subsidiary of the Company; and
(e) any Debt of the Company issued pursuant to that certain Indenture
dated as of ___________, among the Company and United States Trust
Company of New York,
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as trustee relating to subordinated debt securities (which such debt
securities shall rank junior in right of payment to the Securities).
SECTION 12.2 Payment Over of Proceeds upon Dissolution, Etc. Upon any
distribution of assets of the Company in the event of:
(a) any insolvency or bankruptcy case or proceeding, or any
receivership, liquidation, reorganization or other similar case or
proceeding in connection therewith, relative to the Company or to its
creditors, as such, or to its assets, or
(b) any liquidation, dissolution or other winding up of the
Company, whether voluntary or involuntary and whether or not involving
insolvency or bankruptcy, or
(c) any assignment for the benefit of creditors or any other
marshalling of assets and liabilities of the Company,
then and in such event
(1) the holders of Senior Indebtedness shall be entitled to
receive payment in full of all amounts due or to become due on or in
respect of all Senior Indebtedness, or provision shall be made for such
payment in cash, before the Holders of the Securities are entitled to
receive any payment on account of the Principal Amount, interest or such
other amounts as may be provided for in Section 2.3(a), if any, in
respect of the Securities; and
(2) any payment or distribution of assets of the Company of
any kind or character, whether in cash, property or securities, by set-
off or otherwise, to which the Holders or the Trustee would be entitled
but for the provisions of this Article XII, including any such payment
or distribution which may be payable or deliverable by reason of the
payment of any other Debt of the Company being subordinated to the
payment of the Securities, shall be paid by the liquidating trustee or
agent or other person making such payment or distribution, whether a
trustee in bankruptcy, a receiver or liquidating trustee or otherwise,
directly to the holders of Senior Indebtedness or their representative
or representatives or to the trustee or trustees under any indenture
under which any instruments evidencing any of such Senior Indebtedness
may have been issued, ratably according to the aggregate amounts
remaining unpaid on account of the principal of, and premium, if any,
and interest on the Senior Indebtedness held or represented by each, to
the extent necessary to make payment in full of all Senior Indebtedness
remaining unpaid, after giving effect to any concurrent payment or
distribution to the holders of such Senior Indebtedness.
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In the event that, notwithstanding the foregoing provisions of this
Section 12.2, the Trustee or the Holder of any Security shall receive any
payment or distribution of assets of the Company of any kind or character,
whether in cash, property or securities, including any such payment or
distribution which may be payable or deliverable by reason of the payment of
any other Debt of the Company being subordinated to the payment of the
Securities, before all Senior Indebtedness is paid in full or payment thereof
provided for, and if such fact shall then have been made known to the Trustee
as provided in Section 12.10, or, as the case may be, such Holder, then and in
such event such payment or distribution shall be paid over or delivered
forthwith to the trustee in bankruptcy, receiver, liquidating trustee,
custodian, assignee, agent or other person making payment or distribution of
assets of the Company for application to the payment of all Senior Indebtedness
remaining unpaid, to the extent necessary to pay all Senior Indebtedness in
full, after giving effect to any concurrent payment or distribution to or for
the holders of Senior Indebtedness.
For purposes of this Article XII only, the words "cash, property or
securities," or any combination thereof, shall not be deemed to include shares
of Capital Stock of the Company as reorganized or readjusted, or securities of
the Company or any other corporation provided for by a plan of reorganization
or readjustment the payment of which is subordinated, at least to the extent
provided in this Article XII with respect to the Securities, to the payment of
all Senior Indebtedness which may at the time be outstanding; provided,
however, that (i) Senior Indebtedness is assumed by the new corporation, if
any, resulting from any such reorganization or readjustment, and (ii) the
rights of the holders of the Senior Indebtedness are not, without the consent
of such holders, altered, in any manner adverse to such holders, by such
reorganization or readjustment.
The consolidation of the Company with, or the merger of the Company
into, another corporation or the liquidation or dissolution of the Company
following the conveyance or transfer of all or substantially all of its assets
to another person upon the terms and conditions set forth in Article V shall
not be deemed a dissolution, winding up, liquidation, reorganization,
assignment for the benefit of creditors or marshalling of assets and
liabilities of the Company for the purposes of this Section 12.2 if the
corporation formed by such consolidation or into which the Company is merged or
the person which acquires by conveyance or transfer all or substantially all of
the assets of the Company, as the case may be, shall, as a part of such
consolidation, merger, conveyance or transfer, comply with the conditions set
forth in Article V.
SECTION 12.3 Acceleration of Securities. In the event that any
Securities are declared due and payable before their Stated Maturity pursuant
to Section 6.2, then and in each such event the Company shall promptly notify
holders of Senior Indebtedness of such acceleration. The Company may not pay
the Securities until 120 days have passed after such acceleration occurs and
may thereafter pay the Securities if this Article XII permits the payment at
that time.
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In the event that, notwithstanding the foregoing, the Company shall make
any payment to the Trustee or the Holder of any Securities prohibited by the
foregoing provisions of this Section 12.3, and if such facts then shall have
been known or thereafter shall have been made known to the Trustee (as provided
in Section 12.10) or to such Holder, as the case may be, pursuant to the terms
of this Indenture, then and in each such event such payment shall be paid over
and delivered forthwith to the Company for the benefit of the holders of Senior
Indebtedness by or on behalf of the person holding such payment.
The provisions of this Section 12.3 shall not apply to any payment with
respect to which Section 12.2 would be applicable.
SECTION 12.4 Default in Senior Indebtedness. The Company may not
make any payment of the Principal Amount, interest or other such amounts as may
be provided for in Section 2.3(a), if any, in respect of the Securities and may
not acquire any Securities for cash or property (other than for Capital Stock
of the Company) if:
(1) a default on Senior Indebtedness occurs and is continuing
that permits holders of such Senior Indebtedness to accelerate its
maturity; and
(2) the default is the subject of judicial proceedings or the
Company receives a notice of default thereof from any person who may
give such notice pursuant to the instrument evidencing or document
governing such Senior Indebtedness. If the Company receives any such
notice, then a similar notice received within nine months thereafter
relating to the same default on the same issue of Senior Indebtedness
shall not be effective for purposes of this Section 12.4.
The Company may resume payments on the Securities and may acquire
Securities if and when:
(A) the default is cured or waived; or
(B) 120 or more days pass after the receipt by the Company of
the notice described in clause (2) above and the default is not then the
subject of judicial proceedings; and
this Article XII otherwise permits the payment or acquisition at that time.
In the event that, notwithstanding the foregoing, the Company shall make
any payment to the Trustee or the Holder of any Security prohibited by the
foregoing provisions of this Section 12.4, and if such fact then shall have
been known or thereafter shall have been made known to the Trustee as provided
in Section 12.10 or such Holder, as the case may be, pursuant to the terms of
this Indenture, then and in each such event
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such payment shall be paid over and delivered forthwith to the Company for the
benefit of the holders of the Senior Indebtedness by or on behalf of the person
holding such payment.
The provisions of this Section 12.4 shall not apply to any payment with
respect to which Section 12.2 would be applicable.
SECTION 12.5 Payment Permitted if No Default. Nothing contained in
this Article XII or elsewhere in this Indenture or in any of the Securities
shall prevent (a) the Company, at any time except during the pendency of any
case, proceeding, dissolution, liquidation or other winding up, assignment for
the benefit of creditors or other marshalling of assets and liabilities of the
Company referred to in Section 12.2 or under the conditions described in
Section 12.3 or 12.4, from making payments at any time of the Principal Amount,
interest or such other amounts as may be provided for in Section 2.3(a), if
any, as the case may be, in respect of the Securities, or (b) the application
by the Trustee or the retention by any Holder of any money deposited with it
hereunder to the payment of or on account of the Principal Amount, interest or
such other amounts as may be provided for in Section 2.3(a), if any, as the
case may be, in respect of the Securities if the Trustee did not have, at the
time provided in the proviso to the first paragraph of Section 12.10, notice
that such payment would have been prohibited by the provisions of this Article
XII.
SECTION 12.6 Subrogation Rights of Holders of Senior Indebtedness.
Subject to the payment in full of all Senior Indebtedness, the Holders of the
Securities shall be subrogated to the extent of the payments or distributions
made to the holders of such Senior Indebtedness pursuant to the provisions of
this Article XII to the rights of the holders of such Senior Indebtedness to
receive payments or distributions of cash, property or securities applicable to
the Senior Indebtedness until the Principal Amount, interest or such other
amounts as provided for in Section 2.3(a), if any, as the case may be, in
respect of the Securities shall be paid in full. For purposes of such
subrogation, no payments or distributions to the holders of the Senior
Indebtedness of any cash, property or securities to which the Holders of the
Securities or the Trustee would be entitled except for the provisions of this
Article XII, and no payments pursuant to the provisions of this Article XII to
the Company or to the holders of Senior Indebtedness by Holders of the
Securities or the Trustee, shall, as between the Company, its creditors other
than holders of Senior Indebtedness and the Holders of the Securities, be
deemed to be a payment or distribution by the Company to or on account of the
Senior Indebtedness.
SECTION 12.7 Provision Solely to Define Relative Rights. The
provisions of this Article XII are intended solely for the purpose of defining
the relative rights of the Holders of the Securities, on one hand, and the
holders of Senior Indebtedness, on the other hand. Nothing contained in this
Article XII or elsewhere in this Indenture or in the Securities is intended to
or shall:
52
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(a) impair, as between the Company and the Holders of the
Securities, the obligation of the Company, which is absolute and
unconditional, to pay to the Holders of the Securities the Principal
Amount, interest or such other amounts as may be provided for in Section
2.3(a), if any, as the case may be, in respect of the Securities as and
when the same shall become due and payable in accordance with the terms
of the Securities and this Indenture and which, subject to the rights
under this Article XII of the holders of Senior Indebtedness, is
intended to rank equally with all other general obligations of the
Company; or
(b) affect the relative rights against the Company of the
Holders of the Securities and creditors of the Company other than
holders of Senior Indebtedness; or
(c) prevent the Trustee or the Holder of any Security from
exercising all remedies otherwise permitted by applicable law upon
default under this Indenture, subject to the rights, if any, under this
Article XII of the holders of Senior Indebtedness to receive cash,
property or securities otherwise payable or deliverable to the Trustee
or such Holder.
SECTION 12.8 Trustee to Effectuate Subordination. Each Holder of a
Security by such Holder's acceptance thereof authorizes and directs the Trustee
on such Holder's behalf to take such action as may be necessary or appropriate
to effectuate the subordination provided in this Article XII and appoints the
Trustee such Holder's attorney-in-fact for any and all such purposes.
SECTION 12.9 No Waiver of Subordination Provisions. No right of any
present or future holder of any Senior Indebtedness to enforce subordination as
herein provided shall at any time in any way be prejudiced or impaired by any
act or failure to act on the part of the Company or by any act or failure to
act, in good faith, by any such holder, or by any noncompliance by the Company
with the terms, provisions and covenants of this Indenture, regardless of any
knowledge thereof any such holder may have or be otherwise charged with.
Without in any way limiting the generality of the foregoing paragraph,
the holders of Senior Indebtedness may, at any time and from time to time,
without the consent of, or notice to, the Trustee or the Holders of the
Securities, without incurring responsibility to the Holders of the Securities
and without impairing or releasing the subordination provided in this Article
XII or the obligations hereunder of the Holders of the Securities to the
holders of Senior Indebtedness, do any one or more of the following: (i) change
the manner, place or terms of payment or extend the time of payment of, or
renew or alter, Senior Indebtedness, or otherwise amend or supplement in any
manner Senior Indebtedness or any instrument evidencing the same or any
agreement under which Senior Indebtedness is outstanding; (ii) sell, exchange,
release or otherwise dispose of
53
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any property pledged, mortgaged or otherwise securing Senior Indebtedness;
(iii) release any person liable in any manner for the collection of Senior
Indebtedness and (iv) exercise or refrain from exercising any rights against
the Company or any other person.
SECTION 12.10 Notice to Trustee. The Company shall give prompt
written notice to the Trustee of any fact known to the Company which would
prohibit the making of any payment to or by the Trustee in respect of the
Securities. Failure to give such notice shall not affect the subordination of
the Securities to Senior Indebtedness. Notwithstanding the provisions of this
Article XII or any other provision of this Indenture, the Trustee shall not be
charged with knowledge of the existence of any facts which would prohibit the
making of any payment to or by the Trustee in respect of the Securities, unless
and until the Trustee shall have received written notice thereof at the address
specified in Section 13.2 from the Company or a holder of Senior Indebtedness
or from any trustee or agent therefor; and, prior to the receipt of any such
written notice, the Trustee, subject to the provisions of Section 7.1, shall be
entitled in all respects to assume that no such facts exist; provided, however,
that if a Trust Officer of the Trustee shall not have received, at least three
Business Days prior to the date upon which by the terms hereof any such money
may become payable for any purpose (including, without limitation, the payment
of the Principal Amount, interest or such other amounts as may be provided for
in Section 2.3(a), if any, as the case may be, in respect of any Security), the
notice with respect to such money provided for in this Section 12.10, then,
anything herein contained to the contrary notwithstanding, the Trustee shall
have full power and authority to receive such money and to apply the same to
the purpose for which such money was received and shall not be affected by any
notice to the contrary which may be received by it within three Business Days
prior to such date.
Subject to the provisions of Section 7.1, the Trustee shall be entitled
to rely on the delivery to it of a written notice by a person representing
himself to be a holder of Senior Indebtedness (or a trustee or agent on behalf
of such holder) to establish that such notice has been given by a holder of
Senior Indebtedness (or a trustee or agent on behalf of any such holder). In
the event that the Trustee determines in good faith that further evidence is
required with respect to the right of any person as a holder of Senior
Indebtedness to participate in any payment or distribution pursuant to this
Article XII, the Trustee may request such person to furnish evidence to the
reasonable satisfaction of the Trustee as to the amount of Senior Indebtedness
held by such person, the extent to which such person is entitled to participate
in such payment or distribution and any other facts pertinent to the rights of
such person under this Article XII, and if such evidence is not furnished, the
Trustee may defer any payment which it may be required to make for the benefit
of such person pursuant to the terms of this Indenture pending judicial
determination as to the right of such person to receive such payment.
SECTION 12.11 Reliance on Judicial Order or Certificate of Liquidating
Agent. Upon any payment or distribution of assets of the Company referred to
in this Article
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XII, the Trustee, subject to the provisions of Section 7.1, and the Holders of
the Securities shall be entitled to rely upon any order or decree entered by
any court of competent jurisdiction in which such insolvency, bankruptcy,
receivership, liquidation, reorganization, dissolution, winding up or similar
case or proceeding is pending, or a certificate of the trustee in bankruptcy,
liquidating trustee, custodian, receiver, assignee for the benefit of
creditors, agent or other person making such payment or distribution, delivered
to the Trustee or to the Holders of Securities, for the purpose of ascertaining
the persons entitled to participate in such payment or distribution, the
holders of Senior Indebtedness and other indebtedness of the Company, the
amount thereof or payable thereon, the amount or amounts paid or distributed
thereon and all other facts pertinent thereto or to this Article XII.
SECTION 12.12 Trustee Not Fiduciary for Holders of Senior Indebtedness.
The Trustee shall not be deemed to owe any fiduciary duty to the holders of
Senior Indebtedness and shall not be liable to any such holders if the Trustee
shall in good faith mistakenly pay over or distribute to Holders of Securities
or to the Company or to any other person cash, property or securities to which
any holders of Senior Indebtedness shall be entitled by virtue of this Article
XII or otherwise. The Trustee shall not be charged with knowledge of the
existence of Senior Indebtedness or of any facts that would prohibit any
payment hereunder unless a Trust Officer of the Trustee shall have received
notice to that effect at the address of the Trustee set forth in Section 13.2.
With respect to the holders of Senior Indebtedness, the Trustee undertakes to
perform or to observe only such of its covenants or obligations as are
specifically set forth in this Article XII and no implied covenants or
obligations with respect to holders of Senior Indebtedness shall be read into
this Indenture against the Trustee.
SECTION 12.13 Rights of Trustee as Holder of Senior Indebtedness;
Preservation of Trustee's Rights. The Trustee in its individual capacity
shall be entitled to all the rights set forth in this Article XII with respect
to any Senior Indebtedness which may at any time be held by it, to the same
extent as any other holder of Senior Indebtedness, and nothing in this
Indenture shall deprive the Trustee of any of its rights as such holder.
Nothing in this Article XII shall apply to claims of, or payments to,
the Trustee under or pursuant to Section 7.7.
SECTION 12.14 Article XII Applicable to Paying Agents. The term
"Trustee" as used in this Article XII shall (unless the context otherwise
requires) be construed as extending to and including the Paying Agent within
its meaning as fully for all intents and purposes as if the Paying Agent were
named in this Article XII in addition to or in place of the Trustee; provided,
however, that Sections 12.10 and 12.12 shall not apply to the Company or any
Affiliate of the Company if it or such Affiliate acts as Paying Agent.
55
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ARTICLE XIII
MISCELLANEOUS
SECTION 13.1 Trust Indenture Act Controls. If any provision of this
Indenture limits, qualifies or conflicts with another provision hereof which is
required to be included in this Indenture by the TIA, the required provision
shall control.
SECTION 13.2 Notices. Any notice or communication shall be in writing
and delivered in person or mailed by first-class mail, postage prepaid,
addressed as follows:
if to the Company:
Apartment Investment and Management Company
1873 South Bellaire Street, 17th Floor
Denver, Colorado 80222
Attention: [ ]
if to the Trustee:
United States Trust Company of New York
114 West 47th Street
New York, NY 10036
Attention: Corporate Trust Department
The Company or the Trustee by notice to the other may designate
additional or different addresses for subsequent notices or communications.
Any notice or communication given to a Holder of Securities shall be
mailed to such Securityholder at the Securityholder's address as it appears on
the registration books of the Registrar and shall be sufficiently given if so
mailed within the time prescribed.
Where this Indenture provides for notice in any manner, such notice may
be waived in writing by the person entitled to receive such notice, either
before or after the event, and such waiver shall be the equivalent of such
notice. Waivers of notice by Holders shall be filed with the Trustee, but such
filing shall not be a condition precedent to the validity of any action taken
in reliance upon such waiver.
Failure to mail a notice or communication to a Securityholder or any
defect in it shall not affect its sufficiency with respect to other Holders of
Securities of the same
56
<PAGE> 65
series. If a notice or communication is mailed in the manner provided above,
it is duly given, whether or not received by the addressee.
If the Company mails a notice or communication to the Holders of
Securities of a particular series, it shall mail a copy to the Trustee and each
Registrar, co-registrar or Paying Agent, as the case may be, with respect to
such series.
In case by reason of the suspension of regular mail service or by reason
of any other cause it shall be impracticable to give notice to Holders of
Securities by mail, then such notification as shall be made with the acceptance
of the Trustee shall constitute a sufficient notification for every purpose
hereunder. In any case where notice to Holders of Securities is given by mail,
neither the failure to mail such notice, nor any defect in any notice so
mailed, to any particular Holder of a Security shall affect the sufficiency of
such notice with respect to other Holders of Securities given as provided
herein.
SECTION 13.3 Communication by Holders with Other Holders.
Securityholders may communicate pursuant to TIA Section 312(b) with other
Securityholders with respect to their rights under this Indenture or the
Securities. The Company and the Trustee, the Registrar or the Paying Agent with
respect to a particular series of Securities, and anyone else, shall have the
protection of TIA Section 312(c).
SECTION 13.4 Certificate and Opinion as to Conditions Precedent. Upon
any request or application by the Company to the Trustee to take any action
under this Indenture, the Company shall furnish to the Trustee:
(1) an Officers' Certificate stating that, in the opinion of the
signers, all conditions precedent, if any, provided for in this
Indenture relating to the proposed action have been complied with; and
(2) an Opinion of Counsel stating that, in the opinion of such
counsel, all such conditions precedent have been complied with.
SECTION 13.5 Statements Required in Certificate or Opinion. Each
Officers' Certificate or Opinion of Counsel with respect to compliance with a
covenant or condition provided for in this Indenture shall include:
(1) statement that each person making such Officers' Certificate
or Opinion of Counsel has read such covenant or condition;
(2) a brief statement as to the nature and scope of the
examination or investigation upon which the statements or opinions
contained in such Officers' Certificate or Opinion of Counsel are based;
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<PAGE> 66
(3) a statement that, in the opinion of each such person, he has
made such examination or investigation as is necessary to enable such
person to express an informed opinion as to whether or not such covenant
or condition has been complied with; and
(4) a statement that, in the opinion of such person, such
covenant or condition has been complied with.
SECTION 13.6 Separability Clause. In case any provision in this
Indenture or in the Securities 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 13.7 Rules by Trustee, Paying Agent and Registrar. With
respect to the Securities of a particular series, the Trustee with respect to
such series of Securities may make reasonable rules for action by or a meeting
of Holders of such series of Securities. With respect to the Securities of a
particular series, the Registrar and the Paying Agent with respect to such
series of Securities may make reasonable rules for their functions.
SECTION 13.8 Legal Holidays. A "Legal Holiday" is any day other than a
Business Day. If any specified date (including an Interest Payment Date,
Redemption Date or Stated Maturity of any Security, or a date for giving
notice) is a Legal Holiday at any Place of Payment or place for giving notice,
then (notwithstanding any other provision of this Indenture or of the
Securities other than a provision in the Securities of any series which
specifically states that such provision shall apply in lieu of this Section)
payment of interest or Principal need not be made at such Place of Payment, or
such other action need not be taken, on such date, but the action shall be
taken on the next succeeding day that is not a Legal Holiday at such Place of
Payment with the same force and effect as if made on the Interest Payment Date
or Redemption Date, or at the Stated Maturity or such other date and to the
extent applicable no Original Issue Discount or interest, if any, shall accrue
for the intervening period.
SECTION 13.9 Governing Law. THIS INDENTURE AND THE SECURITIES SHALL BE
GOVERNED BY AND CONSTRUED IN ACCORDANCE WITH THE LAWS OF THE STATE OF NEW YORK,
AS APPLIED TO CONTRACTS MADE AND PERFORMED WITHIN THE STATE OF NEW YORK,
WITHOUT REGARD TO PRINCIPLES OF CONFLICTS OF LAW.
SECTION 13.10 No Recourse Against Others. A director, officer,
employee or stockholder, as such, of the Company shall not have any liability
for any obligations of the Company under the Securities or this Indenture or
for any claim based on, in respect of or by reason of such obligations or their
creation. By accepting a Security, each Holder of such Security shall waive and
release all such liability. The waiver and release shall be part of the
consideration for the issue of the Securities.
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SECTION 13.11 Successors. All agreements of the Company in this
Indenture and the Securities shall bind its respective successor. All
agreements of the Trustee in this Indenture shall bind its successor.
SECTION 13.12 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 13.13 Benefits of Indenture. Nothing in this Indenture or in
the Securities, express or implied, shall give to any person, other than the
parties hereto and their successors hereunder and the Holders of Securities,
any benefits or any legal or equitable right, remedy or claim under this
Indenture.
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SECTION 13.14 Multiple Originals. The parties may sign any number of
copies of this Indenture. Each signed copy shall be an original, but all of
them together represent the same agreement. One signed copy is enough to prove
this Indenture.
APARTMENT INVESTMENT AND
MANAGEMENT COMPANY
By:
------------------------------------------
Name:
Title:
Attest:
- ------------------------------
Name:
Title:
AMERICAN BANK NATIONAL
ASSOCIATION, as Trustee
By
-------------------------------------------
Name:
Title:
Attest:
- ------------------------------
Name:
Title:
60
<PAGE> 1
EXHIBIT 4.3
================================================================================
- --------------------------------------------------------------------------------
APARTMENT INVESTMENT AND
MANAGEMENT COMPANY
SUBORDINATED DEBT SECURITIES
------------------------------
INDENTURE
Dated as of __________
------------------------------
UNITED STATES TRUST COMPANY OF NEW YORK,
Trustee
================================================================================
- --------------------------------------------------------------------------------
<PAGE> 2
CROSS REFERENCE TABLE(1)
<TABLE>
<CAPTION>
TIA INDENTURE
SECTION SECTION
- ------- -----------
<S> <C> <C>
310 (a)(1) . . . . . . . . . . . . . . . . . . . . . . . . . . . 7.8; 7.10
(a)(2) . . . . . . . . . . . . . . . . . . . . . . . . . . . 7.10
(a)(3) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . N.A.
(a)(4) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . N.A.
(a)(5) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 7.10
(b) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 7.8; 7.10
(c) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . N.A
311 (a) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 7.11
(b) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 7.11
(c) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . N.A.
312 (a) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 2.7
(b) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 13.3
(c) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 13.3
313 (a) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 7.6
(b) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 7.6
(c) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 7.6; 13.2
(d) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 7.6
314 (a) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 4.2; 13.2
(b) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . N.A.
(c)(1) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 13.4
(c)(2) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 13.4
(c)(3) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . N.A.
(d) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . N.A.
(e) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 13.5
(f) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 4.3
315 (a) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 7.1
(b) . . . . . . . . . . . . . . . . . . . . . . . . . . . . 7.5; 13.2
(c) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 7.1
(d) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 7.1
(e) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 6.11
316 (a)(1)(A) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 6.5
(a)(1)(B) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 6.4
(a)(2) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . N.A.
(b) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 6.7
(c) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . N.A.
</TABLE>
- --------------------
(1) Note: This Cross Reference Table shall not, for any purpose, be deemed
to be part of the Indenture.
<PAGE> 3
<TABLE>
<CAPTION>
TIA INDENTURE
SECTION SECTION
- ------- -----------
<S> <C> <C>
317 (a)(1) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 6.8
(a)(2) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 6.9
(b) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 2.6
318 (a) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 13.1
</TABLE>
<PAGE> 4
TABLE OF CONTENTS(2)
ARTICLE I
<TABLE>
<S> <C> <C>
DEFINITIONS AND INCORPORATION BY REFERENCE
SECTION 1.1 Definitions. . . . . . . . . . . . . . . . . . . . . . . . . . 1
SECTION 1.2 Other Definitions. . . . . . . . . . . . . . . . . . . . . . . 5
SECTION 1.3 Incorporation by Reference of Trust Indenture Act. . . . . . . 6
SECTION 1.4 Rules of Construction. . . . . . . . . . . . . . . . . . . . . 6
ARTICLE II
THE SECURITIES
SECTION 2.1 Forms Generally. . . . . . . . . . . . . . . . . . . . . . . . 7
SECTION 2.2 Securities in Global Form. . . . . . . . . . . . . . . . . . . 7
SECTION 2.3 Title, Terms and Denominations. . . . . . . . . . . . . . . . 8
SECTION 2.4 Execution, Authentication, Delivery and Dating . . . . . . . . 11
SECTION 2.5 Registrar and Paying Agent. . . . . . . . . . . . . . . . . . 13
SECTION 2.6 Paying Agent to Hold Money and Securities in Trust. . . . . . 14
SECTION 2.7 Securityholder Lists. . . . . . . . . . . . . . . . . . . . . 14
SECTION 2.8 Transfer and Exchange. . . . . . . . . . . . . . . . . . . . . . 15
SECTION 2.9 Replacement Securities. . . . . . . . . . . . . . . . . . . . 17
SECTION 2.10 Outstanding Securities; Determinations of Holders' Action. . 18
SECTION 2.11 Temporary Securities. . . . . . . . . . . . . . . . . . . . . 19
SECTION 2.12 Cancellation. . . . . . . . . . . . . . . . . . . . . . . . . 19
SECTION 2.13 Payment of Interest; Interest Rights Preserved. . . . . . . . 20
SECTION 2.14 Persons Deemed Owners. . . . . . . . . . . . . . . . . . . . 21
SECTION 2.15 Computation of Interest . . . . . . . . . . . . . . . . . . . 21
ARTICLE III
REDEMPTION
SECTION 3.1 Right to Redeem; Notices to Trustee. . . . . . . . . . . . . . 22
SECTION 3.2 Selection of Securities to be Redeemed. . . . . . . . . . . . 22
SECTION 3.3 Notice of Redemption. . . . . . . . . . . . . . . . . . . . . 22
</TABLE>
- --------------------
(2) Note: This Table of Contents shall not, for any reason, be deemed to
be part of the Indenture.
i
<PAGE> 5
<TABLE>
<S> <C> <C>
SECTION 3.4 Effect of Notice of Redemption. . . . . . . . . . . . . . . . 23
SECTION 3.5 Deposit of Redemption Price. . . . . . . . . . . . . . . . . . 23
SECTION 3.6 Securities Redeemed in Part. . . . . . . . . . . . . . . . . . 24
ARTICLE IV
COVENANTS
SECTION 4.1 Payment of Securities. . . . . . . . . . . . . . . . . . . . . 24
SECTION 4.2 SEC Reports. . . . . . . . . . . . . . . . . . . . . . . . . . 24
SECTION 4.3 Compliance Certificate. . . . . . . . . . . . . . . . . . . . 24
SECTION 4.4 Further Instruments and Acts. . . . . . . . . . . . . . . . . 25
SECTION 4.5 Maintenance of Office or Agency. . . . . . . . . . . . . . . . 25
SECTION 4.6 Limitations on the Incurrence of Certain Other Debt. . . . . . 25
ARTICLE V
SUCCESSOR CORPORATION
SECTION 5.1 When Company May Merge or Transfer Assets. . . . . . . . . . . 26
ARTICLE VI
DEFAULTS AND REMEDIES
SECTION 6.1 Events of Default. . . . . . . . . . . . . . . . . . . . . . . 26
SECTION 6.2 Acceleration. . . . . . . . . . . . . . . . . . . . . . . . . 28
SECTION 6.3 Other Remedies. . . . . . . . . . . . . . . . . . . . . . . . 28
SECTION 6.4 Waiver of Past Defaults. . . . . . . . . . . . . . . . . . . . 29
SECTION 6.5 Control by Majority. . . . . . . . . . . . . . . . . . . . . . 29
SECTION 6.6 Limitation on Suits. . . . . . . . . . . . . . . . . . . . . . 29
SECTION 6.7 Rights of Holders to Receive Payment. . . . . . . . . . . . . 30
SECTION 6.8 Collection Suit by Trustee. . . . . . . . . . . . . . . . . . 30
SECTION 6.9 Trustee May File Proofs of Claim. . . . . . . . . . . . . . . 30
SECTION 6.10 Priorities. . . . . . . . . . . . . . . . . . . . . . . . . . 31
SECTION 6.11 Undertaking for Costs. . . . . . . . . . . . . . . . . . . . 31
SECTION 6.12 Waiver of Stay, Extension or Usury Laws . . . . . . . . . . . 32
ARTICLE VII
TRUSTEE
SECTION 7.1 Duties of Trustee. . . . . . . . . . . . . . . . . . . . . . . 32
</TABLE>
ii
<PAGE> 6
<TABLE>
<CAPTION>
PAGE
----
<S> <C> <C>
SECTION 7.2 Rights of Trustee. . . . . . . . . . . . . . . . . . . . . . . 33
SECTION 7.3 Individual Rights of Trustee, etc. . . . . . . . . . . . . . . 33
SECTION 7.4 Trustee's Disclaimer. . . . . . . . . . . . . . . . . . . . . 34
SECTION 7.5 Notice of Defaults. . . . . . . . . . . . . . . . . . . . . . 34
SECTION 7.6 Reports by Trustee to Holders. . . . . . . . . . . . . . . . . 34
SECTION 7.7 Compensation and Indemnity. . . . . . . . . . . . . . . . . . 34
SECTION 7.8 Replacement of Trustee. . . . . . . . . . . . . . . . . . . . 35
SECTION 7.9 Successor Trustee by Merger. . . . . . . . . . . . . . . . . . 37
SECTION 7.10 Eligibility; Disqualification. . . . . . . . . . . . . . . . 37
SECTION 7.11 Preferential Collection of Claims Against Company. . . . . . 37
ARTICLE VIII
SATISFACTION AND DISCHARGE
SECTION 8.1 Discharge of Liability on Securities. . . . . . . . . . . . . 37
SECTION 8.2 Repayment to the Company. . . . . . . . . . . . . . . . . . . 38
SECTION 8.3 Option to Effect Defeasance or Covenant Defeasance. . . . . . 38
SECTION 8.4 Defeasance and Discharge. . . . . . . . . . . . . . . . . . . 38
SECTION 8.5 Covenant Defeasance. . . . . . . . . . . . . . . . . . . . . . 38
SECTION 8.6 Condition to Defeasance or Covenant Defeasance. . . . . . . . 39
ARTICLE IX
SUPPLEMENTAL INDENTURES
SECTION 9.1 Supplemental Indentures without Consent of Holders. . . . . . 39
SECTION 9.2 Supplemental Indentures with Consent of Holders. . . . . . . . 40
SECTION 9.3 Compliance with Trust Indenture Act. . . . . . . . . . . . . . 41
SECTION 9.4 Revocation and Effect of Consents, Waivers and Actions. . . . 41
SECTION 9.5 Notation on or Exchange of Securities. . . . . . . . . . . . . 42
SECTION 9.6 Trustee to Sign Supplemental Indentures. . . . . . . . . . . . 42
SECTION 9.7 Effect of Supplemental Indentures. . . . . . . . . . . . . . . 42
ARTICLE X
SINKING FUNDS
SECTION 10.1 Applicability of Article. . . . . . . . . . . . . . . . . . . 43
</TABLE>
iii
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<TABLE>
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SECTION 10.2 Satisfaction of Sinking Fund Payments with Securities. . . . 43
SECTION 10.3 Redemption of Securities for Sinking Fund. . . . . . . . . . 43
ARTICLE XI
ACTIONS OF HOLDERS OF SECURITIES
SECTION 11.1 Purposes for which Meetings may be Called. . . . . . . . . . 44
SECTION 11.2 Call, Notice and Place of Meetings. . . . . . . . . . . . . . 44
SECTION 11.3 Persons Entitled to Vote at Meetings. . . . . . . . . . . . . 44
SECTION 11.4 Quorum; Action. . . . . . . . . . . . . . . . . . . . . . . . 45
SECTION 11.5 Determination of Voting Rights; Conduct and
Adjournment of Meetings. . . . . . . . . . . . . . . . . . 45
SECTION 11.6 Counting Votes and Recording Action of Meetings. . . . . . . 46
SECTION 11.7 Actions of Holders Generally. . . . . . . . . . . . . . . . . 47
ARTICLE XII
SUBORDINATION
SECTION 12.1 Securities Subordinate to Senior Indebtedness. . . . . . . . 48
SECTION 12.2 Payment Over of Proceeds upon Dissolution, Etc. . . . . . . . 48
SECTION 12.3 Acceleration of Securities . . . . . . . . . . . . . . . . . 50
SECTION 12.4 Default in Senior Indebtedness . . . . . . . . . . . . . . . 51
SECTION 12.5 Payment Permitted if No Default . . . . . . . . . . . . . . . 52
SECTION 12.6 Subrogation Rights of Holders of Senior Indebtedness . . . . 52
SECTION 12.7 Provision Solely to Define Relative Rights . . . . . . . . . 52
SECTION 12.8 Trustee to Effectuate Subordination . . . . . . . . . . . . . 53
SECTION 12.9 No Waiver of Subordination Provisions . . . . . . . . . . . . 53
SECTION 12.10 Notice to Trustee. . . . . . . . . . . . . . . . . . . . . . 53
SECTION 12.11 Reliance on Judicial Order or Certificate of Liquidating
Agent . . . . . . . . . . . . . . . . . . . . . . . . . . 54
SECTION 12.12 Trustee Not Fiduciary for Holders of Senior Indebtedness . . 55
SECTION 12.13 Rights of Trustee as Holder of Senior Indebtedness;
Preservation of Trustee's Rights . . . . . . . . . . . . 55
SECTION 12.14 Article XII Applicable to Paying Agents . . . . . . . . . . 55
</TABLE>
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<TABLE>
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ARTICLE XIII
MISCELLANEOUS
SECTION 13.1 Trust Indenture Act Controls. . . . . . . . . . . . . . . . . 56
SECTION 13.2 Notices. . . . . . . . . . . . . . . . . . . . . . . . . . . 56
SECTION 13.3 Communication by Holders with Other Holders. . . . . . . . . 57
SECTION 13.4 Certificate and Opinion as to Conditions Precedent. . . . . . 57
SECTION 13.5 Statements Required in Certificate or Opinion. . . . . . . . 57
SECTION 13.6 Separability Clause. . . . . . . . . . . . . . . . . . . . . 58
SECTION 13.7 Rules by Trustee, Paying Agent and Registrar. . . . . . . . . 58
SECTION 13.8 Legal Holidays. . . . . . . . . . . . . . . . . . . . . . . . 58
SECTION 13.9 Governing Law. . . . . . . . . . . . . . . . . . . . . . . . 58
SECTION 13.10 No Recourse Against Others. . . . . . . . . . . . . . . . . 58
SECTION 13.11 Successors. . . . . . . . . . . . . . . . . . . . . . . . . 59
SECTION 13.12 Effect of Headings and Table of Contents. . . . . . . . . . 59
SECTION 13.13 Benefits of Indenture. . . . . . . . . . . . . . . . . . . . 59
SECTION 13.14 Multiple Originals. . . . . . . . . . . . . . . . . . . . . 60
</TABLE>
v
<PAGE> 9
INDENTURE dated as of ________, by and among Apartment Investment and
Management Company, a Maryland corporation ("Company"), and United States Trust
Company of New York, as trustee ("Trustee").
RECITALS OF THE COMPANY
The Company has duly authorized the execution and delivery of this
Indenture to provide for the issuance from time to time of its unsecured
debentures, notes or other evidences of indebtedness (herein called the
"Securities") to be issued in one or more series as in this Indenture provided.
For and in consideration of the premises and the purchase of the
Securities by the Holders thereof, it is mutually covenanted and agreed, for
the equal and ratable benefit of the Holders of the Securities or each series
thereof as follows:
ARTICLE I
DEFINITIONS AND INCORPORATION BY REFERENCE
SECTION 1.1 Definitions.
"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 or cause the direction of the management and policies of such person,
directly or indirectly, whether through the ownership of voting securities, by
contract or otherwise; and the terms "controlling" and "controlled" have
meanings correlative to the foregoing.
"Board of Directors" means either the board of directors of the Company
or any committee of such board authorized with respect to any matter to
exercise the powers of the Board of Directors of the Company.
"Board Resolution" means a copy of a resolution certified by the
Secretary or an Assistant Secretary of the Company to have been duly adopted by
the Board of Directors and to be in full force and effect on the date of such
certification, and delivered to the Trustee.
"Business Day" means, except as otherwise specified as contemplated by
Section 2.3(a), with respect to any Place of Payment or any other particular
location referred to in this Indenture or m the Securities, means each Monday,
Tuesday, Wednesday,
<PAGE> 10
Thursday and Friday which is not a day on which banking institutions in that
Place of Payment or other location are authorized or obligated by law or
executive order to close.
"Capital Stock" for any corporation means any and all shares, interests,
rights to purchase, warrants, options, participations or other equivalents of
or interests in (however designated) stock issued by that corporation.
"cash" means such coin or currency of the United States as at any time
of payment is legal tender for the payment of public and private debts.
"Company" means the party named as the "Company" in the first paragraph
of this Indenture until a successor replaces it pursuant to the applicable
provisions of this Indenture and, thereafter, shall mean such successor.
"Company Request" or "Company Order" means a written request or order
signed in the name of the Company, by its Chairman of the Board, a Vice
Chairman, its President or a Vice President, and by its Treasurer, an Assistant
Treasurer, its Secretary or an Assistant Secretary, and delivered to the
Trustee or, with respect to Sections 2.4, 2.8, 2.11 and 7.2, any other employee
of the Company named in an Officers' Certificate delivered to the Trustee.
"Debt" means with respect to any person at any date, without duplication
(i) all obligations of such person for borrowed money, (ii) all obligations of
such person evidenced by bonds, debentures, notes or other similar instruments,
(iii) all Debt of others secured by a lien on any asset of such person, whether
or not such Debt is assumed by such person, (iv) all obligations of such person
pursuant to leases which are required to be capitalized under generally
accepted accounting principles consistently applied and (v) all Debt of others
for the payment of which such person is responsible or liable as obligor or
guarantor.
"Default" means any event which is, or after notice or passage of time
or both would be, an Event of Default.
"Depositary" means, with respect to the Securities of any series
issuable or issued in whole or in part in global form, the Person specified as
contemplated by Section 2.3(a) as the Depositary with respect to such series of
Securities, until a successor shall have become such pursuant to the applicable
provisions of this Indenture, and thereafter "Depositary" shall mean or include
such successor.
"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 6.2.
2
<PAGE> 11
"Dollar" or "$" means a dollar or other equivalent unit in such coin or
currency of the United States as at the time shall be legal tender for the
payment of public and private debts.
"Exchange Act" means the Securities Exchange Act of 1934, as amended.
"Holder" or "Securityholder," when used with respect to any Security,
means a person in whose name a Security is registered on the Registrar's books.
"Indenture" means this Indenture, as amended or supplemented from time
to time in accordance with the terms hereof and shall include the terms of a
particular series of Securities established as contemplated in Section 2.3(a).
"interest," when used with respect to a Discount Security which by its
terms bears interest only after Maturity, means interest payable after
Maturity.
"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 or, in the
case of a Discount Security, the Principal Amount payable upon a declaration of
acceleration pursuant to Section 6.2, becomes due and payable as therein or
herein provided, whether at the Stated Maturity or by declaration of
acceleration, call for redemption or otherwise.
"Officer" means the Chairman of the Board, any Vice Chairman, the
President, any Vice President, the Treasurer, the Secretary, any Assistant
Treasurer or any Assistant Secretary of the Company.
"Officers' Certificate" means a written certificate containing the
information specified in Sections 13.4 and 13.5, signed in the name of the
Company by its Chairman of the Board, a Vice Chairman, its President or a Vice
President, and by its Treasurer, an Assistant Treasurer, its Secretary or an
Assistant Secretary, and delivered to the Trustee.
"Opinion of Counsel" means a written opinion containing the information
specified in Sections 13.4 and 13.5, from legal counsel who is acceptable to
the Trustee. The counsel may be an employee of, or counsel to, the Company or
the Trustee.
"Periodic Offering" means an offering of Securities of a series from
time to time the specific terms of which Securities, including, without
limitation, the rate or rates of interest, if any, thereon, the Stated Maturity
or Maturities thereof, the original issue date or dates thereof, the redemption
provisions, if any, and any other terms specified as
3
<PAGE> 12
contemplated by Section 2.3(a) with respect thereto, are to be determined by
the Company, or one or more of the Company's agents designated in an Officers'
Certificate, upon the issuance of such Securities.
"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 any
series, means the place or places where, subject to the provisions of Section
4.5, the Principal of and any interest on the Securities of that series are
payable as specified as contemplated by Section 2.3(a).
"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 2.9 in exchange for or in lieu of a
mutilated, destroyed, lost or stolen Security shall be deemed to evidence the
same debt as the mutilated, destroyed, lost or stolen Security.
"Principal" or "Principal Amount" of a Security, except as otherwise
specifically provided in this Indenture, means the outstanding principal of the
Security plus the premium, if any, of the Security.
"Redemption Date" or "redemption date," when used with respect to any
Security to be redeemed, shall mean the date specified for redemption of such
Security in accordance with the terms of such Security and this Indenture.
"Redemption Price" or "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.
"Regular Record Date" for the interest payable on any Interest Payment
Date on the Securities of any series means the date specified for that purpose
as contemplated by Section 2.3(a).
"SEC" means the Securities and Exchange Commission.
"Securities" has the meaning stated in the first recital of this
Indenture and more particularly means any Securities authenticated and
delivered under this Indenture.
"Securityholder" or "Holder," when used with respect to any Security,
means a person in whose name a Security is registered on the Registrar's books.
4
<PAGE> 13
"Special Record Date" for the payment of any Defaulted Interest on the
Securities of any issue means a date fixed by the Trustee pursuant to Section
2.13.
"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 as the fixed date on which an amount equal to the Principal of
such Security or an installment of Principal thereof or interest there on is
due and payable.
"Subsidiary" means, with respect to any person, a corporation of which a
majority of the Capital Stock having voting power under ordinary circumstances
to elect a majority of the board of directors of such corporation is owned by
(i) such person, (ii) such person and one or more Subsidiaries of such person
or (iii) one or more Subsidiaries of such person.
"TIA" means the Trust Indenture Act of 1939 as in effect on the date of
this Indenture, except as provided in Section 9.3.
"Trust Officer" means any officer of the Trustee assigned by the Trustee
to administer its corporate trust matters.
"Trustee" means the party named as the "Trustee" in the first paragraph
of this Indenture until a successor replaces it pursuant to the applicable
provisions of this Indenture and, thereafter, shall mean such successor.
"United States" means the United States of America, its territories, its
possessions (including the Commonwealth of Puerto Rico), and other areas
subject to its jurisdiction.
SECTION 1.2 Other Definitions.
<TABLE>
<CAPTION>
Defined in
Term Section
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<S> <C>
"Bankruptcy Law" 6.1
"Custodian" 6.1
"Defaulted Interest" 2.13
"Event of Default" 6.1
"Exchange Date" 2.11
"Legal Holiday" 13.8
"Notice of Default " 6.1
"Outstanding" 2.10
"Paying Agent" 2.5
"Registrar" 2.5
"Senior Indebtedness" 13.1
</TABLE>
5
<PAGE> 14
SECTION 1.3 Incorporation by Reference of Trust Indenture Act.
Whenever this Indenture refers to a provision of the TIA, the provision is
incorporated by reference in and made a part of this Indenture. The following
TIA terms used in this Indenture have the following meanings:
"Commission" means the SEC.
"indenture securities" means the Securities.
"indenture security holder" means a Holder or Securityholder.
"indenture to be qualified" means this Indenture.
"indenture trustee" or "institutional trustee" means the Trustee.
"obligor" on the indenture securities means the Company.
All other TIA terms used in this Indenture that are defined by the TIA,
defined by TIA reference to another statute or defined by SEC rule have the
meanings assigned to them by such definitions.
SECTION 1.4 Rules of Construction. Unless the context otherwise
requires:
(1) a term has the meaning assigned to it;
(2) an accounting term not otherwise defined has the meaning
assigned to it in accordance with generally accepted accounting
principles in the United States as in effect from time to time;
(3) "or" is not exclusive;
(4) "including" means including, without limitation; and
(5) words in the singular include the plural, and words in the
plural include the singular.
6
<PAGE> 15
ARTICLE II
THE SECURITIES
SECTION 2.1 Forms Generally. The Securities of each series shall be in
substantially such form (including global form) as shall be established by
delivery to the Trustee of an Officers' Certificate or in one or more
indentures supplemental hereto, in each case with such appropriate insertions,
omissions, substitutions and other variations as are required or permitted by
this Indenture, and may have such letters, numbers or other marks of
identification and such legends or endorsements placed thereon as may be
required to comply with the rules of any securities exchange or as may,
consistently herewith, be determined by the Officers executing such Securities
as evidenced by their execution of the Securities. The Officers' Certificate
so establishing the form of Security of any series shall be delivered to the
Trustee at or prior to the delivery of the Company Order contemplated by
Section 2.4 for the authentication and delivery of such Securities.
The permanent Securities shall be printed, lithographed or engraved or
produced by any combination of these methods or may be produced in any other
manner, provided, that such method is permitted by the rules of any securities
exchange on which such Securities may be listed, all as determined by the
Officers executing such Securities as evidenced by their execution of such
Securities.
SECTION 2.2 Securities in Global Form. If Securities of a series are
issuable in temporary or permanent global form, as specified as contemplated by
Section 2.3(a), then, notwithstanding clause (10) of Section 2.3(a) and the
provisions of Section 2.3(b), any such Security shall represent such of the
Outstanding Securities of such series as shall be specified therein and may
provide that it shall represent the aggregate amount of Outstanding Securities
from time to time endorsed thereon and that the aggregate amount of Outstanding
Securities represented thereby may from time to time be reduced to reflect
exchanges. Any endorsement of a Security in global form to reflect the amount
of 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 2.4 or Section 2.11.
Subject to the provisions of Section 2.4 and, if applicable, Section 2.11, the
Trustee shall deliver and redeliver any Security in 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 2.4 or
2.11 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 13.4 or 13.5 and need
not be accompanied by an Opinion of Counsel.
7
<PAGE> 16
The provisions of the last sentence of Section 2.4 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 13.4 or 13.5 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 2.4.
Notwithstanding the provisions of Sections 2.1 and 2.13, unless
otherwise specified as contemplated by Section 2.3(a), payment of Principal of
and any interest on any Security in global form shall be made to the person or
persons specified therein.
SECTION 2.3 Title, Terms and Denominations.
(a) The aggregate Principal Amount of Securities which may be
authenticated and delivered under this Indenture shall be unlimited.
The Securities may be issued in one or more series. There shall be
established and, subject to Section 2.4, set forth, or determined in the manner
provided, in an Officers' Certificate of the Company, or established in one or
more indentures supplemental hereto:
(1) the title of the Securities of the series (which shall
distinguish the Securities of the series from all other Securities);
(2) any limit upon the aggregate Principal Amount of the
Securities of the series which 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 Sections 2.8, 2.9, 2.11, 3.6, 9.5
or 10.3 and except for any Securities which, pursuant to Section 2.4,
are deemed never to have been authenticated and delivered hereunder);
(3) whether any Securities of the series may be represented
initially by a Security in temporary or permanent global form and, if
so, the initial Depositary with respect to any such temporary or
permanent global Security, and if other than as provided in Section 2.8
or Section 2.11, as applicable, whether and the circumstances under
which beneficial owners of interests in any such temporary or permanent
global Security may exchange such interests for Securities of such
series and of like tenor of any authorized form and denomination;
(4) the person to whom any interest on any Security of the
series shall be payable, if other than the person in whose name that
Security (or one or more
8
<PAGE> 17
Predecessor Securities) is registered at the close of business on the
Regular Record Date for such interest, and the extent to which, or the
manner in which (including any certification requirement and other terms
and conditions under which), any interest payable on a temporary or
permanent global Security on an Interest Payment Date will be paid if
other than in the manner provided in Section 2.2 and Section 2.4, as
applicable;
(5) the date or dates on which the Principal of the Securities
of the series is payable or the method of determination thereof;
(6) the rate or rates at which the Securities of the series
shall bear interest, if any, the date or dates from which any such
interest shall accrue, the Interest Payment Dates on which any such
interest shall be payable and the Regular Record Date for any interest
payable on any Securities on any Interest Payment Date;
(7) the place or places where, subject to the provisions of
Section 4.5, the Principal of and any interest on Securities of the
series shall be payable, any Securities of the series may be surrendered
for registration of transfer, Securities of the series may be
surrendered for exchange and notices and demands to or upon the Company
in respect of the Securities of the series and this Indenture may be
served;
(8) the period or periods within which, the price or prices at
which and the terms and conditions upon which, Securities of the series
may be redeemed, in whole or in part, at the option of the Company;
(9) the obligation, if any, of the Company to redeem or purchase
Securities of the series pursuant to any sinking fund or analogous
provisions or at the option of a Holder thereof, the conditions, if any,
giving rise to such obligation, and the period or periods within which,
the price or prices at which and the terms and conditions upon which
Securities of the series shall be redeemed or purchased, in whole or in
part, and any provisions for the remarketing of such Securities;
(10) the denominations in which any Securities of the series
shall be issuable, if other than denominations of $1,000 and any
integral multiple thereof;
(11) if other than the Principal Amount thereof, the portion of
the Principal Amount of any Securities of the series which shall be
payable upon declaration of acceleration of the Maturity thereof
pursuant to Section 6.2;
9
<PAGE> 18
(12) if other than as defined in Section 1.1, the meaning of
"Business Day" when used with respect to any Securities of the series;
(13) if and the terms and conditions upon which the Securities
of the series may or must be converted into securities of the Company or
exchanged for securities of the Company;
(14) any terms applicable to Original Issue Discount, if any (as
that term is defined in the Internal Revenue Code of 1986 and the
Regulations thereunder), including the rate or rates at which such
Original Issue Discount, if any, shall accrue;
(15) if the Securities of the series may be issued or delivered
(whether upon original issuance or upon exchange of a temporary Security
of such series or otherwise), or any installment of Principal of or any
interest is payable, only upon receipt of certain certificates or other
documents or satisfaction of other conditions in addition to those
specified in this Indenture, the form and terms of such certificates,
documents or conditions; and
(16) any other terms of the series (which terms shall not be
inconsistent with the provisions of this Indenture, except as permitted
by Section 9.1(7)).
All Securities of any one series shall be substantially identical except
as to denomination and the rate or rates of interest, if any, and Stated
Maturity, the date from which interest, if any, shall accrue and except as may
otherwise be provided in or pursuant to an Officers' Certificate pursuant to
this Section 2.3(a) or in any 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 for issuances of additional Securities of
such series or for the establishment of additional terms with respect to the
Securities of such series.
If any of the terms of the series are established by action taken
pursuant to a Board Resolution, a copy of any appropriate record of such action
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 series. With respect to Securities
of a series subject to a Periodic Offering, such Board Resolution or Officers'
Certificate may provide general terms for Securities of such series and provide
either that the specific terms of particular Securities of such series shall be
specified in a Company Order or that such terms shall be determined by the
Company, or one or more of the Company's agents designated in an Officers'
Certificate, in accordance with the Company Order as contemplated by the first
proviso of the third paragraph of Section 2.4.
10
<PAGE> 19
(b) Unless otherwise provided as contemplated by Section 2.3(a) with
respect to any series of Securities, any Securities of a series shall be
issuable in denominations of $1,000 and any integral multiple thereof.
SECTION 2.4 Execution, Authentication, Delivery and Dating. The
Securities shall be executed on behalf of the Company by its Chairman of the
Board, one of its Vice Chairmen, its President or one of its Vice Presidents,
or the Treasurer or any Assistant Treasurer, under its corporate seal
reproduced thereon attested by its Secretary or one of its Assistant
Secretaries. The signature of any of these officers on the Securities may be
manual or facsimile.
Securities 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.
At any time and from time to time after the execution and delivery of
this Indenture, the Company may deliver Securities of any series 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 such Company Order shall authenticate and deliver such
Securities; provided, however, that, with respect to Securities of a series
subject to a Periodic Offering, (a) such Company Order may be delivered by the
Company to the Trustee prior to the delivery to the Trustee of such Securities
for authentication and delivery, (b) the Trustee shall authenticate and deliver
Securities of such series for original issue from time to time, in an aggregate
Principal Amount not exceeding the aggregate Principal Amount established for
such series, pursuant to a Company Order or pursuant to such procedures
acceptable to the Trustee as may be specified from time to time by a Company
Order, (c) the rate or rates of interest, if any, the Stated Maturity or
Maturities, the original issue date or dates, the redemption provisions, if
any, and any other terms of Securities of such series shall be determined by a
Company Order or pursuant to such procedures and (d) if provided for in such
procedures, such Company Order may authorize authentication and delivery
pursuant to oral or electronic instructions from the Company, or the Company's
duly authorized agent or agents designated in an Officers' Certificate, which
oral instructions shall be promptly confirmed in writing.
If the forms or terms of the Securities of the series have been
established in or pursuant to one or more Officers' Certificates as permitted
by Sections 2.1 and 2.3(a), in authenticating such Securities, and accepting
the additional responsibilities under this Indenture in relation to such
Securities, the Trustee shall be entitled to receive, and (subject to Section
7.1) shall be fully protected in relying upon, an Opinion of Counsel stating:
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(a) that the form and terms of such Securities have been duly
authorized by the Company and established in conformity with the provisions of
this Indenture; and
(b) that such Securities when authenticated and delivered by the
Trustee and issued by the Company in the manner and subject to any conditions
specified in such Opinion of Counsel, will constitute valid and legally binding
obligations of the Company, enforceable in accordance with their terms, subject
to customary exceptions;
provided, however, that, with respect to Securities of a series subject to a
Periodic Offering, the Trustee shall be entitled to receive such Opinion of
Counsel only once at or prior to the time of the first authentication of
Securities of such series and that the Opinion of Counsel above may state:
(x) that the forms of such Securities have been, and the terms of
such Securities (when established in accordance with such procedures as
may be specified from time to time in a Company Order, all as
contemplated by and in accordance with a Board Resolution or an
Officers' Certificate pursuant to Section 2.3(a), as the case may be)
will have been, duly authorized by the Company and established in
conformity with the provisions of this Indenture; and
(y) that such Securities when (1) executed by the Company, (2)
completed, authenticated and delivered by the Trustee in accordance with
this Indenture, and (3) issued by the Company in the manner and subject
to any conditions specified in such Opinion of Counsel, will constitute
valid and legally binding obligations of the Company, enforceable in
accordance with their terms, subject to customary exceptions.
With respect to Securities of a series subject to a Periodic Offering,
the Trustee may conclusively rely, as to the authorization by the Company of
any of such Securities, the form and terms thereof and the legality, validity,
binding effect and enforceability thereof, upon the Opinion of Counsel and
other documents delivered pursuant to Sections 2.1 and 2.3(a) and this Section,
as applicable, at or prior to the time of the first authentication of
Securities of such series unless and until it has received written notification
that such opinion or other documents have been superseded or revoked. In
connection with the authentication and delivery of Securities of a series
subject to a Periodic Offering, the Trustee shall be entitled to assume, unless
it has actual knowledge to the contrary, that the Company's instructions to
authenticate and deliver such Securities do not violate any rules, regulations
or orders of any governmental agency or commission having jurisdiction over the
Company.
Notwithstanding the provisions of Section 2.3(a) and of the preceding
three paragraphs, if all Securities of a series are subject to a Periodic
Offering, it shall not be necessary to deliver the Officers' Certificate
otherwise required pursuant to Section
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2.3(a) at or prior to the time of authentication of each Security of such
series if such Officers' Certificate is delivered at or prior to the
authentication upon original issuance of the first Security of such series to
be issued.
Each Security shall be dated the date of its authentication.
The Trustee may appoint an authenticating agent acceptable to the
Company to authenticate Securities. Unless otherwise provided in the
appointment, an authenticating agent may authenticate Securities whenever the
Trustee may do so. Each reference in this Indenture to authentication by the
Trustee includes authentication by such agent.
No Security shall be entitled to any benefit under this Indenture or be
valid or obligatory for any purpose unless there appears on such Security a
certificate of authentication substantially in the form provided for herein
duly executed by the Trustee by manual signature of an authorized signatory,
and such certificate upon any Security shall be conclusive evidence, and the
only evidence, that such Security has been duly authenticated and delivered
hereunder. The Trustee's certificate of authentication shall be in
substantially the following form:
This is one of the Securities of the series designated therein
referred to in the within-mentioned Indenture.
United States Trust Company of New
York, as Trustee
By:
------------------------------------
Authorized Signatory
Notwithstanding the foregoing, if any Security shall have been duly
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 2.12 together with a written statement (which need not
comply with Section 13.4 or 13.5 and need not be accompanied by an Opinion of
Counsel) stating that such Security has never been issued and sold by the
Company, for all purposes of this Indenture such Security shall be deemed never
to have been authenticated and delivered hereunder and shall never be entitled
to the benefits of this Indenture.
SECTION 2.5 Registrar and Paying Agent. The Company shall maintain,
with respect to each series of Securities, an office or agency where such
Securities may be presented for registration of transfer or for exchange
("Registrar") and, in the Borough
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of Manhattan, The City of New York, an office or agency where such Securities
may be presented for purchase or payment ("Paying Agent"). The Registrar shall
keep a register of the Securities and of their transfer and exchange. The
Company may have one or more co-registrars and one or more additional paying
agents. The term Paying Agent includes any additional paying agent.
The Company shall enter into an appropriate agency agreement with
respect to each series of Securities with any Registrar, Paying Agent or co-
registrar (if not the Trustee). The agreement shall implement the provisions
of this Indenture that relate to such agent. The Company shall notify the
Trustee of the name and address of any such agent. If the Company fails to
maintain a Registrar or Paying Agent for a particular series of Securities, the
Trustee shall act as such and shall be entitled to appropriate compensation
therefor pursuant to Section 7.7. The Company or any Subsidiary or an
Affiliate of either of them may act as Paying Agent, Registrar or co-registrar.
The Company initially appoints the Trustee as the Registrar and Paying
Agent in connection with such Securities.
SECTION 2.6 Paying Agent to Hold Money and Securities in Trust. Except
as otherwise provided herein, prior to or on each due date of payments in
respect of any series of Securities, the Company shall deposit with the Paying
Agent with respect to such Securities a sum of money sufficient to make such
payments when so becoming due. The Company shall require each Paying Agent
(other than the Trustee) to agree in writing that the Paying Agent shall hold
in trust for the benefit of Holders or the Trustee all money held by such
Paying Agent for the making of payments in respect of the Securities of such
series and shall notify the Trustee of any default by the Company in making any
such payment. At any time during the continuance of any such default, a Paying
Agent shall, upon the written request of the Trustee, forthwith pay to the
Trustee all money so held in trust with respect to such Securities. If the
Company, a Subsidiary or an Affiliate of either of them acts as Paying Agent
for a series of Securities, it shall segregate the money held by it as Paying
Agent with respect to such Securities and hold it as a separate trust fund.
The Company at any time may require a Paying Agent for a series of Securities
to pay all money held by it with respect to such Securities to the Trustee and
to account for any money disbursed by it. Upon doing so, such Paying Agent
shall have no further liability for the money.
SECTION 2.7 Securityholder Lists. The Trustee shall preserve in as
current a form as is reasonably practicable the most recent list available to
it of the names and addresses of Holders of each series of Securities. If the
Trustee is not the Registrar for any series of Securities, the Company shall
cause to be furnished to the Trustee at least semiannually on June 1 and
December 1 a listing of Holders of such series of Securities dated within 15
days of the date on which the list is furnished and at such other times as the
Trustee may request in writing a list in such form and as of such date as the
Trustee
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may reasonably require of the names and addresses of Securityholders of such
series of Securities.
SECTION 2.8 Transfer and Exchange. Upon surrender for registration of
transfer of any Security at the office or agency of the Company designated
pursuant to Section 4.5 for such purpose, the Company shall execute, and the
Trustee shall authenticate and deliver, in the name of the designated
transferee or transferees, one or more new Securities of any authorized
denomination or denominations of a like aggregate Principal Amount and tenor.
The Company shall not charge a service charge for any registration of transfer
or exchange, but the Company may require payment of a sum sufficient to pay all
taxes, assessments or other governmental charges that may be imposed in
connection with the transfer or exchange of the Securities from the
Securityholder requesting such transfer or exchange (other than any exchange of
a temporary Security for a definitive Security not involving any change in
ownership or any exchange pursuant to Section 2.11, 3.6, 9.5 or 10.3, not
involving any transfer).
Notwithstanding any other provisions (other than the provisions set
forth in the sixth and seventh paragraphs) of this Section, a Security in
global form representing all or a portion of the Securities of a series may not
be transferred except as a whole by the Depositary for such series to a nominee
of such Depositary or by a nominee of such Depositary to such Depositary or
another nominee of such Depositary or by such Depositary or any such nominee to
a successor Depositary for such series or a nominee of such successor
Depositary.
At the option of the Holder, Securities of any series may be exchanged
for other Securities of the same series of any authorized denomination or
denominations, of a like aggregate Principal Amount and tenor, upon surrender
of the Securities to be exchanged at such office or agency. 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.
Whenever any Securities are so surrendered for exchange, the Company
shall execute, and the Trustee or a duly appointed authenticating agent shall
authenticate and deliver, the Securities which the Holder making the exchange
is entitled to receive.
If at any time the Depositary for the Securities of a series notifies
the Company that it is unwilling or unable to continue as Depositary for the
Securities of such series, the Company shall appoint a successor Depositary
with respect to the Securities of such series. If a successor Depositary for
the Securities of such series is not appointed by the Company within 90 days
after the Company receives such notice, the Company will execute, and the
Trustee, upon receipt of a Company Order for the authentication and delivery of
definitive Securities of such series, will authenticate and deliver Securities
of such series in definitive form in an aggregate Principal Amount equal to the
Principal
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Amount of the Security or Securities in global form representing such series in
exchange for such Security or Securities in global form.
The Company may at any time and in its sole discretion determine that
the Securities of any series issued in the form of one or more global
Securities shall no longer be represented by such global Security or
Securities. In such event the Company will execute, and the Trustee, upon
receipt of a Company Order for the authentication and delivery of definitive
Securities of such series, will authenticate and deliver Securities of such
series in definitive form and in an aggregate Principal Amount equal to the
Principal Amount of the Security or Securities in global form representing such
series in exchange for such Security or Securities in global form.
Notwithstanding the foregoing, except as otherwise specified in the
preceding two paragraphs or as contemplated by Section 2.3(a), any permanent
global Security shall be exchangeable only as provided in this paragraph. If
the beneficial owners of interests in a permanent global Security are entitled
to exchange such interests for definitive Securities of such series and of like
Principal Amount and tenor but of another authorized form and denomination, as
specified as contemplated by Section 2.3(a), then without unnecessary delay but
in any event not later than the earliest date on which such interests may be so
exchanged, the Company shall deliver to the Trustee definitive Securities in
aggregate Principal Amount equal to the Principal Amount of such permanent
global Security, executed by the Company. On or after the earliest date on
which such interests may be so exchanged, such permanent global Security shall
be surrendered by the Depositary with respect thereto to the Trustee, as the
Company's agent for such purpose, to be exchanged, in whole or from time to
time in part, for definitive Securities without charge and the Trustee shall
authenticate and deliver, in exchange for each portion of such permanent global
Security, an equal aggregate Principal Amount of definitive Securities of the
same series of authorized denominations and of like tenor as the portion of
such permanent global Security to be exchanged; provided, however, that
notwithstanding the last paragraph of this Section 2.8, no such exchanges may
occur during a period beginning at the opening of business 15 days before any
selection of Securities of that series to be redeemed and ending on the
relevant Redemption Date. If a 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 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.
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Upon the exchange of a Security in global form for Securities in
definitive form, such Security in global form shall be cancelled by the
Trustee. Securities issued in exchange for a Security in global form pursuant
to this Section 2.8 shall be registered in such names and in such authorized
denominations as the Depositary for such Security in global form, pursuant to
instructions from its direct or indirect participants or otherwise, shall
instruct the Trustee. The Trustee shall deliver such Securities to the persons
in whose names such Securities are so registered.
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 Security presented or surrendered for registration of transfer or
for exchange shall (if so required by the Company or the Trustee) be duly
endorsed, or be accompanied by a written instrument of transfer in form
satisfactory to the Company and the Registrar duly executed, by the Holder
thereof or his attorney duly authorized in writing.
The Company shall not be required (i) to issue, register the transfer of
or exchange Securities of any series during a period beginning at the opening
of business 15 days before any selection of Securities of that series to be
redeemed and ending (except as otherwise provided in the first proviso in the
eighth paragraph of this Section 2.8) at the close of business on the day of
the mailing of the relevant notice of redemption, or (ii) to register the
transfer of or exchange any Security so selected for redemption, in whole or in
part, except the unredeemed portion of any Security being redeemed in part.
SECTION 2.9 Replacement Securities. If (a) any mutilated Security is
surrendered to the Trustee, or (b) the Company and the Trustee receive evidence
to their satisfaction of the destruction, loss or theft of any Security, and
there is delivered to the Company and the Trustee such security or indemnity as
may be required by them to save each of them harmless, then, in the absence of
notice to the Company or the Trustee that such Security has been acquired by a
bona fide purchaser, the Company shall execute and upon its written request the
Trustee shall authenticate and deliver, in exchange for any such mutilated
Security or in lieu of any such destroyed, lost or stolen Security, a new
Security of the same series and of like tenor and Principal Amount, bearing a
number not contemporaneously outstanding.
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, pay such Security.
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<PAGE> 26
Upon the issuance of any new Securities 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 issued pursuant to this Section in lieu
of any mutilated, destroyed, lost or stolen Security shall constitute an
original additional contractual obligation of the Company, whether or not the
destroyed, lost or stolen Security shall be at any time enforceable by anyone,
and any such new Security shall be entitled to all benefits of this Indenture
equally and proportionately with any and all other Securities of that issue
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.
SECTION 2.10 Outstanding Securities; Determinations of Holders' Action.
Securities of any series "Outstanding" at any time are, as of the date of
determination, all the Securities of such series theretofore authenticated by
the Trustee for such series except for those cancelled by it, those delivered
to it for cancellation and those described in this Section 2.10 as not
outstanding. A Security does not cease to be "Outstanding" because the Company
or an Affiliate thereof holds the Security; provided, however, that in
determining whether the Holders of the requisite Principal Amount of
Outstanding Securities have given or concurred in any request, demand,
authorization, direction, notice, consent or waiver hereunder, Securities owned
by the Company or any other obligor upon the Securities or any Affiliate of the
Company or such other obligor shall be disregarded and deemed not to be
outstanding, except that, in determining whether the Trustee shall be protected
in relying upon any such request, demand, authorization, direction, notice,
consent or waiver, only Securities which the Trustee knows to be so owned shall
be so disregarded. Securities so owned which have been pledged in good faith
may be regarded as Outstanding if the pledgee establishes to the satisfaction
of the Trustee the pledgee's right so to act with respect to such Securities
and that the pledgee is not the Company or any other obligor upon the
Securities or any Affiliate of the Company or of such other obligor. Subject
to the foregoing, only Securities outstanding at the time of such determination
shall be considered in any such determination (including, without limitation,
determinations pursuant to Articles 6 and 9). In addition, in determining
whether the Holders of the requisite Principal Amount of Outstanding Securities
have given or concurred in any request, demand, authorization, direction,
notice, consent or waiver hereunder, the Principal Amount of a 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 acceleration of the Maturity thereof pursuant to Section
6.2.
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If a Security has been paid pursuant to Section 2.9 or in exchange for
or in lieu of which another Security has been authenticated and delivered
pursuant to this Indenture, it ceases to be outstanding unless the Trustee
receives proof satisfactory to it that the replaced Security is held by a bona
fide purchaser.
If the Trustee (other than the Company) holds, in accordance with this
Indenture, on a Redemption Date or on Stated Maturity, money sufficient to pay
Securities payable on that date, then on and after that date such Securities
shall cease to be outstanding and interest, if any, on such Securities shall
cease to accrue; 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.
SECTION 2.11 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, 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. Such temporary Securities may be in global
form.
If temporary Securities for some or all of the Securities of any series
are issued, the Company will cause definitive Securities representing such
Securities to be prepared without unreasonable delay. After the preparation of
such definitive Securities, the temporary Securities shall be exchangeable for
such definitive Securities of like tenor upon surrender of the temporary
Securities at the office or agency of the Company designated for such purpose
pursuant to Section 4.5 for such series for the purpose of exchanges of
Securities of such 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
and of like tenor of authorized denominations. Until so exchanged the
temporary Securities shall in all respects be entitled to the same benefits
under this Indenture as definitive Securities.
Until exchanged in full as hereinabove provided, the temporary
Securities of any series shall in all respects be entitled to the same benefits
under this Indenture as permanent Securities of the same series and of like
tenor authenticated and delivered hereunder.
SECTION 2.12 Cancellation. All Securities surrendered for payment,
redemption, 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
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all Securities so delivered 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 (including Securities received by the Company in exchange
or payment for other Securities of the Company) and may deliver to the Trustee
(or to any other person for delivery to the Trustee) for cancellation any
Securities previously authenticated hereunder which the Company has not issued
and sold, and all Securities so delivered shall be promptly cancelled by the
Trustee. The Company may not reissue, or issue new Securities to replace,
Securities it has paid or delivered to the Trustee for cancellation. No
Securities shall be authenticated in lieu of or in exchange for any Securities
cancelled as provided in this Section, except as expressly permitted in the
form of Securities for any particular series or as permitted by this Indenture.
All cancelled Securities held by the Trustee shall be destroyed by the Trustee
and evidence of their destruction delivered to the Company unless the Company
directs by Company Order that the Trustee deliver cancelled Securities to the
Company.
SECTION 2.13 Payment of Interest; Interest Rights Preserved. Unless
otherwise provided as contemplated by Section 2.3(a) with respect to any series
of Securities, interest on any Security which is payable, and is punctually
paid or duly provided for, on any Interest Payment Date shall be paid to the
person in whose name that Security (or one or more Predecessor Securities) is
registered at the close of business on the Regular Record Date for such
interest.
Any interest on any Security of any series which 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 Holder
on the relevant Regular Record Date by virtue of having been such Holder, and
such Defaulted Interest may be paid by the Company, at its election in each
case, as provided in clause (1) or (2) below:
(1) The Company may elect to make payment of any Defaulted
Interest to the persons in whose names the Securities of such series (or
their respective Predecessor Securities) are registered at the close of
business on a Special Record Date for the payment of such Defaulted
Interest, which shall be fixed in the following manner. The Company
shall notify the Trustee in writing of the amount of Defaulted Interest
proposed to be paid on each Security and the date of the proposed
payment, and at the same time the Company shall deposit with the Trustee
an amount of money 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 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
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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 Securities at his address as it appears in the Security
Register, not less than 10 days prior to such Special Record Date.
Notice of the proposed payment of such Defaulted Interest and the
Special Record Date therefor having been so mailed, such Defaulted
Interest shall be paid to the persons in whose names the Securities (or
their respective Predecessor Securities) are registered at the close of
business on such Special Record Date and shall no longer be payable
pursuant to the following Clause (2).
(2) The Company may make payment of any Defaulted Interest on
the Securities 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 2.8,
each Security delivered under this Indenture upon registration of transfer of
or in exchange for or in lieu of any other Security shall carry the rights to
interest accrued and unpaid, and to accrue, which were carried by such other
Security.
SECTION 2.14 Persons Deemed Owners. Prior to due presentment of a
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 Security
is registered as the owner of such Security for the purpose of receiving
payment of Principal of and (except as otherwise specified as contemplated by
Section 2.3(a) and subject to Section 2.8 and Section 2.13) interest on such
Security and for all other purposes whatsoever, whether or not such 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.
None of the Company, the Trustee, any Paying Agent or the 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.
SECTION 2.15 Computation of Interest . Except as otherwise specified
as contemplated by Section 2.3(a) for Securities of any series, (i) interest on
any Securities which bear interest at a fixed rate shall be computed on the
basis of a 360-day year comprised of twelve 30-day months and (ii) interest on
any Securities which bear interest
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at a variable rate shall be computed on the basis of the actual number of days
in an interest period divided by 360.
ARTICLE III
REDEMPTION
SECTION 3.1 Right to Redeem; Notices to Trustee. 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 2.3(a) for Securities of any series) in accordance with this
Article. In the case of any redemption at the election of the Company of less
than all of the Securities of any series, the Company shall, within the time
period set forth below, notify the Trustee in writing of the Redemption Date,
the Principal Amount and any other information necessary to identify the
Securities of such series to be redeemed and the Redemption Price.
The Company shall give the notice to the Trustee provided for in this
Section 3.1 at least 60 days before the Redemption Date (unless a shorter
notice shall be satisfactory to the Trustee).
SECTION 3.2 Selection of Securities to be Redeemed. Unless otherwise
specified as contemplated by Section 2.3(a) with respect to any series of
Securities, if less than all the Securities of any series with the same issue
date, interest rate and Stated Maturity are to be redeemed, the Trustee shall
select the particular Securities to be redeemed by a method the Trustee
considers fair and appropriate, which method 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 make
the selection not more than 60 days before the Redemption Date from Outstanding
Securities of such series not previously called for redemption. Provisions of
this Indenture that apply to Securities called for redemption also apply to
portions of Securities called for redemption. The Trustee shall notify the
Company promptly in writing of the Securities to be redeemed and, in the case
of any portions of Securities to be redeemed, the principal amount thereof to
be redeemed.
SECTION 3.3 Notice of Redemption. Unless otherwise specified as
contemplated by Section 2.3(a) with respect to any series of Securities, at
least 30 days but not more than 60 days before a Redemption Date, the Company
shall mail a notice of redemption by first-class mail, postage prepaid, to each
Holder of Securities to be redeemed.
The notice shall identify the Securities to be redeemed and shall state:
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(1) the Redemption Date;
(2) the Redemption Price;
(3) if fewer than all the Outstanding Securities of any series
are to be redeemed, the identification (and, in the case of partial
redemption, the Principal Amounts) of the particular Securities to be
redeemed;
(4) that on the Redemption Date the Redemption Price will become
due and payable upon each such Security (or portion thereof) to be
redeemed and, if applicable, that interest thereon will cease to accrue
on and after said date;
(5) the place or places where such Securities maturing after the
Redemption Date, are to be surrendered for payment of the Redemption
Price; and
(6) that the redemption is for a sinking fund, if such is the
case.
At the Company's request, the Trustee shall give the notice of
redemption in the Company's name and at the Company's expense; provided,
however, that, in all cases, the text of such Company Notice shall be prepared
by the Company.
SECTION 3.4 Effect of Notice of Redemption. Once notice of redemption
is given, Securities called for redemption become due and payable on the
Redemption Date and at the Redemption Price stated in the notice, and from and
after such date (unless the Company shall default in the payment of the
Redemption Price and accrued interest) such Securities shall cease to bear
interest. Upon surrender of any such Security for redemption in accordance
with said notice, such Security shall be paid by the Company at the Redemption
Price, together with accrued interest to the Redemption Date; provided,
however, that, unless otherwise specified as contemplated by Section 2.3(a),
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 Regular Record Dates according to their terms and the provisions
of Sections 2.8 and 2.13.
If any Security called for redemption shall not be so paid upon
surrender thereof for redemption, the Principal shall, until paid, bear
interest from the Redemption Date at the rate prescribed therefor in the
Security.
SECTION 3.5 Deposit of Redemption Price. Prior to or on the Redemption
Date, the Company shall deposit with the Paying Agent (or if the Company or a
Subsidiary or an Affiliate of either of them is the Paying Agent, shall
segregate and hold in trust) money sufficient to pay the Redemption Price and
(except if the Redemption Date shall be an Interest Payment Date) accrued
interest on, of all Securities to be redeemed on that
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date other than Securities or portions of Securities called for redemption
which prior thereto have been delivered by the Company to the Trustee for
cancellation. If such money is then held by the Company in trust and is not
required for such purpose, it shall be discharged from such trust.
SECTION 3.6 Securities Redeemed in Part. Any Security which is to be
redeemed only in part shall be surrendered at the office or agency of the
Company designated therefor pursuant to Section 4.5 (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 upon such
surrender, the Company shall execute and the Trustee shall authenticate and
deliver to the Holder of such Security a new Security or Securities of the same
series and of like tenor, in an authorized denomination as requested by such
Holder, equal in aggregate Principal Amount to and in exchange for the
unredeemed portion of the Principal of the Security surrendered.
ARTICLE IV
COVENANTS
SECTION 4.1 Payment of Securities. The Company shall promptly make all
payments in respect of each series of Securities on the dates and in the manner
provided in the Securities and, to the extent not otherwise so provided,
pursuant to this Indenture. An installment of Principal of or interest on the
Securities shall be considered paid on the date it is due if the Trustee or a
Paying Agent (other than the Company or an Affiliate of the Company) holds on
that date funds designated for and sufficient to pay such installment. At the
Company's option, payments of Principal or interest may be made by check or by
transfer to an account maintained by the payee.
SECTION 4.2 SEC Reports. The Company shall file with the Trustee,
within 15 days after it files such annual and quarterly reports, information,
documents and other reports with the SEC, copies of its annual report and of
the information, documents and other reports (or copies of such portions of any
of the foregoing as the SEC may by rules and regulations prescribe) which the
Company is required to file with the SEC pursuant to Section 13 or 15(d) of the
Exchange Act. The Company also shall comply with the other provisions of TIA
Section 314(a).
SECTION 4.3 Compliance Certificate. The Company shall deliver to the
Trustee within 120 days after the end of each fiscal year of the Company
(beginning with the first fiscal year ending on or after the date hereof) an
Officers' Certificate stating whether or not the signers know of any Default
that occurred during such period. If they do, such Officers' Certificate shall
describe the Default and its status.
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SECTION 4.4 Further Instruments and Acts. Upon request of the Trustee,
the Company will execute and deliver such further instruments and do such
further acts as may be reasonably necessary or proper to carry out more
effectively the purposes of this Indenture.
SECTION 4.5 Maintenance of Office or Agency. The Company
will maintain in the Borough of Manhattan, the City of New York, an office or
agency where Securities of that series may be presented or surrendered for
payment, where any Securities of that series may be surrendered for
registration of transfer, where Securities of that series may be surrendered
for exchange, purchase or redemption and where notices and demands to or upon
the Company in respect of the Securities of that series and this Indenture may
be served. The office of the Trustee in New York, New York shall be such
office or agency for all of the aforesaid purposes unless the Company shall
maintain some other office or agency for such purposes and shall give prompt
written notice to the Trustee of the location, and any change in the location,
of such other office or agency. If at any time the Company shall fail to
maintain any such required office or agency in respect of any series of
Securities or shall fail to furnish the Trustee with the address thereof, such
presentations and surrenders of Securities of that series may be made and
notices and demands may be made or served at the address of the Trustee set
forth in Section 13.2, and the Company hereby appoints the same as its agent to
receive such respective presentations, surrenders, notices and demands.
The Company may also 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 such purposes and may from time to time rescind
such designations; provided, however, that no such designation or rescission
shall in any manner relieve the Company of its obligation to maintain an office
or agency in accordance with the requirements set forth above for Securities of
any series for such purposes. The Company will give prompt written notice to
the Trustee of any such designation or rescission and of any change in the
location of any such other office or agency.
. SECTION 4.6 Limitations on the Incurrence of Certain Other Debt. The
Company shall not create, incur, issue, assume, guaranty or otherwise become
directly or indirectly liable for or with respect to or otherwise permit to
exist any Debt of the Company that is subordinate in right of payment to any
Debt of the Company unless such Debt is either pari passu with the Securities
or subordinate in right of payment to the Securities pursuant to subordination
provisions that are at least as favorable to the holders of the Securities as
the subordination provision set forth in this Indenture with respect to Senior
Indebtedness.
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ARTICLE V
SUCCESSOR CORPORATION
SECTION 5.1 When Company May Merge or Transfer Assets. The Company
shall not consolidate with or merge with or into any other person or convey,
transfer or lease its properties and assets substantially as an entirety to any
person, unless:
(a) either (1) the Company shall be the continuing corporation
or (2) the person (if other than the Company) formed by such
consolidation or into which the Company is merged or the person which
acquires by conveyance, transfer or lease the properties and assets of
the Company substantially as an entirety (i) shall be a corporation,
partnership or trust organized and validity existing under the laws of
the United States or any state thereof or the District of Columbia and
(ii) shall expressly assume, by an indenture supplemental hereto,
executed and delivered to the Trustee, in form satisfactory to the
Trustee, all of the obligations of the Company under the Securities and
this Indenture;
(b) immediately after giving effect to such transaction, no
Default shall have occurred and be continuing; and
(c) the Company shall have delivered to the Trustee an Officers'
Certificate and an Opinion of Counsel, each stating that such
consolidation, merger, conveyance, transfer or lease and, if a
supplemental indenture is required in connection with such transaction,
such supplemental indenture, comply with this Article and that all
conditions precedent herein relating to such transaction have been
satisfied.
The successor person formed by such consolidation or into which the
Company is merged or the successor person to which such conveyance, transfer or
lease is made shall succeed to, and be substituted for, and may exercise every
right and power of, the Company under this Indenture with the same effect as if
such successor had been named as the Company herein; and thereafter, except in
the case of a lease of its properties and assets substantially as an entirety,
the Company shall be discharged from all obligations and covenants under this
Indenture and the Securities.
ARTICLE VI
DEFAULTS AND REMEDIES
SECTION 6.1 Events of Default. Unless otherwise specified as
contemplated by Section 2.3(a) with respect to any series of securities, an
"Event of Default" occurs, with respect to each series of the Securities
individually, if:
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(1) the Company defaults in (a) the payment of the principal of
any Security of such series at its Maturity or (b) the payment of any
interest upon any Security of such series when the same becomes due and
payable and continuance of such default for a period of 30 days;
(2) the Company fails to comply with any of its agreements in
the Securities or this Indenture (other than those referred to in clause
(1) above and 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 such series) and
such failure continues for 60 days after receipt by the Company of a
Notice of Default;
(3) there shall have been the entry by a court of competent
jurisdiction of (a) a decree or order for relief in respect of the
Company in an involuntary case or proceeding under any applicable
Bankruptcy Law or (b) a decree or order adjudging the Company bankrupt
or insolvent, or seeking reorganization, arrangement, adjustment or
composition of or in respect of the Company under any applicable federal
or state law, or appointing a custodian, receiver, liquidator, assignee,
trustee, sequestrator (or other similar official) of the Company or of
any substantial part of its property, or ordering the wind up or
liquidation of its affairs, and any such decree or order for relief
shall continue to be in effect, or any such other decree or order shall
be unstayed and in effect, for a period of 60 consecutive days;
(4) (a) the Company commences a voluntary case or proceeding
under any applicable Bankruptcy Law or any other case or proceeding to
be adjudicated bankrupt or insolvent, (b) the Company consents to the
entry of a decree or order for relief in respect of the Company in an
involuntary case or proceeding under any applicable Bankruptcy Law or to
the commencement of any bankruptcy or insolvency case or proceeding
against it, (c) the Company files a petition or answer or consent
seeking reorganization or substantially comparable relief under any
applicable federal state law, (d) the Company (x) consents to the filing
of such petition or the appointment of, or taking possession by, a
custodian, receiver, liquidator, assignee, trustee, sequestrator or
similar official of the Company or of any substantial part of its
property, (y) makes an assignment for the benefit of creditors or (z)
admits in writing its inability to pay its debts generally as they
become due or (e) the Company takes any corporate action in furtherance
of any such actions in this clause (4); or
(5) any other Event of Default provided with respect to
Securities of that series.
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"Bankruptcy Law" means Title 11, United States Code, or any
similar Federal or state law for the relief of debtors. "Custodian" means any
receiver, trustee, assignee, liquidator, custodian or similar official under
any Bankruptcy Law.
A Default under clause (2) above is not an Event of Default until
the Trustee notifies the Company, or the Holders of at least 25% in aggregate
Principal Amount of the Outstanding Securities of such series notify the
Company and the Trustee, of the Default and the Company does not cure such
Default within the time specified in clause (2) above after receipt of such
notice. Any such notice must specify the Default, demand that it be remedied
and state that such notice is a "Notice of Default."
SECTION 6.2 Acceleration. If an Event of Default with respect to
Securities of any series at the time Outstanding (other than an Event of
Default specified in Section 6.1(3) or (4)) occurs and is continuing, the
Trustee by notice to the Company, or the Holders of at least 25% in aggregate
Principal Amount of the Outstanding Securities of that series by notice to the
Company and the Trustee, may declare the Principal Amount (or, if any of the
Securities of that series are Discount Securities, such portion of the
Principal Amount of such Securities as may be specified in the terms thereof)
of all the Securities of that series to be immediately due and payable. Upon
such a declaration, such Principal (or portion thereof) shall be due and
payable immediately. If an Event of Default specified in Section 6.1(3) or (4)
occurs and is continuing, the Principal (or portion thereof) of all the
Securities of that series shall become and be immediately due and payable
without any declaration or other act on the part of the Trustee or any
Securityholders. The Holders of a majority in aggregate Principal Amount of
the Outstanding Securities of any series, by notice to the Trustee (and without
notice to any other Securityholder) may rescind an acceleration with respect to
that series and its consequences if the rescission would not conflict with any
judgment or decree and all existing Events of Default with respect to
Securities of such series have been cured or waived except nonpayment of the
Principal (or portion thereof) of Securities of such series that has become due
solely as a result of such acceleration and if all amounts due to the Trustee
under Section 7.7 have been paid. No such rescission shall affect any
subsequent Default or impair any right consequent thereto.
SECTION 6.3 Other Remedies. If an Event of Default with respect to a
series of Outstanding Securities occurs and is continuing, the Trustee may
pursue any available remedy to (a) collect the payment of the whole amount then
due and payable on such Securities for Principal and interest, with interest
upon the overdue Principal and, to the extent that payment of such interest
shall be legally enforceable, upon overdue installments of interest from the
date such interest was due, at the rate or rates prescribed therefor in such
Securities and, in addition thereto, such further amount as shall be sufficient
to cover the costs and expenses of collection, including amounts due the
Trustee under Section 7.7 or (b) enforce the performance of any provision of
the Securities or this Indenture.
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The Trustee may maintain a proceeding even if the Trustee does
not possess any of the Securities or does not produce any of the Securities in
the proceeding. A delay or omission by the Trustee or any Securityholder in
exercising any right or remedy accruing upon an Event of Default shall not
impair the right or remedy or constitute a waiver of, or acquiescence in, the
Event of Default. No remedy is exclusive of any other remedy. All available
remedies are cumulative.
SECTION 6.4 Waiver of Past Defaults. The Holders of a majority in
aggregate Principal Amount of the Outstanding Securities of any series, by
notice to the Trustee (and without notice to any other Securityholder), may on
behalf of the Holders of all the Securities of such series waive an existing
Default with respect to such series and its consequences except (1) an Event of
Default described in Section 6.1(1) with respect to such series or (2) a
Default in respect of a provision that under Section 9.2 cannot be amended
without the consent of the Holder of each Outstanding Security of such series
affected. When a Default is waived, it is deemed cured, but no such waiver
shall extend to any subsequent or other Default or impair any consequent right.
SECTION 6.5 Control by Majority. The Holders of a majority in
aggregate Principal Amount of the Outstanding Securities of any series may
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 on the
Trustee with respect to the Securities of such series. However, the Trustee
may refuse to follow any direction that conflicts with law or this Indenture or
that the Trustee determines in good faith is unduly prejudicial to the rights
of other Securityholders or would involve the Trustee in personal liability.
SECTION 6.6 Limitation on Suits. A Holder of any Security of any
series may not pursue any remedy with respect to this Indenture or the
Securities unless:
(1) the Holder gives to the Trustee written notice stating that
an Event of Default with respect to the Securities of that series is
continuing;
(2) the Holders of at least 25% in aggregate Principal Amount of
the Outstanding Securities of that series make a written request to the
Trustee to pursue the remedy;
(3) such Holder or Holders offer to the Trustee reasonable
security or indemnity against any loss, liability or expense
satisfactory to the Trustee;
(4) the Trustee does not comply with the request within 60 days
after receipt of the notice, the request and the offer of security or
indemnity; and
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(5) the Holders of a majority in aggregate Principal Amount of
the Outstanding Securities of that series do not give the Trustee a
direction inconsistent with such request during such 60-day period.
A Securityholder may not use this Indenture to prejudice the
rights of any other Securityholder or to obtain a preference or priority over
any other Securityholder.
SECTION 6.7 Rights of Holders to Receive Payment. Notwithstanding any
other provision of this Indenture, the right, which is absolute and
unconditional, of any Holder of any Security to receive payment of the
Principal of and (subject to Section 2.13) interest on such Security on the
Stated Maturity or Maturities expressed in such Security (or, in the case of
redemption, on the Redemption Date) held by such Holder, on or after the
respective due dates expressed in the Securities or any Redemption Date, or to
bring suit for the enforcement of any such payment on or after such respective
dates, shall not be impaired or affected adversely without the consent of each
such Holder.
SECTION 6.8 Collection Suit by Trustee. If an Event of Default
described in Section 6.1(1) with respect to Securities of any series occurs and
is continuing, the Trustee may recover judgment in its own name and as trustee
of an express trust against the Company for the whole amount owing with respect
to such series of Securities and the amounts provided for in Section 7.7.
SECTION 6.9 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 shall then be due and payable as
therein expressed or by declaration or otherwise and irrespective of whether
the Trustee shall have made any demand on the Company for the payment of
overdue Principal 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 of Principal
and interest 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 any other amount due the Trustee
under Section 7.7) and of the Holders of Securities 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;
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and any Custodian, receiver, assignee, trustee, liquidator, sequestrator or
similar official in any such judicial proceeding is hereby authorized by each
Holder of Securities 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 of Securities, to pay the Trustee any amount due it for the reasonable
compensation, expenses, disbursements and advances of the Trustee, its agents
and counsel, and any other amounts due the Trustee under Section 7.7.
Nothing herein contained shall be deemed to authorize the Trustee or the
holders of Senior Indebtedness to authorize or consent to or accept or adopt on
behalf of any Holder of a Security 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 in any such proceeding.
SECTION 6.10 Priorities. If the Trustee collects any money pursuant to
this Article 6, it shall pay out the money in the following order and, in case
of the distribution of such money on account of Principal or interest, upon
presentation of the Securities, or both, as the case may be, and the notation
thereon of the payment if only partially paid and upon surrender thereof if
fully paid:
FIRST: to the Trustee for amounts due under Section 7.7;
SECOND: to holders of Senior Indebtedness as provided for in Article
XII;
THIRD: to Securityholders for amounts due and unpaid for the Principal
and interest on the Securities 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 amounts due and payable on such Securities for Principal
and interest, respectively; and
FOURTH: the balance, if any, to the Company.
The Trustee may fix a record date and payment date for any payment to
Securityholders pursuant to this Section 6.10. At least 15 days before such
record date, the Company shall mail to each Securityholder and the Trustee a
notice that states the record date, the payment date and amount to be paid.
SECTION 6.11 Undertaking for Costs. 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, a court in its discretion may
require the filing by any party litigant in the suit of an undertaking to pay
the costs of the suit, and the court in its discretion may assess reasonable
costs, including reasonable attorneys' fees, against any party litigant in the
suit, having due regard to the merits and good faith of the claims or defenses
made by the party litigant. This Section 6.11 does not apply to a suit by the
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Trustee, a suit by a Holder pursuant to Section 6.7 or a suit by Holders of
more than 10% in aggregate Principal Amount of the Outstanding Securities of
any series, or to any suit instituted by any Holder of any Security for the
enforcement of the payment of the Principal of or interest on any Security on
or after the Stated Maturity or Maturities expressed in such Security (or, in
the case of redemption, on or after the Redemption Date).
SECTION 6.12 Waiver of Stay, Extension or Usury 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 stay or extension law or any usury or other 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.
ARTICLE VII
TRUSTEE
SECTION 7.1 Duties of Trustee.
(a) If an Event of Default has occurred and is continuing, the Trustee
shall exercise the rights and powers vested in it by this Indenture and use the
same degree of care and skill in its exercise as a prudent man would exercise
or use under the circumstances in the conduct of his own affairs.
(b) Except during the continuance of an Event of Default:
(1) the Trustee need perform only those duties that are
specifically set forth in this Indenture and no others and shall not be
liable except for the performance of such duties; and
(2) 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. However, the Trustee shall examine the certificates and
opinions to determine whether or not they conform to the requirements of
this Indenture.
(c) The Trustee may not be relieved from liability for its own
negligent action, its own negligent failure to act or its own willful
misconduct, except that:
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(1) this paragraph (c) does not limit the effect of paragraph
(b) of this Section 7.1;
(2) the Trustee shall not be liable for any error of judgment
made in good faith by a Trust Officer unless it is proved that the
Trustee was negligent in ascertaining the pertinent facts; and
(3) the Trustee shall not be liable with respect to any action
it takes or omits to take in good faith in accordance with a direction
received by it pursuant to Section 6.5.
(d) Every provision of this Indenture that in any way relates to the
Trustee is subject to paragraphs (a), (b), (c) and (e) of this Section 7.1.
(e) The Trustee may refuse to perform any duty or exercise any right or
power or extend or risk its own funds or otherwise incur any financial
liability unless it receives indemnity satisfactory to it against any loss,
liability or expense.
(f) Money held by the Trustee in trust hereunder need not be segregated
from other funds except to the extent required by law. The Trustee shall not
be liable for any interest on any money received by it except as the Trustee
may otherwise agree with the Company.
SECTION 7.2 Rights of Trustee. (a) The Trustee may rely on any
document believed by it to be genuine and to have been signed or presented by
the proper person. The Trustee need not investigate any fact or matter stated
in the document.
(b) Before the Trustee acts or refrains from acting, it may require an
Officers' Certificate or an Opinion of Counsel. The Trustee shall not be
liable for any action it takes or omits to take in good faith in reliance on
such Officers' Certificate or Opinion of Counsel.
(c) The Trustee may act through agents and shall not be responsible for
the misconduct or negligence of any agent appointed with due care.
(d) Subject to the provisions of Section 7.1 (c), the Trustee shall not
be liable for any action it takes or omits to take in good faith which it
believes to be authorized or within its rights or powers.
SECTION 7.3 Individual Rights of Trustee, etc. The Trustee in its
individual or any other capacity may become the owner or pledgee of Securities
and may otherwise deal with the Company or its Affiliates with the same rights
it would have if it were not Trustee. Any Paying Agent, Registrar or co-
registrar or any other agent of the Company
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may do the same with like rights. However, the Trustee must comply with
Sections 7.10 and 7.11.
SECTION 7.4 Trustee's Disclaimer. The Trustee makes no representation
as to the validity or adequacy of this Indenture or the Securities. The
Trustee shall not be accountable for the Company's use of the proceeds from the
Securities and, shall not be responsible for any statement in the registration
statement for the Securities under the Securities Act of 1933, as amended, or
in the Indenture or the Securities (other than its certificate of
authentication) or for the determination as to which beneficial owners are
entitled to receive any notices hereunder.
SECTION 7.5 Notice of Defaults. If a Default with respect to the
Securities of any series occurs and is continuing and if it is known to the
Trustee, the Trustee shall give to each Holder of Securities of such series
notice of such Default in the manner set forth in TIA Section 315(b) within 90
days after it occurs. The Trustee shall have no duty to inquire as to the
performance of the Company's covenants in Article IV hereof. In addition, the
Trustee shall not be deemed to have knowledge of any Default or Event of
Default except (i) any Event of Default occurring pursuant to Section 4.1 or
6.1(l) or (ii) any Default or Event of Default of which the Trustee shall have
received written notification or obtained actual knowledge.
SECTION 7.6 Reports by Trustee to Holders. Within 60 days after each
May 15 beginning with the May 15 following the date of this Indenture, the
Trustee shall mail to each Holder of Securities a brief report dated as of such
May 15 that complies with TIA Section 313(a). The Trustee also shall comply
with TIA Section 313(b) and (c).
A copy of each report at the time of its mailing to Holders of
Securities shall be filed with the SEC and each stock exchange on which the
Securities of that series may be listed. The Company agrees to notify the
Trustee whenever the Securities of a particular series become listed on any
stock exchange and of any delisting thereof.
SECTION 7.7 Compensation 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) to reimburse the 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, advances and disbursements of
its agents and counsel), except any
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such expense, disbursement or advance as may be attributable to its
negligence or bad faith; and
(c) to indemnify the Trustee for, and to hold it harmless
against, any loss, liability or expense incurred without negligence or
bad faith on its part, arising out of or in connection with the
acceptance or administration of this trust, 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.
To secure the Company's payment obligations in this Section 7.7, the
Trustee shall have a lien prior to the Securities on all money or property held
or collected by the Trustee, except that held in trust to pay the Principal of
or interest, if any, on particular Securities.
The Company's payment obligations pursuant to this Section 7.7 shall
survive the discharge of this Indenture. When the Trustee incurs expenses
after the occurrence of a Default specified in Section 6.1(3) or (4), the
expenses are intended to constitute expenses of administration under any
Bankruptcy Law.
SECTION 7.8 Replacement of Trustee. The Trustee may resign by so
notifying the Company; provided, however, no such resignation shall be
effective until a successor Trustee has accepted its appointment pursuant to
this Section 7.8. The Holders of a majority in aggregate Principal Amount of
the Outstanding Securities of any series at the time outstanding may remove the
Trustee with respect to the Securities of such series by so notifying the
Trustee and may appoint a successor Trustee. The Company shall remove the
Trustee if:
(1) the Trustee fails to comply with Section 7.10;
(2) the Trustee is adjudged bankrupt or insolvent;
(3) a receiver or public officer takes charge of the Trustee or
its property; or
(4) the Trustee otherwise becomes incapable of acting.
If the Trustee resigns or is removed or if a vacancy exists in the
office of Trustee for any reason, with respect to the Securities of one or more
series, the Company shall promptly appoint, by resolution of its Board of
Directors, a successor Trustee 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
series).
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In the case of the appointment hereunder of a successor Trustee with
respect to all Securities, every such successor Trustee shall deliver a written
acceptance of its appointment to the retiring Trustee and to the Company.
Thereupon, the resignation or removal of the retiring Trustee shall become
effective and the successor Trustee shall have all the rights, powers and
duties of the Trustee under this Indenture. The successor Trustee shall mail a
notice of its succession to Holders of Securities of the particular series with
respect to which such successor Trustee has been appointed. The retiring
Trustee shall promptly transfer all property held by it as Trustee to the
successor Trustee, subject to the lien provided for in Section 7.7.
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
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
as co-Trustees of the same trust and that each such Trustee shall be trustee of
a trust or trusts hereunder separate and apart from any trust or trusts
hereunder administered by any other such Trustee; and upon the execution and
delivery of such supplemental indenture the resignation or removal of the
retiring Trustee shall become effective to the extent provided therein and each
such successor Trustee, without any further act, deed or conveyance, shall
become vested with all the rights, powers, trusts and duties of the retiring
Trustee with respect to the Securities of that or those series to which the
appointment of such successor Trustee relates; but, on request of the Company
or any successor Trustee, such retiring Trustee shall duly assign, transfer and
deliver to such successor Trustee all property and money held by such retiring
Trustee hereunder with respect to the Securities of that or those series to
which the appointment of such successor Trustee relates, subject, nevertheless,
to its lien, if any, provided for in Section 7.7.
If a successor Trustee with respect to the Securities of any series does
not take office within 30 days after the retiring Trustee resigns or is
removed, the retiring Trustee, the Company or the Holders of a majority in
aggregate Principal Amount of the Outstanding Securities of such series at the
time outstanding may petition any court of competent
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jurisdiction for the appointment of a successor Trustee with respect to the
Securities of such series.
If the Trustee fails to comply with Section 7.10, any Holder of a
Security of such series may petition any court of competent jurisdiction for
the removal of such Trustee and the appointment of a successor Trustee.
SECTION 7.9 Successor Trustee by Merger. If the Trustee consolidates
with, merges or converts into, or transfers all or substantially all its
corporate trust business or assets to, another corporation, the resulting,
surviving or transferee corporation without any further act shall be the
successor Trustee.
SECTION 7.10 Eligibility; Disqualification. The Trustee shall at all
times satisfy the requirements of TIA Section 310(a)(1) and 310(a)(5). The
Trustee shall have a combined capital and surplus of at least $50,000,000 as
set forth in its most recent published annual report of condition. The Trustee
shall comply with TIA Section 310(b). In determining whether the Trustee has
conflicting interests as defined in TIA Section 310(b)(1), the provisions
contained in the proviso to TIA Section 310(b)(1) shall be deemed incorporated
herein.
SECTION 7.11 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 therein.
ARTICLE VIII
SATISFACTION AND DISCHARGE
SECTION 8.1 Discharge of Liability on Securities. Except as otherwise
provided as contemplated by Section 2.3(a), when (a) the Company delivers to
the Trustee all Outstanding Securities or all Outstanding Securities of any
series, as the case may be, theretofore authenticated and delivered (other than
(i) Securities which have been destroyed, lost or stolen and which have been
replaced or paid as provided in Section 2.9, (ii) Securities 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 2.6) for cancellation or (b) all Outstanding
Securities have become due and payable and the Company deposits with the
Trustee cash sufficient to pay at Stated Maturity the Principal Amount of all
Principal of and interest on Outstanding Securities or all Outstanding
Securities of such series (other than Securities replaced pursuant to Section
2.9), and if in either case the Company pays all other sums payable hereunder
by the Company, then this Indenture shall, subject to Section 7.7, cease to be
of further effect as to all Outstanding Securities or all Outstanding
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Securities of any series, as the case may be. The Trustee shall join in the
execution of a document prepared by the Company acknowledging satisfaction and
discharge of this Indenture on demand of the Company accompanied by an
Officers' Certificate and Opinion of Counsel and at the cost and expense of the
Company.
SECTION 8.2 Repayment to the Company. The Trustee and the Paying Agent
shall return to the Company on Company Request any money held by them for the
payment of any amount with respect to the Securities that remains unclaimed for
two years; provided, however, that the Trustee or such Paying Agent, before
being required to make any such return, may at the expense and direction of the
Company mail to each Holder of such Securities 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 mailing, any unclaimed money then remaining
will be returned to the Company. After return to the Company, Holders entitled
to the money must look to the Company for payment as general creditors unless
an applicable abandoned property law designates another person.
SECTION 8.3 Option to Effect Defeasance or Covenant Defeasance. Unless
otherwise specified as contemplated by Section 2.3(a) with respect to
Securities of a particular series, the Company, may at its option, by Board
Resolution, at any time, with respect to any series of Securities, elect to
have either Section 8.4 or Section 8.5 be applied to all of the outstanding
Securities of any series (the "Defeased Securities"), upon compliance with the
conditions set forth below in this Article VIII.
SECTION 8.4 Defeasance and Discharge. Upon the Company's exercise
under Section 8.3 of the option applicable to this Section 8.4, the Company
shall be deemed to have been discharged from its obligations with respect to
the Defeased Securities on the date the conditions set forth below 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 the defeased Securities, which shall thereafter be
deemed to be "outstanding" only for the purposes of Sections 2.4, 2.5, 2.6,
2.9, 2.11, 2.12, 4.1, 4.5, 6.6, 6.7, 7.7, 7.8 and 8.2 of this Indenture and to
have satisfied all its other obligations under such series of Securities and
this Indenture insofar as such series of Securities are concerned (and the
Trustee, at the expense of the Company, and, upon written request, shall
execute proper instruments acknowledging the same). Subject to compliance with
this Article VIII, the Company may exercise its option under this Section 8.4
notwithstanding the prior exercise of its option under Section 8.5 with respect
to a series of Securities.
SECTION 8.5 Covenant Defeasance. Upon the Company's
exercise under Section 8.3 of the option applicable to this Section 8.5, the
Company shall be released from its obligations under Sections 4.2 and 4.3 and
Article V and such other provisions as may be provided as contemplated by
Section 2.3(a) with respect to Securities of a particular series and with
respect to the Defeased Securities on and after the date the
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conditions set forth below are satisfied (hereinafter "covenant defeasance"),
and the Defeased Securities 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 if any thereof) in connection with such
covenants, but shall continue to be deemed "outstanding" for all other purposes
hereunder. For this purpose, such covenant defeasance means that, with respect
to the Defeased Securities, 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 Article, whether directly or indirectly, by reason of any
reference elsewhere herein to any such Section or Article or by reason of any
reference in any such Section or Article to any other provisions herein or in
any other document and such omission to comply shall not constitute a Default
or an Event of Default under Section 6.1 but, except as specified above, the
remainder of this Indenture and such Defeased Securities shall be unaffected
thereby.
SECTION 8.6 Condition to Defeasance or Covenant Defeasance. The
following shall be the conditions to application of either Section 8.4 or
Section 8.5 to a series of outstanding Securities.
(a) The Company shall have irrevocably deposited with the Trustee, in
trust, (i) sufficient funds to pay the Principal of and interest to Stated
Maturity (or redemption) on, the Debt Securities of such series, or (ii) such
amount of direct obligations of, or obligations the principal of and interest
on which are fully guaranteed by, the government of the United States, and
which are not subject to prepayment, redemption or call, as will, together with
the predetermined and certain income to accrue thereon without consideration of
any reinvestment thereof, be sufficient to pay when due the Principal of, and
interest to Stated Maturity (or redemption) on, the Debt Securities of such
series.
(b) The Company shall have delivered to the Trustee an opinion of
counsel to the effect that the funds deposited pursuant to Section 8.6(a) will
not be subject to any rights of the holders of Senior Indebtedness.
ARTICLE IX
SUPPLEMENTAL INDENTURES
SECTION 9.1 Supplemental Indentures without Consent of Holders.
Without the consent of any Holders of Securities, the Company and the Trustee,
at any time and from time to time, may enter into one or more indentures
supplemental hereto, in form satisfactory to the Trustee, for any of the
following purposes:
(1) to evidence the succession of another corporation to the
Company and the assumption by any such successor of the covenants of the
Company herein and in the Securities; or
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(2) to add to the covenants, agreements and obligations of the
Company for the benefit of the Holders of all of the Securities or any
series thereof, or to surrender any right or power herein conferred upon
the Company; or
(3) to establish the form or terms of Securities of any series
as permitted by Sections 2.1 and 2.3(a), respectively; or
(4) 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,
pursuant to the requirements of Section 7.8; or
(5) to cure any ambiguity, defect or inconsistency; or
(6) to add to, change or eliminate any of the provisions of this
Indenture (which addition, change or elimination may apply to one or
more series of Securities), provided that any such addition, change or
elimination shall neither (A) apply to any Security of any series
created prior to the execution of such supplemental indenture and
entitled to the benefit of such provision nor (B) modify the rights of
the Holder of any such Security with respect to such provision; or
(7) to secure the Securities; or
(8) to make any other change that does not adversely affect the
rights of any Securityholder.
SECTION 9.2 Supplemental Indentures with Consent of Holders. With the
written consent of the Holders of at least a majority in aggregate Principal
Amount of the Outstanding Securities of each series affected by such
supplemental indenture, the Company and the Trustee may amend this Indenture or
the Securities of any series or 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 modify-
ing in any manner the rights of the Holders of the Securities of such series
under this Indenture; provided, however, that no such amendment or supplemental
indenture shall, without the consent of the Holder of each Outstanding Security
affected thereby:
(1) change the Stated Maturity of the Principal of, or any
installment of Principal of or interest on, any such Security, or reduce
the Principal Amount thereof or the rate of interest thereon or any
premium payable upon redemption thereof or reduce the amount of
Principal of any such Discount Security that would be due and payable
upon a declaration of acceleration of maturity thereof pursuant to
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Section 6.2, or change the Place of Payment, or change the coin or
currency in which, any Principal of, or any installment of interest on,
any such Security 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, on or after the Redemption
Date);
(2) reduce the percentage in Principal Amount of the Outstanding
Securities of any series, the consent of whose Holders is required for
any such amendment or supplemental indenture, or the consent of whose
Holders is required for any waiver (of compliance with certain
provisions of this Indenture or certain defaults hereunder and their
consequences) with respect to the Securities of such series provided for
in this Indenture;
(3) make any change in the terms of the Subordination of the
Securities in a manner adverse to the Holders of any series of
outstanding Securities; or
(4) modify any of the provisions of this Section, Section 6.4 or
6.7, except to increase the percentage of Outstanding Securities of such
series required for such actions 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.
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.
It shall not be necessary for the consent of the Holders under this
Section 9.2 to approve the particular form of any proposed amendment or
supplemental indenture, but it shall be sufficient if such consent approves the
substance thereof.
After an amendment or supplemental indenture under this Section 9.2
becomes effective, the Company shall mail to each Holder of the particular
Securities affected thereby a notice briefly describing the amendment.
SECTION 9.3 Compliance with Trust Indenture Act. Every supplemental
indenture executed pursuant to this Article shall comply with the TIA as then
in effect.
SECTION 9.4 Revocation and Effect of Consents, Waivers and Actions.
Until an amendment or waiver with respect to a series of Securities becomes
effective, a consent to it or any other action by a Holder of a Security of
that series hereunder is a continuing
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consent by the Holder and every subsequent Holder of that Security or portion
of that Security that evidences the same obligation as the consenting Holder's
Security, even if notation of the consent, waiver or action is not made on the
Security. However, any such Holder or subsequent Holder may revoke the
consent, waiver or action as to such Holder's Security or portion of the
Security if the Trustee receives the notice of revocation before the Company or
an agent of the Company certifies to the Trustee that the consent of the
requisite aggregate Principal Amount of the Securities of that series has been
obtained. After an amendment, waiver or action becomes effective, it shall
bind every Holder of Securities of that series.
The Company may, but shall not be obligated to, fix a record date for
the purpose of determining the Holders entitled to consent to any amendment or
waiver with respect to a series of Securities. If a record date is fixed, then
notwithstanding the first two sentences of the immediately preceding paragraph,
those persons who were Holders of Securities of that series at such record date
(or their duly designated proxies), and only those persons, shall be entitled
to revoke any consent previously given, whether or not such persons continue to
be Holders after such record date. No such consent shall be valid or effective
for more than 90 days after such record date.
SECTION 9.5 Notation on or Exchange of Securities. Securities of any
series authenticated and delivered after the execution of any supplemental
indenture with respect to such series 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 such series so modified as to conform, in
the opinion of the Trustee and the Board of Directors, 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 that series.
SECTION 9.6 Trustee to Sign Supplemental Indentures. The Trustee shall
sign any supplemental indenture authorized pursuant to this Article 9 if the
amendment does not adversely affect the rights, duties, liabilities or
immunities of the Trustee. If it does, the Trustee may, but need not, sign it.
In signing such amendment, the Trustee shall be entitled to receive, and
(subject to the provisions of Section 7.1) shall be fully protected in relying
upon, an Officers' Certificate and an Opinion of Counsel stating that such
amendment is authorized or permitted by this Indenture.
SECTION 9.7 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 shall be bound thereby, except
to the extent otherwise set forth thereon.
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ARTICLE X
SINKING FUNDS
SECTION 10.1 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 2.3(a) 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 Securities of any series is herein referred to as an "optional sinking
fund payment." If provided for by the terms of Securities of any series, the
cash amount of any sinking fund payment may be subject to reduction as provided
in Section 10.2. Each sinking fund payment shall be applied to the redemption
of Securities of any series as provided for by the terms of the Securities of
such series.
SECTION 10.2 Satisfaction of Sinking Fund Payments with Securities.
The Company (1) may deliver Outstanding Securities of a series with the same
issue date, interest rate and Stated Maturity (other than any previously called
for redemption), and (2) may apply as a credit Securities of a series with the
same issue date, interest rate and Stated Maturity 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, in each case, in satisfaction of all or any
part of any mandatory sinking fund payment with respect to the Securities of
such series with the same issue date, interest rate and Stated Maturity;
provided that such Securities have not been previously so credited. Such
Securities shall be received and credited for such purpose by the Trustee at
the Redemption Price specified in such Securities for redemption through
operation of the sinking fund and the amount of such sinking fund payment shall
be reduced accordingly.
SECTION 10.3 Redemption of Securities for Sinking Fund. Not less than
60 days (or such shorter period as shall be acceptable to the Trustee) prior to
each sinking fund payment date for any series of Securities, the Company will
deliver to the Trustee an Officers' Certificate specifying the amount of the
next 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 and
the portion thereof, if any, which is to be satisfied by delivering and
crediting Securities of that series pursuant to Section 10.2 and will also
deliver to the Trustee any Securities to be so delivered. 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 3.2 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 3.3. Such notice having been duly
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given, the redemption of such Securities shall be made upon the terms and in
the manner stated in Sections 3.4 and 3.6.
ARTICLE XI
ACTIONS OF HOLDERS OF SECURITIES
SECTION 11.1 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.
SECTION 11.2 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 11.1, to be held at such time and at such place in
the Borough of Manhattan, The City of New York or, with the approval of the
Company, at any other place. 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 13.2, 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 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 11.1, 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, or in such other place as shall be determined and
approved by the Company, for such meeting and may call such meeting for such
purposes by giving notice thereof as provided in subsection (a) of this Section
11.2.
SECTION 11.3 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
(1) a Holder of one or more Outstanding Securities of such series, or (2) a
person appointed by an instrument in writing as proxy for a Holder or Holders
of one or more Outstanding Securities of such series by such Holder or Holders.
The only persons who shall be entitled to be present or to speak at any meeting
of Holders of Securities of any series shall be the persons entitled to vote at
such meeting and their counsel, any representatives of the Trustee and its
counsel and any representatives of the Company and its counsel.
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SECTION 11.4 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. In the absence
of a quorum within 30 minutes of 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 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 determined by the
chairman of the meeting prior to the adjournment of such adjourned meeting.
Notice of the reconvening of any adjourned meeting shall be given as provided
in Section 11.2(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 an 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, whether or not present
or represented at the meeting.
SECTION 11.5 Determination of Voting Rights; Conduct and Adjournment of
Meetings. (a) Notwithstanding any other provisions of this Indenture, the
Trustee may make such reasonable regulations as it may deem advisable for any
meeting of Holders of Securities of a series in regard to proof of the holding
of Securities of such series and of the appointment of proxies and in regard to
the appointment and duties of inspectors of votes, the submission and
examination of proxies, certificates and other evidence of the right to vote,
and such other matters concerning the conduct of the meeting as it shall deem
appropriate. Except as otherwise permitted or required by any such regulations,
the holding of Securities shall be proved in the manner specified in Section
11.7 and the appointment of any proxy shall be proved in the manner specified
in Section 11.7. Such regulations may provide that written instruments
appointing proxies, regular on their
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face, may be presumed valid and genuine without the proof specified in Section
11.7 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 11.2 (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 vote with respect to 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 11.2 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 11.6 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 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 facts setting
forth a copy of the notice of the meeting and showing that said notice was
given as provided in Section 11.2 and, if applicable, Section 11.4. Each copy
shall be signed and verified by the affidavits of the permanent chairman and
secretary of the meeting and one such copy shall be delivered to the Company,
and another to the Trustee to be preserved by the Trustee, the latter to have
attached thereto the ballots voted at the meeting. Any record so signed and
verified shall be conclusive evidence of the matters therein stated.
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SECTION 11.7 Actions of Holders Generally. (a) Any request, demand,
authorization, direction, notice, consent, waiver or other action provided by
this Indenture to be given or taken by Holders may be embodied in and evidenced
by one or more instruments of substantially similar tenor signed by such
Holders in person or by an agent duly appointed in writing. Except as herein
otherwise expressly provided, such action shall become effective when such
instrument or instruments or record or both are delivered to the Trustee and,
where it is hereby expressly required, to the Company. Proof of execution of
any such instrument or of a writing appointing any such agent, or of the
holding by any person of a Security, shall be sufficient for any purpose of
this Indenture and (subject to Section 7.1) conclusive in favor of the Trustee
and the Company, if made in the manner provided in this Section. The record of
any meeting of Holders of Securities shall be proved in the manner provided in
Section 11.6.
(b) The fact and date of the execution by any person of any such
instrument or writing, or the authority of the persons executing the same, may
be proved in any reasonable manner which the Trustee deems sufficient.
(c) The Principal Amount and serial numbers of Securities held by the
person, and the date of holding the same, shall be proved by the books of the
Registrar.
(d) Any request, demand, authorization, direction, notice, consent,
waiver or other act of the Holder of any Security in accordance with this
Section 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 or the Company in reliance thereon, whether or not
notation of such action is made upon such Security.
(e) If the Company shall solicit from the Holders any request, demand,
authorization, direction, notice, consent, waiver or other act in accordance
with this Section, the Company may, at its option, by or pursuant to an
Officers' Certificate delivered to the Trustee, fix in advance a record date
for the determination of Holders entitled to give such request, demand,
authorization, direction, notice, consent, waiver or such 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
percentage of Outstanding Securities or Outstanding Securities of a series, as
the case may be, have authorized or agreed or consented to such request,
demand, authorization, direction, notice, consent, waiver or other act, and for
that purpose the Outstanding Securities or Outstanding Securities of the
series, as the case may be, shall be computed as of such record date; provided,
that no such authorization, agreement or consent by the Holders on the record
date shall be deemed effective unless such request, demand, authorization,
direction, notice, consent, waiver or other act shall
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become effective pursuant to the provisions of clause (a) of this Section 11.7
not later than six months after the record date.
ARTICLE XII
SUBORDINATION
SECTION 12.1 Securities Subordinate to Senior Indebtedness. Unless
otherwise specified as contemplated by Section 2.3(a), the Securities shall be
subordinated to Senior Indebtedness as set forth in this Article XII. The
Company covenants and agrees, and each Holder of a Security of any series by
such Holder's acceptance thereof likewise covenants and agrees, that, to the
extent and in the manner hereinafter set forth in this Article XII, the
indebtedness represented by the Securities and the payment of the Principal
Amount, interest and such other amounts as provided for in Section 2.3(a), if
any, in respect of each and all of the Securities are hereby expressly made
subordinate and subject in right of payment to the prior payment in full of all
Senior Indebtedness.
"Senior Indebtedness" means the principal of (and premium, if any) and
interest on (including interest accruing after the filing of a petition
initiating any proceeding pursuant to any Bankruptcy Law, but only to the
extent allowed or permitted to the holder of such Debt of the Company against
the bankruptcy or any other insolvency estate of the Company in such
proceeding) and other amounts due on or in connection with any Debt of the
Company incurred, assumed or guaranteed by the Company, whether outstanding on
the date of the Indenture or thereafter incurred, assumed or guaranteed and all
renewals, extensions and refundings of any such Debt of the Company; provided,
however, that the following will not constitute Senior Indebtedness:
(a) any Debt of the Company as to which, in the instrument creating
the same or evidencing the same or pursuant to which the same is
outstanding, it is expressly provided that such Debt of the Company
shall be subordinated to any other Debt of the Company, unless such Debt
of the Company expressly provides that such Debt of the Company shall be
senior in right of payment to the Securities;
(b) any Debt of the Company which by its terms states that such Debt
of the Company shall not be senior in right of payment to the
Securities;
(c) Debt of the Company in respect of the Securities; and
(d) any Debt of the Company to any Affiliate of the Company or
Subsidiary of the Company.
SECTION 12.2 Payment Over of Proceeds upon Dissolution, Etc. Upon any
distribution of assets of the Company in the event of:
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(a) any insolvency or bankruptcy case or proceeding, or any
receivership, liquidation, reorganization or other similar case or
proceeding in connection therewith, relative to the Company or to its
creditors, as such, or to its assets, or
(b) any liquidation, dissolution or other winding up of the
Company, whether voluntary or involuntary and whether or not involving
insolvency or bankruptcy, or
(c) any assignment for the benefit of creditors or any other
marshalling of assets and liabilities of the Company,
then and in such event
(1) the holders of Senior Indebtedness shall be entitled to
receive payment in full of all amounts due or to become due on or in
respect of all Senior Indebtedness, or provision shall be made for such
payment in cash, before the Holders of the Securities are entitled to
receive any payment on account of the Principal Amount, interest or such
other amounts as may be provided for in Section 2.3(a), if any, in
respect of the Securities; and
(2) any payment or distribution of assets of the Company of
any kind or character, whether in cash, property or securities, by set-
off or otherwise, to which the Holders or the Trustee would be entitled
but for the provisions of this Article XII, including any such payment
or distribution which may be payable or deliverable by reason of the
payment of any other Debt of the Company being subordinated to the
payment of the Securities, shall be paid by the liquidating trustee or
agent or other person making such payment or distribution, whether a
trustee in bankruptcy, a receiver or liquidating trustee or otherwise,
directly to the holders of Senior Indebtedness or their representative
or representatives or to the trustee or trustees under any indenture
under which any instruments evidencing any of such Senior Indebtedness
may have been issued, ratably according to the aggregate amounts
remaining unpaid on account of the principal of, and premium, if any,
and interest on the Senior Indebtedness held or represented by each, to
the extent necessary to make payment in full of all Senior Indebtedness
remaining unpaid, after giving effect to any concurrent payment or
distribution to the holders of such Senior Indebtedness.
In the event that, notwithstanding the foregoing provisions of this
Section 12.2, the Trustee or the Holder of any Security shall receive any
payment or distribution of assets of the Company of any kind or character,
whether in cash, property or securities, including any such payment or
distribution which may be payable or deliverable by reason of the payment of
any other Debt of the Company being subordinated to the payment of the
Securities, before all Senior Indebtedness is paid in full or payment thereof
provided for, and if such fact shall then have been made known to the Trustee
as
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provided in Section 12.10, or, as the case may be, such Holder, then and in
such event such payment or distribution shall be paid over or delivered
forthwith to the trustee in bankruptcy, receiver, liquidating trustee,
custodian, assignee, agent or other person making payment or distribution of
assets of the Company for application to the payment of all Senior Indebtedness
remaining unpaid, to the extent necessary to pay all Senior Indebtedness in
full, after giving effect to any concurrent payment or distribution to or for
the holders of Senior Indebtedness.
For purposes of this Article XII only, the words "cash, property or
securities," or any combination thereof, shall not be deemed to include shares
of Capital Stock of the Company as reorganized or readjusted, or securities of
the Company or any other corporation provided for by a plan of reorganization
or readjustment the payment of which is subordinated, at least to the extent
provided in this Article XII with respect to the Securities, to the payment of
all Senior Indebtedness which may at the time be outstanding; provided,
however, that (i) Senior Indebtedness is assumed by the new corporation, if
any, resulting from any such reorganization or readjustment, and (ii) the
rights of the holders of the Senior Indebtedness are not, without the consent
of such holders, altered, in any manner adverse to such holders, by such
reorganization or readjustment.
The consolidation of the Company with, or the merger of the Company
into, another corporation or the liquidation or dissolution of the Company
following the conveyance or transfer of all or substantially all of its assets
to another person upon the terms and conditions set forth in Article V shall
not be deemed a dissolution, winding up, liquidation, reorganization,
assignment for the benefit of creditors or marshalling of assets and
liabilities of the Company for the purposes of this Section 12.2 if the
corporation formed by such consolidation or into which the Company is merged or
the person which acquires by conveyance or transfer all or substantially all of
the assets of the Company, as the case may be, shall, as a part of such
consolidation, merger, conveyance or transfer, comply with the conditions set
forth in Article V.
SECTION 12.3 Acceleration of Securities. In the event that any
Securities are declared due and payable before their Stated Maturity pursuant
to Section 6.2, then and in each such event the Company shall promptly notify
holders of Senior Indebtedness of such acceleration. The Company may not pay
the Securities until 120 days have passed after such acceleration occurs and
may thereafter pay the Securities if this Article XII permits the payment at
that time.
In the event that, notwithstanding the foregoing, the Company shall make
any payment to the Trustee or the Holder of any Securities prohibited by the
foregoing provisions of this Section 12.3, and if such facts then shall have
been known or thereafter shall have been made known to the Trustee (as provided
in Section 12.10) or to such Holder, as the case may be, pursuant to the terms
of this Indenture, then and in such event such payment shall be paid over and
delivered forthwith to the Company for the
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benefit of the holders of Senior Indebtedness by or on behalf of the person
holding such payment.
The provisions of this Section 12.3 shall not apply to any payment with
respect to which Section 12.2 would be applicable.
SECTION 12.4 Default in Senior Indebtedness. The Company may not
make any payment of the Principal Amount, interest or other such amounts as may
be provided for in Section 2.3(a), if any, in respect of the Securities and may
not acquire any Securities for cash or property (other than for Capital Stock
of the Company) if:
(1) a default on Senior Indebtedness occurs and is continuing
that permits holders of such Senior Indebtedness to accelerate its
maturity; and
(2) the default is the subject of judicial proceedings or the
Company receives a notice of default thereof from any person who may
give such notice pursuant to the instrument evidencing or document
governing such Senior Indebtedness. If the Company receives any such
notice, then a similar notice received within nine months thereafter
relating to the same default on the same issue of Senior Indebtedness
shall not be effective for purposes of this Section 12.4.
The Company may resume payments on the Securities and may acquire
Securities if and when:
(A) the default is cured or waived; or
(B) 120 or more days pass after the receipt by the Company of
the notice described in clause (2) above and the default is not then the
subject of judicial proceedings; and
this Article XII otherwise permits the payment or acquisition at that time.
In the event that, notwithstanding the foregoing, the Company shall make
any payment to the Trustee or the Holder of any Security prohibited by the
foregoing provisions of this Section 12.4, and if such fact then shall have
been known or thereafter shall have been made known to the Trustee as provided
in Section 12.10 or such Holder, as the case may be, pursuant to the terms of
this Indenture, then and in each such event such payment shall be paid over and
delivered forthwith to the Company for the benefit of the holders of the Senior
Indebtedness by or on behalf of the person holding such payment.
The provisions of this Section 12.4 shall not apply to any payment with
respect to which Section 12.2 would be applicable.
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SECTION 12.5 Payment Permitted if No Default. Nothing contained in
this Article XII or elsewhere in this Indenture or in any of the Securities
shall prevent (a) the Company, at any time except during the pendency of any
case, proceeding, dissolution, liquidation or other winding up, assignment for
the benefit of creditors or other marshalling of assets and liabilities of the
Company referred to in Section 12.2 or under the conditions described in
Section 12.3 or 12.4, from making payments at any time of the Principal Amount,
interest or such other amounts as may be provided for in Section 2.3(a), if
any, as the case may be, in respect of the Securities, or (b) the application
by the Trustee or the retention by any Holder of any money deposited with it
hereunder to the payment of or on account of the Principal Amount, interest or
such other amounts as may be provided for in Section 2.3(a), if any, as the
case may be, in respect of the Securities if the Trustee did not have, at the
time provided in the proviso to the first paragraph of Section 12.10, notice
that such payment would have been prohibited by the provisions of this Article
XII.
SECTION 12.6 Subrogation Rights of Holders of Senior Indebtedness.
Subject to the payment in full of all Senior Indebtedness, the Holders of the
Securities shall be subrogated to the extent of the payments or distributions
made to the holders of such Senior Indebtedness pursuant to the provisions of
this Article XII to the rights of the holders of such Senior Indebtedness to
receive payments or distributions of cash, property or securities applicable to
the Senior Indebtedness until the Principal Amount, interest or such other
amounts as provided for in Section 2.3(a), if any, as the case may be, in
respect of the Securities shall be paid in full. For purposes of such
subrogation, no payments or distributions to the holders of the Senior
Indebtedness of any cash, property or securities to which the Holders of the
Securities or the Trustee would be entitled except for the provisions of this
Article XII, and no payments pursuant to the provisions of this Article XII to
the Company or to the holders of Senior Indebtedness by Holders of the
Securities or the Trustee, shall, as between the Company, its creditors other
than holders of Senior Indebtedness and the Holders of the Securities, be
deemed to be a payment or distribution by the Company to or on account of the
Senior Indebtedness.
SECTION 12.7 Provision Solely to Define Relative Rights. The
provisions of this Article XII are intended solely for the purpose of defining
the relative rights of the Holders of the Securities, on one hand, and the
holders of Senior Indebtedness, on the other hand. Nothing contained in this
Article XII or elsewhere in this Indenture or in the Securities is intended to
or shall:
(a) impair, as between the Company and the Holders of the
Securities, the obligation of the Company, which is absolute and
unconditional, to pay to the Holders of the Securities the Principal
Amount, interest or such other amounts as may be provided for in Section
2.3(a), if any, as the case may be, in respect of the Securities as and
when the same shall become due and payable in accordance with the terms
of the Securities and this Indenture and which, subject to the rights
under
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this Article XII of the holders of Senior Indebtedness, is intended to
rank equally with all other general obligations of the Company; or
(b) affect the relative rights against the Company of the
Holders of the Securities and creditors of the Company other than
holders of Senior Indebtedness; or
(c) prevent the Trustee or the Holder of any Security from
exercising all remedies otherwise permitted by applicable law upon
default under this Indenture, subject to the rights, if any, under this
Article XII of the holders of Senior Indebtedness to receive cash,
property or securities otherwise payable or deliverable to the Trustee
or such Holder.
SECTION 12.8 Trustee to Effectuate Subordination. Each Holder of a
Security by such Holder's acceptance thereof authorizes and directs the Trustee
on such Holder's behalf to take such action as may be necessary or appropriate
to effectuate the subordination provided in this Article XII and appoints the
Trustee such Holder's attorney-in-fact for any and all such purposes.
SECTION 12.9 No Waiver of Subordination Provisions. No right of any
present or future holder of any Senior Indebtedness to enforce subordination as
herein provided shall at any time in any way be prejudiced or impaired by any
act or failure to act on the part of the Company or by any act or failure to
act, in good faith, by any such holder, or by any noncompliance by the Company
with the terms, provisions and covenants of this Indenture, regardless of any
knowledge thereof any such holder may have or be otherwise charged with.
Without in any way limiting the generality of the foregoing paragraph,
the holders of Senior Indebtedness may, at any time and from time to time,
without the consent of, or notice to, the Trustee or the Holders of the
Securities, without incurring responsibility to the Holders of the Securities
and without impairing or releasing the subordination provided in this Article
XII or the obligations hereunder of the Holders of the Securities to the
holders of Senior Indebtedness, do any one or more of the following: (i) change
the manner, place or terms of payment or extend the time of payment of, or
renew or alter, Senior Indebtedness, or otherwise amend or supplement in any
manner Senior Indebtedness or any instrument evidencing the same or any
agreement under which Senior Indebtedness is outstanding; (ii) sell, exchange,
release or otherwise dispose of any property pledged, mortgaged or otherwise
securing Senior Indebtedness; (iii) release any person liable in any manner for
the collection of Senior Indebtedness and (iv) exercise or refrain from
exercising any rights against the Company or any other person.
SECTION 12.10 Notice to Trustee. The Company shall give prompt
written notice to the Trustee of any fact known to the Company which would
prohibit the making of
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any payment to or by the Trustee in respect of the Securities. Failure to give
such notice shall not affect the subordination of the Securities to Senior
Indebtedness. Notwithstanding the provisions of this Article XII or any other
provision of this Indenture, the Trustee shall not be charged with knowledge of
the existence of any facts which would prohibit the making of any payment to or
by the Trustee in respect of the Securities, unless and until the Trustee shall
have received written notice thereof at the address specified in Section 13.2
from the Company or a holder of Senior Indebtedness or from any trustee or
agent therefor; and, prior to the receipt of any such written notice, the
Trustee, subject to the provisions of Section 7.1, shall be entitled in all
respects to assume that no such facts exist; provided, however, that if a Trust
Officer of the Trustee shall not have received, at least three Business Days
prior to the date upon which by the terms hereof any such money may become
payable for any purpose (including, without limitation, the payment of the
Principal Amount, interest or such other amounts as may be provided for in
Section 2.3(a), if any, as the case may be, in respect of any Security), the
notice with respect to such money provided for in this Section 12.10, then,
anything herein contained to the contrary notwithstanding, the Trustee shall
have full power and authority to receive such money and to apply the same to
the purpose for which such money was received and shall not be affected by any
notice to the contrary which may be received by it within three Business Days
prior to such date.
Subject to the provisions of Section 7.1, the Trustee shall be entitled
to rely on the delivery to it of a written notice by a person representing
himself to be a holder of Senior Indebtedness (or a trustee or agent on behalf
of such holder) to establish that such notice has been given by a holder of
Senior Indebtedness (or a trustee or agent on behalf of any such holder). In
the event that the Trustee determines in good faith that further evidence is
required with respect to the right of any person as a holder of Senior
Indebtedness to participate in any payment or distribution pursuant to this
Article XII, the Trustee may request such person to furnish evidence to the
reasonable satisfaction of the Trustee as to the amount of Senior Indebtedness
held by such person, the extent to which such person is entitled to participate
in such payment or distribution and any other facts pertinent to the rights of
such person under this Article XII, and if such evidence is not furnished, the
Trustee may defer any payment which it may be required to make for the benefit
of such person pursuant to the terms of this Indenture pending judicial
determination as to the right of such person to receive such payment.
SECTION 12.11 Reliance on Judicial Order or Certificate of Liquidating
Agent. Upon any payment or distribution of assets of the Company referred to
in this Article XII, the Trustee, subject to the provisions of Section 7.1, and
the Holders of the Securities shall be entitled to rely upon any order or
decree entered by any court of competent jurisdiction in which such insolvency,
bankruptcy, receivership, liquidation, reorganization, dissolution, winding up
or similar case or proceeding is pending, or a certificate of the trustee in
bankruptcy, liquidating trustee, custodian, receiver, assignee for the benefit
of creditors, agent or other person making such payment or distribution,
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delivered to the Trustee or to the Holders of Securities, for the purpose of
ascertaining the persons entitled to participate in such payment or
distribution, the holders of Senior Indebtedness and other indebtedness of the
Company, the amount thereof or payable thereon, the amount or amounts paid or
distributed thereon and all other facts pertinent thereto or to this Article
XII.
SECTION 12.12 Trustee Not Fiduciary for Holders of Senior Indebtedness.
The Trustee shall not be deemed to owe any fiduciary duty to the holders of
Senior Indebtedness and shall not be liable to any such holders if the Trustee
shall in good faith mistakenly pay over or distribute to Holders of Securities
or to the Company or to any other person cash, property or securities to which
any holders of Senior Indebtedness shall be entitled by virtue of this Article
XII or otherwise. The Trustee shall not be charged with knowledge of the
existence of Senior Indebtedness or of any facts that would prohibit any
payment hereunder unless a Trust Officer of the Trustee shall have received
notice to that effect at the address of the Trustee set forth in Section 13.2.
With respect to the holders of Senior Indebtedness, the Trustee undertakes to
perform or to observe only such of its covenants or obligations as are
specifically set forth in this Article XII and no implied covenants or
obligations with respect to holders of Senior Indebtedness shall be read into
this Indenture against the Trustee.
SECTION 12.13 Rights of Trustee as Holder of Senior Indebtedness;
Preservation of Trustee's Rights. The Trustee in its individual capacity
shall be entitled to all the rights set forth in this Article XII with respect
to any Senior Indebtedness which may at any time be held by it, to the same
extent as any other holder of Senior Indebtedness, and nothing in this
Indenture shall deprive the Trustee of any of its rights as such holder.
Nothing in this Article XII shall apply to claims of, or payments to,
the Trustee under or pursuant to Section 7.7.
SECTION 12.14 Article XII Applicable to Paying Agents. The term
"Trustee" as used in this Article XII shall (unless the context otherwise
requires) be construed as extending to and including the Paying Agent within
its meaning as fully for all intents and purposes as if the Paying Agent were
named in this Article XII in addition to or in place of the Trustee; provided,
however, that Sections 12.10 and 12.12 shall not apply to the Company or any
Affiliate of the Company if it or such Affiliate acts as Paying Agent.
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ARTICLE XIII
MISCELLANEOUS
SECTION 13.1 Trust Indenture Act Controls. If any provision of this
Indenture limits, qualifies or conflicts with another provision hereof which is
required to be included in this Indenture by the TIA, the required provision
shall control.
SECTION 13.2 Notices. Any notice or communication shall be in writing
and delivered in person or mailed by first-class mail, postage prepaid,
addressed as follows:
if to the Company:
Apartment Investment and Management Company
1873 South Bellaire Street, 17th Floor
Denver, Colorado 80222
Attention: [ ]
if to the Trustee:
United States Trust Company of New York
114 West 47th Street
New York, NY 10036
Attention: Corporate Trust Department
The Company or the Trustee by notice to the other may designate
additional or different addresses for subsequent notices or communications.
Any notice or communication given to a Holder of Securities shall be
mailed to such Securityholder at the Securityholder's address as it appears on
the registration books of the Registrar and shall be sufficiently given if so
mailed within the time prescribed.
Where this Indenture provides for notice in any manner, such notice may
be waived in writing by the person entitled to receive such notice, either
before or after the event, and such waiver shall be the equivalent of such
notice. Waivers of notice by Holders shall be filed with the Trustee, but such
filing shall not be a condition precedent to the validity of any action taken
in reliance upon such waiver.
Failure to mail a notice or communication to a Securityholder or any
defect in it shall not affect its sufficiency with respect to other Holders of
Securities of the same
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series. If a notice or communication is mailed in the manner provided above,
it is duly given, whether or not received by the addressee.
If the Company mails a notice or communication to the Holders of
Securities of a particular series, it shall mail a copy to the Trustee and each
Registrar, co-registrar or Paying Agent, as the case may be, with respect to
such series.
In case by reason of the suspension of regular mail service or by reason
of any other cause it shall be impracticable to give notice to Holders of
Securities by mail, then such notification as shall be made with the acceptance
of the Trustee shall constitute a sufficient notification for every purpose
hereunder. In any case where notice to Holders of Securities is given by mail,
neither the failure to mail such notice, nor any defect in any notice so
mailed, to any particular Holder of a Security shall affect the sufficiency of
such notice with respect to other Holders of Securities given as provided
herein.
SECTION 13.3 Communication by Holders with Other Holders.
Securityholders may communicate pursuant to TIA Section 312(b) with other
Securityholders with respect to their rights under this Indenture or the
Securities. The Company and the Trustee, the Registrar or the Paying Agent with
respect to a particular series of Securities, and anyone else, shall have the
protection of TIA Section 312(c).
SECTION 13.4 Certificate and Opinion as to Conditions Precedent. Upon
any request or application by the Company to the Trustee to take any action
under this Indenture, the Company shall furnish to the Trustee:
(1) an Officers' Certificate stating that, in the opinion of the
signers, all conditions precedent, if any, provided for in this
Indenture relating to the proposed action have been complied with; and
(2) an Opinion of Counsel stating that, in the opinion of such
counsel, all such conditions precedent have been complied with.
SECTION 13.5 Statements Required in Certificate or Opinion. Each
Officers' Certificate or Opinion of Counsel with respect to compliance with a
covenant or condition provided for in this Indenture shall include:
(1) statement that each person making such Officers' Certificate
or Opinion of Counsel has read such covenant or condition;
(2) a brief statement as to the nature and scope of the
examination or investigation upon which the statements or opinions
contained in such Officers' Certificate or Opinion of Counsel are based;
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(3) a statement that, in the opinion of each such person, he has
made such examination or investigation as is necessary to enable such
person to express an informed opinion as to whether or not such covenant
or condition has been complied with; and
(4) a statement that, in the opinion of such person, such
covenant or condition has been complied with.
SECTION 13.6 Separability Clause. In case any provision in this
Indenture or in the Securities 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 13.7 Rules by Trustee, Paying Agent and Registrar. With
respect to the Securities of a particular series, the Trustee with respect to
such series of Securities may make reasonable rules for action by or a meeting
of Holders of such series of Securities. With respect to the Securities of a
particular series, the Registrar and the Paying Agent with respect to such
series of Securities may make reasonable rules for their functions.
SECTION 13.8 Legal Holidays. A "Legal Holiday" is any day other than a
Business Day. If any specified date (including an Interest Payment Date,
Redemption Date or Stated Maturity of any Security, or a date for giving
notice) is a Legal Holiday at any Place of Payment or place for giving notice,
then (notwithstanding any other provision of this Indenture or of the
Securities other than a provision in the Securities of any series which
specifically states that such provision shall apply in lieu of this Section)
payment of interest or Principal need not be made at such Place of Payment, or
such other action need not be taken, on such date, but the action shall be
taken on the next succeeding day that is not a Legal Holiday at such Place of
Payment with the same force and effect as if made on the Interest Payment Date
or Redemption Date, or at the Stated Maturity or such other date and to the
extent applicable no Original Issue Discount or interest, if any, shall accrue
for the intervening period.
SECTION 13.9 Governing Law. THIS INDENTURE AND THE SECURITIES SHALL BE
GOVERNED BY AND CONSTRUED IN ACCORDANCE WITH THE LAWS OF THE STATE OF NEW YORK,
AS APPLIED TO CONTRACTS MADE AND PERFORMED WITHIN THE STATE OF NEW YORK,
WITHOUT REGARD TO PRINCIPLES OF CONFLICTS OF LAW.
SECTION 13.10 No Recourse Against Others. A director, officer,
employee or stockholder, as such, of the Company shall not have any liability
for any obligations of the Company under the Securities or this Indenture or
for any claim based on, in respect of or by reason of such obligations or their
creation. By accepting a Security, each Holder of such Security shall waive and
release all such liability. The waiver and release shall be part of the
consideration for the issue of the Securities.
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SECTION 13.11 Successors. All agreements of the Company in this
Indenture and the Securities shall bind its respective successor. All
agreements of the Trustee in this Indenture shall bind its successor.
SECTION 13.12 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 13.13 Benefits of Indenture. Nothing in this Indenture or in
the Securities, express or implied, shall give to any person, other than the
parties hereto and their successors hereunder and the Holders of Securities,
any benefits or any legal or equitable right, remedy or claim under this
Indenture.
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SECTION 13.14 Multiple Originals. The parties may sign any number of
copies of this Indenture. Each signed copy shall be an original, but all of
them together represent the same agreement. One signed copy is enough to prove
this Indenture.
APARTMENT INVESTMENT AND
MANAGEMENT COMPANY
By:
------------------------------------------
Name:
Title:
Attest:
- ----------------------------
Name:
Title:
UNITED STATES TRUST COMPANY OF NEW YORK, as
Trustee
By
-------------------------------------------
Name:
Title:
Attest:
- ----------------------------
Name:
Title:
60
<PAGE> 1
EXHIBIT 4.7
- --------------------------------------------------------------------------------
APARTMENT INVESTMENT AND MANAGEMENT COMPANY
and
------------------------------
As Warrant Agent
------------------------------
WARRANT AGREEMENT
Dated as of ____________, 19__
------------------------------
- --------------------------------------------------------------------------------
<PAGE> 2
TABLE OF CONTENTS(1)
<TABLE>
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<S> <C> <C>
Parties . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Recitals . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
ARTICLE I
ISSUANCE, EXECUTION AND AUTHENTICATION
OF WARRANT CERTIFICATES
Section 1.1 Issuance of Warrant Certificates . . . . . . . . . . . . . . 4
Section 1.2 Form of Warrant Certificate . . . . . . . . . . . . . . . . 5
Section 1.3 Execution and Authentication of Warrant Certificates . . . . 5
Section 1.4 Temporary Warrant Certificates . . . . . . . . . . . . . . . 6
Section 1.5 Payment of Taxes . . . . . . . . . . . . . . . . . . . . . . 7
Section 1.6 Definition of Holder . . . . . . . . . . . . . . . . . . . . 7
ARTICLE II
WARRANT PRICE, DURATION AND EXERCISE OF WARRANTS
Section 2.1 Warrant Price . . . . . . . . . . . . . . . . . . . . . . . 8
Section 2.2 Duration of Warrants . . . . . . . . . . . . . . . . . . . . 8
Section 2.3 Exercise of Warrants . . . . . . . . . . . . . . . . . . . . 8
Section 2.4 Reservation of Shares . . . . . . . . . . . . . . . . . . . 9
ARTICLE III
OTHER TERMS OF WARRANTS
Section 3.1 Call of Warrants by the Company . . . . . . . . . . . . . . 10
Section 3.2 Adjustment of Exercise Price and Number of Shares
Purchasable or Number of Warrants . . . . . . . . . . . . 10
</TABLE>
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(1) This Table of Contents is not a part of the Warrant Agreement.
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<TABLE>
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<S> <C> <C>
ARTICLE IV
REGISTRATION, EXCHANGE, TRANSFER AND
SUBSTITUTION OF WARRANT CERTIFICATES
Section 4.1 Registration. Exchange and Transfer of Warrant
Certificates . . . . . . . . . . . . . . . . . . . . . . . 14
Section 4.2 Mutilated, Destroyed, Lost or Stolen Warrant
Certificates . . . . . . . . . . . . . . . . . . . . . . . 15
Section 4.3 Persons Deemed Owners . . . . . . . . . . . . . . . . . . . 15
Section 4.4 Cancellation of Warrant Certificates . . . . . . . . . . . . 16
ARTICLE V
OTHER PROVISIONS RELATING TO RIGHTS
OF HOLDERS OF WARRANT CERTIFICATES
Section 5.1 No Rights as Stockholders Conferred by Warrants or
Warrant Certificates . . . . . . . . . . . . . . . . . . . 16
Section 5.2 Holder of Warrant Certificate Mav Enforce Rights . . . . . . 16
ARTICLE VI
CONCERNING THE WARRANT AGENT
Section 6.1 Warrant Agent . . . . . . . . . . . . . . . . . . . . . . . 17
Section 6.2 Conditions of Warrant Agent's Obligations . . . . . . . . . 17
Section 6.3 Resignation, Removal and Assignment of Successor . . . . . . 19
ARTICLE VII
MISCELLANEOUS
Section 7.1 Consolidations and Mergers of the Company and Sales,
Leases and Conveyances Permitted Subject to Certain
Conditions . . . . . . . . . . . . . . . . . . . . . . . . 20
Section 7.2 Rights and Duties of Successor Corporation . . . . . . . . . 21
Section 7.3 Amendment . . . . . . . . . . . . . . . . . . . . . . . . . 21
</TABLE>
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<TABLE>
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Section 7.4 Notices and Demands to the Company and Warrant
Agent . . . . . . . . . . . . . . . . . . . . . . . . . . 21
Section 7.5 Notices to Warrantholders . . . . . . . . . . . . . . . . . 21
Section 7.6 Addresses . . . . . . . . . . . . . . . . . . . . . . . . . 23
Section 7.7 Governing Law . . . . . . . . . . . . . . . . . . . . . . . 23
Section 7.8 Delivery of Prospectus . . . . . . . . . . . . . . . . . . . 23
Section 7.9 Obtaining of Governmental Approvals . . . . . . . . . . . . 23
Section 7.10 Persons Having Rights Under Warrant Agreement . . . . . . . 24
Section 7.11 Headings . . . . . . . . . . . . . . . . . . . . . . . . . . 24
Section 7.12 Counterparts . . . . . . . . . . . . . . . . . . . . . . . . 24
Section 7.13 Inspection of Agreement . . . . . . . . . . . . . . . . . . 24
Testimonium . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 26
Signatures . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 26
Exhibit A - Form of Warrant Certificate . . . . . . . . . . . . . . . . . . A-1
</TABLE>
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<PAGE> 5
THIS WARRANT AGREEMENT, dated as of ________ 199__, between
Apartment Investment and Management Company, a corporation duly organized and
existing under the laws of the State of Maryland (the "Company") and
_____________, a [corporation] [national banking association] organized and
existing under the laws of _____________, as Warrant Agent (herein called the
"Warrant Agent").
WHEREAS, the Company proposes to sell [If Offered Securities and
Warrants - [title of Offered Securities being offered] (the "Offered
Securities") with] warrant certificates (such warrant certificates and other
warrant certificates issued pursuant to this Agreement herein called the
"Warrant Certificates") evidencing one or more warrants (the "Warrants" or,
individually, a "Warrant") representing the right to purchase [shares of Class
A Common Stock, par value $.01 per share (the "Class A Common Stock"),](2) of
the Company; and
WHEREAS, the Company desires the Warrant Agent to act on behalf
of the Company, and the Warrant Agent is willing to so act, in connection with
the issuance, exchange, exercise and replacement of the Warrant Certificates,
and in this Agreement wishes to set forth, among other things, the form and
provisions of the Warrant Certificates and the terms and conditions on which
they may be issued, exchanged, exercised and replaced;
NOW, THEREFORE, in consideration of the premises and of the
mutual agreements herein contained, the parties hereto agree as follows:
ARTICLE I
ISSUANCE, EXECUTION AND AUTHENTICATION
OF WARRANT CERTIFICATES
Section 1.1 Issuance of Warrant Certificates. [If Warrants
alone -- Upon issuance, each Warrant Certificate shall evidence one or more
Warrants.] [If Offered Securities and Warrants -- Warrant Certificates shall
be [initially] issued in units with the Offered Securities and shall [not] be
separately transferable [before ___________, 19__ (the "Detachable Date")].
Each such unit shall consist of a Warrant Certificate or Certificates
evidencing an aggregate of ___________ Warrants.] Each Warrant evidenced
thereby shall represent the right, subject to the
- --------------------
(2) To be modified as appropriate to reflect underlying securities.
<PAGE> 6
provisions contained herein and therein, to purchase one share of Class A
Common Stock.
Section 1.2 Form of Warrant Certificate. The Warrant
Certificates (including the Form(s) of Exercise [and Assignment] to be set
forth on the reverse thereof) shall be in substantially the form set forth in
Exhibit A hereto, shall be printed, lithographed or engraved on steel engraved
borders (or in any other manner determined by the officers executing such
Warrant Certificates, with the execution thereof by such officers conclusively
evidencing such determination) and may have such letters, numbers or other
marks of identification and such legends or endorsements placed thereon 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 securities exchange on which the
Warrant Certificates may be listed or as may, consistently herewith, be
determined by the officers executing such Warrant Certificates, with the
execution thereof by such officers conclusively evidencing such determination.
Section 1.3 Execution and Authentication of Warrant
Certificates. The Warrant Certificates shall be executed on behalf of the
Company by its Chairman, its Chief Executive Officer, its President or one of
its Vice Presidents (any reference to a Vice President of the Company herein
shall be deemed to include any Vice President of the Company whether or not
designated by a number or a word or words added before or after the title "Vice
President"), under its corporate seal reproduced thereon attested to by its
Treasurer or Secretary or one of its Assistant Treasurers or Assistant
Secretaries. The signature of any of these officers on the Warrant Certificates
may be manual or facsimile.
Warrant Certificates evidencing the right to purchase a number of
shares of Class A Common Stock having an aggregate par value not exceeding $
_________ (except as provided in Sections 1.4, 2.3(c), 4.1 and 4.2) may be
executed by the Company and delivered to the Warrant Agent upon the execution
of this Warrant Agreement or from time to time thereafter. The Warrant Agent
shall, upon receipt of Warrant Certificates duly executed on behalf of the
Company, authenticate Warrant Certificates evidencing Warrants representing the
right to purchase a number of shares of Class A Common Stock having an
aggregate par value not exceeding $________ and shall deliver such Warrant
Certificates to or upon the order of the Company. Subsequent to such original
issuance of the Warrant Certificates, the Warrant Agent shall authenticate a
Warrant Certificate only if the Warrant Certificate is issued in exchange or in
substitution for one or more previously authenticated Warrant Certificates or
in connection with their transfer, as hereinafter provided.
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<PAGE> 7
Each Warrant Certificate shall be dated the date of its
authentication by the Warrant Agent
No Warrant Certificate shall be entitled to any benefit under
this Agreement or be valid or obligatory for any purpose, and no Warrant
evidenced thereby shall be exercisable, until such Warrant Certificate has been
authenticated by the manual signature of the Warrant Agent. Such signature by
the Warrant Agent upon any Warrant Certificate executed by the Company shall be
conclusive evidence, and the only evidence, that the Warrant Certificate so
authenticated has been duly issued hereunder.
Warrant Certificates bearing the manual or facsimile signatures
of individuals who were at the 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
Warrant Certificates or did not hold such offices at the date of such Warrant
Certificates.
Section 1.4 Temporary Warrant Certificates. Pending the
preparation of definitive Warrant Certificates, the Company may execute, and
upon the order of the Company the Warrant Agent shall authenticate and deliver,
temporary Warrant Certificates which are printed, lithographed, typewritten,
mimeographed or otherwise produced substantially of the tenor of the definitive
Warrant Certificates in lieu of which they are issued and with such appropriate
insertions, omissions, substitutions and other variations as the officers
executing such Warrant Certificates may determine, with the execution thereof
by such officers conclusively evidencing such determination.
If temporary Warrant Certificates are issued, the Company will
cause definitive Warrant Certificates to be prepared without unreasonable
delay. After the preparation of definitive Warrant Certificates, the temporary
Warrant Certificates shall be exchangeable for definitive Warrant Certificates
upon surrender of the temporary Warrant Certificates at the corporate trust
office of the Warrant Agent [or ________], without charge to the Holder (as
defined in Section 1.6 below). Upon surrender for cancellation of any one or
more temporary Warrant Certificates, the Company shall execute and the Warrant
Agent shall authenticate and deliver in exchange therefor definitive Warrant
Certificates representing the same aggregate number of Warrants. Until so
exchanged, the temporary Warrant Certificates shall in all respects be entitled
to the same benefits under this Agreement as definitive Warrant Certificates.
3
<PAGE> 8
Section 1.5 Payment of Taxes. The Company will pay all stamp
taxes and other duties, if any, to which, under the laws of the United States
of America or any State or political subdivision thereof, this Agreement or the
original issuance of the Warrant Certificates may be subject.
Section 1.6 Definition of Holder. The term "Holder" as used
herein shall mean [If Offered Securities and Warrants which are not immediately
detachable -- prior to the Detachable Date, the registered owner of the Offered
Security to which such Warrant Certificate was initially attached, and, after
such Detachable Date,] the person in whose name at the time such Warrant
Certificate shall be registered upon the books to be maintained by the Warrant
Agent for that purpose pursuant to Section 4. 1. [If Offered Securities and
Warrants which are not immediately detachable -- Prior to the Detachable Date,
the Company will, or will cause the registrar of the Offered Securities to,
make available to the Warrant Agent current information as to Holders of the
Offered Securities.]
4
<PAGE> 9
ARTICLE II
WARRANT PRICE, DURATION AND EXERCISE OF WARRANTS
Section 2.1 Warrant Price.(3) During the period set forth in
Section 2.2, each Warrant shall entitle the Holder thereof, subject to the
provisions of this Agreement, to purchase from the Company one share of Class A
Common Stock at the exercise price of $ __________. Such exercise price of each
Warrant is referred to in this Agreement as the "Exercise Price."
Section 2.2 Duration of Warrants. Any Warrant evidenced by a
Warrant Certificate may be exercised at any time, as specified herein, on or
after [the date thereof] [________, 19__] and at or before the close of
business on _________ 19 (the "Expiration Date"). Each Warrant not exercised
at or before the close of business on the Expiration Date shall become void,
and all rights of the Holder of the Warrant Certificate evidencing such Warrant
under this Agreement or otherwise shall cease.
Section 2.3 Exercise of Warrants. (a) During the period
specified in Section 2.2, any whole number of Warrants may be exercised by
surrendering the Warrant Certificate evidencing such Warrants at the place or
at the places set forth in the Warrant Certificate, with the purchase form set
forth in the Warrant Certificate duly executed, accompanied by payment in full,
in lawful money of the United States of America, [in cash or by certified check
or official bank check in New York Clearing House funds] [by bank wire transfer
in immediately available funds,] of the Exercise Price for each Warrant
exercised. The date on which payment in full of the Exercise Price for a
Warrant and the duly executed and completed Warrant Certificate are received by
the Warrant Agent shall be deemed to be the date on which such Warrant is
exercised. The Warrant Agent shall deposit all funds received by it as payment
for the exercise of Warrants to the account of the Company maintained with it
for such purpose and shall advise the Company by telephone at the end of each
day on which such a payment is received of the amount so deposited to its
account. The Warrant Agent shall promptly confirm such telephonic advice to the
Company in writing.
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(3) Complete and modify the provisions of this Section as appropriate to
reflect the exact terms of the Warrants.
5
<PAGE> 10
(b) The Warrant Agent shall from time to time, as
promptly as practicable after the exercise of any Warrants in accordance with
the terms and conditions of this Agreement and the Warrant Certificates, advise
the Company of (i) the number of Warrants so exercised, (ii) the instructions
of each Holder of the Warrant Certificates evidencing such Warrants with
respect to delivery of the certificate or certificates representing shares of
Class A Common Stock to which such Holder is entitled upon such exercise, and
instructions of such Holder as to delivery of Warrant Certificates evidencing
the balance, if any, of the Warrants remaining after such exercise, and (iii)
such other information as the Company shall reasonably require.
(c) As soon as practicable after the exercise of any
Warrants, the Company shall issue to or upon the order of the Holder of the
Warrant Certificate evidencing such Warrants, a certificate or certificates
representing the number of shares of Class A Common Stock to which such Holder
is entitled in such name or names as may be directed by such Holder; and, if
fewer than all of the Warrants evidenced by such Warrant Certificate were
exercised, the Company shall execute and an authorized officer of the Warrant
Agent shall manually authenticate and deliver a new Warrant Certificate
evidencing the number of Warrants remaining unexercised.
(d) The Company shall not be required to pay any stamp or
other tax or other governmental charge required to be paid in connection with
any transfer involved in the issuance of the Class A Common Stock; and in the
event that any such transfer is involved, the Company shall not be required to
issue or deliver any shares of Class A Common Stock until such tax or other
charge shall have been paid or it has been established to the Company's
satisfaction that no such tax or other charge is due.
Section 2.4 Reservation of Shares. For the purpose of enabling
it to satisfy any obligation to issue shares of Class A Common Stock upon
exercise of Warrants, the Company will, at all times through the close of
business on the Expiration Date, reserve and keep available, free from
preemptive rights and out of its aggregate authorized but unissued shares of
Class A Common Stock, the number of shares of Class A Common Stock deliverable
upon the exercise of all outstanding Warrants.
The Company covenants that all shares of Class A Common Stock
issued upon exercise of the Warrants will, upon issuance in accordance with the
terms of this Agreement, be fully paid and nonassessable and free from all
taxes, liens,
6
<PAGE> 11
charges and security interests created by or imposed upon the Company with
respect to the issuance and holding thereof.
ARTICLE III
OTHER TERMS OF WARRANTS
Section 3.1 [Call of Warrants by the Company.(4) If Warrants
issued hereunder are callable by the Company -- The Company shall have the
right to call and repurchase any or all Warrants on or after ________, 19__
(the "Call Date") and upon the occurrence of [discuss events or circumstances
under which Company may call the Warrants] (the "Call Terms") at a price of $
_________ per Warrant (the "Call Price"). Notice of such Call Price, Call Date
and Call Terms shall be given to registered holders of Warrants in the manner
provided in Section 7.5.]
Section 3.2 Adjustment of Exercise Price and Number of Shares
Purchasable or Number of Warrants. The Exercise Price, the number of shares of
Class A Common Stock purchasable upon the exercise of each Warrant and the
number of Warrants outstanding are subject to adjustment from time to time upon
the occurrence of the events enumerated in this Section 3.2.
(a) If the Company shall (i) pay a dividend in or make a
distribution of shares of its capital stock, whether shares of Class A Common
Stock or shares of its capital stock of any other class, (ii) subdivide its
outstanding shares of Class A Common Stock, (iii) combine its outstanding
shares of Class A Common Stock into a smaller number of shares of Class A
Common Stock or (iv) issue any shares of its capital stock in a reclas-
sification of the Class A Common Stock (including any such reclassification in
connection with a consolidation or merger in which the Company is the
continuing corporation), the number of shares of Class A Common Stock
purchasable upon exercise of each Warrant immediately prior thereto shall be
adjusted so that the holder of each Warrant shall be entitled to receive the
kind and number of shares of Class A Common Stock or other securities of the
Company which such holder would have owned or have been entitled to receive
after the happening of any of the events described above, had such Warrant been
exercised immediately prior to the happening of such event or any record date
with respect thereto. An adjustment made pursuant to this paragraph (a) shall
become effective
- --------------------
(4) Complete and modify the provision of the Section as appropriate to
reflect the exact terms of the Warrants.
7
<PAGE> 12
immediately after the effective date of such event, retroactive to immediately
after the record date, if any, for such event.
(b) If the Company shall issue rights, options or
warrants to all holders of its outstanding Class A Common Stock, without any
charge to such holders, entitling them to subscribe for or purchase shares of
Class A Common Stock at a price per share that is lower than the market price
per share of Class A Common Stock (as defined in paragraph (e) below) at the
record date mentioned below, the number of shares of Class A Common Stock
thereafter purchasable upon the exercise of each Warrant shall be determined by
multiplying the number of shares of Class A Common Stock theretofore
purchasable upon exercise of each Warrant by a fraction, of which the numerator
shall be (i) the number of shares of Class A Common Stock outstanding on the
date of issuance of such rights, options or warrants plus the number of
additional shares of Class A Common Stock offered for subscription or purchase,
and of which the denominator shall be (ii) the number of shares of Class A
Common Stock outstanding on the date of issuance of such rights, options or
warrants plus the number of shares which the aggregate offering price of the
total number of shares of Class A Common Stock so offered would purchase at the
market price per share of Class A Common Stock at such record date. Such
adjustment shall be made whenever such rights, options or warrants are issued,
and shall become effective retroactive to immediately after the record date for
the determination of stockholders entitled to receive such rights, options or
warrants.
(c) If the Company shall distribute to all holders of its
shares of Class A Common Stock evidences of its indebtedness or assets
(excluding cash dividends or distributions payable out of capital surplus and
dividends or distributions referred to in paragraph (a) above) or rights,
options or warrants or convertible or exchangeable securities containing the
right to subscribe for or purchase shares of Class A Common Stock (excluding
those referred to in paragraph (b) above), then in each case the number of
shares of Class A Common Stock thereafter purchasable upon the exercise of each
Warrant shall be determined by multiplying the number of shares of Class A
Common Stock theretofore purchasable upon the exercise of each Warrant, by a
fraction, of which the numerator shall be (i) the then current market price per
share of Class A Common Stock (as defined in paragraph (e) below) on the date
of such distribution, and of which the denominator shall be (ii) the then
current market price per share of Class A Common Stock less the then fair value
(as determined by the Board of Directors of the Company, whose determination
shall be conclusive) of the portion of the assets or evidences of indebtedness
so distributed or of such subscription rights, options or warrants or
convertible or exchangeable securities applicable to one share of Class A
Common Stock. Such adjustment shall be
8
<PAGE> 13
made whenever any such distribution is made, and shall become effective on the
date of distribution retroactive to immediately after the record date for the
determination of stockholders entitled to receive such distribution.
(d) In the event of any capital reorganization or any
reclassification of the Class A Common Stock (except as provided in paragraphs
(a) through (c) above), any holder of Warrants upon exercise thereof shall be
entitled to receive, in lieu of the Class A Common Stock to which he or she
would have become entitled upon exercise immediately prior to such reorgani-
zation or reclassification, the shares (of any class or classes) or other
securities or property of the Company that he or she would have been entitled
to receive at the same aggregate Exercise Price upon such reorganization or
reclassification if his or her Warrants had been exercised immediately prior
thereto.
(e) For the purpose of any computation under paragraphs
(b) and (c) of this Section 3.02, the current or closing market price per share
of Class A Common Stock at any date shall be deemed to be the average of the
daily closing prices for ___ consecutive trading days commencing __________
trading days before the date of such computation. The closing price for each
day shall be [the last sale price] for such day, in either case as reported in
the principal consolidated transaction reporting system with respect to
securities listed or admitted to trading on the New York Stock Exchange (the
"NYSE") or if the Class A Common Stock is not listed on the NYSE, then on the
principal United States national securities exchange on which the Class A
Common Stock is listed or quoted. If the Class A Common Stock is not listed or
quoted on any United States national securities exchange, then the current or
closing market price per share of Class A Common Stock shall be determined by
the Board of Directors of the Company in good faith.
(f) Whenever the number of shares of Class A Common Stock
purchasable upon the exercise of each Warrant is adjusted as herein provided,
the Exercise Price payable upon the exercise of each Warrant shall be adjusted
by multiplying such Exercise Price immediately prior to such adjustment by a
fraction, of which the numerator shall be the number of shares purchasable upon
the exercise of each Warrant immediately prior to such adjustment, and of which
the denominator shall be the number of shares so purchasable immediately
thereafter.
(g) The Company may elect, on or after the date of any
adjustment required by paragraphs (a) through (d) of this Section 3.2, to
adjust the number of Warrants in substitution for an adjustment in the number
of shares of Class A Common Stock purchasable upon the exercise of a Warrant.
Each of the Warrants
9
<PAGE> 14
outstanding after such adjustment of the number of Warrants shall be
exercisable for the same number of shares of Class A Common Stock as
immediately prior to such adjustment. Each Warrant held of record prior to such
adjustment of the number of Warrants shall become that number of Warrants
(calculated to the nearest hundredth) obtained by dividing the Exercise Price
in effect prior to adjustment of the Exercise Price by the Exercise Price in
effect after adjustment of the Exercise Price. The Company shall notify the
holders of Warrants, in the same manner as provided in the first paragraph of
Section 7.5, of its election to adjust the number of Warrants, indicating the
record date for the adjustment, and, if known at the time, the amount of the
adjustment to be made. This record date may be the date on which the Exercise
Price is adjusted or any day thereafter. Upon each adjustment of the number of
Warrants pursuant to this paragraph (g) the Company shall, as promptly as
practicable, cause to be distributed to holders of record of Warrants on such
record date Warrant Certificates evidencing, subject to paragraph (h), the
additional Warrants to which such holders shall be entitled as a result of such
adjustment, or, at the option of the Company, shall cause to be distributed to
such holders of record in substitution and replacement for the Warrant
Certificates held by such holders prior to the date of adjustment, and upon
surrender thereof, if required by the Company, new Warrant Certificates
evidencing all the Warrants to be issued, executed and registered in the manner
specified in Section 1 (and which may bear, at the option of the Company, the
adjusted Exercise Price) and shall be registered in the names of the holders of
record of Warrant Certificates on the record date specified in the notice.
(h) The Company shall not be required to issue fractions
of Warrants on any distribution of Warrants to holders of Warrant Certificates
pursuant to paragraph (g) or to distribute Warrant Certificates that evidence
fractional Warrants. In lieu of such fractional Warrants, there shall be paid
to the registered holders of the Warrant Certificates with regard to which such
fractional Warrants would otherwise be issuable, an amount in cash equal to the
same fraction of the current market value of a full Warrant on the trading day
immediately prior to the date on which such fractional Warrant could have been
other wise issuable (the "Valuation Date"). For purposes of this paragraph (h),
the current market value of a Warrant shall be the aggregate closing market
price on the Valuation Date (determined as set forth in paragraph (e)) of all
shares of Class A Common Stock issuable upon exercise of one Warrant plus the
fair value (as determined by the Board of Directors of the Company, whose
determination shall be conclusive) of any other assets or securities
purchasable upon exercise of one Warrant less the Exercise Price of one
Warrant.
(i) Notwithstanding any adjustment pursuant to Section
3.2 in the number of shares of Class A Common Stock purchasable upon the
exercise of a
10
<PAGE> 15
Warrant, the Company shall not be required to issue fractions of shares of
Class A Common Stock upon exercise of the Warrants or to distribute
certificates which evidence fractional shares. In lieu of fractional shares,
there shall be paid to the registered holders of Warrant Certificates at the
time such Warrant Certificates are exercised as herein provided an amount in
cash equal to the same fraction of the current market value of a share of Class
A Common Stock. For purposes of this paragraph (i), the current market value of
a share of Class A Common Stock shall be the closing market price (determined
as set forth in paragraph (e)) of a share of Class A Common Stock for the
trading day immediately prior to the date of such exercise.
ARTICLE IV
REGISTRATION, EXCHANGE, TRANSFER AND
SUBSTITUTION OF WARRANT CERTIFICATES
Section 4.1 Registration, Exchange and Transfer of Warrant
Certificates. The Warrant Agent shall keep, at its corporate trust office [and
at _________], books in which, subject to such reasonable regulations as it may
prescribe, it shall register Warrant Certificates and transfers of outstanding
Warrant Certificates.
[If Offered Securities and Warrants which are immediately
detachable -- Prior to the Detachable Date, a Warrant Certificate may be
exchanged or transferred only together with the Offered Security to which such
Warrant Certificate was initially attached, and only for the purpose of
effecting, or in conjunction with, an exchange or transfer of such Offered
Security. Additionally, on or prior to the Detachable Date, each transfer or
exchange of an Offered Security [on the register of the Offered Securities]
shall operate also to transfer or exchange the Warrant Certificate or
Certificates to which such Offered Security was initially attached. After the
Detachable Date, upon] [If Offered Securities and Warrants which are immedi-
ately detachable or if Warrants alone -- Upon] surrender at the corporate trust
office of the Warrant Agent [or __________] of Warrant Certificates properly
endorsed [or accompanied by appropriate instruments of transfer] and
accompanied by written instructions for [transfer or] exchange, all in form
satisfactory to the Company and the Warrant Agent, such Warrant Certificates
may be exchanged for other Warrant Certificates or may be transferred in whole
or in part; provided that Warrant Certificates issued in exchange for [or upon
transfer of] surrendered Warrant Certificates shall evidence the same aggregate
number of Warrants as the Warrant Certificates so surrendered. No service
charge shall be made for any exchange [or transfer] of Warrant Certificates,
but the Company may require payment of a sum sufficient to cover any stamp or
other tax or governmental charge that may be imposed in connection
11
<PAGE> 16
with any such exchange [or transfer]. Whenever any Warrant Certificates are so
surrendered for exchange [or transfer], the Company shall execute and an
authorized officer of the Warrant Agent shall manually authenticate and deliver
to the person or persons entitled thereto a Warrant Certificate or Warrant
Certificates as so requested. The Warrant Agent shall not be required to effect
any exchange [or transfer] which would result in the issuance of a Warrant
Certificate evidencing a fraction of a Warrant or a number of full Warrants and
a fraction of a Warrant. All Warrant Certificates issued upon any exchange [or
transfer] of Warrant Certificates shall evidence the same obligations, and be
entitled to the same benefits under this Agreement, as the Warrant Certificates
surrendered for such exchange [or transfer].
Section 4.2 Mutilated, Destroyed, Lost or Stolen Warrant
Certificates. If any mutilated Warrant Certificate is surrendered to the
Warrant Agent, the Company shall execute and an officer of the Warrant Agent
shall manually authenticate and deliver in exchange therefor a new Warrant
Certificate of like tenor and bearing a number not contemporaneously
outstanding. If there shall be delivered to the Company and the Warrant Agent
(i) evidence to their satisfaction of the destruction, loss or theft of any
Warrant Certificate and of the ownership thereof 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
Warrant Agent that such Warrant Certificate has been acquired by a bona fide
purchaser, the Company shall execute and upon its request an officer of the
Warrant Agent shall manually authenticate and deliver, in lieu of any such
destroyed, lost or stolen Warrant Certificate, a new Warrant Certificate of
like tenor and bearing a number not contemporaneously outstanding. Upon the
issuance of any new Warrant Certificate 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 Warrant Agent) connected therewith.
Every new Warrant Certificate issued pursuant to this Section in lieu of any
destroyed, lost or stolen Warrant Certificate shall evidence an original
additional contractual obligation of the Company, whether or not the destroyed,
lost or stolen Warrant Certificate shall be at any time enforceable by anyone,
and shall be entitled to all the benefits of this Agreement equally and
proportionately with any and all other Warrant Certificates 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 re-
placement or payment of mutilated, destroyed, lost or stolen Warrant
Certificates.
Section 4.3 Persons Deemed Owners. [If Offered Securities and
Warrants which are not immediately detachable -- Prior to the Detachable Date,
the
12
<PAGE> 17
Company, the Warrant Agent and all other persons may treat the owner of any
Offered Security as the owner of the Warrant Certificates initially attached
thereto for any purpose and as the person entitled to exercise the rights
represented by the Warrants evidenced by such Warrant Certificates, any notice
to the contrary notwithstanding. After the Detachable Date, and] Prior to due
presentment of a Warrant Certificate for registration of transfer, the Company,
the Warrant Agent and all other persons may treat the Holder as the owner
thereof for any purpose and as the person entitled to exercise the rights
represented by the Warrants evidenced thereby, any notice to the contrary
notwithstanding.
Section 4.4 Cancellation of Warrant Certificates. Any Warrant
Certificate surrendered for exchange[, transfer] or exercise of the Warrants
evidenced thereby shall, if surrendered to the Company, be delivered to the
Warrant Agent, and all Warrant Certificates surrendered or so delivered to the
Warrant Agent shall be promptly cancelled by it and shall not be reissued and,
except as expressly permitted by this Agreement, no Warrant Certificate shall
be issued hereunder in lieu or in exchange thereof. The Company may at any time
deliver to the Warrant Agent for cancellation any Warrant Certificates
previously issued hereunder which the Company may have acquired in any manner
whatsoever, and all Warrant Certificates so delivered shall be promptly
cancelled by the Warrant Agent. All cancelled Warrant Certificates held by the
Warrant Agent shall be destroyed by it unless by written order the Company
requests their return to it.
ARTICLE V
OTHER PROVISIONS RELATING TO RIGHTS
OF HOLDERS OF WARRANT CERTIFICATES
Section 5.1 No Rights as Stockholder Conferred by Warrants or
Warrant Certificates. No Warrant Certificate or Warrant evidenced thereby
shall entitle the Holder thereof to any of the rights of a stockholder,
including, without limitation, the right to receive dividends.
Section 5.2 Holder of Warrant Certificate May Enforce Rights.
Notwithstanding any of the provisions of this Agreement, any Holder of any
Warrant Certificate, without the consent of the Warrant Agent, any stockholder
or the Holder of any other Warrant Certificate, may, on its own behalf and for
its own benefit, enforce, and may institute and maintain any suit, action or
proceeding against the Company suitable to enforce or otherwise in respect of
its right to exercise the
13
<PAGE> 18
Warrant or Warrants evidenced by his or her Warrant Certificate in the manner
provided in the Warrant Certificates and in this Agreement.
ARTICLE VI
CONCERNING THE WARRANT AGENT
Section 6.1 Warrant Agent. The Company hereby appoints
____________ as Warrant Agent of the Company in respect of the Warrants and the
Warrant Certificates upon the terms and subject to the conditions herein set
forth, and ___________ hereby accepts such appointment. The Warrant Agent shall
have the power and authority granted to and conferred upon it in the Warrant
Certificates hereby and such further power and authority to act on behalf of
the Company as the Company may hereafter grant to or confer upon it. All of the
terms and provisions with respect to such power and authority contained in the
Warrant Certificates are subject to and governed by the terms and provisions
hereof.
Section 6.2 Conditions of Warrant Agent's Obligations. The
Warrant Agent accepts its obligations herein set forth, upon the terms and
conditions hereof, including the following, to all of which the Company agrees
and to all of which the rights hereunder of the Holders from time to time of
the Warrant Certificates shall be subject:
(a) Compensation and Indemnification. The Company agrees
promptly to pay the Warrant Agent the compensation to be agreed upon with the
Company for all services rendered by the Warrant Agent and to reimburse the
Warrant Agent for reasonable out-of-pocket expenses (including reasonable
counsel fees) incurred by the Warrant Agent in connection with the services
rendered hereunder by the Warrant Agent. The Company also agrees to indemnify
the Warrant Agent for, and hold it harmless against, any loss, liability or
expense incurred without negligence or bad faith on the part of the Warrant
Agent, arising out of or in connection with its acting as such Warrant Agent
hereunder, including the reasonable costs and expenses of defending itself
against any claim or liability in connection with the exercise or performance
at any time of its powers or duties hereunder. The obligations of the Company
under this subsection (a) shall survive the exercise of the Warrant
Certificates and the resignation or removal of the Warrant Agent.
(b) Agent for the Company. In acting under this Warrant
Agreement and in connection with the Warrant Certificates, the Warrant Agent is
acting solely as agent of the Company and does not assume any obligation or
relationship
14
<PAGE> 19
of agency or trust for or with any of the owners or holders of the Warrant
Certificates.
(c) Counsel. The Warrant Agent may consult with counsel,
which may include counsel for the Company, and the written advice of such
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.
(d) Documents. The Warrant Agent shall be protected and
shall incur no liability for or in respect of any action taken or omitted by it
in reliance upon any notice, direction, consent, certificate, affidavit,
statement or other paper or document reasonably believed by it to be genuine
and to have been presented or signed by the proper parties.
(e) Certain Transactions. The Warrant Agent, any of its
officers, directors and employees, or any other agent of the Company, in its
individual or any other capacity, may become the owner of, or acquire any
interest in, any Warrant Certificates, with the same rights that it would have
if it were not such Warrant Agent, officer, director, employee or other agent,
and, to the extent permitted by applicable law, it may engage or be interested
in any financial or other transaction with the Company and may act on, or as
depositary, trustee or agent for, any committee or body of holders of
securities or other obligations of the Company as freely as if it were not such
Warrant Agent, officer, director, employee or other agent.
(f) No Liability for Interest. The Warrant Agent shall
not be under any liability for interest on any monies at any time received by
it pursuant to any of the provisions of this Agreement or of the Warrant
Certificates unless otherwise agreed to in writing by the Company and the
Warrant Agent and except for the negligence of the Warrant Agent.
(g) No Liability for Invalidity. The Warrant Agent shall
not incur any liability with respect to the validity of this Agreement or any
of the Warrant Certificates.
(h) No Responsibility for Representations. The Warrant
Agent shall not be responsible for any of the Recitals or representations
contained herein or in the Warrant Certificates (except as to the Warrant
Agent's Certificate of Authentication thereon), all of which are made solely by
the Company.
15
<PAGE> 20
(i) No Implied Obligations. The Warrant Agent shall be
obligated to perform such duties as are herein and in the Warrant Certificates
specifically set forth and no implied duties or obligations shall be read into
this Agreement or the Warrant Certificates against the Warrant Agent. The
Warrant Agent shall not be under any obligation to take any action hereunder
which may tend to involve it in any expense or liability,~the payment of which
within a reasonable time is not, in its reasonable opinion, assured to it. The
Warrant Agent shall not be accountable or under any duty or responsibility for
the use by the Company of any of the Warrant Certificates authenticated by the
Warrant Agent and delivered by it to the Company pursuant to this Agreement or
for the application by the Company of the proceeds of the Warrant Certificates
or any exercise of the Warrants evidenced thereby. The Warrant Agent shall have
no duty or responsibility in case of any default by the Company in the
performance of its covenants or agreements contained herein or in the Warrant
Certificates or in the case of the receipt of any written demand from a Holder
of a Warrant Certificate with respect to such default, including, without
limiting the generality of the foregoing, any duty or responsibility to
initiate or attempt to initiate any proceedings at law or otherwise or, except
as provided in Section 7.4 hereof, to make any demand upon the Company.
Section 6.3 Resignation Removal and Assignment of Successor.
(a) The Company agrees, for the benefit of the Holders from time to time of the
Warrant Certificates, that there shall at all times be a Warrant Agent
hereunder until all of the Warrant Certificates are no longer exercisable.
(b) The Warrant Agent may at any time resign as such
agent by giving written notice to the Company of such intention on its part,
specifying the date on which it desires its resignation to become effective;
provided that, without the consent of the Company, such date shall not be less
than three months after the date on which such notice is given. The Warrant
Agent hereunder may be removed at any time by the filing with it of an
instrument in writing signed by or on behalf of the Company and specifying such
removal and the date on which the Company expects such removal to become
effective. Such resignation or removal shall take effect upon the appointment
by the Company of a successor Warrant Agent (which shall be a bank or trust
company organized and doing business under the laws of the United States of
America, any State thereof or the District of Columbia and authorized under
such laws to exercise corporate trust powers) by an instrument in writing filed
with such successor Warrant Agent and the acceptance of such appointment by
such successor Warrant Agent pursuant to Section 6.3(d).
16
<PAGE> 21
(c) In case at any time the Warrant Agent shall resign,
or be removed, or shall become incapable of acting, or shall be adjudged a
bankrupt or insolvent, or shall file a voluntary petition in bankruptcy or make
an assignment for the benefit of its creditors or consent to the appointment of
a receiver or custodian of all or any substantial part of its property, or
shall admit in writing its inability to pay or meet its debts as they mature,
or if a receiver or custodian of it or of all or any substantial part of its
property shall be appointed, or if an order of any court shall be entered
approving any petition filed by or against it under the provisions of any
applicable bankruptcy or similar law, or if any public officer shall have taken
charge or control of the Warrant Agent or of its property or affairs, a
successor Warrant Agent, qualified as aforesaid, shall be appointed by the
Company by an instrument in writing filed with the successor Warrant Agent.
Upon the appointment as aforesaid of a successor Warrant Agent and acceptance
by the latter of such appointment, the Warrant Agent so superseded shall cease
to be the Warrant Agent hereunder.
(d) Any successor Warrant Agent appointed hereunder shall
execute, acknowledge and deliver to its predecessor and to the Company an
instrument accepting such appointment hereunder, and thereupon such successor
Warrant Agent, without any further act, deed or conveyance, shall become vested
with all the authority, rights, powers, trusts, immunities, duties and obliga-
tions of such predecessor with like effect as if originally named as Warrant
Agent hereunder, and such predecessor, upon payment of its charges and
disbursements then unpaid, shall thereupon become obligated to transfer,
deliver and pay over, and such successor Warrant Agent shall be entitled to
receive, all monies, securities and other property on deposit with or held by
such predecessor, as Warrant Agent hereunder.
(e) Any corporation into which the Warrant Agent
hereunder may be merged or converted or any corporation with which the Warrant
Agent may be consolidated, or any corporation resulting from any merger,
conversion or consolidation to which the Warrant Agent shall be a party, or any
corporation succeeding to all or substantially all of the corporate trust
business of the Warrant Agent, provided that it shall be qualified as afore-
said, shall be the successor Warrant Agent under this Agreement without the
execution or filing of any paper or any further act on the part of any of the
parties hereto.
17
<PAGE> 22
ARTICLE VII
MISCELLANEOUS
Section 7.1 Consolidations and Mergers of the Company and Sales
Leases and Conveyances Permitted Subject to Certain Conditions. The Company
may consolidate with, or sell or convey all or substantially all of its assets
to, or merge with or into any other corporation, provided that in any such
case, either the Company shall be the continuing corporation, or the
corporation (if other than the Company) formed by such consolidation or into
which the Company is merged or the corporation which acquired by purchase or
conveyance all or substantially all of the assets of the Company shall
expressly assume the obligations of the Company hereunder.
Section 7.2 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, and the predecessor corporation, except in the event of
a lease, shall be relieved of any further obligation under this Agreement and
the Warrants. 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 shares of Class A Common Stock issuable pursuant to the terms hereof.
Section 7.3 Amendment. This Agreement may be amended by the
parties hereto, without the consent of the Holder of any Warrant Certificate,
for the purpose of curing any ambiguity, or curing, correcting or supplementing
any defective provision contained herein, or making such provisions in regard
to matters or questions arising under this Agreement as the Company may deem
necessary or desirable; provided that such action shall not adversely affect
the interests of the Holders of the Warrant Certificates in any material
respect. Any amendment or supplement to this Agreement or the Warrants that has
a material adverse effect on the interests of Holders of any series of Warrants
shall require the written consent of the Holders of a majority of the then
outstanding Warrants of such series. The consent of each Holder of a Warrant
affected shall be required for any amendment pursuant to which the Warrant
Price would be increased or the number of shares of Class A Common Stock
purchasable upon exercise of Warrants would be decreased. The Warrant Agent
may, but shall not be obligated to, enter into any amendment to this Agreement
which affects the Warrant Agent's own rights, duties or immunities under this
Agreement or otherwise.
18
<PAGE> 23
Section 7.4 Notices and Demands to the Company and Warrant
Agent. If the Warrant Agent shall receive any notice or demand addressed to
the Company by the Holder of a Warrant Certificate pursuant to the provisions
of the Warrant Certificates, the Warrant Agent shall promptly forward such
notice or demand to the Company.
Section 7.5 Notices to Warrantholders. Upon any adjustment of
the number of shares purchasable upon exercise of each Warrant, the Exercise
Price or the number of Warrants outstanding pursuant to Section 3.2, the
Company within ________ calendar days thereafter shall (i) cause to be filed
with the Warrant Agent a certificate of a firm of independent public
accountants of recognized standing selected by the Company (who may be the
regular auditors of the Company) setting forth the Exercise Price and either
the number of shares of Class A Common Stock and other securities or assets
purchasable upon exercise of each Warrant or the additional number of Warrants
to be issued for each previously outstanding Warrant, as the case may be, after
such adjustment and setting forth in reasonable detail the method of
calculation and the facts upon which such adjustment are made, which
certificate shall be conclusive evidence of the correctness of the matters set
forth therein, and (ii) cause to be given to each of the registered holders of
the Warrant Certificates at such holder's address appearing on the Warrant
Register written notice of such adjustments by first-class mail, postage
prepaid. Where appropriate, such notice may be given in advance and included as
part of the notice required to be mailed under the provisions of this Section
7.5.
Pursuant to Sections 3. 1 [add other sections as applicable], the
Company shall cause written notice of such Call Price, Call Date and Call Terms
[reference other items as applicable], as the case may be, to be given as soon
as practicable to the Warrant Agent and to each of the registered holders of
the Warrant Certificates by first class mail, postage prepaid, at such holder's
address appearing on the Warrant Register. In addition to the written notice
referred to in the preceding sentence, the Company shall make a public
announcement in a daily morning newspaper of general circulation in ___________
of such Call Price, Call Date, and Call Terms [reference other items as
applicable], as the case may be, at least once a week for two successive weeks
prior to the implementation of such terms.
If:
(a) the Company shall declare any dividend payable in any
securities upon its shares of Class A Common Stock or make any distribution
(other than a cash dividend) to the holders of its shares of Class A Common
Stock; or
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<PAGE> 24
(b) the Company shall offer to the holders of its shares
of Class A Common Stock any additional shares of Class A Common Stock or
securities convertible into shares of Class A Common Stock or any right to
subscribe thereto; or
(c) there shall be a dissolution, liquidation or winding
up of the Company (other than in connection with a consolidation, merger, or
sale of all or substantially all of its property, assets, and business as an
entirety);
then the Company shall (i) cause written notice of such event to be filed with
the Warrant Agent and shall cause written notice of such event to be given to
each of the registered holders of the Warrant Certificates at such holder's
address appearing on the Warrant Register, by first-class mail, postage
prepaid, and (ii) make a public announcement in a daily newspaper of general
circulation in ___________________ of such event, such giving of notice and
publication to be completed at least _________ calendar days prior to the date
fixed as a record date or the date of closing the transfer books for the
determination of the stockholders entitled to such dividend, distribution, or
subscription rights, or for the determination of stockholders entitled to vote
on such proposed dissolution, liquidation or winding up. Such notice shall
specify such record date or the date of closing the transfer books, as the case
may be. The failure to give the notice required by this Section 7.5 or any
defect therein shall not affect the legality or validity of any distribution,
right, warrant, dissolution, liquidation or winding up or the vote upon or any
other action taken in connection therewith.
Section 7.6 Addresses. Any communications from the Company to
the Warrant Agent with respect to this Agreement shall be addressed to
_______________ Attention: ________________, and any communications from the
Warrant Agent to the Company with respect to this Agreement shall be addressed
to Apartment Investment and Management Company, 1873 South Bellaire Street,
17th Floor, Denver, Colorado 80222, Attention: Corporate Secretary (or such
other address as shall be specified in writing by the Warrant Agent or by the
Company).
Section 7.7 Governing Law. This Agreement and each Warrant
Certificate issued hereunder shall be governed by and construed in accordance
with the laws of the State of New York.
Section 7.8 Delivery of Prospectus. The Company will furnish to
the Warrant Agent sufficient copies of a prospectus, appropriately
supplemented, relating to the Class A Common Stock (the "Prospectus"), and the
Warrant Agent agrees that upon the exercise of any Warrant Certificate, the
Warrant Agent will deliver to the
20
<PAGE> 25
person designated to receive a certificate representing shares of Class A
Common Stock, prior to or concurrently with the delivery of such Securities, a
Prospectus.
Section 7.9 Obtaining of Governmental Approvals. The Company
will from time to time take all action which may be necessary to obtain and
keep effective any and all permits, consents and approvals of governmental
agencies and authorities and securities acts filings under United States
Federal and state laws (including, without limitation, to the extent required,
the maintenance of the effectiveness of a registration statement in respect of
the Class A Common Stock under the Securities Act of 1933, as amended), which
may be or become required in connection with exercise of the Warrant
Certificates and the original issuance and delivery of the Class A Common
Stock.
Section 7.10 Persons Having Rights Under Warrant Agreement.
Nothing in this Agreement expressed or implied and nothing that may be inferred
from any of the provisions herein is intended, or shall be construed, to confer
upon, or give to, any person or corporation other than the Company, the Warrant
Agent and the Holders of the Warrant Certificates any right, remedy or claim
under or by reason of this Agreement or of any covenant, condition,
stipulation, promise or agreement hereof; and all covenants, conditions,
stipulations, promises and agreements contained in this Agreement shall be for
the sole and exclusive benefit of the Company and the Warrant Agent and their
successors and of the Holders of the Warrant Certificates.
Section 7.11 Headings. The Article and Section headings herein
and the Table of Contents are for convenience of reference only and shall not
affect the construction hereof.
Section 7.12 Counterparts. This Agreement may be executed in any
number of counterparts, each of which so executed shall be deemed to be an
original; but such counterparts shall together constitute but one and the same
instrument.
Section 7.13 Inspection of Agreement. A copy of this Agreement
shall be available at all reasonable times at the principal corporate trust
office of the Warrant Agent [and at ___________] for inspection by the Holder
of any Warrant Certificate. The Warrant Agent may require such Holder to submit
its Warrant Certificate for inspection by it.
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<PAGE> 26
IN WITNESS WHEREOF, the parties hereto have caused this Agreement
to be duly executed, and their respective corporate seal to be hereunto affixed
and attested, all as of the day and year first above written.
APARTMENT INVESTMENT AND
MANAGEMENT COMPANY
By:
--------------------------
[SEAL]
Attest:
- ----------------------------
[Assistant] Secretary
[SEAL]
Attest:
[Assistant] Secretary
[NAME OF WARRANT AGENT]
By:
--------------------------
[SEAL]
Attest:
- ----------------------------
[Assistant] Secretary
22
<PAGE> 27
EXHIBIT A
[FORM OF WARRANT CERTIFICATE]
[Face]
Form of Legend if Offered Securities [Prior to _____________, this
with Warrants which are not imme- Warrant Certificate may be
diately detachable transferred or ex- changed if
and only if the [Title of
Security] to which it was
initially attached is so
transferred or exchanged.]
Form of Legend if Warrants are not [Prior to ________________,
Warrants immediately exercisable Warrants evidenced by this
Warrant Certificate cannot be
exercised.]
EXERCISABLE ONLY IF AUTHENTICATED BY THE WARRANT
AGENT AS PROVIDED HEREIN
VOID AFTER THE CLOSE OF BUSINESS ON _________, 199_
APARTMENT INVESTMENT AND MANAGEMENT COMPANY
Warrant Certificate representing
Warrants to purchase
Class A Common Stock
as described herein.
No. _________ Warrants
This certifies that ____________ or registered assigns is the
registered owner of the above indicated number of Warrants, each Warrant
entitling such registered owner to purchase, at any time [after the close of
business on __________ 19__, and on or before the close of business on
_________, 19__ one share of Class
A-1
<PAGE> 28
A Common Stock, par value $.01 per share ("Class A Common Stock") of Apartment
Investment and Management Company (the "Company"), on the following basis.(1)
During such period, each Warrant shall entitle the Holder thereof, subject to
the provisions of the Warrant Agreement (as defined below), to purchase from
the Company one share of Class A Common Stock at the exercise price of $
________ (the "Exercise Price"). The Holder of this Warrant Certificate may
exercise the Warrants evidenced hereby, in whole or in part, by surrendering
this Warrant Certificate, with the purchase form set forth hereon duly
completed, accompanied by payment in full, in lawful money of the United States
of America, [in cash or by certified check or official bank check in New York
Clearing House funds or by bank wire transfer in immediately available funds],
the Exercise Price for each Warrant exercised, to the Warrant Agent (as
hereinafter defined), at the corporate trust office of [name of Warrant Agent],
or its successor, as warrant agent (the "Warrant Agent") [or at ________], the
addresses specified on the reverse hereof and upon compliance with and subject
to the conditions set forth herein and in the Warrant Agreement.
The term "Holder" as used herein shall mean [If Offered Debt
Securities with Warrants which are not immediately detachable -- prior to
_________ 19__ (the "Detachable Date"), the registered owner of the Company's
[title of Offered Securities] to which such Warrant Certificate was initially
attached, and after such Detachable Date,] the person in whose name at the time
such Warrant Certificate shall be registered upon the books to be maintained by
the Warrant Agent for that purpose pursuant to Section 4. 1 of the Warrant
Agreement.
Any whole number of Warrants evidenced by this Warrant
Certificate may be exercised to purchase shares of Class A Common Stock. Upon
any exercise of fewer than all of the Warrants evidenced by this Warrant
Certificate, there shall be issued to the registered owner hereof a new Warrant
Certificate evidencing the number of Warrants remaining unexercised.
This Warrant Certificate is issued under and in accordance with
the Warrant Agreement dated as of ________, 19 (the "Warrant Agreement"),
between the Company and the Warrant Agent and is subject to the terms and
provisions contained in the Warrant Agreement, to all of which terms and
provisions the holder of this Warrant Certificate consents by acceptance
hereof. Copies of the Warrant
- --------------------
(1) Complete and modify the following provisions as appropriate to reflect
the terms of the Warrants.
A-2
<PAGE> 29
Agreement are on file at the above-mentioned office of the Warrant Agent [and
at ________].
[If Offered Securities with Warrants which are not immediately
detachable--prior to _________, 19__ (the "Detachable Date"), this Warrant
Certificate may be exchanged or transferred only together with the [title of
Offered Security] (the "Offered Security") to which this Warrant Certificate
was initially attached, and only for the purpose of effecting, or in
conjunction with, an exchange or transfer of such Offered Security.
Additionally, on or prior to the Detachable Date, each transfer of such Offered
Security on the register of the Offered Securities shall operate also to
transfer this Warrant Certificate. After the Detachable Date, this] [If Offered
Debt Securities with Warrants which are immediately detachable or Warrants
alone--This] Warrant Certificate and all rights hereunder, may be transferred
when surrendered at the corporate trust office of the Warrant Agent [or
_________] by the registered owner or his assigns, in person or by an attorney
duly authorized in writing, in the manner and subject to the limitations
provided in the Warrant Agreement.
[If Offered Securities with Warrants which are not immediately
detachable--Except as provided in the immediately preceding paragraph, after]
[If Offered Debt Securities with Warrants which are immediately detachable or
Warrants alone-After] authentication by the Warrant Agent and prior to the
expiration of this Warrant Certificate, this Warrant Certificate may be
exchanged at the corporate trust office of the Warrant Agent [or at
_________________________] for Warrant Certificates representing the same
aggregate number of Warrants.
This Warrant Certificate shall not entitle the registered owner
hereof to any of the rights of a stockholder, including, without limitation,
the right to receive dividends.
Reference is hereby made to the further provisions of this
Warrant Certificate set forth on the reverse hereof, which further provisions
shall for all purposes have the same effect as if set forth at this place.
This Warrant Certificate shall not be valid obligatory for any
purpose until authenticated by the Warrant Agent.
A-3
<PAGE> 30
IN WITNESS WHEREOF, the Company has caused this Warrant
Certificate to be duly executed under its corporate seal.
Dated:
--------------------
APARTMENT INVESTMENT AND
MANAGEMENT COMPANY
By:
------------------------------
Attest:
- ---------------------------------
Certificate of Authentication
This is one of the Warrant Certificates referred to in the
within-mentioned Warrant Agreement.
- ---------------------------------
As Warrant Agent
By:
------------------------------
Authorized Signature
A-4
<PAGE> 31
[FORM OF WARRANT CERTIFICATE]
[REVERSE]
(Instructions for Exercise of Warrants)
To exercise any Warrants evidenced hereby, the Holder of this
Warrant Certificate must pay [in cash or by certified check or official bank
check in New York Clearing House funds or by bank wire transfer in immediately
available funds], the Exercise Price in full for each of the Warrants
exercised, to _______________ Corporate Trust Department, ____________,
Attn: [or ____________], which payment should specify the name of the Holder of
this Warrant Certificate and the number of Warrants exercised by such Holder.
In addition, the Holder of this Warrant Certificate should complete the
information required below and present in person or mail by registered mail
this Warrant Certificate to the Warrant Agent at the addresses set forth below.
[FORM OF EXERCISE]
(To be executed upon exercise of Warrants.)
The undersigned hereby irrevocably elects to exercise Warrants,
represented by this Warrant Certificate, to purchase _________ shares of Class
A Common Stock, par value $.01 per share ("Class A Common Stock"), of Apartment
Investment and Management Company and represents that he or she has tendered
payment for such shares of Class A Common Stock [in cash or by certified check
or official bank check in New York Clearing House funds or by bank wire
transfer in immediately available funds] to the order of Apartment Investment
and Management Company, c/o Treasurer, in the amount of $________ in accordance
with the terms hereof. The undersigned requests that said shares of Class A
Common Stock be registered in such names and delivered, all as specified in
accordance with the instructions set forth below.
If said number of shares of Class A Common Stock is less than all
of the shares of Class A Common Stock purchasable hereunder, the undersigned
requests that a new Warrant Certificate representing the remaining balance of
the Warrants evidenced hereby be issued and delivered to the undersigned unless
otherwise specified in the instructions below.
A-5
<PAGE> 32
Dated:
Name
-----------------------------------
(Please Print)
- -----------------------------------
(Insert Social Security or Other
Identifying Number of Holder)
Address
--------------------------------
---------------------------------------
---------------------------------------
Signature (Signature must conform in all respects to name of holder as
specified on the face of this Warrant Certificate and must bear a signature
guarantee by a bank, trust company or member broker of the New York, Chicago or
Pacific Stock Exchange.)
This Warrant may be exercised at the following addresses:
By Hand at
- -----------------------------------
---------------------------------------
---------------------------------------
By mail at
- -----------------------------------
---------------------------------------
---------------------------------------
(Instructions as to form and delivery of
certificates representing shares of Class A Common Stock
and/or Warrant Certificates):
A-6
<PAGE> 33
[FORM OF ASSIGNMENT]
(TO BE EXECUTED TO TRANSFER
THE WARRANT CERTIFICATE)
FOR VALUE RECEIVED _______________________________ hereby sells,
assigns and transfers unto
---------------------------------------
Please print name and address
(including zip code)
Please insert social security or
other identifying number
- ---------------------------------
- ---------------------------------------------------------------------------
the right represented by the within Warrant Certificate and does hereby
irrevocably constitute and appoint ________________, Attorney, to transfer said
Warrant Certificate on the books of the Warrant Agent with full power of
substitution.
Dated:
------------------------------------------
Signature
(Signature must conform in all respects to
name of holder as specified on the face of
this Warrant Certificate and must bear a
signature guarantee by a bank, trust company
or member broker of the New York, Chicago or
Pacific Stock Exchange.)
Signature Guaranteed:
- ---------------------------------
A-7
<PAGE> 1
EXHIBIT 23.1
CONSENT OF INDEPENDENT AUDITORS
We consent to the reference of our firm under the caption "Experts" in the
Registration Statement on Form S-3 and related Prospectus of Apartment
Investment and Management Company for the registration of Debt Securities,
Preferred Stock, Class A Common Stock, Warrants and Guarantees, and of AIMCO
Properties, L.P. for the registration of Debt Securities and Warrants, and to
the incorporation by reference therein of our reports (i) dated March 6, 1998,
except for Note 25, as to which the date is March 17, 1998, with respect to the
consolidated financial statements and schedule of Apartment Investment and
Management Company included in its Annual Report (Form 10-K/A) for the year
ended December 31, 1997; and (ii) dated March 6, 1998, except for Note 25, as to
which the date is March 17, 1998, with respect to the consolidated financial
statements and schedule of AIMCO Properties, L.P. included in its Registration
Statement on Form 10, all filed with the Securities and Exchange Commission.
/s/ ERNST & YOUNG LLP
------------------------
ERNST & YOUNG LLP
Dallas, Texas
August 11, 1998
<PAGE> 1
EXHIBIT 23.2
CONSENT OF INDEPENDENT AUDITORS
We consent to the reference of our firm under the caption "Experts" in the
Registration Statement (Form S-3) and related Prospectus of Apartment Investment
and Management Company (AIMCO) for the registration of Debt Securities,
Preferred Stock, Class A Common Stock, Warrants, and Guarantees, and of AIMCO
Properties, L.P. for the registration of Debt Securities and Warrants and to the
incorporation by reference therein of our report dated January 30, 1998 (except
for Note 19, as to which the date is March 5, 1998), with respect to the
consolidated financial statements and schedule of Ambassador Apartments, Inc.
(Ambassador) as of December 31, 1997 and 1996, and for each of the three years
in the period ended December 31, 1997, included in AIMCO's Current Report on
Form 8-K dated March 17, 1998 (as amended on April 3, 1998), and our report
dated January 27, 1997 (except for Note 15, as to which the date is March 13,
1997 and Note 2(J), as to which the date is March 31, 1997), with respect to the
consolidated financial statements and schedule of Ambassador as of December 31,
1996 and 1995, and for each of the two years in the period ended December 31,
1996 and the period from August 31, 1994 through December 31, 1994, and the
combined financial statements of Prime Properties (Predecessor to Ambassador)
for the period from January 1, 1994 through August 30, 1994, included in
Amendment No. 1 filed on February 6, 1998 to AIMCO's Current Report on Form 8-K
dated December 23, 1997, filed with the Securities and Exchange Commission.
/s/ ERNST & YOUNG LLP
-----------------------
ERNST & YOUNG LLP
Chicago, Illinois
August 11, 1998
<PAGE> 1
EXHIBIT 23.3
CONSENT OF INDEPENDENT AUDITORS
We consent to the reference to our firm under the caption "Experts" in the
Registration Statement (Form S-3) and related Prospectus of Apartment
Investment and Management Company for the registration of Debt Securities,
Preferred Stock, Class A Common Stock, Warrants, and Guarantees and of AIMCO
Properties, L.P. for the registration of Debt Securities and Warrants and to the
incorporation by reference therein of our report dated February 13, 1998, except
for Note 20, as to which the date is March 19, 1998, with respect to the
consolidated financial statements of Insignia Financial Group, Inc. as of
December 31, 1997 and 1996, and for each of the three years in the period ended
December 31, 1997 included as exhibit 99.2 in Apartment Investment and
Management Company's Current Report on Form 8-K dated March 17, 1998 (and
Amendment No. 1 thereto filed April 3, 1998), filed with the Securities and
Exchange Commission.
/s/ ERNST & YOUNG LLP
------------------------
ERNST & YOUNG LLP
Greenville, South Carolina
August 12, 1998
